the end might well happen within months, not years or decades

[Von Curtis]

Thursday is "D-Day" . . . . . as in Derivatives

http://halturnershow.blogspot.com/20...rivatives.html


The Derivatives Bomb , comment from http://www.informationclearinghouse....ticle20954.htm

The first concept is Mortgage Backed Securities (MBS). The other concept, now called “toxic” paper are the exotic inventions of the executives and of especially Mr. Paulson as head of the largest wall street crime family, Goldman Sacks, who is the first among equals in the board of directors of this true in every sense of the word, the “organized” crime families of America.

These toxic papers are called “collateralized debt instrument” (CDI) or “collateralized debt obligation” (CDO). They are primarily divided in two categories, Derivatives, and Swaps. It is incorrect and confusing to lump MSB and CDO together or use them interchangeably. MBS has been around for a long time, as long as the mortgage itself. CDO and/or CDI, according to a study done a couple of months ago was used only three time prior to 2005 by the New York Time, MSM “paper of record”.

Before the Cheney-Bush regime, the real estate finance was done through MBS, which is straight forward. I buy a home, put whatever down (even $0), the bank/mortgage company. Would finance the rest based on my credit; sell the mortgage to Fannie or Freddie (or if it was solid kept it for itself). Fannie or Freddie then packaged my mortgage with yours and a thousand others and sold it to investors (or if solid kept it for themselves).
There was real, physical asset behind this package of 1000 mortgages sold, and a one or two wage earners who obligated themselves to pay the interest and principal. Because the homes and their vales were finite, this MBS was finite and known. The profits, i.e., the interest and points on the loan, were relatively small (compared to the economy and currently). In early 1990s S&L meltdown, all the banks and Wall Street could steal from the taxpayers was $300b.

Enter the Cheney-Bush Disaster.
This is the picture in 2005-2007: total residential real estate in the US = $12trillion, total commercial real estate in US = $12t; total world real estate = $50t; total amount of stocks, deposits in world = $50t. total mortgages on residential real estate in US = $5-6t. total residential mortgages held/guaranteed by Fannie/Freddie = $2.5t.

With the “old” system of MBS the “most” the regime and its cronies cold have stolen was not more than $5t (the entire amount).

The diabolical people in and connected to the regime were in for more, a lot more, to steal, and for as long as they could. Hence they concocted a scheme of Monopoly money on the side, called Derivatives. The first order of this so-called derivative market was a 32 times leverage, floated by – you guessed it – Paulson’s Goldman Sacks and other crime families. This paper was issued, held, and traded by wall street, hedge, private equity and sovereign (e.g., Chinese, German, Arabs) funds. This would give them $5t x 32 = $160t to float around.
Then they wrote other derivatives, all leveraged, using batches and mix and match of these derivatives.
In one single instance that came to light, S&P, the grate rating agency was paid $300m in bribes – as in under the table, send it to Camen Island bribe-- to rank one of these packages AAA, because they knew, and S&P knew , and the buyers (e.g., Chinese) knew that they were highly inflated.
The problem was easily fixed – by Insurance Swaps. They were supposed to be insurance on these packages, so if they came down in value or the seller had inflated the vale, or Defaulted on the payment, this Default insurance would cover it. The biggest insurer was IAG, taken over by the FED for an initial $85b. what did they do? Through bribery and other similar legal acts, they got AAA ratings. So now they could insure something like $50b with an initial capital of $1b; insure $500b with $5b, and so on. So after stealing all those insurance premiums, when the reckoning, i.e., payback time, came, these insurers, like AIG, and numerous hedge funds runs by the five big crime families and smaller ones under their wings, were all penniless. For even a 1% market down-turn would wipe out their entire capital.

By some estimates, as of 4 months ago, there was some $570t outstanding of these “toxic” papers. That is 4 times more than the entire wealth on Earth created in the past 10,000 years. All of this leveraged, piggy-backed, on the miniscule (by comparison) of the residential MBS of $5t.

So the problem as we see is not MBS, but CDOs. For a 20% down in MBS creates $1t in liabilities (as in the old times of the S&L crisis).
But thanks to the ingenuity of these looters, now this liability would be $114t, a figure close to the entire wealth of the humanity.

As we see Mike,
Until Pulson’s bill, we heard about CDO and Insurance Swaps. Then since his bill, all we hear from the MSM is MBS. They seem to have been ordered to delete those terms, for they would immediately bring to mind that these papers that made this ruinous fraud possible were perfected and used during the Cheney-Bush reign. But if we fall for this bait and switch, most people might well fall for this trick and associate the situation now with those of the older times.

Unfortunately, that’s what I guess some otherwise first rate economists might have fallen for this switch and believe the problem is easily solvable by some older mechanism. As an educated guess, I don’t give our nation more than 25% chance to pull through this catastrophe, looking for some miracle. At least, no one, to my knowledge, has offered any workable, detailed solution to date, and even if per chance there were one, the current political leadership, and the similar choices we have for the future does not seem to be up to the task. And as we witness now, the end might well happen within months, not years or decades that people before had thought it might collapse.

Peace to all,
CounterSkeptic
CouterSkeptic | 10.06.08 - 11:04 pm | #

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[Von Curtis]

http://www.agmates.com/blog/2008/10/.../#comment-9082

Two British Comedians talking about the sub - prime market, and the Financial crisis - 12 months ago.

News is just out that the US Congess has approved the US $700m Wall Street Bail out.

I saw this video about March this year and thought it was very funny. What I realise now is how chillingly accurate their satirical predictions are.

This is hilarious - scary - how can two British comedians see and predict the unfolding crisis with such clarrity yet none of the powerbrokers, politician could?

(thanks to Agmate Leonard)




The people in Britain and the US really enjoyed that video - the American moderator said " Talk about right on .
They are absolute geniuses at satire and poking at power. There is no American equivalent like them that I know of. You learn something every day and they should be on US prime time as well."

http://www.itszone.co.uk/zone0/viewt...=499870#499870

[Von Curtis]

http://www.thepeoplesvoice.org/cgi-b...0/08/amazing_1


Amazing! -The first ever global depression will go down in history horribly misunderstood. What a pathetic bunch of ignorant fools we have become. Consumer junkie credit card morons. Perfect little victims.

Its like a game of Monopoly. In America, the richest 1% now hold ALMOST 1/2 OF ALL UNITED STATES WEALTH.

A similar rule applies worldwide. The world’s richest 1% now own over 40% of ALL WORLD WEALTH. This is EVEN AFTER you account for all of this ‘good will’ ‘humanitarian’ BS from celebrities and executives.

ITS A SHAM. As they get richer and richer, less wealth is left circulating beneath them.

The wealth does not ‘trickle down’ as we were told it would. It just accumulates at the top. Shrinking the middle class and expanding the lower class. Causing a domino effect of socio-economic problems. But the rich will never stop. They just keep getting richer. Leaving even less of the pie for the other 99% of us to share. At the same time, they throw back a few tax deductible crumbs and call themselves ‘humanitarians’. Cashing in on the PR and getting even richer the following year.

THE RICHEST 1% INCREASED THEIR AVERAGE BOTTOM LINE WEALTH AGAIN. On average, they are now worth over $4,000,000 each. That's an all time high. As a group, they are now worth well over $17,000,000,000,000. THAT'S WELL OVER SEVENTEEN TRILLION DOLLARS. Another all time high. Which by the way, is much more than the entire middle and lower classes combined. Also more than enough to pay off our national debt, fund the Iraq war for a decade, repair our infrastructure, and bail out the US housing market.

Still think that our biggest problem is China? Think again. Its the 1% club. That means every big name celebrity, athlete, executive, entrepreneur, developer, banker, and lottery winner. Along with many attorneys, doctors, and politicians. If they are rich, then they are part of the problem. Their incredible wealth was not ‘created’, ‘generated’, grown in their back yard, or printed up on their command. It was transferred FROM US TO THEM. Directly and indirectly. Its become near impossible to spend a dollar without making some greedy pig even richer. Don’t be fooled by the occasional loss of a millionaire’s fortune. Overall, they just keep getting richer. They absolutely will not stop. Still, they have the nerve to pretend as if they care about ordinary people. ITS A LIE. NOTHING BUT CALCULATED PR CRAP. WAKE UP PEOPLE. THEIR GOAL IS TO WIN THE GAME.