Posted by
rycK on Tuesday, August 19, 2008 1:00:35 PM
Kenneth Rogoff: The Prophet of Doom: Down Goes a Big Bank.
We are ways curious about the workings of the bureaucratic world. We seem to elect the least talented people who, in turn, identify or appoint other examples of the least talented people to run our federal and state agencies and we can expect the very worst performance from them. We get exactly that. There are several mentionables in this list including the bunglers at Freddie Mac and its inbred sister. Apparently the anti-capitalists are in the majority in the US and certain international agencies. We could mention former FM Chief executive Franklin D. Raines when we discuss bunglers. [1]
Now, we were recently informed [by the NYT] that a big investment bank will go down and Fannie and Freddie will be nationalized. That is nice.
“And now we’ve reached the next stage of our seemingly never-ending financial crisis. This time Fannie Mae and Freddie Mac are in the headlines, with dire warnings of imminent collapse. How worried should we be?”[2]-- By Paul Krugman Published: July 14, 2008. [Emphasis is mine in all quotes.]
Today, a remnant of the IMF [Idiot Monetary Flubbers] signals more disaster.
“The deepening toll from the global financial crisis could trigger the failure of a large US bank within months, a respected former chief economist of the International Monetary Fund claimed today, fuelling another battering for banking shares.”[3]-- Kenneth Rogoff Credit crunch may take out large US bank warns former IMF chief. From Times Online. August 19, 2008. [Emphasis is mine in all quotes. This link references all quotes in this essay unless otherwise noted.]
The bad news was presented by Harvard’s Professor Kenneth Rogoff, formerly the chief economist of the IMF. The IMF does not exactly posses a legacy that we might hail as a success record in handling the finaincial affairs of third world countries who often go broke even after money is shoveled their way.[4] The IMF types appear to be more adept in the meddling business than financial assistance as they impose “conditionality” upon their victims that are frequently an unworkable snarl of political objectives.[5] The loans are based upon certain Structural Adjustment Programs (SAPs) , aptly knows as saps, that freqeuntly work against the economic progress of the country involved if we look at the results of such loans. Rogoff is probably more famous for providing the theorectical economic basis for ruining the financial underpinning of certain poor coutries than solving problmes. He aparently now looks at the US as the next to fall. He is the one who recommends recession for our problems.[6] He says we cannot grow out of this. Growth, of course, is the enemy of the far left as growth allows entrepeneurs to spring up and create new jobs and gadgets. This process interfers with socialism.
Growth is the ONLY way out of debt.
“In an ominous warning, he added: “We’re not just going to see mid-sized banks go under in the next few months, we’re going to see a whopper, we’re going to see a big one — one of the big investment banks or big banks,” he said.”
Is this a prediction or a wish?? Lots of leftists want our system to crumble and the low-class senator Chuck Schumer from New York tried to stir up excitement and disable our credit system when he released information about the financial status of Indy Mac in Pasadena prompting some legal action by California’s AG Jerry Brown, the offspring of the criminal Pat Brown.[7]
“The letter, signed mostly by former staffers at IndyMac's now-shuttered mortgage operation, asks Brown to investigate Schumer and to prosecute him under a state law making it a misdemeanor to spread false and damaging statements or rumors about a bank.
Through a spokesman, Schumer denied that any of his statements were false and said IndyMac's downfall was inevitable after years of high-risk lending. The spokesman added that the information Schumer cited about the savings bank's financial troubles was taken from regulatory filings that are publicly available on the Federal Deposit Insurance Corp. website.”
But, is this damaging and what was Schumer’s point? Does he want to torpedo lenders in the US? Is Chuckles ready to shake the financial foundation of the US or California in order to make some political points? It appears so. We can apply the same reasoning to Nancy Pelosi’s ultimatum NOT TO DRILL in the US. Who needs cheap energy except those who would grow the economy? I think we need 9-10$ gasoline so we can beat Europe as the Green Game. [8]
What are these people doing? Do they want us to slog through another depression? That worked out well for the Fascists, FDR and Communists in the 30s. Maybe the Russians can bail us out for a fee.
“The professor also sounded a warning over rising US inflation, which rose last month to its highest since 1991, and criticised the Federal Reserve for having cut American interest rates too drastically. “Cutting interest rates is going to lead to a lot of inflation in the next few years in the United States,” he said.”[9]
But gold is falling from its high near $1000 per Troy oz. I have to agree that the lower interest rates were a mistake, but where did this idea come from? Goldman Sachs?
The Japanese wonder too:
“Although the [Japan’s] central bank’s downbeat economic report included vague predictions of a return to growth over time, traders said that the comments had shattered any last hope that Asia’s export-led economy might somehow “decouple” from the woes in the US.”[10]
I thought this was a global economy. We can decouple the Japanese by canceling payment on their US Treasury bonds. Perhaps they can only grow if we shrink.
We must wonder just what our enemies on the left are working on. We must wonder if there is some collective exercise in place that has the goal destroying our financial structure.
We know the Europeans are on the economic skids.[11] We know California will default soon.[12] Maybe we should all go down. Let us all be losers.
I guess we need to elect Obama, double our taxes, raise the price of gasoline to 9$ a gallon and achieve economic nirvana in leftist terms. Sure.
Stay tuned………..
rycK
Comments to: ryckki@gmail.com
[4] http://en.wikipedia.org/wiki/Conditionalities
[7] “Former IndyMac Bank workers who blame Sen. Charles E. Schumer for the collapse of the large Pasadena thrift have found an ally in their quest to hold the New York Democrat to account: a public relations firm with a Republican-heavy client list.
Schumer, chairman of Congress' Joint Economic Committee and a vocal critic of the Bush administration, on June 26 released letters he had sent to federal bank regulators, saying IndyMac's shaky state "poses significant risks to both taxpayers and borrowers." Ex-IndyMac workers' complaint against Sen. Charles Schumer may have political undertones.
http://www.latimes.com/business/la-fi-schumer16-2008aug16,0,5472765.story?track=rss