Central bank seems to be panicking.
Hmmm. I wonder what they know that we don’t. Or are they just idiots. It is one or the other.
What a piece of crap.
The Federal Reserve, a private company, that is interested in the nation's banks in so far as they provide steady profits, will provide US paper money {for a fee} to keep this charade from collapsing.
When the USA abandoned the gold standard, we got this semi-private banking system and it since wall street has been allowed to enter the banking business {via the side door} this is a natural extension.
I have no solutions to this mess, but I hope I outlive it's collapse.
Very little, if anything, but certainly more than they are currently lying about. We gloom-and-doomers here on FR have been predicting and detailing the consequences of the inevitable crash of the housing bubble for years. They're only now starting to come to pass.
Central bank seems to be panicking.
Hmmm. I wonder what they know that we don’t. Or are they just idiots. It is one or the other.
My conjecture is that simply The Fed knows they don’t know. Lacking detailed knowledge of the interlinked markets because there are no reporting mechanisms for scrutinizing rebundled securities, The Fed just has various financial doomsday scenarios to weigh - most of them all too plausible.
Part of it is that one broker told me many of these mortgage-backed deals were “mark-to-model” instead of mark-to-market. That’s insane, but apparently it was approved by a whole bunch of investors.
Between the lower interest rates, the mortgage loan teasers, the lack of oversight, and basic greed, a collective insanity gripped this country.
What I don’t understand though is that in vetting these combined investment vehicles, everyone was convinced that risk had been allocated properly so long as what was strong, credit wise, could compensate for what was weak, such as the subprime mortgages. Moreover, the amount of the riskier components would have been kept small.
Despite what seemed prudent, it seems like everything that was black became white and vice versa. Insted of strong credit as a bulwark against weak credit, the weak credit overwhelmed the strong credit. It is still a mystery on what basis that is so.
They’re learning of the true extent of the illiquid debt derivatives markets.