The Rush Limbaugh LIVE Radio Thread - Monday, December 22, 2008

AND NOW . . . amidst billowing clouds of fragrant, aromatic first- and second-hand premium cigar smoke. . . it is time for . . . that harmless, lovable little fuzz ball, the highly-trained broadcast specialist, having more fun than a human being should be allowed to have, from behind the golden EIB microphone, firmly ensconced in the prestigious Attila-the-Hun chair at the Limbaugh Institute of Advanced Conservative Studies, serving humanity simply by showing up, and he’s not retiring until every American agrees with him, do NOT doubt him, with shrieks of joy at the mere mention of his name (that’s Rush, for those in Rio Linda),the Mandarin of Talk Radio, with talent on loan from G-d, at the cutting-edge of societal evolution, with half his brain tied behind his back — just to make it fair, the all-knowing, all-caring, all-sensing, all-feeling, all-concerned Maha-Rushie! America’s anchorman, truth detector, and doctor of democracy. A Real Man, a living legend, a way of life. Commander in Chief of U.S. Operation Chaos. Chief Waga-Waga El Rushbo of the El Conservo Tribe. Chief of the Patriotism Police. Leader of the Conservative Movement. A Weapon of Mass Instruction. El Rushbo (a little Spanish lingo, there). He is the man who is running America (you know it and I know it). He knows the Democrats like every square inch of his glorious naked body. He is ready to do what he was born to do—that’s host. Get ready to what you were born to do—that’s listen (and post your comments on the Rush Limbaugh LIVE Radio Thread).

This is just a general comment about Caroline nee Kennedy.

Why do people consider her to be from the ‘right’ background. Jackie may have had a certain elegance about her, if you don’t count selling herself for Greek money.

But the Kennedy’s are about as trashy and sorry a clan as one could find. Money came from bootlegging. Daddy was a hounddog who had his retarded daughter lobotomized.

Mother a helpless enabler who ignored everything so she could have her money and clothes.

Daddy bought the offices for his kids. One brother ... if I remember ... took risks and was killed because of so much pressure put upon him. Another was president (and a hound dog) Another was a murderer.

Where’s the class in all that?

A lot more class in the Palin background if you ask me.

For months we’ve been stating that it was Schumer’s bomb which started the economic crash, with the exposure and subsequent run on and failure of Indymac Bank. Nice to see LAT and Rush are catching up.

Actually, taking down Bear Stearns in February-March was a trial run to the same tactic employed later, in September just in time for elections "surprise", on a more massive scale against Lehman / Merrill / Wachovia / WaMu ... with Schumer pouring gasoline on the CDS + shortselling fire and setting off consumers' panic in June by finishing off a commercial, not investment, bank IndyMac (which could not be saved, but could have been quietly sold off by FDIC like many smaller banks since).

Yes, it's good to hear that Rush is finally starting to catch up and understand (or maybe it has been explained to him by someone "in the know" if he inquired about Madoff blow up) that the reason Paulson was screaming "fire in a theatre!" was because the financial "theatre" had been set ablaze since the beginning of the year and Fed and Treasury together had been putting out arson "fires" from the start.

Maybe someone noticed and pointed out that market having $60+ Trillion in CDSs for $10+ Trillion in entire US mortgage market is a wee bit too much "insurance"... more like 6:1 leveraged bet against the transparently overpriced and loose market - prime, Alt-A or subprime - which would take down any financial institution (via potential "run on the bank" / redemptions) and entire financial system.

Hopefully Rush and others will follow up on this in the same vein.

Bank [of England] 'did not understand [the severity of economic problems before the current financial] crisis'

Thanks for the ping. Did a little follow up, and this article from March is eye-opening.

Updated 3/19/2008 10:07 AM

USA TODAY
If the U.S. economy were a car, all of its warning lights would be flashing red.
The breathtaking collapse of investment bank Bear Stearns over the weekend is the latest — and perhaps the most alarming — indicator to flash on the economy’s dashboard.

First, the crisis in subprime mortgages — loans to those with poor credit — infected the credit markets. Then home prices started sinking. Then mortgage defaults rose, and the economy began to sputter. Now, the Federal Reserve is desperately trying to stabilize the credit market before a failure of confidence can poison the entire U.S. financial system.

The latest sign that the financial system is close to overheating: Bear Stearns, (BSC) once the country’s fifth-largest investment bank, agreed Sunday to be sold for just $2 a share, down 93% from its closing price Friday.

The best-case scenario now is that the Fed can get the financial markets humming again, leading to a recovery in the housing market and a resurgent economy. The worst case: an economic breakdown in which the crisis spreads to other banks, and beyond.

“It’s a really dicey moment we’ve come to,” says Seattle-based money manager William Fleckenstein.

http://www.usatoday.com/money/industries/banking/2008-03-17-bear-stearns-bailout_N.htm

Thanks for the article, it shows a precursor (Bear Stearns) of scenario that played out on much larger scale later with other investment and commercial banks:

Bear Stearns failed because its investors no longer believed it could repay its loans — even its short-term, overnight loans. Even worse, investors concluded the bank no longer could stand behind the complex agreements it had with other financial institutions. And Bear Stearns had a web of intertwined agreements with other banks, investment houses and corporations.

So while its demise could send ripples through the economy, its significance helped lead the Federal Reserve to support JPMorgan Chase's (JPM) offer for Bear Stearns. As part of the deal, the Fed agreed to fund $30 billion of Bear Stearns assets that would be difficult to sell quickly, raising the possibility that taxpayers could be on the hook for part of the bailout.

"As far as Wall Street securities houses go, Bear Stearns wasn't too big to fail," says Steve East, chief economist for FBR Capital Markets. (FBMC) "It was too interconnected to fail."

....

Bear's investors became increasingly reluctant to do business with the company. Despite the company's assurances that it had plenty of cash on hand to continue operations, it collapsed Friday.

The story of Bear Stearns isn't just a saga of a spectacular Wall Street failure. The company's failure signals far deeper problems with the nation's economy and raises questions about the consequences of Bear Stearns' problems for ordinary Americans:

....

The Fed wasn't so much concerned that 85-year-old Bear Stearns would go bankrupt, but rather that it would take other companies down with it, causing a financial meltdown.

"Clearly, JPMorgan Chase and the Fed came to the rescue to help stem a domino effect,"

Intertwined and interconnected and not liquid to buy or sell quickly securities the value of which was in doubt - that's the exact problem with all the other large international institutions which comprise financial system. Notice that the article did not say why other banks stopped dealing with Bear Stearns, just as later in the year they stopped dealing with each other. Lack of liquidity and confidence in counterparties i.e. potential for "run on the bank" which was heavily promoted by Democrats (Schumer, Reid and some short sellers) all throughout the year, are at the crux of it. Short term liquidity (backstop) had to be pumped by Fed into financial institutions to restore confidence in financial system.

And good articles on the subject in links in my posts # 20 and #21 from the thread October Surprise Out of Control?

Anatomy of Morgan Stanley Panic, Defusing the Credit Default Swap Bomb, and How Short-Sellers Almost Destroyed U.S. Banking [System]

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