What Is The Truth behind the Financial Crisis?

What Is The Truth behind the Financial Crisis?

www.moneymorning.com

Are you shell-shocked? Are you wondering what’s really going on in the market? The truth is probably more frightening than even your worst fears. And yet, you won’t hear about it anywhere else because “they” can’t tell you. “They” are the U.S. Federal Reserve and the U.S. Treasury Department, and they can’t tell you what’s really going on because there’s nothing they can do about it, except what they’ve been trying to do - add liquidity.

(visit the link for the full news article)

Unbelievable! That is the word I’m chosing to describe the events occuring in the US and pretty much everywhere else in the civilized world right now. Unbelievable because so many are blind to what is really going on.
The reason for the financial crisis is simple but how far does the rabbit hole go?

I smell JP Morgan & Rothschild.


www.moneymorning.com
(visit the link for the full news article)

Its a giant MLM ponzi scheme made up by Rockefeller and Rothschild.
They all have to come to and end sooner or later.
Thanks Mr R's for destroying our lives to make yours better.
Plenty of us will remember you, in the next place.

Greed, Power, Controll

2nd line

This article does not qualify for Breaking Alternative News because it is older than 48 hours and is dated September 18th. Also the title of the the thread doesn't match the article, and is the first part of a three part series.

Please read the Instructions for the Breaking News Forums.

It looks like an interesting article, and I suggest finding the remaining parts and providing links, but this thread will be moved to the Global Meltdown forum.

If TARP went to help those facing default, even if only revaluing property value and renegotiating a reasonable loan and interest rates, as intended, rather than Congress watching Paulson bait and switch in a fashon that an enraged vehicle operator may sign another motorist with certain hand/finger manipulation,

Many defaults may have been avoided, hence; avoiding potential liabilities on this insuring of worthless loans.

That would stop the onslaught of investor "gamblers" from collecting.

I believe the problem stems to insider trading of known toxic hedges and swaps, that became a "sure win" just as playing craps with a pair of loaded dice.

It seems those players (foreign investors and greedy insiders) would suck America dry of monitary assets rather than face losing the game they created, developed rules for, and invested in ferociously.

Now, rather than repeal the TARP or demand transparency and step by step dispercement records and narrowing scope of use,
The whole ass-backward corrupt league of injustice financeers are working the obviously unqualified Congressmen/women for more prop loaans and bailout funds than can be fathomed in normal monitary policy, and getting it.

In reality, which seems to be nonexistant in Washington of late, they are milking law-abiding persons-(I no longer use the label Citizen due to the US Inc. mastery of those claiming this status now-a-days)-and evidently there are no reprecussions to fear, for, all of these players should be indicted under RECO.

With the new administration's pre-election "change" promises being another bait and switch show, and the new Chief of Staff being the "John Holmes" of NAFTA, and now coming after the 2nd amendment with vigor,

...need I continue?

Congress may fein a special olympics mentality, but I know my 12 year old daughter fully understands the overall simplicity of how inverted they have become and that this portrayal of oath of office is a sham. Wow!

A very good article, Part 1.... it explains it pretty well...

the unregulated derivatives, OTC, issued with no collateral or backing (assets) in any way.. the several major financial institutions 'created'
debt, literally out-of-thin-air..for fees/commissions

which in turn produced ledger profits (not yet realized)
but those paper profits allowed major bonuses o be paid out,
which also led to the exhuberant stock prices of those financial institutions.


Greenspan (the former Fed chairman) allowed and praised this debt paper
and 'betting' Paper... issued as CreditDefault Swaps and InterestRateSwaps...and other funny money...
because Greenspan wanted to increase/grow the credit-economy base
to offset the reasonably anticipated collapse of all the unaffordable mortgages that were issued to the unable-to-pay in a modern day version of the Johnson era Great Society/P.C. /affirmative-action to include the illegals.



i draw your attention to this current article:
www.marketoracle.co.uk...

you'll read where some $178Trillion in derivatives were/are created by
these irresponsible banks/institutions in the USA alone... some 90% by
3-4 major creators, (and infer these to be; JPM/GS/MS/AIG....or others)


also how accounting methods allow these banks towritedown some of the
paper as 'losses' but not be required to post the profitable paper as 'Gains'
those profits/gains are still being held in 'off balance' sheets-> effectively immune from taxation..until such time the banks decide to monetize the profits they hold as Level-3 assets.

[etc]




see: this credible data, from a credible source:

Source: Comptroller of the Currency

So, is it a stretch to say that the current production of the financial-ized U.S. economy “is” derivatives? So what share of this notional should we be adding to U.S. reported GDP [approx 13 Trillion] to adequately account for Derivatives?

As it stands now, only revenue [8 – 12 billion per annum in fees] generated from trading these “off balance sheet” instruments is attributed - counted in bank revenues. But as we have learned in recent times; when things go awry with these instruments – many TRILLIONS of losses quickly materialize and migrate to these banks' income statements, negatively affecting GDP. Amazingly, folks who trade these instruments are widely referred to as “smart money”, but the empirical evidence “screams” that these derivatives instruments are bought and sold [conjured] into existence by individuals who do not fundamentally know what they are worth.

The dichotomy arises due to the manner in which mark-to-market accounting rules are applied – losses being crystallized and ‘counted' on the income statement [negatively affecting nominal GDP] while gains are left to accrue off-balance-sheet where they are NOT MEASURED [no affect on measurable GDP], because doing so would be construed as a taxable event. This is and has been the root of a major dilemma in the accounting treatment of derivatives for YEARS. The fact that derivatives are treated in this fashion is not sound from a purely economic perspective but rather traditional from an accounting perspective.

The observable implications are that these instruments always have had MUCH greater impact on nominal GDP than the current “practice” of recording trading fees as revenue only. It's all about gearing and the point from which you measure your base. Remember, for the past 15 years – right up until Q2/08 - these outstanding notionals have done nothing but mushroom – and in the past few years, leap by as much as 20 to 30 TRILLION in notional in a given year:

The Fed/Treas. keeps pumping 'liquidity' into these Banks, and the banks accept, to cover their writedowns on the cousins of the derivatives,,,
those soured MortgagedBackedSecurities... these Mortgage related bonds/debts/SIVs and an almost arms-length of other debt/credit paper
ammount to $1.5-to-$2.5Trillion in writedowns that are erroneously deemed the initial cause of the current systemic Economic collapse on WallStreet.


What a lie... the real cause are the hidden derivatives that are being firewalled behind the mortgage crisis...
and the mortgage crises that snowballes the credit freeze, which results in
commerce and consumers freezing up, which in turn causes the layoff across the whole economy.


the banks will start lending after the Fed/Treas slop another $8-9trillion into their balance sheets, and the economy pleads to pay 10+% interest in money they -think-they-need to survive.



gotta sign off before I become too much of a nuisance to the PTB,


thanks for looking behind the veil...


[edit on 3-2-2009 by St Udio]

the powers that be are desperately trying to issue life rafts (bailout's) for those whose company's are desperately trying to avoid a haircut on the losses that have been yet to be acknowledged (which are toxic assets which have yet to be written down) because they want the gov't to be stuck with the "suprising losses".

Also the velocity of money has slowed sharply what this means is that as the monetary base expands rapidly (biggest increase is excess reserves stored by banks at the federal reserve bank which were boosted by all the fed's 3 letter "temporary lending facilities" that get rolled over every few months....because this allows the fed to expand there balance sheet i.e hold all this toxic crap.......,some of the money is probably excess reserves from the tarp funds....which is collecting money via the fed paying interest on excess reserves which serves as a deterent for banks to lend to shady customers ...who may not pay them back) not much of that money actual gets into the economy via LOANS and therefore potentially a very deflationary situation. The gov't is concerned that giving stimulus checks will not generate spending either B/C they did study's that those check were mostly saved, or used to pay off debt. Also when negative CPI numbers come out they are concerned that consumers ...shhhhh "may THINK that prices will become lower" so they will wait to purchase ....although there may be equal supply destruction via bankruptcy's as there is demand destruction so who knows

many analysists think the dollar will be devalued directly against gold.......some think the fed may even try to boost inflation expectation's by the fed's buying gold (or just getting INVESTMENT banks to abandon there HUGE short positions) not sure if this would work ........people may see it instead as a safe haven shift from gov't debt to GOLD????