Super-rich Brats Complain About Cheap Bernanke Santa

Elaine Meinel Supkis

After deliriously rising on the news that the big housing developers managed to sell new houses last month without inquiring as to how they did this deed, the markets are now in danger of fainting away due to the very bad news that existing housing is collapsing in value and sales. And the happiness in Japan will also vanish as they contemplate the possibility their number one chumps, the US, will go under. And everyone wonders if the magician, Bernanke, can pull a hell hound out of his hat instead of a skunk.

From the Washington Post:

Sales of existing homes dropped for a fifth straight month in July, falling to the slowest pace in nearly five years, while home prices fell for a record 12th consecutive month.

The National Association of Realtors reported that sales of existing homes dipped by 0.2 percent last month to a seasonally adjusted annual rate of 5.75 million units.

The median price of a home sold last month slid to $230,200, down by 0.6 percent from the median price a year ago. It marked the 12th consecutive month that home prices have declined, a record stretch.

I'm angry that the goofs who run our media and our government both adamantly refuse to admit the big boom/bubble built by Greenspan in 2002 with his fake 1% interest rates has collapsed. It fell apart way back in late 2005, for crying out loud! The remaining sectors collapsed one by one over the last 2 years. As the Fed and the investing classes frantically built new financial structures or designed new hedges or new dikes and barriers, they all fell down. So now the bankers and the top officials running the world's economies...oh, leaving out China, of course....are all frantically trying to use backhoes and bulldozers pushing huge mountains, historically huge mountains of money in a frantic attempt to turn the tide.

Now there are stories of various kings and princes trying to order the tide to turn. Even small children know what happens next. Also, the Little Dutch Boy who stopped the ocean from topping the dykes in Holland probably drowned. As a preson who has done lots and lots of drainage work, the nature of bad floods is, they weaken the ground under the dams and then the dam collapses. So shoving more dirt on top does nothing if the rain is coming down harder and harder, the winds are blowing harder and harder and it is a full moon.

The collapse of the unnecessary and stupid Greenspan free money/no money down game is ENDING. Period. There is no trick that can bring this back. None. It is finished because the US no longer saves money and is deep in debt. Going deeper into debt will make things much, much worse. Like trading a Catagory 5 hurricane for a Catagory 9.5 earthquake! Or Yellowstone blowing up.

Washington Post:

The deep slump in housing, combined with recent severe turmoil in financial markets, has raised worries about a possible recession. But many economists believe the Federal Reserve will ward off a full-blown downturn by reducing a key short-term interest rate should financial market conditions fail to stabilize.

ACK. Stop it! STOP! Now. We have been in a full-blown downturn for years now. The wages of American workers has fallen not for one year but for 20 years now. Instead of accumulating wealth, they have accumulated DEBTS. And the lower the interest rates, the greater the debts. This is bad. Bad. Bad. I hope even stupid idiots creating this mess can read simple English. BAD DOGGIES.

If we can drop interest rates to 1% again, will this fix America's trade deficit? Obviously not. For the only way to drop interest rates is to do what Japan is doing: dropping wages. Then workers cain't buy nothin' , right? Nothing is zero. Giving them all loans might spur more buying...of Chinese stuff! And then more factories move overseas, etc.

From Bloomberg:

Acer Inc., competing with Lenovo Group Ltd. for sales in Asia, agreed to buy Gateway Inc. for $710 million, helping the company surpass its rival as the world's third-biggest personal computer maker by adding U.S. customers.

The per-share price for Irvine, California-based Gateway is $1.90, Acer said today in a statement, 57 percent more than the closing price of $1.21 on Aug. 24. Taipei-based Acer will fund the acquisition from its cash holdings, Chairman J.T. Wang said at a news briefing in Taipei.

Once powerful corporations in America are now selling for a song to Asia. And note they plan to sell to America! So this isn't a problem of Americans not buying anything. On top of this, Home Depot had to take a hit as they frantically sell off profitable parts of their business that may be unprofitable in the future. As the housing market here dies. This cycle I have detailed for years and years is obvious to anyone. It is a spiral down into the pits of bankruptcy for the USA.

From Bloomberg:

U.S. stocks declined after Lehman Brothers Holdings Inc. analysts reduced their earnings estimates for Countrywide Financial Corp. and traders pared bets that the Federal Reserve will lower its benchmark lending rate.

Arrest the officers of Countrywide! Make them cough up the $400 million they took by selling their stocks after the market was obviously falling back in September, 2006! This proves that the Bank of America purchase of this turkey was rigged by the rulers who dare not let this bloated mess fall off the chimney an onto the top of the convertible parked below.

FRom Bloomberg:

Bernanke, 53, hasn't made any public comments since July. He'll break his silence with a speech on housing and monetary policy Aug. 31 at the Fed's annual retreat-cum-symposium in Jackson Hole, Wyoming, before central bankers and economists from around the world.
*snip*
Some seasoned Fed watchers say he should have avoided the optimistic assertion that the damage caused by subprime mortgages was ``contained'' before the collapse of credit in the world's money markets prompted extraordinary central bank intervention earlier this month. Now, as he resists demands to cut the benchmark interest rate, the faultfinding, some from former Fed policy makers, has escalated to charges that he's behind in the game and losing his credibility and effectiveness.

``This is a make-or-break moment for Bernanke,'' says David M. Jones, a former Fed economist who has written books on the central bank. ``It is an early and maybe ultimate test'' for the Fed chairman, who finds himself in ``a position of weakness, not strength.''

Break the bank! Break the Bank! Polly want a cracker! Squawk! The good Bernanke did act his role of Santy Claus for the gang of demented little crooks who run our economic system. But these brats are pissed off when they saw the sock held only $45 billion and a small temporary overnight rate cut. 'We want 1% loans, Santa!' they screamed as they kicked him in the knees and spat on Rudolph's red nose.

So now, poor Bernanke is going on a picnic with these irritated, nasty, spoiled little children who are taking their BB guns and sling shots. They will pepper him until he yields to their demands.

Washington Post:

``there was this growing sense that he was oblivious to the pain in the marketplace,'' says Lehman Brothers Holdings Inc. chief U.S. economist Ethan Harris.

WHAAAAA! Me hurt me finger! WHAAA!! Where is our nanny to kiss our boo-boo?

I wish I could take all these rich people out back behind the woodshed. They want to know real pain? I will haul these little monsters to a coal mine and put them to work...IN CHINA. Hell, I will send them all to Chinese re-education camps. Teach them some manners and the meaning of 'pain.' Hell, let's cut to the bottom of hell's circles and send them to patrol in Iraq without body armor. Aw, just give them to Iran. The Iranians could have some fun for once. Or Venezuela. I know! I'll divide them into groups and send them on a world tour. The survivors can then lecture me about pain.

The WP:

Frank said in an interview he continues to believe Bernanke ``is as good as we could have gotten from this administration.'' Still, Frank says, ``I am troubled that he is too much of an `inflation-is-the-only-issue' chairman.''

It is official. Our rulers want inflation. Lots of inflation so long as they get richer. They need inflation so we will get inflation. This is how all dead beats pay off their creditors and our creditors are in Asia and the biggest is this very angry dragon which is nearly totally fed up with us. Great. Also, inflation kills workers and the retirees. Just in time for us baby boomers! Whoopee. Since the Fed lies about inflation already, they will make the lies bigger and like Japan, pretend there is no inflation. This is going to be fun, no? One thing is certain. Our houses will no longer protect us from inflation. But our rulers don't care.

They can't feel OUR pain.

Now for some history again, we need to see what is agitating our rulers and how they screwed up and the best way to do this is to look at various filings they have with the SEC. So, it is off we go to the inner workings of our rich overlords.

Time to visit the SEC filing by the Dreyfus Premier Fixed Income Fund:

Exactly 1/4 of the income produced by this famous fund went into the pockets of the people running it!

Everyone is going to Rio! The returns there are better than here. And since Dreyfuss has joined the chorus of rich people shrieking at the Federal Reserve to lower interest rates real low, they will 'carry trade' the money here to Brazil! Isn't that cute. What they want is what Japan is: super low rates that are super fake and then use the money in schemes elsewhere while they sit at home, collecting the differential.

Note that in 2006, they got hammered to the tune of $9 million. Again and again, we see that the real money losses didn't start last month. They started last year which is why we saw that 'mysterious' violent jerk in world stock markets back at the end of February. This is because the losses of the year before are digested after January and there was a momentary rush to the doors.

Being very suspcious, I am assuming the 'good news gang' stuff on TV was pure hogwash produced by powerful people wishing to exit the markets but they needed chumps. The officers in Countrywide began their wild selling back in October, 2006, when the accountants came to them with the pile of bad news. This was when everyone was still debating if there was a bubble, much less, did it pop! Dreyfus wrote off a lot of bad bets early on before the end of 2006, as we can see here.

From the Richmond Federal Reserve headquarters comes this neat Power Point presentation: The ABX-He mess is one of the smellier parts of the CD markets. Namely, these puppies are dying, fast. This chart is courtesy of the Feds who want us to know, they are tracking this trail of stinky, smelly ooze. Hooray.

It is very interesting to me that this chart ends right after the sudden dip that mystified everyone back last end of February, 2007. Do note how the various paper products designated as ABX-He, how the suddely diverge on January 17, 2007. Up until then, they very slightly moved downwards. We must remember the nature of this particular hellish little puppy is, if you go above 100, you get really rich but this creature of the night lives in a reverse, widdershins world because it is magical, so if you go below 100, you die. Fast.

So in the beginning of December, they all sagged slightly below 100. Dreyfus funds probably sold off back then for they took a big hit from October to December, anxious to get the pain over with but worried someone might figure out what was going on. All the big, interconnected Houses did the same. They began to sell BEFORE January. Then it fell apart rapidly as even the younger, more reckless kids working for the bourses suddenly decided it was time to unload like crazy. In one month, these toxic toys took a 40% hit. Today, they are nearly worthless. I am interested in the February 24th event because the media and everyone they interviewed all pretended to scratch their heads and they tried to blame CHINA for all this.

I noted that it wasn't China's fault, the 'carry trade' took a hit when the Bank of Japan raised interest rates up a tiny fraction. Now that the data is finally coming in, it is obvious that world markets were rocked by the hedge fund hell hounds who were running away from their ABX puppies!

This chart doesn't show the complexities built into the credit derivatives market. As the obvious flaws which created losses would show up, they would make a new system, a new puppy would be pulled out of these wizard's hats and they would continue to make money by making money that had one purpose only: to increase debt in the West while increasing industrialization in the East! What an irony for history who is a bitch who loves her daily dose of iron. History, I may add, is sister to the Fates and the Furies. And She has their taste for revenge on hubris.

Yes, that hubris. The thing that happens when the Goddesses are ignored. When humans imagine they are gods.

Here is a chart showing the tremendous speed at which these 'new' instruments, these hellish puppies grew into monsters the size of Grendel, the ancient ancestress of these creatures.

Cash grew due to inflation and so it was easy to increase cash holdings but note how the derivatives shot up in financial money value as it raced past actual money made the old fashioned way. If I made a chart showing the rise in value of tulips in the Netherlands back during the 30 Year's War (yes, the way to fund the fighting was to use the value of tulips in lieu of gold which was having problems due to piracy, heh---one of my ancestors was working for the Dutch, intercepting shipments...). Yes, the value shot past the value of real money (sans gold, of course) and we see a classic example of 'Madness of the Crowds' hysteria.

And this is why the Goddess of History likes to live on Mt. Olympus with the Fauns and Satyrs. She likes sex, booze and running wild at night. This keeps her from slitting her wrists out of despair. Meanwhile, the Fates weave with the spiders and the Furies sharpen their claws.

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Comments

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