Today's "Fixes"; Tomorrow's Crisis
Jon Markman is on the mark, with regard to our assertion that today's "fixes" will beget even larger crisis's tomorrow with the GSE's; PBGC; FDIC & SIPC.
The nation's two largest mortgage bankers, Fannie Mae and Freddie Mac are essentially nationalized.
A secretive state-owned cabal in Singapore called Temasek Holdings is allowed, without protest,
to become the largest institutional holder of the leading U.S. broker. Dozens of regional banks are headed for receivership.
The Bush administration grows closer to becoming the ultimate arbiter of how money is borrowed, lent, distributed and deployed in an America already...
racked by plunging home values, a disappearing auto industry, a shattered dollar and a thinning middle class.
The next crises may emerge in federal guarantees as private entities are let off the hook for their obligations.
CDS costs on the quasi-governmental Fannie Mae and Freddie Mac bonds are now twice the price of similar bonds issued in Germany.
The Nattering One muses... the widening of CDS spreads means that one should ignore stock prices...
as Wall Street is betting that Fannie & Freddie will fail and the crisis will worsen.
As we have told some in private.. this is only Act II in a Greek tragedy, in which very few survive the toxic debt cloud and its deadly fallout.
Those who do survive will be welcomed in Act III by a fate that will make Act II's death seem merciful...
as a final Tsunami hits the GSE's bonds, the Fed, FDIC and PBGC, which are collectively overwhemled and forced into failure...
leaving the taxpayer on the hook and the banking, private pension and social security systems bankrupt and in total disarray.
Go ahead, scoff, laugh and say its "too big to fail" and could never happen,
then look around and see what has happened in the last 8 years.
Newsflash: Goldilock's isn't coming and this party is going to have an ugly ending.
The nation's two largest mortgage bankers, Fannie Mae and Freddie Mac are essentially nationalized.
A secretive state-owned cabal in Singapore called Temasek Holdings is allowed, without protest,
to become the largest institutional holder of the leading U.S. broker. Dozens of regional banks are headed for receivership.
The Bush administration grows closer to becoming the ultimate arbiter of how money is borrowed, lent, distributed and deployed in an America already...
racked by plunging home values, a disappearing auto industry, a shattered dollar and a thinning middle class.
The next crises may emerge in federal guarantees as private entities are let off the hook for their obligations.
CDS costs on the quasi-governmental Fannie Mae and Freddie Mac bonds are now twice the price of similar bonds issued in Germany.
The Nattering One muses... the widening of CDS spreads means that one should ignore stock prices...
as Wall Street is betting that Fannie & Freddie will fail and the crisis will worsen.
As we have told some in private.. this is only Act II in a Greek tragedy, in which very few survive the toxic debt cloud and its deadly fallout.
Those who do survive will be welcomed in Act III by a fate that will make Act II's death seem merciful...
as a final Tsunami hits the GSE's bonds, the Fed, FDIC and PBGC, which are collectively overwhemled and forced into failure...
leaving the taxpayer on the hook and the banking, private pension and social security systems bankrupt and in total disarray.
Go ahead, scoff, laugh and say its "too big to fail" and could never happen,
then look around and see what has happened in the last 8 years.
Newsflash: Goldilock's isn't coming and this party is going to have an ugly ending.
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