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Posted: 6/16/2009 10:40:41 AM EST
http://tickerforum.org/cgi-ticker/akcs-www?post=98956

None Of This Was A Mistake
You're going to be unhappy reading this.

You've been warned.

I said - very unhappy.

Dateline August 2nd, 2002:

The basic point is that the recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

Judging by Mr. Greenspan's remarkably cheerful recent testimony, he still thinks he can pull that off. But the Fed chairman's crystal ball has been cloudy lately; remember how he urged Congress to cut taxes to head off the risk of excessive budget surpluses? And a sober look at recent data is not encouraging.

...

Bear in mind also that government officials have a stake in accentuating the positive. The administration needs a recovery because, with deficits exploding, the only way it can justify that tax cut is by pretending that it was just what the economy needed. Mr. Greenspan needs one to avoid awkward questions about his own role in creating the stock market bubble.

Any more questions folks? (Hattip Grf on the forum for the "get" on the article)

Unintentional eh Mr. Ben and Mr. Greenspan?

This is the same Pimco whose Bill Gross said this earlier this year:

PIMCO’s view is simple: shake hands with the government; make them your partner by acknowledging that their checkbook represents the largest and most potent source of buying power in 2009 and beyond.

Yeah.

Oh, and guess where Greenspan works now? That would be PIMCO.

This mess was intentional, as I have said all along.

Where was Ben Bernanke when Alan was out playing?

In the snakepit up to his neck:

Dr. Bernanke has already served the Federal Reserve System in several roles. He was a member of the Board of Governors of the Federal Reserve System from 2002 to 2005; a visiting scholar at the Federal Reserve Banks of Philadelphia (1987-89), Boston (1989-90), and New York (1990-91, 1994-96); and a member of the Academic Advisory Panel at the Federal Reserve Bank of New York (1990-2002).

So there you have it folks.

A raw statement of intent. Essentially a claim that PIMCO, who has said their strategy is to "shake the hand of government", made the statement at the time that Greenspan "needed" to create a housing bubble in the aftermath of the Nasdaq blowup - the prior bubble that he engineered, to keep the heat off him.

Well, what does history tell us folks?

Greenspan did blow the Nasdaq and Housing bubbles.

His extreme "Randian" view toward regulation (that none was ever necessary) might have been a good idea in a world where everyone bore the consequence of their own fraud and malfeasance, but he wasn't willing to do that either, as shown by refusing to accept his culpability for the Nadsaq mess, instead forcing the costs on others, hiding furtively in the shadows and claiming that "nobody could see it coming."

This sort of Machiavellian approach to "regulation" - allow everyone to pillage, rape and burn and then run like hell before you get caught, was in fact Greenspan's legacy in 2002. We had all the evidence we needed then, and what's worse, Ben Bernanke, the current protagonist, was standing right there next to Greenspan during the housing bubble's creation as a member of the Board of Governors!

These clowns - every one of them - must go.

Both Greenspan and Bernanke have been caught lying one too many times, and our nation and its economy have suffered mightily due to their malfeasance and intentional misdirection.

You're caught Ben.

You should resign, then commit Seppuku.

Its the honorable thing to do for destroying the wealth, hopes and dreams of millions of Americans.

But you don't have any honor, do you Ben?

And for that reason I call upon Congress to force you from office here and now, today, along with every other Board of Governor's member who served with Alan Greenspan and said nothing, confirming and approving of what he did by both action and inaction, along with what you have done since.

If you should refuse to leave office, then Congress must revoke The Federal Reserve Act.

You've been caught and the time for excuses has expired.

As for the mess we are now in, there is only one way out, and that's the same way we've had all along:

Force the bad debt back onto the balance sheets of those who are responsible for it (e.g. "conduits" and the like) and then force the defaults to be recognized. For those institutions this renders insolvent, shut them down and pay creditors in strict priority order.

We need a banking system, but we don't need any specific bank itself.

Such a move would allow those banking institutions who have done the right thing through all these years to capitalize on the business opportunity, it would force housing prices to immediately contract to sustainable levels, and it would force GDP to a sustainable level based on consumption not to exceed earnings power less a savings reserve. Force the US Federal and State Governments to live within their means - that's right, austerity, not audacity.

This path would be excruciatiating painful for our nation but fast - and then be over.

We can either take this path or we will suffer the consequences of continuing to try to re-inflate yet another bubble.

THE LATTER ATTEMPT WILL NOT WORK.

You saw what happened with Greenspan's and Bernanke's idiocy blowing a housing bubble to cover their own butt.

Do you want something MUCH WORSE if we try that again, or would you prefer that what must, mathematically occur, be over and done with?

IT IS TIME TO PAY THE CHECK.
Link Posted: 6/16/2009 10:46:27 AM EST


That's one hell of a way to start your 1st post.


Link Posted: 6/16/2009 10:53:06 AM EST
Originally Posted By ChinoUSMC:


That's one hell of a way to start your 1st post.




Thanks, I think. I've been lurking here for about a 6 months now.
I'm currently prepping financially for the probable market collapse and I decided I may need to really learn more about how to survive after watching a movie called Defiance.
It made me realize money ain't gonna cut it. So I did some searching and a friend recommended this site.
Link Posted: 6/16/2009 11:14:07 AM EST
Link Posted: 6/16/2009 11:30:31 AM EST
Originally Posted By Feral:
Originally Posted By BlackLabelSociety:
Thanks, I think. I've been lurking here for about a 6 months now.
I'm currently prepping financially for the probable market collapse and I decided I may need to really learn more about how to survive after watching a movie called Defiance.
It made me realize money ain't gonna cut it. So I did some searching and a friend recommended this site.


Welcome.

Lots and lots of information here on the non-financial aspects of living prepared.....even some good stuff on the financial end of things.



Thanks! I'm sure I'll be spending some time around here.
Link Posted: 6/16/2009 11:52:56 AM EST
Originally Posted By BlackLabelSociety:
http://tickerforum.org/cgi-ticker/akcs-www?post=98956

None Of This Was A Mistake
You're going to be unhappy reading this.

You've been warned.

I said - very unhappy.

Dateline August 2nd, 2002:

The basic point is that the recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

Judging by Mr. Greenspan's remarkably cheerful recent testimony, he still thinks he can pull that off. But the Fed chairman's crystal ball has been cloudy lately; remember how he urged Congress to cut taxes to head off the risk of excessive budget surpluses? And a sober look at recent data is not encouraging.

...

Bear in mind also that government officials have a stake in accentuating the positive. The administration needs a recovery because, with deficits exploding, the only way it can justify that tax cut is by pretending that it was just what the economy needed. Mr. Greenspan needs one to avoid awkward questions about his own role in creating the stock market bubble.

Any more questions folks? (Hattip Grf on the forum for the "get" on the article)

Unintentional eh Mr. Ben and Mr. Greenspan?

This is the same Pimco whose Bill Gross said this earlier this year:

PIMCO’s view is simple: shake hands with the government; make them your partner by acknowledging that their checkbook represents the largest and most potent source of buying power in 2009 and beyond.

Yeah.

Oh, and guess where Greenspan works now? That would be PIMCO.

This mess was intentional, as I have said all along.

Where was Ben Bernanke when Alan was out playing?

In the snakepit up to his neck:

Dr. Bernanke has already served the Federal Reserve System in several roles. He was a member of the Board of Governors of the Federal Reserve System from 2002 to 2005; a visiting scholar at the Federal Reserve Banks of Philadelphia (1987-89), Boston (1989-90), and New York (1990-91, 1994-96); and a member of the Academic Advisory Panel at the Federal Reserve Bank of New York (1990-2002).

So there you have it folks.

A raw statement of intent. Essentially a claim that PIMCO, who has said their strategy is to "shake the hand of government", made the statement at the time that Greenspan "needed" to create a housing bubble in the aftermath of the Nasdaq blowup - the prior bubble that he engineered, to keep the heat off him.

Well, what does history tell us folks?

Greenspan did blow the Nasdaq and Housing bubbles.

His extreme "Randian" view toward regulation (that none was ever necessary) might have been a good idea in a world where everyone bore the consequence of their own fraud and malfeasance, but he wasn't willing to do that either, as shown by refusing to accept his culpability for the Nadsaq mess, instead forcing the costs on others, hiding furtively in the shadows and claiming that "nobody could see it coming."

This sort of Machiavellian approach to "regulation" - allow everyone to pillage, rape and burn and then run like hell before you get caught, was in fact Greenspan's legacy in 2002. We had all the evidence we needed then, and what's worse, Ben Bernanke, the current protagonist, was standing right there next to Greenspan during the housing bubble's creation as a member of the Board of Governors!

These clowns - every one of them - must go.

Both Greenspan and Bernanke have been caught lying one too many times, and our nation and its economy have suffered mightily due to their malfeasance and intentional misdirection.

You're caught Ben.

You should resign, then commit Seppuku.

Its the honorable thing to do for destroying the wealth, hopes and dreams of millions of Americans.

But you don't have any honor, do you Ben?

And for that reason I call upon Congress to force you from office here and now, today, along with every other Board of Governor's member who served with Alan Greenspan and said nothing, confirming and approving of what he did by both action and inaction, along with what you have done since.

If you should refuse to leave office, then Congress must revoke The Federal Reserve Act.

You've been caught and the time for excuses has expired.

As for the mess we are now in, there is only one way out, and that's the same way we've had all along:

Force the bad debt back onto the balance sheets of those who are responsible for it (e.g. "conduits" and the like) and then force the defaults to be recognized. For those institutions this renders insolvent, shut them down and pay creditors in strict priority order.

We need a banking system, but we don't need any specific bank itself.

Such a move would allow those banking institutions who have done the right thing through all these years to capitalize on the business opportunity, it would force housing prices to immediately contract to sustainable levels, and it would force GDP to a sustainable level based on consumption not to exceed earnings power less a savings reserve. Force the US Federal and State Governments to live within their means - that's right, austerity, not audacity.

This path would be excruciatiating painful for our nation but fast - and then be over.

We can either take this path or we will suffer the consequences of continuing to try to re-inflate yet another bubble.

THE LATTER ATTEMPT WILL NOT WORK.

You saw what happened with Greenspan's and Bernanke's idiocy blowing a housing bubble to cover their own butt.

Do you want something MUCH WORSE if we try that again, or would you prefer that what must, mathematically occur, be over and done with?

IT IS TIME TO PAY THE CHECK.


welcome to the group
Link Posted: 6/16/2009 12:45:50 PM EST
One hell of a first post!!

Welcome to the forum, and join us on a campout sometime, you'd make for some interesting campfire discussions. Check the tacked threads.

Ops
Link Posted: 6/16/2009 12:54:14 PM EST
that's some recommendation. and fast. Defiance was released January 16th, 2009. 6 months to the day ......
Link Posted: 6/16/2009 1:46:01 PM EST
You should fit in nicely. Welcome.
Link Posted: 6/16/2009 3:48:37 PM EST
Thanks all for the warm welcomes.

Link Posted: 6/16/2009 5:50:09 PM EST
welcome BLS, lots of great info, w/ minimal tinfoil in the SF.
Link Posted: 6/16/2009 6:08:16 PM EST
.......and they hope their "green" bubble will save us from the housing bubble.....


Link Posted: 6/16/2009 6:14:19 PM EST
I don't believe anyone who uses that many adjectives.
Link Posted: 6/16/2009 6:26:50 PM EST
Interesting read, but that much engineering of a private sector economy is un-possible. Of course, not according to our current president
Link Posted: 6/16/2009 6:36:20 PM EST
Originally Posted By mcnielsen:
Interesting read, but that much engineering of a private sector economy is un-possible. Of course, not according to our current president


is it that hard to create a housing bubble? reduce interest rates, encourage politicians to pass legislation to force lenders to give mortgages to those who shouldn't receive them; slacken lending laws, allowing people w/ little or no down payment to get a loan; encourage people to borrow against the equity in their homes, which is often the only savings they have; get creative w/ loans allowing people to initially only pay interest so they can buy more house than they can afford. granted one person alone, was not responsible, but greenspan did allow many regulations to be relaxed, having the effect of making money cheap and available to more than before.
Link Posted: 6/16/2009 6:45:30 PM EST
And if all that was intentionally engineered, the question would be why? So that Greenspan could get a new job?
Link Posted: 6/16/2009 6:53:13 PM EST
Originally Posted By mcnielsen:
And if all that was intentionally engineered, the question would be why? So that Greenspan could get a new job?


Pure speculation, but the widespread assumption is simply politics.
Coming out of a huge dot com bubble, the quickest way to stimulate the economy is to flood the market with cheap, easy credit.
But of course, it only prolongs the overall problem, and obviously exacerbates the damage.
Link Posted: 6/16/2009 7:28:00 PM EST
Originally Posted By ffemt596:
I don't believe anyone who uses that many adjectives.



Those treacherous damned English professors...
Link Posted: 6/17/2009 3:36:43 AM EST
Originally Posted By red_on_black:
Originally Posted By ffemt596:
I don't believe anyone who uses that many adjectives.



Those treacherous damned English professors...


yeah, damn them smartguys. They'll be the ruination of everything we're striving for.
Link Posted: 6/17/2009 4:55:39 AM EST
[Last Edit: 6/17/2009 4:56:40 AM EST by skunkwerx]
Beware the "single man" theories.

The powerful people are all culpable.
It takes the Adminstration, Fed, Treasury, Senate, Congress, Fannie, Freddie, Wall Street, the Bankers, the Oil Sheiks and the rest of the scoundrels to make it all happen.

What's the common thread? The are mega-rich and/or politically powerful.
They're playing a big game of Monopoly and RISK in order to get all the money and dominate the globe.

I think we may be caught in a big game of political mousetrap.

We hear complaints about Obama (justifiably) , who blames it on Bush, who blames it on Clinton, and now I'm hearing the MSM blame it on Reagan...and so on.

Theory: It seems the politicians in each party set these big time bombs for each other, hoping to trip up the opposition and leave them holding the bag. The American people are actually holding the bag, since we pay the taxes to prop up everything.

It's a big tug of war, as they pull the rope back and forth the economy reacts. The harder they tug in one direction, the more violent the reaction.
Some of our calmest economic periods of time are when we have total grid-lock in Washington and they balance each other to the point of near stasis.

Look at the complaints about Obama's new socialism? Another "single man" theory.
I'm not defending him at all, but he needs Congress and Senate to push it through. He needs the courts to support it, he needs Bernanke to cooperate with the fiscal policy to make it work.
Without Congress (our supposed representatives) we wouldn't have TARP 1, TARP 2 and Porkulus Maximus. We wouldn't have a $1.9 trillion debt to service on Oct 1, 2009!!

Bernanke and Greenspan are just players in the big game like Clinton, Bush, Geihtner, Pelosi, Obama, Reid, Barney Frank, Dodd and the whole rest of the buffoons.

One day Americans may put it together.
Up until recently, we sit back watch them, pointing fingers at each other, we attempt to choose sides, but, perhaps soon we will realize it's ALL OF THEM!

When the heat gets hot enough, they villify someone (like Greenspan) and throw him under the bus.
It's part of the game.

The average American watches, in total distraction, as the powerful tell us, "look over there, it's something shiney!" And we fall for it every time.

Link Posted: 6/17/2009 5:00:00 AM EST
Originally Posted By mcnielsen:
And if all that was intentionally engineered, the question would be why? So that Greenspan could get a new job?


It is all about Power, Money or both.
Link Posted: 6/17/2009 5:29:10 AM EST
Originally Posted By thedave1164:
Originally Posted By mcnielsen:
And if all that was intentionally engineered, the question would be why? So that Greenspan could get a new job?


It is all about Power, Money or both.


I understand, but that's not specific enough an answer. Sorry, guys, a little too much tin foil for me on this one. The source is someone's blog, only speculative and circumstantial evidence has been provided here.

To the OP: Welcome to the forum!
Link Posted: 6/17/2009 5:33:37 AM EST
100% of the original post is a copy paste of the article itself.
The words are by Karl Denninger, a British Banker and Financial Pundit.

None-Of-This-Was-A-Mistake.html


here is Denninger's article for today, June 17th
http://market-ticker.denninger.net/authors/2-Karl-Denninger



Link Posted: 6/17/2009 7:28:53 AM EST
Originally Posted By mcnielsen:
I understand, but that's not specific enough an answer. Sorry, guys, a little too much tin foil for me on this one. The source is someone's blog, only speculative and circumstantial evidence has been provided here.


No, Denninger's contention is that the housing bubble was created by "them" to help boost the economy after the .com bubble burst. And now that housing bubble has popped, we need some other, new bubble to carry on with our deficit spending lifestyle, but the numbers are getting so big that it's hard to do.

So basically "they" create bubbles to .... profit, I guess, but then when bubble blows up they make a new one instead of fixing the underlying problems.

And welcome OP, I was same boat as you, just lurked longer
Link Posted: 6/17/2009 7:30:32 AM EST
Oh, and Denninger "Some guy's blog" is the one who first (as near as I can tell) US source who wrote about the Italian bond fiasco.

So lots of tin foil needed, but once you start going down the rabbit hole it gets hard to tell which way is up anymore.
Link Posted: 6/17/2009 8:01:31 AM EST
Originally Posted By mcnielsen:
Originally Posted By thedave1164:
Originally Posted By mcnielsen:
And if all that was intentionally engineered, the question would be why? So that Greenspan could get a new job?


It is all about Power, Money or both.


I understand, but that's not specific enough an answer. Sorry, guys, a little too much tin foil for me on this one. The source is someone's blog, only speculative and circumstantial evidence has been provided here.

To the OP: Welcome to the forum!


actually, the source is paul krugman, writing for the NY times, in 2002. krugman has a phd in economics from MIT, so i'd say he knows his stuff. denninger bases his statements on krugman's piece. essentially, what krugman is stating is that some influential people were calling for actions by greenspan to rev up the economy. iirc, at the time of krugman's article bush was pushing for a tax cut, which would have been difficult to push through if the economy was still in the tank.

in 2005, krugman expounded upon greenspan's dubious actions. link here's a snippet from the article:

But as recently as last October Mr. Greenspan dismissed talk of a housing bubble: "While local economies may experience significant speculative price imbalances, a national severe price distortion seems most unlikely."

Wait, it gets worse. These days Mr. Greenspan expresses concern about the financial risks created by "the prevalence of interest-only loans and the introduction of more-exotic forms of adjustable-rate mortgages." But last year he encouraged families to take on those very risks, touting the advantages of adjustable-rate mortgages and declaring that "American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage."

If Mr. Greenspan had said two years ago what he's saying now, people might have borrowed less and bought more wisely. But he didn't, and now it's too late. There are signs that the housing market either has peaked already or soon will. And it will be up to Mr. Greenspan's successor to manage the bubble's aftermath.


greenspan was the person who could have prevented much of the over borrowing by raising interest rates, but he didn't and people continued to borrow cheap money. obviously greenspan isn't the only person behind the bubble, but he's a key person. i do not doubt that bush and numerous politicians on both sides of the isle encouraged greenspan to get the economy moving. in fact, i wouldn't be surprised if there were an immense number of PACs and other donors who pushed the politicians who in turn pushed greenspan.
Link Posted: 6/17/2009 8:10:26 AM EST
From another Krugman article in August of 2002:
To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html
Link Posted: 6/17/2009 8:43:10 AM EST
Originally Posted By nh11b:
So basically "they" create bubbles to .... profit, I guess, but then when bubble blows up they make a new one instead of fixing the underlying problems.

Read this.

The notion that the investment accounts of the baby-boomers are being raided on purpose doesn't seem so far fetched.
Link Posted: 6/17/2009 8:49:53 AM EST
Originally Posted By mcnielsen:
Originally Posted By thedave1164:
Originally Posted By mcnielsen:
And if all that was intentionally engineered, the question would be why? So that Greenspan could get a new job?


It is all about Power, Money or both.


I understand, but that's not specific enough an answer. Sorry, guys, a little too much tin foil for me on this one. The source is someone's blog, only speculative and circumstantial evidence has been provided here.

To the OP: Welcome to the forum!


Thanks for the welcome!

There is no tin foil. It's a known fact.
Please review this chart and look at the M3 money supply. This is an accumulation of all physical cash in circulation and bank deposits (M1), + M2 (M1 + savings deposits less than $100,000) = M3.
Look at the year 2000 and beyond...they've been JAMMING credit into banks like mad. Why do you think we all have been getting credit card offers 8 times a day for the last 10 years?
http://www.sott.net/image/image/13791/full/350px_Components_of_the_United_.png
M3 isn't even real money...it's never been printed. it's digits on a computer at the central bank.
However with the use of Fractional Reserve Banking, they can basically turn $100 into $1000 of loanable money. It's a 1:10 ratio. It's good because it's backed by the FDIC and the Fed.
Link Posted: 6/17/2009 9:09:06 AM EST
An engineered housing bubble is one of those things that is totally believable, even in the absence of proof. It just fits perfectly. Look what it has been the springboard for.
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