# Jim Willie claims the end of the dollar is a few months away.



## BillS

http://www.allnewspipeline.com/They_Know_Chaos_Is_Coming.php

They Know The Chaos Is Coming" - Dr. Jim Willie Exclusive

By Live Free or Die and Susan Duclos

Dr. Jim Willie joined Live Free or Die and I for an exclusive interview, in which Dr. Willie warns us of a planned launch of a 'new dollar' that will be 'blood red', the extreme wreckage of our current financial system brought on by the 'satanic' banking cabal, the chaos coming to America in 3 separate areas and much more.

The West, meaning London, NY and western Europe will lose control and we are going to see the dollar rise, rise more.... then "die suddenly." Dr. Willie also talks about the collapse of financial instruments, how the west is lowering the price of oil to "damage Russia," how the Ukraine war comes into play, and how ultimately China will double gold prices and triple silver prices.

At approximately the 21 minute mark, Dr. Willie addresses what all this will mean to the average American, describing how pensions will be affected, those living off of any welfare program will see their benefits cut in half, food and gas shortages, lack of cash at ATMs, as well as how police across America have been militarized in preparation for the fallout because "they know the chaos is coming."

He explains how the gradual growing global rejection of the USDollar for trade will alter the banking systems, force the Fed into a huge volume increase in their bond purchase program to cover what foreign nations discard and diversify from USTreasurys. The end result will be refusal by foreign suppliers to accept over-valued USDollars in exchange for both finished goods and raw materials, even crude oil. The US import supply chain is soon to be threatened. Thus the motive and pressure will be fierce to create a new domestic dollar, the birth of the New Scheiss Dollar, which will suffer a series of devaluations.

The show is jam packed with information and is a must see in order to understand what is coming, how we got here and where we are going.


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## Geek999

Satanic banking cabal? 

Thanks for getting us back on track after all the threads on Ebola and ISIS.


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## BillS

In the past Jim Willie has refused to give time predictions, saying that the predictions are event-driven, not time driven. So the fact that he says the dollar as we know it today will die in the next couple of months is significant.


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## BillS

Geek999 said:


> Satanic banking cabal?
> 
> Thanks for getting us back on track after all the threads on Ebola and ISIS.


You laugh at me but I think you're ignorant. I think you refuse to educate yourself. I wonder sometimes if you're a pro-government troll based on some of the things you say.

For the benefit of people who may have questions:

Jim Willie is one of a number of people who say that the globalists are satanists. I'm fully convinced that the people who control the Federal Reserve also control the major corporations, the mainstream media, the educational establishment, and the leadership of both political parties.

Not only that, the globalists want to depopulate the earth to a "sustainable" level of 500 million. That means they want to kill 13 out of every 14 people on the planet. They also want a one world government that will usher in the antichrist.

Everyone should educate themselves about Agenda 21.


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## squerly

BillS said:


> In the past Jim Willie has refused to give time predictions, saying that the predictions are event-driven, not time driven. So the fact that he says the dollar as we know it today will die in the next couple of months is significant.


It would be much more interesting if it happened _before _the midterm elections than after.


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## notyermomma

:tinfoilhat:

If we're going to point fingers and label people as satanists, it may be worthwhile to learn what satanism actually is. To wit:



> We have found Satanism is the original religion of humanity. We have done our research. Satanism is based upon the ancient religions that predated Judaism and Christianity from hundreds to thousands of years.
> 
> Christianity was a reaction to the original Pagan religions, labeled as "Satanism" meaning "enemy/adversary" in Hebrew. [...] The Original Gods [Demons] were unjustly labeled as monsters and branded as "evil" to keep humanity from spiritual knowledge. Because of this, the human race has drastically degenerated both spiritually and intellectually.
> 
> Spiritual Satanism strongly advocates all learning, knowledge, inquiry, and free thought.
> 
> Spiritual Satanism supports the separation of church and state. Satanists do not push Satanism or prosyletize. [...] Spiritual Satanism is a life loving religion. Satan accepts us as we are, but guides us to advance ourselves to where we evolve to a higher level. Spiritual Satanists are free to live their lives as they choose- responsibility to the responsible. We live by natural law and encourage everyone to develop themselves to their fullest extent. [...] As opposed to the stories of how the Nazarene healed people; Satan shows us how we can heal ourselves and perform so-called miracles, using our minds and the powers of our own souls.


For the record, I'm not a Satanist. I just think that if we're going to denigrate others with a label, we should darn well know what we're talking about.



> Through empowering ourselves, we have confidence, self-respect and achieve spiritual advancement and independence.


Sounds oddly familiar, doesn't it? :goink:


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## Geek999

BillS said:


> You laugh at me but I think you're ignorant. I think you refuse to educate yourself. I wonder sometimes if you're a pro-government troll based on some of the things you say.
> 
> For the benefit of people who may have questions:
> 
> Jim Willie is one of a number of people who say that the globalists are satanists. I'm fully convinced that the people who control the Federal Reserve also control the major corporations, the mainstream media, the educational establishment, and the leadership of both political parties.
> 
> Not only that, the globalists want to depopulate the earth to a "sustainable" level of 500 million. That means they want to kill 13 out of every 14 people on the planet. They also want a one world government that will usher in the antichrist.
> 
> Everyone should educate themselves about Agenda 21.


I've worked in the financial services industry for 40 years. I've seen plenty of financial problems and just plain screw-ups. I accept that economic problems are one of the things we should prep for. I have never run into a Satanist.

If you want to have a discussion of finance or economics I'm game, but I'm not going to worry about "satanic banking cults" any more than I'm going to worry about zombies.

As for the globalists, if they want to kill 13 out of every 14 people, nuclear war is much faster and more effective. The economic system has a tendency to fail from time to time without necessarily killing anybody, merely leaving them broke and angry.


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## BillS

Geek999 said:


> Satanic banking cabal?
> 
> Thanks for getting us back on track after all the threads on Ebola and ISIS.


I'm done talking to you.


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## Geek999

BillS said:


> I'm done talking to you.


That's your choice, but I have nothing against you personally. I wouldn't mind a rational discussion of economic issues, but anything that starts off with dehumanizing, e.g. "banksters", "satanic banking cult", "antichrist", people who work in financial services isn't about financial services or the economy. It is an attack on people, just as much as if you spoke about a "satanic farming cult" or a "satanic manufacturing cult", or something similar. I happen to be one of the people who works in that industry. I object to the idiocy that I am part of a "satanic banking cult".

I don't even mind objections to what bankers do. I've objected to many things in today's law enforcement world, e.g. SWAT, insulation of cops from being held responsible for their actions, domestic spying, etc. For this I've been called a "cop basher", etc. Never have I suggested a "satanic police cult". In fact I can't think of a faster way to convince folks to ignore me than suggesting such a thing.

If you want to discuss something like the prospect of the dollar crashing, etc. that's fine with me. In fact I think such topics are highly appropriate. If you want to start with a premise that folks in financial services are a "satanic banking cult" you're going to have to wait while I finish laughing.


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## RevWC

Geek999 said:


> worry about zombies.


Why would you not worry about zombies?

vract:


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## RevWC

I think that basically bankers, government, corporations, and a lot of other folks have lost their moral and ethical compass. Not all involved included (except government).


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## Tirediron

Geek999 your user name has the "mark of the beast" inverted.....................................


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## Geek999

Tirediron said:


> Geek999 your user name has the "mark of the beast" inverted.....................................


I hadn't noticed that until now. Thanks for pointing it out. I'm sure it will make BillS feel better.


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## Geek999

RevWC said:


> Why would you not worry about zombies?
> 
> vract:


Excellent point. I'll worry about zombies before I worry about a satanic banking cult.


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## readytogo

This JIm Williwilly must be a stock market wizard because he is FULL OF SPECULATIONS WITHOUT A PAPER TRAIL in other words a; GENIUASS.

The more a man speaks the less his understood
Abraham Lincoln


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## Geek999

Economics and finance are not well developed sciences and there is a world of contrary opinion on economic matters. Sometimes our economic policy makers will get things right and sometimes they'll get it wrong. There is plenty of room for differing opinions. However, if you start off with "satanic banking cult" you're not opening a economic discussion.

I recognize that BillS is very concerned with the possibility of economic collapse. I think that is a reasonable fear and/or reason to prep. I'd be pleased to have a real economic discussion with anyone on the forum that is concerned about such issues.


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## labotomi

BillS said:


> So the fact that he says the dollar as we know it today will die in the next couple of months is significant.


He needs to drive traffic to his site for more revenue to pay his debts.


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## BillS

notyermomma said:


> :tinfoilhat:
> 
> If we're going to point fingers and label people as satanists, it may be worthwhile to learn what satanism actually is. To wit:
> 
> For the record, I'm not a Satanist. I just think that if we're going to denigrate others with a label, we should darn well know what we're talking about.
> 
> Sounds oddly familiar, doesn't it? :goink:


It's not a question of denigrating others with a label. A true Satanist worships Satan. What you're describing are pagans.


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## notyermomma

Have you asked any Satanists yourself?

I wasn't "describing" anything. I simply cut and pasted directly from the Joy Of Satan website. I know all about paganism, and the JOS website explicitly states that Satanists are not pagan. I'm guessing you didn't check my link above.


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## northstarprepper

For someone like me who does not know a lot about this Jim Willie guy, could someone explain why he is the person I should listen to rather than others? I have heard so many different opinions on the economy that I can only say that someday it will all come tumbling down, but when that will be is beyond me.

For instance, with so many dollars in circulation, how is the dollar so strong against foreign currencies? With our debt so large that it is likely that the Fed is actually purchasing government bonds under an alias, how is it that we can keep this up month after month? How are the prices of precious metals being forced so low? That should do for now. Thanks.


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## UncleJoe

northstarprepper said:


> For someone like me who does not know a lot about this Jim Willie guy, could someone explain why he is the person I should listen to rather than others? I have heard so many different opinions on the economy that I can only say that someday it will all come tumbling down, but when that will be is beyond me.


It's beyond anybody's ability to predict when the economy will crash. But I agree; it's being held together with bubblegum and string. It will take a downturn again and it will be bad. The Fed can't lower interest rates any further to stimulate the economy. It's already at 0%-.25%. All they can do is create more money which devalues what's already in circulation with the result being inflation. The more they print the higher the rate of inflation. Which to you and me; means higher prices with no income increase to offset the price rise.

I used to follow Gerald Celente closely. He's been forecasting a total economic collapse with rioting in the streets, every year since '09. Economies cycle. If you predict a problem long enough, some day you'll be right.


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## squerly

UncleJoe said:


> I used to follow Gerald Celente closely. He's been forecasting a total economic collapse with rioting in the streets, every year since '09. Economies cycle. If you predict a problem long enough, some day you'll be right.


Me too. Got tired of him always being wrong. So much of what his quarterly newsletter said was on the money but his predictions haven't been right in quite a while.


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## notyermomma

northstarprepper said:


> For someone like me who does not know a lot about this Jim Willie guy, could someone explain why he is the person I should listen to rather than others? I have heard so many different opinions on the economy that I can only say that someday it will all come tumbling down, but when that will be is beyond me.
> 
> For instance, with so many dollars in circulation, how is the dollar so strong against foreign currencies? With our debt so large that it is likely that the Fed is actually purchasing government bonds under an alias, how is it that we can keep this up month after month? How are the prices of precious metals being forced so low? That should do for now. Thanks.


NSP, thanks for bringing the conversation back on track. I apologize for the snark ... I was just having a little fun.


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## Geek999

UncleJoe said:


> It's beyond anybody's ability to predict when the economy will crash. But I agree; it's being held together with bubblegum and string. It will take a downturn again and it will be bad. The Fed can't lower interest rates any further to stimulate the economy. It's already at 0%-.25%. All they can do is create more money which devalues what's already in circulation with the result being inflation. The more they print the higher the rate of inflation. Which to you and me; means higher prices with no income increase to offset the price rise.


The problem with the inflation prediction is first, it hasn't really shown up yet in the aggregate figures (some are sure to argue the price of X has tripled, but the aggregate figures don't show it) and second it ignores the velocity of money. The money supply is a function of both the quantity of money in circulation and the velocity of that money. When the crisis hit a few years ago the velocity of money dramatically slowed and has not yet resumed it's prior pace. That has kept inflation from taking off.

This creates a dilemma for the FRB because they can control the quantity of money but not the velocity of money. They've been trying to offset the slowing velocity by increasing the quantity and don't have good tools for predicting when the velocity might pick up again, so inflation might pick up and surprise them, or we could continue in this mode for a considerable period.

The fact that craziness on the fiscal side like Obamacare, closing coal fired power plants, etc. is going on doesn't make things any easier.

I could go on about factors impacting velocity, but I think you get the idea.


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## hiwall

Everyone should read Geek's statement (post 24), I think it is important. I believe most on this forum think economic collapse is coming but all predictions of the timing are usually wrong and it could really be anyone's guess.


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## Coastal

I for one am kind of excited for the new blood red Satan Dollar! Have they released any early artwork?

Oh wait google says yes!










I would've thought satan could afford better graphic designers...but whatever.


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## Geek999

hiwall said:


> Everyone should read Geek's statement (post 24), I think it is important. I believe most on this forum think economic collapse is coming but all predictions of the timing are usually wrong and it could really be anyone's guess.


Thank you. Part of the problem is that folks think economics is well understood and that the government, or bankers, or somebody has a handle on it and we want to blame those folks when it doesn't go well. Frankly economics is in its infancy and we are also in a period of rapid technological change which makes predictions based on past experience difficult. At least we don't have economists pronouncing their models as absolutely certain like the global warming models.

If you are worried about the economy crashing, the best thing you can do is go to your local community college and take Economics 101-102. The post I made about the velocity of money is standard Economics 102 stuff. That way you will have the background to at least understand arguments on all sides when these matters are discussed.

Opinion Alert: My own view on the economy crashing is that it crashed in 2008 and we are living in the aftermath now. Nobody died. It will crash again in the future. An economic crash is certainly unpleasant and certainly something to prep for, but by itself is not a TEOTWAWKI event.


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## BillS

notyermomma said:


> Have you asked any Satanists yourself?
> 
> I wasn't "describing" anything. I simply cut and pasted directly from the Joy Of Satan website. I know all about paganism, and the JOS website explicitly states that Satanists are not pagan. I'm guessing you didn't check my link above.


Real Satanists worship Satan. They love every kind of evil. They're aren't good people. No, I didn't look at the sight. There might be a few people who call themselves satanists but really aren't. Just like you have Muslims who don't believe in killing infidels so they aren't real Muslims.


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## Tirediron

It is funny how people think that they can predict with any degree of accuracy what a economy will do, even the manipulators don't have the control people would like to believe that they do. Most of the whole world's money system has been on life support since the turn of the century.


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## Geek999

Tirediron said:


> It is funny how people think that they can predict with any degree of accuracy what a economy will do, even the manipulators don't have the control people would like to believe that they do. Most of the whole world's money system has been on life support since the turn of the century.


Manipulation is illegal. If you have any real knowledge of someone who is manipulating any market it is your responsibility to report that to the appropriate financial regulatory body.


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## BillS

northstarprepper said:


> For someone like me who does not know a lot about this Jim Willie guy, could someone explain why he is the person I should listen to rather than others? I have heard so many different opinions on the economy that I can only say that someday it will all come tumbling down, but when that will be is beyond me.
> 
> For instance, with so many dollars in circulation, how is the dollar so strong against foreign currencies? With our debt so large that it is likely that the Fed is actually purchasing government bonds under an alias, how is it that we can keep this up month after month? How are the prices of precious metals being forced so low? That should do for now. Thanks.


Jim Willie predicted that the Fed would go to a permanent zero interest rate policy and that the Fed would never taper regardless of what they said.

Jim Willie seems to have contacts that know things. I believe him when he says there's going to be a new dollar for domestic use and a different dollar for foreign trade.

He believes some things that I don't. That the government set up the earthquake off Japan that caused the tsunami. He believes that the government is controlling the weather to create a drought in California.

I believe the dollar is strong against foreign currencies for a couple of reasons: *the banksters are dumping large futures contracts on the gold and silver markets to keep them down. Some of them are for a year's worth of production.* The contracts are bringing in a lot of money. Saudi Arabia has increased oil production to hurt the Russians. Dollars are still required to buy oil from OPEC. The Saudis must be sitting on the dollars. I think there's concern about Europe and Japan and that's causing more interest in the dollar. And the velocity of the dollar continues to drop. That keeps the dollar stronger. I heard someone else on Greg Hunter's USA Watchdog that thinks the dollar will get stronger then it will die. And that will happen soon. I hate to believe in predictions like that because I've probably read 50 of them that never happened. But we'll see.


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## northstarprepper

Thanks to all of you for your insight. I will continue to read up on economics and I am sure that about when I am starting to understand it all, it will all fall apart. But oh well, I will try to learn anyway. Thanks.


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## BlueShoe

I believe Jim Sinclair was the first to predict that and he called it "QE To Infinity". I'm not that familiar with Jim Willie, but Jim is a Seligman, and his dad basically founded the NASDAQ, wasn't it? The family is steeped in big name banks and investment houses, having been on the ground floor when some were founded. Jim missed a predicted date a couple years back himself, though.


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## Geek999

Predictions by anyone are simply opinions that may or may not prove to be correct. The value in those predictions is often not in what is predicted but the logic that supports the prediction. So if someone tells me that there is a prediction that the dollar will rise then fall, that is useless unless it is accompanied by some sort of reasoning that allows you to agree or disagree.

The crisis in 2008 had a variety of effects. One was the decline in velocity I mentioned earlier. Another was a decision that bank capital ratios needed to be significantly strengthened. There are basically three ways a bank can improve its capital ratio, 1) reduce lending, 2) retain profits instead of paying out dividends, 3) raise new equity.

All three of those have been used by banks in various mixes, but 1 is the easiest to implement. The reduction in lending has had two effects: 1) decreasing the money supply at a time the FRB was trying to increase the money supply, and 2) leaving a lot of borrowers without a place to get a loan, particularly mortgage borrowers.

QE has been seen as a tool to address both of those problems. While I think "QE to Infinity" is a bit of hyperbole, I would say that someone predicting in say, 2011 or 2012, that QE would run a very long time would look like a pretty good call with hindsight, albeit QE is now being reduced and should be over by the end of the year. The artificially low rates similarly will come to an end though it looks like that is far enough into the future that it is hard to see when that will be.

I would guess that normal interest rates won't be until the FRB feels we have a strong, well capitalized banking system that is prepared to support the level of lending consistent with a vibrant economy. We aren't there yet and that's a big part of why the economy remains weak.

Note that while the FRB is trying to get bank capital ratios up, the various regulatory agencies are crowing about taking record fines out of one bank after another. These fines are a direct reduction of bank capital and are therefore slowing the process of getting back to a desirable level of lending.


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## BlueShoe

Jim said it in 2010, I believe. Seems to me it was when QE II was officially announced where in plans were also announced about ending QE. He refuted the plans to end it and coined the term 'to infinity'.


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## squerly

Geek999 said:


> Note that while the FRB is trying to get bank capital ratios up, the various regulatory agencies are crowing about taking record fines out of one bank after another. These fines are a direct reduction of bank capital and are therefore slowing the process of getting back to a desirable level of lending.


As a side note to your note, regulations like the "ability to repay" rule (given to us by the Dodd-Frank ACT) do nothing to promote increased velocity. And North Carolin's SAFE Act goes a step further by making sure that non-bank lenders are limited in filling the lending void created by Dodd-Frank. (Or it could be that the SAFE Act is just a BS law backed by banks, designed to limit competition from outside sources and keep the pie for themselves???)

Either way, unnecessary regulations (many of which we can thank the Obama administration for) are smothering growth in lending and are prime examples of what happens when our politicians pass laws that are poorly thought out or benefit rich donors/lobbyists instead of the nation as a whole.


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## Geek999

Most of Dodd-Frank is just overhead.


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## RevWC

"One of the reasons why we have not seen even more inflation is because the velocity of money is extraordinarily low. In general, when an economy is healthy money tends to flow through the system rapidly. People are buying and selling and money changes hands frequently. But when an economy is sick, money tends to stagnate. And that is exactly what is happening in the United States right now. In fact, at this point the velocity of the M2 money stock has dropped to the lowest level ever recorded..."


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## Geek999

Thanks for the graph. It makes the point much clearer. The FRB's problem controlling inflation will be when the velocity turns up again.

Anybody who claims to know when that will be? Include reasoning when you make your prediction!


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## BlueShoe

Christmas. Christmas shopping = temporary.


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## hiwall

Or Ebola = no Christmas shopping. Also please note that our own DOW stock market has dropped a thousand points in about a week. Economic news from the USA and the EU is all bad. Maybe, just maybe, something will happen to make us all glad we are preppers.


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## goshengirl

hiwall said:


> Maybe, just maybe, something will happen to make us all glad we are preppers.


Or crying because we haven't prepped enough?


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## labotomi

hiwall said:


> Or Ebola = no Christmas shopping. Also please note that our own DOW stock market has dropped a thousand points in about a week. Economic news from the USA and the EU is all bad. Maybe, just maybe, something will happen to make us all glad we are preppers.


If something happens I will be glad I'm as prepared as I am, however I have no doubt that I would be happiest if that something never happened.


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## BillS

squerly said:


> As a side note to your note, regulations like the "ability to repay" rule (given to us by the Dodd-Frank ACT) do nothing to promote increased velocity. And North Carolin's SAFE Act goes a step further by making sure that non-bank lenders are limited in filling the lending void created by Dodd-Frank. (Or it could be that the SAFE Act is just a BS law backed by banks, designed to limit competition from outside sources and keep the pie for themselves???)
> 
> Either way, unnecessary regulations (many of which we can thank the Obama administration for) are smothering growth in lending and are prime examples of what happens when our politicians pass laws that are poorly thought out or benefit rich donors/lobbyists instead of the nation as a whole.


Geek acts like he doesn't know that all the big banks are already dead. The government passed a law that forces the Financial Accounting Standards Board to allow the too big to jail banks to value their toxic mortgages at any price they want to. So it doesn't matter if that $500,000 mortgage is on a property currently worth $200,000. They still carry it on their books at $500,000 or more. The big banks survive because they're allowed to borrow money from the Fed at almost 0%. They use that money to buy treasury bonds. That's how they survive on life support.

Not only that, the big banks have trillions of dollars in derivative exposure. Mostly interest rate derivatives. Which means that when interest rates rise those banks will be wiped out.


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## Geek999

BillS said:


> Geek acts like he doesn't know that all the big banks are already dead. The government passed a law that forces the Financial Accounting Standards Board to allow the too big to jail banks to value their toxic mortgages at any price they want to. So it doesn't matter if that $500,000 mortgage is on a property currently worth $200,000. They still carry it on their books at $500,000 or more. The big banks survive because they're allowed to borrow money from the Fed at almost 0%. They use that money to buy treasury bonds. That's how they survive on life support.
> 
> Not only that, the big banks have trillions of dollars in derivative exposure. Mostly interest rate derivatives. Which means that when interest rates rise those banks will be wiped out.


The so-called "toxic mortgages" are an ever smaller issue as time goes by and mortgages either pay off or otherwise settle through foreclosure, short sales, etc.

Capital ratios are improving, though they aren't yet where the regulators want them. Don't take my word for it, pick whatever banks you are interested in and compare their call reports from 2008 to now.


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## Elinor0987

Geek999 said:


> Thanks for the graph. It makes the point much clearer. The FRB's problem controlling inflation will be when the velocity turns up again.
> 
> Anybody who claims to know when that will be? Include reasoning when you make your prediction!


I'm not sure when the velocity will pick up again but there is an often overlooked detail about this. It is often stated that a crisis in confidence in the dollar or a large enough decline in foreign usage of the dollar will cause an increase over here. What if it is a foreign government or businesses overseas that needs money and has to liquidate their dollar holdings? All of the dollars will eventually end up here and I don't know how many of them would have to be sold in any given point in time to cause an uptick in the velocity but since the worldwide economies are tanking, it seems more probable every day.


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## Geek999

Elinor0987 said:


> I'm not sure when the velocity will pick up again but there is an often overlooked detail about this. It is often stated that a crisis in confidence in the dollar or a large enough decline in foreign usage of the dollar will cause an increase over here. What if it is a foreign government or businesses overseas that needs money and has to liquidate their dollar holdings? All of the dollars will eventually end up here and I don't know how many of them would have to be sold in any given point in time to cause an uptick in the velocity but since the worldwide economies are tanking, it seems more probable every day.


Usage goes up and down all the time. What people express concern about is the money all coming back at once. However, for that to happen foreigners would have to buy stuff here. That would cause an unprecedented economic boom along with the inflation everyone fears. The proper policy response by the FRB would be to stop stimulating.


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## BlueShoe

A few yrs ago the fedgov spokesman made a State of the Union speech stating a goal to "double" our exports within a two yr period. The easiest way to do that is by lowering the value of the Dollar (currency war) and inviting foreigners to buy your stuff.

I don't think anyone believes that we have been successful in doubling our exports at this moment.


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## Geek999

BlueShoe said:


> A few yrs ago the fedgov spokesman made a State of the Union speech stating a goal to "double" our exports within a two yr period. The easiest way to do that is by lowering the value of the Dollar (currency war) and inviting foreigners to buy your stuff.
> 
> I don't think anyone believes that we have been successful in doubling our exports at this moment.


Stating a goal and having a clue about how to achieve it are two different things.


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## Marcus

Geek999 is correct about several things on this thread.

The velocity of money is at historic lows (or just off the lows... same difference.)

Economics isn't really a Science....yet. It's still in the stage of Renaissance Age Chemistry/Alchemy. Certain things are known to be true on the Micro level while other things which are sometimes contradictory are known to be true at the Macro level.

BillS is correct about the financial derivative time bomb. It was one of the causes of the Crash in 08, and yet it has never been adequately addressed. The holders of these instruments, which are very thinly traded if at all, are hoping that the passage of time will cause this problem to go away as mortgages are paid off or re-financed.

But the *real* issue about money and finance revolve around sound currency. The US dollar is appreciating in value against other currencies, but it's not due to some fundamental soundness in the USD. Rather the Euro-Economies have much greater problems in their countries than what we face here. Tax rates are prohibitive, unemployment is rife, and a socialized state cause these countries to not be competitive on the world stage. Even Germany, who makes equipment that makes things, has seen their economy falter. And remember, Germany has been carrying most of the other EU countries since 2008.

The near term issue for the US has to do with where we are in the business cycle. Since the recession supposedly ended back in 2009, the economy has grown somewhat anemically for various economic and political reasons. We're now about due for another recession which will again lower our standard of living.


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## Geek999

Marcus said:


> Geek999 is correct about several things on this thread.
> 
> The velocity of money is at historic lows (or just off the lows... same difference.)
> 
> Economics isn't really a Science....yet. It's still in the stage of Renaissance Age Chemistry/Alchemy. Certain things are known to be true on the Micro level while other things which are sometimes contradictory are known to be true at the Macro level.
> 
> BillS is correct about the financial derivative time bomb. It was one of the causes of the Crash in 08, and yet it has never been adequately addressed. The holders of these instruments, which are very thinly traded if at all, are hoping that the passage of time will cause this problem to go away as mortgages are paid off or re-financed.
> 
> But the *real* issue about money and finance revolve around sound currency. The US dollar is appreciating in value against other currencies, but it's not due to some fundamental soundness in the USD. Rather the Euro-Economies have much greater problems in their countries than what we face here. Tax rates are prohibitive, unemployment is rife, and a socialized state cause these countries to not be competitive on the world stage. Even Germany, who makes equipment that makes things, has seen their economy falter. And remember, Germany has been carrying most of the other EU countries since 2008.
> 
> The near term issue for the US has to do with where we are in the business cycle. Since the recession supposedly ended back in 2009, the economy has grown somewhat anemically for various economic and political reasons. We're now about due for another recession which will again lower our standard of living.


Re: Derivatives. We've touched on the subject in other threads. The term is too broad to be useful in studying problems. They are primarily used to either transfer risk or repackage something, e.g. Mortgages, without really changing the risk in the marketplace. They don't actually create risk unless used by someone who wants to acquire a risk.

If you want to discuss a particular form of derivatives, I can explain actual usage as opposed to what the conspiracy theorists think is going on.


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## Marcus

Geek999 said:


> They are primarily used to either transfer risk or repackage something, e.g. Mortgages, without really changing the risk in the marketplace. They don't actually create risk unless used by someone who wants to acquire a risk.


There's a lot of people in Europe who bought AAA rated mortgage derivatives (2nd tranche) for the higher interest it paid and then got burned back in 2008-2009.

IMHO, most of the mortgage derivatives were all a marketing gimmick to increase profits for the big banks while selling sophisticated investments to novice investors who only wanted a higher rate of return than was available on CDs.

Some in the insurance industry were bankrupted by the coverage they offered on mortgage defaults for these AAA rated derivatives. Only a bailout allowed them to avoid liquidation.


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## Geek999

Marcus said:


> There's a lot of people in Europe who bought AAA rated mortgage derivatives (2nd tranche) for the higher interest it paid and then got burned back in 2008-2009.
> 
> IMHO, most of the mortgage derivatives were all a marketing gimmick to increase profits for the big banks while selling sophisticated investments to novice investors who only wanted a higher rate of return than was available on CDs.
> 
> Some in the insurance industry were bankrupted by the coverage they offered on mortgage defaults for these AAA rated derivatives. Only a bailout allowed them to avoid liquidation.


The process of repackaging mortgages has a purpose and it does not create any new risks. The real risks came entirely from the underlying mortgages.

Here is what happens with mortgages: Mortgages normally pay down the principal in a stream that changes over the life of the mortgage, with the actual duration of the mortgage being highly uncertain. This is not an attractive investment for most lenders/investors. What those investors desire is an investment with a maturity that matches their own needs, e.g. 5 years or 10 years, not some variable between 6 months and 30 years.

The process of packaging mortgages into MBS securities and then the MBS into CMOs makes the maturity of the resulting tranches much more predictable. The only losses on either an MBS or a CMO held to maturity would be on the underlying mortgages and pre-2007 those were highly predictable as well.

Problems with the underlying mortgages resulted in the predictability going away and created problems in buying and selling the derivatives, but they had not in fact acquired any new risk for someone who could hold them to maturity. The risk at the start was that the underlying mortgages would go bad and that was still the case. The only difference was the risk went bad for the first time since the 1930s and instead of banks holding that risk as they did in the 1930s, the risk was now held by whoever had bought the CMOs. In other words, the CMO allowed the transfer of risk from the banks who originated the mortgages to whoever wanted an instrument with a highly certain maturity.

This process has been in place since the S&Ls went away during the 1980s. Commercial banks who write mortgages today are typically short term lenders. While they have the operational ability to write mortgages, they don't generally look for long term investments, so without an outlet like the CMO marketplace they simply would not write the mortgages in the first place and getting a mortgage would be significantly more difficult for even good borrowers in good times.

There is one new risk that became apparent during the crisis, which came not from the derivatives per se, but from the then relatively new requirement to use mark to market accounting for instruments that folks intended to hold to maturity. Let's say Bank A is holding a $100 million CMO and the crisis hits and the market dries up, but the underlying mortgages are still paying. Bank A has not lost a dime on the CMO but since no one knows what will happen next buyers will only pay 20 cents on the dollar for the CMO. If Bank A is still willing to hold the CMO then it really doesn't matter, but the accounting rules force them to mark down the value on their books. The result is they appear to be taking a loss when nothing has actually happened to their CMO since they never intended to sell it anyhow. Suddenly the bank looks wobbly as losses are being booked when nothing actually happened.

The banks understood this in 2008 and felt the individual CMOs might still pay 80-90 cents on the dollar, or even pay in full if they simply waited. This is why the original TARP program didn't work. The government wanted to buy these derivatives for 20 cents on the dollar and the banks understood that regardless of short term market conditions these would ultimately be worth something much closer to full value.

At the end of the day the only money lost was due to the underlying mortgages not being paid. All of the short term pain was due to mark to market accounting and illiquid markets, not any actual losses on the derivatives that would not have existed if the derivatives had never been used to package the mortgages.

For a derivative holder this is not unlike what you would experience if you purchased a bond. Let's say you buy a 10 year bond at 100. The bond drops in price to 80, then climbs to 110 and ultimately pays at 100 exactly like it was supposed to. Did you have a 20% loss when it was at 80? Only on paper. Did you have a 10% gain at 110? Again only on paper. You actually got exactly what you expected when you collected your 100 at the maturity of the bond.

In the case of the mortgage crisis there were some real losses due to defaulted mortgages, but what appeared to be losses on derivatives were simply changes in market valuation that were only a problem if one was forced to sell at the bottom of the market.


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## Marcus

Geek999 said:


> The process of repackaging mortgages has a purpose and it does not create any new risks. The real risks came entirely from the underlying mortgages.


You are correct and the *overall* risk is unchanged. However the *distribution* of that risk has been greatly changed by using tranches.

In the pre-tranche days, a group of mortgages were packaged into a government backed bond (Ginnie Mae, Fannie Mae, Freddie Mac) and that bond was sold in the marketplace.

For example, 1,000 mortgages of $100,000 each were made into a single $100 million bond. Let us also assume in this example that the average interest rate on those mortgages was 6%. If 10 of these mortgages defaulted, the effective interest rate paid on the investment would drop to 5.94%. If 100 defaulted, the interest drops to 5.4%. If 300 defaulted, the interest drops to 4.2% If half defaulted, it would drop to 3%. This assumes no recovery or sale of non-performing assets. In the RW, there will usually be some sort of recovery or sale.

The only real risk (besides massive defaults) were if interest rates dropped as the principal was returned. Then it would not be possible to achieve the same rate of return (6%) as in the original investment. I had this happen to me when interest rates dropped and the debtors re-financed. *But I didn't lose any capital.* It was merely repaid early.

Now let's take the same example using a 3 tranche (60-30-10) MBS. Tranche 1 (60% of the pool of mortgages) would be AAA rated and might only pay 4% Tranche 2 (30%) might pay 6% and this is where the trouble starts. *Rating agencies were also rating these as AAA when there was significantly more risk involved in owning this investment.* Tranche 3 (10%) might pay 8% and be BBB rated.

Now lets look at the same default levels and their effects on these investments. If 10 mortgages default, the loss is *entirely* absorbed by those holding Tranche 3 and reduces their effective return to 7.2%. If 100 default, Tranche 3 loses *their entire investment.* If 300 default, Tranche 3 is again wiped out and Tranche 2 loses 2/3 of their investment. If 500 default, Tranches 2 & 3 are wiped out and Tranche 1 loses 1/6 of their investment which reduces their return to ~3.4%. Again there will likely be some recovery of assets, but Tranche 1 is made whole first, then Tranche 2, and finally Tranche 3 if there are any assets left.

The fact that these Tranche 2 MBS were over-rated and marketed to unsuspecting novice investors in Euroland has blackened the eye of all of the big banks and is one of the reasons very few small investors are interested in touching any sort of MBS.

Compare the effects of the pre-Tranche and post-Tranche days and put yourself in the shoes of a small investor. Would you rather get half of the promised interest with a chance of some sort of recovery of principal *or* would you rather only hope for a chance of some sort of recovery?

This scheme was nothing more than legalized stealing from trusting people. Oh and by the way, the big banks also charged quite a bit more in fees for doing this crap.

The markets are illiquid because, while you can dress up a pig in any manner you choose, in the end it's still a pig. While mark to market certainly exasperated the situation, trying to solve a problem that doesn't really exist (steady income streams from mortgages) is the root cause.

There are bond mutual funds for those who want a steady stream of income.


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## BlueShoe

The risk remains unchanged, but is transferred to the next 'sucker'.  The next facet is what a lot of banks are now paying fines for doing; for colluding with rantings agencies who were rebundling high risk 'assets' as something higher value than they actually are/were. For intentionally writing risky loans that they were able to pawn off to another entity, in reality they were scamming the system while regulators were not doing their jobs. THAT is the underlying cause of the economic collapse. And that is where the discussion takes a turn most times.

If the risk remains the same, the probability for failure doesn't increase/decrease. If the risk was rebundled as lower risk the probability for failure doesn't go away. It gets deceptively hidden and the overall health of the system is artificially reported by the 'banks' and government. THAT is where the reality separates from the smoke. When the asset doesn't perform as the companies described the weakness is exposed putting pressure on the rest of the sector. When the rest didn't perform, more faltering and on and on. They built a house a cards and we all know that.

Marcus, I've read your posts for years and you have an honest understanding of what is and did happen that I always pay attention to. Geek, you have the insiders view to the industry and I also read/watch your posts for insight. Bill is becoming more frustrated, but I agree with the direction of his opinion about the top banks and they're usurious and/or unhealthy appetite for control of people and assets.


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## hiwall

Sometimes people forget the only reason banks are in business. Banks only purpose is to make money. They are not there for the public good or the betterment of our country or any other reason. They are only there to make money for their owners/investors. Banks are all run by people and some of those people running banks are bound to be crooks, just like some plumbers, bakers, soldiers, cops, or whoever. Our nation has more than a million laws to supposedly curb illegal behavior but in the pursuit of money people often skirt the edges of law to make a bigger profit. As time goes by those skirting the law get closer and closer to the edge and often then go past the edge. When they break the law they are sometimes caught and sometimes not. Bankers are not evil, it is just another business trying to turn the biggest profit possible like any other business. We all deal with banks just like we all deal gas stations, dentists, doctors, grocery stores, and other businesses. I do not dislike banks but at the same time I try to minimize my dealings with them.


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## BlueShoe

I disagree quite a bit with some of that. But seeking a legitimate/moral profit is not unhealthy. The method can be unhealthy and as evidenced in recent years criminal. Some of the top banks are run by money junkies. Studies show that some top bankers are cocaine addicts too.

At the same time, it would be hypocritical to believe we don't benefit in this nation GREATLY by the actions of those banks that serve the public and government, and we benefit at the hands of oppressing others in other nations. Our quality of life isn't all because we are all hard workers. We're not. Some of the recent events have backfired on us, but being the powerful nation that we are has given us the power to be on top of the heap.

Many of the top banks/bankers _do_ serve evil in many regards, and evil can enter anywhere when an unhealthy appetite results in collusion/deceit for profit. Not just at the top.


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## Geek999

From the past several posts it seems you have all gotten my point that packaging mortgages into derivatives does not create a new risk. It transfers the inherent risk in the mortgages to a new owner.

Regarding interest rates and terms like "usurious", it is worth noting what the interest rate is payment for 1) anticipated inflation, 2) time value of money, and 3) risk of default. Mortgages are traditionally a bargain when the rates are measured against those factors, so to suggest banks are charging "usurious" rates on mortgages is absurd. To suggest they are charging usurious rates on any loan is also in the eye of the beholder. One person may think that a rate is too high and another may think the same rate is a bargain. Most states do have usury laws in place and I don't believe there have been any charges of usury in recent years, so rates have at least been within legal standards, even if they don't meet your personal preferences for lower rates.

Regarding the allegation of "collusion" between the ratings agencies and banks I would suggest that is simply a derogatory term for what was, and still is, normal business practices. In order to obtain a rating from a rating agency, the bank hires the agency and pays a fee. The government requires that ratings be in place for any publicly sold security. Ratings agencies can, and do, object if the mortgages included in a mortgage backed instrument are of such poor quality that the rating desired is not warranted. The result is generally swapping out the lower quality mortgages for some higher quality mortgages to bring the quality of the package up to a level satisfactory to the rating agency.

Prior to the crisis, mortgages were perceived to be extremely safe (even the ones we now know were dicey) because the sense was 1) homeowners would default on all other bills before defaulting on the mortgage, and 2) even if they did default, the value of the home would cover it. If you want to suggest that both the banks and the ratings agencies were woefully wrong on those assumptions that would be fair. To toss around allegations that there was "collusion" or something else sinister in the process ignores the fact that 1) the government required writing mortgages for lower income borrowers, and 2) the government requires the ratings, and 3) the assumptions had proven true since the Great Depression.

Bankers aren't geniuses able to tell the future and using that knowledge to deliberately screw people over. If they were that prescient then they'd have been somewhere else when the crisis occurred. If you wanted to suggest they were a bunch of fools, that I would not argue.

As for bankers being criminal I would argue that point with two of my own: 1) If you have ever been arrested (not convicted, merely arrested) for anything more serious than a DUI you won't be employable in the financial services industry. You'd have an easier time gaining employment in almost any other industry if you were prone to breaking laws. 2) There has not been a single high profile conviction stemming from the mortgage crisis. The few convictions for financial crimes that have occurred in recent years have been unrelated to the mortgage crisis, e.g. Bernie Madoff. Widespread stupidity is not a crime.

Now for those that still think that banks are not trustworthy I have a very strong suggestion. Don't do business with them! There is nothing that requires you to use a bank for anything. Banking is only done between consenting adults.


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## BlueShoe

If you work for a corporation, they probably require a direct deposit. I don't trust the fed gov either, but they have men with guns pointed in our direction forcing us to comply.

The banks got bailed didn't they? Genius. They always do in this society. Didn't see anyone call mortgage rates usurious but anyone paying attention knows of the criminality collusion of the LIBOR scandal wherein rates were being faked. 

And insiders with common sense keep pointing out that the game is still rigged because with all the criminality that went on, nobody is going to jail. 

That's The Golden Rule. Banks are a scourge and a blessing at the same time. Depends on perspective. Criminality is just what it is.


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## Geek999

BlueShoe said:


> If you work for a corporation, they probably require a direct deposit. I don't trust the fed gov either, but they have men with guns pointed in our direction forcing us to comply.
> 
> The banks got bailed didn't they? Genius. They always do in this society. Didn't see anyone call mortgage rates usurious but anyone paying attention knows of the criminality collusion of the LIBOR scandal wherein rates were being faked.
> 
> And insiders with common sense keep pointing out that the game is still rigged because with all the criminality that went on, nobody is going to jail.
> 
> That's The Golden Rule. Banks are a scourge and a blessing at the same time. Depends on perspective. Criminality is just what it is.


Generally direct deposit is convenient, not a requirement, but you can always direct it to a credit union or some other place if you don't want to deal with a bank.

No the banks did not get "bailed". They got extorted. Being summoned to Washington and told "we're taking 5% of your business on terms that are not negotiable and oh by the way if you don't accept we'll put you out of business", is not a bailout. It is an "offer you can't refuse".

The LIBOR "scandal" had government direction and then government complaining about it when it was over. Furthermore the rates involved were entirely between banks. LIBOR stands for "London Inter Bank Offered Rate", i.e. a rate banks charge each other. The public was not involved unless one had a product pegged to LIBOR (uncommon).

I'm not sure who you are referring to as "insiders with common sense". I work with bankers routinely and I have not heard anyone from the industry make any such comment.

Again I strongly suggest if you really believe bankers are criminals, then just don't do business with them. Saying such a thing makes about as much sense as "doctors are criminals" or "plumbers are criminals". If you have any real evidence of a criminal act by anyone in the financial services industry there are regulators who would very much like to learn what you know. If you're just repeating what someone else has said with no direct knowledge, then you are engaged in idle gossip.


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## BlueShoe

Geek999 said:


> Generally direct deposit is convenient, not a requirement, but you can always direct it to a credit union or some other place if you don't want to deal with a bank.


My paycheck goes to a credit union. All the people getting SNAP cards got those by the banks lobbying Congress to give them exclusivity to government welfare funds which are redeemed at stores.



> No the banks did not get "bailed". They got extorted. Being summoned to Washington and told "we're taking 5% of your business on terms that are not negotiable and oh by the way if you don't accept we'll put you out of business", is not a bailout. It is an "offer you can't refuse".


They're still getting bailed out. They wouldn't exist unless the taxpayer was used to replace them as the party of last resort on repayment. They paid a criminal government it's portion in fines for the benefit of not having to serve time for crashing the world economy and evaporating a trillion dollars in assets in short order...and so insiders could claim they're innocent if they don't have to serve time.



> The LIBOR "scandal" had government direction and then government complaining about it when it was over. Furthermore the rates involved were entirely between banks. LIBOR stands for "London Inter Bank Offered Rate", i.e. a rate banks charge each other. The public was not involved unless one had a product pegged to LIBOR (uncommon).


Which government? Please post proof. Did bankers commit conspiracy regarding LIBOR rates or not? Yes or no?



> I'm not sure who you are referring to as "insiders with common sense". I work with bankers routinely and I have not heard anyone from the industry make any such comment.


You read it last time you tried this vein of apologetics for criminality in another thread. I can't help with someone else's selective memory.



> Again I strongly suggest if you really believe bankers are criminals, then just don't do business with them. Saying such a thing makes about as much sense as "doctors are criminals" or "plumbers are criminals". If you have any real evidence of a criminal act by anyone in the financial services industry there are regulators who would very much like to learn what you know. If you're just repeating what someone else has said with no direct knowledge, then you are engaged in idle gossip.


The fact that some bankers are criminals and behaved in a criminal or immoral manner, especially within the top 6-8 banks, does not change depending on any person's non-criminal activity with them. Why would you believe it does? Please explain this. That's exactly like saying if you don't like rapists owning an airline then don't fly on airplanes. How does that change the immoral behavior committed? I don't commit crimes with criminal bankers either.

I believe bills would agree that some of the major bankers are among the lowest life forms on the planet...ever to inhabit the planet. That includes the regulators who don't do the job of policing them.


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## Geek999

You're now into a "criminal government", so I suggest you just stick to your position. I'll stick to mine.


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## BlueShoe

You've been talking about the regulators too. Those are government representatives supposedly working for the good of the people...but not.


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## Geek999

I'll go along with that. I'm sure all the LEOs here will be glad to know you and I agree that we have a criminal government.


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## DM1791

Would you guys agree that the Fair and Affordable Housing Act played a major role in setting the stage for the mortgage collapse that ultimately led to the 08 banking and credit crash? 

The way I understand the law, certain criteria for loan origination had to be suspended in order to maintain "demographic diversity" among mortgage holders. If a bank is not allowed to adequately and accurately screen its candidates for mortgages based on financial criteria alone, then there's no way they can accurately predict the risk associated with that mortgage.

Just wanted to get some opinions of people more in the know than myself.


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## BlueShoe

You haven't read the thread if you're asking.


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## Geek999

DM1791 said:


> Would you guys agree that the Fair and Affordable Housing Act played a major role in setting the stage for the mortgage collapse that ultimately led to the 08 banking and credit crash?
> 
> The way I understand the law, certain criteria for loan origination had to be suspended in order to maintain "demographic diversity" among mortgage holders. If a bank is not allowed to adequately and accurately screen its candidates for mortgages based on financial criteria alone, then there's no way they can accurately predict the risk associated with that mortgage.
> 
> Just wanted to get some opinions of people more in the know than myself.


Yes. The requirement to write mortgages for people with inadequate finances was the trigger for the crisis. Other factors exacerbated it, but that's where it started.


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## BlueShoe

You meant the DESIRE to write mortgages to people with inadequate finances, that could in turn be sold as AAA rated to retirement accounts/hedge funds was the trigger for the crisis.

That is the reason the individual above us posted what he did...to recreate the argument all over again.


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## BlueShoe

BillS said:


> In the past Jim Willie has refused to give time predictions, saying that the predictions are event-driven, not time driven. So the fact that he says the dollar as we know it today will die in the next couple of months is significant.


Just as a marker, it's been 1 month since this was posted. To be accurate can we say that the event should take place by sometime in January? I don't have 44 minutes to devote to the video so I don't know that he called his shot of a couple of months. Just accepting that he did.


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## Geek999

BlueShoe said:


> You meant the DESIRE to write mortgages to people with inadequate finances, that could in turn be sold as AAA rated to retirement accounts/hedge funds was the trigger for the crisis.
> 
> That is the reason the individual above us posted what he did...to recreate the argument all over again.


No, I meant exactly what I said.


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## BlueShoe

I know. And I posted the truth.


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## DM1791

BlueShoe said:


> You meant the DESIRE to write mortgages to people with inadequate finances, that could in turn be sold as AAA rated to retirement accounts/hedge funds was the trigger for the crisis.
> 
> That is the reason the individual above us posted what he did...to recreate the argument all over again.


 I really wasn't trying to recreate an argument. I tried reading the entire thread, but got a bit lost in the technical jargon of financials. When we get into made up names for imaginary products sold on virtual markets, the terminology gets a bit confusing for us laymen.

I was really just trying to get a feel for how much of a part that law played, because the way I understand it (and I am by far no jurist, legislator, or anything else) the banks were required to adjust their lending criteria under certain conditions and to disregard what might otherwise have been considered disqualifying problems with credit history, income, etc.

Now, I'm sure the bankers were all too happy to comply because they knew that by repackaging the products and selling them, the bad loans would not rest on their balance sheets any longer than necessary and they could turn a healthy profit with the repackaged products (all insured by 3rd party companies like AIG, of course). I just wasn't sure if the initial cause was the bankers' ever hungry lust for profits or the laws' woefully idealistic vision of how credit markets _should_ work.

I guess the take away I have from this entire thread (the parts I have been able to wrap my limited powers of understanding around) is that government was trying to solve what they saw as an injustice, and that opened the door for the banks to exploit a market weakness and attempt to make a profit on it. Things were all good for a while (as they usually are with bubbles) and because they were good, people assumed they always would be. When things popped, the banks had made no real provisions and plans to absorb the impact, and they panicked, the gov't panicked, and everything ended up more screwed up than they began with.

I mean, it doesn't take an expert to realize that if the problem going in was that these institutions became "too big to fail" and then they started failing.... then how can the answer possibly be to make them even bigger? Every single bank that was determined "too big to fail" and required a bailout is now larger and holds a greater percentage of cumulative deposits (private and corporate) than they did before the crash. How could that possibly have made things safer and more stable in the financial markets?


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## BlueShoe

Understood, then.

Very little happens in DC that isn't actively lobbied for. If DC acts it's basically for two reasons. Overwhelmingly the sector in question has lobbied for it at great expense, _or_ some entity has lobbied for it to extract income from that sector. the Luxury Tax of the 1980s is an example of the 2nd. Most always it's the 1st that rules, as was done prior to the collapse. Two words prove this fact. Glass-Steagall. The collapse doesn't happen without it's repeal.

Along that line, does anyone believe that the banking/mortgage/financial sector doesn't have the power and funding to get any desired result they want out of legislative bodies? They lobbied and succeeded at having Glass-Steagall repealed which was created after the Great Depression to specifically prevent 'banks' from becoming too big to fail. It still hasn't been put back in place.


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## Geek999

BlueShoe said:


> Understood, then.
> 
> Very little happens in DC that isn't actively lobbied for. If DC acts it's basically for two reasons. Overwhelmingly the sector in question has lobbied for it at great expense, _or_ some entity has lobbied for it to extract income from that sector. the Luxury Tax of the 1980s is an example of the 2nd. Most always it's the 1st that rules, as was done prior to the collapse. Two words prove this fact. Glass-Steagall. The collapse doesn't happen without it's repeal.
> 
> Along that line, does anyone believe that the banking/mortgage/financial sector doesn't have the power and funding to get any desired result they want out of legislative bodies? They lobbied and succeeded at having Glass-Steagall repealed which was created after the Great Depression to specifically prevent 'banks' from becoming too big to fail. It still hasn't been put back in place.


Sometimes they get their way and sometimes they don't. Dodd-Frank is a good example of getting something they didn't want.


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## BlueShoe

They got a partial on that one. Dodd-Frank hasn't fixed the gaping hole that was left when Glass-Steagall was repealed.


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## Geek999

DM1791 said:


> I really wasn't trying to recreate an argument. I tried reading the entire thread, but got a bit lost in the technical jargon of financials. When we get into made up names for imaginary products sold on virtual markets, the terminology gets a bit confusing for us laymen.
> 
> I was really just trying to get a feel for how much of a part that law played, because the way I understand it (and I am by far no jurist, legislator, or anything else) the banks were required to adjust their lending criteria under certain conditions and to disregard what might otherwise have been considered disqualifying problems with credit history, income, etc.
> 
> Now, I'm sure the bankers were all too happy to comply because they knew that by repackaging the products and selling them, the bad loans would not rest on their balance sheets any longer than necessary and they could turn a healthy profit with the repackaged products (all insured by 3rd party companies like AIG, of course). I just wasn't sure if the initial cause was the bankers' ever hungry lust for profits or the laws' woefully idealistic vision of how credit markets _should_ work.
> 
> I guess the take away I have from this entire thread (the parts I have been able to wrap my limited powers of understanding around) is that government was trying to solve what they saw as an injustice, and that opened the door for the banks to exploit a market weakness and attempt to make a profit on it. Things were all good for a while (as they usually are with bubbles) and because they were good, people assumed they always would be. When things popped, the banks had made no real provisions and plans to absorb the impact, and they panicked, the gov't panicked, and everything ended up more screwed up than they began with.
> 
> I mean, it doesn't take an expert to realize that if the problem going in was that these institutions became "too big to fail" and then they started failing.... then how can the answer possibly be to make them even bigger? Every single bank that was determined "too big to fail" and required a bailout is now larger and holds a greater percentage of cumulative deposits (private and corporate) than they did before the crash. How could that possibly have made things safer and more stable in the financial markets?


The argument was already there so don't worry about starting it.

The argument in favor of forcing lending to sub-standard borrowers was based on the idea that housing only goes up due to inflation. This has been a free ride for middle class homeowners and the lawmakers involved, e.g. Barney Frank, wanted to push that opportunity down the income scale.

Initially bankers went along with this due to the belief that the loans were protected by the value of the house and that borrowers would default on their mortgage last in an effort to keep their homes. These beliefs proved to be wrong in hindsight. I wouldn't describe them as "happy" to write substandard mortgages, but they could be fairly criticized for going along with it. Some banks exited the mortgage market before it blew up because they didn't think it was prudent.

AIG is another whole story that was only loosely tied in but came to a head concurrently.


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## BlueShoe

Barney Frank only came into the leading chair seat after the damage was already done, at the end of the bubble cycle, after the sector was behaving fraudulently.

The number of bogus mortgages was not enough to cause the economic collapse. It was only enough to HELP cause a housing bubble, a bubble aided by the fed reserve who allowed the industry to self police.

Barney Frank didn't force the ratings agencies to fraudulently alter the bogus mortgages into AAA vehicles for resale to the next sucker to get stuck with. Nor did Barney Frank lobby for the repeal of Glass-Steagall which was key to creating the economic collapse. It was a Republican written bill approved by Congress and signed by William Jefferson Clinton. It took until 2007 for the collapse to take hold. Housing sectors would have been disrupted, but no collapse would've happened without fraud.

You're an industry insider who hasn't admitted any culpability by the sector you're in, which is why BillS thinks you're a plant.  People can believe what they want, but nobody can explain away faking ratings and repealing Glass-Steagall as the key reasons for economic collapse.


----------



## Geek999

BlueShoe said:


> Barney Frank only came into the leading chair seat after the damage was already done, at the end of the bubble cycle, after the sector was behaving fraudulently.
> 
> The number of bogus mortgages was not enough to cause the economic collapse. It was only enough to HELP cause a housing bubble, a bubble aided by the fed reserve who allowed the industry to self police.
> 
> Barney Frank didn't force the ratings agencies to fraudulently alter the bogus mortgages into AAA vehicles for resale to the next sucker to get stuck with. Nor did Barney Frank lobby for the repeal of Glass-Steagall which was key to creating the economic collapse. It was a Republican written bill approved by Congress and signed by William Jefferson Clinton. It took until 2007 for the collapse to take hold. Housing sectors would have been disrupted, but no collapse would've happened without fraud.
> 
> You're an industry insider who hasn't admitted any culpability by the sector you're in, which is why BillS thinks you're a plant.  People can believe what they want, but nobody can explain away faking ratings and repealing Glass-Steagall as the key reasons for economic collapse.


Barney Frank has been involved in the financial services laws passed by Congress for three decades. Here is the Wikipedia page on him.

https://en.wikipedia.org/wiki/Barney_Frank

You are correct that the housing bubble alone was not enough to cause the crash. If it hadn't been for the switch to mark to market accounting, the banks would not have given the appearance of being in trouble. They would have just sat on the mortgage exposure until it played out. So mark to market accounting was a factor. Also in 2007 the uptick rule was removed by the SEC. This facilitated unlimited short selling of banks and other companies, collapsing the stock market and creating a liquidity crisis.

When you put all these factors together it led to the collapse we experienced. I'm not going to defend the Federal Reserve, which is not a commercial bank but an arm of the government.

As for the ratings agencies, there is a difference between being completely wrong and being "fraudulent". Their mistake was basing their ratings on mortgage experience since the end of the Great Depression. Clearly they should have included the Great Depression in their calculations. Furthermore, a rating is nothing more than an opinion. It is not insurance against loss.

If Glass-Steagal had not been repealed, I think we would have been better off. This was an example of government deciding the experience of the Great Depression no longer mattered, so the ratings agencies were not alone in their error. BTW: The uptick rule was also a Depression era regulation, so Glass-Steagal was not the only Depression era regulation withdrawn. I believe that we would have been better off with the whole set of Depression era laws and regulations and that it is difficult to say that any particular piece of the structure was the critical element as opposed to all of the Depression era regulations taken together.

As for my involvement in the industry, I've been quite open about that, so I am hardly a "plant". Are all the LEOs on the forum "plants" for the government? I doubt it, though I frequently disagree with them. I have freely admitted that bankers made mistakes. BillS thinks there is a "satanic banking cult". Feel free to side with him.


----------



## Marcus

Here is a good explanation of what happened in an entertaining speech: 



In particular, the section about the banking crisis starts around the 5:35 mark here:


----------



## BlueShoe

Geek999 said:


> Barney Frank has been involved in the financial services laws passed by Congress for three decades.


Oh, I know he's been involved. He did not chair the committee until the very end. Lots of industry insiders have been involved for decades. Barney is just the biggest magnet for attention by the pretend conservatives who try to deflect for the Republicans who wrote the repeal of Glass-Steagall. That repeal was massively more instrumental to the economic collapse than Barney's progressivism.



> As for the ratings agencies, there is a difference between being completely wrong and being "fraudulent". Their mistake was basing their ratings on mortgage experience since the end of the Great Depression. Clearly they should have included the Great Depression in their calculations. Furthermore, a rating is nothing more than an opinion. It is not insurance against loss.


So no corporation involved did anything wrong, as in immoral or fraudulent?That's your contention? I know from past posts you don't like to answer direct questions, but please answer that one. High risk means high risk.

The 'insurance' wasn't taken out through ratings agencies. You're just offering a defense for something not said. The agencies defrauded that the risky mortgages were AAA by a bundling process.



> If Glass-Steagal had not been repealed, I think we would have been better off.


The industry got what they wanted. Republicans wrote the repeal. Barney Frank didn't write it.



> As for my involvement in the industry, I've been quite open about that, so I am hardly a "plant". Are all the LEOs on the forum "plants" for the government? I doubt it, though I frequently disagree with them. I have freely admitted that bankers made mistakes. BillS thinks there is a "satanic banking cult". Feel free to side with him.


I understand your position. It's just the same as government employees voting for the candidate who will give them the most hand-outs.

BillS has mostly stopped his predictions of doom with specific dates. He's making progress. He's not wrong that some of the people in the banking and financials sectors are serving evil. Satanic cults? Don't know. They wouldn't admit it if they were.


----------



## Geek999

He seems to skip the fact that the lending to unqualified borrowers was a government requirement.


----------



## BlueShoe

Always blaming government. Geek999, you won't answer that question I asked will you? Was there any fraud in the sector? Thanks for showing your bias. 



Marcus said:


> Here is a good explanation of what happened in an entertaining speech:
> In particular, the section about the banking crisis starts around the 5:35 mark here:


Wow, holy wow! He was making $330,000 PER WEEK for 6 yrs!

Here's another insider. Brooksley Borne of the CFTC investigating derivatives. This proves that Greenspan was a hands off chairman who said the industry would self police. She was blowing the whistle well before the collapse.
http://video.pbs.org/video/1302794657/

18:00 minute mark where derivatives are discussed as being insurance (18:50).
20:00 where fraud was discussed. Fraud was admitted by Bankers Trust.
25:25 there are 5 lobbiests from the banking/financials sector for every Congressman.
33:35 watch as Republican Graham states there is no evidence that this a troubled market with fraud, as if Brooksley was wrong. 
34:40 Brooksley answers that she's trying to protect the American money system.
*35:45 the beginning of the end starts.* A trillion dollar hedgefund is collapsing just as Brooksley warned Sen Graham 6 wks earlier.
39:50 the first notice sent to the President and Brooksley points out that government had no idea what was going on because they were not in place to regulate the derivatives. Nation's economy is on alert for collapse (this was still under Bill Clinton's terms).
42:45 Greenspans claims regulators can't do anything to save people from themselves. No regulations will be made on over the counter derivatives. The Great Depression is set up to happen again.
Congress acts to shut down Brooksley Born and her alerts. She resigned during Clinton's term.
Alan Greenspan, Larry Summers, Robert Rubin win in deregulating the sector despite the near collapse caused by the banksters on Wall Street.
Ten years later, the economy starts dumping just as she said it could.
Robert Rubin went to Citibank and the taxpayers bailed them out for over 100 billion dollars. Summers and Geithner (the tax cheat) went to work for Obama. Robert Rubin's top deputy advisor was placed in Brooksley's old job. Nobody from the office will blow the whistle again with them in there. Greenspan admits before Congress that the sector can't self-police...that his belief was false.
52:30 Brooksley says there will be more and more of these examples due to non-action.

Now Geek'll say he didn't see my question----as usual. :kiss:


----------



## Geek999

BlueShoe said:


> Always blaming government. Geek999, you won't answer that question I asked will you? Was there any fraud in the sector? Thanks for showing your bias.
> 
> Wow, holy wow! He was making $330,000 PER WEEK for 6 yrs!
> 
> Here's another insider. Brooksley Borne of the CFTC investigating derivatives. This proves that Greenspan was a hands off chairman who said the industry would self police. She was blowing the whistle well before the collapse.
> http://video.pbs.org/video/1302794657/
> 
> 18:00 minute mark where derivatives are discussed as being insurance (18:50).
> 20:00 where fraud was discussed. Fraud was admitted by Bankers Trust.
> 25:25 there are 5 lobbiests from the banking/financials sector for every Congressman.
> 33:35 watch as Republican Graham states there is no evidence that this a troubled market with fraud, as if Brooksley was wrong.
> 34:40 Brooksley answers that she's trying to protect the American money system.
> *35:45 the beginning of the end starts.* A trillion dollar hedgefund is collapsing just as Brooksley warned Sen Graham 6 wks earlier.
> 39:50 the first notice sent to the President and Brooksley points out that government had no idea what was going on because they were not in place to regulate the derivatives. Nation's economy is on alert for collapse (this was still under Bill Clinton's terms).
> 42:45 Greenspans claims regulators can't do anything to save people from themselves. No regulations will be made on over the counter derivatives. The Great Depression is set up to happen again.
> Congress acts to shut down Brooksley Born and her alerts. She resigned during Clinton's term.
> Alan Greenspan, Larry Summers, Robert Rubin win in deregulating the sector despite the near collapse caused by the banksters on Wall Street.
> Ten years later, the economy starts dumping just as she said it could.
> Robert Rubin went to Citibank and the taxpayers bailed them out for over 100 billion dollars. Summers and Geithner (the tax cheat) went to work for Obama. Robert Rubin's top deputy advisor was placed in Brooksley's old job. Nobody from the office will blow the whistle again with them in there. Greenspan admits before Congress that the sector can't self-police...that his belief was false.
> 52:30 Brooksley says there will be more and more of these examples due to non-action.
> 
> Now Geek'll say he didn't see my question----as usual. :kiss:


Bernie Madoff was a fraud. He also had nothing to do with the financial crisis and might still be in operation had there not been a financial crisis.

Fannie and Freddie were not commercial banks and were treated like arms of the government. The resolution of those two institutions was to make them arms of the US Treasury. I'm fine with criticizing them.

The CFTC is the regulator for the commodities industry, a government entity, which is responsible for regulating some derivatives products. It is important to note that they are involved only with those products considered to be commodities, but if they're the regulators, they have the power to regulate a product out of existence. Complaints by a regulator about something they control strikes me as pretty stupid.

In general there wasn't any sort of industry wide fraud. There has not been a single successful prosecution for fraud related to the financial crisis.

BTW: Bankers Trust has not existed since the early 1990s, which brings the whole presentation into question so there is no need to go through it moment by moment.

As for the lobbyists, etc. that interaction is normal when you have an over-regulated industry. There are 6,000 banks in the country. They each have whole departments that do nothing except try to keep up with industry regulations.

I stand by my earlier statement that there was no bailout. The banks involved were not given a choice in the matter. There was a lot of poor decision making.

As for derivatives being insurance, I have said before that the term derivatives covers a wide range of products which do not act in the same manner from product to product. Some products actually are insurance and are handled by insurance companies like AIG. Insurance products generally are risk transference products. For instance, life insurance transfers the financial risk of a person dying from the family to an insurance company.

AIG is a whole saga in itself starting with Eliot Spitzer's removal of the CEO Hank Greenberg, who was later proven in court to have done no wrong. Mr. Greenberg is still in the courts suing the US government for the government's actions toward AIG as an illegal taking. That story is not over yet, but many feel that AIG would not have been a problem if Mr. Greenberg had continued to run it.


----------



## BlueShoe

Two words trounce your erroneous reasoning. "Senate Hearings." The economic crash occurred 7 yrs ago when Bush was President, so discussion here is too dated to be pertinent?  The testimony was given before the Senate where Republican Senator Phil Graham and Chairman Greenspan can be witnessed refuting calls to regulate and trumpeting the good health of the system.

TRANSLATION OF YOUR ANSWER: I'm not willing to answer the question because I won't admit any corporations acted fraudulently/immoral. But I will pretend Bankers Trust doesn't count...and I can't deny all the lobbiests used to push the legislative matters like deregulation which permeated the era.

We're not talking about all the types of derivatives and you know it.



> A little more than a decade ago, (Brooksley) Born foresaw a financial cataclysm, accurately predicting that exotic investments known as over-the-counter derivatives could play a crucial role in a crisis much like the one now convulsing America. Her efforts to stop that from happening ran afoul of some of the most influential men in Washington, men with names like Greenspan and Levitt and Rubin and Summers - the same Larry Summers who is now a key economic adviser to President Obama.
> 
> *She was the head of a tiny government agency who wanted to regulate the derivatives. They were the men who stopped her.*


This economy faltered at the Tech Bubble, which was VERY shortly after Brooksley resigned. 
The World Trade Center attack happened in 2001, which is also fairly soon after Brooksley resigned. That pressure on the system exposed corporations that were keeping double books and lying about returns/financial health during the Clinton era/Tech Bubble collapse.
Remember the Bush Tax Cuts? That was two yrs of moves to reinflate the bubble and stave off recession. And it took until 2007 for it to fail completely.

The fact that we can still be reminded of who caused the collapse perturbs you. It wasn't Joe Six-pack's mortgage.



> *American International Group Inc* (NYSE:AIG - News), *which has received $180 billion in U.S. taxpayer mone*y, was subpoenaed on Thursday by New York's top legal officer for information on its credit default swaps contracts, sources familiar with the matter said. Details were being sought on the contracts going back seven months, including those that have been wound down by AIG's Financial Products unit and those that have not, involving billions of dollars, one of the sources said. A spokesman for AIG declined to comment. *The request stems from New York Attorney General Andrew Cuomo's investigation into $165 million paid to employees at the unit in retention bonuses this month.* On Thursday, Cuomo did not comment on the subpoena, but he said in a statement that "CDS contracts were at the heart of AIG's meltdown.
> 
> *The CDS market is largely unregulated* and opaque, comprised of privately negotiated contracts among fund managers and broker-dealers.





> The derivatives traders that hit the jackpot with last fall's AIG bailout are getting more attention from the government. More than two dozen Democrats in Congress called on Thursday for an investigation of the decision to pay in full the holders of credit default swaps written by AIG (AIG, Fortune 500). The group of 27 legislators, led by AIG critic Rep. Elijah Cummings of Maryland, sent a letter to Neil Barofsky, the special inspector general for the Troubled Assets Relief Program, demanding the investigation. The legislators say they want to know why AIG's trading partners - a group that includes some of the biggest and most sophisticated financial institutions in the world -* were made whole for risky, unregulated trades with scarce taxpayer funds. *
> 
> The moves come less than two weeks after AIG tried to defuse questions about who benefited from last fall's federal rescue, by naming the banks and municipalities that received federal funds.
> 
> AIG was pulled back from the brink of bankruptcy last September thanks to an $85 billion emergency loan from the Federal Reserve Bank of New York. With the tab for that rescue having more than doubled since then...Among the issues being raised by lawmakers is why the counterparties on AIG's swaps received full payment for positions that were worth considerably less in the market.


----------



## Geek999

BlueShoe said:


> Two words trounce your erroneous reasoning. "Senate Hearings." The economic crash occurred 7 yrs ago when Bush was President, so discussion here is too dated to be pertinent?  The testimony was given before the Senate where Republican Senator Phil Graham and Chairman Greenspan can be witnessed refuting calls to regulate and trumpeting the good health of the system.
> 
> TRANSLATION OF YOUR ANSWER: I'm not willing to answer the question because I won't admit any corporations acted fraudulently/immoral. But I will pretend Bankers Trust doesn't count...and I can't deny all the lobbiests used to push the legislative matters like deregulation which permeated the era.
> 
> We're not talking about all the types of derivatives and you know it.
> 
> This economy faltered at the Tech Bubble, which was VERY shortly after Brooksley resigned.
> The World Trade Center attack happened in 2001, which is also fairly soon after Brooksley resigned. That pressure on the system exposed corporations that were keeping double books and lying about returns/financial health during the Clinton era/Tech Bubble collapse.
> Remember the Bush Tax Cuts? That was two yrs of moves to reinflate the bubble and stave off recession. And it took until 2007 for it to fail completely.
> 
> The fact that we can still be reminded of who caused the collapse perturbs you. It wasn't Joe Six-pack's mortgage.


So Graham and Greenspan can't be wrong? Very few people understood what was unfolding before the fact, including me. If I were somebody who had every word recorded in the media I am sure you could find some incorrect opinions in my past. In case you weren't aware, none of our leaders can see the future. Neither can bankers. Everyone gets it wrong from time to time. That is not "fraud". That is human limitation.

It isn't up to me to "admit" anything. If you can name a name and a "fraudulent" action that will hold up in court, be my guest to pursue it someplace where it matters. So far nobody has done that, which says to me the actions of the bankers were legal.

I'll stick by my comments about Bankers Trust. Once upon a time it was a major bank. About 15 years before the financial crisis it was acquired, some businesses sold off, and others absorbed into the acquiring bank. The name still exists about 6 layers down in the organization structure of that bank where it is a non-bank shell. That has the effect of preventing anyone else from starting a company with that name.

My point on there being many types of derivatives is you need to say what type of derivatives you are talking about to have a meaningful conversation. If you can't name the specific type of derivative product no one knows what you are discussing. I could probably guess what type you should be discussing from the context, but why should I guess?

As for Joe Sixpack, it wasn't his fault, unless he defaulted on a mortgage. Most people continued to pay their mortgages. I continue to pay mine.


----------



## BlueShoe

Geek, if there are 6000 banks in America and only a couple handfuls of the top banks acted immorally, why would you want to harm the credibility of the 5080 local/regional innocent banks by partnering the immoral actions of those handful of banks with the innocent?

That speaks volumes about your intentions to deflect blame from the top banksters. That is the stick we have to use to judge your character.



Geek999 said:


> So Graham and Greenspan can't be wrong?


You named a homosexual Democrat named Barney. There's Republican Gramm boisterously admonishing the person who warned the world in a Senate Hearing about what would happen. Greenspan, Summers, Rubin right there claiming the same and we all know the result. Senator Gramm was one of the people who wrote the repeal of Glass-Steagall. Gramm-Leach-Bliley Act. That must be Barney's fault.

You're pretending you're not wrong right now, but you're still wrong. Most of us know the difference in being wrong and behaving obstinately or even immorally to further your position.



> Very few people understood what was unfolding before the fact, including me. If I were somebody who had every word recorded in the media I am sure you could find some incorrect opinions in my past.


Not before a Senate Hearing, you couldn't. Try to stay on par with discussion.


> In case you weren't aware, none of our leaders can see the future. Neither can bankers. Everyone gets it wrong from time to time. That is not "fraud". That is human limitation.


So in the Senate Hearing where it comes out from Gramm and Greenspan that it's dangerous to spook the markets about not regulating, you're trying to say it's not the inherent danger of the products they were afraid people would find out about? Sure thing. They knew. Now we know they knew.
You were also wrong about fraudulent activity. You were also wrong that over-regulation in the commercial markets caused the financial collapse.

Brooksley saw it very easily and showed it to the world. I guess she should've been born Jewish so someone in the industry might have listened to her instead of listening to Greenspan, Summers, Rubin, Geithner, Bernanke. Which is why we should avoid people like Jacob Lew and Janet Yellin who are just similar versions in ideology to Greenspan, Summers, Rubin, Geithner, Bernanke. One of the stated reasons for creating the Fed Reserve was so there wouldn't be financial collapses again. The charter is a bad, fraudulent joke on society. That's where BillS is coming from, albeit he verbalizes it very rhetorically charged.



> It isn't up to me to "admit" anything. If you can name a name and a "fraudulent" action that will hold up in court, be my guest to pursue it someplace where it matters. So far nobody has done that, which says to me the actions of the bankers were legal.


Already did that with Bankers Trust. Now keep your word or admit you never intended to.
Your explanation is the same defense as saying Bill Clinton isn't a rapist, or didn't receive sexual gratification if he isn't officially convicted for it. This gets to the crux of your type of people. You don't have a moral compass guiding you. You people think everything comes down to what can you be convicted of/what can we get away with, because only a criminal record is the balance of morality.



> I'll stick by my comments about Bankers Trust. Once upon a time it was a major bank. *About 15 years before the financial crisis it was acquired some businesses sold off, and others absorbed into the acquiring bank. The name still exists about 6 layers down in the organization structure of that bank where it is a non-bank shell. That has the effect of preventing anyone else from starting a company with that name.*


*

Wrong. They were convicted of criminality ushering in the financial crisis. The financial crisis was in the 1990s, resurfacing in 2001, continuing until the ultimate financial collapse which was in 2006-2007. All events were part of the same financial crisis. You're just trying to pretend it didn't happen because it proves you wrong.




My point on there being many types of derivatives is you need to say what type of derivatives you are talking about to have a meaningful conversation. If you can't name the specific type of derivative product no one knows what you are discussing. I could probably guess what type you should be discussing from the context, but why should I guess?

Click to expand...

Bull. It's specifically stated in the video as the topic of discussion. You're trying to introduce ALL derivatives to try to deflect from having to answer the question. You're trying to confuse people with terms.




As for Joe Sixpack, it wasn't his fault, unless he defaulted on a mortgage. Most people continued to pay their mortgages. I continue to pay mine.

Click to expand...

Joe Sixpack defaulting on his mortgage did not cause the housing bubble to collapse. It didn't cause the economic collapse. You're a plant. The police officers viewing this forum aren't plants. You are. They're government employees. You're not. Well, one of them might be a plant.*


----------



## Geek999

BlueShoe said:


> That speaks volumes about your intentions to deflect blame from the top banksters. That is the stick we have to use to judge your character.


So you think you have the right to judge my character? I think not.


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## BlueShoe

So why are you lumping the over 5000 'banks' who are busy lending and receiving payment with the 20 or so who are responsible for the collapse by behaving poorly/immorally?

The housing bubble didn't cause the financial collapse. It _couldn't_ cause it.


----------



## Geek999

BlueShoe said:


> So why are you lumping the over 5000 'banks' who are busy lending and receiving payment with the 20 or so who are responsible for the collapse by behaving poorly/immorally?
> 
> The housing bubble didn't cause the financial collapse. It _couldn't_ cause it.


So does that mean you think you can sit in judgment of my character or not?


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## BlueShoe

You mean about you saying Bankers Trust being found fraudulent in action isn't an example of fraudulent activity by corporations, or that a court decision determines whether fraudulent/immoral activity took place?


----------



## Geek999

BlueShoe said:


> You mean about you saying Bankers Trust being found fraudulent in action isn't an example of fraudulent activity by corporations, or that a court decision determines whether fraudulent/immoral activity took place?


You were complaining earlier about my not answering your questions. I'm still asking whether you feel you have the right to sit in judgment of my character as you claimed earlier. You're trying to shift off that topic.


----------



## BlueShoe

Did you answer my questions or are you trying to shift off that topic?
Did you say there were no court convictions of fraud? Did you blame over-regulation for the economic collapse?
I asked the questions first.


----------



## Geek999

BlueShoe said:


> Did you answer my questions or are you trying to shift off that topic?
> Did you say there were no court convictions of fraud? Did you blame over-regulation for the economic collapse?
> I asked the questions first.


Just because you ask a question doesn't mean it makes any sense, or that I have any obligation to respond, especially if you suffer from so much hubris that you think you have the right to sit in judgment of my character.

Despite that I will take a shot at the immediate questions: In the latest round of financial crisis, 2007 forward, there have been no convictions related to the crisis. There have been convictions of folks like Bernie Madoff, but they really were not consequential to the crisis. If you are trying to relate back decades, then you'll find a few convictions, most (not all) of which were later overturned on appeal. IMHO these also had nothing to do with the crisis.

I did NOT blame over-regulation for the collapse. I maintain that the industry is highly regulated and that the economic collapse was due to misguided regulations, not the quantity of regulations.


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## BlueShoe

Thanks. But can you now please answer the questions I asked instead of posting something about convictions and Bernie Madoff?


----------



## Geek999

BlueShoe said:


> Thanks. But can you now please answer the questions I asked instead of posting something about convictions and Bernie Madoff?


I just answered your most recent questions. There have been no fraud convictions that had anything to do with our most recent financial crisis. I seriously doubt that after 6 years there are going to be any. Fraud includes deceit and deceit requires that you know what you were saying is untrue. What did mortgage bankers say? They said "we'll lend you $X at Y%" which they then did. Yet you are running around calling them criminals, or frauds, or "banksters" and then claiming the right to judge my character.

I think that's more than enough for some clown who thinks he has the right to judge my character, or the character of anyone else here. If you actually were interested in understanding what happened you would take a very different attitude. You've decided to believe Barney Franks and Barack Obama that the collapse was caused by the banks. Did it ever cross your mind that they were the frauds?


----------



## BlueShoe

Geek999 said:


> I just answered your most recent questions. There have been no fraud convictions that had anything to do with our most recent financial crisis. I seriously doubt that after 6 years there are going to be any. Fraud includes deceit and deceit requires that you know what you were saying is untrue. What did mortgage bankers say? They said "we'll lend you $X at Y%" which they then did. Yet you are running around calling them criminals, or frauds, or "banksters" and then claiming the right to judge my character.
> 
> I think that's more than enough for some clown who thinks he has the right to judge my character, or the character of anyone else here. If you actually were interested in understanding what happened you would take a very different attitude. You've decided to believe Barney Franks and Barack Obama that the collapse was caused by the banks. Did it ever cross your mind that they were the frauds?


Okay so stooping to calling names is your answer to a charge of character deficiencies. Got it.

All I can judge your character on is limited to the issue we're discussing. Not your everyday interactions with the world you live in. Just on these topics. It's poor. You've displayed a continual pasting over of the fraud on the part a some of the banks/ratings agencies. And you've blamed Barney Frank, but not Phil Gramm. You're prone to deflect to government when the actions were done by corporations and at the behest of corporations.

The main question I've asked several times over the past day or so is if you think any of the players acted immorally/fraudulently. You stammered onto convictions saying there weren't any, but there were at the beginning of the entire scam. THAT is why I recently asked if you said there were no convictions. I haven't given up on the morality question. Why would you not separate the thousands of innocent 'banks' like commercial banks from those 8-20 investment banks that acted immorally?


----------



## Geek999

BlueShoe said:


> Okay so stooping to calling names is your answer to a charge of character deficiencies. Got it.
> 
> All I can judge your character on is limited to the issue we're discussing. Not your everyday interactions with the world you live in. Just on these topics. It's poor. You've displayed a continual pasting over of the fraud on the part a some of the banks/ratings agencies. And you've blamed Barney Frank, but not Phil Gramm. You're prone to deflect to government when the actions were done by corporations and at the behest of corporations.
> 
> The main question I've asked several times over the past day or so is if you think any of the players acted immorally/fraudulently. You stammered onto convictions saying there weren't any, but there were at the beginning of the entire scam. THAT is why I recently asked if you said there were no convictions. I haven't given up on the morality question. Why would you not separate the thousands of innocent 'banks' like commercial banks from those 8-20 investment banks that acted immorally?


Well clown, you still have no right to judge me or my character, and I will freely call you clown or any other derogatory name I choose as long as you are so rude as to claim that right. It is at least proper English unlike "bankster".

The thousands of banks all perform essentially the same function when lending. The difference is scale. There is no real difference if you get your mortgage from a small bank or a large bank. You still have a mortgage. The bank still bundles them and sells them.

There are some religions that think charging interest is immoral, but I doubt anyone here is an adherent to one of those religions, so unless there is deceit there is no fraud and no immorality. You have not described any such deceit and I am not aware of any deceit by the bankers, so unless you can describe the deceit and name who did it, you have no basis for claiming any fraud. Furthermore, fraud is something that must be done with intent, so it is not performed by an organization as a whole, such as a bank with thousands of employees, but by an individual making statements that he knows to be untrue in an effort to deceive. I'll take the morality of the average "bankster" any day over that of a clown such as you.

In fact, I would guess your reason for persisting in this dialog is you are one of the many deadbeats who borrowed money and then didn't pay it back and you are too intellectually lazy to recognize that the actual immorality was your theft, not any action of a bank. The "fraud" was in your saying you would pay the money back, per the terms of the mortgage, when you had no intention of doing so.

I am now going to add you to my Ignore list. Please do the same with my name as you clearly have no interest in rational discussion with me.


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## BlueShoe

You speak English? The Oxford dictionary does. 
http://www.oxforddictionaries.com/us/definition/american_english/bankster


> bankster
> Syllabification: bank·ster
> Pronunciation: /ˈbaNGkstər  /
> Definition of bankster in English:
> noun
> derogatory , chiefly US
> A member of the banking industry seen as profiteering or dishonest:


It's an accurate moniker for immoral circus clowns who defrauded investors at the top levels causing the economic collapse worldwide, doing it with intentional deceit. Banksters did that, not the local Credit Union or regional bank. Investment banks did that to local banks and municipalities by stealing retirement accounts through unregulated derivatives markets. You also tried to blame high-risk mortgages in any thread like this.

Since you obviously DO fully understand the definition of deceit, anyone can qualify that in your intentionally practiced use is illustrated by blaming government regulation when it was not a regulated mechanism. BillS pegged your character. He's pretty good at financial topics, and I generally agree with him. To be accurate, I RECOGNIZE your character. You portray and display it.

Something consistent about you is being wrong. Of the several houses I have, any mortgage has been current or sometimes prepaid. Always. And I don't earn dirty money from cheating banksters who worship money through usury. :droolie: Like most people in the world. You have a disdain for most borrowers, don't you? Bernie Madoff had a sociopathic perspective. He had a disdain for his investors. He justified why his victims aren't victims, but were enriched while he was active. On this topic you have a strikingly similar character trait with him.

*The big investment houses know the gov can't let them look fraudulent because that would cripple this phony economy faster than anything. *So there will be record fines from them and no criminal prosecutions. They are a revolving door with government regulators, like Ginsler who went from working under Rubin and Summers to replace Brooksley so there could be no more whistle blowing from that department. We see the Sachs-Goldman conveyor line to/from Federal Reserve positions. Everyone knows what the score is, and you're pretending people are stupid and don't see it.


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## UncleJoe

*Enough!!!*

BS and Geek

You're both as guilty as the next in the name-calling department. You will stop now or take a 30 day vacation from the board to figure out how to have a civil conversation.

And when I have more time I'm going to gut this thread.


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