Happy New Year.
Jim Willie tells it like he thinks it is. A lot of people here agree with his take. If they are only partially right, there is going to be big money to be made on the short side of every thing J6P consumes or doesn't consume in great quantities such as houses and automobiles.
Wall Street is in deep sneakers. They are busy putting a positive spin on 2007, which in mid-year unleashed the beginning of an unstoppable nightmare. The first cracks were revealed in gory fashion in the form of subprime mortgages blasting fissures through the entire bank and bond system. The next cracks will blossom into a mindboggling series of shocks next year. The US Federal Reserve planted millions of seeds, led by Alan Appleseed Greenspan, during almost two years of ridiculously irresponsible low interest rates so as to assure a doomed outcome. One should never entrust US-based lending institutions to create mortgage products, to approve of loans, to work (collude) with appraisers, the end result of which is massive creation of new debt destined to implode. Recall that the Good Crazed Maestro, who resembles Mr Magoo even more since his retirement, endorsed the housing bubble, begged for it even, urging down long-term interest rates in 2001 & 2002. He desperately needed for housing inflated so-called wealth to save his bacon from the stock bust a year earlier. Both the stock bubble and housing/mortgage bubbles had his fingerprints on them. GREENSPAN MORTGAGED THE ENTIRE BANKING SYSTEM AND ECONOMY WITH BAD LOANS, WHICH ARE IN SYSTEMIC DEFAULT. He actually blessed the housing bubble as a legitimate foundation for an entire USEconomy, a fact that should never be forgotten. One must knock down a fifth martini or whiskey to buy such heretical garbage, but the entire nation lapped it up like hopeless drunkards grasping at overturned bottles. The past several weeks have included a boatload of denials and a large dose of tontaria (Spanish: nonsense). This article is a brief attempt to address the denials and tontaria, a reflection upon the completed year. In no way is any claim made of being a comprehensive listing of blatant deceptions. That requires a 200-page book.
The Robert Rubin mentality has prevailed for well over a decade, wherein US banking policy is designed to recklessly put off problems until tomorrow in order to buy some time today. And yes, during the many todays, the Manhattan Made Men crowd have profited handsomely. Well, Bob, tomorrow is 2008. You are busy covering your hind parts with a fresh Abu Dhabi infusion at Citigroup, a guarantee of some bought time but not any reprieve of eventual bankruptcy. Rubin ushered in, with zero fanfare or broad recognition, the age of the Mussolini Fascist Business Model. The merger of state of big business started in the mid-1990 years with the financial sector, and has extended to energy and military defense in the 2000 years. Get nervous if and when it extends to the pharmaceutical industry in coming years and forced innoculations. Their motives are almost uniformly self-serving, not for the public sector service and benefit. This is about profit and control. In fact, a syndicate has had control of the White House since the Ole Gipper took one in the ribcage in a close call with the Grim Reaper in 1981. This group crosses political party lines with excellent disguise. Nationalism and security are their calling cards these days. The tragedy of this business model is the spread of corruption throughout an entire system, hidden at first, boasted in midstream, enforced at the point of a gun later on. My claim of US institutionalized dishonesty made in 2005 in public manner, even at conferences, has been verified with bold examples for all to see. It extends far and wide, to charity organizations, even to sports.
Next year, a reign of financial and economic terror will befall the world banking system, with the United States as its origin. The shock waves will have California as its epicenter, the creative laboratory of nutty mortgage design. The US banking system will finally be recognized as destroyed, insolvent, and entirely dysfunctional. The repair process in reaction will be interesting to behold, as money will be printed, created, and dispensed at a clip never seen before in a multi-national fashion in the history of mankind. So far, no level of desperation can be detected. That will surely change in 2008. The Wall Street criminal fraud artisans, at the focal point of responsibility for dissemination of trillion$ of mortgage bonds, could not resist temptation. In fact, the US Federal Reserve seems still unaware of crisis. Wall Street did what they do best, package and sell, with regard only for their fees, paychecks, and bonuses, as they organized collusion toward fraud and misrepresentation never seen before in modern history. Well, this time, they got stuck with a huge amount of inventory. Big domestic institutions followed by foreign institutions wised up, but not quickly enough. The private equity movement was in full swing also, leading to more accumulated inventory. Then it slammed shut. Unfortunately for them, the assembly line was halted abruptly. IMAGINE SALMONELLA in a meat packing business with huge volume in shipping products. As the production line halted, much of the toxic output ended up in the meat packer balance sheet, even dinner table. Some CEO executives took sick and fell by the wayside. Their customers are all sick, very sick, and will get even sicker.
http://www.kitco.com/ind/willie/dec272007.html