Here ya go, Forest. Nice and easy: Anyone who doubts me, just do the Math. Total US Subprime Value: 2 Trillion. http://www.msnbc.msn.com/id/17584725 Total Bailout Money Committed: 13 Trillion. http://www.bloomberg.com/apps/news?...id=armOzfkwtCA4 Difference: 11 TRILLION PAID TO ?????? We've been screwed. It's time for everyone to Man Up and face Reality.
For a start the only place big enough for the Asians to invest dollars a few years ago was US bonds. You could argue that this investment opened the door for greenspan to lower interest rates which lead to a real estate boom. And so US had it both ways. Cheap goods and low interest rates .... how could you possibly stuff that up. regards f9
Achilles, Geithner just announced that derivatives such as CDSs should be transacted on a public exchange, just as equities and commodities are, in the future. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=alaMtgFAIQoc The Treasury Department & SEC have stated transparency and reducing the kind of systemic, hidden risk that almost took out the entire financial system (and still might?) as their reason to set up a public, visible exchange. There is a pushback from trading desks about this. I think this partially supports your claims (the private party contracts and 30x-50x leverage, or more, actually, and the fact that many of the firms being propped up are probably at least partly being propped up so as to make good on the bets they took - such AIG), but it also detracts from the 'bankers in total control' claim, too - assuming they do start regulating these contracts on public exchanges, exclusively.
The only thing that matters is the size of subprime (2< Trillion) compared to the bailout (>13 Trillion). That proves the entire thing is a rubber-stamped fraud, engineered by Wallstreet and blessed by Government. Derivatives is just another sphere of fraudulent laundering - whence no action taken by Government - proves massive complicity to loot the treasury. Believing Paulson or Bernacke who plead ignorance is about the same as believing Greenspan who feigned "no idea" markets might bubble after 0% rates. And Santa Claus is real because Daddy told me so!! Centralized exchanges for derivatives is an interesting idea, but so what?! Everything that could have been done to stop, fix and deal with this mess once-and-for-all was swept aside by Government and you're pointing to something that *might* happen as proof positive there's no collusion or massive fraud between Washington and Wallstreet (AS IF, there wasn't any before that!)?! I mean, c'mon dude. You're smarter than that. And if they ever get a derivative exchange off the ground, it'll be filled with all kinds of loopholes that won't even TOUCH the family jewels. I'd bet the House on that. Here, Dick Durbin put it on a silver platter for you. All the devout and faithful to Big Government can do mental gymnastics explaining the obvious away (not that this stands by itself!): Senator Admits That Bankers Own Capitol Hill http://www.businessinsider.com/senator-admits-that-bankers-own-capitol-hill-2009-5
Apparently, the sheep are so brainwashed simple arithmetic eludes them: 13 Trillion - 2 Trillion = 11 Trillion (when only 2 Trillion was necessary to fix the problem?!). Scary. Really fucking scary.
You are wrong, of course, but only in the long run. You will be right in the short and intermediate term. However, it won't be long before we see interest rates on treasuries rise, and double digit "real inflation" return. We were already at 12% inflation in early 2009, and we will be back there and higher very soon, in spite of the depressed economy. Have you done any grocery shopping lately?
The current plan is to trade standardized (whatever that is) CDS's via a regulated exchange, but custom CDS's will be exempt. good luck with that!