Remember that ‘mulligan’ I was talking about yesterday? Well, for some unknown reason it is getting even bigger this morning.
Many of you saw the stories of how ‘The Fed’ (a private corporation that ‘manages’ the monetary system of the US) er, ‘loaned’ 7 plus TRILLION to banks around the world ON TOP OF the 700 Billion dollar bail out of Wall Street banks AND the nearly hundred billion dollar bailout of the auto industry.
Since ‘The Fed’ is NOT a Federal agency and because it is ‘privately held’ it need not show its books to anyone.
The fact that the Fed has been doing whatever it wanted to, pretty much since its 1913 inception only came to light AFTER they were threatened with a Congressional Audit.
UNDERSTAND, good citizen, the information floating around now is the result of a ‘voluntary self-audit’. It should NOT, by any stretch of the imagination, be construed as ‘full disclosure’.
With that fact firmly in mind, I would like you to compare and contrast this story with the one that follows it:
The central banks announced that they would slash by roughly half the cost of an existing program under which banks in foreign countries can borrow dollars from their own central banks, which in turn get those dollars from the Fed. The banks also said that loans will be available until February 2013, extending a previous endpoint of August 2012.
“The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity,” the banks said in a statement. The participants in addition to the Fed are the Bank of England, the European Central Bank, the Bank of Japan, the Bank of Canada and the Swiss National Bank.
(Comment: Markets are UP more than 300 points on this news this morning.)
Now try to make sense of this hellacious development
Millions of American schoolchildren are receiving free or low-cost meals for the first time as their parents, many once solidly middle class, have lost jobs or homes during the economic crisis, qualifying their families for the decades-old safety-net program.
The number of students receiving subsidized lunches rose to 21 million last school year from 18 million in 2006-7, a 17 percent increase, according to an analysis by The New York Times of data from the Department of Agriculture, which administers the meals program. Eleven states, including Florida, Nevada, New Jersey and Tennessee, had four-year increases of 25 percent or more, huge shifts in a vast program long characterized by incremental growth.
From today’s top headline on the NY Times to the top story in the business section to the latest post (at the time I wrote this) from Jesse of Crossroads Café fame
I had also suggested after the bell that there would be an effort to blow off the downgrade of the big money center banks. I suspected there would be a more singular effort to pump up the SP futures from the Fed's house banks, but it appears the Central Banks, led by the Fed, decided to hit the markets with a major sugar rush of cheap dollars. That is US dollars.
"I will be surprised if they do not try and rally stocks in the face of this to put the brave face on and whistle past the graveyard once again. This is what traders like to do when they have been caught offsides by the news. But they may not be able to sustain it without official help from the strong trading desks of the financial sector."
This is just a big serving of a quick energy drink to ease the short term liquidity problem, and dull the news impact of the bank downgrades. When the rush wears off, and it will because this is doing little to help the average person in the real economy, we will see how the markets react to the growing piles of paper covering the landscape of a mismanaged and ruined economy.
The Eurozone problems have not been solved by this. It has only bought them some time, and further addicted the Western world to US dollars.
Um, there’s another outcome that I think Jesse sees but he isn’t mentioning because people don’t like to associate themselves with ‘crazy talk’.
But, a few trillion here and a few trillion there and pretty soon you’re talking ‘serious money’.
Um, (crazy talk time!) How far are 'we' (the US) from dropping into the same 'rabbit hole' that Zimbabwe slid down?
The entire US GDP is only a shade over 14 Trillion (and there’s more than a little ‘shaky accounting’ behind that number!) and we are, for the moment, the world’s largest economy.
So what does it say about ‘conditions on the ground’ inside the ‘world’s largest economy’ that MILIONS of FAMILIES are on government poverty relief programs?
How the fuck is the US supposed to bail out the Euro-zone when it’s own tax base is so decimated that the bulk of its citizens qualify for food stamps?
What does this ‘prove’ good citizen?
Two things, first that ALL money us FUNNY and secondly, we are the victims of gross fraud and mismanagement.
When, good citizen are you going to stop falling for that old gag that only stupid people cannot see the King’s splendid new clothes?
The idiot king is buck naked and we can all see it!
Thanks for letting me inside your head,