Soon they’ll be coming after shorts’ profits!

You watch.
Cramer may want to be the Dictator of the New America!
TIme to turn off CNBC and watch Bloomberg.

“It was five years ago when 10 securities firms reached a $1.4 billion settlement with regulators that was supposed to wipe out the conflicts of interest that infected Wall Street research. A little caveat: The global research-analyst settlement, as it was called, didn’t apply to fixed-income research. Nor to any other research — technical, commodities or quantitative — for that matter. Just stocks.”

SEC Probes `Vomitorium’ While More Patients Gag: Susan Antilla :
http://www.bloomberg.com/apps/news?pid=20601039&sid=al7ADyiLbmAE&refer=columnist_antilla

Kip

…I mean people usually just settle for less.

America is joining the rest of the world. If you travel enough, you know how much the rest of Europe is taxed. They are decades ahead of us. They have been through these cycles of wealth distributions many more times than us.

I agree with viv. People are not stupid, majority just want to survive.
Also, the bigger the lie, the easier it is for the masses to believe.

If you think about it, the real problem for banks, F&F hedgies and brokerages is not mortgages per se, but the derivatives based on them; SIVs CDOs CDSs MBSs etc. This is what drove Bear out of business.

There’s a reason that Buffet calls them “Weapons of Financial Mass Destruction”. They actually have CDOs to the Nth power, CDO(n), which are derivatives of derivatives N layers deep! That takes $1 and turns it into N fantasy dollars. If the fed bails out everybody all N fantasy dollars get monetized and dilute the net worth of the USA (and the world for that matter).

We might also want to consider that this collapse began with Long Term Capital about 10 years ago. That was just a hint of what was to come. Did we learn anything? No. We kept adding to this house of cards at ever increasing rates.

In fact, the real estate bubble was driven mostly by Wall Street which needed ever more raw material for their derivatives of derivatives. They pressured banks, F&F, brokerages and hedge funds to originate or manufacture as many mortgages as possible. Due to the miracle of retarded rating agencies, the worst garbage in world could be repackaged as AAA super senior tranches.

Now that the real estate market has collapsed from its own weight, these things are going sour at a phenomenal and amplified rate. One foreclosure can ripple through many layers of derivatives, damaging assets 10 times the value of the original (way over priced) home.

A global uncontrolled unwinding of the entire derivative web would be far worse than our current real estate crisis.

So it makes sense that Bernanke and Paulson are trying to let air out of the balloon slowly, hoping beyond hope that it won’t pop. An orderly de-leveraging (hisssss) is survivable, a POP! of $100T is not.

If you are trying to understand these guys by looking at what’s fair, proper or sensible in the real estate market, you’re missing the whole show. And the inflation from $100 oil and deflation from a growing global recession is making it a dual of titans.

A real horror show staring you!

PS: Wikipedia has good descriptions of derivatives: CDOs SIVs CDSs MBSs which is now mandatory reading if you expect to survive this debacle.

I can’t recall who said it, but there are only two states of human nature, panic and complacency. It’s basically a byproduct of evolution, that we react to a situation when it becomes critical rather than prevent it.

So yes deflation is here and it will sweep across globally. It’s only when the crisis gets full blown will we see any reaction from the public till than complacency will reign. People will think it’s not too bad, it’s ok, we’ll get by, till it gets really urgent.

The man for the job was Ron Paul, the FED needs to be abolished, IT IS the systemic risk in the system, till than as roubini put it so eloquently, welcome to USSRA – (United Socialist State Republic of America).

Socialism is alive and kicking and it’s starting to suffocate the system.