http://market-ticker.denninger.net/ Ok Mr. Obama, Time To Choose Are you really "Change We Can Believe In"? Are you really "Yes We Can"? If so, here are the acts you must undertake as soon as you are sworn in, and you should announce them tomorrow so the market will stop tanking due to the lies of Mr. Paulson and Bernanke: You will send up a bill that enacts a full repeal Gramm-Leach-Bliley. This was the law that repealed the Glass-Steagall act (the majority of it, anyway.) You will send up a bill that reinstates the leverage limit of 12:1 that used to apply to investment banks (the dropping of which is the proximate cause of this mess, and which Henry Paulson was directly responsible for through his lobbying and requests) and apply it to all institutions doing business in The United States. You will send up a bill that repeals the 2005 "Bankruptcy Abuse Prevention" act - an act you voted no on originally. This one should be a no-brainer, since you didn't support it originally. You will send up a bill that repeals the TARP/EESA, and will vow to do everything in your power to stop the expenditure of any further funds under the existing law, and you will direct Treasury on January 20th to reverse the tax changes that granted $150 billion in "preferences" without a vote of Congress or even public notice. You will send up a bill that requires the SEC, OTS, and OCC to compel all assets and liabilities to be consolidated upon a firm's balance sheet and directs that all marking methods, formulas and variables along with each asset held be disclosed accurately for every firm that operates in the United States. You will direct The Federal Reserve by executive order to comply with the FOIA filed by Bloomberg and disclose, immediately and forever into the future, all loans issued, to whom, the specifics of the collateral pledged, and the discount or "haircut" applied. Such information will be published via The Web at the point of issuance of Fed Credit and all actions taken by The Federal Reserve or any of its district banks shall be undertaken in the full sunshine of the public view. If The Fed should refuse, you will pledge to send up to Congress a bill to repeal The Federal Reserve Act of 1913, and replace The Federal Reserve system entirely with an entity that will under penalty of federal law operate 100% "in the sunshine." If you want to stabilize our markets and financial system, you must undertake all six of the above acts, and you should announce your intention to do so now, so that the markets can anticipate that the "dark ages" of obfuscation, lying and theft will stop on January 20th. You should, today, call upon Henry Paulson to resign immediately, as his actions in 2004 were the proximate cause of this mess, he is hopelessly tied up in conflicts of interest that have been expressed in ridiculous favoritism over the last year and a half, and in addition he has refused to admit his complicity. We are literally on the precipice of a full-on meltdown despite what the talking heads are saying. Henry Paulson and Ben Bernanke came to you and the rest of Congress about a month ago and said they would "fix it" by buying up illiquid assets. They lied; not only did they not do so, I allege they never intended to do so, and worse, they knew up front that their "prescription" would not and cannot work, because there is simply not enough money and credit available to solve the problem. The Main Street economy will not and cannot recover until the excessive debt is forced into the open and defaulted. That cannot happen until the lying and obfuscation both of firms and our government, including Treasury via the "TARP" and The Fed, is stopped. Only then can lending return to a sustainable level and only then will the markets and our economy normalize. It is a false hope of the highest order to believe that we can manage to "muddle through" or that we can sustain the consumption rates that this nation has had for the previous 20 years. That is not possible. Instead, we will (and must) return to a consumption rate more closely matching that of the 1960s on a per-capita basis, before "easy money" and "easy credit" became the underlying theme in American Life. This adjustment will not be easy. Without "silly credit", which cannot be restarted or maintained, we sell 11 million automobiles in the US a year, instead of 17.5 million. We sell one million fewer homes a year. Leisure travel dollars spent will fall by 20% and perhaps more. We sell a lot less "bling" of various sorts, whether it be $300 cell phones (the $50 one makes calls you know, and doesn't require a $100/month service plan either!), $5 lattes or $10 martinis. This is reality my friends, and there is no escaping it. What's worse is that the people who "believed" we could forever live beyond our means and just ring up another charge, either as consumers or granters of that credit, are and must eat the inevitable losses from this excess, which means for a time we will suffer output and consumption that is below sustainable limits while the excesses are worked off. If President-Elect Obama wishes to have any hope of being able to enact improvements to our health care and educational systems (as just two examples of the many things he has promised to do) the above must be accomplished first, or the black hole of debt deflation will suck up all of the resources that would be used for those other purposes - and then some. Worse, there is a near-100% chance that if Bernanke has or does "print", that is, intentionally devalue through monetization, the instant that act is detected (and it will be) all foreign capital support of our Treasury market will disappear. This will force an immediate cut in Federal Spending by at least 50% (and probably more.) It takes only a cursory look at federal spending to determine that the only way to accomplish this would be to radically slash Social Security, Medicare and the military by more than half each, along with a roughly 60% cut across all discretionary federal programs (remember, you can't stop paying the interest due without defaulting and cutting off all Treasury debt funding.) This would literally gut every program that Americans depend on nationwide and result in tens of millions of Americans being rendered jobless, homeless, and without medical care - within days. In short, we would suffer an almost-identical event to what happened in Iceland. Yes it can - happen here. Don't think for one second that the media and public aren't on to the charade that "big business" and government have run for the last twenty years. They are. John Bohner is hollering about The Fed's secrecy, Bloomberg has filed an FOIA (and presumably intends to sue if he doesn't get what he's asking for) and on MSNBC.COM we had this ditty: "The losses have to be taken, but no one wants to take them," Hendler said at a conference Wednesday, speaking about the banks and their handling of troubled assets. "It seems like the taxpayers are going to be taking a good portion of that." Gee, who's been saying that for a year and a half - that the losses have to be taken? I, among others. And what has been done? Secretary Paulson, Ben Bernanke and President Bush have taken those losses onto the taxpayer's backs in secret instead of forcing the people who made the bad decisions to eat them. Drudge has had bailout-slamming headlines up continually for days now. 25 million views in the last 24 hours, more than 3/4 of a billion per month. You think "Joe Middle Class Six Pack" finds this amusing - or acceptable - when it scuttles all the other promises you (and the rest of the Democrats) have made? You think "Joe" hasn't figured it out by now? Somehow I doubt it. I suspect that the rest of America who voted for you is not going to look too kindly upon your administration if you can't (or won't) make the tough choices, forcing the people who committed the bad acts and booked the losses to eat them, instead of shifting them to those Americans who did nothing wrong. Nor will America sit still while their next door neighbor gets a freebie mortgage modification and principal forgiveness while he does not - because he put 20% down and lived within his means, while his neighbor bought a boat and a Hummer and played "nouveau riche" on a beer budget. That sort of robbery from the prudent to benefit those who behaved imprudently (and to those who even committed fraud in overstating their incomes!) will not be tolerated. I know I won't stand for it, and I'm one of those who did vote for you. You wrote a lot of checks on the campaign trail, the most important of which was a promise that you would not allow this sort of crap to go on in an Obama Administration. We voted for you and put you in office, as we have watched more than a million jobs disappear from America over the last year, with new unemployment claims coming in at 516,000 this week, continuing claims at roughly 3.9 million. It is time to let adults in the room and lock up the children who have and are pressing policies that will, if not stopped, guarantee a Depression greater than that which gripped America in the 1930s. I, and the rest of America, expect you to cash those checks with policies and acts, and you can start today by declaring your intentions to stand with us, not those who have ripped this nation off. In the meantime, I'm going to blatantly rip off (and modify) Steph's comment in the forum (which she says she overheard at work) and rename the TARP for you. It shall hereafter be known on The Market Ticker as the T.U.R.D. Taxpayer Universal Raping Device We The People have just one question for you Mr. Obama: Are you going to attempt to polish it or flush it? <!-- <rdf:RDF xmlns:rdf="http://www.w3.org/1999/02/22-rdf-syntax-ns#" xmlns:trackback="http://madskills.com/public/xml/rss/module/trackback/" xmlns:dc="http://purl.org/dc/elements/1.1/"> <rdfescription rdf:about="http://market-ticker.denninger.net/feeds/ei_657.rdf" trackbacking="http://market-ticker.denninger.net/comment.php?type=trackback&entry_id=657" dc:title="Ok Mr. Obama, Time To Choose" dc:identifier="http://market-ticker.denninger.net/archives/657-Ok-Mr.-Obama,-Time-To-Choose.html" /> </rdf:RDF> --> <!-- no digg urls in entry -->
T-3 Your are not, I trust , going to hold your breath until all of this happens??? Remember Billyboy "I worked as hard as I could to get you a tax cut---"? Overbore
This whole thing has me bamboozled...best thing I could do is to shut this machine off fora month or two. Get my news from foxy robin mead..
