One clear thing that emerges from all these non-sense and lies, is that these experts/pundits/economists etc. really don't understand what they are doing, and the same way that Joe Average became a day trader during the Tech Bubble and made a virtual fortune before making real big losses on the stock market, 90 to 95% percents of professional money managers (pension funds, prop traders, hedge fund managers, and so on) made a lot of money since the mega(-bear)-rally of 2004-2007.
And since the government and its bodies have no clue on how to fix this mess (they still don't understand that there is no fix and the market readjustment that is happening is a good thing for the future and should be embraced instead of fought).
I mentioned Rothbard's America's Great Depression a couple of days ago here, and it is very impressive how things are unfolding in the exact same manner as the depression of 1929-1934. Even the dates match, just 78 years later.
One thing that is different, is that at that time, the Gold standard was preventing the printing of trillions of $... so it looks like that the deflation that happened in the 1929-1930 period and was a predicted and positive action might not happen this time and make the sequel of Great Depression a lot worse than the original one.
Below some extracts of interesting posts.
Bill Fleckenstein shows his anger:
MacroMan is ironic and makes us laugh:
Unfortunately, despite some 12 financing facilities created by the Treasury and the Fed, massive interest rate cuts and various bailouts, the government has little to show for its attempts to dictate where markets should trade.
The Fed's own balance sheet has exploded from roughly $900 billion worth of debt in August to around $2 trillion as of last week. Knowledgeable sources expect that to reach $3 trillion by the end of the year.
These numbers and rates of growth are so enormous (and unprecedented) as to be utterly incomprehensible. Does anybody actually think the government has any idea what it's doing?I think it's certainly dawning on folks that when the government "does something," it often creates more problems than it solves. In this case, as it props up poorly managed companies, it may only be allowing them to rain further havoc on the better ones in their industry.
When I wrote that book, I pretty much exorcised my own demons regarding my revulsion and anger at the policies of former chief Alan Greenspan and his Federal Reserve.
[...]This is going to be a very unpleasant period, I'm sorry to say. The outcome we are witnessing is exactly why, during both the stock mania and the housing mania, I was so vociferous in my criticism of Greenspan. He is the one man who continually meddled with the market and continually advocated that folks behave in an irresponsible way.
I find it outrageous that this buffoon is still making speeches (and commanding huge fees) when the entire country, and perhaps the world, is paying for his crimes against finance.
Macro Man had to laugh at a Bloomberg story about one of the Fed's alphabet soup programs, the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility. Incredibly, this program seems to go by the shorthand acronym ABCPMMMFLF, which appears to be less a government liquidity program than the product of wiping spilled coffee off a keyboard.
Clearly, there is a gap in the market for snappily-named government programs. Image, as Andre Agassi used to say in the early 90's, is everything- and what sort of image does a program called the ABCPMMMFLF convey? "We don't know what we're doing".
What the situation requires is a public-spirited advertising agency to rebrand the dizzying array of government rescue packages in a way that will capture the public's imagination and boost confidence in the economy and financial markets.
In the absence of such an agency, Macro Man is happy to step into the breach. He has cobbled together a series of programs that should do a much better job of conveying their purpose to the public, and thus restore confidence in policymakers.
The first port of call is to revamp the liquidity and asset support programs. In the Macro Man Program (MMP), there will be two primary facilities:
* The Commercial paper Recovery Assistance Program (CRAP), and
* The Treasury Unsaleable asset Recovery Directive (TURD).
The MMP also provides for two programs that are designed to help banks shore up their financial standing:
* As previewed in this space last month, the Special Capital Raising/Extended Writedown Undertaking (SCREWU) will enable financial institutions to increase their capital base while reducing holdings of dodgy assets.
* Meanwhile, a special accounting framework for structured credit will be instituted until market conditions normalize: the Special CDO Accounting Mechanism (SCAM).
What to do with the GSEs? "Conservatorship" is an ugly word that is difficult to understand. Much better for the government to manage them under the auspices of the:
* Federal Residential Agency Unwinding Directive (FRAUD).
Meanwhile, we should probably assume that Ms. Pelosi's desire to divert some government funds to the automotive sector will be successful. This will be accomplished via a:
* Automakers' Recovery and Stability Enhancement (ARSE) program.
Let's not forget the international efforts at crisis resolution, either.
* The primary outcome of the weekend G20 meeting will be a new Liquidity Enhancement and Modality Origination Network (LEMON). As an aside, Macro Man has thought about it for another 24 hours....and he still doesn't know what a "modality" is.
* In Europe, where banks are behind the curve in owning up to losses, policymakers are rushing to create a Harmonized European Accounting Directive for Implementing New Standards for Assets and Nonstandard Derivatives (HEADINSAND).
Finally, it is worth observing that amongst the plethora of government programs produced over the last few months, very little has been done to address the original source of the crisis: US homeowners.
In conjunction with consumer advocacy groups, Macro Man has designed a program that seeks to aid troubled homeowners. Congress can expect to see lobbyists agitating for its passage in the new year:
* A Single Home Owners With Mortgages Extended Treasury Home Equity loan Modification with Offsetting New, Equilibrium Yields program. A bit of a mouthful, to be sure, but its acronym is sure to resonate with an irate electorate: SHOWMETHEMONEY.
Also worth reading:
The End, by Michael Lewis - Nov 11 2008