That’s all I hear today in the media – that the market has lost confidence.
Why have people lost confidence? Was it an accident? NO.
Was it an intentional act? Yes.
Who’s responsible? That’s easy.
- Congress. We know why the meltdown happened in 2008. Financial institutions sold crap to people claiming it was “Grade AAA” chocolate. It was, well, crap and this was discovered when the first bite was taken. There has been no penalty assessed for doing this.
- The Banks. They repeatedly said “we’re well-capitalized” and then blew up. Bear and Lehman among them. There was no penalty assessed for doing this.
- The President. He said he didn’t come to Washington to protect the banksters. Then he did exactly that. In short, he lied. Even after we discovered over a hundred thousand perjured documents filed in foreclosure cases, there was no criminal penalty assessed for doing this.
- The President (again). He said he’d cut the deficit in half by the end of his first term. Instead he more than doubled it and last night put forward a demand for yet more unpaid-for spending that will guarantee more than a trillion in deficits on a forward basis, along with essentially defunding Social Security and Medicare taxes while both programs are deeply in the red. In short he’s driving the nation straight toward ruin exactly like a junkie demands more and more drugs even though he’s aware that if he continues he will certainly die.
- Ben Bernanke. He’s been wrong about virtually every prognostication he has ever made about the economy, going back to 2006. He also lied when he told Congress that “The Federal Reserve will not monetize the debt”, just months before doing exactly that. There has been no penalty assessed for doing this.
- Wall Street itself. HFT abuse is the stuff legends are made of. It’s a true outrage, really. The bid and offer manipulation on a daily basis is chronicled by Nanex; I’ve also written about it repeatedly. Market manipulation is illegal. There has been no penalty assessed for doing this.
- The Banks (again) are lying about their balance sheets. We know this is a fact because in virtually every case where the FDIC has taken over a bank, from big to small, it has resulted in monstrous losses against claimed “asset values” on the balance sheet, sometimes on values claimed just weeks before in public filings. There has been no penalty assessed for doing this.
- Case-Schiller and Zillow both claim $9 trillion in residential property value losses. The Fed claims $500 billion, approximately, in decreased mortgage debt. The rest cannot be found; the presumption must be that the banks are hiding trillions in bad paper in mortgages alone! Is there another explanation? Not really. Sure, some of this loss is equity, but not $8.5 trillion out of $9 trillion. There has been no penalty assessed for doing this.
- Federal Regulators. They got caught allowing IndyMac to backdate deposits. The really ugly part of it is that the same people were involved in that as were involved in the same offense during the S&L crisis! The OCC sued to block state-level predatory lending statutes that would have largely cut off the housing bubble. That’s not idiocy, it’s rank corruption.
So on what basis should we expect “confidence” in the markets, especially when the markets all clear those those very same banks that pulled the scams, appear to be still pulling the scams, and the governments and regulators are still enabling the scams while the market has every reason to believe that the scam won’t hold up and it will all fly apart on the back of Greece defaulting?
There’s your answer.