People seemed surprised at the depth of what is coming. All you need do is reread what Enron was all about and who was involved (50% of our congressman according to one article) and then realize that this is Enron on a global scale. We've gotten so use to the criminals running our government we think of it as business as usual, except now people expect these people to get us out of this downward cycle. Impossible. All they are doing is hiding their criminality behind $700B which will do absolutely nothing to help this situation. The only 2 people in Congress that appear to have a clue to what is transpiring are Ron Paul & Dennis Kucinich.

http://in.youtube.com/watch?v=WL-9CV-qbMw
http://in.youtube.com/watch?v=Lou6beUkR_U&...feature=related
http://in.youtube.com/watch?v=Ak-ZVUhTcdw

Paulson doesn't give a toss about the balance sheets. It's what's OFF them that's frightening him to death. When I read Shah Gilani's excellent analysis How to End the Credit Crisis at No Cost to US Taxpayers which was much better than the analysis that I wrote a few days previously “How to save the US Taxpayer $700 Billion and the Failure of "Mark to Market" the penny finally dropped.


...I believed Mr. Paulson when he said that the $700 billion was to clean up balance sheets. Why shouldn't I? That's what he said clear as crystal, I wrote it down.

What's on the balance sheets is the RMBS's, but why now and why $700 billion? I couldn't understand it.

But it's nothing to do with the balance sheets.

I wouldn't be surprised if on average those RMBS (residential mortgage backed securities) are worth 80 to 90 cents on the dollar if they are valued properly (i.e. not Market to Market).

But this crisis is not about accounting rules, I couldn't understand how they were all being so dumb saying “Oh woe is me…Mark to Market all these banks are insolvent, and it's all because the market is stalled”. No I was stupid, I under-estimated the intelligence of those guys, they know exactly that they can value those assets using income capitalization, and nothing much has changed for the past three months. How could I have been so stupid to think they were SOoo stupid?

So why now?

It's what's not on the balance sheets that matters. Because as Shah Gilani explained, chances are the bets that were placed via CDS's dramatically geared the potential losses, in just the same way they dramatically geared profits when house prices were rising.

I always thought that it was illegal to take out insurance on your next-door neighbor's house in case it burnt down. What CDS's allowed the banks to do was to write a hundred policies, and now one house in fifty is in danger of burning down, and the guys that wrote a hundred policies on each house are in danger of defaulting. And the way the system is structured that could set of a domino meltdown of CDS's,

The reason it's $700 billion is that Mr. Paulson knows that he can't afford any more RMBS's to fail.

Not because some poor people might lose their homes, ...

That's just "collateral damage".

It's because if they do, the $68 Trillion chain reaction could start.

http://www.marketoracle.co.uk/Article6495.html

How to save the US Taxpayer $700 Billion and the Failure of "Mark to Market"
Politics / Credit Crisis Bailouts Sep 24, 2008 - 06:36 PM

By: Andrew_Butter

Politics

Diamond Rated - Best Financial Markets Analysis ArticleSo that's the BIG PLAN unveiled to the Senate Banking Committee yesterday, put the assets that you don't want to "Mark to Market" in quarantine, and save them for a rainy day.

OK that buys time, but (a) at what cost and ( who knows if $700 billion will be enough? Some people say it will take $5 Trillion.

All Mr. Paulson can say is that he doesn't have a clue how much money he will need, but once he's got a cheque for $700 billion, well the next $4.3 trillion shouldn't be too hard. That's the key to any confidence trick, get the mark on the hook so he thinks the only way out when you come back for more is to put more in.
http://www.marketoracle.co.uk/Article6451.html

How to End the Credit Crisis at No Cost to US Taxpayers
Politics / Credit Crisis Bailouts Sep 25, 2008 - 11:16 AM

The key culprits are the structured financial products that reside on the balance sheets of banks, dead investment banks, insurance companies, hedge funds and all manner of other duped and unsuspecting investor entities worldwide , as well as the proliferation of the unregulated $62 trillion credit default swaps (CDS) market.

Because all these securities , and in the case of credit default swaps, bilateral contracts , are impossible to value and impossible to guarantee, no one trusts them . As a result, everyone is afraid of these securities and contracts.

Banks are currently not lending to one another because they are afraid that the next round of write-downs and losses may imperil some of their trading partner banks to which they formerly lent billions and billions of dollars to every night. If the answer were really as simple as adding liquidity, the Federal Reserve would have lowered the Fed Funds target. But that won't work. It's a vicious cycle that's eroding banks' faith in one another, and worse, our faith in our banks.
http://www.marketoracle.co.uk/Article6459.html


ENRON ALL OVER AGAIN. We didn't learn then so we're going to pay until we go bust folks, 71 senators & 188 congressmen on Enron Gravy Train. All but 5 of the 56 members of another investigative committee, House Energy and Commerce, got Enron or Arthur Andersen dough. The United States of Enron The New York Times January 19, 2002

http://www.uow.edu.au/arts/sts/bmartin/dis.../citienron.html

The majority of Americans don't have a clue as to what is coming.

It boils down to this.

1% of the American population are pure criminals.

1% of the American population knows who the criminals are.

The other 98% are in the ether.

You and our ilk will be shoulder to shoulder on the green...see you then.

The freakin' lights are out.


WAKE UP!

X-Ray, with all due respect, I am getting sick and tired of talking about it.



Taunton

The Sons of Liberty were in the habit of meeting under a large tree (most village greens had one), which was called the "Liberty Tree". In cities or towns that lacked a tree big enough, the rebels would erect a tall pole as a symbolic tree. This flag was raised on one such "Liberty Pole" in Taunton, Massachusetts on October 21, 1774.

Humans...they only learn the hard way.