Excited Delirium

Stories about Excited Delirium, the Shock Economy and a little fiction here and there.

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Where Did the Fed Get $7.7 Trillion?

The Federal Reserve – a privately owned lender to the Federal Government in the US – printed $7.7 trillion during the 2008 financial crisis.

They gave it to banks in 2008 while the rest of America started to fall apart.

Dennis Kucinich explains:

If you don’t believe what he’s saying, know this:  nearly HALF of all capital gains in the US went to just 0.1% of the US population.  Continued efforts to reduce the tax on capital gains will only exaggerate the inequality in the US and elsewhere, including Canada.

Here’s the translation:  socialism for the top crust, capitalism for the rest of you.

US to Backstop $75 TRILLION in Derivatives Risk?

Just as #occupywallstreet picks up steam, it looks like the US Federal Reserve will backstop (ie. insure against risk or exposure) the massive $75 TRILLION of notional derivatives carried by the Bank of America.

What this means is that when Europe finally implodes and banks fail, U.S. taxpayers will hold the bag for trillions in CDS insurance contracts sold by Bank of America and JP Morgan.  Even worse, the total exposure is unknown because Wall Street successfully lobbied during Dodd-Frank passage so that no central exchange would exist keeping track of net derivative exposure.

No wonder Americans are upset.

This is the Ponzi-Bingo-Lottery-Casino attitude being presented by American financial institutions and the obvious reality is that the Fed will continue to do everything it can to prevent a massive hemorrage from happening, but every time they try to block things up, everyone just gets impacted.

It’s time to let it go.  Stop treating the banks like they’re little children and make them accept their responsibility.

The Dollar is Doomed and the Fed’s Days are Numbered

Most of the non-digital media that I stumble upon like radio and the occasional TV news report rarely identify the fact that the US dollar has tanked so substantially over the last 7 years. The policies of the Bush administration have been a disaster – for most.

And the point of all this: the last 30 seconds of this video interview with Jim Rogers offer some insights that I think we can appreciate:

The American Central Bank is a disaster. It’s causing huge inflation in the world, not just in America. It is so bad – you can write this down -that I suspect that the American Central Bank will disappear within the next decade.

The US Federal Reserve: Privatization of Public Regulation?

There are dozens of stories related to this, so I’m going to try to filter to the most relevant.

For those of you who watch events in the market, you’ll have heard that the Federal Reserve Board is speaking with a number of interest groups and organizations, mainly with the intent of modifying and ‘updating’ rules concerning financial regulation.

I smell a rat.

It seems like most financial instutions have been at the trough for the last few months, claiming financial instability if they don’t get massive handouts, whipping the media into a grand and delirious frenzy.

I suspect that this situation is the financial equivalent of 9/11, giving the powers that be the public perception that ‘something must be done’. This ‘something’ is a complete overhaul that will likely favour a very small handful of financial institutions.

Let’s start here: The New York Times.

And here, reminding ourselves that the Federal Reserve Board is not a public institution.

Basically, the proposal is to merge a wide array of Federal and State regulatory bodies into a small collection of “Commissions” that would monitor and control pretty much all aspects of financial markets. In an effort to summarize the Commissions, I think they are as follows (but it seems like some windows have been left open for more groups):
1. A Securities Commission that would include the Commodity Futures Trading Commission
2. Mortgage Origination Commission
3. Prudential Financial Regulator to lead the banks
4. An insurance commission

What’s staggering about all of this is that it has been laid out conveniently amidst the ‘wild storm of panic’ that is being whipped up by mainstream media, which makes me feel like these sweeping changes will have the same impact on American (and global) financial activity similar to how the Patriot Act influenced world travel.

Empty your bottles will become ‘empty your wallets’.

Let’s take commodities. Putting regulation of commodities – our food, our electricity, our fuels – gives a new private institution the ability to take prices to a whole new level without the threat of public interference.

Look at Enron and what happened to California when the entire electricity market was deregulated. It nearly bankrupt one of America’s most influential economic powerhouses.

So, imagine Enron running our lives when it comes to chicken or beef or corn prices. Or gas. Or electricity.

It ain’t gonna be pretty.