AS SOMEONE WROTE DensityDuck: UN-altered REPRODUCTION and DISSEMINATION of this IMPORTANT information is ENCOURAGED!!
some of my thoughts from the discussion:
Those dangerous criminals in the highest ranks of Freddy & Fanny AND federal government as well, who in violation of Freddy & Fanny statute began packaging low grade mortgages with false rating - consciously created this unprecedented attack on US financial system.
Indy Mac may look like one of the victims, as we all are, but prices of real estate began falling in the fall of 2005!Bankers at Indy Mac did not do a good job: they MUST HAVE start selling declining assets in 2005 to cut loses
This is bullshit explanation they gave, because: everybody knew that housing is a bubble. Several hedge funds made billions on the common sense analysis of buying power of american public.Well, lets assume GDP is $13 tril. The President’s actual budget for 2007 totals $2.8 tril.
All of a sudden we have feds taking over OTHER PEOPLE debts in the amount of -so far- almost 6 tril, since banks started to go down
DO WE KNOW how much it will cost us and in what way it will get financed?
The system is not TRANSPARENT. It was ok for a while, when perception of it was more or less positive
NOT ANY MORE. TRUST diminishes, risks are growing and facts are just started to unveil
We are in a very new territory now: US fed paper and its denominator($) is declining in value and in its risk assessment. S&P already warned that FM&FM situation may and likely WILL CHANGE THE CREDIT RATING OF FED PAPER.if rating of federal government paper declines, if dollar is declining, if GDP is not growing, if taxation level will increase, if assets value SERIOUSLY AND UNCONTROLLABLY FALL DOWN- we may sit down and write some models to depict it in more or less precise way -
But i doubt we can figure out effects of Gulf Oil been locked by the possible war with Iran.
And we MUST expect that Venezuela and Russia WILL DRASTICALLY CUT ON EXPORTS OF OIL
How about fuel shortages? How about attack of a much harder degree then 9-11 was?
If we want to be fair we must take it ALL into account. This economy never had a situation of FM&FM magnitude alone not mentioning the rest. It is just a beginning. For those of you who can not overcome the wishful thinking: all your optimistic conclusions are based on assumption of certain variables fluctuation within desired: asset values, government credit rating and ability to borrow, dollar value, economic growth, general state of economy, etc
AGAIN: it may go OK under the above. But what if:
-assets deflate to th unexpected level, say MUCH more then u estimated
-government can not borrow that easy as in the past
-tax revenues go down because economy shrinks
-chaotic processes will take place because of t he FUEL SHORTAGES caused by IRAN war
-large scale terror attack kills tens of millions in nuclear or biological hit
All of the above are very likely events and NOTHING is done on a systemic level to prevent any of the consequences!!!!!!!