Image via WikipediaWhat Is Wrong With This Picture?
From Yahoo News:
Japan was prepared to offer foreign reserves worth up to $100 billion to the IMF if the Washington-based lender needs extra funds to help emerging economies, a government source said on Thursday.
Prime Minister Taro Aso will make the proposal at the global financial summit of 20 industrialised and emerging nations starting Friday night in Washington, the source told Reuters, confirming a media report.
And from Reuters:
Japan will offer up to $100 billion to the International Monetary Fund for emerging economies in a new effort to come to grips with the fast-moving financial crisis that threatens to tip the world into a deep and long recession.
Markets tumbled anyway in Asia, spooked by worries that massive capital injections and emergency regulatory measures have failed to halt a freefall in markets and damage to the real economy.
Correct me if I am wrong, but hasn’t Japan been in a recession since the early 90s? That’s right, their markets crashed 17 years ago after a huge real estate and stock market bubble burst. Sound familiar?
They could have let the folks behind the bubble fail, but instead their solution was to throw money at the problem, trying to obscure the real reason for the decline.
Which resulted in a 17 year long recession, which is now getting even worse. Which is exactly what the liars and thieves at the Fed and the Treasury are trying to do.
Look at this, from the Reuters article:
Washington, which hosts a meeting of the G20 leaders at the weekend on the crisis, backed away on Wednesday from using a $700 billion bailout fund to cleanse bank balance sheets of bad mortgage debt. U.S. Treasury Secretary Henry Paulson said he preferred instead to focus on buying stakes in banks to encourage them to increase lending.
[…]
In Washington, Paulson defended a change in plans for the bailout package.
“I will never apologize for changing an approach or strategy when the facts change.”
Paulson’s announcement drew criticism and added to worries stoked by dismal employment data from Britain and a World Bank warning Tuesday that global trade may contract in 2009.
“It is shocking to see the U.S. government deciding not to use any of the $700 billion on buying mortgage-related assets,” Dariusz Kowalczyk, chief investment strategist at CFC Seymour in Hong Kong, said in a morning note.
“Declining house prices and falling values of mortgage-related securities are the primary reason for the current crisis, and abandonment of attempts to tackle these problems head-on will prolong the recession,” he wrote.
The combination of tight credit conditions and a global downturn has set off what economists say has become the worst financial and economic crisis in 80 years and left investors bracing for more interest rate cuts.
The crisis also continued to take a toll on companies, with top U.S. electronics retailer Best Buy reporting it had cut its full-year growth outlook, boosting fear about the impact of slower consumer spending on the U.S. economy.
Paulson said that nonfinancial firms as well as banks may need more cash infusions but that he saw “implementation difficulties” aiding companies not federally regulated.
Before I go further, let me say without reservation that the ‘Declining house prices and falling values of mortgage-related securities are NOT the primary reason for the current crisis’. The reason for the current crisis is that uber-greedy asshats created worthless securities and sold them worldwide, successfully, until their CON GAME was recognized. Then everybody, including the cons, got scared and quit playing any game at all.
A Short Trip Down Memory Lane
Remember back in September, when Paulson was running around threatening that IF WE DID NOT BUY THESE WORTHLESS PIECES OF PAPER WE WOULD PLUNGE HEADLONG INTO A SEVERE RECESSION?
Look folks, this guy, Hank Paulson, Secretary of the US Treasury, is a CON MAN. He came from Goldman Sachs, was CEO of that company until 2006. Goldman Sachs was one of the leading writers of these worthless securities.
2006 was the height of the bubble. His buddy Bush the Dumbest got him a job at the Treasury and old Hank made a cool half billion dollars on just that deal alone, all TAX-FREE.
Funny how Goldman Sachs got a gift from all of US last month to the tune of about 60 billion dollars. Or not so funny, depending on if you’re Goldman, Sachs, or just one of 300 million regular Americans who never even noticed their (and their children’s) pockets being pinched.
And Another Thing
‘Implementation difficulties’ aiding unregulated companies? For cryin’ out loud, Hank! Do you think we haven’t noticed how you have already picked and chose which companies you’re going to help? When they didn’t fit your ‘regulatory’ criteria, you just changed their status and opened up the lending window!
Hank Paulson, you are a liar. You are a thief. And worse than that, you’re our Treasury Secretary. You know that the only way out of this mess is to let the market work.
Assholes and idiots who tried to take advantage of the less financially advantaged, who made greed-based decisions that turned out to backfire on them, should be not just allowed to fail, but FORCED to fail.
And if any culpability can be proved (LOOKING AT YOU HANKY BOY!), the folks responsible should serve the rest of their lives in prison (as a minimum), and I don’t mean some cushy place with more room for inmates than I have in my house…
(end of rant)
I am Jon, and, well… it’s probably not the end of the rant, just the end for this post.
