Posts Tagged ‘bad bets’

I saw a video last night in which the speaker stated the Fed charter comes to an end in December of next year. Unfortunately, it appears he does not know about the McFadden Banking Act of 1927, which gave the Fed a permanent charter. More to follow…

 

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If you haven’t followed the housing market, you may not be aware of what a Credit Default Swap entails. Basically, it’s insurance against default. Of course, there is a twist. You need not own the asset on which you’ve taken out the insurance. This is part of the process that broke the US housing market.

The practice should be abolished. No other insurance policy allows you to insure something you don’t own.

All that said, the notion that Greece – via this most recent bailout – may be able to sidestep paying the insurance on their default is absurd. It’s word games. The notion that a state bailout, in Europe or America, avoids a default is a false premise. Greece, like the banking industry here, defaulted. That is why they need and needed a bailout.

All of this is just further evidence the rule of law is broken.

 

 This is being touted as good news.  It is not.  For relative chump change, these banks will be indemnified for their crimes.  The same banks will then charge fees, recouped from the payout no doubt, to help a limited number of people. Be assured they are right now looking for any loophole that will allow them an out.    Be also assured their friends in the judicial and legislative systems are helping insert more of the same loopholes. 

 Damn criminals.  That’s all I have to say about that.

 As always, Mish has great words.  However, the comment thread is even better than Mish’s post…it gets deep fast.

I’ve been sounding the alarm about the Vegas market for awhile now, using Detroit as an example of what can happen to a single industry town.  Vegas is, IMHO, particularily susceptible because the Reid-Goodman-Goodman triad is doing nothing to help the city, much less the state.  The market is almost assuredly going to continue to decline, despite Mr. Nason’s assurance of it being nearly a “sure bet” market.