3/10/11…the dumbest guys in the room!

After opening DOWN yesterday’s trading was characterized by EIGHT up/down cycles…all supposedly due to tensions alleviating or being exacerbated in Libya…horse manure. NYSE volume was just 871 million shares, the SECOND lowest of the year…was everyone out getting charcoal on their foreheads???…beaten only by the 817 million share day of February 14th…could they all have been out buying roses and chocolates?

People wake up…there are a few big players out there pushing the market anywhere and everywhere they want…yesterday it appears half were aligned on each side. TB has no further comments on the market other than to say we as Americans are incapable of  focusing not only on only one event at a time but to be unable to correctly even perceive the meaning of said event, in what has to be the most severe case of ADD on record. If we were analyzed we wouldn’t even be allowed to manage our own investments let alone others! The stock market is opening with the Dow -160…Sayonara Takahashi!

Bloomberg Quote of the Day: “A mother is not a person to lean on but a person to make leaning unnecessary.” Dorothy C. Fisher…don’t worry kids, as long as we have ‘helicopter moms’ it is they, not you, who do the leaning…on your teachers, employers, anyone who stands in your way. TB

TB’s Quote of the Day: “Part of being a secure America is to encourage homeownership.” President George W. Bush, June 2002, from a speech titled ‘Blueprint for the American Dream’ delivered at and African-American church in Atlanta, Georgia. Attneding were Franklin Delano Raines, then CEO of FNMA, and Leland Brandsel, CEO of FHLMC…both men flew back to Washington, D.C. on Air Force, proving that there are cheaper ways to fly from Atlanta to D.C. than private jets…or even publicly-owned ones!

…when Bethany McLean and Joe Nocera wrote All The Devils Are Here,  they missed a bet by not calling their chapter on the GSE’s this, a play on McLean’s expose on Enron, The Smartest Guys in the room. But not only were both the GOP and Dems on the take and even when it was obvious that FNMA and FHLMC were risking the entire American dream, both sides merely yelled but did nothing to stop it…until it was too late. Note that the quote above was delivered SIX years before the collapse…and was followed by the firing of the CEO’s of both GSE’s yet the continued to grow, and as yesterday’s ‘market share’ rant showed were driven by power, money, and for both of these agencies accounting fraud. The GOP embraced the dream of home ownership for all Americans just as the Dems did…yet we have been led to believe it was just the bought and paid for Barney Frank and Chris Dodd that allowed this to happen. Yet we know, thanks to Karl Rove that the GOP can never be topped when it comes to a propaganda generating machine.

On February 24th, TB devoted this column to Fed Governor Hoenig’s speech of the prior day on saving our financial system. In it he said,

“Fifteen years ago (1996!), I gave a speech entitled “Rethinking Financial Regulation,” which summarized
the major threats facing our financial system. My suggestion then was to take steps to reduce interdependencies among large institutions and ot limit them to relatively safe activities if they chose to provide essential banking and payments services and be protected under the federal safety net. I also argued that safety net protection and public assistance should not be extended to large organizations engaged exclusively in nontraditional and high-risk activities. A final point in those remarks was that central banks must pursue policies that preserve financial stability. I am going to repeat those suggestions today, and as often as the opportunity allows. History is on my side.”

Had we listened to that Iowa professor then he would not have had to repeat it now as an active Fed governor. Like Hoenig, and Diogenes, TB will not back off on his effort to fix America for the future generations, who now seem doomed except for the children of today’s wealthiest Americans. Make no mistake, this is not to imply that they are bad people although it appears the wealthiest of them caused the financial catastrophe that has put 14 million Americans out of work while they continue, not only to reap the rewards but to thwart any attempts at financial reform…and openly flaunt their disdain for our system of government and the American people, and their downstream small community banks.

What could be a better of example of this than the ‘bonus’ reform that requires most of a bonus to be paid in restricted stock and subject to ‘clawbacks.” All but the top EIGHT officers of Goldamn Sachs, whose title includes PARTNER (even though it remains a partnership within a publicly held corporation!?!), and many of whom are department heads, are ALLOWED to SHORT those restricted shares, and do so openly, to the detriment of the shareholders. Thus they can make millions even when they blunder and then simply forfeit the restricted, and potentially worthless shares! This is the ultimate in hypocrisy and as a result they, JPMorgan and others continue to take on even more risk…while NOT serving the needs of their customers and depositors.

As a result, it is TB’s goal to convince as many people as possible when asked what party they belong to, to reply: AMERICAN, or independent. Imagine in all of us changed our affiliation to independent…we would be on our way to taking back our country – but do we have the will to do this.

That is why reading All the Devils are Here is so important to our future. Because we have to realize that it was not just Barney Frank, Chris Dodd and the rest of the Democrats that helped destroy our system, but the GOP including but not limited to George W. Bush, Phil Gramm and his lovely wife Wendy (as Jimmy Carter would say), and much of the GOP. Have we forgotten that it was the GOP that was in control of Congress during all but two of the Clinton years and all but two of the last eleven…yet the GOP propaganda machine has the Democrats responsible for all of our ills. Now that is efficient propaganda.

Tomorrow TB will include some of the snippets from the chapter…a real eyeopener…and depressant.

Have a great day…don’t become complacent…and most importantly: read the book!

TB

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