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Fraud Probe - International Relations

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December 05, 2007 – Comments (3)

I was thinking about the implications in a broader sense of what Wall Street and the banks have done in terms of working relations with other nations.  Right now we are seeing losses to different levels of government, pension plans, money markets and the US subprime mortgage losses are limited to the US, but are around the world.  These things were rated triple AAA by US firms.

In Canada we have the Yukon Government with $36.5 million frozen in this kind of garbage, which is about $1200 for every man, woman and child that lives in the Yukon.   Several small communities in Norway have been badly hit.  These are but two international hits that I know about.

Now we have New York prosecutors issuing subpoenas to Wall Street firms.  Make no mistake, this is morally a fraud and there is a serious problem with the law for it to not be legally a fraud.

But this is a fraud that has been committed against the world.  What I know as a Canadian is that we've had high taxes and we've sacrificed a lot to get our debt under control.  We've had a sluggish economy and disgraceful job prospects for our university graduates, but we now have surplus budgets and we have been reducing our federal debt.  We have far more responsible lending laws and much stronger insurance costs for mortgages with less than 25% down.  At one point we had 54.9% income taxes for income over $80k, yet average housing prices were $300k.  The sacrifice for getting our debt under control was beyond enormous.

I am just waiting for the "$hit to hit the fan" with our Canada Pension Plan, which has been investing our tax dollars.  I have a feeling that all that sacrifice, hard work and belt tightening is going to be wiped out by this mess.  Having said this, my first thoughts when was researching our Canada Pension and found out they had put our money in the market was, "you dumb, stupid, ignorant, f---- idiots, we have debt and that's the first place of responsibility to put our tax dollars." 

But regardless of what my instincts and feelings were with respect to what the government did, this stuff was rated as having a very low risk.

So, take a minute and think about this.  Do you think a US citizen is going to get a welcome of any kind from those small towns in Norway that don't have the money to pay for their children's education any more because half of their tax money just dissolved? 

I predict there is going to be some ultra serious international relationship problems by the time this stuff works its way out of the market.   

3 Comments – Post Your Own

#1) On December 05, 2007 at 1:33 PM, floridabuilder2 (99.31) wrote:

how could our international profile get any lower?  It is the equivalent of everyone hating americans to everyone really hating americans.....

2008 will be worse than 2007.... enjoy this market rally while it lasts

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#2) On December 05, 2007 at 5:09 PM, abitare (43.81) wrote:

dwot,

Great report, again. I think most Americans do not understand, what has been done, yet.  

I would like to see some arrests and some guys making big rocks smaller in prision.

"ultra serious international relationship problems by the time this stuff works its way out of the market"

The US dollar is already reflecting the sentiment of the world. But most Americans do not yet understand, what this means. They will figure it out slowly as more banks start closing and unemployment starts kicking in.  

Have you seen Smartest Guy in the room about Enron? Those guys did not suffer enough from their corruption. 

I am hedging my bets to work overseas if the US get hit to hard. 

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#3) On December 06, 2007 at 6:59 PM, dwot (43.80) wrote:

Abitarecatania I think the US dollar has declined because of the level of debt. 

I've hedged my bets on the economy by moving up north to work.  I can't see teaching being a profession for anyone to survive in anymore as its funding is pretty much dependent on taxes and the pressure on taxes is at a breaking point.

Floridabuilder, I agree, all the magic bullets have been used and now it is time to heal. 

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