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alstry (< 20)

How The Fed and Banks Destroyed Our Economy



August 28, 2009 – Comments (15)

First, create a finanicial instrument where the banks can make piles of money when the loans they issue it a credit default swap.  Could you imagine if surgeons could make money buying life insurance on their patients before surgery?

Second, infect every aspect of our economy with piles of debt.  Lower interest rates to unprecedented levels.  Send out solicitations to everyone and their cousins....and loan loan loan....the more loans that eventually default, the more money you make.

Third, tell everyone the economy is growing as spending surges with the new found temporary money.....and then convince people to borrow even more....lots more...over 2X the total GDP.

Fourth, buy all the politicians with the new found tax revenues from the crack like boost in the economy and tax receipts.

Fifth, make sure no segment of the economy is left unlevered and loan massive amounts to Cities, Counties, States, Hospitals, Schools, Families, Commercial Real Estate, Businesses and the Federal Government. 

Confirm you have loaned out the maximum and more than the system can afford to repay.

AT THIS POINT....remind everyone how the economy is going gang busters and start to raise interest rates....raise them 17X....nobody will be able to see what is going on, it is party time.

When the loans start defaulting, just so you can really profit from your credit default swaps.....start to tighten credit and watch everything crash.

As the entire economy crashes, few really know you are profiting because the defaulting loans are offsetting the profits from the you have a bunch of swaps hidden in quiet private equity and offshore hedge funds.

Then to really conceal your behavior, go crying to Congress and threaten them if they don't hand you Trillions of taxpayer dollars to cover the defaulting loans, the economy will implode as millions are losing their jobs and getting kicked out of their homes by the same people who caused this mess.

As this is all taking place, put a few colocated computers on the exchange floors and start high frequency trading stocks back and forth to each other so the masses think things are turning around.  HF trading can even make bankrupt finanicials control volume and increase in price many times.....

Make sure your analysts and economists portray the same story as revenues and earnings are evaporating, government tax receipts are shrinking, and tens of millions are suffering massive wage cuts.....after all, it is the goldilox economy.....and there are no bears left to tell a different story.

Then one day, turn off the computers, watch the market crash and everyone's retirement dreams go up in smoke... and you and the politicians tell all that no one could have foreseen it coming as the over leveraged economy is left in shambles and you own the remaining assets of the nation....along with the politicians.

The problem now is how will people react when they find out that our entire nation is broke.......and even those few remaining with savings will be forced to turn it over to the government to defend our country and keep our politicians employed?


15 Comments – Post Your Own

#1) On August 28, 2009 at 10:46 AM, Bkeepr100 (< 20) wrote:

The Creature from Jekyll island  by G, Edward Griffin,  talks about these facts.  Alstry has it right.  The Greater Obama Depression is coming!


Just wait till you can't buy or sell anything, without having to use the banking system's digital currency.   

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#2) On August 28, 2009 at 10:59 AM, alstry (< 20) wrote:

I guess there can be some positives from the destruction of our economy....

Baker Botts lays off more lawyers in second round of cuts this year

Baker Botts LLP, one of Texas' biggest law firms, laid off lawyers this week, the second time it has done so this year.

Mike Cinelli, a spokesman for the Houston-based firm, said Thursday that the lawyers were let go for economic reasons.

THE ONLY PROBLEM IS EVERYONE IS LAYING OFF FOR ECONOMIC REASONS....pretty soon, there will be no economy left as all will learn practically everything became dependent on credit to function.

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#3) On August 28, 2009 at 11:00 AM, alstry (< 20) wrote:


U.S. consumer confidence fell to its lowest in four months in August on worries over high unemployment and dismal personal finances, though the mood managed to improve from earlier this month, a survey showed on Friday.


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#4) On August 28, 2009 at 11:07 AM, ocsurf (< 20) wrote:

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#5) On August 28, 2009 at 11:11 AM, alstry (< 20) wrote:

BENTON HARBOR -- Whirlpool says it will cut 1,100 jobs and close a refrigerator factory in Evansville, Ind.

Get ready....we really are  just beginning the crash for you doom and gloomers.

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#6) On August 28, 2009 at 12:19 PM, russiangambit (28.92) wrote:

Alstry, don't you realise, we , the people of the United States, don't want to know the truth because it will be bad for the markets.

At least, that is what FED said recently in their appeal not to release the details of the bank bailouts.

We'd rather play hot potato selling stocks of bankrupt companies back and forth to each other and making 20-30-50-100% profits in the process as long as the poptato is in the air.

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#7) On August 28, 2009 at 12:40 PM, alstry (< 20) wrote:

russian....there will be a time for us to will be a very interesting we will all learn at the same time our nation is broke and we have all been living a Ponzi existance for the past 10 years.....

When 90% of your GDP is credit depdendent and government spending....when the banks cut of credit, government can't spend.

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#8) On August 28, 2009 at 1:23 PM, debtRichQuick (< 20) wrote:

Alstry,I keep reading your blogs on the CDS market. I'm trying to pinpoint what exactly it is that you are seeing. I can't. What is the trigger event that we are supposed to be looking for? Something is going to have to trigger the avalanche you are talking about. I'm trying to see it, but I'm having a hard time. Is it the county and state budgets? Are those going to roll into a CDS collapse cause the DOW to break down to 5,000?  I have been reading you blog since that video you posted for me a few weeks back (Whitman was it? I forget the lady's name). Anyhow, I am searching for something specific.


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#9) On August 28, 2009 at 1:25 PM, debtRichQuick (< 20) wrote:

It is obvious sheet is hitting the fan down there in CA. Especially when this is what leadership comes up with as part of a solution.

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#10) On August 28, 2009 at 1:31 PM, debtRichQuick (< 20) wrote:

"To raise cash, California hosts garage sale of prison uniforms, Schwarzenegger-signed cars"

LOL! We are talking about a gap in the billions! Who the fire truck came up with this ridiculous idea??? No wonder CA is an absolute mess. Are these really leaders?

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#11) On August 28, 2009 at 1:37 PM, alstry (< 20) wrote:


As credit tightens.....people start liquidating, and more and more start walking to the door.....and this door is a very narrow one as few are buyers while lots of people are starting to head to the exit at an accellerating rate......

All somebody has to do is scream fire and all hell breaks loose.

It can be anything.....We are now at the point where California is having a big liquidation sale......municipalities are cutting way back.....malls are closing down.......who knows what the trigger will be exactly.

Sure  houses are selling...but only first time buyers and low end investors....selling a home with a Jumbo is practically impossible unless you are  giving it away....and conditions are getting more difficult as credit tightens further.

Honestly, I am not sure whether an external event will be created to prevent a panic.....but either way we are on a path to total zombulation.

It is somewhat unsettling when you think how orchestrated this whole process has been.....but it is what it is.......yet so few can  see it.

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#12) On August 28, 2009 at 2:07 PM, russiangambit (28.92) wrote:

> It is obvious sheet is hitting the fan down there in CA. Especially when this is what leadership comes up with as part of a solution.

And IOUs to be paid with a credit from JPM. JPM , which is in the same mafia ring as FED, Treasury and GS.

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#13) On August 28, 2009 at 4:39 PM, JerseyShoreGirl (< 20) wrote:

Doesn't help the situation any when many of the people who are advising the President are self-avowed Communists, Revolutionaries and anti-Capitalists.    Hmmm, wonder where all of this fits into the picture?

What in the world is a 'Green Jobs Czar'?  ... as Glenn asks, "What kind of jobs does a Communist create anyway?"  Labor camps anyone? 

Can't say Michelle O didn't warn us .. "Barack will require you to work .... he won't let you go back to your lives as usual."

Obama had Communists mentors as a child too ... Frank Marshall Davis.

Must be just a coincidence that Obama hung out with Communists as a child and is now surrounds himself with Communists and Revolutionaries.  Remember the old saying ... "Show me your friends and I will tell you who you are?"

Also, why would the President need to declare a cyber-security emergency and take control of the internet?  Is this the America I know?

Finally, ...

"Obama's victory was more than a progressive move; it was a dialectical leap ushering in a qualitatively new era of struggle," Chapman wrote. "Marx once compared revolutionary struggle with the work of the mole, who sometimes burrows so far beneath the ground that he leaves no trace of his movement on the surface. This is the old revolutionary ‘mole,' not only showing his traces on the surface but also breaking through."

I would definitely compare this President to a mole ... working beneath the surface to fundamentally change our country .. until one day we wake up and and won't recognize her. 

Glenn Beck's show tonight will talk about things we can actually do to stop this administration (and Congress) before they do one more thing .. hope it's not too late!

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#14) On August 28, 2009 at 4:48 PM, alstry (< 20) wrote:


You are striking on my central 9.09 theme.......the big issue America will be facing heading into October is whether America should convert to communism due to capitalism letting us down.

Once the nation learns how credit default swaps destroyed our economy....the arguments for communism will be surprisingly strong.

As one who prefers liberty and freedom.....this debate will be unsettling....however, no single administration destroyed our freedoms more than the previous a result there is currently little distinction between either party.

The consumer is now being told he is the most depressed in four months.  He is being educated how to get mad.  Soon he will learn why....this healthcare nonsense is simply a primer.

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#15) On August 28, 2009 at 7:31 PM, mawnck (< 20) wrote:

Lord help me, sometimes even a kitchen table needs a speaking to.

Alstry, you make a lot of sense. JerseyShoreGirl, you need to step away from the punchbowl for a few days.

A few facts for you.

(1) Glenn Beck is not a reliable source for information. Neither are the weasels who edit his clips for him.

(2) On those occasions when Glenn Beck appears to be making sense, carefully reread fact #1.

His conspiracy theory kookdom from this week has been spectacular, I'll grant you that. But here's a liberal website making mincemeat of your hero's little circus act without even breaking a sweat.

And from the same site, one of Beck's "victims" has a friend stick up for him, again by resorting to the tactic of, well, not talking crazy.

I think when whoever's still around goes back and chronicles this period in our history, the question everyone will be asking is "what happened to the conservatives? Where was the pro-business pro-fairness pro-Capitalism party when this country really needed them?"

And the answer will be "at home in front of Fox News frothing at the mouth about preposterous conspiracy theories involving death panels and Communist armies."

There's no conspiracy here. It's just a bunch of greedy, unethical people that acted in their own economy-destroying self-interest ... and the government that looked the other way while they did it.

And there you sit in front of the idiot box, listening to idiots. American Idol, only without the singing. Nice job, patriot.

Again, Alstry, thanks for keeping the facts coming.

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