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abitare (99.44)

Ron Paul Grills Paulson & "Helicopter" Ben 10 July 08. Hank Paulson is a Blatant Liar.

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July 13, 2008 – Comments (8) | RELATED TICKERS: FMCC , FNMA , GLD

Ron Paul at Financial Services Hearing 7/10/08

 

Mish Shedlock calls Hank Paulson a Blatant Liar:

Operation "Rescue Fannie" Underway - Paulson a Blatant Liar

SUMMARY:

To What Extent Did Paulson Lie?

Now we get to debate the meaning of the following

"Keeping Fannie and Freddie in Current Form"

"There will be no nationalization of Fannie and Freddie"

"A government takeover will not be necessary"

It seems to me that and injection of $15 billion capital into Fannie Mae and Freddie Mac and creating a new class of Government Owned Securities is most emphatically NOT in agreement with the above ideas.

Paulson Is The Great Pretender

Hell there is so much pretending going on it's hard to keep track. For starters everyone is pretending Fannie and Freddie are solvent. If they were solvent there would be no need for a $15 billion injection. Secondly, the government directly owning a new class of shares is not keeping Fannie in its current form.

The big concern is "Where does it stop?" Opening up a $15 billion dollar window will be the first of 10 such operations. This is likely the start of a U.S. Taxpayer Bailout of China. Disgustingly it is a U.S. Taxpayer bailout of PIMCO as well. Flashback May 23, 2008.

Bill Gross Triples Bet On Mortgages

The Financial Times reported Pimco's Bill Gross triples bet on mortgages.
Bill Gross, whose Pimco Total Return fund (PTTRX) is the world's largest bond mutual fund, has tripled his bet on mortgage debt, which now comprises about 61 percent of the fund's assets, the Financial Times said on Friday.

The chief investment officer of Pacific Investment Management Co said his decision to raise exposure in recent months stemmed from the U.S. government's implicit guarantee of debt issued by Fannie Mae (FNM) and Freddie Mac (FRE), the government-sponsored mortgage financiers.

"Government policy is moving to sanctify the status of the government-sponsored agencies," Gross said, according to the newspaper. "It became a question of which institutions would be sheltered by the government umbrella.""Operation Rescue Fannie" has now morphed into a taxpayer bailout of Bill Gross, China, and anyone else that levered into buying Fannie Mae garbage. It is a moral hazard to the highest degree, for bondholders to be made whole in this mess.

Paulson Is A Blatant Liar

It's now time to point blank call Paulson what he is: A blatant liar.

Flashback July 10th 2008 Paulson: Financial Institutions Must Be Allowed To Fail.


For market discipline to be effective, market participants must not expect that lending from the Fed, or any other government support, is readily available," Paulson said. "For market discipline to effectively constrain risk, financial institutions must be allowed to fail."Even though I called for it, this is extremely disgusting to see. I am hoping that bondholders participate at least partially over this, but I'm not holding my breath.

Addendum

Several people asked about the "inflationary" aspects of such a bailout. My reply is these bailouts cannot be looked at in isolation. The ongoing destruction of credit will dwarf this proposed bailout. The destruction of credit via defaults and writeoffs dwarfs the stimulus package and will dwarf the next one as well. I have repeatedly said there would be government attempts to contain deflation, just as there were in Japan. Those attempts will do nothing but prolong the agony."

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com"

FYI - Videos for the Fool Community

$4 GAS & ENERGY & IRAN WAR EXPLAINED BY RON PAUL to CONGRESS July 09, 2008

Ron Paul Lectures Bernanke: U.S. Moving Towards Fascism April 02, 2008



Ron Paul challenges the "Federal" Reserve  2/17/2007

 

Ron Paul to Bernanke - Moral hazard of currency devaluation September 20, 2007

 

Ron Paul Grills Ben Bernanke on Rate Cuts Driving Inflation November 08, 2007

Ron Paul is Insane

 

Jim Rogers on CNBC: ABOLISH THE FEDERAL RESERVE and Bernanke

 

Jim Rogers: The Dollar is Doomed and the Fed's Days are Numbered 20 May 08

 

Useful Idiots Marcy Kaptur Gets Real Confused (Humor)

 

8 Comments – Post Your Own

#1) On July 13, 2008 at 10:28 PM, lquadland10 (< 20) wrote:

1776 They just saved China>>>>>>>> Fed to buy stock if they have to>>>>>>>>>. IS IT BAD ENOUGH YET!!!!!!!!! NO WAIT FOR THIS WEEK> PAULSON FROM GS> IMPEACH BUSH CHANEY POSILY REED CHARMAIN FRANK.

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#2) On July 14, 2008 at 12:19 AM, lquadland10 (< 20) wrote:

         What is the truth. Buy Gold.

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#3) On July 14, 2008 at 1:20 AM, DemonDoug (98.95) wrote:

Paulson was blinking about 150 times a minute.  No lies there, right Hank?

I don't even think he even believed a word of what he said.

I like at the end, going to have another meeting.  Good job Frank. Yeesh.

BTW Ron Paul knows who is responsible for the dollar.  It's Congress.  Straight out of the Constitution.  All he is doing is trying to assert his right as a member of Congress to do what is right in terms of currency.

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#4) On July 14, 2008 at 1:27 AM, blade5adj (26.39) wrote:

Thanks for the comment, abitarecatania.  I think I see better where you're coming from.  I think the crucial question becomes whether or not the markets are "efficient", and whether when I look at Yahoo! finance at a particular stock, if the price it is currently trading at is actually what that company is truly worth at that time.

With that, whether or not the run up in the 90s was over exaggerated, and whether the current downturn we're in is exagerrated, in the opposite way. Stocks reflect what the market perceives the company's prospects to be, and hence, in good times, people are far more optimistic, and in bad times, very pessimistic.  Just look at the topics in the Caps blog...Not exactly a bucket of sunshine haha.

With the dividends, a company doesn't usually boost its dividends significantly because once they've issued a dividend, the stock is punished if they decide to take it back.  Thus, many companies prefer to maintain a steady rate of increase in the dividends rather than pay out X percent of profit.  People like steady, gradually increasing stocks (at least in terms of dividends).  If they paid out X percentage of their income that quarter in the form of a dividend, that stock would be extremely volatile, and thus analysts would not recommend it for general investors.  I think that would explain your astute observation that even though the market rallied significantly during the 90s, dividends did not increase by the same rate.

I would say that one of the primary reasons the 90s were so out of whack was that people perceived that the common rules of economics no longer applied.  Hence, the truly bizarre valuations that occurred during this period.  But yes, if you're comparing peak to peak, lost decade.  I just don't think that peak was an accurate representation of the market's true value.

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#5) On July 14, 2008 at 9:45 AM, abitare (99.44) wrote:

FYI - Jim Rogers is on www.bloomberg.com video talking about FRE and FNM "it is an unmitigated disaster"

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#6) On July 14, 2008 at 1:43 PM, zygnoda (26.60) wrote:

If I form a bank and it goes bellyup do I get to ride in Ben's helicopter?  Can I fly?   

It's no suprise that they are lying their butts off about this.  If they tell the truth things crash down in a spectacular fashion.  Obviously they don't want that.   They want an orderly collapse of things.

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#7) On July 14, 2008 at 2:36 PM, CycleFreak7 (< 20) wrote:

Why, oh why-oh-WHY!

Why are we stuck voting for the lesser of two evils for our next President instead of truly positive vote for Ron Paul?

 

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#8) On July 15, 2008 at 7:05 AM, abitare (99.44) wrote:

ALCON,

Thank you for the replies.

lquadland10,

Good videos. I hate that Arie guy talking to Chris Mathews. 

DemonDoug,

Yep, it was funny to watch Paulson dance. What is with Barney Frank?  

zygnoda,

People usually want order, they sometimes incite a panic. The stockmarket sell off has been orderly thus far. Not what I would have expected.

CycleFreak7 

No doubt. I will write in Ron Paul.

 

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