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I am convinced that there is a rarefied (thin) air around places like Wall Street and Washington, D.C. – its as if because everyone agrees that a thing is so and is a certain way, then it therefore is. And, since no other viewpoint or perspective is given credence – any other valuable insight and its resulting good judgment is lost. Things that would not make any good sense in light of the facts and factual reality anywhere else, make the rounds in Wall Street and Washington as if they are perfectly reasonable when they are not. Anything that differs from the way they want to believe it is and the way they all mostly agree it is – simply gets discredited, mocked and ignored.
September 20, 2008 Posted by cricketdiane

It is evident that we have been watching the decimation of the American system of government, economic model and balance of power. There are possibilities of fixing the specifics and making appropriate corrections without tearing the foundations into an unrecognizable interpretation. – cricketdiane

September 21, 2008 Posted by cricketdiane

So, I thought about this and it occurs to me that if a person were looking at me and the house behind them was raging with fire, would I really be concerned with convincing them of what they couldn’t see was endangering them and whether there is a fire or a matter of my opinion about a fire or why I think there is a fire? Or would I just shove them out of harm’s way and go put out the fire? Some things genuinely aren’t a matter of rhetoric.

Saying this is to say – we have people making decisions both in Wall Street and in Washington that have never bought their own groceries or had to make a choice between their car insurance and having the electricity bill paid. The rain never touches their heads, the pavement never touches their feet and ideas of what is what are constrained by the limited, rarefied environment where they exist. It makes Disneyland look real in comparison and more in touch with reality.

September 20, 2008 Posted by cricketdiane

create standard mortgage form, practice and allowable percentages using Fannie Mae and Freddie Mac – not for purchase but for conversion process.

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make all credit default swaps and all other non-regulated credit derivatives of a similar nature null and void. This spreads out the absorption ratios across the board and has the least amount of systemic risk.

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re-collateralize all debt and liability obligations to a government standard across the board and rate by same standard of measure.

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allow defaults and bond defaults to be born by those companies currently in the business of holding them having profited from them already.

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make ARM, interest-only and negative amortization practices for loans illegal and force reset of all currently held ARM products – to reset at current market rates in their own company’s expense to conform to new Fed guidelines.

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using already proposed guidelines for international standard – force sound principles of accounting and make off-balance sheet accounting illegal.

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set up commission of regulatory standards insulated from lobbyists and answering to Fed Treasury and Congressional leadership.

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end speculative short selling as an acceptable practice, make appropriate regulatory changes to commodities speculation as quickly and evenly-handed as possible. Speculation cannot be allowed to drive real value and prices in the marketplace.

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and – don’t bail out what can’t be fixed by throwing money at it. That will devalue our currency while arbitrarily causing prices to increase and consequently for the cost of living and even the most basic necessities to skyrocket while not actually repairing the systemic fragility that exists.

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Just give everybody a million dollars and we’ll pay our own damn mortgages – Cricket Diane C “Sparky” Phillips

For $700 billion dollars, each and every man, woman and child in the United States, legal and otherwise, could be given $1 million dollars each and pay off their own damn mortgages. Then the rest of the money could be used to bail out these corporations from their criminally negligent behaviors.

The credit default swaps, derivative instruments and exotic financial products backed up by air can be nullified and made illegal where the losses would be spread across those foolish enough to have bought them, traded in them and used them as an asset class. The defaulted mortgages already foreclosed are covered by Fannie Mae and Freddie Mac as well as by the “housing bill” already passed and the US Treasury could go back to doing the more sane things they are qualified to do.

The time to fear a market collapse has passed. The confidence game is over. This opportunity for change will not wait for the new president to pick out the drapes to be resolved sometime next year. But, since the government believes it is well within their sense of normalcy to spend another trillion plus dollars – they may as well give everyone whose feet are standing in this country, a million dollars each to solve the problem where they stand. At least something would get done.

Written by Cricket Diane C “Sparky” Phillips, 09-21-08, USA

September 22, 2008 Posted by cricketdiane

When you’ve had the position as a decision-maker in all this – how is it you figured that doing whatever Wall street friends thought was best would work out? Didn’t it occur to you that anything which requires “confidence” to keep its value is a con game intended to profit for no real return? It was a con game. We were had. They got away with it. There is nothing but air backing it up. Countries around the world are realizing they got “had” too. What did you think would happen? It was a con.

Written by Cricket Diane C “Sparky” Phillips, 09-22-08, USA

It doesn’t matter if everyone on the Hill, and on the Street are in on the game – its still a con built on lies.

Around the world, there is disgust and dismay for the corruption of the economic system and the current behavior of our government concerning it. The financial industries and US government financial branches were warned ahead of time to correct the accounting abnormalities, resolve the unsecured debt instruments being packaged and resold, fix the unregulated “insurance” business of derivatives and their complex bond default swaps, and told that to not do so threatened the stability of the global markets and monetary systems.

This isn’t about a feeling of confidence, mood or emotion. The lies upon which our current markets rest are depleting the valued resources which once represented something. Now they don’t offer jobs or job growth, nor secured tangible assets nor in fact, do they stand on or offer anything to the American people.

September 22, 2008 Posted by cricketdiane

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In fact, until the reality could no longer be avoided as a negative evident to everyone, there were still “experts” saying it was all alright and simply a “bubble”. With a dollar worth little more than ten cents in 1976 money based on its actual ability to buy something, the “experts” continued to say that there was not a problem. And the US government insisted it would all be okay.

Now – who is living in a deluded fantasy land? Is it me or the people who’ve lost the equity in their own homes and can’t sell them for the money owed on them? Or the people trying to get gasoline for cars they can no longer afford now that their credit cards are maxed out? Or the people that are applying for jobs where 78,000 other applicants are vying for the same job that think there will be a job for them “right around the corner”?

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Look around the world, they are mocking us as our diplomats and state department officials seek to push our policies of free market economy and representative democratic government on others, while we are using socialist, communist and dictatorial policies and practices in this and other eminent situations. The rest of the world is dropping their level of willingness to put up with America and the arrogance of demands for others to conform to a model the US isn’t honoring.

As you’ve reduced our world respect and standing to a complete joke of arrogance and contempt for everything we stood for, you and your Wall Street buddies turn to blame everyone but yourselves. You can discredit what I may say about it all – how is that going to make any difference?

Our industries are a poor shadow of what is innovative in the world. Our stock market is a loose cannon imploding on its own corruption and greed. Our politicians warm unearned seats by their own self-serving complacency and willingness to sell every principle of America down the river to protect their own riches and positions of power.

Our voices aren’t heard, our interests aren’t protected and our representation in our government is extraordinarily lacking. The current planned bailouts and already consummated bailouts are evidence of a government serving the interests only of themselves and their rich friends. They want to force it to be done in a short period of time without any recourse through the courts if it turns out to be unconstitutional to have done it, such that no new administration elected by our choices could possibly ever interfere with protecting their friends’ interests.

September 22, 2008 Posted by cricketdiane

I’m not the one that sunk hard-earned money into a 401K that is worth half its value now. I’m not the one who sold “securities” that were constructed on air with nothing to back them up. I’m not the one that borrowed money leveraged against them nor the one that sold them around the world.

I’m not the one who created a counterfeit form of US currency in the form of credit default swaps and complicated derivative products designed to get assets in return for nothing. I’m not the one who built businesses upon this nor that was in the enforcement business that should’ve stopped it. I’m not the one who ignored the international monetary commissions about correcting all this.

I’m not the one who acted like it would all be okay so long as everyone believes it is and keeps buying the worthless paper for more than the last person did. I’m not the one that said it won’t hurt anybody or made the choice to refuse regulating or legislating appropriately for it.

So, the banking, finance and investment industry has taken advantage of our ignorance and made fools out of all of us. The politicians laughed in their sleeves and mocked us for not catching on, all the while in full knowledge of what was going on. And, you think I’m crazy?

The Danger – the Economy in the US is based on a con game – Cricket Diane C Sparky Phillips
September 22, 2008 Posted by cricketdiane

As homeowners across the United States have lost their jobs and homes, where do we find the stories of their “new lives” in tent cities, campgrounds, parking lots and streets across America? Is it in our press with our precious freedom of the press and rights to freedom of speech? No, – it’s only made public in other countries where there is a willingness to show the New Great Depression in America with their contempt about our complete refusal to address it at all.

When the stock market and US economy was actually in grave danger earlier this year, did the US press cover the reality of the situation where solutions could be given and created? Of course not, out of deference to the superstition that to tell the truth of the situation would somehow make a bad market occur, create a recession and cause stocks to value lower.

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“Over the past few years, CDSs helped transform bond trading into a highly leveraged, high-velocity business. Banks and hedge funds found that it was much easier and quicker to just buy and sell CDS contracts rather than buy and sell actual bonds. As of the end of 2007, they had grown to roughly $60 trillion in global business.”

“Credit default swaps written by AIG cover more than $440 billion in bonds.”

Quotes from:

http://www.reuters.com/article/reutersEdge/idUSMAR85972720080918?pageNumber=1&virtualBrandChannel=0

How AIG fell apart
Thu Sep 18, 2008 1:55pm EDT
By Adam Davidson
(Explanation of the credit default swaps in a clear manner -)

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http://www.bloomberg.com/apps/news?pid=newsarchive&sid=auCzaUuqODfc

Democratic Senators Christopher Dodd and Charles Schumer have said the Federal Reserve, which is getting $200 billion in special funding from the Treasury this month, has the authority to take on a broader role.The Fed’s role expanded further when the central bank agreed on Sept. 14 to accept a broader range of collateral, including equity, in exchange for loans to investment banks. The central bank today said loans to securities firms soared to a record $59.8 billion yesterday.

At the Fed’s request, the Treasury yesterday instituted a supplemental funding program for the central bank allowing it to expand its balance sheet. The Treasury has announced a total of $200 billion of bill auctions so far under the program.

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http://www.nytimes.com/interactive/2008/09/15/business/20080916-treemap-graphic.html?WT.mc_id=glob_mrktg_lnk3&WT.mc_ev=click

September 15, 2008
A Year of Heavy Losses

A year ago, financial companies were flying high. But as problems in the mortgage and credit markets have grown, the stocks of many Wall Street firms have been hard hit. Some of the biggest companies have been bought out, taken over by the government or gone bankrupt.

*** Wonderful interactive chart describing the losses in blocks by company and comparison from Oct 07 – Sept 12, 08

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http://www.unodc.org/unodc/en/corruption/index.html

“Corruption hurts the poor disproportionatelyby diverting funds intended for development, undermining a government’s ability to provide basic services, feeding inequality and injustice, and discouraging foreign investment and aid”.

Kofi Annan, United Nations Secretary-General
in his statement on the adoption by the General Assembly of the United Nations Convention against Corruption
The Global Programme against Corruption

Corruption undermines democratic institutions, retards economic development and contributes to government instability. Corruption attacks the foundation of democratic institutions by distorting electoral processes, perverting the rule of law, and creating bureaucratic quagmires whose only reason for existence is the soliciting of bribes. Economic development is stunted because outside direct investment is discouraged and small businesses within the country often find it impossible to overcome the “start-up costs” required because of corruption.

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When properly underwritten, alternative mortgage products, including those with payment options that can result in negative amortization, confer benefits to both financial institutions and homebuyers. The American consumer could suffer greatly from any guidance that imposes unduly restrictive standards on the use of these mortgage products.
Proposed Guidance – Nontraditional Mortgage Products March 27, 2006 Page 5 of 10
The Agencies’ concerns about tighter underwriting standards for Interest Only and Option ARMs may be unwarranted. Our members report that borrowers with Interest Only and Option ARMs tend to have higher incomes and higher FICO scores than borrowers with traditional mortgages. The Proposed Guidance also cautions lenders to assume that borrowers make only minimum payments during the deferral period when calculating the amount that the loan balance can increase. There is no evidence to support this assumption. While no aggregate database exists for alternative mortgages at this time, our members have reported that such alternative mortgage loans are amortizing more quickly than traditional mortgages. This would suggest that these alternative mortgage borrowers are making much more than minimum payments. When assessing an institution’s exposure on mortgages with simultaneous second-lien loans, the Agencies should consider all mitigating factors, including whether the institution has retained all the risk or sold or insured a portion of it.

Re: Proposed Guidance- Interagency Guidance on Nontraditional Mortgage Products 70 FR 77249 (December 29, 2005)

from post –
September 23, 2008 Posted by cricketdiane
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** MY NOTE –
now there is obviously a lot wrong with this one – from the point at which is says “our members report that . . . borrowers with Interest Only and Option ARMS tend to have higher incomes and higher FICO scores than borrowers with traditional mortgages.” According to everything we now know about this – what was being presented was a lie, no matter how it is viewed.

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“And in those deals, they sold protection as often as they bought it — although they rarely set aside the reserves they would need if the obligation ever had to be paid.

In one notorious case, a small hedge fund agreed to insure UBS AG (UBSN.VX: Quote, Profile, Research, Stock Buzz), the Swiss banking giant, from losses related to defaults on $1.3 billion of subprime mortgages for an annual premium of about $2 million.

The trouble was, the hedge fund set up a subsidiary to stand behind the guarantee — and capitalized it with just $4.6 million. As long as the loans performed, the fund made a killing, raking in an annualized return of nearly 44 percent.”

Excerpt from :

http://www.reuters.com/article/newsOne/idUSN1837154020080918?pageNumber=3&virtualBrandChannel=0&sp=true

Buffett’s “time bomb” goes off on Wall Street
Thu Sep 18, 2008 1:42pm EDT
By James B. Kelleher – Analysis

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http://news.sky.com/skynews/Home/World-News/Tent-Cities-Spring-Up-In-The-US-Credit-Crunch-Making-People-Homeless/Article/200809315103250?lpos=World_News_News_Your_Way_Region_9&lid=ARTICLE_15103250_Tent_Cities_Spring_Up_In_The_US%3A_Credit_Crunch_Making_People_Homeless

‘Tent Cities’ Spring Up In The US

3:10pm UK, Friday September 19, 2008
Communities of homeless people living in tents are cropping up across the US as the effects of rising unemployment, repossessions and the credit crunch bite. (with photos.)

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Bankers didn’t want regulations messing up their negative amortization loans and profits in high risk ARMS

http://www.fdic.gov/regulations/laws/federal/2005/05comguide.html

reference courtesy of Michael  Blomquist at GretaWire on FoxNews at 2.03 a.m.

– On this webpage above that he suggested in his post, I found the statement on my previous post that was made by the trade association ACB – America’s Community Bankers which outlines their disagreements with, and positions concerning the Federal government’s financial agencies proposed regulations. This document came from December 29, 2005 and was apparently one of many instrumental in deflecting the proposals from being enacted. – (my comments)

http://www.fdic.gov/regulations/laws/federal/2005/05c22guide.pdf

Why was there ever a loan to cover “interest only”? How could that have ever made sense in light of sanity?

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Does anyone in the financial industry know what a “moral hazard” actually is? Well, there’s a line you’ve all already crossed like it wasn’t even there. Barney Frank is apparently working for the banking industry – not for us. And so are some others in Washington under the guise of protecting our interests.

There comes a point at which shoes simply must get the shoestrings tied whether the kid wants it that way or not. I don’t see how it is any different with finance industry regulations, whether that suits them or doesn’t or whether they want to keep doing things in the same way that will surely mean the downfall of all of us.

I am offering my plan – not because the experts can’t handle it but because they aren’t and they haven’t – my opinion is at least as sensible as theirs, in some ways certainly more so. Perhaps it will inspire something other than what they are planning to do that will work better.

Written by Cricket Diane C “Sparky” Phillips, 092308, USA

September 23, 2008 Posted by cricketdiane

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My list of what is lacking in the US government $700 billion dollar bail out plan –
Statistics and probability involved in using $700 billion and altering the free market dynamics therewith

macroeconomic policy in the public domain for extant systems

integrity – justification – structural deficiencies resulting from this action

socio-economic probabilities

policy constraints

econometric analysis of outcomes

and parameters for resultant conflicts

divergence theory and collusion (of effects and outcomes)

deficit spending macroeconomic results (known)

growth dynamics (probabilities)

outcome scenarios – event horizon and logistics

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political doctrine constraining application

foreign policy dynamic component for international cooperation and continued progress

September 24, 2008 Posted by cricketdiane

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The Treasury plan, which follows a new federal guarantee for money market fund holdings, would push Washington’s potential bailout tab to $1.8 trillion.

http://www.cnbc.com/id/26808715

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Apparently nearly two trillion dollars isn’t going to be enough either because our economy has very real systemic problems with the integrity of its fundamental structures. Maybe they ought to fix the holes in the bucket before putting more water in it.

Oh yeah, and its bring your own fuel, if you want to run around the US anywhere in a vehicle that doesn’t have two wheels and some pedals.

September 24, 2008 Posted by cricketdiane

** My note today –
Apparently the Republican Party didn’t mind spending over $10 Trillion dollars during their administration while cutting services and every social program in the country and every safety net available to the American people. And, they didn’t mind spending another $2 Trillion dollars in the last few months of their lease on power. But, oh how they have decided spending is not a good thing now as evidenced by their stonewalling passage of the current stimulus bill introduced by Democrats to help Americans directly, help families, feed people destitute from the economic blight, help communities and create jobs.

But that doesn’t matter, because the Republican party is serving the desires of those who line their campaign coffers – not the people of the United States, nor their futures. It is so not fair because I have believed in the Republicans and the Democrats in Washington to get the job done for us. Can’t they just do that?

– cricketdiane, 01-30-09