The Unsinkable brian cork™

Brian Patrick Cork is living the Authentic Life

does the fed work for Goldman?

December30

This depends on how we might define work.

There’s a perspective, to be sure.

It can be argued that the Fed is intentionally holding rates at zero in the hopes of forcing investors, concerned about long-term challenges that include retirement, to invest in longer-term riskier assets instead of collecting “little or nothing (Bernarke)” on money market or CD’s.

Worse now for the Fed is the impression that monetary authorities work first and foremost for Wall Street.

Of course, Fed officials see this a bit differently… They see supporting Wall Street as their mechanism for supporting Main Street.

Ultimately, without the former, the latter is locked out of capital markets, and economic chaos could follow.

The purpose of Wall Street is supposed to be, or was designed to be (when it was founded in 1913) channeling investment funds into Main Street.

But most Americans no longer view Wall Street as ultimately working in their best interests – and, I believe they are mostly correct. This is the same Wall Street that aggressively pushed garbage loans onto the American people as policymakers praised the wonders of financial innovation. When did the purpose of finance evolve into simply a mechanism to enrich the relative few at the expense of many? And when did policymakers embrace this view? As Paul Krugman has noted, the Fed cannot envision a world not dominated by the magic of structured finance. Yet this is a world that failed us completely.

Look for my forthcoming post outlining the federally funded Goldman Scam that almost took AIG to it’s knees.

But, here’s the pattern outline, because I know you can’t wait:

1. Goldman creates or sells $23 billion (or more) of CDOs and stuffs them into AIG.

2. Goldman proclaims to the world they have no exposure to CDOs and warns that banks and insurers with CDO exposure will get downgraded.

3. Goldman initiates the mark downs of CDOs with AIG and others, acelerating the market’s downward spiral.

4. Huge mark to market losses lead insurer and bank credit to freeze, short term markets to lock up, ABCP to collapse.

5. AIG posts as much collateral as it has to Goldman, who has more aggressively marked down the exposure.

6. Bond insurers are downgraded, banks begin commutations with them.

7. AIG fails, Fed steps in, Goldman gets bailed out at par.

Come on! This is no accident. And no one in authority wants to find out where the truth lies.

Meanwhile…

The House has passed a bill to audit the Federal Reserve. However, we find ourselves hands-on-knees with a fast-action response from the the Fed claiming that an audit would interfere with its “independence”.

Sing me the song of irony.

Even though the Bill was buried, word got out, and  79% of the American people support at least the notion of a full audit.

NOTE: The Constitution does not empower what is becoming a central bank. And Congress, which created the Federal Reserve in 1913 (and, it coincided, oddly, somehow with the creation of Wall Street) which has the power to create credit and money (rather like Wall Street), and, certainly has the power to audit, dissolve, or do whatever it likes with the central bank (including stripping it of the power to create credit).

Point of reference: Can we agree that the Fed has bungled efforts to manage the economy, keeping unemployment low, and regulating banks?

Just in cases that white van finds me soon, the the independence argument is a red herring./1

Peace be to my Brothers and Sisters.

Brian Patrick Cork

______________________

1/ Something that draws attention away from the central issue.

break the banks

December12

The financial industry, lead by banks, predators all, have spent an astonishing $300 million in 2009 with lobbyists trying to hold updated regulation as bay.

In his weekly radio and Internet address Saturday, President Barack Obama said the economy is only now beginning to recover from the: “irresponsibility of Wall Street institutions that gambled on risky loans and complex financial products…”. This in pursuit of short-term profits and big bonuses with little regard for long-term consequences.

It’s been awhile since I’ve agreed withObama on much of anything. But, this is me adding a nod where it’s due.

By the way… The Obama also speaks up on 60 Minutes this Sunday night.  The fifteen families (Prudent Society) have an advanced screening of the Sunday interview. But he says: “the people on Wall Street still don’t get it. They’re still puzzled why it is that people are mad at the banks. Well, let’s see. You guys are drawing down $10 million, $20 million bonuses after America went through the worst economic year in decades, and you guys caused the problem.”

I’d prefer he not use the terms “you guys”. But, the point is appreciated.

How many of you readers know able-bodied businesses that have been eviscerated by their banks closing lines-of-credit (they need it to fund their lobbying efforts), only because they can, and, given the current bail-out plan?

Little known fact #42: There is a growing number of foreclosures driven by banks closing those lines that may be tied to 2nd mortgages (this is what many true entrepreneurs do, mind you).

How many of you have a form letter from a credit card company changing terms, and compromising your best interests?

It makes more sense, if you are a banker sorting out ways to optimize bonuses, for banks to be part of the problem as opposed to a solution.

Americans don’t choose to be victimized by mysterious fees, changing terms and pages and pages of fine print.

We are not being represented with and by truth and light.

And, while innovation should be encouraged, risky schemes that threaten our entire economy should not. We can’t afford to let the same phony arguments and bad habits of Washington kill financial reform and leave American consumers and our economy vulnerable to another meltdown.

All Prudent and optimistic Gentlemen should be at the ready. Look for our signal.

Peace be to my Brothers and Sisters.

Brian Patrick Cork

treasury this

August28

You are going to start reading, here-and-there, short stories carefully generated by an Obama-biased media, about the Federal Deposit Insurance Corporation (FDIC). It’s under historic pressure trying to support the deposits held by a rapidly growing list of failed banks.

All the history aside; someone else can offer-up dates, numbers, and statistics – the number to watch, at this point in time is the balance of the United States Treasury itself. I can’t help but notice, because I always look to read between the lines, is that number, and certainly a topic, the media and the government is tip-toeing around. And, when this administration says “don’t worry”, that means you need to be wary.

When you get a little bit of information, it usually means there is a lot of pressure that requires some bleeding off.

Just be aware. This needs to be a concern. Guide yourselves accordingly.

I can’t say this has much, if anything, to do with that smoking rabbit; but, a Prudent Society of Optimistic Gentlemen are certainly watching, yes they surely are.

Peace be to my Brothers and Sisters.

Brian Patrick Cork

inside story

May15

The Treasury Department has asked the Obama Administration for clearance to control the Derivatives Market.

In a two-page letter sent Wednesday to congressional leaders, Treasury Secretary Timothy Geithner said he wants to create a central electronic-based system that would track the buying and selling of derivatives. He also wants to ensure that financial firms selling the instruments have enough capital on hand in case they default and subject them to stringent standards of conduct and new reporting requirements.

Geithner wrote in his letter:

“All (over-the-counter) derivatives dealers and all other firms whose activities in those markets create large exposures to counterparties should be subject to a robust regime of prudential supervision and regulation.”

[…]

Obviously regulations, control and transparency sound great. However, Wall Street – and, certainly Global finance is most efficient when it’s manipulated and controlled by power mongers brokers and illuminati hand-picked insiders.

Look what a disaster Sarbanse-Oxley has been for the markets.

Seriously.

Wall Street began to second guess itself about the time socialist regulators began to enforce lop-sided audit controls. Sarbanse-Oxley became, literally, it’s own industry over night. Only some of you noticed that, as “options” for inside trading and the dissemination of related information became more difficult, short-sellers were able to step in and confound institutional traders.

Change and rules might be good. But, too much government is not.

The violent, lathe-like spinning of Ayn Rand in her grave threatens to throw the Earth out of its orbit, and hurl us screaming into the sun.”- Nick Milne

Note: I lifted that, in part, from Nick Milne (and, freely admit, changed a few words, and it’s very context) with naught but the best of intentions.

In any event…

Good or bad – and, always depending on where you stand in the equation, our national and the global financial markets have always been manipulated with the plan being steady growth, with most of the profits fueling a multitude of strategies that benefit a relatively select few.

When I am writing about things like this, it always takes me back to when Grandad would talk about “defending the mountains of Hemingway’s Spain”More on that later – maybe.

Obama likely means well (in a sophomoric sort of way). And, many people that support him (for now) were not the beneficiaries of that accumulated wealth and power. However, the system probably can’t work off of Democratic ideals for long (notice how Wall Street can’t get a sustained run going?) and global markets keep looking for excuses to put more authority in the hands of a shrinking number of banks.

This sets the stage for revolution.

Watch how in the next fifteen years key families, their familiars, and other elites work through certain banks (including the sinisterly named Bank of America) to amass wealth, and become more blatant about deploying it strategically.

I don’t know yet if Obama will go down in history as the Anti Christ; there are too many views, (in terms of cultural nuance) to define what that might look like. But, it sort of feels like a significant part of his legacy will be that of having set the stage for anarchy and the foundation for a greater Brazil-like gap between the wealthy and the desperately poor.

Gawd… The irony is almost delicious. It’s the aftertaste that will have me concerned.

To be more clear… What we see happening now appears to be common sense changes to equalize the financial process. But, global finance can’t work that way. The result will be a broken system that can only be righted through financially incentivized leadership.

So, ironically, more rules will result in greater chaos, and set the stage for a power elite that only Thomas Jefferson could have imagined when he designed our Constitution to allow for separatist (like) rules.

Peace be to my Brothers and Sisters.

Brian Patrick Cork

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Lots of stuff.

Meanwhile, here, I discuss events, people and things in our world - and, my (hardly simplistic, albeit inarticulate) views around them.

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All the while, striving mightily, and daily, to remain a prudent and optimistic gentleman - and, authentic.

brian cork by John Campbell





photos by John Campbell

 

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