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

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

News Flash

December2

So…

A headline from yesterday: “Dow plunges on news recession began in Dec. 2007”

…Fascinating.

Where was Bernarke a year ago?  What was Paulson thinking about? What happened to all of those financial pundits?

Oh… now I remember… They were touting stocks to include mortgage companies and banks (many of which no longer exist).

Meanwhile…  Lets stop and carefully consider the following tidbits of ironic information derived from related news articles…

“The National Bureau of Economic Research, a group of academic economists, concluded Monday that the country has been suffering through a recession since December 2007.”

But, this really got my attention:

“The bracing impact of the Fed’s aggressive rate reductions, however, has been somewhat stymied by the credit and financial crises, Bernanke said. Despite lower borrowing costs, skittish banks have been reluctant to lend money to people and businesses, a vicious cycle that has seriously hobbled the U.S. economy.”

Isn’t this why we lent billions to the banks – so they can make loans to stimulate the economy?

Instead, the banks are apparently hoarding cash and/ or using the money to (I can’t breathe) acquire the assets of other banks.

Was all of this a scam in order to facilitate the United States finally building a world bank candidate?

More later.

Peace be to my Brothers and Sisters.

Brian Patrick Cork

The system really works!

September20

So… Ben Bernanke cut interest rates on Tuesday.

This will change everything!

Not only will this move bail out investors and eliminate risk for future dumb decisions, but a half-point cut can save the average poor homeowner about $1,000 per month on their $4 million mortgage. But, let’s be fair… $1,000 a month is a lot to a poor person (don’t get me started on flat-tax). They can put that money into their diversified portfolios, or add equity to their vacation homes.

Whew… Sub-prime mortgage crisis, solved.

In related news, Senator Chuck Schumer proposed giving more discretion and power to Freddie Mac and Fannie Mae because it’s been at least nine months since either of them had a major accounting scandal.

Wouldn’t Thomas Jefferson be proud…

Larry Fidler, the judge in the murder trial of Phil Spector on Wednesday abandoned the idea of presenting the deadlocked jury with a reduced charge of manslaughter against the music producer. Spector faces 15 years to life in prison if convicted of murdering actress Lana Clarkson (he allegedly shot her in the mouth /1) at his Los Angeles area home in February 2003. In a day of complex legal maneuvering, both the judge and jury struggled to find a way to advance the case — which was stalled after seven days of deliberations, and a five-month trial. The jury reported on Tuesday that it was split 7 to 5 over a murder verdict. It did not indicate which way it was leaning. The jury had expressly been told to acquit or convict Spector of murder. Fidler denied a second defense motion to declare a mistrial and sent the jury home without new instructions on how to proceed, and then ominously stated that he planned to withdraw a crucial instruction.

Sure enough, Fidler recalled the jury on Thursday and withdraw the time honored instruction that had said prosecutors must prove beyond a reasonable doubt /2 that Spector intentionally pointed a gun at Clarkson; and, the gun ended up inside her mouth while in Spector’s hand.

NOTE: Spector is still revered in music circles for his work in the 1960s and 1970s with The Beatles, The Ronettes, Tina Turner and Cher.

To me it is pretty straightforward… As soon as the jury sorts out that Judge Fidler is looking for a guilty verdict, and they comply, they can go home. On the other hand… Perhaps this is Judge Fidler’s way of getting back at Spector for bringing us Cher.

Peace be to my Brothers and Sisters.

Brian Patrick Cork
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1/ Interestingly… Prosecutors acknowledge that the gun went off by accident while it was in Spector’s hand.

/2 This means yes or no. Beyond a reasonable doubt. Go to prison or go home. By the way, its “reasonable” doubt”, not “shadow of a doubt” like on television.

What’s All This About?

"What am I looking at?", you might wonder.

Lots of stuff.

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

You'll also learn things about, well, things, like people you need to know about, and information about companies you can't find anywhere else.

So, while I harangue the public in my not so gentle way, you will discover that I am fascinated by all things arcane, curious about those whom appear religious, love music, dabble in politics, loathe the media, value education, still think I am an athlete, and might offer a recipe.

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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