Good Evening Everyone
Just a heads up here before I start: Some of my posts are going to contain much more commentary going forward. I need to make this change because its now become almost impossible for me to highlight all of the financial news around the collapse of our economy.
The amount of negative news is rising to a level in which I can barely keep up with it. It would take a several page post in order to include everything. I am sure one page per day of me ranting is more than enough for all of you! Here is a nice recap on today's news for whoever is interested.
Folks, our "economic ship" has now sprung more leaks than the Titanic. Today alone we saw Citi go under $1/share, news of a potential GM bankruptcy, and word that AIG was bailed out in order save Europe.
Here is the Guardian link to the Reuters piece on the AIG story:
"WASHINGTON, March 5 (Reuters) - The U.S. government rescued giant insurer American International Group in part because its collapse would dramatically hurt European institutions, a senior Democratic lawmaker said on Thursday.
The U.S. government has bailed out AIG three times since Sept. 16 and committed about $180 billion to keep the insurer alive and doing business.
"One of the reasons we had to rescue AIG was the fact that it was going to bring down Europe," Pennsylvania Rep. Paul Kanjorski told reporters after his subcommittee held a hearing on systemic risk.
When asked if he was concerned that some of the money going to AIG was going to European counterparties, Kanjorski said: "I am sure it is."
I sit here in shock as I begin to try and digest these three headlines. My first thought here is "Wow, how the mighty have fallen". I mean these three companies(C, GM, AIG) are the USA's largest bank, automaker, and insurance company respectively. When I look at their stock prices on my computer screen, I can't believe my eyes. All three are now under $2 a share. Two of them were under $1 dollar a share at one point today.
I continue to ask myself: How on earth did this happen? How did three of the strongest companies in the world shrink to nothing? Then I think: How was this ever allowed to happen? Where was the risk management? I mean you gotta wonder: Did these companies even have a business plan?
I spoke about investors that were "blinded by the bubble" last week. I guess the CEO's of this nation were no different. What angers me here is they are paid to be different. They are supposed to avoid such catastrophes. I would love to know the answer to this question: When our CEO's dropped the ball, why didn't the CFO's of these companies or our regulators catch it?
Folks, the problem the market has right now is investors have ZERO confidence in our economic system. They don't trust the bankers, they don't trust the ratings agencies, they don't trust the SEC, and they don't trust the politicians.
I believe the market is starting to price in a new fear. They are beginning to lose faith that the system can or will be fixed. I also share this concern.
Our economy is filled with so much fraud and corruption that it may be unable to fix itself unless the system completely fails.
Lets be brutally honest here. We all know what the market needs in order to begin to recover: TRANSPARENCY. This is the root of the problem when you get right down to it. The private money that's needed in order to begin the healing process is on strike until it happens. When price discovery is established, you will see trillions of dollars immediately go right to work. This will allow us to finally begin the healing process.
Its really that easy in my eyes folks. Whats so frustrating here is you know the government has come to the same conclusion. So you gotta wonder: Since all of us know what the problem is, why is the hell don't we just fix it and get it over with? This is where the corruption and fraud come in. They refuse to do it because 1000's of companies will fail as a result, unemployment will rise to near record levels, and the risk of social/political chaos will rise dramatically.
Well guess what folks? ITS GOING TO HAPPEN ANYWAY WHETHER WE LIKE IT OR NOT! If the government refuses to allow transparency then the market is going to take things into its own hands and destroy itself until it gets what it wants. The result is going to be the SAME either way!
If this is the case than lets just do it already. I am tired of slowly peeling off this band aid. Lets just rip it off! Its much less painful this way.
Our politicians refuse to pull the plug because they are scared to bite the hand that feeds them. It was reported on CNN yesterday that Wall St spent $5 billion in DC lobbying for deregulation. 1/3 of this was in the form of campaign contributions. Folks, essentially this tells you that this housing bubble was the best bubble that money could buy!
I am sure there were more billions thrown at them by every major industry that threatens to go under if transparency is established. I mean Gee, Do you think the home builders, the auto industry, and the NAR(National Association of Realtors) threw a buck or two at the politicians.
Do I really need to answer this one?
My fear here is I don't think any of our politicians have the guts or character to stand up to the power and influence of our financial elite. I mean I haven't seen one guy in DC try to stand up to them and try to do whats right. NOT ONE PERSON! This infuriates me! Where are the LEADERS folks???? Why won't one frickin person stand up?? There is a huge void of leaership in Washington.
There is a gigantic empty platform that's just sitting here waiting for a hero who is willing to grab the bull by the horns and LEAD. America is desperate to find a leader: SOMEONE IN WASHINGTON PLEASE STAND UP AND TAKE CHARGE! AMERICA NEEDS YOU DESPERATELY!
Its obviously not going to be Obama. His agenda unfortunately is just more of the same.
The system is broken and needs to be totally overhauled. We continue to see zero transparency for two simple reasons: 1) The companies involved in this debt bubble refuse to open their books because most of them are insolvent. 2) Our politicians don't have the balls to force them to do so because they are afraid to bite the hands that fill their coffers with cash.
As a result, we all sit here and suffer as the market drops week after week. Our retirements, our economy, and our way of life are all being destroyed as a result of this fraud and corruption.
If we don't put a stop to this soon there will be no economy to save. Today was totally demoralizing. The principles that made this country so great are currently being stomped on by both political parties.
Thomas Jefferson and Benjamin Franklin would be ashamed if they were were able to see what this nation has morphed into.
Chaos is right around the corner if we don't straighten this out folks. What frightens me most is it might be too late.