I always had a general rule in government that when I was presented with a choice between conspiracy and incompetence, I always chose incompetence to explain the inexplicable.

So, some think there was a conspiracy, some authoritative posters say a conspiracy is impossible. So, we lost more money and power in the last couple of months than we lost at Pearl Harbor or on 9-11 (No I’m not saying they are equivalent, no lives have been lost in this “crisis,” though I wouldn’t mind taking some.). We’ve looked real hard for blame for Pearl Harbor and 9-11. If there was a conspiracy, we should find them and shoot them, and, yes, I do mean that literally. If it was incompetence, we should find them and fire them and make sure that the best job they can get is as an ACORN voter registrar.

But I firmly believe it is God who gave us the final nudge into one of the biggest financial disasters in recent memory. Why? I don’t know the answer to that question, if it were so, then I’d be like God, which obviously I’m not. In Romans 8:28, it says all things work out good for God’s purposes.

Thankfully, I’m not one who’s so easily given in to tinfoil conspiracies, as there are more important things to do in my daily life. But the devil knows what our position is, he’s been watching us for the last six thousand years, his ultimate purpose is to gather as many humans to form a single world government and rebel against God (read Revelations). Now, this may be something that’s part of God’s plan, or it may be simply the case of unintended consequences unfolding according to underlying biblical principles (greed leads to greater troubles, etc).

Whatever it is, it’s a done deal. Now, we are to pray for President-elect Obama and hope for the best. Let us pray that God may be merciful to us and deliver from this political wilderness in 2010 and 2012.

Some emergency.

If it really was such an emergency, how come they’ve got such large piles of cash lying around that they are “slinging a dead cat” to figure out who to give it to?

Right.

If it was as they said it was, and if it required what they said it did, then: All the money would be gone by now–within days of authorization–and all the “toxic” assets would have been quarantined. And don’t give me this bull about “not being sure what assets were bad or would go bad.” Everyone knew and has known for months what assets were going south. They’ve been reading their bottom line. They couldn’t have even called it a crisis without having first identified what the problems were.

So yeah, it was a crock and they are still selling it.

You are exactly right: delay this 60–or even 30–days and we are talking about President-elect McCain.

Get your hand out or get run over by those that do . . . .

Best. Quote. Ever.

Guvment doth need checketh itself before it wrecketh itself. I bite my thumb at Hank of the House of Paulson, Alan of the House of Greenspan, and Ben of the House of Bernancke, foul villains, all. Likewise do I call down furies and cacodeamons upon the heads of Barney the Frank, Harry the Dusty, and Nancy the Perfidious Lady o’ the Bay. And for our so-called lords, they o’ the Great Bailout. Pah!

Clubs, bills, and partisans! strike! beat them down! Down with the Capulets! Down with the Montagues!

Poor John McCain campaigned amidst a cosmic screwing. First the voters were pauperized and then, as they cut back spending, they started to be fired. While the financial system was cracking due to ANOTHER bubble burst, the one in MBS.

It’s always something!

The right needs to learn that Wall Street is not our friend necessarily, although we both have an interest in free markets. Of course, WE want liberty and prosperity. THEY want pillage, momentum investing, huge commissions and the right to walk around with a shit-eating grin about how much better they are than the peons.

Poor John McCain campaigned amidst a cosmic screwing. First the voters were pauperized and then, as they cut back spending, they started to be fired. While the financial system was cracking due to ANOTHER bubble burst, the one in MBS.

It’s always something!

The right needs to learn that Wall Street is not our friend necessarily, although we both have an interest in free markets. Of course, WE want liberty and prosperity. THEY want pillage, momentum investing, huge commissions and the right to walk around with a shit-eating grin about how much better they are than the peons.

Don’t forget – the criminals got in on the housing frenzy as well. It was a drop in the TRILLION dollar bucket but it is still going strong.

Records show WaMu, America’s largest savings and loan, financed at least 43 mortgages worth $24.5 million on properties bought and sold by members of the Soni family since 2007. Of the 22 homes sold in that period, at least six have become problems for WaMu: Four were foreclosed, one received a notice of default and another was listed for sale at a $260,000 loss. Total value of WaMu’s mortgages on the troubled properties: $2.7 million.

A Kansas City businessman was sentenced to 13 years in prison for a $17 million mortgage fraud scheme that included buying a home owned by former Jackson County Executive Katheryn Shields and her husband. Raymond Zwego Jr. will also pay nearly $5.6 million in restitution and serve three of those years in prison for a probation violation.

This fall as the media shifted its attention from oil prices to the election coincided with the time that commodity prices began to fall.

I am not sure what good the $700Billion bailout accomplished, either.

Global finance is going through a massive transition from a high-risk/high-return world to a low-risk/low-return world. That means that people are rotating lots of money among different asset classes. Much of this rotation is being done under duress, either because people have losses, because they want to run higher capital ratios, or both.

Additionally, the outlook for corporate earnings is totally opaque, everywhere in the world, which means that stock and corporate bond markets have no information to discount. That’s one reason (there are others) why they’ll go off on a wild tear, moving 10% on no news at all.

Markets are people too. Whenever you’re trying to understand them, ask what you’d do. If you were looking out at the stock market, it might seem rational to imagine that it’s undervalued.

But ask yourself what you’d do if you had no certainty that next year will see a recovery, or the first year of Great Depression II?

Wouldn’t you sell everything you own, just in case, and wait for some clearer signs?

That’s what markets are doing.

Of course, this also means that as soon as there is a recovery (whether it happens in 2009 or 2019), markets will rocket up so fast you might not even have time to get aboard.

I was organizing files in my computer recently and ran across a memo I wrote to Governor Murkowski’s COS back in ’05. We were have a devilish time with the unions that work our ferry system and the media were giving us Hell about it. Particularly, I was catching Hell about it in the media and I didn’t like it at all. I had lost the argument about what we should have done and was carrying out other people’s plans and taking all the abuse for it. So I posited to the COS something like, “Oil is around $50/bbl. and we’ve got plenty of money. Let’s throw some around and get these people off our backs.”

I’m starting to hear the bleating and wailing here about how the sky is falling at $50/bbl. when it was in the $140s not long ago. Lower prices just mean you can’t do as much. We kept Alaska running and the Permanent Fund growing when oil was under $20; didn’t like it, but could do it. The Saudis won’t have to give up the Rolls at any price. The only thing they’re worrying about – and we should be worrying about – is whether they want to keep all their accrued wealth in things denominated in US Dollars.

A smart person with long experience sees someone trying to corner the silver market and they pounce on him. Likewise, if someone (s) is thought to be bidding up oil futures from a short position, they are vulnerable to anyone who figures it out and wants to play with them.

Today, only a very minor fraction of the billions of shares traded every day are traded by people at all, let alone people with long experience. A person with long experience may not be susceptibe to manipulation or even if so, the market will sort it out, but somebody who understands the trading algorithms can sure manipulate a computer program. Just look at how easy it is for those who want to to manipulate the “Recommended” algorithm here, and it doesn’t take many to do it.

It was not wilful manipulation designed to cause a deep recession.

The events (most all of which were necessary to cause the fall):

Late90s:

1-Fannie et al presume lenders are racist to make them loan money to low income potential buyers

2-But don’t worry lenders, we will back the loans and the securitization packages

2000

3-Tech bubble bursts sending stockholders to real estate

2001

4-911 keeps stock market flat for years keeping former stock market players in real estate

2002

5-post Enron, congress overeacts and passes Sarbanes-Oxley that criminalizes business failure and mark to market rules ruins balance sheets

6-Greenspan keeps interest rates at 1% for three years after 911 thus heating up the r/e market

Housing bubble bursts

No one is smart enough to have concocted that plan and made it happened.

The lesson is keep the govt out of the market as much as possible due to its distortions.

But also, its all damage control since Eve bit the apple and un til Christ returns.

We have the worst econ system on earth except for all the others, ever.

We will have ups and downs. Our political system allows for corrections, albeit slowly.

There’s been a huge inter-connected, tin-foil-hat-wearing thought that maybe the oil producing countries (all of ‘em) got together and said “let’s get the USA”.

If they take us down, demand for their product falls, and they end up eating sand. And while the jihadists may hate us enough to suicide bomb our markets, I’m not sure the money guys there aren’t enjoying all those decadent western consumer goods they’d lose.

I can’t see King Abdullah trading in his Rolls for a camel. Meanwhile, if that happens, I’ll move back to the family farm, put in a big garden, and start keeping chickens. Plenty of deer in the woods, too.

My own sense, from long experience with markets, is that grand opportunities for manipulation are very rare. Usually when someone tries to mess with the system, there are enough other people to pick up on it, and they mess with him instead. Markets are brutally efficient that way.

In short, I don’t find it credible that the global economic system has hidden fragilities that are exploitable by a small number of actors, so as to create widespread distress.

However, it’s entirely credible that the system is vulnerable to changes in sentiment by large numbers of actors. That, in fact, has happened innumerable times since our ancestors climbed down from the trees.

What happens when nearly every consumer in the country suddenly looks at the value of her house relative to her mortgage payment, and says “I gotta start saving some more money”?

Answer: instant recession.

Why would someone have to make $10 trillion if the market went down that much?

It’s not a zero-sum thing.

The market went poof and some people/entities definitely benefit, but not in dollars.

They benefit in control…….. Total control of our national debt.

China, Germany, Saudi Arabia…….. I asked this awhile back on first joining here at RedState ……….. What if the Chinese, Saudis and others up and say “margin called” ?

It may not be in allot of international best interests to do that in the short term. But what if they don’t care and want us wiped out?

There’s been a huge inter-connected, tin-foil-hat-wearing thought that maybe the oil producing countries (all of ‘em) got together and said “let’s get the USA”.

They all take a hit for a bit, watch our market go to Hades-in-a-gift-basket, then pounce.

Ahhhhhhhh, I haven’t really slept with any kind of normalcy in days, so my mind is a raging torrent, flooded with rivulets of thought cascading into a waterfall of creative alternatives.

Cheers !

I’d like to see the passage written by Adam Smith that states free markets cannot be manipulated.

The day can, (and maybe has) come where an American economy all but stripped of its Christian roots, can be used to frighten the populace into giving up their sense of personal responsibility before God.

Unfortunately, we have the right people coming into power to make this happen.

We also have an impotent out-going President who gave up the fight long ago, and he has left us fractured.

There is much talk of rebuilding the Republican Party to be conservative. By the time we do, I’m afraid the damage may be permanent.

How many of us are already reconsidering their financial investment in the economy of this Great Nation, for fear we will lose our status and our homes?

What the opposition is doing is working, even on obviously well prepared, hardworking folks like Achance.

When an enemy ambushes you with overwhelming force, you don’t hit the deck and try to think how to respond, or you will be overrun.

No, you turn into the enemy and advance with everything you have in order to survive.

There is no time to worry about custom and courtesy. We know where the enemy is.

The enemy is the Democratic Party.

We need to instinctively pull the trigger and fire back with everything we have.

As I said above, I don’t think anybody could do this, but I think that there are some who could influence things, turn the herd was the phrase used above. Well, what if it worked and the herd did turn, but suddenly and catastrophically. The law of unintended consequences is a b@#$h.

We all know that fiat currency is nothing other than confidence in a promise. What if such a good job was done of damaging that confidence, that no one believes the promise anymore? Yes, the sovereigns have to act like they believe it, they have no choice; there but for the Grace of God go they. Now the sovereigns and all their horses and men have to try to put it all back together again.

About oil prices, remember I told you all this past summer that they would collapse below $100. That’s because I figured underlying demand to be supportive of a price like $75 or $80. (Below $50, that surprised me.)

But to the point about whether this whole mess has been engineered by manipulators, this would be my question:

Look at just the US stock market. It’s down nearly 50% from its high, reached thirteen months ago. That’s quite a few trillion dollars of value gone poof.

If this was a grand manipulation, then someone somewhere must be about $10 trillion richer. It’s not George Soros. It’s not the Chinese, and it’s not the Saudis. Their markets have all collapsed even more than ours.

Financial assets around the world have lost value fundamentally because private credit formation has ended. There are a lot of reasons why that happened, but that’s another story.

What’s the one financial asset in the world that has held its value?

The US dollar.

Who are the key holders of US dollars and dollar-denominated debt? Foreign central banks and sovereigns.

They’re the people who are really calling the shots now. They’re the reason Fannie and Freddie were nationalized. And they’re the reason we will only be able to create so much inflation over the next few years.