The Last Bastion Of A Dying Government
The Market Ticker ® - Commentary on The Capital Markets
Posted 2013-02-06 08:29
by Karl Denninger
in Editorial
Ignore this thread
The Last Bastion Of A Dying Government
 

It's political prosecution.

And coupled with it are gross internal violations of the law by the government itself.

Octonion I underscores how inflated grades during the credit boom contributed to more than $2.1 trillion in losses at the world’s financial institutions after home-loan defaults soared and residential prices plummeted. The U.S. is seeking penalties against S&P and its New York-based parent, McGraw-Hill Cos., that may amount to more than $5 billion, based on losses suffered by federally insured banks.

“During this period, nearly every single mortgage-backed CDO that was rated by S&P not only underperformed but failed,” Attorney General Eric Holder said yesterday at a news conference. “Put simply, this alleged conduct is egregious, and it goes to the very heart of the recent financial crisis.”

Uh huh.

And Moody's and Fitch didn't do the same thing?

Of course they did.

So why S&P?

Well, McClatchy says that Moody's was dropped from the investigation in the summer of 2011 -- right about the time S&P downgraded the US.

Investigator interest in Moody’s apparently dropped off around the summer of 2011, about the same time S&P issued the historic downgrade of the U.S. government’s creditworthiness because of mounting debt and deficits.

“After the U.S. downgrade, Moody’s is no longer part of this,” said the person familiar with the case, who demanded anonymity in order to speak freely about the matter.

Political prosecution is nothing new.  Nor is political "protection."  We've seen so many examples since 2007, including Citibank which had its former Chief Risk Officer admit under oath before the FCIC that it knew it was selling crap securities into the market along with myriad other examples, that trying to list all of them would run to thousands of examples. 

Never mind that the Department of Just-us has said on the record that part of their consideration when it comes to filing criminal charges is whether there would be a market disruption should a given firm be charged.

This is a bald, public admission that if you want to commit murder you should first be employed by a big bank and then have them solicit it, since the firm won't be prosecuted since it would "damage confidence" and other such twaddle.

In the meantime RBS is allegedly paying a "big" penalty for "manipulating LIBOR."

Yeah, right.  Where are the criminal charges?

I'm not impressed.  More to the point, let us remember that Bernanke himself testified under oath before Congress in March of 2007 that problems in the subprime market were "likely to be contained."  And he, along with the rest of the FOMC, was in possession of superior information.

Indeed, not only was the FOMC in possession of superior information let us not forget that in 2007 when the discount rate was cut the recently-released transcripts show that Tim Geithner was in fact communicating with banks about the impending cut despite his claim otherwise.

Was he prosecuted?  No, he was appointed Treasury Secretary.

Nor was Bank of America or Ken Lewis, its CEO at the time, prosecuted.  They were rescued instead.

Everyone is telling us these days that the economy and markets are "mended" and that we should all be buying stocks and "investing in America."  The truth is something different -- there is a cadre of robbers and they're both on Wall Street and in the government itself.  They will not only use unfair competitive means to screw you, when push comes to shove they will use the government to come after you with political prosecution should you not do things "their way."

The facts are that there's no reason for anyone to engage in entrepreneurial activity any longer.  It was bad enough in the 1990s when I ran MCSNet and we had telcos doing things that appeared to be blatantly illegal under long-standing tariff rules prohibiting discriminatory pricing -- but we couldn't get anyone interested in enforcing the law.

Now it's far worse -- both Egan Jones and S&P, who have had the audacity to tell the truth (even if S&P started doing so late) have both been attacked by the government where the power and revenue that S&P had in the first place came from a effective government monopoly grant that had, after any reasonable amount of consideration, no rational purpose in the first place.

I'd be disgusted with this but I'm well-beyond the point where any sort of act by our government surprises me any longer.  After turning a blind eye to massive money laundering along with supplying guns to Mexican drug gangs rather than prosecuting both nothing shocks me any longer.

As the fiscal singularity toward which we are accelerating becomes more-evident in the window expect even more lawless behavior by those in Washington.  While I still believe there is time for a peaceful rescue of what once was America, with each passing day that candle dims in the window of our nation.

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Maddymax
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these clowns are like the Wizard of Oz

the curtain has been opened to expose them if people want to open their eyes

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Ben's policy will lead to wage deflation and commodity inflation which will lead to the Greatest Depression and Uprising Ever.
Who needs TA we got POMO
Digitlman
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When the gov't is essentially working to make downgrading the creditworthiness of the USA illegal, then we all need to be very worried.
Mayorquimby
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If I were MCG I would layoff 10 pct of staff after making clear to entire company what happened. Then, downgrade USA again.

Not that I feel any sympathy for a company that was not only complicit in the last mega-bubble, but one that is at the forefront of screwing kids in college - and has been for decades now.


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They who wish to hurt you, work within the law.
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Gold is theft.
Maddymax
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one last thing this confirms why no big boys like frontline untouchables showed were ever even indicted

they are all in on the scam and ponzi

egan jones and sanp tell the truth out of business

obama is more corrupt then people can imagine evidence is so clear


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Ben's policy will lead to wage deflation and commodity inflation which will lead to the Greatest Depression and Uprising Ever.
Who needs TA we got POMO
Trades50
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Silver
Land of Tax and Spend
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Quote:
And Moody's and Fitch didn't do the same thing?


If we had a media that was objective and not controlled by the central planners you would expect them to ask the same question.

People should be asking this question as well. This country is now dumbed down and is absent of critical thinking.

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When the people fear the government, there is tyranny. When the government fears the people, there is liberty. - Thomas Jefferson
Crzymorse
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Maryland
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Bond Vigilante hits windshield.
Xanii
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Espoo, Finland
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"As the fiscal singularity toward which we are accelerating becomes more-evident in the window expect even more lawless behavior by those in Washington. While I still believe there is time for a peaceful rescue of what once was America, with each passing day that candle dims in the window of our nation."

Not any better in europe. We are all Greece. And this from a viewpoint from the last AAA-rating country in EU (Finland). Seems like the whole western nations have gone nuts. I wonder who will pick up the pieces when enough time passes.

I guess the talk in europe right now is are goverments audacious enough to bailout the money launderers in Cyprus and wether people will take that. Anything goes and the end will look exactly like that.

Not entirely sure which is worse. constant bailouts that are against all deals we signed up for when joining EU or having to fight for the second amendment and other serious problems you people have over there in US.

I guess you have a more imminent problem with the disarming of citizens. That is always an alarming signal that takes priority above anything else.
Aztrader
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And where are charges against wall street? They took the mortgages, packaged them, leveraged them, and sold them to investors without any real disclosure. This looks like soviet Russia and they are purging anyone that stands in thier way.

Every day we see more and more over stepping their bounds and the public are still hiding in the closet over commenting on this BS. They will eventually start shutting down blogs that even bring it up since the internet is the last place for freedom of speech.

Waiting for it all to blow, but the sheeple are staying in check..........
Nevertoolate
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Chicago mob tactics. You hurt me, I hurt you.

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"Socialist never mind stealing, as long as they are the ones doing the stealing. They never mind lying, as long as they are doing the lying."-Mannfm11

Before you attempt to beat the odds, be sure that you can survive the odds beating you.
Fraudster
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It's a done deal guys. We are just recording history at this point. I no longer weep for what I see going on. I now only expect it all to get worse.

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"Let China sleep, for when she wakes, she will shake the world." - Napoleon Bonaparte

"Circulation ceases first at the outer edges [Europe and Japan]. It will take a while yet for the decay to reach the heart [America]." - Foundation & Empire by Isaac Asimov
Rickcaird
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This is all corruption plain and simple. When you hire a Chicago politician, you get Chicago corruption: reward and punishment.
Jb350
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Karl wouldnt it be ironic if "Vice Chairman Geithner" won his position at treasury due to his foreknowledge of the impending rate cut? You could say he stole your very own money and gave it to the banksters that day in august 2007. Turbo Timmy indeed. Or you could say that you bought his way in as treasury secretary, unwillingly of course!
Grumpy_bear
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More SRS please Mistress!
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inline

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Denninger, Karl. Leverage: how cheap money will destroy the world. Hoboken: John Wiley & Sons, Inc., 2012. p. 126, par. 3.
Patentleathershoes
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On the Daisy Chain
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Time for more TF protests. Simultaneous in NYC and DC...

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"An unborn child's property rights are protected by law. His right to life is not." Ronald Reagan
Adrenaline_junky
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One of the more eloquent and concise tickers ever, I think.

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"If Goldman Sachs is doing God's work, they must be referring to the cruel God of the Old Testament who brought forth plagues, floods, and pestilence." - Me
Ktrosper
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Gen wrote..
This is a bald, public admission that if you want to commit murder you should first be employed by a big bank and then have them solicit it...
Good point. These pigs are truly untouchable.

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The unexamined life is not worth living.-Socrates
The only stable state is the one in which all men are equal before the law.-Aristotle
Liberty exists now in the spaces government has not yet chosen to occupy.-Doc Zero
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Flaps10
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Classic Ticker

But I thought the last act was looting the treasury.

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"Better to die on your feet than live on your knees"
Genesis
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Well no.

The last act is shooting you.

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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
Anti
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As an ancillary illustration of a corrupt government, I saw the movie (DVD) "Burzynski" this weekend. It documents the activity of the government to suppress and steal an effective cancer treatment. A more medical approach than Gerson, but the same agencies abusing the same toolkit while the bodies stack up.

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Health is better than health insurance
http://gerson.org/
Over the past 60 years, thousands of people have used the Gerson Therapy to recover from so-called “incurable” diseases such as cancer, diabetes, heart disease and arthritis.
Flaps10
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Point taken

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"Better to die on your feet than live on your knees"
Zarathustra
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Funkytown
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Karl, are you still as "optimistic" as you were last week?

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"And in knowing that you know nothing, that makes you the smartest of all." - Socrates
Bertdilbert
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Quote:
While I still believe there is time for a peaceful rescue of what once was America, with each passing day that candle dims in the window of our nation.


There is no peaceful save.

Happened into a friend yesterday. He commented on that a good paying entry level job today was pretty much the same as what we were making 30 years ago. His wife chipped in that everything in the supermarket is now around 5 bucks.

This is not going to end well Karl.

Meanwhile I see more and more on robotic technology replacing more human jobs. Obama care cost will make robots more competitive. The more the government increases the cost of an employee, the greater the market for robots and the decline in cost due to the economies of scale. Robots do not pay into SS or medicare or earned income tax.

Moreover the money paid for a robot verses employee wages does not incur additional taxes as those employee wages are spent throughout the economy.

This means massive revenue shortfalls coupled with greater societal safety net needs. This is just not going to balance out. The only save for jobs will be to drop minimum wage laws and allow humans to be competitive with machines.

Technology will save us...

Meanwhile the divide between private sector wages verses government jobs will widen. This will place greater burdens on the private sector and will further separate government/unions as the enemy of the people.

Government/business/unions verses the people is going to blow up bigger than ****. You can count on it.

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Dear Euroland: Relax, Germany has a plan for your money!

Political Capital Defined: We are out of money but will tax our citizens for whatever it takes to "SAVE" the Euro.
Bluebird
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Bertdilbert said "Technology will save us..."

That is what my family tells me...there is nothing to worry about because technology will save us.

Andysvw
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Its a war on all honest people. Thats the demographic tptb fear. Look at all the effort they put into the divide and conquer tactic. Tea baggers? Commie OWS.

We have a two party system the honest and the not. At some point all us honest people will need to face it head on. The technocrats have taken over the world.

At this point all they got are more lies. Sure they will trot out false champions like Ron or the judge or Obama. Any way to keep us punchy.

The moment of clarity is coming. Yes it is. My red pill moment was long ago. The oath keepers are chewing on theirs right now. The democrats are staring at a gigantic pile of them. They aint skittles and one bite and they will know it too. Taste the rainbow biatch.
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