No wonder people are so angry these days. They have good reason.
Our government thinks we’re stupid.
Money can be printed out of thin air whenever they want.
Jobs numbers can be printed out of thin air.
The other week, we learned:
“The people who make the rules are the political class in Washington. And they’ve conveniently written them in such a way that they don’t apply to themselves.”
“Congressional lawmakers have no corporate responsibilities and have long been considered exempt from insider trading laws, even though they have daily access to non-public information and plenty of opportunities to trade on it.”
And according to Blue Chip Trader’s Adam Lass, we just learned the following:
We learned that back on July 21, 2008, Former Secretary of Treasury Hank Paulson invited all his old friends from Goldman Sachs into a conference room at hedge fund Eton Park Capital Management’s Manhattan office, and then told them all exactly that he was about to put Fannie Mae and Freddie Mac into conservatorship.
This advance information was worth millions to these guys, maybe billions.
We are currently being told there is suddenly no way to sort out how much money they took in short-selling in advance of the public release.
If you or I had let something like this slip, we’d be jailed for insider trading. But apparently, it’s not illegal to give your cronies a trillion-dollar heads up… not if your name is John Paulson.
But Wait! It Gets Even Better…
Remember how we argued about the wisdom of doling out $500 billion in TARP monies?
Turns out that back in December of 2008, the Federal Reserve secretly gave American banks some $1.2 trillion dollars… and then encouraged them to lie about it to their depositors and shareholders.
This is not just one of my usual rants about the immorality and long-term stupidity of economic manipulation, people. All of this matters to us very much right now. Because apparently, this was all some kind of signal to the wise guys that Washington was about to do it again.
All week, rumors were swirling that a major ratings agency was going to downgrade just about the entire American banking edifice. This would cost billions in lost profits, as it forces the banks to raise rates on all the money they borrow. Usually, that sort of thing cause the markets to go down — a lot!
This anxiety showed up in the charts as the clearest set of sell signals you could ever hope to see.
But did the markets go down?
No. The markets went up — a lot!
And it turns out this was not idle speculation, but rather an absolute lock: 48 hours later, the Fed announced that it would indeed bail out the European central banks, just as it had the American banks.
Obviously, someone knew something — and probably made millions, if not billions, off that inside knowledge. There is simply no other conclusion we can draw.
And it seems no one will go to jail for this blatant rip-off because this sort of theft is not illegal if you are exceedingly well-connected, as we have learned from the whole Paulson episode.
The U.S. economy still stinks, and don’t let anyone tell you different.
Each positive report we’ve heard lately has been quietly negated within a few days…
GDP was up over 3%. Except it really wasn’t. Unemployment was down, except it really wasn’t. Housing sales are up, except it’s all foreclosures — and prices are still falling. Retail sales are up, except that’s just inflation talking; unit sales are actually down.
Looking to Europe, wiser minds are already noting this whole central banking move does NOTHING to actually fix Europe’s troubles. It simply insures that their banks can stay open one more day while Europe’s leaders squabble.
And that, from Adam Lass, pretty much sums up what’s been going on.
I couldn’t have said it better myself.
Thanks Adam…
