Friday, March 6, 2009

Please read this:

and realize you have been duped big time, and yet still has the balls to yell insults at the people spending the time to make you aware of this gigantic crime being committed to you:

The end result is that if you do not have a means of transporting yourself out in the event of a riot ... there will be LULZ to be had.

What does a riot look like, you ask the mortgage toiletman!

Well, it begins with a very nice Sunday morning. Then you see something like 500-1000 vehicles and sometimes buses parked in the town center. Then out come tens of thousands of angry people you have never seen before and a few hundreds of them were going straight at you, and then pitch black.

Later, eye witnesses from every town will tell you the same thing. That people from other places riot in theirs. Isn't that strange? LOL.

This whole thing, was due to the inability to handle a very simple issue regarding CDS, that has been talked about for 2 years at every level of society (in the know that is).

Sigh, what do I know, or care. I got my exit route covered.

Still don't have a good picture? Well then this interview should give you another piece of the puzzle.

KAI VIGELAND: The reach of the Madoff scandal is so vast that today the FBI set up a special hotline for investors who think they're among the victims. The agency may want to keep that line open even after the dust settles. Because history teaches us that it probably won't be the last scam of this economic cycle.
There's a name for the part of the cycle we're in -- It's called the "bezzle."
Richard Parker of Harvard's Kennedy School knows all about it. Professor Parker good to have you with us.
PARKER: Delighted to be here.
VIGELAND: So, tell us. What is the "bezzle?"
PARKER: The "bezzle's" a term that was coined by the American economist John Kenneth Galbraith in a book called "The Great Crash: 1929" which he wrote in the middle of the 1950s. What he recognized was that at any given time there is a certain amount of embezzlement going on in the economy. Now this falsely inflates the sense of the total wealth of the economy at that moment. Because, not only does the embezzler now have substantial resources under his control but the embezzled does not yet know that he or she has lost those resources. And so there's, in effect, a kind of double counting of wealth of both the victim and the victimizer. And the inventory of that duplicity is what Ken called the bezzle.
VIGELAND: And at another point in time, then, all of that comes to light, is discovered?
PARKER: Yeah, what happens is that the bezzle varies in size with the business cycle and with the financial cycle. And so, what we've had in the last few years, presumably, is a run-up in the bezzle in conjunction with the run-up in the value of the markets. So that more and more people were drawn into the markets. Money was being made. More and more people came in, threw more money at the market and, as long as the markets kept rising and a new round of investors kept coming in, older investors kept getting good returns on their money and spreading the news that this was a great, sound and high-returning investment.
VIGELAND: So, how does Bernie Madoff fit into the bezzle and particularly within the context of the entire financial crisis?
PARKER: Bernie Madoff is a representative of the species of the bezzler, if you will. And he's by no means unique. This pattern of behavior can be traced back to that famous South Sea Bubble, or the Dutch Tulip Mania. It was a prominent feature in the crash of 1929, and is always present in the run-up in these financial cycles. And then, as the top of the market is reached, and we tip over and start sliding downward . . . of course, new money stops coming in and the game is over.
VIGELAND: So, now that we've entered this bezzle phase, is it safe to assume that there are more Madoffs out there?
PARKER: Oh, I think it's very safe to assume that there are more Madoffs out there.
VIGELAND: Will they be as bad -- $50 billion worth?
PARKER: Oh, I think they could be much worse. I mean . . .
VIGELAND: Oh, geez.
PARKER: Again, what you have to remember is once one or two of these start to tip over, confidence in the market slips. More people begin to pull their money out of various investment vehicles in a rush to get to the door and put it in CDs or cash or whatever. So, we're very likely to see many more of these and larger ones as well, too. I mean, we just don't know what's out there. That is a dark and scary forest to go wandering in in 2009.
VIGELAND: Richard Parker is a senior fellow at Harvard's Shorenstein Center and the author of "John Kenneth Galbraith: His Life, His Politics, His Economics." Thanks so much.
PARKER: Thank you, Tess. I really enjoyed it.


Stockfarmer said...

A good friend of mine had all of his retirement in PFG and WFC stock. He has loast nearly all of it. He told me 500K. About 2 years ago I was urging him to sell or at least spread it into something other than 2 financials stocks. He would not and said it was going back up. The bezzle got him. He is smart and I informed him of real risks but greed stopped him from acting.

I am sure there are millions of people like him.

Greenie said...

Mr. Spy,

I think you understand the economic matters well, but need to do your homework in history.

Let's say, you figured out that the price of houses are too expensive, and if they go down by 50%, many people will suffer. Do you go and shout that the prices should not go down, and someone must do something? The decline is part of a natural cycle that nobody will be able to prevent. The best you can do is not to buy house at the top.

Social cycle is very similar in nature. Whatever bezzle or Obama's socialistic handouts or other policies that people are complaining about are exactly what previous societies did at similar points in the cycle, and nobody could prevent the inevitable outcome. The best you can do is to anticipate what the moves taken by the politicians would be and stay prepared.

During 2001-03, I used to participate in a discussion forum on long economic and social cycles. There were few very smart and knowledgeable people. What they predicted about the politicians' responses would be after the economic crisis turned out to be very correct. So, what you are seeing is not completely unpredictable. We are here through over 50 or 100 years of slow changes.

Id you ask me, I would say that you are seeing an end of American economic/political system. Nobody will be able to prevent it, just like nobody could prevent a bear market.

Greenie said...

It is harder to keep money than make it. Everyone is after you from politicians to Wall Street thieves. Greed, temptation, complacency - everything works full time against you to take all away.

MTGSPY said...

U don't understand.

People are holding onto things they believe have the value it printed on the computer screen, when that value is already part of the "bezzle". They are in other words, pwned, without knowing it.

qadi said...
This comment has been removed by the author.
qadi said...

spy, is that really getting pwned like in "sleepers" or more of a mortal-kombat throat-tearing Fatality?

MTGSPY said...

Nibbling a small short here QLD and IYR, 15% of target size. Betting on there are sheeps to fall in buffet's advertising this morning.

Greenie said...

Will the market rally tomorrow, if Madoff goes free?

MTGSPY said...

I hope it does Greenie. my thoughts and prayer are always with the common people and God. I hate the short sellers who do nothing but the demean the pillars of our society and calling our president nigger.

D said...