The television show mentioned above takes place in New York City. NYC is a vibrant, never sleeping city known as the financial center of the universe. The waters around the city are shark-infested. No, not those from the Animal Kingdom Phylum Class Order Family Genus Species, Animalia Chordata Chondrichthyes, this group is from the legalis attorneyicum class. The lawyers are ready "to roll" in this derivative crisis. New York City is suing Countrywide, Officers, and Underwriters. See http://www.reuters.com/article/businessNews/idUSN2536805820080125?feedType=RSS&feedName=businessNews
The executives of the company cashed out with bonuses of over $700 million. As I wrote in a previous blog many pension funds can only invest in "investment grade" securities. The ratings agencies define "investment grade" based on the data and information presented to them. You can be sure that there will be a multitude of fingers pointing everywhere. Individuals will "plead out" early in order to minimize the impact to their personal lives. This lawsuit is just the tip of the iceberg. There will be many more lawsuits to come. The lawyers will be the winners. Countrywide will lose, the pension fund will lose, Countrywide stockholders will lose,…
Greed produced this debacle. Perception displaced reality among the lenders, underwriters, regulators, stockholders, Congress, and the Fed. The rich and famous went for a joyride with our hard earned money. In the end, the global taxpayer will pay for the ride. If we run out of money, which is possible, there will be a calamity of Biblical proportions. The people who have been running the monetary system are nearly out of tricks. The courts will be busy for years to come. The recent surprise rate cut was in response to the volatility of the the world markets. The U.S. economy has been the economic juggernaut over the last sixty years. Interest rate declines are inflationary and negative to the value of the U.S. Dollar. Gold and silver will continue their climb to $1,600/$50 and beyond. Inflation is the silent killer of the elderly’s savings. The bigger the problem, the greater the cleansing. Cleansing cycles are Biblical, whether is be 76 days, weeks, months, or years. Cleansing removes the worthless and unproductive. Pruning time is upon us.
Could Ben Bernanke, Fed Chief, be thinking, "Why didn’t I keep that job at the University?"
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/01/25/bcnswiss125.xml