Friday, September 19, 2008

Enron Was Ahead of Its Time

Having fun yet? So many story lines and so many angles. What a mess this has all become. The major average "SOARED" this week to finish up where they stared on Monday. I wonder why that is not the headline today? I am going to hit a few key points I am thinking about, and then I will try and amuse/entertain as is the Friday Night usual.

US Congress Eager to Sign Bill with No Details
In case there was any doubt, we have perhaps the largest collection of hapless bums running the country. There was a story on Yahoo Finance earlier that quoted a Senator with the following line:

"We will pass the Treasury plan (RTC plan) as soon as we can, and I would like to see some details."

I have news for you chump, the time to see details is before you pass the biggest bailout plan since the Marshal Plan after WWII, not after. Isn't one of the major problems right now that many "homeowners" signed mortgages without seeing the details before they signed? Creepy.

Well here at Economic Disconnect I was able to obtain the complete bill, and I have taken out some details that the US congress may like to know about before they sign on the dotted line. Here are some key attachments:

1. Ben Bernanke will from now on be referred to as "Great Exalted One" during all congress briefings and interviews as well as in any written media.
2. Hank Paulson will be called "Chrome Domed Love Machine" from this point forward.
3. Treasury and Federal Reserve employees have been granted the right of "Primae Noctis" with regards to any US virgins, should any still exist.
4. Keys to Fort Knox will be provided to Paulson and Bernanke to ward off future "Systemic Risk".

I think the US Congress should really read this thing through before they sign off on it as these attachments seem a bit much to me.

Bill Gross is a Dirty Rotten Criminal

The more Bill Gross of Pimco opens his mouth the more I want him to take me up on my steel cage match challenge. The balls on this charlatan can only be termed massive. After positioning himself to make sure the government has to bailout everything this side of the Milky Way, this clown now fully expects to be managing the FED's holdings! Too rich! Check it out:
Reuters
Pimco's Gross looks to manage government's rescued assetsFriday September 19, 2:51 pm ET
NEW YORK (Reuters) - Bill Gross, chief investment officer of Pimco, said he is interested in managing a pool of assets acquired by the government through recent financial rescue plans.
"We have interest in managing this giant pool of assets, and we expect to be called," Gross said on CNBC television in response to a question on whether Pimco had been consulted by the government about doing so.

With the way the powers have danced to Mr. Gross Outs tunes so far I have every belief Bill will get his wish. Please Bill, give me a call on that match. Soon.

Enron Was Ahead of Its Time
You have to feel bad for those poor souls which ran Enron. They were years ahead of their time, they were just unappreciated as clever geniuses. If Ken Lay and crew had only waited a few more years, history would regard them as savvy players that used the whole "systemic risk" pocket aces to great effect.

Those poor Enron guys. While they were attacked for accounting fraud, Fannie Mae had their purchase caps lifted and was able to operate for 2 years without a single shred of quarterly reports. I mean, falsifying earnings reports is bad, but now that is the new good! Too late for Enron.

Enron used wild and complicated derivatives bets to lever up their small initial working capital into a mammoth, if hollow, money base. At the time this was panned as dangerous but today it is known as the investment bank business model. Again, too late for Enron.

Enron hid losses and wildly exaggerated their asset values using internal parameters that had no basis in the real world. Now this is currently known as "Level Three Asset Accounting" and "Mark to Model" pricing. Again, just missed by a sliver of geological time! Poor fools.

Enron shopped around for a buyer to help them survive, but after looking at their books there were no takers. Once again, we see that the Enron model was not wrong, just early. Today we have the FED and Treasury forcing mergers and buyouts for insolvent institutions, and when that fails they just bail them out themselves.

I think it is clear that the so called scandal that was Enron was something else entirely. I think Enron was punished and attacked so harshly because they exposed the clever plan the banks had for screwing the US taxpayer into paying for their never ending party. Enron was early once again, and paid the price. Their model was then copied and amplified to arrive at the point in time we are now at. I am not writing this to be funny. There is no material difference between Enron's behavior and that of today's players. Sick? Yes. Sad? That too. Basically what we deserve for being the losers that vote in fools? You bet your ass.

Friday Night Entertainment

Book Passages
I think i will include the writer and book title so that if the passage I use is interesting to you, you can take a look at the book.
"So I think I can tell you this: I can just about guarantee you, I believe I can guarantee you, that if you'll take this on faith and commit yourself for two years, assuming you get through some further testing, you will thank me. You'll say I was right. You'll tell me that the very thought that you might have missed out on this gives you the chills. How many human beings have ever lived, Si? Five or six billion, maybe? Well, if you should test out, you'll become one of maybe a dozen out of all those billions, maybe the only one, who just might have the greatest adventure any human being has ever had."


from the novel "Time and Again" by Jack Finney

Rock Blogging
We are in desperate need of some good tunes to soothe the soul after this week.

I am cautiously optimistic about the new Metallica album. Take a listen to "The Day That Never Comes" and you will go back in time to the years when Metallica albums like "Ride the Lightning". I like this song:


I must admit, I can envision a charge on the Fed and Treasury by an army with the intent of setting things straight. Useful visual imagery is provided by Darth Vader's march on the Jedi temple:


Frustrated? Angry? Rock out to Limp Bizkit's temper loss song "Break Stuff". Warning: rough language and imagery. Give me something to BREAK!!!!!!!!!!!!!:


Have a good night.

8 comments:

Anonymous said...

Bravo!

At my workplace all of the dining establishments have been tossing their 5 gal #2 pails in the trash. I have since started to collect them, clean them and then procure the storage bags, desiccants, 02 absorbers, mylar bags and next will be the food I plan to store.

I am going to pack up the basics and then items that will be ready to eat meals once you add water.

http://www.sorbentsystems.com

Next will be the water filtration systems.
(emergency)
http://www.vestergaard-frandsen.com
(non-emergency)
http://www.berkeywater.com
Failing that use CL in small amounts.

If you guys are not prepping yet I seriously recommend you do at this point. Don't wait for the mad panic to set in guys. Just a little here and there everyday will save you in the long run. Hell even stocking up on water, can foods, basic grains/rice and bathroom supplies.

Have cash on hand.
Have a firearm and plenty of ammo.
Train with your firearm.
Gather supplies.(food/meds/lux items)
Network with friends and make a plan.

This could all blow over but in the end we all know what's going to happen.

G

PS: I am dead serious. This is not a drill and prep like you would if a nasty CAT 4 hurricane were on target to hit you in the face. Failing that get out of it's way.

watchtower said...

That was a good Friday night post GYSC, I hadn't ran into the "PIMPCO" stuff before reading it here.

Let me say that I have read just about every Stephen King book that he has written and I can honestly say that nothing he has written has chilled me like this J.R. Nyquist article:

Financial Collapse and Destructive War
by J. R. Nyquist

"I took a break while working on this column and read an email which contained the following phrase: “several U.S. Treasury charts are not unlike what you see before a country goes into default.” The email writer noted, “That really would be ‘game over’ for the United States. “

"If the United States went bankrupt the following sequence would occur: The U.S. government would lose its credibility, the country’s currency would fail and imports could not be maintained – especially oil imports. There would be shortages. But the sequence doesn’t end with shortages. It doesn’t end with mere economic loss. When the financial structure collapses, the national security structure collapses. Then nothing will restrain the military power of Russia and China."

"America’s financial collapse threatens to uncork the totalitarian genie from its bottle. I believe it is too late to stop the worst from happening. The sequence has begun. The Kremlin knew that a financial crash was about to take place. They’ve been waiting on it. They are prepared to exploit it. And the Americans are completely oblivious. They are utterly unprepared."

Sorry for how long this is but it blew me away.
I'll try not to post this much in the future but I believe JR Nyquist is on to something and I would like for people to be aware.

watchtower said...

Oh yeah, here is a link for anyone interested in reading the whole article:

http://www.financialsense.com/stormwatch/geo/pastanalysis/2008/0919.html

Anonymous said...

Good stuff guys!

As always I digg this stuff.

G

Lisa said...

This was one of your best write-ups. We are in total agreement regarding Bill Gross. Great stuff here, love it.

getyourselfconnected said...

Thanks to all for reading over the past few days. I watched some news this morning and eveyone was in agreement that "This Had to be Done", but sadly nobody seems to know exactly what it is they are trying to do. We are approaching a dark and desperate time.

watchtower said...

GYSC wrote:
"We are approaching a dark and desperate time."

Apparently Russia thinks so too.

G has some good common sense things to do up at the top of this comments section.
Wouldn't hurt a thing to do this, if this all turns out much better than what it's looking like then no harm done.
But if not...

Has anyone here heard of the gas shortages in Nashville?
I have family in Nashville TN and what you are reading is correct, my family says that they are being rationed 7 gallons at the present (when the stations actually have gasoline).
Of course this probably has something to do with H. Ike, but this just shows you how people panic in these kind of cases.
I live in an area that doesn't see a whole lot of snow in a given year.
Everytime the weatherman calls for a lousy 2 - 3 inch snow people go nuts here, they go to the store and clean the milk and bread out in a matter of hours (no, I'm not joking).

Just imagine if something really serious ever happened.

Panic sucks, be like the Boy Scouts, "be prepared".

Anonymous said...

"Give me control over a nation's currency and I care not who makes its laws."
Baron M.A. Rothschild

If Hank wins kids and this coutry is screwed.

Kevin