Monday, June 28, 2010

Must Watch Video

The link I am providing is to a segment that was on Jon Stewarts show. He is interviewing a man named Jim Cramer. Mr. Cramer ran a hedge fund and now has a show called "Mad Money" on which he gives stock market advice.

In the interview, Mr. Stewart questions the use of market manipulation and options trading. What is really being discussed is that many people knew the market was being manipulated since 1999 and that it was going to crash; but, the financial experts did not expose it.

The Jon Stewart interview of Jim Cramer

Now, I have been saying for about four years that the housing bubble and the stock crash were engineered and intentional. When I was saying it four years ago, most people thought I had lost my mind. Instead they listened to Bernake, Paulson, Greenspan and people like Mr. Cramer. I want you to watch this video made around that time.

Schiff versus Stein

More financial experts lying

And the false solutions

And now comes the sad part. The solution was planned at the same time the problem was created. The solution is less, less for everyone in the United States. There are people who think they are taking part in a "tea party revolution", it is a manufactured outlet for their rage, it is not real.

Regardless of what side people were on in these "arguments", the solution they are promoting is to stop options trading that eliminates your retirement funds from having insurance against wild swings in the market. The large movements in the market allowed everyone to make money off of your retirement except you.

The games that were being played are all being exposed and that is good; but, the solution will fundamentally change the market when it does not need to. By going back to the rules that were in place during the late 90s we can substantially fix the problem. We do not need to create a situation where the market lies flat.

With congress passing 2,000 pages of financial reform and they are claiming they don't even know what effect the changes will have, we are continuing to be lied to. Those who understand the changes will make money and those who do not will continue to lose.

Average people are now paying more attention to the economy. They are outraged by what is happening in America, this is all good. They are also being sold a bill of goods about the solutions. The solutions will result in a weaker United States and more of a reliance on globalization.

I am personally in favor of limiting options trading and forcing stock valuations to be meaningful, to be based on the underlying value of the companies. I am in favor of CEOs only getting bonuses if the company makes a profit rather than if the stock goes up. The current method makes companies do things that are bad for the long term life of the company; but, are good for the short term value of the stock. Warren Buffet is correct about such things.

Where I disagree is in regards to having insurance on your company. All companies have risk. Risk is an innate part of life and that is why we have insurance. Insurance is like a savings account, we all contribute and if one of us fails the insurance is there to protect us. AIG was the largest insurance company of financial institutions in the world. They stopped acting as an insurance company and began acting as a financial risk taker.

Since 1999 everyone became a risk taker. People took out second mortgages on their primary residences to play in the stock market. Companies bought risky stocks and derivatives and paid less attention to their businesses. Pension funds invested in crazy schemes to avoid having to have people put more money in their pensions and having the corruption of the managers exposed. We became a economy of gambling rather than an economy of stability.

The solution being proposed is that we have less and pay off the debt that was created by "Wall Street" and NEVER LET IT HAPPEN AGAIN (that is the same as was said after the great depression. I fully believe we will nationalize the federal reserve, heck, we have nationalized the banks. Our wages will go down, we will have an international reserve currency or the value of currencies will be tied to one another (same thing) and our standard of living will be tied to productivity.

If we do not accept these results, the economy will be allowed to completely fail. That has always been the real intent behind what was begun in 1999 and became apparent in 2007-2008. But, listen to the videos, this was not an accident and was apparent to those who were in charge.

We are being taken down a path of monitoring each other. It is not "too big to fail" it is instead "to weak to influence change". The western governments are all implementing "austerity measures". State governments are choosing between prisons and schools. It is nationwide and international not limited to local. That is so that we will look at things more globally.

The Chinese workers will begin to be paid better and the west will begin to be paid less. Our national greed led to this. Too many people wanted a free lunch and gambled to get it. The party is over, the house is a mess and now comes the time to clean the house. No matter how bad the hangover or how great the party, it is time to get back to work. You and I will get back to work; but, the damage cannot be undone, the lamp is broken, the couch has vomit on it, the dishes are broke.

Some of us chose not to be at the party, still we live in the house also and have to help clean it up. You might say that this is unfair, fair has nothing to do with it. It is no more fair than a Chinese laborer having to work 14 hour days to pay for our debt. Selling our debt to the Chinese and Russians and Japanese in order to buy Escalades and chrome wheels was also unfair.

My ex-wife got half my pension and to keep our BMW, she also gets paid by me monthly for doing nothing. I am not alone in this situation it happens all the time in divorce. We took vows (a contract, a promise), she broke them and I pay for the privilege. It is no different than what we have done as a nation, no different than what Greece has done. The Germans didn't do it; but, they were forced to pay for Greece's default on their promises. My point is that we have to look at our promises in the same light that we look at what we have done as a nation to understand what is going on.

The problems in the economy were known for a long time. We have been trained to believe that we should take as much as we can while we are alive and die with as much debt as possible. That is considered winning by many. As long as we think that way, we will not deserve what we get and are leaving our children with our debt.