FRANKENSTEIN ECONOMY

..."The explanation was prompted by an article in the New York Times in which former Goldman employees and debt experts claimed that the bank knew the CDOs it was designing and selling to clients were highly risky. The sources claimed that rather than warning clients of the dangers, Goldman spent millions of dollars "short-selling" the instruments, reaping vast rewards when they imploded.

Sylvain Raynes, an expert in structured finance at R & R Consulting, told the New York Times: "The simultaneous selling of securities to customers and shorting them is the most cynical use of credit information that I have ever seen."

We formed a mob and went after an innocent monster "FRANKENSTEIN" who did no wrong, with pitchforks and torches, yet the SCUM on WALL STREET who feasted on our carcass and maybe even placed SIDE BETS on the implosion of the very products they were peddling seems VULGAR to me....where is the JUSTICE, where are the TRIALS? where is our enron moment?

Where were the checks and balances back in the day 2003-2007? Remember which idiot on MSM who has been talking up any housing revival. LIAR LOANS, PIGGY BACK LOANS, NO DOCUMENTATION LOANS...just come in if you have a FACE you get a loan.

SO even if the speculators got money to speculate and build with no real demand, the GATE KEEPRS should not have cleared so many to buy the homes or use those funds for flipping.....flipping wasn't just for flapjacks anymore, flipping was a lifestyle, a business.....and it seemed like it could go on forever....building condos and homes without any regard to demand.

People were ALLOWED to buy homes that otherwise, without these LAX LOAN STANDARDS AND FED 1% ARTIFICIAL RATES they normally could have. Now like REPO MAN ....people will be tossed out on the street and these unaffordable homes ripped away from them....the people will not get justice.

SO BANKS KNOWINGLY PUT unqualified people into loans, knowingly these ALT A and subprime lonas got packaged up, kissed by rating agencies like they were gold, just as many were shorting the hell out of the industry making it on both sides.....AND THEN it went WHOOMPP!!!!

And that brings us today, if you thought we had malinvestments, and maladjustments in past phases, this one is sure to be the doozy! and instead of stupid 1% rates we now have had 2 years of 0% !!!! and the housing sector is still in the death throws.....

WITHOUT FED manipulation of the STOCK MARKET, an ILLEGAL ACTION, UNCONSTITUTIONAL intervention into economy, not in their MANDATE....everyone looks away as we get an 85% SURGE in paper stocks that helps the FEW, NOT THE MANY.

How do I know this? It's why I posted the Consumer Sentiment numbers today, what more would it take a tripling of the stocks? BUT WHO IS BUYING AND WITH WHAT MONEY? we already covered that. CS was so weak it is right back where it was at the WORST OF THE CRISIS!! SO are the housing data, so usually consumer sentiment doubles during the first 2 years of a recovery.....MOST AMERICANS have the BULK of their wealth in their homes....$3 TRILLION of that or more have been taken away.....11 MILLION owe more than home is worth....we are on course to lose another 15% going forward!!!

SENTIMENT affects spending decisions, not for toys....for items of real value.

THE FED experiment is a drastic failure. GOV'T action has been drastic failure....I have NO optimism Republicans will do any better.

4 BANKS now hold more than 50% of ALL the BANK ASSETS in the entire US BANKING SYSTEM: B of A, CITI, JP, and Wells Fargo......isn't that grand?

TOO BIG TO FAIL got too COLOSSAL TO FAIL.

BY allowing the Financials to go to the FED and get funds at 0%......where do you think that money went? YES...much of it into stocks and commodities.

BUBBLES END UP AS BUSTS....FED POLICY GUARANTEES THIS CYCLE....it started with that idiot many idolize Greenspan....now Ben's doing a fine job too.

If we have seen any REAL improvement in the economy, it is FAR TOO LITTLE for what has been spent.......the upper 2% won't complain, the BANKSTERS WON'T COMPLAIN.

Get ready for HUGE money to be passed around like they earned it...they are smartly deferring that until 2011....thinking maybe less will be paying attention?

Mortgages that banks hold were held in suspended animation in march of 2009 by the suspension of mark to market, home prices have slid quite a bit since 2009 and now they are headed down again.....WHAT IS THE VALUE OF THESE AT THE BANKS?

IMHO BANK profits are fictitious at best, make believe........anything has value by finding someone to pay you a specifiied amount at that time....otherwise its just a fraud...not based on reality......

If 7 of last 8 recoveries were led by Housing, that at LEAST tells you of its importance in our economy.....so I ask again what leads this "recovery"?

GOV and FED...guess what? we will soon realize it's GROUND HOG DAY AGAIN!

Duratek