Wednesday, October 12, 2011
Symptom of Bubbles Bursting
Protesters Are Symptom NOT Cause
See Link ---
First known bubble in the financial memory was the tulip bubble in the Netherlands where people sold cows, sheep, land and wine for a single tulip with the hope of cashing in on the TULIP MANIA that swept the country.
Then came the South Sea Bubble from 1719 to 1722 which centered around 3 entities, the BANK OF ENGLAND, South Sea Company and British East India Company all of whom had taken on huge government debt amounting to 18.3 POUNDS when the total British Government Debt at the time was 50 million pounds.
All of these bubbles and the modern versions had the EXACT SAME characteristics:
#5. Rigged Markets by BIG PLAYERS
Fast forward to the 1920s and BLACK TUESDAY.
Then onto the 1990s and the DOT.COM FARCE.
I remember when AOL and NETSCAPE were trading at $300 plus in the mid-nineties. It seemed anything with a DOT COM after it was a sure thing.
And then it all fell apart and the little guy was left with JUNK!
Again in the late 90s and early 2000s when the banks lent money like it was going out of fashion people were getting mortgages at 110% the purchase price of the HOUSE!!!
But there was a CRITICAL DIFFERENCE in the housing bubble - the entire economy was affected - not a select few who were greedy enough or stupid enough to get involved in the shell game that was being unleashed by the so-called "financial engineers" at the BIG BLUE CHIPPED investment banks.
Further, a house is a place to live in, NOT A SPECULATIVE instrument.
Greed, corruption and lies via the so-called RATING AGENCIES slapped AAA on the packaged CRAP that was being peddled by Wall Street and its associates.
This is the reason why the O-W-S protesters are symptomatic of a burst bubble. They are rightly angry that crappy derivatives, crappy regulation, crappy spineless government representatives stood idly by while the entire economy, based on housing, (building, selling and speculation on that commodity) imploded.
As the momentum of foreclosures increased followed by job losses, the frustration swelled and poured out onto the streets.
That's the connection between financial skulduggery and the REAL ECONOMY.
Banks were bailed out.
The OMOTS was doubly screwed - taxes taken and given to bail out the banks AND foreclosed houses robo-signed by phantom individuals.
These protests will swell. They will, like all symptoms, show themselves ACROSS THE USA and then, only then will the CLOWNS in DC WAKE UP AND BE FORCED TO BREW some new COFFEE!