"You Can't Fix Stupid"

Why is Gold going down? Because the government wants it too.

Why is Oil going down? Because the government wants it too.

Why is the Dollar going up? Because the government wants it to.

Why are bank stocks going up? Because the government wants them to.

I know, it's stupid. ...but you can't fix stupid. Stupid is as stupid does. Thanks Forrest. Gold is the enemy of the government. Oil is the government's Achilles heel. The Dollar is to the government what oxygen is to you and me. And if the banks are allowed to fail, the entire reason for the government's existence is destroyed. It's really that simple, and stupid at the same time. The government exists to steal your money thru inflation.


House passes housing bill; Bush lifts veto threat
WASHINGTON (Reuters) - The House of Representatives passed a massive housing rescue bill on Wednesday while the White House dropped a threat to veto it, paving the way for measures aimed at shoring up the worst U.S. housing market since the Great Depression.

Removal of the presidential veto threat spurred investors to snap up shares and bonds of mortgage finance companies Fannie Mae and Freddie Mac, which would receive an emergency government lifeline under the bill.

The bill had been in the works for months, but took on greater urgency since concerns about Fannie and Freddie's finances mounted in mid-June

Ten days ago, the U.S. Treasury pledged an unspecified credit line for the companies and said it would buy their stock, if needed, to bolster investor confidence. Those emergency measures required congressional approval.

The two companies, which own or guarantee almost half of the $12 trillion in U.S. mortgage debt outstanding, have recorded heavy losses in the past year amid rising defaults.

If they were unable to keep financing mortgages, analysts say the already weak housing market could grind to a halt, tipping the U.S. economy into a deep recession.

Treasury Secretary Henry Paulson said he recommended that Bush drop his objections because reforms for Fannie Mae and Freddie Mac, the country's two biggest mortgage finance companies, were too important.

"What we're doing with the (companies) is orders of magnitude more important than any of the other parts of this housing legislation," Paulson told reporters.

Congressional budget analysts put a $25 billion potential price tag on the provision to bolster Fannie and Freddie, but pointed to a wide range of possible costs.

Both Paulson and the companies have said the credit line was just a backstop and they had no intention of using it.

The bill also contains an increase in the Treasury's borrowing authority. This hike was sketched out in a fiscal 2009 budget blueprint that cleared Congress earlier this year.

The current debt limit is set at $9.815 trillion. Under the bill, it would be increased to $10.615 trillion to accommodate the federal government's continued deficit spending.
http://biz.yahoo.com/rb/080723/fannie_freddie.html

"...to accommodate the federal government's continued deficit spending." That says it all right there. Continued deficit spending spells just one thing...a lower Dollar. Despite every ounce of hot air spewed by the arrogant traitor Paulson, the US Government has no desire for a "strong Dollar". This housing bill and the bailout of Fannie and Freddie prove that beyond a shadow of a doubt. What could be more inflationary? I'm sure Paulson and his cabal at the Fed will think of something soon. As they say, you can't fix stupid.


Rescuing Fannie Mae or Freddie is nonsense
The proposed rescue of Fannie Mae and Freddie Mac makes no sense.

Both companies are mortgage bundlers and investors.

They buy mortgages from other lenders and securitize them. They hold some for investment and sell some to others. They guarantee payments on the mortgage-backed securities they sell to others. And they buy mortgage-backed securities from other bundlers for investment.

Recently, the stock prices for Fannie and Freddie fell precipitously, to roughly a quarter of their previous peak. That represents a sharply revised judgment by investors about the value of Fannie and Freddie's business model and activities.

That's too bad for holders of Fannie and Freddie stock. But in and of itself, it doesn't represent a systemic economic threat warranting the intervention of the federal government.

The Bush administration has proposed that Fannie and Freddie be given an unlimited line of credit from the federal government and that the federal government be permitted to contribute equity if Fannie and Freddie have capital problems. Congress appears likely to go along.

In the meantime, the Fed has agreed to lend to Fannie and Freddie as well.

Instead, Congress should phase out the existing $2.25 billion line of credit each enterprise has with the federal government over a period of, say, five years, and declare that Fannie and Freddie from that point on are on their own.
http://www.azcentral.com/arizonarepublic/opinions/articles/2008/07/23/20080723robb23.html

Fannie Mae and Freddie Mac are doing a VERY POOR job of running their businesses, so the federal government is going to step in and help them to continue to run a bad business. Sounds pretty stupid too me too. But as you know, you can't fix stupid.


Bouncing Banks: How $11B of Losses Is 'Good News' on Wall St.
Financial stocks were taking a breather Wednesday, which is to be expected after the group's ferocious rally. Heading into today, the Financial SPDR (XLF) had risen 31% in a five-day advance, culminating (perhaps) on Tuesday when huge losses were greeted as good news.

Five banks reporting results Tuesday -- Wachovia, Washington Mutual, SunTrust, Fifth Third, and Regions Financial -- posted quarterly losses of over $11 billion, yet saw their market-caps rise a collective $11.6 billion, with an average gain of 14%, the WSJ reports.

"Bad results are good when expectations are so low,'' Deutsche Bank's influential analyst Michael Mayo wrote Tuesday, comments that both summed up the mood and helped define it. "Real estate problems remain significant, but outside these areas problems have not yet spread in score or severity as much as feared.''

Further aiding sentiment: Both Wachovia's Robert Steel and Washington Mutual's Kerry Killinger declared their respective firms don't need to raise more capital, even after taking losses of $8.7 billion and $3.33 billion, respectively.
http://finance.yahoo.com:80/tech-ticker/article/41935/Bouncing-Banks-How-11B-of-Losses-Is-'Good-News'-on-Wall-St.?tickers=WM,WB,XLF,JPM,AXP,STI,FITB

Didn't we here this same nonsense when banks reported last quarter? They were wrong then, and they are wrong now. The ONLY thing putting a bid under these pathetic banks and their equally pathetic balance sheets is the arbitrary enforcement of an SEC rule that has been "unenforced" since it's inception. The SEC has banned "naked shorting" in 17 banking related stocks. And the government claims that speculators in the Oil markets are manipulating price. The government enforcing a LAW only when it's convenient sounds more like market manipulation to me. Yes, I know banks rising on dreadful earnings sure looks stupid, but hey, you can't fix stupid.


Shorts On Fire
Ben Bernanke and Hank Paulson spoke to congress this past week and their message was clear: Inflation be damned, job one is to rescue the financial system! Of course they will, keep in mind that the Federal Reserve is OWNED by the very banks which they are RESCUING! They will have their hands full in doing so.

During that same congressional testimony the corruption and rot within the regulatory agencies was on full display as one top regulator placed a BAN on activity which has been ILLEGAL since the great depression. A tacit admission that the firms it regulates are and HAVE BEEN above the law. No sooner did the announced ban on NAKED short selling in 17 financial and banking firms was given to CONGRESS, it was then IMMEDIATELY delayed until Monday, July 21st in order to provide an exit for the CULPRITS of this nefarious, illegal and predatory practice.

The BIGGEST rally in financial and banking stocks in decades was nothing more than the perpetrators and criminals FLEEING the scene of their latest CRIMES.

The greatest transfer of wealth in history is beginning to unfold, as those who store their wealth in paper lose it to those who DON’T! It will take years to unfold.

This is the greatest OPPORTUNITY in history. Do not be afraid. Do your homework and thrive. Markets will zoom all over the place as investment assumptions that have held for years are now FALSE. We are not close to the end game here, cash is still spoken of as SAFE and risk free which is the most outrageous of LIES. Paper is poison and the sooner you invest with that in mind the sooner you will be on your way to the penthouse. People that hold their wealth in G7 paper are headed to the OUTHOUSE and they will be able to use their wealth as high priced toilet paper.
http://news.goldseek.com/GoldSeek/1216849299.php

Sure as I'm sitting here, this rally in banking stocks will fail. The first seeds may have been sown today. Banking stocks closed well off of their highs today after the announcement of the housing bill and attached Fannie and Freddie bailout. Gold and Silver got fleeced today by the CRIMEX goons in an effort to give credence to the governments new plan to instill "confidence in the financial system". If giving another boost to the burgeoning hyperinflation scenario will instill confidence in this dead cat, so be it. Gold and Silver will not be held back long. ALL attempts previously have failed, this one will too. Yup, buying bank stocks because the talking heads on financial tv claim they are undervalued is stupid, but again, and I hate to beat a dead cat, you can't fix stupid.


No Bottom Yet For Flailing Financials
In recent months, even the most blindly optimistic forecasters have come to grips with how our banks and investment banks took wildly imprudent risks that will result in horrific losses. The resulting sell-off in financial shares has tempted many investors to scoop up these companies at apparently fire sale prices. Wise investors should resist the temptation, as the pain for financials is just getting started.

The rescue of Fannie Mae and Freddy Mac, in particular, generated a wave of buying amongst the so-called “bargain basement” financial stocks, off some 80 percent from their highs. This optimism was based largely on the belief that the taxpayer would be forced to rescue the banks. But the banks are not the only financial institutions in trouble. The home lending and credit boom provided a feast for all manner of other speculations. Credit cards lenders became very aggressive as did auto lenders and lenders to students. Even businesses borrowed in order to participate in the great consumer credit boom.

These categories of lending are vast, in sum, amounting to several trillion dollars. All financials are exposed, but the degree of infection is not yet fully understood. Soon, even the government must wonder how much more taxpayer “rescue” the $14 trillion U.S. economy can afford?

As the recession takes hold, borrowers are heading for stringent times, especially those with large, high cost credit card debts. Likewise, their lenders, including many regional banks, are likely to experience massive loan defaults. Then, there are the insurance companies who have invested much of their own reserve funds in real estate.

In short, investors should become urgently aware that banks are not the only financial institutions that will be adversely affected by the severe economic conditions now looming ahead.

While the true extent of the problem is hard to estimate, it is a certainty that the U.S. dollar is likely to remain under downward pressure. Gold is likely to experience strong upward pressure as high inflation leads into hyperinflation and systemic financial risks become increasingly manifest, offsetting the downward pressures of recession.
http://news.goldseek.com/GoldSeek/1216830024.php

"Buy bank stocks? Are you stupid?" Try as you might, you just can't fix stupid.


THE INTERNATIONAL FORECASTER
So far this week we saw Wachovia get socked for an $8.86 billion loss with a layoff announcement of 10,750 employees, while Washington Mutual got hammered for a $3.3 billion loss and increased its beleaguered loan-loss reserves by $3.74 billion to $8.46 billion as it announced expense cuts and asset sales. This is nothing. This is just the beginning. This is just window dressing to protect incumbents. Together with the science fiction and fantasy we got last week from the banking sector, these latest financial statements from the banking sector should receive a Nebula Award from the Science Fiction and Fantasy Writers of America. Gene Roddenberry could not have dreamt up financial statements that were more phantasmagoric.
;
All these bank losses, as terrible as they are even in their understated amounts, are pathological accounting lies aimed at keeping the sheople from going ballistic on the incumbent scum-bags in Congress so that these corrupt reprobates and sociopaths can continue in office and maintain their rape, pillage and slaughter of the sheople of the US unabated on behalf of their evil, malevolent and rapacious Illuminist masters.

The stock markets, the bond markets, the derivative markets and the entire financial system would collapse if people knew the real truth about the balance sheets, income statements and debt-to-equity ratios of virtually all the major commercial and investment banking fraudsters of Wall Street. So the devastating truth will be withheld most likely until the final quarter which ends in December, because a good portion of the earnings results for the third quarter are going to be announced prior to the US general elections which would normally be held in early November, barring some false-flag attack. Until then, the huge whitewash reservoir behind the "creative accounting" dam will be sucked dry. We're not sure if there is enough whitewash left on the planet to cover up the losses for Q3, however.
http://news.goldseek.com/InternationalForecaster/1216834605.php