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Reply #62: I have finally wrapped my head around this fact.... [View All]

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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-05-11 12:39 PM
Response to Reply #48
62. I have finally wrapped my head around this fact....
no amount of austerity and now amount of wealth we could ever create would bring the world back into solvency.

I think I am a person of average intelligence, and affinity for science and the technical. I have listened to Kieser and Matheson for over a year and the ramifications finally truly sunk in this weekend. This debt is leveraged way too much. Paying this off will only cause more leveraging. Because of the way these risks were packaged in the investments, no one, and I do mean no one will know how much exposure they have until it blows up.

Here is an example that I hope will make it clear. CAUTION: do not read this if you have just had lunch or breakfast. YOU HAVE BEEN WARNED.

Someone once explained that derivatives sold as investment vehicles was akin to sausage. You name it and it was sliced, diced, chopped and ground up was stuffed into this derivative sausage. This mortgage for a half a million dollar house sold to a hair dresser in Las Vegas, an $250k house to a chemical engineer in Texas, a Yacht note from a billionaire in the Florida Keys, a city Municipal bond to pay for construction of a new water treatment plant. All of these were used to make this derivative sausage. Now some of this was what in the old days would be called a safe bet. A chemical engineer in Texas would have no problem paying on a loan and a city bond is a fairly safe bet. A billionaire could probably pay for a yacht. But the hair dresser in Vegas, not so good.

Now suppose this sausage went on sale. Everyone said it was the best sausage they every had and folks started buying it. There was such a clamor to get it. People had to take numbers and stand in line. Folks that got their sausage found that there were folks willing to buy what they had at a price + a premium. Everyone was happy until.......

someone found a dead rat body parts in the sausage (maybe our hair dresser in Vegas or our billionaire that went bust when he invested heavily in MF Global-good luck there). So, to quote Dirty Harry-"Do you feel lucky punk."

You are holding this sausage. Is is clean or will you find an ear, a tail, or God forbid, an entire rat in your sausage. You will not know until you examine the contents of you sausage. And if there is a rat in your sausage what can you do. The butcher said it was good sausage, Kosher even (a food item can be 10% impure and still be labeled Kosher-and there are many that are not aware of that-but I digress). The company that made it will not give a refund, the butcher that sold it will not take it back and no one wants to buy it from you. You have no way of knowing what is in your sausage until you open it up. Now you have to eat soon because you are hungry. What will you do?

And that my friends is where we stand. We are about to cut into the sausage. Maybe just a small portion of your sausage is bad, maybe the whole thing is contaminated, but either way, you will never see sausage in the same light again.
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  -STOCK MARKET WATCH, Monday, December 5, 2011 Pale Blue Dot  Dec-05-11 05:48 AM   #0 
  - Today's Reports  Pale Blue Dot   Dec-05-11 05:48 AM   #1 
  - Oil rises to near $102 as Iran tensions rise  Pale Blue Dot   Dec-05-11 05:49 AM   #2 
  - U.S. futures gain on Europe progress hopes  Pale Blue Dot   Dec-05-11 05:50 AM   #3 
  - Debt Slavery Why It Destroyed Rome, Why It Will Destroy Us Unless Its Stopped  Demeter   Dec-05-11 05:55 AM   #4 
  - Thank you for today's history/economics lesson!  Juneboarder   Dec-05-11 12:01 PM   #61 
  - White House pushes for confirmation of consumer watchdog nominee  Demeter   Dec-05-11 06:01 AM   #5 
  - Mr. President, if the repugs are going to use pro forma....  Hotler   Dec-05-11 09:14 AM   #46 
  - Economy Avoiding Death Spiral Boosts Bullish Fund Wagers in Commodities  Demeter   Dec-05-11 06:03 AM   #6 
  - Italys Leader Unveils Radical Austerity Measures  Demeter   Dec-05-11 06:07 AM   #7 
  - Will (Three Card) Monti be the first  Po_d Mainiac   Dec-05-11 08:01 AM   #38 
     - Works for me!  Demeter   Dec-05-11 08:08 AM   #40 
     - But at least Berlusconi...  AnneD   Dec-05-11 11:44 AM   #59 
     - +1 n/t  Hotler   Dec-05-11 09:16 AM   #47 
  - Germany ready to shift on ESM bondholder losses  Demeter   Dec-05-11 06:17 AM   #8 
  - Fed may give loans to IMF to help euro zone  Demeter   Dec-05-11 06:18 AM   #9 
  - Euro Governments Consider Special IMF Fund  Demeter   Dec-05-11 06:19 AM   #10 
  - Geithner headed to Europe to meet with Sarkozy and key officials  Demeter   Dec-05-11 06:21 AM   #11 
  - Fuck the IMF. Let the collapse happen.  Hotler   Dec-05-11 09:35 AM   #48 
     - I have finally wrapped my head around this fact....  AnneD   Dec-05-11 12:39 PM   #62 
        - Too bad we don't have a real leader, a real world leader...  Hotler   Dec-05-11 04:41 PM   #72 
  - morning...morning...morning...  xchrom   Dec-05-11 06:38 AM   #12 
  - yeah. whatever  Tansy_Gold   Dec-05-11 06:44 AM   #15 
  - ...  xchrom   Dec-05-11 06:52 AM   #19 
  - How about a happy pic for Monday???  Roland99   Dec-05-11 07:00 AM   #20 
  - wow -- is that your wedding?  xchrom   Dec-05-11 07:02 AM   #22 
  - that was right after we sat at our table at the reception  Roland99   Dec-05-11 07:17 AM   #25 
     - well your happiness is catching -- that's a wonderful picture  xchrom   Dec-05-11 07:22 AM   #26 
     - I was hoping you would post pics today.....  AnneD   Dec-05-11 12:43 PM   #63 
  - Very, very nice.  Tansy_Gold   Dec-05-11 07:23 AM   #27 
  - Congratulations!  DemReadingDU   Dec-05-11 07:34 AM   #31 
  - Very nice!  Po_d Mainiac   Dec-05-11 08:05 AM   #39 
  - omg! What a beautiful couple!  Demeter   Dec-05-11 08:12 AM   #42 
  - Congratulations!  Fuddnik   Dec-05-11 09:40 AM   #50 
  - Just thought I'd post that...y'all have fun with the bulls and bears today  Roland99   Dec-05-11 07:01 AM   #21 
  - Cool.  Ghost Dog   Dec-05-11 09:49 AM   #52 
  - I had to go back to bed in order to understand today's cartoon  Demeter   Dec-05-11 08:10 AM   #41 
     - STILL raining?!?! FEH!  xchrom   Dec-05-11 08:16 AM   #43 
  - europe: Iceland Bank to Sell Eurobonds for First Time Since Crash  xchrom   Dec-05-11 06:39 AM   #13 
  - Economic crisis tests Italy's luxury market  xchrom   Dec-05-11 07:05 AM   #23 
  - Spain losing the roof over its head  xchrom   Dec-05-11 07:07 AM   #24 
     - Yah don't say.  Ghost Dog   Dec-05-11 09:37 AM   #49 
        - unempolyment in spain is huge period.  xchrom   Dec-05-11 10:27 AM   #55 
  - asia: China's thin margin for error in property policies  xchrom   Dec-05-11 06:42 AM   #14 
  - Capital spending plummets 9.8% {japan}  xchrom   Dec-05-11 06:44 AM   #16 
  - Nikkei builds on last week's gains, Italy eyed  xchrom   Dec-05-11 07:24 AM   #28 
  - China Signals Reluctance to Rescue E.U. MUST READ  Demeter   Dec-05-11 06:45 AM   #17 
  - +1  xchrom   Dec-05-11 07:24 AM   #29 
  - Mort Zuckerman: How to tackle Americas lost decade  Demeter   Dec-05-11 06:46 AM   #18 
  - PRECIOUS-Gold dips, investors cautious before euro zone summit  xchrom   Dec-05-11 07:28 AM   #30 
  - The Absurd Zombie Lie About the Economy Right-Wingers Desperately Cling To --  xchrom   Dec-05-11 07:35 AM   #32 
  - +1 n/t  Hotler   Dec-05-11 09:49 AM   #53 
  - south asia: India in bind, may delay coming of foreign retail  xchrom   Dec-05-11 07:38 AM   #33 
  - India may face its worst financial crisis in decades as rupee retreats  xchrom   Dec-05-11 07:47 AM   #35 
  - Sensex down 41pts on profit-booking despite firm global trend  xchrom   Dec-05-11 07:49 AM   #36 
  - Gold ends steady in thin trade, silver up on industrial demand  xchrom   Dec-05-11 07:51 AM   #37 
  - Biden: US 'stands in solidarity' with Greece  xchrom   Dec-05-11 07:44 AM   #34 
  - World on brink of one more recession, says UN  xchrom   Dec-05-11 08:17 AM   #44 
  - Euro zone and China signal sharp global slowdown  xchrom   Dec-05-11 09:03 AM   #45 
  - Chuckle for the day.  Fuddnik   Dec-05-11 09:48 AM   #51 
  - I have no hope. I see no future. eom.  Hotler   Dec-05-11 09:57 AM   #54 
  - Fudd!!!!!  AnneD   Dec-05-11 10:39 AM   #57 
     - You're confusing turkeys with Pennsylvanians.  Fuddnik   Dec-05-11 11:53 AM   #60 
        - Thems wasn't seagulls  Po_d Mainiac   Dec-05-11 01:14 PM   #64 
           - You guys have me in stitches...  AnneD   Dec-05-11 03:21 PM   #67 
  - Morning Marketeers....  AnneD   Dec-05-11 10:28 AM   #56 
  - kicking. n/t  Hotler   Dec-05-11 11:28 AM   #58 
  - NOW it's snowing  Demeter   Dec-05-11 02:04 PM   #65 
  - We had snow thurs-Sun. It's only about 5 degrees out now...  Hotler   Dec-05-11 05:01 PM   #73 
  - @BloombergNews - S&P said to place all 17 euro nations on rating downgrade watch  DemReadingDU   Dec-05-11 02:26 PM   #66 
     - S&P Statement  DemReadingDU   Dec-05-11 03:40 PM   #68 
        - Good thing Geithner is on his way over there.  Fuddnik   Dec-05-11 03:48 PM   #69 
        - What is it girl...  AnneD   Dec-05-11 04:13 PM   #70 
           - While someone else has tunneled into the well and is removing the cash  plumbob   Dec-05-11 04:37 PM   #71 
              - That is next weeks episode....  AnneD   Dec-06-11 07:59 AM   #75 
        - Stand back! This festering sore is about to pop. eom.  Hotler   Dec-05-11 05:04 PM   #74 

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