Again, the world is surprised by clever accounting scams developed by European investment banks. Frankly, it is getting tiresome re-discovering the same schemes in a different locations and no government willing to put an end to the deceit of big business. In the case of Greece, Europe will be using clever government backed banking leverage to hide the EEC's ever expanding current debt, hiding the impact to the taxpayers (citizens). To clarify this, let me take the US example.
Let's put the financial scam called DERIVITIVES in perspective for the average Joe, the total world GDP (income) is $50 trillion a year. The total value of world’s stock and real estate (assets) is $200 trillion (4x leverage). The total value of world derivatives (bets) is $600 trillion (12x leverage!).
In comparison, if Joe six-pack made $50,000/ per year and had $200,000 (4x leverage) in his home and 401K and gambled the same relative amount like our investment brokers, he would be gambling $600,000 a year on his base salary of $50,000. But Joe knows there are, on average, about the same amount of winners and losers, so Joe is unwilling to bet large, because he knows he can have a a run of bad luck. He knows well enough that if he goes full leverage on his stock and real estate accounts, he's putting too much risk against his well being.
Now there’s the catch. When Joe’s bets go sour when his salary drops, he loses his house and maybe his well being. But…. our investment bankers and government run Oligopolies like Fannie Mae and the SEC are smarter; they bet both ways using computer algorithms that guarantee no major loss, thus reducing risk, but still gambling against a downturn. In Joe’s case, the Bank (alias taxpayer Fannie Mae) loses some $ and Joe is allowed to go forward, albeit with bad credit. However, when our investment banks call in the chips, forcing unappraised insurance companies and commercial banks to pay up or go belly up, the bankers are smart enough to know they are part of the US backed banking system, guaranteed by the US govt. Of course, the govt. will merely print money and trade this new money for the soured assets (GM, Chrysler, AIG, Joe’s real estate loans). Net bet....either more fools buy these depreciated assets making them appreciate and making it all OK until the next derivitive caused crash or the US govt. revs up the printing presses, making all citizens more dependent on our government bureaucracies (Fannie, US Treasuries, IMF, and Fed Reserve).
This event could only happen if government became a business in cahoots with the business lobbyists and political elite. Point being, in 1999, under a famously scandalous president, congress did away with the Glass-Steagal act, making investment bankers part of the banking system and thus guaranteeing that they no longer put their own money at risk, but OPM (other peoples money…yours)
Now, under Obamaization of our banking system under the new Frank-Dodd rules, not only are we faced with the sins of our past, we have compounded these sins by creating new banking regulations that will put the govt. squarely as the guarantor of everything under the sun.
Obama and the ilks of the corporate world like Jeffrey Immelt have realized their dream of making a mockery of private enterprize and have set up socialization as the cure for people’s bad economic woe's. Everyone will be treated equal, nobody will be responsible for their actions, and we will become another European nanny state, so when one nation fails, all nations will fail and the rich and poor will all be miserable.
America is no longer exceptional. We are on the same path that Europe is. Think about it.....Obama and GE's Jeffrey Immelt watching the Wall Street demonstrations in their special seats high above the common folk. If anyone believes that Obama has no agenda or that he is a neophyte, they are blind to the slow course of actions taking place. Until our congress owns up to their responsibility to protect the people against this oligopoly, we will continue with this idiocy until we get what we deserve. THINK ABOUT IT.... STOP IT NOW!