America Appears To Be Trapped in a Massive Coverup of Control Fraud and Corruption

[girl gone mad]

(Also check out the note from Janet Tavakoli on Jesse's front page, if you get a chance..)

America Appears To Be Trapped in a Massive Coverup of Control Fraud and Corruption
http://jessescrossroadscafe.blogspot.com/2011/01/america-is-trapped-in-massive-coverup.html">Jesse's Café Américain

I think most readers with an economics background would be familiar with a liquidity trap, which is a situation where monetary policy is unable to stimulate an economy suffering a non-cyclical credit contraction, either through lowering interest rates or increasing the money supply because expectations of adverse events (e.g., exogenous deflationary factors, insufficient aggregate demand, or civil or international war) make persons with liquid assets unwilling to invest.

America is caught in a confidence or credibility trap, in which the changes, investigations, and reforms necessary to restore trust to an economy or market are rendered unlikely because doing so would expose a pervasive corruption that the principals fear would destroy any remaining trust. It could also endanger the careers of politicians and business people who may have permitted and even appeared to facilitate the control fraud that caused the financial crisis in the first place. Personal risk trumps public stewardship.

The fraudulent activity is covered up and therefore continues or appears to continue, crowding out most productive business investment and activity which cannot possibly hope to compete with the highly profitable fraudulent activity under such opaque and uncertain circumstances. Informed market participants are unwilling to invest their liquid assets in a system which they suspect is riddled with accounting fraud, insider trading, and regulatory weaknesses, except of course in a few situations and somewhat ironically in some existing frauds, such as a bubble in equity valuations for example, which they think they understand.

The American government is indeed acting as if it is involved in a massive coverup of a control fraud and corruption that could perhaps be the worst in its history. I think many people who are looking at this know in their hearts that all is not well, that there is something not quite right in the current situation. How else can we explain such massive and widespread financial fraud, with so few meaningful indictments, or even ongoing investigations with credible disclosures? And the worst perpetrators appear to be dictating the remedies and reforms to the system for this government sponsored recovery.

http://jessescrossroadscafe.blogspot.com/2011/01/america-is-trapped-in-massive-coverup.html">more...

[aquart]

1. Should we start a pool on when the volcano finally erupts?

I'm looking at the MidEast and Europe and the tectonic plates are shifting.

[Betty Karlson]

2. Could you please be a bit more specific?

The analogue of the tectonic plate is interesting. But I fail to see how the European plate will shift, and what volcano is going to spew gass and ashes.

[global1]

3. I Know As An Individual Investor I'm Afraid to Get Back Into The Market.....

because I suspect that it is a system that is "riddled with accounting fraud, insider trading, and regulatory weaknesses....".

I was fortunate. I pulled out of most of my retirement stock funds and put the money in cash just back before the crash. I did it for the wrong reason. I thought that BushCo was going to attack Iran and I freaked. So I pulled out of stocks and put it in cash. Thank God I did because at least I held on to most of my money - unlike others that lost most or all of their retirement funds.

Unfortunately - I'm still in the money funds which earn very little interest. I am totally un-trusting of any stock fund - but realize that the market is going up and I'm probably losing money now. I don't know what to do - because I just don't trust the market nor Smith Barney Morgan Stanley anymore.

I can't imagine those people that lost most or all of their retirement income and their reservations about re-investing - if they even could afford to.

I was looking forward to Obama and the Dems perhaps correcting this situation so that I could again have confidence in investing my money. Unfortunately - I don't think that Obama and the Dems in the few corrections that they tell us they made - went far enough to restore my confidence.

Is anybody else on this board in the same situation? What are you contemplating doing? I need some financial advice.

[CanonRay]

8. I'm in the same boat

so when you figure out what to do, please let me know. I feel like putting money back in the market is the same as getting in a rigged crap game. I'm not the guy who has the inside deal, so I'll get screwed. I'm lucky to get a 2% return on anything.

[DCKit]

12. +1

I was out in 2004, when I realized the game was rigged. I took the money and paid off all debt, and won't be wading back in the cesspool anytime soon.

The real pisser is that the money sitting in MM or bank accounts is being leveraged to make money for Wall St. and the mega banksters. It's also being used against the people, in the commodities markets, to strip us of even more cash. Basically, they're borrowing from us at 2% and making Dog knows how much by raising our cost of living.

The only thing I can think of to bypass or beat the system, is to become independent of it - alternative energy, high mpg vehicles, your own personal victory garden, zero debt and self-employment.

[dixiegrrrrl]

15. You got it. Become independent of the system as much as possible.

the game is rigged, and they keep thinking of new ways to take what money we have left.
the only way out is to quit feeding their system on whatever level you can do so.

edited for lack of caffeine

[secondwind]

14. We're sitting tight as well. We occasionally jump in and buy something that is appealing,

and sell when we make a profit, and jump right out again. Like little mice. I'm 64, my husband is 68, we are doing well financially and intend to stay that way. For us, FOR NOW, staying out of the market is the best thing.

Good luck to you!

[sendero]

16. "ditto"....

.... (to use a sullied word). I did not lose money in the crash because after 2001 I learned my lesson. The stock market is a joke, a rigged casino designed solely to give the big IBs and hedge funds a way to fleece the small investor.

The current runup is another example. There is simply no economic basis for stock prices any more. The market is juiced on easy Fed money, money that has to dry up at some point and when it does the market will drop like a rock.

Does it suck getting 1% for your money? Yes it does, and you can thank the Fed for that. But what sucks a lot more is losing 40% in a crash.

I've managed to find some decent interest rates at local banks for limited amounts of deposit, it helps some. But for all of you who are staying away from the stock market because it smells funny, I think you are doing the right thing.

[ThomCat]

4. The speaker in the video does a Damned Good Job of

Destroying the credibility of the Stress Tests.

If the stress tests were done based on the information the credit rating agencies used to determine credit risk, and they didn't actually use any information because it wasn't provided to them, because it didn't even exist, then the stress tests were entirely hypothetical too. They were guesses, not based on any real information either.

So all the banks that are too big to fail, but they're still in business because those stress tests ensure that they're healthy, um, no they don't. We've all been conned repeatedly, and our own government is helping, in order to keep the people who destroyed our economy in charge.

[dkf]

5. If it's all a sham then isn't the American way of life a sham?

Isn't the illusion that we can be provided for a sham? Aren't we all poor as churchmice?

Then what is the point? Might as well give up and die.

[earcandle]

6. Whoah! That is just too easy an out. You have to help like the rest of us.

[Disintermedia8]

11. ...which is precisely

the endpoint recommended by our betters. Keeping us on the edge of despair is how they win.

[earcandle]

7. "or civil or international war" is the part I keep having premonitions on.... and try my best to

avert...

[formercia]

9. A bought and paid for Congress.

"It could also endanger the careers of politicians and business people who may have permitted and even appeared to facilitate the control fraud that caused the financial crisis in the first place. Personal risk trumps public stewardship.'

The boys were smart. They managed to get enough members of Congress to buy into their scam that they have little danger of being rigorously investigated.

[Disintermedia8]

10. I will disagree with one seemingly minor choice of a word

I do not think this is a loss of "confidence". I believe a loss of confidence is a normal part of a cyclical growth model. I believe the real issue is loss of "faith". A far more deadly ailment than losing confidence. Loss of faith means you do not think that "normal" conditions will ever return.

[sendero]

17. "ever" is.

... a long time. Let's go with "in my lifetime".

[The Backlash Cometh]

13. We're way ahead of you. It's happening at the local level.

What you're talking about is what I call the Cleo syndrome. Community leaders are colluding with elected officials in order to override public input with the intent of facilitating deals that they will personally benefit from. It's the new entrepreneur--or old entrepreneurship, outed. It is a massive conspiracy because they need to get into the roots of the community so they have cells inside the lowest levels. That means down to the Home Owner level. You also have to find people who can block efforts when the little guy figures it out and tries to seek outside help. That means there will be a lot of tainted lawyers misleading every effort you make to expose it through the courts. And forget the Florida Bar. Chances are that the board has corrupt attorneys among them. The newspapers are also silenced because their editors get cold feet going against the power hitters who are business men who buy advertisement. The State Attorney's office and Attorney General's office are silenced because many of the guilty parties are political rainmakers and Governors don't want to rock the boat. They figure that stifling a little guy is good value for their campaign money.

Yep. We know all about it at a local level. So, why wouldn't it be happening at a national level?