Monthly Archives: March 2011

03/30/2011 Mr. Obama, Tear down this Wall … Street! – A Matrix movie fan’s interpretation of the Bailout of Wall Street.

So Barack, or Barry rather, please allow me to be casual with you. I am no Ronald and you are definitely much more handsome then Mikhail Gorbachev without a piece of salami hanging on the forehead. I’d just like to have a frank talk with you about our country’s economic policies and Matrix the movie. Perhaps you wouldn’t mind if I call you Mr. Anderson? Neo?

First I’d like to apologize for calling you a puppet subprime President in my earlier blog dated 5/23/2009. I understand what it could be like to be the only Hussein among the establishments and I feel for you.

The frustration came from the expectation we had of you, the One would not reinsert the Prime Program back into Matrix at the Source one more time again back when we voted for you to be the President. But the opposite seems to be exactly what you have been doing. You started to look more like Agent Smith now. I hope you are a Matrix movie fan as I am and you know what I meant. If so, you may find the following analogies of our country’s Wall Street culture, your economic policies and the movie story lines interesting.

You see, Wall Street is the Matrix that has been controlling us the working class (the Humans). Out here on Main Street (Zion City) in the local communities our home ownership structure has been dominated and dictated by the exclusively debt-based mortgage industry (Zero One) created by Wall Street, Fannie, Freddie and their big bank buddies (the Machines). They have in the past been placing in their local branches those docile captured humans while keeping their minds in the Matrix in order to help the Machines disseminate the credit abuse culture and ensure their control of the Earth.

The Federal Reserve, the Treasury Department and their buddies (the Architects) has been engineering the bailouts of the crony riches, printing and pumping more money into the Matrix system to maintain its vitality and crony establishments the same way the Architects have been trying to bring you, the One, together with the Source in order to reboot the Matrix and destroy the Zion yet one more cycle, the same way all your five predecessors did.

From the Berlin Wall coming down to the recent Arab unrests in the Middle East (the Prophecy), we all have witnessed the unprecedented triumph of the people power (the Oracle) in our modern history. Despite the techie’s claims that technological developments of newer tools such as CNN in the early days to the Twitter and Facebook have made the information dissemination faster and more wide-spread, it is really the underlying force of this democratic movements driven by the people’s desire for Free Will seems to be on its way to unbalance the Matrix. You Neo are the One who has been led to the Source by the Keymaker, should not be swayed by the Architects’ assertion to reboot the Matrix again. Let me tell you why.

In our modern history, the Fed (member of the Architects) has been manipulating interest rates and the supply of money in our economy by using repos/reverse repos to implement their monetary policies and the unique Quantitative Easing programs through Wall Street dealers (the Martix) in a pattern of creations and destructions of Main Street (Zion) over and over again while rebooting Wall Street (the Matrix) with revitalized new life to maintain its status quo of the continuously enriched establishments. In particular, Bernanke’s QE and QE2 seemed to have made “Greenspan Put” a child play. Although the Matrix system does have many obvious fundamental serous problems and weaknesses but it somehow kept rebooting itself at the expense of our remaining Human Race who reside at Zion.

Whipsawing the economy is really what their monetary policy doctrine or the much worshipped Monetarism is all about. Inflating bubbles, deflating bubbles, jerking our domestic Main Street economy in the past seems to be not enough, now with the free flow of dollar-based capital, they have the entire global markets to jerk around with in the world and keep playing those same bubble blowing, popping, blowing, popping games all over again, under the disguise or the much worshipped theory called “Monetarism”. In these processes, the Wall Street insiders (the Matrix) get to reap obscene profits and revitalize itself at the expense of exploiting the Main Street (the Humans) over and over again.

Simply take a look at the recent history since Bernanke and Geithner took office. Ben has been a Member of the Board of Governors of the Federal Reserve System since September 2002 to June 2005 during the bubble building years. He became the Chairman of the Council of Economic Advisors from June 2005 to January 2006 and then became Chairman of the Federal Reserve on February 1st, 2006. Timothy on the other hand was holding the key influential role to Wall Street as the President of the Federal Reserve Bank of New York from November 17, 2003 to January 26, 2009 until he became the Secretary of Treasury Department on January 26th of 2009. Together they had been a crucial part of the front men of the Architects of the Matrix to reboot the Matrix when Matrix should have been totally destroyed should there had been no crony forces at work.

Knowing there was a housing market bubble, instead of finding viable soft landing policy alternatives, from June 30th of 2004 until June 29th of 2006 they raised the Fed Fund Rates from 1% all the way to 5.25% in order to throwing darts randomly to “pop the bubble” under the doctrines of “Monetarism”. Facing a crisis in 2007, they decided that they could build more bubbles than Greenspan ever did. From September 8th of 2007 through December 16th of 2008 until today they brought down the Fed Fund Rate from 5.25% to .025% again, under the doctrines of “Monetarism” and presumed prudent “Central Banking Policies”. Furthermore with the newly invented Quantitative Easing Programs, they have started to flood the whole world with dollar liquidity to build even more asset bubbles across the board and induce further global social instability. Until today nobody could really find out what the Architects’ true motives are.

Do they really know what they are doing or have they simply been making it up along the way? If they are so smart and love asset bubble building so much then Greenspan had ever been able to, why did they even bother to “pop Greenspan’s housing bubble” back in 2004 to 2006 to begin with? Wouldn’t it be just as convenient to leave the Fed Fund Rates unchanged and find other housing equity sharing based soft landing policies to cool down the economy instead? That would have led to a Paradise Matrix rather than the Nightmare Matrix they are turning us into now.

It is really funny to observe how the Architects have been busy congratulating and promoting themselves for a presumed job well done in preserving the Wall Street (the Matrix) to avoid a depression and dodging the fact that they were actually the very one who had created the Global Crisis of 2008 to begin with by blindly popping the Greenspan’s housing bubble through their hawkish policies between 2004 to 2006.

What they have really preserved was merely the previous Wall Street crony establishments. A depression it was not. The public certainly needs to know better that there would not have been a depression and that we would all have been better off now had the Architects not done the rescuing of the privileged few at our taxpayers’ expenses in 2008. Cronyism simply means there is an artificial human intervention of the natural selection process for the benefits of the privileged few at the expense of others. We all could live just fine without Goldman Sachs, really.

Given the current economic policies and an unknown and dangerous future for both the US and the world, have any academics been paying attention to analyze how the Architects’ economic policies to date have grossly polarized the American economy between the haves and have-nots while creating the biggest destruction of the middle class in America that have shaken the working class’s faith in Capitalism? The Matrix seems to be getting more and more unbalanced from its own exploitation.

Anyway Neo, for now you seem to have been cloned to just another Agent Smith. Until the next time we talk again, I await your next act.


03/09/2011 How convenient that PIMCO sold all their Treasury holdings to the American taxpayers! Thanks to the liquidity provided by Bernanke' QE2.

I refer to my earlier blog posts about Fed’s Quantitative Easing programs (you could also scroll down and read them below):

03/04/2011 Has Bernanke’s QE 2 shock-and-awe strategy to corner the bond market backfired?
03/03/2011 Right before our eyes – How the Wall Street elite minorities robbed us American citizens again with QE 2.
11/16/2010 The convenience of profit taking that quantitative easings have provided to the big bond fund players.
11/04/2010 What do Fed’s quantitative easings and Jerome Kerviel’s big bets have in common? Their last words: My bosses knew it all along and they didn’t stop me.

Well, exactly as predicted back in November, now the bond funds had sold them all, by the end of February. Buy-low-sell-high they did and Bernanke, on behalf of us taxpayers but without our permission, is holding the bag of those depreciated and soon sliding Treasury papers.

What is the net effect of Quantitative Easing programs so far? Those bond fund inner circle friends are laughing all the way to the banks and appeared to be investment gurus and heroes yet one more time again.

The sequence of events seem to have been staged so smoothly!

Was PIMCO simply as smart as I was back in November in thinking that Bernanke and his colleagues at the Federal Reserve and the US Treasury were suckers or is it rather that they and their Black Minerals brethren have been in bed with Bernanke and Geithner all along and thought we taxpayers could really be the suckers?

What exactly is the purpose of QE2 again? Irrespective of what really transpired behind closed doors, has it achieved it or anything positive for our American economy other than simply making the fat cats fatter?

03/04/2011 Has Bernanke's QE 2 shock-and-awe strategy to corner the bond market backfired?

As I kept searching for an answer to Bernanke’s perplexing QE 2 program for him, I could not help keep trying to find some more excuses for him. His own excuse that he wanted to help create jobs for Americans by hoping to bring the long term interest levels down simply was not convincing enough and sounded more and more absurd. Even a bozo knows more easy money and more flood of dollar liquidity will not help reduce unemployment for Americans before they create millions of jobs for the Chinese, Brazilians, Australians, Wall Street fat cats and big banks in America.

The long term interest rates went sharply higher instead, as explained in the previous blog post, making it more and more difficult for people to own homes and hence further depressed property value that destroyed the core of American wealth. Small businessmen found it harder and harder to create business opportunities and jobs across America.

The excess dollar liquidity would also only be and had indeed been sucked up by the big banks and the fortune 500 big multi national corporations who work only for their own share holders, not the American public and who create jobs only where it makes more sense at the least cost. So $600 million would not do it to create any significant number of jobs for Americans. Not even $6 trillion, before it turns the world upside down.

Meanwhile, this dollar liquidity has flooded the market and has created hyper inflation in food, clothing and energy for the rest of the world. Although the iPad economists like Bernanke keeps claiming that there is no inflation in the US after they have walked around Best Buy stores in their bargain hunting shopping trips, the majority of the world’s population does not live on notebook PCs, flat screen TVs or Groupon bargain deals.

When people can not get affordable food and basic living necessities to feed and clothe their family and themselves, social unrest ensues. It does not take a PhD to understand this. Bernanke simply needs to watch more of these extraordinary events unfold around the world by turning on his new flat screen TV that he bought on a bargain sale at Best Buy.

Will Bernanke be the person to unleash and bring out the four horsemen to our world by December 21st, 2012?

03/03/2011 Right before our eyes – How the Wall Street elite minorities robbed us American citizens again with QE 2

03/03/2011 Right before our eyes – How the Wall Street elite minorities robbed us American citizens again with QE 2

I refer to my earlier blog posts about my views and predictions on Quantitative Easing, 11/16/2010 The convenience of profit taking that quantitative easings have provided to the big bond fund players, and 11/04/2010 What do Fed’s quantitative easings and Jerome Kerviel’s big bets have in common? Their last words: My bosses knew it all along and they didn’t stop me.

Since then and now, major influential bond fund managers have successfully sold their long term treasuries in their portfolio holdings of fixed-income securities at historically highest prices to the American taxpayers and made the private club of the Wall Street riches even richer, thanks to the market liquidity using American taxpayers’ money provided to them by their crony connections with those self-professed genius policy makers at the Fed in Washington, DC.

Listening to the Humphrey Hawkins Testimony where Bernanke bewildered the Congressional gathering yet gain with the fancy excuses for the QE 2, I had to give him due credit as the Toastmaster Champion second only to Obama. While there were some questions about whether there are indeed evidences of run-away inflations and debates about how lower interest rates and the flood of liquidity could help create jobs and help the average Joe in America, nobody asked how his QE policy invention had polarized the American people to the extreme, making the rich even richer and the poors are getting nothing left but the bread crumbs.

Since my original blog post on November 16th, many of the SwapRent blog followers who are not very financial market savvy asked the question about how the QE 2 actually helped make this happen. Here is a quick explanation.

Unlike all the previous central bank’s normal activities in providing temporary money into our economic system through temporarily buying short term treasury securities from Wall Street dealers or called doing Repos (Repurchases, i.e. the securities will be purchased back by the dealers from the Fed later on) with major Wall Street dealers, the genius of the QE invention is very different from that. In it the Fed only buys long term securities permanently from bond funds, banks and other financial institutions.

The way the long term bonds behave is very differently from the short term treasury securities that mature earlier. Long term treasuries securities have the highest prices when the market interest rates are low. Their market prices become lower when the interest rates rise.

Among other maturities, 10-year treasuries bottomed some time around October last year with a daily average yield of 2.41% before QE 2 and they peaked with a daily average yield of 3.75% some time in February this year after QE 2 due to the massive dumping of these long term treasuries from the major institutional bond holders to the American taxpayers through the Fed’s QE 2 program at the historically highest prices ever.

Now marking to market of these securities, there would be tremendous losses on the Fed’s balance sheet derived directly from the QE related bond purchasing activities by the Fed. We, the American taxpayers, ended up holding the bag now again as usual and the interest rates will only be going even higher and higher from now on. The losses will only get even worse. It is really funny to think back on how Bernanke aggressively defended his QE 2 program back in November by touting that the QE 2 program would keep interest rate levels low!

Many of the major bond funds managers looked even more like real genius investment gurus these days by having dumped those long term bonds that they held in their portfolios back to the Fed. Without the $600 million liquidity provided by the Fed they would not have been able to do so this easily and at such attractive prices. Many even boasted that they have managed to halve their long term treasury holdings within the past few months. Genius they are indeed and suckers we American citizens have become again, thanks to the Fed.

I have to say there may also have been a case that the Fed itself is in the game using the QE 2 itself as a disguise so that they could help redress the Treasury Department’s or other related parties’ books under the cloak. It would be anyone’s guess since nobody could audit them to let them reveal the truth.

How come there were no questions to Bernanke from any of the Congressmen on these simple facts? As an American taxpayer, wouldn’t you want to find out more about these blatant abuses right in front of our eyes and what had really happened to our money from these Quantitative Easing inventions?

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