Monday, Oct 05, 2009
All Wall Street Investment Banks guilty of huge systemic Fraud
Mish: Janet Tavokoli - Risk of Collapse greater than in 2007
Plain talking about the derivatives fraud.
"At its core," Tavakoli observes, "the mortgage crisis is no more sophisticated than a schoolyard swindle, and the SEC is the Principal" Check out the You tube links also.
"Regarding the outlook, my analysis is grim. I am not a doomsayer, I follow the cash, and so far, I’ve been correct, and the government has been wrong. Here’s the situation. We are at greater risk of a total meltdown due to a deflationary collapse than we were in 2007. After the greatest Ponzi scheme in the history of the capital markets, we’ve seen history’s greatest fiscal and monetary expansion, but it hasn’t worked. Debt levels of consumers and business exceed the capacity to repay."
Posted by bellwether @ 09:29 AM (770 views) Add Comment
6 Comments
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1. Kickingthecan said...
I read Mish on a daily basis and recommend it if you don't read it yet. Often the comments section is even better than the blog. There are guys like Black Swan, James Cole, Got a Watch, who educate you on a daily basis. Even a guy called Scepticus from the UK who very often puts the UK point of view across and gets plenty of feedback.
They often link to HPC, some of them read it, and they link to the telegraph and guardian and the times etc.
2. bellwether said...
Cheers kickingthacan, read Mish pretty regularly too but will check out comments too. I actually link to Mish via the news site on Fin Viz which is overall a really excellent site
3. mountain goat said...
"...massive fraud, and it's an old story, an old story we can all understand". History repeats but not exactly. Fraud and market manipulation during credit bubbles have happened over and over because of easy money, and government intervention is nothing new either. During the 1930 crash and later during Nixon Presidency, gold sales were banned or the price manipulated. At that time manipulating gold meant manipulating the money supply. Now the money supply is manipulated in other ways and everyone says OMG this will cause inflation. But deflation of this credit bubble is inevitable because there are $ trilllions of toxic loans and derivatives. So it isn't different this time and the system has not been cleaned out yet. So I agree with her that a deflationary collapse is very likely. All markets are moving together, so a general market collapse is likely because of that. Everyone is ready to exit together.
4. bellwether said...
MG sensible comments as always! Tavokli is pretty mainstream and it is refresing to hear someone just call fraud fraud rather than dress the whole thing up as too complex for the public to understand. That we have not addressed the problems is terrrible, that we have compounded the problem by making banks that were "too big to fail" even bigger is utterly negligent .
5. alan said...
Gold doesn't seem to be dropping beyond $1000 an ounce these days. It looks set to stay high. Price earnings ratios are really high, stock market looks high. I like Precter's "pickle index". Its on the Mish site:
http://www.radio.goldseek.com/players/prechtersep29.php
Precter says we are on "the last hurrah". Even if its only partly right, there is a big problem coming. It doesn't look good for US house prices...probably the UK market too.
Precter also says its a "wave of pessimism" or "get safer"...is here - ie:pay up your mortgage, clear the outstandings on cards, etc Precter says people are getting worried about debt.
6. mountain goat said...
Thanks for the link Alan, I like the bit at 20 min when he says in years to come house prices will be down 90% from their highs.
But then I would like this interview, I am a EWI subscriber.