Wednesday, September 29, 2010

Hard asset crowds' gold and silver "socially useless" but oh so necessary interim prophylactic against STDs (Securities transmitted diseases)

Lord Turner UK FSA Regulator referred in 2009 to certain banks' (prop trading) operations as "socially useless" - well the same can be said for the seemingly headlong drive into precious metals.

But there is an IMPORTANT difference; protection(s) from STDs (securities transmitted diseases!) versus proprietary profits.

And the unmistakable signal - officially set in motion in 2008, but by omission, unofficially set in motion at least in 2004/5 - of a credit-induced housing bubble blessed er...transmitted through the securitization markets; fed by the spreads against money markets. In the cover of darkness of certain private OTC "markets" for same "securities."

It's not that rates were kept too low for too long - it's this, housing had increased WELL above any measure of historical average for several years UP to that point in time. Yet bankers, so called, Excel monkeys, possessed of the MOST crunched information known to man, earned the deserved moniker "masters of the financial universe" what I've called MOTFU's - YET - in the singular pursuit of CASH compensation - IGNORED - that which ALL prudent persons know; historical returns and PERFORMANCE ATTRIBUTION. LOOK IT UP. Answers to help explain why investments go up, down and sideways.

When investments are generally viewed as LONG term commitments - BUT house flipping?
Multiple property flipping, aided and abetted by real estate agents, brokers, mortgage brokers, appraisers all combined to create "known" speculation which escaped the attention of Mr Bernanke, Mr Geithner, Mr Paulson and Mr Greenspan and most if not all bankers in a certain Federal Reserve Bank District east of the Hudson leads me to reach at least one clear conclusion - they never watched "Flip this house" on HGTV.

Which leads me to ask "what exactly were they watching?"

And MOST IMPORTANT - what are they watching now?
Which leads to the as yet unanswered question (perhaps only to self) and we PAY FOR THIS?

Ending the siesta on the taxpayers' dime - one easy to read blog at a time.

Chris aka McFid*

* Since 2003, when you need to know exactly what a BFD looks like. Call McFid, the Fiduciary Expert. (BFD means breach of fiduciary duty.)

Copyright © Chris McConnell & Associates 2003 to 2010 All rights reserved

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