Here is a little something to ponder on. Barack Obama recently said that he didn’t like nationalizing everything, but he sure seems to keep doing it. For example, here is an article about the recent bank “stress tests”.
If the test showed that dismal economy would push a bank below a minimum level of capital, regulators asked the bank to find a way to boost its finances. One way to do that would be to convert preferred shares held by the government or other lenders into common stock. That would help the Treasury avoid returning to Congress for more bailout money, but it would dilute the value of common shares and put taxpayer dollars at greater risk.
What we have here is very important, though most people might not realize why. This new “Stress Test” is nothing more than a trick for the government to nationalize banks without having to say that they are nationalizing banks.
Basically the government has come up with a made up test, that you are designed to fail.
The tests estimate losses the banks would face in a “what-if” scenario that includes 10.3 percent unemployment and a 22 percent drop in home prices during the next two years.
They might as well have a “What happens if all your assets are eaten by flying piranhas clause”.
When you fail, the government will splash it all over the news, thereby guaranteeing that nobody will ever invest in you again, or you give the government control. Which sounds suspiciously like the kind of tactics the mafia uses, but I digress. The key to nationalization is in the first quoted paragraph.
The government has purchased non-voting (Preferred) stock as part of the Bailout/Spending Orgy ‘09. That stock would normally have value, but not on this new stress test. So now the bank is undervalued and is about to get raped in the news BUT they can change that non-voting stock into voting (Common) stock, and now their test will be just peachy!
Which means that the government now gets to vote on how your bank is run. Yippee.
So let me see if I’ve got this right. The same people who decide if you are viable or not, get to take you over if you are not viable…
I’m sure this will do absolute wonders for the economy. The government can run the banking, auto, and insurance industries! Next up will be health care, and then they’ll just cap & trade the ever living hell out anything that is left. I’m going to need to speed up my plans for my End Of The World Bunkerplex.
I saw another news article today about Barack’s new plan to cut down on tax evasion by doing away with “loopholes.” A common misconception is that loopholes are tricks in the tax code for evil people to use to avoid paying their fair share. Well, for the non-accountants in the audience, that’s basically a bunch of crap. A loophole is something that was put into the tax code by congress at some point to encourage some sort of behavior. The word loophole is used as profanity by politicians whenever it encourages behavior that the other side liked.
A lot of Americans get up in arms about loopholes when the news is telling them about some rich-fat-cat using them, but they don’t realize that their mortgage or charity deduction is also considered a loophole by somebody else. There was some talk about doing away with the deduction for charitable contributions, which would absolutely destroy charitable giving in America, but whatever, Barack wants you to pay your fair share. Besides, charity is government’s job. They know who best to give that money to, not us idiot taxpayers, with our silly morals or beliefs.
I wish I could find it, but there was a gem of a quote from Timmy Geitner about how awesome it is to make sure everybody pays their fair share of taxes. That’s ironic, since if it had been me or you to make a five figure “mistake” on Turbo-Tax, the IRS would have taken our houses, and our families would be living in cardboard boxes while we served 5 years in prison.
My first thought when I saw today’s headlines about how Barack wants to make sure everybody is paying their fair share of taxes was that it was because he was having one hell of a hard time filling cabinet positions…
In more business news, Chrysler is toast. Despite the fact we just gave them a giant pile of money like two months ago. Well, that was tax dollars well spent. We should print some more and try again! GM is now run by the government and the union, so I’m expecting to see some really overpriced garbage coming out of Detroit.
I’ve not kept up on the specifics, and you can correct me if I’m wrong, but I don’t think Ford has taken any bailout money. If that is the case, then I think they should be running ads all over the place proclaiming that fact. FORD. Buy our cars, because we’re not a bunch of sell-out quisling parasites! They should have it narrated by Mike Rowe, and it should start by having a giant 10 cylinder 4×4 truck run a stupid Chevy HHR off the road where it can blow up in a giant fireball. (I still despise the Chevy HHR… so very much…)
Obama has been on a real roll here nationalizing everything he can get his hands on. Since the Democrats have pretty much changed to Fabian Society style Socialism, and the political parties that are exactly like them in Europe are called Social Democrats, they might as well change their name to the Social Democrats. (Socialists for short) And since Barack is so good at nationalizing everything, his branch of the party could be the National Socialists. (now why does that sound so familiar?)
I’ve been on a huge kick studying the first three decades of this century. It is a byproduct of the story that I’m currently writing (set in 1932) and I’m a sucker for research. I get into these ever expanding research circles that just keep growing and growing. My last trip to the library had me bring home about 50 pounds of books on the Great Depression. The parallels are amazing.
Investments were overinflated. Everything was bought on credit. People used credit to invest in overinflated assets. The bills came due. Unable to sustain the false profits that they were making before, some overvalued companies went out of business. Stupidity and avarice can only carry you so far. Eventually there was a reckoning. Sounds familiar, right?
The media keeps beating us over the head with how much Obama is the 2nd coming of FDR. The scary thing is that I believe they are right, only that at some point in the time they decided that FDR was good for the country. FDR took a crisis (in the spirit of Rahm Emmanual’s No Crisis Left Behind) and used it to remake the country into something different. Something alien.
For such a bunch of people who believe in Darwinism in life, they sure don’t believe in it in business. Distorted, mangled, manipulated, FDR managed to drag out the Great Depression to three times longer than it should have been. Then because Democrats suck at diplomacy and lack the courage to take a moral stand, we got into the biggest war ever.
The parallels haven’t gotten us that far yet, but that’s only because I don’t think America is stupid enough to elect Barack for three more terms. (That and I don’t think Joe Biden has half the moral fiber or courage of Cactus Jack Garner to step down in protest). But then again, Barack has gotten FDR’s agenda further in 100 days than FDR managed in his first term. We might not have that long until the great and glorious vision is realized.
I might have to hurry up and fund my Bunkerplex on credit…