Well, well, well -- the news this morning is all a gush as to how the stocks are rising like a 14 year old boy's dick who just got to see his first picture of a nekked lady...
Great! I mean the feel of a boner coming on -- the stock market, I'm not so sure about.
I'm still suspecting that the bail out is mainly designed to keep an otherwise sinking ship afloat until the end of January when the Bulimo administration is inaugurated. Anything bad that happens after that will be the fault of Bulimo Charisma and anything good (if any) to the wisdom and foresight of Paulson.
In fact, there seems to be an immense rip-off by banks going on at the expense of the taxpayers. The trick has to do with index regulated loans, all $300 trillion of them...
You see, the rate of index regulated loans is determined by the LIBOR*.
LIBOR is determined by the loan rates on loans between banks -- these rates are determined by what the banks themselves report...
The present situation is that the banks are not lending to each other -- they are lending from Federal Reserves around the world at very favorable rates.
The result is that the banks are reporting rates that are not only fictitious -- they are outrageous! The normal spread in what the banks report is around .2% -- today, the spread is 1.75%!!!
This means two things:
1. Banks somewhere are sucking up taxpayer money for nothing and private lenders -- businesses and homeowners are getting whacked with higher rates for which they are financing at the other end
2. The real economy -- that is, businesses and people actually doing real things to produce things and services of real value -- the real economy is being suffocated.
No comments:
Post a Comment