Another new budget lexicon!


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First off we want to remove any rumors that Christmas is going to be late this year….because Sarah Palin shot Rudolph!  These are nasty and petty unsubstantiated reports at best!

What is true is that the Global Economy is ready to jump off the clift.  The raging dirty, rotten, greedy rats are all following the Pide Piper over that clift and then as usual, complaining bitterly.  The latest from the “We invented Hedge Funds” people are: “synthentic collateralized debt obligations”!  These creative SCDO’s are insurance policies.  They generate income by selling insurance against bond defaults, typically in a pool of 100 companies or more!  These are another form of Credit Default Swaps!  These Andromeda Strain of Hedge Funds continue to grow and grow like Topsy!

The front page of the Wall Street Journal today brings to light the plight of a small town in Australia who used all “due diligence” to get the most highly rated investments vehicles and now because of hundreds of bank failures are looking at going bankrupt…by supposedly no fault of their own.  Did they invest in high risk-high reward investment vehicles?  Of course they did!  Were they paying close enough attention to world markets, Pension and Retirement Funds?  Sure…they saw the high returns for everyone and jumped right on board the “Train to Nowhere!”  Little did they know….they could have gotten out last year, or the year before…..but they just couldn’t resist the lure of those big annual return on investments.  All on paper of course!

Towns, Charities, School Districts, Pension Funds, Insurance Companies and Regional Banks all put their money into synthetic CDO’s that insures the equivalent of trillions of dollars of Corporate Debt!  Whoops!  Right now is the time to look for Companies without much insured debt.  So what is the result and who profits?  The result is that “everyone that invested in these vehicles are going to lose their shirts!”  Who wins:  The Evil Hedge Fund Managers that bet on default!  They are going to reach right into the pockets of Pension and Retirement Funds, Individual Investors and take out Trillions of dollars!  That’s what they want to do – at any rate!  What we need to do is simply “Nationalize” the Hedge and Derivative Funds connected to such conduct!  In the name of reason….this is what the FED and the Treasury should be doing right now.  Lock down these markets and take all the funds!

Can we do this?  Sure, who would have thought that the Government would bail out Banks and Investment Banks to the tune of $350 Billion Dollars so far….with a estimated total investment of the people’s money of up to three trillion dollars.  If we don’t?  Oh yeah, the FED and the Treasury will have to come back to the people to take another three trillion dollars…to meet the new “synthethic Collateralized Debt Obligations” problems!

How many more of these “special lexicon items” are we going to have to come to grips with….in the next year?

Merry Christmas and Happy New Year!


About Ron & Anna Winship

Independent News Producers/Writers and Directors for Parker-Longbow Productions. Independent Programming which includes a broad variety of Political, Entertainment and Professional Personalities. Cutting Edge - a talk show...is the flagship of over 30 URL websites developed or under development. The Winships have been blogging for the Orange Juice since back when nickels had buffalos on them, and men wore onions attached to their belts, because it was the fashion back then.