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The idea was to solve a liquidity crisis. Nobody was broke according the theory. But since Enron accounting principles are so rampant, then the idea was to flood finance markets with money - like too much oil on a rusty bolt. Reality, assets had completely vaporized leaving a resulting debt AND those debts were well hidden in Enron accounting. Those unknown debts were literally sucking up the money. This is better explained in How the GAME is played.. Bottom line - something like 40% of this nation's wealth simply vaporized leaving outstanding debts. How does accounting work? Much of that wealth has disappeared long ago. But reality from spread sheets tends to suddenly appear like a rogue wave. Welcome to reality finally popping up like splotches of grass on a desert prairie. Cellar dwellers had to know this economy had serious problems. The housing bubble was pictured on the Economist's front cover as a falling brick labeled Housing Prices. That cover discussed here often. Charts made obvious that homes were 20% and 40% overpriced. The Economist noted this problem very recently (recently in Economics terms) on 16 Jun 2005 which was reposted in the Cellar also in 2005: Quote:
Zengum asked 'when did the money go'. So accurate. To understand what he was saying, read post 1 in How the GAME is played. It completely answered this topmost question. |
Everything is topmost these days. ;)
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(Sorry for the double post but I thought it was relevant)
http://boortz.com/nealz_nuze/2008/12...surprised.html Did you know that your Senators and your Congressmen are getting a $5,000 raise on January 1st? That must be for all of the great work that they have done spending your tax dollars and putting your grandchildren on the hook for trillions and trillions of dollars. .. how many of you out there who own your own business are giving $5,000 cost of living adjustments to your employees right now? How many of you have worked for years without a raise that won't even keep up with inflation? Or a raise at all? Congress is getting one....all thanks to your tax dollars. |
Dec. 12 (Bloomberg) -- The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral.
Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression. The Fed responded Dec. 8, saying it’s allowed to withhold internal memos as well as information about trade secrets and commercial information. The institution confirmed that a records search found 231 pages of documents pertaining to some of the requests. “If they told us what they held, we would know the potential losses that the government may take and that’s what they don’t want us to know,” said Carlos Mendez, a senior managing director at New York-based ICP Capital LLC, which oversees $22 billion in assets. http://www.bloomberg.com/apps/news?p...Zlc&refer=home |
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Let's see. George Jr's administration refused to prosecute Enron until all but embarrassed by the State of Oklahoma. Clearly the money existed where it was important. Meanwhile, because he was doing so much good for GM, Rick Wagoner got a 34% in 2006 and a 67% increase in 2007. This money clearly exists. No problem. The government will now pay for the ROI that cannot exist because Rick Wagoner (like Nardelli) have a long and well proven history of decreasing profits. But the money did exist in their paychecks. Nothing else matters. |
I didn't mean to give you the opportunity to simply regurgitate the same old thing Enron/GWB/GM/beancounter all bad... Perhaps you are unaware that we all have seen and read that far too much already. You better start thinking of something new for 2009 ;)
I was referring to a much larger perspective. It was not that long ago when America was a major producer of "stuff" now it is predominantly a service economy. In this situation we do not have the goods/products to market competitively - all we have are services to provide. Well those are the first things to go and right now...they are gone. |
Where has the Money Gone?
Under my mattress
Because I'm a princess And it seemed nasty to me To have a pea I thank you |
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However that problem is slowly getting worse. Lehigh University no longer calls themselves "The Engineers". Their nickname is now "Mountainhawks". Why? Even Lehigh U wants to diminish engineering. Lehigh University is massively expanding its business school. After all, engineers cost more to educate. The demand in America is for more MBAs - just like Nardelli and Wagoner. Fact don't change only because they were previously cited. What was accurately posted ten years ago has is now obvious even on the spread sheets. |
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Madoff
Some of the money "went" here, either paying the early investors in this ponzi/pyramid scheme, or funding this guy's lifestyle.
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Meanwhile, I just took a 3% pay *cut*, which is the same as the amount of my last raise, which was nearly three years ago. |
First we have to figure out if it actually existed, and then figure out if it disappeared.
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Whereas profits were mostly fictitious, real money that was supposedly invested went to enrich employees - massive bonuses. From the NY Times of 18 Dec 2008:
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Stock brokers typically underperform the market. Significant profits come from naive investors in mutual funds, hedge funds, and other overhyped, underperforming money games where even service fees consume profits. If your broker truly represented your interests, then he recommended selling all stocks last summer. But that would harm his profits. As the NY Times article demonstrates, any real money was quickly going out the door enriching people whose job is only a lowly service but hyped into a genius mythology. |
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