Thursday, August 30, 2012

U.S. Regulators are Desperate and Pathetic

The second theme which has been persistent during our conference has been the financial sector. Governments try to enforce more regulation on both sides of the Atlantic. So far they have had little success, but they definitely are on a crusade. Each defeat the socialists suffer will allow capitalism to prosper and vice versa.

The FSA tries to force regulation onto the BBA, but has not succeeded to do so yet while the SEC suffered a bittersweet defeat after a four year campaign to regulate money market funds. Regulation in itself is not negative, but we need effective and simple regulation. The current framework is counter-productive as well as ineffective regulation which simply does not work. Regulators and socialists alike claim that more regulation is necessary in order to prevent a repeat of the Great Recession which resulted from the financial crisis.

For starters, the financial crisis is ongoing and only about 40% of its impact has been felt from the First Wave. The Second Wave is currently being fueled and will be ready to be released on the socialistic pest and its supporters in order to wipe more of them out and commit economic as well as fiscal homicide. You get what you deserve and constant strikes at free market capitalism will result in extreme hardship.

The financial crisis has been created by socialist bastards who lack common. It is hard to believe that the creation of a representative of the species homo sapiens sapiens can result in a retarded mutation of severe stupidity, overwhelming idiocy and stubborn ignorance wrapped up into an unshakable framework of illusion as well as misguided perception.

The Bank of England has decided to strike back against the imperial descendents who are still mad at London for welcoming the financial refugees which resulted from socialistic policies such as Sarbanes-Oxley and now Frank-Dodd. In a desperate attempt to shore up lost tax revenues several U.S. government agencies have launched a crack-down on U.S. units of British banks and slapped them with heavy fines which banks settled in order to avoid prosecution. The prosecution of those units is nothing more than a ridiculous witch-hunt.

The witch-hunt has expanded beyond the UK and has now caught Deutsche Bank as well as UniCredit's German unit HVB. The move is fueled by anger as well as frustration and desperation. The ship is sinking rather fast and regulators are aware that important players are getting on lifeboats and head East from New York. The prosecution is the last straw the U.S. government has to squeeze some money out of financial institutions before they will be gone for good and out of reach of socialistic inspired destruction.

Speaking of fines, U.S. regulators don't stop at U.S. units of foreign banks but also targets the unfortunate domestic players who have not decided to leave. Morgan Stanley was fined $450K for bets one of its traders executed. The next thing that will happen is that traders will simply stop trading or reduce their activity to the point where it drains more liquidity from the market and creates more problems which will be countered by more social retardation and the downward spiral will eventually cause the death of the system.

The two government controlled mortgage giants, Fannie Mae and Freddie Mac, have been front and center of the financial crisis. Those two enjoyed the most regulation and government control and where the two entities which initiated a firestorm which has never been extinguished. Besides being the source of the collapse those two socialist puppets have also pushed bad loans to over $84 billion since 2007 while they received over $190 billion of taxpayers money.

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