By now you've heard that the SEC is gonna sissy slap Goldman Sachs. Speculation is already mounting that GS got advance notice, and used that information to fuel insider trading deals. What a deal if you can bet against yourself, knowing that you're gonna get dinged, and profit from it!
When it comes to comes to El Squid, who knows? Did they perhaps even ask the SEC to do this so they could short themselves?
A play like this though, rarely is a one off. I have to wonder, what's stage II? What happens next?
We're coming up into an election year. It's time for politicians to pretend that they care about the great unwashed masses. so this could be a good quarter to start prosecutions and start another wave of seizing and selling of smaller banks. To do so, the gov needs to pretend that they are acting fairly and without prejudice.
Going after Goldman Sachs now, and giving them a little smack on the hand, could well give them a bit of cover for when they start really nailing the smaller banks.
Bank of America is planning to increase the rate of foreclosures. In my opinion, it's just a ploy. They may well increase it for a short while, but this will bring pressure on the politicians, who will find another way to give BofA and the other big banks, another mountain of free money. In exchange, we can expect that the SEC will pretend to smack BofA too.
Right on schedule for my May prognostication, economic events are coming to a head. Oil and gasoline prices are rising faster. This will lead to tighter margins, and more layoffs. The systemic problems with the banks in regards to housing, mortgages, stock market gambling and derivatives exposure have grown since the last bailout.
This next round of bailouts will make the last one look like a drop in the bucket. I think now that by the time Obama is out of office, our deficit will officially be way past $50 trillion. Right now it's a paltry $12.8 Trillion. Heck, maybe it'll pass $100 trillion? That doesn't seem out of line at the moment.
Isn't that amazing though? We've added $12 Trillion in debt in such a short span of years. We've multiplied two hundred years of debt more than 12 times in about ten years. in another ten years, it should be in the quadrillions!
We're in for a wild ride and I think it's time for another big crisis. Our politicians likely want to put it off. But I thin they are out of room, for Extend and Pretend. They can go back to that after this little upcoming correction.
In the garden, my beans and squash are coming up. I have little grape clusters forming. I've been enjoying fresh asparagus and onions. Now I just need to get my tomatoes and artichokes in the ground.