Jim Rogers is a legendary investor and partner of George Soros. He is known for being blunt, and, I’ve found from watching what he says, usually quite correct. He is now saying most major US banks are bankrupt.
But it worse than that, he says. The government is rewarding the venal and incompetent and punishing those who saw the debacle coming.
“What is outrageous economically and is outrageous morally is that normally in times like this, people who are competent and who saw it coming and who kept their powder dry go and take over the assets from the incompetent,” he said. “What’s happening this time is that the government is taking the assets from the competent people and giving them to the incompetent people and saying, now you can compete with the competent people. It is horrible economics.”
It’s a theftocracy, with the venal and politically well-connected being rewarded with billions of dollars even though they clearly shoulder much blame for the current credit crisis and recession.
Bloomberg has sued the Fed to get information on who they are loaning to. The Fed is stonewalling.
David Merkel on why the Fed might want to find this information
* The Fed is breaking its own rules, and lending on collateral that it publicly said that it wouldn’t lend against.
* They are playing favorites with institutions, and don’t want that to be revealed.
* The assets in question are technically in compliance with the rules of the Fed, but are worth far less than the amount loaned against them.
* Certain banks would be embarrassed by revealing what they own.
* It’s just a power game, and the Fed thinks it is above the law, particularly during a crisis (that it helped to cause).
There is a good possibility that they are trying to hide the amount that they have lost already.
I recently saw a trailer for a movie, can’t remember the name, about someone up against an Evil Bank that was indistinguisable in purpose and action from organized crime. Certainly this must be fiction because of course nothing like that could happen here, right?