http://www.rgemonitor.com/blog/roubini/2....
The quote is from additional remarks he makes following on from a recent Time Magazine article.
.... "Tenth and final point, so what is left as the only solution is the outright formal or informal nationalization of the U.S. financial system. That effective and creeping nationalization is already underway with the variety of actions that the Fed and the U.S. Treasury have taken and that we described above. So this is the paradox of this U.S. administration: it was so rabidly and ideologically free-markets oriented and averse to any sensible regulation and supervision of the financial system that its policies of being asleep at the wheel caused the biggest asset bubble and credit bubble (not just in mortgages) in U.S. history. And now the unavoidable bust of this bubble is going to force an effective nationalization of a good chunk of the U.S. financial system as no one else but the government can do the job.
This is what the free-market ideologues at the Fed, Treasury and White House have now become – especially after the bailout of Fannie and Freddie’s shareholders, management and bondholders – Comrade Paulson, Comrade Bernanke and the Bolshevik Great Leader Bush. But then their whole approach and ideology has always been not one of free market capitalism but rather one of privatizing gains and socializing the losses; or socialism for Wall Street, the rich and the well connected. So they will now get what they deserve and worked so hard to achieve: a nationalization and bailout of the U.S. financial system."

****ing great. Comrade Paulson, although I prefer douche bag paulson. I dont think the entire system will get nationalized, but i do not like the aspect of privatized profits and socialized losses, especially as this bailout heats up(one we can hopefully STOP!!! Ive got people calling now;) Momentum IS building).

I truly believe without the fed and their machinations, the market will fix this, and it will be for the better. Yes, it will be painful, but ultimatley, the market will correct itself. But given the fed and treasury and congress continually try and **** things up so as to look like they are doing something benefical, i must admit the possibility of what is mentioned above is frightening.

So, what will be a good trade idea for this? What's the best way to profit from this?

Short the American middle class lifestyle?

What part about GSEs, central banking, central planning and massive goverment subsidies is actually "rabidly free-market" in the first place? It was just talk all along.

When this passes, wtf will happen and where do you park your money? Gold? Swiss franc ETF? This is getting more and more confusing...

Think of what our government now owes. Stunning. How can we NOT default on our debt?

If you think it's bad now, just wait until comrade Obama gets up in there.

Contrary to everyone else here. I want Congress to full throttle the destruction of America. Just like the Soviet Union, Communist regimes cannot survive in today's competitive world. Until times get bad, people are just going to continue borrowing their way to oblivion.

This last maneuver (Freddie Fannie bill) will fail of course and then the question to the rest of the world becomes, "Is America too big to fail". They'll either try to bail us out (and destroy themselves in the process) or cut us loose to sink.

I'm not sure how that will play out.

Quote:

"This is what the free-market ideologues at the Fed, Treasury and White House have now become...Comrade Paulson, Comrade Bernanke and the Bolshevik Great Leader Bush."

"Become"? "BECOME"?

Love ya, Nouriel, but wake the **** up.


COMRADE PAULSON RUNS THIS OUTFIT:




COMRADE BERNANKE RUNS THIS OUTFIT:




AND YOU LEFT OUT A FEW OF THE CHIEF POLITBURO APPARATCHIK COMRADES:




"Become," my ass.

Quote:

Short the American middle class lifestyle?

Yep. ETF coming soon.

Well, Roubini is going to be proven wrong on this. Don't know how long it takes to become evident - but he will be eating his words for having encouraged a 'nationalization' i.e. the socializing of America.....or more like turning it into a fascist state.

Maybe this means we will now get to vote on credit card interest rates?

Count me in for zero percent please.

Roubini's point of view is basically that we have a choice. Nationalize the banks, or nationalize the mortgages/housing market. His opinion is in favor of nationalization of housing feeling it the lesser of two evils. He has basically been in favor of everthing the Fed has done mainly with the caveat that it is too little too late. He definitely believes in market intervention. He has fairly accurately projected where we are economically though.

Great. Maybe the Feds can buy everyone a McMansion and put it on the taxpayers' tab.

He has argued previously that the Govt should intervene because FnF distort the market by their size,instability and very existence.He argued the Govt take the GSE's over in order to re-capitalize them, by having the bondholders take a 5% haircut, and that this is far cheaper than Paulson's legislation.It also clears out current management and wipes the equity holders (providing a lesson in moral hazard).It also eliminates the current estimated annual 50 billion subsidy from the spread over treasuries that is paid to the mainly foreign bond holders.
http://www.rgemonitor.com/roubini-monito....
.."The Sunday statement and plan by Secretary Paulson to rescue Fannie and Freddie is the ultimate implementation of socialism for the rich and the well connected. Under the plan the U.S. government would become a major shareholder in the two GSEs (the unofficial figure being rumored is $15 billion for each institution); it would massively extend the Treasury line of credit to the two institutions that is now only $ 2.25 billion for each of them (the unofficial number being rumored is one of a line of credit as large as $300 billion per each institution); finally while marxist comrade Paulson (to borrow the term used by Willem Buiter) waits until Congress passes this legislation comrade Bernanke is providing the two GSEs with access to the discount window on same terms as commercial banks. So the lender of last resort support of the Fed - that was already extended via the PDCF to the non-banking primary dealers - is now officially extended also to the two GSEs: this is "quasi-fiscal recapitalization of two insolvent institutions" as Willem Buiter has correctly argued and imposing a potentially large burden on the U.S. taxpayer without a formal act of Congress.

So not only the creditors/bondholders of the GSEs are made whole and continue to enjoy the subsidy of whatever spread the agency debt will remain relative to US Treasuries (a subsidy that is already worth $50 billion a year); but in this plan the current shareholders of the two GSEs are also bailed out as the resolution of even a bailout of the GSEs' creditors should have at least included fully wiping out the current shareholders of Fannie and Freddie. The official excuse that the government will inject capital and significantly dilute such shareholders is big baloney: the bailout plan itself will raise the market value of the two GSEs and provide - even before passage - an immediate capital gain to the current shareholders of Fannie and Freddie; so whatever the actual dilution of such shareholders may eventually be - given the public capital injection - the current shareholders will be suffering a much smaller loss than in the absence of such a plan that provides massive subsidized liquidity, credit and bailout funding to these insolvent institutions and their shareholders.

Also, unlike any corporate restructuring plan where current management is replaced - we usually kick the bums out - this plan also bails out the corrupt management of Fannie and Freddie that has spent the last few decades creating a corruption and graft machine that is unrivaled in U.S. history. These sleazebacks who fattened their incomes by the hundreds of millions and used these two institutions and the biggest lobby machine in Washington to corrupt and buy off Congress and any potential critic of the GSEs will remain in charge and continue their scams and gambling for redemption financial schemes. Thank you comrades Paulson and Bernanke for making official this socialism for the Wall Street, the rich and the well connected."

Roubini followed this with a link to an article in the Financial Times by Willem Buiter
http://blogs.ft.com/maverecon/2008/07/ti....
which points out that the existence of the GSE's is already Socialism but of the worst kind.
.."There are many forms of socialism. The version practiced in the US is the most deceitful one I know. An honest, courageous socialist government would say: this is a worthwhile social purpose (financing home ownership, helping my friends on Wall Street); therefore I am going to subsidize it; and here are the additional taxes (or cuts in other public spending) to finance it.

Instead the dishonest, spineless socialist policy makers in successive Democratic and Republican admininstrations have systematically tried to hide both the subsidies and size and distribution of the incremental fiscal burden associated with the provision of these subsidies, behind an endless array of opaque arrangements and institutions. Off-balance-sheet vehicles and off-budget financing were the bread and butter of the US federal government long before they became popular in Wall Street and the City of London.

I disagree, there is nothing new: socialize costs and privatize profits. It's the same 'ol ,same 'ol. This is not Socialism. This is crony capitalism: the final stage of Absolute Capitalism about to turn into Corporate Fascist Statism. This is the type of Capitalism US had at the turn of last century and this is the form of Absolute Capitalism as currently practiced in China and also in Russia,

Willi - absolutely correct.

It always makes me laugh in a very sad way that there are many who still blame our "free" market for every ill, when in reality there hasn't been a free market in this country for about 100 years.

Tennesseetrader, I believe it is more that he accepts that there will be bailouts, as that is the way the game is played, has been played, and will continue to be played.

That is why shorting the market is hard.

LINROM - Bingo, and we aren't even close to done yet.

what else would you expect! Its been apparent for years,yet many have called it tinfoil for the sake of...i guess...patriotism. What a joke. Its a disease, and most people could give a **** until they catch it themselves.

Big Props for LINROM ... Fascism People.

Your Jingoism is on Display when you Continue to Insist on Drawing a None-existent Parallel w/ the USSR. THE PARALLEL IS WITH THE THIRD REICH.