How the elites we are asking to solve all this caused all this:

28 04 2009

The Barricade had a great post today regarding the idiocy of the financial elite and how they directly misled us.  The MSM continues to buy this bilk.  AN these are the same guys we are asking to get us out of this mess?  My favorite part:

In 2000, Hank Paulson was the architect of changing the SEC rules regarding the leverage ratios and risk profiles of the investment banks.  Investment banks, prior to the Paulson SEC change, were only allowed to be levered $12 for every $1 of capital that they owned.  In that scenario, if a bank’s assets went down 8.3% then the bank would be technically insolvent.  Hank had the brilliant foresight to petition the SEC to allow for more self-regulation on Wall Street and allow his banks and others to lever $40 for every $1 of capital. In this scenario, a 2.5% decrease in assets wipes out the banks equity and the bank becomes insolvent.

So when you hear Paulson tell you that the reason for the problem we are in is housing, please realize he is lying to you.  He is not just mistaken.  He is lying to you. He knows better. Any investment can drop 20, 30, 40% without causing catastrophe. It is the leveraging up of these declining assets at 40 to 1 ratios that caused the problem.  Hank Paulson was the pointman in creating this leverage.  HE WUZ WRONG.




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