From the Inbox: Conspiracy Theory?

Interesting email I received from one my colleagues. His logic is interesting, and considering the debacle our President has gotten us in over the last 8 years, I wouldn’t be surprised if the brilliant minds of Wall Street actually set themselves up with a safety net in the form of insured credit default assets in an effort to leverage something they knew would fail.

OK, so I’ve been turning this all around in my head for a while, and here’s my conspiracy theory for the wall street mess.

Ever since Bush came to power, the finance sector has known that no one is watching, so they are free to rob the country blind. They moved massive amounts of money from poor to middle class people’s hands into the huge investment banks by selling mortages to people who can’t afford them. They then took that and other real money and started making a market for funny money — trading ever crazier financial instruments, and adding more and more layers of speculation (ie, Credit Default Swaps — insurance on these securities should they go bad), while all the while pocketing huge fees on all these transactions. Lots of rich people got richer, their pockets are where the real money disappeared to, impoverishing the nation.

credit: Mossaiq

A conspiracy inside Wall Street?

The gov’t purposefully didn’t regulate the CDSs, #1 because Bush defunded the SEC as a matter of course, and #2 because they are useful to cause a panic that only the feds giving money to wall street can fix. Great info on CDS.

The instant that Wall Street realized that Obama was going to win (when the Palin bounce dissipated), and knew that the ‘make real money off of funny money’ game was going to end, they allowed the securities to tank all at once, knowing that the 62 trillion in CDSs would cause a financial panic if people tried to collect, since there’s probably not that much money on the planet. That way, they can count on their buddies the Bushes to just give them a huge lump sum right before leaving office, instead of the many hundreds of billions that they would’ve made on funny money had McCain been president.

Hence, Bush and his appointees are pushing the bailout just like the Patriot Act: This is an (easily preventable) emergency (that we knew was coming)! Give my friends all this money right now with no oversight or we’ll have a Great Depression (we won’t)!!! Notice how they had this all ready to roll right when the emergency hit, just like with the Patriot Act. They knew something like this was going to happen, and they wanted it to go *exactly* their way when it did. It’s good for hedge fund managers and investment banks because they get free money. It’s good for Bush and the neocons because the next president will have an even *bigger* hole to dig themselves out of before they can actually do anything once elected — another 700 billion that can’t be used to actually fix any problems. Obama will be hamstrung before he even takes office, just like Clinton was.

Our only defense is Congress, who has not once stood up for the people when in this situation.

- Justin.

My overall, question, however, is if the root cause of this issue lies in people not paying their mortgages, why wouldn’t the bail out provide a type of bond or restricted bill that gives the American people a way to take the money and only use it to pay a mortgage on one house that they own? I mean, if mortgage securities are banking on people paying their mortgages, help people pay them as part of the $700 billion dollar pie!