Mark-to-Make-Believe Economy
Reaches Permanent Plateau
“Is there anything staying in the way of raising the dividend…?”
“We really want to see a real recovery before we do that…”
You can always depend on the honesty of bankers, right?
This was an exchange between an analyst and the CEO of J.P Morgan, Jamie Dimon, on last week’s conference call. Without the ability to pay out a cash dividend, the bank’s allegedly-stellar earnings are only as good as the paper they’re printed on.
And in a world where banks can profit thanks to the ‘spread’ between the money they borrow for free from the Fed and the yield on Treasuries… there’s no reason to even bother lending to consumers.
Add in the fact that banks can fore go recognizing losses following the suspension of ‘mark-to-market’ accounting rules, and you have all the makings of the continuation of the mark-to-make-believe economy.
Not to be outdone, however, the profitability of the banks has been outdone— by the Federal Reserve. They reported record earnings in 2009, amidst a huge balance sheet expansion. The results, of course, are unaudited. After all, the Fed argues, it’s not a public company, and it’s not part of the government.
There’s reason to worry. Eventually the fairy tale will end, and we’ll find that it’s not all happily ever after. Without banks lending, or requiring such stringent underwriting standards, homeowners face another downturn in housing in 2010 as more sub prime and Alt-A mortgages come due. Ditto with commercial real estate, where easy loan terms from before the crisis are finally coming due.
The jobs picture, distorted by calculations and seasonal adjustments, remains dastardly, with unemployment still in the double-digits, well above the worst-case-scenario projects of the year prior.
Amidst this backdrop of questionable earnings, economic growth vastly distorted through the lens of government intervention, and the potential further loss of individual freedoms when the fairytale ends.
Markets may be mired in mark-to-make-believe, but not all opportunities to grow and liberate your wealth share that same fate.
Washington is out to steal your future. They want to confiscate your savings. And nationalize your retirement.
You can see the overwhelming evidence for yourself,
* Plans they're devising right now in the halls of Congress..
* Past actions that have devastated individuals like you and...
* Five signs they're getting you primed to do it again
How can you protect yourself, your savings and your loved ones?
The only answer is that we must get rid of them.
The Communist Muslim Usurper and His Minions from Hell must be removed Now !
The Federal Reserve must be Removed Once again ! I give them the Choice to Leave or We shall remove them with Haste and We shall take No Prisoners to Maintain in our Prisons ! They may interpret that Statement anyway they Wish ! Their Time on this Planet Has Expired !
I offer Them this Choice, Leave Immediately or We will remove You, Period !
This is not a Threat, This is a Fact !