Wall Street then received the biggest 'wet kiss' they ever did as the banking regulations were dissolved and Bush sent $1.2 Billion to the housing market to 'move renters to homes.' The beginning of the housing bubble in 2003.
Then every measure of legislation was a jobs bill which supplied 'short term immediate' upticks in prosperity. "Flash in the Pan Economics." It was completely dependent upon the ability of the USA Congress to pump out spending bill after spending bill while raising the debt ceiling higher and higher and higher during the Bush years. The National Debt exploded. The money reserves of the country were drained and yet that was not enough.
The housing bubble became all too real following the resignation of John Snow and Paulson did nothing, but, travel to China to 'whine and wine and dine' those he felt would give insight to Goldman Sachs. Then the housing collapse of 2008. The SECOND major bailout and corruption of the USA was now endless.
The bailouts didn't stop there. The investment banks took their money and ran leaving the USA high and dry for an economy. The economy was shrinking and shrinking fast even as the investment banks stated they were going to pay off their 'bailout' in a short period of time. The Recovery and Reinvestment Act was a bailout for the nation and Governors were there to receive monies for 'shovel ready' jobs. The government infrastructure was bouyed and the next budget would fully fund the federal government securing more and more jobs and sending 'authority' in the real world to begin the process of 'restraiining corruption.'
The next huge bailout came as the elections of 2010 closed from the Fed in the way of QE1. That 'felt' so good it was followed by the next major bailout QE2.
Well.
It would seem the Wall Street crowd is again seeking to achieve great wealth at the cost of the American taxpayer. Enter stage right the 'speculators' that hope to make money from the insolvency of the USA.
How S&P's warning could actually help US debt (click title to entry - thank youi)
NEW YORK (AP) — A warning from Standard & Poor's that mounting debts put the U.S. government's credit rating at risk blindsided markets last Monday. The Dow Jones industrial average lost more than 240 points in the morning before recovering. It was the worst one-day drop for stocks since fears over a nuclear meltdown in Japan sent investors into hiding on March 16.The response made sense. A downgrade of U.S. debt, after all, could turn into an economic calamity. Here's the surprising part: After a quick dip, prices for U.S. government debt began rising.
Economists and bond traders offer varying explanations for the Treasury market's curious reaction, but there's a common thread: S&P's warning shot could actually wind up making bonds more attractive.
If an actual downgrade were to occur, the effects would ripple through financial markets. When S&P lowers the credit rating on a country, it's saying that there's a greater chance the country won't pay its debts.
Creditors demand higher borrowing rates. In the U.S. it would mean higher interest payments for the federal government. All borrowers — from companies, homeowners to credit card users — would find it harder to borrow. Presumably, bond prices would fall.
The strength of Treasurys, the very debt that S&P said was at risk, left many observers confused. Aren't U.S. government bonds more dangerous now?
"There's quite a bit of head-scratching going on," said Guy LeBas, the chief fixed income strategist at Janney Montgomery Scott. "It looks like the bond market got hit in the head with a frying pan and is already up looking for a fight."...
...Kalivas and others say the threat of a downgrade may push Congressional Republicans and the Obama administration to reach an agreement on tackling the country's long-term debts. Cutting spending and raising taxes would lead the government to sell fewer Treasurys. A drop in supply would likely push Treasury prices up.
The warning could also prod Washington to make even deeper spending cuts more quickly than they would otherwise. Economists warn that slashing too deeply, just like raising taxes too high, could threaten the economic recovery. That could actually help the bond market, too.
When the economy slows, investors tend to take fewer risks and favor stable investments like bonds. During the financial crisis, for instance, Treasurys trounced other investments.
In a note sent to clients last week, Goldman Sachs economists said the greater threat of a downgrade wouldn't translate into higher long-term interest rates and lower Treasury prices. In fact, it would have the opposite effect. "A significant push toward fiscal austerity would lead to lower growth," they wrote.
The Federal Reserve would also likely postpone raising short-term interest rates, because the threat of inflation would diminish. That, too, would add to the appeal of Treasurys.
In other words, what's bad for the economy is often good for Treasury bonds....
Basically, Wall Street could engineer huge profits by investing far less in the 'credit markets.' Not bad for people that have mastered the 'art of the con.'
