Oil 14. Orderly bankruptcy, an intimidation to investors (1/10/09)

On 5/17/08, Congress passed the bill to raise the cap of jumbo loan rates on mortgage from previous $417,000 to $729,750 in high priced parts of the country . . On same day, Funnie Mae announced new rule to reduce down payment from 10% to 5%. It may reflect what Bush said at that time, the economy of US was basically sound.

But two months later Federal officials said they needed a bailout to rescue the mortgage giants. What happened? Certainly it was not because of new rule. It was less than two months after the new regulation. New house buyers may have started their application procedure but have no time to enjoy the new benefit yet, let alone to go new foreclosure. The collapse of Funnie Mae and Freddie Mac was manipulated, on the purpose to touch off a financial crisis to cover up "Dollar crisis" caused by excessive petro dollar. Remember I revealed it on 7/4. The oil price turned around its rising curve and started its descending since then. And one week later, on 7/11, a new project to stabilize the dollar was done - to create a financial crisis. Then we saw a series of psychological operation - news propaganda on "troubled real estate giants" even though two months ago it was full of confidence to save the housing market. Government is the sponsor of FunnieMae and Freddie Mac. It controls and directs the business of the two. If Feds wants the two going bankruptcy, they went bankruptcy. Outsiders never know the truth.

But Funnie and Freddie are limited to real estate only. To push up a financial tsunami, the Insiders need another big name - Leman Brothers became victim. Though real estates loan was an important business for Leman Brothers, it also packed various other kind of loan to investors. The bankruptcy of Leman Brothers vastly effects in financial area -banks, mutual funds, insurance company, money market ... Feds could have saved Leman Brothers like they saved Bear Stern. The cost would be much smaller compare to 700 billion they used in later rescue plan. But they leave it alone. The bankruptcy of Leman Brothers is a necessity to push up a financial tsunami.

It is a very successful plan. All investment fund, or speculating money, or petro dollar, are locked in a balloon of US bond. Feds has whips in hand. Any one dares to invest in other area are beaten. Foreign currency? Most devalued to dollar. Stock market? Anytime will lose several hundred points. Real estates? No one knows where is the bottom. Feds also has intimidation in hand: media predict more lay offs, more bankruptcy. One interesting thing is Media's propaganda on Auto giants' bankruptcy. They say US auto industry is inefficient and deserve a shut down. But Government still gave the Auto giants a little money to survive several months. What for? If you have a boat, and know there is a big hole in the bottom and the sinking is inevitable, will you spend more money to paint it or decorate it? Why not use the money to buy a new one? But they still spend money on a sinking boat, says it is an "Orderly bankruptcy". Is that ridiculous?

"Orderly bankruptcy" is a sword of Damocles. It warns you that if you dare to invest, the sword will drop on you any time. By announcing the bankruptcy of Ford or GM, Feds could create another stock market earthquake. The purpose is to maintain the balloon of the US bond. Keep the money from leaving.

Feds plans to keep that balloon for months, no longer than one year.

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If Feds call you and defame my message, it is a tactic of intimidation. They don't want people know the fact.
It also proves what I wrote are truth. They are afraid of it.