Whatever really happened on 9/11 and who exactly were directly or indirectly responsible for that horror will probably never be know entirely, – but the current fairytale conjured and bruted by the fascists in the bushgov, is a pack of LIES!!!

Obama inherited this nightmare. Democrats however, including Obama are rank cowards who failed to articulate this truth to the American people and allowed the obstructionists in the gop, and remaining fascists the bushgov still in positions of authority, and thier lockstep partisans in redneck Amerika to obstruct, undermine, mangle, and destroy any policy that would have benefited poor and middleclass Americans.

The fascists in the bushgov and the gop allowed 9/11 to happen on their watch!!!

The fascists in the bushgov and the gop then ghoulishly and gleefully exploited the dead and the mayhem of 9/11 (a Pearlharborlikeevent, a Riechstadt fire) to brute and force a mangling, dismemberment, and reengineering of the Constitution and every principle that formally defined America.

Irag never was, is not now, and never will be a necessary war. Amerika is responsible for attacking without provocation a nation that did not attack us, that had nothing to do with 9/11, and that WAS NOT JIHADI!!! (That would be Saudi Arabia, the bushgov goodfriends, that is jihadi, that is the funding and nurturing tit for all the jihadists massmurder gangs including al Quaida, 15 of whose citizens were DIRECTLOY INVOLVED ON 9/11 you ignorant idiots in redneck Amerika)

All the dead in Iraq and America died for nothing more than the wanton profiteering of the fascists in the bushgov. The Iraq war was, is, and always will be a crime scene, that was never necessary, or justified, and that will always haunt Americans as the most obscene abuse of power and disinformation in the history of America.

The fascists in the bushgov and the gop favor, benefit, cloak, and advance the best interests of the predatorclass alone and exclusive, and promote and discourage any and every policy that would benefit poor and middleclass Americans.

There is a badmoon rising. The divides are vicious and unmendable. There is no compromising or reconciliation possible with the gop in it’s current panjandrum. The gop and their ignorant fascists, biggoted, racist haters in redneck America are our enemies. We either defeat and silence this evil brood and expose their pathological lying, or we allow these beasts to continue dismembering the Constitution, advancing the predatorclass, prosecuting unnecessary, unfunded costly bloody warsofchoice, and destroying what little is left of America’s poor and middleclass
- or we stand up, call these pathological liars and corporatist obsturctionists on their dirty dealings on the facts and truth, – or we are doomed to witness the inevitable destruction of America.

A pox on the house of the gop and redneck Amerika. They do not represent America, or decent Americans.

But the practical effect of these regulations is that the government is in effect subsidizing whatever is perceived as low risk by some credit rating agencies and, in relative terms, taxing what is not.

What would happen if the regulator of the health insurance industry for instance would order that all insurance companies that provided health insurance for those that some health rating agencies deemed not healthy enough would have to put up more regulatory capital than compared to what they were required when insuring someone rated AAA on their health? Would this be possible?

I. Do. Not. Care.

Bygones Obama can open his mouth and speak. In fact, he seems to be enjoying that. He just never seems to actually say anything that would put pressure on those 51 or 58 or 59 or 60 (or 100) Senators, he never says anything that changes the consensus, and hence, to get to the Zen stage of this, if Obama speaks, does the forest care?

But then, the man can’t bring himself to ask the DOJ to investigate the possibility of investigations into torture, illegal war, security and ratings fraud and assorted “bygones” worth tens of thousands of lives and trillions of dollars, so it’s all good. We need some realism – you simply cannot get 51 Senators, so we need to look forward.

I would not doubt though that the statutes would require recognition of rating agencies as being authoritative on credit valuation decisions. This kind of thing is endemic in US statutes. Tax deficiency interest is statutorily set as an add on to Federal Reserve rates. The Federal rates are targets. The actual daily bank rates are set privately. Some even base their investment on LIBOR.

I would research this point if I still had full access to a legal library.

The essential point though is Congress tends to use very general terms. In my view, the best example of a generality is the Full Employment Act of 1946 , as amended. These acts merely state what the economic policy of the United States is. It is up to the executive branch and delegated boards like the Federal Reserve to implement the policy statute.

The short answer is that Congress would never need to prescribe statutorily that ratings agencies be determinative of banking and other financial decisions. That would be the normal bailwick of the executive branch regulatory structure. The law tells what must be done or accomplished. Regulations are the province of the Prince that does the accomplishing. The Prince and minions could not keep a functioning state going were it any different.

I do not think the United States is still a healthy functioning state. The healthy state is factions co existing in reasonable harmony. We seem to be at the very bottom of what would be acceptable as reasonable harmony between factions.

Our President and Congress are supposed to be Leaders. Leaders are supposed to do the right thing, not the politically expedient thing. As long as we continue to make excuses for their gutless behavior, we will continue to get the leaders we deserve.

First both recessions were clearly in the cards and or sent coming by many people! The Federal Reserve saw them coming, and most Financially trained people saw them coming.

This leaves out both or maybe all Presidents, NOT their advisors.

The Federal Reserve always is aware of the Yield curve, as they set the short end of the curve.

Below please see the Federal Reserve study as to this was clearly able to be seen coming actually several years in advance! Yes several years, these recessions did not sneak up on us.
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Jonathan Wright, a research economist at the Federal Reserve, in his paper titled “The Yield Curve and Predicting Recessions”, tested the ability of various models to predict recessions. While his study confirmed a significant and relatively stable relationship between the yield differential (or spread) and subsequent recessions, Wright found an important second variable that substantially improved predictive ability. When the federal funds rate is low, Wright’s model showed that chances of recession are significantly less than when the funds rate is high, even if the yield differential is negative. This is best illustrated by comparing output from the model with the fed funds rate set at 3.5% and at 5.5%. The spread is calculated as the difference between ten-year and three-month US Treasury securities.

Probability of recession within the next 4 quarters
Fed Funds Rate: 3.5% 5.5%
Spread: 1.0% 4% 16% < this is a normal curve
Spread: 0.0% 17% 40% < this is a flat curve
Spread: -1.0% 43% 70% < this an inverted curve

If the fed funds rate is low, the probability of a recession is also low unless the yield curve becomes inverted. However, if the fed funds rate is high, there is significant (40%) probability of a recession when the yield curve is flat, increasing to high probability when the yield curve is negative (70% at -1.0%).
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What made this current recession extra bad was that it caim hand in hand with what is called a "liquidity crisis", why we had to have something??–and it came in the form of the TARP.
Now this Liquidity Crisis was also clearly far in advance of the onset of the recession, actually in 2006, a liquidity problem or crisis is always available to be seen in what Financial Trained people see as what is called the TED Spread.
Below a thumb nail decription of the Ted Spread
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TED is an acronym formed from T, for T-bills, and ED, for the Eurodollar futures contract.

What is the spread?
Originally the spread was between the interest rates for three-month US Treasuries contracts and the three-month Eurodollars contract as represented by the London Interbank Offered Rate (LIBOR).

However, ever since the Chicago Mercantile Exchange dropped T-bill futures, the spread is calculated as the difference between the three-month T-bill interest rate and three-month LIBOR.

How is the spread measured?
As you see in the chart below, the spread ranges from around between “50” and “500.” What do these numbers represent?

The chart below is in basis points, aka bps. For example, let’s say the T-bill rate is 4% and the ED trades at 4.5%, then the TED spread is 50 bps (.5%).

For all intents and purposes, between 10 and 50 bps should be viewed as normal. Anything greater can be viewed as a signal.

What does an increased spread signify?
When did the TED spread start becoming volatile? Well, by looking at the above chart you can see that it all happened in the second half of 2007.

And what was the stock market doing at the time? In October of 2007, the DOW was above 14,000 points. By the end of 2007 the DOW was already down to the lower 13,000s.

Why is this important? A rising TED spread is often looked at as a signal that the US stock market is about to head into a downturn because of an exodus of liquidity. The spread increases because whereas T-bills are pretty much considered risk free, LIBOR represents the risk involved with lending between commercial banks. If banks believe interbank loans are getting riskier because of default risks, they will increase the interest rates (hence liquidity lowers), thus increasing the TED spread.

How do we fix the TED spread? Or better yet, USE it!
Leaving all that mumbo jumbo behind, the TED spread is really just calculating the trust level between banks. If that’s what it signifies, then the next logical question is: Why did the TED spread fall so quickly in the above graph?

That is where the US government did a cash infusion into the banking system. Most people criticized the infusion by posting data that showed consumer lending was still down. And they are right. However, it is worth it to note that interbank lending premiums fell drastically, increasing liquidity in the economy.

Ripple into the consumer market?
At the time, it doesn’t seem the decrease in the TED spread is having a ripple effect in the consumer market. Consumer credit limits are being slashed every day, required credit scores for loans are increasing, loan rates are holding pretty constant, and more.

Why? It’s hard to say, but it could be that financial institutions are unsure of their models that price in risk. The saying goes “All models are wrong, but some are useful.” So they may be trying to re-evaluate some of their practices before extending credit into the consumer market again.

That’s All
That’s a pretty basic overview of the TED spread, below a link that will show you where the Spread is currently, it just is an update to the chart above

http://www.bloomberg.com/apps/cbuilder?ticker1=.TEDSP%3AIND

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Now Was any of this hidden?—-Not to tough to see in hind site, you say, —This not the first time this has gone on —-All that is being put forth is that Financial storm warnings were sounded, in the Yield curve and here too—in the Ted spread—-
These yield curve rates, are published daily by the US Treasury for all to see each day, same with the rates that make up the TED Spread.

Why Didn't this make front page NEWS, on all Business channels, or in News papers, that we likely in 2006 were going to have a recession per we hade an Inverted yield curve from 2006 thru 2007 when the Federal Reserve started cutting interest rates, –why becuse tthe TED spread Expoded in mid summer of 2007,—–
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Now where were you, and where was Predident Bush and President Obama WHEN IN 2006 THESE FINANCIAL SIGNALS WERE FLASHED, FINANCIAL STORM SIRENS GOING OFF ?

2006,– President Bush was President, confronted with an off cycle election coming, Current President Obama was running to become a Senator, He didn't get elected Senator till Nov 2006, and didn't take his Senate seat till Jan 2007. Now thats where they were, argue that. Now where was Congress, well it was in the hands or control of the Repubican's (both House and Senate) as the house didn't become under the Democrats till the elction of Nov 2006, and the Senate did become a Democratic majority till fall 2008. Argue that!

Where was the Yield curve in 2006– The below is cut and pasted from YOUR , U.S. Treasury site ( Google Yield curve and see for yourself)

NOW LOOK !!!!!!!! HERE IN TIME, WHERE THE CURVE WENT
–INVERTED–
FROM THE 6 MONTH WHICH IS SHORT TERM,
TO THE 30 YEAR –WHICH IS LONG TERM–HELLO THIS 2006
Date 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr

06/12/06 4.78 4.93 (5.13) 5.09 5.02 4.97 4.95 4.96 4.99 5.17 5.03
06/20/06 4.70 4.92 (5.24 5.23 5.19) 5.16 5.13 5.14 5.15 5.33 5.19

08/01/06 (5.20 5.12 5.18 5.11) 4.97 4.91 4.90 4.92 4.99 5.17 5.07

What I am talking about is the discrimination present in bank regulations that demand from a bank to have 8 dollars in equity when it lends 100 dollar to a ordinary citizen, a small business or an entrepreneur, it is required to put up 8 dollars in equity; but only 1.6 dollars when lending or investing to anything anointed with a triple-A rating by the credit rating agencies.

Who authorized the official regulatory discrimination?

When dealing with regulations on an adversarial basis , the first thing you do is look for regulatory overreach to invalidate the regulation.

Prior restraint is the bugaboo of all conservative politics.

The ratings agencies sprang into being on their own without the need of law prescribing them. If one goes into the Congressional debates about financial laws way back when, I bet the issue was heavily aired.

When were the regulators authorized to give the credit rating agencies so much regulatory power… and when were the regulators authorized to impose a regulatory layer of discrimination of risk on top of the markets´ normal discrimination of risk? Those are the questions.

The bad habit of giving up your own opinion for a published scorecard was well entrenched by the 1950′s. One simply did not argue against a rating. They defined everything and were backed by regulation. Consequently, the debates over the Roosevelt Era financial laws are probably filled with Congressional discussion about ratings primacy being implied by the laws that were passed.

I remember discussions about the subject in finance classes fifty years ago. Even a crass student understood the awe attached to ratings agencies.

Judgement is frowned on as being litigable when you may CYA using a formula that takes the place of judgement.

I ask it because in my mind that is one of the most misguided concepts ever and that clearly impacts a society by creating incentives to turn risk-takers into wimps.

These regulations also included that the banks do not need any equity, zero, zilch, when lending to the government and this is of course a prime driver in helping to build up government debt.