Making A Sow's Ear Out Of A Silk Purse

They're Not Finished With Your Wallet Yet...


So here I am, found pretty much sitting on my hands in order to keep them away from my keyboard for the past few days as I watch the fur fly and the mud slung by "honorable" men/women in suits in Congress and by their foils in the lamestream media.

The wild eyed partisan TV talking heads tell us that financial Apocalypse is upon us in about thirty two minutes from now if we don't each immediately throw $3,500 per actual taxpaying taxpayer (this excludes those enjoying "earned income credits"--you're not a real taxpayer in the Websters Dictionary sense) into a giant hat, close our eyes, AND TRUST THE GOVERNMENT to spend it in one of the most expensive Zip Codes in NY City; on Privately owned Companies employing men and women many of which which make more in a year than most average Americans make in a lifetime.

Oh My GOD..."The market's down 777 points today" screams most of the Newspaper and website headlines after 95 Democrats voted against 140 of their fellow Congressmen in the process of not passing Nancy Pelosi's version of George Bush's "Financial Bailout Measure."

Funny thing, but the Democrats hold a 235 to 199 majority in the House at present, but the thing which surprised me the most was who actually voted against the measure--including Georgia's notorious Race Warlord John Lewis of Al Sharpton/ML King/Congressional Black Caucus fame.

"Foreign Markets At Risk"...to paraphrase...scream other headlines.

I say SCREW the #&$@! "Foreign Markets"...under my breath more than once in the past few weeks.

Since when have the "Foreign Markets" done anything for me and most Americans except make money while their peoples and their governments suck off the giant US government tits and boat loads of money shipped overseas by this same Congress that is so two-faced in their concern for the domestic financial markets.

I continue to have news for you this morning, and if you read the Internet sites outside ABC/CBS/NBC/CNN/MSNBC or AOL and Google and the NY Times/LA Times/Washington Post (name another lamestream dead tree legacy media or broadcast TV outlet) you'd know that profit taking has already begun in spite of the widely publicised "failures" in the financial markets and on Wall Street.

My Blog Idols over at Powerline have a good posting with references I'm going to expand on this morning.

First there's Joseph Calhoun's article over at "Real Clear Politics" that points out the new money being raised to buy and pay for the bargans out there if you're shopping for banks and other credit institutions:

In Times of Crisis, Trust Capitalism
By Joseph Calhoun

The US government is executing a coup d’etat of capitalism and I fear that we will pay the price for many years to come. Hank Paulson, Ben Bernanke and a host of others tell us the credit market is not working and the only way to get it working again is for the government to intervene. They claim this intervention is urgently needed and if we don’t act, the consequences are dire. Dire, as in New Depression dire. Have these supposed experts on capitalism forgotten how it really works?

Last week Goldman Sachs raised $10 billion in new capital in one day. They sold $5 billion in preferred stock and warrants to Berkshire Hathaway and also completed a secondary offering of common stock that raised another $5 billion. Friday, JP Morgan raised $10 billion in a secondary offering to help pay for the Washington Mutual takeunder. Both of these offerings were oversubscribed, meaning that the companies could have raised more capital if they wanted.

There is not a shortage of capital for well run financial companies.

HOLD IT...Hold It...hold it...

My POINT...exactly. Do YOU get what he's saying here?

What Mr. Calhoun doesn't say, however, is that the exact same condition which exists on Wall Street also exists on main street America for...

WELL RUN HOUSEHOLDS.

Get the Picture?

Calhoun goes on:

There is, however, a shortage of capital for companies that have acted irresponsibly with investor capital in the recent past. For some reason, our political leaders believe this is a failure of the market, but isn’t this what should be expected from rational investors? Given a choice, why would a rational investor allocate limited capital to the losers rather than the winners? If capital is really as scarce as it seems, isn’t it better for our economy if we make sure that it is allocated wisely?

The biggest bank failure in the history of the United States happened last Thursday night and by Friday morning, it was business as usual. The only difference was the name on the door and the losses suffered by those unfortunate enough to invest in Washington Mutual bonds or stock. The taxpayers didn’t lose anything and depositors didn’t lose anything, only investors. That is how capitalism works in case everyone has forgotten.

Likewise Joe, I say that there is also currently a shortage of capital for "individuals" and the Democrats beloved "Working Families" that have acted irresponsibly with "investor capitol" (read "investment capitol" to mean the shareholders of institutions willing to loan vast sums of money used buy large houses and cars and bass boats and $150 tennis shoes and expensive un-deserved vacations to Disney World for the kids.)

Calhoun's reference to the private fund raising going on piqued my interest, so I did a little Googling and found this to support his assertions:

Goldman Sachs Prices $5 Billion Public Offering Of Common Equity
September 24, 2008

Berkshire Hathaway Invests $5 Billion, Receives Warrants for Further $5 Billion

The Goldman Sachs Group, Inc. (NYSE: GS) announced today that it has priced a public offering of 40.65 million common shares at $123 per share for total gross proceeds of approximately $5 billion. In addition, Goldman, Sachs & Co. has an over-allotment option of 6.10 million common shares.

This offering, combined with the recently announced $5 billion strategic investment by Berkshire Hathaway Inc. in the form of perpetual preferred stock, brings total capital raised to $10 billion. In addition, Berkshire Hathaway Inc. will receive warrants to purchase $5 billion of common stock with a strike price of $115 per share, which are exercisable at any time for a five year term.

The Goldman Sachs Group, Inc. is a bank holding company and a leading global investment banking, securities and investment management firm. Goldman Sachs provides a wide range of services worldwide to a substantial and diversified client base that includes corporations, financial institutions, governments and high net worth individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world.

And of course everyone knows who owns Berkshire Hathaway hiding out there in the ethanol plants corn fields of Nebraska (not NY City)?

You'd be wrong if you thought of this Big Rich Guy with the bad comb over...

But you'd be right if you said THIS little rich guy, instead:


(For those of you busy rearing children or that went to college at UGA or Florida State, that would be Warren Buffett...)

Then over at JP MorganChase they're also bringing in money hand over fist in defiance of this horrible government induced "financial meltdown":

JPMorgan Chase & Co. Announces $8 Billion Capital Raise

New York, September 25, 2008 - JPMorgan Chase & Co. (NYSE: JPM) today announced that it intends to offer $8 billion of its common stock for sale to the public. J.P. Morgan Securities Inc. will serve as sole bookrunning manager and underwriter for the transaction. The underwriter will have a 30-day option to purchase up to an additional 15% of the offered amount of common stock from the company to cover over-allotments, if any.

JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.0 trillion [emphasis mine-VRR] and operations in more than 60 countries....

Then after raising $8 BILLION new dollars from "investors" (not the government) in the face of the current catastrophe, the very next day last week JPMorgan did this:

JPMorgan Chase Acquires the Deposits, Assets and Certain Liabilities of Washington Mutual's Banking Operations

Highly attractive, strategic transaction significantly strengthens consumer franchise.

Deal expected to be accretive to earnings immediately. Adds large, stable deposit base and recurring earnings stream to company.

Company intends to raise additional capital in conjunction with this transaction to maintain strong capital position.

Acquisition creates largest U.S. depository institution, with over $900 billion of customer deposits

Expansion into attractive California, Florida and Washington State markets creates nation's second-largest branch network; also strengthens existing presence in New York, Texas, Illinois, Arizona, New Jersey, Colorado, Connecticut and Utah

Larger branch footprint will allow company to further extend and grow commercial banking, business banking, credit card, consumer lending and wealth management efforts

New York, Sept. 25, 2008 - JPMorgan Chase & Co. (NYSE: JPM) tonight announced it has acquired all deposits, assets and certain liabilities of Washington Mutual's banking operations from the Federal Deposit Insurance Corporation (FDIC), effective immediately. Excluded from the transaction are the senior unsecured debt, subordinated debt, and preferred stock of Washington Mutual's banks. JPMorgan Chase will not be acquiring any assets or liabilities of the banks' parent holding company (WM) or the holding company's non-bank subsidiaries. As part of this transaction, JPMorgan Chase will make a payment of approximately $1.9 billion to the FDIC.


If that's not enough to convince you that SOMEBODY believes that everything isn't going down the crapper on Wall Street without Federal intervention, on this past Friday they offered part ownership in their company for only another $10 Billion, apparently to be received from Lemmings willing to jump off the cliff with their fellow investors wallowing in the pit of insolvency:

JPMorgan Chase & Co. Prices $10 Billion Capital Raise
New York, September 26, 2008 -

JPMorgan Chase & Co. (NYSE: JPM) today announced that it priced a $10 billion offering of approximately 246.9 million shares of its common stock at $40.50 per share. J.P. Morgan Securities Inc. served as sole bookrunning manager and underwriter for the transaction. The underwriter will have a 30-day option to purchase approximately up to an additional 37.0 million shares of common stock from the company to cover over-allotments. The closing is expected to occur on or about September 30, 2008.

I don't know about you, but I say that if BZILLIONAIRE Warren Buffet is buying into the investment houses this week, and "investors" are tossing billions at firms like JPMorgan, then as I said a few weeks ago...they're not burning American Dollars yet, people are still graduating from college and need a place to live other than an apartment, the housing market will recover given time, and finally...

the $#@%& Government should keep MY TAX DOLLARS out of this natural "correction process" in the markets and get their race baiting bigoted, group hysteria mongering fingers out of the investment and loan making process before they really do permanently screw things up.