Tuesday, July 19, 2011

GOPCons - How To Make Money On the Credit Default

Credit Default Swaps Without the Training Wheels

When oligarch children grow up to the age of majority, they naturally want to follow in the footsteps of their parents.  Of course, the little tykes have had a chance to play with things such as credit default swaps, CDO's and fraudulent securitized mortgage blocks while they were running about the mansion grounds on their tricycles.

Oh my goodness.  The "little people" are defaulting. (image source)

But once the "terrible teens" set in, all that "starter package" looting and pillaging quickly loses its glitter and the youngsters are ready for some of the real stuff.  Mommy and Daddy might give them a railroad or a "starter corporation" to dismember, but even such larger presents still leave them challenged when they look in awe at the gigantic looting schemes the parents are pulling off right and left.

The kids have seen the autocracy slice down the tax rates for the oligarchs, Big Phama luxuriating in non-negotiable rates for Medicare Part D and the health insurance companies raising rates to welcome in the Affordable Care Act, so they, quite predictably are "chomping at the bit" for the next big move.

Even if they are still too young to drive and have to take the family limousine to the Summer Looting Festival.

The Summer Looting Festival

So, exactly how will Mom and Dad rake in the bucks from the nation's credit default?

We have to look at a couple of the examples mentioned above to get the "lay of the land."

1.) Let's take a look at the non-negotiable Medicare Part D bill that got passed at 3 AM.  What "goes missing" right away is any discussion of exactly why all those drugs wind up costing so much.  No need to even think about it.  The deal was solid.  

The GOPCons would vote for the socialistic drug bill with the grinning assistance of the lobbyists of the Big PHARMA oligarchs who were promised that they would never have to compete for prices again in this century.  

There was no imaginable reason why the federal government (under the autocrat) should ever so much as "blink an eye" at the prospect of outright price fixing, windfall profits and back room cronyism.

Since then, PHARMAgarchs have pocketed hundreds of billions of dollars of "profit."  Totally legal.

It's been paradise.  Republicans helping the old and infirm, uh, to get the medicine they need.   No need to note that the money to pay for it was borrowed.

2.) Next, let's consider the premium rate increases the HEALTHCAREgarchs have imposed -- utterly without any basis in cost whatsoever -- very, very quickly before the Affordable Care Act had a chance to come into effect and stop them.

A "new word" was quickly introduced into the "talking points."  "Uncertainty."  Although the entire Affordable Care Act is written in black and white for business planners to read, health care costs have become "uncertain."  And, since "uncertainty" validates any money hoarding or savage price fixing, business could hardly be expected to spend any of the estimated $2 Trillion they have on their books and anyone -- such as an employer -- who might have to actually buy health insurance immediately raised all prices because of the "uncertainty."

You guessed it.  Since the business agents of the oligarchs "don't know how expensive health insurance will become," the situation will become "uncertain."

Premium rates went up around 35% on average since then, even though actual health care costs only increased around 6%.

Making Money From the National Debt Default

Let's lay out the plan.

The oligarchs' GOPCon servants follow their orders and block the moves to raise the debt ceiling -- even though the same people who are now ranting and raving about not raising the debt ceiling have already raised the debt ceiling seven times in the last decade -- making the country's credit rating go down and interest payments go up.

Borrowing money will become more expensive.

However, among the oligarchs, very conveniently, no one knows how expensive.  But, remember, the corporatist crowd doesn't need to borrow any money -- they already have $2 trillion on the books from the looting during the autocracy.


You guessed it.  Since the business agents of the oligarchs "don't know how expensive borrowing will become," the situation will become "uncertain."

Then, following the path set down by PHARMA and the Health Care insurance industry, prices can be raised immediately without any possible corresponding reason such as the costs of anything.  This means that, if you are a corporation or an oligarch, you can raise prices as much as you want even if you don't have to borrow any money at all because you have trillions of dollars in the bank already.

The increased prices, all carefully justified by the imaginary extra cost of borrowing even when there is no borrowing taking place or necessary, suddenly boost the amount of consumer money flowing into your money bin, complaints about the price increases can be dispatched easily as merely another effect of the default and higher interest rates, no problem that they are utterly inflationary.  

If that excuse doesn't shut up the whining, starving middle class consumers, there's always the "uncertainty" issue.

And, bonus-wise, if anybody does actually have to borrow money, they can borrow it from you!  But wait, what interest will you be charging?  The national credit rate has gone up, because of the uncertainty!

Oh darn.  Mom and Dad certainly didn't want to have to raise the interest rates they charge, just willy nilly, but in the atmosphere of national default, higher rates and, of course, the uncertainty, they had no choice.

If you are one of the "chosen few," that is, one of the oligarchs, you will be forced to increase the interest rates on the loans you make because the credit rating of the entire country has caused national debt interest rates to increase.  Once this is in place, your "take" will, naturally, also increase.  That, dear visitors, is "how you do it."

You get the idea.  This is currently the "dinner topic" in our oligarch family mansion.

No comments:

Post a Comment