The Globama Fund

I was half listening to the news on Wednesday and the reporter was casually going through the day's headlines. She moved from one topic to the next with no emotion and ended the segment with a nice smile moving on to the next topic. The news ran something like this:

-DOW Jones up huge today posting new highs for the session
-Treasuries hold modest gains for afternoon session
-Freddie Mac reports $23.6 Billion loss and will need $30 billion this week to survive

Wait, stop right there. Did you just casually say that Freddie will need $30 billion to survive? With no emotion? No care? What has happened here?

It made me think back only twelve months ago when we had the Bear Stearns collapse over a weekend in March. News streamed across that Bear was going to be bought for $21 billion by J.P. Morgan and that the Fed was going to cover the difference of $7 billion to get the deal done.

The world went crazy. The media went crazy. Shouts were heard everywhere: "$7 billion? That's insane! They can't just give that company that much money!" What about the tax payers?"

Now, only twelve months later, its a small headline at the bottom of the screen that Freddie Mac will need a $30 billion bailout. No big deal.

About an hour later Obama announced his plan to raise the IMF's reserves to $500 billion from its current total of $50 billion. (The IMF is a global version of the Federal Reserve, a lender of last resort for foreign banks and countries)

His plan was for the US to donate $100 billion, and for the rest of the world collectively to add $400 billion.

$100 billion!!! And the news reporter didn't blink an eye! What is happening right now?

What are these leaders seeing in our future that they feel the need to take the IMF reserves from $50 billion to $500 billion? That's a pretty big difference.

Meanwhile the markets are in euphoria right now. I keep hearing that the banks are now making money, have strong balance sheets, and their stocks are now strong buys for the future.

Really? Has their balance sheet really changed that much in a week? In fact it has, it has become much worse.

The real news of the day today, the one you probably will not ever hear about, is that China's Premier Wen Jiabao is very concerned about the future value of China's assets in the United States.

As Obama talks about putting $100 billion in an IMF fund and sending $30 billion this week to Freddie Mac, Wen Jiabao is sitting over in China wondering........where are they getting the money to do that?

Let's hope he doesn't put the puzzle together, otherwise our real crisis can begin and the true value of American stocks, bonds, currency, and real estate will be revealed to the world.