Monday, September 29, 2008

Suicide by Crooked Cop

"Capitalism will always survive in the United States as long as the government is willing to use socialism to bail it out."

Nathra Nader
Ralph Nader's father

Like an exceptionally violent scene from "The Sopranos", the American People are being held hostage to the wealthiest cabal in the world in order for them to become even more wealthy. There is a loaded gun to our head that says "Either give us your money or you will lose everything."

"Finance is the art of passing money from hand to hand until it finally disappears."

Robert W. Sarnoff

This situation was hardly unexpected. The housing and finance bubble had been described, documented, detailed for years. It was like a round of musical chairs, shifting the money around as if it was the green pea in some shell game in Chinatown.
Well now the music has stopped.
We all knew that the escaping Bush regime would engineer one last fleecing, a well placed poison pill if you will, a parting "gift" to the American People. It could have taken the shape of another false flag phony terrorist operation or a much anticipated invasion of Iran. As it turns out, those options were frivolous compared to the daring, daylight robbery of every man woman and child in the United States of America.

Today with constituents telling Congress to vote "nay" 100 to 1, the 700 billion dollar toothless taxpayer give-away program was defeated in the House of Representatives 228-205. They haven't told us where the money is going to or where it is coming from. It sounds like another example of faith based legislation. If this plan is passed with no mandate for finance regulation, executive pay caps, taxpayer warrants (paybacks), no help for homeowners in trouble and most importantly, no prosecution for the guilty, it cannot be called a "rescue plan" but is rather a hijacking of the personal wealth of the common people for the greater benefit of the already filthy rich. The word on Wall Street late last week was that the champagne bottles were already popping after Treasury Secretary Henry Paulson announced his corporate welfare bailout in a three page, no frills document that republican presidential candidate John McCain said he hadn't even read well into Tuesday of the following week. This plan is worthy of the Gambino family and the kicker is that $700,000,000,000 will not begin to satiate the hunger of the herd of pigs that are now lining up at the feedbag. Hear them squeal? I think what will probably happen if this bill never passes is that Wall Street will sober up and realize that they can't make any money unless they get back to work. A tremendous amount has already been made and the bailout would be the icing on the cake. Ultimately they will come to terms with this and get back to business. If the bill does pass, then this will be just the beginning as in any blackmail, there is always more to come. Nothing will have changed. Hopefully the American People will finally have the resolve to say NO and not succumb to these overfed piglets.
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that grow up around them will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."

Thomas Jefferson

Monday, September 15, 2008

Free Falling

US in 'once-in-a-century' financial crisis : Greenspan
14 hours ago
WASHINGTON (AFP) — The United States is mired in a "once-in-a century" financial crisis which is now more than likely to spark a recession, former Federal Reserve chief Alan Greenspan said Sunday.
The talismanic ex-central banker said that the crisis was the worst he had seen in his career, still had a long way to go and would continue to effect home prices in the United States.
"First of all, let's recognize that this is a once-in-a-half-century, probably once-in-a-century type of event," Greenspan said on ABC's "This Week."
Asked whether the crisis, which has seen the US government step in to bail out mortgage giants Freddie Mac and Fannie Mae, was the worst of his career, Greenspan replied "Oh, by far."
"There's no question that this is in the process of outstripping anything I've seen, and it still is not resolved and it still has a way to go," Greenspan said.
"And indeed, it will continue to be a corrosive force until the price of homes in the United States stabilizes.
"That will induce a series of events around the globe which will stabilize the system."
Greenspan was also asked whether the United States had a greater-than 50 percent chance of escaping a recession.
"No, I think it's less than 50 percent.
"I can't believe we could have a once-in-a-century type of financial crisis without a significant impact on the real economy globally, and I think that indeed is what is in the process of occurring."
The former Federal Reserve chairman also predicted that the financial crisis would see the failure of more major financial institutions, even as embattled Wall Street investment giant Lehman Brothers scrambled to find a buyer.
"In and of itself that does not need to be a problem.
"It depends on how it is handled and how the liquidations take place. And indeed we shouldn't try to protect every single institution."
On Saturday, Democrat Barack Obama's campaign seized on a warning from Greenspan about John McCain's tax plans to portray the Republican as economically reckless.
In an interview with Bloomberg Television Friday, Greenspan said the nation could not afford 3.3 trillion dollars of tax cuts proposed by McCain without matching cuts in spending.
Greenspan, a long-time friend of McCain and a Republican, said about the Arizona senator's plans to extend massive tax cuts imposed by President George W. Bush: "I'm not in favor of financing tax cuts with borrowed money."
McCain has said he would pay for his cuts by ending pet funding projects for US lawmakers' districts known as "earmarks."

Op-Ed Columnist New York Times
Financial Russian Roulette "If institutions need to be rescued like banks, they should be regulated like banks — why were we so unprepared for this latest shock?"

Published: September 14, 2008
Will the U.S. financial system collapse today, or maybe over the next few days? I don’t think so — but I’m nowhere near certain. You see, Lehman Brothers, a major investment bank, is apparently about to go under. And nobody knows what will happen next.
To understand the problem, you need to know that the old world of banking, in which institutions housed in big marble buildings accepted deposits and lent the money out to long-term clients, has largely vanished, replaced by what is widely called the “shadow banking system.” Depository banks, the guys in the marble buildings, now play only a minor role in channeling funds from savers to borrowers; most of the business of finance is carried out through complex deals arranged by “nondepository” institutions, institutions like the late lamented Bear Stearns — and Lehman.
The new system was supposed to do a better job of spreading and reducing risk. But in the aftermath of the housing bust and the resulting mortgage crisis, it seems apparent that risk wasn’t so much reduced as hidden: all too many investors had no idea how exposed they were.
And as the unknown unknowns have turned into known unknowns, the system has been experiencing postmodern bank runs. These don’t look like the old-fashioned version: with few exceptions, we’re not talking about mobs of distraught depositors pounding on closed bank doors. Instead, we’re talking about frantic phone calls and mouse clicks, as financial players pull credit lines and try to unwind counterparty risk. But the economic effects — a freezing up of credit, a downward spiral in asset values — are the same as those of the great bank runs of the 1930s.
And here’s the thing: The defenses set up to prevent a return of those bank runs, mainly deposit insurance and access to credit lines with the Federal Reserve, only protect the guys in the marble buildings, who aren’t at the heart of the current crisis. That creates the real possibility that 2008 could be 1931 revisited.
Now, policy makers are aware of the risks — before he was given responsibility for saving the world, Ben Bernanke was one of our leading experts on the economics of the Great Depression. So over the past year the Fed and the Treasury have orchestrated a series of ad hoc rescue plans. Special credit lines with unpronounceable acronyms were made available to nondepository institutions. The Fed and the Treasury brokered a deal that protected Bear’s counterparties — those on the other side of its deals — though not its stockholders. And just last week the Treasury seized control of Fannie Mae and Freddie Mac, the giant government-sponsored mortgage lenders.
But the consequences of those rescues are making officials nervous. For one thing, they’re taking big risks with taxpayer money. For example, today much of the Fed’s portfolio is tied up in loans backed by dubious collateral. Also, officials are worried that their rescue efforts will encourage even more risky behavior in the future. After all, it’s starting to look as if the rule is heads you win, tails the taxpayers lose.
Which brings us to Lehman, which has suffered large real-estate-related losses, and faces a crisis of confidence. Like many financial institutions, Lehman has a huge balance sheet — it owes vast sums, and is owed vast sums in return. Trying to liquidate that balance sheet quickly could lead to panic across the financial system. That’s why government officials and private bankers have spent the weekend huddled at the New York Fed, trying to put together a deal that would save Lehman, or at least let it fail more slowly.
But Henry Paulson, the Treasury secretary, was adamant that he wouldn’t sweeten the deal by putting more public funds on the line. Many people thought he was bluffing. I was all ready to start today’s column, “When life hands you Lehman, make Lehman aid.” But there was no aid, and apparently no deal. Mr. Paulson seems to be betting that the financial system — bolstered, it must be said, by those special credit lines — can handle the shock of a Lehman failure. We’ll find out soon whether he was brave or foolish.
The real answer to the current problem would, of course, have been to take preventive action before we reached this point. Even leaving aside the obvious need to regulate the shadow banking system — if institutions need to be rescued like banks, they should be regulated like banks — why were we so unprepared for this latest shock? When Bear went under, many people talked about the need for a mechanism for “orderly liquidation” of failing investment banks. Well, that was six months ago. Where’s the mechanism?
And so here we are, with Mr. Paulson apparently feeling that playing Russian roulette with the U.S. financial system was his best option. Yikes.

Friday, September 5, 2008

Another Astounding Success!

Now that the oil companies are doing a brisk business in Iraq, isn't it time for the leading US war contractor to come right out into the open and make a grab for what is left?
Iraq is the perfect example of the 4 decades of western Shock Therapy experiments world wide. From the electric shock treatments at McGill (that were good at breaking down but not rebuilding) to Milton Friedman and the Chicago School of Economics' early experiments in Chile, Iraq is at the apex of this practice where all of the most ruthless methods were used in concert, resulting once again in perfect chaos, a breakdown where there shall be little success in rebuilding.

Anyone who still believes that the world is not under the control of an very small group of the international elite, the wealthiest .01 percent, anyone who thinks democracy is still a viable concept without first addressing the economic power structure itself, still has their head in the sand. Martin Luther King gave his life to wake up America.

Iraq seeks to buy 36 F-16 fighters from U.S.: report

37 minutes ago
The Iraqi government is seeking to buy 36 advanced F-16 fighters from the U.S., American military officials familiar with the request told the Wall Street Journal.
This move could help Iraq reduce its reliance on U.S. air power and potentially allow more American forces to withdraw from the country than had been proposed.
The F-16, made by Lockheed Martin Corp, is the most sophisticated weapons system Iraq has attempted to purchase so far.
Late in July, the U.S. Department of Defense had approved up to $10.7 billion in arms sales for Iraq, including a $2.16 billion sale of M1A1 Abrams tanks built by General Dynamics Corp.
The U.S. recently announced F-16 sales to Morocco and Romania. Those sales, each for roughly $100 million per plane with training, related equipment and support included, offer an indication of how lucrative the Iraq deal could be for Lockheed Martin and its suppliers.
Iraq now appears determined to significantly expand the air power of its military, which has become more competent and confident in recent months but depends heavily on the U.S. for air support.
Iraq quickly has become one of the biggest weapons buyers in the world as it seeks to strengthen and professionalise its fighting force.
No one was available at the U.S. Department of Defense for comment.