September 20, 2008
Elaine Meinel Supkis
While looking up information within my own blog here, I visited March, 2007, to see what predictions I made back then. Stocks were soaring to record heights and there was only one bad, down day. All the things I talked about back then, have now come true. The ruling elites are ecstatically overjoyed with the free funny money they gave themselves as a free Xmas present. After killing the bears, they could celebrate a great victory over reality. The comments of readers at the major media concerning the bail out of Wall Street, has been nearly uniformly negative, incidentally. This will freak out the market manipulators greatly.
Entertaining little song, 'Take A Load Of Fannie Mae'
Macbeth meets three magical witches who come from a dark cave and are accompanied by lightning bolts. They tell him his future which he totally misunderstands because he is greedy for power and wealth:
1 WITCH: When shall we three meet again
In thunder, lightning, or in rain?ALL: Fair is foul, and foul is fair:
Hover through the fog and filthy air.A dark Cave. In the middle, a Caldron boiling. Thunder.
1 WITCH. Thrice the brinded cat hath mew'd.
2 WITCH. Thrice and once, the hedge-pig whin'd.
3 WITCH. Harpier cries:—'tis time! 'tis time!1 WITCH. Round about the caldron go;
In the poison'd entrails throw.—
Toad, that under cold stone,
Days and nights has thirty-one;
Swelter'd venom sleeping got,
Boil thou first i' the charmed pot!ALL. Double, double toil and trouble;
Fire burn, and caldron bubble.ALL
Fair is foul, and foul is fair:
Hover through the fog and filthy air.Exeunt
The witches do classic magic: everything is the opposite and all are one thing at the same time [in the fog that now obscures reality]. Their chant is about doubling both toil and troubles. This is the nature of the Derivatives Beast. It is now a legendary monster that has now been finally triggered with the default of the entity that is supposed to insure all the Macbeths running the banking/investment houses. This insurance was to protect them from losses no matter what happens. The concept of transferring risk to a third or fourth party who then will pay all the losses if things go wrong, was a ridiculous fiction from day one.
It was obvious to me that when there is a major economic downturn, the counterparties responsible for paying off bad bets at the International House of Pancakes Casino would simply go bankrupt. Which is what AIG did: it threw in the towel when its bets that the bettors it was clearing risks for were making bad bets. This was all very similar to throwing poisonous amphibian parts into a caldron in a cave filled with thunder and expecting French cuisine.
The desires of the US/EU/UK empire to have eternal riches via NATO menacing, controlling and killing Muslims who have oil, has failed miserably. Now, we are going rapidly bankrupt. I remember very clearly the mood in America before the despicable invasion of Iraq: 'We are going to have cheaper oil!' Bush fired anyone who told him, this war would be very expensive. The belief was, we would rush into Bagdad, settle down and pump the oil for our own benefit. Instead, the Iraqis succeeded in costing us an extra trillion dollars. We lost money in this casino. The three witches are laughing in their Cave of Wealth and Death. Witch #2, Inflation, has toured the planet and destroyed great wealth. Witch #3, Depression, is ironing her dress in preparation of taking over the surviving wealth. And Witch #1, the top witch, is Libra. She is going to finally balance her scales and will be happy when this process is done.
(CNNMoney.com) -- Stocks rallied Friday, with the Dow rising 369 points, as the government's plan to help rescue banks from toxic mortgage debt soothed investors at the end of a gut-churning week on Wall Street.Treasury prices plunged and gold prices tumbled as investors bailed out of safe-haven plays and poured money into equities, reversing the flight-to-safety trend of earlier in the week. Oil rallied more than $6 a barrel. The dollar jumped nearly 2% versus the yen, but fell versus the euro.
Every time I warned gold speculators that gold is extremely vulnerable to government manipulation, they counter with the story that gold is real money and real wealth. It is only this if one can use it to be the basis of a banking system. When bank lending and bank holding collapses, gold ends up being buried in the ground in hiding holes or graves. When the Roman empire collapsed, most of the gold became gold mosaic glass pieces and were used to decorate churches. No mosaics in rich, pre-collapse Rome were made from gold. Gold was used as money.
But after the collapse, it wasn't used for money. A gold hoard dug up by a farmer in Britain a dozen years ago was a pot filled with Islamic coins. Very few of these were intact because most of them were quartered or shaved. This was because the face value no longer matched the buying power of the coins so they were weighed on scales rather than representing future value. When gold is used as a counterweight, this is a signal that the banking system is collapsing. Note that this gold was unable to buy anything in England. It couldn't buy land, for example. Land exchanged hands the old fashioned way: killing people. Want land? You murder the fighting males and enslave the survivors.
Markets shot up since the US decided to socialize all the market systems and put it under Stalinist controls. The artlessness of this business is horrifying.
Hedge Funds Raise Cash in Rally, Wait to Gauge Effects Bailout
(Bloomberg) -- Hedge funds raised cash holdings during the biggest two-day global stock rally in history because they aren't sure where markets are headed after the U.S. moved to bail out banks and limit bets against financial companies.``The rally hurt us quite a bit'' because the firm shorted some stocks in expectation they would fall, said Chris Wang, co- founder of SYW Capital Management LLC in New York, which oversees less than $100 million. ``The best thing for us to do is shrink our books and hold more cash.''
The increase in cash indicates fund managers don't expect calm to return to markets in the next several weeks, said Bill Grayson, president of Falcon Point Capital LLC, a San Francisco- based investment firm. Some funds are seeking to protect the year's gains, while others are hoping to pare losses.
``The one thing I can guarantee is incredible volatility in the foreseeable future,'' he said.
And yet another story from last night:
John Bogle Says U.S. Government Seems `Punch Drunk'
(Bloomberg) -- John Bogle, who created the $106 billion Vanguard 500 Index Fund in 1976, said the U.S. government appears ``punch drunk'' given its proposals to rescue the financial system.``We're playing a game of casino capitalism, interfering with the way the market is working,'' Bogle, 79, said in a telephone interview today from Valley Forge, Pennsylvania. ``The government seems punch drunk. It doesn't seem systematic.''
Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke proposed removing troubled assets from banks' balance sheets last night, while the Securities and Exchange Commission temporarily banned short sales of financial firms. The plans followed the government takeover this week of American International Group Inc., the biggest U.S. insurer, and its bailout of Fannie Mae and Freddie Mac, the largest mortgage financiers, two weeks ago.
Yes, this is fuel on the fire that makes the three Witches' cauldron boil harder. It has DOUBLED our future toils and troubles. The first story here mentions how the dollar became stronger based on the US killing the entire concept of Wall Street capitalism. Now we are in a total fantasy state and guess what? The Japanese carry trade resumes! Not only that, Europe is very anxious to make the euro weaker vis a vis the dollar. Not any other currencies. This is because the US is the ultimate destination of all global trade. Everyone wants this including the army of Macbeths who run our economic system and dream of ruling all of it. After all, the three witches promised them this future. Time now to visit the past. I am rather proud of my predictions and analysis. It is rather shocking reading from a year and a half ago:
Culture of Life News, March 21, 2007: Funny Money Fuels Corporate Profits
But the temptations of the carry-trade/yen/dollar/0.5%/5.45% Ponzi scheme lures all our rich bastards into playing this rigged game that is destroying our industrial base even as it is setting up the entire planetary banking system for a terrible collapse.Because all this wealth depends upon Americans being forced to 'save' money by paying ruinous mortgages for grossly over-inflated properties. This hidden tax on our economic system was allowed to grow because for a brief while, the over-inflation of the housing assets allowed people to go into debt to buy other things. Now the American homeowner, buried under a mountain of debt, cannot soak up any more.
The only way for this to work was for the markets to shoot up higher and higher while interest rates go lower and lower due to inflation being hidden via the yen/dollar rigged game which requires Japan to have no inflation at all even as there is raging inflation hidden carefully from view by the simple expedient of beggaring the Japanese workers!
Now, with interest rates rising because the hidden Japanese inflation is now quite obvious and because the dollar, hidden from view when the Feds committed the crime of concealing the vital M3 numbers that tell us how much money they are printing, inflation is raging nearly out of control in all areas where one can't cut spending: medical care, energy and food.
In Japan, they dealt with this very brutally: cutting energy use in draconian ways, importing foreign food, driving down the profits of Japanese farmers who are now going bankrupt and thinking about joining the smart Korean farmers who are fighting 'free trade' with great violence. The loss of health care is sweeping all the industrial nations as the ruling elites claim, staying alive is bad, profits are above all, important.
The cartoon is very appropriate today, isn't it? Japan was worried to death when the yen strengthened to 96 to the dollar last fall. The hysteria there was very intense. It took all year for the Japanese to force the yen downwards to even just 110 to the dollar, they said, one year ago, they wanted it to be 120 to the dollar. They are a long way from that goal but are relentless in pursuing it. The US should be fighting this but is not. Our rulers also want the Japanese carry trade. This is why, when the US was pounding China over these same monetary issues, the US was NOT pounding Japan who has the identical situation with the dollar!
Why isn't China the source of carry trade too, one may ask. It is simple: Japan has a totally fake banking system that is based on the fiction of Japan being in a depression. Japan's GNP has grown greatly the last 5 years of nonstop growth. And there is very real inflation in Japan. They LDP rulers simply ignore all of this. China could be a support of the carry trade, too, if they wanted. All they would have to do is pretend there is no inflation! If China's interest rates were much lower than the US, this would be the result But China has sensible rates so the carry trade won't happen.
Absolutely no one in charge of any banking system is trying to stop the Japanese carry trade. This is because it is the FULCRUM of all global lending. It is the well-spring. It is the caldron that is boiling the water which the three Witches stir.
Here is another story from March, 2007:
What on earth is 'normalacy'? Only after giant market crashes, do we ever see a period of stagnation. The post-1929 market didn't reach previous highs until the end of the 1950's and that, only after a huge hunk of humanity was eliminated in the most violent spasm to cross the planet earth: WWII.What worries people but which they desperately discount is that terrible thing: a flight from the dollar. Most nations don't have all that many dollars to flee from but there are several who certainly do. Russia and Japan, for example. Both equal China's FOREX reserves. Since no nation comes close to China's holding of dollars, this means any flight from that currency will probably begin there.
And one has to ask how people like the Rothschields keep their wealth for so long, not to mention the House of Hanover in London. They don't take risks in down markets. And they have very long family memories.
So far, the Chinese are content simply to make this situation much, much worse. Anyone looking at the IMF numbers and watching the USA slide from the number one country with reserve funds to NUMBER 13 and only without including Saudi Arabia, for example, who has more reserve funds than we have---this is a historic moment: the empire lost control of its own money and can no longer guide its own financial affairs. This is dangerous, to say the least.
Many readers want to know about the ruling elites. I keep saying, they tend to be people who have long family memories. Most humans don't know much about anyone past at best, two generations. The Jewish people are an exception to this rule. There have been huge gaps in their knowledge of the past such as after the Roman diaspora. The branch that comes out of southern Russia has particularly murky years from the Dark Ages to 1800 AD. But in general, the push is to remember as much as possible. Thus, the Bible.
The biggest history book written in Rome at its height was written by a Jewish historian, for example. After Caesar was assassinated by frantic Senators, no Roman put pen to paper to write history except for Cicero and a vengeful Emperor had him beheaded for this. After these examples, historians decided to go into a new profession. Back to the elites: they remember a lot of stuff. So why do they end up causing huge crashes?
It is simple: as they move majestically through history, the elites amass power and money. But they have an army of people who want to do this too, following in their wake! These people will break all the rules, make all the mistakes, over and over again. So why are Jewish people making such huge mistakes when they have a superior family history memory bank?
Ah, this is a riddle. This is where the gnome business comes in: lusts and desires overwhelms sensibility. Christians and Muslims as well as Buddhists, etc all go nuts the exact same way. Since these three great religions are all anti-interest rates and anti-compound interest, they all depend on enslaving people in debts in other ways. Mostly via sword as I mentioned above. One day, you own your land. The next day, an invader now owns the land and you are a slave. See?
But the Jews couldn't do this after they were conquered by various invaders. They made their way via their collective wits. Which is why they end up heavily involved in banking. Killers don't need banks. Banks are civilized. The problem is, everyone is prone to becoming a killer if they get power. We see this clearly in the Jewish community as the suppression, theft and killing of Muslims in the Holy Lands clearly shows. This is making the Jewish community lose its wits and collectively, they are becoming stupider by the year.
Soon, they will be as dumb as royalty in Europe or ancient Chinese emperors. Already, their backing of and association with the Bush clan, etc, is dumbing them down. So as the Jewish community dumbs itself down thanks to the transformation from survivors of tyranny to tyrants, the entire global banking system which they worked so hard to strengthen and use, is collapsing. This is because they want the US to suppress a billion Muslims. And this is pure insanity. So it is one of the underlying driving forces of this economic collapse we are suffering today. So long as the US is used as a machine to fight Muslims so Jews can take the Holy Lands, we will see only economic destruction as bin Laden quickly figured out 20 years ago.
Note: bin Laden's family is very close to the Bushes and Osama listened to and watched all this from birth until he grew up and became an associate of the CIA.
On top of all this, there are the forces of nature which the three Witches are invoking when they chant their spells:
Culture of LIfe News, March 16, 2007: Understanding Classic Boom/Bust Cycles
All bubble/peak profiles look similar because the psychology coupled with the technology/inventions that feul bubbles create not a smooth bell curve but an over-hyped/panic/recovery/failure four-stage profile. In the stock market, these eruptions and collapses are first triggered by new technologies.
*snip*
This man wants everyone to think this is still a 'bull market'. He points to a sudden drop just a month ago as proof, things are OK. Because the market then shot up after that pause, he imagines it will do this forever. The graph at the top of this page shows how all bull markets run: there are two significant drops before the big, off the cliff moment. Refusing to see this, many bullish commentators pretend these are aberrations and not signs of the coming collapse in asset values.
Understanding the psychology and process of how humans operate is important. We cannot help but create bubbles and all crashes of all systems, types and manias are the same. When tracked and observed, they follow this track with greatest fidelity. No one of any religion or ethnic collective memory can fight the forces of nature that drives humans to always create this graph above. Whether it be articles of clothing, methods of burial, collecting Beanie Babies, printing money, stock markets, etc, the story is always the same. The same rise and crash happens.
Clever humans have noticed this for quite a while. Kotlikoff is one famous economist tht has hammered away at this business of cycles:
Generational accounts indicate not only what existing generations will pay, but also what future generations are likely to pay. The burden on future generations is determined by working through the government's "intertemporal budget constraint." This constraint says that the present value of the government's spending on goods and services cannot exceed the sum of three items: (1) the government's net wealth, (2) the present value of net payments to the government by current generations, and (3) the present value of net payments by future generations. Translation: the government cannot spend more than the sum of what it has and what it can raise. At any point in time we can project the present value of the government's spending and also estimate items 1 and 2. By subtracting 1 and 2 from the present value of government spending, we can determine the aggregate present value taken from future generations. By one set of estimates, as of 1989 the present value of future government spending was $25.4 trillion, the government's net wealth was—$0.5 trillion, and the present value of net payments of current generations was $21.2 trillion. This left $4.7 trillion to be paid by future generations.An analysis of U.S. generational accounts for 1991 indicates that unless U.S. economic policy is decisively altered, the typical member of future generations will end up paying roughly 71 percent more over his or her lifetime than will the typical member of current young generations! This figure is above and beyond the fact that future generations will pay more because their incomes will be higher due to economic growth. This 71 percent figure is extraordinarily high and indicates that U.S. economic policy is, generationally speaking, very badly out of balance.
Passing the buck is a great way to party today. In the past, the Jewish people had to always be aware of the potential for 'rainy days' because the rain poured down on their heads with great fury if there was political or economical instability. The cruelty of the other religious majorities was intense and often fearful. So caution was a very strong force in Jewish communities. Ideal bankers are cautious. This is why many Jewish people could be great bankers! It was a VIRTUE born of historical necessity.
Ever since Israel was founded, this has been tossed aside in favor of using the sword to gain stability and power. And it is part of the destruction of the global banking system. Now, let us go back to Japan: here is a nation that, within just one generation of having no real money and feudal serfdom, became a huge industrial/banking power in Asia back in 1900. Japan didn't do this the Jewish way. They did this by defeating rivals on battlefields. Much of the banking system was fed by defeating Russia in the 1890's and collecting reparations. Then, Japan colonized Korea and attacked China's industrial base in Manchuria.
To the Japanese, banking is a tool of imperial power. They were defeated in WWII so they have gone off to use banking as their weapon of choice. This is why they don't care if their people can't save money. They don't care if no one in Japan can get loans. This is fine with the rulers who focus on getting others to use their banking system even as they maliciously drop rates to 0%. This is why the Japanese carry trade is protected by the government and encouraged! It is COLONIALIZATION VIA DEBT.
I have been obsessing over the FOREX reserves of all nations for a number of years. It is a signal of what is going on, a clue or rather, it shows weaknesses and strengths. So it is good to repeat some information I published over a year ago.
Culture of Life News, March 14, 2007: Housing Woes Can Wreck World Economy
Location, location, location. The economic and geographic facts are simple: China, Japan and Russia (!!!!) all have FOREX funds that absolutely dwarf our own. Our Reserve Chairmen have both been idiots who couldn't reserve a table on Friday night at Windows on the World...oh, that is dust. Gone like so many things.These three, two of whom are communist or were communist, hold over $2.4 trillion in FOREX reserves! This is just mind boggling when we realize our own nation holds less than $66 billion. Yes, this is just one quarter what they own. This jaw-dropping information is left out of all chats concerning our fiscal condition. Instead, our leaders prefer to talk about how small our deficits and debts are compared to our legendary GNP percentages.
This is dumb. Much of our GNP is buying and selling stuff made overseas that is contributing to the massive rise in FOREX dollars flowing to foreign nations as we spend wildly. We are number 13 on the IMF list and this is due only to the fact that the biggest oil kings and sheiks are excluded. You can bet, they are up there, too.
Overall, the other FOREX funds in aggragate dwarf the world's biggest empire. Namely, we outspend everyone when it comes to the military. All of them together, in fact! Yet we are one of the poorer nations, even France, those 'surrender monkeys' is far ahead of us.
So is tiny Singapore. And Hong Kong. These are city-states!
The US led this initiative to tell all other nations, they didn't need huge FOREX reserves. The US now is in total collapse and has no reserves. No nation can exist without reserves! The queer threads I am trying to weave here are important. The US ended up with no reserves because we decided to live by the sword alone. We feel, deep inside, no one can collect our debts or make us pay up because we are the world's #1 military power and many of our creditors either are living under our military domination like Europe or are threatened by us like non-nuclear Muslims. Or Japan who we protect for free.
The mistake that was made was for the US to fall behind nuclear China and nuclear Russia in reserves. Both of these nations CAN collect our debts if they make a union with other debt-holders like OPEC. This is changing the face of international power and is a possible trigger for a massive global nuclear war. Which is why I worry about this. The Japanese and the Jewish people both want the US to be a great military power that will keep the Chinese, Russians and Muslims all at bay. Instead of using superior technological processes married with superior banking skills, the business is now, 'How can we run everything in the red?'
For military systems require deficit spending. Wars are expensive. Banks love to fund wars for it makes them rich. And the caution of Jewish bankers has been thrown to the historical winds as they think, if they fund WWI, WWII and now, WWIII, the prize of sole ownership of the Holy Lands will be theirs! And alas, this coincides with Christian beliefs of the Apocalypse. Palin is a huge believer in having the Apocalypse. She is the Whore of Babylon.
Back to today's news:
SEC Considers Revising Shorting Ban in Options Market
(Bloomberg) -- The U.S. Securities and Exchange Commission may revise its ban on short sales to add financial companies and carve out an exemption for brokerages that pair off brokers in the $1.6 trillion U.S. options market.The commission may add companies after firms such as M&T Bank Corp. were left off a list of 799 insurers, banks and securities institutions barred from short sales. The staff also will recommend that options market-makers be exempt from the ban, easing concern the rule would raise investor costs, the agency said in a statement today.
``If they don't fix it, there just won't be an options market on Monday,'' Steve Claussen, chief investment strategist at OptionsHouse LLC, the Chicago-based online brokerage unit of options trading firm PEAK6 Investments LP. ``If they have an exemption for market-makers that they're allowed to sell stock short, then they can provide a market in the options.''
The options market is dead. The malicious inner-party games going on as the biggest houses protect themselves while leaving rivals out in the cold is a sign that this rescue operation is PHONY. It is designed to protect only a handful of people. Many of whom want a New World Order with Israel on top. Not that the Japanese don't want this, too. With Japan on top. The US public is told, we will be on top but everyone knows this is a lie. We get to hold all debts and die in all future wars.
The final death of all hedge funds is here. They are being executed by the biggest operators. Who have hedge funds but now find these worthless. All hedge funds not connected with the biggest players and bribers of Congress will now be tossed into the three Witches' stew pot like so many toads and frogs. I see everyone at the top simply abandoning the concept of markets entirely. They will now play total power politics. This is why there is this huge push to move all bad investments onto the backs of the US taxpayers.
Here is another story from last night about everyone trying to get the SEC to forbid short selling:
(MarketWatch) - Several companies tried to climb aboard the Securities and Exchange Commission's short selling lifeboat on Friday. Some of them may succeed.
Under pressure from Wall Street executives, the SEC temporarily banned short selling of roughly 800 financial-services stocks on Friday to try to halt a market meltdown.
*snip*
For GE, financial services make up about 45% of its overall business. A person familiar with the situation said the company has talked to the SEC about possibly being included on the list. American Express, one of the largest credit card companies, said it was just beginning to look into the possibility of being added.
CIT Group, a leading commercial lender in the U.S., "made a formal request to be added to the list," spokesman Curtis Ritter said in an email to MarketWatch.
A Capital One spokesman didn't return a phone message left seeking comment on Friday afternoon.
Guaranty Financial Group Inc. (Ticker: GFG) said Friday that it should be added to the list too. Guaranty said it is the second largest publicly-traded financial institution holding company headquartered in Texas and one of the 50 largest publicly-traded financial institution holding companies based in the U.S. ranked by asset size.
Again, I see in comments at the NYT and Washington Post, 100% fury over these plans. I don't think people are being fooled. John McCain is still in the running only because there is a huge number of Americans who want the Apocalypse. And Obama is being shoved towards this, too. He is being strong-armed into endorsing economic collapse and the Apocalypse. This is very sad, of course. the operators of our systems are dead-set on getting their own way even if it kills America.
The $1 trillion question: Will this gigantic bailout work?
This is what we might call the $1trillion question. That's $1,000,000,000,000, by the way. It is a little like surgery. The US government has amputated the gangrenous leg of the banking system to save the patient. But it is now preparing to graft the infected limb on to the body politic of America. The US taxpayers will be lucky if they do not feel distinctly unwell as a result of this little experiment.The truth is that simply buying the banks' worthless securities has been an option, if an unpalatable one, for the authorities since the credit crunch began a year ago. All the plans to lend against these assets, such as the Bank of England's Special Liquidity Scheme, and other "injections of liquidity", were temporary solutions, born out of a hope, if not an expectation, that the crisis would not be prolonged.
We know better now. What the American authorities have done is the only sure way to protect the banking system against further destabilisation. Short-selling or not, left to their own devices, the markets would sooner or later force more banks into the arms of the taxpayer anyhow. It is a sad day when hard-pressed citizens find themselves subsidising private banks for their stupid mistakes. But that is what's happening in the US, and it will surely be done here. The Bank of England hates the notion; but Gordon Brown may well feel that he has no choice.
See how the toil and trouble double? England has no choice but to accept the new burdens! No one is being arrested! Fraud and economic crimes galore and not one person is arrested! In China, the milk scandal on top of the school collapse scandal roils the upper ranks of the communist party. But here in the West, we have nothing yet! Politicians are falling but they are simply going to move into the system and make money via bribes like Tony Blair and Bill Clinton did, both amassed huge fortunes this way. President Eisenhower didn't die with $200 million in his bank account. Reagan did. From Reagan, onwards, all our leaders have been owned by the international bankers. They hate Jimmy Carter, our last real President.
US banking: Merrill Lynch boss to get $11m payoff after nine months' work
Merrill Lynch's newly recruited chief executive, John Thain, stands to share a $200m (£111.4m) payout with two senior lieutenants for less than a year's work which culminated this week in the bank surrendering its 94-year-old independence.The Wall Street bank known as the "thundering herd" agreed to a $50bn takeover by Bank of America on Monday after a hasty 48 hours of negotiation. The talks were prompted by fears over banking stability arising from the collapse of Lehman Brothers.
Thain, who was previously the head of the New York Stock Exchange, joined Merrill in December with a mandate to steer the bank out of financial trouble. When he arrived, he was given a $15m signing on bonus. If he leaves in Bank of America's takeover, he stands to get a further $11m in accelerated stock payouts.
Three men who supervised the bankruptcy of Lehman will be REWARDED, not put in prison! $200 million for screwing up! Maybe I should constantly make mistakes in my analysis and I might be paid millions. Instead, I tell the truth and only get the kind, loving support of readers here. By the way, thank you, thank you, all of you!
But these guys get paid to lose money. They win no matter what. Spreading destruction, they walk away with their pockets stuffed with money. We get to fix the messes and they don't even pay taxes. There is no political will to stop this. These guys will get their tools in DC to pass rules and laws that protect them but not us. They are feeding us to the sharks, they ARE the sharks and they should all be arrested and charged with economic mayhem crimes and treason. For this is going to destroy the US. We can't afford to foot the bills these guys are dumping into our laps.
From a very fine web history of the Great Depression, done as a timeline:
1931 opened with the usual estimates of approaching recovery based on such shallow analyses as the length of previous depressions (declining stages seldom longer than 18 months) and the "unsatisfied backlog of consumer and industrial needs" supposedly accumulated during the previous year of restricted purchases. On January 11, 1931, a N.Y. Times editorial oozed quiet confidence that the worst had occurred and had been sustained, with all weaknesses squeezed out and, therefore, slow but sure recovery must be imminent.All economic weaknesses may indeed have been squeezed out, but what of the weaknesses in political economic policy? Concerning these, the N.Y. Times now began to give prominent exposure to those with a different message.
Dr. Joseph Schumpeter blamed 90% of the Depression on the expansion of productive capacity of agriculture and industry due to Great War "abnormalities" such as payments of "non-commercial debts of a commercial character," the flight of capital from some countries, and comparatively high wages paid in some countries.
Albert H. Wiggins, chairman of Chase National Bank, called for the U.S. to reduce war debt obligations. He stressed economic interdependence - the need to restore world trade as a pre-requisite for business recovery within the nation. He also called for more flexible prices and wages to speed the economic readjustments required for recovery.
The role of WW I in causing the Great Depression and then preventing recovery was beginning to come into focus in the public press.
The German Reichstag began its increasingly urgent pleas for substantial revision of Germany's reparations obligations.The stock and domestic bond markets staged impressively steady rallies in anticipation of the revival that would come with the spring business season. (In those days before air conditioning and modern snow removal, the economy had a noticeable seasonal rhythm.) As the auto manufacturers began production of their new models, steel production climbed and business leaders, bankers and economists joined yet once again in the "confidence game." For once, the oft-burned and discredited politicians were generally mum.
The stock market advance continued side by side with a continuing decline in brokers loans. However, there was so much unused money around that brokers were now increasingly able to finance margin accounts without borrowing from the banks for this purpose. The brokers loan statistics thus lost much of their value as an indicator of the extent of margin trading.$570 million in new bonds were floated in three weeks on this sea of optimism. A substantial gold outflow from England was stemmed in January. In February, Peru bonds fell sharply on news of a possible default. The price of silver continued to fall, hitting 25 3/4 cents per ounce on February 16, 1931. The N.Y. Times reported that, of 98 business lines listed for N.Y. City, NONE were doing better than in 1930, 29 were about equal with 1930 levels, and 69 were worse.
A year of declining business was being increasingly reflected in declining dividends. Stock prices that had been at "investment" levels based on dividends supported by 1929 earnings were now shown to be too high based on reduced dividends from reduced 1930 earnings. (In those days before high marginal tax rates, dividends were a desirable form of return on investment.)
*snip*
In early March, $2 billion in U.S. Treasury issues of various types, offered at low interest rates, were quickly oversubscribed. $75 million N.Y. Central and $50 million Penn. RR. bonds were also quickly oversubscribed. There was clearly lots of money around looking for work even at low interest rates - just as long as the risk was minimal. (After all, with the general price decline at about 12% per year, even 3% interest meant a 15% real return on investment.) U.S. and high grade domestic bonds were hitting their highest levels since 1924, but secondary issues were in decline.Over 50% of the industrial companies on the NYSE were using excess cash to buy their own stock at low 1930 and 1931 prices. Some retired it and some kept it as treasury stock for future use in mergers or for other purposes. This reduction in the number of floating shares, similar in an opposite direction to the flood of new issues floated during the 1929 boom, makes the decline in share prices even more glaring. It also demonstrates that even many business insiders still did not understand the nature of this Great Depression.
*snip*
On May 7, 1931, the Federal Reserve Bank cut its discount rate to the all time record low of 1 1/2%. This caused a slight flurry in the securities markets, and then the decline resumed. After all, ALL business indices were DOWN.Commodity prices were slipping steadily lower. Low interest rates stimulated nothing but savings accounts. These were still paying 4% to 4 1/2% interest, and constituted excellent "investments" under current conditions. However, since the banks were now getting less than this on government bonds and other high grade loans, this interest rate was expected to come down, too.
Just as all charts and graphs follow the same historic curves, the details of these bubbles and crashes do the same thing. This is why it is important to review this constantly since we are moving along these timelines. We are now in 1932 and heading towards 1933 when things totally collapsed.
Wall Street Journal: Stocks Leap as Feds Fashion Aid Plan
While hurting hedge funds and other momentum traders, the government's intervention through relieving banks of toxic mortgage bonds, backstopping money-market accounts and temporarily banning short sales of financial stocks may finally stem the panic on Wall Street and turn the stock market and the banking system around. One veteran trader compared the action to John Pierpont Morgan spearheading the move by bankers to bail out of Wall Street in 1907. The government appeared determined to prevent the ripple effects of financial markets from dragging the "real economy" into a depression, the trader said."I would be amazed if we haven't seen the bottom here," the trader said. "It's very good for the markets (but) it's very bad for the people who've taken the point of view that things in the U.S. and globally are fundamentally so bad that they have to be unsound at much lower price levels. The authorities are saying, 'not so fast.'"
They are NOT trying to protect the 'real economy'. They are trying desperately to protect their own ill-gotten gains. If they have to murder the entire economy, they will and they are doing this. The ripple effects are like Hurricane Ike's waves: utterly destroying everything in its path. Even sucking the land out to sea, leaving everything underwater. Indeed, they even use the word, 'Underwater' to describe being in debt more than something is worth.
Ex-Finance Ministers Offer U.S. Economic Advice
When the U.S. Treasury stepped in to save Fannie Mae and Freddie Mac this month, the public got a reminder of just how interconnected the economies of the world have become. What began as a problem in the U.S. mortgage market, with people borrowing too much to buy houses here, ended up threatening to drag down the entire global economy.With the news of the Fannie and Freddie bailout still unfolding, former finance ministers from around the world met last week to discuss global economic stability. Some of them had a polite suggestion for the U.S., namely that a little international advice might have helped stave off the crisis.
"Now I think the time has come," said Yashwant Sinha, former finance minister of India. "After the crisis here ... the U.S. should accept some monitoring by the IMF." Sinha thinks an IMF review might have sounded an additional warning about America's still-unfolding mortgage crisis.
*snip*
The U.S. Treasury says America has now agreed to get a stability assessment from the IMF. The announcement didn't get much attention, but officials at the IMF expect to start examining U.S. finances in the next couple months.
The IMF can't tame the US beast because we still run the IMF. This won't be fixed by invoking proper international bodies to move in and tell us how to behave. Many of these international organizations were set up by the real rulers after WWI and WWII in order to keep the British empire afloat. And to keep money flowing towards London. Now, London is going under thanks to the US sinking. Both were used to fund colonization of Palestine which is a tremendously expensive and explosive operation that is doomed to failure due to simple population dynamics. Namely, the one thing Palestinian women can still produce in prodigious numbers are sons seeking revenge.
Just as every 'Taliban' the US kills is replaces by 7 sons seeking revenge. In Europe, Japan and even the international Jewish community, births are dropping like rocks. Only the Hassidim are giving birth in high numbers and they want the Apocalypse. So we are stuck in this system that is very unstable and has many bad elements in it and it is sociological, ecological and economical as well as historical. All these forces are converging.
Toil and trouble doubles.
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