Elaine Meinel Supkis
75% of the US public didn't support the Bank Bail Out TARP coup. Yet the vote was somewhat close in Congress. This shows the yawning disconnect between our representatives and the public. The terrible collapse predicted for Monday was merely a fall in stocks and banking gnomes refusing to trust each other...HAHAHA. No trust amongst thieves! Anyway, stocks fell across the world since everyone was hoping that the US public would foot the bill for the entire planet's market systems. Time to examine this and predict what will happen next.
(Bloomberg) -- U.S. Treasury Secretary Henry Paulson said he will work with Congress to salvage a $700 billion rescue plan after the House of Representatives rejected his initial proposal.
``We need to work as quickly as possible; we need to get something done,'' Paulson told reporters at the White House after meeting with President George W. Bush. ``We believe that our plan, and the plan that we developed with congressional leaders and worked so hard, is a plan that works. And we need a plan that works.''
Damn right, 'We need a plan that WORKS.' But Gollum's plan won't work. Or rather, the work it will do will work for Goldman Sachs and JP Morgan but NOT for the people who are going to be on the hook for paying for this wretched plan. And this is what the plan is: making a bunch of life rafts for the ruling elites so they can paddle away while the Titanic sinks!
I can see why poor Paulson is peeing in his panties over all this! His phone is probably ringing off the hook as all his super-rich buddies call him, fangs dripping with blood. 'There will be BLOOD IN THE STREETS,' they shriek. Well, what they think as 'blood' isn't blood at all. The bloody streets come later when angry workers go hunting for them. They are talking red ink here. And their solution is simple: more red ink so they can use this to discharge their own red ink. They want a red ink transfer. So they get wealth and we get the bad debts.
World markets fell because the expectation of goodies collapsed. Let us not forget what happened the week before: stocks were certainly NOT falling at all! Goodness gracious. In anticipation of this tsunami of goodies that would be showered on them, all the gnomes and trolls and hell hounds celebrated. They were absolutely certain, Gollum would get the Ring of Power and then would use this to command the US public to buy garbage and hold it indefinitely or sell it at a loss to the US public, not to these creatures of the Night.
Instead, this silly coup belly flopped. The leadership of both parties supported this coup, of course. They are all trolls, gnomes and traitors, after all! Every single one of the negotiators of this dreadful TARP bank bail bill are multi-millionaires. Their sob story that passing this bill would protect the little people was fake.
Protecting us involves not dumping massive mountains of future debts on our children! I hope my beloved children can afford to protect myself and my husbands from the ill winds of being old as well as not being in debt when I am old so that there isn't an excess burden but that my home has full value equity! So if the gnomes dump trillions of debts on top of my children's future incomes, this destroys not only me but them! So I can't let this happen. I am FURIOUS that Congress merrily OKed huge spending bills that bust the budget to the tune of nearly a trillion dollars.
Congress can't pass this bill. Period. If they are so damn interested in fixing this ugly debt mess they created, they can start passing balanced budgets and impose tariffs and barriers so the flood of imports either slows down dramatically or we get enough money from an import tax so that THAT balances our budget! Got that?
It is utterly, stupidly simple. We won't shut out imports, we TAX the damn stuff and this INCLUDES OIL. Then, we see our government coffers bulge big. Right now, the US taxpayers are subsidizing imports by not taxing them. We, in turn, are passing all this along to our children by refusing to fund things fully. This cannot go on. By definition, it is unsustainable and it is destroying America.
Even if we EXPORT a trillion dollars of goods, if we import TWO trillion, we are a trillion in the hole! The rise in exports isn't stopping the flood of imports. GADS. This is the easiest thing on earth to understand and our government and media steadfastly refuses to understand this. Remember when emailing or phoning your Representatives, use stories like this one to read off the talking points. Tariffs and taxes on imports are GOOD. They will save our nation. If this starts a trade war....SO FUCKING WHAT!!!! WE ARE IN THE MIDDLE OF A TRADE WAR AND ARE LOSING, BIG TIME, ANYWAY!
Sigh. Isn't that easy? We can see why I am so unpopular in DC. Congressmen are not happy to see me. I irritate them and turn their world views upside down. Well, we all must turn them upside down! Or we all suffer the fate of being sucked down that toilet Ross Perot talked about so many years ago.
The US trade deficit has grown to $US700 billion, which of course is money not spent on US goods and services. This has killed off well paying jobs, has slowed the economy and created unemployment.
HAHAHA! There it is again! That $700 billion is all over the place! This is the amount of our budget deficit. It is the amount of our trade deficit. It is the amount of the Pentagon's budget. It is a very interesting number that was echoed yesterday in the stock markets. This pesky $700 billion is obviously a MAGIC NUMBER. And therefore, a herald of sorts. Like a trumpet blowing in our ears. And I hope it has woken up the American people.
Here is an excellent read from the Mises Austrian Economist people:
As if fighting inflation, smoothing out the business cycle, and saving the world from economic crises were not enough, central banks are being advised to include another objective in their mission: the purchase and management of stock portfolios.
The Washington Post reports that former Treasury Secretary (and soon-to-be-former president of Harvard University) Lawrence Summers "is advising some of the world's biggest holders of US Treasury bonds that they ought to find much better ways to invest their money." Summers says that by holding large portfolios of US Treasuries, central banks are passing up more lucrative investments in the stock market.
To make sense of this proposal (if indeed it makes any sense), it is first necessary to understand how central banks came to hold so many reserves, and why the majority of their reserves are currently held in the form of US government debt. From there, Summers's proposal is a small and apparently logical step.
I often argue with them. But this posting is quite right and should be passed around. There are so many fine minds out there! Virtually none of them are noticed by the top millionaires who run America. But if more of us read all of this, the more we form an alternative consensus. And this is certainly happening! If 75% of the US public can be so much at odds with the faux leaders of Congress and the White House including both Tweedle dumb and Tweedle don't candidates, then this is a GOOD THING.
The media will bend all its might to thwart this awakening. The media will twist and turn like a snake. The NYT and Washington Post both support this stupid TARP business. The Wall Street Journal is foaming at the mouth with rage over being thwarted. But we have the internet.
In Congress, at the party, the Congressmen there began to talk about the internet. They want to control it, of course. This began a heated debate between myself and them. Censoring us is a tool used by the rulers to prevent information from passing around. Lies can be passed around. But so can TRUTHS! And the truth is covered up by the mainstream media and is exposed online even as some online use this power to lie and tell stupid stories that have no real foundation or make up stuff out of thin air.
We get to pick and choose which reality we want! Not be forced into a faux reality by the media and by corrupt political leaders who gain power by eliminating choices.
(Bloomberg) -- Rates in the $7 trillion-a-day market for borrowing and lending securities show that the logjam in credit markets is approaching the level seen after the March collapse of Bear Stearns Cos.
Securities that can be borrowed at interest rates close to the Federal Reserve's target rate for overnight loans between banks are called general collateral. Notes and bonds that are in the highest demand in the repurchase, or repo, agreement market are called ``special'' by traders because rates on loans secured by these securities are lower than the general collateral rate.
The CHART OF THE DAY shows the spread of the general collateral repo rate below the Fed's target rate of 2 percent. The gap, which averaged 0.06 percentage point in the 10 years prior to August 2007, when subprime mortgage losses spread, is now 1.25 percentage points. A wider spread indicates a greater scarcity of Treasuries. The spread reached 2.05 percentage points on March 19 after the central bank engineered the takeover of Bear Stearns by JPMorgan Chase & Co.
When central banks have faux interest rates so they can encourage excess lending, we get this sort of mess. All the 'fixes' do is make things worse since all fixes are aimed at increasing lending when lending can't increase because all systems that want lending are too deep in debt! AH! Isn't that queer?
So reality is imposed despite this. Putting the US government an extra trillion in debt so that banks can churn out more debts is...INSANITY. It is IMPOSSIBLE. It is...EVIL. The extremely ancient story about the magic mill built by the gnomes that then kidnap the Frost Giant's daughters and enslaves them to force them to grind out gold, comes to mind. So the girls were hustled aboard the gnome's ship. There, the poor girls ground and ground. The gnomes wanted more and more. Finally, the girls protested and began to sing a dire dirge. This magic song suddenly caused the mill's internal magic to switch in an eye blink as fast as lightning from grinding gold to grinding salt. The heavy salt sank the ship.
But it continues to grind to this day which is why the oceans are salty.
The system is reversing. And this can't be stopped by doing the very things that caused the system to reverse. The good American people are being lied to. They are told, if we double our national debt, we can continue to over consume like in the past. But this can't go on. We are nearing the end. That is all there is. The more we try to continue in the teeth of all this, the worse it will become later. If we stop now, we will be OK in the long run. If we continue, we will be destroyed.
(Bloomberg) -- Money-market rates in Europe jumped to records after the U.S. Congress rejected a $700 billion rescue plan for financial companies, heightening concern more banks will fail, and as lenders hoarded cash as the third quarter ends.
The euro interbank offered rate, or Euribor, that banks charge each other for one-month loans climbed to a record 5.05 percent today, the European Banking Federation said. Rates on three-month loans in dollars were as high as 10 percent as of 10:50 a.m. in London, said Ronald Tharun, a money-market trader in Stuttgart at Landesbank Baden-Wuerttemberg, Germany's biggest state-owned lender. The dollar Libor-OIS spread, a gauge of the scarcity of cash, advanced to a record. Rates in Asia also rose.
``The money markets have completely broken down, with no trading taking place at all,'' said Christoph Rieger, a fixed- income strategist at Dresdner Kleinwort in Frankfurt. ``There is no market any more. Central banks are the only providers of cash to the market, no-one else is lending.''
The natural interest rate must rise! It is woefully low. Far too low compared to global inflation. Even as commodity prices fall, this isn't a sign that the world needs more debt. The world needs more CAPITAL and this is earned via LABOR. Labor, unlike mere commodities, involves levels of VALUE-ADDING which, coupled with union organizing raising wages, allows the workers to intercept profits and turn it into COMMERCE. Namely, buying things.
Depressions happen when the WORKERS can't get the profits! Japan has a queer depression going whereby the workers get nearly no rewards and can't buy hardly anything while the industrialists are swimming literally in golden bathtubs and making record profits, the greatest profits on earth! This is destroying Japan, of course.
Most Americans think Japan is like it was post-WWII with the bosses living sober, cheap lives and workers get life-time employment with good wages. That was destroyed after 1994 and been replaced with a repressive society that is seeing a huge gap between the top and bottom. This is why the prime ministers are falling like leaves in Fall every year, it seems. Eventually, the workers might waken and overthrow the LDP.
(Nikkei)--The recent Wall Street crisis appears to have prompted Middle Eastern sovereign wealth funds to rethink their strategy of placing large portions of their petrodollars in U.S. stocks.
Bader Al-Sa'ad, managing director of the Kuwait Investment authority, said Tuesday it is the responsibility of each country's central bank to rescue financial institutions, stressing that the KIA has no intention of helping U.S. banks.
He also said he thinks the crisis in the U.S., Europe and Asia will create investment opportunities in various areas, such as the real estate and financial sectors, indicating that the KIA will review its portfolio.
One of the largest SWFs in the world, the KIA has more than 200 billion dollars in assets and invested a total of more than 5 billion dollars earlier this year in Citigroup Inc. and Merrill Lynch & Co. But those equities lost their value sharply due to the renewed financial turmoil. Al-Sa'ad said the KIA suffered a loss of 270 million dollars on its investment in Citigroup.
This is ass-backwards. The fall in the markets are BECAUSE of the OPEC people departing! They are not buying, ergo, the markets fall. And they are not buying because they are not stupid. They tried to prop up the global system and got burned. Now, they will buy other things of interest. This terrifies the Jewish financiers. They know what these things are.
Performance in recent vintages of both subprime and Alt-A mortgages continued to deteriorate during August… 60+ day delinquencies for both Alt-A and subprime mortgages had increased, while cure rates had decreased; interestingly, however, roll rates — which measure the percentage of loans that worsened in delinquency status — decreased in most areas. For 2006 subprime first liens, the 60+ day delinquency percentage reached 40.24%, a jump of 5.49% from the prior month; for 2007 vintage loans, 30.82% were 60 or more days delinquent, up 6.05%.”
The housing bust will be done once these stupid, useless subprime, Alt-A debts are totally wiped out. There will be a 100% failure rate in these things. And I said years ago, 'These should be ILLEGAL.' I used 'bridge loans' in the past to make money. This is necessary if one is developing housing. But these loans are never held more than three years! Usually, two at the most. Builders who got these bridge loans had to have good property to hold it against. Namely, I had this mansion and would use it as collateral since it had no mortgage on it. This was all before I had to sell everything when my husband got injured at work.
The geniuses in the gnome community thought they could take builder's loans and rename them and hand them out like candy to home buyers. Who then used this to play 'flip the properties'. This is a total failure and people should go to prison. Both flippers and the bankers. There was no collateral property backing these loans. As I pointed out, when I had to close down my own affairs, I had zero debt but zero profits. But I didn't destroy the banking system! This is important to remember: there has to be some basis for the system. It can't be built on cloud coo-coo land.
Now for one more book to read:
R.G. Hawtrey, the English economist, said, in the March, 1926 American Economic Review:
"When external investment outstrips the supply of general savings the investment market must carry the excess with money borrowed from the banks. A remedy is control of credit by a rise in bank rate."
The Federal Reserve Board applied this control of credit, but not in 1926, nor as a remedial measure. It was not applied until 1929, and then the rate was raised as a punitive measure, to freeze out everybody but the big trusts.
Professor Cassel, in the Quarterly Journal of Economics, August 1928, wrote that:
"The fact that a central bank fails to raise its bank rate in accordance with the actual situation of the capital market very much increases the strength of the cyclical movement of trade, with all its pernicious effects on social economy. A rational regulation of the bank rate lies in our hands, and may be accomplished only if we perceive its importance and decide to go in for such a policy. With a bank rate regulated on these lines the conditions for the development of trade cycles would be radically altered, and indeed, our familiar trade cycles would be a thing of the past."
This is the most authoritative premise yet made relating that our business depressions are artificially precipitated. The occurrence of the Panic of 1907, the Agricultural Depression of 1920, and the Great Depression of 1929, all three in good crop years and in periods of national prosperity, suggests that premise is not guesswork. Lord Maynard Keynes pointed out that most theories of the business cycle failed to relate their analysis adequately to the money mechanism. Any survey or study of a depression which failed to list such factors as gold movements and pressures on foreign exchange would be worthless, yet American economists have always dodged this issue.
I use this book as reference. Do enjoy reading it, Mullins is very clear about things. Now for really muddled thinking, let's look at this very dumb commentary by Irwin Kellner:
By Irwin Kellner, MarketWatch
Now, don't get me wrong, I am not saying things aren't serious out there, but another Great Depression? I don't think so.
If you look at the data, you will see more differences than similarities between the 1930s and today:
In the crash of 1929 the Dow Jones industrials plunged 40% in two months; this time around it has taken a year to fall 22%.
The jobless rate jumped to 25% by 1933; it is little more than 6% today.
The gross domestic product shrank by 25% during the early 1930s; it is up over 3% during the past year.
Consumer prices fell by about 30% from 1929 to 1933; and the last time I looked they were still rising.
Home prices dropped more than 30% during the Depression vs. about 16% today.
Some 40% of all mortgages were delinquent by 1934 compared with 4% today.
In the 1930s, more than 9,000 banks failed compared with fewer than 20 over the past couple of years.
Remember also it was policy errors, not the stock market crash, that caused the Great Depression:
This man, to make his point, muddles up time badly. He compares Year One of this Great Depression cycle with the ENTIRE depression cycle of 1929-1938. Comparing the statistics of one year against a decade of years is a fraud. This man knows perfectly well that he is being cheeky here. He knows the difference between one year and a decade. He was told to write this story and did his best to mislead.
For example, as our housing falls off a cliff, he claims that it isn't so bad. Why, by 1934, it was much worse than today! But the housing bubble didn't begin to slow down until last year. And the bankruptcy mess didn't begin until the fall of 2007. After four years of this collapse, I would not be surprised if we get similar numbers!
The first year of the Great Depression, 1930, the banking system was still limping along. It didn't fail until after 1933. And obviously, if we want no Great Depressions, we should have kept all those nifty laws passed back then that would have prevented this mess today. But Congress was paid to tighten the bankruptcy laws at the same time they loosened all the banking laws of the 1930's. And so we get a double-trouble mess. Which cannot be fixed by the US falling deeper into debt to the bankers!
So let's keep up the pressure and continue fighting these bastards!