October 25, 2008
Elaine Meinel Supkis
As the US falls into the same system that runs Japan, we have to recognize that the effects of the 0% system is not going to fix the US trade deficit. The Treasury is allowing all our dear, bankrupt banks to announce that they are going to the bankrupt Fed for funds. We also look at a series of old, old newspaper clippings that clearly show that today's mess is nearly totally identical to past messes. The IMF is going to allow many of the 'first world' nations to borrow immense sums. And not live under IMF cruel rules, either, I bet. And we revisit the business of the Plunge Protection Team.
Fed: New rate cut likely, with record low within sight The Fed lowered its federal funds rate, the benchmark overnight lending rate at which banks lend to one another, by a half-percentage point to 1.5% in an emergency announcement Oct. 8.
Many investors believe the central bank will cut rates by at least another half-percentage point following the end of a two-day meeting on Oct. 29.
In fact, the fed funds futures on the Chicago Board of Trade are now pricing in a 26% chance that the Fed will cut rates by three-quarters of a percentage point to 0.75% by that meeting.
Well, with the Treasury and the Fed pumping money like mad, handing out loans like there is no tomorrow, why bother with any banking traditions? Why not have 0% interest like Japan? This sort of wacky thinking is contagious. Japan pioneered the 'endless zeros' and got away with it. So now, all nations that can do this are tempted to do this.
It should be obvious to even the experts that if 0% interest was a good thing, why, this would have been the interest rates from day one! Why have compound interest, for example? Why even have banking? If all we need is someone to sign off on loans that require no money down and the loans are based on $0 savings, why, anyone can get and pay for a loan!
This charming,fabulous system is similar to the concept of Santa Claus: all we have to do, is be 'good' and he will give us free gifts!
Actually, this present Santa system is rewarding BAD children. The bankers across the planet went totally insane, underwriting trillions in loans, thanks to the Japanese 0% lending system. The housing bubble was global, not local. If we read the news very carefully, the first thing that springs to mind is, almost all developed nations had housing bubbles that ran alongside each other like horses hitched to the same carriage.
If we look even closer, we see an interesting thing: nearly all the housing built during this global bubble were based on the same interest rates, usually around 5%, more or less.
Frantic governments periodically raised their local rates, even up to 6%, in order to cut back on this housing lending. It had no effect. It didn't matter if one's currency was strong or weak, all of them ended up in this global housing boom that was predicated on an endless stream of easy lending money pouring into the back door of all the banks, hedge funds and investment houses.
These same guys also flooded the world with lending for buy-ups and take-overs. All the money for this came from the same odd source: the 0% lending by Japan. The source for all this nearly free lending wasn't China, for example. China's rates have always been above 2%. There was briefly another source of cheap lending: Greenspan's 1% interest period from 2003-2004. But this was only one year.
The Japanese have been doing this for over a decade!
The swelling of 'world wealth' coincides with this long period of free lending. Most of the money created this way was not in yen but in dollars. So the US lost control of who produces dollars. Since dollars are debt, the cranking out of epic amounts of debts meant this debased US dollars. Since this was done via Japan, this also killed the yen. So we saw, for about 6 years, the dollar and the yen BOTH in free fall vis a vis most currencies on earth.
Years ago, I often noted that the concept of the two top economic powers on earth both running cheap lending schemes coupled with WEAK CURRENCIES was insane and could not end well. Little Iceland shouldn't be the 'strong currency capital of the world' while the US and Japan were playing this cheating game.
Both the US and Japan openly stated that they HAD to do this because they wanted their economies to grow.
And that inflation didn't matter. Well, we just got washed over by a tsunami of hyperinflation which has now receded. We are now in the other half of this destruction of all that Japanese/US 0% lending lunacy: equity and asset value destruction.
Both the US and Japan desperately want to reinflate all the original items this flood of funny money inflated. Namely, stocks, housing, corporations, etc.
These items are 'wealth producers' because one can dump cheap debts on top of them! Commodities translate directly into inescapable inflation. But when artwork, diamonds, gold jewelry, vacation villas, yachts and custom cars rise in value as everyone eagerly bids higher and higher thanks to tons of free money, this gives the illusion of wealth. Paying more to fuel the yachts, custom cars, etc. feels like losing wealth.
It doesn't make one feel one iota richer.
I will note here that the solutions being tried by everyone in charge of financial systems in the world are all aimed at 'controlling' the creation of money but no one is discussing what exactly got out of control in the first place. When Japan's FOREX reserves began to bulge in size back when the Asian Currency Crisis happened, this should have been recognized as a warning sign.
Everyone was in agreement that Japan, after an epic housing/stock market bubble of 1990, was in this 'depression.' Yet, they squirreled away an amazing amount of US dollars! How could they do this? Certainly, they were not rolling in dough in Tokyo.
This riddle disturbed me back in 1999 when the Japanese FOREX reserves were less than $500 billion.
Back then, the economic giant, the US, had a reserve of around $70 billion. So the disparity was already massive and troublesome. For some reason, few, if any, economists or central bankers considered this to be a warning sign of impending economic destruction.
When China, after 1999, began to do the same, there was rising alarm but this was only because it was China doing this. Even when Japan, who stopped at $650 billion in 2004 suddenly began to increase their holdings again, still, many people disregarded this coincidence. I was astonished at the ease with which China built their own FOREX reserves.
This infuriated the G7 nations who attacked China for this activity over and over again. While never attacking Japan. When China approached nearly $2 trillion in their reserves, Japan was at $1 trillion. Their race was joined by Russia, who built up their own reserves to be ten times greater than the US.
WSJ: The decision came after concerns that banks left off any group list would appear too weak for government assistance, spooking investors and depositors and potentially making troubled banks' situations more dire.
Treasury officials were expected to announce investments in about 22 different banks Friday at 11 a.m.
They shifted gears after PNC Financial Services Group Inc. announced Treasury was investing $7.7 billion in its bank as part of the deal to acquire National City Corp. National City was denied government assistance and was forced into a sale.
One reason for regulators' rush to arrange the National City deal by Friday morning was the planned 11 a.m. announcement. Regulators worried that National City's absence from that list would spark a panic among customers and shareholders.
Among the banks that were going to be included on this morning's list were Capital One Financial Corp. and SunTrust Banks Inc., according to people familiar with the matter.
The US has nothing to invest. Japan, China and Russia all have RESERVES they can put up as the basis for internal lending. But not the US. I often joke that the Federal Reserve is neither federal nor has reserves. When the Japanese carry trade created all those dollars for us [aka: liquidity] we didn't 'grow' our own reserves to the same degree. Not even slightly.
Not one bar of gold was added. Nor did we buy a pile of euros and yen to the same degree as our trade rivals were socking away those new dollars.
And let's look at today's news story about our dying banking system: depositors are fleeing it. I can't blame them. It isn't simply naked fear. It is the same problem savers in Japan are facing: they earn little to no interest on savings in banks.
A number of the smaller economies that were funnels for the Japanese carry trade were islands like Ireland, Iceland, New Zealand, etc. These places offered real savings rates if people deposited their money in banks located in these island 'kingdoms'.
Desperate Japanese savers flocked to these places. When the US and UK both dropped rates too low, savers in these two places did the same. The world saw this flood of savings fleeing the world's top economies and this was supposed to be good, not evil.
The world became so accustomed to this, it became 'normal'. But this is very abnormal. Just like previous periods in time when there was a trade/monetary imbalance as the nation hosting global trade resolutions, England, tottered on the edge of final destruction starting in 1914 with WWI breaking out.
Europe resolved its financial problems by launching WWI. The US wasn't even in the war which, when this story about 'bank hoarding' was written. The war was only slightly more than two months old when the government was already fretting about the banking situation.
For the condition of the central banks in London and Paris were rapidly deteriorating. Germany was rapidly moving towards Paris. And the overextended British and French empires could not bring home their troops that were subjugating huge swaths of the planet.
The US is at war today. Our war spending is at the same level as during the Vietnam/Cold War.
This war expenditure requires 0% financing. The US is relieved that Japan has violated all sound banking rules and has made this sort of war financing OK. Normally, during wars, interest rates rise as lending increases. Governments get around this by printing money and unleashing seas of inflation. The US has done this during the War on Terror.
We not only unleashed record overspending in the government, we stood idly aside while Japan cranked out dollars like crazy, too.
Now, banks are 'hoarding money' just like in 1914. And the government is bankrolling the banks like in the Great Depression.
I hate to tell everyone this news, but the various tricks and schemes being used by Paulson and that Great Depression 'expert', Bernanke, are identical to the Hoover attempts at restarting the economy back in the early 1930's. Here are some random samples:
THE NEW YORK TIMES.
July 2, 1930 BUSINESS MEN URGE FREER WORLD TRADE International Chamber Sees in Exchange of Goods a Remedy for Present Economic Crisis. HOARDING OF GOLD DECRIED Resolution Adopted In Paris Calls for Cheap Credit and More Liberal Circulation of Capital. Decry Hoarding of Gold. Cites Causes of Crisis. Gold hoarding by central banks is partly responsible for the present critical economic conditions throughout the world, it is set forth in a resolution passed by the council of the International Chamber of Commerce, which has been meeting in Paris.
Again: the banks are hoarding gold! Oh my! And that is what is responsible for the banking collapse. We see this today: who has the biggest money hoards on earth? The banks? Or perhaps we should look at several major, central banks: Japan and China both are sitting on $3 trillion, just by themselves!
This goes back like a rabbit running into his hole to the idea that this hoarding is part of the global trade process which is due entirely to the US passively allowing everyone to flood the US with their exports!
International leaders tried to hold meetings about this 'hoarding' by the banks. At these meetings, they tried to jawbone everyone into lending again.
But why lend at 0% interest? And if prices are falling, why borrow? The giant loans and even bigger reparations of WWI were in default. On top of that, Russia defaulted on the Czar's loans. So this was a triple whammy. The top creditor nation, the US, could no longer underwrite any loans at all since nearly everyone was defaulting on previous loans.
Not matter what tools the President used, it couldn't bring dead loans back to life anymore. So banks 'hoarded' their loot. China and Japan are doing this right now. Due to their currencies rising as well as their industrial exports contracting, they have to hold onto their hoards instead of lending. So even if they drop rates and Japan cannot do this, it won't change the dynamics of them holding while the US flounders about, seeking more and more loans for its increasingly gigantic budget deficits.
Here is a story from two years later:
This proved to be delusional, of course. The worst was yet to come. Like this year, it was an election year. Hoover desperately wanted to have things set to rights. But wages were still dropping. Workers were being laid off. World trade had collapsed as everyone scrambled, like we will see next year, everyone who still had some industries left were desperate to protect them. And rightfully so!
Any nation that refused to do this, ended up ravaged.
The US has, so far in the present cycle, stupidly volunteered to continue to sop up all global trade. But back then, we were a creditor nation so we were very wary about this. Back in 1933, the new President didn't walk into his office until mid-Spring. And one of the earliest decrees of Roosevelt was his confiscation of gold and the revaluing of the dollar to a lower peg.
April 6, 1933, Text of President's Gold Hoarding Order The text of President Roosevelt's executive order on gold "hoarding issued today was as follows:
Forbidding the Hoarding of Gold Coin, Gold Bullion and Gold Certificates By virtue of the authority vested in me by Section 5(b) of the Act of October 6, 1917, as amended by Section 2 of the Act of March 9, 1933, entitled
An Act to provide relief in the existing national emergency in banking, and for other purposes~',
in which amendatory Act Congress declared that a serious emergency exists,
I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist and pursuant to said section to do hereby prohibit the hoarding gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations and hereby prescribe the following regulations for carrying out the purposes of the order:
Section 1. For the purpose of this regulation, the term 'hoarding" means the withdrawal and withholding of gold coin, gold bullion, and gold certificates from the recognized and customary channels of trade. The term "person" means any individual, partnership, association or corporation.
Section 2. All persons are hereby required to deliver on or before May 1, 1933, to a Federal Reserve bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion, and gold certificates now owned by them or coming into their ownership on or before April 28, 1933, except the following:
Again, the business about bankers and savers 'hoarding' wealth rather than lending it! When banks can't offer any decent return on savings, why hand it over? So the government simply used the power of the sword to force savers into lending. The US has no savers now, not to the extent that they can even begin to cover the capital costs of borrowers who are going rapidly bankrupt.
The government's offer of less than 1% interest is not going to bring in any money into the system.
Now let us discuss gold again: it being inert and geologically stable, it doesn't rust or shrink away, for example, it is a good icon to use as 'money' since one can hold it for a very long time and not see any changes in its geological status.
For example, we had stories last year about people in an Indian bank who lost their life savings because termites crawled inside and ate all the paper. There are no bugs that eat gold. Not even gold bugs eat their gold [hahaha...stupid joke].
The point is, gold hoarders can sit on their loot for a long, long time! And time is money. The more money circulates, the more it can 'grow' so if it becomes inert, this is a problem.
The world price of gold is declining right now, oddly enough. Just like in 1932. But then, suddenly, France decided to convert its dollar hoard into gold. The raid on US gold holdings was swift and devastating. This is why the President had to take draconian controls over gold in the US!
We do wonder if Japan and China will do this, too.
France did it during the worst part of the Great Depression because trade with France was declining. Trade with Japan and China is now declining. Eh? The world price of gold is artificial since the biggest gold stashes are held by governments and still used as a secret handshake, so to speak.
But China and Japan COULD demand payment in gold. If they buy gold from the many gold bugs who would dearly love this, the gold bugs, who are in a slump right now, will be in heaven.
This is possible. And it a weapon used by China and Japan while they negotiate with the US to deal with the immense paper holdings they have in their vaults.
Because History seems to be like an old dog going to bed and goes around and around in circles, the re-emergence of gold as the core of FX markets just may be around the corner, ipso facto.
Now to look at this blog one year ago:
Culture of Life News, October 25, 2007: The Plunge Protection Team Circles The ToiletThe Plunge Protection Team holds more meetings. They are desperate to find some Hail Mary play to save their financial houses from destruction as the SIVs now go off the cliff. Meanwhile, China is strengthening their Asian trade complex and are working towards creating an Asia-centric economic system.
*snip*
There are supposedly around $400 billion SIVs swimming about the planet, most of which are drowning. $400 billion, to put things in perspective, is what we spent on killing Iraqis and stealing oil in Iraq for about 3 years.
I remember when Bush fired the Treasury Secretary when he warned this war would cost us $200 billion. This sum is big, by the way. Just as the Iraq war is bankrupting the US government, so will this global SIV fund mess. As each one sinks beneath the waves, the others take on more water.
It certainly was a cool trick for all the financial houses to create these funds.
We forget why. When the stock market suddenly collapsed in 1987 and a number of banks went down along with a host of savings & loans, the US had to bail out a huge number of rich financial houses and some of the more outrageous financiers went to prison (fraud, of course) and to fix this, the Federal Reserve decided to allow a new form of financing that involved creating out-of-the-bank entities which we now call 'hedge funds'.
They were supposed to go bankrupt in bad times but NOT pull down the huge houses because they would be seperate entities.
This solution has a huge flaw: because they can go bankrupt with no effect on the big entities spawning these hedge funds, they became very reckless and spawned a host of these creatures, every week, more and more were created.
A lot of thought went into creating as many variations on various fund types as possible. On top of this, since they believed their risks were hardly visible, they could float BBB funds that carried high risks but even higher interest rates. Soon, everyone rushed out and poured a lot of money into these BBB funds hoping to get super-rich, super-fast.
People hardly remember that flotilla of SIVs that vanished under the waves last year. Everyone was told, this was all under control, $400 billion was no big deal. I noted that this is not only equal to the war misspending by the US, it was also half the size of Japan's huge FOREX reserves.
So it is a huge amount of money that simply vanished. When this happened, all the credit default swaps were also taking on water and were soon swamped. These CDS deals are now sinking rapidly, very rapidly, faster than the SIV fleet last year.
Just like in the Great Depression, all the deals and systems set up to funnel money and trade in the wake of WWI being launched failed one by one, in succession. Today, we see a host of failures becoming obvious.
For example, the credit default failures from the Lehman collapse are STILL not being registered. Indeed, there is fear that these things that are 90% in default, will utterly destroy the last remnants of world banking. So like a hen sitting on a hand grenade, the central bankers are clucking away, trying to find some solution to this impossible situation.
IMF Mulls Emergency Lending; Iceland Gets $2 Billion (Bloomberg) -- The International Monetary Fund is considering an emergency program to prevent a collapse of emerging markets by almost doubling borrowing limits for members and waiving its standard demands for economic austerity measures.
The fund is discussing plans to offer so-called hard- currency loans of three to six months, two IMF officials informed of the matter said. Separately, the Washington-based agency agreed today to lend Iceland $2.1 billion in accordance with existing rules after the island nation's banking system collapsed, threatening a prolonged economic contraction.
For years and years, the US and its IMF buddies told poor nations to bite the bullet. Now that we are up against the wall, we want puff balls, not bullets. So Iceland, a nation with a very, very high standard of living, doesn't have to do 'austerity'.
Argentina had to be treated so cruel back in 1999, children were literally starving to death to the horror of the rest of the world but the IMF didn't give a hoot.
And Africa! Masses suffer terribly, yet have to pay off IMF loans in full! This dual standard is not lost on the rest of the planet. The Chinese know, for example, if they need loans, they pay through the nose and if millions of Chinese die, so what? But little Iceland, being 'white European,' will get generosity and assistance, not chains and blows.
Why is this? HAHAHA. Russia said they would save Iceland. This was a strategic move to take away a big NATO base there. So the IMF is saving Iceland since the US can't do it. Most of our foreign aid flows to Israel or to pay the military of dictators holding down Muslims for us across the planet. We can't also fund all of Iceland, too. Israel has a standard of living [in the Jewish quarters, of course] that equals Iceland, by the way.
BBC: Irish house of cards comes down The Irish thought their Celtic Tiger economy had put an end to generations of emigration. It is not back yet, but the fact that people are talking about it again is a sign of how bad things have got.
Ireland is the first country in western Europe to officially fall into recession, defined as two consecutive quarters of negative economic growth.
Places like Drogheda, a commuter town near Dublin, have been particularly hit.
During the unprecedented boom years, the population here grew by a third. Now, it is an unemployment black-spot - ringed by new developments with empty, unsold houses.
More proof that the housing bubble was global. And the energetic financial games by many small nations has had a very toxic outcome. All these nations worked hard at one main thing: to grab US jobs via the outsourcing and offshoring mania. The US government not only didn't protect any of our own industrial base, it stood aside or actively assisted corporations in looting our nation by having us consume products which were imported or done overseas while the jobs and the tax base flowed overseas.
Ireland did this very aggressively in the computer field. Like India, they also did telephone work and other office jobs that used to be done in America for Americans. Since they are not part of our main economy, they are easily cast aside when the economy flags. Ireland has little real power and therefore, can't blackmail other nations into supporting them as they flounder about, for example.
Also, they used their new wealth to build lots of houses. The BBC article talks about people buying two, three or more houses. These people hoped to sell to someone else but were in reality, selling to each other for investment purposes. There were no tenants in the wings, begging for housing.
The US also has too much housing in the wrong places. Housing has to be reasonably close to jobs! And jobs are moving restlessly about the planet. One day, you have a job, the next, it has jumped to Asia or South America! Or even back to the US! This instability coupled with a housing boom is most dangerous. Houses can't jump from one country to another, after all. And workers stuck with overpriced/overleveraged properties have only one road open: bankruptcy and abandonment.
Russia's financial crisis is escalating with lightning speed as foreigners pull funds from the country and the debt markets start to price a serious risk of sovereign default. Russia's financial crisis is escalating with lightning speed as foreigners pull funds from the country and the debt markets start to price a serious risk of sovereign default.
The cost of insuring Russian bonds against bankruptcy rocketed to extreme levels yesterday. Spreads on credit default swaps (CDS) reached 1,123, higher than Iceland's debt before it sought a rescue from the International Monetary Fund. Moves by Hungary, Ukraine and Belarus to seek emergency loans from the IMF have now set off a dangerous chain reaction across Eastern Europe.
Romania had to raise overnight interest rates to 9% on Wednesday to stem capital flight, recalling the wild episodes of Europe's ERM crisis in 1992. The CDS spreads on Ukraine's debt have topped 2,800, signalling total revulsion by investors.
Rating agency Standard & Poor's issued a downgrade alert on Russian bonds yesterday, warning that a series of state rescue packages worth $200bn (£124bn) could start to erode the credit-worthiness of the state.
S&P said Russia's budget was likely to slip into deficit in 2009 as result of the dramatic slide in oil and metal prices this autumn, and cautioned that "the ongoing concentration of the financial system in state hands" had become a political risk.
Russian companies must roll over $47bn of foreign loans over the next two months, and a further $150bn or so next year, a task that has become close to impossible as investors flee Eastern Europe.
Russia has a huge FOREX reserve. Note how everyone is leery about Russia defaulting due to dropping oil/gas contracts but Russia is not running in the red? Eh? No nation is running deeper in the red, longer in the red, than the US. The only reason we are allowed this boon is NOT because the dollar is the world's premier trade resolution currency!
It is because we are allowing everyone to destroy our native industries and markets.
Russia, like Japan and China, will not let just anyone come in and rearrange the furniture. There are far more controls there than here. In the long run, the nation that is in the most trouble is not Russia but the US.
What is goofier about this article is the remark that more and more Russian economic systems are falling into the hands of the Kremlin! Well! Looking at the US news, it seems that the US is taking over all mortgages, all banking and most of our industrial base is military so it is connected to the government quite directly. And we are doing all of this, deep in the red!
Much, much deeper than Russia.
But since we allow everyone to invade our markets, this is just fine with the rest of the world. Indeed, this is the old status quo everyone wants to continue.
UK recession fears spark massive sell-off of sterling The pound has slumped to a five-year low against the dollar, and is close to having its worst week since sterling was ejected from the European Exchange Rate Mechanism in 1992.
Sterling fell as far as $1.62 during yesterday's trading.
Foreign exchange, gilts and equity markets all reacted strongly to the Prime Minister and the Governor of the Bank of England admitting that Britain is likely to enter its first recession in 16 years.
The turmoil in currency markets was reflected on world stock markets, as the FTSE 100 in London and the Dow Jones Industrial Average in New York plunged once again as company after company warned that the outlook for profits was deteriorating.
The yen is rising because it has a huge FOREX base behind it. England, like the US, has virtually no reserves so the pound is falling. The US dollar is not going downwards only because of the peculiar position of the dollar and only the dollar: the US is the world's main trade destination. Until this changes, the dollar must be 'strong' so they can profit from this one-way trade.
JCB workers take pay cut to avoid layoffs Thousands of workers at the manufacturing firm JCB have voted to accept a pay cut of £50 a week to prevent the loss of 350 jobs, it was announced today.
The GMB union said around 2,500 of its members at seven JCB plants in England and Wales had agreed to work a four-day week for the next 13 weeks to help the company weather the economic downturn.
Despite recording pre-tax profits of £187m last year, the company has been badly hit by the downturn in property and construction. In July this year, it warned of a "rapid decline" in demand.
The workers are the fundamental basis of all economies. Period. Not banks, not corporations. Workers must be able to buy for an economy to 'grow'. When workers can't buy, we get bad depressions or recessions. Working wages have not kept up with inflation.
The majority of profits have flowed increasingly into the hands of the few. It is getting worse and worse. In the Great Depression, workers at first did this sort of sacrifice. To keep all from being eaten by wolves, they would make joint sacrifices. But this only makes the recession or depression worse in the long run.
The fact that wages are falling and unemployment is rising is yet another indication that the unbalanced system we call 'the status quo' is failing. Reviving it by saving the very rich won't work. Indeed, the rich have bent all their energy towards dumping epic amounts of debt on all systems and on top of this, evading taxes.
Just today, the top advisor to the NY governor has had to resign because it turns out, he hasn't paid or filed any taxes for years!
All the top wealthy people on earth are very good at gaming systems so they can evade taxes. The tax base has not kept up with wealth growth. Instead, thanks to the 0% rates being offered by governments themselves, government debt has grown. The PRINCIPAL matters! Even if we never pay any interest at all on this mess, as the principal grows, it still is destructive.
Margin Calls Prompt Sales, and Drive Shares Even Lower In the last week, as the value of stock portfolios has plunged, executives and fund managers who had bought shares on margin — that is, using borrowed money — have been forced to sell millions of dollars worth of stock to settle those loans with banks.
Professional investors say that the margin calls probably added to the pressure on stock prices last week, when the average stock plunged nearly 18 percent.
Some analysts and investors are concerned about a situation in which margin calls occur in larger numbers, causing an even bigger wave of selling, even though most analysts say that stock prices are already historically low.
One smart thing that came out of the Great Depression were the rules concerning playing speculative games with loans. Namely, you can't do it! Margin calls, thanks to Greenspan and the host of right wing Ayn Randistas, are now eating away at everything.
People who borrowed super-cheap money can't hold stocks and other things when the value drops on the PRINCIPAL owed. Namely, if it isn't earning a profit, they can't eat the losses due to these loans. So they have to sell as fast as possible. Of course, this causes panics and price collapses! Which is why it must be illegal.
Citadel: liquidity strong, operating as usual (Reuters) - Citadel Investment Group, one of the world's biggest hedge funds, said on Friday it has $8 billion in available credit and sought to quell rumors it was liquidating some portfolios after its two main funds had lost 35 percent since January.
Reacting to persistent market talk it had asked the U.S. government for a cash injection and that financial regulators were coming to inspect its accounts, Chicago-based Citadel held an unusual and hastily arranged conference call.
Just like the SIVs and CDS markets, the host creatures are dying. The hedge funds will die just like their grandpas, the Trust Funds of the Roaring Twenties died off, one by one, during the Great Depression. Again, our ancestors made these stupid things illegal. And the Ayn Randistas legalized and enabled it all over again.
Greenspan "shocked" at credit system breakdown Former Treasury Secretary John Snow agreed that risk had been under-priced on a global basis. He said risks in mortgage markets were masked in part by accounting irregularities at Fannie Mae and Freddie Mac.
"A critical lack of transparency in secondary markets left policy-makers and regulators unable to discern the true nature and extent of the systemic risk that continued to build," he told the panel.
Greenspan urged that securitizers be required to retain "a meaningful part" of securities they issued. He said that regulatory reform will be necessary in the areas of fraud, settlement, and securitization to reestablishfinancial stability.
He also conceded he was "partially wrong" about his belief that certain derivatives, such as credit default swaps, did not need to be regulated.
My, how this god has fallen! He now admits to being 'partially wrong'? HAHAHA. How about totally, absolutely wrong from top to bottom, beginning to end? Until these clowns finally admit they were bonkers, we will continue to suffer. And Trust Funds/Hedge Funds will not function well no matter how 'transparent' they are. They could be stark naked and still be coyote ugly broads.
The risks of lending at 1% or less were painfully obvious to me, years ago. It should have been obvious to Greenspan. When he did this while Bush was cutting taxes to the rich, he knew this was a very, very naughty thing. But his excuse was, this all for the good of the nation because the stock market crash and 9/11 was so very unusual.
Har.
WWI was a major emergency. So was WWII. The attack on Wall Street by the 9/11 gang [with some significant assistance from our own government letting them do their worst] was not anywhere near the level of global wars. And we know from history that the last thing a government should do when under attack is drop interest rates to near zero! It was unprecedented and stupid. But everyone loved it because who doesn't love tax evasion and free loans?
The Gnomes blacked out all financial deal information from 'rescue' papers.The Treasury Department has hired two big accounting firms to help keep tabs on the government's financial-industry rescue program, and once again certain basic elements of the deals are shrouded in secrecy.
PricewaterhouseCoopers LLP will provide internal controls for the government's $700 billion bailout fund. Ernst & Young will provide general accounting and consulting. The Treasury Department said the first phase of the three-year contracts will be worth $191,469.27 and $492.006.95, respectively.
That sort of specific detail is lacking in the agreements themselves. The Pricewaterhouse Coopers contract released by the Treasury Department on Tuesday has blacked-out text in the area covering the firm's bid, and also conceals the name of the PricewaterhouseCoopers partner who signed the deal.
Another section listing the names of the
PricewaterhouseCoopers employees designated to work on the contract also is blacked out.
*snip*
A spokesman for Bank of New York Mellon said he did not know why the compensation information was redacted, and referred our question to the Treasury Department.
The gnome has not idea why all important information about how much money the same gnomes who destroyed our financial system will be getting? HAHAHA. Always good for a laugh! Will Paulson tell us why this is all so tip-top secret? HAHAHA. Again. I notice that all the pious calls from these same clowns for less secrecy falls to the cellar the minute we ask for any information! So much for nakedness.
Corporate-tax rates are fallingAS THE effects of the financial crisis ripple out into the wider economy, businesses are struggling. With access to credit all but choked off and global demand falling, firms are keen for any help they can get.
America's big companies have a friend in John McCain, who says he will cut the top federal corporate-tax rate from 35% to 25%. Once state and local taxes are added, the combined rate amounts to an average 40% of profits, the second highest in rich countries. Over the past decade, corporate-tax rates have fallen considerably, especially in the countries of the European Union.
Yup: here it is in a nutshell. Our corporations have screwed up the entire planetary financial systems. They control many governments via bribery, etc. They write the rules, damn it! And they want massive spending on things like wars, etc. And bail outs, of course, when they screw up everything! But THEY DON'T WANT TO PAY TAXES.
They hate taxes when they pay it. They encourage poor little debt-beasts like poor little Joe the Plumber to also hate taxes. Then these cruel rulers turn on Joe and tell him, when he loses his job, 'Sorry, chum. We can't afford to feed you or keep you alive. HAHAHA. Eat that, fool! Oh, and vote for me!' Yes, a real alliance.
A couple news stories for your morning coffee...
China to give soft loan of $1.5 billion to Pakistan
http://tinyurl.com/6pax4x
Was It Deliberate?
http://tinyurl.com/8cc5z
Posted by: Blunt Force Trauma | October 25, 2008 at 10:44 AM
I think a global currency under the control of a global body may be in the cards.
A more stable yardstick than the ability of supercomputers to churn out zeroes may also be used to standardise the global currency value.
The past year has been so interesting! First it was a game of trades, then a game of finance, now a game of economies. Next stop is a game of politics.
May you live in interesting times.
Posted by: David | October 25, 2008 at 10:57 AM
Don't forget the Whine-a-thon Olympic Games!
Posted by: Elaine Meinel Supkis | October 25, 2008 at 11:28 AM
And Typepad just changed our posting system for the worse! It is a royal, utterly annoying pain in the ass for me now! I use code directly and they have this simplified system that is a piece of garbage for me because it destroys my templates!!!!!
GAH!!!! Progress is not always so hot.
Posted by: Elaine Meinel Supkis | October 25, 2008 at 11:29 AM
Russia is doing well because Putin told the Russian zi juus Oligarchs to stay out of policy and politics and they could keep their wealth.
America should be so lucky.
Posted by: PLovering | October 25, 2008 at 11:31 AM
Russia is a resource exporter and doesn't have a trade deficit or a HUMONGOUS national debt.
ECONOMY 101
You cannot consume more than you produce indefinately.
Debt is not wealth.
Posted by: PK Scott | October 25, 2008 at 11:53 AM
But as much as we might want to hate the Fed/Treasury, I feel that credit must be given where credit is due.
That guy under Clinton, Rubin watshisname... to further strengthen and entrench the USD as the world's reserve currency, then to break down global barriers to capital flows...
A work of genius. Twisted, but so very well thought out.
Posted by: David | October 25, 2008 at 12:47 PM
Here is a "depression-sort-of" new idea (but probably not really new).
Anyhow, I won't go into the details now but my idea entails a group of residents, high-quality low-cost small-scale planned housing (essentially owned from the get go by the residents), one or more folks leasing some land (for profit and relief from property taxes), and in the end enhancements made to the property. Probably will require a 50-year renewable lease type arranement or something like that as well as community by-laws from the get-go.
This could be done. It could be small-scale and appropriate. And these homes although small would have great common space, necessary goods within walking distance, and minimal debt from the get go. I'm going to work towards this goal.
I think I want to develop much more detailed plans. In the end, the choice is free - thats the beauty of it. But this could be win-win in reality.
Peace,
Ken
Posted by: Buffalo Ken | October 25, 2008 at 01:07 PM
Ever live in a condominium, Ken?
That is what you are talking about.
Posted by: Elaine Meinel Supkis | October 25, 2008 at 01:18 PM
Its funny you say that because that is the same thing a friend of mine said - and condos - are one possibility, but I think it could be done in many ways. Honestly, I think I could come up with a plan for a "pleasant abode" with sufficient space for two for about $30,000 for supplies and labor. Maybe 500 square feet or something like that, 1 bathroom, 1 bedroom. Assuming it was done as part of a community and I also think the community needs some open land for community farming and at least a general store for basic supplies. Some pleasant walkways and simple open areas (like an outdoor auditorium) would be nice too.
And yes, I did own and live in a condo. Rancho Palos Verdes (I think that was the name) in the LA area. The condo had 2 levels (maybe it was a townhome) and about 800 square feet if I remember correctly. After 10 months I got real lucky and sold it for a $40,000 profit which financed my graduate degree! I haven't been so lucky since then.
Peace,
Ken
Posted by: Buffalo Ken | October 25, 2008 at 01:38 PM
And I can't resist saying this. When I went to college (NC State and UNC-Chapel Hill), the public universities in North Carolina were about the absolute best bang you could get for you buck. Personally I think all education should be so FREE. If someone wants to learn, let them - its good for everyone. Nowadays I think its much harder even for those with the ambition - what a shame. It shouldn't be this way and just about all of us know it.
The gnomes are going to have to get some humility if they have any hope of coming out of this unscathed physically. Just that seems that way to me. You know the 60's happened and then some lessons were learned. Well - here we are now.
Peace,
Ken
Posted by: Buffalo Ken | October 25, 2008 at 01:51 PM
I'll acknowledge this - some communities will work out long-term and some will fail. There is always risk, but the concept here is to minimize risk for a "set" community with fairly clear-cut defined boundaries. This is a better way to reduce risk than them goofy old derivatives, but maybe, we needed the derivative's "potential energy" to get to realization of this possibility? Who knows - not me.
You never know unless you try and of course, it takes 2 to tango! Damn, I wish I had some Irish Meade just now! Oh well, the Oktoberfest batch is going flawlessly so far, so that will due when it is ready. Incidently, my wife's birthday is tomorrow. Please wish your husband a happy birthday from me.
Peace,
Ken
Posted by: Buffalo Ken | October 25, 2008 at 02:06 PM
Elaine,
I've got an idea for a great graphic in your next article. When you play Microsoft hearts against the CPU, doesn't it always feel like the CPUs are teaming against you?
1) rename the computer opponents as: "Hedge funds", "the treasury" and "investment banks"
2) rename your side as "joe 6-pack"
3) Capture the game screen, and use an image editor to write on the capture: "the toxic debt hearts game, where US INSTITUTIONS transfer our losses, and deal the most toxic cards to YOU THE PEOPLE BWAHAHAHA
Posted by: Timothy | October 25, 2008 at 02:10 PM
Elaine: loved your last paragraph about Joe the (non-licensed) Plumber. It is, IMHO, exactly how the Republicans feel. The Dems aren't too far behind though. How candidates can keep spouting this obvious lie AND get away with it is a total mystery to me. These guys go on the campaign trail and talk about all the jobs they are going to create and that they are for the little guy, aka Middle America. THEN, when they are in Congress (or the White House), they fight raising the minimum wage tooth,fang and claw! Our Fed govt can get a check for $700+ billion to Wall Street in a weeks time though only ONE raise to the minimum wage in NINE years.
Posted by: Paul S | October 25, 2008 at 02:18 PM
Over on the Silver Bear Cafe, Mike Whitney referred to the U.S. as the world's largest creditor nation. I stopped reading after that. My time is valuable.
As for middle America, I have been driving through it recently looking for a good deer run. I see signs everywhere on farms that say: "SARAH!"
I am not kidding. There is some illigible writing below it, but all you can see from the road is "Sarah!".
In my opinion, this election is really between Palin, who represents the oil barons, and Biden, who represents the banking cartels. McCain will die of cancer and Obama will be shot, so these two powerful entities are fighting for the right to rule America via their proxies, Palin and Biden.
Again, that's just my opinion.
Posted by: DeVaul | October 25, 2008 at 02:55 PM
The 700 billion Congress gave to a few bankers amounts to about 25,000 per American. That would have paid off all my debts and changed my life, and I am betting it would have done the same for millions of other Americans.
Posted by: DeVaul | October 25, 2008 at 02:58 PM
When the factories stop turning (depression) the factories owners start looking for another buyer of their machinery.
Someone with good credit and a never-ending demand for machinery.
Uh, yah, that would be War.
The Derivative Beast eats all the money then the War Beast eats all the people.
Then the elite go back to hunting and fishing on their enormous estates.
http://www.financialarmageddon.com/
"One of the most jaw-dropping news items I saw this week was the announcement by Volvo, the world's second largest truckmaker, that it had "won just 115 European orders in the third quarter, down from 41,970 a year earlier," according to a Bloomberg report, "Volvo, Scania Miss Profit Estimates, Cut Truck Output."
In my mind, that extraordinary 99.7 percent drop makes a clear statement about the suddenly precarious state of the global economy."
Posted by: GK | October 25, 2008 at 03:11 PM
Elaine-- Great article but you are way off-base associating the beliefs of Ayn Rand as a justification of what the Banksters have been doing to this country. Greenspan was in Rand's circle until she threw him out for being a poser. Ayn Rand would correctly recognize what is happening today as an attack on the lifeblood of our (or any) economic system, namely, money. You can bet she would be opposed 100%.
I'm not a huge Ayn Rand fan, she oversimplified some things and overdramatized others, but she was pretty much right on when it comes to ideas regarding the integrity of economic systems.
Posted by: BuckarooBanzai | October 25, 2008 at 03:22 PM
"The Derivative Beast eats all the money then the War Beast eats all the people."
The trust funds of the 30's ate all the money and then WWII ate most of the people, so yeah, that does sound familiar.
Posted by: DeVaul | October 25, 2008 at 03:22 PM
Here is my deduction on the rising of the dollar and yen.
The contract around the world are base in dollars. Since the dollars will soon be toast. The entity who receive the payment side of the contract demand the payment in advance before the fall of the dollars. Since the bank could not or do not lend any more dollars, the entity who must pay in dollars need to find someone who hold lot of dollar. That someone is the japanese government. So the entity who need to pay in dollars is asking other to pay him in yen instead of dollars. With the yen he receive, he go to the japanese bank and demand they exchange the yen for the dollars so he can complete the contract base on the dollars. That demonstrate that the yen is rising because more enity are using yen to fullfill their payment in dollars. And the dollars is rising because a lot of entity want to quickly end their contract in dollars.
The end.
Posted by: wuen | October 25, 2008 at 03:33 PM
The Fed has one directive. Save the Banks.
The whole 'manage inflation' or 'manage the economy' or whatever is just cover.
This is why the $700 B went to Them not us endentured serfs to the Fed.
http://en.wikipedia.org/wiki/The_Threepenny_Opera
" The play challenges conventional notions of property as well as those of theatre. It asks the central and highly political question, "Who is the bigger criminal: he who robs a bank or he who founds one?"
Here is why we have Zionist 1 and Zionist 2 running as VP. To prevent Nuremberg Laws like this:
http://judicial-inc.biz/nuremberg_laws.htm
Posted by: GK | October 25, 2008 at 03:38 PM
GK, you are right. And thanks for the news item.
Buckaroo Banzai...loved the anime.
But you are wrong about Greenspan being thrown out by Ayn, Namely, she was like the Troskyites: she was always trying to refine her inner circle down to the last nubbin and idiot and succeeded. But her previous pets ran off to do even more mischief inspired by her insipid beliefs.
Posted by: Elaine Meinel Supkis | October 25, 2008 at 03:40 PM
"And the dollars is rising because a lot of entity want to quickly end their contract in dollars."
I think this is really what's going on right now, at least on the international scene. This is the only explanation for the recent rise in the dollar that makes sense to me. I think it will be short lived.
As Elaine has pointed out many times, you cannot have a strong currency based upon a nation wallowing in ahistorical epic debt.
Posted by: DeVaul | October 25, 2008 at 04:03 PM
Um... Why does not Ralph Nader or Cynthia McKinney promise to gig EACH AMERICAN $25,000???
Why the hell not!!!
Posted by: blues | October 25, 2008 at 04:05 PM
We may get it very soon!
There is about 3 trillion of dollars and US T-bonds out there that must return to the US or be repudiated by our government.
I see one more hyperinflationary tsunami washing over us before it finally ends.
Posted by: DeVaul | October 25, 2008 at 04:08 PM
Okay folks! MY presidential campaign is now up and running!!! EVERYBODY gets $25,000.00!!!
Vote the blues party!!!
Posted by: blues | October 25, 2008 at 04:13 PM
Elaine,
A post please on China's plans for Bretton Woods III!
Check out discussion on Naked Capitalism blog, like
Managing Down "Bretton Woods" Expectations and China Launches Salvo Against Dollar Hegemony (Updated), especially the comments of Richard Kline, like this one:
Bretton Woods I wasn't negotiated at Bretton Woods; it was the result of a series of US-UK bilateral accords followed by a lengthy negotiation between the two on a bilateral framework. This was then presented to an audience who, in the midst of a desperate war that had rendered most of them functionally insolvent, were invited to join where not joining meant ruin. Yes, yes, there were negotiations in those three weeks, but really those were jots and tittles on the prepared program. So it will be with the next regime. It will materialize suddenly out of a process underway for some time.
---Which may well be called 'the Beijing Consensus,' regarding which thanks Matt D. for the tip on the EU-Asian conference. It is extremely telling that this meeting of the last two days has received _zero_ notable comment in the US MSM. I'm not saying that any final accord was struck there, but again most of the action would have been offstage in private multi-lateral consultations. The fact that it was held at all indicates that there had been much backstage preparation. This is happening so quickly, but that's no surprise. China's leadership has been very careful to take not provocative actions, very cautious on intervening anywhere. They have been ostractized and indeed beseiged by the world community within the not too distant past. No country has done more to prepare in case such a squeeze were to be put on them again, financially, diplomatically, or militarily. They would rather negotiate their way in though, clearly, and have done a damn good job of biding their time. They didn't even offer to dollar fund Korea---a US possession---in the last few weeks when the US did nothing there....
Posted by: nn | October 25, 2008 at 04:21 PM
I was wondering about this summit, too. It is all over Chinese News, but nothing here.
Maybe Elaine can analyse it for us and let us know what she thinks they are up to.
It's interesting that we were not invited.
Posted by: DeVaul | October 25, 2008 at 04:32 PM
It looks to me as if this is simply a consolidation of central bank. Each having seized control of their respective host government and commerce. A new omnipotent central bank (BIS?) with tentacles through-out the world, the new world order.
They will break all competitors and resistance through financial terrorism - play by our new rules or go broke, entirely. It is already well on the way.
Gold/silver backed currencies would be such a great alternative but alas, the central bankers hold 2/3 of global gold. Fort Knox holds spider webs in their empty vaults. The gold was long ago stolen - or so I read.
My personal opinion is that the key lies in the US abolishing the federal reserve. This alone may just bring bankruptcy as it would require the co-operation of other countries to recognize US backed notes in order to facilitate international trade.
The US has the might to invoke other measures. For example, we have the RICO Act which was written for ongoing criminal organizations. RICO allows the confiscation of even remotely gained assets that may have been gained by criminal activity.
For example, confiscation of the personal assets of the criminal perpetrators. Yes, seize all their gold, real estate, investments and other businesses like large private banks.
People have not yet been hurt bad enough to motivate them to such extremes. The status quo is strong and the people still seem weak. I keep waiting for the outrage that never seems to come. But the only force strong enough to stop the tide is the combined will of the people.
Posted by: DrKrbyLuv | October 25, 2008 at 04:40 PM
I am not a believer in the one world order or currency. I seriously doubt that China or Russia or India or a host of other nations will want to play along with another Norman/Anglo-Saxon aristocratic controlled central bank.
The fact that both China and Russia have publicly stated that they oppose a unipolar world lends support to my belief that the old aristocrats are dreaming if they think they can control the world with a bankrupt system that they alone will create and run. I believe that plan is DOA.
Posted by: DeVaul | October 25, 2008 at 04:54 PM
DeVaul: The plan may well be DOA.
The Russians, Chinese, Arabs and some OPECers are working on an alternative financial system ... one based on gold.
Fiat systems won't work with zi juus around.
Posted by: PLovering | October 25, 2008 at 05:36 PM
WELL, there are the gold ETFs which, if I am not mistaken, hold billions in gold bullion. There is a nice fat juicy pile of gold for the government to confiscate. Mighty convenient of them to pile it up like that.
Over two years ago I figured you had to be an idiot to "own" gold that was stored in the US. That was before the Liberty Mint got "confiscated" because they were minting Liberty "Dollars". Even the stoner hippies I knew that were printing their own barter currency knew to call it Armadillo HOURS, never, ever dollars or bucks.
The way I figure it, the Chinese aren't idiots, they HAVE to know that eventually the dollar is toast. I think that there is a carefull calibration being made of just WHEN to start buying up (once again, boys and girls) raw materials and the means of production (and probably precious metals)with a vengance. That will be when everything hits rock bottom prices, and that ain't yet.
My other question is what is going to happen to the "repatriated" dollars that are flowing like a wave back into the US right now?
Posted by: PK Scott | October 25, 2008 at 05:51 PM
Hey Ken,
Google A-bode. (I think it is www.a-bode.com) These guys are WAY ahead of you.
Posted by: PK Scott | October 25, 2008 at 05:52 PM
OOPS, my bad.
www.myabod.com
Posted by: PK Scott | October 25, 2008 at 06:19 PM
Or google "earthship". This guy has dedicated HIS LIFE to build the kind of communities you are talking about.
Posted by: PK Scott | October 25, 2008 at 06:22 PM
700,000,000,000 / 305,499,370 = 2,291.33
That's twenty three HUNDRED dollars per person, not twenty three thousand. A nice chunk, but perhaps not life changing for everybody.
Posted by: Doug | October 25, 2008 at 07:29 PM
Oh, we are going to make a lovely trip to down the rabbit hole and deep into the Cave of Wealth and Death to talk some more about CDOs of various sorts. Really, the topic gives me a headache like the sort of migraine I get before lightning storms.
Indeed, it is very stormy outside and lightning is brewing, I can feel it.
So time to talk about some of the most insane money schemes ever cooked up by crooked gnomes.
Posted by: Elaine Meinel Supkis | October 25, 2008 at 07:39 PM
Hello Elaine,
Good article, that leads directly to my questions...
So, why should all of humanity be forced to suffer and struggle any longer now that the entire global financial system has been exposed as a mind-boggling deception within many other deceptions? No one in their right mind would continue to be enslaved by a proven deception, which is also proven to be undeniable slavery-by-proxy !!!
Understand clearly, that these leaders have, once again, been caught red-handed, with their pants down around their ankles, and their hands in the cookie-jar/till, colluding to exploit and deceive everyone and at a scale and scope that is absolutely mind-boggling. Furthermore, this model of civilization (money, politics, and religion) has repeatedly failed. Unlike past failures though, this one is global in scope and greatly compounded by massive international deception and rampant greed in the form of derivatives, other smoke and mirrors financial schemes (scams), and several layers of speculation. The same out-of-control "betting schemes" were also behind the skyrocketing oil prices of recent years.
Here is Wisdom...
Posted by: Seven Star Hand | October 25, 2008 at 07:54 PM
OK, housing dreamers (as one of them), I hate to break it to you but the Debt Industrial complex is heavily dependent upon overly priced abodes that require massive loans to afford.
This is accomplished by byzantine zoning and building regulations, in coordination with insurance companies that will only insure what they have seen before, and finance companies that will only loan money to structures they have seen before.
As well as peer pressure from the media such as architectural magazines, newspaper ads and home decoration porn.
And the zoning is designed to increase demand for automobiles (garages) and petrol (sprawl).
But if we hold our hands and dream we will soon have sustainable straw bale communities were everyone can walk to work and spend 8 hours a day with their children carving sculptures instead of watching MTV CRIBS.
Posted by: GK | October 25, 2008 at 08:08 PM
The most striking thing through all of this garbage is that NO ONE is kept accountable AT ALL! No one is resigning, no one is forced to resign, NO ONE! Not in USA, not in Iceland(?), not in Germany, not in UK... Every bank, every financial institution, every place have same people in charge that created this mess and fed the Derivatives Beast...
There is no accountability. None. When things go haywire next time, it's no wonder; no matter what happens, all executives gain their profits and share no risk at all. Even if they cheat everyone, hide true risks, and literally starve people to death. Even if they force companies bankrupt to buy them. Even if they STEAL your tax money AND share 10% of that 700 billion "rescue" package. And go party to add insult to injury.
BTW, when there was talk about freezing bonuses etc to executives, do you still remember when some bankers said "Oh, we might make it through without the bailout after all"? But then again, those voices mostly died down (except in Germany and here in Finland)... but no surprise, those gnomes are good at finding excuses WHY their pays cannot be touched.
Oh, I know already WHAT to do if you can't touch current executives pays: Fire them all and hire someone else to do their job. Come on, I can do it; I promise I need only 10% of the wage of your current banker boss. And while I may not have diploma to prove my knowledge, I sure know a cheating deal when I see one. If someone says: "Here is investment without any risk at all and high profits at all market times!", I laugh at them. Hard. Then I say: "Ok, deposit one billion in my bank as your guarantee for your promise, and I invest one billion for your fund without risk". But I guess they would not agree to such a deal...
Kick them out. Kick them all out. Faster the better. Take their property. Steal from the biggest thieves. Make them resign, throw them to jail. Oh, Elaine, I remember when the "rescue" bill first seemed to fail and you wrote how Paulson was sweating and seemed to be under extreme pressure. I was so happy for a second, I thought that gnomes party was seriously over. But no. Not yet.
Posted by: Duski | October 25, 2008 at 08:17 PM
"Even if they STEAL your tax money AND share 10% of that 700 billion "rescue" package. And go party to add insult to injury."
I mean, share that 70 billion in their next bonus program for excutives. I mean come on. When things like this comes out, ALL THAT MONEY should be drawn out from those institutions INSTANTLY. No wonder they wanted Paulson to have all the rights to the money with none accountability; Then it would not matter AT ALL if they needed it in the first place. They could just loot it, WHO CARES if the company goes bust, when the executives can have 70 billion!
Posted by: Duski | October 25, 2008 at 08:20 PM
YES! Raise taxes! By simply raising taxes that will be the end all cure all! (thats what I was tot!) Not to mention the giant corporations that you wish to tax will get a loophole in the same tax bill! Beam me up! I yield back the big oil and banking conglomerates in the democratic party! Joe Biden = ConocoPhillips and ALL credit cards! Rockefeller syndicate was first, (bush cheney=Exxon Mobil)Now its time for CHANGE, Obama Biden (Du Pont syndicate) Wonder how many these guys can kill?
Psssst. Could congress provide a loan for GM too? Its also owned by the same outfit as well as the paint industry and (GASP!) the largest manufacturer of gunpowder in the country!
BY THIS PRICKING ON MY THUMB SOMETHING WICKED THIS WAY COMES......
Posted by: Dutch Money Changer | October 25, 2008 at 09:12 PM
Sorry Duski, didnt you know? There are two kinds of people when it comes to elitist philosophy. The eaters and the eaten. And they are the only ones with a knife and fork!
mwhahhaha
Posted by: The Dutchman | October 25, 2008 at 09:20 PM
Ah, the dangers of being a predator!
I used to have oxen. They were one of the biggest pairs in America, weighed a ton and a half, EACH. They stood 7 fee tall at the shoulder and had a horn span of about 4'.
Once a bear bothered the boys. They lit after the poor thing and nearly hammered it with their horns.
They could go after very large predators. The coyotes and others left them alone. Their hides were so thick, when the vet had to use a needle on one of them, it bent!
Yes, they were grazers. And extremely dangerous and powerful grazers. Moral of this story is: the working class is the same.
Posted by: Elaine Meinel Supkis | October 25, 2008 at 09:52 PM
Duski , right on, same thing happened with Vietnam, no one was held accountable, so same mistakes later on.
Posted by: ziff house | October 25, 2008 at 10:14 PM
Dr Luv said, "But the only force strong enough to stop the tide is the combined will of the people."
The people have spoken: We want more Britney Spears, more Dancing With the Stars, more Drugs, loose shoes, and tight pants. Any questions?
Posted by: Zulu | October 25, 2008 at 10:47 PM
How about more naked short selling on TV, too? Heh.
Posted by: Elaine Meinel Supkis | October 25, 2008 at 11:06 PM
I know the elite wants only to eat and not share anything. But when things go too much unbalanced, we WILL have revolutions. NO ONE wants that, it's a bloody mess. I'd much rather see the elite share some before they really make masses too poor and angry for it all.
Even if it means everyone is poor then. That would save many lives at the end.
Posted by: Duski | October 26, 2008 at 07:13 AM
Actually, while I steam it off here, I happen to live in Finland. Our things are still ok, we have healthy middle class, good social services (you know, when someone is really poor and gets free money, all that money goes back to boost the economy), but a tad high taxes...
But things here too are going for the worse, richest 10% gets richer faster and lowest income work is already losing it's buying power. Eventually if nothing is changed, we'll be down the same drain.
Posted by: Duski | October 26, 2008 at 07:18 AM
While I'm at it...
Problem here is that every raise in wages is done in percents: When someone gets 5% raise, every worker union tries to get at least that much for their workers too! But this means, in the long run, that income differences between lowest and highest get higher and higher over time. Of course, this suits the richest 10% very well, but slowly erodes the lower wages buying power (inflation touches us all anyway).
Also when you are rich, you gain more income from owning shares etc. That's why our progressive taxing of wages fails hard to tax the very richest. It's a marvel, when your income is high enough, you are taxed less since you can arrange your income to those sources with solid and lower tax rate...
Posted by: Duski | October 26, 2008 at 07:24 AM