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Check the results of the survey attached to this story if you want to see where this country is headed:

Sometimes I think those crazy Mayans who predicted it would all go pear-shaped in 2012 weren't too far off...


Hi Elaine,

Peter Morici an economist at U Maryland has a regular column on counterpunch. His most recent column discussed the recent BOE mortgage/ bond swap.

From his article:

"Over the past two decades, banks have moved from a "deposits into loans model" to a "loans into bonds model". The shift is a good thing because it eliminates the kind of risks banks bear when they borrow short and lend long, which mightily contributed to the US Savings and Loan Crisis of the 1980s and 1990s. Properly done, the loans to bonds model permits banks to greatly expand their lending capacity.

However, in recent years, banks have created increasingly complex and difficult to understand securities. Banks sold, bought and resold securities, and engaged in credit-default swaps that did not lay off risk in the manner advertised. Insurance companies, pension funds and fixed income investors, having been stuck with risky securities, are no longer willing to finance bank loans in this manner. Banks can no longer sell CDOs to these investors.

These practices did permit banks to earn outsized profits on transactions fees and pay executives much better than in comparable non-financial firms. However, it is simply impossible to borrow at 5% and lend at 7%, the essence of traditional banking, and skim off the kinds of profits and executive bonuses bankers now expect and still provide for loan servicing, insurance and the other costs involved in lending and securitization.

Unfortunately, bankers are not much interested in returning to traditional lending practices and are looking to other lines of business within their larger financial services firms for opportunities that may permit continued outsized incomes."

Prof. Morici says that securitization is a good thing, and recognizes that the finance companies ( and their leaders) can make a bundle, however he doesn't say who else this benefits.

Does it benefit savers?
Is it good for society as a whole?
Is unending expansion of lending capacity, as he says, good for an economy as a whole or does it lead to speculation.

Unfortunately as Japan has shown infinite lending does not lead to widespread prosperity, just more risk which eventually the tax-payers absorb through decreasing services and higher taxes.

What is the true role of a bank? To fund speculation or to fund sound investments based on true assets.

D. F. Facti

McCain is nuts.

My bellwether conservative friend predicts an Obama nomination, then a round defeat at the hands of John.

In 2000 my friend was pro-GWB, because McCain was too volatile. Now, of course, he is circumspection and leadership personified.

Won't it be grand not to have to look at Condoleezza and her boyfriend come next January 20th?

I choose to remain optimistic for our country. Leadership will not be coming from the Oval Office, however. That's a lost cause - - - no matter who's sitting in it.

And forget disaster planning - - - Condi and the In Crowd want us to die out of sight of the Ferragamo store at 53rd and 5th ...


Sometimes I think those crazy Mayans who predicted it would all go pear-shaped in 2012 weren't too far off...

Mayan prophecy is not madness, they all are based in maths and science, in the one your talking about they used the solar cycle, a cycle of over 5000 years and their changes, and how this changes affect the human kind, specially from '09 to '12, gamma rays, heat waves etc... this is the 6th it happens and its supposed to be up to everyone of us what to do...

Elaine Meinel Supkis

All religions are based ultimately on astronomy as seen by ancient people who turned these celestial events into stories. Just as I make up creatures to explain money, it is much easier to understand and track these number-based events if we turn them into some sort of magical being. Oddly enough.

The Mayans were superb astronomers. Back when I used to do lectures, I said, 'The earliest astronomers who created all our religions were in an enviable condition: they and the gods they created ruled humanity! Astronomers could demand human sacrifices! And sleep with pretty girls! And live like kings!

Then they lost control of the religions they created. The astronomical parts died nearly totally and the magic stories took over. Eventually, nearly all connections were broken and astronomy nearly died. Only when religion was chucked out the door, did astronomy revive.'

Abelian; 'securitization' was a deliberate policy set to 'fix' overlending under Reagan. Since the people doing this stuff absolutely refuse to understand the magic of money making, their fix was a fiasco. I predicted back then, this securitization process would only create a monster which I now call 'The Derivatives Beast'. It will devour all wealth!

This is the nature of humans: create a safe haven in the precincts were darkness cloaks the creation of wealth, they will go insane and try to create infinite wealth and this ALWAYS ends in a total crash and all the pretty funny money vanishing. Refusal to let it vanish always causes gross inflation which eats it up. Either way, it must die.

The reality of this infuriates people in power. They really do imagine they control reality, not the other way around. This is why people like me infuriate them all.

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