The Fascist takeover by way of taxpayer bailout

[Swamp Gas]

www.guardian.co.uk/business/2008/sep/20/wallstreet.useconomy

American taxpayers will swallow Wall Street's toxic debts
US treasury will pay hundreds of billions in biggest intervention since 1930s

US Treasury secretary Henry Paulson holds a news conference at the Treasury department in Washington DC

US Treasury secretary Henry Paulson holds a news conference at the Treasury department in Washington DC. Photograph: Chris Kleponis/AFP/Getty images

A sweeping package of measures by the US government to bail out struggling banks sparked hasty cross-party negotiations in Congress and sent financial markets rocketing on hopes of a long-term resolution to the credit crunch yesterday.

Proposing a state-sponsored corporation to sweep up toxic debts held by teetering financial institutions, President Bush called for bipartisan action to restore confidence in the US economy.

"America's economy is facing unprecedented challenges and we are responding with unprecedented action," he said. "There will be ample opportunities to debate the origins of this problem. Now is the time to solve it."

Alarmed at the prospect of this week's banking crisis sparking a domino-style fall of further banks, the US treasury put forward a three-pronged plan which amounts to the biggest intervention in the markets since the Depression of the 1930s.

Its proposed body to clean up the banking industry will require hundreds of billions of dollars. Alongside this, there will be federal insurance to protect money held in usually ultra-safe money market funds which have been faltering this week due to their exposure to troubled banks.

The treasury secretary, Henry Paulson, admitted that it would be expensive to tidy up banks' bad debts, but he said doing nothing would be far more costly.

"This bold approach will cost American families far less than the alternative - a continuing series of financial institution failures and frozen credit markets unable to fund economic expansion," Paulson told a press conference in Washington.

Referring bluntly to the week's events as a "crisis", Paulson said it was no longer viable to treat each financial blow-up on a case by case basis: "We must now take further, decisive action to fundamentally and comprehensively address the root cause of our financial system's stresses."

The planned body to hold banks' liabilities is loosely modelled on the Resolution Trust Corporation, a body which tidied up assets held by crumbling savings and loans associations between 1989 and 1995.

Democrats said they would work with the Bush administration on the plan. Barack Obama backed it in principle, saying it was "critical" the markets and the public have confidence that action will be "unimpeded by partisan wrangling".

Democratic senator Charles Schumer said treasury officials had left no doubt about the alternatives: "Their description of what would happen if we didn't act was startling, astounding and a little worrisome."

Although lawmakers promised measures in "hours rather than days", there is likely to be a tough round of horse-trading. Democrats are expected to use the opportunity to demand more public money to aid homeowners facing foreclosure.

The proposals had a euphoric impact on Wall Street, where the Dow Jones Industrial Average leapt 368 points to close at 11,388. After a remarkable week, the surge meant the market was only down a few points for the week, despite Monday's biggest one-day plunge since 2001.

The rise provided relief for Wall Street banks trying to halt a collapse in investor confidence as sceptics questioned the viability of standalone "broker dealer" institutions on Wall Street in the wake of Lehman Brothers' bankruptcy.

The fragility of banks has caused repercussions for millions of savers with their cash in money market funds, which only hold securities with good credit ratings, and which hold a total of $2trillion. Earlier this week, one fund dropped in core value for only the second time in the industry's history, and others have been shutting down, prompting the Bush administration to step in with a guarantee yesterday.

"The financial fever has broken," said Mark Vitner, an economist at Wachovia Securities. "The government's actions have broken down the fear that was so widespread and pervasive."

As in London, the US Securities and Exchange Commission has ruled that some 800 financial stocks are to be protected from short-sellers. A criminal investigation is under way into whether speculators deliberately spread misinformation about banks' finances.

"Now the shorts are really going to be squeezed - until the pips squeak," said Mike Lenhoff, chief strategist at stockbroker Brewin Dolphin in London.

But Adam Sussman, director of research at the hedge fund consultancy Tabb Group, said it made no sense to punish speculators when shares go down, yet allow them free reign when stocks rise. "If we're going to be against speculation, maybe the government should force people to stop buying Google when its price jumps 500%," said Sussman.

[Swamp Gas]

www.bloomberg.com/apps/news?pid=20601087&sid=aZ2aFDx8_idM&refer=home


Treasury Seeks Authority to Buy $700 Billion Assets

By Alison Fitzgerald and John Brinsley

Sept. 20 (Bloomberg) -- The Bush administration asked Congress for unchecked power to buy $700 billion in bad mortgage investments from U.S. financial companies in what would be an unprecedented government intrusion into the markets.

The plan, designed by Treasury Secretary Henry Paulson, is aimed at averting a credit freeze that would bring the financial system and economic growth to a standstill. The bill would bar courts from reviewing actions taken under its authority.

``It sounds like Paulson is asking to be a financial dictator, for a limited period of time,'' said historian John Steele Gordon, author of ``Hamilton's Blessing,'' a chronicle of the national debt. ``This is a much-needed declaration of power for the Treasury secretary. We can't wait until the next administration in January.''

As congressional aides and officials scrutinized the proposal, the Treasury late today clarified the types of assets it would purchase. Paulson would have authority to buy home loans, mortgage-backed securities, commercial mortgage-related assets and, after consultation with the Federal Reserve chairman, ``other assets, as deemed necessary to effectively stabilize financial markets,'' the Treasury said in a statement.

The Treasury would also have discretion, after discussions with the Fed, to make non-U.S. financial institutions eligible under the program.

Bigger Than Pentagon

The plan would raise the ceiling on the national debt and spend as much as the combined annual budgets of the Departments of Defense, Education and Health and Human Services. Paulson is asking for the power to hire asset managers and award contracts to private companies. Most provisions of the proposal expire after two years from the date of enactment.

A failure by the government to support the U.S. financial system could lead to ``a depression,'' Senator Charles Schumer told reporters in New York. ``To do nothing is to risk the kind of economic downturn this country hasn't seen in 60 years.''

The Treasury is seeking authority to step in as buyer of last resort for mortgage-linked assets that few other financial institutions in the world want to buy, following government takeovers of mortgage giants Fannie Mae and Freddie Mac and insurer American International Group Inc.

``Democrats will work with the administration to ensure that our response to events in the financial markets is swift,'' House Speaker Nancy Pelosi said in a statement.

Fast Track

The majority party will seek to reduce mortgage foreclosures and create ``fast-track authority'' for an overhaul of financial regulation, Pelosi said. Democrats will ensure ``the government is accountable to the taxpayers in any future actions under this broad grant of authority, implementing strong oversight mechanisms.''

The proposal will include curbs on executive pay for the companies whose assets the government will be buying, Steve Adamske, a spokesman for Representative Barney Frank, said today in an interview.

Democrats also will include a plan to stem foreclosures, which may involve tapping the loan-modification abilities of the Federal Housing Administration, the Federal Deposit Insurance Corp., and Freddie Mac and Fannie Mae, Adamske said. Frank, a Democrat from Massachusetts, is chairman of the House Financial Services Committee.

``The consequences of inaction could be catastrophic,'' Senate Majority Leader Harry Reid said in a statement.

`Serious Issues'

``While the Bush proposal raises some serious issues, we need to resolve them quickly,'' he said. ``I am confident that, working together, we will.''

House minority leader John Boehner, an Ohio Republican, said today he is reviewing the proposal but didn't say whether he was inclined to support it.

``The American people are furious that we're in this situation, and so am I,'' Boehner said in a statement. ``We need to do everything possible to protect the taxpayers from the consequences of a broken Washington.''

Congress, which may pass legislation as soon as Friday, needs to ``make sure there are protections built in for taxpayers,'' said Schumer, a New York Democrat on the banking committee. Lawmakers should ensure ``taxpayers who gave the money will be put ahead of the stockholders, bondholders and others.''

Paulson is seeking an expansion of federal influence over markets that hasn't been seen since the Great Depression, said Charles Geisst, author of ``100 Years of Wall Street'' and a finance professor at Manhattan College in New York.

Hoover Era

Geisst likened the plan to the Reconstruction Finance Corp., which was chartered by Herbert Hoover in 1932 with the goal of boosting economic activity by lending money after credit markets seized up.

President George W. Bush said he called leaders in both houses of Congress and ``found a common understanding of how severe the problem is and how necessary it is to get something done quickly.''

``This is going to be a big package because it's a big problem,'' Bush said following a meeting with Colombian President Alvaro Uribe at the White House. ``We need to get this done quickly, and the cleaner the better.''

Democratic presidential nominee Barack Obama said in a radio address that he ``fully supports'' Paulson and Fed Chairman Ben S. Bernanke's efforts to stabilize the financial system. The plan, however, should benefit both main street and Wall Street, he said.

Republican Presidential nominee John McCain ``looks forward'' to reviewing the proposal while focusing at least in part on ``minimizing the burden on the taxpayer,'' said Jill Hazelbaker, communications director for the McCain campaign.

Ban Legal Challenges

The ban on legal challenges of actions by Treasury is ``distasteful, it's unfortunate and it's bad precedent, but this is an emergency and you have to act,'' said Jerry Markham, a law professor at Florida State University and author of ``A Financial History of the United States.''

``What you don't want happen is to have lawsuits that will slow things down and cause problems,'' he said.

The proposal would raise the nation's debt ceiling to $11.315 trillion from $10.615 trillion and require the Treasury secretary to report back to Congress three months after Treasury first uses its new powers, and then semiannually after that.

Paulson would gain discretion to act as he ``deems necessary'' to hire people, enter into contracts and issue regulations related to a revival of U.S. mortgage finance, according to a three-page proposal. The Treasury would ``take into consideration'' protecting taxpayers and promoting market stability.

Hiring Authority

The Treasury plans to hire managers to purchase the assets through so-called reverse auctions, seeking the lowest prices, a person briefed on the proposal said yesterday. The document specifies that Treasury may buy only assets from U.S.-based financial institutions issued or originated on or before Sept. 17.

The House will pass legislation to implement the plan by the end of next week, and the Senate will act soon after, Frank said yesterday in an interview on Bloomberg Television's ``Political Capital with Al Hunt.''

Bush today said he's unconcerned that the price tag on the package may seem high.

``I'm sure there are some of my friends out there that are saying, I thought this guy was a market guy, what happened to him,'' the president said. ``My first instinct was to let the market work, until I realized, while being briefed by the experts, how significant this problem became.''

The Bush administration seeks ``dictatorial power unreviewable by the third branch of government, the courts, to try to resolve the crisis,'' said Frank Razzano, a former assistant chief trial attorney at the Securities and Exchange Commission now at Pepper Hamilton LLP in Washington. ``We are taking a huge leap of faith.''

[Swamp Gas]

www.thenation.com/doc/20081006/greider


Paulson Bailout Plan a Historic Swindle

By William Greider

September 19, 2008

Financial-market wise guys, who had been seized with fear, are suddenly drunk with hope. They are rallying explosively because they think they have successfully stampeded Washington into accepting the Wall Street Journal solution to the crisis: dump it all on the taxpayers. That is the meaning of the massive bailout Treasury Secretary Henry Paulson has shopped around Congress. It would relieve the major banks and investment firms of their mountainous rotten assets and make the public swallow their losses--many hundreds of billions, maybe much more. What's not to like if you are a financial titan threatened with extinction?


Mark Sumner: The dereguation binge that tanked global markets is a bullet deliberately fired into the economy by ideologues, heedless of the ultimate cost to taxpayers. And John McCain cheered them on.

Nicholas von Hoffman: Even without knowing the specifics of Paulson's staggering rescue plan, you can kiss the environment, preschool education and health insurance for all goodbye.

Mark Ames: John McCain is making a big show of criticizing the government "bailout" of insurance giant AIG. But it turns out that AIG is one of the largest donors to his pet think-tank.

Steve Fraser: Washington's mission may, at this late date, be an even greater one than Roosevelt's New Deal faced.

Chuck Collins: The corporations that rigged the casino economy and CEOs and investors who profited at our expense should bear the recovery costs.

Nicholas von Hoffman: Fifty-seven million American families, who put their money in theoretically stable investments find themselves staring into the abyss.


William Greider: Paulson's rescue plan represents a historic swindle--all sugar for the villains, lasting pain for the rest of us. Don't let Wall Street get away with this without enacting significant reform.

William Greider: The house of global finance is on fire--and the lightning bailout of AIG raises serious question about government's capacity to extinguish the flames.

William Greider: An epic deflation of wealth sweeps away arrogant financiers and their fraudulent gimmicks, setting the stage for reform.

William Greider: We are flirting with catastrophe, and our foreign creditors are part of the story.
William Greider: Nobody knows if the current financial crisis could become the type of economic unraveling that makes history.
William Greider: An unlikely dissident has proposed a new way to understand, and reform, the world economy
If Wall Street gets away with this, it will represent an historic swindle of the American public--all sugar for the villains, lasting pain and damage for the victims. My advice to Washington politicians: Stop, take a deep breath and examine what you are being told to do by so-called "responsible opinion." If this deal succeeds, I predict it will become a transforming event in American politics--exposing the deep deformities in our democracy and launching a tidal wave of righteous anger and popular rebellion. As I have been saying for several months, this crisis has the potential to bring down one or both political parties, take your choice.

Christopher Whalen of Institutional Risk Analytics, a brave conservative critic, put it plainly: "The joyous reception from Congressional Democrats to Paulson's latest massive bailout proposal smells an awful lot like yet another corporatist lovefest between Washington's one-party government and the Sell Side investment banks."

A kindred critic, Josh Rosner of Graham Fisher in New York, defined the sponsors of this stampede to action: "Let us be clear, it is not citizen groups, private investors, equity investors or institutional investors broadly who are calling for this government purchase fund. It is almost exclusively being lobbied for by precisely those institutions that believed they were 'smarter than the rest of us,' institutions who need to get those assets off their balance sheet at an inflated value lest they be at risk of large losses or worse."

Let me be clear. The scandal is not that government is acting. The scandal is that government is not acting forcefully enough--using its ultimate emergency powers to take full control of the financial system and impose order on banks, firms and markets. Stop the music, so to speak, instead of allowing individual financiers and traders to take opportunistic moves to save themselves at the expense of the system. The step-by-step rescues that the Federal Reserve and Treasury have executed to date have failed utterly to reverse the flight of investors and banks worldwide from lending or buying in doubtful times. There is no obvious reason to assume this bailout proposal will change their minds, though it will certainly feel good to the financial houses that get to dump their bad paper on the government.

A serious intervention in which Washington takes charge would, first, require a new central authority to supervise the financial institutions and compel them to support the government's actions to stabilize the system. Government can apply killer leverage to the financial players: accept our objectives and follow our instructions or you are left on your own--cut off from government lending spigots and ineligible for any direct assistance. If they decline to cooperate, the money guys are stuck with their own mess. If they resist the government's orders to keep lending to the real economy of producers and consumers, banks and brokers will be effectively isolated, therefore doomed.

Only with these conditions, and some others, should the federal government be willing to take ownership--temporarily--of the rotten financial assets that are dragging down funds, banks and brokerages. Paulson and the Federal Reserve are trying to replay the bailout approach used in the 1980s for the savings and loan crisis, but this situation is utterly different. The failed S&Ls held real assets--property, houses, shopping centers--that could be readily resold by the Resolution Trust Corporation at bargain prices. This crisis involves ethereal financial instruments of unknowable value--not just the notorious mortgage securities but various derivative contracts and other esoteric deals that may be virtually worthless.

Despite what the pols in Washington think, the RTC bailout was also a Wall Street scandal. Many of the financial firms that had financed the S&L industry's reckless lending got to buy back the same properties for pennies from the RTC--profiting on the upside, then again on the downside. Guess who picked up the tab? I suspect Wall Street is envisioning a similar bonanza--the chance to harvest new profit from their own fraud and criminal irresponsibility.

If government acts responsibly, it will impose some other conditions on any broad rescue for the bankers. First, take due bills from any financial firms that get to hand off their spoiled assets, that is, a hard contract that repays government from any future profits once the crisis is over. Second, when the politicians get around to reforming financial regulations and dismantling the gimmicks and "too big to fail" institutions, Wall Street firms must be prohibited from exercising their usual manipulations of the political system. Call off their lobbyists, bar them from the bribery disguised as campaign contributions. Any contact or conversations between the assisted bankers and financial houses with government agencies or elected politicians must be promptly reported to the public, just as regulated industries are required to do when they call on government regulars.

More important, if the taxpayers are compelled to refinance the villains in this drama, then Americans at large are entitled to equivalent treatment in their crisis. That means the suspension of home foreclosures and personal bankruptcies for debt-soaked families during the duration of this crisis. The debtors will not escape injury and loss--their situation is too dire--but they deserve equal protection from government, the chance to work out things gradually over some years on reasonable terms.

The government, meanwhile, may have to create another emergency agency, something like the New Deal, that lends directly to the real economy--businesses, solvent banks, buyers and sellers in consumer markets. We don't know how much damage has been done to economic growth or how long the cold spell will last, but I don't trust the bankers in the meantime to provide investment capital and credit. If necessary, Washington has to fill that role, too.

Finally, the crisis is global, obviously, and requires concerted global action. Robert A. Johnson, a veteran of global finance now working with the Campaign for America's Future, suggests that our global trading partners may recognize the need for self-interested cooperation and can negotiate temporary--maybe permanent--reforms to balance the trading system and keep it functioning, while leading nations work to put the global financial system back in business.

The agenda is staggering. The United States is ill equipped to deal with it smartly, not to mention wisely. We have a brain-dead lame duck in the White House. The two presidential candidates are trapped by events, trying to say something relevant without getting blamed for the disaster. The people should make themselves heard in Washington, even if only to share their outrage.

[Swamp Gas]

www.marketoracle.co.uk/Article6429.html


US Treasury Bailout Auction Scam and How To Stop It

Politics / Credit Crisis Bailouts Sep 23, 2008 - 04:10 PM

By: Mike_Shedlock

Best Financial Markets Analysis ArticleAs more and more details of the Paulson proposal become clear, the smellier the package is.

Today Bernanke admitted the Treasury has no intention of conducting a true reverse auction. Inquiring minds are considering Fed Chairman Bernanke Clarifies Government's $700 Billion Proposal .

"I believe that under the Treasury program, auctions and other mechanisms could be designed that will give the market good information on what the hold-to-maturity price is for a large class of mortgage-related assets. If the Treasury bids for and then buys assets at a price close to the hold to maturity price, there will be substantial benefits," said Bernanke.

In further questioning, Bernanke said the $700 billion proposed by Paulson should be "adequate," and argued that a lesser, "underwhelming" amount would only create more problems down the road. It's important to remind the public that this is not a $700 billion "expenditure," but that the auctions from the assets will earn "good value," and potentially even more, he added.

Bernanke is a liar. You know it, I know it, and Bernanke knows it. The idea that taxpayers are going to get "good value" of out $700 billion of pure garbage is insanity, especially if those auctions are rigged.

Conde Nast is reporting Bernanke Gives Up on Reverse Auction Idea .

Under a reverse auction, Treasury wouldn't bid at all. It would circulate a list of assets, and then buy them from whichever bank was willing to sell them for the lowest price.

The way Bernanke sees the auction working, however, it's the other way around: the banks would tender their assets for sale, and then Treasury would put in a bid at what it considers "close to the hold to maturity price".

With thanks to Conde Nast for the link, Clusterstock is reporting CONGRESSIONAL HEARINGS: Bernanke Confirms Government Will Pay Too Much For Crap Assets .

Bernanke wants government to pay significant premium over current "firesale" price for troubled assets. Specifically, he wants to pay close to the "hold-to-maturity" price, which he argues is much higher than the mark-to-market firesale price. Bernanke and Paulson believes this is necessary to get banks to participate.

This is a huge boon to banks and will likely hose taxpayers. Why? Because the government will not have time to figure out what the true "hold to maturity" value of these assets is. Instead, it will have to take the word of banks who have every incentive to dump their crap on taxpayers.

The justification for this is that banks won't participate in the bailout unless you give them big incentive to do so. To which we say: Tough beans. Make the program expensive, as it should be. Give the banks a specified period of time to accept the help or forever forego it. Then work with the banks that jump at the offer.

24/7 WallStreet is reporting Paulson Plan Shows A Weakness: Above Market Pricing, Greater Taxpayer Risk .

What has become clear is that Treasury plans to purchase bad assets from banks at prices very near their original value. The risk to taxpayers under this program would be tremendous. If housing prices continue to fall, so will the value of the paper the government has purchased. Under this set of circumstances the public could be at risk for underwriting the great majority of the Treasury's purchases and never having a chance to recoup their investment.

Buying troubled bank assets at above where they would be valued in a free market now and at a price which is near to the potential price when they mature is a great handout to the banks but undermines almost any chance that the Treasury will ever get any meaningful yield from the bailout.

Taxpayers lose any chance of being made whole.

Stop The Scam

You know what to do. And that is send another fax.

This Is The Entire Fax
Dear Senator

Please stop the Treasury's $700 billion auction scam.

Bernanke lied today before Congress when he stated auctions from assets will earn "good value".

It is clear from Bernanke's testimony that the Treasury's intent is not to buy assets at fair value but any value the Fed and Treasury wants. This puts taxpayers at risk for the full amount of the $700 billion.

This scary provision of the bill must be eliminated:

" (c) Sale of Mortgage-Related Assets.--The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act. "

The following scary provision cannot be tolerated as it would allow the Treasury to repeatedly roll over debt at the treasury's discretion ensuring that the entire $700 billion of taxpayer money would be wasted.

Depending on interpretation of the following wording, taxpayer liability may be unlimited.

" Sec. 6. Maximum Amount of Authorized Purchases.
The Secretary's authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time. "

Your Name
A Concerned Citizen
(leave your address off, some Senators toss out of state mails)

Fax List

Sen. Richard Shelby (R) 202-224-3416 or 202-224-5137 (try both not sure which is correct)
Sen. Harry Reid (D) 202-224-7327
Sen. John Ensign (R) 202-228-2193
Sen. Jim Bunning (R) 202-228-1373
Sen. Chuck Grassley (R) 202-224-6020

Those inclined should also fax their own senators as well.

Please see Phone And Fax Numbers For All US Senators; More On What To Do for more numbers .

Please send this email to 10 others and have them do the same.
Thanks

We CAN make a difference

By Mike "Mish" Shedlock
globaleconomicanalysis.blogspot.com

Click Here To Scroll Thru My Recent Post List

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

I do weekly podcasts every Thursday on HoweStreet and a brief 7 minute segment on Saturday on CKNW AM 980 in Vancouver.

[Swamp Gas]

faculty.chicagogsb.edu/john.cochrane/research/Papers/mortgage_protest.htm

To the Speaker of the House of Representatives and the President pro tempore of the Senate:

As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:

1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.

2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.

3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.

For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.


Signed (updated at 9/25/2008 8:30AM CT)

Acemoglu Daron (Massachussets Institute of Technology)
Adler Michael (Columbia University)
Admati Anat R. (Stanford University)
Alexis Marcus (Northwestern University)
Alvarez Fernando (University of Chicago)
Andersen Torben (Northwestern University)
Baliga Sandeep (Northwestern University)
Banerjee Abhijit V. (Massachussets Institute of Technology)
Barankay Iwan (University of Pennsylvania)
Barry Brian (University of Chicago)
Bartkus James R. (Xavier University of Louisiana)
Becker Charles M. (Duke University)
Becker Robert A. (Indiana University)
Beim David (Columbia University)
Berk Jonathan (Stanford University)
Bisin Alberto (New York University)
Bittlingmayer George (University of Kansas)
Boldrin Michele (Washington University)
Brooks Taggert J. (University of Wisconsin)
Brynjolfsson Erik (Massachusetts Institute of Technology)
Buera Francisco J. (UCLA)
Camp Mary Elizabeth (Indiana University)
Carmel Jonathan (University of Michigan)
Carroll Christopher (Johns Hopkins University)
Cassar Gavin (University of Pennsylvania)
Chaney Thomas (University of Chicago)
Chari Varadarajan V. (University of Minnesota)
Chauvin Keith W. (University of Kansas)
Chintagunta Pradeep K. (University of Chicago)
Christiano Lawrence J. (Northwestern University)
Cochrane John (University of Chicago)
Coleman John (Duke University)
Constantinides George M. (University of Chicago)
Crain Robert (UC Berkeley)
Culp Christopher (University of Chicago)
Da Zhi (University of Notre Dame)
Davis Morris (University of Wisconsin)
De Marzo Peter (Stanford University)
Dubé Jean-Pierre H. (University of Chicago)
Edlin Aaron (UC Berkeley)
Eichenbaum Martin (Northwestern University)
Ely Jeffrey (Northwestern University)
Eraslan Hülya K. K.(Johns Hopkins University)
Faulhaber Gerald (University of Pennsylvania)
Feldmann Sven (University of Melbourne)
Fernandez-Villaverde Jesus (University of Pennsylvania)
Fohlin Caroline (Johns Hopkins University)
Fox Jeremy T. (University of Chicago)
Frank Murray Z.(University of Minnesota)
Frenzen Jonathan (University of Chicago)
Fuchs William (University of Chicago)
Fudenberg Drew (Harvard University)
Gabaix Xavier (New York University)
Gao Paul (Notre Dame University)
Garicano Luis (University of Chicago)
Gerakos Joseph J. (University of Chicago)
Gibbs Michael (University of Chicago)
Glomm Gerhard (Indiana University)
Goettler Ron (University of Chicago)
Goldin Claudia (Harvard University)
Gordon Robert J. (Northwestern University)
Greenstone Michael (Massachusetts Institute of Technology)
Guadalupe Maria (Columbia University)
Guerrieri Veronica (University of Chicago)
Hagerty Kathleen (Northwestern University)
Hamada Robert S. (University of Chicago)
Hansen Lars (University of Chicago)
Harris Milton (University of Chicago)
Hart Oliver (Harvard University)
Hazlett Thomas W. (George Mason University)
Heaton John (University of Chicago)
Heckman James (University of Chicago - Nobel Laureate)
Henderson David R. (Hoover Institution)
Henisz, Witold (University of Pennsylvania)
Hertzberg Andrew (Columbia University)
Hite Gailen (Columbia University)
Hitsch Günter J. (University of Chicago)
Hodrick Robert J. (Columbia University)
Hopenhayn Hugo (UCLA)
Hurst Erik (University of Chicago)
Imrohoroglu Ayse (University of Southern California)
Isakson Hans (University of Northern Iowa)
Israel Ronen (London Business School)
Jaffee Dwight M. (UC Berkeley)
Jagannathan Ravi (Northwestern University)
Jenter Dirk (Stanford University)
Jones Charles M. (Columbia Business School)
Kaboski Joseph P. (Ohio State University)
Kahn Matthew (UCLA)
Kaplan Ethan (Stockholm University)
Karolyi, Andrew (Ohio State University)
Kashyap Anil (University of Chicago)
Keim Donald B (University of Pennsylvania)
Ketkar Suhas L (Vanderbilt University)
Kiesling Lynne (Northwestern University)
Klenow Pete (Stanford University)
Koch Paul (University of Kansas)
Kocherlakota Narayana (University of Minnesota)
Koijen Ralph S.J. (University of Chicago)
Kondo Jiro (Northwestern University)
Korteweg Arthur (Stanford University)
Kortum Samuel (University of Chicago)
Krueger Dirk (University of Pennsylvania)
Ledesma Patricia (Northwestern University)
Lee Lung-fei (Ohio State University)
Leeper Eric M. (Indiana University)
Leuz Christian (University of Chicago)
Levine David I.(UC Berkeley)
Levine David K.(Washington University)
Levy David M. (George Mason University)
Linnainmaa Juhani (University of Chicago)
Lott John R. Jr. (University of Maryland)
Lucas Robert (University of Chicago - Nobel Laureate)
Luttmer Erzo G.J. (University of Minnesota)
Manski Charles F. (Northwestern University)
Martin Ian (Stanford University)
Mayer Christopher (Columbia University)
Mazzeo Michael (Northwestern University)
McDonald Robert (Northwestern University)
Meadow Scott F. (University of Chicago)
Mehra Rajnish (UC Santa Barbara)
Mian Atif (University of Chicago)
Middlebrook Art (University of Chicago)
Miguel Edward (UC Berkeley)
Miravete Eugenio J. (University of Texas at Austin)
Miron Jeffrey (Harvard University)
Moretti Enrico (UC Berkeley)
Moriguchi Chiaki (Northwestern University)
Moro Andrea (Vanderbilt University)
Morse Adair (University of Chicago)
Mortensen Dale T. (Northwestern University)
Mortimer Julie Holland (Harvard University)
Muralidharan Karthik (UC San Diego)
Nanda Dhananjay (University of Miami)
Nevo Aviv (Northwestern University)
Ohanian Lee (UCLA)
Pagliari Joseph (University of Chicago)
Papanikolaou Dimitris (Northwestern University)
Parker Jonathan (Northwestern University)
Paul Evans (Ohio State University)
Pejovich Svetozar (Steve) (Texas A&M University)
Peltzman Sam (University of Chicago)
Perri Fabrizio (University of Minnesota)
Phelan Christopher (University of Minnesota)
Piazzesi Monika (Stanford University)
Piskorski Tomasz (Columbia University)
Rampini Adriano (Duke University)
Reagan Patricia (Ohio State University)
Reich Michael (UC Berkeley)
Reuben Ernesto (Northwestern University)
Roberts Michael (University of Pennsylvania)
Robinson David (Duke University)
Rogers Michele (Northwestern University)
Rotella Elyce (Indiana University)
Ruud Paul (Vassar College)
Safford Sean (University of Chicago)
Sandbu Martin E. (University of Pennsylvania)
Sapienza Paola (Northwestern University)
Savor Pavel (University of Pennsylvania)
Scharfstein David (Harvard University)
Seim Katja (University of Pennsylvania)
Seru Amit (University of Chicago)
Shang-Jin Wei (Columbia University)
Shimer Robert (University of Chicago)
Shore Stephen H. (Johns Hopkins University)
Siegel Ron (Northwestern University)
Smith David C. (University of Virginia)
Smith Vernon L.(Chapman University- Nobel Laureate)
Sorensen Morten (Columbia University)
Spiegel Matthew (Yale University)
Stevenson Betsey (University of Pennsylvania)
Stokey Nancy (University of Chicago)
Strahan Philip (Boston College)
Strebulaev Ilya (Stanford University)
Sufi Amir (University of Chicago)
Tabarrok Alex (George Mason University)
Taylor Alan M. (UC Davis)
Thompson Tim (Northwestern University)
Tschoegl Adrian E. (University of Pennsylvania)
Uhlig Harald (University of Chicago)
Ulrich, Maxim (Columbia University)
Van Buskirk Andrew (University of Chicago)
Veronesi Pietro (University of Chicago)
Vissing-Jorgensen Annette (Northwestern University)
Wacziarg Romain (UCLA)
Weill Pierre-Olivier (UCLA)
Williamson Samuel H. (Miami University)
Witte Mark (Northwestern University)
Wolfers Justin (University of Pennsylvania)
Woutersen Tiemen (Johns Hopkins University)
Zingales Luigi (University of Chicago)
Zitzewitz Eric (Dartmouth College)

[Swamp Gas]

news.yahoo.com/s/ap/20080928/ap_on_el_pr/candidates_bailout_1


Obama says financial bailout necessary

2 hours, 48 minutes ago

WASHINGTON - Barack Obama says bailing out Wall Street bankers is necessary to keep the U.S. economy from crumbling even further and taking American workers down with it.

In a statement Sunday, the Democratic presidential nominee said, "regardless of how we got here, a failure to deal with the current crisis would have devastating consequences for our economy, costing millions of Americans their jobs and retirement security."

Obama says he pressed for several provisions that were in the agreement, including oversight by an independent board and measures to help homeowners stay in their homes.

He said that when taxpayers are asked to take such an "extraordinary step because of the irresponsibility of a relative few, it is not a cause for celebration. But this step is necessary."

Obama said that if he's elected president, he'll order a review to ensure the plan is working.

[Swamp Gas]

Fuck Obama! I am tired of hearing this "change" he is talking about. We are being rammed down our throats two AIPAC/Corporatist stooges, and the only difference I see is environment and woman's rights. Otherwise they both lie about Russia, Iran, Bailout Scam, FISA, Iraq, 9/11, Afghanistan, perpetual war, and Pakistan, and the Constitution itself. The Democrats have stars in their eyes after 8 years of the Horror Show called the Bush Administration. They knew people would vote for whoever they threw against McCain. When I post at Thinkprogress I get called names like "McCain supporter, "tin foil hat", and even "troll". That is what happens as you mature, you have to put up with Left Gatekeepers, and Right Wing Nuts, both who are directly or indirectly Neocon Supporters.

georgewashington2.blogspot.com/2008/09/dallas-federal-reserve-bank-president.html

[Swamp Gas]

Pelosi declares Martial Law!!!

www.dailynewscaster.com/2008/09/28/rep-michael-burgess-we-are-under-martial-law/

[Swamp Gas]

www.counterpunch.org/whitney09292008.html


House and Global Investors Vote "No" on Paulson Bailout

Black Monday?

By MIKE WHITNEY

Today the US House rejected Treasury Secretary Paulson's $700 billion Emergency Economic Stabilization Act of 2008. Paulson said he has the votes, but Paulson was wrong. The House bucked the Paulson's claim that buying up the illiquid mortgage-backed assets from the nation's banks would be enough to save the financial system from an impending meltdown. The jury remains out on that question, too. Professor Nouriel Roubini, chairman of Roubini Global Economics, summed it up like this, "You're not resolving the two fundamental issues: You still have to recapitalize the banking system, and household debt is going to stay high". A large number of economists believe Roubini is right. The bill would not solve the underlying problems.

There is a crisis. The banking system is undercapitalized, the credit markets are frozen, and foreign creditors are beginning to slow their purchases of US debt. It's all bad. At the same time the number of casualties among the financial giants--Bear Stearns, Indymac, AIG, Lehman, Washington Mutual--continues to grow. Three more struggling European banks were added to the list of financial institutions that needed emergency government assistance this past weekend. It's no wonder Congress feels like they have to do something to stop the bleeding.

Before the stock market opened on Monday, the futures markets had slumped heavily into negative territory, while the TED spread, an indicator of stress in interbank lending, had widened to 3.19, a level that suggests another rocky week of trading ahead. Could this be another Black Monday?

Paulson's bill was designed to avert a system-wide crash by clearing the banks' balance sheets so they could resume extending credit to consumers and businesses. The hope was that massive infusion of capital would "turn back the clock" to the happy days of low interest speculation and bubble economics. Paulson is a "one trick pony" who firmly adheres to the belief that wealth creation depends on maximum leverage and an ever-weakening currency. But that world view is no longer applicable after reaching Peak Credit, where consumers are no longer able to make the interest payments on their loans and businesses and financial institutions are forced to curb their spending and dump their toxic assets at firesale prices. The system is deleveraging and nothing can stop it. Paulson has yet to accept the new reality.

Besides, there was no guarantee that the banks would use the money in the way that Paulson imagines. As one Wall Street veteran explained to me, "I don't see one penny of that $700 billion ending up helping the broader economy. I see it being used to prop up share prices so the insiders can salvage as much as possible when dumping their shares".

Indeed, the $700 billion is just part of a massive "pump and dump" scheme engineered with the tacit approval of the US Treasury and the Federal Reserve. Once the banksters have offloaded their fraudulent securities and crappy paper on Uncle Sam, they will do whatever they need to do pad the bottom line and drive their stocks up. That means they will shovel capital into hard assets, foreign currencies, gold, interest rate swaps, carry trade swindles, and Swiss bank accounts. The notion that they will recapitalize so they can provide loans to US consumers and businesses in a slumping economy is a pipedream.

The US is headed into its worst recession in 60 years. The housing market is crashing, securitzation is kaput, and the broader economy is drifting towards the reef. The banks are not going to waste their time trying to revive a moribund US market where consumers and businesses are already tapped out. No way; it's on to greener pastures. They'll move their capital wherever they think they can maximize their profits. In fact, a sizable portion of the $700 billion will likely be invested in commodities, which means that we'll see another round of hyperbolic speculation in food and energy futures pushing food and fuel prices into the stratosphere. Ironically, the taxpayers’ largesse will be used against them, making a bad situation even worse.

Then again, if a rehabbed bill isn't passed, no one can predict with certainty what will happen. Here's how Tim Shipman summed it up in "Bailout Failure Will Cause US Crash", in the UK Telegraph:

"Officials close to Paulson are privately painting a far bleaker portrait of the fragility of the global economy than that advanced by President George W Bush in his televised address last week.

One Republican said that the message from government officials is that 'the economy is dropping into the john.' He added: 'We could see falls of 3,000 or 4,000 points on the Dow [the New York market that currently trades at around 11,000]. That could happen in just a couple of days.

'What’s being put around behind the scenes is that we’re looking at 1930s stuff. We’re looking at catastrophe, huge, amazing catastrophe. Everybody is extraordinarily scared. It’s going to be really, really nasty.'”

The fear on Capital Hill is palpable, especially among the Democrats who have led the effort to pass Paulson's boondoggle ASAP. Speaker of the House, Nancy Pelosi, and fellow Democratic Party leaders, Chris Dodd, Harry Reid and the blabbering blowhard from Massachusetts, Barney Frank, did everything in their power to sandbag dissenters, quash resistance, and rush the bill to a vote without the usual deliberation and debate. Rep. Marcy Kaptur (D-Ohio) was one of many angry members of congress who lashed out at Pelosi's highhandedness. It's all caught on a one minute video:

Rep. Marcy Kaptur: "The normal legislative process that should accompany a monumental proposal to bail out Wall Street has been shelved. Yes, shelved! Only a few insiders are doing the dealing. These criminals have so much power they can shut down the normal legislative process of the highest lawmaking body in this land. All the committees that should be scanning every word that is being negotiated have been benched. And that means the American people have been benched. We are constitutionally sworn to protect this country against all enemies foreign and domestic, and yes, my friends, there are enemies....The people who are pushing this bill are the very same one's who are responsible for the implosion on Wall Street. They were fraudulent then; and they are fraudulent now.We should say No to this deal".

Republicans were equally furious at the way the Pelosi Politburo kept the rank and file out of loop as much as possible. Rep. Michael Burgess (R-Texas) summarized the feelings of a great many congressmen who felt they were being railroaded by Pelosi and Co: "We have seen no bill. We have been here debating talking points ...House Republicans have been cut out of the process and derided by the leaders of the House Democrats as "unpatriotic" for not participating in supporting the bill. Mr. Speaker, I have been thrown out of more meetings in the last 24 hours than I ever thought possible as an elected official of 800,000 citizens of N. Texas....Since we didn't have hearings, since we didn't have markup, let's at least put this legislation up on the Internet for 24 hours and let the American people see what we have done in the dark of night. After all, I have never gotten more mail on a single issue than on this bill that is before us tonight."

Rep Dennis Kucinich (D-Ohio) gave the best speech of the day railing against the financial industry and defending the interests of working class Americans.

Rep. Dennis Kucinich: "The $700 bailout bill is being driven by fear not fact. This is too much money, in too short of time, going to too few people, while too many questions remain unanswered. Why aren't we having hearings...Why aren't we considering any other alternatives other than giving $700 billion to Wall Street? Why aren't we passing new laws to stop the speculation which triggered this? Why aren't we putting up new regulatory structures to protect the investors? Why aren't we directly helping homeowners with their debt burdens? Why aren't we helping American families faced with bankruptcy? Isn't time for fundamental change to our debt-based monetary system so we can free ourselves from the manipulation of the Federal Reserve and the banks? Is this the US Congress or the Board of Directors of Goldman Sachs?”

There was greater opposition to the Paulson bill than any legislation in the last half century. The groundswell of public outrage has been unprecedented, and yet, Congress, completely insulated from the demands of their constituents, continues to blunder ahead following the same pro-industry script as their ideological twins in the White House. There's not a dime's worth of difference between the two parties. Not surprisingly, neither Pelosi nor any of the Democratic leadership has even met with any of the more than 200 leading economists who have stated unequivocally that the bailout will not address the central problems that are wreaking havoc on the financial system. Instead, they have caved in to Bush's demagoguery and the spurious claims of G-Sax bagman Henry Paulson, a man who has misled the public on every issue related to the subprime/financial fiasco so far.

There are parts of Paulson's Emergency Economic Stabilization Act of 2008 that every US taxpayer should understand, even though the media is keeping those facts obscured. In sections 128 and 132; the proposed bill would have suspend "mark to market" accounting. This means that the banks would no longer be required to assess the worth of their assets according to what similar assets fetched on the open market. For example, Merrill Lynch just sold $31 billion of mortgage-backed securities for $6 billion, which means that similar bonds should be similarly priced. Simple; right? The banks need to adjust the value of those assets on their balance sheet accordingly. This gives investors and depositors the ability to know whether their bank is in bad shape or not. But Paulson's bill lifted this requirement and allowed the banks to assign their own arbitrary value to these assets, which is the same old Enron-style accounting scam.

Paulson's bill also proposed the "Elimination of FASB 157 and 0% reserves". This is just as sketchy as it sounds. FASB or Financial Services Regulatory Relief Act reads:

"Federal Reserve Banks are authorized to pay banks interest on reserves under Section 201 of the Act. In addition, Section 202 permits the FRB to change the ratio of reserves a bank must maintain relative to its transaction accounts, allowing a zero reserve ratio if appropriate. Due to federal budgetary requirements, Section 203 provides that these legislative changes will not take effect until October 1, 2011."

It's all legal mumbo jumbo to conceal the fact that the banks can continue to operate with insufficient capital, which is why the system is currently blowing up. It all get's down to this: The reason the system is exploding is because the various financial institutions have been allowed--via deregulation--to act as banks and create as much credit as they choose without a sufficient capital base. When one reads about massive deleveraging, this relates directly to the fact that under-capitalized businesses were operating with too much debt in relationship to their capital. That's it in a nutshell; forget about the CDOs, the MBSs, the CDS and the whole alphabet soup of derivatives garbage. They were all inserted into the system so Wall Street landsharks could expand credit without supervision and balance trillions of dollars of debt on the back of a one dollar bill. This is why Paulson wants to suspend the rules which would bring credibility and trust back to the system. After all, that might impinge on Wall Street's ability to enrich itself at the public's expense.

Nouriel Roubini sites a study by Barry Eichengreen, "And Now the Great Depression", which points out why Paulson's $700 billion plan is likely to fail:

"Whenever there is a systemic banking crisis there is a need to recapitalize the banking/financial system to avoid an excessive and destructive credit contraction. But purchasing toxic/illiquid assets of the financial system is NOT the most effective and efficient way to recapitalize the banking system....

“A recent IMF study of 42 systemic banking crises across the world provides evidence of how different crises were resolved.

“First of all only in 32 of the 42 cases there was government financial intervention of any sort; in 10 cases systemic banking crises were resolved without any government financial intervention. Of the 32 cases where the government recapitalized the banking system only seven included a program of purchase of bad assets/loans (like the one proposed by the US Treasury). In 25 other cases there was no government purchase of such toxic assets. In 6 cases the government purchased preferred shares; in 4 cases the government purchased common shares; in 11 cases the government purchased subordinated debt; in 12 cases the government injected cash in the banks; in 2 cases credit was extended to the banks; and in 3 cases the government assumed bank liabilities. Even in cases where bad assets were purchased – as in Chile – dividends were suspended and all profits and recoveries had to be used to repurchase the bad assets. Of course in most cases multiple forms of government recapitalization of banks were used." (Nouriel Roubini's Global EonoMonitor.)

In short, it wouldn't work. Nor was it designed to work. The bill was just Paulson's way of carving a silver canoe for he and his brandy-drooling investor buddies so they can paddle away to some offshore haven while the rest of us drown in a bottomless ocean of debt.

[Swamp Gas]

October 2, 2008

business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4863587.ece

Middle Americans unite against the great bank rescue

Alexi Mostrous in Richfield, Minnesota and Matt Spence

Willie Benway, 45, a Bush-voting truck driver with a Harley-Davidson jacket and a faded blond goatee, has little in common politically with Sharon Valentine, 60, a retired English teacher and self-confessed “woolly liberal”. On the subject of the $700 billion bank bailout plan, however, both are on the same page.

“It's goddamn un-American,” Mr Benway said as he leant against his pickup outside the Thrift Store in Richfield, Minnesota. “We don't give money to companies. We're not France - yet.” For Ms Valentine, sitting in a nearby mall: “Congress was right to vote the Bill down. It doesn't tackle the root causes or help the people that need it.”

In Richfield, a typical middle-class surburb of Minneapolis in the heart of the Midwest, Americans from across the political spectrum found something to gripe about when it came to the bailout.

“I literally had thousands of e-mails asking me to vote no on this,” said Congressman Tim Walz of Minnesota, one of 95 Democrats who opposed the Bill on Monday. “I've never seen anything like it in my two years of Congress. Folks just didn't want it.”
Related Links


Three of Minnesota's eight members of the House of Representatives voted against the Wall Street bailout Bill on Monday. Two were Democrats and one was a Republican. Michele Bachmann, the lone Minnesota Republican to oppose the Bill, issued a statement calling it “rushed, unworkable and short-sighted”.

During Monday's debate, the ultra-rightwinger read into the Congressional record a piece from Investor's Business Daily putting the blame for the mortgage crisis on a Clinton-era rule change. This, it was claimed, had pushed the mortgage giants Fannie Mae and Freddie Mac “to aggressively lend to minority communities” so that home ownership could “open the door for blacks and other minorities to enter the middle class”.

On the other side of the aisle, the Democrats Mr Walz and Collin Peterson gave different reasons for voting against the plan. Mr Walz, who is locked in a competitive race for re-election, struck a populist tone: “My job is to protect the American taxpayer and this plan doesn't go far enough in looking out for the middle class. It doesn't go far enough to hold Wall Street accountable.”

But there is also the risk of fallout should the warnings of impending economic catastrophe come true. According to a Washington Post poll released this week, 47 per cent of Americans opposed the Bill. Nevertheless, almost nine out of ten expressed concern that the bailout's failure could lead to a more severe economic decline.

“I keep hearing that if we don't put in all this money then people will lose their jobs,” Randi Hansen, 26, a waitress at Richfield's only bowling alley, said. “I'm really worried about it. My friend has already lost her house and I can't afford not to work now. I'm a single mother and I have $50 a month to live on.”

Tim Dyksman, 38, who was laid off from a warehouse business in nearby Edina six months ago, said: “It sucks that big bosses get bonuses while the little guy gets screwed.”

Many people yesterday afternoon were still absorbing the shockwaves coming out of Wall Street.

As ever in Richfield, some people were finding comfort in their faith. “It's interesting to see what's going to happen,” said Jean, an elderly lady who declined to give her second name. “But the Bible says that we'll get through the bad times by trusting in the Lord. That's what I'm going to do.”

[Swamp Gas]

existentialistcowboy.blogspot.com/2008/10/house-bows-to-blackmail-passes.html

Friday, October 03, 2008

House Bows to Blackmail, Passes Unconstitutional Bailout

The bailout bill is unconstitutional but passed the House under the Bush administration's threat of martial law!

The House rejected the original bill on Monday, sending stocks tumbling around the world.

But lawmakers approved the rescue package, backed by U.S. President George W. Bush and Treasury chiefs, Friday after the U.S. Senate passed it by a large majority on Wednesday.

Congress voted 263 to 171 in favor of the bailout bill, which will now go to President Bush to be signed.

Wall St, after climbing nearly 300 points before the bill was passed, slipped after the successful vote as the market tried to take in the news.

President Bush later said he would sign the bill into law Friday.

[Swamp Gas]

Congress threatened with Martial Law:

www.youtube.com/watch?v=HaG9d_4zij8

[chickenlittle]

Yeah, bluntly we are F#cked!!!!!
This fear mongering is being used EVERYDAY IN EVERYTHING!
It has truley become business as usual.sick making,isn't it.

[Swamp Gas]

A few Patriots left. Kucinich, Ron Paul, Russ Feingold, Donald Payne (Yay!!! Our Congressman).

No difference between the parties. It is the Rich against the Rest of Us.

Theta and I are voting third party, and Fuck Obama, that Uncle Tom weasel.

[Swamp Gas]

www.republicbroadcasting.org/index.php?cmd=news.article&articleID=1811

BAILOUT CREATING A FINANCIAL BLACK HOLE TO SUCK US ALL IN


Posted On: October 4th, 2008


A dish of Bailout with a side of pork, shareholders vaporized by Derivatives Death-Star, We all await the financial markets implosion, No problems solved by the bailout, Stay prepared for a full shutdown of the financial system with some cash on hand, Credit default swaps unregulated point in the chain.

Well, what a surprise, we've been sold down the river for the usual "thirty pieces of silver" by our Congress and our President, working together in unison, for the nth time.

The $700 billion bailout, a mere sideshow, sweetened with 150 billion in pork, has now been approved so that Wall Street can continue to game the system and its hapless suckers, the American sheople. Just put some pork in, and the hungry piranha in Congress would legislate their own mothers into slavery for a nice juicy morsel of that pork. And never mind the moral hazard dripping from the pork, because that makes it taste all the sweeter.

If you were wondering why all the healthier financial institutions, and of course we say that with tongue-in-cheek because we know they are all eventually slated for destruction by the explosive blast of a Quadrillion Dollar Derivative Death-Star, were buying all the gargantuan commercial and investment banks that are laden with toxic waste, you now have your answer. This is why all the shareholders in these zombie-acquisition deals are getting vaporized. Their assets were more valuable than they thought, because unbeknownst to them, the US government was about to pay far more for these assets than they were worth. But since the shareholders were not Illuminists, they were not privy to this information. And look at the disgrace with Citibank and Wachovia. After Citigroup wipes out the Wachovia shareholders, with the help of the FDIC, suddenly Wells Fargo, which now sees the value of all of Wachovia's crap paper via the Paulson Ponzi-Plan, comes through with a better offer. The Wachovia shareholders should attack Citigroup based on their fraudulent balance sheets, because they were in no position to acquire anything on this scale, or any other scale for that matter.

The Illuminist insiders were all told in advance that Wall Street's Excellent Bailout Bonanza would be stuffed down the throats of gullible US taxpayers. Note how many of these zombie-acquisition-deals were done before the bailout plan was even proposed on September 20. As you can see, the masters of the universe are so arrogant that they were willing to bet hundreds of billions of dollars that the Paulson Ponzi-Plan would be successfully shoved up our collective butts by our bought-and-paid-for-or-compromised government "representatives," so-called, despite the hue and cry of the sheople against this monstrosity, sometimes by as much as 300 to 1. All that cesspool paper that they now own by virtue of these zombie-acquisition-deals is very valuable to them. It will be sold to the government for far more than it is worth so that financial institutions around the world can somehow pretend that the losses are far less than they really are. And never mind that everyone in the world knows this stuff is crap, because we will all now have some sort of collective pipedream in the United Goldilocks Matrix. We can just see Hank and Ben firing up the pods and installing the everything-will-turn-out-juuuust-right software, so we can all pretend that the credit-crunch never happened. We will just ignore it. This is another Illuminist fantasy that will turn out about as well as their subprime scam.

Of course, the reality is, whether this cesspool paper worth pennies on the dollar is sold for its hold-to-maturity value or for some lesser, but still outrageously exaggerated, figure, the sheople will eat just about everything they pay out for this toxic garbage via the bailout plan. This stuff is crap even under current conditions, which are worsening by the minute. Just imagine what this stuff will be worth as the real estate markets, and the value of our new collateral, continue to fade off into the sunset while we enter into the Very Large Depression, which is now insured to happen by virtue of the Paulson Ponzi-Plan. And how much less will it be worth as the rate of return on this garbage gets buried by the upcoming double-digit interest rates that will be born out of the hyperinflation generated by all these bailouts, thus reducing its present value quite drastically. Then throw in the proposed government workouts, complete with interest rate reductions and cram-downs, just for good measure, and that ten cents on the dollar paper that we paid thirty, forty or fifty cents on the dollar for, will soon become worthless. Making matters even worse, all this toxic waste will be sold by select Illuminist institutions at what will be sham "arranged" auctions where everyone gets to sell what they want for the price they want, as long as they are Illuminist insiders. Everyone else can of course go scratch. With Hanky Panky as the real, unsupervised or rubber-stamped auctioneer, you can bet that we, the sheople, will be taken to the Illuminati's slaughterhouse to be sliced up into some prime cuts for the elitist carnivores. Mutton chops anyone? Dinner is now served, complete with caviar and champagne. Bon appetite.

The Illuminati will now act like drunken sailors at a keg party. They will drain the keg in short order, and then ask for more. If they do not get what they want, they will get rowdy, pounding the tables with their mugs and threatening a brawl that will destroy the tavern if they do not get their next round, pronto. Out comes the next keg, which gets drained even faster than the first because everyone is inebriated, and the next round of table pounding and threats becomes manifest. This process will proceed until everyone at the party has more than they can handle and passes out. Then comes the derivatives tsunami that will drown them all in a sea of counterparty risk, an event which will be used to usher in a new Orwellian, corporatist fascist state, where the financial, manufacturing and other major industries are all nationalized. We, and our European and Canadian counterparts, will all then resemble our fellow fascists, Marxists and dictators in Russia, in China, in the Middle East, in Asia and in South America, and the formation of world government will seem like the most the most natural thing to do, when everyone is on the same page, after the pesky, arrogant United States has been humbled into submission.

As we mentioned, this Excellent Bailout Bonanza, this Paulson Ponzi-Plan, is just a sideshow to distract everyone from the real issue, which is of course the Derivative Death-Star, with a Quadrillion Dollar mass that is about to implode, detonate, and morph into a financial black hole that will suck the entire world economy into its dark, massive, foreboding center. The subprime debacle is just one of the many fuses leading into the gargantuan derivatives powder keg. The subprime paper to be auctioned is little more than a catalyst for the creation of the real disaster, which are the credit-default swaps and interest rate swaps, an entangled, Byzantine labyrinth of opaque, unregulated counterparty risk that will be ignited by continuing corporate bankruptcies and double-digit interest rates that will be created by a hyper-inflated economy awash in bailout dollars which the Fed will have created out of thin air.

Foreign nations with dollar forex cannot possibly keep buying all the treasuries that will have to be created to fund all these bailouts because they are all experiencing rampant inflation, and printing more of their own domestic currencies to absorb the dollars necessary to purchase treasuries is no longer possible without risking social upheaval and revolution as hyperinflation destroys their economies. This means that some, or even most, of the new treasuries that will be created by the Treasury and the Fed to fund the bailouts and deficits will have to be monetized, which is immediately inflationary. M3 is about to explode as these many monetizations and the Fed's trillions in liquidity injections continue to flood the fiat money and credit system, which will continue in its cryogenic state despite the Paulson Ponzi-Plan that will now be implemented in an attempt to re-inflate the credit markets, which are the lifeblood of our debt-based, fiat money system, thanks to the cessation of the gold standard. Everyone on Wall Street knows that the subprime paper is not the real problem. The real reason they distrust one another, and will not lend to one another, is the unknown counterparty risk that will go into a plasma state when the Derivative Death-Star detonates. It is the opaque, unregulated OTC derivatives market that they are really afraid of.

Due to the fact that you have 70 or more trillion of credit default swaps insuring 5 trillion in bonds, a ten billion dollar loss by a large corporation can on average morph into a 140 billion disaster of epic proportions that could wipe out several other companies, whose own credit-default swap counterparty risk would then ignite, in a chain reaction reminiscent of a thermonuclear explosion. Remember, credit default swaps are not true derivatives with a zero net sum. They are insurance policies. But unlike most insurance, there are no regulators or loss reserves, thanks to Slick Willie Clinton and the Congress, which passed the Commodity Futures Modernization Act in 2000. Worse yet, they can be used to insure property which the insured party does not even own. Hence, you can see why everyone trembles at the thought of this radioactive sector going thermonuclear.

Did you see how the stock market received the Paulson Ponzi-Plan? They used it as an opportunity to de-leverage, which is pretty much all it was good for, and the Dow was taken to a new low in the process. No problems have been solved, and we will continue on to our ignominious destiny with recession, depression, and a third world Banana Republic standing where we are all but irrelevant to the world economy. No one will have anything but worthless paper to spend for foreign tangible goods.

Americans and Europeans are too stupid to understand the necessity of owning precious metals under these disastrous circumstances, and they will have little of value to trade for the tangible goods exported by the world's manufacturing economies, who have taken over America's role as the lead producer thanks to free trade, globalization, off-shoring, outsourcing and both legal and illegal immigration. The main purpose of the IF is to wise these dolts up, and save them from the planned destruction of our economy at the hands of the Illuminati. This situation is survivable, but advance notice and preparation are the key to success. Gold and silver are the only remedy for what now ails our nation, and nations around the world.

The Senate financial market rescue bill would temporarily allow the FDIC to borrow unlimited amounts of money from the Treasury Department in order to provide larger government deposit coverage that would extend until the end of next year, which really means forever. This has all the earmarks of a banana republic.

The latest propaganda from the government and the Illuminist think tanks tells us that, treasuries are more secure than gold because they are backed by the US government and gold has a counter party risk by whoever is storing your gold as the counter party. I’ve never heard any stupider comments.

The Fed has informed Bank of America to be ready for a one-week universal shutdown of the banking system, including access to checking accounts, savings accounts and credit cards. This is why you need $5,000 in small bills in your safe at home and small denomination gold and silver coins.

[chickenlittle]

Putting the bailout into perspective,
this is crazy to think:
1 billion seconds ago it was 1959
1 billion minutes ago Jesus walked the earth (supposed,for those who don't believe)just a timeline here
1billion hours ago no one walked upright

[Swamp Gas]

I also heard that we will loan the money to the government, they will give the money to the banks, and then the government will give us back the money.

The catch is WE will have to pay interest on our own money!!!

I have to track down this, but more than one economist has said this.

It will not fix the problem. They will take the bad assets, lower the interest rate, and get more suckers to sign onto more attractive variable loans. Then the same process will happen. Throwing money at bankers is like throwing heroin at a junkie. 2 years from now, they will be asking for another trillion dollars. Obama has said he will increase the defense budget to one trillion dollars. Jobs are disappearing.

That is the BIG sticking point. we are expected to pay for rancid Wall Street greasers,, and get nothing but an increase in FDIC insurance from $100,000 to $250,000. Literally, it is extortion on the level of the Bolsheviks stealing from the Russian people. We remember what happened in that. Americans are too dumbed down, full of chemicals, booze, drugs, hormones, pesticides, and false information that they will do nothing. The Elite could care less what the American people think. Nobody will protest.

What to do? Stock up on precious metals, food, water, and protection to last 6 months, if not more. Pay up debts ASAP, even if to work a second job. Keep listening to intelligent music, watch creative movies, and read technical and classic writings. We are in for a rough ride, and yes, communicate offline for all of us with addresses and phone numbers.

[Swamp Gas]

This gets more bizarre and deeper


www.guardian.co.uk/business/2008/oct/05/wall.street.bailout

Now Wall Street may shun $700bn bail-out

Fears are mounting that many Wall Street banks and financial firms will refuse to participate in the US government's $700bn bail-out package, leaving global markets and world economies in a perilous state for months to come.

'There is a growing feeling that banks ... might instead decide to tough it out,' said Thomas Caldwell, chairman and CEO of Caldwell Financial, a $1bn-plus fund manager.

For the past two weeks all eyes in the market have been focused on US Congress and its attempts to pass Treasury Secretary Henry Paulson's bail-out package - a bill to allow the US government to buy up to $700bn of toxic mortgage-related assets from American banks, which would in theory free the credit markets and set the gears of global commerce spinning once more.

Last Monday, after the bill was thrown out by the House of Representatives, more than $1 trillion was wiped off the value of US stocks as the market was gripped by panic. The bill was passed on Friday afternoon, however, after the inclusion of $149bn of tax breaks and strict rules for participating banks.

But Wall Street analysts, believe the addition of so many terms to the bill might deter potential participants.

One of the least attractive elements is a section designed to curb executive pay at banks that participate in the bail-out package. These include limiting stock-related pay and banning 'golden parachutes' for executives.

'I think this hodge-podge of regulations and rules will be enough to put many [chief executives] off participating,' Caldwell said.

Sources close to Goldman Sachs and Merrill Lynch indicated the banks might choose not to participate in the bail-out as there is a growing view on Wall Street that the market may be bottoming out.

Analysts also believe that the mere presence of the government as buyer of last resort will be enough to get credit markets moving again, and that a large number of banks would not need to take part for the legislation to succeed.

Wall Street ended its worst week in seven years with another tumble on Friday. The Dow Jones Industrial Average closed down more than 157 points on Friday at 10,325.38.

[increase 1776]

$400B Sent To Israel
Ahead Of Lehman BK
The Voice of the White House
10-5-8

WASHINGTON, DC -- "There is a very serious aspect to the current economic collapse that no one wants to discuss, neither the economic pundits, the media or the scared politicians. This concerns an aspect of the subprime scams and, basically and stripped of euphemistic words and propaganda phrases, is that very large amounts of money from various banks and financial institutions and the owners and controllers thereof were, and are being, sent outside this country to a secure area. I am speaking most specifically of American business frantically sending, electronically, huge amounts of money to banks in Israel.

The three banks that are getting most of the stolen money are: Hapoalim group, Bank Leumi group, Discount Bank group. It is not necessary to mention that the senders are all Jewish and it should be noted that Israeli banking concerns practice strict banking security (see their Protection of Privacy Law, 1981 [PPL]) Under the PPL, "an infringement of privacy is, inter alia, a violation of an obligation to maintain secrecy regarding a person's private affairs, established by explicit or implicit agreement." The bank's obligation of secrecy extends not only to the details of the client's account but also to all transactions related to the account In other words, if the US authorities want to know about this, they can bend over while the Israeli bankers drive them home.

And if the sticky-fingered ones decide to make a quick flight to Israel ahead of FBI investigators, like their new accounts, they are entirely safe. Note here that Israel does not extradite its citizens. But it does allow prosecutions in its own courts for crimes committed abroad. None of this information is really secret but is well-known to investigative bodies such as the Department of State and the FBI. Currently,U.S. law-enforcement personnel and prosecutors, who fear that Israeli-oriented economic criminals will use the Jewish state as a refuge.

Lehman Brothers Shipped Off $400B Just Before Bankruptcy Nice !
By Linda Sandler
September 27, 2008

Bloomberg -- Lehman Brothers Holdings Inc.'s brokerage unit, in the months before its parent filed for bankruptcy protection, lost more than $400 billion in assets, according to the trustee overseeing customer accounts.

Lehman's holding company filed for bankruptcy Sept. 15 claiming $639 billion in assets, using four-month-old data. The wholly owned brokerage unit shrank to less than $100 billion in assets from $500 billion ``a few months ago,'' according to a Sept. 19 court statement by James Giddens, the trustee overseeing the settling of Lehman brokerage customer accounts by the Securities Investor Protection Corp.

The loss in value was caused by ``changes in the market,'' according to Giddens, a partner at law firm Hughes Hubbard & Reed, who spoke at a bankruptcy court hearing in Manhattan. The runoff may indicate Lehman's customers, including many hedge funds, canceled and closed out trades as they began to doubt the firm's ability to navigate the credit crunch, bankruptcy analysts and lawyers said.

``There was the proverbial run on the bank'' at Lehman, said Martin Bienenstock of the law firm Dewey & LeBoeuf, who is advising clients including Walt Disney Co. on recovering their money from Lehman. There was a similar capital flight from Bear Stearns earlier this year, he said.

Most of Lehman's pre-bankruptcy assets were securities, according to its balance sheets. Lehman said on Sept. 10 that the consolidated gross assets of the firm stood at $600 billion and net assets at $311 billion. The difference between net and gross is the so-called matched book, which is overnight lending or securities pledged for overnight borrowing.

tbrnews.org/Archives/a2880.htm
This is IcePick's specialty.The S&L robbery,the theft of Mexico's oil as payment for the Mex/Bailout,and on and on.Now the U.S.Army has two active military groups, as of Oct.1,2008,to be used in America against Americans. www.salon.com/opinion/greenwald/2008/09/24/army/index.html

[Swamp Gas]

Thanks Increase, I was going to look for this.

The Zionists are at the bottom of all this.

[increase 1776]

www.youtube.com/watch?v=ge2J2lNusJs Looks like the Amero is here already.

[Swamp Gas]

Amero......

www.counterpunch.org/ross10122008.html


The Long-Running Mexican Meltdown
The Sky is Falling on Mexico, Too

By JOHN ROSS

Mexico City.

Fury at the billionaire bail-out of the criminal class that has driven Wall Street into a disaster of 9/11 dimensions festers down at the bottom of the economic food chain on Main Street USA. It is a familiar syndrome south of the border. Bailing out the super rich on the backs of the rest of us has had Mexicans seething since the great FOBAPROA scam of the mid-1990s.

The Mexican Meltdown kicked in in late 1994. The outgoing president, the reviled Carlos Salinas de Gortari, had borrowed $33 billion USD in short-term loans to keep his house of cards from crashing down before he left office. Worried about his legacy, Salinas refused to devaluate a chronically over-valued peso, leaving the dirty work to his inept successor Ernesto Zedillo. When on December 20th, the new president was forced to devalue, the peso sank from three to ten to a dollar overnight. Panicked investors pulled their money out of the country to the tune of $1.5 billion a day. Capital flight emptied out the nation's once-healthy reserves. With payback on Salinas's short-term "tesobonos" coming due daily, Mexico was staring down default by January 1995.

Meanwhile, Mexican banks, which were re-privatized just two years previous, had been stripped back to the bone. The only liquidity left in the vaults was said to be $26 billion in narco-money that the U.S. Drug Enforcement Administration claims is washed through the Mexican banking system annually. Interest rates were ratcheted up to 100% plus and debtors were crucified.

Encouraged by the banks, farmers had borrowed beyond their means to position themselves for the never-materialized bonanza of the North American Free Trade Agreement (TLCAN are its Spanish initials) and couldn't pay up. The banks foreclosed on family farms, ranches, machinery, and herds of livestock.

Urban borrowers, squeezed by the soaring rates, lost taxis and taco stands, their furniture and their apartments. The banks hired armed, off-duty cops who broke down the doors of the debtors, terrorizing their families. Over a thousand citizens were unlawfully jailed and charged with theft.

By February 1995, Mexico had lurched into its deepest economic slide since the Great Depression. Indeed, depression was the mood of the day. Farmers drank pesticide to end it all or poured gasoline over their bodies and immolated themselves in despair. 33 citizens leaped to their deaths before onrushing trains down in the Mexico City Metro in 1996, a record.

But other debtors organized and fought back. El Barzon which took its name from a popular depression-era tune (the "barzon" was the strap that fastened the plough to the mule team) mobilized farmers and cityslickers alike. Bank officials were tarred and feathered, highway tollbooths burnt to the ground. In Mexico City, the Barzonistas sealed bank doors shut with superglue and marched through the streets in their underwear or less or clothed only in barrels in classic Great Depression style. One day, El Barzon paraded a circus the banks had foreclosed on to the great doors of the Bank of Mexico where the elephants took dumps on the marble steps, a steaming souvenir for the hated bankers.

The U.S. Central Intelligence Agency told the daily business journal El Financiero that the Barzon movement was even more subversive than the Zapatista Army of National Liberation, the Indian rebels in Chiapas whom Zedillo was falsely blaming for destabilizing Mexico and triggering the collapse.

Like the Cassandras of Wall Street today, the bankers cried Armageddon and the president, Zedillo, much as George Bush in the current imbroglio, stampeded congress into a monumental bail-out. FOBAPROA ("Banking Fund for the Protection of Savings") dumped $120 billion USD in bad debt on the backs of Mexican taxpayers, 20% of the nation's gross domestic product - Bush's monstrous bail-out only accounts for 7% of U.S. GDP.

Unlike the U.S. Congress's testy reaction to what is being dubbed "GRINGOPROA" here, the Mexican legislature, then dominated by the long-ruling (71 years) Institutional Revolutionary Party (PRI), in connivance with the right-wing PAN, signed off on FOBAPROA without missing a beat. Only the left Party of the Democratic Revolution (PRD), led by Andres Manuel Lopez Obrador (AMLO) raised its voice in protest. A referendum on the bail-out organized by Lopez Obrador drummed up 2,000,000 votes against Zedillo's skam.

The cost of FOBAPROA has been incalculable. With the Mexican government obligated to shell out $8 to 10 billion USD of Mexican taxpayers hard-earned money each year to pay off the debts of deadbeat banks, social budgets have shrunk, schools and hospitals do not get built, and the nation's highway system, also privatized under Salinas and Zedillo, has fallen into dangerous disrepair.

Once the banks had been reasonably sanitized, the Zedillo government sold them off to international financial combines - Citigroup, Santander, the Bank of Nova Scotia, the Spanish BBVA, and the Hong Kong-based HSBC dominate the Mexican banking industry, 90% of which is in non-Mexican hands. Now the globalization of the Mexican banking system has left it vulnerable to contagion from the collapse of Wall Street.

In fact, the gringo credit crunch has already spread south of the border. Battered by spiraling interest rates, Mexican borrowers are defaulting big time on their loans - 6.9% of all bank loans are unrecoverable. Spurred by unconscionable hand-outs of credit cards to the middle and underclasses, 8.9% of all plastic is contaminating credit markets. Constricting credit threatens 2,000,000 small businesses and doomsayers speculate that fresh crisis and a new FOBAPROA are on Mexico's plate for 2009.

The U.S. debacle, tagged the "Jazz Effect" by Argentinean president Cristina Fernandez at the United Nations General Assembly conclave last week (an insult to a uniquely American art form), has infected Mexico's economic bloodstream and the nation's well-being seems beyond recovery for the foreseeable future.

Whereas President Felipe Calderon and his 350-pound finance minister Agustin Carstens once assured suspicious investors of 3% growth in 2008, the lowest on the Latin American totem pole trailing even basket case countries like Honduras and Haiti, Merrill Lynch, itself a flattened former powerhouse just spun off to the Bank of America, has recalibrated that anemic forecast to a sickly 1.9% in light of the fall-out from the downturn in El Norte.

Sinking oil prices as energy demand tails off into a deflationary spiral will cripple investment in PEMEX, the national oil consortium Calderon so ardently wants to sell off to Big Oil - PEMEX accounts for 40% of the nation's budget. Even more ominous is the nosedive in "remesas", remittances sent south by Mexican workers in the U.S. that is the only sustenance for whole rural regions and which constitute Mexico's poverty program - one out of every four Mexican families now subsist on the remesas. Remittances are Mexico's second source of dollars, right behind petroleum.

This August, the flow of greenbacks from the north diminished by a shocking 12% and total remesas have sunk 4.4% in the first five months of 2008. Prospects for relief are dim. Mexicans working in the U.S. are the last hired and the first fired. With U.S. national unemployment topping 6% - California where more Mexicans work than any other state registered 7.9% unemployment last month and the construction industry which employs many Mexican workers is off 14% - workers are beginning to return home even though unemployment and inflation here are hitting highs not seen since the Meltdown of the 1990s.

Although the Calderon administration minimalizes the return migration, estimating that no more than 200,000 workers will come home to Mexico in coming months, many immigration watchers are calculating that the numbers could stretch into the millions. Despite labor secretary Javiar Lozano's happy face forecast that Mexico will be able to provide jobs for the returnees, it should be remembered that these workers fled to the U.S. precisely because they could not find work here.

Moreover, Mexico, which runs a serious trade deficit with the U.S., will see exports and the jobs they generate dry up in 2009. Automobile and auto parts orders, a big chunk of Mexico's export basket, have been cancelled due to sagging sales up north and workers are being laid off on both sides of the border. Manufacturing orders for border-based maquiladoras are plummeting and hundreds of thousands of jobs have been lost to even lower wage countries like China in recent years.

The news gets worse. Workers' pension funds, privatized under Zedillo to allow for investment in money markets, have lost 62.5 billion pesos since the first of the year. The credit collapse has gutted the Mexican stock market as sorely as it has eviscerated U.S., European, and Asian exchanges - the Bolsa de Valores has lost over a thousand points just in the last month, panicking the nation's top Forbes list billionaires.

Carlos Slim, the world's first, second, third, or fourth richest man depending on how one measures fortunes, claims to have lost half of his in recent weeks - Slim, owner of many telephone companies in Latin America, is heavily invested in both Wall Street and the Mexican stock market where his corporations account for a third of the trading volume. The despondent Slim recently summoned the press to hear out his doom and gloom prognosis, describing the current credit crisis as far more dangerous than 1929 and anticipating deep and prolonged world recession if not Great Depression.

While the sky falls in on Mexico's future, President Felipe Calderon appears astoundingly blasé, echoing John McCain's misguided appraisal of his own economy by declaring Mexico's "fundamentally sound", an opinion he shared with brokers last week at the reeling New York Stock Exchange where he was invited to open trading by clanging the traditional bell.

Calderon's optimism was echoed by his super-sized finance minister Carstens who assures investors that "this is one crisis Mexico is prepared for." The old maxim that when Wall Street gets the sniffles, Mexico comes down with pneumonia is no longer operative, the former World Bank behemoth counsels. "Now Wall Street has pneumonia and we will only get a little cough." Such delusional reasoning invoked a chorus of coughing when Carstens went before congress recently to insist that Mexico would resist the gringo disease without resorting to cutting budgets.

Dubious observers like La Jornada financial columnist Carlos Fernandez Vega suggests that a good place to initiate cuts might be Carstens himself. Imagine how much Mexico could save in spiraling food costs if the corpulent finance secretary's intake was slashed 10% in the next budget cycle.

[increase 1776]

That just leaves Canada to complete the problem.They already have the solution.My 83year old mother told me today that she lost $75,000.00 on her IRA.Always said they worship the Devil.The moneychangers have no heart or soul.The almighty Dollar is their savior.

[Swamp Gas]

Oct 12, 2008 19:41:41 GMT -5 increase 1776 said:

That just leaves Canada to complete the problem.They already have the solution.My 83year old mother told me today that she lost $75,000.00 on her IRA.Always said they worship the Devil.The moneychangers have no heart or soul.The almighty Dollar is their savior.

Does your mom live in Canada or the USA?

I work with a 70 year old woman who said she has lost $40,000 in her IRA. She can't quit to unleash it, and cannot move it until she either retires or leaves the job. She is petrified to say the least.

Listening to Gary Null on a local FM station from 12-1 PM EST, he was talking about abolishing the Fed, and said right now you are better off putting your 401K money into herbs, vitamins, organic food, and exercise. He talks of the NWO, supports Mike Gravel, Ron Paul, Bob Barr, Ralph Nader, and Cynthia McKiney.

Here is the link to his show. Very insightful. It would be 9 AM-10 AM PST.

www.nyc.gov/html/nycmg/wnyefm/html/home/home.shtml

Click "Listen Now"

[Swamp Gas]

www.antiwar.com/justin/?articleid=13601


Back to the Future

The economy crashes, war looms, a savior appears – haven't we been here before?

by Justin Raimondo

"The eternal hourglass of existence is turned upside down again and again, and you with it, speck of dust!"

– Friedrich Nietzsche

Nietzsche eventually went mad, some say due to the effects of syphilis, others blame the implications of his complex and darkly ironic philosophy of life, which included, as its central precept, the doctrine of eternal recurrence. The concept makes its most dramatic appearance in Thus Spake Zarathustra, where Nietzsche, speaking through Zarathustra, is arguing with a grey dwarf who represents human limitations:

"‘Behold this moment!' I went on. ‘From this gateway Moment a long, eternal lane runs back: an eternity lies behind us.'

‘Must not all things that can run have already run along this lane? Must not all things that can happen have already happened, been done, run past?'

‘And if all things have been here before: what do you think of this moment, dwarf? Must not this gateway, too, have been here – before?'

‘And are not all things bound fast together in such a way that this moment draws after it all future things? Therefore – draws itself too?'

‘For all things that can run must also run once again forward along this long lane.'

‘And this slow spider that creeps along in the moonlight, and this moonlight itself, and I and you at this gateway whispering together, whispering of eternal things – must we not all have been here before?

‘ – and must we not return and run down that other lane out before us, down that long, terrible lane – must we not return eternally?'"

This concept, it has to be admitted, is subject to various interpretations: since Nietzsche wrote in parables and aphorisms, his text rich with metaphor, it's hard to say whether he was speaking about the willingness to relive one's life, exactly as it was lived, over and over again, as a sign of life affirmation and psychological health, or if he meant it in the temporal sense, as a cosmological theory. Time, according to this variant of Nietzschean thought, doesn't progress in a straight line, but loops back on itself: we are doomed to go through the same cycles, again and again, and there isn't a damned thing we can do about it.

In any case, it's this latter interpretation that fascinates me, these days, because we seem to be reliving the first days of the Great Depression of the 1930s, and war drums are heard in the distance. As the stock market takes another dizzying dive, and the ghosts of FDR, Hoover [.pdf], and – yes – Hitler return to haunt us, reproach us, taunt us, the madness that overtook Nietzsche isn't hard to understand. To continually make the same mistakes, to stumble over the same ruts in the road, to repeat mindlessly and without the least bit of irony or self-mockery the dusted-off slogans of yesteryear, all to the same tragic and bloody effect – what kind of a nightmare universe are we living in?

Once again, the delicate structure of human economy shudders, and falls, as the death of a system that has made us the wealthiest nation on earth is loudly proclaimed. Capitalism is dead – long live … what?

We've seen these other ‘isms before, and they aren't a pretty sight. Socialism, fascism, communism, national socialism, corporatism, and other despotisms too obscure to be mentioned – they're all rising from their graves, resurrected by fear and the hope of redemption. A government official affixes his signature to a piece of paper and suddenly the market is abolished, the banks nationalized, as the very visible hand of the State takes hold. And all of this furious action is framed within the context of an ongoing war – a world war, officially declared by our President.

Perhaps unconsciously presaging this moment, the War Party has often – and cleverly – utilized images of the 1930s in its propaganda: in their world, Hitler never died, but lived on to bedevil us in many forms. Every tinpot despot we've faced and overthrown has been depicted as the latest incarnation of the failed painter-turned-dictator whose name has become a byword for human evil. Yes, even Manuel Noriega! (Remember him?) To the neocons, it is always 1939, every negotiation is another Munich, and the only real solution is war, followed by a promise of blood, sweat, and tears. Churchill is their god, and Franklin Delano Roosevelt sits at his right hand side. These two stood fast during the crisis, and withstood the storm unbowed, uniting their respective nations – and indeed the West – in a worldwide crusade that only ended after many millions had been hurled into the abyss from the heights of their heroism.

"The eternal hourglass of existence is turned upside down again and again, and you with it, speck of dust!"

To my fellow specks of dust, I would issue this warning: you may think the danger of a destructive war – another world war – is abating, now that we are to have a new President, likely one who is willing to talk and doesn't see Munich in every effort at conciliation. Yet, remember, that he, too, is a speck of dust, albeit one a bit bigger and of more consequence that most. He, too, is carried along by the same forces that drive us all, the winds of Time that blow backwards as well as forward, and carry us to where we've been before….

We are entering a danger zone, one that is full of hidden minefields, and unless we step gingerly, and carefully, tragedy is ensured. In times of economic uncertainty, such as these, human beings are susceptible to all sorts of malign influences: energized by economic ignorance, disdainful of history, and unconstrained by either morals or common sense, demagogues arise, and a thousand alien ‘isms take root in American soil, flowers of evil luring us with extravagant colors and exotic perfumes. Ideology, like madness, takes hold of human minds, and dehumanizes them quite effectively. As the conservative philosopher Russell Kirk reminds us (in his storied attack on the neoconservatives): "Ideology animates, in George Orwell's phrase, ‘the streamlined men who think in slogans and talk in bullets.'"

All these rising ideologies take as their starting point the necessity of increasing government power and influence in every sphere of human activity, starting with economics and ending with – well, who knows? There is no logical endpoint to the modern "liberal" faith in the power and benevolence of government – and, these days, the "conservatives" agree with them, and then some.

This crisis, like the one that followed in the wake of 9/11, conjures the atmosphere and the rhetoric of wartime. Already we are hearing about the "war on recession," Little surprise that the solutions proposed require the regimentation of capital under Washington's command. Economic actors are no longer free individuals but soldiers in an army. What we are witnessing is how an economy – and a society – becomes militarized.

The economic crisis – caused in large part by the economic consequences of militarism – has set into motion a fundamental shift in American politics, one that is a perfect breeding ground for the rise of a genuinely fascist system. Our own form of Caesarism will have distinctly American characteristics, of course, but the universal pattern will run true to form: a system of economic corporatism, with all power invested in the State and the whole infernal machinery energized by a demonic sense of mission – in our own case, the "duty" to export the wonders of "democracy," American-style, to the world, and otherwise Do Good.

All the ingredients are there, and the rise of Barack Obama to frontrunner status is troubling at this particular historical conjuncture. With the media agog over him, and his "antiwar" supporters willing to suspend disbelief to a very great degree, President Obama will be in a position to prove his "toughness" in the foreign policy field without having to face much criticism. Indeed, he'll earn praise for, say, confronting Vladimir Putin over Ukraine – "Watch Ukraine," advised his opponent, and I wouldn't be at all surprised if Obama is indeed watching it. His planned grand scale re-invasion of Afghanistan is already being hailed by yesterday's "liberals" – tomorrow's hawks – as we dig ourselves into a deeper hole than was ever dug in the sands of Iraq.

The militarization of the economy, the regimentation of capital and – eventually – labor, will make the War Party's job all that much easier. The centralization of economic power in the hands of government officials will ensure that the resources of the nation will be directed, at will, to whatever ends are deemed necessary for victory. We are headed for a future where all the wealth of the country, its energies and attention, are mobilized and marshaled by government as one would command an army. It will be a society perfectly suited to become a modern Sparta, one naturally inclined to militarism and war, as different from the old market-oriented America as the Borg is from human civilization.

Another danger sign: the Obama's campaign's remarkable haughtiness, which is just a reflection of his own regal manner. He's acting like he's already the President, and he hasn't even been elected yet. Just wait until he gets into the Oval Office: an arrogance that had been merely annoying will become overweening. An arrogance, I might add, that is shared and carried to its logical conclusion by his fervent followers, who are just as extreme and often just as scary as their Republican counterparts.

In what has to be the most outrageous act of government intimidation of political opponents since the Alien and Sedition Acts, a group of prominent prosecutors and local law enforcement officials in Missouri, including in St. Louis and surrounding rural areas, have banded together and formed the "Obama Truth Squad." Under the rubric of enforcing "campaign ethics laws," they are threatening to take anyone to court who fails to tell "the truth" about the Dear Leader.

Where in the name of all that's holy is the American Civil Liberties Union? Probably the same place they were before and during World War II – cheering on the prosecution of "reactionary" dissidents, including war opponents.

In the grim future we are headed for, anyone who dares oppose Obama's policies, no matter how disconnected the issues are from race, is bound to be called a "racist," if not by the White House then by its media amen corner, which will be the most obsequious since Stalin's day. The media hated George W. Bush, and yet look how easily they fell for his guff in the run-up to the Iraq war. Just imagine what a starry-eyed fourth estate will let the Obama administration get away with! I shudder to think of it.

Assuming he wins the White House, it will be a huge problem just finding out what's going on, what with the mainstream media anesthetized, and the liberals cheerleading the administration's every move. In the age of Obama, Antiwar.com is an absolute necessity. The War Party, far from being banished from Washington, is simply re-entering through the back door.
~ Justin Raimondo

[Swamp Gas]

www.reuters.com/article/email/idUSTRE49N1XX20081024

U.S. has plundered world wealth with dollar: China paper

Fri Oct 24, 2008 6:14am EDT

BEIJING (Reuters) - The United States has plundered global wealth by exploiting the dollar's dominance, and the world urgently needs other currencies to take its place, a leading Chinese state newspaper said on Friday.

The front-page commentary in the overseas edition of the People's Daily said that Asian and European countries should banish the U.S. dollar from their direct trade relations for a start, relying only on their own currencies.

A meeting between Asian and European leaders, starting on Friday in Beijing, presented the perfect opportunity to begin building a new international financial order, the newspaper said.

The People's Daily is the official newspaper of China's ruling Communist Party. The Chinese-language overseas edition is a small circulation offshoot of the main paper.

Its pronouncements do not necessarily directly voice leadership views. But the commentary, as well as recent comments, amount to a growing chorus of Chinese disdain for Washington's economic policies and global financial dominance in the wake of the credit crisis.

"The grim reality has led people, amidst the panic, to realize that the United States has used the U.S. dollar's hegemony to plunder the world's wealth," said the commentator, Shi Jianxun, a professor at Shanghai's Tongji University.

Shi, who has before been strident in his criticism of the U.S., said other countries had lost vast amounts of wealth because of the financial crisis, while Washington's sole concern had been protecting its own interests.

"The U.S. dollar is losing people's confidence. The world, acting democratically and lawfully through a global financial organization, urgently needs to change the international monetary system based on U.S. global economic leadership and U.S. dollar dominance," he wrote.

Shi suggested that all trade between Europe and Asia should be settled in euros, pounds, yen and yuan, though he did not explain how the Chinese currency could play such a role since it is not convertible on the capital account.

A two-day Asia-Europe Meeting (ASEM) of 27 EU member states and 16 Asian countries was set to open on Friday. Though few analysts expect much in the way of concrete agreements, Shi said it could prove momentous.

"How can Europe and Asia grasp each other's hands and together confront the once-in-a-century global financial crisis sparked by the U.S.; how can they construct a new equitable and safe international financial order?" he said.

"The world is waiting for this Asian-European meeting to achieve big results in financial cooperation."