Even if Congress backs the Paulson bail-out, the $700 billion blast cannot save the US, Britain or the world from the deepest economic slump since the Thirties. If Congress balks, God help us. The credit system is suffering a heart attack. Inter-bank lending is paralysed. Funds are accepting zero interest on US Treasury notes for the first time since Pearl Harbour, because no bank account is safe.
Wherever you look – dollar, euro, sterling Libor (the rate at which banks lend to each other), or spreads on credit derivatives – the stress has reached breaking point. If borrowers cannot roll over the three-month loans that are the lifeblood of business, they will default en masse.
“Money markets are imploding. If no action is taken very soon, there is a significant risk that the global economy will collapse,” says BNP Paribas. Almost every trader says much the same thing. So does US treasury secretary Hank Paulson, who as Toby Harnden reports, literally dropped on bended knee to beg help from Democrats on Capitol Hill.
Republican refuseniks – defying their president – have a grim responsibility if they now tip America over the edge, setting off the “adverse feedback loop” that so terrifies the US Federal Reserve. Like players in a Greek tragedy, they seem determined to repeat the “liquidation” policy that led to the Great Depression – and to Democrat ascendancy for years.
Lehman Brothers’ collapse showed the chain of inter-connections that can cause mayhem across a clutch of different markets. That was just one bank – albeit with $630 billion or so in liabilities.
Credit is the lubricant of a modern economy. A seizure now would probably lead to the bankruptcy of General Motors and Ford in short order, but it would not stop with the US car industry. Waves of job losses would set off a self-feeding spiral. Yet more people would default on their mortgages (and car loans), driving house prices down even further. That, in turn, would threaten the solvency of the best banks. That is the way to Armaggedon.
As Mr Paulson says, US taxpayers are on the hook whether they like it or not. A $700 billion fund to soak up toxic debt and stabilise the credit market is the cheapest way out. It is certainly cheaper than Depression.
Hopes that the world can cruise happily on as the US buckles have been dashed by the violent downturn across Europe and Asia over the summer. The Baltic Dry Index measuring freight rates for ships has plummeted by two thirds since May. Japan’s economy is already contracting. China’s may be close behind: a third of all textile factories in Guangdong have closed this year. House prices are tumbling in Shenzen, Beijing, Shanghai.
Albert Edwards, global strategist at Société Général, says Asia built its boom on shipping goods to the US: “The emerging market boom is going to collapse and this will shake investors to the core. The great unwinding has only just begun.”
In Europe, an arc of states from Scandinavia down through the core of the euro zone is already sliding into recession. German GDP shrank by 0.5 per cent in the second quarter. Its manufacturing orders have fallen for eight months in a row, for the first time since records began. Spain is at the onset of a calamitous bust after a property bubble that surpassed even the excesses in America.
This is debt deflation – partly imported from America, partly home-grown. It is global. There is nowhere to hide. Even oil-rich Norway took emergency action this week to shore up its banks.
How will it all end? Europe assumed – wrongly – in the early Thirties that it could withstand the Atlantic gales after the collapse of the Bank of the United States in December 1930. However, Austria’s Credit-Anstalt failed in the early summer of 1931, setting off contagion across the central European banking system.
In the end, it was America that muddled through. The US produced Roosevelt: Europe lost half its democracies. We now live in more benign times, but unlike America, it is far from clear whether the eurozone has the machinery to rescue its economy in a fast-moving crisis. EU rules prohibit big fiscal bail-outs. There is no EU treasury to take charge.
America’s serial bail-outs – nearing $1.6 trillion, or 12 per cent of GDP – are playing havoc with the US budget. The deficit is above 6.7 per cent, near a 60-year peak. But claims that the US is going bust are frivolous. The US Treasury is not taking on permanent debt: it is behaving like a giant wealth fund, hoovering up mortgage securities selling far below their real value for reasons of panic. Famed investor Warren Buffett expects it to make “a considerable amount of money”.
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There isn't enough money in the world to defuse the Quadrillion-Dollar Derivatives Bomb -- and nothing will restore trust and lending while it exists (and keeps growing daily, because the sale of this rubbish still hasn't been banned).
Most of these bets (which involve far more than housing-related debt) are matched sets representing opinion and counter-opinion. Many have been sold on to other owners, so the banks don't know who's holding what. If they'd first admit what's on their books, they could proceed to do the only sensible thing and nullify these toxic contracts among themselves on a no winners/no losers basis, refunding whatever sums were paid up-front.
The whole "crisis" is based on their seeking to preserve some profit from worthless investments, at taxpayer expense. These things never should have been created and sold in the first place!
Imagine being able to buy 200 insurance policies on someone else's $25,000 car and expecting to collect $5 million when it's wrecked. That principle is behind the insanely hyperinflated "notional value" of derivative securities.
Well, the so-called bailout rescue just passed, the largest single tax and debt increase in history. The Dow answered with a decline while Paulson and President say they are grateful (and also out of office in January 2009.)
There are typo/lacunae in the article (US Debt is 71% of GDP, unfunded liabilities are 7 times GDP, and derivatives are ten times the global economy). All historical highs except $10 T T debt which was 120% of GDP in the Great Depression/World War II.
Paulson sold his $430 M GS stock to become Treasury Sec, and paid no taxes.
If history is any precedent, assets will correct down the amount they were financed (100:1 in the case of derivatives; 125% in the case of GM DiTech home loans.)
Neiother a borrower nor lender be.
Hoovering the operative word indeed...
Its much more than voting No to the bailout, the introduction of financial regulation and dengration of our freedoms.
We need the equivalent of King Philippe IV of France who 700yrs ago on Friday the 13th of October sequestrated the Knights Templar.
The problem we have as did Philippe, removing the cancer is one thing but returning the wealth is quite another.
So 700yrs and 700bn, Philippe and us. Philippe's method was to roast the Templars over a slow fire, our solution is imprisonment by fictitious debt.
Philippe couldn't find the Templars wealth. Financial "sophistication" prevents us from doing the same.
http://www.halexandria.org/dward222.htm
We need change!
NO to bailout
Can't anyone remember when citizens and businesses had positive bank balances and credit wasn't the 'lifeblood of the economy'?
If we can manage to return to a sound economy, do you think it will occur without the destruction of the Wall Street-type banking and management model?
As destructive as this will be, we must do it to once again achieve a sustainable economy.
Just one simple idea to fund those 0,7 trillions needed . I have read that total assets in the US amount to amount 700 trillions ...why not tax those assets 0,1% ?? I am sure that not too many of the very rich will notice at all . The poor Amercians for sure will notice those 2800 US$ Mr Bush wants them to participate in the solution of this mess .
Just one simple idea to fund those 0,7 trillions needed . I have read that total assets in the US amount to amount 700 trillions ...why not tax those assets 0,1% ?? I am sure that not too many of the very rich will notice at all . The poor Amercians for sure will notice those 2800 US$ Mr Bush wants them to participate in the solution of this mess .
Just one simple idea to fund those 0,7 trillions needed . I have read that total assets in the US amount to amount 700 trillions ...why not tax those assets 0,1% ?? I am sure that not too many of the very rich will notice at all . The poor Amercians for sure will notice those 2800 US$ Mr Bush wants them to participate in the solution of this mess .
Bailout: Main Street�s message to Wall Street & Washington�
We don�t believe you.
Not a single word you say.
Why?
Do the words �read my lips - no new taxes� ring a bell?
We didn�t believe you when you said - �the credit crisis is well contained.�
We didn�t believe you when you said - �the worst is now behind us.�
We didn�t believe you when you told us the bill would be - �$150 billion.�
We didn�t believe you then and we don�t believe you now.
And how dare you!?!
How dare you trot out a bumbling, stumbling, stuttering, slickster like the former CEO of Goldman Sachs who personally profited to the tune of a $700 Million Dollar personal fortune by sending our jobs to China so some fat cat Wall Street CEO could double the value of his stock options, grab some lobbyist created tax credits, and drop .09 cents to his bottom line.
Not to mention that he, his former firm, and his ilk, were the ones who created and profited from dumping all this toxic Wall Street paper on Main Street in the first place!
Any coincidence that Paulson tried to �bum rush� us into a bailout, right after Goldman Sachs started to collapse?
Bear Stearns - no problem.
Fannie & Freddie - no problem.
Lehman Brothers - no problem.
Merrill Lynch - no problem.
WAMU - no problem.
Goldman? - problem.
We all know there are no coincidences on Wall Street.
And now you want to keep your $40 million dollar apartment in Manhattan, your $10 million dollar vacation home in the Hampton�s, and the windfall profits you sucked out of America, just before you collapse it?
You want us to bail you out of bankruptcy, right before you send us (and America) into it?
You want bankruptcy reform for you - after you locked us into serfdom with the bankruptcy reform act of 2005 - right at the peak of the credit, and housing bubble?
You want a bailout - AFTER you locked us, our children, and America into debtors prison?
Relief, reform, and a bailout for you� and the bill & debtors prison for us?
You must really think we�re a bunch of chumps.
Well guess what Wall Street & Washington, while �this sucka may go down� this time YOU�RE going down with us.
Sincerely,
Main Street
http://www.sliderontheblack.com/
Hank Paulson had worked at Goldmans all his career prior to taking this role. Could this like of establishment diversity hinder his ability?
Lehmans (one of Goldmans top competitors) was allowed to fail without any intervention.
A week or two later, when it became apparent that Goldmans was in trouble, Hank leapt into action to announce a potential resuce package.
The scaremongering is akin to the weapons of mass destruction scenario in my opinion e.g. If you don't sign up, everything will collapse. If a restaurant down my street closed, I don't see why the town should pay to rescue it.
Hank Paulson had worked at Goldmans all his career prior to taking this role. Could this like of establishment diversity hinder his ability?
Lehmans (one of Goldmans top competitors) was allowed to fail without any intervention.
A week or two later, when it became apparent that Goldmans was in trouble, Hank leapt into action to announce a potential resuce package.
The scaremongering is akin to the weapons of mass destruction scenario in my opinion e.g. If you don't sign up, everything will collapse. If a restaurant down my street closed, I don't see why the town should pay to rescue it.
Nothing but rampant inflation can save us now.
Doling out $5.2Trillion to wall street was never going to fly.
Instead of Saving FMAE/FMAC and this bailout, the US could have handed $20k to every man woman child, to do with as they wished.
Recapitalise a bank via share issues, buy up dodgey securities, pay off your own mortgage ect.
Hank Paulson had worked at Goldmans all his career prior to taking this role. Could this like of establishment diversity hinder his ability?
Lehmans (one of Goldmans top competitors) was allowed to fail without any intervention.
A week or two later, when it became apparent that Goldmans was in trouble, Hank leapt into action to announce a potential resuce package.
The scaremongering is akin to the weapons of mass destruction scenario in my opinion e.g. If you don't sign up, everything will collapse. If a restaurant down my street closed, I don't see why the town should pay to rescue it.
The bill is a fraud. It contains too much junk and gives Paulson dictatorial powers on how the taxpayers money will be spent. While it may help banks temporarily it also quitely is going to bail our state and minicipal pension funds. People do not like this.
Bailout: Main Street�s message to Wall Street & Washington�
We don�t believe you.
Not a single word you say.
Why?
Do the words �read my lips - no new taxes� ring a bell?
We didn�t believe you when you said - �the credit crisis is well contained.�
We didn�t believe you when you said - �the worst is now behind us.�
We didn�t believe you when you told us the bill
would be - �$150 billion.�
We didn�t believe you then and we don�t believe you now.
And how dare you!?!
How dare you trot out a bumbling, stumbling, stuttering, slickster like the former CEO of Goldman Sachs who personally profited to the tune of a $700 Million Dollar personal fortune by sending our jobs to China so some fat cat Wall Street CEO could double the value of his stock options, grab some lobbyist created tax credits, and drop .09 cents to his bottom line.
Not to mention that he, his former firm, and his ilk, were the ones who created and profited from dumping all this toxic Wall Street paper on Main Street in the first place!
Any coincidence that Paulson tried to �bum rush� us into a bailout, right after Goldman Sachs started to collapse?
Bear Stearns - no problem.
Fannie & Freddie - no problem.
Lehman Brothers - no problem.
Merrill Lynch - no problem.
WAMU - no problem.
Goldman? - problem.
We all know there are no coincidences on Wall Street.
And now you want to keep your $40 million dollar apartment in Manhattan, your $10 million dollar vacation home in the Hampton�s, and the windfall profits you sucked out of America, just before you collapse it?
You want us to bail you out of bankruptcy, right before you send us (and America) into it?
You want bankruptcy reform for you - after you locked us into serfdom with the bankruptcy reform act of 2005 - right at the peak of the credit, and housing bubble?
You want a bailout - AFTER you locked us, our children, and America into debtors prison?
Relief, reform, and a bailout for you� and the bill & debtors prison for us?
You must really think we�re a bunch of chumps.
Well guess what Wall Street & Washington, while �this sucka may go down,� this time YOU�RE going down with us.
Sincerely,
Main Street
http://www.sliderontheblack.com/fed-bernanke-paulson/bailout-main-streets-message-to-wall-street-washington/
Three Step Common Sense Plan
I. INSURANCE
a. Insure the sub-prime bonds/mortgages with an underlying FHA-type insurance. Government-insured and backed loans would have an instant market all over the world, creating immediate and needed liquidity.
b. In order for a company to accept the government-backed insurance, they must do two things:
1. Rewrite any mortgage that is more than three months delinquent to a 6% fixed-rate mortgage.
a. Roll all back payments with no late fees or legal costs into the balance. This brings homeowners current and allows them a chance to keep their homes.
b. Cancel all prepayment penalties to encourage refinancing or the sale of the property to pay off the bad loan. In case of foreclosure or short sale, the borrower will not be held liable for any deficit balance. FHA does this now, and that encourages mortgage companies to go the extra mile while working with the borrower�again limiting foreclosures and ruined lives.
2. Cancel ALL golden parachutes of EXISTING and FUTURE CEOs and executive team members as long as the company holds these government-insured bonds/mortgages. This keeps under-performing executives from being paid when they don�t do their jobs.
c. This backstop will cost less than $50 billion�a small fraction of the current proposal.
II. MARK TO MARKET
a. Remove mark to market accounting rules for two years on only sub-prime Tier III bonds/mortgages. This keeps companies from being forced to artificially mark down bonds/mortgages below the value of the underlying mortgages and real estate.
b. This move creates patience in the market and has an immediate stabilizing effect on failing and ailing banks�and it costs the taxpayer nothing.
III. CAPITAL GAINS TAX
a. Remove the capital gains tax completely. Investors will flood the real estate and stock market in search of tax-free profits, creating tremendous�and immediate�liquidity in the markets. Again, this costs the taxpayer nothing.
b. This move will be seen as a lightning rod politically because many will say it is helping the rich. The truth is the rich will benefit, but it will be their money that is at risk to stimulate the economy. This will enable all Americans to have more stable jobs and retirement investments that go up instead of down.
I Love the USA and I Love England . What the Bankers have done is outragious... Our standard of living will go down..The press in the usa talks about $ 700 Billion. Nothing is said about the Federal Reserve loaned the banks $ 1.25 Trillion Dollars
last week. They are causing volitility big time by doing this..They scare people out of stocks ..then somehow they short gold and silver so it drops in price so the confused investor stays away from that too. then at the same time they prop up the dollar.. This is carefully planned.. nobody is allowed to see the M 3 money supply ..
If people knew how huge the M 3 money supply has grown in the last 6 months Ben Bernake would be thrown in jail.. It is time to Shut Down the Federal Reserve Fraud Kings.
I am sorely grieved. The taxpayers cannot afford anymore of Bush's crimes. We are being punished for him being in office.
God help us!
I will quit my job and live off my land before I pay the mafia regime another blasted worthless quarter.
Bush is a spoilt brat who didn't get his way with his thugs, so now he is threatening the taxpayers again.
If it was the Republican 'refuseniks' that derailed the bailout, then, good for them. It's maybe the only thing any politician has done right. Collapes is inevitable. The USA is already broke. It can't be fixed.
The big longer term danger is that we allow ourselves to be seduced away from democratic freedoms, messy though they are, into simplistic "solutions" by a latter day Dostoyevskyan "Grand Inquisitor".
The world is not short of ideologically driven wannabe tyrants - we know them well from History. Today, they are not Nazi or Communist but Green or religious fundamentalist ( the flavour is not important). In seeking to "Save the Planet" for a True God or Mother Nature, these folk basically are anti -human, and will , thanks to modern databases created by bossy nannies, be able to subject us to controls well beyond the dreams of Yagoda or Heydrich..
Those whom gas and bullets do not kill will surely fall to State planned Famine.
Beware those who will call for an end to democratic freedoms and enterprise; they will soon be heard and we know, too well, where it ends.
...and now they are coming for your retirement money, they want it back...
4 Minutes that shows some people do understand how things work.
http://uk.youtube.com/watch?v=AMqJvhmD5Yg
------------------------------------------------------
Everyone whom reads newspapers knows the radical Neoconservatives Republicans running this show in America screwed-up. Do we really expect America�s new "Trash Bank" to be any different? Do we really trust the Bush Administration to do the right thing? This will be more of the same with no bid contracts, no regulation and exclusion of any oversight by the Courts.
Treasury Secretary Paulson's new "Trash Bank" is just another license to steal from the American Taxpayer.
Think about it... there's estimated "72 trillion dollars" worth of CDO's floating around in World Banks... "72 TRILLION DOLLARS" along with "382 trillion dollars" worth of swaps and options. This will cost the America taxpayer, and the World, far more then 700 billion dollars. Long term, expect a cost to American taxpayers in the TENS of "TRILLIONS of DOLLARS." Expect America to file bankruptcy and officially make the change from Democracy to Fascism. That's what the Neoconservatives Republicans want. This gives them the perfect opportunity to bankrupt American. Then out source the remaining government agencies, write plenty of no bid contracts and issue a new currency with a dollar redemption rate favoring the Elites. Then rein in and/or destroy Social Security, Medicare, state run Medicaid and other social programs.
I say play the ball where it lands... whatever a bank and /or investment bank owns it owns. Solve this problem the old fashion way with business mergers, fire sales and closures. Let 50% of all American Banks disappear and let Investment Banks fold. Then recreate and regulate, regulate, regulate!!!
Want to stop this economic downturn in its tracks then recreate an industrialized America with high paying jobs and benefits not more welfare for Wall Street and the radical Neoconservatives Elitist friends. America should spend that first 700 billion dollars on Americans by creating jobs, a government work program, rebuild infrastructure and a national health care system that "really works." Then recapitalize the FDIC, insure money market accounts and raise interest rates.
In America we need to revisit and investigate the Gramm-Leach-Bliley Act passed in 1999 which repealed the second Glass-Steagall Act which barred investment banks and retail banks from merging. The Gramm-Leach-Bliley, among other things, allowed a single institution to create debt-based investments and sell them. That's what started the financial catastrophe in America, indirectly London and maybe the World.
What amazes me most about this financial crisis is the lack of newspaper stories and editorials asking for investigations Worldwide. It's plausible that security fraud and/or violations of the RICO Act may have occurred on a very, very large
scale.
-------------------------------------------
We have our own troubles in the UK. First we bail out Northern Rock and now Bradford & Bingley.
The poor old taxpayer is running out of money.... Who is next ??
Who will pay the property tax on all these vacant houses and vacant buildings?
James Sinclair is right..
O T C Derivitive Contracts are the problem and must be stopped... outlaw them..
Shut Down the Federal Reserve
Who will pay the property tax on all these vacant houses and vacant buildings?
James Sinclair is right..
O T C Derivitive Contracts are the problem and must be stopped... outlaw them..
Shut Down the Federal Reserve
Ambrose ... You are the Best
for months the usa tv would not talk about this , someone over their head was saying...keep this banking mess quiet, and they did..But you came thru..
James Sinclair at jsmineset.com explained it very well ..O T C Derivitive Contracts were written by banks also Credit Default Swaps were put in place..Now the Wall St. bankers lost over $ 20 Trillion Dollars. they hold thousands of debt notes on vacant houses and vacant buildings.. they want to unload these before the property tax has to be paid to city and county governments...
Who ever holds the defaulted mortgage papers has to pay the property tax. If the US goverment buys these properties they will have to pay the property taxes and pay to mow the grass. Still these O T C Derivitive Contracts are not outlawed and the banks are still writing them. Some body has to stop them...
So as the global financial system implodes, somehow gold cannot eclipse the high from the day Bear Stearns died?
Don't you love free markets!
So as the global financial system implodes, somehow gold cannot eclipse the high from the day Bear Stearns died?
Don't you love free markets!
We have a solution.
www.fedupusa.org
This is certainly starting to look like the 30's ...except now we have criminal bankers instead of the Nazis.
Rhur = S&L bailout
Sudetenland = LTCM bailout
Poland = todays bailout
Surrender now - don't repeat the mistakes of 1939!
Ambrose is #1 in my book, he smells the dirt and informs us all !!!!!!!!!!
http://www.youtube.com/watch?v=wpIP49DuIXI
There is no limit to the amount of credit the Fed can create: so no chance of it being, or going, bust. There is of course the matter of consequent inflation. Central bankers can print money but they can't create value. Taxation is the preferred option, especially for savers - there being more taxpayers than savers. In international terms the US tax burden is relatively light, especially for the well-advised rich.
In my opinion, rather than bail-out the banks, which probably won't work, recapitalise them through partial, but temporary, nationalisation. They can then right down the value of sub-prime loans and so give them the capacity to lend again.
If you haven't already guessed what the problem is (since the politicians are keeping their big gobs shut)...then here it is. The Federal Reserve Bank of the US is bankrupt. That is why there is total fear and scaremongering in the US congress and executive. Ben Bernanke took his poorly thesis of how to run a central bank and made it his policy on taking helm. He has steered the bank to bankruptcy.
You don't believe it? Go and read the latest trading account from the Fed itself.
If the $700 billion package does not come through, the Fed has no other alternative than to print itself out of this mess. Many austrian school economists have warned that this day was coming and here it is, here and right now.
Weimar Germany in a nuclear super power. That is the abyss for mankind!
Still, don't sign the bill. It will only get worse!
Check out
http://blogs.cfr.org/setser/2008/09/26/extraordinary-times/
for a detailed examination of the Fed balance sheet.
Where there's smoke, there's fire !
Bush warned of financial chaos if not approved soon . The SEC alerted on the 23.9 of an " regulatory vacuum " in the gigantic uncontrolled CDS market .
Question : is it a mere coincidence that starting Wednesday 1.10.2008 the 3rd Infantry Division’s 1st Brigade Combat Team , now returning from the streets of Bagdad , will be assigned to home patrols on Amercian soil for the first time ever accordning to news in armytimes.com ?
I guess there is a good chance of a melt down with civil unrest at the end of the 3rd quarter 2008 which is next Tuesday ? May God help us ....out of this mess .
Ambrose & All:
Karl Denninger knows the way forward out of this mess with sensible solutions that will not bend the taxpayers over the table. Will we still have a recession? Yes, but if we want to get through it as quickly as possible, heed Karl's suggestions:
http://market-ticker.denninger.net/
http://www.tickerforum.org/cgi-ticker/akcs-www
When Bill Clinton eased banking restrictions, he dished out $8-billion dollars for "community reinvestment loans.� The money just evaporated. When the �creative financing� schemes fell through, as is their wont whenever 30-million Mexican nationals buy inflated properties and default, it left banks in the lurch. Never mind that the aforementioned demographic is the new face of the Democratic Party; the mortgages morphed into �toxic� instruments. Hillary Clinton counted heavily on the loan giveaways to buy votes. Interestingly enough, had Hillary secured the nomination; she, instead of Barack Obama would be presiding over the bailout. So, why should Americans perpetuate the housing bubble? Because it�s a scam! And, this is its well-timed exit strategy. Where is that $8-bilion plus dollars? These crooks stole my money; they even stole my car. The bubble is the problem, let it burst: http://theseedsof9-11.com
The envelope, please! The Yardeni (of Y2K fame) award for disaster prognostication goes to the likable Ambrose Evans-Pritchard. (Applause from the Wall Street Audience!)
Just wanted you to see the letter I've written to my Representative. If you like it, feel free to use it.
Dear Mr. Forbes,
Suspending the 'mark to market' rule will accomplish everything this bailout would and would cost nothing. It is absolutely inconceivable that Paulson, Bernanke and Cox do not know this. Given that knowledge, my conclusion is that the Paulson Plot (as everyone I know refers to it) is nothing less than treason against the United States and should be treated as such. They have already freely admitted giving advance information on their plans to various companies like Goldman Sachs. That constitutes enabling insider trading, correct? That alone is conspiracy.
These men could not get to the positions they occupy today and be stupid. Therefore we can only conclude they were aware this would happen for years AND FACILITATED IT.
Finally, if we had sound money none of this would be possible and the government would not be suspending civil liberties with the Patriot Act and sundry other legislation.
I could not in good conscience vote for anyone who provides one thin dime to these criminals.
Very Respectfully,
Louis Nardozi
If you haven't seen these videos describing the scam you really must.
http://fedupusa.org/
Alan,
The Fed is bankrupt, literally. However, the patient (the people) are in intensive care; broken in a financial car crash.
So what if the patient was the innocent party? Save the patient. Then prosecute the guilty parties.
When the patient survives, then the guilty can be pursued, and prosecuted for reckless behaviour.
When the patient survives, the guilty can be told to moderate/regulate their behaviour.
Right now, this is about survival for the innocent and the guilty.
The guilty can be admonished AFTER innocent are saved, in my opinion.
Make no mistake. This is now about saving the innocent by way of allowing the guilty to survive, and we can deal with them at a later time.
Distance lends perspective. Best wishes to you and yours at this perilous moment in world affairs.
Note to ed.: It's Shenzhen, not Shenzen.
oldasiahand
on September 27, 2008
at 02:32 PM
Report this comment
Oldasiahand,
Brilliant!
When the world respects what is then perhaps the world will get what is.
Just one example: the so called bail out does nothing to hold back the oncoming derivatives tsunami. It just gives poor people in the U.S. time to manage their property debts. You know, all those welfare junkies: Wall Street, and Main Street U.S.A.
Debt junkies, all of them. So are their cousins in the U.K., and elsewhere.
The poet Walt Whitman said: 'First, last, and always, your debt is due.'
So true. The last two decades are an aberration; a fantasy for people living beyond their means, and wrongly assuming that they would never have to pay their debt in full.
In full, they will now be forced to pay their debt.
Gold, and gilts will make sure of that.
China, Japan, Asia: this 21st century is yours. Caveat emptor. Do not bail out bankrupt Westerners. Invest in thine own. My children and yours will benefit from it, even if we do not in the short/medium term.
The FED is one of the most corrupt institutions in the world and was founded in bizarre circumstances two days before Xmas in 1913 by other corrupt institutions, the major banks.
The 1929 crash was engineered entirely by them in order to transfer wealth from the small and middle man to the big boys, especially the big banks.
Now they are trying to concentrate even more power in their hands and using fearmongering to try and bully Congress into going along with Paulson, the bankers fixer, absurd bailout plan.
In the Asia crisis ten years ago Malaysia got though without borrowing any money. They were advised by a team of money experts from Britain. There are other ways to get through this without allowing the FED to concentrate power. The FED should be closed down anyway. Ron Paul and Cynthia McKinney both want to do this.
Dear Ambrose,
Thank you for your generous, diligent efforts. This is the 11th hour. Somehow, I fear that all the alarm bells ringing will fail to get people off the beach before the tsunami hits. The waves are crashing on the beach. There's still time to run, but arrogance and ignorance will cling to their water wings on the beach, I suspect.
Thank you for your excellent analysis. Some people heed it. Some people have children to protect, and act accordingly.
Best wishes to you and yours.
Cynthia
Dear Ambrose,
Thank you for your generous, diligent efforts. This is the 11th hour. Somehow, I fear that all the alarm bells ringing will fail to get people off the beach before the tsunami hits. The waves are crashing on the beach. There's still time to run, but arrogance and ignorance will cling to their water wings on the beach, I suspect.
Thank you for your excellent analysis. Some people heed it. Some people have children to protect, and act accordingly.
Best wishes to you and yours.
Cynthia
Need anymore proof that Federal Reserve are manipulating this crisis?
The Fed has claimed that this is a "liquidity crisis."
Really Ben? Then perhaps you can explain this?
Look at Temporary Open Market Operations . There has been an intentional drain of "slosh", or liquidity, from the banking system. $125 billion in the last four days drained?
You wouldn't be trying to intentionally cause a bank failure or two to bolster your call for the $700 billion "bailout" plan, or perhaps intentionally lock the short-term credit markets, would you Ben?
If the market has a liquidity crisis, why would you be intentionally draining reserves from the banking system? Don't you think you ought to explain that to Congress?
Dear Ambrose,
Thank you for your generous, diligent efforts. This is the 11th hour. Somehow, I fear that all the alarm bells ringing will fail to get people off the beach before the tsunami hits. The waves are crashing on the beach. There's still time to run, but arrogance and ignorance will cling to their water wings on the beach, I suspect.
Thank you for your excellent analysis. Some people heed it. Some people have children to protect, and act accordingly.
Best wishes to you and yours.
Cynthia
Dear Ambrose,
Thank you for your generous, diligent efforts. This is the 11th hour. Somehow, I fear that all the alarm bells ringing will fail to get people off the beach before the tsunami hits. The waves are crashing on the beach. There's still time to run, but arrogance and ignorance will cling to their water wings on the beach, I suspect.
Thank you for your excellent analysis. Some people heed it. Some people have children to protect, and act accordingly.
Best wishes to you and yours.
Cynthia
Dear Ambrose,
Thank you for your generous, diligent efforts. This is the 11th hour. Somehow, I fear that all the alarm bells ringing will fail to get people off the beach before the tsunami hits. The waves are crashing on the beach. There's still time to run, but arrogance and ignorance will cling to their water wings on the beach, I suspect.
Thank you for your excellent analysis. Some people heed it. Some people have children to protect, and act accordingly.
Best wishes to you and yours.
Cynthia
It's so much more simple than most everyone realises.
When I was doing the second year of my MBA at the Harvard Business school in 1968-69 I did the Banking Course under a wonderful teacher called I think Charlie Williams. The most significant two lessons I think I learned was that borrowing short and lending long would eventually lead to disaster and that fractional banking would do the same thing, eventially. Think about it. What is a bank supposed to do? Then try the why technique for every aspect of the crisis and you will get back to those two answers above.
Good piece, Ambrose; the internet opened up and I can read the Telegraph again.
Sorry folks, I accidentally have been hoarding canned goods and frozen foods and one night of being banker with credit card for a restaurant meal of 20+ people plus "ice-money" means I have a cash hoard; must call up my 91 year-old father and ask about bank holidays again. (Ice-money? The 1997 Quebec ice storm that knocked out the electrical grid meaning no ATM';s for 3 weeks.) Now the opportunity money is in Treasury's and FDIC-insured bank deposits; when I need it at the June 1932/March 2003-type bottom will I be able to access it? Food for rational thought and I'm sorry to say it's in short supply now--me and Ambrose seem to be the only rational ones left.
For the rest of you--do you think the people that brought you this mess in Fannie and Freddie--government bureaucrats and the Democrats in Congress are going to treat you any better? Would they watch for any new excesses or will they go for "affordable housing" which helped get us in this mess. And their friends the Labor Movement with its goons and stooges, they're waiting in the wings to raid the American People by nationalizing industry, raising taxes (no taxes on undeclared income and union types usually cheat on taxes anyways when they're not stealing) and the usual extortion labor unions are known for: jacking up pay scales in union contracts. Read up on what the New Deal was really like and get ready for the Next War: like Roosevelt, like Obama.
If the Paulson Plan adds to it the germ of the insurance idea from the House GOP and that FDIC-type insurance for all CDO's is made to apply to all new issuance of said drivel, then maybe we will be out of the woods. I would be happier if CDO's were abolished and loans handled the way they were handled in the old days, from a portfolio in a financial institution--which worked. Derivatives are essentailly insurance and have to be actuarily sound; looks like the Derivative actuaries didn't do their sums right or didn't THINK THINGS THROUGH. And as for speculation in insurance policies, that problem was dealt with several centuries ago--no third-party life insurance, for instance.
Not that the vast bulk of mortgages, like mine, are very current. There will be a value to them. But unlike a straight bond the CDO has additional nebulosity to it; hence the market has dried up as no one wants to buy. Mark to Market? Does this mean the CDO is worth zero?
Easy point here: I held $20k in exchange-traded bonds of a company where for 4 years none traded. No holders wanted to sell nor needed to; no buyers got to buy. Now, was the price/value 0--or infinity? Under mark-to-market with buyers but no sellers the price is infinity; sellers but no buyers price is zero. Another bond I held gyrated wildly going from 94 to 13 before I sold it finally at 96.
Hopeless. Some good points here--but the Demagogues have it; Class Warfare. Enjoy the dark as the utility workers strike and take down the power grid with them--in 1946 they threatened to in Pittsburgh PA and my older siblings were sent to live with their grandparents out of state until the crisis blew over when the Democrats were overwhelmingly defeated at the polls. Unfortunately the Democrats came back with the Great Society and the deliberately-created social upheavals of the 1960's and '70's from the Democrats' Social Engineering.
Expect even more Social Upheaval of the '60's radical type--this time backed by the government.
Got to get back to work, but from the Socialist/Populist drivel I see here there is no hope. Anyone out there besides me want to see George Soros killed? I bet he's behind these bear raids; also, Obama is probably a KGB plant from the 1980's and now a Putin agent.
Hello, Mr. Rockefeller. I know people who signed on to these loans, one of them an overworked anesthesiologist doing her internship, and they knew perfectly well what they were getting into. I asked her how she planned to pay for it. She just smiled at me and whispered "Chapter 7," and giggled.
If'n y'all pee on an electric fence, y'all gonna git the shock of yer life! It's that tricky.
I will admit on a macroeconomic scale it will probably be a bit on the rough side, but I have to suppress an urge to laugh out loud at the impending misery of self-righteous thieves. Every vice has its justification: examples being "I'm not an alcoholic or drug addict, I'm self-medicating!" "Look what you made me do!" "It's society, evil demons, and the Illuminati who are ruining my world!"
Um, I don't think so. No one ever needs any help in that department, folks are pretty good at screwing things up on their own.
The sun still rises, the rain still falls, and babies still smile. Take a Xanax or Seroquel and chill out, dude. Maybe the video of my favourite Depression movie, "Bound for Glory" about the life of Woody Guthrie, or for you European enthusiasts of deprivation and depravity, I think Liza Minelli's "Cabaret" is appropriate, too. Come into the KitKat Klub, meinen Herren, it's safe inside. Tango, anyone?
What gets me is that the central banker's preeminent bank BIS told the world two years ago what was on the horizon but where none of our political leaders (Bush, Blair as the time et al) did nothing until now when the roof is starting to cave in.
It beats me also why we elect politicians as they are all reactive, not proactive and where they do nothing until it is too late. In many ways is it that they know what is out there but do not know how to fix it or are they plainly too thick to see the writing on the wall. Either way they are no good for the people they supposingly represent.
Clearly now we are looking at a world recession, possibly depression, with the US now having a debt when everything is added in of around $52 trillion. Yes I did say trillion.
Therefore after all this is all over (probably a decade at least), we have to change our economic and political systems to address sustainability and needs worldwide.
Dr David Hill
World Innovation Foundation Charity (WIFC)
Bern, Switzerland
"The US Treasury is not taking on permanent debt... Famed investor Warren Buffett expects it to make �a considerable amount of money�."
I keep hearing this argument, and there's something wrong with it. We are talking about the organisation whose task is to regulate the amount of money in the economy. It doesn't need to "make money" by wheeling and dealing in plasterboard houses as it is already in charge of printing and destroying the stuff. It's a closed system. If it "makes money" down the line, an equivalent amount of money must have been destroyed elsewhere.
So now they try to solve the problem by having this credit bubble actually extended and I think the $700 billion will be like a drop in the bucket because the total credit market in the U.S. is something close to $60 trillion, then you have the CDS market � credit default swap � of around $62 trillion. Then you have the whole derivatives worldwide worth about a notional $1,300 trillion.
So the $700 billion is really nothing and the Treasury is just giving out this figure when actually the end figure may be $5 trillion.
Inflationary Depression unavoidable. Congressman Dr.Ron Paul was right, and he is being proven so. Search for his videos.
http://www.breitbart.tv/?p=182363
So now they try to solve the problem by having this credit bubble actually extended and I think the $700 billion will be like a drop in the bucket because the total credit market in the U.S. is something close to $60 trillion, then you have the CDS market � credit default swap � of around $62 trillion. Then you have the whole derivatives worldwide worth about a notional $1,300 trillion.
So the $700 billion is really nothing and the Treasury is just giving out this figure when actually the end figure may be $5 trillion.
Inflationary Depression unavoidable. Congressman Dr.Ron Paul was right, and he is being proven so. Search for his v