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Topic: Jump You Fuckers: Follow the bouncing 700 Billion (Read 23455 times) |
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Fritz
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Re:Jump You Fuckers: Follow the bouncing 700 Billion
« Reply #30 on: 2009-02-01 22:35:19 » |
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[Fritz]As I wishfully look toward retirement, this is not a welcome report.
Source: The Globe and Mail - Reuters
Author: MARK BENDEICH
Date: February 1, 2009
Pension system reels from meltdown
SYDNEY — Australia, long regarded as a model for global pensions reform, has some explaining to do after the markets meltdown, and not just to its own citizens.
Having forced Australians over the past two decades to trust in markets to provide for their old age – and tempted other nations to go down the same path – it is watching horrified as a big chunk of its retirement savings go up in smoke.
Last year's plunge in financial markets has wiped out around a quarter of Australia's nearly $1-trillion (U.S.) in pension fund savings in real terms, according to Organization for Economic Co-operation and Development data, a figure surpassed only by the vastly bigger economies of the U.S. and Britain.
Australian pension funds lost about $200-billion in the first 10 months of 2008, compared with $300-billion for the U.K. and a staggering U.S. loss of $2.2-trillion, the data showed. Over 10 years, figures for Australia still show positive returns but even local industry figures point to the worst decade in 30 years.
Pensioner Geoff Curthoys, 90, walks along a street in Sydney
Pensioner Geoff Curthoys, 90, walks along a street in Sydney (Will Burgess/Reuters)
The Globe and Mail
As a result, Australians who never dreamt of queuing up for a state pension are now doing just that, feeding a crisis of confidence in a pension model that has served as a trail blazer for other nations around the world, from Asia to Europe.
“My superannuation [pension] fund has been trashed,” said Bob Partington, 60, a former bottling industry executive who went into semi-retirement in 2006, aiming to play more golf and live mainly on a pension drawn from his retirement savings.
“My fund has gone down between 40 and 50 per cent. … I was coming up for retirement and now I can't retire,” he said from his Sydney home where he has started a business consultancy to help make ends meet and support a family of five.
Mr. Partington is a baby boomer, one of the ‘60s generation that is putting enormous strain on pensions systems in rich countries worldwide. He and his contemporaries are the reason Australia was among the first to overhaul its pension system about 23 years ago, shifting to a compulsory system of private savings.
He isn't even among the hardest hit.
Unlike Mr. Partington, who is still not poor enough to qualify for a state pension, other Australians who amassed large sums of retirement savings now need state handouts to get by, a situation that the Australian system was designed to avoid.
The rate at which people are resorting to the state pension jumped by about 50 per cent in the December quarter, according to The Sydney Morning Herald, from around 2,000 a week in October to 3,000 last month as Australian and global markets nosedived.
“That's because self-funded retirees are starting to drop below the threshold value for receiving the age pension,” said Theresa Kot, president of the Association of Independent Retirees, which is lobbying for reform of the pensions system.
The age pension, available at 65, is rationed depending on an applicant's assets and income and it is worth up to about $1,100 Australian ($892 Canadian) a month. It represents only about a fifth of workers' average final salary at retirement, according to the OECD data, which in policy terms is a sign of success.
Without a mountain of private savings, it would have to be much more. But as that mountain shrinks, the question of raising the age pension is becoming a burning political issue, along with tighter regulation of private retirement savings.
The retirees' association has called on the government, which had already embarked on a pensions review in May, to ensure better regulatory oversight of the kinds of investment products that pension funds can invest in.
“Our crisis of confidence is not so much in the funds,” Ms. Kot said. “Our crisis of confidence is with ASIC [the securities regulator], which has not been prudent in monitoring the markets and monitoring the products,” she added.
Australia's pension system rests on three pillars: compulsory savings by employers who contribute the equivalent of 9 per cent of wages into individual pension accounts, voluntary contributions by workers and, lastly, the state pension.
Many other countries have studied the Australian experience, sending fact-finding missions Down Under from Europe, Asia and South America in a search for ways to boost savings and ease the burden of aging populations on state finances.
Britain was one of them.
It legislated last year to adopt a new pensions scheme from 2012 that carries some Australian hallmarks; namely, a compulsory savings scheme where employers must contribute into workers' pension funds with the workers bearing the investment risk.
Like Australia before it, Britain is weaning workers off defined benefit schemes – where employers promise to pay retirees a proportion of their final salary – and moving to a world where retirees are left with a basic state pension and their retirement savings that are at the mercy of markets.
But British-based independent pension consultant John Ralfe said faith in the Australian model was now very thin on the ground, even though an Australian industry survey last September showed satisfaction with fund returns still running high at 80 per cent, down from 87 per cent a year earlier.
“As we approach 2012, even if we are then through the recession, people will say: ‘I'm not going to save 3 per cent because I need to pay down the mortgage or I need to hunker down, and even if I do save 3 per cent, hell, look what happens when you put your money in the stock market. It disappears,'” Mr. Ralfe said.
“All that will encourage people to opt out.”
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Where there is the necessary technical skill to move mountains, there is no need for the faith that moves mountains -anon-
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Re:Jump You Fuckers: Follow the bouncing 700 Billion
« Reply #31 on: 2009-02-03 21:13:57 » |
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Perspective it is all relative, but we all seem to be in the same 'ox cart' each singing our national anthems, as the wheels fall off; I found it note worthy that 'The Bear' seeks "enlightenment and cooperation".
Cheers
Fritz
Source: The Oil Drum
Author of Post: Gail the Actuary on
Date: February 3, 2009 - 8:09pm
Putin Speech at Davos World Economic Forum
Russian Prime Minister Vladimir Putin spoke at the opening ceremony of the World Economic Forum in Davos, Switzerland a few days ago. His speech takes a conciliatory tone and emphasizes co-operation, possibly because Russia, like everyone else, is encountering economic problems. Part of Russia's problems are no doubt due to the lower price of oil and the lack of availability of credit. (As we have discussed earlier, most recently here, all of these problems seem to be indirectly the result of world peak oil.)
Putin's speech includes comments on energy security and on actions Russia taking with respect to energy. As one might expect, much of the speech relates to the world economic crisis.
Below the fold are some excerpts. The full transcript can be found here.
Putin's View of the Causes of the Current Economic Crisis
In the last few months, virtually every speech on this subject started with criticism of the United States. But I will do nothing of the kind.
I just want to remind you that, just a year ago, American delegates speaking from this rostrum emphasised the US economy's fundamental stability and its cloudless prospects. Today, investment banks, the pride of Wall Street, have virtually ceased to exist. In just 12 months, they have posted losses exceeding the profits they made in the last 25 years. This example alone reflects the real situation better than any criticism.
The time for enlightenment has come. We must calmly, and without gloating, assess the root causes of this situation and try to peek into the future.
In our opinion, the crisis was brought about by a combination of several factors.
The existing financial system has failed. Substandard regulation has contributed to the crisis, failing to duly heed tremendous risks.
Add to this colossal disproportions that have accumulated over the last few years. This primarily concerns disproportions between the scale of financial operations and the fundamental value of assets, as well as those between the increased burden on international loans and the sources of their collateral.
The entire economic growth system, where one regional centre prints money without respite and consumes material wealth, while another regional centre manufactures inexpensive goods and saves money printed by other governments, has suffered a major setback.
I would like to add that this system has left entire regions, including Europe, on the outskirts of global economic processes and has prevented them from adopting key economic and financial decisions.
Moreover, generated prosperity was distributed extremely unevenly among various population strata. This applies to differences between social strata in certain countries, including highly developed ones. And it equally applies to gaps between countries and regions.
A considerable share of the world's population still cannot afford comfortable housing, education and quality health care. Even a global recovery posted in the last few years has failed to radically change this situation.
And, finally, this crisis was brought about by excessive expectations. Corporate appetites with regard to constantly growing demand swelled unjustifiably. The race between stock market indices and capitalisation began to overshadow rising labour productivity and real-life corporate effectiveness.
Unfortunately, excessive expectations were not only typical of the business community. They set the pace for rapidly growing personal consumption standards, primarily in the industrial world. We must openly admit that such growth was not backed by a real potential. This amounted to unearned wealth, a loan that will have to be repaid by future generations.
This pyramid of expectations would have collapsed sooner or later. In fact, this is happening right before our eyes.
Putin's Proposed Solutions to the Economic Crisis
In our opinion, we must first atone for the past and open our cards, so to speak.
This means we must assess the real situation and write off all hopeless debts and "bad" assets.
True, this will be an extremely painful and unpleasant process. Far from everyone can accept such measures, fearing for their capitalisation, bonuses or reputation. However, we would "conserve" and prolong the crisis, unless we clean up our balance sheets. I believe financial authorities must work out the required mechanism for writing off debts that corresponds to today's needs.
Second. Apart from cleaning up our balance sheets, it is high time we got rid of virtual money, exaggerated reports and dubious ratings. We must not harbour any illusions while assessing the state of the global economy and the real corporate standing, even if such assessments are made by major auditors and analysts.
In effect, our proposal implies that the audit, accounting and ratings system reform must be based on a reversion to the fundamental asset value concept. In other words, assessments of each individual business must be based on its ability to generate added value, rather than on subjective concepts. In our opinion, the economy of the future must become an economy of real values. How to achieve this is not so clear-cut. Let us think about it together.
Third. Excessive dependence on a single reserve currency is dangerous for the global economy. Consequently, it would be sensible to encourage the objective process of creating several strong reserve currencies in the future. It is high time we launched a detailed discussion of methods to facilitate a smooth and irreversible switchover to the new model.
Fourth. Most nations convert their international reserves into foreign currencies and must therefore be convinced that they are reliable. Those issuing reserve and accounting currencies are objectively interested in their use by other states.
This highlights mutual interests and interdependence.
Consequently, it is important that reserve currency issuers must implement more open monetary policies. Moreover, these nations must pledge to abide by internationally recognised rules of macroeconomic and financial discipline. In our opinion, this demand is not excessive.
At the same time, the global financial system is not the only element in need of reforms. We are facing a much broader range of problems.
This means that a system based on cooperation between several major centres must replace the obsolete unipolar world concept.
We must strengthen the system of global regulators based on international law and a system of multilateral agreements in order to prevent chaos and unpredictability in such a multipolar world. Consequently, it is very important that we reassess the role of leading international organisations and institutions.
I am convinced that we can build a more equitable and efficient global economic system. But it is impossible to create a detailed plan at this event today.
It is clear, however, that every nation must have guaranteed access to vital resources, new technology and development sources. What we need is guarantees that could minimise risks of recurring crises.
Naturally, we must continue to discuss all these issues, including at the G20 meeting in London, which will take place in April.
Putin's Views on Energy Security
Three years ago, at a summit of the Group of Eight, we raised the issue of global energy security. We called for the shared responsibility of suppliers, consumers and transit countries. I think it is time to launch truly effective mechanisms ensuring such responsibility.
The only way to ensure truly global energy security is to form interdependence, including a swap of assets, without any discrimination or dual standards. It is such interdependence that generates real mutual responsibility.
Unfortunately, the existing Energy Charter has failed to become a working instrument able to regulate emerging problems.
I propose we start laying down a new international legal framework for energy security. Implementation of our initiative could play a political role comparable to the treaty establishing the European Coal and Steel Community. That is to say, consumers and producers would finally be bound into a real single energy partnership based on clear-cut legal foundations.
Every one of us realises that sharp and unpredictable fluctuations of energy prices are a colossal destabilising factor in the global economy. Today's landslide fall of prices will lead to a growth in the consumption of resources.
On the one hand, investments in energy saving and alternative sources of energy will be curtailed. On the other, less money will be invested in oil production, which will result in its inevitable downturn. Which, in the final analysis, will escalate into another fit of uncontrolled price growth and a new crisis.
It is necessary to return to a balanced price based on an equilibrium between supply and demand, to strip pricing of a speculative element generated by many derivative financial instruments.
To guarantee the transit of energy resources remains a challenge. There are two ways of tackling it, and both must be used.
The first is to go over to generally recognised market principles of fixing tariffs on transit services. They can be recorded in international legal documents.
The second is to develop and diversify the routes of energy transportation. We have been working long and hard along these lines.
In the past few years alone, we have implemented such projects as the Yamal-Europe and Blue Stream gas pipelines. Experience has proved their urgency and relevance.
I am convinced that such projects as South Stream and North Stream are equally needed for Europe's energy security. Their total estimated capacity is something like 85 billion cubic meters of gas a year.
Gazprom, together with its partners – Shell, Mitsui and Mitsubishi – will soon launch capacities for liquefying and transporting natural gas produced in the Sakhalin area. And that is also Russia's contribution to global energy security.
We are developing the infrastructure of our oil pipelines. The first section of the Baltic Pipeline System (BPS) has already been completed. BPS-1 supplies up to 75 million tonnes of oil a year. It does this direct to consumers – via our ports on the Baltic Sea. Transit risks are completely eliminated in this way. Work is currently under way to design and build BPS-2 (its throughput capacity is 50 million tonnes of oil a year.
We intend to build transport infrastructure in all directions. The first stage of the pipeline system Eastern Siberia – Pacific Ocean is in the final stage. Its terminal point will be a new oil port in Kozmina Bay and an oil refinery in the Vladivostok area. In the future a gas pipeline will be laid parallel to the oil pipeline, towards the Pacific and China.
Also, with respect to Russia's internal efforts related to energy security:
A promising area for joint efforts could be the sphere of energy saving. We see higher energy efficiency as one of the key factors for energy security and future development.
We will continue reforms in our energy industry. Adoption of a new system of internal pricing based on economically justified tariffs. This is important, including for encouraging energy saving. We will continue our policy of openness to foreign investments.
Putin's Final Comments
Ladies and gentlemen, the international community is facing a host of extremely complicated problems, which might seem overpowering at times. But, a journey of thousand miles begins with a single step, as the proverb goes.
We must seek foothold relying on the moral values that have ensured the progress of our civilisation. Integrity and hard work, responsibility and self-confidence will eventually lead us to success.
We should not despair. This crisis can and must be fought, also by pooling our intellectual, moral and material resources.
This kind of consolidation of effort is impossible without mutual trust, not only between business operators, but primarily between nations.
Therefore, finding this mutual trust is a key goal we should concentrate on now.
Trust and solidarity are key to overcoming the current problems and avoiding more shocks, to reaching prosperity and welfare in this new century.
Thank you.
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Where there is the necessary technical skill to move mountains, there is no need for the faith that moves mountains -anon-
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Fritz
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Re:Jump You Fuckers: Follow the bouncing 700 Billion
« Reply #32 on: 2009-02-21 19:33:48 » |
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[Fritz]least we forget how these death by a thousand cuts will continue as the new adminstartion enables the system to look under the smelly rocks.
Cheers
Fritz
Howzat!
Source: The Economist
Author: Economist
Date: Feb 19th 2009
Shocking allegations against Stanford Group, so soon after the arrest of Bernard Madoff, suggest this will be a fraud-infested downturn
HOUSTON has not seen anything like it since the collapse of Enron. On February 17th federal agents swooped on Sir Allen Stanford’s financial group, seizing mountains of documents, and a judge placed it in the hands of a receiver. The obvious parallel, however, was not the defunct energy firm but Bernard Madoff. Charges filed by the Securities and Exchange Commission (SEC) portray the flamboyant Sir Allen (pictured on the right above) as the Ponzi-master’s offshore equivalent, perpetrating a fraud of “shocking magnitude” based on “false promises” and fabricated performance data, primarily through his Antigua-based bank.
The central allegation is that Stanford International Bank hoodwinked investors over the safety and liquidity of uninsured certificates of deposit (CDs). It took in some $8 billion, consistently offering rates well above those of big banks—sometimes more than twice as high. Despite assurances that the money was going into liquid securities, much of it was apparently ploughed into sticky assets such as property and private equity.
How well these performed is unclear, but the stated returns were suspiciously smooth and impressive: consistently in the low double digits for over a decade, with a loss of just 1.3% last year, when stockmarkets around the world crashed.
Unlike Mr Madoff, Sir Allen has not been accused of running a Ponzi scheme, though it is possible that large sums have been lost in unwise bets. Many of the bank’s 30,000 clients tried—unsuccessfully—to withdraw their money this week, some even descending on its neo-Georgian headquarters near the airport of St John’s, the Antiguan capital. Depositors also besieged Stanford’s smaller, onshore Bank of Antigua, as well as operations in Venezuela and Panama. A big chunk of the client base is Latin American—reportedly, America’s Federal Bureau of Investigation is investigating whether he had money-laundering links to a Mexican drugs cartel. Americans are said to have ploughed in as much as $1.5 billion. In total, the group claims to have more than $50 billion “under advisement”.
The hoodwinking ran deep, according to the SEC’s complaint. The portfolio was not, as claimed, monitored by a team of more than 20 analysts, but by the sole shareholder himself and his chief financial officer, an old college classmate. Among those on the cosy investment committee were Sir Allen’s father and a neighbour with cattle-ranching experience.
Investors can perhaps be forgiven for failing to spot this inbred governance structure. Other warning signs were more obvious: the implausibly small auditing firm that Stanford used—like Mr Madoff; and a stunning lack of transparency. The chief investment officer told staff not to reveal too much about the oversight of investments because it “wouldn’t leave an investor with a lot of confidence”.
Once again, regulators are shuffling uncomfortably in the spotlight. Antigua’s financial regulator has lived down to its reputation for being supine even by Caribbean standards. It gave Stanford a clean bill of health a few months ago. Sir Allen’s local clout and political connections may have helped here. His knighthood came from a grateful Antiguan government, not Queen Elizabeth.
American regulators have been more assiduous, though are still open to charges of foot-dragging. FINRA, which oversees brokers, has fined Stanford several times in recent years, including a $10,000 penalty for misrepresenting the “risks and potential benefits” of its CDs. Such a small fine will fuel suspicion that the self-regulatory body is too close to the industry. The SEC, still smarting from its failure to unearth Mr Madoff’s alleged tricks, began probing Stanford as far back as 2006.
Even then, it was arguably late. Law enforcers had been sniffing around Sir Allen since the late 1990s, after he lost his banking licence in Montserrat, another Caribbean island. His group’s murkiness has long alarmed those who looked closely. “There was no excuse for anyone with an ounce of sophistication to invest,” says David Marchant of Offshore Alert, a newsletter. The SEC stepped up its probe after the Madoff revelations. But a bigger impetus may have been a deeply sceptical report in January by Alex Dalmady, an independent analyst. The blogosphere picked this up, and within days it was making headlines worldwide. This offers hope for those who despair of the SEC’s bungling, suggesting that in the internet age forensic vigilantes and bloggers may fill the gap.
Book-cookers have long been drawn to offshore finance. The difference this time is the profile of the alleged perpetrator. Sir Allen strenuously cultivated an image of respectability as an entrepreneur, philanthropist and sports impresario. He sponsored golf and tennis tournaments. But his main devotion was to cricket (and, as witnesses to his flirting can attest, its players’ wives). His grand project was a $20m-per-game competition featuring a West Indian team, the “Stanford Superstars”.
This second allegation of massive fraud in as many months is unlikely to be the last. Downturns expose old shenanigans and encourage new ones, as executives gamble for salvation. This may be particularly true for money managers, hit by rising redemption requests and falling returns and inflows: Stanford’s fate was probably sealed when it started to block redemptions, after clients asked for $1.3 billion back in the last quarter of 2008.
If this is the beginning of an ugly trend, all but the strongest money managers have reason to fret. JPMorgan Chase’s private bank saw a record $80 billion of net inflows last year as investors fled less pukka firms. But those investors should ask questions of themselves, too. How did Stanford attract so many despite being a complex, opaque operation in a lightly regulated jurisdiction, offering oddly stable returns?
They may yet get much of their money back, but the amount left in the pot is anyone’s guess. Sir Allen has vowed to clear his name, but refusing to co-operate was perhaps not the best start. As The Economist went to press his whereabouts were unknown. According to reports—which may well be apocryphal—Sir Allen had tried to charter a corporate jet near Houston, but was turned away because the operator would not take his credit card.
[Fritz]odds and sods
(CNN) -- Bank of America CEO and Chairman Kenneth Lewis has been issued a subpoena by the New York State Attorney General's Office, which is investigating whether the bank violated state law by withholding information from investors, a source familiar with the investigation told CNN.
Kenneth Lewis is the CEO and chairman of Bank of America, the nation's largest bank.
Attorney General Andrew Cuomo has been highly critical of Wall Street firms in general and Merrill Lynch in particular for the way they have conducted themselves in the midst of a financial crisis.
Last week, he accused Merrill Lynch, which was acquired by Bank of America late last year, of secretly doling out big bonuses before reporting a huge quarterly loss.
"Merrill Lynch's decision to secretly and prematurely award approximately $3.6 billion in bonuses, and Bank of America's apparent complicity in it, raise serious and disturbing questions," Cuomo wrote in a letter to Rep. Barney Frank, D-Massachusetts, chairman of the House Committee on Financial Services.
In his letter to Frank, Cuomo said Merrill gave bonuses of at least $1 million each to 696 employees, with a combined $121 million going to the top four recipients. The next four recipients were awarded a total of $62 million, and the next six received $66 million, he said. In all, the bonuses for 2008 totaled $3.6 billion.
"While more than 39,000 Merrill employees received bonuses from the pool, the vast majority of these funds were disproportionately distributed to a small number of individuals," Cuomo wrote. "Indeed, Merrill chose to make millionaires out of a select group of 700 employees."
The attorney general said Merrill "awarded an even smaller group of top executives what can only be described as gigantic bonuses."
Cuomo also claimed Merrill handed out the bonuses ahead of its federally funded acquisition by Bank of America, which was announced in mid-September and closed by year's end.
It "appears that, instead of disclosing their bonus plans in a transparent way as requested by my office, Merrill Lynch secretly moved up the planned date to allocate bonuses and then richly rewarded their failed executives," Cuomo wrote.
Bank of America has received $45 billion in federal bailout money, including $20 billion to support its takeover of Merrill. Bank of America reported a net loss of $1.79 billion for the fourth quarter. Merrill reported a net loss of $15.31 billion for the fourth quarter.
Bank of America spokesman Scott Silvestri that Merrill was "an independent company" when the bonuses were awarded.
"Bank of America did urge the bonuses be reduced, including those at the high end," Silvestri wrote. "Although we had a right of consultation, it was their ultimate decision to make."
Silvestri said the top executives for Bank of America "took no incentive compensation for 2008," with an 80 percent reduction for the "next level" of executives.
Top executives from Bank of America -- as well as Bank of New York Mellon, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, State Street and Wells Fargo -- appeared before the Financial Services Committee last week to explain how they spent the $165 billion they received from the government's Troubled Asset Relief Program, or TARP.
In the testimony, Lewis said he received no bonus for 2008 and was paid a salary of $1.5 million.
Bank of America's stock, which traded higher than $40 a share in the past year, closed at a fresh 52-week low of $3.93 a share Thursday. It's the largest bank in terms of assets in the United States and is headquartered in Charlotte, North Carolina.
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Where there is the necessary technical skill to move mountains, there is no need for the faith that moves mountains -anon-
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Re:Jump You Fuckers: Follow the bouncing 700 Billion
« Reply #33 on: 2009-02-21 20:17:26 » |
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I couldn't resist posting this one
Cheers
Fritz
California's crisis
The ungovernable state
California makes Washington, DC, look like a model of fiscal probity
Source: The Economist
Author: Ronald Grant Archive
Date:Feb 19th 2009
IT TURNS out that the only way to negotiate a budget for the world’s eighth biggest economy is to issue politicians with toothbrushes and lock them in a building. California’s legislators have spent the past three months debating how to fill a $42 billion fiscal hole. Officials have given warning of fiscal Armageddon, bureaucrats have been forced to take unpaid leave and Arnold Schwarzenegger, the state’s governor, has accused members of his own party of innumeracy—all to no avail. But a few nights of indoor camping seems to have concentrated minds.
As The Economist went to press a Republican senator appeared willing to cast a decisive vote in favour of the budget, which requires the approval of two-thirds of legislators. The process has been messy, but revealing. Investors sometimes say that recessions help to reveal flaws in business models. This one has exposed deep cracks in the state of California.
The immediate cause of the budget crisis can be traced to Wall Street. California depends on income taxes for almost half of its revenues (see chart). Its tax code is so progressive—that is, rich-soaking—that in 2006 the top 1% of earners paid 48% of all income taxes. Since the wealthy derive much of their income from bonuses, capital gains and stock options, the state’s fortunes rise and fall with the markets. California’s economy is as wide and deep as the ocean, but much of its revenues come from froth. That froth has simply blown away.
The sudden loss of revenues would not be such a problem if public spending had been kept under control. But whenever the state receives an “April surprise” of unexpectedly high income-tax receipts, as it did during the roaring middle of this decade, it ratchets up spending on public services. This is largely the fault of the liberal Democrats who dominate both houses of the legislature. But not entirely. It was voters, for example, who by means of ballot initiatives insisted that the state spend more money on schools and stem-cell research. Pet conservative causes have forced up spending too. In the past 20 years the number of state prison inmates has risen from fewer than 80,000 to more than 170,000.
Yet the biggest enemy of fiscal responsibility is California’s political culture. Thanks to a bipartisan yen for gerrymandering, virtually all electoral districts are safely Democratic or safely Republican. So the only elections that count are the primaries, which tend to favour the pure of ideology. Republican candidates promise never to raise taxes; Democrats pledge allegiance to the environmental movement and the teachers’ unions. Not surprisingly, the politicians generated by such a system agree on little. “They belong to different universes,” says Allan Hoffenblum, a Republican consultant.
One of the few moderates is Abel Maldonado, the Republican state senator who appeared most likely to break with his party’s anti-tax orthodoxy. In return for supporting tax increases Mr Maldonado wants support for a ballot initiative that would reform the primary system, making it more hospitable to people like him (ah, to hold the deciding vote at such a time). He may get his way, although his initiative is probably doomed. Every special-interest group that benefits from the current system, of which there are many, would fund the campaign against it.
A deal on the budget would avert impending catastrophe. California has already delayed tax refunds and payments to state contractors. Work on roads and bridges has virtually halted. Cities and counties are preparing to sue the state government for money owed to them. Earlier this month Standard & Poor’s downgraded California’s bond rating, which was already as bad as Louisiana’s, to the worst in the nation.
Even if a budget is signed it will not be the end of the matter. The books will not balance unless California’s voters permit the state government to raid programmes for children and the mentally ill which they had previously created through ballot initiatives. Voters must also approve changes to school funding and permit the state to borrow $5 billion against the future proceeds of the lottery. If they fail to do so—and the lobbying against some of the changes may be fierce—taxes will have to rise further and the budget may have to be reopened.
The mess in its biggest state is bad news for the nation. As he signed his stimulus bill this week Barack Obama declared “the beginning of the end” of the recession. Yet if California’s budget passes, one in eight Americans will suffer a mood-lowering rise in their sales and income taxes. They will pay almost twice as much to register their cars, and 12 cents per gallon more to fill them up. Take that, Mr Obama.
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Where there is the necessary technical skill to move mountains, there is no need for the faith that moves mountains -anon-
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Re:Jump You Fuckers: Follow the bouncing 700 Billion
« Reply #34 on: 2009-02-24 22:31:18 » |
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[Fritz]Interesting comment I thought
Source: http://www.cbc.ca/money/story/2009/02/18/world-markets.html#articlecomments
Author: msamour
Date: 2009/02/18 at 8:13 AM ET
I am really amazed that no one in the media is discussing Japan being in a depression right now. Their overall economy contracted by 12% last year, and this year is expected to be worse. It took over one year for analysts to admit the United States was in a recession. I could have told these people to get their heads out of their papers, and look outside at mainstream. They saved at least 6 months of time and be up front with the people.
There is a rumour around on the internet about a fellow named Reinhadt that charges 720$ per half year to be told his "predictions". Well, here are mine for free. I guess I cannot ask for money since I am not a member if a secret organization,
What we can expect in the next year. Well sometime in the spring, Eastern European countries will most likely default on their debt which will create a massive market sell off. There will be forced liquidation (this almost started two nights ago). Chinese treasury will dump U.S. treasuries little by little while they are investing in hard assets. This in term will cause inflation in the prices of goods in the United States. Rising unemployment, and rising inflation has a potential to make crowds very angry. One does not need to be a genius to understand this concept.
After the default and rapid collapse of Eastern European countries, there will be calls to grant the IMF and the World Bank more powers than it already has. More Anglo-Dutch bankers and investors will flee the U.K. and the United States, i.e. the Rothshield which are estimated at 250 trillion dollars (lowball figure) and the Rockerfellers which are estimated at 80 trillion dollars in wealth each will likely also relocate to "safe havens". Why would they not. The U.K. population will be furious, the American population will be furious, and people from many nations will be furious. Canadians, well maybe they might get "slightly annoyed" at all this, but they will forget about hit when they have to dig themselves out of spring snowstorm which are sure to come right around or after St Patty's day.
The summer will be indicative of the rest of the year. Pay attention to second quarter numbers, they will give an indication of how bad the third quarter number will be like, I expect another 1, or 2% lower.
If none of this happens, well at least I don't have to give anyone their money back. If it does, I'm not a psychic. I'm just using common sense folks, as should all of us do.
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Where there is the necessary technical skill to move mountains, there is no need for the faith that moves mountains -anon-
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Fritz
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Re:Jump You Fuckers: Follow the bouncing 700 Billion
« Reply #35 on: 2009-02-24 23:56:55 » |
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[Fritz]Geeze ... this financial crisis thing could be getting serious ...sigh
Source: Free Press
Author: KEVIN G. HALL • MCCLATCHY NEWSPAPERS •
Date: February 22, 2009
Experts push to nationalize U.S. banks
WASHINGTON -- Former Federal Reserve Chairman Alan Greenspan thinks it's necessary. His successor, Ben Bernanke, doesn't rule it out. From editorial pages to the blogosphere to boardrooms, this is the question on many minds: Should the United States nationalize some banks?
A few months ago, it would have been heretical to suggest that Bank of America could become Bank Owned by America.
Now, however, the U.S. economy is sinking faster than anyone thought possible, and respected economic authorities are suggesting that temporary bank nationalization could be the best solution.
Views of Greenspan, Bernanke
"It may be necessary to temporarily nationalize some banks in order to facilitate a swift and orderly restructuring," Greenspan, the long-revered sage of free-market theory, told London's Financial Times in an interview published Wednesday. "I understand that once in a hundred years this is what you do."
When Bernanke was asked whether he shared his predecessor's views, he didn't distance himself from them during a question session Wednesday at the National Press Club. He answered as if nationalization were inevitable -- after first listing some of the problems it would entail.
"Well, I think as a general rule, it's very challenging for governments to manage banks for a protracted period. And there's the additional problem that if you have a government-run institution, that you tend to lose the franchise value," Bernanke said.
"So I think whatever actions may need to be taken at one point or another, I think there's a very strong commitment on the part of the administration to try to return banks or keep banks private or return them to private hands as quickly as possible."
(2 of 2)
The term "nationalization" conjures images of the communist Soviet Union or corrupt Latin American dictatorships, but advocates of nationalizing U.S. banks envision a seizure of big banks on the grounds that they already are insolvent except for some accounting sleight of hand.
Advertisement
Banks are sitting on trillions of dollars worth of complex securities, backed by U.S. mortgages that are going into default as more homes are now worth less than the mortgages on them.
If banks were forced to put present-day values on these securities instead of hold-to-maturity values, their liabilities would far exceed their assets. They would be insolvent.
Seizure, surgery, sale
What's needed, nationalization advocates argue, is for the government to seize Bank of America, Wells Fargo, Citigroup and other large banks, carve out their bad assets, then break them into smaller pieces for quick sale to the private sector.
"Nationalization is the only option that would permit us to solve the problem of toxic assets in an orderly fashion and finally allow lending to resume," Nouriel Roubini, a prominent New York University economist, wrote in an opinion piece Feb. 15 in the Washington Post. "Of course, the economy would still stink, but the death spiral we are in would end."
Other analysts think that nationalization is all but inevitable.
"It's very hard when you get to this point not to do that," said Adam Posen, the deputy director of the Peterson Institute for International Economics, a free-market research center.
Posen said he thinks that nationalization is losing its stigma, and he envisions scenarios in which the government could seize the nation's 50 largest banks.
It's inescapable, some say
Most depositors would be safe, since their deposits are insured up to $250,000. Stockholders probably would be wiped out, and bondholders eventually would get shares of any new company.
The government could even make money on some seizures, if history is any guide.
Roubini and Posen said they think that a bold, drastic step is inescapable, and that a failure to take it now would only make it costlier and more difficult later.
Today's problem is the $1.2 trillion in assets whose underlying collateral is shoddy subprime mortgages, which have eroded faith in the broader U.S. housing market. For now, the Obama administration is mum on nationalization.
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Where there is the necessary technical skill to move mountains, there is no need for the faith that moves mountains -anon-
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letheomaniac
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Re:Jump You Fuckers: Follow the bouncing 700 Billion
« Reply #36 on: 2009-02-25 13:27:54 » |
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[letheomaniac] With the capitalist system reeling, dragging dead Reds from their graves for a good airing is all the rage these days. Might as well jump on that bandwagon... Here's Vlad.
http://www.informationclearinghouse.info/article20946.htm
Did Vladimir Lenin Predict The Banking Disaster Of 2008?
"Imperialism the Highest Stage of Capitalism"
By V. I. Lenin
LCW vol.22,
Lenin enumerated the following five features characteristic of the epoch of imperialism:
The epoch of imperialism opens when the expansion of colonialism has covered the globe and no new colonies can be acquired by the great powers except by taking them from each other, and the concentration of capital has grown to a point where finance capital becomes dominant over industrial capital. Lenin enumerated the following five features characteristic of the epoch of imperialism:
(1) the concentration of production and capital has developed to such a high stage that it has created monopolies which play a decisive role in economic life;
(2) the merging of bank capital with industrial capital, and the creation on the basis of this “finance capital”, of a financial oligarchy;
(3) the export of capital as distinguished from the export of commodities acquires exceptional importance;
(4) the formation of international monopoly capitalist associations which share the world among themselves, and
(5) the territorial division of the whole world among the biggest capitalist powers is completed. Imperialism is capitalism at that stage of development at which the dominance of monopolies and finance capital is established; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun, in which the division of all territories of the globe among the biggest capitalist powers has been completed. [Lenin, Imperialism the Highest Stage of Capitalism, LCW Volume 22, p. 266-7.]
"[Imperialism] is something quite different from the old free competition between manufacturers, scattered and out of touch with one another, and producing for an unknown market. Concentration [of production] has reached the point at which it is possible to make an approximate estimate of all sources of raw materials (for example, the iron ore deposits)... [throughout] the whole world. Not only are such estimates made, but these sources are captured by gigantic monopolist associations [now called multi-national conglomerates]. An approximate estimate of the capacity of markets is also made, and the associations "divide" them up amongst themselves by agreement. Skilled labor is monopolized, the best engineers are engaged; the means of transport are captured – railways in America, shipping companies in Europe and America. Capitalism in its imperialist stage leads directly to the most comprehensive socialization of production; it, so to speak, drags the capitalists, against their will and consciousness, into some sort of a new social order, a transitional one from complete free competition to complete socialization.
"Production becomes social, but appropriation remains private. The social means of production remain the private property of a few. The general framework of formally recognized free competition remains, and the yoke of a few monopolists on the rest of the population becomes a hundred times heavier, more burdensome and intolerable." (p. 205)
"The development of capitalism has arrived at a stage when, although commodity production still "reigns" and continues to be regarded as the basis of economic life, it has in reality been undermined and the bulk of the profits go to the "geniuses" of financial manipulation. At the basis of these manipulations and swindles lies socialized production; but the immense progress of mankind, which achieved this socialization, goes to benefit... the speculators." (p. 206-207)
Monopoly, oligarchy, the striving for domination and not for freedom, the exploitation of an increasing number of small and weak nations by a handful of the richest or most powerful nations – all these have given rise to those distinctive characteristics of imperialism which compel us to define it as parasitic or decaying capitalism. … It would be a mistake to believe that this tendency to decay precludes the rapid growth of capitalism. It does not. In the epoch of imperialism, certain branches of industry, certain strata of bourgeoisie and certain countries betray… now one and now another of these tendencies. On the whole, capitalism is growing far more rapidly than before.”
Imperialism, the Highest Stage of Capitalism, VI Lenin, Selected Works in one volume, p 260
(ch.7) Parasitism and the Decay of Capitalism...parasitism is characteristic of imperialism... the deepest economic foundation of imperialism is monopoly. This is capitalist monopoly, i.e., monopoly which has grown out of capitalism and which exists in the general environment of capitalism, commodity production and competition, in permanent and insoluble contradiction to this general environment. Nevertheless, like all monopoly, it inevitably engenders a tendency of stagnation and decay....Certainly, the possibility of reducing the cost of production and increasing profits by introducing technical improvements operates in the direction of change. But the tendency to stagnation and decay, which is characteristic of monopoly, continues to operate, and in some branches of industry, in some countries, for certain periods of time, it gains the upper hand.... imperialism is an immense accumulation of money capital in a few countries, amounting, as we have seen, to 100,000-50,000 million francs in securities. Hence the extraordinary growth of a class, or rather, of a stratum of rentiers, i.e., people who live by “clipping coupons”, who take no part in any enterprise whatever, whose profession is idleness. The export of capital, one of the most essential economic bases of imperialism, still more completely isolates the rentiers from production and sets the seal of parasitism on the whole country that lives by exploiting the labour of several overseas countries and colonies....
Imperialism....CH. 10... the bourgeoisie to an ever-increasing degree lives on the proceeds of capital exports and by “clipping coupons”. It would be a mistake to believe that this tendency to decay precludes the rapid growth of capitalism. It does not. In the epoch of imperialism, certain branches of industry, certain strata of the bourgeoisie and certain countries betray, to a greater or lesser degree, now one and now another of these tendencies. On the whole, capitalism is growing far more rapidly than before; but this growth is not only becoming more and more uneven in general, its unevenness also manifests itself, in particular, in the decay of the countries which are richest in capital....
...the tendency of imperialism to split the workers, to strengthen opportunism among them and to cause temporary decay in the working-class movement, revealed itself much earlier than the end of the nineteenth and the beginning of the twentieth centuries; for two important distinguishing features of imperialism were already observed in Great Britain in the middle of the nineteenth century—vast colonial possessions and a monopolist position in the world market. Marx and Engels traced this connection between opportunism in the working-class movement and the imperialist features of British capitalism systematically, during the course of several decades. For example, on October 7, 1858, Engels wrote to Marx: “The English proletariat is actually becoming more and more bourgeois, so that this most bourgeois of all nations is apparently aiming ultimately at the possession of a bourgeois aristocracy and a bourgeois proletariat alongside the bourgeoisie. For a nation which exploits the whole world this is of course to a certain extent justifiable.”[15] Almost a quarter of a century later, in a letter dated August 11, 1881, Engels speaks of the “worst English trade unions which allow themselves to be led by men sold to, or at least paid by, the middle class”. In a letter to Kautsky, dated September 12, 1882, Engels wrote: “You ask me what the English workers think about colonial policy. Well, exactly the same as they think about politics in general. There is no workers’ party here, there are only Conservatives and Liberal-Radicals, and the workers gaily share the feast of England’s monopoly of the world market and the colonies.”
[13] (Engels expressed similar ideas in the press in his preface to the second edition of The Condition of the Working Class in England, which appeared in 1892.)...
The distinctive feature of the present situation is the prevalence of such economic and political conditions that are bound to increase the irreconcilability between opportunism and the general and vital interests of the working-class movement: imperialism has grown from an embryo into the predominant system; capitalist monopolies occupy first place in economics and politics; the division of the world has been completed; on the other hand, instead of the undivided monopoly of Great Britain, we see a few imperialist powers contending for the right to share in this monopoly, and this struggle is characteristic of the whole period of the early twentieth century. Opportunism cannot now be completely triumphant in the working-class movement of one country for decades as it was in Britain in the second half of the nineteenth century; but in a number of countries it has grown ripe, overripe, and rotten, and has become completely merged with bourgeois policy in the form of “social-chauvinism”.
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"You can't teach an old dogma new tricks." - Dorothy Parker
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Re:Jump You Fuckers: Follow the bouncing 700 Billion
« Reply #37 on: 2009-02-25 22:15:09 » |
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Quote:| [letheomaniac]<snip>... the bourgeoisie to an ever-increasing degree lives on the proceeds of capital <snip.><snip>.....Parasitism and the Decay of Capitalism...parasitism is characteristic of imperialism...<snip>..... |
I found the dog-eared CD of the soundtrack for "Doctor Zhivago" ... closed my eyes and mind to the Bolsheviks and curled up with Julie Christie hearing the wind and snow blowing out side my house, and dreamed wonderful dreams.
Sigh
Fritz
PS: great photo of raising McDonalds sign
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Where there is the necessary technical skill to move mountains, there is no need for the faith that moves mountains -anon-
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Re:Jump You Fuckers: Follow the bouncing 700 Billion
« Reply #38 on: 2009-03-01 17:44:46 » |
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[Fritz]Just a little gloom and doom to start the new week
Source: International Forecaster
Author: Bob Chapman
Date: February 25 2009\
We Watch Now As Funds Get Vaporized
real inflation has been raging, purchasing power diminishing, pension plan funds being systematically starved, expect a dollar dump by foreign holders, new tax laws and new strings attached, Still not sure why we have to bail out fraudster bankers, bailouts will only help banks to continue to fleece the public.
Since 1997, real inflation, as opposed to ridiculously understated official inflation, has raged at a minimum of 8% annually, and has soared as high as 14-16%. This means that you have lost a minimum of two thirds of your 1997 purchasing power. So, if you invested $10,000 in the Dow components in 1997, not only would you have no gain whatsoever, you would have losses on the stocks which were dropped from the index due to poor performance and, in addition, to add insult to injury, your purchasing power has been reduced from $10,000 to approximately $3,000 in terms of 1997 dollars. In other words, that $10,000 you invested in 1997 will today only buy what $3,000 would have bought in 1997.
Effectively, anyone playing the general stock markets has been wiped out by this combination of lost capital gains and reduced purchasing power. Those who began investing after 1997 have done even worse because they have suffered major capital losses in addition to having suffered reduced purchasing power. So much for the much touted 10% average annual gains for stocks. By contrast, you could have bought gold in 1997 for about $300 per ounce and more than tripled your money at today's prices. Your $10,000 would have become $30,000+, however, due to inflation caused by the Fed's profligate increase in the money supply, which the Fed intentionally orchestrated in order to impoverish you and bring you to your knees so you will accept world government, your purchasing power would only be about $10,000 in 1997 dollars. So you would at least be even in terms of purchasing power. Certainly, $10,000 in purchasing power is a whole lot better than $3,000. This example is a classic illustration of how gold preserves your wealth. As you can see, failure to invest in gold, silver and their related shares is tantamount to committing financial suicide. The bankruptcy courts will soon be full of the tens of millions of US citizens who ultimately will ignore gold and silver as a safe haven, or who will simply lack the capital to invest in gold and silver in any case because they are in hock up to their ears, or because they have become unemployed, or both.
Pension plans, often heavily invested in stocks and real estate, asset classes which have seen tens of trillions of dollars disappear in a matter of months, are now so far behind in funding due to their ludicrous underlying assumptions about ROI (return on investment) that they are effectively bankrupt and will have to be bailed by the grievously under-funded PBGC (Pension Benefit Guaranty Corporation), which of course can only provide pennies on the dollar unless another bailout is orchestrated to save middle class pensions, which is not going to happen, and these losses do not even take into account loss of purchasing power due to inflation, which is understated officially to screw retirees out of their social security benefits. Instead of a PBGC bailout, we more likely will see the US follow in the footsteps of Argentina by nationalizing private pension money, mixing it with government entitlements. If you were wondering where the elitists plan to park a large portion of those new treasuries being issued to fund all the bailouts, look no further than your IRA's, 401(k)'s and your company pensions, which will be forced to purchase these treasuries as part of the process by which the elitists will nationalize your pensions. Also, as part of this process, the types of assets you are allowed to invest in will be greatly limited, and your pension will be overseen by your corrupt, bungling government, insuring a complete financial clusterf--k. That way, you get the unspeakable privilege of owning dollar-denominated paper assets that will be vaporized along with Federal Reserve notes (aka toilet paper, aka "worthless paper") when foreign owners of dollar forex all head for the exits to see who can dump their dollars the fastest as they try to purchase as many tangible, real assets as they can find in the US. You won't know, of course, because statistics about foreign ownership in the US are, conveniently, no longer published by the FTC. However, you will find out soon enough as you are Zimbabwe'd and Weimar-ized. And that only addresses problems due to devaluation of the dollar. Wait until the interest rates skyrocket as hyperinflation takes hold and risk reaches new heights. This will collapse the treasury market, and the value of all your pension plan assets, which the government will have forced you to invest in treasuries, will go down in flames with it.
Also, many pension-sponsoring companies are going to go under because they are being systematically starved of necessary capital by the big, so-called "legacy banks," who are using the financial debacle to eliminate their competition and that of their fellow elitist business corporations, especially transnational conglomerates. When these victims of the financial holocaust go under, the pension funds they sponsor will go under with them and there will be precious little in the way of bailouts to make up for these losses. Rest assured that the elitist companies will get their equity injections, toxic waste buyouts and loss assumptions, while everyone else gets the shaft. This is what the Pelosi Political Pork/Plunder Payoff Plan is all about, as well as the multi-trillion Obama bank bailout, which supposedly will help Main Street in addition to Wall Street, based on the tiresome platitudes offered in Tuesday's presidential speech. If you believe that, then we still have that bridge in Brooklyn for sale at pennies on the dollar, at least until one of the dollar surplus nations uses its hundreds of billions in dollar forex to gobble it up.
Note that all the new tax laws concerning pensions encourage you to put more money in, and to keep it there longer. The scum in our government and on Wall Street want to encourage you to place your money into accounts to which they have strings attached with onerous tax law penalties. They want to make sure you put as much of your hard-earned savings in such accounts as possible, and to keep it there as long as possible, so they have sufficient time and opportunity to steal it from you via inflation, dollar devaluation, insider trading, investment fraud, depreciation of asset values through deflation, direct taxation, foreclosure sales, bankruptcy auctions and outright confiscation. That is with the assistance of the SEC and CFTC.
There is no end in sight for the real estate market, which will not bottom for several years. Once interest rates go into double digits, option ARM's implode and unemployed government employees bring the overall unemployment rate up to 30% or even higher, we could be looking at a roll-back to 1981 home prices. Once these three factors are in full swing, you won't be able to give a house away. No one wants to buy a home that is plummeting in value, few will be able to afford it even if they did want to buy it, and the few remaining who wanted to buy it and were still able to afford it will not have the credit or down payment money that is necessary to obtain a loan to buy it. Bank sales of foreclosed property will dominate the markets at all levels, and in all geographic areas. Few areas in the US will be spared from drastically declining home values. Also, once deflation takes over during the next one to three years, those who are liable under those big mortgages they took out based on inflated real estate prices will be unable to sell in any case, because they will be underwater and unable to clear their liens. If we get cram-down authority for our bankruptcy judges, where loan balances can be reduced to levels commensurate with value, there will be few if any homeowners who are drastically underwater who will not take advantage of this bankruptcy protection whether or not they can swing the mortgage payments. No one wants to pay more for a home than it is worth. That means that virtually all real estate derivatives could become worthless regardless of quality. That also means that all the large banks are hopelessly insolvent even if we set aside the Quadrillion Dollar Derivative Death Star waiting to implode as ongoing business failures set off counter-party liability on credit default swaps (CDS's), and as double digit interest rates fry those on the wrong side of interest rate swaps (IRS's). Therefore, all money thrown at these zombie financial institutions is not only being wasted, but is also stoking further hyperinflation without generating any offsetting benefits whatsoever in return. In addition, any common stock, preferred stock or bonds given to taxpayers by any of these walking dead elitist banks and financial institutions is absolutely worthless. These walking dead must be shot in the head with a silver bullet or have wooden stakes driven through their hearts to put them out of their misery, and all their existing accounts should be given to the successful regional banks whose executives had the foresight to stay clear of all the financial carnage. Many of the current and former executives of these zombie institutions and of the Clinton Administration, which set up this nightmare scenario, are now advising the Obama Administration on what to do about the depression we are in. So we are now asking drunk drivers and reckless speeders to give us lessons about highway safety. Only in America.
The bailout for mortgage borrowers is rife with moral hazard, as is the bailout of zombie banks and financial institutions. We keep hearing Barack "Nero Fiddled While Rome Burned" Obama and Sheila "We Just Can't Let This Happen" Bair, the head of the FDIC, tell us that we have to bail out bankster gangsters and borrower felons, and that we just can't allow these banksters and borrowers to go under, nor can we allow the overall financial situation to deteriorate further. Not only can we, but we absolutely should allow these borrowers and bankster gangsters to go under. The situation is going to deteriorate further no matter what they do, and they are in fact exacerbating the ongoing debacles by creating money out of nothing and then throwing it at people and institutions that are already dead, financially speaking. Tim Geithner, the Fed's hatchet-man and tax cheater who is now acting as our Treasury Secretary, wants to apply stress tests to these banks like some sort of bank doctor, when he should be acting as the official bank coroner. Instead of trying to see how banks will react to various financial stresses, which tests should have been conducted years ago by our bogus regulators who looked the other way while collecting their pay, he should simply be determining the cause of death and listing it on the banks' death certificates. Had these stress tests been conducted in a timely fashion, it would not have mattered anyway, because as our subscribers know, these deaths were by suicide, and not by natural causes. These institutions have self-destructed on orders from the Puppet Masters to collapse the world financial system to make way for a new one-world system in place of the nation-state system.
People who acted wisely and stayed on the sidelines while everyone else want on a felonious spending and lending binge in the real estate markets, which felonious activity occurred with the full encouragement of our government who practically arm-twisted many lenders into giving loans, under threat of discrimination lawsuits, to anyone who could fog a mirror, and which felonious activity and loan malfeasance the Fed actively encouraged via Mr. Bubbles, Alan Greenspan, who was the former Fed Chairman before Buck-Busting Ben took over, still cannot get into the real estate market because the prices are being kept artificially high by all the bailouts. They watch in silent anger and consternation as those who committed felonies by taking out "liar loans" get their mortgage principal reduced and payments lowered to avoid generating foreclosures which would take real estate prices down to a more realistic level that honest, qualified buyers could afford. They watch in stupefied horror and frustration as those banks which engaged in derivative and loan fraud and over-leveraged speculation get hundreds of billions of taxpayer largesse doled out to them so they can continue to defraud the public and make nonsensical loans to keep the daisy chain of fraud going while they collect their commissions and spreads on new issuance of toxic waste using money that has been borrowed interest-free, while charging usurious rates, relative to their borrowing costs, to anyone else who needs to borrow money. These bankster gangsters then have the gall to say they are not accountable to taxpayers as to how the money is used, while glomming salaries, bonuses and dividends out of money that has been handed to them which they did nothing to earn, and some of this money is even used as takeover money to hostilely acquire the honest, healthy banks in order to eliminate competition while simultaneously hoarding the gifted bailout money to force the rest of their competition to fail and go under because they can't borrow to meet their capital requirements. Obama's bogus promises that these horrendous and fiendish practices will not be allowed to occur with respect to future bailout funds is just window-dressing and inane platitudes for the ignorant masses. Business will go on as usual in Washington and on Wall Street -- as corrupt as ever. Right has become wrong, and wrong has become right, just as the Bible warned. Surely, we are in the End Times.
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Where there is the necessary technical skill to move mountains, there is no need for the faith that moves mountains -anon-
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Hermit
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Re:Jump You Fuckers: Follow the bouncing 700 Billion
« Reply #39 on: 2009-03-01 23:06:03 » |
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Soros sees no bottom for world financial "collapse"
With respect Fritz, the above combines competent analysis with lizard grade conspiracy theories. As a tinfol cap, I offer George Soros. Unfortunately, he agrees with my scenario (which largely matches the above less the conspiracy bits) and a depressingly steep dive to the bottom with no end anywhere in sight. I nearly took out the highlighting given that most of the article is significant, and then decided that, given the subject, that this article deserved to be bleeding all over the screen for a while.
Source: Reuters
Authors: Pedro Nicolaci da Costa (Reporting), Juan Lagorio (Reporting), Gary Hill (Editing)
Dated: 2009-02-21
Renowned investor George Soros said on Friday the world financial system has effectively disintegrated, adding that there is yet no prospect of a near-term resolution to the crisis.
Soros said the turbulence is actually more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union.
He said the bankruptcy of Lehman Brothers in September marked a turning point in the functioning of the market system.
"We witnessed the collapse of the financial system," Soros said at a Columbia University dinner. "It was placed on life support, and it's still on life support. There's no sign that we are anywhere near a bottom."
His comments echoed those made earlier at the same conference by Paul Volcker, a former Federal Reserve chairman who is now a top adviser to President Barack Obama.
Volcker said industrial production around the world was declining even more rapidly than in the United States, which is itself under severe strain.
"I don't remember any time, maybe even in the Great Depression, when things went down quite so fast, quite so uniformly around the world," Volcker said.
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With or without religion, you would have good people doing good things and evil people doing evil things. But for good people to do evil things, that takes religion. - Steven Weinberg, 1999
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Re:Jump You Fuckers: Follow the bouncing 700 Billion
« Reply #40 on: 2009-03-05 21:30:48 » |
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[Fritz]It is going to be extremely difficult to resist the conspiracy models, as we going down this road to damnation
Source: Market Watch
Author: Alistair Barr & Greg Robb
Date: March 3, 2009
Pressure to reveal major AIG counterparties grows
Some suggest fees for firms that got billions of dollars from insurer's bailout
SAN FRANCISCO (MarketWatch) -- Calls increased Tuesday to reveal the financial institutions that got almost $40 billion in collateral from American International Group shortly after the government first bailed out the insurer last year.
AIG almost collapsed in September after ratings agency downgrades triggered demands for billions of dollars in extra collateral from firms that had bought derivative-based protection from the insurer on complex mortgage-related products known as collateralized debt obligations, or CDOs.
AIG didn't have that much money and faced bankruptcy. But it was saved by an $85 billion emergency loan facility from the Federal Reserve.
By Nov. 5, the insurer had paid out $37.3 billion of that money to counterparties who had purchased a certain type of derivative-based protection from AIG called multi-sector credit-default swaps, according to the company's third-quarter regulatory filing.
Since then, AIG and the Federal Reserve Bank of New York have unwound most of these contracts. To do this, they offered to buy the CDOs that were originally insured by the agreements. The counterparties sold these assets at a discount, but were compensated in full in return for allowing AIG to extricate itself from the obligations. The counterparties also got to keep the $37.3 billion in collateral, according to The Wall Street Journal.
The counterparties have never been disclosed publicly. However, banks that sought and received collateral from AIG included Goldman Sachs (GS:
Goldman Sachs Group Inc, The Wall Street Journal said in November.
Now that the government's bailout of AIG has ballooned to more than $160 billion, some politicians want to know which financial institutions benefited from taxpayer support provided to the insurer.
"AIG has given the counterparties $20 billion. Those people could be just about anybody in the world. Why won't the Fed disclose who those are?" Sen. Ron Wyden, D-Ore., asked Fed Chairman Ben Bernanke during congressional testimony on Tuesday.
Bernanke said the counterparties made "legal, legitimate, financial transactions" with AIG and presumed at the time that the contracts would remain private.
"That is a consideration we have to take into account," he added.
Sen. Mark Warner, D-Va., suggested that AIG's counterparties should have to take a "haircut," rather than be made whole, because some of them probably didn't do enough due diligence on whether the insurer was financially strong enough to be selling such protection.
"In effect, what we're saying is, consequently, folks who bought these instruments and that, at some point in their process, should have been doing some level of credit analysis of what AIG was selling who didn't do that credit analysis are going to still come out whole for their lack of appropriate due diligence or responsible behavior," he said.
"I'm as unhappy as you are about that, senator," Bernanke replied. "I just don't know what to do about it."
Full disclosure of all AIG's CDS counterparties isn't needed, but the major counterparties that benefited from government support of the insurer should be disclosed and a fee should be assessed "for the benefit their shareholders received from the U.S. taxpayer," Joshua Rosner, a managing director at research firm Graham Fisher & Co., said Tuesday.
"If the government's AIG support provided protection to Goldman to the tune of $20 to $25 billion, then shouldn't they pay the taxpayer something for the utility expense of that protection?" he added.
Goldman has said several times that its exposure to AIG isn't material and is offset by collateral and hedges. A spokesman for the firm reiterated that on Tuesday, but declined to comment further.
An AIG spokeswoman said Tuesday that the insurer hasn't disclosed its major CDS counterparties and that the information is confidential.
The insurer's portfolio of credit default swaps was still notionally worth $302.2 billion at the end of 2008, despite government-supported efforts to aggressively unwind it during the fourth quarter.
AIG estimated Monday that another downgrade by ratings agencies would trigger $8 billion in collateral and termination payments to counterparties on these contracts.
Some of AIG's CDS give counterparties another right to terminate the contracts if the insurer's ratings fall to BBB or Baa2. The notional value of these derivatives was more than $38 billion at the end of 2008. See full story. End of Story
Alistair Barr is a reporter for MarketWatch in San Francisco.
Greg Robb is a senior reporter for MarketWatch in Washington.
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Where there is the necessary technical skill to move mountains, there is no need for the faith that moves mountains -anon-
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Re:Jump You Fuckers: Follow the bouncing 700 Billion
« Reply #41 on: 2009-03-07 11:47:26 » |
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Nice that the US is sharing their huge financial reserves with the world
Cheers
Fritz
Source: Finacial Post
Author: SERENA NG and CARRICK MOLLENKAMP
Date: MARCH 7, 2009
Top U.S., European Banks Got $50 Billion in AIG Aid
The beneficiaries of the government's bailout of American International Group Inc. include at least two dozen U.S. and foreign financial institutions that have been paid roughly $50 billion since the Federal Reserve first extended aid to the insurance giant.
Among those institutions are Goldman Sachs Group Inc. and Germany's Deutsche Bank AG, each of which received roughly $6 billion in payments between mid-September and December 2008, according to a confidential document and people familiar with the matter.
Covered Counterparties
Some banks that were paid by AIG after it was bailed out by the government
* Goldman Sachs
* Deutsche Bank
* Merrill Lynch
* Société Générale
* Calyon
* Barclays
* Rabobank
* Danske
* HSBC
* Royal Bank of Scotland
* Banco Santander
* Morgan Stanley
* Wachovia
* Bank of America
* Lloyds Banking Group
Source: WSJ research
Other banks that received large payouts from AIG late last year include Merrill Lynch, now part of Bank of America Corp., and French bank Société Générale SA.
More than a dozen firms with smaller exposures to AIG also received payouts, including Morgan Stanley, Royal Bank of Scotland Group PLC and HSBC Holdings PLC, according to the confidential document.
The names of all of AIG's derivative counterparties and the money they have received from taxpayers still isn't known, but The Wall Street Journal has identified some of them and is publishing others here for the first time.
Lawmakers Want Names
The AIG bailout has become a political hot potato as the risk of losses to U.S. taxpayers rises. This past week, legislators demanded that the Federal Reserve disclose names of financial firms that have received money from AIG, which Fed officials have described as too systemically important in the financial system to be allowed to fail.
In a Senate Banking Committee hearing in Washington on Thursday, Fed Vice Chairman Donald Kohn declined to identify AIG's trading partners. He said doing so would make people wary of doing business with AIG.
But Mr. Kohn told lawmakers he would take their requests to his colleagues. The Fed, through a new committee led by Mr. Kohn to discuss transparency concerns, is now weighing whether to disclose more details about the AIG transactions.
The Fed rescued AIG in September with an $85 billion credit line when investment losses and collateral demands from banks threatened to send the firm into bankruptcy court. A bankruptcy filing would have caused losses and problems for financial institutions and policyholders globally that were relying on AIG to insure them against losses.
Since September, the government has had to extend more aid to AIG as its woes have deepened; the rescue package now has swelled to more than $173 billion.
The government's rescue of AIG helped prevent its counterparties from incurring immediate losses on mortgage-backed securities and other assets they had insured through AIG. The bailout provided AIG with cash to pay the banks collateral on the money-losing trades; it also bought out underlying mortgage-linked securities, many of which are currently worth less than half their original value.
Banks and other financial companies were trading partners of AIG's financial-products unit, which operated more like a Wall Street trading firm than a conservative insurer. This AIG unit sold credit-default swaps, which acted like insurance on complex securities backed by mortgages. When the securities plunged in value last year, AIG was forced to post billions of dollars in collateral to counterparties to back up its promises to insure them against losses.
More Problems
Now, other problems are popping up for AIG. The insurer generated a sizable business helping European banks lower the amount of regulatory capital required to cushion against losses on pools of assets such as mortgages and corporate debt. It did this by writing swaps that effectively insured those assets.
Values of some of those assets are declining, too, forcing AIG to also post collateral against those positions. And if the portfolios incur losses, AIG will have to compensate the banks.
AIG had seen this business as a relatively safe bet for the company and its investors. The structures were designed to allow European banks to shuck aside high capital costs. A change in capital rules has meant that the AIG protection no longer meets regulatory requirements.
The concern has been that if AIG defaulted, banks that made use of the insurer's business to reduce their regulatory capital, most of which were headquartered in Europe, would have been forced to bring $300 billion of assets back onto their balance sheets, according to a Merrill report.
—Liam Pleven and Sudeep Reddy contributed to this article.
Write to Serena Ng at serena.ng@wsj.com and Carrick Mollenkamp at carrick.mollenkamp@wsj.com
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Re:Jump You Fuckers: Follow the bouncing 700 Billion
« Reply #42 on: 2009-03-25 22:13:22 » |
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....sigh....
Fritz
Source: Cluster Fuck Nation 25
Author: James Kunstler
Date: March 23, 2009
Full Commanding Denial
If central casting called for a poised, straight-talking, and capable-seeming president, it would be hard to come up with someone better than the Barack Obama who walked and talked around the White House grounds with Steve Croft on "60-Minutes" Sunday night. He may perfectly represent the majority who elected him, though, because he also appears to be in full commanding denial of the realities overtaking our American experience.
Those realities include the fact that we can't possibly return to the easy credit and no money down "consumer" economy no matter how many nominal dollars get shoveled into the fiery furnaces of banks too-big-to-fail. As Treasury Secretary Geithner's underling, Stephanie Cutter, said last week, "Our singular focus is on increasing lending to support economic recovery. Everything we do to stabilize the financial system is done with that goal in mind."
Lending on the scale that became normal over the last decade is for sure the one thing that we will not recover. We turn around in 2009 to find ourselves a much poorer nation than we thought we were a year ago, especially among that broad range of formerly middle-class wage-earners who lived so luxuriously until yesterday. The public can't process this reality and the president, for all his relaxed charm, is either not ready to articulate it, or can't process it himself.
Everything that we're doing right now is engineered to avoid reality, to sustain the unsustainable, to recover the unrecoverable, when the mandate of reality compels us to face our losses in order to move on to the next chapter of a collective American life. The next chapter would be a society that runs on a much more local and modest scale, centered on essential activities like growing food, requiring harder physical work, and focused attention -- in other words, the opposite of a society lost in abstractions, long-range daisy chains of off-loaded responsibility, and incessant pleasure-seeking.
In retreat from this reality, we've set in motion two forces that are pretty certain to bring us to grief. The first proceeds from the fateful FMOC decision last week at the Federal Reserve Bank to begin buying massive amounts of our own treasury bonds and bills. This is predicated on the idea that the mechanisms of wealth production -- even of illusory wealth, such as the fortunes created by trading securitized unpayable debt -- can keep chugging along, spinning off limitless additional suburban villas, chain stores, car trips, and deep-fried snacks. It would be sententious to explain how this destroys currencies, but wherever "monetizing debt" has been tried before in history, that is the outcome. The result would be ruinous at every level and would lead straight to the second terrible force: social upheaval brought on by the conversion of economic problems into political turbulence.
Those two forces are underway right now, in fact, since the overt monetizing of last week was preceded by the shoveling of bail-outs, which tacitly guaranteed a collapse of credibility in US debt instruments. I'm not in favor of violence and anarchy, but after the AIG bonus affair, it's hard to imagine that we are not one more corporate misdeed away from a rocket-propelled-grenade, or something like that, being fired into a glass office tower somewhere -- and then the "first-broken-window" rule of social disintegration comes into play. Meanwhile, I stick to my time-table of six-to-eighteen months before the reckless creation of new money-for-nothing filters through the system, overcomes even compressive mass bankruptcy, and starts expressing itself in the sinking value of dollars and the revved up velocity of their circulation in pursuit of tangible commodities.
We're already seeing the first twinges of that in the up-creep of oil prices, busting through the $50-a-barrel barrier last week. Since scarcity tends to express itself in gross volatility, it's easy to imagine oil prices rising swiftly beyond the $147-per-barrel record level of last year. As that occurs, the most basic premises of everyday life in the USA will be called into question. If you think car sales have been bad lately, with oil in the $35-a-barrel range most of the winter, just wait. The newly-minted unemployed will be marooned in their subdivisions. They will not be buying GMC Yukons on 48-month installment contracts, let alone X-boxes on their Visa cards. They might be very very hungry, though. All bets are off as to how these social classes may organize themselves to alleviate their hunger (and express their anger about it).
Given all this, it's kind of hard to believe that the savvy, thoughtful Mr. Obama is going along with such a disastrous program as the one his "team" is rolling out. Perhaps his ease and confidence masks a tragically conventional world-view, an incapacity to imagine "change" outside a very narrow range of possibility. I must say I doubt this is the case. I think, he is going along, for the moment, with a consensus of wishes to prop up life as we know it at all costs. This consensus emanates from the top down and the bottom up. The millions of "Joe-the-Plumber(s)" out there don't want to rethink the terms of existence anymore than the lords of Goldman Sachs. I also think that circumstances will force Mr. Obama's hand before long -- specifically that a moment will arrive when he goes on TV and tells the American public that things have changed way beyond the scope of what they even imagined when they pulled the levers last fall and voted for an uncharted future.
Capable observers are calling, meanwhile, for a robust bear market rally moving through Spring, on technical grounds that have little to do with the greater forces roistering in the background. Reality is a cruel mistress. If the stock market rally rolls out as predicted, it will surely fake-out the mainstream media. They'll conclude wishfully and foolishly that something like "recovery" is underway. They may even interpret rising oil prices as a "positive sign" that the great groaning enterprise of the something-for-nothing economy is back "on track."
They'll be shocked sometime after Memorial Day when it all comes off the rails again. We have a lot to sort out and very little time to get on with job. Notice, I haven't even mentioned the potential for mischief and instability coming out of the rest of the world -- enough black swans to blot out the sun. Want some concrete advice? For those of you sitting on US Treasury bonds and bills, now would be a good time to get out.
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Re:Jump You Fuckers: Follow the bouncing 700 Billion
« Reply #43 on: 2009-04-30 21:02:25 » |
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Senate defeats anti-foreclosure proposal
Source: Associated Press
Authors: Anne Flaherty
Dated: 2009-04-30
The Democratic-controlled Senate on Thursday defeated a plan to spare hundreds of thousands of homeowners from foreclosure through bankruptcy, a proposal that President Barack Obama embraced but did little to see it through.
A dozen Democrats joined Republicans in the 45-51 vote to scuttle the measure, which Obama had said was important to saving the economy and promised to push through Congress. But facing stiff opposition from banks, Obama did little to pressure lawmakers who worried it would encourage bankruptcy filings and spike interest rates.
"The vote today was a bipartisan rejection of an interest-rate hike, which is exactly the wrong solution for jobs, homeowners and the economy," said Senate Republican leader Mitch McConnell of Kentucky.
Democratic leaders lamented that they were powerless, with the 45 votes falling far short of the 60 to overcome procedural hurdles. The newest Democrat, Sen. Arlen Specter of Pennsylvania, voted against it.
"The banks that are too big to fail are saying that 8 million Americans facing foreclosure are too little to count in this economy," said Senate Majority Whip Dick Durbin of Illinois, who championed the measure and had spent weeks negotiating with financial lobbyists in a bid to strike a deal.
Obama long has backed the proposal to give debt-ridden individuals the option of asking a bankruptcy judge to reduce their mortgage payment. He cited that support last fall as he privately lobbied skeptical Democrats to back the $700 billion Wall Street bailout. And once he was president, he had promised, he would push for its passage.
In February, the newly inaugurated president included the proposal as the stick in a housing plan full of carrots for the banking industry. The broader rescue plan encouraged, but did not require, lenders to cut homeowners' monthly payments and refinance loans for individuals whose home's market value has sunk below what they owe.
The following month, the House passed the bankruptcy legislation along party lines in a 234-191 vote.
But the bankruptcy option got only a tepid endorsement from Treasury Secretary Timothy Geithner. As debate on the measure brewed, Geithner was pushing for the creation of a government-sponsored program that would rely on private investors to buy the risky mortgage-backed securities weighing down the market.
The forced easing, or "cram-down," of a mortgage by a bankruptcy judge would have likely introduced additional uncertainty for investors.
Congressional Democrats also questioned the merits.
"Do I want to have my rate go up so that somebody else might be able to cram down" their mortgage payment? asked Sen. Ben Nelson, D-Neb., who voted against the measure.
In recent days, as it became clear the measure would fail, the administration did little to counter the aggressive lobbying by banks fighting the proposal and focused its efforts instead on a more popular bill targeting credit card companies.
Spokeswomen at the Treasury Department and White House did not respond to requests for comment, and absent from the debate was any statement of administration policy.
Obama supporters blamed the banks.
[b]"There was a lot of fear-mongering," said Andrew Jakabovics, associate director for housing and economics at the Center for American Progress in Washington. "The banks put on a good show, saying, 'Hey, if you force us to take more losses, we're going to go out of business.'"
Indeed, the banking industry had a direct line to Capitol Hill. Officials from some of the biggest banks, including JP Morgan Chase & Co., Bank of America Corp. and Wells Fargo & Co., as well as groups representing credit unions and community banks, negotiated for weeks with Durbin and other leading Senate Democrats.
Trying to win support, Durbin narrowed the provision substantially. The latest proposal would have restricted eligibility to homeowners already in foreclosure whose lender had not offered them better terms. Homes would also have to be worth less than $729,000 and apply to mortgage loans originated before 2009.
Durbin had offered the measure as an amendment to a housing bill aimed at easing the nation's credit crunch. That bill would guarantee bank deposits up to $250,000 through 2013.
The bill also would permanently increase the borrowing authority for the Federal Deposit Insurance Corp. from $30 billion to $100 billion. Increasing the FDIC's credit would allow the agency to reduce large new premiums it has begun charging banks to insure deposits.
The Senate is expected to vote on that measure next week. Durbin said he would try to restore the bankruptcy provision in conference with the House, although it was considered unlikely he would succeed.
"I'll be back," he said. "I'm not going to give up."
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Re:Jump You Fuckers: Follow the bouncing 700 Billion
« Reply #44 on: 2009-04-30 23:36:56 » |
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Top Senate Democrat: bankers "own" the U.S. Congress
Source: Salon.com
Authors: Glenn Greenwald
Dated: 2009-04-30
Glenn Greenwald was previously a constitutional law and civil rights litigator in New York, is the author of two New York Times Bestselling books: "How Would a Patriot Act?" (May, 2006), a critique of the Bush administration's use of executive power, and "A Tragic Legacy" (June, 2007), which examines the Bush legacy and of "Great American Hypocrites", which examines the manipulative electoral tactics used by the GOP and propagated by the establishment press, and released in April, 2008, by Random House/Crown.
Sen. Dick Durbin, on a local Chicago radio station this week, blurted out an obvious truth about Congress that, despite being blindingly obvious, is rarely spoken: "And the banks -- hard to believe in a time when we're facing a banking crisis that many of the banks created -- are still the most powerful lobby on Capitol Hill. And they frankly own the place." The blunt acknowledgment that the same banks that caused the financial crisis "own" the U.S. Congress -- according to one of that institution's most powerful members -- demonstrates just how extreme this institutional corruption is.
The ownership of the federal government by banks and other large corporations is effectuated in literally countless ways, none more effective than the endless and increasingly sleazy overlap between government and corporate officials. Here is just one random item this week announcing a couple of standard personnel moves:[i]Former Barney Frank staffer now top Goldman Sachs lobbyist
Goldman Sachs' new top lobbyist was recently the top staffer to Rep. Barney Frank, D-Mass., on the House Financial Services Committee chaired by Frank. Michael Paese, a registered lobbyist for the Securities Industries and Financial Markets Association since he left Frank's committee in September, will join Goldman as director of government affairs, a role held last year by former Tom Daschle intimate, Mark Patterson, now the chief of staff at the Treasury Department. This is not Paese's first swing through the Wall Street-Congress revolving door: he previously worked at JP Morgan and Mercantile Bankshares, and in between served as senior minority counsel at the Financial Services Committee. So: Paese went from Chairman Frank's office to be the top lobbyist at Goldman, and shortly before that, Goldman dispatched Paese's predecessor, close Tom Daschle associate Mark Patterson, to be Chief of Staff to Treasury Secretary Tim Geithner, himself a protege of former Goldman CEO Robert Rubin and a virtually wholly owned subsidiary of the banking industry. That's all part of what Desmond Lachman -- American Enterprise Institute fellow, former chief emerging market strategist at Salomon Smith Barney and top IMF official (no socialist he) -- recently described as "Goldman Sachs's seeming lock on high-level U.S. Treasury jobs."
Meanwhile, the above-linked Huffington Post article which reported on Durbin's comments also notes Sen. Evan Bayh's previously-reported central role on behalf of the bankers in blocking legislation, hated by the banking industry, to allow bankruptcy judges to alter the terms of mortgages so that families can stay in their homes. Bayh is up for re-election in 2010, and here -- according to the indispensable Open Secrets site -- is Bayh's top donor:
Goldman is also the top donor to Bayh over the course of his Congressional career, during which Bayh has received more than $4 million from the finance, insurance and real estate sectors:
In a totally unrelated coincidence -- after the Government, as Matt Taibbi put it, enacted "a bailout program that has now figured three ways to funnel money to Goldman, Sachs"-- this is what happened earlier this month:Goldman reports $1.8 billion profit
Goldman Sachs reported a much stronger-than-expected first-quarter profit Monday, bouncing back from its worst quarter as a public company. . . .
In reporting its results a day earlier than expected, New York-based Goldman said it earned $1.81 billion, or $3.39 a share, for the quarter ended March 31. Analysts surveyed by Thomson Financial were looking for a profit of $1.64 a share.
Goldman shares, which have surged more than 70% during the past month, continued rising late Monday, gaining about 4.7% for the day. Nobody even tries to hide this any longer. The only way they could make it more blatant is if they hung a huge Goldman Sachs logo on the Capitol dome and then branded it onto the foreheads of leading members of Congress and executive branch officials.
Of course, ownership of the government is not confined to Goldman or even to bankers generally; legislation in virtually every area is written by the lobbyists dispatched by the corporations that demand it, and its passage then ensured by "representatives" whose pockets are stuffed with money from those same corporations. Just as one example, as Jane Hamsher reported about Bayh:Bayh's little "lobbyist problem" is considered by many to be what tanked his Vice Presidential aspirations. His wife Susan earns about $837,000 a year serving on seven corporate boards, among them Wellpoint, a health insurance company for which Bayh helped secure a $24.7 million dollar grant. She's on the board of ETrade, even as Bayh is on the Senate Finance Committee.
Bayh wants people to believe he's a "moderate" who sits in the "center."
Center of K Street, maybe.
Meanwhile, the only citizen protests relating to this mass robbery are driven by anger at the government for treating bankers too harshly and unfairly -- one of the most classic manifestations of what Taibbi, in a separate piece, so aptly calls the "peasant mentality":After all, the reason the winger crowd can’t find a way to be coherently angry right now is because this country has no healthy avenues for genuine populist outrage. It never has. The setup always goes the other way: when the excesses of business interests and their political proteges in Washington leave the regular guy broke and screwed, the response is always for the lower and middle classes to split down the middle and find reasons to get pissed off not at their greedy bosses but at each other. That’s why even people like [Glenn] Beck’s audience, who I’d wager are mostly lower-income people, can’t imagine themselves protesting against the Wall Street barons who in actuality are the ones who fucked them over. . . .
Actual rich people can’t ever be the target. It’s a classic peasant mentality: going into fits of groveling and bowing whenever the master’s carriage rides by, then fuming against the Turks in Crimea or the Jews in the Pale or whoever after spending fifteen hard hours in the fields. You know you’re a peasant when you worship the very people who are right now, this minute, conning you and taking your shit. Whatever the master does, you’re on board. When you get frisky, he sticks a big cross in the middle of your village, and you spend the rest of your life praying to it with big googly eyes. Or he puts out newspapers full of innuendo about this or that faraway group and you immediately salute and rush off to join the hate squad. A good peasant is loyal, simpleminded, and full of misdirected anger. And that’s what we’ve got now, a lot of misdirected anger searching around for a non-target to mis-punish . . . can’t be mad at AIG, can’t be mad at Citi or Goldman Sachs. The real villains have to be the anti-AIG protesters! After all, those people earned those bonuses! If ever there was a textbook case of peasant thinking, it’s struggling middle-class Americans burned up in defense of taxpayer-funded bonuses to millionaires.[/url] It’s really weird stuff. [b]One might think it would be a big news story for the second most-powerful member of the U.S. Senate to baldly state that the Congress is "owned" by the bankers who spawned the financial crisis and continue to dictate the government's actions. But it won't be. The leading members of the media work for the very corporations that benefit most from this process. Establishment journalists are integral and well-rewarded members of the same system and thus cannot and will not see it as inherently corrupt (instead, as Newsweek's Evan Thomas said, their role, as "members of the ruling class," is to "prop up the existing order," "protect traditional institutions" and "safeguard the status quo").
That Congress is fully owned and controlled by a tiny sliver of narrow, oligarchical, deeply corrupted interests is simultaneously so obvious yet so demonized (only Unserious Shrill Fringe radicals, such as the IMF's former chief economist, use that sort of language) that even Durbin's explicit admission will be largely ignored. Even that extreme of a confession (Durbin elaborated on it with Ed Schultz last night) hardly causes a ripple.
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With or without religion, you would have good people doing good things and evil people doing evil things. But for good people to do evil things, that takes religion. - Steven Weinberg, 1999
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