Economic Meltdown

[mur]

How ya doin?

I worked in the mortgage biz for 13years.

The financial markets are in complete disarray...if you have not noticed.

There are many reasons for this....I will post some along the way.

The main culprit is the Federal Reserve.

Abolish it

[mur]

House of Cards
You thought the housing crisis was bad? You ain’t seen nothing yet.

By Danny Schechter


The Mess

Nationwide, two million homes sit vacant. Home sales are at a nine-year low. Former Treasury Secretary Larry Summers says that housing finance has not been this bad since the Depression. We still don’t know the full extent of the colossal subprime rip-off, but a recent Bank of America study did some guesstimating on the scale of the consequences of the “credit crisis.” The meltdown in the U.S. subprime real estate market, the bank said, had led to a global loss of $7.7 trillion dollars in stock market value since October.

While many eyes are focusing on the housing meltdown and its hugely negative effect on an economy clearly moving into recession, few are paying attention to the next bubble expected to burst: credit cards. Combined with the subprime losses, such a credit card nightmare has the potential, experts say, of bringing down the entire financial system and global economy. You and your credit card have become key players in the highly unstable financial crunch. Mortgage lender cupidity and bank credit card greed wedded to financial institution deregulation supported by both political parties, have been made manifestly worse by Bush administration support-the-rich policies. It has brought us to a brink not seen since just before the Great Depression.

While campaigning in Edinburg, Texas, in February, Barack Obama met with students at the University of Texas-Pan American. “Just be careful about those credit cards, all right? Don’t eat out as much,” he said. After the foreclosure crisis, he warned, “the credit cards are next in line.”

The coupling of home equity debt and credit card debt has gone hand in glove for years. The homeowners at risk can no longer use their homes as ATM machines, thanks to their prior re-financings and equity loans, often used in the past to pay off their credit cards. Indeed, homeowners cashed out $1.2 trillion from their home equity from 2002 to 2007 to pay down credit card debts and to cover other costs of living, according to the public policy research organization Demos.

To compound the problem, fewer people are paying their credit card bills on time. And, to flip the old paradigm, more are using high-interest credit card cash to pay at least part of their mortgages instead of the other way around.


How bad is it?

• Financial analysts say that in the U.S. alone more than $850 billion in unpaid credit card balances is at stake and fast approaching $1 trillion, roughly the same amount as in the subprime market.

• CNN reports that worldwide, consumers have racked up more than $2.2 trillion in purchases and cash advances on major credit cards in just the last year.

• The unpaid debt portion of this is continuing to pile up, with U.S. consumers last year adding $68 billion against their credit lines, boosting credit card debt by 7.8 percent, the largest increase in seven years, just when the last recession was beginning.

• Even as they spent, consumers have been going into default at a stunning rate. The percentage of people delinquent on their credit cards is soaring, and credit card companies are now writing off somewhere near 5 percent of payments.

• By last fall, the major banks were setting aside billions for loan-loss reserves while anticipating an increase of 20 percent in non-payments over the next two to four quarters.

• Capital One, one of the biggest credit card banks, was forced to write off $1.9 billion in bad debt just in the last quarter of 2007.

•By October, according to a survey of only the leading credit card banks by the Associated Press, the value of credit card accounts at least 30 days late was up 26% from the previous year, to $17.3 billion. Serious delinquencies among some of the biggest lenders rose by 50 percent or more in the value of accounts that were at least 90 days delinquent.

• Making matters worse, or more widespread throughout the economy, just as with mortgage debt, credit card debt is put into pools that are then resold to investment houses, other banks and institutional investors. About 45 percent of the nation’s $900-plus billion in credit card debt has been packaged into these pools, and so many companies, not just a few, are at risk of being forced out of business by credit card debt write-offs.

What this adds up to, and what Obama didn’t say, is that we are actually face to face with the results of the most massive failure of our political and economic system since the Depression. Since Ronald Reagan, we have been living in an era in which neither the meltdown of the savings and loan banks in the 1980s nor the Enron-like scandals of the Bush years has stopped the relentless advancement and protection by both parties of the ability of financial institutions to make a buck at any cost to the social good and economic fabric. Which is what you get, of course, when both parties are so dependent on massive financial contributions to get their candidates into office and when the corporate media, heavy with advertising from the FIRE sector – Finance, Insurance and Real Estate – doesn’t warn the public or investigate the egregious fudging, misrepresentation and outright fraud that underpins the subprime and looming credit card crisis.


Priceless!

more here
http://www.lacitybeat.com/cms/story/det ... ards/7181/ (http://www.lacitybeat.com/cms/story/detail/house_of_cards/7181/)

[JiveTurkey]

The main culprit is the Federal Reserve.

Abolish it


Enough said.



But, since I'm "wordy" (according to our bitch), I'll add a bit more.

The Fed is responsible for ALL of our current financial problems in some way, shape or form.

Abolishing it is a great start.

Then, hangings all around for the board members. The White House lawn would make a great location.

[mur]

More impending collapse news


What do Fleck, Fortis, RBS and Barclays Have in Common?

Posted on June 28th, 2008 in Uncategorized

What they have in common is all have recently predicted a massive unraveling of the US financial ’system’ within a few weeks. It is not as if this prediction or being on the verge of a meltdown is something new. The financial system has come apart several times in the past year but the Fed has always stepped in with something that has caused the markets to calm down (on the surface) and stocks to rally. Bonds, however, have never responded in quite the manner of stock market participants who each time in the past have become irrationally exuberant when Bernanke says that ‘all is good’ or decides to throw money around such as the couple of hundred billion to the investment banks in March. In my mind having to create facilities like the TAF in the first place meant the situation was dire.

In the past few weeks fear has come back in full force complete with blown out credit spreads and crashing financial sector stocks. However, this time around the Fed does not have the fire power nor the market confidence behind them because every measure they have taken thus far has only drained their reserves, delayed the inevitable, caused other problems elsewhere for the US and global economies and has not fixed the problem.

From day one the banks, Government and talking heads on bubblevision have been in denial or resorted to outright lying, in an orchestrated attempt to talk the markets into healing instead of doing what needs to be done, which is admitting there is a problem and taking necessary measures and lumps. Oppenheimer’s Meredith Whitney has been preaching this for a year about the banks in particular. In March she said she had downgraded bank’s earnings estimates 22 times in three months and coming out of the closet is the first step to balance sheet repair.

When this many get together and say the exact same thing, I listen. However, on Monday morning I am sure bubblevision and a little loud bald man will tell you ‘the glass is half full’ and ‘BUY BUY BUY’. - Best Mr Mortgage

more from here
http://mrmortgage.ml-implode.com/

[apeci]

It's rather disgusting to hear that all the talking heads are telling people that this is a great time to take on risk in the down market. People like Dave Ramsey, a bloated mortgage broker who fancies himself a Biblically inspired financial expert, continuing to tell people to invest in stock mutual funds. The poor boomers that have listened to these fools are going to be hurting most of all as they see their retirement funds waste away.

[boycotteverything]

In the past few weeks fear has come back in full force complete with blown out credit spreads and crashing financial sector stocks. However, this time around the Fed does not have the fire power nor the market confidence behind them because every measure they have taken thus far has only drained their reserves, delayed the inevitable, caused other problems elsewhere for the US and global economies and has not fixed the problem.

The Fed and the usual gang of 'experts' will always spend their meager energy on the analysis of the economic cogs and gears rather than the state of the deus ex machina itself. The fact is that the world is experiencing the greatest transfer of wealth since the beginning of recorded history. Pax Americana is in decline and fall. Nothing can slow the decent and the chaotic consequences for human continuance per se. Behold a pale horse. The ultimate discontinuity is at hand and the results will not be pretty- interesting, but not pretty.

The Empire won't go quietly- not with a whimper but a bang. Perhaps that is why the Johannine prophecies seem so apt. This movie played out before in a much smaller theatre. It doesn't require a prophet to see the future anymore- just a bit of tweaking on the fine tune knobs. The future has never had such a compelling immediacy.

The world is being strangled by the Malthusian garrote. Desperate populations are about to become engaged in a war for remaining resources. That is what the Iraq war is all about. Self preservation will finally wring out the last dampness of altruism. It has happened before to a lesser degree and the remedy that it spawned- Christianity- will find itself finally eclipsed by it's opposite principles. This is the larger picture. All that's left are the tedious details, the footnotes- the various methods of mayhem and the hydra-headed fools, the walk-ons of history, that permit their use.

So what sound and fury do we see in the immediate future? The crash of the markets, unlimited war, local transfers of wealth and property- evictions, repossessions, the calling of social margin. Families squatting in the dross of their own foreclosed homes- the new huddled masses, their utilities disconnected, while the successors of the failed banks are unable to force them out. Transportation at a stand-still. Empty grocery stores. Gunshots in the night. And the foreign wars of our addled emperor coming home. The attack on Iran will result in the sinking of aircraft carriers in the Persian Gulf. Saudi Arabia will be over-run by the gangs of it prodigal son. There will be no more oil shipped by those greedy sheiks. The ayatollahs will loose their missiles on Israel and taste the fruits of Samson's nukes. Persia will be no more. Israel will be no more. And then it all comes home. The scatterings of the Middle Eastern desperadoes will appear on our own streets, in our own buildings- and bring with them endless nine elevens. Of course there is more- much more- this is just a selective foretaste of the impending chaos. Let your imagination run wild to see the entire movie. Whatever disaster that you have the temerity to envision will come to pass. Shortly.

The billions that have gone before us, upon whose shoulders we stand, are here and now- new flesh on their bones- to witness the denouement of history. It could have been otherwise. The greatest fear shall now become- not death, but the inability to die. Perhaps John had it right after-all.

[mur]

Don't forget the prison camps

http://concernedhumanity.net/camps.html

[1972]

Hi and welcome!

I am trying to draw a conclusion as to how we go from economic meltdown and the housing market.
Then BAM!

Now we are a prison camps?

Can mine haz room service?

And a private gas chamber?

:smokin:

[mur]

Hi and welcome!

I am trying to draw a conclusion as to how we go from economic meltdown and the housing market.
Then BAM!

Now we are a prison camps?

Can mine haz room service?

And a private gas chamber?

:smokin:

Natural progression

[1972]

Not an answer.
Care to connect the dots for someone not on the same page as you?
Bad economy = prison camps?

[apeci]

Don't forget the prison camps

http://concernedhumanity.net/camps.html
Much of this must be taken with a hefty grain of salt. Many of these supposed camps have been independently checked out and proven to be either nonexistent or misrepresented. For example I live near Richards Gebaur Air Force Base, what's left of it at least, as cited in your link:


MISSOURI
Richards-Gebaur AFB - located in Grandview, near K.C.MO. A very large internment facility has been built on this base, and all base personnel are restricted from coming near it.
I have fond memories of going to airshows at this base. However it was closed down in the 90s. Half of the runway has been torn up and the tarmac is leased out to store new cars. The buildings are deteriorated and broken, the hangars rusted, and the land overgrown. There is still a lot of debate over what to do with it and I believe it is currently being integrated with the KC Smartport, one of the largest inland transport hubs in the nation and a major crossroads for the NAFTA Superhighway. There is no internment facility and nobody is restricted from going near the base. You can freely drive up to it and roam around. The area with the new cars is however fenced in and I suspect that someone with an overactive imagination saw this prior to the cars being brought in for the first time, however the barbed wire points out.

I believe there is still a Marine presence in the area in the form of a school and a court I think, but if I recall correctly that too was to be decommissioned. A golf course now takes up much of the vacant land.

No doubt there are camps of a sort being built across the country for the explicit purpose of containing combatants in a Martial Law style situation. But when some of these reports are outright false it casts a serious shadow of doubt onto the claim as a whole and does nothing but serve as disinformation to avert the prying eyes of the people. Perhaps that is the purpose of their inclusion.

[boycotteverything]

Not an answer.
Care to connect the dots for someone not on the same page as you?
Bad economy = prison camps?

I think Mur's point is that this isn't simply 'a bad economy.' This is the ultimate economic and social meltdown. The time when the chickens come home to roost. Such a meltdown will not occur in a vacuum. The social consequences will lead to everything from suicide to rebellion- the total dissolution of civil society. In such a world you can expect the State to exercise any means necessary to maintain its grip on power. But I think Mur might be wrong about the need for these camps. The neocon fascists will resort to wholesale execution instead- just as they've done in Iraq.

[boycotteverything]

And... the foregoing doesn't even consider the other big shoe that's dropped- abrupt climate change. When the near term consequences of global warming are added to this social witch's brew the problem compounds exponentially. I'm reminded of the report prepared for Andrew Marshall at the pentagon in 2003 by Randall and Schwartz. http://www.gbn.com/GBNDocumentDisplaySe ... v?id=28566 (http://www.gbn.com/GBNDocumentDisplayServlet.srv?aid=26231&url=/UploadDocumentDisplayServlet.srv?id=28566)
Their conclusions: societal dissolution and general war. The DOD took this report very seriously and has been preparing for the predicted consequences ever since. And, yes- this includes the camps.

I purposely chose to avoid mention of climate change in my original jeremiad because to many righties it seems to be a matter of some dispute. Consideration of climate change is not essential to drawing conclusions concerning the decline and fall of the empire but when added to the mix the future becomes more bleak by a factor of ten.

[mur]

Not an answer.
Care to connect the dots for someone not on the same page as you?
Bad economy = prison camps?

Yes...it is a bad economy now...but it has the potential to get much much worse.

I hope it does not for all of our sakes...especially my kids.

The Fed has tampered with the numbers for far too long, and the signs I see look pretty fucking bad.



These prison camps do exist...if the economy collapses not just having a bad economy, I am talking collapse...our society will collapse shortly there after....food riots, social unrest, etc.

The more the Fed tinkers...the more dramatic the collapse will be.

Fema camps

http://www.youtube.com/watch?v=l0pfGOH4uxA

Start at 45 seconds

[boycotteverything]

The more the Fed tinkers...the more dramatic the collapse will be.
'Tinker' is just another word for wanking. As I recall from my university days- the most obtuse amongst us were the business majors.

[boycotteverything]

and hey, man- I told you you'd love this forum. You owe me a big fat fucking cheese steak, you hoser. Plus you never even thanked me for chasing that crotchety old curmudgeon, Chimpbutt, outa here. Jeezizz- the things I do for you...

[mur]

Thanks BE...I do like it...Cheese steaks on me...next time you get to Philly

It won't take much, once the house of cards starts to go.

http://www.youtube.com/watch?v=DK2g0TGaAZA

[mur]

s]3L3QVn4JyYAs]

[boycotteverything]

fuck, i'm starved. on my way. and don't forget the green peppers and freedom fries.

[boycotteverything]

sending that little movie to the Wyz. It gave me the chills... again.

[apeci]

These prison camps do exist...
I don't doubt some of them exist as reported. But many of them simply do not. Confusing misinformation with what should be taken with concern is a gross failure to convey that concern. That list you linked is found on many websites verbatim. With how many reports are out there like my own contradicting how these locations are being reported, it is discouraging to the reader who knows this and still finds them cited. It gives credence to the assertion that distributors of this information are crackpots when in fact they simply aren't aware of the fault in their data because like many they have failed to verify it. This is obviously a serious issue and must therefore be taken with a healthy dose of skepticism.

[boycotteverything]

The issue isn't how many times somewhat inaccurate claims are made in the internets- it's a matter of principle. Everything posted has a half-life of a million years. So? In principle, and in fact, the Leviathan is making preparations for the ultimate summer camp. Wanna be bunkmates? Have I told you recently that you're cute?

Damn! you look good in stripes!
http://wiki.majorityrights.com/_media/holocaust/uniforms.jpg
Arbeit macht frei!

[mur]

I agree there is much mis-information on this subject and many others.

Perhaps that is the purpose...so one does not know what to believe.

Hopefully I am over reacting, but I would rather put the info out there and let people decide for themselves.

This is just all just my opinion....but I see a world of shit straight ahead

[boycotteverything]

http://www.columbia.edu/itc/history/winter/w3206/images/auschwitzarbeitwebbg.jpg


Hopefully I am over reacting

I think you're reacting quite properly. As the Republicans/ Neocons say- work will set you free.

[mur]

PROTOCOLS FOR ECONOMIC COLLAPSE IN AMERICA
by
Al Martin


And this is how the U.S. Treasury would handle an economic collapse.
It's called the 6900 series of protocols. It would start with
declaring a force majeure, which would immediately be interpreted by
the marketplaces as a de facto repudiation of debt. Then the SEC and
the various regulatory exchanges would anticipate the market's
decline, hour by hour -- when Japan's markets opened the next day,
what would happen when the European markets, and all the inter-
linkages of the global markets. On the second day, US Special Forces
would be dropped in by parachute in the cities where the twelve
Federal Reserve district banks are located.


The origin of these protocols comes from the Department of Defense.
This is contingency planning for a variety of post-collapse scenarios.
Those scenarios would include, obviously, military collapse, World War
III, in other words, and its aftermath. What we're talking about now
is aftermath -- how the aftermath would be handled.


One does not necessarily know how the events would transpire that
would cause the collapse, whether it's military collapse or economic
collapse. In World War III, it would become obvious -- when the
mushroom cloud started to appear over cities.


Economic collapse scenarios were always premised on the basis of a US
declaration of force majeure on debt service. It's a very extensive
scenario. The scenarios are all together, i.e., military, economic,
political and social complete destabilization leading to collapse.
Then they break down individual scenarios. In the economic collapse
scenario, the starting point would be the United States Treasury
declaring a force majeure on debt service, which is de facto
repudiation, and that's how it would be interpreted by the world's
capital marketplaces. Then the scenario goes on from there. The US
Treasury would obviously declare a force majeure sometime after the
European markets had settled down. In other words, they had gone out
on the day, which means 11:38 a.m. EDT, our time. They'd wait until
the European markets closed, and the US markets had been open for a
couple of hours. That's when they'd determine how to begin the process
of unwinding or controlling the collapse to the best extent possible,
mainly because they know that the greatest hedge pressure would be
people seeking to use other markets to hedge their long exposure in
the United States and that the US would be the biggest seller in all
the rest of the world's markets. Therefore you would want to declare
the force majeure when the rest of the world's markets closed. The
declaration of force majeure would be precipitated by the declaration
that the United States is no longer able to service its debt. That's
pretty simple. Who makes that decision? The Treasury Department. The
President does not make that decision. The Secretary of the Treasury
does. He has that authority.
You might ask -- wouldn't he have his arm twisted not to do that?


The answer is that if there isn't any money left to service the debt,
it doesn't make any difference what the current regime might want to
do.


The day of reckoning is now coming. What has happened in the interim,
from 2001 to present, is dynamic, global economic deterioration. The
economic deterioration visited upon the United States by Bushonomics
is not a localized event. It is, in fact, global. We have a planet now
that is sinking into a sea of red ink.


The United States is consuming 80% of the planet's savings rate to
finance its debt. The central banks of Germany, Japan and Saudi Arabia
are no longer the powerhouses they used to be. Their reserves have now
been substantially depleted. They can, therefore, no longer hide the
fact that they own a certain number, likely in the trillions of
dollars, of U.S. Treasury debt that isn't being serviced, because they
can't hide it through bookkeeping tricks anymore because their
reserves are so depleted.


Therefore somebody has covertly been putting demands on the Bush-
Cheney regime for payment. Why do you think 2900 metric tons of gold
is depleted from U.S. inventory since March of `01?


Why do you think that $2 billion in currency seized from Iraq last May
is now unaccounted for?


Someone is putting demands on the Bush-Cheney regime. Someone is
saying to the Bushonian Cabal that -- You've got to start servicing
this debt because we, foreign central banks, are in nations - European
and Asian - whose reserves are now nearly exhausted.


Who could be putting that kind of pressure on them?


It has to be coming from whoever is organizing this thing at the very
top, which I would tend to think has got to be most likely a cabal of
people that would involve Henry Kissinger, James Baker, George
Schultz, possibly William Simon. It would be somebody at the very top
that is familiar with how to do this. It would have to be someone
familiar with finances.


So would this be one faction of a cabal blackmailing or forcing
another faction? No, it's not really blackmailing. It's being done out
of desperation. The German, Japanese and Saudi central banks are
saying to the Bushonian cabal, You've got to start servicing this debt
because we don't have the reserves to cover you anymore. We can no
longer make it appear that the debt is being serviced because our own
reserves are so substantively depleted. Therefore you must begin to
cover this debt. If you don't, then, at some point, we will have to
publicly admit in order to save our own necks -- that we were the end
buyers of a lot of stealth debt, a lot of debt that your Treasury
issued illegally and has never serviced. That would then expose the
whole cabal.


The Kissinger-Baker faction are at the top of how this was done on the
economic side of the equation. They were not the original insiders so
much, but the managers of the conspiracy from the U.S. Treasury, to
wit, the U.S. Treasury and Federal Reserve role-play the part.


Take Henry Kissinger. It may not have occurred to anyone why in the
last 3 years Henry Kissinger has been back in Washington more than he
has in the last 30 years. And why are all these quiet meetings in
Washington with alleged senior Bush-Cheney regime officials, as
foreign news services endlessly put it. It's because Kissinger is the
point man. He's the one that is telling them the disposition of other
foreign central banks.


Kissinger would probably also be involved in transfer or hypothecation
of any assets from the cabal. In other words, they're being stolen
from the American people by the Bush-Cheney regime and the Bushonian
Cabal, and they are being used to hypothecate, transfer, service, or
otherwise carry this debt held by certain foreign central banks.


The process of unraveling has already begun because of ever-spiraling
Bushonian budget deficits. The Bush-Cheney regime, even in its overt
policies (now they're overt political, economic, social and military
policies) is generating $600-billion-plus deficit per year, which is
consuming 80% of the planet's net savings rate.


It doesn't have the slack. In other words, it can't refinance stealth
debt by issuing more stealth debt anymore. Nor can they bleed money
out of the system like they could in the 1980s by hiding it when the
overt policies of the Bush-Cheney regime are already producing a
budget deficit of 6% of Gross Domestic Product. There is no other
mechanism that they could use anymore to hide expansion of debt that
could be used to service said stealth debt, and they are, frankly,
running out of assets that they can steal from the American people.


So the proverbial day of reckoning is coming. The Bush-Cheney regime
(and I give them credit for this) are telling the American people
what's coming, knowing the American people are too stupid to
understand. They are telling the American people about the re-
institution of the Gold Confiscation Act and the sudden scrapping of
the Treasury's emergency post-collapse gold note scheme to maintain
domestic liquidity.


David Walker, US Comptroller General and chief of the GAO has said
that should the Bush-Cheney regime be re-ensconced into power and,
hence, the scourge of Bushonomics persist, that the United States
could no longer service its debt beyond 2009. They're not hiding it
from anybody anymore. They are telling you what's happening. Now, what
does that mean? The key is in what Walker is saying when he says the
debt can no longer be serviced. I've been asked this on the radio
shows. People have noticed what Walker said because he's out in the
news more often than he used to be. It's unusual for the Comptroller
General of the United States, which is a rather arcane position, to be
out in the news so much.


It simply means that when he says the United States will no longer be
able to sustain Bushonian budget deficits, he means that by 2009, if
Bush-Cheney have a second term in office, the United States will be
consuming 100% of the planet's savings rate to finance Bushonian
budget deficits.


Therefore, if the planet can no longer generate any more liquidity to
lend to the United States, one of three things have to happen: A)
There has to be a sudden and dramatic reduction in federal spending.
There are only two places that can come from. There would have to be
an immediate $100-billion cut in defense spending, which would end any
hopes the Republicans had of getting into office for years to come
because it would destroy any confidence the NFWCs (Naïve Flag Waving
Crowd) had in them. Or you would have to scrap the multi-trillion-
dollar Bushonian tax cuts for the Republican rich, something that's
equally unpalatable.


The other option, B, as Paul O'Neill mentioned, is a dramatic increase
in the rate of federal income taxation from the current nominal rate
of 28% to 65%, which is what the Treasury Department estimated would
be required post-2009 to provide the U.S. Treasury with sufficient
revenues to continue to service debt.


The third option, or C, becomes the declaration of a force majeure on
credit service of U.S. Treasury debt by the United States Treasury,
which is tantamount and would be accurately construed as de facto debt
repudiation by the United States of America.


There are other signs to look for. They're not going to happen now,
but if Bush-Cheney is re-elected, you'll begin to see more signs that
the end is coming. I know a lot of people may disagree, but you wait
and see. If Bush-Cheney has a second term, see if they do not
institute some currency expatriation control. See if that doesn't come
in the way Nixon tried it in May-June of 1971.


In the second term, there will be some sort of currency expatriation
control in the United States, but there will also be loopholes that
will allow the large money to escape. The restrictions will apply to
the 10- and 20-thousand-dollar people. It ain't going to apply to the
10- and 20-million-dollar people. It would be self-defeating to do
that.


When that day comes, in other words, when the U.S. Treasury declares a
force majeure on debt, it wouldn't be broad-cast on mainstream media.
There's no sense because the American people don't even understand
what it means. But the announcement would actually be put on the
Federal Reserve wire system, which would, of course, immediately be
picked up by all media outlets anyway.


The U.S. Treasury would declare a force majeure on debt after the
Asian and European markets closed, probably at 12:30 p.m. EDT. The
reason why that hour was always selected is because Asian and European
markets close. It's also the lunch hour for the markets. It's when
you're going to have the fewest people on the floor of the exchanges.
That would be the ideal time to make such an announcement.


A few seconds after that announcement was made, all United States
markets, both equities debt and commodities i.e., stock, bonds,
commodities, that have trading collars or permissible daily limits
would all be limit-offered with pools. Limit-offered means that there
are more sellers at the limit i.e., limit down, than there are buyers.


So-called 'pools' would immediately begin to form, probably a thousand
contracts every few minutes. 'Limit-offered with pools' - this is
trader language. Pools to sell 2,000 lots, 3,000 lots. That means, the
number of sellers over and above the available buyers at the limit-
offered price. That would begin to build.


By 1:00, the news would begin to sink in because it would take awhile
before panic selling would arise from the public. This news is being
released at lunch hour.


A lot of the American people initially would not even understand the
temerity of the news. You would see professional selling first, and as
that professional selling intensified over the afternoon, the SEC, the
CFTC, NASDAQ, and various market regulatory authorities would begin to
institute certain emergency market protocols. This would be the
installation of the so-called 'declaration of fast market conditions,'
for instance; the declaration of 'no more stop orders,' the
declaration of 'fill at any price,' etc. in a desperate bid to
maintain liquidity.


That first day, the Dow Jones Industrial Average and related indices
on a percentage basis would lose about 20% of their value by the close
of business that day. The real impact would come overnight when the
American people found out what this was all about and when it was
explained to them.


At 7:30 a.m. EDT, the Tokyo markets would open, and no price would be
affixed for probably three or four hours into the session due to the
avalanche of selling. Once prices were established, the government of
Japan would close all of its financial markets. Europe would not even
open. All European governments would close all capital exchanges the
next day.

...continued

[mur]

The United States would, in order to accommodate global electronic
trading, attempt to open the market on the second day, which they
would do, regardless of price, just to maintain some liquidity. At the
end of Day Two, the Dow Jones and related indices, would have lost two
thirds of their value, and prices would be set accordingly.


On Day Three, the New York Stock Exchange, the SEC and other related
agencies would recommend to the United States Treasury and the Federal
Reserve that all markets be closed. That would be on the morning of
Day Three. Eleven a.m., the Federal Reserve would then order all
domestic banks closed. All of the twelve Federal Reserve district
banks would (30 minutes later) have special U.S. forces parachuted in
and around them to secure whatever gold bullion reserves they had
left.


Day Three, 9:00 p.m., the President of the United States would declare
a state of martial law. All financial transactions would come to an
end. The Treasury would act to formally de-monetize the U.S. dollar
and declare it worthless.


This would be totally unprecedented. In the past, collapses have been
temporary and have been brought back up. But what we're talking about
now is the end.


These protocols that I'm referring to aren't even all that secret.
They were publicly available all through the Clinton era. These are
Treasury protocols that were instituted mostly in the late 1970s when
the Treasury and Federal Reserve began to feel that it was important
to have an emergency-collapse protocol in place.


What precipitated the timing of this was the inflationary spiral of
the late 1970s. The U.S. Treasury and the Federal Reserve were both
concerned that this inflationary spiral, which was occurring not only
domestically but globally, might lead to a global, uncontrollable
hyper-inflation that the Federal Reserve or major central banks could
not stop by traditional means, i.e., by raising interest rates and
contracting money supply.


There was also the recognition, of course, that global central reserve
bank bullion inventories had been so depleted over the previous 30
years that any re-institution of a species currency, even on a
temporary basis, and even within a regional or individual nation-state
basis, was no longer possible.


This is an analogy. In a military scenario, it's like the President of
the United States pushing the final red button -- the commit button.
The Treasury Secretary of the United States has a similar mechanism.
It's called the yellow button, the commit button. The Secretary of
Defense has the same system. This is what happens. Computer program
starts to institute these protocols. Imagine the complexity of trying
the manage all this. I think it's going to happen all simultaneously.
There are hundreds of different agencies involved, both domestically
and internationally. In order to maintain liquidity for as long as
possible, it has to be extremely well-coordinated, and there must be
existing collapse protocols that can be used.


The reason I was familiar with them was because I used to see the U.S.
Treasury 6900 Series Collapse Protocol, 6903, 6904 there'll be A, B,
and so on which keyed in to the Department of Defense to be
incorporated within the Department of Defense's own World War III
scenario and various types of military/ political/ social instability/
war/ pestilence, chaos, etc. scenarios.


All federal agencies had individual collapse protocols that ultimately
got coordinated through the Department of Defense. Obviously, the
Department of Defense would be the ultimate coordinator because it
would need to have special forces available, on a stand-by basis,
ready, that could quickly parachute into areas all over the country,
into the cities particularly, to secure federal properties and assets.


And that's literally how it would begin. By the end of the third day,
it would be all over -- a state of martial law. We're not talking
about war, now; this is just economic collapse.


There's no military implication here, no political, no social
implication or policy directive thereunto. This is strictly economic
collapse. By the end of Day Three, effectively, all banks in the world
will be shut down, all paper currencies will become valueless. Martial
law would be declared. There would be no continuing transactions, at
least for a period of time, of commodities. All providers of fuels and
foods would be shut down automatically.


They have this in great detail too. U.S. Department of Defense Special
117th Assault Unit would parachute in to seize control of the cattle
yards in Oklahoma City. This is how well it's planned. In other words,
economic collapse would automatically involve expansive military
action and control.


By the end of the third day, when you no longer have a domestic medium
of exchange, you have to have secured food and fuel stocks. You've got
to have troops that have secured distribution points where there is
food and fuel stocks, warehouses, tanks, etc. Otherwise people are
just going to go get them, and the people have to know that if they
try to go break into that store and steal that loaf of bread, they're
going to be shot.


Protocols for environmental disasters are called 'scaling-circle
scenarios.' 'Scaling circles' is a Department of Defense euphemism.
It's also used in FEMA, OEM and other emergency management services.
In environmental catastrophes, which are going to become national or
global, it's got to start someplace. It's going to start in one very
small, specific area. Therefore what happens is that the immediate
force containment is the greatest in the first circle, to try to
contain the spread of the disaster and keep it within that circle.


The environmental problem, to whatever extent it's possible, before it
spreads, will be neutralized or mitigated, in order to keep that
catastrophe within that circle, or, if it is likely that it is to
escape that circle, to attack whatever it is in such a fashion as to
mitigate its strength and its ability to contaminate or otherwise
affect other areas.


In the case of earthquakes, for instance, affecting the west coast,
beginning at Mt. Rainier and moving southward -- that's a different
type of scenario. That does not include as much Department of Defense
involvement. It includes separate protocols, wherein mostly FEMA and
OEM act as the senior coordinating agencies between municipal, county
and state disaster and containment, which is called Disaster and
Containment Units. Federal troops would only be brought in for the
purposes of maintaining control.


In a military or economic collapse situation, National Guard units
would provide any spare help they could in combating whatever the
problem is. Federal troops would be used in order to have the specific
authority simply to shoot anyone. There are plans for all sorts of
scenarios. The economic-disaster scenario is the one I always found
the most intriguing because it is the one that is least understood by
the American people.


Military control would be necessary when lines begin to form at the
banks, people trying to access their money. But that wasn't even
anticipated as a big problem. Lines would form at the banks, but it
was not even envisioned until sometime on Day Three because the
American people wouldn't get it. It would be announced that the stock
markets are down 2000 or 3000 points, and since we've always been
taught they'll come back, the people would still be buying stocks.


You could count on everybody remaining in ignorance all the way down
because the American people have never been taught Economics 101. The
American people wouldn't realize the full extent of it until the
markets were closed on the third day, or until the time when they went
down to cash a check and the bank was closed with soldiers out in
front. Then they would go down and see the gas station's closed. They
see the local supermarket has been shuttered, and there's federal
troops in front of it. Then they might begin to catch on. And remember
-- it's not just federal troops. In emergency-collapse protocols, even
before the declaration of a formal state of emergency or a state of
martial law, the local military authorities within any given county or
jurisdiction have the ability to essentially militarize anyone, that
is, any civilian. This would be more than just deputizing civilians.
It's federal. In other words, they would have the ability to
militarize and give military authority to a civilian force. This would
include not only police and the sheriffs and state police, but all
local law enforcement that exists below the state level would be
immediately militarized. They wouldn't take just anybody like they did
in Iraq. It would be like the military when they call for volunteers.
Then they'd have everybody and their brother-in-law volunteering,
waving around the American flag and so on.


You've got a lot of pickup-driving guys in this country with the gun
racks in the back and the Confederate flag flying. So you start waving
the American flag in front of their face and say, Hey, you're going to
get your chance you always wanted -- to fit your potbelly inside an
army uniform and carry a gun and shoot people. How appealing would
that be?


And besides, if you do this, then you're going to get to eat.


In other words, this is how it would unfold over three days, but, in
fact, very few Americans would know what to do about it or how to take
any precautions. They wouldn't have a clue because they don't
understand enough about economics to know what is happening. So that's
what it is -- Economic Armageddon. If the Bush-Cheney regime is re-
installed into power, that is effectively what Comptroller General
David Walker is saying.


In conclusion, since there is very little the people of the United
States can do to protect themselves. We're not going to make any
suggestions of how to protect yourselves because there's very little
you can do.


We could tell you to go out and buy gold coins and bury them in the
coffee can in the back yard and go to your nearest survivalist store,
but, frankly, that's useless. In the last analysis, it's a lot of
hype. There is very little the average US citizen could do.


The only thing that can prevent this, as the Comptroller alluded to
when he was asked by Barbara Walters, How do we prevent reaching the
problem by 2009? He said simply, "A change of regimes."


So how do you prevent it? Don't vote for Bush and Cheney -- and hope
that Bush does not use his emergency powers to cancel or postpone the
election by edict, powers which you, the flag-waving citizens, have
given him.


All flag-waving citizens, be warned. If you want to vote for Bush-
Cheney again, make sure you got plenty of Spam on hand.


Here's an interesting and humorous aside. A couple of days ago, Hormel
Foods, which makes Spam, announced that in the last six months there
have been record sales of Spam in the United States the survivalists'
food of choice. After all, they pride themselves on the fact, as the
spokesman for Hormel said, "It is the only food product you can buy
with an expiration that's 50 years."


When everything goes to hell, when all that man has created has turned
to dust again, the final legacy is going to be Spam. It will be the
last surviving item -- when the anthropologists of 20 thousand years
from now are digging sites and they see these enormous mountains of
unopened cans of Spam They'll have monuments to the past out of Spam.


So if Bush-Cheney has a second term in office, there will be some sort
of currency restriction, like Nixon did in 1971. On April 13, 2004,
Deputy Assistant Treasury Secretary John Boine talked about potential
currency restrictions. He used the word that's going to fuel the
flames of the survivalist and gloom-and-doom collapse people.


It's very, very telling that the U.S. Treasury may institute a
restriction on the amount of U.S. dollars that can be converted into
gold.


Furthermore, he intimated (and I suspected that this was coming,
although this wouldn't actually become law until Bush-Cheney was in
office for second term one way or another) that the Bush-Cheney regime
determines that the Gold Confiscation Act gives to Treasury the power
for so-called forced disclosure of gold holdings.


I'm not quite sure of the language of the Gold Confiscation Act from
1933. It just says, "compelled", as in citizens are lawfully compelled
to redeem gold for script. I don't think there was any such provision,
which he was inferring that there is. That was FDR's "Raw Deal" of
1934, when people were coerced into giving up their gold. But nowhere
in this act does it specifically authorize the Treasury to mandate
citizens to report their gold holdings. So if this gets any press at
all, particularly within the circles of gold bugs and so on, watch
out.


Furthermore, on Washington Journal they were talking about how FEMA
has recommended to the Office of Homeland Security to have increased
restrictions regarding citizen hoarding of long-term food and fuel
supplies. That's pretty sinister too.


What they're talking about is the purchase of long-term so-called
stores of survival food. FEMA was talking about some sort of
restriction preventing people from accumulating food stores; putting
it simply, that's what it means. The second point was to increase
restrictions that already exist.


FEMA was recommending even tighter restrictions on citizens building
their own private property underground storage tanks for the purposes
of long-term storage of fuel. The real intent of this is is threefold:
a) to restrict citizens' ability to hoard food; b) restrict citizens'
ability to hoard long-term storage of fuel; c) the forced
identification of citizens to reveal food and fuel stocks they may be
hoarding.


And that, in my opinion, is the real essence. The Bush-Cheney regime
was scared of having the FEMA angle put into the equation because they
knew what it means and how people would interpret it.


They have tried to use environmental legislation to restrict people's
ability to build fuel storage facilities on their own property -- to
get around what the true intent of that was.


But the bigger picture is that if you start to limit citizens' ability
to hoard fuel and food and shake them up by potential forced
identification of gold holdings or forced redemption.


In other words, what you don't want is citizens who have the ability
to store a lot of food and fuel and to own gold because they would be
able to resist state control in the future.


You've got to have every citizen on a rationing card to control the
civilian population. You can't have citizens out there hoarding food
and fuel because then people can say to government,"I ain't taking a
rationing card, baby, with my national ID card. I don't have to. You
can't control me through food and fuel and ever-worthless paper
currency."


I used to make fun of these people. But now, things have come full
circle on this debate. The Bush-Cheney regime is making it
increasingly clear through their small changes in policy. Not a lot of
people monitor these decisions, but I do. And the pattern is becoming
increasingly clear.


In fact, I would believe that those of the survivalist mentality (the
food, fuel, the gold coins in the coffee can in the back yard) people
who think that way will be ultimately vindicated - if George Bush has
a second term in office.


People should quit making fun of them because they would be vindicated
- even though they were all burned out, twenty-dollared to death,
buying books and tapes, and discredited by mainstream media. It may
sound like a hollow victory, but it won't be a hollow victory for them
- them that's got the Spam...

[mur]

Fed saved Bear to avert 'contagion'

According to newly released documents, the Federal Reserved backed Bear Stearns to avoid the collapse of the U.S. financial system.
June 27, 2008: 10:20 AM EDT

WASHINGTON (AP) -- The Federal Reserve scrambled to avert an "expected contagion" that risked infecting the nation's financial system when its took unprecedented actions in mid-March to provide financial backing to a Bear Stearns rescue package and provide emergency loans to big Wall Street firms.

The Federal Reserve released documents Friday providing insights into its private deliberations of those controversial decisions. The Fed's actions came at a time when credit and financial problems were intensifying, threatening to paralyze the entire financial system and plunge the economy into a recession.

Given the fragile conditions of the financial markets at that time, the Fed said it felt compelled to intervene because an "immediate failure" of Bear Stearns would bring about an "expected contagion."

The Fed initially moved on March 14 to provide temporary emergency financing to investment bank Bear Stearns Cos. through an arrangement with JP Morgan Chase & Co. Two days later as the investment bank teetered on the brink of bankruptcy, the Fed agreed to back up to $30 billion of a deal where JP Morgan would take over the troubled company.

That same day - March 16 - the Fed said it would allow big Wall Street firms to go directly to the Fed for emergency loans, a privilege only commercial banks had enjoyed. It was the broadest use of the Fed's lending powers since the 1930s.


Find this article at:
http://money.cnn.com/2008/06/27/news/ec ... 2008062710 (http://money.cnn.com/2008/06/27/news/economy/fed_bear_stearns.ap/index.htm?postversion=2008062710)

[boycotteverything]

Remember that obscure essay that appeared and suddenly disappeared on GLP concerning the force majeure? Kali managed to grab it and paste it on WW after it vapored into the void. What's the relationship? What's the frequency, Kenneth? I'll see if I can't dig it up and post a link. Wyz probably knows exactly where it is since his mind is sorta like an arcane card catalog. But he's still in the closet here. I think what you've resurrected here is the mother of all conspiracies. All the pieces fit. Dumbya might actually be the fucking antichrist after all. Christ knows I've boring people with that little pronouncement for 7 years now. In the mean time I'm too depressed to eat.

[mur]

That is it...posted above

[boycotteverything]

it is?? i had remembered it as having been better written. i must be having an acid flashback.

[boycotteverything]

has anyone had the time or inclination to read that book i posted in 'steal this book?' the description of the crash of '29 will blow your sox off. read the fucking thing. ok? here's the link again-
http://xroads.virginia.edu/~HYPER/ALLEN/cover.html

also, i notice that no-one's wishing me a happy birthday anymore. that really sucks.

[mur]

Implications of Peak Credit

When it comes to the collapse in credit, the above Central Banks are powerless to do a thing about it. This is to be expected now that we are on the backside of Peak Credit.

The saturation point has been reached. It took decades but we have finally arrived. None of the financial engineering jobs that fueled this credit boom will ever be needed again. SIVs, Conduits, Toggle Bonds, Covenant Lite loans are all dead for years, more likely decades to come. Add to that liar loans, Pay Option Arms, insane leverage, and numerous other ridiculous lending arrangements. And if those things are not coming back, we do not need Wall Street shills to securitize that garbage and pitch it to unsuspecting suckers.

In addition to financial engineering jobs, there was a boom in commercial real estate, home depots, remodeling companies, landscaping, furniture, appliances, plumbing, heating, air conditioning, restaurants, and even things like grass seed.

There is no source of jobs to replace what has been lost and what will be lost. Discretionary spending is dead. Boomers about to retire are about to get religion. Sadly, it's too late. Savings they thought they had in their house, have now vanished into thin air. It was all a mirage in the first place, but mountains of credit has been extended on the basis of that mirage. Trillions of dollars of imagined wealth has gone up in smoke. Trillions of dollars more are about to.

Deflation Has Set In

It is amusing that in the face of this carnage, many are still screaming inflation, stagflation, or even hyperinflation simply because food and energy prices are rising. Deflation is here and now in the US. Deflation is knocking on the door of the UK and Eurozone. And there is nothing that can be done about it.

Can The Fed Print Its Way Out?

Some will insist that I am wrong, that the Fed can print. Well the Fed can print, but the Fed cannot spend. In addition, the Fed cannot give money away, nor would the Fed even if it could. Finally, the Fed cannot force banks to lend or businesses or consumers to borrow.

Bank credit is contracting with the Fed Funds rate at 2%. Bank credit would not be going much of anywhere even at 0% in my estimation. The reason is simple: banks are insolvent!

The Fed is like the powerless man behind the curtain in the Wizard of Oz. Once peak credit sets in, all the Fed can do is bluff. The notion of a helicopter drop is pure nonsense.

What About A Crack-Up Boom?

We had a crack-up-boom. What else can you call the financial engineering that went with SIVs, Conduits, Toggle Bonds, Covenant Lite loans, Pay Option ARMs, etc., etc? That crack-up-boom is over. And just like every credit boom in history, the backside, once the credit boom ends is deflation. Previous examples include Tulip Mania, the South Sea Bubble, John Law Mississippi scheme, the Great Depression, and the property bust in Japan.

Weimar Germany was not a credit boom, but an example of hyperinflation caused by massive printing to pay for war reparations. Zimbabwe is another example of hyperinflation caused by printing.

What About Congress?

Congress, unlike the Fed, can indeed spend money it does not have. They have already done so with an ill-advised stimulus package. There will indeed be more stimulus packages just as there was in Japan. However, nothing can match the sheer number of jobs created in the housing and commercial real estate booms. And nothing can replace the destruction of wealth that is now taking place in housing and the equity markets.

Attitudes Lead The Way

It took nearly 80 years for people to get as reckless as they did in 1929. 80 years! Few are still alive that went through the great depression. That is the nature of the game. People have to forget what a depression is like to bring about the conditions that cause them. And they did. And they made the same mistakes over again, except larger.

The madness of crowds, however, can only go so far. A significant reversal is now underway. The secular peak in consumption has been reached. A reversal in attitudes towards consumption started with houses, but it’s spreading to cars, boats, and even Starbucks coffee. It will take a long time for attitudes to get back to equilibrium. And attitudes, like pendulums, will not stop at equilibrium once they get there.

The odds of a significant bout of inflation now are about the same as they were in 1929. Next to none. History is about to repeat.

Mike "Mish" Shedlock

From here
http://globaleconomicanalysis.blogspot.com/

[mur]

I guess I will continue my blog here.

Part one is at a forum that is not what it's name implies.

Located here

http://lucianarchy.proboards.com/index.cgi?board=general&action=display&thread=288


Please note I started it in 2007

I frequently post full articles...inserted with my own comments

Mish Shedlock get's a lot of this right.....imo.

I agree with everything Mish says below


Obama Asks Congress for the "Power to Punish"

Obama wants to extend the powers of the Fed. Then again he wants to take some powers away from the Fed. It's hard to know what he is thinking until you boil it down to its essence. Being president is not enough, Obama wants to become the Czar of Czars with the "Power to Punish".

Shades of Roosevelt, Obama to Create Consumer Financial Agency With Power to Punish. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aY004TTBuCAA)

President Barack Obama will propose creating an agency to protect consumers of financial products with the power to punish offending firms and stripping the Federal Reserve of some of its powers.

The Consumer Financial Protection Agency, to be announced tomorrow in the overhaul of financial regulations, will have the authority to ban “unfair terms and practices,” said a document obtained by Bloomberg News. Those powers now rest with Fed.

“We’ve got to make sure that we have somebody who is focused and responsible for protecting consumers, whether it’s on subprime loans, for their mortgages, for their credit cards,” Obama said today in an interview with Bloomberg Television.

Lawmakers, including Senate Banking Committee Chairman Christopher Dodd, have faulted the Fed for not using its authority to ban “unfair or deceptive acts” in consumer lending, and have opposed expanding the Fed’s power to act as a systemic-risk regulator for financial markets. The Fed has responded by writing rules strengthening consumer protections in credit-card and mortgage lending.

“In some cases, we’re expanding modestly the Fed’s powers,” Obama said. “In other circumstances, we’re actually going to relieve them of some responsibilities, for example, on the consumer side.”
Fed spokeswoman Michelle Smith declined to comment.

Obama’s plan will let the agency set mortgage rules, write rules for banks and non-bank companies, supervise and examine institutions for compliance, and set fines and penalties for offenders, according to the document.

That may sound good on paper or in soundbites delivered by the great orator. However, I suspect it will end up doing nothing more than extending government control over every aspect of our lives to the point of sheer ridiculousness, all for political gain.

No one, and I mean NO ONE in any position of authority has placed the blame where it belongs. And the onus of that blame should be placed squarely on the very existence of the Fed in conjunction with the free lunch policies of Congress.

Unless and until the root cause of this mess is addressed, nothing good can possibly come from all this meddling no matter how good it sounds at first glance.

Now instead of reducing the powers of the Fed, Obama wants to increase them while at the same time threatening businesses with a whole new bureaucratic nightmare with the "Power to Punish".

I have a better idea, and it's far simpler: Let's eliminate the Fed and balance the budget. The rest of the problems will then easily cure themselves.

Mike "Mish" Shedlock

http://globaleconomicanalysis.blogspot.com/2009/06/obama-asks-congress-for-power-to-punish.html

Mur comment
Again....Mish hits this out of the park...the Fed has got to go


What do you think of Obama now BE?

[pack3tg0st]

Nice!

I think Obama is powerless and at the mercy of corporate america... and yes, even this proves it...

The abolishment of the fed isn't being talked about because it would destroy a large group of the wealthy elite financially... The elite need the fed... its very effective at siphoning money off the less fortunate to help them buy off their next round of politicians...

I agree... the Fed has to go... but sadly, it never will... Obama is trying to do what he can given the situation, but he has also foolishly surrounded himself with wealthy wall street tycoons for his advisors... Hell, his Treasury Sec. was the head of the NY FED Reserve. No chance of Fed abolishment there...

We're hosed... the policies of the government and attempted rescue of the economy has assured us that this will be a long, severely drawn out economic depression...

[skunk]

God this thread is fucked up.


I have a better idea, and it's far simpler: Let's eliminate the Fed and balance the budget. The rest of the problems will then easily cure themselves.

Amen.

[mur]

Get Ready for Inflation and Higher Interest Rates (http://online.wsj.com/article/SB124458888993599879.html)


Some Excerpts

About eight months ago, starting in early September 2008, the Bernanke Fed did an abrupt about-face and radically increased the monetary base -- which is comprised of currency in circulation, member bank reserves held at the Fed, and vault cash -- by a little less than $1 trillion. The Fed controls the monetary base 100% and does so by purchasing and selling assets in the open market. By such a radical move, the Fed signaled a 180-degree shift in its focus from an anti-inflation position to an anti-deflation position. The percentage increase in the monetary base is the largest increase in the past 50 years by a factor of 10 (see chart nearby). It is so far outside the realm of our prior experiential base that historical comparisons are rendered difficult if not meaningless. The currency-in-circulation component of the monetary base -- which prior to the expansion had comprised 95% of the monetary base -- has risen by a little less than 10%, while bank reserves have increased almost 20-fold. Now the currency-in-circulation component of the monetary base is a smidgen less than 50% of the monetary base. Yikes!

http://s.wsj.net/public/resources/images/ED-AJ638A_laffe_NS_20090609175213.gif


The rest is here

http://online.wsj.com/article/SB124458888993599879.html

[mur]

Breakdown of the Fed's $13.9 Trillion Commitment (http://globaleconomicanalysis.blogspot.com/2009/06/breakdown-of-feds-139-trillion.html)

Note...there is an important chart at the above link


Excerpt

I have a request for Geithner and Bernanke: Tell the truth or shut up.

Both Geithner and Bernanke maintain that banks are well capitalized. Indeed many banks are returning TARP funds. However, if banks are well capitalized then why not cancel the remaining $7 Trillion of this taxpayer ripoff right now? Pray tell, what's the need to go ahead with the PPIP?

Ben and Tim, please stop saying that taxpayers will not lose money on these schemes. You know, I know and the whole world knows that is a preposterous lie. Please come out and say you really do not give a damn about taxpayers because we all know that you don't. This is a taxpayer sponsored bank bailout, no more no less.

If you cannot give an honest assessment (and the whole world knows you can't), then please stop your disgusting, phony charades and fake transparency efforts.

[mur]

This was in fact predicted...

At best, Obama is a puppet, at worst he is in on it.



Obama's Blueprint for Reform Concentrates Still More Power in Hands of the Fed (http://globaleconomicanalysis.blogspot.com/2009/06/obamas-blueprint-for-reform.html)
^^^
Link


Excerpt


My Comment: Note how increased power is given to the Fed, an agency that did not see this coming and whose premise is that bubbles are best dealt with after the fact because no one can tell bubbles in advance.

The best way to limit appetite for risk is to prevent the Fed from manipulating interest rates to ridiculously low levels. The way to do that is to abolish the Fed, not strengthen its power.

[boycotteverything]

What do you think of Obama now BE?Here's what I think. Obama is neither a puppet nor a god. He's a good man in the right place at the right time to mitigate the inevitable bloodbath of failed empire. The thrust of his Consumer Protection initiative is to help the peons resist the corporate predators who are eating them alive. It wasn't that long ago in America that congress enacted usury laws to protect the people against mafia style credit ripoffs. And after years of 'degregulation' what do we have? Vigorish rates on credit cards and other loan 'instruments' in the neighborhood of 40%- rates that would make Al Capone blush. The beneficiaries of these pernicious schemes, the modern robber barons, aren't building railroads anymore- they're running money rackets. Does anyone really think that the stock market- banking cartel is anything more than a casino with the odds fixed in favor of the house? My own preference would be dissolution rather than reform. But Obama, being president, is obligated to patch the bloody heads of those victimized by the mendacity of the predators. He's doing his best. His work in this regard is in the best traditions of earlier Republicans like Teddy Roosevelt- trust busting.

[pack3tg0st]

BE... Obama is either a puppet or powerless...

Remember the strong words he had about alternative fuels and passing fuel efficiency laws?

His grand scheme to save the earth: give em forever to get fuel economy standards to 35.5 MPG...

35.5? I had a car in the late 90's that got 38 MPG... IF you want change, tell the automakers that manufacture of gasoline powered vehicles will be illegal in 10 years.

They'll do something...

Tell me this BE... What campaign promise has he kept so far?

[boycotteverything]

IF you want change, tell the automakers that manufacture of gasoline powered vehicles will be illegal in 10 years.
i agree.

[mur]

Any moron knows the Fed engineered this so called crisis...first he appoints Geithner, former NY Fed chief...(who gave us the AIG debacle, Bears Stearns whitewash) and now he wants to give the Fed more power?

He is either incredibly stupid (not), or he is in bed with them.

This whole fiasco has been a FED power grab, and Obama supports and endorses it.

To be fair, Bush or McCain would have also.

But to think that Obama has the common man's best interest at heart is ridiculous.

The FED needs to be abolished, not given more power.

Either Obama can recognize this, or he is against us.

Looks like to me, he has chosen the bankers.

He talks a good game, but his actions betray his words.

Don't forget who gave us derivatives, subprime mortgages and high credit card fees to begin with.

THE FEDERAL RESERVE

[boycotteverything]

hahahaha. the guy's steering a big ship. and he's learning as he goes.

[skunk]

I call bullshit. He's not learning, he's cashing in.

[boycotteverything]

ka ching!

[pack3tg0st]

Lets do a quick re-cap.

He ran for pres saying he thought the gitmo military tribunals were unjust... and then when he gets in office he re-affirms the tribunals...

He was going to help out the middle class by taxing the rich... but then he tells the rich he's going to give them tax breaks (windfall profits tax).

He's supposed to be all about the middle class, but is bailing out the rich investment bankers, while letting the Manufactering industry take a nose dive, and lay off more middle class workers.

His idea of changing washington was to appoint a bunch of "old school" clinton advisors, and bring on investment bankers and wall streeters to fill his cabinet...

Universal Healthcare for all!!! Single payer is out though... instead, he's simply going to re-invent medicare/medicaid...

Lets see if war crimes were committed and prosecute! Oh wait... lets just look into it, but not prosecute...

Don't ask don't tell: Not even a referrendum to stop kicking out gay soldiers...

Looks like the same bullshit to me... You can either believe he's powerless, and a puppet of business, or you can conclude that he's just another politician, doing the same shit that politicians have done for yrs...

However, he is NOT omni-benevolent... Some people are still sucked in by the cult of personality he has developed, and I'm sure as all this progresses, we'll see those people snap back to reality.

We were duped BE... you're going to have to admit it sooner or later... The only thing thats "changed" is the name on the desk in the oval office...

All Hail Chairman Obama, CEO United States inc. LLC

[skunk]

Hey, at least he's not an old white guy.

[pack3tg0st]

Might as well be...

He's lining the wallets of old white guys...

[skunk]

But, but, but...He's different looking so he must be change!

[boycotteverything]

like i say- it's a reallly big ship. it turns slowly.

[Ima Nasshole]

hahahaha. the guy's steering a big ship. and he's learning as he goes.
Keep choking on that montra BE, everything Pack said is "spot fucking on".

this will never happen in our lifetime (http://www.govtrack.us/congress/bill.xpd?bill=h110-2755)

and neither will this (http://www.govtrack.us/congress/bill.xpd?bill=h111-1207)

[Ima Nasshole]

like i say- it's a reallly big ship. it turns slowly.
That's the problem with your generation, you can never admit when you're wrong.

[boycotteverything]

the guy wasn't elected to be a revolutionary. he's a moderate politician. that's the system we have. he'll do his best to make humanitarian changes. that's all we can expect of the guy.

[skunk]

the guy wasn't elected to be a revolutionary.

So why would he bother using "change" as his campaign slogan? He was elected to be a revolutionary.

[boycotteverything]

'change' from the policies of neo-conservatism. really, as simple as that. you're not old enough to remember the political slogans used in on prior decades. "The new deal," "The square deal," "The new frontier," "The war on poverty..." all called for a break with the past and none were revolutionary.

[mur]

'change' from the policies of neo-conservatism. really, as simple as that.

Oh really?

Seems to me Obama has continued everything Bush enacted, plus more.

http://www.foxnews.com/politics/first100days/2009/04/13/obama-administration-upholds-terrorist-surveillance-secrecy-rules/

[boycotteverything]

'change' from the policies of neo-conservatism. really, as simple as that.

Oh really?

Seems to me Obama has continued everything Bush enacted, plus more.

http://www.foxnews.com/politics/first100days/2009/04/13/obama-administration-upholds-terrorist-surveillance-secrecy-rules/OK. He's Bush redux according to Fox. What can I say? I see a huge difference in spirit. Especially in breaking with Likud. But hey- time will tell...

[Ima Nasshole]

the guy wasn't elected to be a revolutionary. he's a moderate politician. that's the system we have. he'll do his best to make humanitarian changes. that's all we can expect of the guy.
He's a fucking moderate? OMG I've fucking heard it all now...


I just watched the "Telepromptor in Chief" give his "and this is what I'm going to fuck up next" speech on the tele and I'm left wondering why the fuck do we need all these new regulations when we don't have any oversight on the current regulations?

The only thing this guy is interested in doing is fattening his wallet and the wallets of the global elite, and building a historic legacy as the first black president, even though he's not 100% black.

I have been inspired to write a book... the "Audacity of Change" Thoughts on reversing all the shit Obama reclaimed.

[pack3tg0st]

Conservative rhetoric much Ima? LOL

There's nothing wrong with using a teleprompter. The people on Fox news and other pundits who give him hell for using one, use one themselves...

6 months is really too long to see what is going to happen w/Obama... but its not too long to watch him waffle over his campaign promises...

half the country is going "WTF?! you promised me x"... a small but vocal minority are going "WTF OBAMA SUX DONKEY DICK".

The Rich are content... The middle and lower classes are fleeced into believing bullshit...

I guess my whole point is... spewing conservative "talking points" is just as bad as belonging to the Obama Cult of Personality.

[boycotteverything]

There's continuity on American polity. It's a reality built into the system. Little known is the fact that FDR followed and redoubled the policies of Herbert Hoover. Like I say- the ship of state is big and unwieldy. No helmsman has a full handle on it and the chart relies on the immediate past. You can fight that if you want- but it's always been the case nonetheless.

[mur]

I'm not blaming Obama...I'm saying he says one thing, and does another.

He says he wants more transparency, but the reality is less.

I can agree, his hands are tied...tied by the FED and special interests.

He truly is a charismatic figure head that could influence the future of our nation.

But is it really an influence for the better?

More FED RESERVE power is better?

[boycotteverything]

I don't have any answers to that, Mur. I just have a sense that the house of cards is tumbling- Humpty Dumpty had a great fall- and that a kind man ought to be there to pick up the pieces while he wades through the goo. I'm confident we have that. Will it be enough? Nah. 'Enough' is a moving target. Just relax. At the very least we have a ticket to the last act of this sound and fury show. Just think about all those poor saps that checked out during the intermission...

[mur]

Senator Shelby Calls Fed's Expertise "Grossly Inflated" as Geithner Attempts to Defend the Indefensible (http://globaleconomicanalysis.blogspot.com/2009/06/senator-shelby-calls-feds-expertise.html)

Like every bloated bureaucracy, the Fed wants still more power. Secretary of Treasury Tim Geithner, a former Fed Governor, is all too happy to give it to them.

Please consider Geithner Defends Plan to Give Fed Stepped-Up Powers in Overhaul. (http://www.bloomberg.com/apps/news?pid=20601087&sid=afydjEJN5RJc)

Treasury Secretary Timothy Geithner defended the administration’s proposal to give the Federal Reserve increased powers in his first public tussle with lawmakers skeptical whether the central bank is up to the job.

Advocating for President Barack Obama’s regulatory overhaul on Capitol Hill, the Treasury chief faced repeated questions from senators who cited previous regulatory failures at the Fed and potential conflicts with its monetary-policy duties.

“The Federal Reserve is best positioned” to oversee the biggest financial companies, Geithner told the Senate Banking Committee in Washington, adding that the Obama plan gives the Fed only “modest additional authority.” Most central banks around the world have some responsibility for monitoring systemic risks, he said.

Dodd, a Connecticut Democrat, quoted one critic’s view that giving the central bank more power was like awarding a son a “bigger, faster car right after he crashed the family station wagon.” He added that he hadn’t made a conclusion on the issue.

Geithner said that the Fed has “greater knowledge and feel for broader market developments” than any other U.S. banking agency. He added that giving those powers to a council of regulators wouldn’t work.

“You don’t convene a committee to put out a fire,” he said.
The president’s announcement yesterday marks the beginning of what promises to be a political battle that’s likely to alter the administration plan, with some lawmakers opposing any expansion of the Fed’s power. Obama, who has called the “sweeping overhaul” of regulation one of his top domestic priorities, said he wants to sign legislation by year-end.

Blueprint For A Power Grab

Obama and Geither call this "reform". It's not. Abolishing the Fed would be reform. Giving the Fed more authority is a power grab, not reform.

Obama's Blueprint for Reform Concentrates Still More Power in Hands of the Fed.

Fed Uncertainty Principle In Action

Flashback Thursday, April 03, 2008

Inquiring minds are taking another look at the Fed Uncertainty Principle. (http://globaleconomicanalysis.blogspot.com/2008/04/fed-uncertainty-principle.html)

Uncertainty Principle Corollary Number Two

The government/quasi-government body most responsible for creating this mess (the Fed), will attempt a big power grab, purportedly to fix whatever problems it creates. The bigger the mess it creates, the more power it will attempt to grab. Over time this leads to dangerously concentrated power into the hands of those who have already proven they do not know what they are doing.

That prediction was made well in advance of any of the Fed's power grabs. I wish I was wrong.

Stop The Power Grab

Phone, Fax, or Call your legislative representatives and tell them you support Ron Paul's effort to dismantle the Fed not increase its power.

Please see Speak Out - Audit the Fed, Then End It! for ways to contact your representatives.

Make the message simple.

"Stop the Fed's Power Grab"
"Audit the Fed, Then End It"

Phone, Fax, or Call your legislative representatives today!

Mike "Mish" Shedlock

[Cogburn]

A power grab over a dying enterprise?

Let them fuck that corpse until there's nothing left other than bones.

The debt-based fiat currency experiment is unsustainable because the lifestyles required of the participants are unsustainable.

I don't think that this is the end or that we'll see the end of the U.S. Dollar in our lifetime, but it's absolutely the foundations of the house of cards starting to creek and groan.

[mur]

The FED is the virus that is killing us...

End it's rule, and the patient will recover

[Cogburn]

I disagree with a lot of folks on this point.

I don't believe the patient is terminal, merely the pathogen itself.

When the day comes that gold and silver bouillon may no longer be purchased for fiat currency and likewise exchanged, perhaps I might agree with you.

I can still walk into any back with an international currency exchange counter and redeem dollars for current spot price.

I can still use gold and silver bouillon as hard asset collateral on a loan and still receive that bouillon in return when the loan contract is fulfilled.

Amshel Rothschild setup this game. You can still play it the same way he did.

[skunk]

Fuck the fed.

[boycotteverything]

Weimar. Coming soon to a neighborhood near you.

http://www.moonbattery.com/Weimar-inflation.jpg
What is the BTU value of a dollar?

[mur]

http://www.bloomberg.com/apps/data?pid=avimage&iid=i9j.BeUdCS.E

I don't trust him

[skunk]

Weimar. Coming soon to a neighborhood near you.


Soon after the nazis take the reigns?

[boycotteverything]

who knows? but these are interesting times.

[mur]

Too Big to Fail, or Succeed (http://online.wsj.com/article/SB124528373595925623.html)
Everyone will want to become big enough to enjoy 'systemic risk' protection.



By PETER J. WALLISON

In a speech at the White House yesterday, President Barack Obama outlined what he envisions for future regulation of the financial system. He called his plan "a new foundation for sustained economic growth . . . a transformation on a scale not seen since the reforms that followed the Great Depression." Indeed it is.

His plan, if adopted, will fundamentally change the nature of our financial system and economy. The underlying concerns and assumptions are clear, and they are made clearer by considering other ways that his administration has dealt with the consequences of competition -- particularly the faux bankruptcies of General Motors and Chrysler and the impending change in antitrust policy. Although the president said in his speech that he supports free markets, these initiatives confirm that the administration fears the "creative destruction" that free markets produce, preferring stability over innovation, competition and change.


According to the administration white paper circulated prior to the president's speech, the Federal Reserve would be authorized to create a special regulatory regime -- including requirements for capital, leverage and liquidity -- for any firm "whose combination of size, leverage, and interconnectedness could pose a threat to financial stability if it failed." In addition, if a large financial firm is failing, the Treasury is to be given the power -- in lieu of bankruptcy -- to appoint a conservator or receiver to "stabilize" it.

Designating particular financial firms for this kind of special regulatory treatment clearly signals to the markets that these institutions are too big to fail. It will reduce the perceived risk of lending to them, enabling them to raise funds at lower cost than their smaller competitors.

In other words, the administration's plan would create what are essentially government-sponsored enterprises like Fannie Mae and Freddie Mac in every sector of the financial economy -- insurers, securities firms, finance companies, bank holding companies, and hedge funds -- where these specially regulated firms are to be designated. The result will be devastating for competition. Larger firms will squeeze out smaller ones and aggressive small companies will have less opportunity to overcome the government-backed winners.

Moreover, the administration's proposal to provide a special bailout mechanism for large firms confirms the likelihood that these firms will never be closed down or liquidated. Citing the market turmoil that followed Lehman's collapse, the administration will argue that failures like this are "disorderly." But failure comes from risk-taking -- the very source of our economy's strength -- and it is ultimately risk-taking and its consequences that the administration's plan is intended to prevent.

The turmoil following Lehman's failure occurred because market participants expected, after the rescue of Bear Stearns, that any larger firm would also be rescued. When Lehman wasn't, all market participants were required to recalibrate the risks of dealing with all others, causing a freeze-up in lending and hoarding of cash. Lehman's failure itself did not cause any substantial losses, and within two weeks of its bankruptcy filing Lehman's trustee sold its brokerage, investment banking, and investment management businesses to four different buyers.

Contrast this with AIG, the administration's paradigm, which was saved by the government because it was allegedly too big to fail. That firm is gradually wasting away under government control, with the taxpayers footing the bill.

The administration's fear of competitive outcomes is not reflected solely in financial-sector policies. Consider General Motors and Chrysler. They were defeated in the marketplace. Simply put, they failed to build automobiles enough Americans wanted to buy.

Their disappearance would not have threatened the stability of the financial system, although it would undoubtedly have been disruptive for suppliers, dealers and employees. Yet the administration wouldn't allow them to fail, either. Despite all the talk about credit priorities, the fundamental point is that the administration used taxpayer money to overturn the market's verdict. If we want a preview of what the administration will do with the resolution authority it wants for large financial companies, we need look no further.

The same pattern with regard to competitive markets can be seen in the Justice Department's new antitrust policy. Christine Varney, the new assistant attorney general in charge of antitrust policy, has said that U.S. policy should be more like Europe's. Until now, U.S. antitrust policy has tried to protect competition. Europe attempts to protect competitors. Protecting competitors means blunting the skills of superior players, allowing inferior managers and business models to remain in business and thus preventing better managements and business models from emerging. Again, stability wins out over change and progress.

The president has said on several occasions, including in yesterday's speech, that "I've always been a strong believer in the power of the free market." But his administration's prescriptions tell a different story. In AIG, GM, Chrysler, Fannie Mae and Freddie Mac we can see the future that the administration envisions for our economy -- a sclerotic and unchanging structure of big companies working with, protected by, and relying on big government.

Mr. Wallison is a senior fellow at the American Enterprise Institute.

[GeneralStriker]

Mur, calm down for crissakes. you're gonna bust a blood vessel over this. just consider that this decline of empire is a theatrical production and we're lucky enough have tickets for the final act. think about the billions of schmucks who checked out before the intermission. at least we're here for the denouement. it's only life- it comes and goes. maybe the main man will finally descend on the wings of a dove and change it all in the twinkling of an eye. (or 'come like a thief in the night'- (only to be shot in the neck by Pack! hahahaha) you got your health, your kids and a few bucks for a cheese steak- what else do you want? let the assbites hoard their gold and then try to by a loaf of bread with it. ("hey, asshole. how do I know this is really gold? got your assay kit with ya?") hahahaha go check out that smiling waitress with the big tits. you need that, too. and of course-

...smoke em if ya got em.

[WarlordZeroOne]

Economic Meltdown, how's Prez Obama going to pay for the SPACE-PORT? has he accounted for that. :projectile:

[mur]

This is good for a few laughs



z]PZ93NjLabU8z]

[mur]

Behind the Scenes, Fed Chief Advocates Bigger Role (http://www.nytimes.com/2009/06/24/business/economy/24fed.html?_r=1)
By STEPHEN LABATON

WASHINGTON — During the debate over financial regulation, the Federal Reserve chairman, Ben S. Bernanke, has been surprisingly quiet.

But behind the scenes, he has been a forceful proponent of giving the Fed more power, both defending his management of the economic crisis and arguing that more authority would help the agency act more decisively to reduce the chances of a recurrence, according to interviews with lawmakers and officials from the Fed, the Treasury and the White House.

Despite criticism by some lawmakers that the Fed failed to anticipate the problems that led to the crisis, Mr. Bernanke has told associates that such critics fail to recognize the extraordinary actions taken by the central bank over the last year.

Mr. Bernanke believes the Fed’s actions have played a major role in averting a possible second Great Depression,

Mur comment....You mean the economic crisis that the FED caused to begin with?


according to government officials who know his thinking. Those steps, the Fed chairman has told these people, demonstrate that the agency is up to the larger task assigned to it by the Obama administration.

Mr. Bernanke has one important champion — President Obama. On Tuesday, the president reinforced his preference for an enlarged role for the Fed in a news conference at the White House.

The administration’s proposals for a regulatory overhaul are built around the idea “that there’s got to be somebody who is responsible not just for monitoring the health of individual institutions, but somebody who’s monitoring the systemic risks of the system as a whole,” Mr. Obama said. “And we believe that the Fed has the most technical expertise and the best track record in terms of doing that.”

He said that while the Fed was not blameless, it was not fair to single it out for failing to avert the crisis.

Mur comment...Bullshit

“I think that the Fed probably performed better than most other regulators prior to the crisis taking place, but I think they’d be the first to acknowledge that in dealing with systemic risk and anticipating systemic risk, they didn’t do everything that needed to be done,” Mr. Obama said.

The president and Mr. Bernanke do not, however, see eye-to-eye over whether to create a Consumer Financial Protection Agency, part of which would be carved out of the Fed’s existing jurisdiction over mortgages and credit cards.

Breaking ranks with the administration, Mr. Bernanke is expected to tell Congress that the Fed would prefer to keep the responsibility for consumer lending. He is also expected to promise a stronger emphasis on consumer debt issues in the future.

Mr. Bernanke’s surrogate in the debate has been the Treasury secretary, Timothy F. Geithner, who in Congressional testimony, speeches and interviews has praised the Federal Reserve’s performance.

Mur comment...Geithner is Bernake's pawn pure and simple. The game is rigged

(Mr. Geithner’s views may also have reflected his pedigree. He joined the administration after serving five years as president of the New York Federal Reserve, where he worked closely with Mr. Bernanke.)

Mr. Bernanke has been reluctant to get involved in the political debate, but has argued to associates and lawmakers that the often-mentioned alternative of a council supervising the largest firms would not be nimble or accountable enough.

He also has said that the plan is not a radical departure from the Fed’s current role. The Fed is already the umbrella supervisor of virtually all of Wall Street’s largest institutions, and the Obama plan would add only a handful of new companies to the Fed’s oversight list. The Fed so far has not specified which companies it would add to its purview, but once it decides, it is expected to make the list public.

Mur comment...What a crock! Given what has just transpired, the FED ought to be dismantled, once and for all.

The biggest impact, government officials said, is not in the number of institutions the Fed regulates, but in how it regulates them. It will have to go beyond measuring the financial safety of institutions to examining their connections to other firms and markets, and the dangers those connections could pose.

By possibly requiring the largest institutions to hold more capital against losses or to reduce the amount of debt they carry, for example, the Fed could make firms less profitable and less competitive with their smaller rivals. That in turn could prompt some of the largest institutions to decide to shrink, either by borrowing and lending less, or selling off units.

Fed officials said they expected that new capital requirements would be tailored to the risks and strengths of each bank.

They and top administration officials disagree that the Fed’s new authority amounts to overseeing “too big to fail” banks. Under the plan, the government would have explicit authority to seize any faltering institution that was judged an unacceptable risk to the overall financial system. As a result, the government would not have to guarantee creditors 100 cents on the dollar — and “too big to fail” would no longer be the default policy.

That breaks from the practice of last year, when creditors to the American International Group, Fannie Mae and Freddie Mac were repaid in full because Mr. Bernanke and Henry M. Paulson Jr., then the Treasury secretary, did not think the government had the legal authority to shut down nonbank institutions, or to choose which loans to repay in full and which to discount.

Mr. Bernanke has also told people that he finds it illogical that some lawmakers are citing the Fed’s failure years ago to curtail deceptive or abusive subprime loans as the reason for their objections to the administration’s plan.

Mur comment...They think we are fools....It was not subprime mortgages that brought down the house of cards, it was the bets made on them that were 100 times the value of the actual mortgages.

In recent months, a series of new regulations issued by the Fed on mortgages and credit card policies issued under Mr. Bernanke have generally been applauded by consumer groups and some lawmakers, although Congress recently passed a law, which President Obama signed, to add some features. The new law requires banks and card companies to give 45 days’ notice before a change in interest rates and prohibits them from raising rates on existing balances unless a card holder falls 60 days behind on minimum payments.

Some critics have raised other concerns — that the Fed is stretching itself too thin, or compromising the political independence that is essential for setting monetary policy.

“The plan does give more power to the Fed and just complicates its job and therefore raises questions about its ultimate mission,” said John B. Taylor, a professor of economics at Stanford and a Treasury under secretary in the Bush administration. His book, “The Road Ahead for the Fed,” (Hoover Institution Press) is being published this week. “If the Fed goes further off its course and doesn’t focus on what it did in the 1980s and 1990s, it will have less control over inflation. It will lose its independence. It will have to become more political.”

Vincent R. Reinhart, a resident scholar at the American Enterprise Institute and former director of the Fed’s division of monetary affairs, said that policy makers needed to be concerned about mission creep.

“The main problem in becoming the systemic risk regulator is that it can be a very diffuse responsibility,” Mr. Reinhart said. “Should the Federal Reserve have been monitoring Enron and Long Term Capital Management and the Hunt brothers when they were involved in silver market manipulation?”

He added: “What is the ideal governor of the Fed supposed to be, someone who understands monetary policy, systemic risk, bank regulation, consumer affairs and Congressional relations? You are reaching the point where the agency is being spread pretty thin.”

Mr. Bernanke’s views, which have evolved as the financial crisis has unfolded, contrast markedly with those of his predecessor. Alan Greenspan, who said last year in his book “The Age of Turbulence” that the idea of the Fed as a systemwide regulator was “mission impossible.”

Mur comment....We are being set up for something that we would have never accepted, but most are in fact going to think (whatever it turns out to be)...that it is a good thing.

[mur]

Who Owns the Banks, Round Two? (http://online.wsj.com/article/SB124580390083944851.html)
Bank nationalization will soon be back on the agenda unless the economy picks up.



The stress tests came and went, but haven't settled the argument over whether anything short of seizing the biggest banks amounts to recapitulating Japan's experience with zombie banks.

That argument remains relevant -- because bank nationalization will soon be back on the agenda unless the economy picks up.

It would be good to get the parallel straight. Japan's problem wasn't so much zombie banks as zombie borrowers, kept alive with new infusions of money because the political class, speaking for Japanese society, wanted to delay and minimize foreclosures, layoffs and asset fire sales to preserve "harmony." An even more important, but unsung, factor in Japan's so-called lost decade was a relentless series of tax hikes.

Letting U.S. banks slide on their capital ratios is not the same as making "zombie banks." Somebody somewhere has to hold bad loans until they're resolved, either because borrowers make repayment or are forced into liquidation. There's no question that the Obama administration has opted for an unspoken policy of regulatory forbearance with respect to various too-big-to-fail banks. But those banks have no natural reason (aside from political pressure) to keep zombie borrowers alive if it would be financially advantageous to foreclose.

For all that, the Obama stress tests have served a confidence-building purpose -- confidence in Washington, not the banks.

It dispensed with the idea that the problem of how to unwind Washington's massive commitment to the financial sector could somehow be solved at the expense of bank shareholders. That idea was always a distraction -- there was not enough market capitalization in the entire banking sector to make a fig's difference, especially while the prospect of nationalization hung over it.

In climbing down, the Fed and the Obama administration did indeed credit future earnings of the banks with solving a big part of their capital problem. Call it fudge: This is a bet on growth, the only decent solution out there, because neither nationalization nor capital raising by banks can get the Federal Reserve off the hook of inflating away the banking system's massive additional losses on consumer, business and housing loans if growth doesn't come back.

As usual, however, there is no coherence in the administration's approach. Even while it counts on surging bank profits, it attacks the banking system's credit card profits, its mortgage profits, its senior-secured lending profits, etc. This is no way to avoid the rightly frightful prospect of having to add Citigroup and Bank of America to the portfolio of companies Washington is running badly.

Meanwhile, Team Obama is periodically tempted by the pro-nationalizers' claim that giving the big banks time to heal can only stifle recovery by retarding their return to lending. The critics underestimate two things: The dynamism of our financial sector, with plenty of healthy banks, start-ups and foreign investors likely to step into any lending gap if real opportunities for profitable loans present themselves (a difference vs. Japan, whose financial system was relatively closed).

They also underestimate the degree to which the problem is demand for loans rather than supply.

It's good to recall the puzzlement of the early Clinton administration over the "jobless recovery" that prevailed after it took office in 1993. The mystery wasn't the mystery the administration liked to pretend: Business refused to hire or expand out of fear of Bill Clinton's then-pending health-care reforms.

Mr. Obama's own initiatives on climate, labor, taxes and health care are the biggest threat to growth -- thus to the success or disaster of the Fed's giant liquidity bet, failure of which could still send us Argentina's way (as the Fed itself no doubt is discussing in its closed meetings today and yesterday).

Here, a happy happenstance for the nation is that our president is an object of craving utterly independent of the policies he pursues. Mr. Obama, therefore, has an unlikely degree of freedom to throw overboard his agenda and go for growth without fear of his public abandoning him.

From the start, he has seemed uniquely detached and noncommittal about his own policy positions, as if he was entertaining them only to see if they might be useful to him. Let's not underestimate this advantage over lesser politicians, who get trapped by their rhetoric. Let's also hope Mr. Obama takes advantage, becoming the "growth" president and saving the big initiatives for his second term. Otherwise, with the AIG disaster before him, he may be remembered as the president who nonetheless blundered into similar disasters trying to manage Citibank et al.

[mur]

8]EjielL-z9o48]

[GeneralStriker]

Roubini/ Houdini... it's all horseshit. Just like in the 30's all the king's horses and all the king's men are pontificating on how to glue this collapsing house of cards back together again. Goo goo ga joob to the experts and textperts and chokers. They are a gaggle of jokers. What is their prescription for economic cure? Growth. Consumption. Despoliation. Now there's an original idea. Let's reinvent Coolidge and Harding. Or even better- switch off your TV and let em starve.

[pack3tg0st]

Mur:

been following your thread for a while now :P

What do you make of Iraqi oil going up for sale next week?

[mur]

Mur:

been following your thread for a while now :P

What do you make of Iraqi oil going up for sale next week?

Truthfully, I have not given it much thought.


@the General,

I'm not saying Roubini is the be all end all, but he did accurately forecast certain scenarios.

I believe what he is saying is , "this is not over"

[GeneralStriker]

Iraqi oil going up for saleThat, of course, was the real purpose of Dumbya's 'war.' Blood for oil. What a deal!

[GeneralStriker]

I believe what he is saying is , "this is not over"duh...

[mur]

Bernanke Suffers From Selective Memory Loss; Paulson Calls Bank of America "Turd in the Punchbowl" (http://globaleconomicanalysis.blogspot.com/2009/06/bernanke-suffers-from-selective-memory.html)


Excerpt

New York State Attorney General Andrew Cuomo's letter to the SEC and Senate Banking Committee on the Bank of America, Merrill Lynch Merger provides strong evidence of coercion to commit securities fraud by former Treasury Secretary Paulson and Fed Chairman Ben Bernanke, and actual securities fraud by Bank of America CEO Kenneth D. Lewis.

Bank of America's attempt to exit the merger came to a halt on December 21, 2008. That day, Lewis informed Secretary Paulson that Bank of America still wanted to exit the merger agreement. According to Lewis, Secretary Paulson then advised Lewis that, if Bank of America invoked the MAC, its management and Board would be replaced.

In an interview with this Office, Secretary Paulson largely corroborated Lewis's account. On the issue of terminating management and the Board, Secretary Paulson indicated that he told Lewis that if Bank of America were to back out of the Merrill Lynch deal, the government either could or would remove the Board and management.

Snip


The biggest point of contention was over whether Mr. Bernanke threatened to oust Bank of America CEO Mr. Lewis. Bank of America approached top U.S. officials in mid-December about abandoning its deal to buy Merrill Lynch.

Mr. Bernanke defended the Fed's actions, saying the central bank acted with the "highest integrity" in the negotiations with Bank of America. "I did not tell Bank of America's management that the Federal Reserve would take action against the board or management," Mr. Bernanke said, adding that the decisions were "taken under highly unusual circumstances in the face of grave threats to our financial system and our economy."

Lawmakers pointed to a Dec. 20 email written by Richmond Fed President Jeffrey Lacker. One of a series unearthed by the panel, the email recounts a conversation between Messrs. Lacker and Bernanke in which the Fed chief planned to tell Bank of America that "management is gone," if they quashed the deal and later needed more government aid, wrote Mr. Lacker.

Pressed on the issue, Mr. Bernanke said he didn't make such a comment to Mr. Lewis and didn't remember that part of the conversation with Mr. Lacker.

[mur]

The Bloodless Coup of the Global Financial Stability Board: From Guidelines to Rules (http://www.huffingtonpost.com/ellen-brown/the-bloodless-coup-of-the_b_219653.html)

Too long to post the whole thing but definitely worth reading

This is the last paragraph.

A Bloodless Coup?

Suspicious observers might say that this is how you pull off a private global dictatorship: (1) create a global crisis; (2) appoint an "advisory body" to retain and maintain "stability"; and then (3) "formalize" the advisory body as global regulator. By the time the people wake up to what has happened, it's too late. Marilyn Barnewall, who was dubbed by Forbes Magazine the "dean of American private banking," wrote in an April 2009 article titled "What Happened to American Sovereignty at G-20?":

It seems the world's bankers have executed a bloodless coup and now represent all of the people in the world. . . . President Obama agreed at the G20 meeting in London to create an international board with authority to intervene in U.S. corporations by dictating executive compensation and approving or disapproving business management decisions. Under the new Financial Stability Board, the United States has only one vote. In other words, the group will be largely controlled by European central bankers. My guess is, they will represent themselves, not you and not me and certainly not America.

Adoption of the FSB was never voted on by the public, either individually or through their legislators. The G20 Summit has been called "a New Bretton Woods," referring to agreements entered into in 1944 establishing new rules for international trade. But Bretton Woods was put in place by Congressional Executive Agreement, requiring a majority vote of the legislature; and it more properly should have been done by treaty, requiring a two-thirds vote of the Senate, since it was an international agreement binding on the nation. The same should be mandated before imposing the will of the BIS-based Financial Stability Board on the U.S., its banks and its businesses.

Even with a two-thirds Senate vote, before Congress gives its approval it should draft legislation ensuring that the checks and balances imposed by our Constitution are built into the agreement. The legislatures of the member nations could be required to elect a representative body to provide oversight and take corrective measures as needed, with that body's representatives answerable to their national electorates. If we are to avoid abdicating our national sovereignty to a private foreign banking elite, we need to insist on compliance with the constitutional and legal mandates on which our country was founded.

[boycotteverything]

OK. You've posted all this crap. We've read it all. So now tell us- what, specifically, is the solution. No Libertarian diatribes... What would Mur do? (Bearing in mind all potential suffering, of course.) I'm ready.

[skunk]

This is a great chance for us to start over. Pseudo-capitalism is dead.

The solution? We need to build something new, something sustainable, something we can create together as amerikans without special interests and the feds involved.

[boycotteverything]

This is a great chance for us to start over. Pseudo-capitalism is dead.

The solution? We need to build something new, something sustainable, something we can create together as amerikans without special interests and the feds involved.So- you've taken it upon youself to answer for Mur.. Specifics will be required in this thread. Got any?

[mur]

End the rule of the Central Bank(s)

It will be painful at first, but in order to make an omelet, you have to break a few eggs.

Ban donations (legal bribes) to elected officials.... entirely.

As for the rest, I am open to suggestions.

[mur]

i]thR-lVuztIYi]

[skunk]

Ugh, Bachmann is a fuck up.

[boycotteverything]

Is that the best the repuglicans can do? Trot out this know-nothing asshat? I'm with the Skunk on this. The woman is a fuck up.

[mur]

I would do her

[boycotteverything]

I would do herwell that's a different thread. but i probably would too.

[mur]

I can't say it any better than Mish




Bernanke is a Total Failure Unsuited for Role as Fed Chairman (http://globaleconomicanalysis.blogspot.com/2009/06/bernanke-is-total-failure-unsuited-for.html)

Inquiring minds are reading Bernanke Flubs Tryout, Still Up for Leading Role (http://www.bloomberg.com/apps/news?pid=20601039&sid=aujzHSMEByKc) by Caroline Baum.

Most often I agree with Caroline, but not this time.

After trashing (and rightfully so) Bernanke's last appearance before Congress, Caroline somehow arrives at the following conclusion.


It would be hard to find someone more suited for the job of Fed chairman than Bernanke. His performance yesterday has nothing to do with his unique qualifications for the position. ... Unless President Barack Obama wants a solo pilot, he would do well to tap Bernanke for a second term.

Let's take a look at the qualifications of which Baum speaks.

Ten Qualifications

1) Bernanke is either a liar or has a memory problem. I believe the former. Either way, there is a problem when a Fed chairman cannot recall a conversation with another Fed governor over something as critical as the Bank of America/Merrill Lynch merger. See Bernanke Suffers From Selective Memory Loss; Paulson Calls Bank of America "Turd in the Punchbowl" for my take.

2) Bernanke claims to be a student of the great depression yet amazingly concludes the cause was misguided Fed policy after the stock market crash. This is nonsense. The cause of the great depression and the cause of the current depression (yes we are in a depression), is the massive expansion of credit and debt fostered by the Fed itself. Bernanke is no student of history, he is a dunce.

3) Bernanke has on many occasions promised transparency. This is an outright lie. There is no transparency and Bloomberg has filed freedom of information lawsuits requesting information that should have been disclosed. Moreover, Congress had to subpoena the Fed in regards to the Bank of America / Merrill Lynch shotgun wedding which is how we know about Bernanke's selective memory loss. What else is Bernanke hiding?

4) Bernanke is creative. Some might think creativity is a positive attribute. It is, for a design engineer. Unfortunately creativity is not a good attribute for a Fed chairman. This whole mess was sponsored by the Fed when Greenspan got creative with interest rate policy. Bernanke is light-years more creative than Greenspan as witnessed by an amazing array of Fed lending facilities and the ballooning of the Fed's balance sheet swapped for garbage collateral. The unintended consequences of Bernanke's extraordinary actions are coming down the road. We do not even know what those consequences are. However, we do know that the Fed has no exit policy, and will come up with one by the seat of Bernanke's pants on the fly. Given there is no need for the Fed at all, the last thing we need is for a creative Fed.

5) Bernanke supports policies of theft. Proof of this is easy to establish. Bernanke favors a policy of 2% inflation, and inflation is theft. How so? Inflation benefits those with first access to money: governments, banks, and the wealthy. Government benefits when property taxes rise more than wages, banks benefit by borrowing money into existence, and the already wealthy benefit by being next in line for access to cheap money. By the time those low on the totem pole have access to cheap money, asset prices are already through the moon. Moreover, those with enough common sense to avoid the bubbles, get nothing for their money sitting in the bank. The middle class has been ravished by inflation, and Bernanke supports that inflation.

Please note that Bernanke cannot even follow his own mandate. Where was Bernanke when property and commodity prices were soaring? The answer is he was ignoring them. Thus we see the one sided nature of Bernanke's policies. He let home prices soar, and now that they are crashing looks to support them. By the way, this is not just Bernanke, this is a symptom of central bankers in general.

6) Bernanke cannot dissent. As a member of the Greenspan Fed, Bernanke went along with everything Greenspan did. It is clear Greenspan failed. Thus it is clear that Bernanke failed by supporting Greenspan's policies.

7) Bernanke supports policies of outright fraud. Fractional reserve lending is a fraud. Please consider Murray N. Rothbard and the Case for a 100 Percent Gold Dollar (http://www.fff.org/freedom/0999c.asp) in which Rothbard condemned fractional reserve banking as a violation of contract. "In my view, issuing promises to pay on demand in excess of the amount of the goods on hand is simply fraud, and should be so considered by the legal system. For this means that a bank issues "fake" warehouse receipts — warehouse receipts, for example, for ounces of gold that do not actually exist in the vaults. This is legalized counterfeiting; this is the creation of money without the necessity of production, to compete for resources against those who have produced. In short, I believe that fractional-reserve banking is disastrous both for the morality and for the fundamental bases and institutions of the market economy...."

8) Bernanke could not spot the housing bubble. Amazingly Bernanke thought the housing bubble was "well contained" right before it exploded in his face. Of course there is another possibility: Bernanke is a liar and knew it was not contained but did not want to say so.

9) Bernanke has no idea where interest rates should be. Of course no one else does either. But Bernanke thinks he does. The result is overshooting interest rate policy in both directions, just as Greenspan did. This is the Fed Uncertainty Principle (http://globaleconomicanalysis.blogspot.com/2008/04/fed-uncertainty-principle.html) Corollary Number One in action: The Fed has no idea where interest rates should be. Only a free market does. The Fed will be disingenuous about what it knows (nothing of use) and doesn't know (much more than it wants to admit), particularly in times of economic stress.

10) Bernanke is a power grabbing hack. This is the Fed Uncertainty Principle Corollary Number Two in action: The government/quasi-government body most responsible for creating this mess (the Fed), will attempt a big power grab, purportedly to fix whatever problems it creates. The bigger the mess it creates, the more power it will attempt to grab. Over time this leads to dangerously concentrated power into the hands of those who have already proven they do not know what they are doing.

Summary:

Bernanke is a disingenuous liar with a memory problem. He is also an economic dunce who does not understand the cause of great depression nor could he spot a housing/credit bubble visible to nearly every blogger in the country. However, like his mentor Greenspan, Bernanke believes that every problem can be cured by throwing money at it. Finally, he is a creative, political power grabbing hack who gives memorable speeches about throwing money out of helicopters.

I have to hand it to Caroline. That is indeed a unique set of qualifications.

Bernanke’s four-year term ends in February, let us hope he is gone. Better yet, it's time to Audit the Fed Then End It!

Mike "Mish" Shedlock

http://globaleconomicanalysis.blogspot.com/2009/06/bernanke-is-total-failure-unsuited-for.html

[Cogburn]

3) Bernanke has on many occasions promised transparency. This is an outright lie. There is no transparency and Bloomberg has filed freedom of information lawsuits requesting information that should have been disclosed. Moreover, Congress had to subpoena the Fed in regards to the Bank of America / Merrill Lynch shotgun wedding which is how we know about Bernanke's selective memory loss. What else is Bernanke hiding?
What is he hiding?

He's hiding the fact that not a single one of the members of the Fed Board have fucking Clue #1 as to how to fix this. They are as fucked as we are.


5) Bernanke supports policies of theft. Proof of this is easy to establish. Bernanke favors a policy of 2% inflation, and inflation is theft. How so? Inflation benefits those with first access to money: governments, banks, and the wealthy. Government benefits when property taxes rise more than wages, banks benefit by borrowing money into existence, and the already wealthy benefit by being next in line for access to cheap money. By the time those low on the totem pole have access to cheap money, asset prices are already through the moon. Moreover, those with enough common sense to avoid the bubbles, get nothing for their money sitting in the bank. The middle class has been ravished by inflation, and Bernanke supports that inflation.
Populist and flatly incorrect. Inflation benefits anyone that have a portion of their savings invested in precious metals. The trick is to have your investment in metals outpace the rate of inflation for your other investments.

The fact that most American's have no clue as to how to save or manage money is a different discussion.


6) Bernanke cannot dissent. As a member of the Greenspan Fed, Bernanke went along with everything Greenspan did. It is clear Greenspan failed. Thus it is clear that Bernanke failed by supporting Greenspan's policies.
The problem isn't Bernanke's lack of dissent, the problem is the expectation that he ever would in the first place.


7) Bernanke supports policies of outright fraud. Fractional reserve lending is a fraud. Please consider Murray N. Rothbard and the Case for a 100 Percent Gold Dollar in which Rothbard condemned fractional reserve banking as a violation of contract. "In my view, issuing promises to pay on demand in excess of the amount of the goods on hand is simply fraud, and should be so considered by the legal system. For this means that a bank issues "fake" warehouse receipts — warehouse receipts, for example, for ounces of gold that do not actually exist in the vaults. This is legalized counterfeiting; this is the creation of money without the necessity of production, to compete for resources against those who have produced. In short, I believe that fractional-reserve banking is disastrous both for the morality and for the fundamental bases and institutions of the market economy...."

Bernanke could not spot the housing bubble. Amazingly Bernanke thought the housing bubble was "well contained" right before it exploded in his face. Of course there is another possibility: Bernanke is a liar and knew it was not contained but did not want to say so.
See above.

Mish gets 60% credit from me. Good article, none the less.

[mur]

Good points

This is my favorite


The problem isn't Bernanke's lack of dissent, the problem is the expectation that he ever would in the first place.

[boycotteverything]

The whole lot of these bastards are Bernie Madoffs.

[Cogburn]

I'm sure that's why the volume is so loud against legalization this time around.

We already know who to fill the jails with once we let the potheads out.

[boycotteverything]

The entire US economy is a Ponzi.

[skunk]

We already know who to fill the jails with once we let the potheads out.

The mormons?

[Cogburn]

We already know who to fill the jails with once we let the potheads out.

The mormons?
Them too.

[boycotteverything]

3 squares and cot- the UAW.

[boycotteverything]

More than a year ago I said this- and I stand by it-



In the past few weeks fear has come back in full force complete with blown out credit spreads and crashing financial sector stocks. However, this time around the Fed does not have the fire power nor the market confidence behind them because every measure they have taken thus far has only drained their reserves, delayed the inevitable, caused other problems elsewhere for the US and global economies and has not fixed the problem.



The Fed and the usual gang of 'experts' will always spend their meager energy on the analysis of the economic cogs and gears rather than the state of the deus ex machina itself. The fact is that the world is experiencing the greatest transfer of wealth since the beginning of recorded history. Pax Americana is in decline and fall. Nothing can slow the decent and the chaotic consequences for human continuance per se. Behold a pale horse. The ultimate discontinuity is at hand and the results will not be pretty- interesting, but not pretty.

The Empire won't go quietly- not with a whimper but a bang. Perhaps that is why the Johannine prophecies seem so apt. This movie played out before in a much smaller theatre. It doesn't require a prophet to see the future anymore- just a bit of tweaking on the fine tune knobs. The future has never had such a compelling immediacy.

The world is being strangled by the Malthusian garrote. Desperate populations are about to become engaged in a war for remaining resources. That is what the Iraq war is all about. Self preservation will finally wring out the last dampness of altruism. It has happened before to a lesser degree and the remedy that it spawned- Christianity- will find itself finally eclipsed by it's opposite principles. This is the larger picture. All that's left are the tedious details, the footnotes- the various methods of mayhem and the hydra-headed fools, the walk-ons of history, that permit their use.

So what sound and fury do we see in the immediate future? The crash of the markets, unlimited war, local transfers of wealth and property- evictions, repossessions, the calling of social margin. Families squatting in the dross of their own foreclosed homes- the new huddled masses, their utilities disconnected, while the successors of the failed banks are unable to force them out. Transportation at a stand-still. Empty grocery stores. Gunshots in the night. And the foreign wars of our addled emperor coming home. The attack on Iran will result in the sinking of aircraft carriers in the Persian Gulf. Saudi Arabia will be over-run by the gangs of it prodigal son. There will be no more oil shipped by those greedy sheiks. The ayatollahs will loose their missiles on Israel and taste the fruits of Samson's nukes. Persia will be no more. Israel will be no more. And then it all comes home. The scatterings of the Middle Eastern desperadoes will appear on our own streets, in our own buildings- and bring with them endless nine elevens. Of course there is more- much more- this is just a selective foretaste of the impending chaos. Let your imagination run wild to see the entire movie. Whatever disaster that you have the temerity to envision will come to pass. Shortly.

The billions that have gone before us, upon whose shoulders we stand, are here and now- new flesh on their bones- to witness the denouement of history. It could have been otherwise. The greatest fear shall now become- not death, but the inability to die. Perhaps John had it right after-all.

[mur]

nicely put...I hope you are wrong...but I don't think you are

[boycotteverything]

yeah well i wrote that in a bit of a depressed mood. hahahaha i hope i'm wrong too.

[mur]

r]vB6M3iDzhIgr]

[boycotteverything]

Confiscate the excess wealth of the rich by increasing the 'death tax' by 1000% and repealing Dumbya's income tax reduction for the billionaires, cut the defense dept by 60%, and adopt socialized medicine, Canadian style. Put the banksters and stock market mafia on trial and give them cots next to Bernie at Florence Super Max. Simple.

[mur]

And maybe our Representative's should actually read the bills that they vote on

[boycotteverything]

Wait- i forgot one more thing. Confiscate Murnut's money too. And his car.

[mur]

Audit the Fed Blocked by Senate Procedural Move (http://globaleconomicanalysis.blogspot.com/2009/07/audit-fed-blocked-by-senate-procedural.html)

In the House, Mr. Sunshine, Ron Paul Wins Support to Audit Fed Reserve. (http://www.foxnews.com/politics/2009/06/24/mr-popular-rep-paul-wins-supporters-fed-sunshine/)

The feisty congressman from Texas, whose insurgent "Ron Paul Revolution" presidential campaign rankled Republican leaders last year, now has the GOP House leadership on his side -- backing a measure that generated paltry support when he first introduced it 26 years ago.

Paul, as of Tuesday, has won 245 co-sponsors to a bill that would require a full-fledged audit of the Federal Reserve by the end of 2010.

The bill would call for the comptroller general in the Government Accountability Office to audit the Fed and report those findings to Congress. The GAO's ability to conduct such audits now is severely restricted.

A slew of top Republicans are backing the bill, as are many Democrats.

"Ron Paul has the right idea on this," said Sen. Jim DeMint, R-S.C., who supports similar legislation in the Senate. "I'm just hoping we can get a clear audit. ... We need to know what they're up to."

Unfortunately for Paul, the bill appears to be idling in the House Financial Services Committee, which is chaired by Barney Frank, D-Mass. The bill has been sitting there, gathering co-sponsors, since Paul introduced it in late February.

Calls to Frank's office were not returned.

Paul acknowledged that his bill hasn't advanced but said Frank has "promised" him he will deal with his bill and is willing to give it a hearing. Paul said it's easily got the "momentum" to pass the full House.

A representative with the Federal Reserve could not be reached for comment. DeMint told FOX News last week that the measure would have a good chance of passing the Senate if supporters can push Paul's to a vote, which he said would be successful, in the House.

"The whole process is unconstitutional. There is no legal authority to operate such a monetary system," Paul said in February, in a statement calling for Washington to "end the Fed."

DeMint amendment to audit the Federal Reserve blocked by Senate Leadership

m]4tRQHsXujpom]

Senator Jim DeMint (R-SC) is blocked by Senate Democrat Leadership from having a vote on his amendment to audit the Federal Reserve, based on a bill authored by Congressman Ron Paul (R-Texas) in the House, H.R. 1207, and Senator Bernie Sanders (D-Vermont) in the Senate, S. 604.

Speak Out - Audit the Fed, Then End It!

If you have not done so yet, please contact your legislative representatives and tell them you support a Fed audit. If you have already done so, then please do so again. Details how in Speak Out - Audit the Fed, Then End It! (http://globaleconomicanalysis.blogspot.com/2009/05/speak-out-audit-fed-then-end-it.html)

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com/2009/07/audit-fed-blocked-by-senate-procedural.html

[Cogburn]

A representative with the Federal Reserve could not be reached for comment. DeMint told FOX News last week that the measure would have a good chance of passing the Senate if supporters can push Paul's to a vote, which he said would be successful, in the House.
:lol:

Shit... Ben and Timmy have been all over the TV for months, but today they can't be reached for comment. Good day to schedule a vacation, I suppose.

At least the rest of the crap in that bill are going to get axed.

I'm going to guess you'll be hearing more about Senate Rule XVI.

Guess it's time to change Rule XVI (http://rules.senate.gov/public/index.cfm?FuseAction=RulesOfSenate.View&Rule_id=b279b7f6-5919-43ea-b154-872cc0bef7e4&CFID=13088764&CFTOKEN=79071530) to make it so a quorum could override the application.

John "The Corpse" McCain tried back in 2003. (http://commerce.senate.gov/public/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=9654acba-13a5-4b76-83bd-586e1651cc64&Month=7&Year=2003)

I enjoy how it's always the same fuckers mucking about in the dirty little cracks of our government.

[mojo]

John "The Corpse" McCain tried back in 2003. (http://commerce.senate.gov/public/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=9654acba-13a5-4b76-83bd-586e1651cc64&Month=7&Year=2003)

I enjoy how it's always the same fuckers mucking about in the dirty little cracks of our government.

;)

[attachment=0:33r953q7]imageDownload.jpg[/attachment:33r953q7]

[Cogburn]

It would have been a good thing... however because it was remanded to committee, there it sits.

Were this a "bad" conspiracy, McCain would have pushed for SR173(103rd) just so such changes to Rule XVI would be resigned to Never-Never Land.... thereby clearing the way for all those things that the senator in the OP video listed off as being in violation of Rule XVI....

How many thousands of those are there?

[boycotteverything]

The most stunning statement made in that Rolling Stone article I posted somewhere (can't remember where) is that 'while the wealth of the empire goes down the drain, Goldman Sachs is that drain.' The fix is in.

[pack3tg0st]

Don't know if this is the right place...

But it seems as good a place as any...

You can quote me on this...

DJIA @ 7950 by Friday...

had to document that prediction somewhere...

carry on

[Cogburn]

There's a mid-year spending boom merely 5 weeks away... Back to school.

That's +200 just on the spending volume in retail alone.

That's not to say we won't see 7500 before then.

[pack3tg0st]

Oh, the spending boom won't affect much I don't think...

I still think we're surfing an "artificial high" in the DJIA...

Investors got a little giddy when Obama was going to hand them money...

now that the money has run out... they've realized that the stock prices hadn't achieved "true value" yet...

we're not even close to out of this mess before we hit 5500 IMHO.

[Cogburn]

Nah... the equity of the DIJA alone warrants, IMHO, no less than 6000 at close.

Check out the players.

http://www.djaverages.com/?view=question&page=one

Home Depot
[offsite=http://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=HD:1g9gja3w]HD Ratios & Returns
Price-to-sales 0.56
Return on Equity 13.4
Operating Margin 9.3
Profit Margin 3.5%

HD Financials
Sales $69.556 bil
Profits $2.418 bil
Assets $43.767 bil
Employees 322000.0[/offsite:1g9gja3w]

Caterpiller
[offsite=http://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=CAT:1g9gja3w]CAT Ratios & Returns
Price-to-sales 0.39
Return on Equity 40.5
Operating Margin 16.8
Profit Margin 5.2%

CAT Financials
Sales $48.753 bil
Profits $2.523 bil
Assets $64.44 bil
Employees 112887.0[/offsite:1g9gja3w]

Pfizer
[offsite=http://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=PFE:1g9gja3w]PFE Ratios & Returns
Price-to-sales 2.08
Return on Equity 13.4
Operating Margin 42.6
Profit Margin 17.0%

PFE Financials
Sales $47.315 bil
Profits $8.05 bil
Assets $122.932 bil
Employees 81800.0[/offsite:1g9gja3w]

Verizon
[offsite=http://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=VZ:1g9gja3w]VZ Ratios & Returns
Price-to-sales 0.9
Return on Equity 19.1
Operating Margin 32.2
Profit Margin 8.0%

VZ Financials
Sales $100.112 bil
Profits $7.996 bil
Assets $226.851 bil
Employees 223900.0[/offsite:1g9gja3w]

Proctor and Gamble
[offsite=http://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=PG:1g9gja3w]PG Ratios & Returns
Price-to-sales 1.85
Return on Equity 23.5
Operating Margin 23.9
Profit Margin 17.0%

PG Financials
Sales $82.077 bil
Profits $13.981 bil
Assets $132.395 bil
Employees 138000.0[/offsite:1g9gja3w]

Heavy Industry, Retail/Durable Goods, Drug Manufacturer, Communications, Food/Drink Manufacturer.... Jim Kramer would love this as a portfolio. Nice and diversified.

Not a single ROE under 10 points.... Cat is 40+!

These companies are wealth engines for an investor. I didn't include it in the C&P, but if you look the P/E for each of those companies has serious room for growth... Shit.. P&G was under 12...

Even when the economy is going south these companies are still winners... and 7.5% of the total index.

If anything I think Citigroup will be yanked from the index and replaced with Wells Fargo. There's a 20 point bump in the average right there.

[boycotteverything]

http://www.gummy-stuff.org/1929-DOW.gif
1992 to 2009?

The Dow will crash 1932 style in the next few days. Margin calls will sink the banks. The stock exchanges are nothing but mobbed-up casinos and the mob is getting freaked. There is no spending boom, nor will there be. GM is being parceled out. A million more will be out of work in the next month. Foreclosures will eventually approach 40%. America is about to become a nation of broken squatters. But it will be even worse for China. The expansion of the empire's money supply is a unilateral repudiation of foreign debt. Hundreds of millions will shortly be unemployed and rioting in the streets; there will be a resort to cannibalism. The Malthusian garrote is tightening and in the end 'the living will envy the dead.' We continue to suck the biles of Gaea so all the little men can ride their motor cars around. The harvest is close bye.

[mur]

Speaking of riots in China

http://globaleconomicanalysis.blogspot.com/2009/07/156-killed-in-china-as-violence-erupts.html

[boycotteverything]

It's begun...

[pack3tg0st]

We can always hope BE...

Here's to the Economy!

http://cinematropolis.files.wordpress.com/2009/06/roadwarrior_l.jpg

[boycotteverything]

packer- you've got just enough time to can some spuds and bottle your beer. so quit fucking around over here and get yer sorry ass in gear!

[pack3tg0st]

Dun need to bottle... I keg...

2 kegs in the fridge should suffice :P I actually have to finish one off so I can keg the Washington brew...

[boycotteverything]

bastard. one of those is mine.

[pack3tg0st]

LOL come finish it off!!

I need to keg the washington beer, so I've had slightly too much to drink the last 2 nights...

[pack3tg0st]

Just to reiterate...


DJIA @ 7950 by Friday...

DOW 61.82 -0.76%
8,101.78...

Only 110 more to go...

[boycotteverything]

I'm rooting for ya! May the bastards fall into a dark pit.
"these are the times that try men's souls" Tom Payne

[pack3tg0st]

After watching everything yesterday, i'm wondering if I should lower my estimate lol

Although, I think we'll pull out a slight positive tomorrow...

Anyway, want to take bets on how many banks are going to close this weekend?

[Cogburn]

The Dow will crash 1932 style in the next few days.
<sigh>

... and when Friday comes and we're not all looking at eating dogfood next month we'll know how to judge your financial savvy.

[boycotteverything]

Anyway, want to take bets on how many banks are going to close this weekend?No. That's the prerogative of the casinos. 1932 is right around the corner again though.

[boycotteverything]

The Dow will crash 1932 style in the next few days.
<sigh>

... and when Friday comes and we're not all looking at eating dogfood next month we'll know how to judge your financial savvy.
But of that day and hour knoweth no man, no, not the angels of heaven, but my Father only.

[boycotteverything]

Roubini on the state of the economy. From Forbes this morning:


Doctor Doom
Brown Manure, Not Green Shoots
Nouriel Roubini, 07.09.09, 12:00 AM EDT
The jobs situation is even worse than the headlines.

http://images.forbes.com/media/authorbox/nourielroubini.jpg

The June employment report suggests that the alleged green shoots are mostly yellow weeds that may eventually turn into brown manure. The employment report shows that conditions in the labor market continue to be extremely weak, with job losses in June of over 460,000. With the current rate of job losses, it is very clear that the unemployment rate could reach 10% by later this summer--around August or September--and will be closer to 10.5%, if not 11%, by year-end. I expect the unemployment rate is going to peak at around 11% at some point in 2010, well above historical standards for even severe recessions.

It's clear that even if the recession were to be over anytime soon--and it's not going to be over before the end of the year--job losses are going to continue for at least another year and a half. Historically, during the last two recessions, job losses continued for at least a year and a half after the recession was over. During the 2001 recession, the recession was over in November 2001, and job losses continued through August 2003 for a cumulative loss of jobs of over 5 million; this time we are already seeing more than 6 million job losses and the recession is not over.
Article Controls

The details of the unemployment report are even worse than the headline. Not only are there large job losses right now, but as a way of sharing the pain, firms are inducing workers to reduce hours and hourly wages. Therefore, when we're looking at the effect of the labor market on labor income, we should consider that the total value of labor income is the product of jobs, hours and average hourly wages--and that all three elements are falling right now. So the effect on labor income is much more significant than job losses alone.

The details also suggest that other aspects of the labor markets are worsening. If you include discouraged workers and partially employed workers, the unemployment rate is already above 16%. If you consider also that temporary jobs are falling now quite sharply, labor market conditions are becoming worse and the average duration of unemployment now is at an all-time high. So people not only are losing jobs, but they're finding it harder to find new jobs. So every element of the labor market is worsening.

The unemployment rate rose only marginally from 9.4% to 9.5%, but that's because so many people are discouraged that they exited the labor force voluntarily and therefore are not counted in the official unemployment rate.

The other element of the report that must be considered is that, for the summer, the Bureau of Labor Statistics (BLS) is still adding between 150,000 and 200,000 jobs based on the birth/death model. We know the distortions of the birth/death model--that in a recession jobs created within firms are much smaller than those created by firms that are dying. So that's distorting downward the number of job losses. Based on the initial claims for unemployment benefits, it's more likely that the job losses are closer to 600,000 per month rather than the figures officially reported.

Manure is great fertilizer, so this is good. Before he told us that the weeds were getting yellow (ie dying) and now we have a great layer of fertilizer to get this economy going! In all seriousness

These job losses are going to have a significant effect on consumer confidence and consumption in the months ahead. We've also seen extreme weakness in consumption. There was a boost in retail sales and real personal consumption-spending in January and February, sparked by sales following the holiday season, but the numbers from April, May and now June are extremely weak in real terms. In April and May you saw a significant increase in real personal income only because of tax rebates and unemployment benefits. In April, there was a sharp fall in real personal spending, and in May the increase was only marginal in real terms.

This suggests that most of the tax rebates are being saved rather than consumed. The same thing happened last year: With a $100 billion tax rebate, only thirty cents on the dollar were spent while seventy cents were saved. Last year, people expected the tax rebate to stimulate consumption through September. Instead, there was an increase in April, May and June, with the increase fizzling out by July.

This year it's even worse. We have another $100 billion in tax rebates in the pipeline. But the numbers suggest that in April, real consumption fell. And in May it was practically flat. So this year households are even more worried than they were last year about jobs, income, credit cards and mortgages. Most likely only around 20 cents on the dollar--rather than 30 cents last year--of that increase in income is going to be spent. In any case, that increase in income is just temporary and is going to fizzle out by the summer. So you can expect a significant further reduction in consumption in the fall after the effects of the tax rebates fade.

The other important aspect of the labor market is that if the unemployment rate is going to peak around 11% next year, the expected losses for banks on their loans and securities are going to be much higher than the ones estimated in the recent stress tests. You plug an unemployment rate of 11% in any model of loan losses and recovery rates and you get very ugly losses for subprime, near-prime, prime, home equity loan lines, credit cards, auto loans, student loans, leverage loans and commercial loans--much bigger numbers than what the stress tests projected.

In the stress tests, the average unemployment rate next year was assumed to be 10.3% in the most adverse scenario. We'll be already at 10.3% by the fall or the winter of this year, and certainly well above that and close to 11% at some point next year.

So these very weak conditions in the labor market suggest problems for the U.S. consumer, but also increasing problems for the banking system as these sharp increases in job losses lead to further delinquencies on loans and securities and lower than expected recovery rates.

The latest figures on mortgage delinquencies and foreclosures suggest a spike not only in subprime and near-prime delinquencies, but now also on prime mortgages. So the problems of the economy are significantly affecting the banking system. Even if for a couple of other quarters banks are going to use the new Financial Accounting Standards Board (FASB) rules and under-provisioning for loan losses to report better-than-expected results, by Q4, with unemployment rates above 10%, that short-term accounting fudge will have a significant impact on reported earnings. And this will show the underlying weakness in the economy. So banks may fudge it for a couple of other quarters, but eventually the effects of very sharp unemployment rates and still sharply falling home prices are going to drag down earnings and have a sharp effect on losses and capital needs of the banks and the entire financial system.

Essentially, the results today suggested that there are not as many green shoots. These green shoots, as I've argued, are mostly yellow weeds that may even turn into brown manure if a double-dip, W-shaped recession occurs in 2010-11. And it's not just the employment situation. Real consumption and retail sales remain weak. Industrial production remains weak. The housing market, in terms of price adjustment, remains weak, even if the quantities--demand and supply--may be closer to bottoming out. Indeed, the inventory of unsold new homes is so large that you could stop producing new homes for almost a year to get rid of that inventory. Moreover, about 50% of existing home sales are distressed sales (short sales and foreclosed homes).

The labor market conditions may have a significant effect on how long it takes for the housing market to bottom out. It's already estimated that by the end of this year, there will be about 8.4 million people with a mortgage who have lost jobs, and therefore have little income. Therefore, the number of people who will have difficulties servicing their mortgages is going to rise very sharply.

Home prices have already fallen from their peak by about 30%. Based on my analysis, they are going to fall by at least 40% from their peak, and more likely 45%, before they bottom out. They are still falling at an annualized rate of over 18%. That fall of at least 40%-45% percent of home prices from their peak is going to imply that about half of all households that have a mortgage--about 25 million of the 51 million that have mortgages--are going to be underwater with negative equity and will have a significant incentive to walk away from their homes.

The job market report is essentially the tip of the iceberg. It's a significant signal of the weaknesses in the economy. It affects consumer confidence. It affects labor income. It affects consumption. It affects the willingness of firms to start increasing production. It has significant consequences of the housing market. And it has significant consequences, of course, on the banking system.

Overall, it's an extremely weak report and suggests that weakness in the labor markets is going to continue, and that the recession is more likely to continue through the end of the year and the beginning of next year. It also suggests that recovery will be anemic, subpar, below trend. We are still estimating that U.S. growth next year is going to be 1% above the 2009 level, well below a potential growth rate of 3%. This is because there is little deleveraging of households, corporate firms and financial institutions while there is a massive re-leveraging of the public sector with sharply rising deficits and debts as many of the private losses have been socialized.

There are also signs that there may be forces leading to a double-dip recession sometime toward the second half of next year or toward 2011. If oil prices rise too much, too fast, too soon, that's going to have a negative effect on trade and real disposable income in oil-importing countries (U.S., Europe, Japan, China, etc.).

Also, concerns about unsustainable budget deficits are high and are going to remain high, with growth anemic and unemployment rising. These deficits are already pushing long-term interest rates higher as investors worry about medium- to long-term stability. If these budget deficits are going to continue to be monetized, eventually, toward the end of next year, you are going to have a sharp increase in expected inflation--after three years of deflationary pressures--that's going to push interest rates even higher.

For the time being, of course, there are massive deflationary pressures in the economy: the slack in the goods markets, with demand falling relative to supply-and-excess capacity. The rising slack in labor markets, which are controlling wages and labor costs and pushing them down, implies that deflationary pressures are going to be dominant this year and next year.

But eventually, large budget deficits and their monetization are going to lead--toward the end of next year and in 2011--to an increase in expected inflation that may lead to a further increase in 10-year treasuries and other long-term government bond yields, and thus mortgage and private-market rates. Together with higher oil prices driven up by this wall of liquidity rather than fundamentals alone, this could be the double whammy that could push the economy into a double-dip or W-shaped recession by late 2010 or 2011.

So the outlook for the U.S. and global economy remains extremely weak ahead. The recent rally in global equities, commodities and credit may soon fizzle out as an onslaught of worse-than-expected macro, earnings and financial news take a toll on this rally, which has gotten way ahead of improvement in actual macro data.

Nouriel Roubini, a professor at the Stern Business School at New York University and chairman of Roubini Global Economics (RGE), is a weekly columnist for Forbes. Read more of his columns here.
http://www.forbes.com/2009/07/08/jobs-report-mortgages-unemployment-recession-opinions-columnists-nouriel-roubini.html

[boycotteverything]

Une Force Majeure

See posts below from Murnut on June 29, 2008

[boycotteverything]

Never mind- here it is, posted by Murnut last summer

Part 1, Part 2 next post


PROTOCOLS FOR ECONOMIC COLLAPSE IN AMERICA
by
Al Martin


And this is how the U.S. Treasury would handle an economic collapse.
It's called the 6900 series of protocols. It would start with
declaring a force majeure, which would immediately be interpreted by
the marketplaces as a de facto repudiation of debt. Then the SEC and
the various regulatory exchanges would anticipate the market's
decline, hour by hour -- when Japan's markets opened the next day,
what would happen when the European markets, and all the inter-
linkages of the global markets. On the second day, US Special Forces
would be dropped in by parachute in the cities where the twelve
Federal Reserve district banks are located.


The origin of these protocols comes from the Department of Defense.
This is contingency planning for a variety of post-collapse scenarios.
Those scenarios would include, obviously, military collapse, World War
III, in other words, and its aftermath. What we're talking about now
is aftermath -- how the aftermath would be handled.


One does not necessarily know how the events would transpire that
would cause the collapse, whether it's military collapse or economic
collapse. In World War III, it would become obvious -- when the
mushroom cloud started to appear over cities.


Economic collapse scenarios were always premised on the basis of a US
declaration of force majeure on debt service. It's a very extensive
scenario. The scenarios are all together, i.e., military, economic,
political and social complete destabilization leading to collapse.
Then they break down individual scenarios. In the economic collapse
scenario, the starting point would be the United States Treasury
declaring a force majeure on debt service, which is de facto
repudiation, and that's how it would be interpreted by the world's
capital marketplaces. Then the scenario goes on from there. The US
Treasury would obviously declare a force majeure sometime after the
European markets had settled down. In other words, they had gone out
on the day, which means 11:38 a.m. EDT, our time. They'd wait until
the European markets closed, and the US markets had been open for a
couple of hours. That's when they'd determine how to begin the process
of unwinding or controlling the collapse to the best extent possible,
mainly because they know that the greatest hedge pressure would be
people seeking to use other markets to hedge their long exposure in
the United States and that the US would be the biggest seller in all
the rest of the world's markets. Therefore you would want to declare
the force majeure when the rest of the world's markets closed. The
declaration of force majeure would be precipitated by the declaration
that the United States is no longer able to service its debt. That's
pretty simple. Who makes that decision? The Treasury Department. The
President does not make that decision. The Secretary of the Treasury
does. He has that authority.
You might ask -- wouldn't he have his arm twisted not to do that?


The answer is that if there isn't any money left to service the debt,
it doesn't make any difference what the current regime might want to
do.


The day of reckoning is now coming. What has happened in the interim,
from 2001 to present, is dynamic, global economic deterioration. The
economic deterioration visited upon the United States by Bushonomics
is not a localized event. It is, in fact, global. We have a planet now
that is sinking into a sea of red ink.


The United States is consuming 80% of the planet's savings rate to
finance its debt. The central banks of Germany, Japan and Saudi Arabia
are no longer the powerhouses they used to be. Their reserves have now
been substantially depleted. They can, therefore, no longer hide the
fact that they own a certain number, likely in the trillions of
dollars, of U.S. Treasury debt that isn't being serviced, because they
can't hide it through bookkeeping tricks anymore because their
reserves are so depleted.


Therefore somebody has covertly been putting demands on the Bush-
Cheney regime for payment. Why do you think 2900 metric tons of gold
is depleted from U.S. inventory since March of `01?


Why do you think that $2 billion in currency seized from Iraq last May
is now unaccounted for?


Someone is putting demands on the Bush-Cheney regime. Someone is
saying to the Bushonian Cabal that -- You've got to start servicing
this debt because we, foreign central banks, are in nations - European
and Asian - whose reserves are now nearly exhausted.


Who could be putting that kind of pressure on them?


It has to be coming from whoever is organizing this thing at the very
top, which I would tend to think has got to be most likely a cabal of
people that would involve Henry Kissinger, James Baker, George
Schultz, possibly William Simon. It would be somebody at the very top
that is familiar with how to do this. It would have to be someone
familiar with finances.


So would this be one faction of a cabal blackmailing or forcing
another faction? No, it's not really blackmailing. It's being done out
of desperation. The German, Japanese and Saudi central banks are
saying to the Bushonian cabal, You've got to start servicing this debt
because we don't have the reserves to cover you anymore. We can no
longer make it appear that the debt is being serviced because our own
reserves are so substantively depleted. Therefore you must begin to
cover this debt. If you don't, then, at some point, we will have to
publicly admit in order to save our own necks -- that we were the end
buyers of a lot of stealth debt, a lot of debt that your Treasury
issued illegally and has never serviced. That would then expose the
whole cabal.


The Kissinger-Baker faction are at the top of how this was done on the
economic side of the equation. They were not the original insiders so
much, but the managers of the conspiracy from the U.S. Treasury, to
wit, the U.S. Treasury and Federal Reserve role-play the part.


Take Henry Kissinger. It may not have occurred to anyone why in the
last 3 years Henry Kissinger has been back in Washington more than he
has in the last 30 years. And why are all these quiet meetings in
Washington with alleged senior Bush-Cheney regime officials, as
foreign news services endlessly put it. It's because Kissinger is the
point man. He's the one that is telling them the disposition of other
foreign central banks.


Kissinger would probably also be involved in transfer or hypothecation
of any assets from the cabal. In other words, they're being stolen
from the American people by the Bush-Cheney regime and the Bushonian
Cabal, and they are being used to hypothecate, transfer, service, or
otherwise carry this debt held by certain foreign central banks.


The process of unraveling has already begun because of ever-spiraling
Bushonian budget deficits. The Bush-Cheney regime, even in its overt
policies (now they're overt political, economic, social and military
policies) is generating $600-billion-plus deficit per year, which is
consuming 80% of the planet's net savings rate.


It doesn't have the slack. In other words, it can't refinance stealth
debt by issuing more stealth debt anymore. Nor can they bleed money
out of the system like they could in the 1980s by hiding it when the
overt policies of the Bush-Cheney regime are already producing a
budget deficit of 6% of Gross Domestic Product. There is no other
mechanism that they could use anymore to hide expansion of debt that
could be used to service said stealth debt, and they are, frankly,
running out of assets that they can steal from the American people.


So the proverbial day of reckoning is coming. The Bush-Cheney regime
(and I give them credit for this) are telling the American people
what's coming, knowing the American people are too stupid to
understand. They are telling the American people about the re-
institution of the Gold Confiscation Act and the sudden scrapping of
the Treasury's emergency post-collapse gold note scheme to maintain
domestic liquidity.


David Walker, US Comptroller General and chief of the GAO has said
that should the Bush-Cheney regime be re-ensconced into power and,
hence, the scourge of Bushonomics persist, that the United States
could no longer service its debt beyond 2009. They're not hiding it
from anybody anymore. They are telling you what's happening. Now, what
does that mean? The key is in what Walker is saying when he says the
debt can no longer be serviced. I've been asked this on the radio
shows. People have noticed what Walker said because he's out in the
news more often than he used to be. It's unusual for the Comptroller
General of the United States, which is a rather arcane position, to be
out in the news so much.


It simply means that when he says the United States will no longer be
able to sustain Bushonian budget deficits, he means that by 2009, if
Bush-Cheney have a second term in office, the United States will be
consuming 100% of the planet's savings rate to finance Bushonian
budget deficits.


Therefore, if the planet can no longer generate any more liquidity to
lend to the United States, one of three things have to happen: A)
There has to be a sudden and dramatic reduction in federal spending.
There are only two places that can come from. There would have to be
an immediate $100-billion cut in defense spending, which would end any
hopes the Republicans had of getting into office for years to come
because it would destroy any confidence the NFWCs (Naïve Flag Waving
Crowd) had in them. Or you would have to scrap the multi-trillion-
dollar Bushonian tax cuts for the Republican rich, something that's
equally unpalatable.


The other option, B, as Paul O'Neill mentioned, is a dramatic increase
in the rate of federal income taxation from the current nominal rate
of 28% to 65%, which is what the Treasury Department estimated would
be required post-2009 to provide the U.S. Treasury with sufficient
revenues to continue to service debt.


The third option, or C, becomes the declaration of a force majeure on
credit service of U.S. Treasury debt by the United States Treasury,
which is tantamount and would be accurately construed as de facto debt
repudiation by the United States of America.


There are other signs to look for. They're not going to happen now,
but if Bush-Cheney is re-elected, you'll begin to see more signs that
the end is coming. I know a lot of people may disagree, but you wait
and see. If Bush-Cheney has a second term, see if they do not
institute some currency expatriation control. See if that doesn't come
in the way Nixon tried it in May-June of 1971.


In the second term, there will be some sort of currency expatriation
control in the United States, but there will also be loopholes that
will allow the large money to escape. The restrictions will apply to
the 10- and 20-thousand-dollar people. It ain't going to apply to the
10- and 20-million-dollar people. It would be self-defeating to do
that.


When that day comes, in other words, when the U.S. Treasury declares a
force majeure on debt, it wouldn't be broad-cast on mainstream media.
There's no sense because the American people don't even understand
what it means. But the announcement would actually be put on the
Federal Reserve wire system, which would, of course, immediately be
picked up by all media outlets anyway.


The U.S. Treasury would declare a force majeure on debt after the
Asian and European markets closed, probably at 12:30 p.m. EDT. The
reason why that hour was always selected is because Asian and European
markets close. It's also the lunch hour for the markets. It's when
you're going to have the fewest people on the floor of the exchanges.
That would be the ideal time to make such an announcement.


A few seconds after that announcement was made, all United States
markets, both equities debt and commodities i.e., stock, bonds,
commodities, that have trading collars or permissible daily limits
would all be limit-offered with pools. Limit-offered means that there
are more sellers at the limit i.e., limit down, than there are buyers.


So-called 'pools' would immediately begin to form, probably a thousand
contracts every few minutes. 'Limit-offered with pools' - this is
trader language. Pools to sell 2,000 lots, 3,000 lots. That means, the
number of sellers over and above the available buyers at the limit-
offered price. That would begin to build.


By 1:00, the news would begin to sink in because it would take awhile
before panic selling would arise from the public. This news is being
released at lunch hour.


A lot of the American people initially would not even understand the
temerity of the news. You would see professional selling first, and as
that professional selling intensified over the afternoon, the SEC, the
CFTC, NASDAQ, and various market regulatory authorities would begin to
institute certain emergency market protocols. This would be the
installation of the so-called 'declaration of fast market conditions,'
for instance; the declaration of 'no more stop orders,' the
declaration of 'fill at any price,' etc. in a desperate bid to
maintain liquidity.


That first day, the Dow Jones Industrial Average and related indices
on a percentage basis would lose about 20% of their value by the close
of business that day. The real impact would come overnight when the
American people found out what this was all about and when it was
explained to them.


At 7:30 a.m. EDT, the Tokyo markets would open, and no price would be
affixed for probably three or four hours into the session due to the
avalanche of selling. Once prices were established, the government of
Japan would close all of its financial markets. Europe would not even
open. All European governments would close all capital exchanges the
next day.

...continued

[boycotteverything]

Une Force Majeure, Part 2...


The United States would, in order to accommodate global electronic
trading, attempt to open the market on the second day, which they
would do, regardless of price, just to maintain some liquidity. At the
end of Day Two, the Dow Jones and related indices, would have lost two
thirds of their value, and prices would be set accordingly.


On Day Three, the New York Stock Exchange, the SEC and other related
agencies would recommend to the United States Treasury and the Federal
Reserve that all markets be closed. That would be on the morning of
Day Three. Eleven a.m., the Federal Reserve would then order all
domestic banks closed. All of the twelve Federal Reserve district
banks would (30 minutes later) have special U.S. forces parachuted in
and around them to secure whatever gold bullion reserves they had
left.


Day Three, 9:00 p.m., the President of the United States would declare
a state of martial law. All financial transactions would come to an
end. The Treasury would act to formally de-monetize the U.S. dollar
and declare it worthless.


This would be totally unprecedented. In the past, collapses have been
temporary and have been brought back up. But what we're talking about
now is the end.


These protocols that I'm referring to aren't even all that secret.
They were publicly available all through the Clinton era. These are
Treasury protocols that were instituted mostly in the late 1970s when
the Treasury and Federal Reserve began to feel that it was important
to have an emergency-collapse protocol in place.


What precipitated the timing of this was the inflationary spiral of
the late 1970s. The U.S. Treasury and the Federal Reserve were both
concerned that this inflationary spiral, which was occurring not only
domestically but globally, might lead to a global, uncontrollable
hyper-inflation that the Federal Reserve or major central banks could
not stop by traditional means, i.e., by raising interest rates and
contracting money supply.


There was also the recognition, of course, that global central reserve
bank bullion inventories had been so depleted over the previous 30
years that any re-institution of a species currency, even on a
temporary basis, and even within a regional or individual nation-state
basis, was no longer possible.


This is an analogy. In a military scenario, it's like the President of
the United States pushing the final red button -- the commit button.
The Treasury Secretary of the United States has a similar mechanism.
It's called the yellow button, the commit button. The Secretary of
Defense has the same system. This is what happens. Computer program
starts to institute these protocols. Imagine the complexity of trying
the manage all this. I think it's going to happen all simultaneously.
There are hundreds of different agencies involved, both domestically
and internationally. In order to maintain liquidity for as long as
possible, it has to be extremely well-coordinated, and there must be
existing collapse protocols that can be used.


The reason I was familiar with them was because I used to see the U.S.
Treasury 6900 Series Collapse Protocol, 6903, 6904 there'll be A, B,
and so on which keyed in to the Department of Defense to be
incorporated within the Department of Defense's own World War III
scenario and various types of military/ political/ social instability/
war/ pestilence, chaos, etc. scenarios.


All federal agencies had individual collapse protocols that ultimately
got coordinated through the Department of Defense. Obviously, the
Department of Defense would be the ultimate coordinator because it
would need to have special forces available, on a stand-by basis,
ready, that could quickly parachute into areas all over the country,
into the cities particularly, to secure federal properties and assets.


And that's literally how it would begin. By the end of the third day,
it would be all over -- a state of martial law. We're not talking
about war, now; this is just economic collapse.


There's no military implication here, no political, no social
implication or policy directive thereunto. This is strictly economic
collapse. By the end of Day Three, effectively, all banks in the world
will be shut down, all paper currencies will become valueless. Martial
law would be declared. There would be no continuing transactions, at
least for a period of time, of commodities. All providers of fuels and
foods would be shut down automatically.


They have this in great detail too. U.S. Department of Defense Special
117th Assault Unit would parachute in to seize control of the cattle
yards in Oklahoma City. This is how well it's planned. In other words,
economic collapse would automatically involve expansive military
action and control.


By the end of the third day, when you no longer have a domestic medium
of exchange, you have to have secured food and fuel stocks. You've got
to have troops that have secured distribution points where there is
food and fuel stocks, warehouses, tanks, etc. Otherwise people are
just going to go get them, and the people have to know that if they
try to go break into that store and steal that loaf of bread, they're
going to be shot.


Protocols for environmental disasters are called 'scaling-circle
scenarios.' 'Scaling circles' is a Department of Defense euphemism.
It's also used in FEMA, OEM and other emergency management services.
In environmental catastrophes, which are going to become national or
global, it's got to start someplace. It's going to start in one very
small, specific area. Therefore what happens is that the immediate
force containment is the greatest in the first circle, to try to
contain the spread of the disaster and keep it within that circle.


The environmental problem, to whatever extent it's possible, before it
spreads, will be neutralized or mitigated, in order to keep that
catastrophe within that circle, or, if it is likely that it is to
escape that circle, to attack whatever it is in such a fashion as to
mitigate its strength and its ability to contaminate or otherwise
affect other areas.


In the case of earthquakes, for instance, affecting the west coast,
beginning at Mt. Rainier and moving southward -- that's a different
type of scenario. That does not include as much Department of Defense
involvement. It includes separate protocols, wherein mostly FEMA and
OEM act as the senior coordinating agencies between municipal, county
and state disaster and containment, which is called Disaster and
Containment Units. Federal troops would only be brought in for the
purposes of maintaining control.


In a military or economic collapse situation, National Guard units
would provide any spare help they could in combating whatever the
problem is. Federal troops would be used in order to have the specific
authority simply to shoot anyone. There are plans for all sorts of
scenarios. The economic-disaster scenario is the one I always found
the most intriguing because it is the one that is least understood by
the American people.


Military control would be necessary when lines begin to form at the
banks, people trying to access their money. But that wasn't even
anticipated as a big problem. Lines would form at the banks, but it
was not even envisioned until sometime on Day Three because the
American people wouldn't get it. It would be announced that the stock
markets are down 2000 or 3000 points, and since we've always been
taught they'll come back, the people would still be buying stocks.


You could count on everybody remaining in ignorance all the way down
because the American people have never been taught Economics 101. The
American people wouldn't realize the full extent of it until the
markets were closed on the third day, or until the time when they went
down to cash a check and the bank was closed with soldiers out in
front. Then they would go down and see the gas station's closed. They
see the local supermarket has been shuttered, and there's federal
troops in front of it. Then they might begin to catch on. And remember
-- it's not just federal troops. In emergency-collapse protocols, even
before the declaration of a formal state of emergency or a state of
martial law, the local military authorities within any given county or
jurisdiction have the ability to essentially militarize anyone, that
is, any civilian. This would be more than just deputizing civilians.
It's federal. In other words, they would have the ability to
militarize and give military authority to a civilian force. This would
include not only police and the sheriffs and state police, but all
local law enforcement that exists below the state level would be
immediately militarized. They wouldn't take just anybody like they did
in Iraq. It would be like the military when they call for volunteers.
Then they'd have everybody and their brother-in-law volunteering,
waving around the American flag and so on.


You've got a lot of pickup-driving guys in this country with the gun
racks in the back and the Confederate flag flying. So you start waving
the American flag in front of their face and say, Hey, you're going to
get your chance you always wanted -- to fit your potbelly inside an
army uniform and carry a gun and shoot people. How appealing would
that be?


And besides, if you do this, then you're going to get to eat.


In other words, this is how it would unfold over three days, but, in
fact, very few Americans would know what to do about it or how to take
any precautions. They wouldn't have a clue because they don't
understand enough about economics to know what is happening. So that's
what it is -- Economic Armageddon. If the Bush-Cheney regime is re-
installed into power, that is effectively what Comptroller General
David Walker is saying.


In conclusion, since there is very little the people of the United
States can do to protect themselves. We're not going to make any
suggestions of how to protect yourselves because there's very little
you can do.


We could tell you to go out and buy gold coins and bury them in the
coffee can in the back yard and go to your nearest survivalist store,
but, frankly, that's useless. In the last analysis, it's a lot of
hype. There is very little the average US citizen could do.


The only thing that can prevent this, as the Comptroller alluded to
when he was asked by Barbara Walters, How do we prevent reaching the
problem by 2009? He said simply, "A change of regimes."


So how do you prevent it? Don't vote for Bush and Cheney -- and hope
that Bush does not use his emergency powers to cancel or postpone the
election by edict, powers which you, the flag-waving citizens, have
given him.


All flag-waving citizens, be warned. If you want to vote for Bush-
Cheney again, make sure you got plenty of Spam on hand.


Here's an interesting and humorous aside. A couple of days ago, Hormel
Foods, which makes Spam, announced that in the last six months there
have been record sales of Spam in the United States the survivalists'
food of choice. After all, they pride themselves on the fact, as the
spokesman for Hormel said, "It is the only food product you can buy
with an expiration that's 50 years."


When everything goes to hell, when all that man has created has turned
to dust again, the final legacy is going to be Spam. It will be the
last surviving item -- when the anthropologists of 20 thousand years
from now are digging sites and they see these enormous mountains of
unopened cans of Spam They'll have monuments to the past out of Spam.


So if Bush-Cheney has a second term in office, there will be some sort
of currency restriction, like Nixon did in 1971. On April 13, 2004,
Deputy Assistant Treasury Secretary John Boine talked about potential
currency restrictions. He used the word that's going to fuel the
flames of the survivalist and gloom-and-doom collapse people.


It's very, very telling that the U.S. Treasury may institute a
restriction on the amount of U.S. dollars that can be converted into
gold.


Furthermore, he intimated (and I suspected that this was coming,
although this wouldn't actually become law until Bush-Cheney was in
office for second term one way or another) that the Bush-Cheney regime
determines that the Gold Confiscation Act gives to Treasury the power
for so-called forced disclosure of gold holdings.


I'm not quite sure of the language of the Gold Confiscation Act from
1933. It just says, "compelled", as in citizens are lawfully compelled
to redeem gold for script. I don't think there was any such provision,
which he was inferring that there is. That was FDR's "Raw Deal" of
1934, when people were coerced into giving up their gold. But nowhere
in this act does it specifically authorize the Treasury to mandate
citizens to report their gold holdings. So if this gets any press at
all, particularly within the circles of gold bugs and so on, watch
out.


Furthermore, on Washington Journal they were talking about how FEMA
has recommended to the Office of Homeland Security to have increased
restrictions regarding citizen hoarding of long-term food and fuel
supplies. That's pretty sinister too.


What they're talking about is the purchase of long-term so-called
stores of survival food. FEMA was talking about some sort of
restriction preventing people from accumulating food stores; putting
it simply, that's what it means. The second point was to increase
restrictions that already exist.


FEMA was recommending even tighter restrictions on citizens building
their own private property underground storage tanks for the purposes
of long-term storage of fuel. The real intent of this is is threefold:
a) to restrict citizens' ability to hoard food; b) restrict citizens'
ability to hoard long-term storage of fuel; c) the forced
identification of citizens to reveal food and fuel stocks they may be
hoarding.


And that, in my opinion, is the real essence. The Bush-Cheney regime
was scared of having the FEMA angle put into the equation because they
knew what it means and how people would interpret it.


They have tried to use environmental legislation to restrict people's
ability to build fuel storage facilities on their own property -- to
get around what the true intent of that was.


But the bigger picture is that if you start to limit citizens' ability
to hoard fuel and food and shake them up by potential forced
identification of gold holdings or forced redemption.


In other words, what you don't want is citizens who have the ability
to store a lot of food and fuel and to own gold because they would be
able to resist state control in the future.


You've got to have every citizen on a rationing card to control the
civilian population. You can't have citizens out there hoarding food
and fuel because then people can say to government,"I ain't taking a
rationing card, baby, with my national ID card. I don't have to. You
can't control me through food and fuel and ever-worthless paper
currency."


I used to make fun of these people. But now, things have come full
circle on this debate. The Bush-Cheney regime is making it
increasingly clear through their small changes in policy. Not a lot of
people monitor these decisions, but I do. And the pattern is becoming
increasingly clear.


In fact, I would believe that those of the survivalist mentality (the
food, fuel, the gold coins in the coffee can in the back yard) people
who think that way will be ultimately vindicated - if George Bush has
a second term in office.


People should quit making fun of them because they would be vindicated
- even though they were all burned out, twenty-dollared to death,
buying books and tapes, and discredited by mainstream media. It may
sound like a hollow victory, but it won't be a hollow victory for them
- them that's got the Spam...

[boycotteverything]

Bear in mind that this article originally appeared in 2003. It's been making its rounds at Ron Paul Meet-up sites since 2008. The predictions were dire. The author warned at that time that if B..sh were to be reelected in 2004 the chickens would come home to roost in 2009. This is exactly what happened. Hold on to your hats- we're going on a wild ride.

[mur]

i]XcQJSFJKvy0i]




Craig Roberts: Bank bailout was a fraud and it won't succeed. Don't know what sort of stupidity the Treasury Secretary and the Federal Reserve will resort to next.

Max Keiser: Quick question. What should the Treasury Secretary be doing?

Craig Roberts: He should be trying to save the dollar as the world's reserve currency which means stopping the wars, reducing the bailout money, and trying to reduce the trade and budget deficits in order to save the dollar. That's what he should be doing.

Max Kesier: Does the treasury secretary work for the people or does he work for the banking system on Wall Street?

Craig Roberts: He works for Goldman Sachs.

http://globaleconomicanalysis.blogspot.com/2009/07/craig-roberts-former-assistant-treasury.html

[boycotteverything]

hahahahaha Gotta love Paul Craig- he always calls em like he sees em. He's a hard headed Paleo Conservative and never waivers from his Libertarian roots. When he was calling B..sh a war criminal and a traitor and pushing for impeachment the Democrats loved the guy. Now that the shoe's on the other foot they'll be kicking his ass up and the highway. The guy's a national treasure.

[skunk]

Why aren't we talking about the god damn elephant in the room? The fucking fed.

[boycotteverything]

If you read his stuff you'll find that he's as critical of the Fed as Ron Paul. What I admire most about the guy is his consistency.

[mur]

The Empire Strikes Back - Kohn Warns Congress on Meddling in Fed's Affairs (http://globaleconomicanalysis.blogspot.com/2009/07/empire-strikes-back-kohn-warns-congress.html)

Our hero, Ron "Skywalker" Paul, has managed to gather sufficient support to overthrow the Evil Empire widely known as the Fed.

In a brazen attempt to beat back our hero, the Empire has taken its case directly to Congress, seeking more power to rape and pillage the populace under cloak of secrecy.

The Washington Post picks up the story in Sith Lord Kohn warns Congress on meddling in the Empire's affairs. (http://www.washingtonpost.com/wp-dyn/content/article/2009/07/09/AR2009070902513_pf.html)

The [s:1vpbglam]Federal Reserve[/s:1vpbglam] Evil Empire on Thursday launched a robust defense of its independence and warned that efforts in Congress to put monetary policy under political sway would hurt the [s:1vpbglam]economy[/s:1vpbglam] Empire.

[s:1vpbglam]Fed Vice Chairman[/s:1vpbglam] Sith Master Donald Kohn said opening up some of the U.S. central bank's most sensitive decisions to political scrutiny could result [s:1vpbglam]in higher long-term interest rates and hurt the United States&#39; credit rating[/s:1vpbglam] discrimination against the Sith Lords.

Testifying before a congressional panel, Kohn sought to beat back a proposed bill that would open the U.S. central bank's policy decisions to audits by [s:1vpbglam]a federal[/s:1vpbglam]an Ewok watchdog agency. More than half of the members of the [s:1vpbglam]U.S. House of Representatives[/s:1vpbglam] Ewoks have signed as co-sponsors of the measure.

"Any substantial erosion of the [s:1vpbglam]Federal Reserve&#39;s[/s:1vpbglam] Empire's monetary independence likely would lead to higher long-term interest rates as investors begin to fear future inflation," Kohn told [s:1vpbglam]a House[/s:1vpbglam] the Ewok subcommittee.

Kohn's testimony comes as Congress debates [s:1vpbglam]President[/s:1vpbglam] Sith Lord Barack Obama's plan for regulatory reform, which envisions the [s:1vpbglam]Fed[/s:1vpbglam] Evil Empire taking on an expanded role monitoring risks across the entire financial system to help ward off future financial crises.

The proposal has boosted calls for greater accountability at the central bank, which already faces heavy scrutiny from lawmakers troubled by its role in bailing out Wall Street.

Kohn [s:1vpbglam]said[/s:1vpbglam] blatantly lied while stating the administration's plan would not greatly expand the [s:1vpbglam]Fed&#39;s[/s:1vpbglam] Empire's power, and said it would work hand-in-glove with monetary policy, not compromise it as some critics contend.

[s:1vpbglam]Fed[/s:1vpbglam] Empire officials have had to endure rigorous [s:1vpbglam]congressional[/s:1vpbglam] Ewok grillings over their aggressive actions to [s:1vpbglam]restore financial calm[/s:1vpbglam] squash the noble rebellion. Their e-mails have been subpoenaed, recalling past episodes when the central bank came under attack and was forced to yield to the political will.

The proposed bill, put forward by Ron "Skywalker" Paul, a [s:1vpbglam]Texas Republican[/s:1vpbglam] Jedi Knight and long-standing [s:1vpbglam]Fed[/s:1vpbglam] Evil Empire foe, would expose decisions on monetary policy and emergency lending to audits by the [s:1vpbglam]Government[/s:1vpbglam] Ewok Accountability Office.

The [s:1vpbglam]GAO[/s:1vpbglam] EAO is currently prohibited from auditing these areas. Sith Master Kohn said removing this exclusion would be highly detrimental to the Evil Empire and could lead investors to worry that [s:1vpbglam]politics -- not economics --[/s:1vpbglam] sanity would guide the [s:1vpbglam]Fed&#39;s[/s:1vpbglam] Empire's decisions.

Skywalker Paul's bill has 250 co-sponsors, including 78 [s:1vpbglam]Democrats[/s:1vpbglam] Ewoks. But it has not been promoted by the [s:1vpbglam]Democratic[/s:1vpbglam] Ewok majority leadership in the House, where it has yet to face even a committee-level vote thanks to Ewok traitor Barney "Benedict" Frank.

The Dark Lord, Ben "Vader" Bernanke, head of the Evil Empire, could not be reached for comment.

Ron "Skywalker" Paul: We Will Not Be Stopped

Unlike the Dark Lord, our hero, Ron "Skywalker" Paul will comment.

Jedi Knight Paul says We Will Not Be Stopped. (http://www.infowars.com/ron-paul-on-fed-audit-we-will-not-be-stopped/)

[s:1vpbglam]Congressman[/s:1vpbglam] Jedi Night Ron Paul has vowed that he will not be stopped in his effort to audit the [s:1vpbglam]Federal Reserve[/s:1vpbglam] Evil Empire, as he slammed Senate authorities for blocking the bill earlier this week.

Appearing on Fox News’ Freedom Watch with Judge Napolitano, Paul referred to Senate authorities blocking Jim DeMint’s attempt to attach the legislation, (http://www.prisonplanet.com/senate-blocks-bill-to-audit-the-fed-as-government-prepares-for-second-round-of-looting.html) which already has 250 co-sponsors in the House, as a provision to a spending bill as a “facade”.

The amendment was blocked by Senate authorities on Monday after they claimed that it violated rules for provisions attached to spending bills.

“Technicalities are always ignored for things they the Evil Empire wants – this means they don’t want it and this is their organized effort now to stop us, but we’re not going to be stopped, it’s just going to energize everybody at the grass roots,” said the [s:1vpbglam]Congressman[/s:1vpbglam] Jedi Knight.

"Skywalker" Paul said that it made no sense to give the [s:1vpbglam]Fed[/s:1vpbglam] Evil Empire more power when they had already created the bubble that led to the economic collapse in the first place. Sith Lord Obama's new regulatory reform plan, which will officially hand the [s:1vpbglam]Federal Reserve[/s:1vpbglam] Evil Empire complete dictatorial control over the U.S. economy, will give the [s:1vpbglam]Fed[/s:1vpbglam] Empire the authority to “regulate” and shut down any company (http://www.prisonplanet.com/obama-regulatory-reform-plan-officially-establishes-banking-dictatorship-in-united-states.html)whose activity it believes could threaten the economy and the markets.

Jedi Paul explained that nobody knows exactly what would be uncovered but that was the whole point of having an audit in the first place.

“When we discover what’s really going on, I think the American people are going to demand the next step, they’re going to demand honest money – it’s happened many times in history,” added Skywalker.

Now's your chance.
Speak Out - Audit the Evil Empire, Then End It! (http://globaleconomicanalysis.blogspot.com/2009/05/speak-out-audit-fed-then-end-it.html)

Mike "Mish" Shedlock

http://globaleconomicanalysis.blogspot.com/2009/07/empire-strikes-back-kohn-warns-congress.html

[mur]

Friday, July 10, 2009
Al Lewis: Wells Fargo Bank Sues Itself (http://www.foxbusiness.com/story/markets/al-lewis-wells-fargo-bank-sues/)

FOXBusiness



You can't expect a bank that is dumb enough to sue itself to know why it is suing itself.

Yet I could not resist asking Wells Fargo Bank NA why it filed a civil complaint against itself in a mortgage foreclosure case in Hillsborough County, Fla.

"Due to state foreclosure laws, lenders are obligated to name and notify subordinate lien holders," said Wells Fargo spokesman Kevin Waetke.

Being a taxpayer-subsidized, too-big-to-fail institution, it's possible that one of the few ways for Wells Fargo & Co. (WFC: 22.91, -0.34, -1.46%) to know what it is doing is to notify itself with a court filing.

In this particular case, Wells Fargo holds the first and second mortgages on a condominium, according to Sarasota, Fla., attorney Dan McKillop, who represents the condo owner.

As holder of the first, Wells Fargo is suing all other lien holders, including the holder of the second, which is itself.

"The primary reason is to clear title and ownership interest in a property to prepare it for sale," Waetke said in an email exchange. "So it really is not Wells Fargo vs. Wells Fargo."

Yet court documents clearly label "Wells Fargo Bank NA" as the plaintiff and "Wells Fargo Bank NA" as a defendant.

Wells Fargo hired Florida Default Law Group., P.L., of Tampa, Fla., to file the lawsuit against itself.

And then Wells Fargo hired another Tampa law firm -- Kass, Shuler, Solomon, Spector, Foyle & Singer P.A. -- to defend itself against its own lawsuit, according to court documents.

Wells Fargo's defense lawyers even filed an answer to their client's own complaint.

"Defendant admits that it is the owner and holder of a mortgage encumbering the subject real property," the answer reads. "All other allegations of the complaint are denied."

This is even dumber than the lending practices that led to this foreclosure mess, yet this is what the court record says. I learned about this from "The Consumer Warning Network" Web site, which posted an article by Angie Moreschi titled, "Have The Banks Gone Crazy?"

"We've apparently reached the perfect storm for complete and utter idiocy by some banks trying to foreclose on homes," Moreschi wrote.

McKillop, the condo owner's attorney, told me he thinks Wells Fargo doesn't know what it's doing, and that its lawyers figure it is all billable hours to them.

"You can't sue yourself," McKillop said. "It's just so ridiculous. .. It's a waste of paper. It's a bastardization of the legal process."

Wells Fargo's two law firms didn't return messages to explain their filings.

The condo owner is belly up and hired McKillop to pursue a "friendly foreclosure," attempting to escape any lingering liabilities after the foreclosure sale.

"It was a property they thought they were buying as a good investment as a lot of people did back in 2005 and 2006," McKillop said. "All we want to do now is get this property taken care of as fast and as easily as possible for all parties."

Rather than suing itself -- a stunt that was never even attempted on the MTV show "Jackass" -- wouldn't it be easier for Wells Fargo to release one of the liens to itself? Or pursue some other internal accounting strategy rather than tie up the court with nonsense?

"This is just folks cranking out paperwork without conscious thought," said Anthony Sabino, a law professor at St. John's School of Law in New York City.

Sabino added that it is possibly more confirmation of the old saw that a lawyer is one who can speak from both sides of the mouth.

Still trying to comprehend this legal lunacy, I called the Florida Bar, which put me in touch with Florida mortgage foreclosure lawyers. One of them, Tampa attorney Kristofer Fernandez, said he's seen several cases where a large bank has sued itself for foreclosure as the holder of both first and second mortgages.

"Four or five years ago, you would have never seen this," Fernandez said. "Now, it's very common."

In the final years of the housing boom, banks were lending to homeowners with no money down. To do this, they often made 80/20 loans, giving homeowners an 80% first mortgage and a 20% second mortgage.

Now, it seems these moronic mortgages require moronic foreclosures.

Perhaps this strategy may speed up a summary judgment. Or maybe it preserves the position of the second lien holder so it is next in line to collect surplus funds after the first lien is satisfied, Fernandez said.

But fat chance of surplus proceeds in the Florida condo foreclosure market these days.

It takes some pretty shameless lawyers and a rich culture of corporate stupidity for a company to sue itself. I hope Wells Fargo loses this case and ends up having to drag itself all the way to the Supreme Court.

http://www.foxbusiness.com/story/markets/al-lewis-wells-fargo-bank-sues/

[mur]

Friday, July 10, 2009
Everything suggests that the American bonds seized at Chiasso are real (http://www.marketskeptics.com/2009/07/everything-suggests-that-american-bonds.html)
by Eric deCarbonnel

Asia News reports that everything suggests that the American bonds seized at Chiasso are real.

[my comment]

[center:edi6ci0q]
Everything suggests that the American bonds seized at Chiasso are real
ASIA-ITALY
06/30/2009 13:13

Official U.S. sources continue to say they are fakes, but there is no news that American experts have inspected them in person. Arrested for another matter, the director of a U.S. radio who says the bonds are real and Japan was trying to sell in Switzerland, not trusting the ability of the United States to honour its debt.



Milan (AsiaNews) – Four weeks have passed since American bonds were confiscated from two Japanese men who were travelling on a direct train to Chiasso, Switzerland, and while there has been clarification of some - very few -points, Italian authorities have remained silent on the rest of the episode.

In addition, a strange coincidence in the timing of the arrest of a director of an internet radio host who had made revelations regarding the incident ,increases the already strong oddities surrounding the case. This added to the revaluation of the fact that among the evidence seized there were "Kennedy Bonds", all points toward the authenticity of the items seized by the Guardia di Finanza (GdF) in early June.

The major English-speaking newspapers ignored the story for a couple of weeks. They only started to report on it after the Bloomberg agency carried a story on 18 / 6, in which a spokesman for the Treasury, Meyerhardt, declared that the bonds, based on photos available on the Internet, were "clearly false." The same day, the Financial Times (FT) published an article whose title laid the blame for the (alleged) infringement at the feet of the Italian Mafia, despite the fact that the article failed to make even one possible connection with the episode in Chiasso. Nevertheless, the version of events as reported in FT was taken up by others as being "appropriate" (given that it is a very common cliché about Italy and it is a sequester that took place in Italy) and in the end "colourful." It’s a pity that it goes against all logic: that the Mafia tried to pass unnoticed in its attempt to dump fake bonds amounting to 134.5 billion dollars and moreover were to "stung" a mere step from their goal, is not very credible.

Most recently last week, 25 / 6, the New York Times reported on the story in particular, the allegations of CIA spokesman, Darrin Blackford: the U.S. Secret Service carried out inspections, as required by the Italian judiciary, and found that they were fictitious financial instruments, never issued by the “U.S. government”. It is not clear, however, how the checks mentioned by Blackford were carried out and whether they were also are carried out via internet. In fact according to official Italian sources the Commission of American experts, expected in Italy, have yet to arrive. Furthermore, the bonds were accompanied by a recent and original bank record. It is therefore unclear how the U.S. authorities can declare fake documentation that does not originate from the Fed or the U.S. Department of Treasury.

On the contrary, claims in support of the bond’s authenticity were made 20 / 6 on the Turner Radio Network (TRN), an independent radio station broadcast via Internet. On that date in a massive exposure, TRN stated that the two Japanese men arrested by the Guardia di Finanza (GdF) and then released in Ponte Chiasso were employees of the Japanese Ministry for Treasury. AsiaNews had also received similar reports: one of the two Japanese arrested in Chiasso and then released is Tuneo Yamauchi, is the brother of Toshiro Muto, until recently vice governor of the Bank of Japan. On its website, the creator and presenter of the Radio, Hal Turner, had also claimed that his sources had revealed that the Italian authorities believe the evidence to be authentic and that the two Japanese officials are from the Japanese Ministry for Finance. They were supposed to bring the bonds to Switzerland because the Japanese government had apparently lost confidence in U.S. ability to repay its debt. Japanese financial authorities therefore were trying to sell a part of the securities in their possession through parallel channels ahead of an imminent financial disaster, thanks to the anonymity which, Turner said, is guaranteed by the laws of Switzerland.

AsiaNews does not know to what extent Turner’s revelations can be held as credible [neither do I], given that in this case too, it is difficult to believe that $ 134.5 billion would pass unnoticed anywhere in the world [It is possible if it was done through a Swiss “free ports”]. It seems far more logical to assume that the bonds, if authentic, were directed to the Bank for International Settlements in Basel, BIS, the central bank of central banks ahead of the issuance of securities in a new supranational currency [Had not considered this possibility]. Turner had in any event added that as evidence to support his revelations he would have provided the serial numbers of the seized bonds. Before he could do so, however, was imprisoned [Strange coincidence]. Hal Turner is the journalist who long ago first broke the news of a secret plan to replace the dollar, after a severe financial crisis, with a common North American currency, the Amero. In a dramatic phone call from inside the prison in which he is detained pending trial, relayed via internet, Hal Turner claims that his arrest is political and it is in relation to the securities seized in Chiasso, because the authorities are terrified by his revelations of the bonds’ authenticity [IF the bonds’s are authentic, then this is very logical]. Of course, the allegations made against him have to nothing to do with the story and thus an already intricate story becomes ever more complex. Turner maintains that he did not personally formulate the disclosure for which he has been imprisoned. Although it was clearly his responsibility to remain vigilant, it is also true that blogs from around the world and the U.S. themselves are full of threats and provocations. The coincidental timing, the unusual diligence and the details of his arrest arouse suspicions about the true motives of the American federal police. Indeed, this very arrest suggests that the evidence seized from GdF are truly authentic.

One more element in favour of the bond’s authenticity is found in the securities, which in the June 4 statement, the GdF termed "Kennedy Bonds” with photos provided. These photos reveal that the securities under discussion are not bonds but Treasury Notes, because they are securities that can be immediately exchanged for their worth in goods or services and because they are devoid of interest coupons. One side carries a reproduction of the image of the American president, the reverse side that of a spaceship. From confidential, usually well-informed sources, AsiaNews has learned that this type of paper money was issued less than ten years ago (in 1998), although it is difficult to know whether those seized in Chiasso are authentic. But the fact that the release of this particular State Treasury was not completely in the public domain tends to exclude the possibility of counterfeiting. It highly unreasonable to suppose that a forger would reproduce a State Treasury not commonly in circulation and of which there is no public knowledge. For this reason, it can be concluded that the 124.5 billion dollars divided in 249 bonds of 500 million each are authentic. These titles, although referred to as "Federal Reserve Notes" are actually bonds, because they accrue interest and are redeemable at maturity. But one question remains unsolved regarding them. It is somewhat hard to understand why the securities, which were from the outset indistinguishable from the original to the GdF, all have their coupons. Any ordinary investor, even a state, would have cashed in the interest coupon every year, so as not to lose purchasing power.[/center:edi6ci0q]
My reaction: It looks like the bonds seized in Chiasso might be real.

1) Four weeks have passed since American bonds were confiscated from two Japanese men who were travelling on a direct train to Chiasso, Switzerland

2) Major English-speaking newspapers ignored the story for a couple of weeks.

3) According to official Italian sources the Commission of American experts, expected in Italy, have yet to arrive.

4) The bonds were accompanied by a recent and original bank record.

5) Turner Radio Network stated that the two Japanese men arrested by the Guardia di Finanza (GdF) and then released in Ponte Chiasso were employees of the Japanese Ministry for Treasury.

6) AsiaNews received similar reports: one of the two Japanese arrested in Chiasso is Tuneo Yamauchi, is the brother of Toshiro Muto, until recently vice governor of the Bank of Japan.

7) The Italian authorities believe the evidence to be authentic and that the two Japanese officials are from the Japanese Ministry for Finance.

8 ) Japanese financial authorities therefore were trying to sell a part of the securities in their possession through parallel channels ahead of an imminent financial disaster

9) Hal Turner, the creator and presenter of the TRN, claimed he would have provided the serial numbers of the seized bonds as evidence to support his revelations.

10) Before he could do so, however, was imprisoned.

11) The coincidental timing, the unusual diligence and the details of his arrest arouse suspicions about the true motives of the American federal police. Indeed, this very arrest suggests that the evidence seized from GdF are truly authentic.

12) Photos reveal that the securities under discussion are not bonds but Treasury Notes and that this type of Treasury Notes was, in fact, issued less than ten years ago (in 1998).

13) the release of this particular State Treasury was not completely in the public domain tends to exclude the possibility of counterfeiting.

14) It can be concluded that the 124.5 billion dollars divided in 249 bonds of 500 million each are authentic.

15) It is somewhat hard to understand why the securities all have their coupons.


Conclusion:

1) IF one of the two Japanese arrested in Chiasso was really the brother of Toshiro Muto, until recently vice governor of the Bank of Japan, then he might have had the access to the real bonds necessary for forgery.

2) There is enough evidence to suggesting these bonds are real:

A) The bonds were accompanied by a recent and original bank record
B) Italian authorities reportedly believe the evidence to be authentic.
C) The two Japanese arrested in Chiasso were apparently connected to the Japanese government.
D) Hal Turner’s strange arrest before he could provided the serial numbers of the seized bonds
E) The type of Treasury Notes which were confiscated was, in fact, issued less than ten years ago (in 1998).

3) Even if fake, these bonds still represent a major problem, as I wrote in my last entry on the subject.

Even if these bonds are counterfeit, they still present a major problem for the US. High-quality fraudulent treasury bonds measured in the hundreds of billions is the last thing the US needs to deal with right now, as it is already struggling to find lenders to finance the government’s record deficit spending. These fake/real bonds also do nothing to inspire confidence in the dollar at a time when investors around the world are worried about its worth.

http://www.marketskeptics.com/2009/07/everything-suggests-that-american-bonds.html

[pack3tg0st]

Nice mrnut!

If the bonds are real... what is the motive for claiming them to be false?

Is the U.S. trying to shirk its debt?

OR are they worried about what will happen if it gets out that Japan questions our ability to pay our debts...

[mur]

Nice mrnut!

If the bonds are real... what is the motive for claiming them to be false?

Is the U.S. trying to shirk its debt?

OR are they worried about what will happen if it gets out that Japan questions our ability to pay our debts...


Isn't it obvious?

Once word gets out about one "margin call"....many more will be forth coming.....and we can't pay......without printing massive amounts of cash which further devalues the notes.

It's too late now though....any country with half a brain knows they can't collect publicly without sending the world economy to the brink of disaster, if not further.

That's why "everyone" wants to keep this quiet.

Collecting has to be done very secretively...it is in every countries best interest.

The Italians smell a huge payday, 38 billion in fines, if the bonds are real ....... that's why we even know about this.

[pack3tg0st]

Well... not all economies are as fooked as ours though...

China/Russia have formed an alliance and agreed to trade amongst themselves... they're plodding along like normal and ignoring everyone else... Which should scare ya...

Imagine that "Margin call"...

Thats why it seems like other international sources would have screamed at the top of their lungs about this...

[mur]

The Govt of Japan would not (I don't think) try to backdoor the US Treasury...but I guess it is possible.

More likely I suspect these were Chinese proxies.

They have been the most publicly nervous

It is either Japan or China

http://www.treas.gov/tic/mfh.txt

[mur]

Well... not all economies are as fooked as ours though...

China/Russia have formed an alliance and agreed to trade amongst themselves... they're plodding along like normal and ignoring everyone else... Which should scare ya...

Imagine that "Margin call"...

Thats why it seems like other international sources would have screamed at the top of their lungs about this...


Russia and China are in bad shape...much worse than us, and if we go down, they are going down much harder.

[mur]

This guy seems to think it is Japan.

His logic seems good

http://www.gather.com/viewArticle.action?articleId=281474977719393

[skunk]

murnut, great article. From your source:

[offsite:w76r9r9z]This is the single biggest farce I&#39;ve heard about in a long time. Does anyone actually believe that anyone would be transiting a national border with $134 Billion in "fake" Bonds concealed in a suitcase with a fake bottom?

Does anyone actually believe Italian Authorities would ignore their own laws and release persons who violated Italian financial disclosure laws?

Does anyone really believe that a bank or other entity would simply accept a US Treasury "Intergovernmental" Bond with a face value of either $500 Million or $1 Billion without ever calling the US Treasury to determine if the bonds were valid?

The absurd explanation provided by the U.S. Government that the bonds were "fakes" would be laughable if it wasn&#39;t so pathetic.

Clearly the government of Japan got caught red handed trying to dump U.S. Treasury Bonds because they no longer trust that the USA can pay its debts. When the issue blew up in their faces, everyone from Japan to Italy to the USA had to get together and lie about what was happening with the hope that other nations wouldn&#39;t start dumping U.S. Treasuries too.

That is precisely what happened. Anyone who says otherwise is either lying or stupid. . . . . or thinks we&#39;re stupid enough to believe them!

We have now entered the official "end game" for the United States Government. We are broke. Bankrupt. They have no hope of ever repaying their debts. Countries around the world know this and are starting to dump U.S. debt and U.S. currency because it will all become worthless very soon.

There&#39;s no stopping it. There&#39;s no avoiding it. There&#39;s no way to patch things up to make this go away.[/offsite:w76r9r9z]


I think this is the kicker though:

[offsite:w76r9r9z]The United States of America has been bankrupted by its own government. That government bears sole responsibility for the economic collapse that is coming. When the collapse happens, the American people - the most heavily armed population on Earth - will probably take up arms and overthrow the government by force. In our view, forcible overthrow is a fate the U.S. Government richly deserves.[/offsite:w76r9r9z]

Will we be seeing a 3rd AmeriKan Revolution soon enough or what?

[Cogburn]

... the one thing they don't stop to question is how stupid the whole thing is to begin with.

Are you seriously going to let one guy carry around $150 billion in bonds?

Puh-leeze.

What happens if his train derails/boat sinks/plane crashes... you're fucked.

Not to mention... you really gotta trust someone you are going to let carry around the lion's share of your nation's wealth.

Are we expected to just overlook all that, too?

I still call bullshit.

[mur]

u]d4yQFDOpLxYu]


u]ubpw9H08lLsu]


u]BtmX4E3xw2Iu]

[mur]

http://en.wikipedia.org/wiki/Chiasso_financial_smuggling_case

[boycotteverything]

so what was the scheme? to sell em to Guido for 30 cents on the buck? hahahahaha

[Cogburn]

murnut... would you post Alex Jones videos to support a point? Glenn Beck is a half-truth telling fear monger of the exact same color.

Why does everyone assume that this is anything more than just plain ol' counterfeiting?

If these bonds are indeed genuine, the Japanese government would want them back at all costs, as this situation is the same as just setting them on fire.

Media whores like Marrs, Beck and Jones should just shut the fuck up. They do more harm than good.

[mur]

You're right...I don't like Jones....

I do not agree with Beck on every point...but I posted the video's purely as information.

Really, I'm not trying to make a point other than...something does not smell right with this whole story.

I doubt they are counterfeit...just who the hell would cash them?

[boycotteverything]

beck makes me puke. jones make me vomit. and marrs makes me barf. damn good thing there's a difference among em.

[Cogburn]

You're right...I don't like Jones....

I do not agree with Beck on every point...but I posted the video's purely as information.

Really, I'm not trying to make a point other than...something does not smell right with this whole story.

I doubt they are counterfeit...just who the hell would cash them?
Uhhh... mafia?

They were in Italy... no?

Were they picking up, dropping off, or just passing through?

[Cogburn]

Just as an added bit, what would it do to the Italian government if it were made known that the mafia were counterfeiting US securities...

What would it do to the bond market?

Those bonds being counterfeit are as dangerous, if not more so, than if they are legitimate...

[skunk]

What's the difference between the Italian government and Italian mafia? I thought they were one and the same.

[boycotteverything]

I guess you've never been to Italy. You need to get out of that redneck pit on occasion.

[skunk]

I've been there before actually. The Catholic church and the mafia run that country.

[boycotteverything]

if you think that- you've never been there. ...except in bermuda shorts.

[skunk]

Why am I wasting my time with a troll again? Damnit. Sorry for derailing a great thread murnut.

[mur]

Thanks Skunk, and thanks to my favorite troll as well

I like Ben Stein....I don't always agree with him, but I think he makes a lot of good points in the below article

Seems like common sense to me


July 12, 2009
Everybody’s Business
Good Intentions Aside, Are We Killing the Patient? (http://www.nytimes.com/2009/07/12/business/economy/12every.html?_r=1&partner=rss&emc=rss)
By BEN STEIN

HERE’S a funny story that made the rounds in Washington a long time ago: It’s 1955, and President Dwight D. Eisenhower has just suffered a heart attack. He is recuperating in his hospital bed. Richard M. Nixon, the vice president, comes in and says: “General, I am so sorry this has happened. Is there anything I can do to help? I’ll do anything at all.”

Ike looks over at him wanly and says, “Well, you could get your foot off my oxygen tube.”

I heard this fanciful joke from my mother, who, like me, was a huge fan of Nixon. I tell it because it reminds me of what’s going on with the economy.

The sad truth is that the economy is still extremely ill. The recovery we were all waiting for has not started in any meaningful way.

True, by many metrics, the economy has stopped falling drastically, but we are still in a painful recession, large by postwar standards. The bank crises seem to have abated for now and Wall Street is paying itself fantastically well again, thank heavens, after being rescued with taxpayer money. But housing is still extremely weak, profits are miserable and, most important, far too many Americans are unemployed — roughly 9.5 percent, by the latest data.

Just as basic, far too many Americans are living in fear.

What is President Obama doing about it? Perhaps too much. And, possibly, his efforts are too diffuse. When I think about the economy I think about a plump man who has just been hit by a truck while crossing a street and is in severely critical condition with internal bleeding. Instead of just stabilizing his hemorrhaging, the doctor decides that while the patient is unconscious, he might as well also do a face lift, some coronary bypasses and a stomach-stapling to keep him from gaining weight while he is recovering (if he does recover). After all, a crisis is not to be wasted.

The problem is that all these ambitious operations create too much of a burden for the human body to bear.

Similarly, we have an administration that is simultaneously seeking to end the recession, discussing drastic changes to laws on foreclosures and energy use and completely changing the health care system. I respectfully question whether all of this makes sense.

I don’t believe we need to do something radical about energy, but even assuming that we do, why do it right now? Do we need to take one of the few sectors that is working like clockwork through the recession — oil refining — and wring its neck by making it pay for pollution “cap and trade” credits? Why attack a healthy industry when so many other sectors are ill? What is all of this anger at Big Oil, which has not done anything blameworthy, all about? Why endlessly beat up the companies that keep the country going?

All history is the history of class struggle, as Marx said, and I suspect that the rage of the news media and academic classes against the oil industry is a form of class struggle. But more on that in another column.

And do we need drastic work on the legality of foreclosures right now? I agree that foreclosures are a huge problem. But isn’t part of the housing quandary that banks are afraid to lend because they fear losing their collateral — the mortgaged home — if the laws change? Why add that level of uncertainty to an already dicey situation?

I utterly agree that health care should not be denied to Americans because they are poor. But where will the money come from in an economy already on its knees? And if the government is going to print the money, won’t that add to the inflationary fears already hobbling the economy? The huge increase in the monetary base is blamed for a spike in interest rates which are themselves hobbling the recovery.

Long ago, I had a talk with the late, great, much lamented writer and friend John Gregory Dunne at the Palm Restaurant in West Hollywood. I told him about the many things I was doing. It sounds good, he said, but you don’t want to become like one of those third-world countries that embarks on development so ambitious that it’s too much for the economy and the country collapses.

I do not pretend that the analogy with 2009 America is precise, because it’s not. This is a huge first-world country. But there is enough truth that it makes me a bit uncomfortable. Maybe we should just concentrate on ending the recession and talk about the other plans later. Let’s consider just how much uncertainty is good for the economy.

Or, in other words, let’s take government’s foot off the oxygen tube.

Ben Stein is a lawyer, writer, actor and economist. E-mail: ebiz@nytimes.com.

http://www.nytimes.com/2009/07/12/business/economy/12every.html?_r=1&partner=rss&emc=rss

[Cogburn]

I utterly agree that health care should not be denied to Americans because they are poor. But where will the money come from in an economy already on its knees? And if the government is going to print the money, won’t that add to the inflationary fears already hobbling the economy? The huge increase in the monetary base is blamed for a spike in interest rates which are themselves hobbling the recovery.
Ben Stein was all for firing up the printing presses last year and then to have the stones to say something like this makes me want to vomit.

He supported that fucking increase in the monetary base...
4]FAgHhTgs3ec4]

[mur]

I utterly agree that health care should not be denied to Americans because they are poor. But where will the money come from in an economy already on its knees? And if the government is going to print the money, won’t that add to the inflationary fears already hobbling the economy? The huge increase in the monetary base is blamed for a spike in interest rates which are themselves hobbling the recovery.
Ben Stein was all for firing up the printing presses last year and then to have the stones to say something like this makes me want to vomit.

He supported that fucking increase in the monetary base...



Nice segment.

They are printing massive amounts of money, it hasn't worked.

Inflation may be a problem down the road, but it's not a problem now.

There are not any easy answers to these problems...but I would feel a whole lot better if the current administration would focus on the recession/depression issues, without the other less important distractions.

I think the US economy is ultimately, fucked.

Too much tinkering over the years by the Fed.

[mur]

Giving Money Back, Not Profitable: Federal Reserve Study Proves (http://mandelman.ml-implode.com/2009/07/giving-money-back-not-profitable-federal-reserve-study-proves/)

By Mandelman - Last updated: Sunday, July 12, 2009 - Save & Share - Leave a Comment

The Federal Reserve Bank of Boston released the results of its in-depth study on President Obama’s plan to solve the foreclosure crisis, and the conclusions shocked politicians and bureaucrats alike from coast to coast.

According to the study, lenders don’t modify the loans of borrowers at risk of foreclosure because to do so would likely mean having to reduce the amount of money the borrowers owe the bank, and therefore could potentially end up costing the bank money.

As a result of the study’s findings, it’s now considered possible by those inside the Beltway that the Obama administration’s only effort to solve the foreclosure crisis, which provides the lending industry $75 billion if they would simply agree to lose more money by modifying delinquent mortgages to more affordable levels from the homeowner’s perspective, is not likely to be nearly as effective as has been promised by the administration on literally dozens of occasions.

Boston Fed senior economist Paul S. Willen, who is a co-author of the study, commented that the program would be better off giving the money directly to struggling borrowers to help them with their payments, as opposed to handing the cash to lenders where it sits in vaults and is only paid out in the firm of lavish bonuses to senior executives whose incompetence has never been exceeded in the history of the world.

“Loan modification is not profitable for lenders,’’ Willen said. “If it were profitable, they would go out and hire staff.’’

Barney Frank, Chairman of the House Financial Services Committee, after considering the study’s implications carefully, said that the results may lead to unraveling the mystery about why so few struggling homeowners have been able to get help. “Let’s not jump to conclusions on this,” Congressional Representative Frank cautioned.

Frank is holding a hearing Thursday on his proposal to provide government loans to homeowners who have lost their jobs and can’t qualify for loan modifications and other help because they don’t have income. “We need to give more loans to people who don’t have income,” Frank said.

Murnut comment....Loans to people without an income??????? This was part of the original problem...or at least that's what we were told. I'm all for helping folks, but Frank is an idiot


“The problem is worse than we thought,’’ Frank said. Honestly, we figured that this whole thing would be wrapped up in a bow by possibly Memorial Day, but for sure by July 4th. “The failure to do these modifications means the whole situation stays bad longer, so now we may need all the way to Labor Day to get the foreclosures under control. This is going to screw up my vacation plans… It’s very disappointing.”

Murnut comment IDIOT

The Fed’s study showed that only 3 percent of seriously delinquent borrowers - those more than 60 days behind - had their loans modified to lower monthly payments; about 5.5 percent received loan modifications that did not result in lower payments, which are sometimes referred to as payment increases.

The study looked at 665,410 mortgages, originated from 2005 to 2007 that had since become delinquent, and followed about 150,000 borrowers for six months after they received some sort of undefined help, through the end of 2008.

The study acknowledged that the lenders may have some compelling reasons to avoid looking for new borrowers to help, which would justify their compulsive lying about their willingness to do so.

As an example, the study established conclusively that up to 45 percent of borrowers who received some undefined kind of help on their mortgages ended up in delinquent again, and this phenomena appears to be even more common when the type of loan modification received by the borrower was of the payment increase variety. Conversely, about 30 percent of delinquent borrowers are able to fix their problems without help from their lenders, through such means as foreclosure, short sale, deed in lieu, and suicide.

As Mr. Willen phrased it: “A lot of people you give assistance to would default either way or won’t default either way. The banks are trying to maximize profits, and at this point in time maximizing profits cannot be achieved by the banks giving some of the money owed back by modifying loans.’’

Officials from The Hope Now Alliance, which is the private-sector alliance of banks, mortgage servicers and investors, were inexplicably unavailable for comment yesterday. “Maybe they were all on Jury Duty, one source said.

Similarly, officials at the U.S. Treasury chose not to comment on the Fed study, but did note in a statement that they would be continuing to lie about this issue, stating that more than 240,000 homeowners have received loan modifications this year under the president’s program. (This year? Wow. Now that’s impressive. I don’t believe it for a second, but it’s impressive that they are that willing to throw a number out there without vetting it.)

And to add insult to injury, the federal regulators said that the pace of loan modifications has been increasing steadily since last year. (I think I’ve mentioned this before, but I have had enough with sophisticated entities capable of tracking billions of bits of minute details issuing vague and meaningless statements. Now I want to hit the Treasury guys with sticks.)

IMPORTANT Additional Commentary by Martin Andelman…

The preceding story, in its entirety was TRUE. Except for maybe the part that Treasury said, those people lie all the time. To avoid sobbing uncontrollable as I was writing it, I added the lines intended to poke fun. In other words, I enhanced it here and there to emphasize the absurdity of it all, but this story is absolutely true and you can find it online easily by typing into Google something like “Boston Fed Loan modification study.” You’ll find that everyone has written about the study’s conclusion, from The New York Times to the Wall Street Journal, as if it was truly serious and important news.

It reminds me of a study that was conducted at Princeton, I believe, just a few years ago, that concluded that money does, in fact, buy some happiness. I remember being in my car when I heard the results of the study being reported and thinking: “Morons.”

Yet here we have a prominent economist co-authoring a serious study to be published by the Federal Reserve bank… and the media in its entirety is taking the “news” quite seriously, discussing it as if it has grave implications. And this is far from being the only example of this sort of thing that I could readily produce.

I believe what this should teach everybody in the industry is that “they” don’t know what’s going on, at least as related to loan modifications. They just do not know. I’ve been telling “them” for some time now, and they are doing their own studies as well. What this report shows is that we must keep telling “them,” something I’m committed to doing.

The other thing this should show you is the importance of industry data and the valuable role it would play, if we had more of it. For example, I represent about 20 loan modification firms in Southern California in my role as the director of the Commission on Homeowner Representation, or the Crisis Commission, as it is sometimes referred to, and although all of the data is not yet in, I would tell you that those firms alone may be responsible for 5% of the mortgages that Treasury claims to have modified since Obama’s plan started. And wouldn’t that make a headline that would stop quite a few people in their proverbial tracks?

Yes it would. Below is a link to one of my previous articles requesting data from all loan modification firms. Most firms ignored what I asked for, although I did receive data from maybe two-dozen of you. Apparently, the rest of you either believe that you are flying under some imaginary radar, or you don’t understand the importance of what I’m doing.

Just remember… I’m not in the loan modification business. I’m offering… volunteering my time and my column to try to help the industry. If I don’t receive the data, it will not be me who suffers as a result. If you’re concerned that by sending me your data you somehow place your firm at greater risk, I assure you the reverse is true.


http://mandelman.ml-implode.com/2009/07/giving-money-back-not-profitable-federal-reserve-study-proves/

[Cogburn]

CitiBank stock price. (http://www.google.com/finance?client=ob&q=NYSE:C)

Take the slider under the chart and draw it back to 1987. See anything interesting there?

Interesting that CitiBank's stock price was valued exactly where it is now prior to deregulation.

While it might have opened the economic flood gates to pave the way for the technology boom, it was also grossly misapplied in the derivative markets, turning them into utter garbage.

When you get to the level of derivative markets, it's all bullshit, non-existent money, anyway. Have you ever met anyone, in person, that invests in credit-swaps?

Sure, average folks are being harmed by this and it was a problem none of them created or even conceived could exist... but this was also a problem created 20 years ago that is only now coming home to roost.

How about we just rewind the clock to a financial system that was working just fine... before "trickle-down" economics.

[mur]

I don't believe the system was just fine before the late 80's.

I late 70's early 80's were a nightmare not quite as severe as what is occurring now in my opinion....I remember it.

I'm not convinced "trickle up" economics works......got any examples?

That being said, the system is broken, full of worn out patches and fixes tended to by the Federal Reserve as the chief mechanic.

The Fed must die

[Cogburn]

I say you let Capitalists be Capitalists and the only thing government should do is make sure they don't kill or deform anyone in the process.

[mur]

I say you let Capitalists be Capitalists and the only thing government should do is make sure they don't kill or deform anyone in the process.

I think I agree with you...but didn't you just write that you were opposed to trickle down?

[Cogburn]

There's a difference between allowing a tiger to run lose in the wild and building a life-like habitat expecting it to work and operate as effectively as the real thing.

[skunk]

I say you let Capitalists be Capitalists and the only thing government should do is make sure they don't kill or deform anyone in the process.

I think I agree with you...but didn't you just write that you were opposed to trickle down?

Trickle down economics is capitalism for the rich. Not true capitalism.

[WarlordZeroOne]

See Cog, i said you where an Expert at digging up Stuff. Credit where its Due.


Take the slider under the chart and draw it back to 1987. See anything interesting there?

Interesting that CitiBank's stock price was valued exactly where it is now prior to deregulation.

While it might have opened the economic flood gates to pave the way for the technology boom, it was also grossly misapplied in the derivative markets, turning them into utter garbage.

When you get to the level of derivative markets, it's all bullshit, non-existent money, anyway. Have you ever met anyone, in person, that invests in credit-swaps? :smokin:

[mur]

Bernanke: There's No Housing Bubble to Go Bust (http://www.washingtonpost.com/wp-dyn/content/article/2005/10/26/AR2005102602255.html)
Fed Nominee Has Said 'Cooling' Won't Hurt

By Nell Henderson
Washington Post Staff Writer
Thursday, October 27, 2005; D01

Ben S. Bernanke does not think the national housing boom is a bubble that is about to burst, he indicated to Congress last week, just a few days before President Bush nominated him to become the next chairman of the Federal Reserve.

U.S. house prices have risen by nearly 25 percent over the past two years, noted Bernanke, currently chairman of the president's Council of Economic Advisers, in testimony to Congress's Joint Economic Committee. But these increases, he said, "largely reflect strong economic fundamentals," such as strong growth in jobs, incomes and the number of new households.

Bernanke's thinking on the housing market did not attract much attention before Bush tapped him for the Fed job Monday but will likely be among the key topics explored by members of the Senate Banking Committee during upcoming hearings on his nomination.

Many economists argue that house prices have risen too far too fast in many markets, forming a bubble that could rapidly collapse and trigger an economic downturn, as overinflated stock prices did at the turn of the century. Some analysts have warned that even a flattening of house prices might cause a slump -- posing the first serious challenge to whoever succeeds Fed Chairman Alan Greenspan after he steps down Jan. 31.

Bernanke's testimony suggests that he does not share such concerns, and that he believes the economy could weather a housing slowdown.

"House prices are unlikely to continue rising at current rates," said Bernanke, who served on the Fed board from 2002 until June. However, he added, "a moderate cooling in the housing market, should one occur, would not be inconsistent with the economy continuing to grow at or near its potential next year."

Greenspan has said recently that he sees no national bubble in home prices, but rather "froth" in some local markets. Prices may fall in some areas, he indicated. And he warned in a speech last month that some borrowers and lenders may suffer "significant losses" if cooling house prices make it difficult to repay new types of riskier home loans -- such as interest-only adjustable-rate mortgages.

Bernanke did not address the possibility of local housing bubbles or the risks faced by individual borrowers or lenders in a slowing market.

But if Bernanke is confirmed as Fed chief, and if the housing market slows more than he expects, he would be unlikely to use the central bank's power over short-term interest rates to prop up falling housing prices for the sake of individual homeowners, according to comments he has made in numerous speeches and statements in academic papers.

Rather, he has argued for many years that the Fed should respond to rising or falling prices for stocks, real estate or other assets only if they are affecting inflation or economic growth in an undesirable way. Thus, he would advocate cutting interest rates if a reversal in the housing market sharply dampened consumer spending, triggering job losses or a fall in inflation to very low levels.

Lower interest rates encourage consumers and businesses to borrow and spend, spurring economic growth and hiring. That would also make it less likely that very low inflation could turn into deflation, an economically harmful drop in the overall price level.

Bernanke believes "the Fed's job is to protect the economy, not to protect individual asset prices," said William Dudley, chief economist for Goldman Sachs U.S. Economics Research.

That view mirrors Greenspan's. He and Bernanke have both said it is unrealistic to expect the Fed to identify a bubble in stock or real estate prices as it is inflating, or to be able to pop it without hurting the economy. Instead, the Fed should stand ready to mop up the economic aftermath of a bubble.

Greenspan, for example, has rejected suggestions that the Fed should have raised interest rates in the late 1990s sooner or higher to slow soaring stock prices. He says the Fed got it right after that boom by cutting its benchmark rate deeply in 2001, in response to falling stock prices, the recession and the Sept. 11 terrorist attacks.

After Bernanke joined the Fed board in 2002, as the economic recovery remained sluggish and job cuts continued, he vocally supported Greenspan's strategy of lowering the benchmark rate further and holding it very low until mid-2004, when it was clear that both job growth and the economic expansion were solid.

Bernanke also warned in a November 2002 speech that the Fed would act aggressively to prevent deflation, which had devastated the economy during the Great Depression that followed the 1929 stock market crash.

A former chairman of Princeton University's economics department, Bernanke earned academic renown for his research on the Fed's role in causing the Depression.

After the 1929 crash, the Fed mistakenly raised interest rates to protect the value of the dollar, which was then pegged to the price of gold, Bernanke wrote in an October 2000 article in Foreign Policy. The higher rates contributed to surging unemployment and severe price deflation. The Fed then made things worse by not acting to counter the credit crunch that resulted from the collapse of the banking system in the early 1930s.

"Without these policy blunders by the Federal Reserve, there is little reason to believe that the 1929 crash would have been followed by more than a moderate dip in U.S. economic activity," Bernanke wrote.

In late 2000, looking ahead to the possibility of a sharp fall in then-lofty stock prices, Bernanke concluded, "history proves . . . that a smart central bank can protect the economy and the financial sector from the nastier side effects of a stock market collapse."

And in words that might come to mind if housing tanks, he said the economic effects of falling asset prices "depend less on the severity of the crash itself than on the response of economic policymakers, particularly central bankers."
http://www.washingtonpost.com/wp-dyn/content/article/2005/10/26/AR2005102602255.html

[mur]

Must see tv: Barney Frank in fine form on The Daily Show; Jon Stewart on Goldman Sachs’ “greatest quarter in the history of quarters”: “They are now dipping their balls in gold” $GS (http://files.wallstreetfolly.com/wordpress/2009/07/must-see-tv-barney-frank-in-fine-form-on-the-daily-show-jon-stewart-on-goldman-sachs-greatest-quarter-in-the-history-of-quarters-they-are-now-dipping-their-balls-in-gold/)


^^^^^^^
Click above

Frank is a fucking piece of shit and a liar

[mur]

Pick-a-Pay Loans(Option-Arms): Worse Than Subprime (http://online.wsj.com/article/SB124744382165530247.html)



By MARSHALL ECKBLAD

For the third straight month, option adjustable-rate mortgages are generating proportionally more delinquencies and foreclosures than subprime mortgages, the scourge of the U.S.

Option ARMs were typically issued to creditworthy homeowners and allow borrowers to make a range of monthly payments. The payment options include a partial-interest payment that adds the unpaid interest to the loan's balance. On many such loans, balances have risen while values of the underlying properties have plummeted amid the housing crisis.

As of April, 36.9% of Pick-A-Pay loans were at least 60 days past due, while 19% were in foreclosure, according to data from First American CoreLogic, a unit of Santa Ana, Calif.-based First American Corp. In contrast, 33.9% of subprime loans were delinquent, with 14.5% of those loans in foreclosure, the figures show.

Payment-option mortgages are heavily concentrated in the worst-hit regions in the housing market, including California and Florida, making borrowers inordinately vulnerable to declining property values. The deepening loan turmoil could mean higher-than-expected losses for Wells Fargo & Co., J.P. Morgan Chase & Co. and the Federal Deposit Insurance Corp.'s own insurance fund.

"The realization of the issues related to option ARMs is just beginning," said Chris Marinac, director of research at Atlanta-based FIG Partners.

Option-ARM loans are a much smaller portion of outstanding mortgages than subprime loans, but they occupy substantial chunks of certain banks' balance sheets. San Francisco-based Wells Fargo holds a mountain of Pick-A-Pays, having acquired $115 billion of the loans in its purchase of teetering Wachovia Corp., which it agreed to buy late last year.

Due to complicated accounting rules, Wells Fargo assigns the loans a value of $93.2 billion, giving it room to absorb future losses on the loans. The bank, however, won't say whether losses from the loans have risen beyond the firm's original expectations. Wells Fargo declined to comment Friday.

In a securities filing in May, the company said that borrowers accounting for 51% of its outstanding Pick-A-Pay balances made only the minimum payment as of March 31. Wachovia used the Pick-A-Pay name for its option ARMs.

J.P. Morgan holds $40.2 billion in option ARMs that the bank acquired when it purchased most of Washington Mutual Inc. last year. The Seattle company's banking operations were seized by regulators, and the holding company filed for bankruptcy protection.

The New York company said in a filing it has some exposure to an additional $46.5 billion in option-ARMs sitting in complex off-balance-sheet entities. J.P. Morgan declined to comment.

The FDIC also could face future losses due to rising problems with the loans. The federal agency agreed to soak up most future losses from about $5 billion in option-ARMs once held by Coral Gables, Fla.-based BankUnited FSB, which the FDIC seized in May and sold to private investors.

Write to Marshall Eckblad at marshall.eckblad@dowjones.com

[mur]

Spitzer may be a piece of shit in his personal life, but he is right on the money with his comments.


Spitzer Says Banks Made ‘Bloody Fortune’ on U.S. Aid (http://www.bloomberg.com/apps/news?pid=20601103&sid=a.H0jl05On0A#) (Update3)


By Laura Marcinek, Michael McKee and Deirdre Bolton

July 14 (Bloomberg) -- Eliot Spitzer, the former New York governor and attorney general, said U.S. banks made a “bloody fortune” while receiving taxpayer money without a proven benefit to the wider economy.

Politicians understand the “populist rage” with excesses in the financial industry and in this case the “public is right,” Spitzer said in a Bloomberg Television interview today. “We have saved financial services, we have not created a single job. We are still bleeding jobs.”

As New York attorney general, Spitzer was known as “the sheriff of Wall Street.” He changed business practices and collected billions of dollars in settlements from financial corporations such as Merrill Lynch & Co., American International Group Inc. and Marsh & McLennan Cos. He later became governor, resigning in March 2008 after he was identified as a client of the Emperors Club VIP, a high-priced prostitution ring.

Spitzer said rules proposed by President Barack Obama’s administration are irrelevant because agencies failed to enforce existing regulations.

“Regulatory agencies already had the power to do everything they needed to do,” he said. “They just affirmatively chose not to do it.”

“You don’t need new regs to do it, you just need the will to do what they were supposed to do,” he said.

Former Federal Reserve Chairman Alan Greenspan had “avowed a theory of hands off” and didn’t consider himself a regulator, Spitzer said.

“What we’re seeing now is a new regulatory spirit,” he said.

Spitzer said the lessons of the financial crisis will only be remembered over a short period of time.

“Over and over we fall into the same trap,” he said. “Ten years from now we will have forgotten.”

California, New Jersey

Governors of states like California, where the government is in a deadlock over a $26 billion budget deficit, are ’’intensely unpopular right now because they’re working for an impossible situation,’’ Spitzer said.

New Jersey Governor Jon Corzine, who Spitzer said is also in an “impossible position,” has an all-time high disapproval rating of 60 percent of registered voters four months before Election Day, according to a Quinnipiac University poll. In June, Corzine signed a $29 billion budget that raises taxes on the wealthy and implements worker furloughs and wage freezes.

Spitzer, 50, is director of Spitzer Enterprises LLC, his family’s real estate business.

“I missed the opportunity to contribute right now,” Spitzer said.

To contact the reporters on this story: Laura Marcinek in New York at lmarcinek2@bloomberg.net; Michael McKee in New York at mmckee@bloomberg.net; Deirdre Bolton in New York at dbolton@bloomberg.net
Last Updated: July 14, 2009 10:18 EDT

[mur]

Bernanke Sees Chance of Jobless Recovery (http://globaleconomicanalysis.blogspot.com/2009/07/bernanke-sees-chance-of-jobless.html)

Given that the Fed's first mission is to delay, confuse, hope, and otherwise attempt to buy time while engaging in wishful thinking along the way, that Bernanke is willing to admit this may be a jobless recovery is a sign that things will likely be at least that bad. In other words, prepare for a job loss recovery.

This should not come as a surprise to readers of this blog. However, when it comes to jobs, most, including president Obama have been expecting far too much from various stimulus packages.

Please consider Fed Chairman Sees Possibility Of 'Jobless' Recovery: Shelby


Federal Reserve Chairman Ben Bernanke sees the possibility of continued high unemployment even after the recession eases, a key Republican lawmaker who met with the Fed chief told CNBC.

"It was a rather sobering meeting," Sen. Richard Shelby, an Alabama Republican, said in a live interview. "I said...'Could this be a jobless recovery?'...and he said it could be," Shelby said.

Video at the link
http://globaleconomicanalysis.blogspot.com/2009/07/bernanke-sees-chance-of-jobless.html


Bernanke has predicted the recession will end this year, with many economists forecasting that the economy will start to grow again as soon as the current July-September quarter.

But Bernanke's comment that unemployment could remain high for some time appeared to be more pessimistic than any of his recent public statements.

Maria's interview with Shelby was quite lame until the end with a discussion of taxes and business incentives for small businesses. Shelby "I can tell you I'm voting against taxes because we need people to keep their money".

Fundamentally Obama is doing the wrong thing when it comes to real job creation. The Administration's programs are for the most part makeshift work that will do nothing but waste taxpayer money.

The problem is that small businesses face rising taxes (an incentive not to hire) and at the same time the world is awash in overcapacity and shrinking profit margins. The latter is a huge point that neither Shelby nor Maria seemed to realize.

Rising taxes on top of rampant overcapacity is a toxic brew that points to a jobless recovery at best. It is telling that Bernanke is willing to openly admit the possibility.

Mike "Mish" Shedlock

[mur]

G Edward Griffin - Creature From Jekyll Island A Second Look at the Federal Reserve (http://video.google.com/videoplay?docid=6507136891691870450)


[google:2wcdglcp]6507136891691870450[/google:2wcdglcp]

[mur]

I was right


http://i265.photobucket.com/albums/ii218/murnut/Iwasright.jpg

[mur]

0]VSwWy4E6I040]

[mur]

u]ZoQrYa_NKQQu]

[mur]

I know many here don't like Beck

Forget Beck for a second and just listen to all the strange coincidences involving Goldman Sachs


u]_wVQ3_ZaYB4u]

[mur]

Goldman Sachs bites Uncle Sam's hand
The investment bank is fat and happy again, but you wouldn't know it from its squabbling with the Treasury over the warrants in the TARP deal.
By Allan Sloan, senior editor at large
July 17, 2009: 10:39 AM ET

NEW YORK (Fortune) -- I've always thought that the guys running Goldman Sachs were really smart, not only about making money, but also about projecting a classy image to the world outside of Wall Street. Clearly, I overestimated them.

If there was ever a firm with the motivation -- and the money -- to be gracious to the U.S. taxpayers who kept it alive when the financial markets were imploding, it's Goldman. It had a chance to look good and do good for taxpayers and itself and Wall Street for a relative pittance -- and has blown it. Horribly.

As you have probably noticed, Goldman is getting attacked for posting record profits and setting aside a record amount for employee compensation about three seconds after it repaid its $10 billion of loans from the Troubled Asset Relief Program. Repaying those loans freed Goldman from pay restrictions on its top honchos, who seem headed for record or near-record bonuses unless things go badly for the firm in the second half of the year.

What you probably don't know is that Goldman, flush with cash and profits, is squabbling with the Treasury about how much it should pay taxpayers to buy back the stock purchase warrants it gave the government as part of the TARP deal. Talk about tacky.

Had Goldman retained something it was once reputed to have -- a sense of short-term sacrifice in return for long-term profit -- it would have agreed to pay the government generously for the warrants. It could have announced that on Tuesday, along with its profits, and looked like a decent, concerned corporate citizen instead of Greedhead Central.

The warrants are very valuable, especially with the recent sharp run-up in Goldman's stock price. The warrants carry the right (but not the obligation) to buy 12.2 million Goldman (GS, Fortune 500) shares at $122.90 each. Goldman's closing price of $156.84 yesterday put the warrants "in the money" by a bit over $400 million. (That's the $33.94 difference between $156.84 and $122.90, multiplied by 12.2 million.)

Given that the warrants still have more than nine years to run, they're clearly worth more than $400 million, because its owner has years of upside. However, because there's no existing market for such long Goldman warrants, their value is in the eye of the beholder (and the pricing modeler).

Alas, no one would tell me what the government is asking for the warrants or what Goldman is offering for them. "We are in discussions with the Treasury on the buyback of the warrant," said Goldman spokesman Lucas VanPraag. "The purchase price has yet to be determined.... We believe that taxpayers should get a decent return, and we hope that our discussions with the Treasury will do just that." The Treasury declined comment.

My estimate -- okay, my SWAG (for scientific wild-assed guess) -- is that the Treasury is asking for $1 billion to $1.5 billion and Goldman is offering $500 million or so.

Under the law, Goldman, like other early TARP repayers, has the right to force the Treasury to sell back the warrants after a lengthy set of price arbitrations.

When I say that taxpayers kept Goldman alive, I'm not talking about the $10 billion of TARP money or the $12.9 billion of AIG (AIG, Fortune 500) bailout money that Goldman got. The $10 billion was nice, but not necessarily essential to Goldman's survival, and Goldman says it was holding enough assets and collateral to get all or almost all of the $12.9 billion had the government not bailed out AIG.

Rather, I'm talking about the way that U.S. and foreign governments -- in other words, taxpayers -- saved the world's financial system, saving Goldman in the process. Had many of the world's biggest institutions collapsed, which would have happened without taxpayer aid, Goldman would have been wiped out because the firms that owed it money wouldn't have been able to meet their obligations.

I'm also talking about the Federal Reserve Board moving with lightning speed last fall to allow Goldman to become a bank holding company. By giving Goldman access to vast amounts of money it was making available to bank companies, the Fed ended panicky demands from Goldman customers that the firm immediately return the cash and securities it was holding for them. That was the equivalent of a run on the bank, which no institution can survive. Stopping it saved Goldman.

Now this is how Goldman shows its gratitude. It could have shelled out a few extra bucks and done the right thing for taxpayers (and ultimately for itself) by exercising good business judgment and looking generous. Instead, it's behaving in a way that brings to mind one of my favorite Biblical verses, Deuteronomy 32:15: "So Jeshurun waxed fat and kicked...and spurned the Rock of his salvation." In these ultra-political days, filled with economic pain for so many Americans, that's not only the wrong way to act, it's foolish. A word I never thought I'd associate with Goldman.



Find this article at:
http://money.cnn.com/2009/07/17/news/companies/goldman_sachs_tarp_ingratitude.fortune/index.htm

[century]

5]4MH_oz9f1E45]

[Cogburn]

You hear that? It's the creaking of the pillars.

u]VSwWy4E6I04u]
u]ZoQrYa_NKQQu]

[mur]

y]4MH_oz9f1E4y]


Very nice...Thank-you

[mur]

Six Reasons to Abolish the Fed (http://globaleconomicanalysis.blogspot.com/2009/07/six-reasons-to-abolish-fed.html)


Excerpt


In Dismantling the Temple (http://www.thenation.com/doc/20090803/greider/2), William Greider lists Six reasons why granting the Fed even more power is a terrible idea:

1. ?It would reward failure. Like the largest banks that have been bailed out, the Fed was a co-author of the destruction. During the past twenty-five years, it failed to protect the country against reckless banking and finance adventures. It also failed in its most basic function--moderating the expansion of credit to keep it in balance with economic growth. The Fed instead allowed, even encouraged, the explosion of debt and inflation of financial assets that have now collapsed. The central bank was derelict in enforcing regulations and led cheers for dismantling them. Above all, the Fed did not see this disaster coming, or so it claims. It certainly did nothing to warn people.

2.?Cumulatively, Fed policy was a central force in destabilizing the US economy. Its extreme swings in monetary policy, combined with utter disregard for timely regulatory enforcement, steadily shifted economic rewards away from the real economy of production, work and wages and toward the financial realm, where profits and incomes were wildly inflated by false valuations. Abandoning its role as neutral arbitrator, the Fed tilted in favor of capital over labor. The institution was remolded to conform with the right-wing market doctrine of chairman Alan Greenspan, and it was blinded to reality by his ideology (see my Nation article "The One-Eyed Chairman," September 19, 2005).

3.?The Fed cannot possibly examine "systemic risk" objectively because it helped to create the very structural flaws that led to breakdown. The Fed served as midwife to Citigroup, the failed conglomerate now on government life support. Greenspan unilaterally authorized this new financial/banking combine in the 1990s--even before Congress had repealed the Glass-Steagall Act, which prohibited such mergers. Now the Fed keeps Citigroup alive with a $300 billion loan guarantee. The central bank, in other words, is deeply invested in protecting the banking behemoths that it promoted, if only to cover its own mistakes.

4.?The Fed can't be trusted to defend the public in its private deal-making with bank executives. The numerous revelations of collusion have shocked the public, and more scandals are certain if Congress conducts a thorough investigation. When Treasury Secretary Timothy Geithner was president of the New York Fed, he supervised the demise of Bear Stearns with a sweet deal for JPMorgan Chase, which took over the failed brokerage--$30 billion to cover any losses. Geithner was negotiating with Morgan Chase CEO and New York Fed board member Jamie Dimon. Goldman Sachs CEO Lloyd Blankfein got similar solicitude when the Fed bailed out insurance giant AIG, a Goldman counterparty: a side-door payout of $13 billion. The new president at the New York Fed, William Dudley, is another Goldman man.

5.?Instead of disowning the notorious policy of "too big to fail," the Fed will be bound to embrace the doctrine more explicitly as "systemic risk" regulator. A new superclass of forty or fifty financial giants will emerge as the born-again "money trust" that citizens railed against 100 years ago. But this time, it will be armed with a permanent line of credit from Washington. The Fed, having restored and consolidated the battered Wall Street club, will doubtless also shield a few of the largest industrial-financial corporations, like General Electric (whose CEO also sits on the New York Fed board). Whatever officials may claim, financial-market investors will understand that these mammoth institutions are insured against failure. Everyone else gets to experience capitalism in the raw.

6.?This road leads to the corporate state--a fusion of private and public power, a privileged club that dominates everything else from the top down. This will likely foster even greater concentration of financial power, since any large company left out of the protected class will want to join by growing larger and acquiring the banking elements needed to qualify. Most enterprises in banking and commerce will compete with the big boys at greater disadvantage, vulnerable to predatory power plays the Fed has implicitly blessed.


The rest of the blog is here

http://globaleconomicanalysis.blogspot.com/2009/07/six-reasons-to-abolish-fed.html

[boycotteverything]

Fuck it man. It's under control. Just read this article from my December, 1951 Mechanix Illustrated. It was a little delayed in the mail but what the hell. Long and short of it? America is safe.

http://blog.modernmechanix.com/mags/qf/c/MechanixIllustrated/12-1951/space_cops/med_space_cops_0.jpghttp://blog.modernmechanix.com/mags/qf/c/MechanixIllustrated/12-1951/space_cops/med_space_cops_1.jpg

[mur]

Orwellian Comments - Vice President Biden: ‘We Have to Go Spend Money to Keep From Going Bankrupt’ (http://globaleconomicanalysis.blogspot.com/2009/07/orwellian-comments-vice-president-biden.html)

Excerpt


Top Three Orwellian Comments Of All Times

* An American major after the destruction of the Vietnamese Village Ben Tre: "It became necessary to destroy the village in order to save it."
* Vice President Joe Biden: "We Have to Go Spend Money to Keep From Going Bankrupt."
* President George W. Bush: "I've abandoned free-market principles to save the free-market system."


This sadly is what has become of our great nation.

The rest is here

http://globaleconomicanalysis.blogspot.com/2009/07/orwellian-comments-vice-president-biden.html

[boycotteverything]

THIS JUST IN... FLASH....

Mr. Wizard shows Tommy what happened to the economy!

http://i6.photobucket.com/albums/y250/PhotozOnline/MrWizard.jpg
Holy flying frog fuck, Mr. Wizard! That's neat!

[pack3tg0st]

holy cow man...

I haven't seen Mr. Wizard in FOREVER lol

[boycotteverything]

looks like joe biden missed that show too!

[mur]

TARP Special Investigator Says Bailout Total May Reach $23.7 Trillion

Some numbers are so large they simply become incomprehensible.

Remember when costs of the bailout were projected to be $0.5 Trillion, then $1 Trillion, then $3 Trillion.

Now, Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program says U.S. Rescue May Reach $23.7 Trillion.

U.S. taxpayers may be on the hook for as much as $23.7 trillion to bolster the economy and bail out financial companies, said Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program.

The Treasury’s $700 billion bank-investment program represents a fraction of all federal support to resuscitate the U.S. financial system, including $6.8 trillion in aid offered by the Federal Reserve, Barofsky said in a report released today.

“TARP has evolved into a program of unprecedented scope, scale and complexity,” Barofsky said in testimony prepared for a hearing tomorrow before the House Committee on Oversight and Government Reform.

Costs include $2.3 trillion in programs offered by the Federal Deposit Insurance Corp., $7.4 trillion in TARP and other aid from the Treasury and $7.2 trillion in federal money for Fannie Mae, Freddie Mac, credit unions, Veterans Affairs and other federal programs, he said.

Barofsky offered criticism in a separate quarterly report of Treasury’s implementation of TARP, saying the department has “repeatedly failed to adopt recommendations” needed to provide transparency and fulfill the administration’s goal to implement TARP “with the highest degree of accountability.”

As a result, taxpayers don’t know how TARP recipients are using the money or the value of the investments, he said in the report.

Banks Fail to Make Adequate Loan-Loss Provisions

Moody's says Banks Fail to Make Adequate Loan-Loss Provisions.

Banks have failed to make adequate provision for the losses on loans and securities they face before the end of next year, Moody’s Investors Service said.

U.S. banks may incur about $470 billion of losses and writedowns by the end of 2010, which may cause the banks to be unprofitable in the period, the ratings company said in a report published today. “Large loan losses have yet to be recognized in the banking system,” Moody’s said. “We expect to see rising provisioning needs well into 2010.”

Banks and financial firms worldwide have reported losses and writedowns of $1.5 trillion since the credit crisis began in 2007, according to data compiled by Bloomberg. New York-based Citigroup Inc. has reported $112 billion of writedowns, more than any other firm, the data show.

“The fundamentals of financial institutions are still traveling on a downward slope,” Moody’s said. “No-one should consider recent improvements as assurance that the current rebound can be sustained.”

Fed's Game is Delay and Pretend

In spite of writing off $112 billion, Citigroup is still sitting on $800 billion in SIVs, off its balance sheet, not marked to market. What's that worth? No one really knows and the Fed does not want anyone to find out either. That is why mark-to-market accounting is still suspended.

Geithner's PPIP also masks price discovery (on purpose) given the public is on the hook for 93% of the losses. The PPIP encourages speculation (at best), and at worst is a purposely fraudulent scheme to dump assets on the backs of taxpayers to benefit bondholders.

The Fed's game is to delay discovery and pretend things are getting better. Things might be for some assets. In the meantime however, data suggests more foreclosures, more credit card writeoffs, and more commercial real estate losses. Is the Fed winning or losing the battle? On the surface, with no price discovery, it's hard to know. However, if you give any credence to Neil Barofsky, the Fed may be losing a $23.7 trillion battle.

Mike "Mish" Shedlock

http://globaleconomicanalysis.blogspot.com/2009/07/tarp-special-investigator-says-bailout.html

[pack3tg0st]

sigh... welfare for guys who think welfare is bullshit...

thats what the bailout is...

free money for the rich at the poor's expense.

thats all it ever was

[boycotteverything]

hey- there's gotta be something to trickle down to us peedons, no?

[hp]

Holy flying frog fuck, Mr. Wizard! That's neat!

That's right, Tommy, pretty cool.

Mr. Wizard, what's the 'economy' that went up in smoke.

Well Tommy, that's you mom and dad house and your dad's job. By the way, that bicycle you wanted for your birthday, you're not gonna get it.

[hp]

Hey, Mr. Wizard, what ever happened to the 'close box before striking match'.

[century]

0]4X8T2pXehDk0]

[skunk]

A face only a mother could love.

[Cogburn]

A ) Schiff is a douche that has, from this video at least, clearly lost touch with what is currently causing the fluctuation in the dollar. Government bond auctions went insanely well last quarter. All those people now have a vested interest in seeing the dollar remain afloat. No one is selling dollars like they were before. The flux in the dollar is little more than doomtard investors and opportunists betting against sane people who people believe the government is going to be around 10 years from now (at least) and aren't trying to profit from the loopholes in the global economic system.

B ) I watched Bernanke on the TV in the office. There's nothing he said that isn't 100% in keeping with what they have done. Slowly draw back the currency currently in circulation and before there's deflationary pressure, raise interest rates to curb demand. This, of course, completely ignores the fact that they did absolutely the wrong thing to begin with. Now the plan to extricate the federal government from this fiasco will only mire it deeper within it.

Schiff has simply missed the boat and doesn't have a clue what's going on anymore.

[mur]

At Long Last - Fed Explains Exit Strategy (http://globaleconomicanalysis.blogspot.com/2009/07/at-long-last-fed-explains-exit-strategy.html)

Excerpt



Paying interest on reserves has the actual effect of recapitalizing banks slowly over time. Given that bank balance sheets are a wreck no matter how much banks or the Fed pretends otherwise, and given there is little reason for banks to lend (or consumers of businesses to borrow), the one point I agree with Bernanke on (and it is a key one) it is unlikely that the Fed is going to have to resort to various draining actions anytime soon.

However, when the Fed is forced to do so, the economy is likely to be smashed back into a second (or third) serious recession in a hurry. Indeed the recovery is going to be so weak in the interim, for most consumers it will feel as if the recession never ended. I expect a long period where the economy goes in and out of recession a number of times over a period of years.

Finally, the idea that the Fed (or anyone other than the free market) can "calibrate the timing and pace of any future tightening, together with the mix of tools to best foster our dual objectives of maximum employment and price stability" is preposterous.

The Fed micro-mismanaging interest rates and monetary policy is the primary reason we are in this mess in the first place. If we did not have a Fed, we would not need a Fed Exit Strategy!

http://globaleconomicanalysis.blogspot.com/2009/07/at-long-last-fed-explains-exit-strategy.html

[mur]

f]A7EQZYwGGGAf]

[Cogburn]

Just got this in the mail today from one of my 401k's.

http://i28.tinypic.com/htvati.jpg

This is how adults invest in an economic downturn.

You think any of those douchebags on TV can claim 18% profit in the past 60 days?

I put my money where my mouth is... and I'm getting paid.

[mur]

q]00ECLxK2YTsq]

[mur]

Just got this in the mail today from one of my 401k's.



This is how adults invest in an economic downturn.

You think any of those douchebags on TV can claim 18% profit in the past 60 days?

I put my money where my mouth is... and I'm getting paid.


What was it worth at this time last year?

[Cogburn]

It's not an accurate comparison. I went into damage control mode in April and changed my funds. Notice that my YTD is -24%. I don't want to think about what it would have been had I not switched up the funds.

Grayson was just trying to be a witty bitch and failing. There's only 4 million people in New Zealand... Is the representative suggesting we give the money to Brooklyn... or 0.30 to every American?

Grayson is an example of how there's no IQ test to be in Congress.

He sure likes to co-sponsor holidays for religious and ethnic groups, however.

http://thomas.loc.gov/cgi-bin/bdquery/R?d111:FLD004:@1%28Rep+Grayson+Alan%29:

Waaaaaaaaaaaaaaaaaaaaaaay down there.... at #80... is HR 1207. Hard pressed to find any other legislation of any value that man has co-sponsored or sponsored, no?

He must spend all of his time trying to dream up new ways to be snarky.

[mur]

Still...I like seeing Bernanke say "I don't know"

[century]

v]rtnqZOxbKdkv]

[skunk]

Interesting video century. The last thing she says though rings true for any kleptocracy.

"How are they going to fix the california budget? Off the backs of the little people."

Until we as humans realize we're in this together, (and, god forbid, unite) we are going to continue to get fucked every day by those who don't have our best interests at heart.

[Cogburn]

1.8% tax on marijuana? I buy about a quarter ounce a week for $125. That's $2.25 a week, or $117 a year in taxes. I'll pay it with a smile.

Obviously that woman isn't a smoker, however. I smoke American Spirit Lights. In May, they cost $4.00 a pack. Today they cost $6.50 a pack.

My car has a V8 engine so I only use 91 octane and up. For 50 miles in any direction the lowest price is about $3.20 a gallon... for any fuel I would trust to be not watered down.

I don't want to hear this "on the backs of the poor" bullshit.

It's on the backs of criminals, scofflaws, potheads, and smokers.

None of those are exclusive to any economic prosperity.

If you're poor, quit smoking. That's $200 additional a month, easy.

Find yourself in court a lot? Your problem isn't being poor, your problem is getting caught. Your an awful criminal. Try religion instead.

Gas? Well... Life's a bitch. Sleep easy knowing that your '96 Nissan with the bumper held on w/ a bungee cord is cheaper to operate than that fucking Escalade. You could do the entire planet a favor and set every SUV you see on fire. I wouldn't have a problem with that.

Look... the world isn't roses right now, but it's far from TEOTWAWKI.

[century]

For $125 a week you should buy a house with a basement and build a grow room.

[Cogburn]

For $125 a week you should buy a house with a basement and build a grow room.
In process. I can have up to 12 plants by my license.

[mur]

a]sIA055kYVyMa]

[Cogburn]

I don't think I've been able to put it into words until now, but here's what doesn't make sense to me in all this economic commentary...

This "money"... doesn't exist. It's simply the promise of the American people to pay, therefore no wealth has been transferred at this point beyond the fiat currency itself.

If it's a ponzi scheme, and it is as are all fiat currencies, it's unsustainable by definition. Those that setup the scheme are far smarter than I am and they knew how to calculate the point of its collapse. One would think it would be in their best interest to know what that point is and monitor for signs of its approach. There is no calculation I can make using any of the data I have available that indicates the ponzi scheme can last beyond another 20 years without a 35% increase in the number of base participants. There will be a point in our lifetimes where the paper money that you now have in your pocket will be completely worthless. Goldman Sachs is a tool of this transition. Special Drawing Rights for batches of mixed fiat currency only delay the problem not solve it, and that has become apparent to anyone that has been paying attention.

Think about how money has evolved in our society and what it has come to mean. Were I to speculate, perhaps it is that transition for which such measures of the police state are instituted.

Independent of the machinations of any national government, in performing the tasks required for any particular purpose for employment (ie "job"), the worker is provided a standardized unit for compensation. The commercial market determines the value of the tasks performed, therefore determines the units of compensation provided for those tasks.

Regardless of the actual currency that is provided, all work is unitized at the same value, therefore all economies are local. Third world countries prove this axiom to be true. While the third world worker may only be paid $1.00 or less per day, the value of that $1.00 within the local economy is greater than it is within first world economies. Taking into account the scale in the standard of living between the two localities, until a point of equilibrium is reached a third world worker actually profits more from their labor than a worker in the first world even though the actual monetary compensation is drastically less.

In an era of globalization, and given that all economies are local, what would seem to be in demand would be an "international labor credit" which represents the lowest common value the market places on the labor of a worker.

This leaves the individual in a bit of a bind. They become the basis for the entire economic system, but are also the most dispersed. The amount of concentration of effort one can focus on any particular goal then becomes the factor that determines winners from losers.

It's not quite capitalism. It's not quite communism. It's not quite socialism. I don't know what to call it, but it does seem to be where we are headed.... and it's pretty frightening.

Our world seems to be leaning more towards Orwell than Huxley.

[mur]

It's not quite capitalism. It's not quite communism. It's not quite socialism. I don't know what to call it, but it does seem to be where we are headed.... and it's pretty frightening.



Nicely put

Missed this week with all the talk of Racism and Healthcare were Bernanke's comments on commercial Real Estate

The Time Bomb is about to go off......

Excerpt


Federal Reserve Chairman Ben S. Bernanke said a potential wave of defaults in commercial real estate may present a “difficult” challenge for the economy, without committing to additional steps to aid the market.

Bernanke, testifying before the Senate Banking Committee today, urged lenders to modify “problem” mortgages to avert defaults. Christopher Dodd, the Connecticut Democrat who chairs the panel, told Bernanke that “some have suggested” the commercial market “may even dwarf the residential mortgage problems” in the U.S.

It “may be appropriate” for the government and Congress to consider “fiscal” steps to support the industry, Bernanke said today. Ideas for fresh support for the market could include government guarantees for commercial mortgages, Bernanke also said today, while noting no proposal on the subject has emerged.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a2mAhkgbWDXc






Get ready for banking's next headache
A weak economy and frozen financing markets could spell trouble for regional banks with big commercial loan portfolios.
By Colin Barr, senior writer
Last Updated: July 24, 2009: 4:48 PM ET

NEW YORK (Fortune) -- Regional banks can no longer ignore the elephant in the room -- their exposure to the commercial real estate bust.

Though housing markets remain weak, analysts expect credit problems over the next year to center on commercial real estate -- mortgages on office and apartment buildings and shopping malls, as well as construction, development and industrial loans.

U.S. banks hold some $1.8 trillion worth of commercial loans, according to Federal Reserve data. Big regional banks, including PNC (PNC, Fortune 500) of Pittsburgh, KeyCorp (KEY, Fortune 500) of Cleveland and BB&T (BBT, Fortune 500) of Richmond, Va., have more than half their loan books in commercial loans.

With financing markets locked up and the economy still mired in recession -- unemployment is at a 26-year high while capacity utilization, a key measure of industrial production, recently hit a record low -- observers fear a wave of loans will go bad in coming quarters.

"The problems facing commercial real estate are severe and will likely take many years to resolve," Deutsche Bank analyst Richard Parkus told the Joint Economic Committee of Congress this month. He said the biggest losses are likely to come from banks' $550 billion of construction loans, such as loans to homebuilders.

Banks are already bracing for impact. Higher credit costs led to second-quarter losses at banks ranging from Atlanta's SunTrust (STI, Fortune 500) to Delaware's Wilmington Trust (WT). Zions Bancorp (ZION), which operates primarily in Utah, California, Texas and Nevada, was among those forecasting deeper losses on problem commercial real estate loans.

"It is still a pretty crummy economy out there and we are seeing deterioration in all of it," Zions Bancorp chief financial officer Doyle Arnold said in a conference call with analysts and investors.

Accordingly, banks have been adding to their reserves for future credit losses. But with more borrowers falling behind on their loans, it's not clear that these so-called reserve builds will be enough.

SunTrust, for instance, added $161 million in the latest quarter to its loan loss reserve, citing continuing housing market deterioration and "increasing economic stress in the commercial market."

But nonperforming assets rose even more, jumping to 4.48% of total loans from 2.09% a year earlier. As a result, the bank's loan loss reserve tumbled to 53% of nonperforming assets from 70% a year earlier. Investors like to see a number nearer 100%. BB&T, for instance, has 101% coverage.

Thin reserves mean SunTrust "may face material provisions ahead," according to a report from analysts at research firm CreditSights. That could take a toll on profits over the next year.

Similar trends are playing out at Comerica (CMA), whose loan loss reserve has fallen to 78% of nonperforming loans from 91% a year ago, and Zions, which fell to 65% from 79%.

The increase in nonperforming assets comes as some real estate players complain that banks are sitting on bad loans rather than liquidating them -- a trend they claim is suppressing new lending and compounding the problems in a falling market.

"The rate at which these troubled loans are being resolved has been sluggish," James Helsel, treasurer of the National Association of Realtors, told the Joint Economic Committee July 10. "Over $60 billion in assets have become distressed this year but only $4 billion worth of commercial loans have been resolved so far."

Though the banking industry succeeded in raising tens of billions of dollars in new equity in the second quarter, some expect the financing picture to remain cloudy, adding to price declines.

Office rental rates have fallen 23% in New York and 11% in Washington from their 2008 highs, commercial property manager Jones Lang LaSalle said in its monthly market perspective newsletter this month. Meanwhile, office vacancy rates jumped to 14% in Manhattan and 11% in Washington in the first quarter, reflecting the economic slump.

"Debt will remain constricted as banks continue to adopt the 'delay and pray' approach to their real estate holdings, extending loan terms in the hope that better economic conditions will obviate the need to foreclose," Jones Lang LaSalle said in its report.

For their part, bankers blame the problems on weak loan demand and deny they're kicking the can down the line on troubled credits.

"We are managing these problem loans effectively," Comerica chief executive officer Ralph Babb said in the bank's second quarter earnings statement.

Still, the banks have underestimated their problems before. Comerica forecast in January that this year's credit-related charge-offs, or writedowns of uncollectible loans, would be in line with last year's level of $472 million.

But the bank said last week that charge-offs were $405 million in the first half alone, with even "modest" improvement not expected until the fourth quarter. To top of page
First Published: July 24, 2009: 3:26 PM ET



Find this article at:
http://money.cnn.com/2009/07/24/news/economy/banks.commercial.fortune/index.htm

[century]

Zxqcl8H-ta4


What the fuck is up with these fucking queers running the fed.

I will tell you what's up, they are fucking queers , god damnitt. What the fuck!!!!!!!!!!!!!!
I'm tired of these fucking pussies
Fuck!!!!!!!!!!!!!!!!!!!!

Fuck!!!!!!!!!!!!!!!!!

Fuck everybody

[century]

fuck you You know what the fuck is wrong , god damnitt, god damn man, god damn the queers, fuck all you pussies

[century]

4FD71FWK7bk

YA, YA, YA

troll me bitches

[century]

pJcXX3U4oQs

[Cogburn]

[imgs=200:2qqoekcy]http://ndn3.newsweek.com/media/58/090725_COVER-coverhomepage.jpg[/imgs:2qqoekcy]
:lol: :lol: :lol:

[century]

God damit Cogg

[mur]

I've been away on vacation......


d]msTHy91aIgAd]

[mur]

Wall Street profits from trades with Fed

By Henny Sender in New York

Published: August 2 2009 23:04 | Last updated: August 2 2009 23:04

Wall Street banks are reaping outsized profits by trading with the Federal Reserve, raising questions about whether the central bank is driving hard enough bargains in its dealings with private sector counterparties, officials and industry executives say.

The Fed has emerged as one of Wall Street’s biggest customers during the financial crisis, buying massive amounts of securities to help stabilise the markets. In some cases, such as the market for mortgage-backed securities, the Fed buys more bonds than any other party.

However, the Fed is not a typical market player. In the interests of transparency, it often announces its intention to buy particular securities in advance. A former Fed official said this strategy enables banks to sell these securities to the Fed at an inflated price.

The resulting profits represent a relatively hidden form of support for banks, and Wall Street has geared up to take advantage. Barclays, for example, e-mails clients with news on the Fed’s balance sheet, detailing the share of the market in particular securities held by the Fed.

“You can make big money trading with the government,” said an executive at one leading investment management firm. “The government is a huge buyer and seller and Wall Street has all the pricing power.”

A former official of the US Treasury and the Fed said the situation had reached the point that “everyone games them. Their transparency hurts them. Everyone picks their pocket.”

The central bank’s approach to securities purchases was defended by William Dudley, president of the New York Fed, which is responsible for market operations. “We believe that opting for transparency is a greater good,” he said. “If we didn’t have transparency, we’d be criticised on other grounds.”

However, another official familiar with the matter said the central bank “has heard that dealers load up on securities to sell to the Fed. There is concern, but policy goals override other considerations.”

Barney Frank, chairman of the House financial services committee, said the potential profiteering may be part of the price for stabilising the financial system.

“You can’t rescue the credit system without benefiting some of the people in it.” Still, Mr Frank said Congress would be watching. “We don’t want the Fed to drive the hardest possible bargain, but we don’t want them to get ripped off.”

The growing Fed activity has coincided with a general widening of market spreads – the difference between bid and offer prices – as the number of market participants declines. Wider spreads enable banks, in their capacity as market-makers, to make more profit.

Larry Fink, chief executive of money manager BlackRock, has described Wall Street’s trading profits as “luxurious”, reflecting the banks’ ability to take advantage of diminished competition.

“Bid-offer spreads have remained unusually wide, notwithstanding the normalisation of financial markets,” said Mohamed El-Erian, chief executive of fund manager Pimco in Newport Beach, California.

Spreads narrowed dramatically during the years of the credit bubble.

Brad Hintz, an analyst at AllianceBernstein, said he doubted that spreads would ever return to those levels, a development that could be pleasing to the Fed.

“They want to help Wall Street make money,” he said.

http://www.ft.com/cms/s/0/e84383dc-7f8c-11de-85dc-00144feabdc0,dwp_uuid=e8477cc4-c820-11db-b0dc-000b5df10621.html?nclick_check=1

[boycotteverything]

whether the central bank is driving hard enough bargains in its dealings with private sector counterparties, officials and industry executives say.lol

[mur]

Excellent article


Many Chime In On "Housing Hypocrites" Post (http://globaleconomicanalysis.blogspot.com/2009/07/many-chime-in-on-housing-hypocrites.html)

http://globaleconomicanalysis.blogspot.com/2009/07/many-chime-in-on-housing-hypocrites.html

[Lexion]

Very good read.

Smited.

Lex

[mur]

Here's something funny.....I just quit my job!

I'm a good salesman....I'll find another.

Lord knows there has to be something better than what I just left.

Conventional wisdom might suggest that I should have found a new job first...and generally speaking...this is good advice.

But in this particular case, I needed to make a clean break at the spur of the moment, lest I be jerked off again.

I worked for a small real estate company 1099 and it became clear to me today....as I returned from vacation....that they have a terrible business model called "flying by the seat of their pants"

The dispute arose over money of course....and a lack of due diligence.

Time is money and they have been wasting mine.

[boycotteverything]

Excellent article


Many Chime In On "Housing Hypocrites" Post (http://globaleconomicanalysis.blogspot.com/2009/07/many-chime-in-on-housing-hypocrites.html)

http://globaleconomicanalysis.blogspot.com/2009/07/many-chime-in-on-housing-hypocrites.html


The consumers debt was significantly increased because inflated prices were paid for the home. We would not have this precipitous drop without the banks' fraud.But... value is based upon what the market will bear. First rule of supply and demand. The banks were only doing what they were chartered to do- fuck people over by any means possible. Hey- that's the capitalist system.

[boycotteverything]

Conventional wisdom might suggest that I should have found a new job first...and generally speaking...this is good advice.

But in this particular case, I needed to make a clean break at the spur of the moment, lest I be jerked off again.
Fuck it. I vote for principle. Good choice.

[mur]

Tuesday, August 4, 2009
What the Fed is REALLY Trying to Hide In Fighting an Audit

75% of Americans and at least 276 Congress members and 19 Senators want to audit the Fed, but the Fed is fighting tooth and nail to keep everything hidden.

Most people assume that the Fed wants to keep secret the list of banks which received bailout money. You know, something along the lines of "we gave Goldman Sachs $100 billion".

But what the Fed is really struggling to keep hidden is the fact that the entire financial system is based on massive manipulation and fraud by the Fed and its primary dealers.

Specifically, the Fed is desperately trying to hide that many trillions of the government's bailouts have gone to inflating the stock market, buying up the U.S. government's own treasuries, and gaming the currency and gold markets.

Of course, when the New York Federal Reserve's "primary dealers" (the dealers through which the Fed carries out its open market operations in general, and its PPT, ESF, and other schemes through) get the huge sums of cash from the Fed, they place bets based on inside knowledge of where the money flows are going (they also, supposedly, skim off part of the cash, but that's for another essay).

In other words, the Fed's primary dealers engage in insider trading and frontrunning on a scale which would make your normal white collar felons look like a silver nanoparticle.

Finally, the Fed is not the only central bank engaging in manipulation. An audit would show how the Fed is playing footsie with other private central banks in an international con game.

Don't believe me? Show me the books and prove me wrong.

http://www.washingtonsblog.com/2009/08/what-fed-is-really-trying-to-hide-in.html

[Cogburn]

Worse than that.... no sources since it's all original thoughts, but nothing I mention in here stat-wise isn't available via CNBC or Bloomberg.

US Treasury 5 and 7 year bond auctions were totally flat this month. Primaries simply refused to buy, which amounts to the Primaries saying "We have enough federal debt right now, thanks but no thanks." So the Fed says "Oh, well you buy the bonds and we'll instantly monetize half the value of the bonds."

Suddenly the bond auctions are a marginal success.

I can't say that we're done... I've pulled some pretty creative accounting in my own day to make sure the lights and water stayed on... but the dollar is seriously fucked up right now.

One major impact on the market and the house of cards the Treasury and Fed have created to keep things moving may very well collapse.

Like... oh I dunno... say... something on the scale of 9/11.

[BriZz]

i sell internet advertising to real estate agents. the housing market is dead right now except for investors and prices in most places have dropped well over 50%.

[boycotteverything]

So much for us old bastards who tired of the battle and were gonna cash in their houses and retire in Tuscon. Oh shit. And there's more than a few of us.

[boycotteverything]

Retiring in Tuscon

and to sit,
and to wait,
with the kids of your kids
on that sunny front porch,
and to muse your philosophy-
the choicest of thoughts-
and whittle sticks...

[mur]

Stocks: The latest Fed bubble
Are the government programs supporting the financial sector reinflating global stock markets even as economies stumble?
By Colin Barr, senior writer
Last Updated: August 11, 2009: 2:02 PM ET

NEW YORK (Fortune) -- The Federal Reserve has spent the past year cleaning up after a housing bubble it helped create. But along the way it may have pumped up another bubble, this time in stocks.

To head off the worst downturn since the Great Depression, the central bank has slashed interest rates while funneling money to banks.

The Fed has mostly won praise for its efforts. The pace of job losses has slowed, and there has been a modest recovery in output.

At the same time, stocks have bounced back with startling speed. Since global markets hit their bottom in March, the S&P 500 has jumped 51% -- even as the outlook for economic recovery remains dim.

"This is the most speculative momentum-driven equity market since the early 1930s," Gluskin Sheff economist David Rosenberg wrote in a note to clients Monday.

Of course, stocks have rallied in part because investors perceive the worst-case scenario -- a 1930s-style Depression -- is off the table. And while the gains have been remarkable, they come after an even bigger decline. The S&P is still down 16% since Lehman Brothers collapsed in September.

But while most people take the rise in stocks as a hopeful sign for the economy, some see evidence that the Fed has been financing a speculative mania that could end in another damaging rout.

Recent weeks have brought huge rallies in some of the lowest-quality stocks -- including firms such as AIG (AIG, Fortune 500), Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) that are being propped up by the government and are unlikely to return to health any time soon.

What's more, this year has brought an 80% surge in emerging market stocks, while the dollar has posted a 10% decline since March. A declining dollar and surging emerging markets were the hallmarks of the credit-fueled bull run earlier this decade.

"We have put the band back together on a lot of this," said Howard Simons, a strategist at Bianco Research in Chicago. "That couldn't have happened without liquidity."

Though liquidity is admittedly a nebulous concept, there's no question that central bankers around the globe have poured huge amounts of money into the markets to ease the financial crisis. Given free money, investors' appetite for risk shoots higher and they gobble up stocks.

That's good, except when the outlook for economic growth doesn't seem to support the higher stock values.

"Many observers are wondering whether the strong stock market rebound since mid-March is already a forerunner of the next recovery or simply driven by a reflux of liquidity into riskier asset markets," Deutsche Bank Research analyst Sebastian Becker wrote in a report last month.

Rosenberg, who notes that consumer credit has dropped an unprecedented five straight months, said it's far from clear the recession is over. He says the risk of a market relapse later this year is high.

Simons said another factor that could work against recovery is that short-term interest rates could soon head higher, judging by action in futures markets. That could raise companies' borrowing costs at a time when policymakers have committed to holding rates near zero to restore economic growth.

Fed officials have stressed that they will start to unwind their financial support programs at the earliest sign of inflation. Given the cost of cleaning up after the last bubble, Becker writes that "this time, policymakers are unlikely to remain inactive should they suspect the formation of another asset price bubble."

But it's clear that bankers are loath to pull back on their support for the financial system before it's clear the economy has staged a stronger recovery. And the Fed has a long and painful history of ignoring asset price inflation.

"The central bankers have this textbook belief that the only inflation is the kind that appears in consumer price indexes," said Simons. "They don't believe what they're doing could cause an asset price bubble."

For now, Fed chief Ben Bernanke and other central bankers can console themselves for now with stable consumer price inflation readings in major economies.

But comparing the bankers with a driver pulled over for speeding for the umpteenth time, Simons said, "At some point, you have to say maybe your speedometer's broken." To top of page
First Published: August 11, 2009: 12:25 PM ET



Find this article at:
http://money.cnn.com/2009/08/11/news/economy/bubbly.fortune/index.htm

[boycotteverything]

I agree. The Feds have passed the word that the Exchanges are just another example of private institutions 'too big too allow to fail.' But what they're really guaranteeing is another mob controlled casino. Investors are parasites working for themselves not the general prosperity of the nation. Fuck em. I'd love to see the stock markets crash to zero and take all those crooks down with it.

[mur]

Congressional Oversight Panel - August 11 Report - The Continued Risk of Troubled Assets

"...But, it is likely that an overwhelming portion of the troubled assets from last October remain on bank balance sheets today.

If the troubled assets held by banks prove to be worth less than their balance sheets currently indicate, the banks may be required to raise more capital. If the losses are severe enough, some financial institutions may be forced to cease operations. This means that the future performance of the economy and the performance of the underlying loans, as well as the method of valuation of the assets, are critical to the continued operation of the banks.

...If the economy worsens, especially if unemployment remains elevated or if the commercial real estate market collapses, then defaults will rise and the troubled assets will continue to deteriorate in value. Banks will incur further losses on their troubled assets. The financial system will remain vulnerable to the crisis conditions that TARP was meant to fix.

...Part of the financial crisis was triggered by uncertainty about the value of banks' loan and securities portfolios. Changing accounting standards helped the banks temporarily by allowing them greater leeway in describing their assets, but it did not change the underlying problem. In order to advance a full recovery in the economy, there must be greater transparency, accountability, and clarity, from both the government and banks, about the scope of the troubled asset problem. Treasury and relevant government agencies should work together to move financial institutions toward sufficient disclosure of the terms and volume of troubled assets on institutions? books so that markets can function more effectively. Finally, as noted above, Treasury must keep in mind the particular challenges facing small banks.

This crisis was years in the making, and it won?t be resolved overnight. But we are now ten months into TARP, and troubled assets remain a substantial danger to the
financial system.

...Nonetheless, financial stability remains at risk if the underlying problem of troubled assets remains unresolved."


The banks must be restrained, and the financial system reformed, and the economy brought back into balance, before there can be any sustained recovery.

Video
http://www.msnbc.msn.com/id/22425001/vp/32385463#32385463

source link
http://jessescrossroadscafe.blogspot.com/2009/08/next-wave-of-financial-crisis.html

[boycotteverything]

Anyone remember Pack's prediction about the 6500 point Dow a few weeks ago? It may have been a premature ejaculation but... Could our own Amkon Wizard of Wall Street be prescient? Here we go-

http://data.moneycentral.msn.com/scripts/chrtsrv.dll?symbol=%24DJI&E1=0&LPR=2&C1=3&E8=1&D5=0&D2=0&D4=1&DD=1&width=612&height=258&CE=0&CF=0
Dow 8/17 early morning

As a reminder...

http://data.moneycentral.msn.com/scripts/chrtsrv.dll?symbol=%24DJI&E1=0&LPR=2&C1=2&C5=10&C5D=1&C6=1929&C7=1&C7D=1&C8=1931&D5=0&D2=0&D4=1&DD=1&width=612&height=258&CE=0&CF=0

http://data.moneycentral.msn.com/scripts/chrtsrv.dll?symbol=%24DJI&E1=0&LPR=2&C1=2&C5=1&C5D=1&C6=2008&C7=8&C7D=17&C8=2009&D5=0&D2=0&D4=1&DD=1&width=612&height=258&CE=0&CF=0

[pack3tg0st]

which prediction was that? We talking about the gold/DJIA ratio discussion?

[boycotteverything]

i think that's the thread.

[mur]

The Consumer Has Dug in His Heels

By Bill Bonner
leadimage

08/14/09 Ouzilly, France

How do you like this recovery? Pretty good, huh?

Except for the jobs, of course.

And except for the retail sales.

And except for the foreclosures…and house prices. And incomes. And consumer prices. And business profits.

It’s like a female impersonator…just like a real woman in every way, except for the essential ones.

At least stocks are doing well. The Dow rose another 36 points yesterday. In terms of time, it’s already beat the bounce of ’30…it’s in its sixth month. In terms of stock prices, it’s still a laggard, however. US stocks are up about 45% from their low of 6,547 on the Dow. By that measure, the current reading of 9,398 falls a little short of the 50% increase registered five months after the ’29 low.

Yesterday’s news was a big disappointment for mainstream economists. It’s ‘back to the drawing board,’ says The Wall Street Journal.

The dumbbells were already celebrating the end of the recession. Just yesterday, we reported on a survey of 53 of them. They figured the stimulus was working and the recession was coming to an end.

Even the Fed seemed to think so. The Washington Post headline: “Fed views recession as near end.”

But here at The Daily Reckoning summer headquarters we were doing some more painting yesterday…

…which means, we were doing more reckoning…

We don’t know when the recession will end…but we’re dead sure that those 53 economists interviewed by Bloomberg…and those at the Fed too…don’t know either. Few of them seem to have any idea what is really going on.

And now comes news that the economy is not recovering as planned.

“Even with Cash for Clunkers retail sales fall,” reports The New York Times. Retail sales were expected to go up in July. Instead, they went down.

Bummer.

Economists also expected unemployment numbers to go down. Instead, they went up in July…and last week, 558,000 people filed for unemployment benefits – up from the week before. That brings the total to 6.7 million jobs lost since the downturn began in December ’07.

Oh…and what’s this? Foreclosures hit another record high in July…making the third new record in the last five months.

This is a “recovery that only a statistician could love,” says another Washington Post headline.

You can prove anything if you torture the numbers enough. But if you need a job…or need to sell your house…or refinance your mortgage – good luck to you!

And here…in the spirit of summer…of warmth and camaraderie…we would like to offer the above-mentioned economists a little help: Pssst….it ain’t a recession; it’s a depression.

Since 1945, the US economy – and much of the rest of the world economy – has been carried on the backs of American consumers. First, they spent money they earned during the war years. Then, they spent money they earned in the big boom of the ’50s and ’60s. And then they spent money they hadn’t earned at all. They borrowed from future earnings…increasing total US debt from just 120% of GDP in the ’70s…to 370% of GDP in 2007.

In the last 15 years of that period, especially, each time the consumer showed a reluctance to continue spending, the feds rushed to give him more credit. And during the final five years – the Bubble Epoque – debt doubled.

Now, the consumer has dug in his heels. He’s not going a step further until he unloads his excess baggage of debt.

Once again, the feds are trying to stimulate him. The Fed’s key interest rate is practically at zero. The feds are pumping money into the economy as fast as they can. And they’ll give a fellow up to $4,500 if he’ll agree to kill his old car. The Cash for Clunkers programs seem cruel to us auto enthusiasts, but they have been popular, all over the world (more below.) But what good do they do?

Even with the stimulus spending…and the stimulating low interest rates…he’s still not willing to add debt. Of course, this is just what happened in Japan. The public sector spent; the private sector saved. Net result: an on-again, off-again recession that has lasted almost 20 years.

That’s a depression. It’s a point where the model no longer works. Look, how could the US economy recover? It’s a consumer-led economy, so the consumer would have to spend more money. But he’s not earning more money. He has no prospects of earning more – not with 10% unemployment and a punky economy. So, the only way he can spend more is by borrowing. Ergo, the only way the consumer economy can grow is by adding more consumer debt. Is that possible? Could the ratio of debt-to-GDP go to 400%…500%…to the moon?

Well, we’ve weren’t born yesterday. We’ve been around long enough to know that almost anything is possible.

This morning’s news tells us that the federal deficit through July comes to $1.27 trillion. We didn’t think that was possible. And despite this inferno of new debt…the 10-year Treasury bond yields barely 3.6%. We never thought that was possible either.

So, anything could happen. But generally, government stimulus only works when it is not needed. That is, it only works when it goes in the same direction as the underlying trend…not against it. Just like you can make a sailboat go faster by unfurling the sails, you can speed up an expansion by offering more and easier credit.

But now, the underlying trend has reversed. It’s no longer a credit expansion; it’s a credit contraction. The consumer has had his fill of debt. He’s cutting back on his spending and paying off debt. That’s what the July figures show. That’s been the history of entire downturn. That’s why it’s a depression, not a recession. It’s a major change of direction that will take years to accomplish. Now, stimulus is not only useless – since it is against the major trend – its counterproductive. It delays and contradicts the adjustments that need to be made.

But wait. We know what you’re thinking – that the Cash for Clunkers program is a success, because it encourages consumers to buy. See. Sometimes central planning really works, right? Yes, and if you look no further than the auto sales figures for proof, who can argue? Alas, a centrally planned economy is a perverse thing…where every positive statistic has the crumpled up bodies of tortured numbers buried beneath it. Take away the ‘free money’ from the feds and there’s nothing left. No real increase in demand…just a temporary demand based on a temporary and unsustainable stimulus.

Encouraging people to buy too much was what caused the problem in the first place. Encouraging them to buy more now is not a solution; it’s just a continuation of the same flawed policy of stimulating consumer demand…a policy that has been in place for decades.

But now the wind is blowing in the other direction. The government may not like it, but they can’t stop it.

http://dailyreckoning.com/the-consumer-has-dug-in-his-heels/

[Cogburn]

The economy....

http://kuvaton.com/kuvei/its_a_trap.jpg

[boycotteverything]

back to the future...

http://csvcenter.com/2005/images/Oh-Those-Beautiful-Weimar-G.jpg

[mur]

"We're Going Right Back Into The Tank" (http://www.businessinsider.com/henry-blodget-were-going-right-back-into-the-tank-2009-8)


Video by clicking above link

[boycotteverything]

Wow. That guy's a little weird but I think he nails it. A period of devastating deflation followed by a whiplash launch into Wiemar style inflation- with dollars morphing into toilet paper. Oh well. It's an interesting show anyway. Pack's gonna have a line at his door looking for canned food handout!