Whole Lotta Trouble, Part 2

And the angel said "Well you must have had a dream"

Who is Behind the Financial Meltdown? - Market Manipulation and the Institutional Speculator

The market is heavily manipulated. The driving force behind the meltdown is speculative trade. The system of "private regulation" serves the interests of the speculators.

While most individual investors loose when the market falls, the institutional speculator makes money when there is a financial collapse.

In fact, triggering market collapse can be a very profitable undertaking.

There are indications that the Security Exchange Commission (SEC) regulators have created an environment which supports speculative transactions.

And you remember it 'till the dream followed through

Puppetmaster

On top of that, when the system is being manipulated by those in power -- be they government regulators, the elected officials who appointed them, or the billionaire-patrons of the politicians -- honest people have nowhere to run. The result is not just the greed that our elites decry, but a greed enforced by fascistic government regulation.

Till the end of the dream and the dream came true

Who is Behind the Financial Meltdown? - Market Manipulation and the Institutional Speculator

There are several instruments including futures, options, index funds, derivative securities, etc. used to make money when the stock market crumbles.

The more it falls, the greater the gains.

Those who make it fall are also speculating on its decline.

With foreknowledge and inside information, a collapse in market values constitutes a lucrative and money-spinning opportunity, for a select category of powerful speculators who have the ability to manipulate the market in the appropriate direction at the appropriate time.

When I want something I get it

Economic 9-11?

So, it is the job of the Federal Reserve to monitor the loans of its member banks, and, if they are "playing fast and loose", to report the matter and, ultimately, it is the job of the Board of Governors to suspend those banks from the Federal Reserve System if they continue with their irresponsible lending practices.

Dare I point out that all of the current members of the Federal Reserve's Board of Governors were appointed by President George W. Bush? Ben Bernanke, Donald Kohn, Kevin Warsh, Randall Kroszner and Elizabeth A. Duke; by 2006, four of the five were in place on the Board of Governors.

Now President Bush -- in reaction to this crisis that the people he appointed to the Federal Reserve's Board of Governors should have seen coming and should have avoided -- has given us a hard-sale on a 700 billion dollar (?) bailout package -- which we all know will cost much more by the time this plays out.

You'd better go he says yes I think I better

Who is Behind the Financial Meltdown? - Market Manipulation and the Institutional Speculator

The effect of being on a "protected list" was to no avail. It was tantamount to putting those listed companies on a "hit list". If the SEC had implemented a complete and permanent ban on short selling coupled with a freeze on all forms of speculative trade, including index funds and options, this would have contributed to reducing market volatility and dampening the meltdown.

The ban on short selling was applied with a view to establishing the protected list. It expired on Wednesday October 8 at midnight.

The following morning, Thursday 9th of October, when the market opened up, those companies on the "protected list" became "unprotected" and were the first target of the speculative onslaught, leading to a dramatic collapse on of the Dow Jones on Thursday 9th and Friday 10th.

The course of events was entirely predictable. The lifting of the ban on short selling contributed to accentuating the downfall in stock market values. The companies which were on the hit list were the first victims of the speculative onslaught.

Stop for a moment I think you should think for a minute

The New Kleptocracy: Biggest "Giveaway" in American History - Interview with Dr. Michael Hudson

MH: Cash for trash is exactly what it was, and the emphasis should be placed on "Emergency" for Emergency Plan. It was rushed through without giving any opportunity to debate. Dennis Kucinich protested, for instance, that this was the first time a major plan that was going to create the equivalent of 700 billionaires, people who are going to become the next power elite to govern America for the next century --that this act was done without any hearings, without specialists--despite hundreds and hundreds of major economists throughout the world saying that it was a disaster and a giveaway. It is cash for trash. It will not resolve the problems.

Would you change your mind, at the very last minute

White House to banks: Start lending now

Under the authority of the $700 billion financial bailout plan approved by Congress and signed by President Bush earlier this month, the administration also plans to dole out $250 billion to banks in return for partial ownership. The Treasury Department, which is overseeing the massive capital injection program along with the rest of the bailout, will pour $125 billion into nine of the country's largest banks this week. Another $125 billion will go to other banks.

When I want something I get it

The New Kleptocracy: Biggest "Giveaway" in American History - Interview with Dr. Michael Hudson

MH: The Secretary of the Treasury said that he really just picked the amount out of the air. There will be another $700 billion next month, another $700 billion after that. Trillion after trillion will go to create a financial elite of kleptocrats. What's happened here by Mr. Paulson of Goldman Sachs is almost a mirror image of what the other Goldman Sachs' Treasury Secretary Robert Rubin did in Russia: he's creating and endowing a class of kleptocrats by giving them liquid treasury securities in exchange for basically worthless junk. It’s actually called the "Worthless Assets Recovery Program, (WARP)".

Whole lotta trouble

White House to banks: Start lending now

Treasury Secretary Henry Paulson has said the money was aimed at rebuilding banks' reserves so that they would resume more normal lending practices. But reports then surfaced that bankers might instead use the money to buy other banks. Indeed, the government approved PNC Financial Services Group Inc. to receive $7.7 billion in return for company stock and, at the same time, PNC said it was acquiring National City Corp. for $5.58 billion.

Officials have said that there are few strings attached to the capital-infusion program because too many rules would discourage financial institutions from participating.

Whole lotta trouble

Puppetmaster

Yes, you may make a mistake with your money, but the alternative is to have guys with guns and badges take your money from you, and give it to the foxes who are guarding your henhouse.

Whole lotta trouble for you

The New Kleptocracy: Biggest "Giveaway" in American History - Interview with Dr. Michael Hudson

"Mr. Obama is the man who is giving it all away to Wall Street and his major campaign contributors. Look at what's happening with Mr. Rubin, there's no difference at all between his financial advisor Robert Rubin and the Treasury Secretary Hank Paulson." Instead Mr. McCain shifted gears, reversed himself, gave in and said, "now I'm supporting the plan too".

Well this could be a whole lotta trouble

Puppetmaster

Needless to say, they want the economy more regulated -- there is a call for "global macroeconomic coordination".

That means taking more freedom from you, and giving it to our Washington elite.

Whole lotta trouble, baby

The "Worthless Assets Recovery Program"

Our "maverick" John McCain -- but when it comes right down to it, he joins Senator Obama in giving taxpayer dollars to the rich elite of this country, allowing that elite to take over the competition.

Senator Obama -- change we can believe in -- leading the charge in stealing tax dollars from the poor, giving to his rich cronies; McCain agrees with it, and Bush signs off on it. The only change was in control of our wealth -- and it wasn't Robin Hood Socialism, it was banana republic graft, enriching the elite.

Now there's change we can believe in, right Senator Obama?

Whole lotta trouble for you

Financial Meltdown: The Greatest Transfer of Wealth in History

That means the government and the Fed are now committing even more public money and taking on even more public risk. The taxpayers are already tapped out, so the Treasury’s "special deposit" will no doubt come from U.S. bonds, meaning more debt on which the taxpayers have to pay interest. The federal debt could wind up running so high that the government loses its own triple-A rating. The U.S. could be reduced to Third World status, with "austerity measures" being imposed as a condition for further loans, and hyperinflation running the dollar into oblivion. Rather than solving the problem, these "rescue" plans seem destined to make it worse.