Lipstick on a Pig, Part 3 of 3

We pick up from where we left off in Part 2, considering the question of who reaps the political harvest of this economic crisis we are in; we continue reviewing Who's Behind the Economic Collapse? by Cliff Kincaid, October 28, 2008:

Information from the Center for Responsive Politics identifies Goldman Sachs as a "strongly Democratic" firm, having contributed 73 percent of their almost $5 million in 2008 election cycle contributions to Democrats.

Some liberals understand the connection between Goldman Sachs and Obama. "Obama’s number one bundler is Goldman Sachs,” notes John R. MacArthur, publisher of Harper's Magazine, in a release from the "progressive" group calling itself the Institute for Public Accuracy. He was referring to how money from the firm is packaged for the Obama campaign.

"In his book, 'The Audacity of Hope,' Obama talks about how much he likes investment bankers, how bright and liberal they are," says MacArthur. He believes that Obama is a "socialist" only in the sense that he, like Bush and McCain, supports socialism for the rich through the Wall Street bailout.

Socialist or not, Obama is clearly the firm's favorite in the presidential race.

And -- Surprise! Surprise! -- Obama benefits politically from this crisis, as people look to him to save them from the evil speculators.

Lynn Sweet of the Chicago Tribune recently discovered that, on May 3, 2007, Obama had attended an event at the Museum of Modern Art in Manhattan "that was not on his public schedule and is only now surfacing ― a private dinner for Goldman Sachs traders with a discussion on issues moderated for the Wall Street firm by NBC's Tom Brokaw" ― the moderator of the second presidential debate.

Her column notes other Obama campaign connections to Goldman Sachs and mentions that Bloomberg had reported that Obama addressed the Goldman's annual partners meeting 2006 in Chicago.

It is not known, of course, what kind of illegal financial activities may have contributed to the current crisis. But based on what has been publicly said by the President and the SEC, the culprits could possibly include operators of the controversial, mysterious and secretive financial vehicles known as hedge funds.

A hedge fund operator such as George Soros, who was convicted of insider trading in France, is known to make money from the collapse of national economies and currencies. Labeled "The Man who broke the Bank of England" because of his financial activities against the British currency, he is said to be on a witness list of hedge fund operators that will be called to testify before Congress next month―probably after the election.

Isn't it interesting how the candidate that Soros has been backing for years now, Senator Barack Obama, is the main political beneficiary of an economic crisis -- the kind of crisis Soros has been known to generate?

And, isn't it interesting how Senator Obama led the charge in giving over $700 billion dollars of money, borrowed with an I.O.U. signed by the U.S. taxpayer, to financial speculators -- of which George Soros is a very successful example?

Our financial regulatory system is a pig -- corrupt government regulators taking care of their dishonest cronies in the private sector.

And, Barack Obama used his influence (and McCain went along with it, and Bush signed it) to put lipstick on that pig, and sell it to us in a poke. (For my foreign readers: Pig in a poke.)

If Barack Obama wins on Tuesday, the biggest difference we will have beginning in January is that of whose friends will benefit from the corruption and cronyism in Washington, as one crooked regime takes over from another.

Regime change? Change we can believe in!



Please finish reading the originals that I quoted from: Treasury Secretary Looks Out for His Buddies First and Who's Behind the Economic Collapse?

Lipstick on a Pig, Part 2 of 3

We return now to Treasury Secretary Looks Out for His Buddies First, picking up where we left of in Part 1 reviewing that article:

There is no simple way to create markets for the collateralized debt obligations (CDOs) on the banks' books. Trade can only happen when you can discern a price and parties think they will benefit. The bank or hedge fund cannot value these assets correctly in the interbank market because they can't be sure the other party is not going to fail. This results in a price that is far away from where it normally would be quoted. A clearing house takes away much of the risk, leaving only the market risk of the CDO. Better pricing of these CDOs will save taxpayers billions of dollars, since in any auction you will be buying and selling at a more efficient market price.

Who doesn't want the independent clearing house solution? Investment banks of New York. Over 30% of their revenue comes from proprietary trading. They reap massive profits in the over-the-counter (OTC) marketplace. They also would have to spend money to hold positions in the clearing house. This will limit their operations and profitability. Additionally, they are afraid because the clearing house would have access to all kinds of information that the banks deem sensitive. If that information were leaked, it could compromise a bank's competitive position. The New York banks will try to establish a clearing house that they control. They would keep the market fuzzy and to themselves. A bank-controlled clearing house would be a license to steal. This would be like the fox watching the hen house. It will be only a matter of time before we blow up again.

First of all, we already have an organization which, to a great extent, is supposed to be monitoring the financial sector, limiting the damage caused by bad moves there -- and despite that we had the Great Depression, other crises and scandals, and now this. So, now they propose more regulation and perhaps a reorganization -- a "new world economic order".

Kind of like 9/11 -- we had government agencies that had information that something was up, including some surprising particulars, but despite that, the terrorist attack succeeded literally against all odds. No one was ever held accountable or punished, we just had more regulation -- that "Patriot Act" -- and a reorganization -- the Directorate of Central Intelligence became the Directorate of National Intelligence.

We now return to Who's Behind the Economic Collapse?; we repeat the last paragraph that was quoted in the previous post, and continue with the next two paragraphs:

The growing suspicion that the financial meltdown is a "generated crisis" has been fed by statements from President Bush himself that illegal financial activities were taking place. On September 18, when he made a public statement about the growing economic problems, Bush announced that the Securities and Exchange Commission (SEC) was stepping up its enforcement actions "against illegal market manipulation."

By whom or what? The President didn't say.

The next day, September 19, Bush appeared in the Rose Garden with Paulson, SEC chairman Christopher Cox, and Federal Reserve chairman Ben Bernanke. Bush declared, "The SEC is also requiring certain investors to disclose their short selling, and has launched rigorous enforcement actions to detect fraud and manipulation in the market. Anyone engaging in illegal financial transactions will be caught and persecuted [sic]." Again, what was Bush talking about?

The only ones who will be "persecuted" -- and for my usage, I am spelling it correctly -- will be those whistleblowers who come forward to tell us what is really going on; consider the Sibel Edmonds case in connection with 9/11 to see what I am talking about.

Continuing with Who's Behind the Economic Collapse?:

For its part, on the same day, the SEC announced "a sweeping expansion of its ongoing investigation into possible market manipulation in the securities of certain financial institutions." The SEC declared, "Hedge fund managers, broker-dealers, and institutional investors with significant trading activity in financial issuers or positions in credit default swaps will be required, under oath, to disclose those positions to the Commission and provide certain other information."

But no details were provided. Don't voters have the right to know whether these illegal activities were being conducted for political purposes?

Almost as secretive were Treasury Secretary Paulson's maneuvers. He produced a quick three-page proposal to make himself a virtual financial dictator without judicial oversight or review. Then just as quickly it was secretly altered so that he would have the authority to bail out banks in China and other foreign countries.

A "financial dictator without judicial oversight or review" -- now surely we would not expect that from this White House?

For those interested in some of the fascinating details about Paulson's extremely close relationship with China, which may have provoked the financial crisis and stands to benefit from it, the October issue of Bloomberg Markets is a good place to start. It notes that Paulson was sworn in as secretary in July 2006 and that by September he was announcing "creation of the first U.S.-China Strategic Economic Dialogue." Paulson, the magazine reports, has a relationship with Chinese leaders and has traveled to China at least 70 times in his career. It reports that he personally had $25 million worth of holdings in a Goldman Sachs fund whose sole asset was a stake in the Industrial & Commercial Bank of China.

Goldman Sachs, a "full-service global investment banking and securities firm," is "the leading underwriter of Chinese equity securities and M&A [merger and acquisition] advisor in China," its website declares.

"Managing the U.S. relationship with China is an increasingly important part of the Treasury secretary's job," Bloomberg Markets says. "During the Fannie and Freddie crisis, Paulson used his credibility with Chinese leaders to reassure them that the U.S. mortgage companies weren't in jeopardy." Paulson is quoted as saying that "I clearly talked with the Chinese through this. They've worked with me enough that they knew I wouldn't say it unless I believed it."

Why was this necessary? Chinese institutions own more than $30 billion of Fannie Mae and Freddie Mac paper, the magazine reports.

On September 7, of course, the U.S. Government, under Paulson's direction, took control of Fannie Mae and Freddie Mac, putting the U.S. taxpayers on the hook for $5 trillion of mortgages. But Paulson's statement made no mention of the Chinese investments. Instead, he talked about protecting financial markets and U.S. taxpayers.

About a week and a half later the demands came for more taxpayer money for Wall Street, and the national economic crisis was well underway.

Rep. Scott Garrett, Republican of New Jersey, is leading the Congressional effort to find out how Paulson's proposal was developed and by whom. He wants to know what went on behind "closed conference room doors" in the U.S. Government.

Equally significant, on September 23, Paulson's former firm, Goldman-Sachs, received an infusion of $5 billion from Warren Buffett, a major Obama financial backer and booster.

The former Goldman Sachs CEO "does not act or sound much like a conservative Republican to the GOP remnant at the Treasury," noted Robert Novak in an October 2007 column. Novak reported that Paulson had "marched to his own drummer" by naming Eric Mindich, chairman of Eton Park Capital Management, to head the Asset Managers' Committee of the President's Working Group on Financial Markets. "A former Goldman Sachs colleague of Paulson's, Mindich is a top-level Democratic fundraiser," Novak noted. "He was in Sen. John Kerry's inner circle for the 2004 presidential campaign and backs Sen. Barack Obama for 2008."

Then, during the current crisis, Paulson appointed another former Goldman Sachs banker, Neel Kashkari, to run the new "Office of Financial Stability" and buy bad loans and distressed securities.

Talk about a revolving door of cronyism....

But, to whose political benefit does this happen?

Stay tuned for Part 3.

Lipstick on a Pig, Part 1 of 3

We begin with Treasury Secretary Looks Out for His Buddies First, by Jeffrey Carter, November 1, 2008; please see the original for links which I did not reproduce.

Hank Paulson has acted like the secretary of Wall Street rather than the secretary of the Treasury. This economic crisis manifested itself in August 2007 and nothing that Paulson has done has been a remedy for the problem. His solutions have only propped up his cronies on Wall Street. He is sidestepping the real problem in the market: counterparty risk. Only an independent clearing house can solve this crisis.

Secretary Paulson's bailout package does nothing for the problem. It injects money into bankrupt institutions by buying preferred stock, which only solves the easy part of the crisis. What if the stuff on the banks' books is worth less than they say? We will still have a problem. The crux of the problem is that there is so much counterparty risk that banks will not lend to each other. This has frozen what's called the interbank credit market. Banks do not trust each others' financial statements. This is why our credit system is clogged.

There are only two ways to get rid of counterparty risk. One is don't trade with each other. This is not an option; it's what is happening today. The other is to trade through an independent "clearing house" that erases counterparty risk by guaranteeing each trader is solvent. Once we recertify trust, the credit market will unlock and trading can resume.

I thought we established in Economic 9-11? that it was the job of the Federal Reserve to evaluate the general financial situations of its member banks.

In other words, we already have a "clearing house" -- but, the clearing house hasn't been doing its job.

The theory is that Federal Reserve -- which is not really a government entity, by the way -- is supposed to help police our financial sector.

The reality is that the Federal Reserve has become a place for cronies of those in power to leverage their knowledge of what is happening in the financial industry into big profits for select players on the financial scene.

We now consider Who's Behind the Economic Collapse? by Cliff Kincaid, October 28, 2008; again, please see the original for links that I did not reproduce.

Joe Biden made headlines by talking about a "generated crisis" for a President Obama. But is the current financial meltdown another "generated crisis?" Considering the problems in the economy, including too much federal debt, too much spending and easy credit, which have been with us for years, why did this crisis suddenly occur only six weeks before the election?

And is it just a coincidence that it occurred at a time when John McCain was leading in the national public opinion polls and appeared to be on his way to a November 4 election victory?

The crisis was man-made. It is a fact that President Bush's Treasury Secretary Henry Paulson, who worked for a Democratic firm, Goldman Sachs, and has very close ties to Communist China, is the one who convinced Bush to demand hundreds of billions of bailout dollars from Congress.

Let me interrupt this narrative to remind you all that Paulson is one of us rich, self-interested Republicans; Democrats, as we know, are all poor, or at the very least selflessly use their wealth for the benefit of all humanity, like George Soros does.

This is when McCain began falling in the polls. That's apparently because McCain, like Bush, is a Republican, and he has been blamed by Obama and the Democrats for the Republican policies that are said to have produced this crisis. This charge is debatable, but it has proven to be effective, with the cooperation of the major media.

Part of the problem, of course, was of McCain's own making. He voted for the $700-billion plan after flirting with the House conservatives opposing it. This was a major error on his part. He missed a critical opportunity to take on the incumbent President of his own party, Obama, the Democrats, and Wall Street interests.

The timing was important. If you examine the polling trend (see page two of this PDF document from Karl Rove & Company), one can see that McCain was moving ahead of Obama by mid-September. One poll, the Rasmussen poll, had McCain over Obama every day from September 12-17. McCain evened up the race again on September 23, after Obama had taken a lead, but it has been Obama ever since.

Clearly, the controversy over the legislative "bailout" or "rescue" for Wall Street, which emerged in a big way on September 18, changed the dynamics of the presidential race. It has hugely benefited Obama by making the economy take precedence over Obama's controversial associates, pro-socialist views, or lack of a background and security check.

The growing suspicion that the financial meltdown is a "generated crisis" has been fed by statements from President Bush himself that illegal financial activities were taking place. On September 18, when he made a public statement about the growing economic problems, Bush announced that the Securities and Exchange Commission (SEC) was stepping up its enforcement actions "against illegal market manipulation."

Illegal market manipulation -- what have I written about in the few posts where I have addressed this crisis?

Stay tuned for Part 2.

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.

Whole Lotta Trouble, Part 1

McCain camp trying to scapegoat Palin

John McCain's campaign is looking for a scapegoat. It is looking for someone to blame if McCain loses on Tuesday.

And it has decided on Sarah Palin.

Would you change your mind, at the very last moment?

McCain's Ties to Islamic Terrorists -- and Heroin Traffickers?

Senator McCain has been on the wrong side of this all along, and as a Republican in the United States Senate, he must have known about this fact, as documented by Senate Republicans going back to 1997, one year before the date that ethnic Albanian groups claim "McCain did everything that we asked of him to the benefit of the Albanian people, including arming the KLA".

Would you say stop for a second I'll bet you could think for a minute

McCAIN AND THE KLA CONNECTION

As the great "reform" candidate who denounces the influence of "special interests" and the power of money in politics, McCain had better tell us exactly how much the Albanian lobby has thrown his way – and to what effect. Of all the lobbyists in Washington, it is the "special interests" represented by the agents of foreign powers that pose the greatest threat to the integrity of the Presidency.

In the morning light he says when will I see you

McCain's Ties to Islamic Terrorists -- and Heroin Traffickers?

Perhaps Senator John McCain, Republican from Arizona, decorated Navy veteran and war hero, and contender for the US Presidency, is another whose name needs to be added to the list of those who take bribes from foreign organized crime and terrorists?

She says I don't think tomorrow, baby

McCAIN AND THE KLA CONNECTION

Joe DioGuardi, rabid Albanian nationalist and chief American apologist for the drug-connected totalitarians of the KLA, has spread the money from his political action committees far and wide, and no doubt McCain is also the recipient of his largess – but at what price to the American people? The McCain campaign must immediately release the figures, and give us some "straight talk" about the KLA-McCain connection: how much did they get-and in return for what? The American people have a right to know how many American soldiers will be put at risk in the Balkans in the service of paying off President McCain's political debts.

Sometimes I wonder if things would change if we stayed together

Two Plus Two, Part 7

That was 2000 -- now it is 2008.

If elected, McCain's foreign policy will be subservient to the interests of those who traffic in heroin, arms, women for forced prostitution, nuclear secrets, and any other contraband-du-jour -- McCain's foreign policy will mean supporting close allies of Osama bin Laden in the Balkans.

Would you change your mind, at the very last minute

Eyewitness to the Ayers Revolution

When Bill Ayers and Bernadine Dohrn led the domestic terrorist group Weather Underground in 1969, a chance meeting led Army veteran Larry Grathwohl into joining the group. Grathwohl served as a courier, running messages between the group's leadership (called the "Weather Bureau") and individual cells that were to carry out attacks.

Grathwohl was also an informant for the FBI.

I think you should stop for a second think for a moment

Eyewitness to the Ayers Revolution

Larry Grathwohl: The instructions I received from Billy Ayers was that the bombs to be used in Detroit must have shrapnel (fence staples, specifically) and fire potential (propane bottles). The intention was to kill police officers.

This could be a whole lotta trouble

Eyewitness to the Ayers Revolution

Larry Grathwohl: When I objected to Billy Ayers that more innocent people would be killed in the restaurant, he replied, "Innocent people have to die in a revolution." Billy also acknowledged during a criticism session in Buffalo that Bernadine placed the bomb at the Park Police Station which resulted in the death of Police Officer McDonnell.

Whole lotta trouble

Eyewitness to the Ayers Revolution

Larry Grathwohl: Has Billy changed? I hardly think so.

Whole lotta trouble for you

Eyewitness to the Ayers Revolution

Larry Grathwohl: As for Billy’s ideas on education, isn't it apparent? Reading, writing, and arithmetic aren't important! Radicalism is what's important. Fits right in with the Billy Ayers' view of creating mindless soldiers to follow his commands — where best to lay the foundations of a revolution than with the young?

This could be a whole lotta trouble

Eyewitness to the Ayers Revolution

Larry Grathwohl: If we are to believe Mr. Obama, he just didn't know Billy was as radical as he apparently is. Really? Just like he didn't know the Rev. Wright was as radical as he is? Obama is a politician and he wants me to believe that he never discussed politics with the Rev Wright or Billy Ayers?

Well this could be a whole lotta trouble

The Heroin Lobby, Part 10

As long as Albanian organized crime keeps laundering money to Senator Biden through AAPAC & Co., Senator Biden will keep doing the bidding of AAPAC's associated AACL.

Whole lotta trouble

Two Plus Two, Part 8

It is important to keep this in mind, because we can assess that one main reason Senator Biden was recruited as Senator Obama's running mate was to give the junior senator from Illinois a little help in the foreign policy arena (Biden's strength in foreign policy recruited by Obama).

This could be a whole lotta trouble

What "incredibly tough" foreign policy actions is Obama preparing?

Foreign policy journals and pundits linked to the Democratic Party have undoubtedly been discussing many such doomsday scenarios, and Biden's language suggests that the use of the US nuclear arsenal, the world's largest, is under consideration by those who are formulating the foreign and military policy of an Obama-Biden administration.

Whole lotta trouble for you

Two Plus Two, Part 8

The expectation is that they will use nuclear weapons to show everybody how tough Obama is.

The "Worthless Assets Recovery Program"

We begin with The New Kleptocracy: Biggest "Giveaway" in American History -- Interview with Dr. Michael Hudson by Bonnie Faulkner, October 28, 2008:

BF: Secretary of the Treasury Hank Paulson's $700 billion so-called bailout, first called "The Plan", was defeated in the House. Then a modified version called "Troubled Asset Rescue Plan or (TARP)" was passed by Congress in it’s "Emergency Economic Stabilization Act of 2008". Still others refer to this legislation as "Cash for Trash". What would you call it?

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.

The dollar will plunge. The stock market already plunged.

It is purely a giveaway to Mr. Paulson's colleagues on Wall Street and a giveaway to Mr. Obama's and Mr. McCain's campaign contributors. The Democrats were the major supporters of Mr. Paulson while even the Republicans sought to dissociate themselves from the plan so they couldn't get blamed when the inevitable failure of the plan shows that all that was done was a giveaway of $700 billion to Mr. Paulson's colleagues and pals on Wall Street.

It is important to note who was behind this.

President Bush is the kind of Republican that the left loves to point fingers at, because they can't make up their mind whether he is so blatantly corrupt, or so completely incompetent. This doubt will help Bush, come the day when he is on trial for all of this, because the prosecution will need to prove beyond reasonable doubt that he has been corrupt and not stupid.

So, we know that Bush is not a true Republican as we Republicans understand that word. He never had any attachment to the core principles of the Republican Party or to "his" Republican base, but only satisfied us as much as it was felt he needed to in order to win the election. He long ago abandoned us, and for the most part, we have only reluctantly begun to return the favor in recent years.

But we need to understand that the same is true of our straight-talking standard-bearer, John McCain.

Notice how Senator Obama's name came up here.

How much money has Senator Obama raised for his campaign? In a recent post, I quoted the figure of $605 million dollars, and added the comment "That's obscene."

Yeah, Senator Obama is change we can believe in, alright.

But, Senator McCain got right in line with this giveaway of taxpayer dollars, and President Bush signed it into law.

All three of them need to be investigated criminally for this.

BF: Well, now what and who are being bailed out? People now are saying it's a $700 to an $850 billion revolving money fund.

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)".

The United States of America has become a banana republic.

This is pretty much what was done in Russia to create Russian kleptocrats. In Russia’s case they gave State ownership of raw materials and fuels, oil, other assets to individuals who then diversified their portfolios by selling as much as they could to the West and taking their money out and putting them into dollars and sterling and euros. What’s happening here is that the Wall Street beneficiaries are going to take the money and run and put it in safe economies such as Russia, China and any other non-US economy they can find: the result will be a huge capital outflow, a capital flight that will put downward pressure on the dollar.

The final paragraphs from White House tells banks to stop hoarding money give us an insight into what is being done with this money:

The Federal Reserve began a program Monday to purchase the short-term debt of businesses, known as commercial paper. This market has been frozen since the collapse of Lehman Brothers spooked credit markets last month.

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.

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.

"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."

They are using the money to take over the competition.

Have I not written about this in recent weeks?

I told you so.

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

BF: You know Dr. Hudson, I was just about to ask you what the difference is between the Russian Kleptocrats and the American Crony Capitalists? Is there any difference at all that you see?

MF: Only that the Russian Kleptocrats were supported by Clinton's Democratic Administration and the American's Kleptocrats are supported nominally under a Bush Administration but primarily by Mr. Obama and the Democrats led by Barney Frank in the Congress, and Nancy Pelosi and by Reid. These are Democrats that must go and if there is any sign of Mr. Obama keeping them on then you know that the Democratic Party has been firmly captured by the Democratic Leadership Committee, i.e. Wall Street's lobbying group within the Democratic Party.

BF: Well now, since you've brought up Barack Obama, he was the one that lobbied "for" the passage of this, isn't he?

MF: That’s correct and the amazing thing was that McCain did too. Last Friday I was attending the American Monetary Institute Conference in Chicago and we had some of the smartest financial brains around at that. It was at Roosevelt University and we all went down to the Student Union to watch the debate. And let's take a look at what happened last Friday. The previous Thursday Mr. McCain had said there might not be a Friday debate because he was going to suspend the campaign until he could straighten out Washington regarding the bailout. So he went to the White House. There was reportedly not much very much that he said during the meeting but the Republican Congressional Leader Boehner made some very good suggestions. He suggested instead of the bailout the government use the money to set up a bank insurance fund of say anywhere from $250 billion to the $700 billion that was mentioned.

The insurance fund would lend money to banks in exchange for their preferred stock. This fund would be financed by levying an insurance charge on the entire US banking system, just like the Federal Deposit Insurance Corporation levies insurance rates on the banks. And the rates that would be levied, under the Republication proposal, would have reflected the actual risks involved. So that if the banks got together and lobbied politicians and supported the political campaigns of politicians who wanted to deregulate the industry that’s’ fair enough but let them pay the risks. Let them pay 1% or 2% or even 3% of their deposits for this because that’s what it would take the government to bail out policies that Alan Greenspan and others have supported. Instead of supporting this plan and instead of saying that he’d come to Washington to save American taxpayers from the giveaway, Mr. McCain did absolutely nothing. He was blamed by the media on Friday morning (Friday afternoon too) for saying, "Oh he's come to disrupt a done deal. Look what happened. He went to the White House. Now you have the Congressional Republicans opposing it."

Mr. McCain could have said, "Absolutely," that's just what he's done because he's a maverick and he's going to protect American taxpayers from the bipartisan attempt to both reflect the campaign contributions of their largest contributors--Wall Street. And he's not going to let it happen. He could have jumped in front of the parade. Jumped in front of the opposition to the Act, that reportedly 90% of voters were supposed to oppose, and this would have put Mr. Obama on the defensive. McCain could have said, "I'm opposed on the giveway and supporting taxpayers."

Mr. Obama is the man who is giving it all way 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". So the result of the Friday debate, if you remember the first half hour, Mr. Lehrer kept trying to press both presidential candidates on "how do you feel about the bailout, what do you think?"

And they talked about anything else. Mr. Lehrer tried to be more polite and finally he was laughing, and he said, "Aren't either of you guys going to answer my question?" And they both of them said, "No." Now when they refused to give their position to the bailout to the American people. When they refused to take a position on a plan that most voters "overwhelmingly" opposed and then they support the plan this shows they're just in the hands of their financial backers.

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?

I now finish with a blurb from The Lessons of Greed by Thomas Fleming:

Here is this question in a nutshell. If the government's leading economic advisers knew what was going on and allowed it to happen, they are criminals who should be locked up for a long time and have their possessions distributed among their victims; if they did not know, they are incompetent and should be fired and have their possessions distributed among their victims. But is good old Hank Paulson out on the street selling apples to unemployed money managers? No, he is too busy hiring his croneys from Goldman Sachs and giving them the power to cartelize the entire US economy as a wholly owned subsidiary of Goldman Sachs–or, rather, Government Sachs, as the firm is beginning to be called. Is he stupid or a criminal? Fortunately, that is a question to which the answer may be: "Both."

Small wonder that so many people are pinning their hopes on the Democrats–who, unfortunately, were neither more prescient nor less corrupt than the Republicans. When Senator Obama blames John McCain for the crash, he proves what a liar he is. [snip]

Obama -- a liar. Imagine that!

There needs to be a criminal investigation into the graft, corruption, influence-peddling and other crimes that are obviously going on, and Senators Obama and McCain, together with President Bush and Treasury Secretary Paulson, need to answer some questions posed by criminal investigators.

Foxes and the Henhouse

We begin with the first several paragraphs of The Reckoning - Agency's '04 Rule Let Banks Pile Up New Debt by STEPHEN LABATON, October 2, 2008:

"We have a good deal of comfort about the capital cushions at these firms at the moment." — Christopher Cox, chairman of the Securities and Exchange Commission, March 11, 2008.

As rumors swirled that Bear Stearns faced imminent collapse in early March, Christopher Cox was told by his staff that Bear Stearns had $17 billion in cash and other assets — more than enough to weather the storm.

Drained of most of its cash three days later, Bear Stearns was forced into a hastily arranged marriage with JPMorgan Chase — backed by a $29 billion taxpayer dowry.

Within six months, other lions of Wall Street would also either disappear or transform themselves to survive the financial maelstrom — Merrill Lynch sold itself to Bank of America, Lehman Brothers filed for bankruptcy protection, and Goldman Sachs and Morgan Stanley converted to commercial banks.

How could Mr. Cox have been so wrong?

Many events in Washington, on Wall Street and elsewhere around the country have led to what has been called the most serious financial crisis since the 1930s. But decisions made at a brief meeting on April 28, 2004, explain why the problems could spin out of control. The agency’s failure to follow through on those decisions also explains why Washington regulators did not see what was coming.

On that bright spring afternoon, the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent plea by the big investment banks.

They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.

The five investment banks led the charge, including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary.

Our current Treasury Secretary, Henry M. Paulson, Jr., is now in charge (and with wide discretion) of spending $700 billion of taxpayer money to deal with this crisis; this same man "led the charge" in 2004 to create the environment which allowed the catastrophe which WE THE PEOPLE are now paying for.

The mouse is in charge of the cheese!

And President George W. Bush, our 43rd President of the United States, a candidate for whom I proudly voted in the 2000 and 2004 general elections, is the man who put him there.

As a Republican, I was so disgusted with the blatant "I'm-so-smart-and-they're-so-stupid" corruption of the Clinton Administration, that until I started researching what was going on in Washington these days, I missed the blatant "I-call-the-shots-and-I-can-do-whatever-I-want-to" corruption of the Bush-43 Administration.

We need criminal investigations and criminal accountability in this economic "crisis" -- a "crisis" which looks to me like it was allowed to happen to destabilize the financial sector and provide cover for consolidating financial power in the hands of those who are pulling the strings.

But, let's not get ahead of ourselves.

We now continue by considering some excerpts from Unscrupulous Manipulation of the US Financial Architecture: The Failed Presidency of George W. Bush by Prof. Rodrigue Tremblay, October 25, 2008:

It is thus no accident that the Bush-Cheney administration has presided over one of the worst financial collapses and credit crises in U.S. history, by packing regulatory agencies with cronies whose mission it was to let rapacious speculators and market manipulators go wild. The result has been the creation of a casino-like speculative economy that is now crashing down before our very eyes.

"It is thus no accident" -- a little understated.

This is criminal conspiracy, and it is especially obvious when we consider that the Federal Reserve's Board of Governors is populated exclusively by appointees of Bush-43.

There's another layer of oversight that was put into place to look the other way.

Under Bush-Cheney, financial markets became manipulated by unscrupulous bankers and by rapacious hedge funds, as public regulation was reduced to a minimum. Millions of Americans lost their homes through foreclosure and many more saw their working and pension incomes eroded and destroyed by inflation and plant closings. And as what could be a protracted recession proceeds, many more will lose their jobs in the coming months, while some older employees may have to postpone their retirement because of the disappearance of their pension money.

"Millions of Americans lost their homes through foreclosure" -- the blame for this belongs in the laps of our big-liberal Washington elite. They wanted affirmative action in housing, so they changed the rules to push mortgages for people who really didn't qualify -- including to illegal aliens.

Like all other affirmative action programs, this pushed people who were not qualified into situations they weren't ready to handle.

The resulting failure then just reaffirms the need for the big-liberal elite to interfere more, so we get more affirmative action.

Funny how the only thing liberal programs do, other than cost money, is generate the need for more liberal programs.

Do you suppose that is an accident?

By the way -- how has the meaning of the word "liberal" changed over the past two centuries or so?

Ah, are we off the subject? Back to corrupt cronyism...

In a parody of President Abraham Lincoln, we can say this has been an administration that deserved to be dubbed "a government of the wealthy, by the wealthy and for the wealthy." Some would not hesitate to say, also in parody, that it has been "a government of Goldman Sachs, by Goldman Sachs and for Goldman Sachs," considering the ubiquitous political and economic role which that firm has played within the Bush-Cheney administration. President Bush's own Chief of Staff, Mr. Joshua Bolten, comes from Goldman Sachs. And these days, everybody pretends not see the real and potential conflicts of interests of other public servants who are now on the giving public side of things, at the U.S. Treasury, and who are going to be on the receiving private side of public money, in a scant few months. It is the same thing with a lot of what the U.S. Treasury does. —Even the Governor of the Bank of Canada, Mr. Mark Carney, is a former employee of Goldman Sachs!

This revolving door -- they come from the business they are supposed to regulate, and go into the government regulating that business, then back to that business, for which they have just written the rules.

Consider this quote from the Sibel Edmonds case; from The Highjacking of a Nation, Part 2: The Auctioning of Former Statesmen & Dime a Dozen Generals by Sibel Edmonds, November 29, 2006:

The foreign influence, the lobbyists, the current highly positioned civil servants who are determined future 'wanna be' lobbyists, and the fat cats of the Military Industrial Complex, operate successfully under the radar, with unlimited reach and power, with no scrutiny, while selling your interests, benefiting from your tax money, and serving the highest bidders regardless of what or who they may be. This deep state seems to operate at all levels of our government; from the President's office to Congress, from the military quarters to the civil servants' offices.

Edmonds makes this comment in the context of her own case, and refers to the "Military Industrial Complex" -- but, do you for a moment think this doesn't apply to the financial sector, as well?

Continuing with Unscrupulous Manipulation of the US Financial Architecture: The Failed Presidency of George W. Bush:

In a related matter, for historical purposes, it will be remembered that, in the fall of 2008, the Bush-Cheney administration sponsored a huge rescue-plus-bailout of the largest speculative Wall Street investment banks (which the Bush SEC had deregulated on March 28, 2004) and of a host of other banking and insurance institutions which had engaged in alchemy or synthetic finance and made risky investments. To that effect, it is ready to place at risk close to $2.0 trillion of public money and let the public debt explode, with few conditions attached to protect the public interest. In fact, the Bush administration stood ready to advance hundreds of billions of dollars and only requested non-voting preferred shares in the troubled banks and insurance companies that it rescued from bankruptcy. As a consequence, contrary to what the Roosevelt administration did in the 1930s, the U.S. government has no direct say about the way the troubled financial institutions are managed and run, and thus, if the bail-out were to be successful, most of the benefits would go to bank owners and their executives; but, if things continue to deteriorate, taxpayers will be the ones left holding the bag.

Key quotes: "with few conditions attached to protect the public interest" and "thus, if the bail-out were to be successful, most of the benefits would go to bank owners and their executives; but, if things continue to deteriorate, taxpayers will be the ones left holding the bag."

Some have said this is an example of corporate socialism for the rich. In fact, this has nothing to do with socialism per se, but everything to do with legal and unapologetical extortionism on a high level. For all these reasons, if the ongoing recession and financial crisis were to turn into a full-fledged economic depression, as it could possibly do, and as it did in 1873-1880 and 1929-1939, it would have to be dubbed by historians "the Bush-Cheney Grand Economic Depression" of 2008-20(?).

It's called "corruption" -- this is illegal.

In this context, let me skip ahead to some more quotes from Unscrupulous Manipulation of the US Financial Architecture: The Failed Presidency of George W. Bush. After a short rant regarding the Bush Administration's interactions with the media, Prof. Tremblay states:

Never has American journalism and U.S. corporate media been so corrupt and complicit, and this is because the United States has never had such a corrupt administration, i.e. the 2001-2009 Bush-Cheney administration.

Considering how the media does nothing with regard to the Sibel Edmonds case, can I really argue with Prof. Tremblay on this issue?



Prof. Tremblay then concludes:

In its countless failures, the Bush-Cheney administration has been an unhealthy mixture, rarely seen in a democracy, of immorality, lawlessness and incompetence. —It won't be missed by most people, both in the U.S. and around the world.

No argument from me regarding that statement, either.

So, here's the best part; from S.E.C. Concedes Oversight Flaws Fueled Collapse by STEPHEN LABATON, September 26, 2008:

WASHINGTON — The chairman of the Securities and Exchange Commission, a longtime proponent of deregulation, acknowledged on Friday that failures in a voluntary supervision program for Wall Street's largest investment banks had contributed to the global financial crisis, and he abruptly shut the program down.

The S.E.C.'s oversight responsibilities will largely shift to the Federal Reserve, though the commission will continue to oversee the brokerage units of investment banks.

So now, Bush's five foxes on the Federal Reserve's Board of Governors will take over guarding the henhouse.

Here now is another quote from the Sibel Edmonds case; though made in the context of her own case, it seems so applicable to this crisis as well, and this is another reason why I see this financial crisis we are in as just another... ah, but first the excerpt from An Interview with Sibel Edmonds, Page Three by Chris Deliso, July 1, 2004:

CD: What are they so afraid of?

SE: They're afraid of information, of the truth coming out, and accountability -- the whole accountability issue that will arise. But it's not as complicated as it might seem. If they were to allow the whole picture to emerge, it would just boil down to a whole lot of money and illegal activities.

CD: Hmm, well I know you can't name names, but can you tell me if any specific officials will suffer if your testimony comes out?

SE: Yes. Certain elected officials will stand trial and go to prison.

There was a terrorist attack on 9/11, which snowballed into a War on Terror -- and there was a subprime mortgage crisis, which has ballooned into an economic crisis and even a financial meltdown.

Different events, right?

But, what is going on behind the scenes -- in both cases?

Meanwhile, please read the two articles from the New York Times in their entirety, as they are very informative.

Puppetmaster

We review Soros and Sachs on Saving the Economy by Marnie Hanel, October 21, 2008, 4:54 PM:

Yesterday, three economic individualists gathered at the Earth Institute at Columbia University to answer the question: Can We Save the World Economy?

It was no small task for a Monday afternoon.

The panel consisted of global financier George Soros (no friend of Thailand), economic professor Nouriel Roubini (foreshadower of the financial swirlie), and Earth Institute Director Jeffrey Sachs (CNN's favorite expert since the onset of this kerfuffle).

Throughout the next hour and 45 minutes, the gentlemen clearly outlined the origins and implications of the financial crisis, offering a listener a chance to get one's footing even if, say, one barely skated by in Introduction to Economics.

Each cited a systemic failure that led to the collapse of the financial system, pointing a collective finger (which one, you pick) at four mistakes made by Alan Greenspan's Fed: reckless deregulation, aggressive monetary policy, excessive risk taking, and reliance on internal risk-management structures.

One of the fundamental flaws in this system, they said, is its basis on market fundamentalism—a theory that, for varying reasons, each expert said is hooey. As Soros pointed out, the market has never saved itself from failing without the heavy hand of interfering authorities. (Examples he's fond of citing include: The international banking crisis in 1982, the failure of Long-Term Capital Management in 1998.)

A big part of the reason the Federal Reserve System was established was to prevent the kinds of problems they had during the Panic of 1907. Despite that, we had the Great Depression, and other crises, and now we have this mess.

In a market with only that regulation that is necessary and appropriate, people can make mistakes, but other people can do things correctly.

Excessive regulation, however, forces everyone down the same path, and when that path is in error, the whole system has problems.

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.

The antidote to that is freedom -- the freedom to educate yourself and your children on matters of importance, including the economy and finances (hint: your children will not learn critical thinking about the economy in our socialistic government-run school system), and the freedom to act in your own economic best interests.

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.

Our credit-and-loan culture is also to blame, they said, as is an investment-banking system in which passing the risk is the order of the day. Our asset bubble has burst, they say. As a result, we will see a profound change in the way America functions in relation to the rest of the world.

Soros warned that the impact on periphery countries has yet to be seen. Roubini followed up by recalling the phrase, "If the U.S. sneezes, the world gets a cold," and saying, "The U.S. is not just going to get a cold, it’s going to have a severe case of pneumonia." Sachs said the financial crisis would affect developing nations and harm the poor, and added that, if we don’t wake up to the "deep unreality" we've been living in, we will see similar crashes in the environmental and global-poverty spheres.

Sachs argued that nothing short of global macroeconomic coordination can save us from a dismal, long-term financial fate, yet warned that we’re hamstrung until a new president is elected. Who that is will be the deciding factor in how we'll weather the recession.

The gentlemen favor Obama.

They favor Obama.

No surprise there.

In my series Proxy Fight (Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8), I address the backing that Senator Obama receives from George Soros.

What I don't address a great deal at this blog is how George Soros' bet is hedged by backing of Senator McCain, as well.

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.

Guard with jealous attention the public liberty. Suspect everyone who approaches that jewel. Unfortunately, nothing will preserve it but downright force. Whenever you give up that force, you are inevitably ruined.

-- Patrick Henry

From Proxy Fight, Part 8:

There are many things at stake in any US Presidential election, and many issues that are influenced.

An Interview with Sibel Edmonds, Page Two by Chris Deliso, July 1, 2004

CD: Such as?

SE: Everything -- from drugs to money laundering to arms sales. And yes, there are certain convergences with all these activities and international terrorism.

CD: So with these organizations we're talking about a lot of money --

SE: Huge, just massive. They don't deal with 1 million or 5 million dollars, but with hundreds of millions.

However, one important aspect of the 2008 elections...

An Interview with Sibel Edmonds, Page Two by Chris Deliso, July 1, 2004

CD: But what do think, within departments such as the Pentagon and the State Department. Do you suspect certain high officials may be profiting from terrorist-linked organized crime?

SE: I can't say anything specific with regards to these departments, because I didn't work for them. But as for the politicians, what I can say is that when you start talking about huge amounts of money, certain elected officials become automatically involved. And there are different kinds of campaign contributions -- legal and illegal, declared and undeclared.

...is that the US Presidential race has become...

Cracking the Case: An Interview With Sibel Edmonds by Scott Horton, August 22, 2005

SE: [snip] The American people have the right to know this. They are giving this grand illusion that there are some investigations, but there are none. You know, they are coming down on these charities as the finance of al-Qaeda. Well, if you were to talk about the financing of al-Qaeda, a very small percentage comes from these charity foundations. The vast majority of their financing comes from narcotics. Look, we had 4 to 6 percent of the narcotics coming from the East, coming from Pakistan, coming from Afghanistan via the Balkans to the United States. Today, three or four years after Sept. 11, that has reached over 15 percent. How is it getting here? Who are getting the proceedings from those big narcotics?

...a proxy fight...

'The Stakes Are Too High for Us to Stop Fighting Now' An interview with FBI whistleblower Sibel Edmonds by Christopher Deliso August 15, 2005

CD: But you can start from anywhere --

SE: That's the beauty of it. You can start from the AIPAC angle. You can start from the Plame case. You can start from my case. They all end up going to the same place, and they revolve around the same nucleus of people. There may be a lot of them, but it is one group. And they are very dangerous for all of us.

...for control of the heroin trade.

Winners and Losers

I review the first part of How Will Paulson Pick Bank Winners and Losers? by Jane Sasseen, Tuesday, October 21, 2008:

U.S. Treasury Secretary Henry Paulson and other regulators went a bit further toward spelling out how troubled banks will go about securing a capital infusion from the Treasury's $250 billion rescue fund. However, at a press conference held on Monday, Oct. 20, Paulson continued to be mum on a core question: How exactly will regulators decide who does, or does not, get the money?

In other words, will it be a fair, impartial, objective bureaucratic process?

Or, will this be subjective, with Mr. Paulson (or someone else) just making the decision? Based, of course, on that person's best judgment as to what is in the best interests of the American people.

Banking industry sources say the government has little choice but to pick winners and losers among the struggling banks, now that the Treasury has spread half of its first batch of money -- $125 billion -- among nine large institutions. While those that are currently solvent but lack liquidity will likely get funding, others that are essentially insolvent will not, at least not if they remain on their own. "The key is the bank has to be viable," says Bob Litan, a senior fellow and specialist on financial issues at the Brookings Institution. "Regulators have got to make sure that if they put money in, the bank will survive."

As to how they'll do that, exactly, regulators refuse to be specific. Nor will they release the names of any banks that apply and either get turned down by Treasury or withdraw their application -- information that, if it were to become public, would surely lead investors to flee a bank's stock. "Not releasing the criteria or the names of institutions who don't receive funds makes sense, to prevent investors and depositors from drawing negative inferences and acting on incomplete information," says Scott Talbott, a senior vice-president of the Financial Services Roundtable.

Taxpayer Losses Not Expected

Officials made clear Monday that not every bank that applies will necessarily get funding. In a brief speech, Paulson also stressed that the money spent will not lead to taxpayer losses. "This is an investment, not an expenditure, and there is no reason to expect this program will cost taxpayers anything," he said.

And, I trust Mr. Paulson and the Bush Administration. I believe everything they say, and I have no concerns at all about their honesty or integrity.

Paulson said the Treasury has already received "indications of interest from a broad group of banks of all sizes." And he made clear that the money won't be doled out on a first-come, first-serve basis. "Sufficient capital has been allocated so that all qualifying banks can participate," he added.

How do we know that the money is adequate "so that all qualifying banks can participate" -- unless there was a list drawn up before the money was allocated?

And, if a list was drawn up before the money was allocated, why can't we now see the criteria used to draw up that list?

This was preplanned.

They saw this coming, and did nothing to stop it.

I already pointed this out in a previous post, Economic 9-11?

It is the job of the Federal Reserve Board of Governors to monitor the loans being made by banks, identify areas of concern, anticipate the problems that might come up from those concerns, and act to minimize the impact of such problems on the broader financial community.

And, they did not do that.

All of the current members of the Board of Governors of the Federal Reserve were appointed by our current President, George W. Bush.

There needs to be a criminal investigation of this.

And, I don't care how late in Bush's term it is, impeachment must not be off the table. For Speaker of the House Pelosi to take impeachment off the table is dereliction of her duty. It makes me wonder what "Democrat" Pelosi is getting out of all the shady dealings going on in this "Republican" administration.

Instead, the Treasury has worked with the primary regulators of the banking industry -- the Federal Deposit Insurance Corp., the Federal Reserve, the Office of Thrift Supervision, and the Office of the Comptroller of the Currency -- to come up with a uniform application and a standardized evaluation process for all the institutions who want access to new funds. The banks and other institutions will be required to apply by Nov. 14; various regulators will then make a recommendation based on standardized criteria. The final decision, however, will lie with Treasury.

But if that's the case, how do they know that "[s]ufficient capital has been allocated so that all qualifying banks can participate"?

Mergers or Sales Possible

Banking regulators insist they have plenty of insight into the institutions' financial state. "Obviously we're very familiar" with the health of the institutions we oversee, says one senior regulator. He argues that the decisions will be based on our "knowledge of management and the strength of individual business plans, as well as the known strengths and weaknesses" of each institution.

Then how come they didn't see this crisis coming, and take the action they were supposed to take to mitigate this early on?

Other things may factor into their decisions as well. If a troubled institution may no longer be able to last on its own, banking regulators are more likely to push it toward a merger or a sale, as they've done with Bear Stearns and Wachovia (NYSE:WB - News). And in such cases -- or where an institution is able to find a merger partner on its own -- the new joint enterprise could get Treasury funds. Weak firms that can nevertheless do "a concurrent capital rise" will also have a better shot at getting funding, adds another official.

In other words, these regulators decide who sinks, who swims, who gets bought, who gets sold; they have full authority -- and capital -- to compel any reorganization of the financial sector that they deem fit.

Yes, indeed, with that kind of authority, there will be winners and losers.

Does this quote from the Sibel Edmonds case come to mind here? From The Highjacking of a Nation, Part 2: The Auctioning of Former Statesmen & Dime a Dozen Generals by Sibel Edmonds, November 29, 2006:

The foreign influence, the lobbyists, the current highly positioned civil servants who are determined future 'wanna be' lobbyists [snip] operate successfully under the radar, with unlimited reach and power, with no scrutiny, while selling your interests, benefiting from your tax money, and serving the highest bidders regardless of what or who they may be. This deep state seems to operate at all levels of our government; from the President's office to Congress, from the military quarters to the civil servants' offices.

I leave you to read the rest of How Will Paulson Pick Bank Winners and Losers?; I've made my point.

On the horizon
The landscape's burning red
Bushfire
Smoke in your eyes
Smoke in your eyes
If you feel something
That makes you warm all over
If you got a fire and you can't put it out
Got a bushfire

Dems, Lobbyists Blocked Oversight of Fannie, Freddie

This is quality. From AP IMPACT: Mortgage firm arranged stealth campaign, dated October 20, 2008:

WASHINGTON – Freddie Mac secretly paid a Republican consulting firm $2 million to kill legislation that would have regulated and trimmed the mortgage finance giant and its sister company, Fannie Mae, three years before the government took control to prevent their collapse.

In the cross hairs of the campaign carried out by DCI of Washington were Republican senators and a regulatory overhaul bill sponsored by Sen. Chuck Hagel, R-Neb. DCI's chief executive is Doug Goodyear, whom John McCain's campaign later hired to manage the GOP convention in September.

Freddie Mac's payments to DCI began shortly after the Senate Banking, Housing and Urban Affairs Committee sent Hagel's bill to the then GOP-run Senate on July 28, 2005. All GOP members of the committee supported it; all Democrats opposed it.

In the midst of DCI's yearlong effort, Hagel and 25 other Republican senators pleaded unsuccessfully with Senate Majority Leader Bill Frist, R-Tenn., to allow a vote.

"If effective regulatory reform legislation ... is not enacted this year, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole," the senators wrote in a letter that proved prescient.

So, Republicans in the Senate saw the shipwreck that was coming, and wanted to do something about it -- they were going to regulate Freddie Mac and Fannie Mae, and trim them. And, what would have been the effect? Less probability that these two would go under, and less taxpayer exposure if they did?

Unknown to the senators, DCI was undermining support for the bill in a campaign targeting 17 Republican senators in 13 states, according to documents obtained by The Associated Press. The states and the senators targeted changed over time, but always stayed on the Republican side.

In the end, there was not enough Republican support for Hagel's bill to warrant bringing it up for a vote because Democrats also opposed it and the votes of some would be needed for passage. The measure died at the end of the 109th Congress.

Naturally, Democrats were opposed to trimming this quasi-governmental program, and they were opposed to limiting taxpayer exposure.

However, the Republicans are not off the hook! Skipping down....

Before 2004, Fannie Mae and Freddie Mac were Democratic strongholds. After 2004, Republicans ran their political operations. McLoughlin, who joined Freddie Mac in 2004 as chief of staff, has given $32,250 to Republican candidates over the years, including $2,800 to McCain, and has given none to Democrats, according to the Center for Responsive Politics, a nonpartisan group that tracks money in politics.

It's just that, while the Democrats were all against regulation of these quasi-governmental giants, so were some Republicans.

On Friday night, Hagel's chief of staff, Mike Buttry, said Hagel's legislation "was the last best chance to bring greater oversight and tighter regulation to Freddie and Fannie, and they used every means they could to defeat Sen. Hagel's legislation every step of the way."

"It is outrageous that a congressionally chartered government-sponsored enterprise would lobby against a member of Congress's bill that would strengthen the regulation and oversight of that institution," Buttry said in a statement. "America has paid an extremely high price for the reckless, and possibly criminal, actions of the leadership at Freddie and Fannie."

The result: "a congressionally chartered government-sponsored enterprise" (GSE) was playing fast and loose. Having a smaller fraction of reserves, they could make more money when times were good; if their system collapses, they don't care, because they could send the bill back to Congress, regardless of the fact that there was no explicit government guarantee of capital, because the Washington elite would not want to allow this GSE to fail.

So, Congress picks up the tab -- on the giant credit card we have given them.

1) There needs to be a criminal investigation of all of this.

2) The Constitution does not authorize the Federal Government to get involved in the mortgage market; these "government sponsored enterprises" are unconstitutional, and this economic disaster demonstrates why.

Last month, the concerns of the 26 Republican senators who signed Hagel's bill became a reality when the government seized control of Freddie Mac and Fannie Mae amid their near financial collapse. Federal prosecutors are investigating accounting, disclosure and corporate governance issues at both companies, which own or guarantee more than $5 trillion in mortgages, roughly equivalent to half of the national debt.

[snip]

Democrats did not like the harshest provision, which would have given a new regulator a mandate to shrink Freddie Mac and Fannie Mae by forcing them to sell off part of their portfolios. That approach, the Democrats feared, would cut into the ability of low- and moderate-income families to buy houses.

That's a chunk of change -- all because the socialist elite Democrats want taxpayers to underwrite loans for people who can't really afford them.

It's an economic train-wreck; Senator McCain will do nothing to slow this down, and Senator Obama will do everything to speed this up.

Bushfire Revisited

I haven't posted a great deal lately, because I find the information I am learning to be so captivating that I haven't been able to tear myself away from reading and researching long enough to write!

Mostly what intrigues me is researching the current financial crisis, and considering the information I encounter as viewed under the light of the Sibel Edmonds investigation.



May I ask you to consider carefully the following selection of quotes from the Sibel Edmonds case, and to pay particular attention to references to money and financial institutions, and consider these in the context of our financial crisis?



From Former FBI Translator Sibel Edmonds Calls Current 9/11 Investigation Inadequate by Jim Hogue, May 07, 2004:

JH: Can you explain more about what money you are talking about?

SE: The most significant information that we were receiving did not come from counter-terrorism investigations, and I want to emphasize this. It came from counter-intelligence, and certain criminal investigations, and issues that have to do with money laundering operations.

You get to a point where it gets very complex, where you have money laundering activities, drug related activities, and terrorist support activities converging at certain points and becoming one. In certain points -- and they [the intelligence community] are separating those portions from just the terrorist activities. And, as I said, they are citing "foreign relations" which is not the case, because we are not talking about only governmental levels. And I keep underlining semi-legit organizations and following the money. When you do that the picture gets grim. It gets really ugly.

From Former FBI Translator Sibel Edmonds Calls Current 9/11 Investigation Inadequate by Jim Hogue, May 07, 2004:

JH: Here's a question that you might be able to answer: What is al-Qaeda?

SE: This is a very interesting and complex question. When you think of al-Qaeda, you are not thinking of al-Qaeda in terms of one particular country, or one particular organization. You are looking at this massive movement that stretches to tens and tens of countries. And it involves a lot of sub-organizations and sub-sub-organizations and branches and it's extremely complicated. So to just narrow it down and say al-Qaeda and the Saudis, or to say it's what they had at the camp in Afghanistan, is extremely misleading. And we don't hear the extent of the penetration that this organization and the sub-organizations have throughout the world, throughout their networks and throughout their various activities. It's extremely sophisticated. And then you involve a significant amount of money into this equation. Then things start getting a lot of overlap -- money laundering, and drugs and terrorist activities and their support networks converging in several points. That's what I'm trying to convey without being too specific. And this money travels. And you start trying to go to the root of it and it's getting into somebody's political campaign, and somebody's lobbying. And people don't want to be traced back to this money.

From Cracking the Case: An Interview With Sibel Edmonds by Scott Horton, August 22, 2005:

SH: Okay, and you mention when you talk about criminal activity, drug-running, money-laundering, weapons-smuggling...

SE: And these activities overlap. It's not like okay, you have certain criminal entities that are involved in nuclear black market, and then you have certain entities bringing narcotics from the East. You have the same players when you look into these activities at high-levels you come across the same players, they are the same people.

SH: Well, when we're talking about those kind of levels of liquid cash money we probably also have to include major banks too, right?

SE: Financial institutions, yes.

From 'The Stakes Are Too High for Us to Stop Fighting Now' An interview with FBI whistleblower Sibel Edmonds by Christopher Deliso August 15, 2005:

SE: Look, I think that that [the AIPAC investigation] ultimately involves more than just Israelis -- I am talking about countries, not a single country here. Because despite however it may appear, this is not just a simple matter of state espionage. If Fitzgerald and his team keep pulling, really pulling, they are going to reel in much more than just a few guys spying for Israel.

CD: A monster, 600-pound catfish, huh? So the Turkish and Israeli investigations had some overlap?

SE: Essentially, there is only one investigation -- a very big one, an all-inclusive one. Completely by chance, I, a lowly translator, stumbled over one piece of it.

But I can tell you there are a lot of people involved, a lot of ranking officials, and a lot of illegal activities that include multi-billion-dollar drug-smuggling operations, black-market nuclear sales to terrorists and unsavory regimes, you name it. And of course a lot of people from abroad are involved. It's massive. So to do this investigation, to really do it, they will have to look into everything.

CD: But you can start from anywhere --

SE: That's the beauty of it. You can start from the AIPAC angle. You can start from the Plame case. You can start from my case. They all end up going to the same place, and they revolve around the same nucleus of people. There may be a lot of them, but it is one group. And they are very dangerous for all of us.

You can also start from our financial crisis, and our bailout plan.


Meanwhile, may I suggest you review my Bushfire series, which I now have listed under "Important Posts" in the sidebar? Because what I show in that series is exactly what is going on in the financial world today.

Bushfire, Part 1

Bushfire, Part 2

Bushfire, Part 3

Bushfire, Part 4


Also, in light of the current financial crisis, you may wish to review 363.