Rescue for the Few, Debt Slavery for the Many

Rescue for the Few, Debt Slavery for the Many

Michael Hudson
Counterpunch
October 13, 2008

We are now entering the financial End Time. Bailout “Plan A” (buy the junk mortgages) has failed, “Plan B” (buy ersatz stocks in the banks to recapitalize them without wiping out current mismanagers) is fizzling, and the debts still can’t be paid. That is the reality Wall Street avoids confronting. “First they ignore you, then they denounce you, and then they say that they knew what you were saying all the time,” said Gandhi. The same might be said of today’s overhang of debts in excess of the economy’s ability to pay. First the policy makers pretend that they can be paid, then they denounce the pessimists as spreading panic, and then they say that of course students have been taught for four thousand years now how the “magic of compound interest” keeps on doubling and redoubling debts faster than the economy can squeeze out an economic surplus to pay.

Wall Street
The amazing feature of today’s crash is how many Wall Street firms actually believed that the game of musical financial chairs could go on before they had to stop dancing and indeed, escape from the room.

What has ended is the idea that “the magic of compound interest” can make economies rich without having to work and without industry. I hope we have seen the end of derivatives formulae seeking to make money by playing in a zero-sum game. A debt overhang always ends either in foreclosure of the debtor’s property, or in a debt annulment to preserve the economy’s overall freedom and equity.

This means that the postmodern economy as we know it must end – either in financial polarization and debt peonage to a new oligarchic elite, or in a debt cancellation, a Jubilee Year to rescue society. But when the government says that it is reviewing “all” the options, this reality is not one of them. Treasury Secretary Henry Paulson’s first option was to buy packages of junk mortgages (collateralized debt obligations, CDOs) to save the wealthiest institutional investors from having to take a loss on their bad bets. When this was not enough, he came up with “Plan B,” to give money to banks. But whereas Britain and European countries talked of nationalizing banks or at least taking a controlling interest, Mr. Paulson gave in to his Wall Street cronies and promised that the government’s stock purchases would not be real. There would be no dilution of existing shareholders, and the government’s investment would be non-voting. To cap the giveaway to his cronies, Mr. Paulson even agreed not to ask executives to give up their golden parachutes, exorbitant annual bonuses or salaries.

Plan A (the $700 billion to buy mortgage-backed junk that the private sector will not buy) failed partly because it let financial institutions avoid putting a fair value on the debt packages they were selling. Instead of telling the truth about their financial position by marking assets to market prices), they can “mark to model,” Enron-style. We have seen the result: A solid week of plunging stock market prices. The public media call this a panic, but there is nothing irrational about it. Who in their right mind would buy securities or buy into a bank without knowing what the securities were worth? Faith in junk mathematical models has ended.

So we still await a public response to the problem of how to write down debts. Whose economic interest will have to give: that of debtors, as increasingly has been the case over the past eight centuries; or that of creditors, which have fought back to create a neoliberal economy controlled by the FIRE sector?

It is not too late to decide which road to take, but Wall Street bankers and creditors have taken the lead in positioning themselves. Seeing which way the political winds were blowing, they moved to empty out the Treasury before the November 3 elections much like medieval citizens fleeing a horde of Mongolian raiders under Genghis Khan. “We’re moving. Clean out the cupboards,” much as Lehman Brothers emptied out their foreign bank accounts in Britain and elsewhere just before declaring bankruptcy, taking what they could and steering it to their best friends.

The pretense was that a bailout was needed to restore confidence. But the ensuing week showed that the claims were false. It didn’t turn the stock market around as promised. The Dow Jones Industrial Average fell 2,200 points from Wednesday, October 1 through the following Friday October 10 – eight straight trading days, not even pausing for the usual zigzags. Friday’s plunge was 100 points a minute for the first seven minutes – a 690 point drop to under 8000. Each 100 points was more than a 1 percent drop, which was reflected on the NASDAQ. Nothing could withstand the pressure of so many Americans cashing in their mutual funds overnight and so many foreigners in earlier time zones putting in sell-at-market orders.

Short sellers made one of the largest and quickest fortunes ever, and then covered their positions by buying back the stocks they had pre-sold. This pushed prices up even into positive territory just before 10:30 AM when George Bush began to speak. Half the financial stocks showed gains – a sign that the Plunge Protection Team had jumped in. But Mr. Bush said nothing helpful and stocks went back into freefall, ending down another 128 points despite the upcoming weekend G7 meeting. There was no talk at all of reducing debt levels – only of giving more money to banks, insurance companies and other money managers, as if “pushing on a string” somehow would lead them to lend yet more to an already debt-ridden economy.

If Congress really wanted to restore confidence, here’s what it might have done: First, mark to market, not to model. Investors no longer believe America’s Enron-style accounting, debt rating agencies or monoline risk insurers. They don’t trust U.S. banks to be honest about their financial positions. They worry about the fraud charges brought by attorneys general in eleven states against predatory lenders such as Countrywide and Wachovia that Citibank, JPMorgan Chase and Bank of America were so eager to buy.

So is it too late for Congress to change its mind and repeal the giveaway? If the $700 billion handout didn’t stabilize the unsalvageable for small investors, pension funds and even the financial sector itself, what did it do?

What the Fed has been doing while the media have not been looking?

Let’s put the giveaway in perspective. While Senators and Congressmen subject to voters’ choice were debating $700 billion for the major Wall Street contributors to both parties (admittedly only for starters, Mr. Paulson explained), the Federal Reserve already had given even more, without any public discussion and without the major media noticing. Since Bear Stearns failed in March, the Federal Reserve has used the small print of its charter to go outside its normal customers (which are supposed to be commercial banks), to give investment banks, brokerage houses and now large corporations almost indiscriminately some $875 billion in “cash for trash” swaps. (The statistics are released each week in the Fed’s H41 report.) Like Aladdin offering new lamps for old, the Fed has exchanged Treasury securities for junk mortgages and other securities that brokerage houses and investment banks did not have time to pawn off onto OPEC, Asian sovereign wealth funds or other investors.

The press lauds Mr. Bernanke as “a student of the Great Depression.” If he were, he should know that what led to the 1929 collapse were harsh U.S. Government creditor policies toward its World War I Allied governments. This created a situation where the Federal Reserve had to provide easy credit to hold interest rates artificially low so as to encourage U.S. investors to lend to Britain and Germany, which would use these dollar inflows to pay their Inter-Ally arms and reparations debts. Mr. Bernanke’s predecessor, Alan Greenspan, promoted easy credit simply for ideological reasons, to enrich Wall Street by enabling it to sell more debt.

A student of the Great Depression would understand the conflicts of interest between retail commercial banking and wholesale investment banking and money management that led Congress to pass the Glass-Steagall Act in 1933 – conflicts unleashed once again when Pres. Clinton backed then-Fed Chairman Alan Greenspan and Republican leader (and McCain hero) Senator Phil Gramm in leading the repeal of this act, opening up the floodgates to today’s financial double-dealing that has cost the American economy so much.

If Mr. Bernanke does know this history, his behavior is simply that of an opportunistic student of the art of political self-advancement, toadying to Wall Street in campaigning for one last great rip-off before the Bush Administration goes out of business. The Fed has given Wall Street newly minted Treasury bonds, added to the national debt out of thin air. It has done this without feeling any need to rationalize it by drawing absurd public-relations pictures about how the government may “make a profit for taxpayers.”

The Fed Chairman is not elected democratically. He traditionally is designated by the Wall Street financial sector that the Fed is supposed to regulate, acting as its lobbyist for creditor interests – the top 10 percent of the population – against that of the indebted “bottom 90 percent.” This “independence of the central bank” is trumpeted as a hallmark of democracy. But it is undemocratic, precisely by being isolated from public control.

The Age of Oligarchy

Treasury Secretary Paulson has no such luxury. The Treasury is supposed to represent the national interest, not that of bankers – even though its head these days is drawn from Wall Street and acts as its lobbyist. Mr. Paulson presented his almost totalitarian giveaway gruffly to Congress on a take-it-or-leave it basis, announcing that if Congress did not save Wall Street from taking losses on its mountain of bad loans, the banks were willing to crash the economy out of spite. “Please don’t make us wreck the economy,” he said in effect. As Margaret Thatcher used to say while selling off the British government’s crown jewels in the 1980s, TINA: There is no alternative.

In making this bold threat Mr. Paulson behaved as arrogantly as Lehman’s CEO Richard Fuld did when he tried to bluff Korea and other prospective investors into paying the full, fictitiously high book value for his company. (His bluff failed and Lehman went bankrupt, wiping out its shareholders, including the employees and managers who held 30 percent of its stock.) There turned out to be an alternative after all. Responding to the loudest public condemnation in memory, Congress called Mr. Paulson’s bluff.

What made his $700 billion Troubled Asset Relief Program (TARP) so much more visible to the media than the Fed’s actions is that Congress is involved, and this is an election year. The level of deception and false argument is therefore enormous – along with a few tradeoffs and tax cuts to distract attention. Erstwhile Republican opponent Sen. Jeff Sessions of Alabama came right out and said that “This bill has been packaged with a lot of very popular things to give it even more momentum,” so that (as The New York Times explained), “instead of siding with a $700 billion bailout, lawmakers could now say they voted for increased protection for deposits at the neighborhood bank, income tax relief for middle-class taxpayers and aid for schools in rural areas where the federal government owns much of the land.”

Left behind while Wall Street’s believers in the rapture of free markets were swept up to heaven by “socialism for the rich” have been mortgage debtors, student-loan debtors, the Pension Benefit Guarantee Corporation (PBGC, some $25 billion short), the Federal Deposit Insurance Corporation (FDIC, about $40 billion short), as well as Social Security which, we are warned, may run up a trillion dollar deficit thirty or forty years down the line. Only the wealthiest have been beneficiaries, not voters, homeowners and other debtors.

Still, Congress was panicked into acting on Friday, October 3, because a week earlier, September 26, stocks fell 777 points after Congressmen responded to an unprecedented volume of voter protest against the bailout. “This sucker could go down,” Pres. Bush warned as Wall Street’s lobbyists blamed the market downturn to the failure of Congress to preserve the “monetary system,” and specifically the banks and insurance companies that already had lost their net worth and were plunging deeper into Negative Equity territory. Democratic leaders Barney Frank and House Speaker Nancy Pelosi said, in effect, “Look what you’ve done! You irresponsible politicians are grandstanding on principle, and wiping out peoples’ stock market savings and threatening their pension funds. If you don’t give Wall Street firms enough money to cover their losses so that everyone wins, they’ll kill the economy until they get their way.” Well, they didn’t quite say this, but that was basically their message. It certainly was Wall Street’s message: “Wall Street to Economy: Your money or your life.”

So Congress gave in. Democrats ran like lemmings to “save the economy.” Yet the stock market fell a few hundred points, and kept on plunging all week long, much worse and much faster than had occurred right after Congress had initially defeated the bill.

The “Reality Problem”

What did the “free market” theory underlying the giveaway leave out of account? For starters, “the monetary system” turns out to be a euphemism for the fortunes of financial gamblers using junk mathematics (the Merton-Scholes derivatives formula) based on junk economics (blessed with Nobel Prizes) to buy, speculate and even to insure junk mortgages, junk bonds and junk commercial paper and derivatives based on their relative prices. So what is left out first of all was full knowledge of the value of what is being bought and sold. Mark-to-market models leave the price up to the investment bankers. If trust existed and there really was honor among these thieves, a government bailout would not be necessary, because “the market” could clear.

“Free market” ideology assumes that each party will act in his or her self-interest. If this is so, why should foreign governments accumulate more dollar claims on the U.S. Treasury, which already owes their central banks $4 trillion? When there hardly were enough Treasury securities to go around even as the United States ran unprecedented federal budget deficits, U.S. officials urged these banks and sovereign wealth funds to buy packaged mortgages yielding a higher rate of return. And at least by buying these bonds, foreign governments would not be accused of funding America’s war in Iraq that most of their voters opposed. But investors made a fatal mistake in believing U.S. representations of the value of their junk-mortgage packages. This trust has now been lost, all the more so since the bailout’s permission to keep on “marking to market.”

Congress thought that its $700 billion would distract attention at least until the November 4 election. But to no avail. Markets fell 157 points on Giveaway Friday, and kept on going down another 800 points on Monday, October 6 (to about 9500) before bouncing 500 points off the floor, only to fall even more through Friday. So the giveaway failed in its stated purpose to rescue stock market investors (“peoples’ capitalism”) or their pension funds. But that was not its real purpose. The time simply had come to clear out and take whatever one could.

Making banks and insurers in the zero-sum derivative game whole, so that winners can collect their bets while losers can sell their bad investments to the Treasury, is supposed to re-inflate the credit pyramid. The idea is to solve the debt problem with yet more debt to prop up housing prices once again to unaffordable levels! This is not a long-term solution, but it would give insiders enough time to arrange a do-over and get out of the game more quickly, to sell out their junk mortgages and junk bonds to the proverbial “greater fool” – in this case, the “greater fool of last resort,” the U.S. Treasury, as long as it can be run by Mr. Paulson or, under Mr. Obama, perhaps the former Goldman-Sachs official Robert Rubin.

The banks are to “earn” their way out of their negative equity position by selling more of their product – credit – to increase the economy’s debt levels and hence receive more interest payments. The problem is that most families are already “loaned up.” They have no more discretionary income to pledge to carry more debt. Without writing down their debts, there will be no fresh lending, and hence no source of credit and purchasing power for new autos, appliances, goods and services in general. Debt deflation is being imposed on the “real” economy. Creditors and speculators alone are to be made whole.

If no revenue was available for future Social Security, public health care and repair the nation’s depleted infrastructure before this giveaway, think of how bare the cupboard must be now that the government has run up the recent trillions of dollars in new debt rather than writing off a penny of the bad mortgage debts being blamed for causing the debacle.

We can see where this is leading. The wealthiest 1 percent of the population will come into possession of even more returns to wealth than the 57 percent that they are now taking. In contrast to the Statue of Liberty’s inscription “give me your poor … yearning to breathe free,” the Fed – and now the Treasury, with Congressional blessing – is taking from the public purse and giving to America’s wealthiest investors and insiders. This “Robin Hood in Reverse” program is being done without strings, without asking banks to stop paying dividends, exorbitant executive salaries and golden parachutes, and without taking over banks with negative net worth of the kind that many homeowners are experiencing.

Nobody is talking about a debt write-down or moratorium. The subprime mortgage problem could have been solved by writing down just $1 or $2 trillion of the face value and interest rates of predatory loans. Instead, the $10+ trillion in financial-sector damage in recent weeks reflects Wall Street’s fraudulent packaging and sale of junk mortgages at unrealistically high prices, using junk mathematics to calculate junk derivatives and sell them to gullible investors who believe that the pretenses these mathematics, credit ratings and projected income have a basis in reality.

The amazing feature of today’s crash is how many Wall Street firms actually believed that the game of musical financial chairs could go on before they had to stop dancing and indeed, escape from the room. I remember one day back in the 1970s when I warned Frank Zarb of Lazard Freres about the likelihood of Third World debt defaults, and suggested that the firm should do an ability-to-pay analysis. “We don’t have to do any such thing,” he replied. “We have the schedule of what they owe right here in this IMF report.” It was a thick printout of the scheduled debt service for an African country that soon became insolvent. But Wall Street’s mentalité was that of Herbert Hoover on the eve of the Great Depression: A debt is a debt, and that is that. The response is to blame the victim, as if the irresponsibility lies with debtors rather than creditors.

No reversal of the Bush tax cuts is offered to re-inflate the economy, no move toward more progressive taxation of Wall Street speculators who pay only a 15 percent “capital gains” tax rate instead of the much higher income-tax and FICA withholding rates that wage-earners pay. (Wall Street has its own golden parachute program, so why should it pay for Social Security for the rest of society?) There is to be no reduction in the special tax benefits for real estate, whose tax favoritism led to the crisis by “freeing” more income from the tax collector to be pledged to mortgage bankers as interest. The Bubble Economy is to be re-inflated by Fannie Mae, Freddie Mac and the FHA lending to help buyers bid up housing and commercial office prices once again to a rate that promises to impose debt peonage on homeowners.

The budget deficit will soar, without any prosecution of tax evasion scams by UBS or KPMG. Instead of a fiscal or regulatory comet driving these dinosaurs to extinction, the climate has turned more conducive to their proliferation. Our Age of Deception is to be locked in even more tightly. The Congressional bailout’s suspension of mark-to-market rules to rely on Wall Street’s “self-regulation” should win a prize for Oxymoron of 2008 as investors have no clue as to what financial assets are worth. No wonder lending has dried up, especially to banks themselves.

Just as financial victims fail to vote and support their self-interest, predators also turn out to pursue self-defeating “free market” strategies. The financial sector’s short-termism is the greatest enemy to its survival. It has translated its wealth into a fatal political control of its legal climate, blocking [with the explicit support of Barack Obama, Editors] Congressional efforts to rewrite the oppressive bankruptcy laws that credit-card banks lobbied so hard to pass, [with vital help from Joe Biden, the senior senator from credit card company HQ, the state of Delaware, Editors] crucial. These hard bankruptcy terms prevent the courts from renegotiating homeowner debts to keep property occupied, accelerating the real estate price collapse. The result is today’s negative equity, posing the question of just who is to bear the cost of bring debts back in line with the economy’s ability to pay. Will it be the financial institutions that sponsored asset-price inflation and lobbied for deregulation of lenders? Or, will it be the debtors who thought they were riding the wave to get an inflationary free lunch?

Instead of requiring creditors to absorb losses on the excess of debts over what can be paid, the debts are being kept in place, not scaled back to what the economy can pay. The government is to make creditors and computerized derivatives speculators whole – and will act as collecting agent for the overhead of bad debts the economy has run up.

Today we can see the debt-fueled bubble of asset-price inflation that Alan Greenspan trumpeted as real wealth creation for what it really is – credit creation to bid up real estate, stock market and packaged-debt prices. Tangible capital formation has been left out of account, as if postindustrial economies no longer need it.

Will voters see the asymmetry in Congress’s failure to offer debt relief for homeowners as real estate prices plunge below the mortgages that are owed? Will its members be blamed for not rewriting the nation’s bankruptcy laws to free families from debt peonage – and free housing markets from the price declines that result from today’s proliferation of foreclosure sales? For that matter, will there be no relief for corporations having to cut back investment in order to service their junk bonds and other debts with which Wall Street’s corporate raiders and “shareholder activists” have loaded then down?

Evidently not.

Let the Banks Fail

Let the Banks Fail

[originally published 2007-08-17 11:22:01 -0500 but more relevant now than ever]

Now that the financial system is imploding as we all knew that it would, it’s time to get serious about solving the problem that has plagued our nation for almost 200 years – the private central banking system. It’s time to let it go. It’s time to do what Andrew Jackson tried to do a very long time ago. The truth of this excerpt from his Bank Veto Message of July 10, 1832 is as relevant now as it was then.

The present corporate body, denominated the president, directors, and company of the Bank of the United States, will have existed at the time this act is intended to take effect [almost two hundred and] twenty years. It enjoys an exclusive privilege of banking under the authority of the General Government, a monopoly of its favor and support, and, as a necessary consequence, almost a monopoly of the foreign and domestic exchange. The powers, privileges, and favors bestowed upon it in the original charter, by increasing the value of the stock far above its par value, operated as a gratuity of many millions to the stockholders…. The act before me proposes another gratuity to the holders of the same stock, and in many cases to the same men, of at least seven millions more….It is not our own citizens only who are to receive the bounty of our Government. More than eight millions of the stock of this bank are held by foreigners. By this act the American Republic proposes virtually to make them a present of some millions of dollars. EVERY monopoly and all exclusive privileges are granted at the expense of the public, which ought to receive a fair equivalent. The many millions which this act proposes to bestow on the stockholders of the existing bank must come directly or indirectly out of the earnings of the American people…. It appears that more than a fourth part of the stock is held by foreigners and the residue is held by a few hundred of our own citizens, chiefly of the richest class. Is there no danger to our liberty and independence in a bank that in its nature has so little to bind it to our country? The president of the bank has told us that most of the State banks exist by its forbearance. Should its influence become concentered, as it may under the operation of such an act as this, in the hands of a self-elected directory whose interests are identified with those of the foreign stockholders, will there not be cause to tremble for the purity of our elections in peace and for the independence of our country in war? Their power would be great whenever they might choose to exert it; but if this monopoly were regularly renewed every fifteen or twenty years on terms proposed by themselves, they might seldom in peace put forth their strength to influence elections or control the affairs of the nation. But if any private citizen or public functionary should interpose to curtail its powers or prevent a renewal of its privileges, it can not be doubted that he would be made to feel its influence. It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes. Distinctions in society will always exist under every just government. Equality of talents, of education, or of wealth can not be produced by human institutions. In the full enjoyment of the gifts of Heaven and the fruits of superior industry, economy, and virtue, every man is equally entitled to protection by law; but when the laws undertake to add to these natural and just advantages artificial distinctions, to grant titles, gratuities, and exclusive privileges, to make the rich richer and the potent more powerful, the humble members of society the farmers, mechanics, and laborers who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their Government. There are no necessary evils in government. Its evils exist only in its abuses. If it would confine itself to equal protection, and, as Heaven does its rains, shower its favors alike on the high and the low, the rich and the poor, it would be an unqualified blessing. In the act before me there seems to be a wide and unnecessary departure from these just principles.

* * * Experience should teach us wisdom. Most of the difficulties our Government now encounters and most of the dangers which impend over our Union have sprung from an abandonment of the legitimate objects of Government by our national legislation, and the adoption of such principles as are embodied in this act. Many of our rich men have not been content with equal protection and equal benefits, but have besought us to make them richer by act of Congress. By attempting to gratify their desires we have in the results of our legislation arrayed section against section, interest against interest, and man against man, in a fearful commotion which threatens to shake the foundations of our Union. It is time to pause in our career to review our principles, and if possible revive that devoted patriotism and spirit of compromise which distinguished the sages of the Revolution and the fathers of our Union. If we can not at once, in justice to interests vested under improvident legislation, make our Government what it ought to be, we can at least take a stand against all new grants of monopolies and exclusive privileges, against any prostitution of our Government to the advancement of the few at the expense of the many, and in favor of compromise and gradual reform in our code of laws and system of political economy….

It’s time to let the banks fail. Let the stocks fall. And let the chips fall where they may. Let freedom truly reign in America. Our MONEY belongs to US – NOT the banks. Let’s stop borrowing it from them.

Comment

“I don’t believe that China and Bush are on even occasional cunnilingus terms”
http://www.iraq-war.ru/article/138351
or
http://iraqwar.mirror-world.ru/article/138351
russian servers, may be slow or offline

RowanBerkeley | Fri, 2007-08-17 21:48

Amen.

If you want to make a real individual effort, DONT BORROW MONEY FROM BANKS and DONT USE CREDIT CARDS!

IF YOU HAVE CREDIT CARDS, pay them off and get rid of them.

IF you haven’t borrowed money from the bank..>DONT. (See rule of 72, they abuse you and you don’t even know it).

If you’re in a loan, so be it, your awake now and from now on, change and dont use the Bank, its a mark you’ll regret.

DONT BORROW MONEY, DONT USE CREDIT CARDS.

IT IS THE LEAST WE WHO SEE CAN DO.

Spread the word.

Peacetroll | Fri, 2007-08-17 21:51

thanks for the links to the amazing comments.

very good read!

—————————————
“Money” has no value – people do.

qrswave | Fri, 2007-08-17 22:16

It went through a slack period when the original person got leaned upon, but it seems to have bounced back under new management.

My all time favourite comment on there was someone who said “all government is gangster, and, by the way, I am going out now to buy kalashnikov – goodbye”

RowanBerkeley | Fri, 2007-08-17 22:33

Greg Bacon

The Federal Reserve is a cabal of private banks that have nothing to do with accountability to the government.

Their only duty is to make, print, and extort as much money from our pockets as possible.

The FR was put into law in 1913. That’s when Congress officially gave up the Constitutional power to print money.

The US is so far in debt to the “KOSHER NOSTRA” that all of our personal income taxes only pay off part of the interest owed each year.
Corporate income taxes get plowed back into the Pentagon.

We’ll never climb out of this financial hole, unless we take back the country in another revolution.
And not your run of the mill Revolution, but a damned bloody one like the French had in 1789.

We are nothing more than economic slaves to the FR and they are more than happy to oblige in keeping us chained in slavery.. forever.

Greg Bacon | Fri, 2007-08-17 23:23

then to have us raise our arms against them, for in a bloody revolution, those with the biggest guns and the most money will win.

And we know who they are.

What we need, now more than ever, are Americans who are willing to live without the perks and benefits that come with doing the banker’s dirty work, bending to their will, and consuming what they have to offer us.

It is only when the majority of Americans STOP WORKING FOR THEM, STOP BUYING FROM THEM, and STOP BORROWING FROM THEM that we can ever hope to prevail.

—————————————
“Money” has no value – people do.

qrswave | Fri, 2007-08-17 23:29

..I am pleased to have met ( if only by words ) your aquaintence ! I suspect because the devils also see what you see, the forced acceptance of the ‘ RFID ‘(?) chip ‘ is not far off. Peace be to you and yours.

—————————————
Repent and Do Penance

Jesse | Fri, 2007-08-17 23:55

“Rowin’ ” Berkeley” – Do you get some sort of vicarious thrill from reposting such “great comments” as your scintillating “cunnilingus terms” on other blogs than your own, notably Qrswave’s ? Does this give you some perverted satisfaction that you could never otherwise get in your own everyday life ?

Why don’t you stop taking advantage of Qrswave’s good will by sliming up her excellent work with snot such as that ?

And while you’re at it now, why don’t you refrain from wiping yourself on my own personal blog, and just wipe it right back on the mirror of your own personal little masturbatorium,
wherever that is, and row your little toy boat elsewhere ?

quasimodo | Sat, 2007-08-18 03:38

it comes with the territory, bro

RowanBerkeley | Sat, 2007-08-18 12:48

I totally agree with Peacetroll.

Try and keep contact with the legalised sharks to a bare minimum. I wrote an article on this subject a week or so ago. Here’s the link: http://mymarilyn.blogspot.com/2008/10/shed-tear-for-banks-youve-got-to-be.html

hagley road to ladywood – http://www.mymarilyn.blogspot.com

claude | Mon, 2008-10-13 11:51

Fox New Expose: Israelis Had Foreknowledge of 9-11

more about “Fox New Expose: Israelis Had Foreknow…“, posted with vodpod
Comment by: monti
Posted on: 11/25/2007 7:21:59 PM
The Rapture will take place soon and reality will set in to the ones left here. Then they will really understand what store your riches in heaven means. What you have done to the least of them you have done too me. Sound familiar?

Comment by: natgershman
Posted on: 3/30/2007 3:15:22 PM
FAUX is full of S**t and they have no credibility except with the wacko right wing jerks. This story is no doubt bullsh*t too.

Comment by: jenniferje2
Posted on: 3/30/2007 2:16:35 PM
doesn’t it go without saying every industrialized nation spies on the others; wouldn’t they be emiss not to? Also I think the Israeli’s would have thought or known we had the same info and just didn’t realize we were too stupid and/or nefarious to use that info to protect anybody except themselves

Comment by: larilee
Posted on: 3/29/2007 10:53:50 AM
And if Bush wouldn’t listen to US Security advisors, would he have listened to the Israelis? He’s too close to Saudi Arabian insterests.

Comment by: larilee
Posted on: 3/29/2007 10:52:53 AM
As George Bush was told of Al-Quada possibly using airplanes as missiles and targetting US landmarks a few days prior to 9/11, is it surprising others knew about the planned attacks? And if Bush wouldn’t listen to US security advisors, would he have listened to Israelis?

Comment by: reality
Posted on: 3/25/2007 8:34:14 AM
The links to this story may be short lived as Fox is having them taken down. Google “Odigo” and you will see that this Israeli firm warned people 2 hours before teh first plane hit: http://www.whatreallyhappened.com/spyring.html

Comment by: reality
Posted on: 3/25/2007 8:31:45 AM
What is surprising is that this came from FOX…

Bush Signs Presidential Transition Order

Bush Signs Presidential Transition Order

Executive Order Effectively Turns White House

Keys Over To Either Obama Or McCain

(CBS/AP) A piece of paper that President Bush signed Thursday helps ease his way out of the White House when his term ends and clears the way for his successor.

For seven years and nearly nine months, he has signed virtually every memo or order or piece of legislation imaginable. He even vetoed a few bills, but the directive he put his name on Thursday was one that few talk very much about. Basically, it’s the executive order that turns the keys to the White House over to whomever is elected president on Nov. 4.

A little publicized truth is that Washington can’t wait until inauguration day next Jan. 20 to figure out the details of a transition to a new presidency. Both Barack Obama and John McCain already have designated officials to oversee such a transition once the outcome of the election is known. The transition team of the winning candidate will set up procedures for selecting key personnel and making policy decisions in the 11 weeks between the election and when the new president takes office.

Congress has appropriated $8 million to finance transition operations.

White House press secretary Dana Perino said Bush’s order was designed to help coordinate efforts already under way to ensure a seamless transition. She said Bush wants to make sure the next president’s team has everything it needs to hit the ground running.

“This is especially important as our nation is fighting a war, dealing with a financial crisis and working to protect ourselves from future terrorist attacks,” Perino said.

Bush’s order established a presidential transitional coordinating council whose members include top officials from the intelligence and national security community, as well as the White House budget office, the Justice Department, Homeland Security and other agencies. Even before the election, they will work with the Obama and McCain campaigns “on an equal basis and without regard for party affiliation,” the order directs.

“The council shall assist the major party candidates and the president-elect by making every reasonable effort to facilitate the transition between administrations,” Bush’s order said.

President Clinton issued a similar Executive Order on presidential transition to his successor, reports CBS News White House Correspondent Mark Knoller — though his came after the election, on Nov 27, 2000.

Anti-Democratic Nature of US Capitalism is Being Exposed

Anti-Democratic Nature of US Capitalism is

Being Exposed

Bretton Woods was the system of global financial management set up at the end of the second World War to ensure the interests of capital did not smother wider social concerns in post-war democracies. It was hated by the US neoliberals – the very people who created the banking crisis writes Noam Chomsky

by Noam Chomsky

THE SIMULTANEOUS unfolding of the US presidential campaign and unraveling of the financial markets presents one of those occasions where the political and economic systems starkly reveal their nature.

Passion about the campaign may not be universally shared but almost everybody can feel the anxiety from the foreclosure of a million homes, and concerns about jobs, savings and healthcare at risk.

The initial Bush proposals to deal with the crisis so reeked of totalitarianism that they were quickly modified. Under intense lobbyist pressure, they were reshaped as “a clear win for the largest institutions in the system . . . a way of dumping assets without having to fail or close”, as described by James Rickards, who negotiated the federal bailout for the hedge fund Long Term Capital Management in 1998, reminding us that we are treading familiar turf. The immediate origins of the current meltdown lie in the collapse of the housing bubble supervised by Federal Reserve chairman Alan Greenspan, which sustained the struggling economy through the Bush years by debt-based consumer spending along with borrowing from abroad. But the roots are deeper. In part they lie in the triumph of financial liberalisation in the past 30 years – that is, freeing the markets as much as possible from government regulation.

These steps predictably increased the frequency and depth of severe reversals, which now threaten to bring about the worst crisis since the Great Depression.

Also predictably, the narrow sectors that reaped enormous profits from liberalisation are calling for massive state intervention to rescue collapsing financial institutions.

Such interventionism is a regular feature of state capitalism, though the scale today is unusual. A study by international economists Winfried Ruigrok and Rob van Tulder 15 years ago found that at least 20 companies in the Fortune 100 would not have survived if they had not been saved by their respective governments, and that many of the rest gained substantially by demanding that governments “socialise their losses,” as in today’s taxpayer-financed bailout. Such government intervention “has been the rule rather than the exception over the past two centuries”, they conclude.

In a functioning democratic society, a political campaign would address such fundamental issues, looking into root causes and cures, and proposing the means by which people suffering the consequences can take effective control.

The financial market “underprices risk” and is “systematically inefficient”, as economists John Eatwell and Lance Taylor wrote a decade ago, warning of the extreme dangers of financial liberalisation and reviewing the substantial costs already incurred – and proposing solutions, which have been ignored. One factor is failure to calculate the costs to those who do not participate in transactions. These “externalities” can be huge. Ignoring systemic risk leads to more risk-taking than would take place in an efficient economy, even by the narrowest measures.

The task of financial institutions is to take risks and, if well-managed, to ensure that potential losses to themselves will be covered. The emphasis is on “to themselves”. Under state capitalist rules, it is not their business to consider the cost to others – the “externalities” of decent survival – if their practices lead to financial crisis, as they regularly do.

Financial liberalisation has effects well beyond the economy. It has long been understood that it is a powerful weapon against democracy. Free capital movement creates what some have called a “virtual parliament” of investors and lenders, who closely monitor government programmes and “vote” against them if they are considered irrational: for the benefit of people, rather than concentrated private power.

Investors and lenders can “vote” by capital flight, attacks on currencies and other devices offered by financial liberalisation. That is one reason why the Bretton Woods system established by the United States and Britain after the second World War instituted capital controls and regulated currencies.*

The Great Depression and the war had aroused powerful radical democratic currents, ranging from the anti-fascist resistance to working class organisation. These pressures made it necessary to permit social democratic policies. The Bretton Woods system was designed in part to create a space for government action responding to public will – for some measure of democracy.

John Maynard Keynes, the British negotiator, considered the most important achievement of Bretton Woods to be the establishment of the right of governments to restrict capital movement.

In dramatic contrast, in the neoliberal phase after the breakdown of the Bretton Woods system in the 1970s, the US treasury now regards free capital mobility as a “fundamental right”, unlike such alleged “rights” as those guaranteed by the Universal Declaration of Human Rights: health, education, decent employment, security and other rights that the Reagan and Bush administrations have dismissed as “letters to Santa Claus”, “preposterous”, mere “myths”.

In earlier years, the public had not been much of a problem. The reasons are reviewed by Barry Eichengreen in his standard scholarly history of the international monetary system. He explains that in the 19th century, governments had not yet been “politicised by universal male suffrage and the rise of trade unionism and parliamentary labour parties”. Therefore, the severe costs imposed by the virtual parliament could be transferred to the general population.

But with the radicalisation of the general public during the Great Depression and the anti-fascist war, that luxury was no longer available to private power and wealth. Hence in the Bretton Woods system, “limits on capital mobility substituted for limits on democracy as a source of insulation from market pressures”.

The obvious corollary is that after the dismantling of the postwar system, democracy is restricted. It has therefore become necessary to control and marginalise the public in some fashion, processes particularly evident in the more business-run societies like the United States. The management of electoral extravaganzas by the public relations industry is one illustration.

“Politics is the shadow cast on society by big business,” concluded America’s leading 20th century social philosopher John Dewey, and will remain so as long as power resides in “business for private profit through private control of banking, land, industry, reinforced by command of the press, press agents and other means of publicity and propaganda”.

The United States effectively has a one-party system, the business party, with two factions, Republicans and Democrats. There are differences between them. In his study Unequal Democracy: The Political Economy of the New Gilded Age, Larry Bartels shows that during the past six decades “real incomes of middle-class families have grown twice as fast under Democrats as they have under Republicans, while the real incomes of working-poor families have grown six times as fast under Democrats as they have under Republicans”.

Differences can be detected in the current election as well. Voters should consider them, but without illusions about the political parties, and with the recognition that consistently over the centuries, progressive legislation and social welfare have been won by popular struggles, not gifts from above.

Those struggles follow a cycle of success and setback. They must be waged every day, not just once every four years, always with the goal of creating a genuinely responsive democratic society, from the voting booth to the workplace.

* The Bretton Woods system of global financial management was created by 730 delegates from all 44 Allied second World War nations who attended a UN-hosted Monetary and Financial Conference at the Mount Washington Hotel in Bretton Woods in New Hampshire in 1944.

Bretton Woods, which collapsed in 1971, was the system of rules, institutions, and procedures that regulated the international monetary system, under which were set up the International Bank for Reconstruction and Development (IBRD) (now one of five institutions in the World Bank Group) and the International Monetary Fund (IMF), which came into effect in 1945.

The chief feature of Bretton Woods was an obligation for each country to adopt a monetary policy that maintained the exchange rate of its currency within a fixed value.

The system collapsed when the US suspended convertibility from dollars to gold. This created the unique situation whereby the US dollar became the “reserve currency” for the other countries within Bretton Woods.

Conspiracy theory faults Jews for Lehman Brothers’ collapse

Conspiracy theory faults Jews for Lehman Brothers’ collapse

By Anshel Pfeffer
A new anti-Semitic conspiracy theory has been spreading online over the last few days, claiming that on the eve of Lehman Brothers’ collapse last month, the firm transferred $400 billion to Israel.

The theory, which comes in the form of a news report, has already been distributed on dozens of anti-Semitic and anti-Israeli sites. It alleges that senior Jewish officials at the Lehman Brothers investment bank passed their clients’ money on to three Israeli banks, with the intention of then escaping to Israel to enjoy the take without fear of extradition.

Since the collapse of Lehman Brothers, which was founded in the United States by Jewish immigrants from Germany in 1850, Web forums and comment pages have been flooded with anti-Semitic comments accusing Jews of causing the global economic crisis and branding them the greatest beneficiaries of the disaster. Such statements are especially common on clearly racist sites, but can also be found on more popular mainstream sites.

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The Anti-Defamation League in the U.S. and other international bodies monitoring anti-Semitism have documented hundreds of such cases in the past two weeks.

A number of Islamic organizations, including Hamas in Gaza – which called the economic crisis America’s punishment for its bad deeds – have joined the chorus and accused the Jewish lobby of causing the crisis.

But the allegation of the transfer of $400 billion of Lehman Brothers’ cash to Israel is much more focused. The story making the rounds was written as if it were a news report from Washington, and has a byline of the “Voice of the White House.” The story names three Israeli banks that allegedly received the money, explains in detail Israel’s extradition laws and bank-secrecy act, and charges American law-enforcement authorities of having knowledge of the transfer. It also cites excerpts from a real story that appeared on the Bloomberg economic news service wire about estimated losses of $400 billion in the brokerage division of the investment bank.

The “story” first appeared a week ago on the Web site of Jeff Rense, a former journalist who has published numerous conspiracy theories involving Jews, Israel and the American administration.

Since then, it has been picked up and posted on dozens of sites and anti-Semitic blogs. Surfers who read it tried to copy it to more respectable forums and comment pages such as The Huffington Post in the U.S. and The Independent in Britain.

The conspiracy theory is reminiscent of past allegations about Jews, ranging from the czarist-era “Protocols of the Elders of Zion” to the widely circulated libel that the Israeli Mossad knew in advance about the 9/11 attacks on the World Trade Center and warned all of the complex’s Jewish employees not to come to work that morning.

Tel Aviv Stock Exchange to delay trade

Tel Aviv Stock Exchange to delay trade

TEL AVIV, Oct 12 (Reuters) – Trading on the Tel Aviv Stock Exchange will be delayed on Sunday due to massive sell orders which point to a decline of 8.6 percent in the blue chip Tel Aviv 25 index .TA25.

The market had been closed since Wednesday due to the Yom Kippur holiday.

The stock exchange implements circuit breakers whenever there are sharp swings in the index.

According to these rules, a 5 percent or more swing in the TA-25 index in pre-trading hours will lead to a 45-50 minute delay in the opening of trade.

If after the 45 minutes, the fluctuation is 12 percent or more, trading will be delayed again. The amount of time will be determined by the head of the exchange, who could decide to suspend trading for the entire day, according to the bourse’s rules.