My explanation that the sudden appearance of an unprecedented 400 ton short sale of gold on the COMEX in April was a manipulation designed to protect the dollar from the Federal Reserve’s quantitative easing policy has found acceptance among gold investors and hedge fund managers.
The sale was a naked short. The seller had no gold to sell. COMEX reported having gold only equal to about half of the short sale in its vaults, and not all of that was available for delivery. No one but the Federal Reserve could have placed such an order, and the order came from one of the Fed’s bullion banks, one of the entities “too big to fail.”
Bill Kaye of the Greater Asian Hedge Fund in Hong Kong and Dave Kranzler of Golden Returns Capital have filled in the details of how the manipulation worked. Being sophisticated investors of many years of experience, both Kaye and Kranzler understand that the financial press runs with the authorized story planted to serve the agenda that has been put into play.
Institutional investors who have bullion in their portfolio do not want the expense associated with storing it securely. Instead, they buy into Exchange Traded Funds (ETF) and hold their bullion in the form of a paper claim. The largest, the SPDR Gold Trust or GLD, trades on the New York Stock Exchange. The trustee and custodian is a bankster, and only other banksters are able to turn investments into delivery of physical bullion. Only shares in the amount of 100,000 can be redeemed in gold.
The price of bullion is not set in the physical market where individuals take delivery of bullion purchases. It is set in the paper futures market where short selling can drive down the price even if the demand for physical possession is rising. The paper gold market is also the market in which people speculate and leverage their positions, place stop-loss orders, and are subject to margin calls.
When the enormous naked shorts hit the COMEX, stop-loss orders were triggered adding to the sales, and margin calls forced more sales. Investors who were not in on the manipulation lost a lot of money.
The sales of GLD shares are accumulated by the banksters in 100,000 lots and presented to GLD for redemption in gold acquired at the driven down price.
The short sale is leveraged by the stop-loss triggers and margin calls, and results in a profit for the banksters who placed the short sell order. The banksters then profit again as they sell the released gold into the physical market, especially in Asia, where demand has been stimulated by the sharp drop in bullion price and by the loss of confidence in fiat currency. Asian prices are usually at a higher premium above the spot prices in New York-London.
Some readers have said “don’t bet against the Federal Reserve; the manipulation can go on forever.” But can it? As the ETFs such as GLD are drained of gold, their ability to cover any of their obligations to investors diminishes. In my opinion, these ETFs are like a fractional reserve banking system. The claims on gold exceed the amount of gold in the trusts. When the ETFs are looted of their gold by the banksters, the gold price will explode, as the claims on gold will greatly exceed the supply.
Kranzler reports that the current June futures contracts are 12.5 times the amount of deliverable gold. If more than 8 percent of these trades were to demand delivery, COMEX would default. That such a situation is possible indicates the total failure of federal financial regulation.
What the Federal Reserve has done in order to maintain its short-run policy of protecting the “banks too big too fail” is to make the inevitable reckoning more costly for the US economy.
Another irony is the benefactors of the banksters sale of the gold leeched from the gold ETFs. Asia is the beneficiary, especially India and China. The “get out of gold line” of the US financial press enables China to unload its excess supply of dollars, accumulated from the offshored US economy, into the gold market at a suppressed price of gold.
Kranzler points out that not only does the Fed’s manipulation permit Asia to offload US dollars for gold at low prices, but the obvious lack of confidence in the dollar that the manipulation demonstrates has caused wealthy European families to demand delivery of their gold holdings at bullion banks (the bullion banks are essentially the “banks too big to fail”). Kranzler notes that since January 1, more than 400 tons of gold have been drained from COMEX and gold ETF holdings in order to satisfy world demand for physical possession of bullion.
Again we see that institutions of the US government are acting 100% against the interests of US citizens. Just who does the US government represent?
Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.
Source: Paul Craig Roberts
What more time-honored practice in the long history of state sponsored servitude than the institutionalization of prisoners? Incarceration for offenses against government laws is a cornerstone for power and survivability of any regime. Prisons may have been hellholes over the centuries, but seldom has the internment of convicted lawbreakers been a growth industry for private profit. It almost makes one wonder exactly who are the crooks. While most hard-pressed citizens want a safe and secure society, few ever give even a passing thought to the insatiable corporatist criminalization of the criminal justice system. Just how many Americans agree with the proposition, if you did the crime, you need to serve the time.
All loyal law and order proponents can take pride in the one area where the imperium of government discipline still ranks first among nations. A Global Research article - The Prison Industry in the United States: Big Business or a New Form of Slavery? – points out some staggering facts.
“There are approximately 2 million inmates in state, federal and private prisons throughout the country. According to California Prison Focus, “no other society in human history has imprisoned so many of its own citizens.” The figures show that the United States has locked up more people than any other country: a half million more than China, which has a population five times greater than the U.S. Statistics reveal that the United States holds 25% of the world’s prison population, but only 5% of the world’s people. From less than 300,000 inmates in 1972, the jail population grew to 2 million by the year 2000. In 1990 it was one million. Ten years ago there were only five private prisons in the country, with a population of 2,000 inmates; now, there are 100, with 62,000 inmates. It is expected that by the coming decade, the number will hit 360,000, according to reports.”
Just imagine the hidden solution to the high unemployment economy is staring in our faces without even a hint of public reaction. The ultimate entrepreneurial partnership allows for corporate security firms to house government dissenters or rebellious non-conformers.
“Private prisons are the biggest business in the prison industry complex. About 18 corporations guard 10,000 prisoners in 27 states. The two largest are Correctional Corporation of America(CCA) and Wackenhut, which together control 75%. Private prisons receive a guaranteed amount of money for each prisoner, independent of what it costs to maintain each one. According to Russell Boraas, a private prison administrator in Virginia, “the secret to low operating costs is having a minimal number of guards for the maximum number of prisoners.” The CCA has an ultra-modern prison in Lawrenceville, Virginia, where five guards on dayshift and two at night watch over 750 prisoners. In these prisons, inmates may get their sentences reduced for “good behavior,” but for any infraction, they get 30 days added – which means more profits for CCA.”
The dramatic increases in prison population are not from violent convicts or rapists and killers. The majority of offense categories are property, drug and especially public-order related. The goal of social rehabilitation is a quaint concept of another era. The pretense of reclamation from a conviction of prosecutorial discretion is a standard that few DA’s or judges ever consider. Sentencing guidelines are based upon retribution and punishment, in order to keep the prisons filled with a growing number of new inmates. The supposition is that if you are charged with a crime, the suspect will plea bargain or the jury will follow the directions of the government and convict.
For 2011, the US Department of Justice reported a 93% conviction rate. Such a record implies a culture of criminalization or a hard road for an innocent suspect to navigate. No wonder, the private company screws are such staunch supporters of the transgression and disorder society.
The video, Private prisons - the most profitable real estate in the US? – provides a distressing analysis of the consequences of incentivizing revenue return motivated companies as the jailer overseers.
From the report Prison Labor and Crime in the U.S. - Industry, Privatization, Inmate Facts and Stats – Prison Industries and Inmate Labor – section:
“Many companies are now directly involved in some form of profiting off of incarceration or the labor of inmates. Since 1980 when there was only one prison industry operating as a privatized entity, there are now thirty eight states and at least five county jails with privatized prison industry productions or factory operations. Together state and federal factories now number over three hundred nationwide with between six hundred thousand and one million inmates working in some form of manufacturing or services. Hundreds of companies using inmate labor for manufacturing, services and other duties are now partnered with these operations. This is done under the federal Prison Industries Enhancement Certification Program (PIECP) under 18 USC 1761(c).
Clearly companies, businesses and corporations have become heavily invested in, and dependent upon incarceration for cheap labor and profit. In 2009 total sales of prisoner made products totaled $2.4 billion. Some research places that figure as high as $5 billion and this is in addition to the “prison industry” figure of $34 billion used previously.”
Another RT video details the Prison labor booms in US as low-cost inmates bring billions. Is society really safer from the dramatic increase in the prison population, or is this method of crowding a growing herd of cheap labor simply a strategy to enrich politically connected companies?
As the rapid implosion of the economy accelerates, the prospect of even greater numbers of government prosecutions will surely increase. How many Jean Valjean’s are there in Les Misérables penal confines baking bread?
Now if you are sympathy challenged and are as hard as the rocks that need to be broken, why is the political class virtually exempt from accountability. Remember the once popular bumper sticker; “I’ll Buckle Up When Ted Bundy Does”. Well, no compassion for a serial killer is certainly understandable and proper.
However, where is the justice when a professional bankster felon like Jon Corzine skates after his crimes in the MF Global theft? The rules for ex Goldman Sacks predators allows for financing publicly traded private jail companies, but are exempt of ever working on the assembly line making license plates. What is next: a hedge fund totally devoted to the management of a privatized infrastructure of FEMA camps.
Michael Snyder writes in The Economic Collapse article, Private Prisons: The More Americans They Put Behind Bars The More Money They Make.
“If you can believe it, three of the largest private prison companies have spent approximately $45,000,000 combined on lobbying and campaign contributions over the past decade.
Just look at what has happened to the U.S. prison population over the past several decades. Prior to 1980, there were virtually no private prisons in the United States. But since that time, we have seen the overall prison population and the private prison population absolutely explode.
For example, between 1990 and 2009 the number of Americans in private prisons grew by about 1600 percent.
Overall, the U.S. prison population more than quadrupled between 1980 and 2007.”
Hard core criminals that violate civic community standards and endanger public safety should pay a price for their transgressions. Conversely, political prisoners that challenge the crony corruption within the governmental hierarchy do not deserve a sentence in a sweatshop.
With the abandonment of a police ethic that was dedicated to keeping the peace for an apparatus of law enforcement for arbitrary and dishonest statutes, which only serve the privileged elites; our society is sentenced to a death penalty. Slavery was eliminated a century ago, right? Thus far, that message has not filtered down to the penal plantation. An inmate deserves the solitude of solitary confinement.
The most effective private prison is the one that interns the personal guilt of wicked deeds. If public officials would act upon the moral judgments of their conscience, the perversion within the laws that they pass, adjudicate or administer, would exempt or reduce the unequal application of legitimate legislation, now deemed as criminal acts.
Human nature being what it is; evil acts are instinctive within malevolent souls. Accepting a corrosive punitive system, that enriches private companies, is a horrible departure that prison is a valid tool that protects society. The most dangerous and violent forfeit their social freedom by their predatory actions. However, the sheer numbers of confined prisoners does not justify a structure that exploits a captured population for forced labor.
Do we really need to criminalize society as the price to coexist in the era of Guantanamo justice? America once strived to maintain a balance among competing factions. Today there are only Statists that absolve government transgressions as acceptable and the dissenters that are now in the sights for retribution and eventual arrest. The criminalization of citizens for capricious infractions is the sign of a doomed society. When the hacks patrol the halls to enforce proper public behavior, the entire country becomes a prison.
Two important events took place this week. One was President Obama’s call for a higher minimum wage, which got a lot of attention. The other was a new report which showed just how much of our nation’s wealth continues to be hijacked by the wealthiest among us.
That didn’t get much attention.
There’s a Great Robbery underway, although most of its perpetrators don’t see themselves as robbers. Instead they’re sustained by delusions that protect them from facing the consequences of their own actions.
Heads I Win …
An updated report from economist Emmanuel Saez details the loss of income suffered by 99 percent of Americans, and the parallel gains made by the wealthiest among us. Its most startling finding may be this: The top 1 percent has captured 121 percent of the increases in income since the worst of the financial crisis, while the rest of the country has continued to fall behind.
If you thought the rich recovered from the crisis just fine but everybody else got the short end of the stick, relax: You’re not crazy. And since the financial crisis was caused by members of the 1 percent – not all of them, of course, just the ones we spent so much to rescue – it’s understandable if the injustice still rankles you.
You rescued them. Now they’re drinking your milkshake.
Tails You Lose
But this wealth shift is not a new phenomenon. As Saez notes in his paper, “After decades of stability … the top decile share has increased dramatically over the last twenty-five years.” In fact, the top 10 percent’s share of our national income is higher than it’s been since 1917 - and maybe longer. (The figures don’t go back any farther than that.)
Although it began during the Reagan years, to a certain extent this wealth shift has been a bipartisan phenomenon. During the Clinton boom years (more of a bubble, actually; Dean Baker has the details) the top 1 percent saw their real income grow by 98.7 percent, while the other 99 saw a smaller increase of 20.3 percent. They lost more during the recession that followed – a little over 30 percent, as opposed to 6.5 percent for everyone else – but more than made up the difference again during the Bush years.
The same thing happened during the Great Recession: The top 1 percent lost more during the initial shock, but they’re rapidly making up the difference now. Government policy’s been designed to help them. (Meanwhile, underwater homeowners still don’t have the help they need.)
The disparities are even greater when you include capital gains. (Saez uses pre-tax income for his figures. Given the generous tax breaks for capital gains and the many loopholes used by the wealthy,the after-tax differences could be even greater.) There’s even economic injustice at the top. Gains for the one percent have far outstripped those of the top five and top ten percent.
As the old song says: Them that has, gets.
If you can remember the sixties you weren’t there … or can’t afford to remember
The minimum wage has been falling since 1968. As John Schmitt notes in his paper, “The Minimum Wage Is Too Damn Low,” “By all of the most commonly used benchmarks – inflation, average wages, and productivity – the minimum wage is now far below its historical level.”
It’s currently $7.25. What would it have been if it had been tied to a commonly-used benchmark? Schmitt ran the numbers:
Consumer Price Index (CPI-I): $10.52
Current CPI methodology (CPI-U-RS): $9.22
As a percentage of average production worker’s earnings: $10.01
And if it had been tied to productivity gains the minimum wage would be $21.72 today. But that cream was skimmed off at the top.
There’s a myth in this country that enormous wealth doesn’t come from anywhere or anyone, that it’s self-creating and self-sustaining, thriving on pure oxygen like an epiphyte or a garden fairy. In reality, highly concentrated wealth is caused by actions – human actions with human consequences.
Saez: “A number of factors may help explain this increase in inequality, not only underlying technological changes but also the retreat of institutions developed during the New Deal and World War II – such as progressive tax policies, powerful unions, corporate provision of health and retirement benefits, and changing social norms regarding pay inequality.”
Wealth inequity is created whenever an employer lowers his employees’ wages, replaces a full-time worker with several part-timers, busts a union, cuts corners on workplace safety, or pays a lobbyist to change the rules.
It’s created whenever a job is shipped overseas, and when investments are shifted from job-producing industries to the non-productive financial sector. It’s created when GE outsources its manufacturing operation and gets into the banking (read, “gambling with taxpayers’ money”) business. Or when AIG stops insuring risk and starts betting on it.
And the process isn’t slowing down. In fact, it seems to be accelerating.
As Saez says, “We need to decide as a society whether this increase in income inequality is efficient and acceptable and, if not, what mix of institutional and tax reforms should be developed to counter it.”
President Obama’s proposal is modest, and there’s no reason not to enact it immediately. For those who believe that businesses “can’t afford” to pay higher wages, some key facts:
Most low-wage workers work for large corporations, not Mom-and-Pop businesses.
A Data Brief from the National Employment Law Project finds that 66 percent of low-wage employees work for companies with more than 100 employees. A handful of very large corporations collectively employ nearly 8 million low-wage employees.
There’s no evidence minimum wage increases mean fewer jobs.
Opponents say a higher minimum wage means fewer jobs. But the official U.S. unemployment rate in 1968, when the real minimum wage was highest, was 3.6 percent. Today it’s 7.8 percent – and the unofficial numbers are even worse. At the state level, the Fiscal Policy Institute recently concluded that “states with minimum wages above the federal level have had faster small business and retail job growth.”
Ninety-two percent of the 50 largest low‐wage employers in the country were profitable last year.
As the NELP notes, big corporations more than recovered from the recession: 75 percent are collecting more revenue, 63 percent are earning higher profits, and 73 percent have higher cash holdings than they did before the crisis.
Bringing It All Back Home
The real “job creators” aren’t the ultra-wealthy. If they could create jobs with all their added wealth, they would have done it already. The real job creators are working people with jobs.
They don’t invest their money in hedge funds or stash it in offshore accounts. They spend it: on food, transportation, their kids’ education, maybe a night at the movies … And then other people get jobs making those things possible.
We have a working model to follow: The USA in the 35 years after World War II. As Paul Krugman says, “To the extent that people say the economics is confusing or uncertain, that’s overwhelmingly because people want it to be.” We know how to do this.
Raising the minimum wage is a start. A maximum wage would help, too, by reducing CEOs’ incentives to emphasize quarterly gains over long-term growth and leaving more to be shared with employees.
We also need a national strategy for regaining the more reasonable distribution of income this country had in the 1950s. We need to ensure that the door of opportunity, which is closing every day for millions of young people, is opened again. And we need to ask the wealthiest to really pay their fair share – at something closer to the top tax rates of the 1950’s or 1960’s. (Elvis Presley’s manager “Colonel” Tom Parker once said “I consider it my patriotic duty to keep Elvis in the ninety percent tax bracket.”)
Most of all, we need to educate those around us so they understand what’s happening. That includes the well-intentioned well-to-do, who might do more to end the problem if they knew it existed. After all, you can’t stop a robbery until you know it’s happening.
The frightening prospects from a derivative meltdown, well known for years, seem to deepen with every measure to prop up a failing international financial system. The essay Greed is Good, but Derivatives are Better, characterizes the gamble game in this fashion:
“The elegance of derivatives is that the rules that defy nature are not involved in intangible swaps. The basic value in the payment from the risk is always dumped on the back of the taxpayer. Ponzi schemes are legal when government croupiers spin loaded balls on their fudged roulette tables.”
Under conventional international trading settlement, the world reserve currency is the Dollar. The loss of confidence in the Federal Reserve System causes a corresponding decline in value in U. S Treasury obligations. Add into this risk equation, derivative instruments that are deadly threats that can well destroy national currencies. One such response to this unchecked danger can be found in a Bloomberg Businessweek perceptive article, A Shortage of Bonds to Back Derivatives Bets, makes a stark forecast.
“Starting next year, new rules will force banks, hedge funds, and other traders to back up more of their bets in the $648 trillion derivatives market by posting collateral. While the rules are designed to prevent another financial meltdown, a shortage of Treasury bonds and other top-rated debt to use as collateral may undermine the effort to make the system safer.”
China And Japan Move Away From Dollar, Will Conduct Bilateral Trade Using Own Currencies, is one method to avoid the direct consequences of a derivative meltdown.
“The China Foreign Exchange Trade System, the division of the People’s Bank of China which manages currency trading, said that the country will set a daily trading rate based on a weighted average of prices given by market makers. The People’s Bank said on Tuesday that an initial trading rate would be set at 7.9480 Yuan for every 100 Yen at market in Shanghai. Unlike yuan-dollar trading, which only allows for a daily fluctuation of 1 percent in Yuan trading value, Yuan trading with the Yen will be able to move within a 3 percent range.”
Timing of a Dollar reputation is almost impossible to pinpoint with precise market foreknowledge. Yet the inevitability that The Dollar is Doomed, refers to the insight of “Hans F. Sennholz in his essay - Saving the Dollar from Destruction - we are presented with a bleak financial future. Even under optimum conditions, the alternatives are not pleasant. Now let’s ask the 64,000 dollar question. What will happen when interest rates start to rise?”
The economic havoc, with the rise in interest rates, will greatly disrupt existing worldwide trade agreements and practices. In the article How The U.S. Dollar Will Be Replaced, Brandon Smith addresses the pragmatic measures undertaken by major trade partners to protect their domestic economies from a Dollar freefall.
“To those people who consistently claim that the dollar will never be dropped, my response is, it already has been dropped! China, in tandem with other BRIC nations, has been covertly removing the greenback as the primary trade unit through bilateral deals since 2010. First with Russia, and now with the whole of the ASEAN trading bloc and numerous other markets, including Japan. China in particular has been preparing for this eventuality since 2005, when they introduced the first Yuan denominated bonds. The bonds were considered a strange novelty back then, especially because China had so much surplus savings that it seemed outlandish for them to take on treasury debt. Today, the move makes a whole lot more sense. China and the BRIC nations today openly call for a worldwide shift away from the dollar:”
“Dagong Global, a fledgling Chinese rating agency, degraded the U.S. treasury bonds late last year, yet its move was met then with a sense of arrogance and cynicism from some Western commentators. Now S&P has proved what its Chinese counterpart has done is nothing but telling the global investors the ugly truth.”
The derivatives time bomb lingers over every financial market on the planet. Reforms cannot remove excess and greed, from risk management fiscal contracts. When the largest foreign trading partners look to insulate their transactions from an unstable Dollar currency, the panic has already begun.
It should be self-evident that additional U.S. Treasury bailouts with unlimited Federal Reserve claims against every asset of collateral that can be attached, is obscene in its nature. Hedging is equivalent to reassigning betting risk to unfunded insurance underwriters that would never be able to pay off the claim. Governments are broke by almost any financial standard. Central banksters accumulate titles to real property and assets by hook or crook.
Nation states held hostage to financial manipulation are slaves to the central banks. With the demise of the Dollar, the fake debt obligations of the United States must be repudiated. Foreign states are prepared to sever their links to the Dollar reserve currency, by trading directly in the domestic currencies of other countries. Interacting commerce in Dollars with American companies will continue, but the yoke of Federal Reserve Notes legal tender will be rejected when the derivative meltdown explodes.
Warnings That A Massive Stock Market Crash Is ImminentIn the financial world, the month of October is synonymous with stock market crashes. So will a massive stock market crash happen this year? You never know. The truth is that our financial system is even more vulnerable than it was back in 2008, and financial experts such as Doug Short, Peter Schiff, Robert Wiedemer and Harry Dent are all warning that the next crash is rapidly approaching. We are living in the greatest debt bubble in the history of the world and Wall Street has been transformed into a giant casino that is based on a massive web of debt, risk and leverage. When that web breaks we are going to see a stock market crash that is going to make 2008 look like a Sunday picnic. Yes, the Federal Reserve has tried to prevent any problems from erupting in the financial markets by initiatinganother round of quantitative easing, but 40 billion dollars a month will not be nearly enough to stop the massive collapse that is coming. This will be explained in detail toward the end of the article. Hopefully we will get through October (and the rest of this year) without seeing a stock market collapse, but without a doubt one is coming at some point. Those on the wrong end of the coming crash are going to be absolutely wiped out.
A lot of people focus on the month of October because of the history of stock market crashes in this month. This history was detailed in a recent USA Today article….
When it comes to wealth suddenly disappearing, October can be diabolically frightful. The stock market crash of 1929 that led to the Great Depression occurred in October. So did the 22.6% plunge suffered by the Dow Jones industrial average in 1987 on “Black Monday.”
The scariest 19-day span during the 2008 financial crisis also went down in October, when the Dow plunged 2,675 points after investors fearing a financial collapse went on a panic-driven stock-selling spree that resulted in five of the 10 biggest daily point drops in the iconic Dow’s 123-year history.
So what will we see this year?
Only time will tell.
If a stock market crash does not happen this month or by the end of this year, that does not mean that the experts that are predicting a stock market crash are wrong.
It just means that they were early.
As I have said so many times, there are thousands upon thousands of moving parts in the global financial system. So that makes it nearly impossible to predict the timing of events with perfect precision. Financial conditions are constantly shifting and changing.
But without a doubt another major financial collapse similar to what happened back in 2008 (or even worse) is on the way. Let’s take a look at some of the financial experts that are predicting really bad things for our financial markets in the months ahead….
According to Doug Short, the vice president of research at Advisor Perspectives, the stock market is somewhere between 33% and 51% overvalued at this point. In a recent article he offered the following evidence to support his position….
● The Crestmont Research P/E Ratio (more)
● The cyclical P/E ratio using the trailing 10-year earnings as the divisor (more)
● The Q Ratio, which is the total price of the market divided by its replacement cost (more)
● The relationship of the S&P Composite price to a regression trendline (more)
Peter Schiff, the CEO of Euro Pacific Capital, has been one of the leading voices in the financial community warning people about the crisis that is coming.
During a recent interview with Fox Business, Schiff stated that the massive financial collapse that we witnessed back in 2008 “wasn’t the real crash” and he boldly declared that the “real crash is coming”.
So is Schiff right?
We shall see.
Economist Robert Wiedemer warned people what was coming before the crash of 2008, and now he is warning that what is coming next is going to be even worse….
“The data is clear, 50% unemployment, a 90% stock market drop, and 100% annual inflation . . . starting in 2012.”
Financial author Harry Dent believes that the stock market could fall by as much as 60 percent in the coming months. He is convinced that stocks are hugely overvalued right now….
“We have the greatest debt bubble in history. We will see a worldwide downturn. And when you are in this type of recessionary environment stocks should be trading at five to seven times earnings.”
So are these guys right?
We shall see.
But I do find it interesting that some of the biggest names in the financial world are currently making moves as if they also believe that a massive financial crisis is coming.
For example, as I have written about previously, George Soros has dumped all of his holdings in banking giants JP Morgan, Citigroup and Goldman Sachs.
Infamous billionaire hedge fund manager John Paulson, the man who made somewhere around 20 billion dollarsbetting against the U.S. housing market during the last financial crisis, is making massive bets against the euro right now.
So where are these financial titans putting their money?
According to the Telegraph, both of these men are pouring enormous amounts of money into gold….
There was also news last week in an SEC filing that both George Soros and John Paulson had increased their investment in SPDR Gold Trust, the world’s largest publicly traded physical gold exchange traded fund (ETF).
Mr Soros upped his stake in the ETF to 884,400 shares from 319,550 and Mr Paulson bought 4.53m shares, bringing his stake to 21.3m.
At the current price of about $156 a share, these are new investments of about $88m of Mr Soros’ cash and more than $700m from Mr Paulson’s funds. These are significant positions.
So why would they do this?
Why would they pour millions upon millions of dollars into gold?
Well, it would make perfect sense to put so much money into gold if a massive financial crisis was coming.
So is the next financial crisis imminent?
We will see.
Most “financial analysts” that appear in the mainstream media would laugh at the notion that a stock market crash is imminent.
Most of them would insist that everything is going to be perfectly fine for the foreseeable future.
In fact, most of them are convinced that quantitative easing is going to cause stocks to go even higher.
After all, isn’t quantitative easing supposed to be good for stocks?
Didn’t I write an article just last month that detailed how quantitative easing drives up stock prices?
Yes I did.
So how can I be writing now about the possibility of a stock market crash?
Aren’t I contradicting myself?
Not at all.
Let me explain.
The first two rounds of quantitative easing did indeed drive up stock prices. The same thing will happen under QE3, unless the effects of QE3 are overwhelmed by a major crisis.
For example, if we were to see a total collapse of the derivatives market it would render QE3 totally meaningless.
Estimates of the notional value of the worldwide derivatives market range from 600 trillion dollars all the way up to 1.5 quadrillion dollars. Nobody knows for sure how large the market for derivatives is, but everyone agrees that it is absolutely massive.
When we are talking about amounts that large, the $40 billion being pumped into the financial system each month by the Federal Reserve during QE3 would essentially be the equivalent of spitting into Niagara Falls. It would make no difference at all.
Most Americans do not understand what “derivatives” are, so they kind of tune out when people start talking about them.
But they are very important to understand.
Essentially, derivatives are “side bets”. When you buy a derivative, you are not investing in anything. You are just gambling that something will or will not happen.
I explained this more completely in a previous article entitled “The Coming Derivatives Crisis That Could Destroy The Entire Global Financial System“….
A derivative has no underlying value of its own. A derivative is essentially a side bet. Usually these side bets are highly leveraged.
At this point, making side bets has totally gotten out of control in the financial world. Side bets are being made on just about anything you can possibly imagine, and the major Wall Street banks are making a ton of money from it. This system is almost entirely unregulated and it is totally dominated by the big international banks.
Over the past couple of decades, the derivatives market has multiplied in size. Everything is going to be fine as long as the system stays in balance. But once it gets out of balance we could witness a string of financial crashes that no government on earth will be able to fix.
Five very large U.S. banks (including Goldman Sachs, JP Morgan and Bank of America) have combined exposure to derivatives in excess of 250 trillion dollars.
Keep in mind that U.S. GDP for 2011 was only about 15 trillion dollars.
So we are talking about an amount of money that is almost inconceivable.
That is why I cannot talk about derivatives enough. In fact, I apologize to my readers for not writing about them more.
If you want to understand the coming financial collapse, one of the keys is to understand derivatives. Our entire financial system has been transformed into a giant casino, and at some point all of this gambling is going to cause a horrible crash.
Do you remember the billions of dollars that JP Morgan announced that they lost a while back? Well, that was caused by derivatives trades gone bad. In fact, they are still not totally out of those trades and they are going to end up losinga whole lot more money than they originally anticipated.
Sadly, that was just the tip of the iceberg. Much, much worse is coming. When you hear of a major “derivatives crisis” in the news, you better run for cover because it is likely that the entire house of cards is about to start falling.
And don’t get too caught up in the exact timing of predictions.
If a stock market crash does not happen this month, don’t think that the storm has passed.
A major financial crisis is coming. It might not happen this week, this month or even this year, but without a doubt it is approaching.
And when it arrives it is going to be immensely painful and it is going to change all of our lives.
I hope you are ready for that.
Source: The Economic Collapse
Skimming Profits Off Bad Loans…
We think he did, which is why we’re wondering why all the benefits from QE3 appear to be going to the banks. According to Bloomberg News:
“The Federal Reserve’s latest mortgage bond purchases so far are helping profit margins at lenders including Wells Fargo & Co. (WFC) and JPMorgan Chase & Co. (JPM) more than homebuyers and property owners looking to refinance…
Since the Fed’s Sept. 13 announcement that it would buy $40 billion more securities per month, the rates offered for new 30- year loans have fallen by just 0.11 percentage point, compared with a drop of more than 0.6 percentage point for yields on the bonds into which the loans get packaged.” (“Fed Helps Lenders’ Profit More Than Homebuyers:Mortgages”, Bloomberg)
Well, how do you like that? That means that Mr. Bernanke’s trickle down monetary theories aren’t really working at all. Instead of the savings being passed along to homeowners in the form of lower rates, the banks are juicing profits by taking a bigger share for themselves. Who could have known?
Keep in mind, that Bernanke is not some madcap scientist who doesn’t fully grasp how QE works. That’s not it at all, in fact, he’s considered one of the world’s foremost authorities on the topic and has written extensively on Japan’s deflationary woes and their “broken channels of monetary transmission”, which is shorthand for saying that loading the banks with trillions of dollars in reserves won’t do a blasted thing except pump a little ether into stock prices. (which it has done in the last 2 rounds of easing) So, Bernanke’s been down this road before. He knows what QE will do and what it won’t do, which is why he instructed members from the Bank of Japan (BOJ) to implement fiscal-monetary policies that would have a chance of succeeding. His advice was: “BOJ purchases of government debt could support spending programs, to facilitate industrial restructuring.”
Now there’s an idea. Have the Fed buy the bonds that pay for the programs that put people back to work. Brilliant! Once the new workers get their weekly paycheck, it’s off to the grocery store, the gas station, the mall etc. Spending increases, state revenues soar, and the economy clicks back into high-gear. Simple, right? So, why are we still fiddling with this crackpot QE-circlejerk that does nothing but line the pockets of crooked bankers? That’s the question.
In theory, quantitative easing is supposed to lower interest rates and spur investment. That boosts activity and reduces joblessness. But according to a survey conducted by Duke University, the CFO’s of 887 large companies found that lower interest rates wouldn’t really effect their decisions. Here’s a summary:
According to the Duke University analysts:
“CFOs believe that … monetary action would not be particularly effective. Ninety-one percent of firms say they would not change their investment plans even if interest rates dropped by 1 percent, and 84 percent said they would not change investment plans if interest rates dropped by 2 percent.(“Currency war warnings follow US Fed’s “quantitative easing”, Nick Beams, World Socialist Web Site)
Of course it won’t change their investment plans, because what businessmen care about is demand. Who’s going to buy their bloody widgets, that’s what matters to them, not interest rates. Right now, there’s no demand for more widgets because unemployment is high, wages are flatlining, and policymakers have turned off the fiscal stimulus-spigot in an effort to shrink the economy so they can pursue their lunatic idea of dismantling public services and social programs. (mainly Medicare, Medicaid, and Social Security, the “real targets.”)
The point is, spending has to increase to get the economy off the canvas, and the only party that has money to spend is the government. So, Obama should be spending like crazy. The Central Bank cannot fix this problem with its wacko printing spree.
So, what else are the banks up to besides keeping rates elevated so they can make a bigger killing on refis?
Well, for one thing, they’re using their high-powered attorneys and lobbyists to twist arms at the Federal Housing Finance Agency (FHFA) to make it easier for them to make bad loans without suffering any consequences.
How can that be, after all, wasn’t it bad loans that got us into this mess to begin with?
Yes, it was. Even so, the banks are back at it again, up to their same old tricks. Here’s the story from Reuters:
“Just four years after toxic U.S. mortgages brought the global financial system to its knees and triggered the deepest recession since the Great Depression, a U.S. housing regulator may be making it easier for banks to make bad loans without suffering losses.
The Federal Housing Finance Agency released a little-noticed rule last week that makes it harder for Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) – the government-owned companies that guarantee home loans made by banks – to hold lenders accountable when mortgages go bad.
Some experts said the new rules show that lessons of the housing crisis are already being forgotten, and could set up taxpayers for tens of billions of dollars of losses if the lending bubble re-inflates later in the credit cycle.
At issue is when Fannie Mae and Freddie Mac can press banks to make them whole when mortgages go bad.” (“Housing regulators loosen rules, but at what cost?”, Reuters)
Can you believe it? The FHFA is actually accepting responsibility for mortgages where the underwriting was either shoddy or fraudulent. This is the kind of power the banks have. The agency is also assuring that the banks will create more of these garbage loans now that they know that Uncle Sam will be picking up the tab. That’s what you call “bad incentives”! Up to now, the FHFA had been able to force the banks to repurchase the loans that showed “substantive underwriting and documentation deficiencies”. But that’s not going to happen anymore. The looser rules mean that the banks will return to their old ways and that future losses to taxpayers will tally in the hundreds of billions of dollars. According to Joseph Mason, a professor at Louisiana State University’s business school, “Fannie Mae and Freddie Mac could lose even more than they did this time around.” (Fannie and Freddie have already cost taxpayers $188 billion)
To repeat, the banks had changed their behavior because they were afraid of having to repurchase the dodgy loans they originated. (These returned mortgages are called “put-backs”) Now the rules are being tweaked so the banks can shrug off the bad loans for which they are alone responsible. Here’s more from the National Association of Realtors:
“The federal government is taking steps to ease a problem lenders have been complaining about for several years, and that’s the buy-back risk they face if they underwrite a federally backed loan that goes bad and the guarantor of the loan—whether FHA, Fannie Mae or Freddie Mac—determines that the loan was never underwritten in compliance with their “representation and warranty” requirements….
…lenders remain concerned about the risk they face, and in fact earlier this year, in February, Bank of America announced it would stop selling loans to Fannie Mae because of its concerns over the company’s buy-back policies. (“FHFA Gives Banks Reason to Revisit Overlays”, National Association of Realtors)
So B of A is threatening to “stop selling loans to Fannie Mae”? Hurt me some more.
What’s more important, is that the regulators had fixed this problem by imposing penalties on the lenders, but now they’ve backtracked and undone their progress. Now it’s business as usual where the taxpayer-pinata get’s clobbered with more toxic loans. Oh good.
And that’s not all the banks are up to. They’re also fighting “risk retention” rules because they don’t want to pony-up the small amount of capital (5 percent of the loan’s value) on high-risk mortgages that go into securitizations. It’s like an insurance company refusing to keep money on hand to pay off claims. If you think that’s fair, then you should probably be a banker. Now get a load of this excerpt from a “Letter to Bernanke on QE3″ from Moe Veissi, president of the National Association of Realtors:
“Reducing mortgage interest rates in general through MBS purchases will have diminished impact if three important rules counter the availability of mortgage credit. As you have noted, mortgage credit is already tight. A recent survey of NAR members indicates that 53 percent of loans in August went to borrowers with credit scores over 740. To put this in perspective, only 41 percent of loans backed by Fannie Mae in 2001 had scores above 740. If the forthcoming Ability to Repay/Qualified Mortgage (QM), Risk Retention/Qualified Residential Mortgage (QRM), and Basel III rules only serve to further tighten credit, the impact of QE3 is likely to be diminished and only felt among those of substantial wealth and pristine credit. In short, those who need access to affordable credit the least.
While the Federal Reserve (The Fed) is no longer the purveyor of the QM rule, we believe there is still time for the Fed to weigh in with the Consumer Financial Protection Bureau (CFPB) and ensure that this rule does not serve to further tighten credit.” (“NAR Submits Letter to Bernanke on QE3″, Mortgage Professional)
How do you like that, eh? So according to Moe Veissi, making the system safer is too expensive. We just can’t afford it. We need to make credit available to people who wouldn’t normally qualify for a loan.
Sure, Moe, what could go wrong? It’s not like we’re going to blow up the financial system by lending too much money to people who can’t repay their debts, right?
In any event, the banks and the special interest groups are trying to unwind the “Ability to Repay” and “Risk Retention” portions of the new regulations, even these are the essential firewalls that protect the general public from another disaster like the Crash of ’08?
If we heap these recent developments together (FHFA changes on “put-backs”, opposition to “risk retention” and “ability to repay”), then we see that we’re fairly close to where we were in 2007 before the two Bears Stearns hedge funds defaulted sparking the downward spiral that ended with the obliteration of Lehman Brothers on September 15, 2008 and the beginning of the Great Depression 2.
The banks are again in a position where they can skim profits off bad loans to every Tom, Dick and Harry that can sit upright and sign on the dotted line. They don’t have to worry about holding capital against their dodgy assets or whether Uncle Sam is going to get fleeced on the bogus $400,000 loan they issued to that unemployed landscaper living on food stamps. No worries. They’ve covered all the bases.
Now if Bernanke can just get that bubble-thing going, they’ll be back in the clover.
You’re a lot poorer than you thought you were.
According to a report by Sentier Research “real median annual household income… has fallen by 4.8 percent since the ‘economic recovery’ began in June 2009.”
That’s worse than the 2.6 percent decline that took place during the recession itself. (between July 2007 to June 2009) All told–from the beginning of the slump in 2007 until today–median household income has dropped an eyewatering 7.2 percent. (“Changes in Household Income During the Economic Recovery: June 2009 to June 2012″, Sentier Research)
Like I said, you’re a lot poorer than you thought you were.
The Sentier Research report comes on the heels of a similar report from the Fed which was released in June showing that middle class families saw a nearly 40 percent decline in their net worth between the years 2007 to 2010. The Fed’s 80-page tri-annual Survey of Consumer Finances, points to the Great Recession as the putative cause of the overall decline in wealth, but the Fed’s lopsided policies could be as easily blamed. Low interest rates, lax lending standards and outright fraud generated asset-price bubbles that wiped out 2 decades of economic gains for working people in the US.
The Fed’s survey found that the median net worth of families in the US fell by 38.9 percent between 2007 and 2010, from $126,400 to $77,300. Also, the median value of a US home dropped by 42 percent, from $95,300 to $55,000 in the same period. Plunging housing prices have increased the burden of mortgage debt leaving more than 20 percent of all homeowners with negative equity which greatly increases the probability of default.
Is it any wonder why consumer confidence is at its lowest point since November 2011? Or why mom and pop investors are still fleeing the stock market in record numbers 4 years after Lehman Brothers failed? Or why the yields on 10-year Treasuries are still hovering below 2 percent? Or why bank deposits now vastly exceed loans?
All of these are signs of extreme distress, which is why working people have grown so gloomy about the future. Did you know that (According to the Pew Research Center) 61 percent of all Americans were “middle income” back in 1971, while, today, the number has been shaved to 51 percent? That explains why 85 percent of the people surveyed said “that it is harder to maintain a middle class standard of living today compared with 10 years ago.” The majority of the people also admitted that they’ve had to reduce their spending in the past year.
What all of these reports indicate is that the US middle class is being drawn-and-quartered by economic policies which serve to enrich the few at the cost of the many.
Of course, Fed chairman Ben Bernanke is going to “put things right” by launching another round of quantitative easing (QE) which is supposed to boost growth and lower unemployment. Unfortunately, QE doesn’t really work like that, in fact, the Bank of England just released a report that proves that central bank asset purchases disproportionately benefit the rich. Here’s a clip from an article in the Washington Post:
“The richest 10% of households in Britain have seen the value of their assets increase by up to £322,000 [$510,000] as a result of the Bank of England‘s attempts to use electronic money creation to lift the economy out of its deepest post-war slump. …
The Bank of England calculated that the value of shares and bonds had risen by 26% – or £600bn – as a result of the policy, equivalent to £10,000 for each household in the UK. It added, however, that 40% of the gains went to the richest 5% of households.”
It’s not hard to see why this happens. One way the bank’s quantitative easing program works, in theory, by pushing up asset prices in order to support the broader economy. And, according to the Bank of England, the median British household only holds about $2,370 in financial assets. So the direct benefits largely accrue to wealthier households.
What about the United States? Much like in Britain, the distribution of financial assets are also heavily skewed. …. So any move by the Fed to push up asset prices is likely to increase wealth inequality in the short term.” (“Will the Fed’s efforts to boost the economy only benefit the wealthiest?”, Washington Post)
So QE is just a scam to line the pockets of the investor class. Imagine that! It took 4 years and a research team of financial geniuses from the BOE to figure that out.
And here’s something else that’s worth mulling over; working people are getting totally screwed in the deal. Not only are savers and fixed-income retirees being robbed of the puny gains they would have seen if rates were in their normal range instead of zero, but also the prospect of more QE has sent gas futures spiking, while food prices are sure to follow. This is from Bloomberg in an article titled “Bernanke Boosts Oil Bulls to Highest Since May: Energy Markets”:
“Hedge funds raised bullish bets on oil to a three-month high on signs that Federal Reserve Chairman Ben S. Bernanke will take measures to bolster U.S. economic growth and spur a rally in commodities.
Money managers increased net-long positions, or wagers on rising prices, by 18 percent in the seven days ended Aug. 21, according to the Commodity Futures Trading Commission’s Commitments of Traders report on Aug. 24. They were at the highest level since the week ended May 1.” (Bloomberg)
Higher prices at the pump. That ought to rev-up consumer spending, don’t you think?
Still, Bernanke and his fellow doves at the Fed aren’t going to be deterred by something as inconsequential as the travails of working people. Oh no. After all, he has his real constituents to consider, the parasitic Wall Street robber barons. Their needs come first, and what they want is another round of funny-money so they refill the larder at the Hamptons with Beluga and bubbly. That’s why members of the Fed have already started chirping for more “more accommodation”. Here’s what Chicago Fed President Charles Evans had to say last week in his ominous-sounding bulletin titled “Some Thoughts on Global Risks and Monetary Policy”:
“Finding a way to deliver more accommodation… is particularly important now because delays in reducing unemployment are costly. An unusually large percentage of the unemployed have been without work for quite an extended period of time; their skills can become less current or even deteriorate, leaving affected workers with permanent scars on their lifetime earnings. And any resulting lower aggregate productivity also weighs on potential output, wages and profits for the economy as a whole. The damage intensifies the longer that unemployment remains high. Failure to act aggressively now could lower the capacity of the economy for many years to come….
Given the risks we face, I think it is vital that we make such moves today. I don’t think we should be in a mode where we are waiting to see what the next few data releases bring. We are well past the threshold for additional action; we should take that action now.”
What gall! Does anyone really believe that a Fed president gives a rat’s ass about lower unemployment? It’s a joke.
And where’s the proof that QE lowers unemployment, increases wages or benefits the economy as a whole? Nowhere. Evans idea of “accommodation” is just another way of shoveling money to his rich friends.
Now get a load of this in the Wall Street Journal:
“During the recession, people who lost long-held jobs struggled to find new employment and often took substantial pay cuts if they did find new work. Little appears to have changed after the recession ended, a new Labor Department report shows.
From 2009 to 2011, 6.1 million workers lost jobs they had held for at least three years. Just over half — 56% — of them were reemployed by this January, the department found in its latest survey of displaced workers. Two years ago, the survey found that 49% of people who lost such jobs from 2007 to 2009 were reemployed.
People lucky enough to find new work are often taking steep wage cuts. Of the displaced workers who lost full-time wage and salary jobs from 2009-2011 and were reemployed by January, just 46% were earning as much or more than they did in their lost job. A third of them reported earnings losses of 20% or more.” (“New Jobs Come With Lower Wages”, Wall Street Journal)
So even the people who were “lucky enough to find work” are worse off than they were before. Hey, but at least they found a job, right? What about the people who weren’t able to find work at all? What will happen to them?
No worries. Obama and his deficit-slashing buddies in the congress have that all figured out. As soon as the election’s over, President Socialist is going to start kicking people off extended unemployment benefits as fast as humanly possible leaving millions of working people without enough money to house or feed their families. Here’s how it’s all going to go down:
“Over 500,000 people have lost extended unemployment benefits since the start of the year, and two million more are scheduled to lose their benefits on January 1, 2013…. Emergency Unemployment Compensation (EUC), is scheduled to end completely on January 1, ending unemployment payments for 2 million more people overnight.
With the start of the new year, there will be no part of the country that offers more than 26 weeks of unemployment benefits. This is far less than the average duration of unemployment, which has hovered near 40 weeks for over a year…..
Despite the disastrous impact of the cuts, it has been largely ignored both by the major media and in the US elections. Moreover, the Obama administration has already let it be known that it will not seek a renewal of extended jobless benefits.” (“Extended jobless benefits end for 500,000 US workers”, World Socialist web Site)
Can you see how nicely this segues with Michelle’s anti-obesity campaign? The administration plans to increase worker “flexibility”, by putting millions of jobless people on a crash diet.
And, don’t kid yourself, unemployment is just one of the many programs that Obama plans to eviscerate following the vote-count. He’s also going to zero-in on Social Security, Medicare and Medicaid. They’re all on the chopping block, every last one of them. That’s what the so called Fiscal Cliff is all about; it’s a public relations hoax to conceal Obama’s plan to dismantle the vital programs that provide medicine, shelter and a meager retirement for the sick, the needy and the elderly, you know, the folks the Republicans refer to as “useless eaters”.
All of these reports (Sentier, Pew, the Fed’s Survey of Consumer Finances) underline the same point, that the middle class is embroiled in a war-to-the-death with carpetbagging vermin who plan to deprive them of work, strip their assets, foreclose their homes, and leave them penniless to face old age. It’s just good old class warfare–and as Warren Buffett opined–his class is winning.
It is impossible to make up a fantasy tale that rivals the manifestations of the outlandish MF Global scandal. The evaporation of customer’s monies into an intentional off shore stash is tragic enough, but the indignity of allowing “no consequences” for a horrific crime against all investors is inexcusable. Jon S. Corzine is a fraudster that screams out for the gallows of justice. The manner of fleecing the public by Wall Street crooks has a clear distinction. Corzine walks while Madoff serves time. The original “Magical Mystery Tour” was a precursor of today’s reality TV shows. Corzine’s version is more a “House of Horrors”.
The lack of definitive disclosure in the MF Global investigation is hampered at every turn. The stonewalling and cover-up is business as usual in the world of special selective prosecution. The frustration shows as Judicial Watch sues SEC, CFTC for Corzine, MF Global docs.
“Judicial Watch said the CFTC acknowledged receiving the group’s FOIA on April 25, 2012, but failed to provide a final reply by the statutory deadline of May 23, 2012. Similarly, the SEC told Judicial Watch it received the FOIA on April 25, 2012, but did not provide a final response by the mandatory deadline date.
The American people deserve to know the truth about what FSOC officials knew about the epic failure of MF Global and when they knew it. But once again, the Obama administration refuses to provide basic information related to its ‘oversight’ of the private sector,” stated Judicial Watch President Tom Fitton.”
Judging from public polls the attitude towards this dramatic crime hits hard at the diminutive confidence level, which goes a long way to cloud the entire financial community. If MF Global is an aberration, what is the problem of conducting an open and thorough probe that holds the thieves that stole customer’s money accountable?
The public deserves answers. The Daily Finance illustrates this sentiment in the article, MF Global: The Hero, the Villain, and the Anticlimax.
“During an online chat The Motley Fool held shortly after publishing our series on The Astonishing Collapse of MF Global, we polled participants on whether they thought criminal charges would be pressed, and if so, against whom: 71% thought someone would be held accountable and sent to prison. Most thought it would be Corzine. Others eyed JPMorgan CEO Jamie Dimon. Some thought a fall guy (or gal) would be found. But the idea that everyone would walk away seemed impossible.
Ten months later, customers are still fighting for their money to be returned, and getting it in pennies rather than pounds. (A recent ruling will return $130 million more from the CME Group (NYS: CME) JPMorgan Chase is onto its next scandal involving customer accounts and the collapse of a brokerage firm. And Corzine, whose hands-on role at MF Global included roaming the trading floors, is considering starting a hedge fund.”
Crime committed among the protectedGoldman Sachs fraternity is a foregone conclusion. Investor Daily offers up an even more disgusting prospect inCorzine’s Next Act After MF Global: A Hedge Fund. It looks like the vanishing of $1.5 billion is not a prohibition to running a new money scheme.
“Amazingly, Corzine’s reputation may be irrevocably tarnished, but the latest reports suggest the ensuing criminal investigation is unlikely to lead to any charges against him. Of course, Corzine himself has yet to be interviewed by federal investigators in the 10 months since they began examining the details of the firm’s downfall, though it’s anticipated he’ll agree to such an interview next month.”
The infectious relationship between the Corzine Cosa Nostra and the Obama administration is sickening. The Goldman Sachs immunity of their crony connections just keeps on coming over at Eric Holder’s Department of Justice. Breitbart cites: “The New York Times reported that Holder’s Justice Department will not be criminally charging Jon Corzine or any MF Global executives in that case either.”The New American expands in an article by Bob Adelmann, Former MF Global CEO Jon Corzine Will Likely Get Off Scot-Free.
“With the investigators passing on pressing for criminal charges to be filed against Corzine, there are several glaring ironies remaining. First, the huge bets that Corzine made with company money, and then with customers’ monies when the company’s funds were depleted, turned out to be profitable after all.
Second, investigators are currently negotiating with O’Brien, the assistant treasurer from Chicago, to waive her Fifth Amendment rights in exchange for immunity for her testimony about what actually happened in those last days.
Finally, rumors are surfacing that Corzine is about to start another investment company, this time a hedge fund where he will manage investors’ funds for them. There will be just one stipulation: they must have bad memories in order to play.”A financial wizard like Corzine puts P. T. Barnum to shame. Who needs to gear up a forgery currency printing press, when people simply turn over their treasure to a confidence artist with Goldman Sachs credentials? Such surreal conduct in the world of Wall Street larceny is rarely so blatant.
A mass exodus from entrusting your funds in third party risk financial instruments should be the logical response. However, in the bizarre environment of derivative deception and compulsory arbitration, the average saver has little security in the return of their capital. Once, farmers’ biggest hazard was the weather. Today hedging your crop with future contracts in a Corzine account incurs far greater risk. When the government ignores the crimes of major political donors and refuses to prosecute or recover stolen money, it promotes an outlaw system for and by connected elites. Such an absence of fair dealing in the Obama tour of duty deserves their own jail sentence.
Baltimore, Maryland – “America’s national government has moved way beyond a political spoils system,” wrote Charles Goyette in his book The Dollar Meltdown. “A spoils system leaves the host alive so that a politician’s occasional ne’er-do-well brother-in-law can be put on the payroll.”
In contrast, Goyette suggested, “America has become a piñata: Everybody gets a crack at it. Presidents and other elected officials pass the big stick around as a reward to those who help keep them in charge of the piñata party.”
Goyette’s book came out in 2009. Since then, we have learned that the party is even more debauched, nay demented, than he ever imagined. And you, dear reader, were not invited…
- It turns out Federal Reserve officials hold regular meetings with well-connected insiders, tipping them off to future Fed moves. On Aug. 15, 2011, Chairman Ben Bernanke clued in an economist named Nancy Lazar about “Operation Twist” — the Fed’s attempt to bring down long-term interest rates.
Ms. Lazar’s clients, according to The Wall Street Journal, pulled down double-digit returns on 10-year Treasuries between the time of that meeting and the time Operation Twist was unveiled to the public on Sept. 21. Sorry you missed out.
- Treasury Secretary Hank Paulson sat down for lunch with hedge fund managers on July 21, 2008, and informed them a federal takeover of Fannie Mae and Freddie Mac was imminent. Ten days earlier, he swore up and down to Congress no such takeover was in the works.
The takeover, in fact, occurred on Sept. 6 — giving the hedge fund managers their own handsome payday in a six-week span. Again, you were excluded.
Before you object too loudly, we daresay you might wish to consider the consequences.
The Repeal of Habeas Corpus? When Free Speech No Longer Matters
On December 31, 2011, President Obama signed the Department of Defense Authorization Act into law. This is normally the routine annual budget for the Pentagon. But inserted into this year’s bill is language giving the president the authority to use the military to imprison terrorism suspects — including US citizens — indefinitely, and without charges.
In other words, the “great writ” of habeas corpus is in danger of repeal. No longer would the government have to justify to a judge why it holds someone in custody.
“Take away this great writ,” writes The Future of Freedom Foundation’s Jacob Hornberger, “and all other rights — such as freedom of speech, freedom of religion, freedom of the press, gun ownership, due process, trial by jury and protection from unreasonable searches and seizures and cruel and unusual punishments — become meaningless.”
Without habeas corpus, you could be thrown in prison for the “terrorist” act of criticizing the government and the government would never have to declare the precise reason it hauled you away. And in theory at least, the First Amendment would still be in force!
“This defense bill,” says The Rutherford Institute’s John Whitehead, “not only decimates the due process of law and habeas corpus for anyone perceived to be an enemy of the United States, but it radically expands the definition of who may be considered the legitimate target of military action.”
“This bill will not only ensure that we remain in a perpetual state of war — with this being a war against the American people — but it will also institute de facto martial law in the United States.”
135 SWAT Raids per Day: “Life Goes on, But It Is Debased…”
Rampant corruption and the apparatus for wide-scale repression: These are the hallmarks of what military theorist John Robb calls “the hollow state.”
“The hollow state has the trappings of a modern nation-state (‘leaders,’ membership in international organizations, regulations, laws and a bureaucracy), but it lacks any of the legitimacy, services and control of its historical counterpart,” Robb wrote in 2008. It is merely a shell that has some influence over the spoils of the economy.
“The real power,” Robb continues, “rests in the hands of corporations and criminal/guerrilla groups that vie with each other for control of sectors of wealth production. For the individual living within this state, life goes on, but it is debased in a myriad of ways. The shift from a marginally functional nation-state in manageable decline to a hollow state often comes suddenly, through a financial crisis.”
It is in this context that the growing “militarization” of police looks even more ominous than it does on the surface.
The Pentagon has distributed $2.6 billion in military surplus to local police agencies since 1997. Thus do towns of only a few thousand people have their own SWAT teams. Time was their use was limited to hostage-takings and other high-stakes situations. SWAT raids nationwide numbered only 3,000 per year in the early 1980s, according to University of Eastern Kentucky criminologist Peter Kraska.
Nowadays, SWAT teams are used to serve routine warrants. By the time Kraska stopped counting in the mid-2000s, the annual number had exploded to 50,000 — an average of more than 135 per day.
What happens when the tinder-dry combination of piñata-party corruption and a police-state structure meet the spark of violence?
We don’t know where all this is going… but we know it makes us uneasy…which is why we are increasingly interested in casting our gaze for investment opportunity far, far away from US shores.
The US remains a land of (some) opportunity, but it has lost its monopoly.
Source: Daily Reckoning
The glimmer has been lost from industrial wind. The “Green” promises of an alternative energy hits a brick wall when applied to this industry. By an objective analysis standard, wind projects make no economic sense. Just look at some of the provisions that subsidized this botched industry.
“The American Recovery and Reinvestment Act of 2009 (H.R. 1) allows taxpayers eligible for the federal renewable electricity production tax credit (PTC) to take the federal business energy investment tax credit (ITC) or to receive a grant from the U.S. Treasury Department instead of taking the PTC for new installations. The grant is only available to systems where construction began prior to December 31, 2011. The new law also allows taxpayers eligible for the business ITC to receive a grant from the U.S. Treasury Department instead of taking the business ITC for new installations”.
The entire economic basis for developing wind factories rests upon government money. The recent defeat of extending the Production Tax Credit comes at a time when the appeal of backing inefficient and undependable electric generation is sinking like a rock. The PTC and Section 1603 extension was tacked onto the Stabenow amendment, which failed to pass in the Senate. “Stabenow’s amendmentwould have continued the production credit through 2013, as well as a Treasury Department renewable-power grant program known as 1603.”
Even under these generous subsidies, projects continue to fail. The latest causality is the UTC subsidiary Clipper Windpower. Bloomberg reports, that United Technologies is classifying Clipper as a discontinued operation. Forbes announces on their website, United Technologies Unloads Clipper Windpower,
“UTC in January 2010 invested an initial $207m to take a 49.5% stake in Clipper following a liquidity crisis at the wind turbine manufacturer. It gained full control in December 2010 for an additional $223m . . . Clipper was then losing money and share in its core US market. Installations of its flagship 2.5 MW Liberty wind turbine plunged to 28 in 2010 from 242 the previous year . . . .
The company’s image had also taken a hard hit after cracking problems surfaced in 2007 that required a $330m remediation program to replace the blades on all its turbines. Many of its third-party customers left for other vendors.”
The prospect of selling this business is remote. The company was only an assembler of components based upon their designs. Gearbox failures continue to plague these turbines. Under a capitalistic system, businesses that sell an unreliable produce go bankrupt. Clipper Windpower will soon be remembered as an example of a company providing defective and inept technology. Wasting public funds on such a venture exemplifies the shortcomings of “Green” zealots.
Clipper turbines were used on several First Wind projects. The subsidy carousal extends to the developer, as seen in the essay; First Wind swindle has just committed another heist. Cited in the 9/1/09 Democratic and Chronicle business section, the following article appeared – Southern Tier wind farm gets $74.6 million in grants. This amount is in addition to the PTC. As with any federal gift, connections and strings attached usually precede the process.
“First Wind has ties to the administration of President Barack Obama. A New York City hedge fund, D.E. Shaw & Co., is a major investor in First Wind, according to statements issued in recent years by First Wind. Lawrence H. Summers, who now heads Obama’s National Economic Council, was a compensated managing director at D.E. Shaw before leaving late last year.”
Since Clipper Windpower is in no position to honor service warranty agreements with First Wind, just how long will their wind farms continue to operate? Actually, First Wind is on very shaky ground and has serious financial troubles. The Sun Journal reports,
“First Wind, Emera Inc. (the Nova Scotia-based parent company of Bangor Hydro and Maine Public Service) and Ontario-based Algonquin Power and Utilities Corp. propose to jointly build and operate wind-energy projects in Maine and elsewhere in the Northeast. After a failed bid to go public in 2010, which left First Wind cash-hungry, the deal is a way for the Boston-based company to continue building wind towers across Maine and the region, as well as a way for Emera and Algonquin to reach new energy consumers in the U.S.”
After this arrangement collapsed, First Wind sought to sell an equity interest to Algonquin. The publication Recharge states,
“Algonquin Power and Utilities has dropped a bid to purchase a 12% stake for $83m in First Wind Holdings’ 370MW wind portfolio in the eastern US, citing delays in winning approval from regulators in Maine.
First Wind, whose main investors are hedge fund operator DE Shaw and private equity company Madison Dearborn Partners, cancelled an IPO in October 2010 after facing investor concerns over its debt load and future profitability.”
Soon First Wind will succumb to the same fate of Clipper Windpower, a discontinued operation.
The defeat of the Production Tax Credit may not be an assured and indefinite reality, but this is an election year. Surely, the corporate wind lobbyists will want to insert this boondoggle back into the federal budget. However, the ground swell against industrial wind factories is growing.
The little secret that wind projects often are paid not to produce electricity. The power grid is incompatible with many wind projects. Government-Subsidized Wind Farms Told NOT to Produce Energy reports,
“Wind farms in the Pacific Northwest – built with government subsidies and maintained with tax credits for every megawatt produced – are now getting paid to shut down as the federal agency charged with managing the region‘s electricity grid says there’s an oversupply of renewable power at certain times of the year.”
This is an absurd corporate welfare system. It is long overdue to let the free market compete. Industrial Wind is really a corporate/state pet program that operates just as unwisely as all government bureaucracies do. The money that is wasted through the Production Tax Credit and other subsidy grants is a national disgrace. Do your part and express your opposition to your elected officials.
Another Obama Fleecing…
“The national housing market took a hit in the latter half of 2011, falling to new lows not seen since the housing crisis began six years ago, according to data out Tuesday by S&P/Case-Shiller Home Price Indices……The index is down 33.6 percent from its peak in mid-2006.” – Washington Post
The reason that housing prices have dipped only 33.6 percent in the United States instead of 60 percent as they have in Ireland, is because the big banks have been keeping inventory off the market. If the millions of homes–that are presently headed for foreclosure–were suddenly dumped onto the market, prices would plunge and the biggest banks in the country would be declared insolvent. That’s why the banks have slowed the flow of foreclosures. According to Amherst Securities Group’s Laurie Goodman, “….2.8 million borrowers haven’t made a payment in over a year. Add that to the over 450,000 real estate owned (REO) units and you have approximately 3.2 million that are in the shadows. We are liquidating about 90,000 homes a month. That’s about 36 months of overhang; a really shocking number.” (See the whole interview here.)
Indeed, it is shocking, but what’s more shocking is that the banks are allowed to game the system this way and get away with it. New home buyers are paying hundreds of thousands of dollars more than they would be if the banks were not manipulating inventory, so there are real victims in this scam. . And is it really conceivable that Fed doesn’t know that nearly 3 million people are living in their homes for free? Of course, they know; they’re in on it too. The bankers even have a name for this arrangement; they call it “squatters rent” and they estimate it costs them an extra $60 billion per year. They would rather pay that hefty sum then foreclose quickly and have to write down the losses which would leave them broke.
Some readers will probably dispute the claim that housing prices could dip 60 percent in the US as they have in Ireland. These skeptics may want to read a new study titled “Housing, Monetary Policy, and the Recovery” released by the chief economists from the country’s two largest banks (Find it here.)
On page 29 of the report, the authors conclude that it would take “a 57% fall in housing prices would in our accounting sense eliminate housing overhang”. Their second projection estimates that it would take “a 68%” drop. So, if you bought a house in 2005 for $400,000. That house would currently be worth $128,000, a big enough loss to poke holes in anyone’s retirement plans.
So, what should the government do? Should they force the banks to release the backlog homes so prices can adjust quickly and new buyers won’t feel like they’re being gouged? But–if they do–what happens to all the people who bought homes in the last few years who suddenly discover they’re underwater? Won’t that create a whole new wave of foreclosures?
The best approach would be to reduce the principle on the mortgages of the people who are presently in some stage of foreclosure and make the banks pay for the losses. That would slow the stream of foreclosures to a trickle, stabilize the housing market, and force many of the banks into Chapter 11, which should be real goal of any mortgage modification program. The banks were the perpetrators of this gigantic mortgage laundering scam and continue to pose a threat to the financial security of every American. Dismatling the TBTF banks should be the nation’s highest priority.
The Obama administration has chosen an alternate course in its endless effort to appease the bank lobby. They’ve launched a Foreclosure-to-Rental program that’s aimed at severely reducing the backlog of unwanted homes on the banks books via bulk sales to private investors. The program–which is largely shrouded in secrecy– is being hyped as a common sense way to stabilize the housing market and to ‘lower monthly payments so responsible borrowers can stay in their homes.’ In truth, Obama is just helping the banks slash their mountainous inventory so they can avoid bankruptcy.
Here’s part of the announcement from the FHA:
“The Federal Housing Finance Agency (FHFA) today announced the first pilot transaction under the Real Estate-Owned (REO) Initiative, targeted to hardest-hit metropolitan areas — Atlanta, Chicago, Las Vegas, Los Angeles, Phoenix and parts of Florida.
With this next step, prequalified investors will be able to submit applications to demonstrate their financial capacity, experience and specific plans for purchasing pools of Fannie Mae foreclosed properties with the requirement to rent the purchased properties for a specified number of years.” (FHA)
So far, 2,500 Fannie Mae-owned properties have been sold to private investors. But–here’s the problem–”85% of the units are already being rented, and almost 60% of the units are on term leases.” (Calculated Risk) So, everything Obama said about the program was a lie. This isn’t a foreclosure-to-rental program; it’s a property-dump proffered to financial insiders who are getting cheap government financing to fatten the bottom line.
“The original idea behind the REO-to-rental program was to sell vacant REO to investors and only in certain areas. These investors would agree to rent the properties for a certain period, and that would reduce the number of vacant units on the market…. This offer doesn’t seem to match that goal,” says Calculated Risk.
Fancy that; another boondoggle-ripoff compliments of President Hopium. Who could have known?
Here’s a clip from the FHA’s Meg Burns:
“The pilot transaction very much gets at the issue at hand-helping to stabilize communities by keeping people in their homes where possible…This helps stabilize neighborhoods because many of the properties will continue as rentals instead of moving quickly to the for-sale market. In addition, it is easiest to price properties with renters already in place, which should help to attract investor interest. “ (Washington Post)
Sorry, Meg, don’t piss on my leg and tell me it’s raining. This is the old switcheroo pure and simple. The fact that the properties already have renters means that the investors will be raking in sizable returns from Day 1. That’s not the way the program was sold to the public. The American people have been hoodwinked again.
Here’s more from the FHA’s February 27 announcement:
“In order to ensure compliance with applicable securities laws and regulations, details of the sales announcement will be sent to prequalified investors per FHFA’s Feb. 1 announcement. Subsequently, investors who post a security deposit and sign a confidentiality agreement will gain access to detailed information about the properties. At that stage, interested investors must submit a comprehensive application, which will be reviewed by an outside firm. Only investors who are qualified through this rigorous process will be eligible to bid.”
Okay. So, John Q. Public–the little investor–is completely excluded from this massive transfer of real wealth to private equity, hedge funds and other deep-pocket Obama campaign contributors. That’s to be expected. But what’s the so called “confidentiality agreement” all about. Does Obama really think he can shower his dodgy friends with hundreds of billions of dollars in dirt-cheap property and keep the whole matter under wraps?
Dream on, Barry. And what about the financing? Are these cutthroat property scamsters digging into their own pile of cash to pay for these foreclosures or is Uncle Sugar providing 60, 70, 80, or 90 percent financing at rock-bottom rates of .01 percent? That’s what we want to know.
This is not how honest people deal with a crisis if they genuinely have the public’s interest at heart. This is just more-of-the-same fleece-job larceny that was perfected by the Bush claque. Wasn’t Obama going to change all that?
We are only half way through the foreclosure crisis. The experts predict there will be another 7 to 11 million mortgage defaults in the next few years. That means we need a game plan that will keep as many people in their homes as possible while reducing the vast overhang of supply that has left the market in a shambles. It’s a tough job, but it can be done provided the interests of the victims are placed above those of the banks. Fat chance of that, eh?
Let Your Life Be a Friction to Stop the Machine…
Nightmare and insanity are akin: mysterious and involuntary states that skew and distort objective reality. One wakens from nightmare; from insanity there is no awakening.
Whether Americans live in the one state or the other is the paramount question of this era.
For two hundred years Americans have been indoctrinated with a mythology created, imposed and sustained by a manipulating cabal: the financial elite that built its absolute control on the muscle and blood, good will, ignorance and credulity, of its citizenry.
America began with the invasion of a populated continent and the genocide of its native people. Once solidly established, it grafted enslavement of another race onto that base.
With those two pillars of state firmly in place it declared itself an independent nation in a document that nobly proclaimed the equality of all mankind.
In that act of monumental hypocrisy America’s myth had its beginning.
* * *
A Constitution was written that came to be regarded as American Holy Writ. Its central purposes were to defend private property and suppress mass democracy. It has fulfilled both those mandates beyond the wildest dreams of its creators.
Once the existing oligarchy was secure in law and native people largely exterminated, the ruling class increased its wealth and power fantastically in the 19th century, using the government as its enabler, exploiting to the limit the device of chartered corporations.
With its phenomenal money power, the financial elite began to use the military to expand its sway beyond the continent. Regions, territories, islands, and whole countries were annexed, invaded, and possessed outright, their peoples crushed, suppressed, and ruled.
Because ordinary Americans, like any people, need to believe that whatever the ruling elite undertakes in their nation’s name must be essentially benevolent, noble in purpose and justified in fact, the myth had to be radically modified for imperial expansion.
The foundational story was that Americans had come to a howling wilderness teeming with godless savages and, through invincible strength of character and purity of purpose, had tamed the land and honorably earned the right to possess their bountiful home.
In the era of extra-territorial expansion that version was polished to justify and ennoble imperialism. The new corollary was that America could not ignore colonialist brutality but was obliged, by the Manifest Destiny that led us to civilize our own continent, to carry our mission into barbaric darkness wherever tyranny created abuse and suffering.
A national myth that absolutely binds the loyalty of a people to its government must be a subtle and powerful elixir that elevates and aggrandizes that people’s self-regard. National policy will then appear to be an extension of its superior citizenry’s inchoate will, and the basis for a justified arrogance toward the lesser world.
The simple, powerful myth of America’s altruistic and heroic benevolence, shaped and maintained by the financial/political power elite, infused Americans with a deep and outrageously hubristic sense of racial superiority that, mobilized behind various imperial enterprises, has given all such adventures the character of a quasi-religious crusade. In this way insatiable imperialism acquires the apparent moral perfection of a syllogism.
* * *
With WWII, the world was reconfigured. American Capitalism emerged supreme from the horror that had virtually wrecked its capitalist partners. The Soviet Union, though, having absorbed by far the greatest devastation from Nazi Germany, had astonishingly risen above its ruin to become the leading challenger to America as a world power.
This challenge was not competitive, it was systemic: Soviet Communism was a direct threat to American hegemony in that it categorically refuted the philosophical basis of Predatory Capitalism. Grounded in Marx and Lenin, it attacked Capitalism’s inherent evils, monstrous inequities and flagrant injustices that, exacerbated by speculation, exploitation and fraud, would destroy it. And it promoted world revolution to that end.
This face-off of giants in the Cold War necessitated further refinement of the American myth. Now, instead of simply intervening in situations where despotism or tyranny required America to forcefully implant our just and ethical democracy, America had to become the shield and bulwark of the sacred capitalist system in which “free enterprise” was magically and increasingly identified with democracy and equally to be defended.
This version prevailed through many surrogate confrontations around the globe in the era of Mutually Assured Destruction and survived even the debacle of Vietnam, lasting until the collapse of the Soviet Union, as the propaganda stream became ever more intense and pervasive. On radio and television Americans were subjected to an unrelenting barrage of hyper-patriotism in which American moral superiority was a given, and America’s self-touted courage, generosity and decency were its unchallengeable proofs.
The implosion of the Soviet Union left America, in its own terminology, the “Sole Superpower in a Unipolar World”. This, however, did not result in diminution of the myth. The practical effect of having no doomsday enemy–China couldn’t plausibly be cast in that role then–was to supercharge it by increasing its element of pure, hubristic ego. America was no longer just called upon to defend the “Free World” from monstrous heresy; it was now, by virtue of its universally acknowledged, beatific “exceptionalism”, required to oversee and police it in the interests, and for the benefit, of lesser nations.
* * *
“Power corrupts”, said Lord Mahan, “and absolute power corrupts absolutely.”
When the only rival and counterweight to American power disintegrated there was a sense within the American power elite that the opportunity existed, for the first time in history, for one country to absolutely dominate and effectively control the entire world.
This consensus was expressed in a policy statement composed by a cadre of major right-wing political players representing massive corporate capitalist interests called the Project for a New American Century. This triumphalist manifesto laid out a plan for absolute American access and control of essential resources and raw materials worldwide, to be guaranteed by the military which would enforce Full Spectrum Dominance.
The American Myth, which had seemed to have lost momentum and its animating principle in the totally unexpected so-called Cold War “victory”, was now re-energized with a less defensive and reactive essence, and given the glowing radiance and patina of a true and, for the first time, self-professed and articulated, imperial mission.
The attack on the Towers, an unimaginable provocation, was the trigger mechanism for the explosive launch of the effort to impose that imperial model in practice on the world.
* * *
It has been without question the most spectacular failure in the history of American misadventure. After a decade marked by the waste of trillions of dollars and tens of thousands of American lives, the stunning bankruptcy of our internally burglarized nation, and a consequent recession more fundamentally damaging than the Great One, Imperial America has nothing to show for the botched folly of its arrogant overreach but unequivocal disasters in Iraq, Afghanistan, and Pakistan, with no end of madness in sight.
An impartial observer would have to say that the hypnotic hold of the American Myth on the loyalty of the people has led only to disgrace and disaster, and set a direct course to inevitable imperial decline and ruin. That would be inarguable on any rational basis, but it entirely mistakes the motive for, and the purpose of, the myth. The American Myth was never intended to serve the interests either of our country or of our people: it was created solely to buttress, shield, and exalt the ruling financial class. It has done that with astonishing and unbroken success that staggers the imagination from our earliest days.
The massive looting of Iraq/Afghanistan/Pakistan war funding to enrich the Corporate Tyranny—for that is what it has become—is on an unique scale of its own, without anything remotely comparable to its flagrant obscenity in the whole long history of war.
Neither the Pentagon nor any branch of the U.S. government can give any accounting whatever of the many billions of tax-generated dollars that have vanished, evaporated. There is no doubt but that beyond the outrageously inflated, no-bid contracts handed to giant corporate favorites with their preposterous guaranteed profits, much of the money was simply stolen in bulk by, through, or in spite of the military, and distributed among thieves and accomplices, some of it on huge pallets… for convenience, presumably.
* * *
While this wholesale robbery was going on under the oversight of the military abroad, the Corporate Tyranny had evolved a whole set of impenetrably complex devices for the generation of money without any economically productive source or result at home.
The sole driving force and purpose of Capitalism is the realization of profit. According to that calculus, reducing production costs increases profit margin. This leads to the obvious conclusion that as production costs near zero, profit is maximized.
There is no provision for social good in Capitalist theory. Corporations, created to optimize business opportunity through efficient specialization, were originally required to operate for public benefit but that provision was quickly finessed and forgotten.
American law courts have always favored corporate concentrations of wealth since they, like the Congress, exist to serve the moneyed interests. The American Myth was created to provide cover for the financial oligarchy to exploit the country and the citizenry, and the judiciary has consistently cooperated in ruling for corporations against the people.
Indeed, without ever considering the question in law, the Supreme Court long ago endowed corporations with “personhood”, that is with all rights of human beings under our Constitution. The way this travesty occurred–the slipshod by-product of an obliquely related case–shows that the court preferred to incorporate this perversion of the plain intent of the 14th amendment as an unexamined assumption rather than risk an eventual test which would unquestionably have created violent public outrage.
Given the collusion of Congress and the courts in securing legal invulnerability for the Corporate Tyranny and the principle that the only duty of corporations is maximization of profit, it was not surprising that megabanks, huge brokerage houses, giant insurance conglomerates, gilded hedge funds and the credit agencies pretending to certify their work, all engaged in massive and systemic fraud and deception for just that purpose. The result was the crash of ’08, the recession, and the stunning and unprecedented rescue and bailout of the biggest banks, investment houses, and insurance and credit conglomerates with taxpayer dollars. So much for the hallowed Invisible Hand of the Free Market…
* * *
The last decades have seen two related megatrends in American geopolitical mechanics, both with dire effects on the power of the American Myth. First, what belief the world at large had in it has been shattered by a catastrophic series of imbecile and irretrievable military failures and disasters, which has caused erosion of its efficacy at home. Second, in response to this, the State has made increasingly crude efforts to boost the Myth’s waning power by the imposition of totalitarian methods of surveillance, intimidation and coercion on the American people to a degree unprecedented in scope and scale.
The whole clanking, medieval apparatus of Homeland Security that has sprouted like an enormous poison fungus since 9/11 with its brutal police state mindset; the odious Patriot Act with its flagrant subversions of the Bill of Rights; the endless, fantasy-based terror-peddling of the prostitute corporate media with its clowns and harpies churning irrational fear and anger in the uninformed: all this grim, repressive endeavor is a concerted attempt to distract Americans from the real causes of their injury, abuse, and oppression.
And yet, even with the American Myth now totally and irreparably blown full of holes and exposed demonstrably for the tissue of lies, deceptions and frauds that it has always been, it somehow keeps its phenomenal hold on the great mass of the American people. The tragic reality is that, for the majority, their own identities have been so deeply and thoroughly infused with the myth that to disbelieve it is to disbelieve in themselves.
* * *
So the American Myth is dead, and yet it lives on in its deadness, horribly masking our crapshot economy, our bankrupt debtors prison of a society, our Ghost Dance charade of kabuki democracy, while typhoons of impending social, economic and ecological disaster build their enormous, lightning-charged thunderheads above the dark future before us.
And what is it that the dead Myth still imperfectly obscures for Americans? What is outside and beyond the opaque wall of faltering, failing dishonesty and deception? What is the horror that the shoddy, tattered Myth has so long and so effectively concealed?
It is the world that has suffered unrelieved exploitation by the violence of our imperialist mania. It is the many wrecked and pillaged economies financially looted by our imposed predatory capitalist austerity regimes. It is the teeming hundreds of millions of starved, deprived and dying children sacrificed to Wall Street commodities gaming. It is the multitudes of humble, innocent, ignorant people, barely surviving in absolutist and dictatorial regimes propped up in their barbaric cruelty by our military while our banks siphon off the profits left after arming their brutal police and armies and bribing their ruling Kings, Sheikhs or Generals. It is the millions of dead and maimed in the raped populations of simple tribal people whom our indiscriminately murderous juggernaut has left in its bloody wake in Iraq, Afghanistan, and Pakistan. It is the appalling legacy of hate and repulsion, disdain and fear, that America has earned with its appalling hegemonist villainy in every corner of the world.
And at home, what is it we Americans have been so complicit in hiding from ourselves in our devotion to the perverse legend that has come to inhabit our souls like a succubus?
It is the millions of us with no work and no hope in middle age whose jobs and homes have been devoured by the heartless fraud machine of Wall Street. It is the trashed and demolished weedlots of our major cities eroding in crumbling, fire-gutted ruin. It is the many towns and cities with industries shut down and factories deserted or dismantled and shipped overseas. It is our decaying, disintegrating public schools, our bankrupt states and counties, our overtaxed, antiquated public transportation systems, our obsolete, dissolving infrastructure, our bloated, irrational prisons complex, our punishing and inadequate health care disaster, and over it all, the repressive mechanism of our police state, armed and empowered, ready for use against the American people themselves.
* * *
This is where we are. The great question now is whether we as a nation can awaken from this long historic nightmare and face the terrifying and exhilarating prospect of living in the full light of reality without the false props and dishonest constructs of a hoodwinked, herded and dishonored people or, whether we have internalized the falsity and disease to such an extent that it has become an organic, overmastering form of insanity?
In 1846, Henry David Thoreau, offended to his soul by the injustice of the American government’s invasion of Mexico, protested it and went to jail for his convictions. Later, in his essay On Civil Disobedience, he said this:
“If injustice is of such a nature that it requires you to be the agent of injustice to another, then, I say, break the law. Let your life be a counter friction to stop the machine.”
To attempt to break the hold of the American Myth will be a titanic, daunting challenge. To even begin to openly rebel against the might of the National Security State will require the courage to face much more than official disapproval and denunciation. Imperial America will not respond to even the most peaceful and orderly protest with anything less than hard police repression and the level of punishment will rise in relation to the scope and seriousness of the action undertaken.
Small protests will have no effect and will be meaningless. Organized mass events, when they occur, will draw the whole fiercely and brutally motivated National Security State apparatus down upon themselves. Americans, excepting those of our underclass who have felt it, have no experience with violent police or military repression. Those who commit peaceful civil disobedience, a first and innocent tactic of serious protest, will swiftly find out to their cost how it works. In a National Security State that has excised and eradicated all defensive laws and regulations intended to prevent abuse of the public, whatever the State does is legal. To such a pass have we in America come as a result of our long historic indoctrination in serving our financial elite, our Ruling Class.
To achieve any redemption for Americans, to make possible any more just, humane and life-honoring society, will require complete abandonment of the system of Predatory Capitalism. If offers no prospect of reform or improvement and we have all been witness to the idiocy of the so-called “democratic process” in action for generations now.
America is nearing the greatest crisis point in its history and the terrific cataclysm, when it happens, will determine the future our country is to have. If we cannot, in dominating numbers, rise to reject the heartless, mindless, soulless machine of Imperial Predatory Capitalism, we will be condemned to a fascistic command and control horror in which human beings are mere possessions of the State, units of production or service, and then perhaps not even that, as excess population in that brave, new world nay be eliminated.
That end is not inevitable. We are not lost. We are not even defeated because to this moment we have not engaged. We have not honored our responsibility as human beings. We have not risen to defend our humanity. We have let ourselves be ruled.
All around the world the thunder of vast and immeasurable discontent can be heard and felt. In Egypt and Spain, Jordan and Greece, Iraq and Sudan, Afghanistan and Ireland, Latin America, the Far East and Africa, the legitimate anger of humanity is expressing itself against the dead and killing hand of Predatory Capitalism and its agencies of violence. And here, in America, so long trapped and encapsulated, frozen like a fly in amber in a false religion of state idolatry, the anger is deep, widespread, and growing.
It is up to those who know and care to lead. As Thomas Paine said, “These are the times that try men’s souls.” Nothing is guaranteed us. That can’t matter. We cannot be concerned with odds or outcomes. We cannot let the Machine of Injustice grind on. We must oppose it with all the moral force we own. We must act with quiet courage to confront a vicious tyrannical system that is destroying the earth, its life, and its people. We must put our lives on the line to oppose it.
The Nightmare Machine of rapacious exploitation has overthrown humanity’s decency and reason and its bloody inhuman treason flourishes over us. This must be ended.
Let your life be a friction now to stop the Machine.
The Banks Need to Offload Millions of Unwanted Homes. Guess Who’s Going to Buy Them?
The reason is that housing market never completely cleared, which is to say that the Fed’s interventions and the manipulation of inventory by the banks prevented the market from finding a bottom. So, now– a full 6 years after the peak in home sales in 2006–the real estate depression continues while prices drift lower still. And–here’s the bad part–no one knows how much farther prices will drop, because the existing inventory of homes on the market (according to the Wall Street Journal) is presently 1.89 million while the shadow inventory (according to CoreLogic)… is “1.6 million units” which represents another 5 months supply, “the same level as reported in July 2011.”
So we’re back to Square 1.
Here’s more from Corelogic:
“Currently, the flow of new seriously delinquent loans into the shadow inventory has been offset by the roughly equal flow of distressed (short and real estate owned) sales.
CoreLogic estimates the current stock of properties in the shadow inventory, also known as pending supply, by calculating the number of distressed properties not currently listed on multiple listing services (MLSs) that are seriously delinquent (90 days or more), in foreclosure and real estate owned (REO) by lenders.” (Calculated Risk)
So, there’s a mountain of backlog to work-off before the market touches bottom and prices stabilize. But even that doesn’t accurately describe the troubles facing the market. The biggest obstacle to any real recovery is the millions of distressed homes that are set to come onto the market in the next few years. Those numbers will swell by many orders of magnitude when the banks and the 50 Attornies General agree to a settlement on the Robosigning fiasco some time in early 2012. When an agreement is finally reached, a flood of foreclosures will pour onto the market pushing down prices, wiping out precious homeowner equity, further eroding bank balance sheets, and forcing more underwater mortgage holders to “walk away”. Here’s how CNBC’s Diane Olick sums it up:
“The biggest headwind facing the recovery unquestionably is the distress leftover from the housing crash– foreclosures and properties with delinquent loans. ….Right now, there are approximately 6.2 million properties that have delinquent mortgages or are already in foreclosure….. Now not all of the delinquent loans will go to foreclosure especially if legal settlements involve principle write down and more loan modifications….
There is however a worst case scenario …from Amherst Securities which looks at loans that have been modified but likely to default. Amherst claims there are around 10 million loans in trouble. … 4 million 60 days past due. 2.5 million modified claimed will default. and 3.6 million under water loans that they say will likely go bad.
Add all that to the current inventory of bank-owned homes, Fanny, Freddie, FHA, the banks, private label, and you get close to 3.4 million properties.” (CNBC, Diana Olick—Watch the whole video at CNBC http://video.cnbc.com/gallery/?video=3000068580.)
Did you catch that last part? The banks are going to have to get rid of another 3.4 million distressed homes even though the market is already completely saturated. That means prices have only one way to go…DOWN.
Remember, the banks find themselves in this pickle after having already been bailed out 3 times to the tune of many trillions of dollars. (The $700 billion TARP, the $1.25 trillion QE1, and the Fed’s lending facilities which provided blanket support to a cross-section of financial institutions for an estimated $12.4 trillion in loans and other commitments) And now, there’s going to be a 4th trillion dollar bailout, which many expect President Obama to announce on Tuesday in the State of the Union Speech. Here’s a little warm up for that event which appeared in the New York Times:
“President Obama will use his election-year State of the Union address on Tuesday to define an activist role for government in promoting a prosperous and equitable society, hoping to draw a stark contrast between the parties in a time of deep economic uncertainty.. ….
Advisers and other people familiar with the speech say Mr. Obama will expand again on the administration’s effort to resolve the housing crisis with both carrots and sticks to lenders dealing with homeowners behind on their mortgage payments —
(Obama’s) economic team holds that until the housing market recovers, the broader economy cannot — and that all Americans suffer…… Mr. Obama said he would call for “a return to American values of fairness for all and responsibility from all….”(“Obama to Draw an Economic Line in State of Union”, New York Times)
Okay, so Obama is going to wrap this new Banker giveaway in all kinds of populist gobbledygook. No surprise there! Still, it makes you wonder what the administration has up its sleeve? After all, “disappearing” a couple million homes is no easy task even when one’s economics team is chock-full of Wall Street insiders and banker wannabees. So, what’s the plan?
First of all, we need to recognise that–in order for Obama’s bailout to succeed–he needs to do two things at the same time. One, he must prevent the prices of financial assets (mainly mortgage-backed securities) from falling too sharply or the banks will suffer heavy losses. Second, he has to find a way to dispose of the millions of unwanted homes that will wreak havoc on prices if they are allowed to come onto the market.
As we all know by now, the way to keep “risk assets” bubbly is by firing up the printing presses and launching another round of quantitative easing (QE3) So, that’s probably a done-deal. Here’s what CNBC had to say on the topic in an article that appeared on their site just last week:
“The Federal Reserve is likely to step in with $1 trillion worth of easing that could be announced as soon as this month, according to a growing consensus of economists who see the recent uptick in economic growth as unsustainable.
With the Fed’s Open Market Committee set to meet next week, expectations are rising that the languishing housing market will drive the central bank to buy up mortgage-backed securities.
The goal of the purchases will be to drive down interest rates even further from current record-low levels, and, less obviously, to spur confidence that more monetary tools remain to stimulate the economy….
The $1 trillion price tag — Citigroup economists a few weeks ago also envisioned QE3 at that level — is significant in that it will send the Fed’s balance sheet to about $3.9 trillion and likely spark a war with Congress over the threat of inflation.” (“Fed’s Latest Easing Could Cost $1 Trillion: Economists”, CNBC
Of course, the Fed’s (proposed) purchases have nothing to do with “driving down interest rates” (which are already at historic lows) or “stimulating the economy”. That’s just more public relations hype. It’s all about inflating the prices of droopy financial assets that are eating up banks’ balance sheets. That said, Obama will still have to concoct a scheme for gobbling up all those foreclosures that are piling up on the banks’ books. How’s he going to do that?
So far, Obama hasn’t tipped his hand about the shape of the deal to come, but there are signs that the deep-pocket guys are already lining up at the trough. For example, get a load of this on Thursday’s Marketwatch:
“AG Mortgage Investment Trust, Inc…..(the “Company”) announced today that it has priced an underwritten public offering of 5,000,000 shares of common stock at a public offering price of $19.00 per share. The Company has granted the underwriters a 30-day option to purchase up to 750,000 additional shares of common stock at the public offering price to cover overallotments. The offering is expected to close on January 24, 2012 and is subject to customary closing conditions.
The Company intends to use the net proceeds of the offering to make, as market conditions warrant, additional acquisitions of agency securities, non-agency residential mortgage-backed securities and other target assets, and for general corporate purposes.
Deutsche Bank Securities Inc., BofA Merrill Lynch and Stifel Nicolaus Weisel are acting as joint book-running managers for the offering.” (“AG Mortgage Investment Trust, Inc. Announces Pricing of Public Offering of Common Stock”, Marketwatch
So, all of a sudden there’s a gold rush on “agency securities (and) non-agency residential mortgage-backed securities”? Well, fancy that. And it segues nicely with Obama’s (presumed) bailout plan, doesn’t it? Of course, it could all just be a coincidence, but how likely is that? After all, as we pointed out in an earlier article there are some pretty wealthy and well-connected people who are betting the farm that another round of QE will put MBS into the stratosphere. Here’s an excerpt from a post at Zero Hedge:
”….in December the fund (Total Return Fund or TRF) doubled down on its QE3 all in bet, by “borrowing” even more cash, or a record $78 billion, using the proceeds to buy even more MBS, as well as Treasurys, which hit a combined 31% of the TRF’s holdings. In other words, between MBS and USTs, Pimco holds a whopping 79% of total, mostly in very long duration exposure. In fact, this combination of long duration and pre-QE exposure has not been seen at PIMCO since late 2008, early 2009, meaning that as many banks have been suggesting, (Bill) Gross is convinced that the Fed will announce if not outright QE3 this January, then at least intimate it is coming.”(“Pimco Doubles Down On All In Bet Fed Will Monetize MBS”, Zero Hedge)
So what do these guys know that we don’t know?
But, then, QE3 is just part of the story. The other part is the presumed “Public-Private Investment Partnership” that will incentivize the big banks and private equity firms to buy up loads of distressed homes so they can convert them into rental units. “Why would they do that”, you ask? Because Team Obama is going to make them an offer they can’t refuse. All we need to do is to look back at the way Treasury’s Timothy Geithner cobbled together the first PPIP, and we can figure that it will be some variation of that same concept.
Here’s what you need to know about the first PPIP: Uncle Sam was supposed to stump up 94 percent of the financing (low interest, of course) for mortgage-backed securities (MBS) that no one else wanted. (This time it will be the houses themselves) The so-called “private partners” in this confidence scam, (Banks, private equity, hedge funds) would get non-recourse loans which they could get out of at any time if they felt their investment was at risk. Here’s how Paul Krugman summed it up at the time:
“The Geithner scheme would offer a one-way bet: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt. This isn’t really about letting markets work. It’s just an indirect, disguised way to subsidize purchases of bad assets.”
Bingo. It’s just more corporate welfare dolled up as as way to “stabilize the housing market”.
Also, the so-called partnerships were to be conducted via off-balance sheets operations, (Enron-type structured investment vehicles or SIVs), creating another layer of opaque accounting that would allow for additional (but predictable) mischief, malfeasance, fraud, you-name-it. It’s all part and parcel of Geithner’s sordid concoction designed to take John Q. Public to the cleaners one more time.
I expect that there will be a new public-private partnership that will feature many of the same perks as the first. The government will provide unlimited, cheap funding and will back those loans with the “full faith and credit” of the UST. Meanwhile, the banks and hedgies put up mere pennies on the dollar. In return, the taxpayer will get assurances that any profit derived from the renting of said units will be shared equally among the investors. In other words, the banker who put in $.06 while taxpayers put in $.94 will still rake in 50 percent of the profits.
The bottom line: The bankers need to trim their inventory and pump a little more ether into their sagging MBS. Obama and Bernanke will do whatever it takes to get the job done.
Bankers, hedge funds and sovereign wealth funds are gambling on hunger by speculating on food supply.
High-frequency traders and momentum-driven hedge funds made it their business to speculate on food in 2011. Photograph: Tim Wimborne/Reuters
Last year, the price of global food floated high as ever. That’s bad news for most of us, but not for those who trade commodities. In fact, 2011 was a great year for the traders, who thrive on bad news, currency woes, drought, flood, freeze, fire and all other manifestations of imminent apocalypse.
2011 was a wild ride. One spring morning, cocoa futures dropped 12% in less than a minute. Corn ascended to all-time peaks and sugar fluctuated more in one day than it used to in a month. Howard Schultz, CEO of Starbucks, railed against speculators in coffee, while PepsiCo forecast its own medium-term commodity cost increases to exceed $1bn. All of which meant a bumper crop for the world’s commodity exchanges – even those that used to be backwaters, like the Kansas City Board of Trade and the Minneapolis Grain Exchange, both of which recorded their highest electronic trading volumes in history.
It was a volatile year, and the volatility posed problems for the food industry. Faced with a high-stakes game of price-shifting basic ingredients, the world’s largest food processors and retailers put out the call for maths PhDs and economic modellers to theorise and implement ever-more complex risk-management strategies just so they could keep up with the second-by-second spikes and dips of grain and livestock futures. In the meantime, high-frequency traders and momentum-driven hedge funds made it their business to speculate on food.
There were plenty of ways to get in on the action, but as an increasingly complex amalgam of food-based commodity derivatives piled one on top of the other, the more difficult it became to perceive what it was that lay at the bottom of the speculative scrum. What drove the global food market in 2011 – other than those old faithfuls, fear and greed? I put in a call to Professor Yaneer Bar-Yam, of the New England Complex Systems Institute (Necsi), to see if he might have an answer.
Necsi, based in Cambridge, draws on fields as various as maths, physics and computer science to provide new perspectives on – and perhaps even solve – pressing problems in economics, healthcare, international development, and military and ethnic violence. Last year, Bar-Yam and his colleagues published a paper called The Food Crises: A Quantitative Model of Food Prices Including Speculators and Ethanol Conversion, in which the Necsi crew mathematically isolated and quantified the effects of speculation as a driving force behind the bull market in global food derivatives.
“Prices have been way out of equilibrium in 2011,” Bar-Yam told me. “The bubble has not burst yet.”
According to Bar-Yam, the international thirst for biofuels has put a strain on arable land previously reserved for food production. At the same time as the rise of the biofuel mandate, the rise of investable commodity indexes and other electronically traded funds has offered investors of all stripes a chance to sink their cash in a sparkling new casino of derivative products. As a result, an ever-flowing spring of speculative capital sustains the status quo.
But just as food is no ordinary widget, speculation in commodity markets is not simply a matter of financial predation. “The high prices of food have resulted in accumulations of inventories at the same time as people can’t afford food,” said Bar-Yam, who noted that the Arab spring was triggered by the food-price bubble. In fact, Necsi’s quantitative model of speculation predicted the uprisings in Tunisia, Libya and Egypt, and warned that if food prices remain inflated, riots and revolutions will go global sometime between July 2012 and August 2013.
“We are at a critical point,” said Bar-Yam. “We don’t have a stay-the-course option right now.”
He believes the time has come for global regulators to step in and manage the global market. Their first task would be to guarantee transparency and make public information previously shrouded in secrecy – such as who holds the biggest stakes in global commodities. Transparent accounting practices would have made the disappearance of $1.2bn worth of customer money from the books of MF Global less a matter of sleight of hand and more a matter of international crime.
The second part of the speculation solution hinges on a return to traditional position limits in commodities, limits enforced by international laws geared to stop bankers, hedge funds and sovereign wealth funds from going long on the world’s food supply and, in effect, gambling on hunger.
Nothing influences financial regulators like equations, so the reforms we can look forward to in 2012 will ultimately depend on the numbers. Which is a mixed blessing. “One reason people don’t want to understand the math is the deafness of those who are making the money,” said Bar-Yam. “But the old mathematics is manifestly wrong.”
Source: The Guardian
So much written about the Occupy Wall Street is pure BS. If this street theater was a spontaneous and independent movement, where is the outrage towards the high priest of monetary manipulation, George Soros?
From the outset, civil disobedience is the most sincere method of dissent. Breaking All the Rules is based upon a healthy and judicious resistance towards all levels of false authority and systemic corruption. Therefore, it is with a heavy heart, that the careerist organizers and front groups for the establishment sweep away the noble intentions of earnest radicals. Those enablers and facilitators of fraudulent financial institutions makes a mockery of authentic protection.
Long ago, the glory of tangible free enterprise was destroyed under the boot of State Capitalism. When the confused populace rails against demonstrations and defend the crooks that perverted economic M A R K E T S, it becomes clear why the public has a habit of losing money with brokerage houses. In order to take the going broke out of the “so called” investments, one had better learn early that paper assets, often come with future liabilities, when entrusted to the establishment.Occupy Wall Street is smeared as extreme by those who benefit from a diversion away from their own wrongdoings. Once upon a time, a stock exchange functioned as a clearinghouse medium for raising capital. The investment funds financed new ventures that would produce useful products and employ labor. This bygone era was the engine of creating true wealth. Today, gambling is the primary activity conducted under a rigged casino wheel.
How much history do you recall? The incompatible Antony C. Sutton documents in Wall Street and the Bolshevik Revolution how the monopolists of finance funded Lenin. George Soros plays the Schiff role in this modern day version of a Goldman Sachs impersonation of Kuhn, Loeb and Company. If you do not know this pesky fact of the last century, one cannot be expected to make sense out of current events.A simple comparison between OWS and TE (The Establishment) is in order.
Blame Wall Street for Economic Woes
Make OWS the Issue to Deflect Scrutiny
Gain Media Attention for Misdeeds of the Rich
Shift Public Outrage to OWS – Protect System
Argue that 99% vs. 1% is Unjust and Immoral
Use Class Warfare to Demigod OWS Radicals
Demand Redistribution from the Wealthy Rich
|Champion Benefits of Capitalism of the Few|
Call for Bigger Government and Intervention
Strict Regulation for Benefit of Big Business
Abolish Market System – Expand Socialism
Expand Collectivism – More People Control
During the Old Regime under the reign of Louis XVI, the aristocracy lost their heads under the guillotine. In the 21th Century, the masters of the universe, spread breadcrumbs by way of food stamps to a society relegated to systemic government poverty and dependency. The only cake consumed these days requires a hedge fund account to pay for the icing and toppings.
French Libertine Tradition
What realistic likelihood is there for a people’s revolution to replace the titans of finance, when the robber barons are playing CHOPIN : Marche Funèbre for the occupied nation? What chance is there for a replay of the French Libertine Tradition to play out when the theme of anti-clericalism, anti-establishment and eroticism have had their run and the establishment just gets more bold and powerful?A novel counter approach to guns and pitchforks is the video camera that documents the police state. Deplorably the ordinary exploited bystander is characterized as an extremist and soon will be incarcerated into internment camps, built by the Uber Elite. What many naive observers see is not the brutality of the Gestapo police, but the disrespect of the unclean protestors of the Capitalist kingdom.
Most Americans refuse to face the facts of their enslavement and rather condemn the social rebel. Bringing true social justice to an economic system that has eliminated all vestiges of real Free Market enterprise is viewed as a betrayal.
When that hideous dinosaur of establishment journalism, Time Magazine, wraps the symbolism of the protestor in the garb of a terrorist, the message is clear for even the most brain dead striver for more government largess.
Time distorts the significance with more deflection and confusion.
“Massive and effective street protest” was a global oxymoron until — suddenly, shockingly — starting exactly a year ago, it became the defining trope of our times. And the protester once again became a maker of history.
The Washington Post adds to the illusion.
“In this year’s report, Time pieced together what all these revolutions have in common, why they protest, and what the legacy of the year’s protests will be. The magazine profiles a citizen journalist who started the live stream for Occupy Wall Street from Zuccotti Park.”
What both Time and the Washington Post want you to accept is that these protests are composed of radical inspiration and democratic design. No doubt, many demonstrators believe they are acting out of pure intentions, but most are so deluded by inept viewpoints, absent of any consistent or comprehensive philosophy, that they are clueless about goals, objectives and have no viable substitute economic system.
Wall Street only uses money accumulation for keeping score. The underlying objective of the power elite is to control the political process and write all the rules. Nothing has changed from the days of installing Marxist ideology in Russia to the present stage of completing the task of instituting totalitarian collectivism in our country. Another establishment media purveyor of disinformation is MSNBC. In an article by the perennial social outlaw and opportunist, Jesse Jackson compares the global anti-capitalist movement to the U.S. civil rights struggle, the battle against apartheid in South Africa and the fight for Indian independence.
“Jesus was an Occupier, born under a death warrant, a Jew by religion, born in poverty under Roman occupation,” the two-time candidate for the Democratic presidential nomination told a crowd near Saint Paul’s Cathedral. “Gandhi was an Occupier, Martin Luther King was an Occupier, (Nelson) Mandela was an Occupier.”
Coming from an extortionist posing as a minister of faith, this charlatan plays a bit role in the overall scheme to destroy the legitimate foundations of raising capital for worthwhile business endeavors. He insults the significance of Jesus’ ministry and Gandhi’s example. His role is to lead more people into even greater mental confusion.
The establishment refines the elements of mass propaganda and psychological indoctrination to create image campaigns that the system is a moderate and stable force, and must be maintained. As with most left or progressive oriented mindsets, the articulation of social wrongs and injustices are often well stated. However, when it comes to providing meaningful alternatives, the peasants just demand a larger sliced of bread because they are unable to learn the skills to bake their own cake.
Until society embraces the insight that the establishment is behind most radical social movements, they will just keep falling into a dark coffin, designed for them by the very elites that they protect. Economic conditions and business endeavors are on the mind of everyone, especially those who are on the edge of survival. OWS will never provide moneymaking guidance for the average citizen. Even so, do not condemn all forms of protest. Actually genuine resistance accompanied with practical time proven principles of monetary and business wealth creation is the desired option.
In order to explore the nature of financial alternatives and present rational choices for a replacement of the corporatist system of monetary tyranny and transnational globalism, BATR will be starting the Negotium series of weekly business columns.Blending functional economics with political realism is the mission of this endeavor. The overriding principle to achieve a prosperous society requires building upon a solid foundation of Western Civilization and traditional heritage. Understanding the extent that the establishment is willing to go and the degree of deceit that bonds the various corrupt institutions is an essential goal for this collection of essays.
Appreciating the need for extreme encounters with the moderate establishment is a concept that some will challenge. However, given the current state of economic ruin, the plights of the former middle class will only deteriorate at a faster pace under the rule of the Wall Street banksters.
There is an alternative, and you are invited to join the spontaneous rebellion of the real America. Someday the OWS proponents may mature and gain the wisdom to know who is benefiting from their manufactured and controlled protests. Until that time, the task resides with you. Register your opposition to the Wall Street enslavers who stage-manage righteous outrage as an opportunity to misdirect legitimate rebellion. Time is short, act soon.
The Elections Are Much Ado About Very Little…
Americans have been skillfully imbued with idea that the United States of America is the world’s greatest country; it has the most freedom, the best government, the best judicial system, the most inventive people, the best industry, the best morals, a superior social order, a more righteous citizenship, the most wealth, the best athletes, etc. They sincerely believe in a paternal approach to the world and cling to the hope that voting will provide leadership that will keep us free, righteous, and above all, dominate.
Fred Reed puts it this way: “If I were to speechify to a conclave of Tea Partyers, “America is the free-est…the most democratic…the best educated and most dynamic country the world has ever known, an example to all mankind,” the assembled would hoot and hooroar and applaud in dizzy exaltation. Here is the soul of the American approach to existence, bottomless self-admiration devoid of knowledge or curiosity, wrapped like a psychic burrito in the patriotism of overwrought middle-schoolers. And there are many, many of them.”
“Our system of government is not perfect but it is the best the world has to offer.” Some semblance of this idea has been afloat in America for decades. Every four years we elect a president. It is a raucous, mendacious process that has become progressively manipulated. While there is overt accountability of funding for political candidates there is evidence that candidates are preselected and that their campaigns are financed under the table. Several high level politicians attended Bilderberg meetings before finding political success. Obama and Clinton were both knighted at these meetings; so were Romney and Perry. Friendly former English leader Tony Blair was in attendance before becoming Prime Minister. Large political donations frequently go under the radar. The details of John Edward’s indictment provide a glimpse into some of this skullduggery.
Legislation must always be introduced by an elected official but most of the important legislation passed by the House and Senate is written elsewhere. Lobbyists write legislation which is entered in bill form by willing legislators. Complicated world government bills like NAFTA, GATT, and CAFTA are written by members of the CFR or other like minded individuals. The legislation for creating Homeland Security was written long before 9/11/2001 and was withheld to be introduced at that propitious time. Congress no longer declares war, it no longer cuts off funding to projects that have lost public support, it no longer writes its own legislation, it is a pompous, bought and paid for organization catering to pernicious outside influences that are destroying the country.
It isn’t Medicare and Social Security that is bankrupting our nation; it isn’t even the immoral wars though they account for a terrible moral decline. What is destroying America is the New World Order. It is the shifting of manufacturing to China and other third world nations and the open border policies that accompany cultural amalgamation. These policies emerge from the international banking cabal and are intended to wealth down America. No one does better at covering that ground than Dr. Daneen Peterson – set aside some time and read about it here.
Demonstrations against corporate greed may siphon off some of the angst but they miss the target and will be of no more use in correcting the problem than the election of another president. The dilemma is centered in our dependence on money which has been under the control of a hidden banking cabal for centuries. Both political parties including their presidential leaders are controlled by the same financial cabal.
Ron Paul is correct in indicting the Federal Reserve but even if the United States could get out from under this tyrannical power center it would be a lonely nation because all of the major nations of the world have central banks and the control structure would still be in place. The Rothschild family was involved in financing wars two hundred years ago when the world was primarily agrarian. Now that the industrial revolution has created a mass producing world economy the scope of financial power covers much of the world population. Control of the money provides control over the necessities of life.
The only way to avoid financial tyranny is to eliminate the need for money by becoming independent; being able to provide the necessities of life without resorting to a medium of exchange. The world financial cabal is working to prevent this by monopolizing the food supply, by controlling seeds, water, and fertile land. If these efforts are successful the world will become a large plantation populated by serfs whose sustenance is controlled and allotted by an elite cadre
This morning’s newspaper pictured Romney and Perry as the leading presidential candidates. That article mentioned that Home Depot co-founder Ken Langone, a Christie backer, had joined Romney along with John Catsimatidis, a supermarket executive, Paul Singer of hedge fund fame, and Jim Nicholson, former Republican National Committee Chairman. According the article Perry also picked up some Christie support and is positioned to pick up Palin backers. One would assume from this article that the backing of corporate moguls and wealthy elitists is decisive in political success. The movers and shakers have no loyalty to their primary choices, they switch horses without hesitation. The voting public has little to do with the choice of candidates; that choice is controlled by money and power – not substance. See the candidates that are being ignored here.
Proud people believe they have a right to win. They are competitive to a fault. Vietnam veterans suffered some of that proud spirit when their coming home was marred by the disdain of civilian sore losers. Only winners are heroes. Winning is everything – that is the proud America way. There was a time when Americans had a right to be proud of our nation. We were free, benevolent, and righteous. Unfortunately righteousness has succumbed to ugliness and even our victories are without honor. Killing an American citizen in the Middle East by presidential order with a guided missile controlled from a U. S. Air Force base in Creech, Nevada, produces no heroes. It is technically advanced but illegal and cowardly.
The media runs polls which determine the popularity of presidential candidates and the convention then nominates the most popular in an attempt to win the election. The polls, which are controlled by the media, determine which candidate gets the nomination.
One thing is certain: In the coming presidential election there will not be an honorable vote available on the ballot. As has been the case for several decades our nation and our people will suffer for the policies enacted by either candidate because these men do not work for the benefit of our nation and its people, they are beholden to a bold and powerful evil that seeks dominion over the Universe.
Pride cometh before a fall! Teetering at the precipice Americans remain a proud people.
It is time for American citizens to stop voting for candidates that do not represent us, that are destroying our assets and stealing our freedom.