Tag: Wall Street

Cross-posted from Progressive-Independence.org.

From an article by John Browne at Asia Times:

Last week, US Treasury secretary Henry Paulson and Federal Reserve chairman Ben Bernanke faced congressional leaders with a reported forecast that we are “literally days away from a complete meltdown of our financial system”. Apparently, the politicians were stunned into a long silence.

If citizens across the country could glimpse the horror seen by the congressmen (of which we have long warned), then widespread panic would truly be the order of the day. In particular, people will be shocked to see how Paulson’s seemingly vast request to congress for some $1 trillion is utterly dwarfed by the likely problem.

Later in the article:

If the economy moves into a severe recession and then depression, default rates will explode. These, in turn, will cause stock markets to implode, as they did in 1929. In addition, the US dollar is likely to plummet, driving up the trade deficit in the longer term. Considering these factors, many of which the government prefers to hide, things look bad – very bad.

The thing is, most Americans seem to oppose any bailout of Wall Street whatsoever.  U.S. Senator Dianne Feinstein was inundated with communications from constituents demanding that she vote against giving any of their tax dollars to Wall Street, according to the Kansas City Star:

Feinstein’s office has heard from about 50,000 constituents since Congress began considering a financial rescue plan about a week ago – and “only one of a thousand supports it – whatever it is,” the California Democrat said.

Lawmakers from both parties reported similar confusion and concern among constituents as they spent their Saturday painstakingly, and sometimes painfully, trying to craft a still-elusive compromise package.

Senate Majority Leader Harry Reid and Republican Leader Mitch McConnell aimed to have a final plan ready by 6 p.m. Sunday, in time for the opening of markets around the world.

But House Republicans, whose objections derailed a deal reached last week, warned they did not want any rush to judgment.

And:

The senator tends to side on most issues with Democratic liberals and moderates, but her feedback from home was similar to what conservatives were hearing. “People call us and say they’re really against bailing out fat-cats. That’s a big issue,” she said.

“We’ve heard from hundreds of people who say, ‘We pay our bills. Why can’t Wall Street pay theirs?’ ” said Rep. Kay Granger, R-Texas.

Sen. Bob Corker, R-Tenn., said his office had received 3,500 calls in recent days “and just 95 said they supported what we’ve done so far.”

Republicans have apparently been revolting against their own party’s dictator in the White House, seemingly out of a desire to finally look as though they oppose big government interference in the market system – earlier this month, the feds took lending giant Fannie Mae back under their control and also seized its counterpart, Freddie Mac.

Whether this is really the case is up for debate; it could all be a ploy to extend the financial crisis so as to force Democrats in Congress to cave in and write another blank check.  My gut, however, tells me there’s genuine fear that a bailout not crafted to give taxpayers at least partial ownership of the financial institutions in return for a bailout would create a massive backlash at the polls come November.

At any rate, once the bailout does go through (no matter what form it takes), shall it be enough?  According to at least one American economics writer and the foreign press, we’re already in the throes of an economic depression that began months ago.  Considering the massive U.S. debt already being passed on to an incalculable number of future generations, adding another trillion or so dollars to it doesn’t seem as though it’ll solve the problem we now face.

Tonight was an eye-opening experience. Running behind all day long, Hubby and I decided to order a meat-lover’s stromboli for two, and I drove down the road to our local pizza place to pick it up.

There are some things you don’t do in life. You don’t start whistling in the check out line at the grocery store. You don’t give out your personal banking information to the Prince of Nigeria, regardless of how desperate that email sounds.

And, you don’t talk politics at the local pizza place.

All that changed tonight.

Crossposted from WWL to Docudharma, Booman, OWL, Station Charon and Never In Our Names.

.

Or:

A foray into when the UNHOLY TRINITY comes back to bite the most indoctrinated, shocked nation in which it has ever been unleashed right in the ass.

As I often am wont to do, I went back to source material when troubled by this * new economic crisis. (* Which of course is neither new, nor could not have easily been predicted by previous models)

I am re-reading “The Shock Doctrine”. I loathe bogging down into economics, but her work is accessible. Normally understanding economics is about as easy for me as swallowing a VW and passing it sorted into its component parts in bags.

Bill Maher had Naomi Klein on this week past. We catch him on the Sunday Morning rerun * religiously. (* She says with full intended irony, being of the same mind that religious people are idiots for the most part)

“They moved the disaster from Wall Street to Main Street…”

I’d almost change my orientation to do this woman she gets it so very well.

“This is socialism for the Rich”

No Shit.

Andrew Sullivan I wanted to bitch-slap. He said exactly what I predicted the neo-cons would say: “Its the poor peoples faults for taking on loans…”

Not the cunning bastards who tricked us into taking loans they swore wouldn’t bubble from 8% to 18%, as they now have. Not the speculators driving up prices on oil. Its the STUPID poor people.

I wouldn’t do him if he was the last diseased prick on Earth and I drank a gallon of Spanish Fly in a post-battery Earth and both my hands were cut off.

I digress. Lets get back to the Real Trinity.

Wanna fear a Godhead? Fear this one.

There is another way to solve the banking problem on Wall Street and that is to abolish money as debt. Here is a movie, Money as Debt, from Canadian animator Paul Grignon from 2006. The film is 47 minutes long. Please give it a view.

The film has been around in a shorter form since at least 2002. I think it is important to at least view before we sign $700 billion over to the Wall Street and international banks.

 

Barack Obama campaigned Thursday in Española, New Mexico.

At a rally there, he responded to McCain’s weak call to fire Christopher Cox, SEC chairman, and former Republican congressman from California. Reuters reports, Obama implies McCain is ranting: “You can’t erase 26 years of support for the very policies and people who helped bring on this disaster with one week of rants,” Obama said. Why just stop at firing Cox as one symbolic scapegoat? In response to McCain’s call for getting rid of the SEC chairman, Obama said: “Here’s what I say — in 47 days you can fire the whole trickle-down, on-your-own, look-the-other-way crowd in Washington who have led us down this disastrous path. Don’t just get rid of one guy.”

Yeah! Obama is spot on here. It is the conservatives’ failed ideas and failed policies that have gotten our economy in this mess.

The Financial Times first reported in news that Wall Street banks are fighting for life early this morning that the U.S. Federal Reserve was making “it easier for financial institutions to access Fed liquidity by easing terms on its borrowing facilities and accepting a much wider range of assets as collateral.”

The Fed likely figured the shock of bank failure today was an excellent time to sneak in a regulatory change. The Fed “widened the set of assets eligible as collateral for loans of Treasuries to include all investment grade paper, and raised the size of these Treasury loans to $200bn.”

The Fed also suspended rules that prohibit banks from using deposits to fund their investment banking subsidiaries.

The NY Times reports that the Fed loosens standards on emergency loans. Not just loosen, but “dramatically loosen” their standards.

In an obscure but highly important announcement late Sunday evening, the Fed said it would let Wall Street firms post as collateral much riskier assets – including equities, junk bonds, subprime mortgage-backed securities and even whole mortgages – in exchange for emergency loans through the Primary Dealer Credit Facility.

The Fed created the emergency loan program in March, at the same time that it engineered the shotgun marriage of Bear Stearns by JPMorgan. In itself, the program marked a historic expansion of the Fed’s lending to cover investment banks rather than only commercial banks.

This morning, Treasury Secretary Henry Paulson formally announced his grand scheme to use America’s economic mess to consolidate power in the hands of the few, the economic pillagers at the Federal Reserve.

Under the guise of “increasing” regulation, Paulson’s scheme seeks to abolish the last vestiges of New Deal oversight on the U.S. economy and complete the deregulation of Wall Street. Paulson proposes nothing less than economic shock therapy to the U.S. financial sector. As The Guardian notes in its coverage of Paulson: “Big banks saw little to fear in the blueprint.”

In a recent EENR entry I posted about Paul Krugman’s blog entry regarding the real reason regulators have failed to reign in the excesses of Wall Street.  Essentially, the failure was deliberate — an effort to systematically remove any and all regulation.  I guess causing one Great Depression wasn’t enough to wake up the laissez-faire assholes into realizing that the days of unrestricted greed should have remained dead and buried; they’ve been working like hell to create another while making their money, and they appear to have succeeded.

But I digress.  In today’s New York Times column, Professor Krugman expands upon this failure to reign in Wall Street by bringing the discussion to the presidential election.