Do You Believe Banks Are Recovering? (Part 2) 78 comments
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Fraudulent Fed
Ben Bernanke has a number of obligations as head of the Federal Reserve. Among his mandates are:
To strike a balance between private interests of banks and the centralized responsibility of government
- To supervise and regulate banking institutions
- To protect the credit rights of consumers
To manage the nation's money supply through monetary policy to achieve:
- maximum employment
- stable prices, including prevention of either inflation or deflation
To maintain the stability of the financial system and contain systematic risk in financial markets
Let’s assess how Helicopter Ben Bernanke and Mad Dog Alan Greenspan have fulfilled their mandates. They were supposed to supervise and regulate banking institutions. They apparently slipped up slightly on this mandate. It appears that letting banks regulate themselves was a slight miscalculation on Mr. Greenspan’s part. The man who never saw a bubble in his life had this to say:
The presumption that you could incrementally defuse a bubble was a fantasy. Clearly, you cannot defuse these things, unless you hit them right on the head and break the economy. Essentially, break the potential profitability that is engendering that sort of stuff. We could have basically clamped down on the American economy, generated a 10 percent unemployment rate. And I will guarantee we would not have had a housing boom, stock market boom or indeed a particularly good economy either.
So, Greenspan stepped aside as banks sold adjustable rate negative amortization loans to subprime borrowers with no proof of income or assets required. The job of an independent responsible Central Banker is to take the punch bowl away before the party gets out of hand. The politically connected fawning Greenspan chose to spike the punch bowl with 1% interest rates and exhorting the party goers to take out adjustable rate mortgages. Free market capitalism with no rules was the path to prosperity in his mind. The Greenspan Put was in place. Party like it was 1999 and he’d clean up afterwards. Instead, the American taxpayer is stuck with the bill and Greenspan gets $100,000 per self serving speech.
Mr. Greenspan made his biggest mark with his hands off attitude regarding derivatives. His quote from May 2005 will get him into the Federal Reserve Hall of Fame:
The use of a growing array of derivatives and the related application of more-sophisticated approaches to measuring and managing risk are key factors underpinning the greater resilience of our largest financial institutions .... Derivatives have permitted the unbundling of financial risks.
Would you pay this dude $100,000 for his words of wisdom? Didn’t this man have hundreds of PhDs gathering wads of information about the practices of our biggest financial institutions? He was either the most incompetent Federal Reserve Chairman in history, or he was in the back pocket of the banking cartel. Take your choice. The major banks became gambling casinos run by multi-millionaire MBAs, tooling around in their private jets, using derivatives as the chips in their trillion dollar game of craps. When these Masters of the Universe MBAs rolled snake eyes, the world wide financial system collapsed. Mandate #1 was not a success story.
Mandate #2 was to protect the credit rights of consumers. Considering Americans have lost $10 trillion of net worth in the last 18 months due to the Federal Reserve mismanaging interest rates, failing to properly regulate banks, and allowing mortgage brokers to mislead millions of immigrants into mortgages they didn’t comprehend, it appears they may have failed on mandate #2. Now, Ben Bernanke has lowered interest rates to 0% in an attempt to enrich the major banks at the expense of senior citizens living on a fixed income. Investors who were receiving 5% on their money market deposits in 2007 are now receiving less than 0.5%. Ben would prefer that 85-year-old grandmothers invest in high yield bonds. He is systematically stealing from the poor to give to the rich.
Mandate #3 regarding maximum employment doesn’t seem to be working out too well either. The government massaged numbers show unemployment at 8.5%, the highest rate since 1983. Unemployment will easily reach 10% during 2009 and may reach the highest levels since the Great Depression. It appears the Federal Reserve misunderstood their mandate and is working towards minimizing employment as less than 60% of working age population is employed today. By reducing interest rates to generational lows, the Federal Reserve created the boom that led to the bust. Their interest rate manipulations have led to 13 million Americans being unemployed today, an increase of 6 million in less than two years.
Mandate #4 of stable prices with prevention of inflation and deflation has been somewhat of a challenge for geniuses at the Federal Reserve. Using the non-manipulated consumer price index, inflation has consistently run above 8% since the 1980s, peaking above 12% in 2008. By falsifying the calculations, Ben Bernanke is able to leave interest rates at 0%. The government reported figures show no inflation. By manipulating the CPI, the government is able to pay senior citizens 1%, while their costs for food and energy go up 6%. It is good to see the Federal Reserve is looking out for the most susceptible in society.
Lastly, the Federal Reserve was supposed to maintain stability in the financial markets. The last 18 months have been the most unstable period for financial markets in history. The Federal Reserve allowed at least a dozen financial institutions to become too big to fail. By coming to the rescue of the financial markets every time something bad happened starting with LTCM, the Federal Reserve encouraged excessive risk taking by financial firms. These institutions knew the Federal Reserve would clean up their messes. They were right.
With a perfect record in the mandates they were asked to fulfill, you can see why we would want to give the Federal Reserve more power and more mandates. Paul Volcker, the only decent Federal Reserve Chairman in history, thinks otherwise:
The Federal Reserve is going beyond the traditional role of central banks here or abroad. At some point it’s reasonable to ask should this particular institution, with its independence very well protected, be allocating so much of what is essentially government money. The inflation problem, which should be a real threat for the future, is not right on the doorstep. But two or three years from now that may be the critical problem, how that’s handled. Because, given what the Federal Reserve has been doing, it’s going to be harder to retrace their steps, so to speak, than it ordinarily would be.
Goofing on Elvis, Are We Losing Touch?
The stock market has been soaring as banks report fraudulent earnings. These banks are purposely underestimating future losses to make current earnings appear better than they really are. Hank Paulson and Ben Bernanke demanded that Ken Lewis commit fraud by not revealing material information to the public about Merrill Lynch. Why are they not being prosecuted? Bankers protect the members of their bankers club. Dr. John Hussman describes how it works in today’s world:
That's what these bureaucrats want during their stint in government service, that's how they advise our elected officials, and then their revolving door takes them right back to Wall Street. This thing is run by investment bankers and corporate bondholders for the benefit of investment bankers and corporate bondholders.
The government is desperately attempting to convince the world that the banking system is sound and recovery is under way. The actions they have taken have not and will not fix the system. The waves have washed away the foundations of sand propping up the U.S. financial system. Instead of learning from their mistakes, officials have decided to rebuild on a new foundation of sand. We are borrowing from foreigners to bailout bankers and handing the bill to future generations. With government dictating the future of our banking system we can count on massive fraud, waste and mismanagement. Dr. Hussman’s frustration is well founded:
It's frustrating, but we are wasting trillions of dollars that could bring enormous relief of suffering, knowledge, productivity, and innovation in order to defend bondholders of mismanaged financials, and nobody cares because hey, at least the stock market is rallying. If one thing is clear from the last decade, it is that investors have no concern about the ultimate cost of the wreckage as long as they can get a rally going over the short run.
This public relations effort will fail. There are hundreds of billions of losses left to be recorded by our big bad banks. If you believe this is almost over, you are not paying attention.
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This article has 78 comments:
For me Greenspan's remark
"Derivatives have permitted the unbundling of financial risks"
should stand as an epitaph to the financial technocracy
No bank left behind.
That is what it will take to fix this economy. We dont need these 19 banks we have plenty of home town banks. Only BIG GIANT too big to fail institutions need giant banks.
We need neither.
On May 01 07:59 AM User 356519 wrote:
> James, you just had the greatest fraud in US history, in Mr. Bush.
> Now they are trying to fix the mess.
On May 01 08:19 AM atavist.avatar wrote:
> This is unmitigated rubbish. Author most be a short or hedge fund
> toady.
I admit I did not want to believe that the Iraq war was fabricated by the white house, that they would make up evidence and lie to the american people. We don't want to see our president that way, the man we voted for, the man we "trust". But he did. .
Mr. Quninn is exactly correct on this one. I would even say that it may be likely that this entire event was scripted once a certain company realized how unstable the system was. Just run up the price of oil, get a wiff of inflation, induce a "supply side" recession, and the house of cards will tumble over. That same company that ran up the price of oil just happens to be the same one that has benefited the most from the crisis, has the most connections, and has emerged the strongest of the surviving investment banks. Makes you think
The American people were given the right to carry arms in the constitution. in order to be able to form a citizen militia and overthrow anyone who grabbed to much power and ruled with tyranny, and taxed without representation. This is exactly what is going on under our own noses, and the spin masters will always make it sound as if things are being done for our own good while they rob us blind.
Allowing judges to modify mortgages would have been the most simple and effective way of altering the outcome of this crisis. it got squashed. Yet it was one of Obama's pillars for recovery. Note how he hasn't made one sound about it. Why is that? Banks and bank bond holders are made whole, while the government systematically attacks organized labor while saying they are on the working man's side. You can't look at the words, you have to only look at actions as if presented on paper. When you do this type of intellectual, unemotional analysis the conclusions are very clear.
On May 01 08:19 AM atavist.avatar wrote:
> This is unmitigated rubbish. Author most be a short or hedge fund
> toady.
Do you think you could have crammed a few more subjects and sentences in some of those humongous paragraphs?
I think you may have set a world record in this one (I'm going to send it to "Ripley's"):
"This brings us to the stress tests for the 19 biggest banks in the land. The most stressful conditions are supposed to be 10% unemployment and a 20% further fall in home prices. That doesn’t sound too stressful to me. Considering the government reported figures are a manipulated lie, we already have unemployment between 15% and 20% in the real world. A 20% further decline in home prices is a given. The Case Shiller futures index forecasts that the New York Metro area will fall by 31% by the end of 2010. The massive overhang of housing inventory, the coming onslaught of mortgage resets in 2010, and the millions of foreclosures in the pipeline guarantee at least 20% further downside in housing prices. I have a feeling these 19 banks are going to need to study a little harder for their test. Professor Geithner is giving them an open book take home exam and gave them the answers. They will still flunk."
Green Legislation
Insolvent banks sucking government tit.
Usury interest
China/Mexico
Anyone that thinks our "crisis" is near recovery is a fool, or a politician/banker (can you tell the difference?)
We off shored our best customers to buy cheap socks and enjoy record CEO pay and Wall Street profits.
JOBS=CUSTOMERS
And now we are on the path to having neither.
On May 01 09:01 AM ArtfulDodger wrote:
> Quinny:
>
> Do you think you could have crammed a few more subjects and sentences
> in some of those humongous paragraphs?
>
> I think you may have set a world record in this one (I'm going to
> send it to "Ripley's"):
>
> "This brings us to the stress tests for the 19 biggest banks in the
> land. The most stressful conditions are supposed to be 10% unemployment
> and a 20% further fall in home prices. That doesn’t sound too stressful
> to me. Considering the government reported figures are a manipulated
> lie, we already have unemployment between 15% and 20% in the real
> world. A 20% further decline in home prices is a given. The Case
> Shiller futures index forecasts that the New York Metro area will
> fall by 31% by the end of 2010. The massive overhang of housing inventory,
> the coming onslaught of mortgage resets in 2010, and the millions
> of foreclosures in the pipeline guarantee at least 20% further downside
> in housing prices. I have a feeling these 19 banks are going to need
> to study a little harder for their test. Professor Geithner is giving
> them an open book take home exam and gave them the answers. They
> will still flunk."
>
data.bls.gov/cgi-bin/s...
Better to keep your mouth shut and let people think you are a fool than open your mouth and remove all doubt.
On May 01 09:27 AM wg wrote:
> half of this screed is correct and half is nonsense. Where, for instance,
> does the author get an unemployment figure of 13 million? I thought
> it was in the order of 5-6 million. Its the problem with these blogs.
> Writers so often go apeshit with their own "brilliance," that they
> make fools of themselves. I mean, what exactly was t he Fed supposed
> to do about deratives, etc. Isn't that the SEC's province?
fraudulently reduced, the GDP numbers are overreported. Given this phenomenon, there has not been a significant period of POSITIVE GDP growth since the 1980s- only a few blips of positive growth here and there. This is consistent with reality as most of us see it- jobs are disappearing, capital is being destroyed, real standard of living is decreasing, wealth is leaving the country. It's not just this bubble, folks- the entire game is rigged.
Ben Bernake's $12.8 trillion of monetary stimulus has triggered a seven week-long surge in the stock market. Think of it as Bernanke's Bear Market Rally, a torrent of capital gushing from every rusty pipe in the financial system. The Fed's so-called "lending facilities" have gone far beyond their original purpose which was to backstop a broken system. Now they're leaking liquidity into the equities markets and sending stocks soaring while the "real" economy sinks to the bottom of the fish tank. That's how the Fed does business these days; plenty of tasty crepes for the Wall Street kingpins and table-scraps for the lumpen masses.
Guido Mantega, the Brazilian finance minister, said that the overriding issue was cleaning up the global financial system. “If the United States and other countries that have banks with toxic assets do not clean up their financial system, this crisis will last for a long time,” he said.
The Obama Administration has challenged the IMF's bleak picture of bank balance sheets, claiming that the US banking system is fundamentally sound. The IMF said last week that write-offs at US banks could total $2.7 trillion.
With this type of denial attiude we will continue down this path to destruction
You're so spot on with your analysis and for those who are paying attention this would be a scathing indictment of just how massive the fraud, mendacity, and duplicity of the Fed and Treasury has been under Greenspan/Bernanke, Paulson, Summers, and Geithner. But, instead, I think the general public has grown so weary of the "doom and gloom" that people have subconsciously chosen to ignore the prima facie evidence that our financial system and our financial regulators have sold this country down the river (malicious or not). Look at Volcker, the lone voice of reason in the Obama economic team, he's been marginalized and ignored.
Of course we all want to be out of the woods and be on our way toward recovery and a state of financial stability, which I why we buy the B.S. that "green shoots" are sprouting. It's human nature to want to be optimistic and hope the worst is over, but if people really understood the calamitous policies and the precarious situation of the financial system, there would be a revolution. I just don't think we're there yet. It is going to get much worse before it gets any better.
Nik
Ironic in that the song was written to make fun of conspiracy theorist!
Thanks for my laugh for the day!
Find your congressperson:
www.house.gov/house/Me...
On May 01 10:59 AM Dave Shafer wrote:
> So you believe the moon landing was faked?
> Ironic in that the song was written to make fun of conspiracy theorist!
>
> Thanks for my laugh for the day!
From the shadow government site. Unemployment stats. from govt. are just as bogus as CPI. Government spin to understate the enormity of the problems.
www.youtube.com/watch?...
Consumer confidence will fall into the DEEP.
And then how will the banks do with their consumer credit?
If some members of Congress have their way, your household energy bill will go up by $3,100.
video.google.fr/videop...
Two sentences -among many- stand out as they relate to by own business experiences during this time:
1: "The politically connected fawning Greenspan chose to spike the punch bowl with 1% interest rates and exhorting the party goers to take out adjustable rate mortgages."
2: "The major banks became gambling casinos run by multi-millionaire MBAs, tooling around in their private jets, using derivatives as the chips in their trillion dollar game of craps."
Indeed!
They make it hard as possible to follow the money. Some at these amounts is hard to miss. A small piece: Caribbean island bondholdings up 83% this year.
Where's it/are we going to end up?
Is China going to eat zombie Japan's & America's lunch or can we sell them our (new) opium one more time?
On May 01 11:56 AM hksche2000 wrote:
> Solid sources, facts/quotes: great analysis. Thanks JQ!
> Where's it/are we going to end up?
> Is China going to eat zombie Japan's & America's lunch or can
> we sell them our (new) opium one more time?
I just did a quick scan of the comments, and the corresponding "karma points" associated therewith (e.g. thumbs up vs. thumbs down).
What I find INCREDIBLE is that, as a nation of people, we still have such a wide divergence regarding "the truth" and "the spin" about the author's factual data.
OK, then, maybe we need to go back to a few basic "truths" regarding the the economy . . . can we all agree that:
1. As a nation of people we are getting screwed daily...
2. Many of the big banks took unbelievably huge risks that they should not have taken (by using other peoples' money)...
3. These same banks are now holding hundreds of billions in near worthless derivatives, yet they want to place a very high value on it...
4. The government is "trying" to help, and because they are empowered, the only thing they "believe" they can do is to spend money. They don't realize that the "other option" for them was to simply let the fires burn out (e.g. Long Term Capital Management in the late 1990s; Bear Stearns in early 2008; etc.)...
5. The government has a history of "bailing out" the failures, so it's natural to expect failed banks who committed fraud to want government support...
6. The bailouts have not helped...
7. Everyone's lives, and those of their children will be adversely affected...
8. A sustainable recovery is not possible until the American people regain their confidence and trust in their government and in the financial system.
Bottom Line: the author's data is factual, for the most part; so it's best not to shoot the messenger.
The joke of it is, life in America, as I've known it, has been nothing but conspiracy piled upon conspiracy: my entire lifetime (born in 1959) has been a parade of conspiracies from Vietnam to Enron. Even the House Select Committee on Assassinations in 1976 came to the conclusion that Oswald didn't act alone, but you won't hear that anywhere in the media...ANOTHER conspiracy - THE MEDIA.
In any event, Quinn hits the mark on his FED FACTS. Too bad he had to slam 9/11 truth in the process. Maybe that’s a quick way for him to get institutional credibility – portray THEM as the nuts…SHAME ON YOU QUINN.
The 5-6 million unemployed is the INSURED UNEMPLOYED (actually 6,138,000 as of April 18, which is 4.7% of the workforce as determined by the government). Once an unemployed worker is no longer receiving unemployment insurance benefits they are removed from the list. The link for this info is: www.dol.gov/opa/media/...
The "total" official unemployment is much higher (8.7% in March), with links provided by James Quinn in a comment above (data.bls.gov/cgi-bin/... This has been criticized as not counting many underemployed. Also excluded are many who have been unemployed for a long time or are not currently actively looking for work (the discouraged unemployed).
In Part 1 the author referred to unemployment as reported by www.shadowstats.com/ which attempt to include the people missed by the official government report. This number is close to 20% unemployed.
Hope this explains the points of confusion.
On May 01 10:59 AM Dave Shafer wrote:
> So you believe the moon landing was faked?
> Ironic in that the song was written to make fun of conspiracy theorist!
>
> Thanks for my laugh for the day!
www.nypost.com/seven/0...
With regards to markets, the only "fundamental" that matters is the supply/demand configuration. Supply: Sold Out in a massive, engineered panic. Demand: trillions in scared money sitting on the sidelines, trillions more of new money injected by the Fed and Treasury and then the short interest of Bears continually trying to pick a top.
Don't look for anything even remotely resembling a top until we see the 200 DMA on SPX. Around 970.
The whole Carbon Credit idea is yet another Credit defualt swap fiasco in the making and the fact that world 'leaders' are using it in this manner shows there really must be a conspiracy of some sort happening. But finally let me ask one question. "4 years ago, WHO WAS BO ? "
On May 01 11:30 AM sdcougar wrote:
> Here's Obama....if he gets his way, it will cost trillions of dollars
> to fix a non-existent problem--co2 'driven' global warming.
>
> www.youtube.com/watch?...
>
> Consumer confidence will fall into the DEEP.
> And then how will the banks do with their consumer credit?
>
> If some members of Congress have their way, your household energy
> bill will go up by $3,100.
>
> video.google.fr/videop...
No, this is calculated. In addition to the many excellent points this author makes, there is one thing that the pump monkeys and bought politicians absolutely don't want you to realize about this point of time in history, and the ONLY other time in our history we were in that predicament, and that it couldn't get fixed until "Mount Everent" was resolved. FDR tried it, the Chosen One is repeating the experiment. Doesn't mattter in either case.
ftalphaville.ft.com/bl.../
It will take time and resposible financial management to dig our way out. Shoveling the debt from one balance sheet to another doesn't fix it. I sold almost all my stocks this week. Doesn't mean Government Sachs won't find some bullsh*t recommendation to issue every 2 days to fool the last gullible investor. I'll wait for the next bus.
For the most part, the full costs of loans and credit cards are not recognised in the data, because you don't have mark to market accounting for individuals and borrowers. When the borrowers look like they can't pay and the banks will have to mark down their assets, and the debts become distressed, the banks throw their hands up and get trillions in bail-outs and are allowed to move the vulnerable assets from their mtm book to the mark-to-model or held to maturity.
Now, legislation on cram-downs gets rejected as the banks get the law-makers to do their bidding once more.
As Krugman said, we have socialized losses and privatized profits. To prevent the bankruptcy of the financial system, we have bankrupted the people.
I don't know how it will end, but it is not going to be pretty.
On May 01 06:23 PM mals wrote:
> A good article; but can you please leave your right wing mentality
> and concentrate on the financial perspective? Granted that politics
> play a part in all financial matters; but this entire bailout is
> the creation of your right wing republicans.
On May 01 06:23 PM mals wrote:
> A good article; but can you please leave your right wing mentality
> and concentrate on the financial perspective? Granted that politics
> play a part in all financial matters; but this entire bailout is
> the creation of your right wing republicans.
On May 01 12:53 PM 1.5 quadrillion wrote:
> Quinn, 9/11 was an inside job (www.amazon.com/Debunki...)
> and only a certain type of conspiracy theorist thinks the moon landings
> were faked. I will never understand the urge of some people to create
> a fallacious straw man around the generalization "conspiracy theorists".
>
>
> The joke of it is, life in America, as I've known it, has been nothing
> but conspiracy piled upon conspiracy: my entire lifetime (born in
> 1959) has been a parade of conspiracies from Vietnam to Enron. Even
> the House Select Committee on Assassinations in 1976 came to the
> conclusion that Oswald didn't act alone, but you won't hear that
> anywhere in the media...ANOTHER conspiracy - THE MEDIA.
>
> In any event, Quinn hits the mark on his FED FACTS. Too bad he had
> to slam 9/11 truth in the process. Maybe that’s a quick way for him
> to get institutional credibility – portray THEM as the nuts…SHAME
> ON YOU QUINN.
Hey, you're most likely right regarding the content of your article, although you may be just a tad cynical.
Keep working, Quinny! And don't forget me when you're watching those reality shows and writing!
On May 01 09:31 AM James Quinn wrote:
> When I started the article I was going to address housing, spending,
> and war too. Then I thought about how you don't like long articles,
> so I cut it off at 3,500 words.
1. THE BANKS OWN THE SENATE
2. THE BIG U.S. BANKS ALREADY HAVE IN PLACE THE LARGE ANAL PLUGGING SYSTEM THE WORLD HAS EVER SEEN, THEREFORE, WITH THIS SYSTEM IN PLACE STIFFING AMERICANS EACH AND EVERY MINUTE OF EACH AND EVERY DAY, THEY'LL HAVE THEIR MONEY BACK IN NO TIME. YOU CAN BELEIVE THAT!
www.salon.com/opinion/...
From most of your return comments, you seem to be "preaching to the choir." However, a few respondees do truly appear to be "tone-deaf." They just don't like the sound of the music, the length of the number, or the tempo. Please keep up the vigorous conducting.Our country needs more than the [c]RAP being spoon-fed to all of us by present and previous politicos.
Unfortunately the latest "economic crisis" has forced us to face the economic calculus of the world that few ,myself included, seem to understand. [Although I do try.] Economics, however, should be basic math. Our tax codes, corporate accountants,and bank/brokerage attorneys have done their best to assure that this will never be ths case. Way to many simply throw hands in the air assuming that those in government are smarter or better equipped to handle these matters. This is truly the "Audacity of hope." This blind faith and the last 3-4 administrations and congresses have brought us this precipice.
And they have forced us to jump;"Trust us,"they say. Our experiences should have guided us in the opposite direction.
We can only hope that a ground-swell of voter disgust with most present incumbents can erupt before our economy is destroyed. Mr. Quinn and those like him will be part of our way out of this mess. The ingorance and indifference of the masses (in response to all the lies that we have been fed by dems and repubs alike) must be replaced by enlightenment and positive reaction.
Keep up the songs with clarity ,Mr. Quinn, we need a choir tens-of millions strong.
When will we see the prosecution of Mr. Helicopter B and Mr. Treasury G, I am personally harmed by their criminal activities.
You are all like alcoholics in denial. For those who still think their government simply goofed on 9/11 and would never hurt them intentionally to further nefarious goals, here is the short list of VERIFIABLE U.S. Conspiracies, both Governmental and Corporate that have occurred since my birth:
Gulf of Tonkin, Iraq/Al Qaeda connection lies, WMD lies, JFK, RFK, MLK, Vietnam (all aspects of the war), CIA drug running with Noriega (google Barry Seal), NAFTA, Security and Prosperity Partnership of North America, WTO, FBI COINTELPRO, MKULTRA, Warren Commission (Completely contradicted and refuted later by the House Select Committee on Assassinations), ILLEGAL WIRE TAPPING From NIXON TO NOW, Watergate, October Surprise, the "secret" Laos war, CIA Drug running in LOAS, Operation Mockingbird (CIA control of Media - William Colby once said the CIA had ever media in their pocket - he was killed before he was to testify), Project SHAD, Project Ajax, Operation PBSUCCESS, the Tuskegee Syphilis, Operation Northwoods (false domestic terrorism), MKOFTEN (CIA testing chemical toxins on people without their knowledge), CIA development of "ethnic weapons" (Military Review, Nov., 1970), Pentagon Papers, Keating Five, Operation Paperclip, Human Radiation Experiments. 1944 to 1974, the PPT, USS LIBERTY, Secret Bombing of Cambodia,
The list is virtually endless! These are the DOCUMENTED conspiracies the US Government has engaged in that have resulted in the premeditated deaths or crippling of U.S. Citizens!
Look up HAARP or Chemtrails...
The corporate list is just as long and includes things like Love Canal, Terminator Seed Technology (what f'ing idiot at Monsanto came up with this one that is sterilizing seeds by contamination!), Tobacco Company lies, Enron, Arthur Andersen, Exploding Ford Pintos, Media Consolidation, The Business Plot 1933 (google it), General Motors streetcar conspiracy, GM EV1 battery, Federal Reserve Act (www.apfn.org/apfn/rese...), WorldCom, Tyco, Commodities Modernization Act (cause of our current problems), Bolivia Water Grab (PDF).PDF'>www.citizen.org/docume...), Thalidomide Conspiracy, Big Pharma anti-depressants (suicides/murders), Oil Wars, Private Armies (Blackwater, etc), Monsanto/GE/Westinghouse PCB and dioxin poisoning of their own workers and America’s water supply!!!!!!
WTF is it going to take for you SHEEP to get INFORMED and INTO ACTION?????
On May 02 09:25 AM dcb wrote:
> For those who don't want to believe what is going on here is just
> one of many media sources that explain it. The second amendment gave
> us the right to carry arms to overthrow a tyranny (which is happening
> now). I believe it was Jefferson (not sure) who explained what would
> happen when bankers got their claws in Gov't.
>
> www.salon.com/opinion/...
"...the Fed, FDIC, US Treasury etc. plus the banks own efforts if given sufficient time will keep going and recover as the economy as a whole recovers. If banks and the banking system is deemed irrecoverably and disasterously insolvent, this means the same for the whole economy including all us. Insofar as we are not bankrupt insolvent neither are the banks."
1. The Economy As A Whole
Bless you, productive wealth-creating activity is smaller than your "economy as a whole." In Zimbabwe, it used to be agriculture. In the US, it used to be agriculture + mining + manufacturing. The growth of sterile employments and entitlements, bureaucracy and unfunded pensions, does not create wealth. So the question is profitable, productive activity. You know -- the kind of creditworthy borrower that banks like to lend to. It's misleading and tragic that everyone assumes handouts and consumption will pull us out of this crisis. Would that cure Zimbabwe?
If a bank fails, it was managed badly. They made risky loans and lost. Or they made a bet on someone else's book and geared their exposure x40. Let's put aside government guarantees, which are a claim against future taxpayers (profitable producers and savers). When a bank is mismanaged and can't cover losses with paid-in capital, examiners are supposed to close the doors, liquidate, and pay off the depositors as best they can -- just like any other BK.
The FDIC's role, of course, is to do just that, using an insurance premium levied on all members' deposits. The reason that the Fed and Treasury have been pouring cash and credit into Citi, AIG, the GSEs, etc is to stave off panic. So, instead of panic, we get more of the same. Debt piled on unpayable debt and debasement of value.
The sane thing to do, in my humble opinion, is to break up the big insolvent banks and zombie institutions like AIG and FME. Let the market decide their value and utility. If foreign depositors want Citi, let them make a bid for whatever part they like most.
On May 02 03:13 PM 1.5 quadrillion wrote:
> The number of people who have voted thumb down on this post is EXACTLY
> WHY AMERICANS KEEP GETTING HOSED BY THEIR GOVERNMENT and by the fascist
> corporate oligarchy.
>
> You are all like alcoholics in denial. For those who still think
> their government simply goofed on 9/11 and would never hurt them
> intentionally to further nefarious goals, here is the short list
> of VERIFIABLE U.S. Conspiracies, both Governmental and Corporate
> that have occurred since my birth:
>
> Gulf of Tonkin, Iraq/Al Qaeda connection lies, WMD lies, JFK, RFK,
> MLK, Vietnam (all aspects of the war), CIA drug running with Noriega
> (google Barry Seal), NAFTA, Security and Prosperity Partnership of
> North America, WTO, FBI COINTELPRO, MKULTRA, Warren Commission (Completely
> contradicted and refuted later by the House Select Committee on Assassinations),
> ILLEGAL WIRE TAPPING From NIXON TO NOW, Watergate, October Surprise,
> the "secret" Laos war, CIA Drug running in LOAS, Operation Mockingbird
> (CIA control of Media - William Colby once said the CIA had ever
> media in their pocket - he was killed before he was to testify),
> Project SHAD, Project Ajax, Operation PBSUCCESS, the Tuskegee Syphilis,
> Operation Northwoods (false domestic terrorism), MKOFTEN (CIA testing
> chemical toxins on people without their knowledge), CIA development
> of "ethnic weapons" (Military Review, Nov., 1970), Pentagon Papers,
> Keating Five, Operation Paperclip, Human Radiation Experiments. 1944
> to 1974, the PPT, USS LIBERTY, Secret Bombing of Cambodia,
>
>
> The list is virtually endless! These are the DOCUMENTED conspiracies
> the US Government has engaged in that have resulted in the premeditated
> deaths or crippling of U.S. Citizens!
>
> Look up HAARP or Chemtrails...
>
> The corporate list is just as long and includes things like Love
> Canal, Terminator Seed Technology (what f'ing idiot at Monsanto came
> up with this one that is sterilizing seeds by contamination!), Tobacco
> Company lies, Enron, Arthur Andersen, Exploding Ford Pintos, Media
> Consolidation, The Business Plot 1933 (google it), General Motors
> streetcar conspiracy, GM EV1 battery, Federal Reserve Act (www.apfn.org/apfn/rese...),
> WorldCom, Tyco, Commodities Modernization Act (cause of our current
> problems), Bolivia Water Grab (www.citizen.org/docume...;citizen.org/docume...),
> Thalidomide Conspiracy, Big Pharma anti-depressants (suicides/murders),
> Oil Wars, Private Armies (Blackwater, etc), Monsanto/GE/Westinghouse
> PCB and dioxin poisoning of their own workers and America’s water
> supply!!!!!!
>
> WTF is it going to take for you SHEEP to get INFORMED and INTO ACTION?????
>
>
2. Bankrupt Insolvent 'R' Us
Let's say, for example that the good people of the United States went to Mars to borrow a couple trillion, because China said enh! We fill out an application at the First National Bank of Mars, listing out assets and debts, income and monthly expenses. The bank manager shakes his head and says sorry. You can't put whopping big lies on a loan application. We need to have those shopping malls and aircraft carriers appraised at fair market value. And your income, interest payments on debt, unfunded pensions, spending and the loan amount requested are all out of whack. Try Venus. Either that or cut spending.
Okay, no one wants to cut public spending, because we need jobs (cash to buy food, shelter, clothing, transport and medicine). I don't quite see the point of expanding unproductive employment that the market wouldn't otherwise create -- but okay, infrastructure makes sense, too. Plenty of roads and bridges and school buildings need to be spruced up.
However, it doesn't address the financial problem. Spending more, consuming more, and borrowing more are a recipe for economic weakness and decline. If it was accompanied by radical reduction of bureaucracy, deregulation of industry, privatisation -- the whole laissez faire thing that made America great -- we might have a chance at recovery.
What we promised instead is carbon reduction and poverty.
Although I like to give a "thumbs-up or down," this reader's response begs for a third response category; namely "???!!!"
Around July, 2007 when I sold and moved all of my long-term equity holdings to money market funds, I looked at previous bear markets and one of the things I noticed is that no matter what the duration or the issues underlying each one, all of the charts showed one thing they all had in common...there was a massive run-up, sort of an "The worst is over, the market has bottomed, it's safe to get back in stocks again." rally before the bottom falls out for a horrendous drop to what usually became the real bottom. Looking further, I found that since the Federal Reserve was chartered these were usually the result of some sort of government actions, before that it was like you or someone else mentioned, started by Jay Gould or some other large manipulator. It would not surprise me if, considering how the government and the administration is hawking this one, we may be in that large run-up I have been waiting for, for this bear market. The thing about this bear as opposed to most others is that I don't see a "horrendous" that is to say, a hard, fast drop on this one after the big run-up. I'm looking fore a slow "death by a thousand cuts" type of drop that may take years to complete. My hope is that there will still be enough volatility to make for good daytrading. I certainly don't expect to have it as good as I have had it for the last couple of years.
We shall see.
I also want to thank you for not commenting on the substantive part of James' blog. I shudder to think how that would have gone.
On May 01 10:59 AM Dave Shafer wrote:
> So you believe the moon landing was faked?
> Ironic in that the song was written to make fun of conspiracy theorist!
>
> Thanks for my laugh for the day!
Each on my list is documented - google MKULTRA starters. The CIA developed a basketful of nice mind tortures.
The Church committee in 1976 found a WHOLE LOT OF CONSPIRACY - no theories, just fact. en.wikipedia.org/wiki/...
One conspiracy not on my list is U.S. Torture conspiracies since 1947. We have a school of torture at Fort Benning, Georgia. It was once called "the Scool of the Americas" and has been renamed, the “Western Hemisphere Institute for Security Cooperation”!!!
Talk about an Orwellian moniker! Cooperation INDEED! We have ways of making you cooperate!
Enjoy your sleep until you decide to stop participating in your own BRAINWASHING!
On May 02 11:52 PM dragonpaw wrote:
> A note to commentaror 1.5 quadrillion; there is such a thing as tangential
> thinking ( which can occasionally be amusing and provacative) and
> then there is transgressional thinking ( which may include everything
> but the kitchen sink.) Please leave the sink and all the conspiracy
> theories in the kitchen, or an article that alludes to these matters.
> Mr. Quinn's does not.
> Although I like to give a "thumbs-up or down," this reader's response
> begs for a third response category; namely "???!!!"
Each on my list is documented - google MKULTRA starters. The CIA developed a basketful of nice mind tortures.
The Church committee in 1976 found a WHOLE LOT OF CONSPIRACY - no theories, just fact. en.wikipedia.org/wiki/...
One conspiracy not on my list is U.S. Torture conspiracies since 1947. We have a school of torture at Fort Benning, Georgia. It was once called "the Scool of the Americas" and has been renamed, the “Western Hemisphere Institute for Security Cooperation”!!!
Talk about an Orwellian moniker! Cooperation INDEED! We have ways of making you cooperate!
Enjoy your sleep until you decide to stop participating in your own BRAINWASHING!
No, YOU are too stupid to ever google one of the conspiracies on my list...If you did you know they are WELL DOCUMENTED in the public record.
Stop participating in your own brainwashing.
Bush may be stupid but look at what he accomplished:
IRAQ
Profitable Oil wars and contract for his buds
Private Armies not under DOD authority
Torture of HIS (not your) economic enemies
Effective repeal of the 4th amendment
Patriot Acts I & II
Military Commission Act
Wiretapping of YOU
The biggest transfer of the peoples wealth to criminals in history
The destruction of the National Guard
etc, etc, etc...
Sleep well! Blackwater has a private arsenal in North Carolina. They learned a lot during Katrina and are just itching to march here at home..
On May 02 10:01 PM PROXIMO wrote:
> The government is too stupid to accomplish even a small fraction
> of what you allege. Assuming they even had a motive, which is highly
> doubtful.
Your comments always make common sense. Your analysis is straightforward and honest. I think you would enjoy the discussions we have at TheBurningPlatform.com. I think your insights would be much appreciated.
Thanks
Jim
On May 02 09:31 PM Alan von Altendorf wrote:
> Robert Mcdowell posted (three times):
> "...the Fed, FDIC, US Treasury etc. plus the banks own efforts if
> given sufficient time will keep going and recover as the economy
> as a whole recovers. If banks and the banking system is deemed irrecoverably
> and disasterously insolvent, this means the same for the whole economy
> including all us. Insofar as we are not bankrupt insolvent neither
> are the banks."
>
> 1. The Economy As A Whole
> Bless you, productive wealth-creating activity is smaller than your
> "economy as a whole." In Zimbabwe, it used to be agriculture. In
> the US, it used to be agriculture + mining + manufacturing. The growth
> of sterile employments and entitlements, bureaucracy and unfunded
> pensions, does not create wealth. So the question is profitable,
> productive activity. You know -- the kind of creditworthy borrower
> that banks like to lend to. It's misleading and tragic that everyone
> assumes handouts and consumption will pull us out of this crisis.
> Would that cure Zimbabwe?
>
> If a bank fails, it was managed badly. They made risky loans and
> lost. Or they made a bet on someone else's book and geared their
> exposure x40. Let's put aside government guarantees, which are a
> claim against future taxpayers (profitable producers and savers).
> When a bank is mismanaged and can't cover losses with paid-in capital,
> examiners are supposed to close the doors, liquidate, and pay off
> the depositors as best they can -- just like any other BK.
>
> The FDIC's role, of course, is to do just that, using an insurance
> premium levied on all members' deposits. The reason that the Fed
> and Treasury have been pouring cash and credit into Citi, AIG, the
> GSEs, etc is to stave off panic. So, instead of panic, we get more
> of the same. Debt piled on unpayable debt and debasement of value.
>
>
> The sane thing to do, in my humble opinion, is to break up the big
> insolvent banks and zombie institutions like AIG and FME. Let the
> market decide their value and utility. If foreign depositors want
> Citi, let them make a bid for whatever part they like most.
On May 02 11:22 AM Robert Mcdowell wrote:
> I've been saying publicly in FT and elsewhere, including saying that
> Nouriel Roubini is under-estimating, for over a year that the US
> banking system will have its capital wiped out twice over. I've also
> in the FT and to himself direct told Roubini that despite this 200%
> wipeout he is exaggerating the insolvency of the banks!
> The US and UK governments and central banks perhaps a few more are
> doing exactly the right things however they zigzag to get there.
> The story is capable of being simply told.
> The credit crunch is wiping out bank capital once and the recession
> once more. A 70-100% capital wipeout is normal in a recession, and
> that much banks know how to recover from.
> Governments and central banks are refinancing capital and now alkso
> 'funding gaps' (difference between customer deposits and customer
> assets) by assets for T-bills swaps (subject to fees and large 25-30%
> haircuts i.e. plenty of headroom for taxpayr profit), but doing so
> thereby whereby tax dollars are not employed (bailout financing and
> guarantees are off-budget).
> All the writedowns and losses are generally capable of 40-50% debt-recovery
> over 3 years. Bank assets have roughly 50% collateral cover, but
> debt recovery is not limited to collateral, and of course some collateral
> such as property and land may take some years before it is profitably
> worth selling on, bu meanhile can be converted into various asset
> types and sometimes worked for development or actual cash-flow. That
> takes care of repaying government support. The other half, also one
> times capital, has to be found by selling off non-core businesses,
> capital raising (internally and externally) and by cost-cutting,
> again over 1-3 years.
> That banks capital gets eaten into by losses and witedowns is what
> it is for. To be below recommended capital reserves (say 12% ratio
> to risk-weighted assets or 6% ratio to gross assets, including economic
> capital buffers) is not insolvency except temporarily. We do not
> actually have a strict measure of absolute bank insolvency except
> an irrecoverable cash-flow insolvency after full resort to central
> bank liquidity window and other measures. There is a kind of insolvency
> if a bank loses its unsecured borrowing credit rating, when in effect
> it has to be taken over or broken up.
> Recessions and credit crunch are serious shocks to the system. We
> have to accept that they mean capital wipeouts. But the banking system,
> and all or nearly all important banks retain viable book value. If
> one or two fail they may drag down several others and as with lehman
> Brothers example the knock-on costs are excessive. Therefore, it
> is not an option to let a dominant bank fail in this way.
> No banks are too big not to be temporarily insolvent, but they can
> be too big to allow to fail. So let's get real and take it in the
> shorts that we have to navigate through the capital wipeouts and
> accept that the Fed, FDIC, US Treasury etc. plus the banks own efforts
> if given sufficient time will keep going and recover as the economy
> as a whole recovers.
> If banks and the banking system is deemed irrecoverably and disasterously
> insolvent, this means the same for the whole economy including all
> us. Insofar as we are not bankrupt insolvent neither are the banks.
One possible definition of stupidity is to label those who adroitly rule the entire planet politically, economically and socially as "stupid". It would seem highly unlikely that their intelligence is lacking in any way. There may be an overabundance of hubris, however.
On May 04 02:21 PM Steven Vincent wrote:
> Stupidity may be difficult to define. Forrest Gump's mother defined
> it as" "Stupid is as stupid does".
>
> One possible definition of stupidity is to label those who adroitly
> rule the entire planet politically, economically and socially as
> "stupid". It would seem highly unlikely that their intelligence is
> lacking in any way. There may be an overabundance of hubris, however.
On May 04 02:21 PM Steven Vincent wrote:
> Stupidity may be difficult to define. Forrest Gump's mother defined
> it as" "Stupid is as stupid does".
>
> One possible definition of stupidity is to label those who adroitly
> rule the entire planet politically, economically and socially as
> "stupid". It would seem highly unlikely that their intelligence is
> lacking in any way. There may be an overabundance of hubris, however.
On May 04 02:21 PM Steven Vincent wrote:
> Stupidity may be difficult to define. Forrest Gump's mother defined
> it as" "Stupid is as stupid does".
>
> One possible definition of stupidity is to label those who adroitly
> rule the entire planet politically, economically and socially as
> "stupid". It would seem highly unlikely that their intelligence is
> lacking in any way. There may be an overabundance of hubris, however.
Some factors that do not seem to have hit the headlines nor been included in the paltry write-downs are:-
1. Emerging markets. Both US and European banks have been falling over themselves to lend to Latin American and Eastern European economies respectively over the last five years. This fuelled a mind-boggling boom in countries where infrastructure, fair legal systems and accounting principles have not changed since the 19th century. Those same countries have suffered precipitous falls in commodity prices, their currencies and a reverse tsunami of foreign capital. Has this been reflected in bank mark-to-markets? Methinks not.
2. Credit derivative and CDOs/CLO exposures include significant exposures to autos, banks, insurers and monolines. Most of these contain triggers based on restructuring events, not just default. Have these been marked to market? A fraction of total exposure being held on trading books will have been, but the majority held in investment portfolios? Methinks not.
I am not sure that regulators are complicit in a conspiracy to pull the wool over our eyes. I think it more likely that banks are not drawing their attention to or explaining the full exposures that they have. One way or the other, there is no doubt that the banks are pulling a confidence stunt and hoping that the appearance of stability, combined with unprecedented fiscal and monetary measures to boost liquidity, will eventually prevent further failures and remove the need for them to write down assets which are currently worth between 10 - 50% of book but currently held in hold-to-maturity books at par.
All of this is dependent on investor confidence. The banks know it and even if government doesn't know the full facts, they certainly know this much. Therefore, would I believe anything either of them are telling me at the moment? Methinks not!
Oh, the irony. Greenspan et al. isn't in the Fed's "back pocket". The Fed IS a banking cartel, James!
Alan Greenspan was an outspoken opponent of central banks and an advocate of the gold standard. Read his essay in Ayn Rand's "Capitalism: The Unknown Ideal".
Once appointed to the Fed, he wisely decided to shut up.
Keep writing JQ - do not stop merely because you cannot get the whole world to agree with you -- that can never happen.