I know you love it Beave.
If one can't take the bad with the good they have no business playing in that sandbox. But yes, what a bloody day. 2008 will surely weed out the faint of heart so the big guys can buy cheap again.
Chicken Little Demands Apology Sky Falling
- Thread starter darkbeaver
- Start date
If one can't take the bad with the good they have no business playing in that sandbox. But yes, what a bloody day. 2008 will surely weed out the faint of heart so the big guys can buy cheap again.
The big guys will be buying for sure, but they're not from here, vast ammounts of American assets won't be American anymore. Tommorow morining when Wall Street throws the switch the sellings expected to go through the roof, we may see a convienient glitch in the boards as the PPT throws the brakes on again, but we will see a plunge and it should be spectacular. Keep in mind I did not cause it, my anti-capitalist voodo ain't that good eh.:smile:
Work! forty! if it crashes Toro and word sinks into J Q Publics head about the gambling and theft that's been going on under the mislable of sound business practice christ the carnage will be amazing ,were I you I'd be sporting blue collar clothing and really dark shades and slipping out of the country as fast as I could. Every light standard on wall street will be hung with a crucified banker, brokers will be drawn and quartered in every financial capital on the planet. Sporting a suit and tie will get thousands offed just on the chance that thier a money man. Keep your eyes open and your finger on the trigger.:lol:
The Financial Tsunami and the Evolving Economic Crisis: Greenspan’s Grand Design
By F. William Engdahl
Global Research, January 23, 2008
Part III
The Long-Term Greenspan Agenda
Seven years of Volcker monetary “shock therapy” had ignited a payments crisis across the Third World. Billions of dollars in recycled petrodollar debts loaned by major New York and London banks to finance oil imports after the oil price rises of the 1970’s, suddenly became non-payable.
The stage was now set for the next phase in the Rockefeller financial deregulation agenda. It was to come in the form of a revolution in the very nature of what would be considered money—the Greenspan “New Finance” Revolution.
Many analysts of the Greenspan era focus on the wrong facet of his role, and assume he was primarily a public servant who made mistakes, but in the end always saved the day and the nation’s economy and banks, through extraordinary feats of financial crisis management, winning the appellation, Maestro.1
Maestro serves the Money Trust
Alan Greenspan, as every Chairman of the Board of Governors of the Federal Reserve System was a carefully-picked institutionally loyal servant of the actual owners of the Federal Reserve: the network of private banks, insurance companies, investment banks which created the Fed and rushed in through an almost empty Congress the day before Christmas recess in December 1913. In Lewis v. United States, the United States Court of Appeals for the Ninth Circuit stated that "the Reserve Banks are not federal instrumentalities…but are independent, privately owned and locally controlled corporations." 2
Greenspan’s entire tenure as Fed chairman was dedicated to advancing the interests of American world financial domination in a nation whose national economic base was largely destroyed in the years following 1971.
Greenspan knew who buttered his bread and loyally served what the US Congress in 1913 termed “the Money Trust,” a cabal of financial leaders abusing their public trust to consolidate control over many industries.
Interestingly, many of the financial actors behind the 1913 creation of the Federal Reserve are pivotal in today’s securitization revolution including Citibank, and J.P. Morgan. Both have share ownership of the key New York Federal Reserve Bank, the heart of the system.
Another little-known shareholder of the New York Fed is the Depository Trust Company (DTC), the largest central securities depository in the world. Based in New York, the DTC
ustodies more than 2.5 million US and non-US equity, corporate, and municipal debt securi
The Rolling Crises Game
This is the true significance of the crisis today unfolding in US and global capital markets. Greenspan’s 18 year tenure can be described as rolling the financial markets from successive crises into ever larger ones, to accomplish the over-riding objectives of the Money Trust guiding the Greenspan agenda. Unanswered at this juncture is whether Greenspan’s securitization revolution was a “bridge too far,” spelling the end of the dollar and of dollar financial institutions’ global dominance for decades or more to come.
Greenspan’s adamant rejection of every attempt by Congress to impose some minimal regulation on OTC derivatives trading between banks; on margin requirements on buying stock on borrowed money; his repeated support for securitization of sub-prime low quality high-risk mortgage lending; his relentless decade-long push to weaken and finally repeal Glass-Steagall restrictions on banks owning investment banks and insurance companies; his support for the Bush radical tax cuts which exploded federal deficits after 2001; his support for the privatization of the Social Security Trust Fund in order to funnel those trillions of dollars cash flow into his cronies in Wall Street finance—all this was a well-planned execution of what some today call the securitization revolution, the creation of a world of New Finance where risk would be detached from banks and spread across the globe to the point no one could identify where real risk lay.
The 1987 Greenspan paradigm
In October 1987 when Greenspan led a bailout of the stock market after the October 20 crash, by pumping huge infusions of liquidity to prop up stocks and engaging in behind-the scene manipulations of the market via Chicago stock index derivatives purchases backed quietly by Fed liquidity guarantees. Since that October 1987 event, the Fed has made abundantly clear to major market players that they were, to use Fed jargon, TBTF—Too Big To Fail. No worry if a bank risked tens of billions speculating in Thai baht or dot.com stocks on margin. If push came to liquidity shove, Greenspan made clear he was there to bail out his banking friends.
The October 1987 crash which saw the sharpest one day fall in the Dow Industrials in history—508 points—was exacerbated by new computer trading models based on the so-called Black-Sholes Option Pricing theory, stock share derivatives now being priced and traded just as hog belly futures had been before.
The 1987 crash made clear was that there was no real liquidity in the markets when it was needed. All fund managers tried to do the same thing at the same time: to sell short the stock index futures, in a futile attempt to hedge their stock positions.
According to Stephen Zarlenga, then a trader who was in the New York trading pits during the crisis days in 1987, “They created a huge discount in the futures market…The arbitrageurs who bought futures from them at a big discount, turned around and sold the underlying stocks, pushing the cash markets down, feeding the process and eventually driving the market into the ground.”
Zarlenga continued, “Some of the biggest firms in Wall Street found they could not stop their pre-programmed computers from automatically engaging in this derivatives trading. According to private reports they had to unplug or cut the wiring to computers, or find other ways to cut off the electricity to them (there were rumors about fireman's axes from hallways being used), for they couldn’t be switched off and were issuing orders directly to the exchange floors.
By F. William Engdahl
Global Research, January 23, 2008
Part III
The Long-Term Greenspan Agenda
Seven years of Volcker monetary “shock therapy” had ignited a payments crisis across the Third World. Billions of dollars in recycled petrodollar debts loaned by major New York and London banks to finance oil imports after the oil price rises of the 1970’s, suddenly became non-payable.
The stage was now set for the next phase in the Rockefeller financial deregulation agenda. It was to come in the form of a revolution in the very nature of what would be considered money—the Greenspan “New Finance” Revolution.
Many analysts of the Greenspan era focus on the wrong facet of his role, and assume he was primarily a public servant who made mistakes, but in the end always saved the day and the nation’s economy and banks, through extraordinary feats of financial crisis management, winning the appellation, Maestro.1
Maestro serves the Money Trust
Alan Greenspan, as every Chairman of the Board of Governors of the Federal Reserve System was a carefully-picked institutionally loyal servant of the actual owners of the Federal Reserve: the network of private banks, insurance companies, investment banks which created the Fed and rushed in through an almost empty Congress the day before Christmas recess in December 1913. In Lewis v. United States, the United States Court of Appeals for the Ninth Circuit stated that "the Reserve Banks are not federal instrumentalities…but are independent, privately owned and locally controlled corporations." 2
Greenspan’s entire tenure as Fed chairman was dedicated to advancing the interests of American world financial domination in a nation whose national economic base was largely destroyed in the years following 1971.
Greenspan knew who buttered his bread and loyally served what the US Congress in 1913 termed “the Money Trust,” a cabal of financial leaders abusing their public trust to consolidate control over many industries.
Interestingly, many of the financial actors behind the 1913 creation of the Federal Reserve are pivotal in today’s securitization revolution including Citibank, and J.P. Morgan. Both have share ownership of the key New York Federal Reserve Bank, the heart of the system.
Another little-known shareholder of the New York Fed is the Depository Trust Company (DTC), the largest central securities depository in the world. Based in New York, the DTC
ustodies more than 2.5 million US and non-US equity, corporate, and municipal debt securi
The Rolling Crises Game
This is the true significance of the crisis today unfolding in US and global capital markets. Greenspan’s 18 year tenure can be described as rolling the financial markets from successive crises into ever larger ones, to accomplish the over-riding objectives of the Money Trust guiding the Greenspan agenda. Unanswered at this juncture is whether Greenspan’s securitization revolution was a “bridge too far,” spelling the end of the dollar and of dollar financial institutions’ global dominance for decades or more to come.
Greenspan’s adamant rejection of every attempt by Congress to impose some minimal regulation on OTC derivatives trading between banks; on margin requirements on buying stock on borrowed money; his repeated support for securitization of sub-prime low quality high-risk mortgage lending; his relentless decade-long push to weaken and finally repeal Glass-Steagall restrictions on banks owning investment banks and insurance companies; his support for the Bush radical tax cuts which exploded federal deficits after 2001; his support for the privatization of the Social Security Trust Fund in order to funnel those trillions of dollars cash flow into his cronies in Wall Street finance—all this was a well-planned execution of what some today call the securitization revolution, the creation of a world of New Finance where risk would be detached from banks and spread across the globe to the point no one could identify where real risk lay.
The 1987 Greenspan paradigm
In October 1987 when Greenspan led a bailout of the stock market after the October 20 crash, by pumping huge infusions of liquidity to prop up stocks and engaging in behind-the scene manipulations of the market via Chicago stock index derivatives purchases backed quietly by Fed liquidity guarantees. Since that October 1987 event, the Fed has made abundantly clear to major market players that they were, to use Fed jargon, TBTF—Too Big To Fail. No worry if a bank risked tens of billions speculating in Thai baht or dot.com stocks on margin. If push came to liquidity shove, Greenspan made clear he was there to bail out his banking friends.
The October 1987 crash which saw the sharpest one day fall in the Dow Industrials in history—508 points—was exacerbated by new computer trading models based on the so-called Black-Sholes Option Pricing theory, stock share derivatives now being priced and traded just as hog belly futures had been before.
The 1987 crash made clear was that there was no real liquidity in the markets when it was needed. All fund managers tried to do the same thing at the same time: to sell short the stock index futures, in a futile attempt to hedge their stock positions.
According to Stephen Zarlenga, then a trader who was in the New York trading pits during the crisis days in 1987, “They created a huge discount in the futures market…The arbitrageurs who bought futures from them at a big discount, turned around and sold the underlying stocks, pushing the cash markets down, feeding the process and eventually driving the market into the ground.”
Zarlenga continued, “Some of the biggest firms in Wall Street found they could not stop their pre-programmed computers from automatically engaging in this derivatives trading. According to private reports they had to unplug or cut the wiring to computers, or find other ways to cut off the electricity to them (there were rumors about fireman's axes from hallways being used), for they couldn’t be switched off and were issuing orders directly to the exchange floors.
“The New York Stock Exchange at one point on Monday and Tuesday seriously considered closing down entirely for a period of days or weeks and made this public…It was at this point…that Greenspan made an uncharacteristic announcement. He said in no uncertain terms that the Fed would make credit available to the brokerage community, as needed. This was a turning point, as Greenspan’s recent appointment as Chairman of the Fed in mid 1987 had been one of the early reasons for the market’s sell off.” 3
What was significant about the October 1987 one-day crash was not the size of the fall. It was the fact that the Fed, unannounced to the public, inter
"Gambling?" I was in a casino for the first time in 10 years last weekend. I don't understand the appeal.
And you over-estimate the public's intolerance for white collar crime.
Then you don't like the market, it's as simple as that, you're a closet socialist outed right here at Triple C.:lol: There are fewer rules for bankers and brokers then there are for casinos.
Going Bankrupt
Why the Debt Crisis Is Now the Greatest Threat to the American Republic By Chalmers Johnson
23/01/08 "ICH' -- -- The military adventurers of the Bush administration have much in common with the corporate leaders of the defunct energy company Enron. Both groups of men thought that they were the "smartest guys in the room," the title of Alex Gibney's prize-winning film on what went wrong at Enron. The neoconservatives in the White House and the Pentagon outsmarted themselves. They failed even to address the problem of how to finance their schemes of imperialist wars and global domination.
As a result, going into 2008, the United States finds itself in the anomalous position of being unable to pay for its own elevated living standards or its wasteful, overly large military establishment. Its government no longer even attempts to reduce the ruinous expenses of maintaining huge standing armies, replacing the equipment that seven years of wars have destroyed or worn out, or preparing for a war in outer space against unknown adversaries. Instead, the Bush administration puts off these costs for future generations to pay -- or repudiate. This utter fiscal irresponsibility has been disguised through many manipulative financial schemes (such as causing poorer countries to lend us unprecedented sums of money), but the time of reckoning is fast approaching.
There are three broad aspects to our debt crisis. First, in the current fiscal year (2008) we are spending insane amounts of money on "defense" projects that bear no relationship to the national security of the United States. Simultaneously, we are keeping the income tax burdens on the richest segments of the American population at strikingly low levels.
Second, we continue to believe that we can compensate for the accelerating erosion of our manufacturing base and our loss of jobs to foreign countries through massive military expenditures -- so-called "military Keynesianism," which I discuss in detail in my book Nemesis: The Last Days of the American Republic. By military Keynesianism, I mean the mistaken belief that public policies focused on frequent wars, huge expenditures on weapons and munitions, and large standing armies can indefinitely sustain a wealthy capitalist economy. The opposite is actually true.
Third, in our devotion to militarism (despite our limited resources), we are failing to invest in our social infrastructure and other requirements for the long-term health of our country. These are what economists call "opportunity costs," things not done because we spent our money on something else. Our public education system has deteriorated alarmingly. We have failed to provide health care to all our citizens and neglected our responsibilities as the world's number one polluter. Most important, we have lost our competitiveness as a manufacturer for civilian needs -- an infinitely more efficient use of scarce resources than arms manufacturing. Let me discuss each of these.
The Current Fiscal Disaster
It is virtually impossible to overstate the profligacy of what our government spends on the military. The Department of Defense's planned expenditures for fiscal year 2008 are larger than all other nations' military budgets combined. The supplementary budget to pay for the current wars in Iraq and Afghanistan, not part of the official defense budget, is itself larger than the combined military budgets of Russia and China. Defense-related spending for fiscal 2008 will exceed $1 trillion for the first time in history. The United States has become the largest single salesman of arms and munitions to other nations on Earth. Leaving out of account President Bush's two on-going wars, defense spending has doubled since the mid-1990s. The defense budget for fiscal 2008 is the largest since World War II.
Before we try to break down and analyze this gargantuan sum, there is one important caveat. Figures on defense spending are notoriously unreliable. The numbers released by the Congressional Reference Service and the Congressional Budget Office do not agree with each other. Robert Higgs, senior fellow for political economy at the Independent Institute, says: "A well-founded rule of thumb is to take the Pentagon's (always well publicized) basic budget total and double it." Even a cursory reading of newspaper articles about the Department of Defense will turn up major differences in statistics about its expenses. Some 30-40% of the defense budget is "black," meaning that these sections contain hidden expenditures for classified projects. There is no possible way to know what they include or whether their total amounts are accurate.
There
Nothing has been done in the period since 1968 to reverse these trends and it shows today in our massive imports of equipment -- from medical machines like proton accelerators for radiological therapy (made primarily in Belgium, Germany, and Japan) to cars and trucks.
Our short tenure as the world's "lone superpower" has come to an end. As Harvard economics professor Benjamin Friedman has written:
Chalmers Johnson is the author of Nemesis: The Last Days of the American Republic, just published in paperback. It is the final volume of his Blowback Trilogy, which also includes Blowback (2000) and The Sorrows of Empire (2004).
[Note: For those interested, click here to view a clip from a new film, "Chalmers Johnson on American Hegemony," in Cinema Libre Studios' Speaking Freely series in which he discusses "military Keynesianism" and imperial bankruptcy. For sources on global military spending, please see: (1) Global Security Organization, "World Wide Military Expenditures" as well as Glenn Greenwald, "The bipartisan consensus on U.S. military spending"; (2) Stockholm International Peace Research Institute, "Report: China biggest Asian military spender."]
This article was first published at Tom Dispatch: http://www.tomdispatch.com/post/174884/Tomgram:%20%20Chalmers%20Johnson,%20How%20to%20Sink%20America
Copyright 2008 Chalmers Johnson
The partys over economicly. Now the real warring starts, and the devaluation of the dollar down to the Amero in conjunction with the police state and martial law.
Why the Debt Crisis Is Now the Greatest Threat to the American Republic By Chalmers Johnson
23/01/08 "ICH' -- -- The military adventurers of the Bush administration have much in common with the corporate leaders of the defunct energy company Enron. Both groups of men thought that they were the "smartest guys in the room," the title of Alex Gibney's prize-winning film on what went wrong at Enron. The neoconservatives in the White House and the Pentagon outsmarted themselves. They failed even to address the problem of how to finance their schemes of imperialist wars and global domination.
As a result, going into 2008, the United States finds itself in the anomalous position of being unable to pay for its own elevated living standards or its wasteful, overly large military establishment. Its government no longer even attempts to reduce the ruinous expenses of maintaining huge standing armies, replacing the equipment that seven years of wars have destroyed or worn out, or preparing for a war in outer space against unknown adversaries. Instead, the Bush administration puts off these costs for future generations to pay -- or repudiate. This utter fiscal irresponsibility has been disguised through many manipulative financial schemes (such as causing poorer countries to lend us unprecedented sums of money), but the time of reckoning is fast approaching.
There are three broad aspects to our debt crisis. First, in the current fiscal year (2008) we are spending insane amounts of money on "defense" projects that bear no relationship to the national security of the United States. Simultaneously, we are keeping the income tax burdens on the richest segments of the American population at strikingly low levels.
Second, we continue to believe that we can compensate for the accelerating erosion of our manufacturing base and our loss of jobs to foreign countries through massive military expenditures -- so-called "military Keynesianism," which I discuss in detail in my book Nemesis: The Last Days of the American Republic. By military Keynesianism, I mean the mistaken belief that public policies focused on frequent wars, huge expenditures on weapons and munitions, and large standing armies can indefinitely sustain a wealthy capitalist economy. The opposite is actually true.
Third, in our devotion to militarism (despite our limited resources), we are failing to invest in our social infrastructure and other requirements for the long-term health of our country. These are what economists call "opportunity costs," things not done because we spent our money on something else. Our public education system has deteriorated alarmingly. We have failed to provide health care to all our citizens and neglected our responsibilities as the world's number one polluter. Most important, we have lost our competitiveness as a manufacturer for civilian needs -- an infinitely more efficient use of scarce resources than arms manufacturing. Let me discuss each of these.
The Current Fiscal Disaster
It is virtually impossible to overstate the profligacy of what our government spends on the military. The Department of Defense's planned expenditures for fiscal year 2008 are larger than all other nations' military budgets combined. The supplementary budget to pay for the current wars in Iraq and Afghanistan, not part of the official defense budget, is itself larger than the combined military budgets of Russia and China. Defense-related spending for fiscal 2008 will exceed $1 trillion for the first time in history. The United States has become the largest single salesman of arms and munitions to other nations on Earth. Leaving out of account President Bush's two on-going wars, defense spending has doubled since the mid-1990s. The defense budget for fiscal 2008 is the largest since World War II.
Before we try to break down and analyze this gargantuan sum, there is one important caveat. Figures on defense spending are notoriously unreliable. The numbers released by the Congressional Reference Service and the Congressional Budget Office do not agree with each other. Robert Higgs, senior fellow for political economy at the Independent Institute, says: "A well-founded rule of thumb is to take the Pentagon's (always well publicized) basic budget total and double it." Even a cursory reading of newspaper articles about the Department of Defense will turn up major differences in statistics about its expenses. Some 30-40% of the defense budget is "black," meaning that these sections contain hidden expenditures for classified projects. There is no possible way to know what they include or whether their total amounts are accurate.
There
Nothing has been done in the period since 1968 to reverse these trends and it shows today in our massive imports of equipment -- from medical machines like proton accelerators for radiological therapy (made primarily in Belgium, Germany, and Japan) to cars and trucks.
Our short tenure as the world's "lone superpower" has come to an end. As Harvard economics professor Benjamin Friedman has written:
"Again and again it has always been the world's leading lending country that has been the premier country in terms of political influence, diplomatic influence, and cultural influence. It's no accident that we took over the role from the British at the same time that we took over… the job of being the world's leading lending country. Today we are no longer the world's leading lending country. In fact we are now the world's biggest debtor country, and we are continuing to wield influence on the basis of military prowess alone."
Some of the damage done can never be rectified. There are, however, some steps that this country urgently needs to take. These include reversing Bush's 2001 and 2003 tax cuts for the wealthy, beginning to liquidate our global empire of over 800 military bases, cutting from the defense budget all projects that bear no relationship to the national security of the United States, and ceasing to use the defense budget as a Keynesian jobs program. If we do these things we have a chance of squeaking by. If we don't, we face probable national insolvency and a long depression. Chalmers Johnson is the author of Nemesis: The Last Days of the American Republic, just published in paperback. It is the final volume of his Blowback Trilogy, which also includes Blowback (2000) and The Sorrows of Empire (2004).
[Note: For those interested, click here to view a clip from a new film, "Chalmers Johnson on American Hegemony," in Cinema Libre Studios' Speaking Freely series in which he discusses "military Keynesianism" and imperial bankruptcy. For sources on global military spending, please see: (1) Global Security Organization, "World Wide Military Expenditures" as well as Glenn Greenwald, "The bipartisan consensus on U.S. military spending"; (2) Stockholm International Peace Research Institute, "Report: China biggest Asian military spender."]
This article was first published at Tom Dispatch: http://www.tomdispatch.com/post/174884/Tomgram:%20%20Chalmers%20Johnson,%20How%20to%20Sink%20America
Copyright 2008 Chalmers Johnson
The partys over economicly. Now the real warring starts, and the devaluation of the dollar down to the Amero in conjunction with the police state and martial law.
http://www.atimes.com/atimes/Global_Economy/JA26Dj06.html
Central banks support fleecing
The role central banking plays in support of this systematic fleecing of the helpless poor everywhere around the world to support the indigent rich in both advanced and emerging economies has been to flood the financial market with easy money, euphemistically referred to as maintaining liquidity, and to continually enlarge the money supply by financial deregulation to lubricate and sustain a persistently expanding debt bubble.
Concurringly, deregulated financial markets have provided a free-for-all arena for sophisticated financial institutions to profit obscenely from financial manipulation. The average small investor is effectively excluded from reaping the profits generated in this esoteric arena set up by big financial institutions. Yet the investing public is the real victim of systemic risk. The exploitation of mortgage securitization through the commercial paper market by special investment entities (SIVs) is an obvious example.
When the Fed repeatedly pulls magical white rabbits from its black opaque monetary policy hat, the purpose is always to rescue overextended sophisticated institutions in the name of preserving systemic stability, while the righteous issue of moral hazard is reserved only for unwitting individual borrowers who are left to bear the painful consequences of falling into financial traps they did not fully understand, notwithstanding that the root source of moral hazard always springs from the central bank itself.
Greenspan blames Third World - not the Fed
Greenspan in his own defense describes the latest credit crisis as a result of a sudden "re-pricing of risk - an accident waiting to happen as the risk was under-priced over the past five years as market euphoria, fostered by unprecedented global growth, gained traction." Greenspan spoke as if the Fed had been merely a neutral bystander, rather than the "when in doubt, ease" instigator that had earned its chairman wizard status all through the years of easy money euphoria
Greenspan blames "the Third World, especially China" for the so-called global savings glut, with an obscene attitude of the free-spending rich who borrowed from the helpless poor scolding the poor for being too conservative with money.
Yet Bank for International Settlements (BIS) data show exchange-traded derivatives growing 27% to a record $681 trillion in third quarter 2007, the biggest increase in three years. Compared this astronomical expansion of virtual money with China’s foreign exchange reserve of $1.4 trillion, it gives a new meaning to the term "blaming the tail for wagging the dog". The notional value of outstanding over-the-counter (OTC) derivative between counterparties not traded on exchanges was $516 trillion in June, 2007, with a gross market value of over $11 trillion, which half of the total was in interest rate swaps. China was hardly a factor in the global credit market, where massive amount of virtual money has been created by computerized trades.
Crisis of capital for finance capitalism
The credit crisis that was detonated in August 2007 by the collapse of collateralized debt obligations (CDOs) waged a frontal attack on finance institution capital adequacy by December. Separately, commercial and investment banks and brokerage houses frantically sought immediate injection of capital from sovereign funds in Asia and the oil states because no domestic investors could be found quickly. But these sovereign funds investments have reached the US regulatory ceiling of 10% equity ownership for foreign governmental investors before being subject to reviews by the inter-agency Committee on Foreign Investment in the US (CFIUS), which investigates foreign takeover of US assets.
Ambrose Evans-Pritchard of The Telegraph, who as a Washington correspondent gave the Clinton White House ulcers, reports that Anna Schwartz, surviving co-author with the late Milton Friedman of the definitive study of the monetary causes of the Great Depression, is of the view that in the current credit crisis, liquidity cannot deal with the underlying fear that lots of firms are going bankrupt. Schwartz thinks the critical issue is that banks and the hedge funds have not fully acknowledged who is in trouble and by how much behind the opaque fog that obscures the true liabilities of structured finance.
While the equity markets are hanging on for dear life with the Fed’s help through stealth inflation, the bond markets have collapsed worldwide, with dollar bond issuance falling to a stand still, euro bonds by 66% and emerging market bonds by 75% in Q3 2007. Lenders are simply afraid to lend and borrowers are afraid to take on more liabilities in an imminent economic slowdown. The Fed has a choice of accepting an economic depression to cut off stagflation, or ushering hyperinflation by flooding the market with unproductive liquidity. Insolvency cannot be solved by injecting liquidity without the penalty of hyperinflation.
Next:Central banks always fail to stabilize markets
Henry C K Liu is chairman of a New York-based private investment group. His website is at http://www.henryckliu.com.
cluckcluckcluclcluckcluck capitalist pig dogs,
Anyone who wants an idea of what's happening and what it means would benefit from reading this trilogy by Mr Liu, I read it this morning, run for the hills, we have been well and truly phucked by the bankers this time.
Central banks support fleecing
The role central banking plays in support of this systematic fleecing of the helpless poor everywhere around the world to support the indigent rich in both advanced and emerging economies has been to flood the financial market with easy money, euphemistically referred to as maintaining liquidity, and to continually enlarge the money supply by financial deregulation to lubricate and sustain a persistently expanding debt bubble.
Concurringly, deregulated financial markets have provided a free-for-all arena for sophisticated financial institutions to profit obscenely from financial manipulation. The average small investor is effectively excluded from reaping the profits generated in this esoteric arena set up by big financial institutions. Yet the investing public is the real victim of systemic risk. The exploitation of mortgage securitization through the commercial paper market by special investment entities (SIVs) is an obvious example.
When the Fed repeatedly pulls magical white rabbits from its black opaque monetary policy hat, the purpose is always to rescue overextended sophisticated institutions in the name of preserving systemic stability, while the righteous issue of moral hazard is reserved only for unwitting individual borrowers who are left to bear the painful consequences of falling into financial traps they did not fully understand, notwithstanding that the root source of moral hazard always springs from the central bank itself.
Greenspan blames Third World - not the Fed
Greenspan in his own defense describes the latest credit crisis as a result of a sudden "re-pricing of risk - an accident waiting to happen as the risk was under-priced over the past five years as market euphoria, fostered by unprecedented global growth, gained traction." Greenspan spoke as if the Fed had been merely a neutral bystander, rather than the "when in doubt, ease" instigator that had earned its chairman wizard status all through the years of easy money euphoria
Greenspan blames "the Third World, especially China" for the so-called global savings glut, with an obscene attitude of the free-spending rich who borrowed from the helpless poor scolding the poor for being too conservative with money.
Yet Bank for International Settlements (BIS) data show exchange-traded derivatives growing 27% to a record $681 trillion in third quarter 2007, the biggest increase in three years. Compared this astronomical expansion of virtual money with China’s foreign exchange reserve of $1.4 trillion, it gives a new meaning to the term "blaming the tail for wagging the dog". The notional value of outstanding over-the-counter (OTC) derivative between counterparties not traded on exchanges was $516 trillion in June, 2007, with a gross market value of over $11 trillion, which half of the total was in interest rate swaps. China was hardly a factor in the global credit market, where massive amount of virtual money has been created by computerized trades.
Crisis of capital for finance capitalism
The credit crisis that was detonated in August 2007 by the collapse of collateralized debt obligations (CDOs) waged a frontal attack on finance institution capital adequacy by December. Separately, commercial and investment banks and brokerage houses frantically sought immediate injection of capital from sovereign funds in Asia and the oil states because no domestic investors could be found quickly. But these sovereign funds investments have reached the US regulatory ceiling of 10% equity ownership for foreign governmental investors before being subject to reviews by the inter-agency Committee on Foreign Investment in the US (CFIUS), which investigates foreign takeover of US assets.
Ambrose Evans-Pritchard of The Telegraph, who as a Washington correspondent gave the Clinton White House ulcers, reports that Anna Schwartz, surviving co-author with the late Milton Friedman of the definitive study of the monetary causes of the Great Depression, is of the view that in the current credit crisis, liquidity cannot deal with the underlying fear that lots of firms are going bankrupt. Schwartz thinks the critical issue is that banks and the hedge funds have not fully acknowledged who is in trouble and by how much behind the opaque fog that obscures the true liabilities of structured finance.
While the equity markets are hanging on for dear life with the Fed’s help through stealth inflation, the bond markets have collapsed worldwide, with dollar bond issuance falling to a stand still, euro bonds by 66% and emerging market bonds by 75% in Q3 2007. Lenders are simply afraid to lend and borrowers are afraid to take on more liabilities in an imminent economic slowdown. The Fed has a choice of accepting an economic depression to cut off stagflation, or ushering hyperinflation by flooding the market with unproductive liquidity. Insolvency cannot be solved by injecting liquidity without the penalty of hyperinflation.
Next:Central banks always fail to stabilize markets
Henry C K Liu is chairman of a New York-based private investment group. His website is at http://www.henryckliu.com.
cluckcluckcluclcluckcluck capitalist pig dogs,
Anyone who wants an idea of what's happening and what it means would benefit from reading this trilogy by Mr Liu, I read it this morning, run for the hills, we have been well and truly phucked by the bankers this time.
Message from Davos: The recession is coming Business leaders and economists gave a bleak outlook for the economy which is heading for a 'severe downturn'
Gary Duncan, Economics Editor in Davos 23/01/08 "Times Online" -- - A full-blown, prolonged recession in America is now inescapable, with the rest of the world set to be dragged into a severe global slowdown despite yesterday’s emergency US interest rate cut by the Federal Reserve, leading economists said in Davos this morning.
A darkening outlook for the global economy looked set to dominate the week-long World Economic Forum, as plunging stock markets and the Fed’s drastic and dramatic reaction overshadowed the opening of the annual gathering of political and business leaders.
Some of the world’s most prominent economic pundits told an opening session this morning that the Fed’s surprise three-quarter-point cut in US official interest rates was already “too little, too late” to stave off recession in America.
In a bleak discussion of prospects, the economists predicted that Britain, Europe and much of Asia also now face a sharp and unavoidable downturn in their economies, even if they escaped recession.
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Gary Duncan, Economics Editor in Davos 23/01/08 "Times Online" -- - A full-blown, prolonged recession in America is now inescapable, with the rest of the world set to be dragged into a severe global slowdown despite yesterday’s emergency US interest rate cut by the Federal Reserve, leading economists said in Davos this morning.
A darkening outlook for the global economy looked set to dominate the week-long World Economic Forum, as plunging stock markets and the Fed’s drastic and dramatic reaction overshadowed the opening of the annual gathering of political and business leaders.
Some of the world’s most prominent economic pundits told an opening session this morning that the Fed’s surprise three-quarter-point cut in US official interest rates was already “too little, too late” to stave off recession in America.
In a bleak discussion of prospects, the economists predicted that Britain, Europe and much of Asia also now face a sharp and unavoidable downturn in their economies, even if they escaped recession.
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Chalmers Johnson on the Myth of Free Trade
By Chalmers Johnson
In the 1970s, scared that its position as global hegemon was being undermined, the United States turned decisively toward neoliberalism. It ordered the unholy trinity to bring the developing countries to heel. Through draconian interventions into the most intimate details of the lives of their clients, including birth control, ethnic integration, and gender equality as well as tariffs, foreign investment, privatization decisions, national budgets, and intellectual property protection, the IMF, World Bank, and WTO managed drastically to slow down economic growth in the Third World. Continue
By Chalmers Johnson
In the 1970s, scared that its position as global hegemon was being undermined, the United States turned decisively toward neoliberalism. It ordered the unholy trinity to bring the developing countries to heel. Through draconian interventions into the most intimate details of the lives of their clients, including birth control, ethnic integration, and gender equality as well as tariffs, foreign investment, privatization decisions, national budgets, and intellectual property protection, the IMF, World Bank, and WTO managed drastically to slow down economic growth in the Third World. Continue
I watched a show about the alchemists in the middle ages - they used to suck the rich into beleiving they could turn lead into gold via the philosphers stone and banking on their greed would wipe them out financially. I guess subprime mortages are todays philospher stone. I try to keep an even keel, balance things out look at both sides of an argument before forming an opinion- but when I see one of the republican candidates trashing bushes economic stimulus package by saying the only economy it would stimulate is the Chinese economy because the Chinese now make everything and that they will have to borrow the money from the Chinese to implement it - who put these tards in charge?- Am I Missing Something here?
In my opinion giving credit to anything either a Dem or Rep candidate is a mistake. Secondly, independent economists as well as academic experts know full well that you can't spend your way out of what esentially is a problem arrived at by spending in the same areas recommended by Bush. Even the target recipiants are the wrong area of the consuming public to recieve the economic stimulus, no one earning below $24,000 will recieve anything. If the package had been specifically delivered to only those in need, say $30,000 and below you could expect every bit of it to go imeadiately back into the economy and thus provide imeadiate short term stimulus. The 150 billion package is public relations more than anything else, it's far to small to turn the American economy arround, it's not remotely of the same scale as the problem and is borrowed forigne money, exactly the cause of the problem in the first place so it can be seen as just another pile of debt for which the public is further indebted for very cynical purposes.
The unregulated untransparent nature of the financial industry is the source of the problem in conjuction with the service nature of the economy stripped of productive capacity and run on credit for far to long. Americas have to shut thier military industrial complex down, it is the single biggest source of unproductivity. The total debt load both private and government of America is in the order of "$35 trillion", that cannot be easily addressed, especially by $150 billion. The biggest private banks in the world now own the United States, lock, stock and barrell. In my opinion they will default on payment to forigne creditors drive the dollar down to zero instuitute the provisions of NAU and wage war on the rest of the planet from fortress North America, if they can subdue and control the citizens of this continent.
The unregulated untransparent nature of the financial industry is the source of the problem in conjuction with the service nature of the economy stripped of productive capacity and run on credit for far to long. Americas have to shut thier military industrial complex down, it is the single biggest source of unproductivity. The total debt load both private and government of America is in the order of "$35 trillion", that cannot be easily addressed, especially by $150 billion. The biggest private banks in the world now own the United States, lock, stock and barrell. In my opinion they will default on payment to forigne creditors drive the dollar down to zero instuitute the provisions of NAU and wage war on the rest of the planet from fortress North America, if they can subdue and control the citizens of this continent.
If the biggest private banks in the world own the US wouldn't they have a vested interest in protecting their investment? I've never known an investor to buy something with the intention of devalueing it.
In the future you might see inflation erode the size of the debt, assuming the debt is controlled. Anyone have family who bought a house in the early 60's? Back then a $7,000 mortgage was substantial. In today's dollars it's nothing. People inflated their way out of debt.
In the future you might see inflation erode the size of the debt, assuming the debt is controlled. Anyone have family who bought a house in the early 60's? Back then a $7,000 mortgage was substantial. In today's dollars it's nothing. People inflated their way out of debt.