This Isn't the "Great Recession," It's the Great Bank Robbery.

[Parker2112]

In case it's not crystal clear, this isn't the "great recession".


it's really the great bank robbery.

First, there was the threat of martial law if the $700 billion tarp bailout wasn't passed. Specifically, treasury secretary hank paulson warned congress that there would be martial law unless the tarp bailouts were approved.

As i pointed out (http://www.washingtonsblog.com/2009/10/government-said-bailouts-were-needed.html) last october:

the new york times wrote (http://www.nytimes.com/2009/07/18/business/18nocera.html?pagewanted=2) on july 16th:

in retrospect, congress felt bullied by mr. Paulson last year. Many of them fervently believed they should not prop up the banks that had led us to this crisis — yet they were pushed by mr. Paulson and mr. Bernanke into passing the $700 billion tarp, which was then used to bail out those very banks.
***
congressmen brad sherman and paul kanjorski and senator james inhofe all say that the government warned of martial law if tarp wasn't passed:

hag9d_4zij8

bait and switch

indeed, the tarp inspector general has said (http://www.google.com/search?q=%22statements+that+are+less+than+careful+ or+forthright+--+like+those+made+in+this+case+--+may+ultimately+undermine+the+public%27s+understan ding+and+support%2c%22+&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-us:official&client=firefox-a) that paulson misrepresented some fundamental aspects of tarp.

And paulson himself has said (http://www.treas.gov/press/releases/hp1265.htm):

during the two weeks that congress considered the [tarp] legislation, market conditions worsened considerably. it was clear to me by the time the bill was signed on october 3rd that we needed to act quickly and forcefully, and that purchasing troubled assets—our initial focus—would take time to implement and would not be sufficient given the severity of the problem. In consultation with the federal reserve, i determined that the most timely, effective step to improve credit market conditions was to strengthen bank balance sheets quickly through direct purchases of equity in banks.
so paulson knew "by the time the bill was signed" that it wouldn't be used for its advertised purpose - disposing of toxic assets - and would instead be used to give money directly to the big banks?and see this (http://www.washingtonsblog.com/2008/10/even-new-york-times-calls-paulson-liar.html) and this (http://www.washingtonsblog.com/2010/02/mccain-paulson-and-bernanke-promised.html).

But at least the bailout money was used to help the economy by stabilizing the financial sector, right?

Sorry.

As i wrote (http://www.washingtonsblog.com/2009/03/bailout-money-instead-of-stabilizing.html) in march 2009:


the bailout money is just going to line the pockets of the wealthy, instead of helping to stabilize the economy or even the companies receiving the bailouts:

bailout money is being used to subsidize (http://www.propublica.org/article/watchdog-no-hank-you-didnt-get-a-good-deal-for-the-taxpayer) companies run by horrible business men, allowing the bankers to receive fat bonuses (http://www.google.com/search?hl=en&client=firefox-a&rls=org.mozilla:en-us:official&hs=fof&pwst=1&ei=8simsarqeig0sapotin5ca&sa=x&oi=spell&resnum=1&ct=result&cd=1&q=bailout+bonuses&spell=1), to redecorate (http://www.google.com/search?hl=en&client=firefox-a&rls=org.mozilla:en-us:official&hs=pra&ei=u8imscwqiimmsaos47mfcq&sa=x&oi=spell&resnum=1&ct=result&cd=1&q=bailout+redecorate+office&spell=1) their offices, and to buy gold toilets (http://www.huffingtonpost.com/matt-littman/john-thains-35000-toilet_b_162350.html) and prostitutes (http://www.google.com/url?sa=t&source=web&ct=res&cd=1&url=http%3a%2f%2frawstory.com%2fnews%2f2008%2fwall _street_ceos_investment_bankers_charged_0206.html&ei=pcimsdgcizmmsqpbj6mscq&usg=afqjcnhlqkop0h0uevyhkrjvqncng8mngw&sig2=uc50mcbhflmoqbs5ajilmw)


a lot of the bailout money is going to the failing companies' shareholders (http://www.washingtonpost.com/wp-dyn/content/article/2008/10/29/ar2008102904533_pf.html)


indeed, a leading progressive economist says (http://www.washingtonsblog.com/2009/02/leading-economist-says-true-purpose-of.html) that the true purpose of the bank rescue plans is "a massive redistribution of wealth to the bank shareholders and their top executives"


the treasury department encouraged (http://www.washingtonsblog.com/2008/10/giant-companies-are-using-your-money-to.html) banks to use the bailout money to buy their competitors, and pushed through an amendment to the tax laws (http://www.washingtonsblog.com/2008/10/even-new-york-times-calls-paulson-liar.html) which rewards mergers in the banking industry (this has caused a lot of companies to bite off more than they can chew, destabilizing the acquiring companies)
and as the new york times notes (http://www.nytimes.com/2009/03/06/business/economy/06insure.html?8au&emc=au), "tens of billions of [bailout] dollars have merely passed through a.i.g. To its derivatives trading partners".

***

in other words, through a little game-playing by the fed, taxpayer money is going straight into the pockets of investors in aig's credit default swaps and is not even really stabilizing aig.
but at least the government is trying to help the struggling homeowner, right?

Well, phd economists john hussman (http://www.hussmanfunds.com/wmc/wmc100104.htm) and dean baker (http://www.businessinsider.com/henry-blodget-heres-the-real-reason-fannie-and-freddie-are-losing-so-much-money-its-2010-5) (and fund manager and financial writer barry ritholtz) say that the only reason the government keeps giving billions to fannie and freddie is that it is really a huge, ongoing, back-door bailout of the big banks.

Many also accuse obama's foreclosure relief programs as being backdoor bailouts for the banks. (see this (http://www.bloomberg.com/apps/news?pid=20601087&sid=adtt9ppaa4fq), this (http://www.newdeal20.org/2010/03/30/obamas-new-initiatives-help-for-homeowners-or-banks-9246/) and this (http://www.pdamerica.org/articles/news/2010-05-01-12-28-16-news.php)).
But certainly quantitative easing is helping the little guy?
Unfortunately, qe only helps the big banks and giant corporations (http://www.washingtonsblog.com/2010/08/quantitative-easing-wont-help-economy.html), and the small number of investors who hold most of the stock (http://www.washingtonsblog.com/2010/05/should-stock-market-decline-stop-full.html). See this (http://www.zerohedge.com/article/bernanke-confirms-key-goal-fed-and-qe2-boost-stock-prices-create-wealth-delusion), this (http://www.zerohedge.com/article/nic-lenoir-interprets-oracles-words), this (http://www.zerohedge.com/article/art-cashin-ftw-qe2-beginning-look-open-air-multi-month-version-ppt), this (http://www.zerohedge.com/article/rosenberg-joins-chorus-those-accusing-bernanke-asset-read-stock-price-targeting) and this (http://www.creditwritedowns.com/2010/11/why-bernanke-is-gambling.html).

And now, the government has announced that it will maintain tax breaks for the wealthiest while considering slashing social security and medicare (http://www.huffingtonpost.com/2010/11/10/white-house-gives-in-on-bush-tax-cuts_n_781992.html).

Warren buffet famously said (http://www.nytimes.com/2006/11/26/business/yourmoney/26every.html) a couple of years ago:

there's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning.
the proof is in the pudding: A small handful of people have ended up with a lot more loot in their safes, while everyone else has gotten a lot poorer (http://www.washingtonsblog.com/2010/03/life-is-great-but-only-if-you-are.html). And, unfortunately, radical concentration of wealth is destroying both capitalism and democracy (http://www.washingtonsblog.com/2010/04/concentration-of-wealth-is-destroying.html).

the government has not only failed to enforce any laws (http://www.washingtonsblog.com/2010/11/even-greenspan-admits-that-moral-hazard.html) to prevent theft, but has been so busy helping the big boys carry their bags of cash that - even with the sheriffs' badges - it is difficult to tell who is who (http://www.washingtonsblog.com/2009/10/capitalism-socialism-fascism-or.html).

http://www.washingtonsblog.com/2010/11/its-not-great-recssion-its-great-bank.html

[boutons_deux]

Here's an take on how the financial sector, enabled by Repug/conservative degerulation and compromised/nominal regulators, do their dirty deeds.

Vikram Pandit Has No Clothes

Vikram Pandit heads Citigroup, one of the world's largest and most powerful banks. Writing in the Financial Times Thursday morning, with regard to the higher capital standards proposed by the Basel III process, he claims

There is a point beyond which more is not necessarily better. Hiking capital and liquidity requirements further could have significant negative impact on the banking system, on consumers and on the economy.

Mr. Pandit is completely wrong. To understand this, look at the letter published in the Financial Times earlier this week by finance experts from top universities -- the kind of people who trained Mr. Pandit and his generation of bank executives.

The professors write,

Basel III is far from sufficient to protect the system from recurring crises. If a much larger fraction, at least 15%, of banks' total, non-risk-weighted, assets were funded by equity, the social benefits would be substantial. And the social costs would be minimal, if any.

The point is that "bank capital" just reflects the choice between debt and equity -- to "have more capital" simply means to rely more on equity relative to finance. From the professors again, and remembering that these people also have a great deal of practical experience,

High leverage encourages excessive risk taking and any guarantees exacerbate this problem. If banks use significantly more equity funding, there will be less risk taking at the expense of creditors or governments.


Bankers warn that increased equity requirements would restrict lending and impede growth. These warnings are misplaced. First, it is easier for better-capitalized banks, with fewer prior debt commitments hanging over them, to raise funds for new loans. Second, removing biases created by the current risk-weighting system that favor marketable securities would increase banks' incentives to fund traditional loans. Third, the recent subprime-mortgage experience shows that some lending can be bad for welfare and growth. Lending decisions would be improved by higher and more appropriate equity requirements.

Mr. Pandit is a smart individual and he knows all this -- he has a Ph.D. in finance from Columbia University. Why then does he advance such obviously specious arguments in the pages of the Financial Times?

The answer is straightforward.

a) He can get away with it. Modern financial CEOs float in a cloud above the public discourse; they can spout nonsense without fear of being contradicted directly in the pages of a leading newspaper.

b) Officials listen to bank CEOs and an op ed gets their attention. Perhaps they think Mr. Pandit knows what he is talking about -- or perhaps they know that these arguments are completely specious. In any case, they are deferential.

c) Mr. Pandit is communicating with other CEOs and, in this fashion, encouraging them to take recalcitrant positions. There is an important element of collusion in their attempts to capture the minds of regulators, politicians, and readers of the financial press.

Mr. Pandit is engaged in lobbying, pure and simple. Ask the people who invented modern finance theory and figured out how it should be applied (second to last paragraph),

Many bankers oppose increased equity requirements, possibly because of a vested interest in the current systems of subsidies and compensation. But the policy goal must be a healthier banking system, rather than high returns for banks' shareholders and managers, with taxpayers picking up losses and economies suffering the fallout.

============

http://www.huffingtonpost.com/simon-johnson/vikram-pandit-has-no-clot_b_782657.html?view=print

[Parker2112]

BigNews.Biz (http://bignews.biz/) - Oct 22,2008 - A Clash of the Titans for Control of the Presidency

News the media won't report!

Did it ever occur to you that perhaps your vote really doesn't matter because whatever happens in America is being orchestrated by more powerful sources? Few people understand the power and financial influence of two of the most powerful international financial houses in world history and it may very well be they are heavily involved in cutthroat competition for control of our next president. Yet the media has not even begun to question the relationship between these international bankers and our candidates for president.

Well they should before it is too late. Some would argue it may already be too late as the Congress, the White House, the Federal Reserve, the Treasury Department and the two candidates have already joined forces to adopt the most comprehensive bail out of Wall Street and the banking community every seen in American history and followed it with similar action in every major nation throughout the world.

While Congress and the candidates talk about a $700 billion bailout that was necessary to save the economy, the Federal Reserve and Treasury were quietly adopting new programs and regulations to provide direct assistance to the financial markets bringing the total bailout to nearly $3 trillion. As if that is not enough, the Democratic leadership in Congress also intends to offer a future bribe to the taxpayer of another $300 billion stimulation program if Obama gets elected.

How in the world did the Democrats and Republicans, the liberals and conservatives and the media of this nation all agree to such a massive commitment to save the very institutions that cheated, committed fraud, bent regulations and out-smarted the best minds in government and finance? How did people with opposing philosophies who were bitter political rivals bury the hatchet in the midst of one of the most contentious presidential campaigns in history, just a few weeks before the dramatic climax?

....http://bignews.biz/?id=788260&pg=1&keys=financial-Rothschilds-Goldman-presidency

[Parker2112]

http://bignews.biz/?id=788260&pg=1&k...man-presidency (http://bignews.biz/?id=788260&pg=1&keys=financial-Rothschilds-Goldman-presidency) page 2.


Back when Obama was a freshman candidate for Senator he was selected to be keynote speaker for the Democratic national convention in 2004. A nobody from Chicago was plucked from midair and cast into the most important slot in the convention. How he would up there remains to be revealed.

Just a little over one year after being elected as a junior senator, in 2006 Obama was the featured guest before a private gathering of the Goldman Sachs executives in Chicago, an honor unheard of for someone that politically insignificant, speaking before the most powerful financial firm on Wall Street and one of the most powerful in the world. This was quietly reported in Bloomberg News.

It was the launch of his presidential campaign and Goldman executives soon gave over $800,000 to jump start the Obama presidential bid along with collecting millions of dollars from their fellow Wall Street firms and clients. Oh yes, Robert Rubin became the Obama economic expert, a former CEO of Goldman Sachs. Billionaire Warren Buffet became his most trusted economic advisor, a man who was to invest $5 billion in Goldman Sachs in the height of the economic meltdown. Yet Buffet was also a personal guest of Lord Rothschild at a private conference at his English estate.

[Parker2112]

Here's an take on how the financial sector, enabled by Repug/conservative degerulation and compromised/nominal regulators, do their dirty deeds.

Page 3.



Then comes the financial meltdown which can be traced back to a couple of major events. The first major change to the regulatory framework that opened the door to Enron and the sub-prime crisis occurred in 1991, when Goldman Sachs, through a subsidiary called J. Aron, argued that even though it was an investment bank it should be granted the same exemption given to commercial traders in the commodity markets because it was in the business of buying commodities as a middleman. It was granted by the CFTC.

[Parker2112]

Page 3.


A second turning point came when Congress passed the Commodity Futures Modernization Act of 2000, that formally allowed investors to trade energy commodities on private electronic platforms outside the purview of regulators. Critics have called this piece of legislation the "Enron loophole," saying Enron played a role in crafting it. In the months after the act was passed, private electronic trading platforms sprang up across the country, challenging the dominance of NYMEX.

Investment banks like Goldman's had been frustrated with the established exchange because they really were never able to get control of it according to Michael Greenberger, a law professor at the University of Maryland and a former staff member at the CFTC. The new law allowed them to create a private trading platform. The most successful of the private platforms was InterContinental Exchange, or ICE, founded by Goldman Sachs, Morgan Stanley and a few other big brokerages in 2000. ICE soon opened a trading platform in London, allowing its founders to trade vast quantities of U.S. oil overseas without being subject to regulation. This opened the floodgates to oil price speculation.

[Parker2112]

Page 3.


Do we really know anything about the long term relationship between Obama and Goldman Sachs other than their massive fund raising for him? Since he has been secretly guided and financed by Goldman people from the very beginning of his presidential campaign were they influential in his economic platform? Obama never questioned the role of Goldman in the sub-prime fiasco nor in manipulating the oil futures prices. When Goldman specialists tried to drive the price of oil up to $200 a barrel this year Obama never said a word.

[Parker2112]

Page 4.

As for the Rothschilds and McCain, it was not until this year that they held a fund raiser for him in London hosted by Lord Jacob Rothschild and his son, Nathaniel Rothschild in the posh London Spencer House on March 28, 2008. As I said at the beginning, the Rothschilds are the oldest, biggest and most powerful of all financial houses and have long chosen to remain in the background while other firms fronted their interests.

Although they compete with firms like Goldman they also cooperate often on international mergers and acquisitions, have been partners in the oil futures exchange, and recently both sought to expand their influence in Asia with the Rothschilds selling a 20% interest in one of their companies to the Bank of China. The Shanghai and Hong Kong-listed commercial bank will pay $341 million for the stake in the French arm of the La Compagnie Financière. It is the first strategic investment by a leading Chinese bank in the eurozone.

In spite of being foreign based the Rothschilds have been one of the chief beneficiaries of the economic crisis in America as J.P. Morgan and Barclays, firms with significant equity held by the Rothschilds, were able to gobble up Bear Stearns, Lehman Brothers and Washington Mutual in sweetheart deals for a fraction of their asset values in the midst of the crisis.

So what control do we really have over the election, over the president and over the Congress? We know control has been lost of the economy, of world trade and of international finance. Most government institutions seem to be operating at the whim and call of the financial giants. Can we expect more after this election? Is America for sale to the highest bidder and is Obama's $500 million campaign the highest bid? All this bodes ill for the liberal, left wing groups and unions rallying around Obama as they may very well be discarded when they have served the purpose of winning the elections.

[Wild Cobra]

That's what happens when you agree the rich are too big to fail.

[The Reckoning]

parker is the duncan of the political forum. need a rebuttal? post a link!

[Parker2112]

parker is the duncan of the political forum. need a rebuttal? post a link!

are you referring to other threads? otherwise, ADD much?

[Winehole23]

It's incontestable that you bump your own threads.

[Winehole23]

You just diagnosed TR as ADD on the basis of his accurate description of your posting habits.

lol