Tin foil hats
Although there is little reason to subscribe to conspiracy theories which suggest that the financial crisis was “manufactured” by partisan politicians and their financiers in order to win the 2008 election, two weaker narratives connecting politics and the financial crisis are a little more plausible. One is holds that an economic system, already weak in the basics, may have been pushed over the edge by a financial play that got away in a kind of economic Chernobyl. Most economists think that financial manipulation is unlikely to have brought down the economy to the extent that it fell. The second narrative holds that that whatever contributory effect political corruption had on the onset of the crisis, inappropriate linkages undoubtledly exist and should be eliminated on first principles. A series of stories have been detailing some of the dubious links between the evil bankers and our esteemed saviors.
Dan Riehl connects the dots between politicians and the Stanford Financial Group, now charged with an $8 billion fraud. The Politico notes that they gave substantial sums to the Democrats and about 1/10th as much to the Republicans.
Since 2000, R. Allen Stanford, the chief of the Stanford Financial Group in Houston, his wife and company gave $2.2 million in political contributions – $1.7 million to Democratic candidates and committees – according to Federal Election Commission records.
Now it is difficult to judge devils by the length of their pitchforks, but the length of the pitchforks is secondary to the existence of the devils themselves. And it is they who count. Political corruption disables the safety devices of our society. No matter how much regulation is in place, all of it is worthless if they have been shorted out by the watchdogs. So whatever version of conspiracy theory you subscribe or don’t subscribe to, it is still possible to believe that politics played a role in the current financial crisis. Corruption undid the gates, tied down the circuit breakers, disarmed the alarms. It opened the door to Whatever It Was that flashed past in the night. The shenanigans of the Stanford Financial Group are a sample. But the sample, by definition, is only a small taste of the pudding.
The greatest tragedy of the current meltdown is that it may not have been caused by mega-villains, who sat like a Doctor Evil on a mountaintop fortress planning to bring down the system, so much as a fire caused by a bunch of clowns who thought it was a good idea to leave on the gas in the oven before lighting up cigarettes. A Norwegian friend once told me this joke. “How do you sink a Norwegian submarine?” I said I didn’t know. “Swim down to it in diving gear and knock to open the door.” And he told it with a straight face too.
What’s the angle though – a financial play to knock the wind out of the economy as a kind of October surprise? I confess I have no idea how this stuff works; no matter how many explanations I read my mind’s eye just glazes over and the causes start to sound like casuistry. How is this, though? So much raw brainpower, realtime technology, quotidian observation, nerdy preoccupation, government wonkery – and we’re in the beginning stages of perestroika? I dunno. Just seems fishy. Sure seems like these people aren’t worth crap though I tell you what.
A far more effective way to win the election was employed.
Shit on America day after day after day after month after month after year.
Tell us how bad America is, tell us how we are losing the war or in Harry Reid’s case, tell us how we’ve already lost the war. Tell us the economy sucks, when it is strong and there is virtually no unemployment nor any inflation. Take a dump on your own country day after day after day.
Then sail in on the good ship HOPE and CHANGE and STALINISM.
Yes, lib. The MSM and the Dems became a harsh national conscience, a mechanism for unremitting perfectionism and associated self-criticism. Calling yourself foul names day in and day out while looking in the mirror would necessarily be followed by a suicide attempt.
Although there is little reason to subscribe to conspiracy theories which suggest that the financial crisis was “manufactured” by partisan politicians and their financiers in order to win the 2008 election
I think you go to far here. Reasonable questions remain, and there are a great many reasons to be suspicious. There are still all to many curiously serendipitous events and effects, and dubious explanations proffered to reach that conclusion at this point in time.
This line if inquiry has hardly been exhausted, and it is reasonable to continue to ponder and investigate this business.
The jury is still out.
Drive someone to despair and then explain that you’re needed to keep him from jumping off a bridge, and you have to be paid a handsome salary.
I think there were machinations to make the economy worse so the sitting administration would look worse. When I discuss Pres. Clinton with Democratic friends (we all have skeletons in our closets) they always talk about how good the economy was during his sitting, not about the scandals or the unanswered terrorist attacks. The economy hits people at home and they are hyper sensitive to its changes. The manipulators are usually well insulated to the effects they cause. I always laugh at the term “insider trading.’ Someone always knows something that will change the economy in large ways and everyone has friends. It is a stacked deck mostly- the house always wins (pun fully intended). Just like Las Vegas but with less oversight.
Maybe call it the politics of greed. Greed and fear dominate markets and when “greed was good” (the dot.com boom and the latest real estate and stock market boom), we all wanted in. How did the house of cards fall and so fast? Too much of a good thing, too much easy money… needs became wants and wants became “gotta have’s”. No mas. The markets were clearly manipulated by very savvy bankers who discovered a way to create a triple A rated bond out of a -BBB and mix the internal portfolio of the CDO so that no one could understand what “it” was. The men in the “shark skin suits” on Wall Street found a greedy world waiting and hungry for AAA US investments…they ‘knocked on the submarine door and the Norwegians, the Brits, the Frogs ET al opened it and let them in because they saw an easy way to make money. Today its impossible to determine the “sub-prime slime” from the good loans and that’s the challenge facing the Treasury and the Fed now. The sudden withdrawal of $550 bbbbillion in money market funds in mid-September is indeed worth investigating…it sure seems to have pushed the fed over the edge, created panic and fear in the White house and the beginning of a world wide stampede to quality (the US dollar T-Bill). It’s a “who done it” for sure, but in the end it will probably turn out to be very rich and powerful people who collectively figured out that the Ponzi scheme had topped and got the hell out while the getting was good… all more concerned with wealth preservation than electing Obama. With the market in free fall and no bottom in site for the housing market, lack of liquidity and credit (caused by inability to discern the toxic waste on the banks balance sheets) means that fear and loathing and the unknown reign. Obama is playing the “fear card” to his detriment ( no mas hope, change Audacity) and has scared the bejezzus out of his followers. If he keeps at it, we will all be “fearing fear itself”
In a Ponzi scheme, sooner or later there’s an end, and some folks lose money. Maybe we were just witnessing the final straw on the camel’s back, the final card on the house of cards. Sooner or later the coup de grace would arrive.
The brazenness of the con artists, in politics and in corrupt business enabled by shady politics, is the remarkable thing. Lady Pelosi wipes her hand across her mouth and says, “I have done nothing wrong,” and get away with it. And now the politicians follow one Ponzi scheme with a Ponzi Keynes scheme, this time spending money that doesn’t really exist to “stimulate” the economy.
You may remember Chaucer’s Pardoner. First he tells the pilgrims how he dupes suckers by selling them indulgences. Then he can’t resist the temptation: he tries to sell indulgences to his listeners, the very people he just told about his scam. The host threatens the Pardoner with the loss of his balls.
The numbers involved are so mind bogglingly staggering, that I wonder if there was ever any real money involved at all. A thousand years ago the Chinese invented paper money. The notes were actually printed on silk, but the effect was the same. Money was no longer something valuable in itself, like a gold or silver coin, but a promissory note that said when presented to the proper authority it would be redeemed for the value stated on its face. The Chinese had invented the illusion of money. And nothing has been the same since.
It’s isn’t paranoid to say
That what we see’s disturbing
When markets start to act this way
It means something’s perturbing
The way free markets operate
When all is hokey dokey
But when the pols don’t play it straight
They should be in the pokey
They’re not, of course, and I should state
The tycoon money lenders
And others who facilitate
The Congress’s big spenders
Should join the crooks in durance vile
Their names be changed to numbers
But that will only happen while
We’re dreaming in our slumbers
The Congress votes a pork fed bill
Without a thought or worry
Most people didn’t care, but still
Some wondered what’s the hurry
I think the Congress knew full well
That what they did was harmful
They gave to friends, but what the hell
Who took it by the armful
But here’s the problem, if we look
It really wasn’t euros
But just some numbers in a book
A-sitting in some bureaus
Until somewhere someplace some time
Someone needs some Jacksons
And writes a check or drops a dime
And initiates some actions
And somewhere a computer coughs
And numbers change direction
And offs are ons and ons are offs
In infinite collection
The point is no one ever sees
The actual pound or dollar
They might as well be wind in trees
A-blowing down a holler
There never was no dough to keep
It’s all a sham and mirrors
For some of us are just the sheep
A-taken to the shearers
@4 mongoose ~ Ah, but who will investigate? The MSM now has a vested interest in the success of Obama’s agenda. This corruption of the press is a big problem for our country and blogging alone will not make up the losses
Suvorov’s new book identifies (if you believe him) the largest egg.
http://www.financialsense.com/stormwatch/geo/pastanalysis/2009/0216.html
Sometimes, coincidence is just that: coincidence. While it is true the MSM shit on the Bush administration mercilessly and many of Bush’s detractors actively worked to assure the failure of his policies, I find it hard to believe they could have engineered the collapse that did come about. And while the stupidity of Barney Frank and Chris Dodd played a large role in the mortgage meltdown, that alone would not have gotten us where we are today without the willing cooperation of the “very savvy bankers” sigintel writes of in #7. The perfect storm of pure hatred of Bush, rotten social policy of Frank/Dodd et al, and cupidity of people who stood to win very big on the Ponzi scheme of the resale of shaky mortgages looks very much like a manufactured financial crisis, but I continue to believe the American economy is too massive to have been so severly shaken by design. I subscribe to the “gigantic coincidence” school of thought, but if one more bit of evidence is surfaced to demonstrate malign intent I could change my mind. I’m keeping my tinfoil hat close to hand, Wretchard. F
And now, it seems $20+ millions of porkulus funds will be going to finance the emigration of Hamas Palestinians. http://www.whitehouse.gov/blog_post/relief_for_gaza/
Remember, it is always easier to destroy something than build it. It was easy, relatively speaking, to destroy the American economy. Even so, it has taken decades of continuous ratcheting up of socialist policies to bring us to the brink. Obama and Co. threaten to push us over the edge.
Important info on the Stimulus Payment
“This year, taxpayers will receive an Economic Stimulus Payment. This is a very exciting new program that I will explain using the Q and A format.”
“Q. What is an Economic Stimulus Payment?
“A. It is money that the federal government will send to taxpayers.
“Q. Where will the government get this money?
“A. From taxpayers.
“Q. So the government is giving me back my own money?
“A. No, they are borrowing it from China . Your children are expected to repay the Chinese.
“Q. What is the purpose of this payment?
“A. The plan is that you will use the money to purchase a high-definition TV set, thus stimulating the economy.
“Q. But isn’t that stimulating the economy of China ?
“A. Shut up.”
But Hillary liquidated her portfolio just before the crash, in May 2008. 170 sales, no purchases. Can there by no better proof that the event was at least obvious to the insiders, if not indeed planned?
http://www.chartingstocks.net/2009/02/oh-hillaryyouve-got-some-splanin-to-do/
We don’t Need No Stinking Law and Order!
Groups wage battle over adding E-Verify to stimulus bill
Robin Conrad, executive vice president of the National Chamber Litigation Center, said in a statement. “We are hopeful that the incoming administration will agree that E-Verify is the wrong solution at the wrong time.”
The Chamber of Commerce’s lawsuit challenges the government’s use of a presidential executive order coupled with a federal procurement law to make E-Verify mandatory for federal contractors with projects exceeding $100,000 and for subcontractors with projects exceeding $3,000.
The Chamber of Commerce also challenged the expansion of E-Verify to require the reauthorization of existing workers. Also joining in the lawsuit are the Associated Builders and Contractors, the Society for Human Resource Management, the American Council on International Personnel and the HR Policy Association.
—
So what if it is a National Security Issue?
So what if illegals were part of the problem in Housing Costs and Fraud?
So what if it is bankrupting our schools, hospitals, prisons, and welfare systems?
So what if approximately 40,000 US Citizens have died at the hands of illegals over the past 8 years?
So what if it exerts downward pressure on the low end of the wage scale with unfair and unequal competition?
So what if Illegal gangs import drugs and assasinate innocent Black kids in their own neighborhoods?
etc, etc.
…to think that the Chamber of Commerce was once considered to be a respectable organization.
Too much to expect US Politicians to stand on the side of US Citizens, of course.
There were so many competing financial market manipulations, parsing them all would be akin to untying the Gordian knot.
The absence of outrage in this country over the trashing of so much asset value – the net worth of households – is amazing to me. Are people shell shocked? Are they saying, please sir, may I have another? Color me baffled. As for me, and the BC and the American Thinker and others, we’re mad as hell. But not to the point of being an organized opposition. The pig roast in Denver yesterday is probably a good start. http://michellemalkin.com/2009/02/17/yes-we-care-porkulus-protesters-holler-back/ Keeping a sense of humor helps.
Friends, the admin is dragging out what must happen with the banks, the dragging out means every day the river of red ink continues to flow onto America’s books and pool ever deeper in the balance sheets.
Banks are sitting on 1.1 trillion which they won’t lend because the falling asset values working with rule 157 make risk too high.
The risk is real because the rule 157 is real, and the rule 157 is real because the SEC hasn’t gotten a phone call from the White House to say it isn’t, that is, to suspend it due to the circumstances. If you look at the history of the rule, and the dates it has been switched on and off, you will open a door into a dark place. I don’t know why no one from the Bush adm has stepped forward and made a big statement, but smaller entities are screaming every hour of every day.
We’re bleeding, look at the indexes, down 25% since the election (down that much before, too, on the drums) with economically useless gold up 30% in the same time.
Capital is evaporating. While Geithner does a ‘silly me, i’m such a mess’ routine, old folks are losing their savings, young folks are losing their shot at college, all massively and in great numbers, while O makes speeches about helping the new-made victims with ten bucks a week here, or a twentyfive hundred annual credit there, none of which he can pay for anyway and is going to tax away from the very people he is making to be in such grave need of it in the first place.
Kudlow and Mike Ozanian on CNBC this afternoon yelled bleakly at each other that these people, with the dragging and misdirection, are creating the very problem that they seem unable to address, and that the likely reason so many things don’t seem right, is that they are doing it deliberately, perpetuating the downward spiral of self-feeding crisis, in order to take over as much as possible the economy. Of course, that means us, too, and any ability we’d have to recover.
This is just food for thought, but if this situation continues and leads to the Orlov scenario, and Russia decides that with their command structure safely bunkered and our nuclear forces reduced by 80% (if not 100% by trickery), they might go for the 84 targets that their doctrine says will permanently end any threat from USA. Such a nefarious plan would just probe its way forward, making progress when it can, going til it is stopped.
need to call our congressfolk and tell ‘em we’ve caught on to what may be happening and we want it stopped, suspend rule 157 now, tomorrow.
Conspiracy theories imply competence.
End of argument.
Derek
buddy,
Back in September Newt Gingrich was calling for the suspension of the mark-to-market rule. It’s a no-brainer. I’m in the investment business and we discuss this very often at work. I follow the banking industry, and I talk about this with people in the banks I cover. It’s a sensible thing to do. It would also allow for a more orderly retreat of home prices.
Is Geithner retarded or what? He’s a Dartmouth grad (and I graduated from the poorer institution further down state in Durham, at the University of New Hampshire)and is supposed to be a bright fellow. Bright enough to try and skate on his taxes! I rather suspect that he’s just a cynical, corrupt fellow.
Damn Ivy League grads are in the forefront of flushing us all down the toilet. Harvard leading the way.
iconoclast/16, look at when the junk-mortgage inventors the Sandlers, friends of Clintons and Soros, sold Golden West to Wachovia, at the top of the market. a few months later, old east coast Watchovia was coming apart at the seams as the junk blew up and is now taken over at a small fraction of what it was worth before the prominent left-wing big-money political-movers the Sandlers basically busted it out.
Derek, you know much about Axelrod ? He’s pretty competent. So is Putin.
Consider, for example, the news just achieving prominence that Rahm Emmanuel was on the board of Freddie Mac during the fraud years. The NY Post has an article by Dick Morris and Eileen McGann saying:
You don’t have to believe in tin foil hats to reach to have reasonable doubts about whether Rahm Emmanuel should be in the posse going after the stolen strongbox. There must be other talent available.
Buddy,
Rufus has been the house optimist here for some time.
You’re welcome to poke some holes in his Rose Colored Pipe Dreams.
I’d enjoy watching!
Many months ago here at the Belmont Club, we had a discussion about perception and reality. Once again, these twains provide an instructive framework for thinking about the status quo (Latin for “the mess we’ze in”).
Now, moving from the financial to the political realm, consider the following:
In both cases, the perception was good. The reality: not so much.
But maybe it’s just a coincidence.
L3
The whole meltdown was obvious, and the result of group think on the “benefits” of diversity. Though not in themselves the entirety of junk mortgages, the mandated PC thinking of the Establishment, and Press, and Democrats, and indeed some Republicans was that “diversity” was good and in specific, it was “racist” to deny a broke day laborer a $600,000 mortgage, and so the loans were underwritten at public expense. At the insistence of men like Emmanuel and Dodd and Frank and the rest.
A public settling of accounts is likely, in the long run. Since it is extremely unlikely that the system, having crashed, will not keep on crashing and will give any semblance of recovery for years. Forget a recovered economy by 2010 or 2012. It will be a miracle to recover to mid 1990′s levels by 2020. If that.
Because the corruption was an indicator of systemic failure in the economy.
Yes it was a corrupt deal, with cronies getting rich off the “diversity’ mandates of PC groupthink of the Liberal establishment. To which far too many corporate leaders subscribe, also by the by.
But was worse was that this economic activity, instead of being marginal to the great bulk of what America’s transactions consisted of, was instead the CENTER and great majority of the economy.
Basically, America stopped making things in the 1970′s. Anything really of value that could be sold abroad for money, or purchased at home. During the 1980′s, a partial recovery through massive defense buildups stimulated industrial manufacturing, and after the recession of the early 1990′s, we had various tech, internet, and housing bubbles from 1995-2005. At no point was the economy “normal” in the sense that it resembled the bulk of American history, based on manufacturing, agriculture, and a few services. Indeed much of the economy of the US was dominated by importing manufactured goods (of dubious quality and safety) from China and domestic housing fueled by “anti-racist” mortgages to people of dubious credit-worthiness but the “correct” (read: not White) skin color.
Every nation that has any significant economic activity will have it’s cronies, it’s insiders, and it’s corrupt bargains. There is no way to escape it, human nature being what it is.
In a healthy economy, these corrupt deals and transactions, as bad as they are, do not seriously impact the nation as a whole because they are too small, relative to the overall volume of the economy, to have a major impact on the economy as a whole.
It is a measure of the structural weakness of the nation that the housing crisis fueled by the credit collapse brought the whole system down.
Starbucks was fueled on consumers having extra cash in their wallets, cash that was the result of a bubble economy not real income from improved productivity making goods to sell at home and abroad. Apple Computer was fueled by status wars among trendy yuppies, see also Prada. Rail companies were fueled by imports of cheap Chinese goods paid for by money that was in fact from bubble speculation, not real income.
This suggests that the way out of the mess is not simply punishing the wicked (though this must be done) and curtailing corruption, but by fundamentally re-ordering the economy.
By returning the US to a manufacturing economy, plus agriculture, that makes products that are world class on price and quality in major sectors.
In practice this DOES mean producing “national champions” … but it means not endless state subsidies for the equivalent of the Trabant or whatever Aeroflot flies, but ensuring that Boeing remains the dominant seller of airplanes, world-wide. That GM and Chrysler, and to a lesser extent Ford (healthier company) produce cars that Americans will willingly buy, as well as Europeans and others. This means ‘clawing back’ production of key consumer electronics such as computers, televisions, and other key products.
This also means a public discussion of which sectors to abandon, including probably textiles, shoes, and other low-value products.
The government can and should provide “rescue” money to firms, to retain talent and people, but at the same time abrogate existing labor agreements and control executive compensation: a low base salary plus any small percentage of profits (potentially a fortune) to align them with the public interest of seeing the company both successful and providing earnings and jobs/productivity/income to America.
This means a short, sharp, focused intervention, with a limit to public funds and demand (including penalties for non-performance) for results, all down the line for all workers, executive and non-management. Conceptually this would include line-workers understanding their boss is the American people, who demand real results and will with-hold part of their salary yearly if they don’t get it too. Otherwise, the company goes bankrupt and they lose everything.
This is clearly the path out, and whoever finds it first (Japan, Germany, Canada, the US) will be able to dominate whoever lags behind. Conceptually, there is no reason German could not be the world language in thirty years even with a shrinking population if Germany figures out how to make Mercedes and BMWs and Volkswagens that are affordable, reliable, and of the highest quality, while all others make cars designed by Congress or Parliament.
If I had to bet, I’d bet on all failing miserably. The political class is not up to seeing the obvious, and the Press is too stupid to see it either, much less hold feet to the fire.
wretchard, really –how could they be so bald? maybe being found out by people who then realize that with shame not in the quiver there is nothing to shoot, is part of the Cloward-Piven strategy.
IIRC, professors Cloward and Piven stood behind Clinton as he signed the yr 2000 financial regulations that were an artfully designed answer to public calls to regulate ‘dark money’ in the markets and leaking into campaigns. However the credit default swap instrument got left out of the regs and remained unregulated and dark. These then in a whoosh in 18 months into 07 went parabolic to 3 to 9 trillion apiece in Citi, Bank of Amer, & JP Morgan and are the assets that apparently Geithner plans to banckrupt the globe with mark-to-market in order to avoid making them mark-to-cash value, and thus become admitted zombies rather than unadmitted zombies. The hundreds of millions of newly busted humans staggering shocked around the surface of the planet are evidently not part of the calculus, except as speechifyin’ props to toss crumbs to, in the ongoing wealth and power transfer from private to government.
Anyhow, point, the architect of that 2000 achilles heel was Gary Gensler, who has just been appointed –wait for it –yes, to run the Commodity Futures Trading Commission. From the heart of the darkness enveloping us from his 2000 brew, he strides forth to do it to us again, now that that fricken Bush is gone.
A nice nauseating bookend with the Rahm revelation, i think.
all these guys, put in search along with Cloward Piven, yield rich lodes of outrage in writings of the clusters of people who are recognizing this stuff independently.
whiskey,
…a public discussion of which sectors to abandon…
Isn’t that what just happened? The answer, as best I can tell, was “None, so long as they have the votes or seniority or a well-funded 527.” What you describe is industrial policy, which is just a fancy-schmancy name for a command economy. Good luck with that.
Me, I’m (literally) betting we’ll recover, in spite of the inept, inapt ridiculousness coming out of Washington these days. But, then, I live in Texas, the last, best hope of the last, best hope.
Yee-haw!
Cheers.
L3
“We have no government armed with power capable of contending with human passions unbridled by morality and religion… Our constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.”
“The church is the moral compass of society.”
“We have no constitution which functions in the absence of a moral people.”
——————————————————————————–
“Men, in a word, must necessarily be controlled either by a power within them or by a power without them; either by the word of God or by the strong arm of man: either by the Bible or by the bayonet.”
“The highest glory of the American Revolution was this: It connected in one indissoluble bond the principles of
civil government with the principles of Christianity“.
- On July 4, 1821.
John Quincy Adams
(first quote is John Adams)
#16 – Iconoclast
David Geffen, an early and ardent Obama backer, also liquidated his portfolio around May, 2008. Now this might have been coincidence, or related to the Dreamworks financial woes of the period. Or not. Just something to ponder.
Wretchard I think that you set up a straw man or at least overstate the case when you disparage the argument that Democrats on some level sabotaged the economy as “Tin Foil Hat.” While it is unlikely that Soros when in his lair dons nehru suits and cackles like a parody Bond villain while planning the destruction of the United States it is true that he has stated that he looks forward to the day. Also while there are no photographs of him crawling on his belly before doing unspeakable acts of obeisance before his masters beneath an ancient Chinese monastery there is no good argument that I have heard to the effect that acting as if it were true would not produce more effective policy choices.
What is absolutely and indisputably true is that in every Presidential election for the last 76 years when the Democrats were out of power they have sought to convince the American people that the country was in a Recession or headed into a Depression. They have done this with the cooperation of the Media and partisan academics and without regard to either the facts in each case or with consideration as to how their political maneuvering could effect the actual markets. The Republicans have been far less guilty of this vice. Perhaps that is because they assumed, now erroneously, that they are the Party of Wealth and their supporters would be disproportionately hurt by such a tactic. The only question is as to the extent that Democratic obstruction of the Bush administration was rimed to ramp up and paralyze it in the year before the election to support that theme.
It is hard to tease out because the opposition Bush was far more partisan and intransigent from the beginning than that endured even by Reagan. By comparison the hated and about to be impeached Nixon had been handled with kid gloves and courtesy. The refusal over a period of years by the Senate Democrats to allow Bush’s judicial appointments to come to the floor for a vote demonstrates a scorched earth willingness to hurt the country that was not tied to any timetable to cause a pre-election crash.
On tv today Greg Rand of the Rand group, southern California realtors, was talking about tomorrow’s scheduled announcement of the admin’s ‘Housing Plan’. I’ll reconstruct from notes in half-quotes:
‘Tomorrow’s announcement will be another tease about somehow lowering mortgage rates or lowering principle, and it’s gonna make things ten times worse. Already people are choosing to quit paying because they’re waiting for the government to come get them a better deal. When the government started talking about changing the rules, foreclosures were 2% around here, now they’re 9% and climbing. People perfectly able to pay are running around talking about how they were attacked by a predatory lender and are going to just quit paying until the government gets it all fixed. It’s like the government is trying to make it worse.”
Rand continued, “The economy is TRYING to RECOVER, even without ANY help at all from Washington. We have buyers, lots of them, they’re busy looking, but they’re waiting until the government makes the 4% mortgages they keep teasing every few days. I hear the same thing all day, waiting for the government.”
An Arizona realtor (iirc) named Danni Babb (cute blonde) said she was conferring with Wells Fargo/Wachovia today, and was told that “about 25% of the ‘troubled mortgages’ are faking it, waiting for a better deal.”
So, what, does our new admin not want the housing to stabilize?
not want the banking industry to quit hemorraging and start lending?
not want the onrush of returning confidence that those would bring?
not want the unemployment numbers to go down?
Why on earth could this be?
“
Wretchard I think that you set up a straw man or at least overstate the case when you disparage the argument that Democrats on some level sabotaged the economy as “Tin Foil Hat.”
I think it is important to prove the minimal case. Without prejudice to whether or not a conspiracy did exist, we need to establish that it is undeniably the case that a conflict of interest or at least the appearance of impropriety exists. The reason for pitching the case so low is that you want to bring the largest number of readers to the minimum conclusion that we are in big trouble.
It is possible to suggest, though not to prove, that malice was present in the economic meltdown. But I think it is almost self-evident that sleaze and incompetence was; and that sleaze continues to this day. It is vitally important, I feel, to convince the fence sitters that this issue is no right-wing paranoid obsession. Because unless the men at the margin can be persuaded, then the campaign against these ill-considered policies can only be weakened.
I think you understand what I’m getting at.
“…to bring the largest number of readers to the minimum conclusion that we are in big trouble”
Yes. there is in reality a new frame. but so so much noise. and the sinister hides behind the novelty. if we can just help stand up the new frame, it will be evaluated for its worth.
Wretchard,
Of course I understand, I also think that we should try to convince every Obama mini me that he does intend to stuff them into funny suits and birth control glasses.
Check out this site for possible answers:
http://www.deepcapture.com/
“…two weaker narratives connecting politics and the financial crisis are a little more plausible. One is holds that an economic system, already weak in the basics, may have been pushed over the edge by a financial play that got away in a kind of economic Chernobyl….” – Wretchard
I agree that in theory no one person – except George Soros – could have caused a melt down under normal to weak conditions. But, there are a lot of ugly financial people out there who are so rich that they can manipulate the markets for kicks – and for power.
The sum total of money and propaganda that the left controls is tremendous. It’s entirely possible that the dems and their domestic/international cronies were the straw that broke the camel’s economic back.
The just thing to do would be to put them in jail and force them repay their victims.
Not to be too harsh, it would be just and fair to allow the victims to garnish the wages of the offending democrats – including the Big 0.
No, on second thought some jail time is in order.
W,
Do Dems see it that way?
Do the Dems believe it is that way?
Its hard to say what the Dems believe but if they understand the situation to be minimally as many here have outlined then they must understand and are in agreement with the result…You are talking about a fairly massive financial education program as well as overcoming the BDS that will be the response to any attempt at fact checking and that is at a minimum, just for agreement that we are in a bad situation…Look where its gotten Rush.
But there is everything to gain and not a thing left to lose at this point.
Searching for a silver lining on the dark clouds, I came up with this:
If America wants to step out of it’s role as world policeman, and if we want to dodge the punitive UN taxes that are sure to come, and if we, in general, want to “take our place” among the other supplicant nations of the world, then the gutting of our wealth and the diminishment of our stature world-wide that we are experiencing assists this.
In the past, we were in everyone’s sights. If you’re an angry Islamo from Pakistan, you want to bomb America. If you’re a frustrated Belgian lefty with a government pension, you want to bomb America. If you’re a Sorbonne-educated French minister, you hate America’s labor model. If you’re an ANC activist from Zimbabwe, you want to stir-up and capitalize on American racism. Everything, from the weather to Kenyan corruption to dead whales was framed as America’s fault.
But, if our economy and society and standards slip to approximate the patronage-ridden norms in most of the world, and if Americans’ bank accounts are no longer “obese,” and when we are no longer policing shipping lanes and intercepting pirates, then our value as a target for international ire diminishes greatly.
Point is, this would be a good thing, if the cost of supplication wasn’t so great. Which is the nub of the issue: used to be, if American’s were going to pay a cost, they were asked to approve the purchase, first. What troubles me is, 52.4% of us don’t care what this equalization costs, as long as someone else signs the check, licks the stamp and balances the checkbook for them.
‘course, the real culprit is and has always been known. In the immortal words of Mick, “Pleased to meet you . . . ”
These discussions are only useful to the extent that they help us to find a way/ways to combat those who are confused about the nature of reality.
Some have argued that people ought to wait out the disasters and hope things turn around politically. Maybe; but hope isn’t a very good strategy. Luck is all very well but there’s a real need for organizing, political action, etc. The system provides many opportunities for legitimate, valid action. It’s nice to rant, but at some point one has to act within the framework of the laws and the Constitution.
There are no shortcuts to a quality job. If we are going to educate ourselves out of this mess, it’s best we start comprehensively, from the very beginning. Right down at the grassroots.
Wretchard @42: well you are right about that.
but you cannot get these things of the ground without some grousing.
The American people cannot be radically shifted without them feeling outrage, or so it would seem.
Wretchard,
The courts provide a clear “out” for us, I think.
For example, if any recipients of bail-out money can be shown to be partisan “agents” of the Democrats (such as ACORN, which is the Dem’s get-out-the-vote arm), then taxing the nation’s taxpayers to fund one party’s partisan advocacy is a no-no, and the courts will rule against it.
This could hold-up disbursements under the entire bill.
I think the opposition could pick two or three cases that assert citizens’ individual rights, and try them in the nation’s courts for maximum effect. It’ll be important to pick the cases carefully to portray us as backing the “little-guy” against Obama’s Leviathan, and to peel away the international influence that defines our new President’s agenda.
One place to look for just such a case may be Southern Arizona, where a rancher’s property rights are currently at risk of falling to the “undocumented” immigrants’ lobby. This issue provides an example of a virtual Omaha Beach that we’ll need to secure if America is going to survive intact.
Let’s attack the bill’s disbursements root-and-branch legally, and let the courts make the constitutionalists’ case for us.
Re: Wretch @ 35 and etc.
Our host is probably, as usual, onto something. Throughout my life the left has relied on having the loadest voice and claiming the direst circumstance. It is entirely possible the they have overplayed their hand, a la falling skys and cries of wolf. We, or at least I, are numb and, frankly, routinely tuning out out their message. I left the global warming issue after the first end of the earth claim.
So what? Maybe it is time for a new communication/ agitation paradigm. It is possible that Saul Alinsky’s principle’s, now well know, are past their sell by date. Or, more persuasively, once the truth/ con is known, fear recedes.
It seems that wretch proposes to start a ground swell of conscious thought vice an emotional reaction to screams from the soap box. We shall see.
Very little is clear, but there is, it seems to me, a “North Star” that can be used to navigate these seas. One very important thing, maybe the one thing, that we know we can count on and know to be true is Obama’s narcissism and that of his followers.
If that were considered a center of gravity, it might open up important avenues that transcend the much needed debate and informational campaign.
Consider, for example, what would happen in the minds of many — fellow travelers, useful idiots, and just plain fence-sitters — if “IMPEACH OBAMA” bumper stickers started to show up plastered to billboards, street signs, and building walls around the country, followed by actual bumpers when the climate got safe to do so.
That kind of low cost, high profile effort has been used for years by the Left with great success. Tammy Bruce, I think, has talked about her experience with sitting in a basement with a few other people spewing out leftist letters and such so that the recipients felt like they were dealing with a much larger force.
Wretch, I think you’re right, but the wood is so dark and thick and the willow-the-wisps so bright – ? How will we know when we reach the minimum cogency? I certainly don’t know.
Despite my darker intuitions I do believe much explanatory power lies in the (1) we all got on the bandwagon & (2) avarice and lust trump competence and goodwill, but conspiracy is a category beyond, theory. I’d still like some explanation of $550 billion in 2 hours. I’d still like some clear dispelling of the Leninist presentiments. Seems like both should be answerable easily enough.
The absence of outrage in this country over the trashing of so much asset value – the net worth of households – is amazing to me. – weSwinger
Agreed.
Keeping a sense of humor helps. – weSwinger
No, it doesn’t.
Slade @ 50: LOL
(I agree)
Action has the power to clarify in ways that rumination does not. Once you pick up the phone, start a petition, explain something, call a meeting, give a speech — whatever — things become clearer. All of a sudden you know what flies and what doesn’t. What’s possible and what isn’t. What can be done now and what must wait. But none of this is knowable without action.
And action itself is galvanizing. It’s a banner to which people flock. The trick is not to attempt anything too far out of the experience of most. That means sticking to the things people are comfortable with, but taken just a step of boldness further. Pushing the envelope just a bit. Never getting in over your head. Action is emboldening. People see what you’re doing and realize ‘I can do that too’. That’s when things really get interesting.
Politicians are waiting for someone to follow. If you start something reasonable they’ll trip all over themselves to join. If you build it, they will come.
#2 Lib you are correct. The Dems do that consistently, although sometimes it does backfired a bit. Remember when a vote for Goldwater was a vote for war. I would have voted for him had we had the 18 year old vote then and I would have caused the Vietnam War I was drafted to serve during. But I never voted for a Democratic surrender and the unintended consequences such as millions of deaths in SE Asia and our own 3000 from 9-11.
Wretchard is right. The Founders left us all the tools we need to right the ship.
But how many of us truly participate in governing ourselves, even at the school board or local government level? The margin granted to us by our ancestors allowed us to focus on our own lives and take a civilized public space for granted.
And so politcal power has been seized by hucksters, ideologues and ‘D’ students.
Greed, corruption and avaricious self interest are part of the human condition. The wonder of America was not that it was a political system that would change men’s hearts, but that it was a political system that would limit the power of the government and the damage that such men could do to the Republic.
The Federalization of the Republic during the 20th Century, primarily by FDR’s vote buying, weakened the foundation of the Republic enough to provide an entrance to the vermin who have flourished and procreated in the dark corners of the US Senate building and P.S. 149 – out of sight and out of mind.
Barck Obama is the Lucius Sulla of our time. He has marched his legions into the Capital and has declared himself The One (“that was decided on November 4″). He has used the public treasury to reward his friends and assuage the plebians. He will soon post his list of enemies that must be destroyed with the “local control” version of the Fairness Doctrine.
We cannot assault the Capital. If the Republic is to survive then it must be at the local and the State level. Individual citizens have much more influence at the State level than they ever will in Washington. State legislators and governors who respect our Constitutional principles can stand up to Federal encroachment in meaningful ways not available to citizen interest groups.
In time the Constitutional States can field responsible U.S. Senators who can act more boldly with the knowledge that their backs are covered at home.
Forget Federal politics. Go local. No Harvard grads welcome.
The people who so loudly and repeatedly condemned America have done much harm in the world, which I expect we will see in the resurgence of the old jackals.
The problem with blaming them for the economic crisis is that similar economic crises have taken hold in Europe and Asia where they did not endure the same withering and demoralizing criticisms.
Manias, crashes and panics are very old things. They even preceed the departure from the gold standard.
I think we have to take an environmental/evolutionary view of what is going on (which does not mean listening to Al Gore droning). These once-in-a-century events are to the economy what forest fires are to forests, necessary to regeneration. And I say that as someone who has lost much in the fire (without any further explanation). After many years, that which is tall, mighty and inflexible in a forest builds up and is presumed dominant. It crowds out the growth of smaller plant life. Then after a drought a lightning strike or disturbed teenager start a fire and much of that disappears. And a lot of innocent life is damaged, but it creates the opportunity for regeneration, which always happens.
There are now a lot of mispriced assets around. Some need to burn down more and some are shoots of green scattered in a scorched landscape. This creates opportunities. What remains to be seen is how long the fire will burn before the generation occurs, who else will be harmed in the fire and who will take advantage of what is left, and their good or bad intentions.
PB: oh we can have plenty of marches on the capital. The left does it all the time.
Certainly we must act locally and regionally, but we must act nationally too.
We do not have the time to turn this just by local action, if there is board dissatisfaction then it must be expressed in such ways that the MSM filters and the Democrat rank and file politicians can no longer ignore it.
I disagree with you in this.
No matter how our current circumstance came about, it is being used like a Reichstag Fire to amass politcal power (by some of the very people who played a role in it to begin with).
Similarly with global warming: The most important fact isn’t the existance or non-existence of the phenomenon, but use of the debate by those who produce nothing to get control over those who do.
In the industry: the problem with your reasoning is that 1) capital markets, information networks and elite sare global and intertwined these days, 2) Any meaning ful conpiracy would not be localized, it would be too obvious.
And remember there can be shades to this:
1) It could have just gotten out of hand.
2) There could be more than one actor with wicked intent, and all those actors may not be completely aligned in all interests, targets or agendas. Obama could have been rolled. Soros could have gotten played too. This seems the most likely case.
So one has to see who profits in all of this. Follow the money; follow the geopolitical wins.
Vidivici I would not discount a physical Reichstag event of some sort happening, supplied by Obama’s Muslim friends, More of the new diplomacy that “reaches out”.
Then there will be a declaration of martial law.
Mongoose
If there were a responsible national media I would tend to agree with you. But there is not. The FCC can kill national talk radio with a board meeting – and they will. ACORN is receiving $2 billion of public money to swarm local radio stations and make it unprofitable for them to air the likes of Limbaugh. Constitutionalists will lose a national voice.
What works for ACORN works for us. We are going local or going nowhere.
Well PB, we cannot just act locally.I think that you are missing my point. I do not mean to coop the media or use it as a platform, I mean to end run it.
Mongoose:
Interesting, but let’s keep in mind that we had to listen to the Left bang on for the last eight years about how Bush would find some provocation to suspend elections, etc., etc. (That doesn’t mean I don’t find a good bit of what this guy is up to — moving the census, openly threatening his critics — alarming.)
While giving full credit to those who’ve kept this nation safe from major attack for seven years, I’d also wager that jihadists learned they’d get serious blowback. Better to let the Great Satan go back to sleep. Obama and an elite political class steeped in bogus ‘conflict resolution’ theories will give them most of what they want anyway.
Wretchard,
Remember the Democrats will never investigate what happened. They would be investigating themselves and that ain’t gonna happen.
In the old days when there was accountability and transparency, it made sense to not accuse until all the facts were in. But the facts will never come out to the general public in this case. The days of transparent justice are over. If there was still a functioning transparent justice system, Obama would had to produce a birth certificate. No Republican would be allowed to get away with that trick.
Now, whether this $550B was a purposeful takedown of the system is an open question. The culprits, if there were culprits, may have just piggy backed on a smaller run, and made it worse with the intent of embarrassing the Republicans, and ended up taking down the whole house. We will never know.
But the point is that the free flow of information is being highly constricted. Outside of people of who read this blog, and listen to Rush on particular day at the right time, there are few that know about the $550 B. There are also very few that have ever heard of the “compartive efffectiveness” health care restrictions that will ration health care either. Now we hear in the stimulus package there was “net neutrality” language that has the ability to limit recipients of federal largesse from fully publishing their opinion. It gets worse by the day.
I don’t believe that our government betters believe that anything will happen; they think that as usual Americans will just complain but still look for their help to weather this economic storm.
When government appears to be getting too corrupt and arrogant, I remember that it took Shay’s Rebellion (http://www.calliope.org/shays/shays2.html) to showed the framers that the Articles of Confederation were really not working and beyond salvaging. It is time that those of us who still believe in our Scots-Irish cultural heritage fight back in a legal but most forceful way. The only person using his very visible bully pulpit, the one I see charging ahead with his “We Surround Them” call to arms (figuratively), is Glenn Beck, who is now on FNC.
LPB: Right now three of the primary weapons the leftthat the left has areare confusion, inertia and the illusion that they have the nation behind them. That is why they are moving so fast. Once those go, then it is a different game–we are back to “rational” political processes, or at least traditional ones. About 10 quite large (and perfectly legal) marches on state capitals across the the nation would fix this and rally political opposition. It really would not matter of the MSM covered it or not, in fact, if they did not, so much the better. A national rally culd be managed on that basis alone.
It is hard to see how otherwise we can get a national voice together about this all in a time frame that would lead to averting a decade long debacle.
At least a third of the Obama vote was from the Muddle. They did not vote for a communist coup. I imagine that of the other two thirds of the Obama vote, there is a sizable minority that did not plan on this either.
Better to do it now than to do it as a protest to a stolen 2010 election. Then it is really too late. it ma take several attempts to get it right.
Again, we have to act nationally too, there is no way around this.
Remember that we will have 30 million or so new voters from the amnsety programs that are sure to come. The demographics of the next election will be entirely different than this last one. We need to get it together now.
Vinny: Well they banged on the can that he was ruining the economy too, that we were in a recession when we were not. The Democrats alway project. So you notion is one that you would find a little chilling, all things considered/
Mongoose
We need 41 Senate votes to make life miserable for Dear Leader and fight enough of a delaying action to keep the second, third and fourth wave of confiscatory legislation from overcoming us as quickly as the first.
FDR bought himself a Congressional supermajority by pumping Federal money into Republican districts. Local Democrat politicians sold themselves as the spigot. Obama will do the same because it works. You are not going to beat that without people in the neighborhoods and on local TV and in local newspapers.
Mongoose, Unsk (et al) have it right.
I just listened to another multi-box discussion including Mark Haynes and John Harwood. Haynes has been carrying a lot of heavy water trying to force some outrage into the public discussion of the rapidly multiplying bailout/stimulus packages. Today’s subject was the proposed mortgage plan to stop the bleeding in housing. The Haynes position is “moral hazard” based on the 90% performing mortgages receiving nothing more than an “attaboy keep it up” with the nonperforming loans getting huge discounts in principal write-offs and interest reductions. The Harwood position is stabilized housing translates into stabilized economy which benefits the entire country.
The crux of the exchange came when Harwood told Haynes that he was the only person in the country with a performing mortgage that was expressing outrage. The remaining 90% didn’t really care.
There ya go.
The website
isteve.blogspot.com/2009/02/cra-commitments-in-2003-04.html
shows two graphs. The second graph shows the accumulation of bank commitments for the Community Reinvestment Act (CRA). This graph was prepared by the National Community Reinvestment Coalition.
The blogger, Steve Sailer, redid the second graph to the first graph, which shows (instead of accumulating commitments) the development of new commitments over time.
As you can see from the first graph, there is a big spike in the year 1988. An interesting explanation for that spike is provided in one of the comments (2/16/2009), by a commentator who calls himself Ronduck:
[quote]
$800b was committed in 1998. According to wikipedia Bill Clinton was impeached on December 19, 1998. Also according to wiki the whole affair began in January 1998 during a press conference where Bill Clinton said “I did not have sexual relations with that woman.”
My personal guess is that Clinton began using the CRA as a way to funnel money to Democratic interest groups in order to buy them off and get them to lobby their senator to not vote to convict. Some of these minority grievance organizations must have remembered that flush of banking commitments and suggested it to Dubya as a way to win the minority vote.
Amazingly none of the banks refused, protested or called their congressman, they just laid down and did what they were told to do. There were no angry press conferences, no editorials in the WSJ, and no public protest whatsoever. Either the bankers are all Democrats, they are all cowards, or they do not care about the bottom line more than 3 years in advance. Clearly the CRA wave had been building for a while, but it reached a then unheard of high while he was fighting to save his ass, and then dissipated after Clinton defeated the effort to impeach him. Then came Dubya.
Here are the numbers from the report:
1996 – $49.6b
1997 – $221.3b
1998 – $812.2b runup to impeachment
1999 – $103b
Maybe I am seeing something that is not really there.
[unquote]
I do not know why you are stuck on this. We need to show the rank and file Democrats that Pelosi, Reid and Obama are wrong in thinking that they will successfully corrupt the next elections with either fraud or payola. We also need ot buck up the spirits of any opposition in Congress. You cannot do this without an national presence, or let us say it is much more difficult without it. We have to nationalize the 2010 elections somehow, but we need to throw a wrench in there plans right now.
It is just common sense.
Yes, I agree that it is most crucial and essential that there must be local and regional activist, but there must be national actions too. And just galvanizing public opinion so that local action can find a swelling of support is reason enough. My sense is that people are stunned and somewhat intimated. That spell has to be broken, and broken very soon. Nothing personal here, believe me, but I think that you are being a little defensive here. If it is a case of resources limits then you are right of course, but that need not be the case.
We have also to stop this destruction of capital and get national credibility back in international markets ASAP.
And I will point out that the electoral target has to be the house in 2010, and we will have to get a majority. My guess is that there will be an attempt to get around cloture in the Senate, and somehow they will succeed at this. We cannot just depend on using cloture as a brake. We have to one one branch of Congress and the Senate seems to be wishful thinking at this point (not that I harbor high hopes for the house,it will be a hard struggle to get it back).
But we have to put the fear of the electorate throwing them out in them ASAP. We need to put a brake on the Democrats long beffor 2010.
I
I meant to say
… there is a big spike in the year 1998 …
(not 1988)
MS: interesting post.
Mongoose,
I think you are giving way too much credit to the captains of the investment management industry. I have been in conference rooms where I have heard “intelligent” people say things like, “We have a bold new strategy. Our early evidence is that it is not working. We plan to expand our efforts because our strategy is so exciting.”
If you then try to talk to such people, they will then say you lack comprehension or maturity or something. I also know enough to know that they do not believe they are about to create a failure that they will then take advantage of. Mutual reinforcement of truly idiotic ideas is a powerful historical force. Enough conference rooms where this happens eventually cause participants to say, “Whoa, never expected THAT to happen. Good thing someone smart like me is around to deal with this crisis!” And round and round we go.
Will one of our resident financial whizzes please translate this goobledygook for us?
http://www.whitehouse.gov/blog/09/02/18/Help-for-homeowners/
This is the administrations new housing “plan”.
Washington D.C. is as distant to your neighbors as Ancient Rome. The only sure way to prevent a Congressional vote for Obama is to keep that potential Congressman voter from ever picking up his ticket. That only happens at the local level.
I hope that Michael Steele is focusing the resources of the RNC at building local muscle. I’m sure I’m not the only one who has had enough of top down pontificating from blue blood Republicans.
In the INDUSTRY: I worked on wall st. for years, literally, and have worked in the financial community overseas. I have seen some real connections between governments, NGO’s and the Industry. The people you mentioned can be manipulated, they do not have to be in on it. In fact, that is just how one would do it. Obviously, the auditors, rating agencies nad at some subset of the regulators were manipulated, or at least given the opportunity ot screwup, though that manipulation may have been prompted by more localized concerns, effects or impulses.
But my primary point in that comment was that I find it an inadequate argument to say because the crisis is international in scope that it could not have been triggered. In fact, the nature of things would make it quite probable that outcomes would be international in scope, whether or not this was the intent of any collusion or conspiracy.
You know it is quite possible that there was just a general setup, with no particular goal in mind, or maybe just a landscape created by the usual corruption, but someone else deciphered the whole mess and figured out how to break it all apart. The “Captains of Industry” might now be aware of it at all. It does not have to be some monumental architecture, some huge conspiracy. One does not need broad collusion across the industry to trigger it. It could have been done with a small number of people, particualrly if national actors were involved.
Buddy Larsen,
here is a quote from Forbes Fixed Income columnist Richard Lehman – (Richard Lehman is the editor of the Forbes/Lehman Income Securities Investor and author of Income Investing Today) March 2, 2009 Issue
“Remember Adam Smith’s “Invisible Hand”? It’s now a helping hand from our government and don’t be surprised if it becomes a heavy hand before the Feds are done helping us.
The end result, even after the crisis passes, will be an economic system dominated by a Congress reluctant to give up control. Like most government sponsored enterprise, this one will fail.
Read Ayn Rand’s book Atlas Shrugged if you want to know where this leads.
The above is my way of telling you that this economic downturn is likely to last much longer than only a year and that the capitalist system we once knew has ended.
(emphasis mine)
Investors need to reexamine their long-term investment strategy if it presumes that someday soon the stock market will stage a mighty rally and years of 20% gains will return. This is wishful thinking. More likely are years of market volatility where the swift and lucky will prevail and the rest of us will watch and wonder.”
just a little aside as an intro into a “time to buy bonds column . . .”
PB: Nonsense, Washington DC is a close as the cellphone, the freeway ramp or the local airport.
My goodness, even Jesse Jackson can get national rallies going there. The anti-abortion people have a huge rally there every year. I think that your analogy with Rome breaks down a bit here. We have not the same sort of practical political situation at all as did the Roman Republic, and least in terms of the tools before us, and the whole scale of things. Washington politcal is a mixture of the local, regional, the factional and the national in a way it never was in Rome. I do not see why you do not see my points. I see yours.
It goes beyond just congressional elections. Yes FDR put out payola to buy districts, but he also had a huge national front. I doubt one wold have succeeded without the other. His national front put focus on local districts and vice versa. We will not have the dough, or even the opportunity, to dispense money in mist districts, atleast not in the sense that it will be seen to be coming from the GOP. In any event, it would invalidate the whole point of our opposition. National opinion supporting local sentiment is one of the few tools that we have.
We both are right. There has to be a national rousing of opposition, and we need to work at the local level too.
Buddy: sometimes situations arise where a slight push manages to bring the edifice down.
The push isn’t the issue. The edifice is.
The US economy has been building an incredibly unstable edifice for 10 years or so. It was a matter of time that it fell apart. Are we to blame the Democrats for pushing at the moment it would benefit them the most?
If the republican president and congress had funded their spending, had not had their snout in the same trough, had imposed some ethical discipline within their ranks, and with that moral foundation challenged the crooked mortgage organizations, the edifice would not have fallen with a slight push.
But they didn’t. They tried in fact to capitalize politically on the seemingly unstoppable booming economy.
Opportunists maybe. Conspiracy? No.
Derek
On market machinations – I don’t think there was a machination – I think there was a classic short squeeze. Like the fabled scorpion, Soros did what Soros does; he has told us out loud time and again that he is short the USD, and times of tumult generally work to his benefit. This time though, I think that he and a bunch of the other shorts got hung out to dry when the liquidity dried up. Those guys have to cover their positions from time to time, and that time they took it in the shorts, for once, as it were.
The point that Mongoose makes about the Dems and their media lackeys always talking down the economy when they are out of power is at minimum mean and dangerous.
PeterBoston has thought his plan out very well – think globally, act locally, and be patient. I developed an allergy to city council meetings in 1972 when I was part of a neighborhood group against traffic barriers in Berkeley. Those meetings would go on until 1 am and later. The people whose points would win the night had: 1) the loudest voices (could speak over those who would shout him or her down), 2) the biggest bladders (did not seem to have to leave the room – ever), and 3) probably did not have to get up to go to work in the morning! Further corporate experience has shown me that points 1) and 2) helped one prevail in those situations as well. Sorry, off track.
Slade: Maybe we should just preserve our precious bodily humours!
Washington politics^^
Mongoose:
Yes, the Left always projects in its accusations against opponents: Bush was ‘shredding the Constitution’, while the Left nibbles away at the first and second amendments, and its appointed judges shape society by fiat. Bush’s surveillance was said to be privacy infringement, while centralizing patient health care data is far more intrusive and Orwellian. Etc., etc., etc.
I’m not arguing for complacency, or that our concerns are simply a mirror of the Left’s projection and paranoia. Just that there’s plenty afoot now to provide ample basis for critique and resistance: looting the treasury for direct payoffs to constituents and supporters, politicizing the census, stealth fairness doctrine initiatives, subsidizing voter fraud, not to mention the positively Alice-in-Wonderland idea that Congressional grandees who’ve mired this nation in tens of trillions in debt are in any way qualified to run anything, much less the auto industry, the banks, the health care system or the U.S. economy.
Or, to paraphrase Bob Dole, where is the ridicule and scorn?
The point that Mongoose makes about the Dems and their media lackeys always talking down the economy when they are out of power is at minimum mean and dangerous.
Do you mean it is mean and dangerous of the democrats to do this, or it is mean and dangerous for me to make this point?
Vinny: yes indeed, where is it?
That is just the point I am tryng to make with PB.
We have to get the info out there so that peple can see what is going on.
Derek: I think the point is that the instability was do to the subprime regulatory hanky panky and the whole derivative/insurance/securities lending mess around it. It is hard to see how this can be directly laid to rest of at the feet of the GOP or Bush, at least form the budgetary POV. At worse one could say that they did not try hard enough at reform, but given the political climate, MSM attacks and the necessities of fight the WOT, it may be that noything much could be done anayway.
This crisis was not prompted by an insolvency of government. It was triggered by real, abrupt shocks to the system that causes the MBS/CDS ponzi schemes in the US, and similar schemes elsewhere, notable in the EU, to unravel.
The debt that the GOP racked up is deeply regrettable, but this is not the primary cause as I see it. One must say that Paulsen’s panic in the fall, however, heped little, and Bush can take the blame for that one.
Peter Boston (#57) wrote:
No Harvard grads welcome.
Are Yale grads OK?
Jamie Irons
Mongoose:
Sadly, confined mostly to blogs and a handful of columnists, like Mark Steyn.
“This crisis was not prompted by an insolvency of government. It was triggered by real, abrupt shocks to the system that causes the MBS/CDS ponzi schemes in the US, and similar schemes elsewhere, notable in the EU, to unravel.”
Yes. Exactly.
We have to get the info out there so that people can see what is going on.
Constitutionalists, republicans, whatever you want to call us, have lost the fight for the national media, any national media. The only information getting out there is what the cultural masters want out there – and that ain’t nothing that is going to change the march to collectivism.
Culture trumps politics and the culture has changed under our noses. One third grader at a time until Topsy has emerged all growed up at the metro editor’s desk, the big corporate boardroom, and the voting booth. Big media doesn’t worship the Obama because they’re overwhelmed by his integrity and his intellect – it’s in their collective genes. The “people” you can talk to in the national media are already members of the choir and they’re all singing in harmony for their supper.
Wealth and influence have concentrated in Washington, D.C. like never before. The wealthiest zip codes in the country are DC metro areas. That’s new. A disproportionate amount of Obama’s spending will occur in DC metro. Both Democrats and country club Republicans have succeeded in establishing DC as the money and power center of the USA. Autocrats can move between government and big time non-state enterprise without ever changing their address. Tom Daschle never moved back to North Dakota. Jamie Gorelick just keeps moving into bigger houses without ever missing her favorite latte spot.
Like I said. Lucius Sulla has marched his legions into Rome. Plebians marching down K Street are not going to dislodge them. Our only way out are enough new U.S. Senators who know for a fact that their constituents will kick them down the street for buying into the DC life. That can only happen with local and state political and cultural involvement.
Jamie Irons
No Yale grads either. No Ivy Leaguers welcome. One sure way to prevent Northeast collectivist group think from continuing to permeate the bureaucracy is stop electing the people who fill the ranks.
Well, well….
http://news.yahoo.com/s/ap/20090218/ap_on_re_eu/eu_vatican_us_pelosi
This collapse was a freight train many people saw coming. Everyone knew the banks were over leveraged. Everyone knew that housing was a bubble. Everyone knew it was going to end badly. Nobody knew, and most underestimated, when the train was going to run out of track or how badly the crash was going to be.
I remember visiting old college buddies, who now work on Wall St. 3 years ago, while I was in NY. We all knew ‘something’ was going to happen even then. Read some old WSJ articles. It was common knowledge. The optimistic were predicting a ‘soft-landing’. The pessimistic predicted the end of the world (as usual).
No tin foil hat required. We all rode the train knowing that trouble was ahead. Plenty of opportunists took advantage both in the political and corporate arenas. I’m not sure you can call something a conspiracy when it was so obvious and printed in the papers — none of those in power (bankers or politicians) were going to do anything to avert the disaster. It was just too lucrative for both groups to ride it out.
Until the end of course…
JGeer: then why did it happen just right before the election?
Since this is a conspiracy thread, of sorts.
I think I’ve figured out why freely available abortion is such an integral part of the Leftist agenda. Nancy Pelosi let it slip.
Democrats (Leftists) stay in power in democratic societies by establishing a permanent economic underclass and a bureaucracy to serve them. The combined number of dole recipients, agency bureaucrats, and unionized government employees are a formidable voting block that directly benefit from keeping the Democrats in a position to keep the checks and jobs arriving on time.
The underclass breeds, however, and the prudent manager must carefully balance his resources and the size of the herd. Abortion is easily couched in appealing personal choice language while also being an effective way to cull the herd. I’m pretty sure this is what Nancy was thinking although she didn’t use the same words.
And the velocity? Overnight. See Holman Jenkins op-ed piece in today’s WSJ.
And the convenient disappearance of the news media despite 24-hr business coverage?
Don’t rock the boat, baby.
Don’t rock the boat over.
JGreeer:
“Everyone knew that the banks were over leveraged”.
I think it is fair to say that even most of the gloom and doom types didn’t know the full magnitude and extent of problem, with possible exception of Roubini and some others. Bernacke, Paulsen and Greenspan were talking in much smaller numbers than trillions of dollars before September. What happened on September 15 was unprecedented. No Fed Chairman has ever come to Congress and asked for such a huge bailout needed so quickly.
From my perspective, if anything it is those who argue this collapse was not an extraordinary event who are wearing the tin foil in this discussion. I am not including in the tin foil brigade those like Leo who say it can be explained by some extraordinary sequence of events. The collapse perhaps was triggered by an extraordinary sequence of events; we just don’t have the info to say what happened. The $550B run looks very suspicious though given all the other crap that the Democrats and Soros have pulled.
Far too often though, faux conservatives lately have labeled other conservatives “tin foil hatters” for speaking uncomfortable and unfashionable truths. For example, Rick Moran, an editor an PJM, about a year ago went into extreme hissy fit mode if anyone brought up the subject of Obama’s apostate muslim status. No discussion about Obama muslim sympathies were allowed on his site. Those who did were harshly and rudely criticized and ridiculed. True facts about our Dear Leader were buried because Moran was afraid. Many other facts about the One and his programs have buried by people like Moran. This kind of behavior is not helpful. These Rino wimps are playing into Obama’s hand.
One thing is for sure the Democrats set up the collapse with their CRA and , ACORN machinations, their refusal to reform the financial system despite repeated warnings and evidence of huge fraud, their no drilling policies, their full court press for Socialist regulations and their perchance for talking down the economy in Republican administrations.
Derek- in historical terms the size of the deficit in 2007 ($154B) was very small in terms of GDP and the total debt relative to GDP (0.7) was higher than most would like but also way below EU standards and significantly below historical highs. The public borrowing for the deficit at that time was not the cause of the collapse. What did play a role was the massive extension of credit, often to those without the resources to pay ( much of it through Fannie and Freddie), that put the system at risk.
PB,
Wealth and influence have concentrated in Washington, D.C. like never before. The wealthiest zip codes in the country are DC metro areas. That’s new. A disproportionate amount of Obama’s spending will occur in DC metro.
And, let’s not forget that the Dems now want to make DC a full-fledged state, with 2 Senators and 2 Reps – all sure to be Dems.
Whiskey said some things that I strongly agree with:
“… America stopped making things in the 1970’s. … It is a measure of the structural weakness of the nation that the housing crisis fueled by the credit collapse brought the whole system down. … This suggests that the way out of the mess is not simply punishing the wicked (though this must be done) and curtailing corruption, but by fundamentally re-ordering the economy. By returning the US to a manufacturing economy, plus agriculture, that makes products that are world class on price and quality in major sectors. … This means ‘clawing back’ production of key consumer electronics such as computers, televisions, and other key products. … This also means a public discussion of which sectors to abandon, including probably textiles, shoes, and other low-value products.”
As I see it is, people acquire wealth through a combination of the following processes:
1) Working for it through honest labor.
2) Acquiring it by chance, e.g. discovering a gold nugget in a stream bed, winning the lottery, etc.
4) Inheriting it from ancestors.
5) Stealing it from future generations through long term credit or resource depletion.
6) Stealing it from neighbors through various deceptions like Ponzi schemes or outright theft, e.g. sneaking into the neighbor’s home while he’s at work.
7) Using the government as a criminal intermediate to steal through socialism or wars of conquest.
I believe that as a consequence of social entropy and Gramscian subversion, acquiring wealth through honest work went out of fashion and the other methods became ethically acceptable. We eventually found overselves doing a variation of a Thomas Nast political cartoon where we were all in a big circle picking each other’s pockets. That sort of “economic model” is not sustainable and the reason why we are in our current predicament.
The cure is obvious (Stop living off of other people’s money!). Whiskey’s presciption is a good course of action. Whiskey also said:
“If I had to bet, I’d bet on all failing miserably. The political class is not up to seeing the obvious, and the Press is too stupid to see it either…”
The politicians have been promising free lunches for so long that people believe they are entitled to one.
Wrong!
As an American, you’re entitled to Life, Liberty and the Pursuit of Happiness. That’s it!
The first question asked about any proposed economic cure should be:
Who is going to pay for it?
Solutions based upon theft should be immediately rejected. We have to stop stealing from each other and earn our own livings through honest work.
Eggplant says;
Solutions based upon theft should be immediately rejected. We have to stop stealing from each other and earn our own livings through honest work.
programmer responds:
I agree, I agree, I agree! However, what product can my grandsons make that you would buy from them if you could get an equal product from China or others for a lesser price? Not a service, but a product. And I’m probably choosing a bad example using you as my sample of one, for you might very well buy it from them just to buy American made goods. But I suspect you know what I am asking.
JGreer – I agree the coming cataclysm was predicted by many people. I actually fortuitously worked a stint in a small mortgage financing company whose main product’s pitch depended on the idea that appraisal valuations were way off, and often intentionally so, and that compliance measures were ineffective where there was so much collusion at the lower end by appraisers and banks. We pitched to Fannie and Freddie, Countrywide, BofA, Citigroup, WaMu, Wachovia – whoever; we were struggling. For a lot of my analysis I therefore went to the purveyors of a coming catastrophe – and it turns out they were right. It was difficult to take them seriously at times, even with a vested interested in some version of their analysis. But Unsk is right: even they did not predict the simultaneous implosion of the financial system in general. The fallout they predicted was limited to the housing system – mortgage financiers, construction companies, appraisers and mortgage servicers, home depot – that kind of thing. “The general debauchery of the sytem” obviously has great explanatory power. But then there also seem to have been these shocks – oil prices suddenly skyrocketing, and then equally as suddenly deflating, financial shocks, imploding investment banks and heavily involved international insurance giants…. Could all just be the profound interdependencies of the markets for various financial instruments mostly constituted by debt. And yet.
I guess we’ll just have to see.
Eggplant: Hear, hear.
Caught a bit of Rush @ 2:30pm-ish. I came in partway through – he was telling a caller that his email was overflowing with emotion in a way that he’s never seen before (he didn’t elaborate while I was listening, but the way he said it suggested to me that his intent was to suggest that it is dwarfing anything he saw during the Clinton years)- he stated that he was beginning to wonder if it won’t be too much longer before pitchfork brigades start forming…
Frankly I don’t think we’re anywhere near that, but I’m hearing a level of grumbling from my wife’s friends that I’ve never heard before… other wives, I mean. It’s been normal in my experience for us boys to grumble over junk coming out of DC, but the married ladies are normally focused on other things. The fact that a number of them are unnerved by all this to the point that they’re speaking up suggests much, in my opinion…
TRITON: I am seeing this too. When Mom is unhappy…..
You ain’t seen nothin’ yet. Wait until Dear Leader gets to fill Federal Appeals Court vacancies and make 2 or 3 SCOTUS appointments.
Thank you all! Where else can I review such material w/comments? …even on things verbotin (ie. _known_ to be impossible).
Really like Whiskey on base economy verses bubble cash distribution.
From my porch swing, politics is just a vehicle, so I don’t play the DemoPublican good guy, bad guy, finger pointing game. The party reps in DC are becoming actors gyrating to tunes streaming from otherwhere. They are taught and _encouraged_ to think they are the power.
What has changed? USA as a national entity isn’t really the writer; for sure isn’t the editor of the writing. Foreign and domestic monetary nobles push the swings. Further, there need not be a single entity to set up, cause and benifit from a fall. Me thinks they’re smart and esp. their money begets more smarts, enough to know which way to swing the thing.
The most credence I’d give the Dems is, via Rammuel (paraphrased): don’t ever miss the opportunity of a good emergency.
Emergency is the means to get things done. Seems similar to timing in blitzkrieg or less severe sports, where following the momentum is key. Just slowing down at the wrong moment can bring catastrophe (the money in play is lost). Coincidence, that all foundational problems are said to be monetary, yet those same lords don’t like to be swung.
Finally, a swing ride doesn’t require a push on every pass; just when things settle down. Fasten your seat belts, this swing is going to provide a real ride.
Here at work in Silicon Valley, a few years ago everyone at work was buying houses. First homes, second/investment homes, you name it. Buying locally, in San Joaquin Valley, San Francisco, Arizona, Puerto Rico, and other places.
Today, the whole place is abuzz with talk about mortgages, bailout scheming, who qualifies or how to qualify, and so on.
Some troublesome un-politically correct eccentric once said:
“THE TREE OF LIBERTY MUST BE REFRESHED FROM TIME TO TIME WITH THE BLOOD OF PATRIOTS AND TYRANTS. IT IS IT’S NATURAL MANURE.”
AND
“THE LAST HOPE OF HUMAN LIBERTY IN THIS WORLD RESTS ON US. WE OUGHT, FOR SO DEAR A STATE TO SACRIFICE EVERY ATTACHMENT AND EVERY ENMITY.”
The time is approaching, to put aside gentle persuasion of those who attempt, or collaborate in, your oppression, and to heed the ancient wisdom of the founders.
ΜΟΛΩΝ ΛΑΒΕ
The financial institutions in NYC and London became very corrupt and arrogant. The New York hedge funds and big brokerage houses paid of mostly the Democrats.
But remember that Bush picked Paulson as Sec Treas and had no clue how corrupt he was and still is. Bush should have held his ground and left the banks and the mortgages sort themselves out. After all he was a lame duck. But then he is a Harvard MBA and that is even worse than an Ivy League lawyer.
Bush was clueless about domestic politics. If he were not hated by the lefties a lot of us conservatives would have been writing about how bad a POTUS he was.
I am convinced that W is a honorable man and did not benefit in any way from the corruption of Paulson and his Wall Street gangsters.
As I have written before an economy is nonlinear. The financial corrupt backed by the false math models for derivatives and VAR increased nonlinearity of the system and with some manipulations by O’s buds the whole system crashed. But we still make it too partisan.
O is a disaster because of this anti white hatreds and and his arrogance and wacky international leftist ideas.
So they are now going to bail out SOME mortgage holders. Most of the bailouts will go to friends of O and the blacks and mexicans who are on the take but not to those blacks and Hispanic citizens who work hard for what they get.
The full story of the greatest vendetta on earth, it would appear, remains to be told.
The back story behind investigative journalism.
Dont’ forget Schumer caused the ten day run on the californian bank earlier in the year.
I would look into what Sorus did to the UK, France and Asia.
What happened to the 550 billion withdrawn in one morning in Septembet 08.
Knowing that everyone’s energy for political activism is limited, we may one day face the choice of whether we focus our efforts in one exclusive domain – be it global, national or local, or over all of them. When that is the choice, then I’d choose Vinni’s local focus: you always want to protect your home-base.
I’m not sure we’re there yet, though.
Heck, the new Leviathan has some built-in self-destructors, and it may fall under its own weight. Here are just two problems with fallible humans adopting the “Uber-Allocator” role (and two reasons why the Market’s impersonal allocation system is best):
1. some people who think they were going to get a ‘bail-out” for their mortgage but didn’t will call foul. Most heist movie plots end with the crooks killing each other in a bid to get “their share” of the gold. There’s no reason this heist will go any different (there is a lot new media can do to expedite the falling-out).
2. the Soviets had production quotas for toothbrushes, just as the Prog’s today attempt to ration the energy-types consumers have access to by curtailing availability of domestic oil and gas here at home.
While the rest of the world chugs freely and develops new sources of crude in 2009 and 2010, the Dem’s forced scarcity – similar to OPEC’s 70′s squeeze on us – will definitely dampen America’s economic growth here at home. This prolonging of the recession will make it a lot easier for the GOP to outflank Obama from his populist side in the next mid-terms.
Blaming nameless “bankers” for Obama’s recession, so hip today, won’t work so well in another year.
WTI (West Texas Intermediate) is the quote that’s posted in financial news every day, not the OPEC price. WTI historically priced much higher than OPEC crude. Sometime during the last month or so the WTI crude price fell below OPEC. The price of gas continues to escalate despite WTI surplus because the domestic distribution line doesn’t exist. Past economics dictated shipping, not domestic distribution lines. [ref recent link provided by buddy]
The oil and gas economics are being flipped faster than a California condo in 2005.
Mongoose,
Two points and then I’ll stop harping on this.
1. I think that you make valid points about contacts among decision-makers at crucial choke points, particularly on a national scale. And a lot of the asset backed securities were eventually purchased by foreign banks like UBS, so there is your international reach. But there were things going on in other countries similar to what we experienced, but stemming from separate events (thinking of Northern Rock, the cratering of the European real estate market to a degree often worse than here). Maybe there were a few key people who decided to break it all apart in a year’s span, but I want to hear much more before reaching that conclusion.
2. On the link to the Obama mortgage plan, I’m still trying to figure out who this is supposed to help. Looks like the main class of beneficiary is the household that has not lost major sources of income but instead signed on form an ARM and found themselves further and further underwater. Don’t know if the help is too broad (helping everyone who bought more house than they should have) or too narrow (doing nothing for those who have lost major sources of income can could not afford even a refinanced mortgage).
My $0.02
Slade, I’ve come to appreciate your and Buddy Larsen’s analyses of energy economics.
I don’t want to inflate any egos, but, both of you tend to facts. This and the links you contribute to a thread make your delivery very compelling, So…when you say “oil and gas economics are being flipped,” I am curious, what exactly do you mean?
I’m aware that many of America’s economic and military competitors, as well as those who simply face off against our bidding power in the international market for crude-oil, would, for a host of reasons, like to put America on an energy-diet. America’s progressives have a stake in it, too.
But, aside from creating a good buying opportunity for those who’d like to invest in crude/gas-related stocks, I don’t see that crude’s and gas’ detractors’ have achieved anything from their concerted media-driven campaign to get us to go “green.”
Of course, a lot of “sustainability experts” have made loads of consulting fees over the past decade, Al Gore has made his five-hundredth million, and the market for research grants to perform “green” R&D has grown. But, in the end, all that is just media-inspired fluff, isn’t it? On the ground in Turkey and France, Iran and China, the USA and Chile, israel and Algeria, India and Quebec, active, human economies still burn fossil fuels.
End story is, nothing’s changed, really, since the seventies, except the hype – no matter what the “Dream-Weavers’” daily seminars on “Global Warming” intend. From here it looks as if the incessant, paid “green” advertising is simply NOT working.
Heck, most people don’t even recycle these days: It’s going so poorly in fact, that if I was Al Gore, I’d ask the media I paid to pimp my message to refund my money.
i think that oil and gas are still ‘baseline’ essential commodities and that these markets will strengthen as we shuck-off the woozie (Buddy’s word) media-goggles we’ve all been forced to view the subject through.
I’m willing to acknowledge that I may be wrong, though, so I ‘d sure like to know your thoughts, Slade.
Regards,
-Steve
The WTI story is hugely linked to the fall off in North Sea Brent Light…
Further, the Russian Nat Gas squeeze caused the European oil market to crave heavy distillates: many, many Eastern European heat systems are DUAL FUEL: nat gas or fuel oil.
When USSR ran the show the model city used a central heating plant radiating hot water and steam to adjacent apartment blocks. You’ll find this all over the place: Hungary, Poland, Slovakia, etc.
When Putin put the squeeze on the refineries kicked into high gear: they cracked crude into Synthetic Natural Gas and Heavy Distillate.
The capacity to do so was there because the demand for motor fuels was falling off a cliff.
And, of course, the various governments were ringing the phones off the hook demanding prompt solutions from their refiners.
You will see the Brent/ WTI spread get more normal as the winter abates.
Fall off in Brent crude production… I meant.
The 9/18/2008 $550B run/drain needs to be investigated for educational purposes alone. There has been little press coverage of the event, which in and of itself causes those of us that are curious to appear to be wearing the freakin foil hats.
As far as the calls action and marches; what is the libertarian, independent or republican equivalent of ACORN? And how many Billions of stimulus did we get to “community organize”? Who here can tell me that ACORN will not now use our tax dollars to lawyer up and defend against the pending voter fraud cases in numerous states? How many millions of stimulus tax dollars will we get to “community organize” in 2009 and 2011, just in time for the 2010 and 2012 elections? How do you compete with 2 Billion dollars of stimulus to organize? $2B buys a lot of posters, phone calls, cheap 7-11 wine and rides to the polling places.
Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse
Is Capitalism the Culprit?
The media tells us that “deregulation” and “unfettered free markets” have wrecked our economy and will continue to make things worse without a heavy dose of federal regulation. But the real blame lies elsewhere. In Meltdown, bestselling author Thomas E. Woods Jr. unearths the real causes behind the collapse of housing values and the stock market–and it turns out the culprits reside more in Washington than on Wall Street.
And the trillions of dollars in federal bailouts? Our politicians’ ham-handed attempts to fix the problems they themselves created will only make things much worse.
Woods, a senior fellow at the Ludwig von Mises Institute and winner of the 2006 Templeton Enterprise Award, busts the media myths and government spin. He explains how government intervention in the economy–from the Democratic hobby horse called Fannie Mae to affirmative action programs like the Community Redevelopment Act–actually caused the housing bubble.
Most important, Woods, author of the New York Times bestseller The Politically Incorrect Guide to American History, traces this most recent boom-and-bust–and all such booms and busts of the past century–back to one of the most revered government institutions of all: the Federal Reserve System, which allows busy-body bureaucrats and ambitious politicians to pull the strings of our financial sector and manipulate the value of the very money we use.
Meltdown also provides a timely history lesson to counter the current clamor for a new New Deal.
See all Editorial Reviews
Steveaz
Thanks for kind words.
Re: “oil and gas economics are being flipped,” that was a “flip” remark meant to convey that basic economic constraints were in fact dictating some of the convulsions in the oil/gas commodity markets, such as lack of distribution facilities that would permit use of the historically expensive but now cheaper WTI oil.
RE: green energy vs fossil fuels – I agree completely. Saw an article today (Glenn Reynolds I think) suggesting that green investments would be the next market bubble.
And sadly the only serious person who seems to be working with Congress to develop a realistic energy plan is Boone Pickens (I know I know about his ROW-water issues) but he is the only public player who has spoken repeatedly about the need to diversify as one means of reducing over-reliance on foreign supplies. All we are hearing from Obama and Congress – and I am giving Obama some time – is renewables – with neither details nor some outline of long-range plan.
At any rate, been here before, but as per hte ideological argument over Obama’s true intentions, I can only confess a sense of foreboding and despair that there are too few players of Pickens’ calibre and too many players with little focus on what is good for this country’s economy, defensive posture, and long-term viability.
(I don’t agree with your previous post that the current economic downturn will reduce our stature sufficiently to remove this country from the cross-hairs of every radical poverty-striken camel jockey with a gripe. USA is strong and big. But – we should be ashamed that we allowed this financial crisis to unwind without some responsible attempts to mitigate the “footprint”.)
Maybe this is not off topic in a string with this title — A poster here recently linked to an interview with Maurice Strong in which the writer said Strong boasted that world leaders have set out to derail the US economy in order to save the environment. This is the link I saved:
http://www.allamericanblogger.com/2667/maurice-strong-and-the-collapse-of-industrialized-civilizations/
This link does not work.
This is a revealing M. Strong Interview
@124, This is a good link to the article.
Maurice Strong and the collapse of nations
Jim
Want the card game to stop? Then quit borrowing fiat money. When there is no debt. Fiat money cannot exist.
I screwed up the link! Sorry.
Maurice Strong and the collapse of nations
Maybe this one will take.
Jim
Mongoose: I’ll recount a bit of canadian political history, and hopefully you’ll get the point.
In 1984, the conservatives won the election in Canada. They won the second term convincingly, holding government till 1993.
The next election the conservatives won two seats in parliament.
There were two issues that killed them. They promised economic and financial acumen, but continued deficit spending. They bragged about reducing the operating deficit, essentially borrowing money only to pay the interest charges on the debt. Corruption was the second reason.
Conservatives win because of mismanagement of the economy. Tax and spend democrats. The Liberal party in Canada introduced deficit financing, and spent. The conservatives did nothing to fix the problem, in fact it was fixed by a liberal finance minister who had the personal authority to control spending, raise taxes to rid us of the deficit, and make a valuable reputation as prudent managers of government finances, which cemented a center right/ center left coalition that governed for 15 years or so.
The republicans had the house, had the presidency. In the longest and most prosperous time of economic growth possibly in history, they borrowed from the Chinese to pay for a war. They threw away their mantle as prudent managers of government finances, and found that without that, they lose elections.
And you are going on about conspiracy theories? The whole thing was an edifice ready to crumble. It crumbled and the republican candidate quit campaigning to push legislation that would borrow another 850 billion dollars. And you go on about conspiracy theories?
As for some foreign power messing up the financial system, you mean that the party of national security left the country in such a fragile state by their misadministration that someone could poke their finger into something and cause the collapse that we see?
I trust that Obama and crew will mess things up. These stimulus moves will not work, in fact will make things worse. You can count on that. But if the right is preoccupied by stupidity like conspiracy theories instead of seeing where they screwed up seriously bad, they are doomed to opposition.
Derek
Thank you. BTW, JFSanders, one of the posts at your link contains the now-dead link I posted above.
JFSanders @126,
There is too darn much fiat in general, I’m afraid. There’s fiat money, fiat authority, fiat factionalism, fiat intellectualism.
Some us even have fiat hair. It’s an epidemic I tell you.
BTW, that point that keeps peeping up, that thing that changed right in the middle of the vortex, that whatever it was that among other things dropped spot crude so far so fast, that thing that seemed just a dampening by the stubborn mass of such a huge object as USA, well Spengler makes it sensible (and optimistic, at least for USA).
@steveaz,
Everybody knows the problem with Fiat. Hey, Fix It Again Tony for crying out loud.
That’s disgusting, Lifeof!
Next you’ll be describing the sound of an Italian Fighter Augering In:
WOP!
No Doug! It is the Huey that is Italian.
Main rotor goes WOP. WOP, WOP.
Tail rotor goes GUINEA. GUINEA. GUINEA.
Favorite car of Italians? The SAAB. It has a
six-foot trunk. Just right for things about
six feet long that may be a little too stiff to bend, if you know what I mean.
Much better than Found On Road Dead.
@ 128. Derek
In 1948, Czechoslovakia, there were people that were dismissing communist takeover as a conspiracy theory. They were saying “It can’t happen”. It did.
If it walks like a duck and quacks like a duck, it’s a duck. I see too many parallels between the leftist modus operandi in 1948 Czechoslovakia and today’s US that makes me really uneasy. In fact, it is not in the realm of a conspiracy, most of it is rather out in the open.
Some 3-4 years back, I’ve heard lectures of some economic analysts that pretty much nailed down the whole stratagem of what transpired starting from 2008. They were specifically pointing out that there may be groups interested in short-circuiting the economy for their particular reasons and gains, and how they would go about it. At the time it sounded a bit far fetched. So, giving them a benefit of a suspension of disbelief, I was not surprised. The only thing that was unsettling was the timing. Just when McCain/Palin were picking up the steam, slam!
It may seem like going on tangent investigating these matters. But it is not. We need to know what we are dealing with.
That is not saying that it should take priority over the analysis of screwups in the past.
Doug and JF Sanders,
Maurice Strong is a creepy character. I did some other reading about the man. He absolutely hates capitalism and the United States with unbridled passion. It appears that his close relationship with Russian and Chinese Communists suggests that there is collaboration and cooperation between those two. Strong is a man who seems to bring people together in common purpose against a common enemy: us.
I read that he is an extremely bitter man about his childhood poverty during the Depression, and blames the United States for it.
He has a good working relationship with George Soros, and that means that he must have access, through Soros and others, to Barack Obama. The intersection of all of these dangerous and powerful men arrayed against us should give an indication of the kind of peril we are in.
Buddy, what we saw with crude was another variation of trying to corner the market.
A routine bull market got some people to believe their own propoganda about how high oil would go and stay and how much political power it would buy them. So they “spiked”
the futures.
Inevitably correction set in and some of the good guys may well have decided to replicate the 80s and shove crude down to where the bad guys will be hurting.
In both cases, the “manipulation” was not causative but simply added on to what was already happening.
For what it is worth: Latest estimates for the newest Saudi Field say $55 a barrel is break-even point for total costs. The easy to extract Saudi oil is a thing of the past.
Same rock formations leave Putin, Chavez and that Iranian fellow looking at negative cash flow.
In the meantime new American “shales” are opening up and yielding huge quantities of natural. That will hopefully subsidize crude and keep our domestic producers in business.
We live in interesting times.
Hey Fred: Did you catch what happened when Fancy Nancy Pelosi visited the Vatican?
His Holiness read her the riot act.
Yes, Dave, it was delicious to see that unpleasant female Bolshevik get her ass handed to her by a shy, retiring Bavarian theologian who happens to play the piano masterfully.
Dave said:
“In the meantime new American “shales” are opening up and yielding huge quantities of natural. That will hopefully subsidize crude and keep our domestic producers in business.”
It’s my understanding that the Energy Return On Investment (EROI) for shale based energy is so poor that it’ll never be economical (it’s probably no longer economical for the Athabasca Tar Sands in Alberta). There is a huge amount of energy available from ocean thermal gradients but it’s also uneconomical. Our real dilemma is that cheap energy is becoming scarce, e.g. easily extractable petroleum like we had in the Permian Basin, West Texas.
139 fred
Among other things they have in common, B16 and Wretchard both appreciate cats.
A joke from Jim Treacher:
What’s the difference between Jesus and BHO?
Answer: Jesus could assemble a cabinet.
PA Cat, my cat, spoiled brat, runs this program every day:
HAI
BIGTIME DAI
SMALLTIME HR 24 IN DAI
CAN HAS STDIO?
I HAS A VAR
IM IN YR LOOP
UP VAR!!1
IZ VAR BIGGER THAN DAI? KTHX
VISIBLE VAR
VISIBLE “CAN I HAS A CHEESEBURGR?”
SLEEP HR
IM OUTTA YR LOOP
KTHXBYE
96. Mongoose:
“JGeer: then why did it happen just right before the election?”
Good question!
The more I read on this thread the more suspicious I become of leftists collision to gain power.
I was talking to a trader and he said at the “margin” (or at the cusp of an event) it takes just a little push to turn the markets. This is seen at Triple Witching when the stock option, futures, and options on futures expire (well, quadruple witching).
Could certain leftist have conspired to bring down the economy just at the right moment – possibly.
Now, what to do about it?
Wretchard says get educated. But, I think we know the main players – some of whom were named in this thread.
Will going to courts for justice help? It’s a long shot because the bar association supports the leftists. Now, it could slow them down.
Will, protests help. Maybe, if they are fierce enough. But, time is not on our side.
Obama and his cronies are emptying the vault at an amazing rate.
More evidence:
“The FBI is also investigating whether Stanford was involved in laundering drug money for Mexico’s notorious Gulf Cartel. A video posted on the firm’s web-site shows Stanford, now sought by U.S. Marshals, being hugged by Speaker of the House Nancy Pelosi and praised by former President Bill Clinton.”
See: Another Million Dollar Dem Donor Is Busted In Billion Dollar Fraud
http://gatewaypundit.blogspot.com/2009/02/another-million-dollar-dem-donor-is.html
Fred,
As long as you don’t exhale CO2, you’ve got nothing to worry about!
– E.P.A. Expected to Regulate Carbon Dioxide and Other Heat-Trapping Gases –
holder-says-us-cowardly-on-race
“Though race-related issues continue to occupy a significant portion of our political discussion, and though there remain many unresolved racial issues in this nation, we, average Americans, simply do not talk enough with each other about race.”
—
These people are like the Curators of the Museum of Ancient Liberal Causes that have been given permission to let their fascist instincts run wild.
What I’d like to do to that Little Rat-Faced Crook!
Conservative elections-lawyer Cleta Mitchell chided Mr. Holder for not realizing he is “chief law enforcement officer of the United States not a camp counselor.”
RE: coersive interrogation techniques
Doncha think that the universal opposition to using waterboarding and such by Democrats, no matter the national interest, results from:
a) knowledge that these techniques (esp. WB’ing) are extremely effective and efficient
b) they don’t want them available to be used on them…when the time comes?
A little fodder for Whiskey’s mill:
Our First Unisex President?: Black Masculinity and Obama’s Feminine Side
I can’t leave this alone.
A dollar to anybody who has any idea what this quote from the feminist article could possibly mean.
“I believe Obama’s unisex performance on the world’s biggest stage suggests that we are all more free to perform our race and our gender as we see fit than we had previously believed.”
Idiocy rules the world!
NPR story about financial attacks – a “Pearl Harbor on the dollar.”
http://www.npr.org/templates/story/story.php?storyId=100832254
Certainly makes the sense that something like this happened back in September seem a lot less paranoid….
Peter, it means if you’re white you can cross dress as a black girl and feel good about yourself. I want my buck.
Mr. Boston,
Sounds like someone’s determined to paste-over America’s black/gay divide: an attempted closing of the ranks, perhaps, in advance of the next phase of the culture-war.
“Hate-crimes” legislation looms just ’round the corner, doncha know?
(This might be the reason why the lady’s statement caught in your craw.)
Let me see if I understand this.
Architects of the mortgage plan say they (we?) will be lucky if the “recidivism” rate caps at 40% – that’s the number of loans that fail after being helped. By the Plan. Provided by the Government.
Eric Holder gives a stump speech railing against the cowardly racial dialogue in this country. You are still a Victim. Even if you’re too afraid to admit it. I know better than you. I am from the Government.
The stimulus bill signed into law last Tuesday provides something for everyone – except the investor. Who got left out. Because he’s not from the government.
PB: Life is an interpretive dance hologram with performance programming. Dont’ sweat it.
PB, i predict an attack on ‘timism’. Because we should be free to perform our our race and our gender AND our favorite age as we see fit. i pick “5″ –before (spit) school !
30. Doug:
Too bad the Adams were unitarians.
I’m listening to FNS and the debate about another “bailout” – Detroit.
The union apologists keep mouthing the idea that the bankruptcy of GM and C will create a catastrophic “ripple effect” that will seriously damage the overall economy, and put millions of employees out of work.
In 2009, the industry is predicted to sell around 6.5M new vehicles, down from the hayday of 10.5M. Should GM and C stop production completely, the survivors would thrive, trying to fill the 3-4 million unit vacuum thus created.
So it seems most of those pre-certified and pre-qulaified suppliers would immediately be needed to support the explosive sales growth of the remaining manufacturers.
Also, we need to rebut this line of argument for an even more important reason.
Let’s say the bailout only totals only $50 BILLION, and that 5M new vehicles are sold by GM and C. Isn’t taking money from the taxpaying, potential car buyers actually adding $10,000 to the cost of the car? Okay, spread across 10 years, $1,000 per unit?
I realize the largess is spread across all us taxpayers, whether we want a new car, or not; but payback of these monstrous loans will be based on unit sales, no?
Doesn’t that presnt an enormous cost-disadvantage to GM and C, versus those manufacturers who don’t take the money?
At meetings in my organization, comments regarding the Stimulus bill and other government actions are generally settling down into a grim humor mode. This is in an uber-politically correct environment.
Whether there is conspiracy and manipulation behind our economic woes I don’t know. But I see an emerging sense among people that they are being played for dupes, and that all of their hard work for themselves and their organization, playing by the rules at all times, has amounted to increasing losses and a grim future.
No one is making jokes about Bush any longer, whereas just a short time ago he and Cheney were the source of every woe.
Bankruptcy followed by sale and reorganization means the stockholders lose, the contracts are voided, some debt holders lose, the retirees lose and the winners are the consumers, the taxpayers, the employees who get to stay employed and the new owners who get to pick up the previously misused capital (physical, human, and good will) at a discount. Unless the plant is burned down the capital is not lost but reassigned.
Dr C: Doctor Competent-in-Getting-People-Elected-but-Nothing-Else.
F: His flunky
Dr. C: “The Economy is always relevant. Everyone cares about their money. If we pound ‘the economy is failing!’ as hard and as often as possible, enough people will get scared and vote for our candidate, Professor Hope!”
F: “But Boss, what if there really *is* a recession?”
Dr. C: “Don’t be silly! We are the strongest country in the world! What else could explain that nothing happens in the world without it being either our fault or our credit? No, there is no chance of that, and as soon as the Professor is elected we switch over to pounding ‘The economy has recovered!’ neatly preparing the way for his second term!”
F: “Ok Boss, you’re the Boss.”
Dr C: “Disaster! Who could have imagined that if we kept talking down the economy, some people would actually listen, and the aggregate of their selling would wreck their economy! In-con-ceivable!”
F: “Well Boss, if you recall..”
Dr C: “Shut up, flunky. We have much more important things to worry about how. Namely how to exploit this crisis? This time it can’t possibly go wrong!”
F:
158. Mark said…
“At meetings in my organization, comments regarding the Stimulus bill and other government actions are generally settling down into a grim humor mode. This is in an uber-politically correct environment.”
This group needs an intervention by the Honorable Senator Frank, who gave us the correct paradigm for addressing this conundrum some time ago:
“ They told me to call it a recovery package rather than a stimulus package, but I’d rather be stimulated than recovered. “
O is in Canada today, explaining why their oil sands are ‘dirty’, why ‘buy American’ in the stimulus is really jdi*ci%enf and not f#ir@if9, and why NAFTA needs a “side deal” that addresses the concerns of the environment and workers.
o boy.
Charles:
Unitarians get no credit?
Not even an ARM?
You’re just spewing hot CO2, Larsen!
Carol Browner will take care of your kind!
Guys,
Look at Drudge about the meltdown on CNBC.
Look at the events in Oklahoma City where a policeman stopped a driver for displaying an anti-Obama sign AND got visited by the Secret Service highlighted on Instapundit.
Is this the start?
157. geoffgo:
The Ripple Effect
Ref: “Laissez-Faire Capitalism Has Failed” by [I think we all know]:
To paraphrase Churchill, capitalist market economies open to trade and financial flows may be the worst economic regime–apart from the alternatives. However, while this crisis does not imply the end of market-economy capitalism, it has shown the failure of a particular model of capitalism. Namely, the laissez-faire, unregulated (or aggressively deregulated), Wild West model of free market capitalism with lack of prudential regulation, supervision of financial markets and proper provision of public goods by governments.
There is the failure of ideas–such as the “efficient market hypothesis,” which deluded its believers about the absence of market failures such as asset bubbles; the “rational expectations” paradigm that clashes with the insights of behavioral economics and finance; and the “self-regulation of markets and institutions” that clashes with the classical agency problems in corporate governance–that are themselves exacerbated in financial companies by the greater degree of asymmetric information. For example, how can a chief executive or a board monitor the risk taking of thousands of separate profit and loss accounts? Then there are the distortions of compensation paid to bankers and traders.
This crisis also shows the failure of ideas such as the one that securitization will reduce systemic risk rather than actually increase it. That risk can be properly priced when the opacity and lack of transparency of financial firms and new instruments leads to unpriceable uncertainty rather than priceable risk.
[end quote]
I’d be curious to hear what others think about Roubini’s (tiresomely consistent) message. I hear background grumbling at his incessant “Dr. Gloom/Doom” message but the grumbling doesn’t elevate to a roar because his assessment is more right than wrong. Yet we hear next to nothing about “efficient (self-regulating) markets” or the role of securitization that increased risk rather than reducing risk. Add to that the statement by billionaire Wilbur Ross who cited an economic calculation showing that, stripped of real estate equity growth, economic growth was zero to negative for the 2000-2008 time period. Meaning this country has produced nothing – nada – for close to a decade.
By the way, does anyone know who is actually writing these recovery/bailout plans? I can’t believe any of this stuff comes from Summers so I assume Volker as head of the Economic Recovery Board or some such name is the chief architect. But who is actually pulling this stuff together? Particularly the mortgage plan which as far as I can tell has zero support except from Don Peebles down in Florida.
“I’d be curious to hear what others think about Roubini’s (tiresomely consistent) message. I hear background grumbling at his incessant “Dr. Gloom/Doom” message but the grumbling doesn’t elevate to a roar because his assessment is more right than wrong.”
—
Sez who?
Pure Garbage!
(see my 122!)
Is BHO going to ask for asylum when in Canada?
http://www.bukovsky.org/biblio/Eussr-1.htm
interesting read – scroll down for english version of soviet dissident’s recently published “EUSSR.”
just one take, but fun for the afternoon. after all, who knows what the hell is going on.
Missed that one Doug.
For the time being I’m going with the “small incestuous community” model as the most apt descriptor of the relationship between business and government with the caveat that securitization and efficient markets still smell to me.
But it doesn’t really matter. We (I at least) have seen the light. Congress has demonstrated profound stupidity and the new team will be a complicit partner in further reducing the collective IQ in Washington. The financial services sector knows this – well – which brings the issue full circle. Why was this thing not contained?
@Eggplant #140: “Shales” as I used that word is a fairly new jargon referring to hitherto unknown deposits of natural gas.
There are an extraordinary number of wells being drilled in the Dallas-Fort Worth to Ranger-Cisco area. A place previously thought to have been drilled out.
And in the Ark-La-Tex, things are reportedly going hog wild over the quantity believed acessible there.
As far as shale oil and tar sands go, the problem is not monetary, it is political obstructionism. All cloaked in environmental claptrap.
Oh, keep forgetting to mention. Namely Hubbert’s Peak. Hubbert cheated. When he made his well-known predictions, the Railroad Commission was limiting the amounts that could be pumped in the Permian Basin.
Wild wartime drilling had been followed by a sudden drop off in demand at war’s end. Civilian demand did not make up the slack until the mid-1960s. That was when the Railroad Commission lifted all its restrictions.
Therefore it was pretty easy to predict when the Permian Basin would hit maximum peactime production of two million barrels daily and how soon the flowing wells would stop and production decline to one miliion.
Now were there to be a sudden cutoff of imported crude, the Permian Basin could get back up to previous levels in a hurry. Conservation would suffer but needs would be met.
And when I say “cheated” I do not mean deliberately and with falsehood aforethought.
I do mean that Hubbert was provided with an external constant and that enabled accuracy.
Otherwise the oil bidness remains a highly inexact scientific art.
How could it have been contained by the same corrupt Government that initiated it?
(ans: It couldn’t, without self-implication by the corrupt.)
…they’re not too good at that.
—
Obama Announces Rezko Rescue:
Bail Out Losers, Punish Achievers
Obama’s mortgage plan is about anger and revenge.
– Limbaugh
Mark: I live in an uberlib world(and I mean uberlib) and I am seeing this too. In some of that world, my beliefs are well known, and they do not even try to hide it from me.
I do not know what legs its has though. My guess is not much. The MSM could find a way to paper it over somehow. It will reman as background noise.
Great discussion on BC (as always).
Lest we forget, 64 years ago today.
http://teachpol.tcnj.edu/amer_pol_hist/fi/0000018f.jpg
Dave said:
““Shales” as I used that word is a fairly new jargon referring to hitherto unknown deposits of natural gas. There are an extraordinary number of wells being drilled in the Dallas-Fort Worth to Ranger-Cisco area. A place previously thought to have been drilled out.”
I’m reminded of a story that my grandfather told me. During the Great Depression in Roosevelt County, New Mexico (adjoining the Permian Basin), my grandfather and a partner dug water wells with a pick and shovel. He was essentially a human drill bit where he was in the bottom of the well’s shaft shoveling dirt into a bucket that his partner would pull up with a rope and windlass. He’d do this until he struck the water table and then get paid some pittance for multiple days of back breaking labor. Anyway, one day he was digging a well and came down with a blinding headache. He then started to get whoosy and told his partner that he was feeling sick and had to leave the well. His partner then went down to the bottom of the well to resume digging but he also developed a terrible headache and became whoosy. Needless to say, my grandfather had struck natural gas rather water. Natural gas is odorless when it comes straight out of the ground. My grandfather was very lucky that he didn’t suffocate in the bottom of that well.
@144 Ledger
Word on the street is that Chavez was into Stanford CD’s to the tune of $3bil. or 40% of the total fraud. Maybe he and Berine had a deal–Bernie got North America and Europe and Stanford got Latin America.
Apologies if this was posted up thread, but at least not every High School student has been re-formatted and deprived of their critical thinking skills.
Dobson students question Obama’s plan
“By the way, does anyone know who is actually writing these recovery/bailout plans? I can’t believe any of this stuff comes from Summers.”
—
Just heard Summers say he was completely influenced by John Maynard Keynes.
(I will check later to confirm)
…all the smartest people in the World?
If we could replace Summers with Putin, we’d have a fighting chance.
In terms of whether or not there was a conspiracy, it may have been a conspiracy of opportunity.
Forget for the moment “who sent Obama.” Maybe he just got lucky. But once he showed up and was seen as viable — possibly from nothing more than the media love affair with the hunky black metrosexual — it must have been obvious to many other actors that he was the long-awaited horse they could ride. A slick talking King of Jive with a deep emotional committment to the Left, an Angry Black Woman for a wife, and a history of America-hating associations, he was a self-made Manchurian Candidate. Nobody needed to program him. He just showed up that way. It must have been instantly obvious to anyone with an anti-American agenda that this clown prince was the path to the promised land.
It would then become natural to do anything to put the election in his hands. Make sure the weakest Republican was the nominee. Push up the price of oil. Kick the supports out from under the banking system (thank you, Mister Schumer) and start a panic. Ramp up the already hysterical media roar about Bush. Of course, the soft Left was immediately in Obama’s hands — they are the emotional simpletons so easy to manipulate with high-flying words about nothing but hope, change, hate Bush and feel good about yourself. (A very dark thing happened in America when hating became the ultimate indicator of popular moral uprightness.)
In any case, any black-hat long pondering how to best stick it to America had to see that this was an opportunity not likely to be repeated. So maybe many actors swung into motion not because they conferred with one another, but because they all recognized that they could piggyback on the same virus that was about to infect the body politic. Everyone went for the brass ring at the same time. The result may have shocked all of them.
Putin warns US to eschew socialism
“(A very dark thing happened in America when hating became the ultimate indicator of popular moral uprightness.)”
Payback Time
@Doug,
It is to early in the day to drink but your Putin link ends the day for me.
Submarine hatches open out. The pressure of the water keeps them shut. You could not open one if you tried.
If we could replace Summers with Putin, we’d have a fighting chance.
Even a Harvard International Relations PhD can understand Putin. Instead of all the balderdash about stimulus and the economy Putin would just say it like it was “We’re taking your money because you’re too stupid to handle it, and my boys want nicer summer houses.”
Putin is not “educated” enough or nuanced enough to know that you can substitute reality with a few well-crafted sentence constructions.
Just because the Obama gummint throws sh*t on the wall doesn’t mean it’s going to stick. Most Americans just want to be left alone and it takes a long time to get their attention. With the proper catalyst to get people off the dime attitudes/actions can turn in a hurry.
#180 Peterike: That’s pretty much the way I see it too: a perfect storm of mindless hate, irrational hope, green political correctness and a frisson of sexuality. Now, as they say, “you can keep the change.” Here’s the question I can’t answer, though: how can such a strong economy have such a weak intellectual basis? F
“One is holds that an economic system, already weak in the basics, may have been pushed over the edge by a financial play that got away in a kind of economic Chernobyl. ”
Interesting.
In a similar vein, I read somewhere that Osama did not predict the twin towers would implode.
Sometimes one’s reach CAN exceed one’s grasp.
It would be amazingly effective, at getting attention if nothing else, if at a specified date and time, protests occurred simultaneously at every town hall or city hall across the country. If it was at noon, working people could go on their lunch breaks. (The problem with getting conservatives to protest is most of them have jobs and responsibilities, as opposed to the great unwashed who show up for every Dem/lib march*. )
We’re outraged by increased govt spending at historic levels, bailouts designed by and given to those who brought us to this crisis, bullshit “tax cuts” that amount to 8 dollars a week, and looming hyper-inflation due to this ridiculous debt they are getting us into.
If they are purposely trying to destroy capitalism so they can rebuild a new Cuba, some of us might have some objection to that.
* Sharpton’s got his usual band of professional victims to protest a CARTOON. And average Americans getting porked by the govt. are arguing about where and how they should protest. Something is off-balance here.
Limbaugh’s request for Holder and BHO:
“Tell us what you like about this country.
Now.”
(Not some BS about Abraham Lincoln and etc, ad nauseam)
VIDEO: ‘The government is promoting bad behavior… do we really want to subsidize the losers’ mortgages… This is America!
How many of you people want to pay for your neighbor’s mortgage? President Obama are you listening? How about we all stop paying our mortgage!
It’s a moral hazard’…
slade,
For the past year Roubini has had a troubling pattern of being right. But I think the discussion of “Anglo-Saxon” capitalism has been attacking a straw man. We do need new and better regulation to deal with derivatives and securitized debt, but that is not the same thing as a departure from Anglo-Saxon capitalism any more than it would be correct to say that Anglo-Saxon capitalism in equities unded in 1933 and 1934 with legislation governing equities markets. We may even need more spending and receivership of large financial institutions, but we did that in the 90s for Savings and Loans thru the Resolution Trust Corporation. The RTC did not end capitalism either. To sum up, there are things that can and should be done, that require governmental activism within limits of time and scope, but these things should not and need not be permanent or signal the end of “Anglo-Saxon” capitalism.
Frod: Bet that Dobsin teacher gets the axe. How did he/she slip through the cracks?
Too funny.
The Triumphant Return of John Maynard Keynes – STWR – Share The World’s Resources
Collapsed financial firms, Ponzi schemes and big contributions to Democrats…21st Century Apple Pie and Ice Cream, eh?
Gimme, gimme, gimme: More scenes from the anti-Obama entitlement backlash
ht – al-Bob
“Fund Bikini Wax Now!“
F asked:
How can such a strong economy have such a weak intellectual basis?”
It was handed to us as an inheritance.
No intellect required.
Lying on my back now
The stars look all too near
Flowers on the razor wire
I know you’re here
We are few
And far between
I was thinking about her skin
Love is a many splintered thing
Don’t be afraid now
Just walk on in
(flowers on the razor wire)
(walk on in)
Her eyes were cobalt red
Her voice was cobalt blue
I see no purple light
Crashing out of you
So just walk on in
(flowers on the razor wire)
(walk on in)
Her lovers queued up in the hallway
I heard them scratching at the door
I tried to tell her
About Marx and Engels, God and angels
I don’t really know what for
But she looked good in ribbons
So just walk on in
She looked good in ribbons
So just walk on in
Tie a red red red red red red ribbon
Love is a many splintered thing
Tie a red red red red ribbon
Don’t be afraid
Just walk on in
Just walk on in
(incoming…)
(incoming…)
Just walk on in
Just walk on in
Flowers on the razor wire
Just walk on in…
Incoming!
“As far back as 1990, Stiglitz argued in a paper (it can be found on The Economist’s Voice Web site at http://www.bppress.com) against securitizing mortgages and selling them because “when banks retained the mortgages which they issued, they had greater incentives to screen loan applicants.” He asked, again with startling prescience:
“Has securitization been a result of more efficient transactions technologies, or an unfounded reduction in concern about the importance of screening loan applicants?”
—
But America’s financial system has changed dramatically since the 1930′s. Many of America’s big banks moved out of the “lending” business and into the “moving business.” They focused on buying assets, repackaging them, and selling them, while establishing a record of incompetence in assessing risk and screening for creditworthiness. Hundreds of billions have been spent to preserve these dysfunctional institutions.
Nothing has been done even to address their perverse incentive structures, which encourage short-sighted behavior and excessive risk taking. With private rewards so markedly different from social returns, it is no surprise that the pursuit of self-interest (greed) led to such socially destructive consequences. Not even the interests of their own shareholders have been served well.
Meanwhile, too little is being done to help banks that actually do what banks are supposed to do – lend money and assess creditworthiness.
Ribbons Andrew Eldritch.
Maybe some of the financial types can help me out here. I’m thinking heretical thoughts about our Messiah’s plans.
You see I’m having difficulty understanding how the ” $75 Billion Homeowner Stability Initiative to Reach Up to 3 to 4 Million At-Risk Homeowners” is gonna work.
$75B divided by 4 million equals by my LA Unified educated math: only $18,750.
I must have miscalculated. Seems to me 18.75 grand will be a tad short of finally fixing all the mortgages of all these oh so swindled and now deserving victims of the evil capitalist bankers who snookered them into these evil sub prime / alt A loans.
I think that’s on top of $200 Billion already committed.
(not that that adds up to a fix, either)
Davod,
My guess is we’ll never know about the the $550B transfered offshore, since the _nameless_bankers_ want it to stay that way. The point is really: _was_ there a large transfer at all; if so, was it to 1 thru N staging areas where it returned from, to leave a supposed paper trail.
There is _no_ accountability of the Fed. – does anyone see that as an obvious problem?
The Associated Press Analysis – Democrats self-destructing over ethics
Unsk, I heard a Wash Post reporter on the radio (WTOP)this morning saying that the plan offered lenders an incentive of $1,000/loan to refi troubled loans….among other “incentives”. And of course I though or maybe even said out loud “WTF”…. The title of the initiative is somewhat misleading. It should be called the “Lender Stability initiative…” Of course we have already sent a bunch of previous $ to the lenders under other titles….
@203 veracious,
Start by reading this and you will know where the money went.
Mobbing up the Markets
It is amazing how Madoff, Milken, BearStearns,… are all linked to some of the biggest movers and shakers in DC and around the world.
I still hold to my theory that GWB finally had the lights go on and he quit listening to his handlers. And then he put the shaft to them on the way out the door. Only history will tell and then only if the good guys get to write the history.
Jim
I have heard Joe Stiglitz talk to a group of his economic peers. He is “know it all” that is sometimes correct. He did not understand the model instability behind the securitization. He refused to recognize the regulations that were in place and the way the economy was evolving over time. Glass Steagal became irrelevant with the evolution of the financial markets and the way the Fed was operating a non transparent monetary policy while the Congress was flouting any responsible fiscal policy.
Joe was a failure at the World Bank. He is a twerp, a little guy with a big ego even for economists and one who mixes his political ideology with data.
But economics is not a science and so economic theory should not be used to make policy.
Someone kindly gave me a link to a Google cached version of the page at the dead link above:
link
If you do not know, you should copy and paste that if you want to save it.
A Nation of Cowards
Jay,
Even a Stopped Watch!
In the Industry @ 191:
I agree. News of the death of [fill in the blank] has been greatly exagerated. But I will say that Roubini’s (tediously consistent) position forms the foundation for the evolving dispute slowly taking shape in the public forum – that of distinguishing the role, and ultimately the culpability, of Washington from Wall St. I understand about the handful of technical fixes – been over that several times on this board with uptick, MTM, transparency, leverage, and more recently securitization. What I don’t understand is the origination of one (relatively) stupid ‘plan’ after another. Not to be tedious myself, but this mortgage plan is not only unfair (David Malpass says that’s not as important because the situation is in crisis) but it’s also ineffective, according to Malpass who is still focused on unfreezing the credit markets and dealing with the CDS’s. I expected a broad consensus opinion that would gradually – but effectively – lead the country away from the financial brink. That’s not what I am seeing. So capitalism – Anglo Saxon or otherwise – might survive but I’m guessing it’s going get a Stephen King “haircut”.
Short Story: The leverage has to unwind and the CDS obligations have to be rectified, with or without mark-to-market, which is presumably becoming an irreconciable conflict within the economic community. I’m just disgusted. I’m also thinking that the Cloward-Pliven crisis strategy isn’t working all that well. Nobody is coming together – on any front that I can see. Instead we’re getting that grim set of endurance described above.
I don’t think the followers of Cloward-Pliven really want what they say they want.
What kind of people are we when the shortest month of the year is chosen for Black History Month?
Soledad O’Brien wants to know.
@ 213, Doug.
RE the ClowPiv folks, it’s as if they’re more interested in playing a game of “Chicken” with us. As it stands now, either we “spread the wealth around” to delinquent borrowers, or they’ll bring our banking system down.
We get to choose.
The direction they’ve chosen leads to a head-on collision, and they appear to be accelerating right into it. Question is, who will blink first?
CNBC poll,
Would you join Rick Santelli’s tea party?
Jim
They’ve already announced:
“We Won!“
CNN Talking Heads Unanimously Praise Holder’s ‘Coward’ Remarks
No Christ Zone Black Pastors Support Pro-Life Pastor Facing Two-Year Jail Sentence
Doug, that CNBC video of Rick Santelli has given pessimistic ole me a glimmer of hope.
The quote below outlines 3 structural conditions necessary for a free society (can’t recall for sure who said it but I think maybe was Robert Kagan – yeah should’ve looked it up):
1. Economic realism, breaking from leftist utopianism, is fundamental; and the dynamic drive of realism in economics flows from mind, creativity, and enterprise. Also, in the real world, incentives help mightily. (As opposed to disincentives like the mortgage bailout for example?)
2. Politics is more fundamental than economics, for without the rule of law, limited government, and respect for natural rights, economic progress is scarcely possible.
3. Culture is even more fundamental than politics or economics, for without certain architectonic ideas, certain habits of the heart, a love for argument and evidence and open conversation, and a few other moral and spiritual dispositons, neither a republic respecting rights nor a dynamic capitalist economy can thrive or even survive.
It seems the leftists work their destruction according to this 3-step plan. First, the culture. We lost the culture war some time ago. Still significant pockets of holdouts but we definitely don’t represent the dominant culture. Now the left has finally attained a political dominance that’s perfectly in tune with the popular culture, led by the adored Messiah himself. And next comes the no-holds-barred attack on the economy. If this power-grab of the economy STILL doesn’t rouse people to action, well then the only thing left to do will be to accomodate ourselves to the reality that we’re no longer a free people – and will be harder to bear because we’ll be a lot poorer.
Jay @ 207
That seems a harsh characterization – which might be true. I read Stiglitz’s book “Globalization and its Discontents” and I thought his points made some sense – both technical and within the socio-cultural context of the IMF and World Bank, both of which messed up in SE Asia. His presentation was logical and thoughtful. I make a point of paying attention to his opinions. Am I wrong?
But onto Kudlow who just announced that Stanford may be bigger than Madoff – it’s like Oprah and Jerry Springer produced by Scorcese.
Now that is strange…
If you enter Maurice Strong into Muckety’sdatabase it returns no connections to anything… WIERD
As for the “we won!” people. They have no grounding in reality and as such will not be able to come to grips with life without BO. As he is rapidly becoming a 1 term president.
Jim
Aaaaargh! Need a post editor!!!!
Muckety
Jim
BDS was Cloward-Piven –the psychological exhaustion of the enemy via forcing a continual defense of the same obvious truths over and over every day, starting fresh from the same spot as if your yesterday’s perfect argument never happened. The only defense is to forget the proximate topic and name the tactic and the underlying message “surrender or shut up or we’ll nag you to fricken death.”
cloward-piven’s premise (end justifies means) is core leftism, rejection of the vile trope is core rightism. So, we can’t do it back at ‘em, it just won’t work right.
Take fist insert into lefties face. Repeat as necessary until silence is achieved.
Jim
buddy: the mistake was trying to engage them rationally, we should have spoken over their head. Mass protests at Rockefeller Center. The only way to engage these people is to do it in a manner where the third group, the group that are both the left and the right are trying to move, can see them exposed for what they really are. We will yet have opportunities here, believe you me.
They are devoid of decency, to think otherwise is the mistake that we make. They have fundamentally withdrawn from civilized norms. These are people that consider partial birth abortions a “right”. That tell one all one needs to know. They have objectified the rest of us to the point that we do not actually exist to them. We are actors in their internal theater, when they look at us they see but ghosts.
But their project runs counter to the natural and spiritual realities of man and the world. This is why eventually they will have to move beyond BDS to actual street thuggery. Some this will happen. America may not like it much.
The left cannot be moved by any rational discussion or moral suasion. They have retreat from the human. This is why they detest civilization, it is beyond their grasp.
It well come to pitchforks brigades, or worse.
I am not really sure that we lave lost the culture wars, i would urge resistance to that meme. What they propose is not a culture at all. Ii is a parody of culture. Dry up the swamp of government monies that support it and it evaporates. The NYT stock price is a case and point.
Again, it depends on the character of the American people. Has it changed?
I’ve never been much of a conspiracy person, as it implies too much competence. While I could be wrong here, Roubini doesn’t seem to espouse any conspiracy angle either. My take of his beliefs is that the jinga tower of leverage just became too tall and unstable, and it was due to fall over. The handling of Lehman was the first nudge, but his view is that it wasn’t going to take much it over.
Did you learn all that from your first wife, Larsen?
Steeple: But again, why during an election?
(Just a guess, based on personal experience)
That starting over routine does tend to wear one down…
Steeple, the indexes peaked in October 2007, then drifted sideways and down as the economy’s growth started leveling. remember the ongoing discussion of ‘soft’ vs ‘hard’ landing and is we is or is we ain’t gonna drift into recession.
a couple of small Bear/Stearns hedge funds dissolved themselves along in there, no panic, just redeemed subs who took a normal spec loss as the model wasn’t working, and traders knew the risk appetite on the spec end was leveling off as the fed funds rate rises were drying up a little of the cheap money.
But a small group, Weill, Cayne, O’Neal, Fuld –masters of the universes all, despite every caution signal, kept pushing that leverage more and higher on worse and worse ninja paper.
LEH esp, into 40:1, into ‘auction rate securities’ that being auctions could not be better full-view cliffs to run off of.
so, minor catastrophe achieved (a couple of auction failures, not enough bid-to-cover) these guys bailed with 20 or 40 million dollar parachutes (that we know of) and the markets, seeing the weirdness, started selling, but in an orderly way.
the bear raids strted getting attention in the summer, when dark funds on the London exch and Dubai exch would appear on given, light volume (volume damps price moves, so a bear raider wants as clear a field as possible) days and just take the financial stocks outside and shoot ‘em.
Soon enough, these raids became their own fundamentals, a consideration, which froze buyers, decreasing volumes even more, making the shorting even easier and more profitable.
Traders were screaming & hollering, wanting the uptic rule reinstated (pulled on thin reasoning re valuing ETFs just months before).
Soon traders took note that some issues had more float in trade than they had in fact, meaning illegal naked shorting was going on.
but nothing from the SEC, just weird silence, which drove even more people off the buy side, making the mkts fall more as volume continued to dry. ‘It’s just a buyers strike’ we told ourselves –a common thing and short-lived in normal times.
The bear raids came closer together and harsher, still not a peep from SEC, then suddenly LEH failed –still the ONLY financial allowed to just belly up without a hand from gov’t nor counterparty.
Simultaneously the truly savage bear raids began on the big banks & brokers, 6 or 7 trading days in early Sept which drove the stocks down often ten percent a day, 70% in early Sept on short-sales volumes 10 x normal.
this set off a general market panic and thousand point chunks started disappearing out of the indexes, and all the economic metrics froze, credit froze, confidence froze, and the slide down the cycle became a free fall, as each moment of non-restored confidence becomes a real reason to have less confidence in the next moment. Then the election, and now we’re here.
doug @ 230, no i learned it from yours
Never complain about sloppy seconds!
Steeple @ 227: To my knowledge, Roubini has never argued overt conspiracy, but he is making a case for something more serious, which is failure of laissez-faire (Anglo-Saxon) capitalism as per his op-ed in RCP today. I think he will lose that case – but only if DJIA holds the 7450 (+/-) low. If it doesn’t, all bets are off and laissez-faire anything will be the least of our worries.
haw –hope she reads this, so we can see how well you type with your butt between your shoulderblades
You folks have got to read this. About the billions of phantom shares, and the organized crime. (pasted from #38 above)
http://www.deepcapture.com/
I’m still not convinced that Patrick Byrne is a good guy but I’m not at all surprised that this net reaches back to Junk Bond King Milken and Boesky, And I always wondered about the kidnapping of Steve Wynn’s daughter and of course that story he likes to tell of his missing pinky.
Corsi is predicting 6000, fwiw.
…says the bank of International Settlements say there’s 3/4 of a Quadrillion in derivative contracts between bankers in currency swaps, interest rate swaps, bubbles that are ready to burst.
FWIW I think Corsi might be right – give it 50-50.
A Quadrillion here, a Quadrillion there…
This one links to the 171 comments section.
Bernard Madoff, the Mafia, and the Friends of Michael Milken
Trying to get at this ”deepcapture” hairball. A lot of people just think ‘russian mafias’ and ‘kremlin’ as more or less the same conglomerate. August was the kremlin’s Georgia shock to western confidence. Lots of big Dems involved with the Georgia gov’t, and Soros has interest in and contacts with top pols in both combatant countries of that war.
Oil should have superspiked off that war.
That it didn’t was the hidden hand of KSA, quietly offering to open the valves wide, signaling it would fight with the west on the oil price front. As soon as the geopolitical nerves started calming re that war, the Sept bear raids on the American financial system began.
Then Madoff turns himself in, with the word leaking that he was involved with (yawn) Rus mafia, plus latin american drug gangs. Deepcapture talks about Madoff’s incredible influence over the SEC, his ‘special rule’ which he could lend out without limit, plus his involvement with the Dem party.
Now comes Allen Stanford (see post above saying he might ‘be bigger’ than Madoff), another big Dem player, also with ties to organized crime and the Mexican narcotics Gulf Cartel.
Stanford’s spokesman is Ben Barnes, of the Travis County (Austin) Democrats who with Dan Rather’s Austin resident daughter ‘found’ the guy who ‘discovered’ the Bush TANG AWOL documents, the famously blog busted faked docs which CBS’s Dan Rather revealed just weeks before the 2004 election, the same week NBC’s Today Show featured three days of investigative authoress Kitty Kelly talking about President Bush snorting coke at Camp David, the same week the DNC released their “finisher” ad campaign known as “Fortunate Son”, a Bush smear with that CCR song.
Meanwhile, since Stanford & Madoff are linked to the narcos, might mention here that the Colombia Free Trade deal, which would enormously help President Uribe, the first and only successful fighter of the FARC narcotrafficantes, is being furiously (to the extent of unprecedented House rule changes to prevent floor debate) halted by the daughter of the lieutenant of the mobster, Lucky Luciano, who set up the original narco channels now under attack by Uribe. And there, in the deepcapture link, is claims by a pretty credible source that Luciano’s Genovese family is responsible for a large part of the naked short selling which has basically toppled credit in the USA unless it is gov’t guaranteed, and maybe has actually done us in so bad that we have to think about the Dimitri Orlov Scenario –which is a conspiracy story in itself, if you closely read it and ignore his thin rationalizations (yeah, sure, he took it on himself, as a kind man, to start talking in 2005 to influential groups of Americans about the stone-age life that is ‘inevitable’ for us).
Then there’s this, which is brand new and dynamite (snip from page 2 and 3 of):
“Outrage of the Day”
Cramer again took aim at Treasury Secretary Tim Geithner, who Cramer said is losing credibility by the day for his decision as New York Fed Chairman to let Lehman Brothers fail. Cramer said the collapse of Lehman triggered the end of financials as we knew them, and ever since that day, the financials have been sliding farther downward. Geithner has always claimed that he didn’t have the authority to save Lehman, but Cramer said his research shows otherwise. According to Cramer, the Primary Dealer Credit Facility created by Geithner after the Bear Sterns collapse gave him the authority. And, he said, the complacency surrounding Lehman in the days leading up to the collapse was directly caused by people thinking the PDCF would keep them from going under no matter what.
Cramer said Geithner created the lifeline for Lehman, then took it away. The result, he said, was thousands of innocent people losing money. Yet the very next day, Geithner stepped in to save AIG in a far bigger and far more egregious bailout.”
Then in the show, which i just watched, he adds (tho it’s not in the text on his site), that Geithner all along has been planning to “lehmanize” the rest of our banks. if so that would explain everything about the absurdist rules changes and incomprehensible delays, as well as the nervous eye-darting guilty ferret aspect of the guy.
Search [ bill moyers american banks ] –i heard something about Moyers being on a tirade against capitalism, so i did that search, and tho i didn’t read the articles the lead-ins show a thought pattern which you should be aware of.
Barnes & Moyers, both LBJ Texas proteges, his bestest & brightest.
Deep Thoughts
did Madoff turn himself in as the preselected fall guy, so that in the shifting kaleidoscopic fog of who is America and who is not and who is the government and who is not, there would be “a guy” (yes, Madoff! that’s what happened, that guy Madoff! he did it!) for us busted proles to focus on, as we heft our picks and shovels and trudge off to the salt mines?
Stop the Democratic Suicide
Geithner himself is a lightning rod for populist wrath. Ordinary Americans who fail to pay their taxes can expect strict punishment. When Geithner forgot to pay sizeable sums, he was quickly forgiven and made Treasury secretary. Most Americans cannot afford maids, legal or illegal. Geithner’s violation of US employment laws, in paying an illegal-immigrant maid, was also judged to be a minor indiscretion. After all, he is simply the latest in a series of political appointees with illegal-immigrant maid problems. Let’s be reasonable. Important people can’t be expected to do their own housework, and ten minutes otherwise spent saving the world might be wasted on ascertaining whether their servants are violating US immigration laws or not. As the late Leona Helmsley might have said, immigration laws are for the little people.
While liberals oppose Social Security cuts, they favor a policy equally hated by populists, amnesty for illegal immigrants. There is no democracy in the world with rising unemployment where amnesties for foreign workers who disobey national laws would not be a form of political hara-kiri.
Foreclosure Is Part of the Solution, Not the Problem
The cure for the current economic “illness” is not greater and greater amounts of what got the economy sick in the first place.
It’s not effectively 0% interest rates.
It is not massively punishing savers.
It’s not more lax lending.
It is not more artificial asset price inflation.
It’s not more housing tax incentives.
It is not forcing tax payers to bail out failed businesses that deserve to be weeded out of the business “gene pool”.
It’s not the Fed buying bad assets at ridiculously inflated prices or setting up bogus banks to hold the bad assets.
And it most certainly is not preventing or delaying foreclosures.
guys, i’m not disagreeing with you on conspiracy theory, but i’m just skeptical. slade 234, i agree. i think this is a banking/shadow banking failure. but i am still as much a capitalist as ever. going to have to find a way though to manage lending better going forward, but too many lenders just simply ape the other guy with more aggressive tactics which seems to lead to the self-fulfilling prophecy of a credit crisis.
hey Buddy,
I just blew an hour at DeepCapture’s site. There’s lots of meaty goodness there, folks. Jump in, the water’s warm.
About half-way down the page, DC posts:
[Emphasis mine.]
We see this same pattern in supposed “official” condemnations of America’s war-efforts, slanders of American disaster-relief missions and, it seems, in reportage of every other deliberate American effort or campaign around the world. Some similarly treated items from recent history are the Federal responses to New Orleans’ self-inflicted problems after Katrina, our so-called “stingy” response to the SE Asian Tsunami, and our purported “racist” culture (as described in UN forums).
1. First vested media generate, amplify and broadcast a distracting, often completely false, ‘touchstone’ (ex. Lancet Study says “100,000 civilians killed in Iraq” misrepresents what is a humane nation-building exercise)
2. Then choreographed parties (foreign and domestic) repeat and propagate the slander, driving down reputations and stock-prices, throw sand in cogs and gears, or whatever. This is auasi-terroristic, and, again, media mediate and capitalize-on the furor.
3. Finally some suspect social arbiter – be it a UN commissioner, or an American trial lawyer, using the contrived media “touchstone” as a foundation, makes a declarative statement within the pervue of some federal or international regulatory body, that is, itself vested. (ie “America is Stingy,” or “NovaStar” is bilking its investors,” or “Bush hates black people.”) This “official-ization” attempts to cement the slander as fact – and any restitution derived from it, while welcome, is really just icing on the cake.
Whether the goal is to undermine the allure that America’s financial system has for foreign investors, or to erode generally America’s will to intervene in world affairs (a la Iraq), the actual “short-sell” always begins and ends with vested media-reportage. In essence, a new “umbrella” judiciary, or exacting civil code, has been imposed over and above the civic institutions that We-the-People have instituted for ourselves diligently at the ballot-box.
And the entire ad hoc enterprise stands on the shoulders of scolding, collusive media. Can’t we sic the Sherman Anti-trust act on these guys? How about RICO, anyone?
PITCHFORKS!
the Overstock guy has had ‘issues’ with some aspect of Wall Street corruption for some years –i never really paid much attention, assuming some deal had gone sour and he was politiking it. But when Mack Truck objective correalitives start running over you every day, well, then you see him signed of with some credentialed journos collaberating on a professionally done site explaining what you’ve been getting run over by –well, one learns again, that one is stoopid. Then one of my market newsletters pops in my inbox with the subject line “The United States, the World’s Largest Ponzi Scheme” –and whoops suddenly your head is wrapped in cellophane and you’ve got a stick in your butt and you’re laying there with the rest of the suckers on the candy counter of life under a sign saying “five cents apiece”.
I knew about the naked shorting, but had no idea of the extent . And then the “Madoff Exception” rule that SEC gave him, that he then lent out at will, unlimited. Check sesrch, you’ll see the FBI ongoing investigation has released a blurb that mystery money from the London and Dubai exchanges had also manipulated the oil markets on the run to $147, then the same description for the hammers that beat the banks down to small change back in September. and then you learn that there was so much of the phantom trading that it’s still sitting around in the last buyers’ books, unsettled, by the DTCC black box that, guess what, no one has the authority to audit. Since tha banks admit to the credit default swaps on the asset ledger, but not phantom shares, maybe that’s where the mystery money has been going –to wash out swindles and to keep the world governments and markets from having it rubbed in their faces that their brightest genius FIDUCIARIES are either crooks or dupes –or most likely both.
True to form: Over at Yahoo’s “Finances” site, they are definitely pimping for our new Pres.
Check it. If you get your news here, beware, because stocks only “seesaw,” or they “pare,” but, they never appear to ever fall!
As the script goes, it’s “Just another 1.4% drop today, folks. Just some “paring” going on. Some “see-sawing.” Nothing to look at here.”
It’s all kinda scary, just like Mr. Plumpfingers.
Buddy, Slade others;
I’ve just read an article by Alan Blinder, former member of the Fed Reserve and an economic policy consultant to Democratic Presidents and politicians. (January 25th International Herald Tribune. )
He blames the economic collapse on six blunders:
1. ‘Wild Derivatives” starting in 1998.
2. Letting Securities Firm reserve requirements balloon from 12 to 1, to over 33 to 1 in 2004.
3.Subprime Surge 04-07
4. Fiddling with Foreclosures
5. Letting Lehman go.
6. “Tarp Detour” by Paulsen
On its face the article seems convincing. Of course there is no mention of the CRA, Fannie or Freddie or ACORN. Except for the “Wild Derivatives” part, It could serve as a sophisticated Democrat talking point memo blaming nearly the whole collapse on the Bush Administration. There is enough truth in it to make it convincing.
What jumps out at me is the relaxation of the reserve requirements from 12 to 1 to who knows what. Buddy first brought this up. Still burns me. This happened at about the same time, that the fraud was uncovered at Fannie and Freddie. What was the Bush Administration thinking? Couldn’t have anybody connected the dots? What ‘s funny if you google this subject , there are almost no articles on it.
Another thing. In my disturbed mind , I can see how when Bernacke raised interest rates, he pushed a lot of money into the sub prime derivatives. Let me explain. From my perspective, there were 3 kinds of mortgages:
A. Jumbo Loans, above the Fannie/Freddie limit which required good credit scores, collateral and a supporting income.
B. Loans that qualified for the Fannie/ Fannie Securitization Treatment.
C. Fannie/Freddie Loans that also qualified for the low income census tract interest rate break of 1.25% , and a bunch of lesser requirements.
So from what we know now, the big investment banks from 2004 to 2008 were able to decrease their reserve requirements, from 12 to 1 to over 30 to 1. In effect, even if they able to attract no additional capital that new reserve requirement would mean that they able to lend from 04 to 08 at least 2 1/2 times their assets of 04. Merrill, Goldman, Morgan and Lehman alone by my dumb reckoning in 04 together had assets of at least $ 2.6 trillion. So over those four years, if I’m right, those banks at minimum pumped over 4 trillion additional dollars into the credit markets. And for 70% of this same four year period, the Fed was trying to restrict credit and bring down the dollar.
Back to the subprimes. The Jumbo loans were hurt by the Fed tightening. But the Fannie/Freddie loans and particularly the low income loans with their 1.25% break were hurt a lot less. So it only makes sense that money would flow into the loans backed by the government that were still being written, while at the same time, the investment banks all of a sudden had all this new money to lend. Recipe for disaster. This scenario could be all wet. But even if only partly true, it makes Bernacke out to be a total fool.
By Brian Wesbury, chief economist at First Trust Portfolios L.P., writing in National Review (snip, bolding mine):
For some reason our elected leaders, along with a significant, although shrinking, number of financial-market professionals, have fought strenuously against any alteration of the mark-to-market accounting rules set down by the Financial Accounting Standards Board (FASB). Congressman Barney Frank (D., Mass.) clearly stated that these rules were untouchable on CNBC on February 11. “You certainly don’t want Congress legislating accounting [rules],” he argued.
Why is that? Congress makes rules all the time. It tells us how much water our toilets can use, sets gas-mileage standards, says where we can drill for oil, and passes massive new regulatory legislation (see Sarbanes-Oxley) when it sees fit. Why are mark-to-market accounting rules untouchable?
(read the rest at above link, don’t worry, it’s short and no alphabet soup)
******************
Wesbury was on biz tv earlier, they brought him in to talk about whether or not he thought Citi and Bank of Amer could survive as private concerns. Of course he got onto m-to-m, saying that the WHOLE mess is due to frozen credit and credit is frozen because of m-to-m (he’s starting to raise his voice & wave his arms here, exasperated). He continued (paraphrased) ‘…it confuses liquidity with value, two different things, but it’s keeping private investment out and making the banks afraid to lend. We can’t do it without some risk appetite and mark to market won’t allow any.’ The interviewer lady asked him if he was making all this known to the banking committee; he said yes of course, that he had just yesterday talked again to Barney Frank, and that Frank had told him that it was too late now to make make the change. “But it’s NOT to late,” almost shouting at the tv lady, “…we need to get rid of it RIGHT now!”
****************
Okay, now, please gather ’round and lend me you rear. i mean your ear. you’ve just read a Nat’l Review report by, and heard me describe a live interview (which is prob on Youtube somewhere) with, a leading academic proponent of suspending this rule (which BTW in bullish times expands rather than contracts asset values).
OK, this advocate, in the writing and the interview, describes two different recent statements by the guy with the pencil, Barney Frank. Both statements concerned this rule (upon which, incredibly, hangs, in all arguability, the future of the entire western liberal capitalist economic system).
In the first meeting, the Man With the Pencil claims he can’t say the words “suspend it” because (he strongly suggests) it would violate a congressional prohibition. Then some days later, Wesbury catches him a little less prepared, and he says he can’t suspend the rule because “it’s too late”.
********************
Remember, dear reader, there is no cost to suspending; it’s accounting. Try it out in committee. If a working number run without the rule comes up squirrely, ditch it and go back to where you were before, no fault, gavel down, status quo ante restored.
But no, despite howling economists, the rule, without any decent attempt at any real explanation why, has become a sacred cow.
Daily damage in the millions, billions, accrues and envelopes us as real debt, a millstone in the near future and from then on.
Nope, there’s something wrong here, gratuitous damage is being done to the system and the wealth it stores.
Why?
…and, does this situation shed any light on other non sequiters?
good link there buddy.
As The Leftist socialist communist just loves to say, again and again, I Question The Timing: what started on Sept 18 morphed into a nice little October Surprise.
Hot Air » Blog Archive » Smelling a RAT
Feb 19, 2009 … In the name of accountability and transparency, Congress has given the RAT Board the authority to ask “that an inspector general conduct or …
The name of the RAT Board is Orwellian, as is its appearance in the administration that claimed it would have the most transparency in American history.
Putting IGs under Nancy Pelosi’s thumb eliminates transparency and accountability, and calling it an Accountability and Transparency Board is a grim joke.
It’s simply a mechanism to shut down potentially embarrassing (or worse) IG investigations while commanding others against political foes.
Put simply, it brings the worst aspects of the Chicago Machine to Washington DC — a result which we repeatedly warned would happen with Obama’s election.
Buddy,
Your newsletter sure does kick Spengler in the brats and potatoes. I take it he doesn’t have much love for the Asia Times oracle.
Jim
MoreNuanced, Sanders, and Fred.
Regarding the video embedded in that cached link at number 208. Amazingly it still works, but who knows for how long?
WOW! Thank you More.
That video reveals how breathless the MSM can be when it adores its subject. It’s nothing less than an early preview of how they would adulate Obama.
I definitely recommend viewing it and being impressed by Life and Times’ uncritical treatment of Strong’s life and works.
For those who find that video as significant a marker as I think it is, I have a book on my shelf, Natural Process, by the land use reformer Mark Vande Pol, that delineates all the organizations and institutions in which Mr. Strong is pivotal.
Here are just about all the organs that are listed in that video, and maybe a few more.
I’m sorry, I forgot to note that the above excerpt came from pages 319-320 of Dr. Vande Pol’s book.
Also. I overlooked one more comment attributed to Mr. Strong that can be found on page 322.
I’m grateful my scanner and OCR behaved well today.
I wonder why very smart Wretchard in Australia doesn’t think there was any manufactured economic conspiracy, and very smart everyone else in America does.
It seems to me that Bush’s war on terror introduced a new way of attacking the enemy: through his bank accounts. It also seems to me that the soft underbelly of America is not our military nor our morality and churches nor even our political process — it’s our universal “Greed is Good” cowboy capitalism.
Doesn’t it bother you, Wretchard, the repeated mentions of money coming out of Dubai and/or London, and the fact that Obama had his campaign set up to accept campaign donations from overseas? We’ve seen Enron game the system in a heroic way; why does it *have* to be Americans only who think up these schemes?
If you want to overthrow the greatest country in the history of humanity, how the hell are you gonna do it if they are arrogant, rich, nuked and lawyered up, and can’t even be bothered to pay attention to you when you attack them, other to swat you down and squish you like the feeble-but-filthy-rich fly you are?
If it was me, I’d take a few courses in economics (or buy some poor Englishman with a good degree who understands world markets) and start gaming the American system just to see how it works. I’d *use* my filthy richiosity because it’s really the only weapon I have. And everyone knows in a system as complex as the world financial market, there’s always a new scam, a new rule to be broken. Especially if America isn’t paying attention to that sort of infiltration because we’re used to the Japanese or the Germans or the Arabs coming in and trying to buy us … and always always always failing.
It could have been a game gone wrong, gone too far, but I still think that Obama has been bought and paid for by the same overseas purveyors as who were short-selling Wall Street and causing the bankruptcies of Lehman and Bear Stearns. And I just don’t understand why Wretchard is pooh-poohing that unless it’s that he’s too far away in Australia to feel/sense the vibrations everyone else here can feel.
Although ultimately I don’t know that it will make that much difference because, as always, if America is bad off, everyone else in the world is far far far worse than we are. We Americans will not starve. We will not quit buying or driving our cars. We will not be invaded and we will not give up our guns. Australia is probably equally safe from the current financial turmoil, but no country in Europe is, Mexico is swirling down the toilet, most of South America, Japan is in trouble, and I think Canada is riding our coat-tails for dear life. Africa has never managed to haul itself out of the toilet to begin with, but between running out of both oil and water, the Arabs can’t be too happy either, even if they do still have a few American dollars left to rub together.
Does anyone have any idea how China is doing financially? Other than holding a lot of bad American debt and losing a huge percentage of their overseas market, I haven’t seen anything about bank runs in China.
I just think that who-ever started this financial rampage did it to buy himself a President of the United States. Given that, the rampage is not over with because said President will do everything in his power to continue to make sure that America bleeds in all ways until it *can* be taken over — bought if not invaded.
Spengler has an article out that infers the Chinese position.
Obamas the biggest Unilateralist of all!
“Luo Ping, a director general at the China Bank Regulatory Commission, told an American audience, “We hate you guys. Once you start issuing $1 trillion-$2 trillion … we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do.” (Financial Times, December 12, 2008.)”
For what it is worth. I don’t believe that Richard is of the opinion that our meltdown wasn’t manufactured. He just doesn’t think it was OBL and Putin.
My sense was that Richard was doing his best to identify the topic as worthy of further discussion without trying to hijack it at the outset. Seems to me his approach worked well.
For the record, I favor the Twin Towers analogy. Someone or someones gamed the system to get their man in power, and they didn’t have control over everything that would or will take place.
Oh, agree that it wasn’t OBL or Putin. Putin is too poor and rusty and overstretched. Although I *do* think the same Saudi’s as who’ve been financing the “golden chain” of terrorism for the past decade or more should be high on the suspect list. We know that Saudi Arabia is still pouring money into terrorism and madrassah’s around the world, they’re used to hiring educated Englishmen to do their bidding, they have enough money to swing AMerica’s stock market, and they’re used to buying their way out of situations when called upon to fall back and punt.
And then there’s that little issue of Mr. Obama’s middle name and whether or not he’s a Muslim. If you were a keeper of Islam’s black rock and took your religion semi-seriously surely you’d want to buy a President who is at least sorta/kinda a Muslim.
The link to Ben Stein’s latest American Spectator piece, The Age of Fraud is not yet available, but he covered this base very well, particularly WRT NahnCee’s comment. Thanks mostly to our friends on the left from their positions in the academy and the media, our culture’s link with the wellspring of morality – spirituality has come unstuck – and we are left with materialism.
No one gets away free though.
weswinger/267; No one gets away free though Nope, no one does.
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More here @ real clear markets dot com and full of info too are the comments –don’t miss commenter WM as he has quite a grip on the statist angle.
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Pascal/261; here’s a paste from one of many links to Maurice Strong’s 1990 West Magazine accidental Manidfesto:
“Each year the World Economic Forum convenes in Davos, Switzerland. Over a thousand CEOs, prime ministers, finance ministers, and leading academics gather in February to attend meetings and set the economic agendas for the year ahead.
What if a small group of these word leaders were to conclude that the principle risk to the earth comes from the actions of the rich countries? And if the world is to survive, those rich countries would have to sign an agreement reducing their impact on the environment. Will they do it? Will the rich countries agree to reduce their impact on the environment? Will they agree to save the earth?
The group’s conclusion is ‘no.’ The rich countries won’t do it. They won’t change. So, in order to save the planet, the group decides: isn’t the only hope for the planet that the industrialized civilizations collapse? Isn’t it our responsibility to bring that about?
This group of world leaders form a secret society to bring about a world collapse. It’s February. They’re all at Davos. These aren’t terrorists – they’re world leaders. They have positioned themselves in the world’s commodity and stock markets. They’ve engineered, using their access to stock exchanges, and computers, and gold supplies, a panic. Then they prevent the markets from closing. They jam the gears. They have mercenaries who hold the rest of the world leaders at Davros as hostage. The markets can’t close. The rich countries…?” and Strong makes a slight motion with his fingers as if he were flicking a cigarette butt out of the window.
I sat there spellbound. This is not any story-teller talking. This is Maurice Strong. He knows these world leaders. He is, in fact, co-chairman of the Council of the World Economic Forum. He sits at the fulcrum of power. He is in a position to do it.
Readers who pay attention to economics might be thinking “say, that’s exactly what’s been going on for the past decade”….and the scary thing is, they might be correct. Adding further fuel to an already weird fire, Maurice has a very clear deadline in mind. If you guessed 2012, you’re right. (And you should probably reconsider just why you’d guess 2012.)
This interlocking…is the new reality of the century, with profound implications for the shape of our institutions of governance, national and international. By the year 2012, these changes must be fully integrated into our economic and political life.
–Daniel Wood, for West Magazine
Solid pointers to just some of those multudinous channels of influence, infiltration, vandalism and just plain pillage of USA; enemy money both foreign and domestic. Domestic filtering in as cuts of the foreigner games. Yah, the local (interstate) mob got some, the ecology got some (green), Lehman’s got some (or gave some).
One man says, above it all, esp. that 4T of _fractional_ money peddling, the Federal Reserve; many score more. They ride these tides and drop in for a swim, where the water be fine. Enabling and disabling from their high throne, _overseeing_ the good money, credit and finances of USA. Hiding and reporting what they may, with nobody, esp. DC having any say.
We can be sure that they are not tempted to be part of the problem, nor certainly cause it. The vast trillions therein surely be accounted to righteousness and the benefit of USA whose wealth they contain.