The financial elites are well aware of this and under the guise to save their shareholders, they have just to come up with a speech in favor of economic stability and the financially illiterate crowds applaud. In other words, millions of taxpayers who didn't know anything about these complex and fraudulent securities (that imploded along with the U.S. housing market) are now mainly own them. If those assets lose more value, taxpayers stand also to lose a greater purchasing power - talk about a rescue plan!
The tally could rise further if another bank finds itself in trouble, or if the U.S. government steps in to prop up another malfunctioning credit sector, such as student loans. "Taxpayers are on the hook if it goes badly," said John Cochrane, a finance professor at the University of Chicago's business school. "We've been doing that for a century." - Reuters/April 4
Although the tide is changing, it remains to be seen how far lawsuits can go, the probe at Moody's could lead to something revealing. If such an institution is being investigated for having awarded incorrect triple-A ratings to billions of dollars whose value come close to the near junk status, it is time to leave the Titanic. If you are a little skeptical, just know that we're only one quarter through the sub-prime crisis and that the threat of Alt-A that is at least three times bigger than sub-prime. Sleep tight?!
Anyone starting to investigate the global monetary system honestly will notice at first glance that there is indeed something repellent to the mind. Just kind of like an intuitive or esoteric impression to say the least. But it is the main task of the Keynesian alchemy to appear magical to the neophytes - and to discourage them at the same time. Fractional banking represents a system as a convoluted web where the blame games rule. Although the culprits are countless, the least culpable ones remain the central bankers, which are given the status of sainthood. When things go bad, they quickly apologize about their human imperfect nature. In other words, our financial matrix is a regulatory illusion.
It is like Greenspan confessing to being unable to recognize market bubbles until they have popped, but that it is the Fed's role is to mop up after bubbles burst. Meanwhile their 'errors' impoverish and kill millions of people on a regular basis. How will Greenspan be judged when masses will finally hold him responsible for the disappearing $6 trillion in housing wealth threatening the hedge funds and derivatives with reactions in chain of multi-systemic implosions?
For the investors, the buck stops with taxpayers and in their minds, bailouts will continue when needed. But among the insiders, it is the 'Great Depression Part II'. Bonuses will be slashed by up to 90% this year. Many of those brokers and bankers who have lived beyond their means will have to let their Mac Mansions go. Boston financial research firm Celent LLC predicted at least 200,000 banking job cuts nationwide over the next 12 to 18 months. In the immediate future 36,000 lay-offs threaten Wall Street alone! Wait until you see Manhattan after the elections, the city that never sleeps will have to purge its excesses. I am willing to bet with you that thousands of retailers, restaurants will have to file for bankruptcy. Starbucks already feels the pinch, blames the meltdown of housing market for its bleak outlook.
The very scary thought is that the majority of the population is unaware that the Fed. Reserve has run out of ammunitions. John Crudele from the NYPost summarized the numbers pretty well. He noticed that the Commerce department reported the same 0.6% growth reported for the fourth quarter of last year while showing the real inflation disaster, asserting that the economy is contracting since the last quarter of 2007! Additionally, if you recall, a previous column of mine (Global Junkification) also mentioned why this monetary expansion is being more than offset by credit contraction.
Central Banks cannot keep up with the billions being erased from their books as the many other sub-banks are tightening lending. The other day the Bank of England reminded banks to lend while the Building society mortgage loans had fallen 68% as of May 3rd. How realistic could it be, as the British population has more debts than the country's gross domestic product? By comparison in the United States, personal and mortgage debts amounts to $13.8TN, slightly less than the country's $14TN G.D.P, the NYTimes stated last March ... The two countries, once considered as the wealthiest in the world, are just doomed to default. Duh!!!
We currently live in a world that is so illusory and treacherous that it is barely comprehensible for anyone who hasn't attended a sound money crash course to start with. Last month, for example, people were mesmerized by the Bernanke throwing money at the bankers - to bail them out - in order to save the world from collapse. It is not without a reason that contrarian press nicknamed Greenspan' successor as 'Helicopter Ben' since the day he advocated for the rescue of the system with "helicopters stuffed with money". The global slump of 2008-09 has begun as poison spreads, as Ambrose Evans-Pritchard puts it. According to him, there will be no "reset Armageddon". But what exactly one or two years difference does it make considering that the least alarmist reports point to a debacle around 2010. The upcoming mega monetary contraction is unstoppable. "The Great Depression? We did it... very sorry, won't do it again", Copter Ben acknowledged in 2002.
Fortunately on AngryRenter.com, we can see that not all the citizens are clueless and ask themselves why should taxpayers have to bailout reckless lenders and borrowers? All this monetary infusion isn't free: Congress has concocted a $3,000 tax hike per household for the 2009 Federal Budget. The Heritage Foundation says that it completely ignores the impending explosion of Social Security, Medicare, and Medicaid costs. So if the outcome remains as dire, why this increase? It is just like the so-called tax rebate, which is a debt in itself and thus bears interest, in due time it will also add to the already out-of-control inflationary pressures. As of May 12, the WPost investigated the growing deficits that threaten pensions, mentioning a shortfall that could soon run into trillions of dollars:
State governments alone have reported they are already confronting a deficit of at least $750 billion to cover the cost of the retirement benefits they have promised. But that figure likely underestimates the actual shortfall because of the range of methods they use to make their calculations, including practices that have been barred in the private sector for decades...
The Superclass Wants You Poor And Stupid:
Since my previous column, the world has witnessed several tideal waves of near-apocalyptic news but in the wake of the Bear Stearns demise the common man exuded a sigh of relief when hearing that the monetary powers did what they had to do to prevent the world economy from going under. Two days after the intervention (which was decided during a luncheon at the New York Fed before the rescue), the pump and dump machine allowed the Dow to shoot up more than 400pts in one session. In the news, financial journalists marveled at the resilience of the stock market players rallying on optimism that the crisis had hit a bottom and that the housing market is on its way to recover.
Like I have said countless of times, there is no place to hide anymore. The three Credit Rating Agencies and The Securities and Exchange Commission, SEC, have joined the rank of the most machiavellian and infamous organizations on earth. First, MarketWatch reported as of 04/23 a fact that have kept many awake at might among the "Superclass". You see, this super-cop organization dismissed a congressional request to divulge why it cut off an investigation into whether Bear Stearns Cos. hurt investors by improperly determining the value of complex debt instruments. Then you have Roger Lowenstein who wrote an outraging overview shredding the light on S&P, Moody and Fitch and why their (intended) failures to protect consumers and investors alike. On the top of that, it now appears that financial institutions have 'enormous losses' from bad loans they haven't yet recognized -- ?!
"Superclass: The Global Power Elite and the World They Are Making" is also the title of a book written by David Rothkopf who has identified "just over 6,000" people who match his definition of the superclass (with the help of his researchers)- and described its ability to rule the lives of billions of people worldwide. That very Superclass operates now like a giga-world mob enterprise readying itself for the 'final monetization' which is about transferring most of the wealth into their hands. How did they succeed, would you ask? That is quite simple to be honest: they only have to validate the fidelity of their shareholders with profitable returns, and this in turn ensures their positions at the top of the world food chain. Doing just that is enough to give conspiracy theories credibility since it is the power game that coordinates and aligns their moves'.
The words 'conspiracy theories' no longer are regarded as a terminology for wackos, even the Middlebury College (video), and the Carnegie Endowment For Peace are welcoming D. Rothkopf's lectures about the world power structure. It goes without saying that having a superclass member among one's pals, can be extremely beneficial. So it shouldn't come as a surprise to read in the London Times (as of April 27) that the richest 1,000 people in Britain saw their wealth quadruple under the 11 years of Labour's regulation. It is useful to mention that the Labour is left-leaning party. Incredible, isn't it?
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