Friday, November 30, 2007; Page D01
The chairman of the Federal Reserve said last night that the central bank would take into account recent deterioration in the financial markets as it decides whether to cut interest rates next month.
Well, American business certainly won't tolerate a head wind. No matter there was an outrageous lack of any wind at all blowing against the Fed-supported loan of trillions to those who had no collateral.
Any garden-grade bank examiner would have exposed that failing, but they called it a sub-prime loan instead of "pounding money into a hole in the sand"--while paying themselves to do it. Greenspan 'didn't see it coming' just as he failed to see the misguided tax refunds or the dotcom bubble.
Now, with the holiday season upon us, Greenspan is gone and Ben Bernanke, instead of seeking indictments for the swindlers who gamed America's financial system, drums his fingers nervously on the desk and looks for loopholes. Various banks and financial institutions across the world are quite logically taking a bath for their bad judgment and co-conspiracy.
No problem there--make a bad call and pay for it--that's how financial institutions used to run.Yet there is more to this 'bad call' than has been allowed to meet the public eye. This was a swindler's call, a deliberate sucking of invented value from a market vehicle that had no value.
Those are things people in a regulated society go to jail for.
This Ponzi scheme was largely enabled within and hidden by the hedge fund industry, an almost totally unregulated and opaque system of various financial slights of hand--inventions, if you will, for extracting money by promising returns on investments no one understands.
Ask Ben Bernanke to explain the theory behind the derivative contracts and various leverage instruments that sliced and diced worthless mortgages, allowing a profitable and giddy game of musical-chairs until the music stopped. He won't be able to make it make sense. It was not designed to make sense. It was designed to take 2% off the top and 25% off growth, even if the growth was a lie.
Enron and Charles Keating's S&L scandal were small potatoes compared to this and no one is going to jail. It's going to be fixed by interest rates instead of litigated in federal courts. There is no move to restrain a reoccurence; such inventive derivative schemes as (who knows?) selling luxury cars to the indigent, who have no driver's licenses. "Money to be made there, trust me, we'll arbitrage the whole thing and sell it to the Chinese."
This is not my personal wild-eyed claim. Read up on hedge funds and their $100 million-a-year managers. Neither Congress, the investing public nor the Federal Reserve knows what the hell they are, much less what they are up to.
They are exempted from oversight, yet they are the most volatile and coercive force in markets today. They have a hundred (or maybe a thousand) times as much potential leverage and influence on the market as pre-1929 margin requirements had--yet they are entirely unregulated. Who figured that one out?
I will tell you who. Those who would bury all vestiges of FDR and thereby set us up for an international crash that will make '29 look like a walk in the park.
Bernake is trembling. He doesn't know what the hell to do. The Fed has never been scammed on this large a scale and here he is, new guy on the job. Probably $1-1.5 trillion has gone missing
- from the major investment banks (so much for investment)
- from mortgage originators who provided money on negative net worth
- sucked into the black-hole of fees, charges, extraordinary expenses, commissions and various other special charges
Rather than discipline a market that has none, rather than pursue and jail the greedy who made up this economic confection for their own purposes, rather than instill some Alan Greenspan-neglected logic on a system run amok, this appointed defender of the national money system is about to distort it further.Interest rate cuts will follow, to take a long overdue (but-necessary) headwind and turn it into a hell-with-the-torpedoes tailwind. Knowing not what to do, Bernanke can't resist juicing an already over-juiced economy.
The Fed, through the Greenspan Years, did so well holding down inflation that a 1970 $10,000 Mercedes S-Class sedan now costs $70,000 and a quarter million bucks buys a 'starter home.' Wages, in real terms have declined so no one in these times can 'start' a starter home, even on two salaries.But we allow this outrage to continue, jaws dropped and eyebrows raised, as Bernanke, the investment banks and hedge funds pick the last crumbs from our pockets.
And yet they meet, these Federal Reserve Board members. They pontificate in guarded tones and stroke their chins. They look pleadingly to Benjamin Bernanke and call it oversight.
* For more in-depth articles by Jim on Things That Make Me Nuts, check out Opinion-Columns.com
Jim Freeman's op-ed pieces and commentaries have appeared in The New York Times, Chicago Tribune, International Herald-Tribune, CNN, The New York Review, The Jon Stewart Daily Show and a number of magazines.
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Richard Mynick is a US citizen who, despite the best efforts of the corporate media, noticed something disturbing about how the 2000 election was decided, & felt it augured poorly for democracy. |
I totally agree with you. This thing was a CRIME, yet the mainstream media (& Bernanke, of course) insist on portraying it as either a technical problem, or as some sort of unfortunate act of "nature" that (tsk, tsk) we're all naturally very "concerned about," and will try to "alleviate," but that simply "arose," neutrally and impersonally. What's missing here? As you say, what's missing in this portrayal is the concept of agency. The disaster that has struck actually reflects massive corruption and criminality. Some on Wall Street caused this lending to happen, got the rating agencies (like Moody's, S&P, etc) to call the junk loans "Triple A", and then profited to the tune of billions from the scam. Yet no one is being held to account!! Not only that, but now that the world financial system is reeling from the crime that Wall St itself committed, Wall St banks need lower interest rates to help them through the turbulent waters ahead -- so the Fed gives them that. The Fed is bailing out the very criminals (or at least their close buddies) who caused this disaster!! If lower interest rates cause inflation to surge in the months ahead, ALL Americans will essentially be paying the price for bailing out the Wall St criminals. But that's what happens, when Wall St itself controls the oversight agency (ie, the Fed), the politicians, & gets to write all the laws. Very unlikely, to put it mildly, that they'll be making themselves pay for this. Instead, we'll all be paying for it, while the perps get off scot-free. by
Richard Mynick (2 articles, 3 quicklinks, 1 diaries, 915 comments)
on Friday, November 30, 2007 at 12:06:14 PM
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Author, Exec. Dir. The Center For Balance. Websites: PanditPress.com, OligarchyUSA.com, PublicCentralBank.com, EditorFreedom.com,
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Banksters at it again
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Kent Welton (46 articles, 0 quicklinks, 0 diaries, 37 comments)
on Friday, November 30, 2007 at 12:23:28 PM
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Ed Encho is a free lance writer, activist and consultant who resides in West Central Florida. |
Jim Smacks It Out Of The Park Damn right - why aren't these criminal looters having their fat asses frog marched out of their Wall Street offices right now? Then again don't bother answering - it's the stinking, rotting, corrupt system in which 'free market' is just another Orwellian term for crony capitalism. What rot - the people should be storming Wall Street with pitchforks and torches right about now. by
Ed Encho (6 articles, 0 quicklinks, 46 diaries, 266 comments)
on Friday, November 30, 2007 at 6:59:43 PM
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It Is the Way It Is Picture the people...America's working men and women, as a humongous bovine beast. A docile, succulent "Cash Cow". The beast just stands there in its stall, eating and existing for the vampire elite and others to constantly drain it's lifeblood (money) in ten thousand different ways. The MIC siphons off monstrous amounts of cash through ingenious ploys. Wall Street has it's main lines attached, inventing new schemes to suck blood faster and faster. The Fed is a front for criminals...created to defraud and steal massive sums from the American people with a shell game. Bankers making the rules, with their hands on the gate valves, monitoring the flow "out of our pockets". You get the idea here. America the Cash Cow just doesn't have it in her temperament to fight back in any meaningful way. There is no real understanding of the extent of our exploitation. Our head is stuck through the stall, and we can't see our backside with all the tubes running out. It is an ugly and disgusting way for us to live. This arrangement seems to be O.K. with us -- the U.S. people. I guess we don't know how to live any differently. WE'RE FARMED! by
boomerang (0 articles, 0 quicklinks, 0 diaries, 179 comments)
on Saturday, December 1, 2007 at 8:36:42 AM
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Jim Freeman's op-ed pieces and commentaries have appeared in The New York Times, Chicago Tribune, International Herald-Tribune, CNN, The New York Review, The Jon Stewart Daily Show and a number of magazines. |
And yet amazingly ten times as many apply to become Americans as we can accomodate. by
Jim Freeman (107 articles, 39 quicklinks, 126 diaries, 297 comments)
on Saturday, December 1, 2007 at 9:49:34 AM
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Richard Mynick is a US citizen who, despite the best efforts of the corporate media, noticed something disturbing about how the 2000 election was decided, & felt it augured poorly for democracy. |
In a way it's amazing, but in a way it's also very logical. Overall, the effects of US policy in Latin America, the Caribbean, SE Asia, & some places in Africa, have been devastating. Some of these countries may never recover from what we did to them, economically & politically (not to mention via actual invasion or support for violent rightwing coups). For a family that lives in Haiti, Nicaragua or El Salvador, for example, moving to the US would still represent a huge improvement in their circumstances. It's ironic that they'd be emigrating to the same country whose government did so much to louse up their own country, of course. But for these individuals, it's still a perfectly logical decision. This doesn't in any way invalidate boomerang's spot-on metaphor of "The Cash Cow," above. by
Richard Mynick (2 articles, 3 quicklinks, 1 diaries, 915 comments)
on Saturday, December 1, 2007 at 11:32:51 AM
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Young retired yank of 59 living in the highlands o Scotland. Been out of the old country for 20 some years now. I'm with the Dali Lama, kindness is the only thing that will work. LOVE cycling on or off road. My wife is a wonderful girl from Manchester England.We're haven fun. |
On the money On the money Jim. A doff of the cap to you. by
rusty (1 articles, 0 quicklinks, 0 diaries, 241 comments)
on Saturday, December 1, 2007 at 4:05:50 AM
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