Share on Google Plus Share on Twitter Share on Facebook 4 Share on LinkedIn Share on PInterest Share on Fark! Share on Reddit Share on StumbleUpon Tell A Friend 4 (8 Shares)  
Printer Friendly Page Save As Favorite View Favorites View Stats   11 comments

Exclusive to OpEdNews:
OpEdNews Op Eds

Welcome to Phase 2

By (about the author)     Permalink       (Page 1 of 2 pages)
Related Topic(s): ; ; ; ; ; ; ; ; , Add Tags Add to My Group(s)

Must Read 8   Well Said 5   Supported 5  
View Ratings | Rate It

opednews.com Headlined to H3 2/13/11

Become a Fan
  (89 fans)
- Advertisement -


Coming soon by Newton Software


Something strange is going on around here, the type of thing that make you ask yourself, "what's up?" The quitting virus is moving through Washington and Wall Street. When these folks begin to voluntarily give up wealth, power and privilege you can bet your bones that there is some bad juju just over the horizon. I had this same feeling back in 2005 when Congress suddenly got it into their heads that they needed to reform America's bankruptcy laws as soon as possible.

Or in 2004 when George W. Bush had bragged of the "ownership society" yes, thanks to his programs more American's than ever before owned their own homes. He was proud of that and took credit for it, as something that he had done his own self. This was a duck the shoe moment, three years later the narrative had become greedy Americans who took out loans they knew they could never pay back. Sweet innocent, naïve, bankers and mortgage brokers who were taken in by these greedy American home scamming con artists.

The other day over on Wall Street, our nations capital. Wells Fargo & Co. Chief Financial Officer Howard I. Atkins resigned for personal reasons, taking an unpaid leave of absence. Wells Fargo had reported record income for last year of $12.4 billion. It was Atkins who had helped to engineer the takeover of the crippled Wachovia bank in 2008. Banks too big to fail buying up banks not to big to fail. Much like Steinbeck wrote about in "The Grapes of Wrath" of small farmers pushed off the land by the large farmers until all that was left were huge corporations.

Atkins said he resigned for personal reasons which is even further confounded by his up coming retirement. He's nearly sixty, isn't that the age when most working people retire? He'd planned to retire in August when his benefits kick in after ten years of service. After a long and successful career of a decade Atkins will retire with a severance package of $22 million dollars. This will help to tide him over until his Social Security benefits kick in. Insiders are puzzled as to why Atkins would leave so suddenly and under such mysterious reasons.

Bloomberg- "This is rather sudden and it raises the question of why?" said Charles Elson, director of the Weinberg Center for Corporate Governance at the  University of Delaware. Elson owns Wells Fargo shares. "You don't just leave and take an unpaid leave of absence. CFOs don't usually depart in this manner."

It must be a virus, Federal Reserve Governor Kevin Warsh also turned in his notice to America's banker in chief Ben Bernanke. Warsh was the youngest Fed Governor ever appointed and is just forty years old and now leaves that position. It is a position like Pope or a head football coach, you either get promoted or fired but you don't quit. Warsh is reported to disagree with Boss Bernanke on his quantitative easing program.

It is one of those strange ironies that if you took all the economists in the world and laid them end to end they wouldn't reach a conclusion. Quantitative easing was used by the Federal Reserve in 2008 when the Bush administration claimed that our economy was near collapse. It involves expanding the money supply, normally the central bank would lower interest rates to stimulate the economy but since the rates were all ready at zero that wouldn't work. In the years before the financial crisis the Federal Reserve had bought between $700-$800 billion dollars worth of treasury bonds.

- Advertisement -


The government can only print as many dollars as it has customers to buy its treasury notes. By Bernanke buying treasury notes it signals to the government to start the printing presses. This purchase was made before the crisis, once the crisis began the Federal Reserve bought $600 billion in mortgage backed securities at face value. It allowed the "too big to fail" banks to peddle their bad paper on to someone else's books.

Quantitative easing also gives the banks an opportunity to look good. With billions of extra dollars available at virtually a zero percent interest, the banks can sit on their own reserves because there is always plenty of money free for the asking. Remember now, that this was done to prevent an economic collapse and to prevent an end of the world scenario. By June of 2010 the Federal Reserve had purchased $2.1 trillion in mortgage backed securities and treasury notes. Now guess who will be asked to pay for this largesse? That's right, you will, they bought up bad debt and refinanced the banks with free money and left a debt to the American public of $22,000 per million dollars borrowed or your cost is roughly 462 billion dollars! That's not the debt itself, of course, that's just the difference between what the bank was charged to borrow versus the true market cost.

Kind makes all those economizing efforts by the President come into focus, doesn't it? But big Ben stopped when he saw the economic recovery was on the horizon. Ben and Barack skipped merrily arm in arm  through old Washington town singing joyously of the economic recovery. Ben even bemoans the sad fact that there is no recovery in the job market for working people. Strangely, with the economy in full recovery mode Bernanke says that we need $600 billion more in quantitative easing.

It does seems strange that if we needed this economic chemotherapy to keep our economy from dying in 2008 that the doctor would prescribe it again after he now claims that the patient is almost well. Kevin Warsh is quitting over over it and folks are quitting all over town.

"Nor will I retire from politics. After my family and faith, my desire to advance conservative principles is the animating force in my life (even ahead of NASCAR). To those who say, "You can't stop now, there is so much to do and we're on the cusp of taking control of the Senate,' I simply note that there will always be unfinished business in advancing the cause of freedom."  Republican Senator John Kyl
- Advertisement -


Democratic Senator Chris Dodd stepped down last month, Dodd was a member of the Senate Banking committee and Kyl was on the Senate finance committee. Democratic Senator Byron Dorgan also announced his retirement in January saying, "Although I still have a passion for public service and enjoy my work in the Senate, I have other interests and I have other things I would like to pursue outside of public life."

On July the first of last year the Dow Jones average was at 9,773 closing today at 12,229 a market increase of nearly 2,500 points based on what? Based on what, other than free money? In January of 2000 there were over one and a half million new home starts in the United States. Last January there were 588,000. Listen to what the commerce department says,

"For instance, the January Blue Chip forecast (an average of many forecasters) calls for new housing starts to jump to 680,000 in 2011 from  588,000 in 2010, a 15.7 percent leap (not too shabby). This same group expects a further 31 percent increase in 2012 (definitely not shabby)." Commerce Department

Next Page  1  |  2

 

I who am I? Born at the pinnacle of American prosperity to parents raised during the last great depression. I was the youngest child of the youngest children born almost between the generations and that in fact clouds and obscures who it is that I (more...)
 

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon


Go To Commenting

The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact Author Contact Editor View Authors' Articles
- Advertisement -

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Hobo's Lullaby

100 Reasons for Revolution

Guns or Butter

Taken at the Flood

When will the Economy Collapse? You're Looking at It!

In this Country at Least, The Revolution Will Not Be Televised

Comments

The time limit for entering new comments on this article has expired.

This limit can be removed. Our paid membership program is designed to give you many benefits, such as removing this time limit. To learn more, please click here.

Comments: Expand   Shrink   Hide  
10 people are discussing this page, with 11 comments
To view all comments:
Expand Comments
(Or you can set your preferences to show all comments, always)

... is when they say they "want to spend more time... by Nikk Katzman on Sunday, Feb 13, 2011 at 11:11:16 AM
The first going are those most corrupt, conniving ... by PatriotsAct on Sunday, Feb 13, 2011 at 12:19:00 PM
Having read about the several Congress members res... by Bryna Hellmann on Sunday, Feb 13, 2011 at 1:09:21 PM
to look behind the stated reasons for what's going... by Judy Palmer on Sunday, Feb 13, 2011 at 1:54:26 PM
I too have been watching and reading of the mass e... by thepiffler on Sunday, Feb 13, 2011 at 2:02:11 PM
Great article, David. I appreciate that you have '... by Nancy S on Sunday, Feb 13, 2011 at 2:58:37 PM
CATO owns the term "ownership society", they are f... by janet O'Connell on Sunday, Feb 13, 2011 at 4:22:09 PM
Thank you for the info. Makes sense that CATO and ... by Nancy S on Sunday, Feb 13, 2011 at 7:35:52 PM
Thank you so much for bringing it to my attention ... by Elizabeth Hanson on Sunday, Feb 13, 2011 at 5:53:47 PM
Midas is in charge of the garden.Money is enslavin... by martin weiss on Sunday, Feb 13, 2011 at 10:04:49 PM
I saw the decline coming back in 2002. It took me... by Doc McCoy on Monday, Feb 14, 2011 at 9:56:15 AM