"And there is no way to quantify that because they're not asking questions of the banks that created this stuff. They're not saying 'you know what? Give us an accurate picture, every single one of you.' Which is most of the banks in the country. Certainly ones participated more than others and throughout the world. 'Tell us what you own. Tell us what you borrow. Tell us what your loss is. Give us exact numbers. Don't tell us you don't know how to evaluate it.'
Political Scientist Ben Barber amplifies:
"There is somewhere between 50 and $600 trillion, nobody knows how much, of that paper around. But that's because nobody even knows what the paper is. Here's what happens. There are three defaults on mortgages. The bank that holds those sells those at 10 cents on the dollar to a second bank. That bank puts those together with three other defaults and three other defaults and makes a second package and sells it to a third Bank. The third Bank sells 6 of these things from 10 different -- from five different banks to a hedge fund. The hedge fund repackages them, bundles them and sells them to some investor who has no idea what he has. And now we have a world of bad debt and no one can even tell you what it's -- you know, what it's worth."
How did this happen? Was anyone paying attention? Mo Sacirbey, a former investment banker and Vice President at Standard and Poors, says behind this is that the financial system itself changed with more and more people making money from money, not investing in companies that makes things. He says the system became predatory as the markets were manipuated:
"I think we had a transition from what truly was a free-market system to something now that is out of control and probably what I would define as a predatory system where we are not so much dealing anymore about the notion of fair prices, and the notion of markets that -- that work transparently an open late but in fact frequently markets that are manipulated for the end of maybe a few out there -- a few investors, mega-investors. It's even -- even that's very difficult to tell. We still don't know who in fact is making money while so many are losing money on Wall Street right now."
Years ago, right after the American civil war, there was a bearded prophet in Europe, who studied the system and demystified it. While his predictions were off, his analysis still seems on target. Anyone remember Karl "Das Kapital" Marx?
"Owners of capital will stimulate the working class to buy more and more of expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalized, and the State will have to take the road which will eventually lead to communism."
Today long trips are taken not by road but by air, so we may need Captain Sully to fly us away on some magic carpet. The right is mobilizing against the sprectre of a phony socialism while the government is pumping money into the economy to save capitalism. They are back to red-baiting falsely claiming the USA is becoming the next USSR.
Wake up: government funding and private control do not socialism make. We don't need more neo-cons or neo-coms. A broader mobilization is needed to stop the "Big C's" system meltdown.
News Dissector Danny Schechter wrote PLUNDER: Investigating Our Economic Calamity (Cosimo Books) and blogs for Mediachannel.org. Comments to dissector@mediachannel.org
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