Believing in Change Yet ? ? ? ?

Matt Taibbi on business as usual in DC and on Wall Street:



Wall Street = 1, Main Street = 0 . . . .

(Cross-posted from Moved to Vancouver)

The Fat Lady practices the Mikado

THE TELEGRAPH IN THE UK has an article by Ambrose Evans-Pritchard, titled "It is Japan we should be worrying about, not America", that is worthy of your consideration.

Japan is drifting helplessly towards a dramatic fiscal crisis. For 20 years the world's second-largest economy has been able to borrow cheaply from a captive bond market, feeding its addiction to Keynesian deficit spending – and allowing it to push public debt beyond the point of no return.
• • • • •
Simon Johnson, former chief economist of the International Monetary Fund (IMF), told the US Congress last week that the debt path was out of control and raised "a real risk that Japan could end up in a major default".
• • • • •
The savings rate has crashed from 15pc in 1990 to near 2pc today, half America's rate. Japan's $1.5 trillion state pension fund (the world's biggest) has become a net seller of government bonds this year, as it must to meet pay-out obligations. The demographic crunch has hit. The workforce been contracting since 2005.

Like Count Floyd used to say, "Scary stuff, kids"

Banking Bast_rds . . . .

McClatchy has released the first report on their five-month investigation into Goldman Sachs' activities during the lead up to the financial fiasco.

You will be amazed to find out that the politically well-connected investment firm has not been exactly squeaky-clean in their activities.

Or maybe not.

How Goldman secretly bet on the U.S. housing crash
Greg Gordon | McClatchy Newspapers

November 01, 2009 01:37:11 AM

WASHINGTON — In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting.

Goldman's sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled the nation's premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies. Only later did investors discover that what Goldman had promoted as triple-A rated investments were closer to junk.

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McClatchy's inquiry found that Goldman Sachs:


* Bought and converted into high-yield bonds tens of thousands of mortgages from subprime lenders that became the subjects of FBI investigations into whether they'd misled borrowers or exaggerated applicants' incomes to justify making hefty loans.

* Used offshore tax havens to shuffle its mortgage-backed securities to institutions worldwide, including European and Asian banks, often in secret deals run through the Cayman Islands, a British territory in the Caribbean that companies use to bypass U.S. disclosure requirements.

* Has dispatched lawyers across the country to repossess homes from bankrupt or financially struggling individuals, many of whom lacked sufficient credit or income but got subprime mortgages anyway because Wall Street made it easy for them to qualify.

* Was buoyed last fall by key federal bailout decisions, at least two of which involved then-Treasury Secretary Henry Paulson, a former Goldman chief executive whose staff at Treasury included several other Goldman alumni.

The firm benefited when Paulson elected not to save rival Lehman Brothers from collapse, and when he organized a massive rescue of tottering global insurer American International Group while in constant telephone contact with Goldman chief Blankfein. With the Federal Reserve Board's blessing, AIG later used $12.9 billion in taxpayers' dollars to pay off every penny it owed Goldman.

Read the whole article and watch your blood pressure rise while you think about how many Goldman alumni have been and still are in very powerful positions in Washington.

Sleep well . . . .

(Cross-posted from Moved to Vancouver)

Money, Military and Madness . . . .

Currently I'm reading and just about to finish The Sorrows of EMPIRE – Militarism, Secrecy, and the End of the Republic by Chalmers Johnson.

It's a great book with a look at US militarism and global monetary manipulation and their repercussions both at home and abroad. The author's explanation and history of the Pentagon's influence on US government policies is eye-opening for the those not familiar in the ways of Washington. Written in 2004, some of his references are uncanny in their relevance today.

Some excerpts follow as a teaser for you:

After the 1992 election, Cheney left the Defense Department, and between 1995 and 2000 he was the chief executive officer of Halliburton. Under his leadership, Brown & Root took in $2.3 billion in government contracts, almost double the $1.2 billion it earned from the government in the five years before Cheney arrived. Halliburton rebuilt Saddam Hussein's war-damaged oil fields for some $23.8 million, even though Cheney, secretary of defense during the first Gulf War, had been instrumental in destroying them. By 1999, Halliburton had become the biggest nonunion employer in the United States, although Wal-Mart soon replaced it. Cheney also appointed Dave Gibben, his chief of staff when he was at the Pentagon, as one of Halliburton's leading lobbyists. In 2001, Cheney returned to Washington as vice president, and Brown & Root continued to build, maintain, and protect bases from Central Asia to the Persian Gulf.

During Cheney's term as Halliburton's CEO, the company advanced from seventy-third to eighteenth on the Pentagon's list of top contractors. Its number of subsidiaries located in offshore tax havens also increased from nine to forty-four. As a result, Halliburton went from paying $302 million in company taxes in 1998 to getting an $85 million tax refund in 1999.

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In other words, feed at the taxpayer's trough, but never replenish it. Perish the thought, that would be un-American! “Profit=Good, Taxes=Bad” . . . .

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Dick Cheney, Bush Senior's secretary of defense and Bush Junior's vice president, helped broker the deal, while out of office, between Chevron and Kazakhstan as a member of Kazakhstan's Oil Advisory Board. James A. Baker III, former secretary of state, mastermind of the scheme to get the Supreme Court to appoint bush Junior president in 2001, and senior partner of the Houston and Washington law firm of Baker Botts, had a hand in the negotiations. Baker's firm maintains an office in Baku staffed by five attorneys. He is a member of the U.S.-Azerbaijan Chamber of Commerce's advisory council, as is Cheney. During the 1990s the council's cochairman was Richard Armitage, a veteran administrator of the American-sponsored anti-Soviet war in Afghanistan during the 1980s and undersecretary of state in the second Bush administration. Brent Scowcroft, Rice's boss and mentor when he was Bush Senior's national security adviser, is a member of the board of Pennzoil, an active investor in the Caspian Sea oil consortia.

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Is anyone else seeing a pattern here? High government positions and multi-national contracts. Who woulda thunk it ? ? ? ?

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Clinton camouflaged his policies by carrying them out under the banner of “globalization.” this proved quite effective in maneuvering rich but gullible nations to do America's bidding – for example, Argentina – or in destabilizing potential rivals – for example, South Korea and Indonesia in the 1997 economic crisis – or in protecting domestic economic interests – for example, in maintaining the exorbitant prices of American pharmaceutical companies under cover of defending “intellectual property rights.” During the 1990s, the rationales of free trade and capitalist economics were used to disguise America's hegemonic power and make it seem benign or, at least, natural and unavoidable. The main agents of this imperialism were Clinton's secretary of the Treasury, Robert Rubin, and his deputy (today, president of Harvard University), Lawrence Summers. The United States ruled the world but did so in a carefully masked way that produced high degrees of acquiescence among the dominated nations.

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Now where have we heard those last two names? Oh yeah, I know: Rubin was also a former Goldman Sachs and Citigroup big wheel and advisor to the current US president on the economic crisis, and Summers is actually a member of the current administration. Great how this is working out so far . . . .

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Starting in approximately 1981, the United States introduced, under the cover of globalization, a new strategy intended to accomplish two major goals: first, to discredit state-assisted capitalism like Japan's and prevent its spread to any countries other than the East Asian NICs, which had already industrialized by following the Japanese model; and second, to weaken the sovereignty of Third world nations so that they would become even more dependent on the largesse of the advanced capitalist nations and unable to organize themselves as a power bloc to negotiate equitable with the rich countries.

The United States's chosen instruments for putting this strategy into effect were the World Bank and the International Monetary Fund (IMF). Like the General Agreement on Tariffs and Trade, the World Bank and the IMF were created after World War II to manage the international economy and prevent a recurrence of the beggar-thy-neighbor policies of the 1930s. What has to be understood is that both the fund and the bank are actually surrogates for the U.S. Treasury. They are both located at 19^th and H Streets, Northwest, in Washington, DC, and their voting rules ensure that they can do nothing without the approval of the secretary of the Treasury. The political scientist Thomas Ferguson compares the IMF to the famous dog in the RCA advertisements listening to “his master's voice” - the Treasury – on a Victrola.

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Appears to be a bit incestuous, don't you think? Probably not too much of a problem, though. These guys are trustworthy, or they wouldn't be in these positions, right ? ? ? ?

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Thus was born the weird phenomenon of “moral hazard,” meaning American bankers could make outrageously irresponsible loans without any risk of having to absorb the loss or make good the money they had mismanaged. Before it was over, the 1970s loan bonanza produced a disaster of exactly the sort Keynes and the reformers at the end of World War II had sought to avoid. Virtually every country in Africa and Latin America was deeply in debt. In August 1982, Jesus Silva Herzog, the Mexican minister of finance, announced that his country was bankrupt and would no longer be able to pay interest on any of its loans. Just as the bankers had assumed, the U.S. Government stepped in – not to save Mexico but to ensure that American banks did not collapse. At no time, then or later, did our government suggest that the people who made the bad loans bore some responsibility for the results.

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Well, golly gee whiz. Where have we heard that tune before? Perhaps during the end of the bush regime and now at the beginning of the new one? One would think that learning by past mistakes would be a no-brainer, but I guess not . . . .

(Remember this book was written in 2004, not 2009.)

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The United States was the architect of and main profiteer from these efforts. From 1991 to 1993, Lawrence Summers was the chief economist at the World Bank and the man who oversaw the tailoring of “austerity measures” to each country that needed a loan. He decided exactly what a country had that Washington wanted to open up. On December 12, 1991, Summers became notorious for a leaked memo to senior officials of the bank encouraging polluting industries in the rich nations to relocate to the less developed countries. He wrote, “I think the economic logic behind dumping a load of toxic waste in the lowest wage countries is impeccable and we should face up to that.” Brazil's secretary of environment, Jose Lutzenburger replied, “The best thing that could happen would be for the Bank to disappear.”

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There's that Summers guy's name again. What's he doing nowadays? Oh yeah, he's currently the Director of the White House's National Economic Council. This oughta work out just great . . . .

As my friends hear me say on a semi-regular basis:

“We're doomed! Doomed!”

Get the book or check it out at your local library like I did.

Tell your friends . . . .

(Cross-posted from Moved to Vancouver)

Dennis Does ken . . . .

Thanks to the Louis Riel Trail for posting this Dennis Kucinich vs. ken lewis (of bank of america infamy) video yesterday:




Just one more example of why "drf" and I were Dennis supporters before he pulled out of the race for Prez.

He would have really been "Change You Can Believe In" . . . .

(Cross-posted from Moved to Vancouver)

Religion Rides to the Rescue of Wall Street . . . .

It's about a week late for April Fool's, so maybe this is actually legit.

It ought to have a dramatic effect on the current financial situation, so pay attention.

Per Seeking Alpha today:

New SRI ETFs Will Target Different Branches of Christianity

April 07, 2009

The market for socially responsible investing continues to grow for exchange-traded funds investors. Now, a group based in Oklahoma City, Okla., is proposing a set of faith-specific ETFs to launch in the near future.

FaithShares Inc., which is advised by FaithShares Advisors, is asking the Securities and Exchange Commission for approval to offer five new SRI-themed ETFs. Those would be:

* The FaithShares Baptist Values Fund

* The FaithShares Catholic Values Fund

* The FaithShares Christian Values Fund

* The FaithShares Lutheran Values Fund

* The FaithShares Methodist Values Fund

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The FaithShares will be screened for social values of each faith through KLD indexes. FTSE Group, the well-known international index provider, will calculate the indexes. Various broad FTSE indexes will also be used as benchmarks against the KLD indexes.

Not having the expertise in valuing different christian FaithShares, I'll have to rely on experts such as:

pat robertson, pope bennie, ted haggard, charles stanley, et al.

That oughta handle it, eh ? ? ? ?

H/T "drf"

(Cross-posted from Moved to Vancouver)

Hey Paul Krugman . . . .

we need you now:

Turn those speakers up, as the tune is actually quite catchy . . . .




H/T bobcesca.com

(Cross-posted from Moved to Vancouver)

Selling dead donkeys

Just in case you think Edstock's analogy is off the mark, you need to read this.

Battling the Banks . . . .

There's something about this story that gives great satisfaction . . . .

(Cross-posted from Moved to Vancouver)

Size Does Matter . . . .

According to Antonia, anyhow:

Scientists have found that the pleasure women get from making love is directly linked to the size of their partner’s bank balance.

They found that the wealthier a man is, the more frequently his partner has orgasms.*

“Women’s orgasm frequency increases with the income of their partner,” said Dr Thomas Pollet, the Newcastle University psychologist behind the research.

The rest of the story is here.

In today's economy and faltering financial situation, one has to wonder if sexual frustration isn't running rampant.

Time to start workin' on that money muscle, boys and girls* . . . .

* No information provided on same-sex partners.

Uncle Sam's Suckling Little Piggies . . . .

As only Lewis Black could explain:



End of story . . . .