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Guest Post: The Big Squeeze - Predicting The Effects Of Savings Extortion And Abuse Of The Middle Class
- Bear Stearns
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Submitted by Charles Hugh Smith from Of Two Minds
The Big Squeeze - Predicting The Effects Of Savings Extortion And Abuse Of The Middle Class
I am pleased to present a uniquely clear-sighted three-part series by frequent contributor Zeus Y. on the consequences of our corrupt financial-political Status Quo being exploited by a rapacious Financial Elite.
Part I: Oligarchy Becomes Anarchy Introduction
By now it should be clear even to the most optimistic observer that the global financial system has given itself over to systemic lawlessness. Once international banks were effectively allowed to print their own money in an unregulated “shadow” system and have it redeemed full value by national taxpayers, the charade was over. The only thing left, at this point, given the full cooperation of governments and an eerie world-wide non-enforcement of law, is for banks, like a cancer to savage and consume every concrete store of non-counterfeit productivity and asset value.
Not only have governments from China to the United States committed themselves to a chess game meant to eke out relative advantages on a sinking ship, but they have positively rewarded those who are speeding the collapse. A simple, cannibalistic economic rule now persists until a new system emerges: Economic manipulation, destruction, and extortion are simply more profitable, far more profitable, than good old fashion value creation. Disaster capitalism will be pursued full force.
Whether a country is communist or capitalist, authoritarian or marginally democratic, no longer matters. Citizens globally have been made to be the pawns and patsies of a universal financial Ponzi scheme that can only end in carnage. Who cares if this insures debt peonage for the world and likely mass austerity, suffering, and shortages. There’s a buck to be made! Who cares if my own children will be choking on the garbage I spewed into the financial air and water system. I’m rich!
When morality, reason, and sovereignty collapse together, we are left with outright anarchy, in everything but name. This is a reality so uncomfortable that hundreds of trillions dollars more of citizen retirement savings and other assets are likely to be tragically liquidated trying to regain stability and finance the “lean times” in the hopes of the promised upturn.
Act I: Oligarchy Becomes Anarchy
This anarchy and its suicidal impulse was brought to a head, but by no means started with, the collapse of Lehman Brothers and Bear Stearns. These crises did however confirm that the gatekeepers had become one and the same with the barbarians at the gate.
The same story kept repeating itself and was easily predicted by the news accounts of single “rogue” traders damaging storied banks in England, France, and other countries in the past decades: The techno-nouveau riche found vulnerabilities in the “civilized” corruption and racketeering of the establishment banks. These vulnerabilities expanded and softened as banks adopted unfettered gambling as a way to produce huge profits. When gambling didn’t pay, scapegoats were identified and jailed, the sins of the system were larded on those individuals, and nothing changed systemically.
Later, young guns armed with razor wits and high-powered computers saw that they could guarantee for themselves multi-billion dollar profits by not only betting on collapse but aiding and abetting (and even sometimes directly causing) a crash of the very banks they worked for or dealt with. Supported by a profit-by-any-means mentality, they simply took market manipulation to the next logical level, and a Pandora’s box of financial ills was loosed on to the world.
Consider Lehman Brothers. As detailed in Danny Schechter’s movie Plunder, Lehman Brothers was brought down by a spate of naked short selling simultaneously coupled with exotic very short-term anonymous short positions worth hundreds of millions of dollars. One can conclude with high probability given the established dynamic that those who engineered this and profited enormously from it were former employees or colleagues of said employees who migrated to hedge funds.
These players were insider enough to be privy to accounting tricks and frauds, the Repo 105 scams and so forth, being perpetrated by Lehman Brothers. They knew that Lehman Brothers was hiding gargantuan losses and skating on an illusory margin, so they devised a way to push them off the cliff by naked short selling and entrepreneurially betting on their own success. Why not teach the old farts a thing or two about their own game and laugh all the way to the proverbial bank.
With the repeal of Glass-Steagall and the collapse of the walls between conventional banking, investment banking, investment rating systems, and government regulation, the financier class had completed its nefarious project, a fungible two-tiered economic system “unhinging” finances from concrete reality, productivity, and value creation.
On one hand, a shadow banking system created hundreds of trillions of dollars of
Unsurprisingly, hedge funds like Magnetar saw an opportunity to profit from this inequality under the law by lobbying banks to construct highly rated junk investment portfolios and then betting against those portfolios many times over. So you have the young amoral renegade side of the elite sparring with the crooked establishment side in what amounts to them as one big galactic video game. When they lose, they always have another life. When they win, they take home the money and the title. Someone else pays.
It has to be noted that there is no personal stake in this game. Naked short selling, for instance, is phantom selling, selling shares you don’t actually own. Phantom buying, which is what is currently propping up the stock market, is using Fed-funneled money to buy up your own stocks. Risk has been removed from the system. There is only liability, profit, and power. Those of power and size taking great “risks” can leverage those risks into an extortion demand: “take our liabilities off our books, allow us to valuate them for as much as we want, and/or hide them for as long as we like or we’ll blow up the system.” Governments, with the exception of Iceland, said, “Please, financial terrorist, don’t do that. We’ll do anything you ask.”
If free market capitalism existed and worked these banks would have been allowed to collapse, their losses eaten by bond and stock holders, and civil and criminal charges filed against institutions and individuals. However, to do so would have exposed the rot and common criminality in the interlinked global system. Accountability would have indicted the people and connections behind the curtain, so the entire anarchic enterprise has to be covered up and its costs shifted to taxpayers, in a vicious downward cycle, which only accelerates rapaciousness and irrational incentives and punishes savings and responsibility.
Savings interest rates have been near zero for years, lower than inflation. Unemployment is high and people are liquidating their assets to pay for their costs of living. In addition, their future earnings and children’s savings being charged in advance for the multi-trillion dollar malfeasance of banks. Pensions are being looted and/or liquidated along with other real assets.
The major U.S. banks, on the other hand, reported within quarters of the crash they created, that they were able to go through an entire quarter without a single losing trading day. That is pretty easy to do when so-called toxic assets are offloaded to the Federal Reserve for 100 cents on the dollar and when banks receive hundreds of billions of 0% interest rate money and turn around and buy Treasury bonds with 3% interest, “paying” taxpayers back with interest earned on the debt these same banks caused.
No violations are too egregious or too pervasive for the Department of Justice or the SEC to ignore, no infraction too obvious or ridiculous to be covered up. These offices weakly go after the penny ante “bad apples” and keep a bubble system propped up and hopped up on its own version of financial adrenalin. A short laundry list of the most tragicomic examples:
Fraudclosure: hundreds of thousands of mortgages being processed by robosigners, recorded and shifted around electronically, and their paper trails neglected or destroyed, contrary to even the most basic commerce and property laws. Not a single significant prosecution yet.
Exchanges selling shares in precious metals without even having close to the reserves in physical metal to back up and JP Morgan’s “alleged”
Mortgage insurers simply not paying their obligations.
Multiple insurance on the same properties paid out in multipliers above the actual value of the property.
Verified cases of houses being "foreclosed" upon that were already bought with cash.
Same property sold to different owners.
Extorted “marked to model” FASB standards fraud.
With no effective reserve requirements, leverage limits, or accounting standards, institutions with power can simply make up any amount they choose. The above examples show how rampantly institutional entitlement has evolved to claim and sell any property they choose, and valuate and sell any instrument they conjure up.
Power is all about access, and evidence shows where the current power resides. National governments in full collusion and cooperation with gigantic international financial corporations, have opened the floodgates of access to the “little people’s” wealth through bailouts, Fed policy, and quantitative easing, and clanged shut the castle door of the financial elite by allowing them to establish the value of thei r own assets and to concoct, rate, and sell almost any financial asset or instrument with no accountability, transparency, or enforcement.
By Zeus Yiamouyiannis, Ph.D., copyright January, 2011
Tomorrow: Part II: Abused Fundamentals and Fake Markets: How They Play Out
»
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Oly Oly Anarchy Free....
they're winning the future
initialize robot:
parse headline: Guest Post: The Big {{Squeeze}}- Pre{{dic}}ting The Effects Of Savings Extortion And {{Abuse}} Of The {{Mi}}ddle Cl{{ass}}
result: get that fuking midget G.G.'s sister on the phone, pronto!
EndOfFile
If what president Obama doesn't say is important, not once was money or the plagues of fraud and racketeering in world finance even touched on in the SOTU speech.
The closest he would get to "money" is economy and taxes. This should tell you they already won as revisionist exclusion is alive and thriving, indicative of the real extent of of which finance conflicts with the traditional American ideals of truth, and the rule of law.
The president of the US is complacent to these problems, and there should be no doubt that he is beholden and in bed with banks.
Americans should be utterly ashamed of their coward president, who, just like an unfaithful spouse is so in bed with the enemy he won't even acknowledge it's presence.. wow. What a sad day for US citizens and their predatory government.
Barry Soetero is a turd. Like any turd, the longer it sits in the bowl, the uglier it gets- stinking up the whole house.
"The president of the US is complacent to these problems, and there should be no doubt that he is beholden and in bed with banks."
So he's an abettor, not simply complacent. Some might say he was put in place to do the bidding of his puppetmasters.
Since he was elected to uphold certain standards and laws, is his failure to do so, in this crisis, treason? At the very least, might he not be removeable?
But I'm not worried...The girl scouts will still be selling Samoa's!!!!
Buy the fucking Do-si-dos.
+3/box
Freeze a box of thin mints and consume cookies frozen.
Oh yea!
Thank you for saying all the things that so many people in the dying middle class feels. The elite pat themselves on the back and spew propaganda like "Win The future" all the while not comprehending that WE ACTUALLY GET IT. We understand what they have done and what they are getting away with. They party and live well while telling everyone else to suffer through austerity and that things are getting better, and after all , why shouldn't they. We let them. In that regard, it is difficult to know whom to despise more.
I'm not surprised by much, but am about the lack of interest or knowledge about this among our friends. Getting people to wake up if they want to sleep is almost impossible. What can be done if the majority choose to sleep?
Goldman Sachs Got Billions From AIG For Its Own Account, Crisis Panel Finds
http://www.huffingtonpost.com/2011/01/26/goldman-sachs-aig-backdoor-bailout_n_814589.html#
I'm the author of the original essay and a zero hedge reader. This reprinting in zero hedge for some reason cut off a couple of the paragraphs. For the "predictions" (Part II of this longer essay) and the implications (Part III), link back to Charles Hugh Smith's Of Two Minds website:
http://www.oftwominds.com/blogjan11/Zeus-two01-11.html
http://www.oftwominds.com/blogjan11/Zeus-three01-11.html
The paragraph that really got left out was this one: "On one hand, a shadow banking system created hundreds of trillions of dollars ofcounterfeit wealth through the construction and leveraging of derivatives and mark-to-model assets. This was sold and exchanged for real assets, i.e. businesses and real estate. In addition trillions of dollars more in real wealth were siphoned off in transaction fees, bonuses, and profit taking. Financial, criminal, and civil liabilities were, and are still being, avoided through regulatory and governmental capture. On the other hand, infiltrated real value assets are being simply taken over: foreclosed upon, reassigned, and used as guarantees for this colossal fraud. Shadow liabilities are being hidden or shifted on to taxpayers’ bills."
There is no need to change the ystem, all they need to do is to change poeple mind.
As long as people will accept it as the new normal, we are good to go the full speed.
Withdraw. Do not participate. Take your "money" and convert it to real money. Buy untrackable "things". Buy a piece of land and be prepared to defend it.
There is no economy, there is no market, there is no law, there is no justice. It is anarchy, but that is not bad. Use it to your benefit.
Well said. At this point in time, that is all we can do now and let God sort things out.
The more they cost-push the more I cut back spending.
Right on, and whoever junked you should not have, unless its one of the ELITE.
Folks this party id coming to an end a hell of a lot sooner than ANY of us thinks.
Best get your shit in order.Especially get rid of FRN's.
Jamie Dimon likely Junked him.
I think he goes by the handle Johnny Bravo, or is it DoucheBag?
Can't remember anymore.
part one, systemic lawlessness, check, act one anarchy, check (the landlord is not a businessman, the rentier class can only extract from labor, it cannot produce a product)
the raid on equity, stealing peoples collateral from their homes. check and mate. there's only one reason the system bailed out the people with no skin in the game, the zero down underwater mortgages, they wanted to collapse the mortgage system and drain away all the equity which is hiding (remember economists hate savings gluts, and keeping equity in your home is just plain miserly, cough it up comrade!!)
From the article:
"....given the full cooperation of governments and an eerie world-wide non-enforcement of law,.."
This is why Egypt, Algeria, Tunisia, Greece, Yemen, (and soon to be Ireland and Spain) are so important. When the people riot and governments are overthrown, laws eventually get enforced (and sometimes rather violently). And, if fiduciary laws are enforced in one country, that country begins to insist that it's trading partners do the same. Dominos don't always have to start falling from the front (e.g. largest) to the back, they can also fall from the bottom up.
Margin is too thin in an honest biz model.
The coin is in the schmooze.
Shock the monkey
Shock the middleClass
Cover me when I run
Cover me through the fire
Something knocked me out' the trees
Now I'm on my knees
Cover me, darling please
Monkey, monkey, monkey
Don't you know you're gonna shock the middleClass
Fox the fox
Rat on the rat
You can ape the ape
I know about that
There is one thing you must be sure of
I can't take any more
Darling, don't you monkey with the middleClass
Monkey, monkey, monkey
Don't you know you're gonna shock the middleClass
Wheels keep turning
Something's burning
Don't like it but I guess I'm learning
Shock! - watch the middleClass get hurt, monkey
Cover me, when I sleep
Cover me, when I breathe
You throw your pearls before the swine
Make the middleClass blind
Cover me, darling please
Monkey, monkey, monkey
Don't you know you're gonna shock the middleClass
Too much at stake
Ground beneath me shake
And the news is breaking
Shock! - watch the middleClass get hurt, monkey
Shock the monkey
Shock the middleClass
http://www.youtube.com/watch?v=bo9riZYUpTw
+55
Thanks for the link, hedge...one of my favorite videos from my youth (+ sledgehammer). :)
PG is an artist who exploited his 'issues' and made his art better instead of today when a lot of our talent washes away with the zannybar-cum-alcohol tide...
Margin is too thin in an honest biz model.
The coin is in the schmooze.
As if I wrote this myself- a man of my own heart. Excellent!
I am certain that at this point in time, God will step in.
Old school YHWH adherents know we are not in uncharted waters. Previous archivists include authors recording the demise of their social structures due to the international whoring out of the domestic virtues.
It stopped when there was a general turning back to learn "precept upon precept, precept upon precept; line upon line, line upon line; here a little, there a little." and to learn basic farming: "Caraway is not threshed with a sledge, nor is the wheel of a cart rolled over cumin; caraway is beaten out with a rod, and cumin with a stick. Grain must be ground to make bread; so one does not go on threshing it forever. The wheels of a threshing cart may be rolled over it, but one does not use horses to grind grain.
New Age YHWH folks will recognize the principle in the story of the Keynesian / Prodigal. Unfortunately, human pride can cause all kinds of mischief including the purposeful starvation of 45 million souls as Mao did before a turning back may occur. Even there, it could be debated if "God stepped in".
Ultimately, yes He will and does because "on a long enough time line the survival rate for everyone drops to zero", and after that, well, prepare to meet your God.
Ultimately, yes He will and does because "on a long enough time line the survival rate for everyone drops to zero", and after that, well, prepare to meet your God.
Yes he will, and not just when your days here are up.
There's a train a comin, and theres a WAR also, do not be surprised at anyhing from here out, just BE ready.
Forgive me if I am wrong, but does God not do his work through us? I do not ascribe my efforts in life to a religious text, but I have come to an understanding of what I beleive these texts are trying to get at and do not beleive sitting on the sideline is an act of faith. What are you going to do?
First and second world countries slipping to third world status. Third world countries falling to the outer ring of fourth world status, all before our very eyes. What I need is a small farm with a well in a uninhabited county in the US west.
That's why I moved to Canada. The only thing is it gets cold here.
Making a sandwhich, obvious anarchist behaviours.
What should really annoy you is the fact that bankers get rewarded for this fraud- how many have even seen jail time over this? ZERO How many got record bonuses? Nearly all.
And yet they do it all in the name of your god.
Azathoth? Really? They keep pretty quiet about that.....
Dude, their Bean Counters, and they do not trust your numbers.
Bean Counters have laid ruin to almost as many companies as the Obama Admin.
Politicians in developed countries are blaming the developing countries, who provide a majority of their own population with low cost products and services, for their own problems. They are engaging in curbing the visa limits for movement of manpower from the developing countries and engaging in currency wars with each other. The developed countries cannot create jobs in their own country by these practices as the major multinational companies have permanently shipped the manufacturing jobs to the low cost developing countries to maximize their own profits.
(http://www.marketoracle.co.uk/Article21932.html)
The protectionism and currency wars are likely to intensify causing great damage to the earnings and living standards of a majority of the world population.
http://www.marketoracle.co.uk/Article24581.html
Yep, the U.S. wins again!
You go it!, because POTUS said we be INVESTING.
WIN THE WORLD!!!!...........Who wants it?
And people are still surprised why these same companies have an unwillingness to discuss moving those jobs, short of giving people the final notice.
"clear even to the most optimistic observer"
one of my favorite college professors liked to say, "obvious to the most casual observer"
he would say this after filling the chalkboard with equations describing fluid dynamics
another one of his favorites: "it is left as an exercise for the student to prove ..."
rest in peace Dr. B.
defend your property !!!.....whoever strikes the first spark , will be known for eternity.....i wish i was brave enough to do it, but then again i always have this dream that i do light that spark and when i turn around no one is behind me
I couldn't help noticing that the hot zones on the map posted yesterday showing the locations of the current wave of revolt are in the general areas where civilisation itself was born, and as it is from those same areas that humanity and civilisation evolved then migrated outward across the globe over many millennia, so, too, I couldn't help thinking it is logical and fitting that since the whole of western civilisation is ripe for this same revolution that it will follow the same chronological path, but this time with lightning speed. Look for many more tactical attempts by governments (internet shutdowns, etc.) to slow it down, too.
nice observation. Dig the avatar
Agreed.
Attempting to ring fence what cannot be fenced is the task of the Titanic's chair arrangers and their cheerleaders at present.
Usually no one is behind the first guy. It's better to be the hundreth guy.
I sometimes think the only thing that made our founding fathers so brave is that big moat called the Atlantic Ocean.
It's called INTUITION( Truth), and your right, thats why the SPARK has not been lit.
The light that needs be sparked is that of knowledge. Disseminate the truths that you hold. Nothing is more powerful than an idea. Break down artificial constructs of what society is dictating to us, and you will find that the ranks will join. The revolution we need, is the revolution of our minds.
Never fear, our Sputnik moment is here!
Every day I hear from friends and family about new banking abuses. Paradoxically, consumers are better off with zombie banks that are government backstopped and don't need to care as much about the bottom line. A cannibalism hedge.
The situation would be much clearer if people just viewed the Fed as an entity similar to the DoD/CIA/NSA, and the various banks as representative of Boeing, Lockheed, etc.
In other words, the entire construct descends from national policy formulated by the US government. Sure, the bankers are extremely profitable, but so too are the various defense contractors. (While banking profits are awarded to a relatively small group, defense has a mammoth footprint across the US economy.) And sure, the Fed is quasi-private, but it is still afforded the same secrecy & lack of oversight as the war departments.
People may crack on about "national security", but if you step back and look at the big picture, it's all we really have: an unholy union of the MiC and $USD. Take away the support of either, and I'm not sure how many people really want to experience the end result.
So yeah, we're all rentiers. There will be no new policy prescriptions, no hope of the situation improving - we are firmly locked into our position. With the USG helpless in the face of what is occurring, we will just keep going on while things keep going on. Until they don't.
As a follow up, I think it is very important for people to realize that no one is in charge. Not Obama, not Ben, not Tim, Blankfein, et al. No one is actually in charge. The reality is that once it was clear the (assumed to be positive) policy prescriptions implemented 2-3 years ago had failed, there was nothing left to do but attempt to avoid the consequences of those bets. So that's where we are at today - on auto-pilot.
And this really gets to the trajedy of relatively short human lifespans - other than books, we have no one to explain to us the nature of past events. In many ways, what is presently occurring reminds me very much of WWI. Here's a situation that spiraled way, way out of control. By 1916, neither GB, France or Germany could face the prospect of losing, but in order to stave off defeat, the beast still needed millions to be fed to the machine guns in a muddy stalemate. Hence the generic resigned statement to explain almost every situation: "It's the war."
So too us. The reality of the losses that would occur if we were to stop the wars/occupations and/or attempt to seriously address the economy/budget would cause a full-stop cessation of governments at all levels. So we will just keep feeding the beast until we literally exhaust ourselves. When in doubt, bet on bureaucratic inertia (eg QE, POMO, market ramp, MSM propaganda) until all available resources are finally extinguished.
...it is very important for people to realize that no one is in charge.
This can't be stressed enough.
Almost everyone has their own list of who's to blame. As if "it" is Obama's fault, or Dubya's fault, or Dr. Blankenstein and his monster.
But there's no point. No one is driving this bus. It's not that we're "all guilty"--it is that we're all responsible. Once you break into what you think is the main control room where all the levers are pulled and all the big secret plans are concocted, you just find out that the dumbfucks in there are plotting to break into what THEY think is the main control room, and their big secret plans are about as sophisticated as those of the underwear gnomes.
"Who's doin' this? Who's killin' us?" --Pvt Trane
Who is that we? The hobbos freezing on the streets?
Of course, people are driving the bus. But driving the bus does not mean full control over it like pushing speed up beyond what the bus can deliver.
People, an elite empowered by its base, are in control. They might want to exert more and more control while they might never reach full control.
Power does exist. Usually powerful people want to deny that when the bill shows up. But...
Nope. There's a constant flow of different competing interests which exert, at times, wildly varying amounts of influence over institutional power. "The government" is just a label we hang on a group of people with vastly different perspectives on how things should be.
Obama only became Preznit 'cause the financiers are currently in dominance. Dubya won because it was arms-dealers.
Don't let 'em fool ya.
I think economic history and behavioral history do know where this ends: it doesn't. We are merely a point on the swing of the pendulum that details the course of liberty for the common man and the power and control of the Lord, King or Merchantilist.
Like all campaigns, they skirmish, fight battles, win, lose and draw until someone is overexposed and they retreat. In the end, for a period, we are left with the vacuum and the vacuum gets filled with a new set of rules- justified by the people with the most power.
We continue to live the paradigm of government as the only method of social organization. We keep trying to perfect failure. Hopefully, we will figure this out in the near future and try something new.
MAJOR TYPO, PLEASE COMPLETE THIS SENTENCE:
--dilluted tokens of human labor, on the other hand you have an ever dwindling population that has the luxury of pursuing liberty and happiness.
Good guess!
derivatives, though most money is created as loans to consumers and businesses, this isn't enough for bankers, so they developed this system of derivatives traded OFF BALANCE SHEET TRANSACTIONS, so they could bet more $ than actually is in circulation = crash for pay up time. ANSWER, governments should be able to create $, and not just borrwow it=$-=our flawed constitution could be righted=changed, article 1, section 8, para 2, from borrow to create on the credit of the people
Refreshing truthiness with a focus on the true culprits. The leverage of derivatives is so great it can move the underlying and it is not regulated. With derivatives, price is whatever they want it to be. This is on top of banks owning the central printing presses of the world, but that was not enough.
In Germany, the banks were bailed out with public funds (same story around the world) and the banks then turned around and shorted the same public debt that was used to bail them out - that's why Merkel rightly restricted those transactions.
Fines as well that are given are a fraction of the amount stolen - that only encourages more stealing. Merrill's recent fine was $10m, how much did they take in profits?
Prop trading while "acting" in the best interest of client trades is another scam along with round tripping and using off shore dark pools where they can be less accountable.
I would also ask, who owns all the propped up stock and many of the houses today? Could the Fed and banks be acquiring many of the assets of this country using taxpayer dollars that we will pay interest on and at the same time be accumulating the wealth of nations - under the guise of propping up the markets?
Can individuals out bid buyers that are backed by the printing press? If you had a printing press and could issue as much paper and digital 1's and 0's and could not be audited, wouldn't you want to exchange that illusionary "money" for as many hard assets as possible? Could politicians be bought up with unaccounted for printed paper that could be sent to vatican bank accounts or swiss bank accounts?
That is why we need an audit.
There's rampant under reporting of total shares issued, in order to overstate EPS and hide the fact that lots of 'cash bonanzas on balance sheets' that materialized during the horrid economy of 09-10 were acquired through massive issuance (surreptitiously bought by the Fed through it's minions)
Interesting, I know there have been instances of stocks being shorted with more short shares than total stated shares issued so perhaps you are on to something. Obviously, that should not be possible.
That is called counterfeiting, all they would have to do is reconcile cash flows to DTC records.
I also wouldn't be surprised if the same form of counterfeiting occured in mortgage backed securities - perhaps that would be a way to money launder drug money and other illegal activities. I became suspicious when a news report stated some mortgage documents were missing in Juarez, Mexico.
I've often thought that the shares of Publicly Traded Companies could be "fractional reserve".
Could the Fed and banks be acquiring many of the assets of this country using taxpayer dollars that we will pay interest on and at the same time be accumulating the wealth of nations - under the guise of propping up the markets?
Sure
Next higher taxes on states and municipalities.
Did you say leverage of derivatives, here's Soros king of derivatives on what will happen in USA.
Davos
http://www.bloomberg.com/video/66216200/
Mexico has WMD!!!
http://video.foxnews.com/v/4513209/45-pounds-of-pot-catapulted-over-border/?playlist_id=86856
Weapons Moving Drugs
When trebuchets are outlawed, only outlaws will have trebuchets.
I'm libertarian.
My garbage disposal is a trebuchet. Works really well too.
I admired Volker for his comment which went something like, “The greatest contribution the banking industry has made to society in the last 20 years is the ATM.”
They no longer exist to serve us, they exist to prey on us.
There’s another old proverb consistent with the theme of this article, “Money flows to power”.
+ 4 dollar transaction fee.
I remember the realization in my early twenties as I became truly independent that almost none of the businesses I deal with think of me as a loyal customer to be well-served, but look at me in the way a leech looks at a blood bag.
If an EMT was allowed to ask for money up front before transporting you to the ER, he would. That's what American business is now.
Off Topic
Goldman Sachs Got Billions From AIG For Its Own Account, Crisis Panel Finds
http://www.huffingtonpost.com/2011/01/26/goldman-sachs-aig-backdoor-bail...
Pay no attention to the man behind the curtain.
Oz
Interesting thing is, disaster capitalism is the natural end of the current, supply side capitalism which we have the honour of seeing on it's last legs.
if i have to eat more tomorrow than I do today, howsoever incrementally, in the end I will eat everything or explode trying.
ORI
http://aadivaahan.wordpress.com/2011/01/26/a-ha-ahahaha/
I don't post comments often. This post should be carried on the editorial page of every newspaper in the nation. Very well put. A couple of typos need fixing though.......
M.R.
True that. Smitty from Of 2 Mminds found a recap gem by the author Zeus. I will save for my grandchildren.
he promised us change;
he's delivering!
the gold:silver ratio is going bat-shit!
i'm long on grits, peanut butter, applesauce, and southwestern style egg beaters.
no one's been in charge, here, for a looong time, 'cept for ol slewie...
buy an extra bike!
If free market capitalism existed and worked these banks would have been allowed to collapse, their losses eaten by bond and stock holders, and civil and criminal charges filed against institutions and individuals.
This. I have no problem with hedges, CDOs, or any financial games played by banks and houses. The problem is with taxpayer bailouts when their bets come up short.
That's the problem, we don't have free market capitalism. It's the elite political and financial set against the rest.
But the left always blames our problems on free market capitalism, tarnishing its name, when in fact, collusion and corruption are the real culprits.
Great recap of what has happened and continues to go on: but where was the promised prediction of the outcome?
This analysis is short of centuries.
Very hard to build a system of laws without a core representation of it.
How to outlaw theft in the US when the entire US building is the result of theft? This fact can be spinned again and again, rationalized etc it cant change that prohibition of theft in the US framework can only be understood as code to say theft.
Every one knows this. The US has cornered the world in a game based on theft. The world is running out of racially Indians. Somehow, it was stupid that the game would end with Indians getting extinct.
No truly democratic government has ever existed without a strong middle class. So which group is going to win in the end, the marxists (unions and radical progressives) or the corporate fascists? And in either case, who becomes the ultimate puppet for the Masters of the Universe?
Excellent article.
What I resent is that the Banks got us into this mess and they were made whole. Individuals were not.
I hate that the money to bail them out and make them whole will cost me money in higher taxes or reduced retirement benifits.
The Banks are reducing the value of my Real Estate by dumping hundreds of property on the market for prices substancially lower than true market value. This has caused potential Buyer to withdraw from the Real Estate Market.
Their carnage has cost all US Citizens a substancial amout of their Net Worth while they become richer from our demise.
and the solution will be, as allways in history, not evolution but revolution...
how long it will take that the burden arrives in Marseille
I went to Patrick Byrnes Deep Capture blog and was going to post the site nakedshortingexplained.com that explained for any novice the concept of Strategic Fails to Deliver, or naked shorting as it is better known as. Funny thing is that the site is gone, the link now takes you straight to overstock.com. You can still use failstodeliver.com to see if your stock has a spike of failures to deliver.
Our problem is that regulatory capture has occurred everywhere and not just in the financial markets.
Also, could anyone tell me a good place to see the best real time gold and silver spot prices. I dont get it on my discount brokerage site. I moved there after distribution of my fathers trust that was merrill lynched b4 i was able to take possession.
and wasn't Byrne made to look like a whiny crazy bitch in the lame stream media? The talking heads poo pooed 'naked shorting' while spreading a little grey poupon on their propaganda sandwich.
check spot prices @
apmex.com
bulliondirect.com
goldline.com
and silver dips below $27, must be those naked shortz
Byrne is a whiny jerk. Overstock.com went down because it's a crappy company, not because of Camelback downgrades or naked shorting
Great piece, this is it, we're past the middle. everybody knows that governments and bankers are a malignant cancer, who are killing our lives, stealing from us, destroying us. Everybody. The police, the Armed forces, the judiciary, the industrialists, the artists, the cooks, the housewives even.
There is no 'fragile economic recovery' - only one thing has been done n the last two years, printing fiat. That's it, just one single policy. How..how does that ever make a housing crash go away?
I have to disagree. Not everybody knows. People believe what they want to believe and most dont want to believe things are as bad as they really are. I have notice this especially in those who are in their 20's and early 30's. They have so much of their lives ahead of them. Who in their prime of youth wants to believe that their future is not as full of the promise they have been lead to believe it is? And who wants to be the one to burst that bubble? It is hard to adjust to the new paradigm shift for old and young alike so most just dont/wont. At least not until they are forced.
We all know that this new normal is nothing compared to what is to come, but for some the daily grind is so overwhelming that they just cant allow themselves to think about it, preferring to bury their heads in the sand. I will agree that more and more have become somewhat aware. Still there really are very few people that I can talk to about what i see happening esp. since I am a woman (most women I know can't even begin to wrap their heads around it) which is why I blog. Otherwise i pretty much keep my thoughts to myself. Cant walk around being a Debbie Downer all the time.
True, and even knowing about the future trouble is detrimental and self fulfilling. You are better off doing a little prep then making the best of your life at the moment rather than spend too much time worrying about the future. It can hamper your present motivation to get ahead and doing prep.
Who wants to be miserable about the future and become imobilized from it in the present? Not me.
Personally, I think a decent start could be made if the US mint were taken out of the "collectible" business and started stamping out some real intrinsically valuable coinage like the constitution dictates.
And if the Treasury department wants to step up and be adults about it, get out of the debt issuing business and print some US notes that back sound coinage in order to chase the leukemic FRNs from our system. If the FED remains, let them do so in the world against Real Capital. imho
You know what? You know what makes me so sad? You know what makes my blood boil with rage? We all talk the talk, we all give it "big licks", on sites as ZH, but we do nothing.
We all, thanks to the internet and sites like ZH. have started, or know what is going on, but we collectively do nothing, we type away furiously at keyboards, giving our (mostly), correct opinions, but not one of us has the balls to do something, for fucks sake, ANYTHING, to alter course.
And do you want to know one more thing? We should hang our collective heads in shame as we are not prepared to stand up and fight for what is so clearly right.
No wonder the fuckers are getting away with financial rape, we let them, and we do fuck all to stop them.
Act locally, brother.
http://www.youtube.com/watch?v=4Z9WVZddH9w&feature=player_embedded
Get active
you figure it out and you tell ten people who know something is wrong, but can't figure it out, and they tell ten people. pretty soon there are no more sheeple. (the first rule of the government shell game is to keep the shells moving, and lately they have lost a step, we are catching up to their game)
Everyone did act. Remember when congress was voting on TARP and the calls against were something like 99-to-1? But then congress found courage and did what was in our best interest and voted for TARP?
And remember how the Tea Party became a potential vehicle for reform, but then it got co-opted and became the austerity party? An austerity party is great if you're looking for someone to payout on the counterfeit printed by the shadow financial system.
There's only one vehicle left I can think of that's encouraging. Kucinich's bill to have the US Gov issue its own greenback (i.e. not Fed Reserve notes) http://www.monetary.org/kucinichchristmasmiracle.html . Even with that, we're still in for some pretty bad times. Without that, it's game over - system implodes.
The tea party was co-opted from the very start. I remember when Rick Santelli came out fot the TP at the very beginning when it was all about not helping those awful deadbeat homeowners. It sounded just like a bankster sound bite which is why I dismissed the TP at that time. i was reading RGE monitor at the time and the economists there (which I miss dearly). We never took the three pronged approach to the crisis, part of which was to help the homeowner.
yes, if only those deadbeat homeowners would pay their mortgage, we could keep the whole ponzi going. What a joke.
They would have likely been doomed anyways if the shadow banking system was allowed to fail. If the TBTFs failed, it would clear out bad debt everywhere. Left to its own devices, I think only the strong hands would have been the only ones left standing.
So I think the US Gov would have had to step in at some point to stop the debt destruction. But let the playahs who were really exposed to debt take the hit, and then step in when the debt exposures for the remaining players were more manageable. Instead, the US Gov (with Fed Reserve prompting) stepped in front of the whole debt train. Good god, good luck with that.
Edit: Now it's those some indebted playahs that the US Gov is looking to, to rescue the economy. The hope is that those playahs will change their stripes and provide the stewardship of wise financial investments to steer us out of this mess. Instead, those playahs are playing an even faster and looser game, and are simply speculating. What a joke this is too - it's driving up the price of commodities! But they'll keep dancing as long as the music is still playing.
Take care of yourself and immediate family. To do more than that get involved in your local political party. the Tea party has come a long way in a short period. Yes, it will be attempted to be hijacked but the main drive is still there for real reform.
the best way to get involved in politics and make a great difference is become a local precint committeeman. That is the way to take over the party from the inside out. The establishment does not tell you about this, that means it is very important.
You are right, Americans bitch but don't take much action themselves.
Very accurate...and well written....
The question is...
What's next ?
This is a sound bite that should have legs.
"Once international banks were effectively allowed to print their own money in an unregulated “shadow” system and have it redeemed full value by national taxpayers, the charade was over."
When future historians ponder how once mighty nations were able to reduce civilization to a dark age, this will be the sound bite reply.
I appeal to everyone reading the above post to please forward to everyone they know. This is the most concise, accurate and all telling piece I have read on this whole debacle. I got goose bumps reading it as it so clearly points to where all this will end.It put into words every feeling I have in my gut that I was unable to articulate or input in to my brain so that I could find a clear message. A Big Thanks to Zeus, Tyler,Hugh Charles ,
Thanks, Tyler.
Here are the crimes of the century: gargantuan past any measure. Now the story can be told; and this is it!
All that remains is to identify who, in a former democratic society like America, permitted this enormous tragedy to occur. It, of course, was the United States Congress. For it was this body, carrying the sacred trust for representing the interests of the people, that delivered this treasure to the Rothschilds and their assorted vile comrades.
The milestones of this sellout run the gamut from corruption of courts, presidents, political parties and elections to delivery…to a private bank…absolute control of the nation’s currency and now, potential physical control of every citizen within the borders of the United States.
Excellent post... what keeps me coming back to ZH.
Isnt it time to do something? Maybe organize a protest? Who here wouldnt love to flash mob jpm or goldman sachs? If done right it will cause curiosity and wonder and draw some interest. It may not be much but it would be a start. The ptb and bankers are all feeling a bit vulnerable right now. Managing to get a group of protesters thru their security would really freak them out. Everybody is so afraid of terrorism and banks are so.connected to the power structure that probably 40 swat would show up. As long as everyone mostly behaved we could avoid arrest and the incongruity of 40 swat police surrounding a group of peaceful clean well dressed high status appearing individuals holding a few banners would be so unique it might even make the new york times, particularly if we found a way to get at least a dozen or.so people past security. It would also be cool to plan a picnic lunch in brian sacks office. If you confuse security like the gate crashers at the white house inaugeraton ball it might be easier than you think. If we showed up with balloons and cake and party favors to give brian sacks a surprise brthday party and they might even help us sneak in! Dress as dominos delivery or show up as lunch caterers and really provide lunch as part of the protest. There is always a way thru security.
Pardon typos and spelling. I am not very good at texting while driving!
You just ran down a guy on a bicycle, in case you were surprised by that "thump" sound.
I only hate it when people bash the "anarchy" word, because it presumes that you need an otherwise usesless government to tell you what to do, especially one that does not apply equal accountability to all. I agree with max keiser, that people should become like the amish and just refuse to do business with people involved in nefarious wrongdoings, that is how you bring them down. They may have all the loot, but if they can't get their car fixed or buy food, the game changes. Only a stateless anarchic society will insure exclusion of such crooks. I think marc faber hits the nail on the head about obama being an extremely dishonest politician, not that any of them are any different, with possible exception of ron paul. Truth is, people just need to stop affiliating with dishonest people, that is all that needs to happen.
Clear and heavy, a cubic kilometer of solid crystal glass.
[ Disaster capitalism will be pursued full force.] - this is the most profitable course of action for our owners, ie bond holders who profit from higher interest rates to come
Brilliant. Beautiful. Maddening.
though i disagree with the projected outcome of anarchy, that word may describe some micro phenomenon. The marcro projection of our future cirmistance is more likely to be authoritarian; "the bootprint on the face of humanity"`ORWELL. When evil reigns in high places, the fruit of their labor will be authoritarian police state.
My only problem with this essay is your definition of "anarchy". It all seems rather well organized and the protests so far are rather mild.
It's all devolved into lawlessness from the top.
It's already filtering down to everybody else.
Stand firm, passive resistance and hold them accountable.
I agree with everything, but want to make one point. Do not underestimate the willingness and ability of the effete elite to abandon all in their attempt to bail out the sinking ship. The paradigm is dying, and they know it, but that won't stop them from literally throwing everything overboard to try to keep it afloat. They will print and pump longer than we would expect. Extend and pretend...
TSHTF when the elite makes a run for their private lifeboats they've set up. I bet the biggest topic in Davos is what island to buy, asset protection, security, off grid power, where to hide personal oil tankers ;) etc...
in the end we're all worm chowder. be brave, speak from the heart, and buy the freaking dip!
"So you have the young amoral renegade side of the elite sparring with the crooked establishment side in what amounts to them as one big galactic video game."
Seriously, why isn't this available to play on my PS3?
Your dead on, they had to protect Oz and his minions they just had to. I would love to see the others behind all this but their names aren't even in public.
Reading this almost sounds like reading a scientific account of biological predation. Nobody has any will, including the rich and powerful--like animals, they just feather their own nests in undiluted self-interest. Seen from afar, there is no morality, no emotion, just following instincts. Moral outrage is just part of the mix but signifies nothing. The battle lines have been formed. There are more poor and middle-class people, and their numbers are their only advantage. Like Chinese soldiers under Mao, these hoards will charge into the machine gun fire dying by the thousands until, through sheer numbers, they overcome the enemy.