Crony Capitalism and the Financial Meltdown
Financial Crisis Only Squandering Our Future
December 6, 2008
The International Forecaster - Big rise in monetary base, trillions in loans all over the world that will never be repaid, many nations very exposed in monetization crisis, all currencies to fall against gold, writers running naked, larger corporate failures to come, American condition to worsen, resentment already smoldering around the world, taxpayer money still being squandered on bankrupt Wall Street…
The monetary base has again risen dramatically over the past few weeks up 38%, the largest increase since 1939. You can expect all the major central banks to do the same thing, as this was a large part of what G-20 was all about.
Those of you, as we mentioned over the past several weeks, who don’t believe loans are loosening up are wrong; they are. Consumer and bank lending has grown by an annualized rate of close to 50% in the last six months. As this unfolds, we see demonstrations in Iceland where the currency has been crippled, inflation is 18% and no one trusts government, bankers and politicians anymore. European banks will take a $75 billion hit on this fiasco. Incidentally, Danske Bank sees Iceland’s inflation hitting 75%. That could well cause the overthrow of the government.
The Iceland experience could be the forerunner for America three years from now. It could be preceded by Pakistan, Argentina and a number of other countries. Just last week Argentina confiscated pension plans worth $26 billion. Our House of Representatives has discussed a similar plan.
Then there are the loans all over the world in trillions of dollars that will never be repaid. They’ll be monetized and American taxpayers will again pay the bill. The prime targets for trouble are not just the ones you notice among the major countries, but all over the world, especially in Eastern Europe and Latin America - things are going to be every bit as bad. Deficits in Eastern Europe are close to 10% of GDP whereas 3% is normal...
Today worldwide banks are very interconnected, and in the current environment that is very bad news, because eventually problems in one sphere will affect other spheres, making all currencies fall against gold...
Sixteen months ago the US financial system went into a state of collapse, and the rest of the world is caught in the same trap. No grandiose plan by anyone has been offered or concocted to save the economy and the financial system or the economy. All the so-called solutions have not and will not work. More debt and increased taxes won’t work. As a result, governments worldwide are under attack - an extension of religious warfare in India, demonstrations in Iceland and Thailand, and justified smoldering resentment.
Our management, corporate, financial and governmental is corrupt and is a failure, as it is in most other countries. Your assets are not safe from anything. 2009 will see bedlam in every sector of every economy in the world. Your best shot at financial survival is in gold and silver related assets, as we start the second of four phases of the biggest bull market in history...
Our elitist globalists are in the process of destroying our financial system to eliminate the nation-state system and impose a global, corporatist, and fascist dictatorship over the entire world. You subscribers understand this, and now perhaps as much as 25% of our fellow citizens do as well thanks to the Internet and alternative radio.
This time it’s just not Germany and Italy that is to become fascist: it is the whole world if the Illuminists and Europe’s Black Nobility have their way. As part of the Venetian style banking system and the concentration of corporations into cartels, the project is able to finance itself. It also causes concentration of military and police power under a federal mandate, such as Homeland Security, to keep the people in line.
Thus we are to have a world system run by banks, finance and insurance companies, and corporate cartels [see crony capitalism]. This is what is to replace the sovereign state. We saw the Illuminists try this in the Western nations in the 1920s and 1930s. In the US, the driving force was Morgan & Dupont, who tried to implant a fascist government. They were stopped when exposed by General Smedley Butler in 1934.
The next modern move to fascism began with GATT, which was to usher in the WTO in 1986, to develop modern British mercantilism today known as free trade, globalization, offshoring and outsourcing. During that time frame, the corporatist fascist movement was again set in motion by Bilderbergers in 1968 at Mont Tremblant, Canada.
The planning was by George Ball, an Illuminist mover and shaker in those days, who was a senior banker at Lehman Brothers. He was a key top member of the Illuminati. He called for the World Company.
The approach has been implemented and it will show you how far ahead the Illuminists' plan: in the process, the name was changed to "globalization."
The process has now reached the stage where debt from banks, finance houses, insurance companies, and Illuminist corporations are being transferred from their balance sheets to those of government, which are the people. During this process, the physical economy is simultaneously being driven into the ground, recession begins, and depression follows. De-industrialization is then complete, and the economy collapses along with the financial system. No longer a major producer and only a service provider, the economy has a massive account deficit to be funded by foreigners.
This the Illuminists hope will return the world back to the 17th century’s mercantilist, rentier-financial feudalist model. This is where the elitists want us to go, so get ready for it by protecting your assets by owning gold.
Conditions are going to get considerably more difficult for Americans. In two years, 25% to 38% of all Americans will be out of work and waiting outside homeless shelters and food pantries. Many will be the elderly or single women and children. The question is will welfare and food stamps still be available?
Many former manufacturing centers already are experiencing 20% unemployment due to the deliberate elitist policy of transnational conglomerates of free trade, globalization, offshoring and outsourcing. The financial meltdown has plunged and will continue to plunge the working class into levels of destitution worse than those seen in the “Great Depression.” As a prelude to this, banking, Wall Street, and our government squanders taxpayer money on idiotic schemes to prop up bankrupt Illuminist banks, Wall Street, insurance companies, and select Illuminist corporations. In that process, faithful workers are thrown onto the street with no further way of making a living. They are losing their homes, jobs and vehicles, and some are living under bridges.
Our Treasury and the Fed are holding trillions of dollars in almost worthless assets. Each day billions of taxpayer dollars are being thrown into a black hole. The biggest bank and insurance companies in America are bankrupt (Citicorp and AIG). Retail sales are falling and the entire automotive industry is bankrupt. Real unemployment is 14% and long-term unemployment is 18%. We’ll lose about 1.5 million jobs in 2008 to go along with the 5 million lost in the previous eight years. In inner city areas, young male unemployment is 30% to 50%. Twelve million homes are worth less than their mortgages, and millions more will either lose their homes or simply walk away. Another one-third of homeowners face foreclosure in 2008.
As Wall Street, banking, and corporate America are bailed out, the USDA’s Emergency Food Assistance Program has cut its donations to the poor from $240 million to $59 million. Social assistance programs have been laid waste in Medicaid and education. Tax revenue continues to plummet in every state, almost all of which have been terribly managed. States have imposed hiring freezes, cancelled raises, and are cutting back expenses. In many states, such as California and New York, unemployment insurance funds are running out.
Recently we ran the numbers of Barak Obama’s major contributors, which were Wall Street, banking, corporate America, and the University of California–Berkeley, a long time nest of far-left and communist causes. This is whom Obama is beholden too, not the American people.
Obama will expedite the economic collapse by doing very little to help the people as America slips to second-world status. He will continue the occupations in Iraq and Afghanistan, and he will continue to spend vast amounts on security in the name of the scam called terrorism. His Cabinet is a rehash of Clinton Illuminists. The elites remain solidly in power - so much for change. This while the average American is desperate.
Next comes the social and moral collapse as desperate people do desperate things. Crime is about to skyrocket. This is why you need weapons in your home to defend your family. They’ll soon come a time when everyone will be carrying arms, laws or no laws. Your nation is in the process of crumbling physically and morally as our politicians in Washington, bought and paid for, tend to the needs of the elitists.
Mr. Obama has $67 billion more to spend at the Pentagon but less to spend on Americans. War is profitable for the generals and the corporations, and it keeps incumbent politicians in office. It does nothing for the average American but kill off its young. Washington and Wall Street continue to be rewarded for incompetence and greed. We are simply collateral damage in what the elitists believe is a world with too many useless eaters.
The US military expects to have 20,000 uniformed troops inside the US by 2011, all trained to help state and local officials respond to terrorism, nuclear attacks, civil insurrections or domestic catastrophe. This, of course, is in violation of the Posse Comitatus Act, but that is not a bar to our government. They just refer to the Patriot Act, which they say overrides the Comitatus Act. The Cato Institute and the ACLU disagree: they consider the placement of military for such purposes an expansion of executive authority.
These 20,000 troops represent a 7-fold increase in five years...
There is no question that Americans have been short-changed by banks, brokerage firms, insurance companies, financial services, the Fed, and by their government. The risks previously borne by these services have been heaped on consumers. These industries have screwed the public for years, but the last eight years have been disastrous for consumers and a money-fest for these financial advisers; and that is about to come to an end...
Illegal aliens are finding ways to circumvent the state’s employer-sanctions law by turning to the underground cash economy. Some provide services or sell items. Others borrow the identity of citizens or legal residents to get jobs. This is depriving the state and federal government of tax revenue; and they are not happy about that.
Rumors abound in the farming community: in January and February some of the grain companies that bought wheat at $10.00 a bushel may not be able to pay for it. Major grain operations are already facing huge losses. Wheat and corn prices have fallen some 50%. If they default, farmers are going to the wall. If they pay, the commodity buyers go to the wall.
The result of this is another huge bump up in the price of food. March delivery will be in the stores by June and with it another big upward spike in food prices. Hedging could moderate the effects, but after what we’ve seen with hedge funds and derivatives blowing up, we are very skeptical that any real help will be found there. This is not a zero sum game when writers are naked short. This could bring on a severe recession in the form of acute stagflation.
A UN study has concluded that South Korea and Japan have the most effective education systems. It was based on testing what pupils actually know and what they are able to do. The US ranked 18th, Germany 19th. Furthermore the US finished low in each test and in adult literacy. The bottom line is this: stupid people do not stay free very long.
One of the problems is that 45-50% of school budgets is devoted to teachers, textbooks and other basic instructional cost. The rest goes to buildings, liquidating debt, and administrative salaries. Over the last decade, administrative costs have risen 50%. Teacher pay increases have been miniscule at 36%. In the Chicago area, superintendents received an average income of $114,000, and 27 of them received more than $200,000; one was over $300,000. Johnny cannot read but the super retires at 55 handsomely to collect for the next 30 years.
This is a tragedy but, like most everything in our society today, there is no outrage - there will be, but unfortunately it will come when one-third of Americans are in detainment camps.
A Historical Perspective on the Current Financial Meltdown
November 18, 2008Old Thinker News - The United States was successfully seized by international bankers with the passing of the Federal Reserve Act in 1913. Then, with the crash of 1929, further control was gained and great profits were reaped by its engineers. Now, these same interests have their sights set on the globe in an unprecedented power grab. Daily calls for a "New World financial Order" and global governance are now a common occurrence. Discussion of dropping the dollar as the world reserve currency and the creation of a world currency is now taking place.
Author and researcher Gary Allen writes in his 1979 book None Dare Call it Conspiracy:
"When the Federal Reserve System was foisted on an unsuspecting American public, there were absolute guarantees that there would be no more boom and bust economic cycles. The men who, behind the scenes, were pushing the central bank concept for the international bankers, faithfully promised that from then on there would be only steady growth and perpetual prosperity.However, Congressman Charles A. Lindberg Sr. accurately proclaimed:
“From now on depressions will be scientifically created.”Using a central bank to create alternate periods of inflation and deflation, and thus whipsawing the public for vast profits, had been worked out by the international bankers to an exact science.
Having built the Federal Reserve as a tool to consolidate and control wealth, the international bankers were now ready to make a major killing. Between 1923 and 1929, the Federal Reserve expanded (inflated) the money supply by sixty-two percent. Much of this new money was used to bid the stock market up to dizzying heights. At the same time that enormous amounts of credit money were being made available, the mass media began to ballyhoo tales of the instant riches to be made in the stock market. According to Ferdinand Lundberg:
“For profits to be made on these funds the public had to be induced to speculate, and it was so induced by misleading newspaper accounts, many of them bought and paid for by the brokers that operated the pools…”The House Hearings on Stabilization of the Purchasing Power of the Dollar disclosed evidence in 1928 that the Federal Reserve Board was working closely with the heads of European central banks. The Committee warned that a major crash had been planned in 1927. At a secret luncheon of the Federal Reserve Board and heads of the European central banks, the committee warned, the international bankers were tightening the noose.
Montagu Norman, Governor of the Bank of England, came to Washington on February 6, 1929, to confer with Andrew Mellon, Secretary of the Treasury. On November 11, 1927, the Wall Street Journal described Mr. Norman as “the currency dictator of Europe.” Professor Carroll Quigley notes that Norman, a close confidant of J. P. Morgan, admitted:
'I hold the hegemony of the world.'"Author William T. Still offers further evidence in his 1990 book New World Order: The Ancient Plan of Secret Societies:
"Through the Roaring Twenties some eight billion dollars was sliced off the federal deficit incurred during the Wilson administration. James Perloff observed: 'This atmosphere was apparently not to the liking of the Money Trust'."In 1929, only nine months after the inauguration of Herbert Hoover, the third consecutive Republican president, leaders of America's new secret society, the Council on Foreign Relations, engineered the Great Crash of 1929. The crash was the most significant fruit of the new Federal Reserve - the system initiated to prevent such occurrences. Between 1923 and 1929, the Federal Reserve inflated the nation's money supply by sixty-two percent. In the year before the crash, more than 500 banks failed nationwide. The stage was now set for disaster.
Louis McFadden, chairman of the House Banking Committee blamed the international bankers for the Crash: 'It was not accidental. It was a carefully contrived occurrence... The international bankers sought to bring about a condition of despair here so that they might emerge as rulers of us all.'
Curtis Dall, a broker for Lehman Brothers, later to head up the ultra right wing Liberty Lobby in the 1970's, was on the floor of the New York Stock Exchange the day of the Crash. As he explained in FDR: My Exploited Father-In-Law, published in 1970, the Crash was triggered by the planned sudden shortage of call money in the New York money market.
Plummeting stock prices ruined many small investors, but the top 'insiders', like John D. Rockefeller, Bernard Baruch, and Joseph P. Kennedy, made vast fortunes by getting out just before the Crash, then buying back at wholesale prices afterwards.
Bush Administration Rejected Tougher Mortgage Rules in 2005
December 1, 2008
Associated Press - The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents.
"Expect fallout, expect foreclosures, expect horror stories," California mortgage lender Paris Welch wrote to U.S. regulators in January 2006, about one year before the housing implosion cost her a job.Bowing to aggressive lobbying — along with assurances from banks that the troubled mortgages were OK — regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way.
"These mortgages have been considered more safe and sound for portfolio lenders than many fixed rate mortgages," David Schneider, home loan president of Washington Mutual, told federal regulators in early 2006.Two years later, WaMu became the largest bank failure in U.S. history.
The administration's blind eye to the impending crisis is emblematic of its governing philosophy, which trusted market forces and discounted the value of government intervention in the economy. Its belief ironically has ushered in the most massive government intervention since the 1930s.
Many of the banks that fought to undermine the proposals by some regulators are now either out of business or accepting billions in federal aid to recover from a mortgage crisis they insisted would never come. Many executives remain in high-paying jobs, even after their assurances were proved false.
In 2005, faced with ominous signs the housing market was in jeopardy, bank regulators proposed new guidelines for banks writing risky loans. Today, in the midst of the worst housing recession in a generation, the proposal reads like a list of what-ifs:
- Regulators told bankers exotic mortgages were often inappropriate for buyers with bad credit.
- Banks would have been required to increase efforts to verify that buyers actually had jobs and could afford houses.
- Regulators proposed a cap on risky mortgages so a string of defaults wouldn't be crippling.
- Banks that bundled and sold mortgages were told to be sure investors knew exactly what they were buying.
- Regulators urged banks to help buyers make responsible decisions and clearly advise them that interest rates might skyrocket and huge payments might be due sooner than expected.
Federal regulators were especially concerned about mortgages known as "option ARMs," which allow borrowers to make payments so low that mortgage debt actually increases every month. But banking executives accused the government of overreacting. Bankers said such loans might be risky when approved with no money down or without ensuring buyers have jobs but such risk could be managed without government intervention.
"An open market will mean that different institutions will develop different methodologies for achieving this goal," Joseph Polizzotto, counsel to now-bankrupt Lehman Brothers, told U.S. regulators in a March 2006.Countrywide Financial Corp., at the time the nation's largest mortgage lender, agreed. The proposal "appears excessive and will inhibit future innovation in the marketplace," said Mary Jane Seebach, managing director of public affairs.
One of the most contested rules said that before banks purchase mortgages from brokers, they should verify the process to ensure buyers could afford their homes. Some bankers now blame much of the housing crisis on brokers who wrote fraudulent, predatory loans. But in 2006, banks said they shouldn't have to double-check the brokers.
"It is not our role to be the regulator for the third-party lenders," wrote Ruthann Melbourne, chief risk officer of IndyMac Bank.California-based IndyMac also criticized regulators for not recognizing the track record of interest-only loans and option ARMs, which accounted for 70 percent of IndyMac's 2005 mortgage portfolio. This summer, the government seized IndyMac and will pay an estimated $9 billion to ensure customers don't lose their deposits.
Last week, Downey Savings joined the growing list of failed banks. The problem: About 52 percent of its mortgage portfolio was tied up in risky option ARMs, which in 2006 Downey insisted were safe — maybe even safer than traditional 30-year mortgages.
"To conclude that 'nontraditional' equates to higher risk does not appropriately balance risk and compensating factors of these products," said Lillian Gavin, the bank's chief credit officer.At least some regulators didn't buy it. The comptroller of the currency, John C. Dugan, was among the first to sound the alarm in mid-2005. Speaking to a consumer advocacy group, Dugan painted a troublesome picture of option-ARM lending. Many buyers, particularly those with bad credit, would soon be unable to afford their payments, he said. And if housing prices declined, homeowners wouldn't even be able to sell their way out of the mess.
It sounded simple, but "people kind of looked at us regulators as old-fashioned," said Brown, the agency's former deputy comptroller.Diane Casey-Landry, of the American Bankers Association, said the industry feared a two-tiered system in which banks had to follow rules that mortgage brokers did not. She said opposition was based on the banks' best information.
"You're looking at a decline in real estate values that was never contemplated," she said.Some saw problems coming. Community groups and even some in the mortgage business, like Welch, warned regulators not to ease their rules.
"We expect to see a huge increase in defaults, delinquencies and foreclosures as a result of the over selling of these products," Kevin Stein, associate director of the California Reinvestment Coalition, wrote to regulators in 2006.The group advocates on housing and banking issues for low-income and minority residents.
The government's banking agencies spent nearly a year debating the rules, which required unanimous agreement among the OCC, Federal Deposit Insurance Corp., Federal Reserve, and the Office of Thrift Supervision — agencies that sometimes don't agree.
The Fed, for instance, was reluctant under Alan Greenspan to heavily regulate lending. Similarly, the Office of Thrift Supervision, an arm of the Treasury Department that regulated many in the subprime mortgage market, worried that restricting certain mortgages would hurt banks and consumers. Grovetta Gardineer, OTS managing director for corporate and international activities, said the 2005 proposal "attempted to send an alarm bell that these products are bad." After hearing from banks, she said, regulators were persuaded that the loans themselves were not problematic as long as banks managed the risk. She disputes the notion that the rules were weakened.
In the past year, with Congress scrambling to stanch the bleeding in the financial industry, regulators have tightened rules on risky mortgages. Congress is considering further tightening, including some of the same proposals abandoned years ago.
'Grand Larceny' on a Monumental Scale: Does the Bailout Bill Mark the End of America as We Know It?
October 2, 2008Global Research - Tonight the Senate passed the $700 billion Wall Street bailout bill by a vote of 74-25. This follows the rejection of the bill by the House on Monday. In an MSNBC poll, 62 percent of Americans oppose the giveaway, but the lobbyists are doing everything possible to assure the rejection is overturned.
According to Bob Borosage, co-director of The Campaign for America’s Future, House leaders "are bringing in the small business lobby and the banking lobby to buy the twelve Republican votes they need."The Senate took up the bill in order to pressure House members who voted against it to change their positions when it returns to a vote on the House floor on Friday. This procedure may be unconstitutional, because revenue bills must originate in the House, but there is no time or political will for anyone to mount a challenge on constitutional grounds. As another means of inducement—or blackmail—the bill includes the repeal of the wildly unjust alternative minimum tax.
Every reputable economist commenting on the bill opposes it, including NYU’s Nouriel Roubini, who says the plan is "totally flawed." He says:
The plan is "a disgrace: a bailout of reckless bankers, lenders, and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer."My own view is that the plan is worse than that: a crime; grand larceny on a monumental scale.
Here’s why: We know that the debacle started with homeowner defaults on subprime mortgages and that it has now spread to other types of mortgages as foreclosures spread. We know that the unhealthy use of subprime mortgages started during the Clinton administration, as did the bundling and sale of these mortgages into mortgage-backed securities sold in the financial markets.
What has not been reported is that the Bush administration turned these acts of reckless lending into a national program of mortgage fraud. Soon after George W. Bush became president in 2001, meetings at the White House between Federal Reserve Chairman Alan Greenspan and administration officials became more frequent. According to mortgage industry insiders I have interviewed, direction soon began to come down from the banks to mortgage brokers to falsify borrower income information to allow them to qualify for loans that were otherwise out of reach.
The FBI has investigations underway to prosecute some of these cases of mortgage fraud. But they are not reaching above the brokers’ level. The FBI is not gaining access—or at least they have not reported it publicly—to information about collusion at the political level or at the level of the banks which provided the leveraged funding for mortgage money.
But at the time the housing bubble was inflating, no one was watching. Note that when Secretary of the Treasury Henry Paulson testified before the Senate Banking Committee last week, he said he was shocked to learn when assuming office in June 2006 that no federal agency regulated mortgage lending. Rather this was an area left to the states.
What Paulson did not say was that when the states attempted to intervene, they were blocked by the Treasury Department’s Office of the Comptroller of the Currency. In a February 14 article in the Washington Post written before he resigned, New York governor Eliot Spitzer wrote:
"In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative.Why did the Bush administration do this? The only possible answer is that it had every intention of producing the housing bubble, one that had the effect of not only inflating the cost of homes and real estate but also pumping billions of dollars of borrowed cash into the economy through mortgage and home equity loans...
The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks.
The federal government’s actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules. But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation."
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