IsRaEl

I am jewish. Up until my second year of college, at SUNY Albany, I supported Israeli in their treatment of the Palestinians. I was engrained with the view that Israel had to protect itself from terrorists. Than a friend of my mentioned another point of view on the subject in the form of some articles written on a progressive website that I still frequent, Common Dreams.org

This article showed another perspective. Forgetting what group you belong to. Forgetting what your holy book of preference is. I saw a people being mistreated. A majority of a nation abusing the minority. I saw a people who were up there as some of the most abused cultures of the century, abusing another culture. 

Being someone who has always found it easy to put myself in another's shoes I felt for the Palestinian people. If you are a human, in my view, its hard not too. And as a Jew I cannot comprehend that my culture would treat another with anything except the utmost humanity.  If i am bullied in school I know the feeling of being abused, thus making it hard for me to abuse another. But to me, that is what is happening. 

Both sides have an argument.  And if you grew up in either culture you would relate. 

If you grew up hearing stories about how your native lands for thousands of years was taken by western superpowers and given to another culture, and when your culture fought to take it back you were beaten by western military technology, how can you not be upset. 

If  walls encircle your neighborhood you should be upset. If you must pass military checkpoints to move freely and you spend half a day to go places that used to take a few minutes you should be upset.  If you relied on UN food deliveries in order to survive it has got to hurt. As a man your pride has got to be hurting. And now imagine deliveries are no longer allowed to enter, food resources, medical resources, electricity, basic components of life are taken from you, how mad would you be. Very is an understatement. 

Look at Greece. Rioting for weeks. Malatof cocktails thrown and hitting police. All because a 15 was shot and killed by the police and the town is fed up. Well right now the Palestinian people are being starved. They are firing rockets into Israel. Israeli's response is to hold back more food and more medical products.

What's the answer, I don't know. Is peace possible? Always. Are there some Palestinians and Israeli's who would never tolerate a peace, absolutely.

From the Israeli perspective, your towns are being rocketed daily. And in the late 90's during Arafats tenure and the intafada public transportation bus's were being suicide bombed on the regular. This has to infuriate israeli's. I started this by saying how can an abused culture abuse another? Some defend Israel's aggressive stance by saying they must take these actions in order to prevent another holocaust. 

But to me the answer is not to decimate an entire culture. It's not to starve an entire culture. In Iraq we only made progress by talking to our enemies. In Afghanistan, president Karzai is talking to his enemies. After WWII we helped rebuild Germany and Japan. Its the only answer in my view. Yet no one really gave the democratically elected government of Hamas a chance. 

They were elected for some reason. Meaning they have the support of the people. One argument goes, the palestinians do not want peace, Arafat was given a chance at peace and he turned it down. Well remember that Arafat represented one Palestinian faction, the PLO. Why not try with Hamas. 

But wait a minute, the palestinians only want to kill every last Jew. Really? People really believe this.  Maybe they want to but they wouldnt actually do it. I bet during the 60's in the southern USA when blacks were being lynched hourly, I bet many blacks wanted to kill every last white man. Every last christian. 

What if what we have in israel is a handful of disgruntled Palestinians who are firing the rockets, why do we need to make the entire Palestinian culture suffer? Do we in the USA solve gang violence in south central L.A. or in the Bronx by putting up a wall around the community, and eventually calling in the air-force to level the place. Why dont we? Because its wrong? Because killing 10,000 to stop 50 is not the right approach? So why is this behavior tolerated in Gaza.

All I am saying is people do strange things when you cage them, and take away their pride, hurt their family, starve them, and strip them of the bare essentials life has to offer. Think how you would act in such a situation. Imagine America was occupied by a foriegn power, colonized.  Would we revolt? Would we suicide bombs? How far would you go to ensure your family was not abused? How far would you go to feed your family?

Now start asking yourself new questions. Why does the world stand for israel but against saddam? And what i mean by that is why does Israel have the most UN resolutions condemning their actions than any other nation, but no nation has acted to stop their abusive nature, while on the other hand the world unites to topple saddam after a few UN resolutions? 

Why does the world know about south ossetia, which made the evening news regularly for a week straight while a genocide is occurring on the African continent in the Congo that some have called the first african world war, and nothing is on the tv?

These questions might lead you down a path you don't want answers for. It might change who you are as a person. Maybe the world and the people running it and the United States are not as rosey as you read about in grade school. 

But than again,maybe its me who is way off base.

eLeCtIoN fRaUd

We have all heard the theory that Karl Rove stole the presidential election for President W. in 2000 and in 2004.  We heard it was all done electronically. Where a computer program was made for the electronic voting machines that would trigger a vote for Bush when someone voted for the democratic candidate.  Now we here Karl Roves IT guru who happened to be in Florida for the 2000 election and in Ohio for 2004 was about to talk to US attorneys investigating election fraud when his plane mysteriously crashed killing him.

http://www.alternet.org/rights/114674/rove%27s_it_guru_warned_of_sabotage_before_fatal_plane_crash%3B_was_set_to_testify/?page=1

Fed lied tax payers died

Banks are not lending. That is what we were told. That is the main reason, the FED has argued that wall street must be bailed out, to get the banks to lend again. What if this main premise is false? Should we get the bailout money back? According to a report from the federal reserve lending levels are normal. hmm?

MORE TO FOLLOW

DeTrOiT 3 mUsKaTeErS

(updated 2-10-09)
Bailout craze of 08’. Where were you? First the banks and investment houses. Now automanufacturors. What’s next, Wendy’s, Home Depot? Where does it end. What gives you the right Detroit Three, to be handed a bailout loan because you don’t know how to properly run a company. The only difference between you and my uncle bert who closed up shop last year, is that you, Detroit employ directly and indirectly so many, some say up to 2.5 million could be lost in 2009, while my cousin bert only employs two.

On the surface it doesn't seem fair. You cant run a business. Tough shit. Fold up shop and try something else, like my nephew Bert. Remember that saying dont quit your day job. Time to quit that day job son.

But there is a compelling arguments against Detroit folding up shop. With our economy in the tank can this country afford to lose a million jobs. With the country’s manufacturing sector pretty much non-existent should we close down our last niche of manufacturing.

These are hard choices. And our congressional leaders and our president are inept, corrupt, and not strong enough to handle issues of such magnitude.

On the surface it appears that the elite class that runs this country is imploding. They cant run companies, they cant run government agencies (katrina), they cant run war (Iraq). They cannot watch over wall street (sec). They forgot how to watch over and protect our airspace (FAA on 9-11). Is the elite class going through a mid life crisis? Is the conservative ideology right that whatever government touches turns to shit. Or have conservatives been waging a battle, letting katrina fail, letting FAA fail, letting the sec fail, in order to prove their point, see we told you, the government cant work, must not be trusted, so lets shrink it down. (small enough to put it in a bathtub and drown it. this last part is something a radical conservative Grover Norquist truly believes.)

If my gut reaction is true, the elite class is imploding. So throwing money at them in wall street or in Detroit is not going to solve core problems. Just like America must look her soul in the mirror and question if her policies overseas is moral, America’s elite must look themselves in the mirror and ask is there ideology, their system of picking only Harvard educated rich kids from the in crowd to run the country, is that the right way to go.

A professor of mine taught me that the upper crust of society must continually call up others from others classes to join the upper crust. For fresh ideas, and a new perspective. Once the upper crust stops doing this they become surrounded by men who think like they do, who have the same experiences, and who all agree on decisions.

I think President W. Bush’s inner circle was a great example of this. After the first few years he was basically surrounded by yes men, who all believed the same things. The result was more disasters than any other presidency, at least in the modern error.

Generals not agreeing with a simple number like how many soldiers it would take to conquer and secure Iraq were fired. Government auditors who didnt agree with the “team” about how much the Medicare Part D Drug bill would cost and had the gaul to talk about it publicly were fired. What ever happened to allowing variety of views? I thought that was democracy? Could it be that for a long time we have not lived in a Democratic nation, or a Republic? Could it be that very powerful men that run this nation hate the notion of Democracy or Republic? It appears that way.

The proof is in the fruit of the tree. I am going to take you to a little area known as Israel right now. I hope not to many Jewish people are reading this. Because even though I am one, most I meet tend to side with the Israeli's and put humanity and morals on the back burner.

Under President W. our theme has been to spread democracy. Yet our actions and our fruit show otherwise. During the early years of president W.’s first term the people of Palestinian territory had a democratic election, I believe their first. Great news right. If you love humanity it was. But the men that run this country did not like the results. The election chose Hamas to run the government ousting the long running PLO organization. So our elite rewarded democracy by cutting off our funding for the Palestinian government. Funding that is like life support to a people who have no jobs, are not allowed to work in Israel, have no food, cannot grow food. These people have nothing and are living in ghettos, they rely on the world for survival and our elites cut that life line off because we didn't like democracy in action.

Our next move was to start funding and arming the PLO and war broke out between the PLO and Hamas. This is the fruit of our tree. After the fighting stopped Israel built a wall around the territory. Today the territory is so closed off and such little food and medical supplies are delivered that many are calling it a humanitarian crisis. Smells like rotten fruit to me.

Or how about the Sudan, in Africa. The government there recently found oil under tribal land in the south of the country. After a few payments to move the people off the land the Sudan government backed by western elites and the oil cartels began arming and funding militias to kill and destroy villages. When that slowed the airforce carried out large air-force strikes on villages. The government of Sudan, in the funniest statement I have ever heard (kinda funny bc the people of Sudan are definitely not laughing), said they are not bombing villages but that the villagers are moving but its because they are nomads, and thats what nomads do. Nice try. Again, more fruit from the tree of western elite cabal.

Iraq. Which had no terrorists there before 9-11. Every piece of evidence used was false. But we have caused so much violence and destruction that we have caused more recruits to join al queda than Osama could ever get on his own. Again, more fruit.

So Detroit. Who is at fault? How can this be solved? Should we just mourn the corpse of the once strong Detroit manufacturing sector. This will be the subject of part two.

Many are blaming the union. They wont make concessions we are told. They make 78 dollars an our we are informed. Or is it a civil war between the northern American autos who have the support of the Democrats vs. the Southern foreign manufacturing plants who have bought off the Republican leaders. I will break this down in a second, but from what i have learned even if Detroit doesn't pay any labor cost at all that will not change the view Americans have of Americans cars. It wont make people buy more of something they dont like. That my friends falls at the feet of management and the board. Americans typcally buy more Japanese because of reliability issues.

UPDATE
Just read an interesting plan in an article written by the documentarian Michael Moore, who began his career reporting on the Detriot auto industry. He is against giving any money to the industry because he thinks it will be flushed down the toilet, and it the companies will still cut thousands of jobs.

1.Just as FDR ordered car manufacturing plants to stop producing cars and begin producing tanks for WWII we should order the car plants to stop producing cars that run primarily on oil,and start building envirnmentally friendly cars, trains, buses, subways, and light rail.
2. Why give GM tens of billions of dollars when you guy buy all the company stock for 3 billion dollars? If your worried about government running the companies, Michael argues there are many qualified men for the job. He also points out this strategy brought success to the national rail system that was crumbling in the 70's. This strategy will not only save detriot, but create national jobs to help jump start our economy.

MaDoFf

Ponzi scheme. Thats what everyone is calling the curious case of Bernard L. Madoff. The quick story is that he owned a hedge fund that he ran basically single handedly. For years he paid out handsome profits of 10- 17%. Until recently when he declared the fund had been empty for some time. 

Arrested he claims it did not begin as a scheme, yet when he began to lose on his stock bets instead of keeping it real, he lied to his investors and continued to hand them the normal returns. But since the money was not coming from winning bets on wallstreet it began to come from new investors. 

One issue that should have raised red flags but didn't was his audit firm. With the amount of money bernie was handling most would have suspected he use a big outfit. Yet he used a small Friehling & Horowitz which reportedly had offices in strip malls and had only three emplyees, a sectratary an accountant and a partner in his 70's living in Florida. It also seems that while accounting firms are required to undergo peer review to ensure firms are standards are up to par, Friehling & Horowitz have not been peer reviewed in 15 years by claiming they do not do audits. The firm Friehling & Horowitz are now under an ethics probe by the main trade organization of accountants.

One aspect few have reported is that even if you got out of the fund a year ago with your winnings you still might have to return them, according to a previous court precedent.

In 2005 a judge ruled that based on the collapse of the hedge fund The Bayou Group, all parties who took their money out of the group had to return it.  "The idea being that the whole thing was a fraudulent undertaking, so no one should profit from it." 

The end result was that instead of a very small amount of people cashing out, every investor is able to recoup something. The case with The Bayou Group will see all investors receiving between 20 and 40% of their original return.

But this can also lead to problem. What if i spent the money after taking it out of Madoff's fund. What if its in another fund, what if I lost it in another fund? What if I am a retiree and the money i extracted from my Madoff acount is what is keeping me from foreclosing on my home and becoming homeless?

But on the side of the story, we want to know who the investors are who pulled their money. Was it a relative, a close friend? Did Madoff really lose 50 billion or is a few billion in the caymen islands waiting for Madoff to claim it?

We also have another case of the government watchdog not only sleeping at the wheel but also throwing away information of people trying to turn in Madoff, and everyone closing their ears.
One individual, Harry Markopolos has been calling Madoff a fraud for decades.

Interesting Websites

This seems it will be a recuring post.

Economy

Due to the economic problems over the past year that i believe will be a story told for many decades, I have been doing a lot of reading in this department.

Globalresearch.ca , specifically the authors Michael Chossudovsky and Michael Hudson.

npr.org/blogs/money/
credoaction.com/sirota/
cjr.org/the_audit/
Jonathan weil over at bloomberg news
Naomi Klien over at naomiklein.org/main
Naomi Prins over at demos.org

Personal Training and Total life domination

kegconditioning.com

basketballstrength.com

Jocsonhealth.com , he  is a personal trainer/shaman

futsaoyongchunkuen.com 

These four website represent 3 individuals who are changing my life in awesome ways and I cant recomend them enough to everyone looking for changes, growth, and evolution on all levels, body, mind, and soul.

Post -Bailout

For some reason I am very interested in the full story of this economic mess we are in and the way people are trying to solve it, and get rich from it. Maybe I think this is going to go down as a historic event, much like September 11th, 2001 in America.

The bailout seems to be just as murkey and illegal and greedy as the wall street bananza that got us into this mess.

According to Naked Capitolism, the fed's lending has topped 2 trillion dollars last week(with bernake promising loans up to 7 trillion today november 24), even though congress only approved 700 billion. The reason for this is that the 2 trillion dollars is a loan from the FED, which does not have to be approved by congress, i guess. And the 700 billion is the congressional approved tarp program, handed out by Treasury.

The Banks are not lending money like they said they would once they recieved this much needed capitol injection from Washington. The Fed and Treasury who lent the money attached no strings. They could have. The Government in England did.

And while the Fed is not pushing banks to lend, they are pushing banks to merge.

A little side note. While the Fed is lending money to the banks, the Fed is actually a private bank, composed of 12 banks. Guess who is getting all the bailout out money? The 12 banks that own the Fed. Just to clarify, 12 banks that own the Fed are printing money to loan to, umm, themselves.

And, Just released today by Naked Capitolism is news that in the bailout, the Treasury secretary snuck something in. Im not sure if its actually in the bill or some executive order approved by bush. But it is a law that allows banks to write off losses on their tax returns, basically saving money in taxes, or paying zero taxes. Its estimated the law will save banks 110 billion dollars in taxes. This is not a new law, but overiding a law passed by congress, that congress deemed illegal, and now Bush has found a way to change laws without congress.
In a time when our economy is hurting and our government is up to its eyeballs in debt, treasury secretary Paulson deems it necessary to cut taxes for big banks.

Another aspect of the story is how the treasury promised transparency in its bailout plan. Remember the problem with wall street was a 60 trillion dollar derivatives market, where little information is available. So far the treasury has yet to live up to this promise, prompting bloomberg news outfit to sue in court, under the freedom of information act to obtain information on 1. how much contracts are worth that the treasury department outsourced to manage the bailout, and 2. what the collateral is for the Fed loans to the banks.

Another part of the Economic story is the risky loans to those with no collateral, and how banks leveraged against these risky mortgage backed securities because standards and poors rating agency blindly gave them AAA/ no risk rating. So for years, until the collapse, wallstreet used bad collateral ( mortgage backed securities) for loans. And now treasury refuses to tell the public what type of collateral it has accepted in return for loans from the same public.

On the AIG front, once again Naked Capitolism reports in a great story how sweet of a deal AIG is getting. There originaly loan of 85 billion has doubled to 140 billion. And there payment plan has been changed from a 2 year loan at 8.5% interest to a 5 year loan at 3% interest. NC wants to know if homeowners will also get a 60% decrease in there interest rate.

A quote used from Naked Capitolism and analized:

"We said in our title that the AIG case constitutes looting. We refer to notion as set forth by Nobel prize winner George Akerlof and Paul Romer in their 1994 paper, "Looting: The Economic Underworld of Bankruptcy for Profit." Its abstract:"

"Our theoretical analysis shows that an economic underground can come to life if firms have an incentive to go broke for profit at society's expense (to loot) instead of to go for broke (to gamble on success). Bankruptcy for profit will occur if poor accounting, lax regulation, or low penalties for abuse give owners an incentive to pay themselves more than their firms are worth and then default on their debt obligations."

"This is precisely what happened at AIG. Executives there are handsomely paid, yet senior management cast a blind eye as one unit earned outsized profits while taking risks that would have driven AIG into bankruptcy were it not for the Fed's rescue. Before you say, "Well, it was just a few bad apples," the biggest single job of senior management in a financial institution ought to be to assure the health and survival of the entity, which means risk management and control is top of the list (it was at Goldman when it was a private firm). Anytime a unit starts reporting very large profits, managers should be all over it like a cheap suit to make sure the earnings are not the product of massive risktaking. It only takes one aggressive trader plus inattentive management to bring down an entire firm, as Nick Leeson demonstrated with Barings."

While the US is throwing money at banks to solve the recession, China has chosen to spend a portion of its bailout money on low-rent housing, roads, railways and airports and infrastructure in rural areas.

Update:11-17-08'

One of my favorite writers on the web is Michael Chossudovsky, and he blows the lid off the economic crisis over at Globalresearch.ca today with an article about how what we are seeing is a coup detat. Where the financial industry who:

1.caused the collapse of the economy, and

2.who has taken over the Federal reserve banking system and the Treasury department

and 3. who has gotten treasury and congress to approve 700 billion dollars to be given to the Financial industry men who created the mess in order to solve the mess. and

4. Now we find out the money given to the financial industry to solve the mess will be, according to michael, used to buy up corporations throughout america and who have fallen on hard times.

With the stock exchange in free fall, public companies stocks have fallen tremendously. Many companies are in trouble. Car makers, retailer stores, etc. And who is there to pick all the pieces, the heavy hitters of the financial industry.

Michael views this, as i see it, as a coup detat by the financial sector, that soon will take over the industrial sector. Right now he argues, and in the past, the financial sector makes its money without producing anything, very soon they will take over the production sector of our economy.

"Paper wealth accumulated through insider trading

and stock market manipulation is used to acquire control over real economic assets, displacing the preexisting ownership structures. "

Here are my questions. We know corporate america runs the country by buying political muscle so why are some companies winning and some losing? Does this show who are the power players in the corporate world. Why did wall street firms, who caused the crisis, get so much money without question, without strings attached and now the detriot car manufacturors are jumping through loops to get any money? Why hasn't anyone been arrested yet, wtf? why hasn't anyone been fired? If your job is to look over the economy and it crashes and burns you didnt just make a mistake you screwed up big time, and your out. 

Unless, just like 9-11, and katrina, and iraq, the crash, the chaos, the destruction, was all part of the plan. Plan for what? To make rediculous amonts of money. How much money has gone missing in iraq? How much money has been appropriated to rebuild Lousiana and how much of Lousiana has been rebuilt? How many laws were passed that could not have been passed because of 9-11? How much power did the executive branch grab that he would not otherwise have been able to grab, unless we had a 9-11?  You see where I am going with this? If so go read shockdoctrine by Naomi Klein, she writes all about this.

Are our elected officials that dumb? Or would they rather be called incompetent than criminals? And what do you do when the supreme court, executive branch, and legistative branch have been taken over by thugs in suits? 

Its all bush's fault, he is an idiot. Really? Did he force every member of congress except a handfull to pass the illegal patriot act? Or was that done by a Democratic congress? Its congress that runs the country not the president. 

HeNrY rOlLiNs

Saw henry rollins spoken word last night for the second time. He anaylizes the world in a great way. Some of my favorite points that he made:

-Republicans ran there 2004 campaigns on the idea that democrats cant stomach war. Why would anyone want to be able to stomach war. I go to veterans hospitals all the time and see iraq vets with limbs blown off, and lives destroyed and republicans are proud that they can stomach these things? I hope i am never able to stomach these things. I went back to a hotel after my visit to the vet hospital and cried for hours. Republicans say Democrats cannot stomach war and i say good , but i also say republicans cant stomach peace.

-Our nation is the biggest seller of weapons to the world. Peace will negatively affect our economy.

-Rollins met a man in Laos and instead of the man greeting henry with, whats up, how are you , whats going on, he used the phrase what is your life. Rollins said it took him a minute to think about how to answer it. the man from Laos said to Rollins that he used the odd phrase because it provokes thought, and is different.

This reminds me of my trainer, and friend dave. He is a straight up warrior of life. In every category. I cannot recommend him enough. http://www.basketballstrength.com/ and http://www.kegconditioning.com/ , check him out if you ever thought about dominating life itself.

Anyway Dave talks about the greeting. In general when most people meet they say how are you. But are they just saying hello? Are they looking for a longer answer than good, i am good? And isnt it true that when you actually answer this question with more than a sentence you catch the person who asked you, off guard. As if they truly did not want to know the essence to the answer of the question, how are you. Really. Tell me whats going on in your life. Tell me whats new. And i think he is dead on. Most people are being curteous and could care less how you are. What about your freinds and family? If you told them how your truly are every time they asked, all the depth and detail, glories and pain, how would they react?

I think about this all the time now. At every greeting. And since i now know what i know, if you ask me how i am im going tell you, especially dave. But i really like Rollins friend from Laos,and his greeting, WHAT IS YOUR LIFE? If you never thought about this do it. One of the most famous philosophies throught history once said and unexamined life is not worth living. And a modern day civil rights warrior said an examined life is painful.

Bush Was Right

I believe that banking institutions are more dangerous to our liberties than standing armies. (Thomas Jefferson, US President; 1743 - 1826)

The only time Bush got it right was what he said about the economy. Everyone Got Drunk.

Granted he said it to a friend, off camera, when no one was supposed

to sneak a recording device into the room.

I have read at least 50 articles, spanning the world wide web about the economy, credit default swapps, mortgage backed securities, hedging, money market acount, the bond market, the paper market, etc. And while i wrote two pieces on the economy already those were wrote during my learning process, this shall be my final paper.

Everything was great until home prices fell.

Than the house of cards fell.(no pun intended)

(ok yes it was)

Starting with foreclosures, leading into the drop in stock prices in the mortgage

backed securities sector, than into a rush to cash in insurance policies, When one couldnt pay they all couldnt, ending in (for now) the falling of giants, Bear, Lehman, AIG.

The story as i have read it, probably started 300 hundred years ago with the

origins of the banking system of this nation and how its built on leverage.

The crash of 2008 grew out of leverage.

If you ask me to borrow money today but promise to pay it back tommorrow with

interest knowing that my bills are due two days from now, I am leveraging.

I am betting my bills that you will pay me back. If you dont pay me

back i am screwed.

Today America is screwed.

Or most of us are, because someone is making out on this whole mess. Just like the Iraq Colonial Expedition (a line from michael hudson)(dont tell him bc i didnt ask to borrow it). While most of us suffer with the expense of blood and gold someone is getting rich off the expedition.

The basic idea of how banks work is that banks takes in savings

deposits and hand out loans. Savings accounts get 1% today, loans pay the

bank 5-10%. But regulation says the bank can lend out

more

than they have in stock. I think the rate is 30-1. For every dollar in the vault, they can loan out 30 dollars. This creates a problem if all loans stopped being paid than your savings account is finished. This is called a run on the banks and it happened during the 29' crash and the 87' savings and loan. People ran for there savings account, and it was gone.

A Government body the

FDIC

is supposed to insure deposits so fear and panic wont lead to another bank run. But from what i read, when one bank, the Savings And Loans bank, crashed in 87' the FDIC spent over 50% of its reserves to replenish empty savings account. So what would

happen

if more than one bank crashed?

This is the world of banking leverage. The bank needs to lend to make money. The riskier the loan the more money. Now take it up one notch and you have the world of stock market leverage. Today when you buy stocks or bonds you can invest in a swapp. A fancy word for insurance. So that if your gamble loses you can cash

in your insurance policy and you still win.

Being a swapp and not insurance it does not get regulated. Meaning two things.

1.No one overseas the trading in these markets to look out for dangerous trends.

2. Anyone and Everyone selling this swapp/insurance has no obligation by law to keep stock piles of money on hand in case large numbers of people lose on there bet and seek

to

cash in their swapp/insurance. My first question is who was the smart guy at lehman brother and AIG who said we dont need no stinking financeial reserves in case people actually want to cash in their insurance. Secondly how come there has not been any prosecutions. If i sold insurance from my porch but never paid out i would be in jail.

This is one of the parts of the Economic trouble. With these types of rules(none) who would not want to get in on the racket. The housing market had increased in value for decades so anyone selling insurance/swapps on anything

mortgage related would have made a

killing for years. Premiums in and no one putting in insurance claims.

Imagine how Gieco would succeed under this model. So Sales of insurance boomed, CEO's raked in the free money. Wall stree bonuses were huge. Remember when the head of the New York Stock Exchanged retired with a 150 million dollars payout package. Time were good.

You could even buy insurance on stock you didnt own. HUH?

Thats right. I know it sounds weird. I mean how much of a killing would i make if i walked into a hospital and began to purchase life insurance on

patients in ICU. I would be betting against the patient. And my bet would be sound.

Well on wall street they are allowed to bet a stock will crash, making money

when the stock crashes. But too many people bet(bought swapps). And every one on wall street was selling them but not putting away funds to pay them off.

And No one in government was regulating. (they used to be but the law was changed)

But many had mentioned this to former Fed chairman Alan Greenspan. Who's job it was to watch over the economy of the country. Yet when he was told about the dangers of an unregulated credit default swapp market, that is estimated to be 50 trillion dollars in a 5 trillion dolar bond industry. That means while only 5 trillion bonds were sold, 50 trillion bets were made on the bond for its success or failure.

(yes trillion i did not make a mistake)

Greenspan said regulating this 50 trillion dolalr market was not needed. But this is not a Republican issue becuase the treasurey secratary under Bill Clinton, Robert Rubin also refused to regulate the market.

Mr. Rubin is now the economic adviser to current presidential hopefull Barack Obama.

Another aspect of this credit default swapp market

(buying insurance on a stock)

is how companies leveraged against each other by buying insurance from one company than selling insurance to another company.

Anything to make a buck.

Why would you want to buy and sell insurance on the same item, if you ever need to cash in the

insurance you have simply have to pay out the check you get, making no money right?

Wrong.

As risk increases so does insurance premiums. If i bought my premium for 10 dollars, but risk has increased current premiums to 200 hundred dollars, than it pays for me to hedge(buy cheap insurance and sell expensive).(remember there are no rules saying i cant buy and sell the same insurance coverage,and none saying who can sell insurance)

The Problem with this type of leverage is when many banks are interconnected, say if AIG cant pay Lehman, than Lehman can pay Bear, than Bear cant pay Wackovia and on and on. Until they all cry bankrupcy uncle. I have seen it a million times.(ok only once)

So now you have these banks linked together in a daisy chain, and you have this industry that is unregulated so no one has to report anything. So much of how each firm acts is secret. This means that if a bank failed in japan it could be linked to any chain and no one knows who is affected by what. And this not knowing,this uncertainty about what banks are sound, who placed what bets, who lied on their balance sheets, this has caused banks to freeze up their lending. No one knows how much risk is saturating each bank.

For example Wachovia was just bought by Wells Fargo for 14.8 billion dollars, yet one month ago Wachovia listed on its balance sheets its net worth was 50 billion dollars. So either Wachovia lost 35 billion dollars in a few days or Wells Fargo is getting 35 billion dollars in free stuff. Or the third option. That Wachovia is lying on its balance sheet.

But lets back up a minute and talk about selling the stock because what good is it to know the swapp story if you dont know the stock story.

Everyone knows what stocks are. Buy low sell high, lets make some money.

Well according to my research there is an estimated 71 trillion dollars of total world savings. This is money that wants to make money and not sit in the bank. The safest bet

over the years has been US Treasury bonds. But Greenspan in the 2000's lowered rates to 1%. Someone who i read, who can read the market says there was a hidden message

in Greenspans actions at keeping the rate very very low. Basically he was telling the 71 trillion dollars

worth of world wealth to not buy US Government bonds.

Go somewhere else.

So searching for somewhere, anywhere to earn more than a measly 1% wall street tried something out that eventually grew into a monster.

Mortgage Backed Securities.

Which are home morgages that wall street banks buy in bulk and package into stock.

It began innocent.

One banker bought a thousand mortgages. This is 2000, 2001. And like clockwork he recieved a check every month from one thousand home owners who paid there morgage to this wall street banker. So instead of earning 1% from government bonds, this banker earned 7%, the morgage interest rate. It was so lucrative that he began to package up more and more mortgages to sell them to this 71 trillion dollar pool of money that was desperately seeking an avenue of investment that would earn more than 1%.

The thing was the these mortgage backed securities peformed so well, because remember the housing market had risen in value for decades. It was a given that my grandma bought her house cheap and would sell it for profit. And because

of their high performance they sold out like wildfire. Eventually wall street called the mortgage firms one day and said guys we need more mortgages our investors are hungry, but the mortgage lenders said sorry, we tried it all, but we have given out every mortgage we possibly could to prime customers(customers that could prove they had a job, downpayment, good credit). Wall street said these things are so hot and we need more so why dont you lower your standarsd, and we will reward you. Do whatever it takes to get us more mortgages.

So the game began.

But first to lower standards we have to have a federal government that would like lower standards and pushed for it. And they did.

So mortgage outfits all over the country, big and small began to lower standards. They wanted to cash in on the feeding frenzy going on on wall street. Greed was an issue but so was competition.

If one street is lined with companies selling mortgages and your firm has the strictest criteria most likely you would do the least business. So not only did the owners

of these companies race to the bottom to survive, but workers in these companies

would constantly push there superiors to lower standard. They didnt want to lose out on a sale.

Standards grew so laxs that 23 dead people in Chicago were given mortgages. And living people were able to get mortgages by not even showing w2 forms. Just answer two questions do you have a job and do you get a paycheck? yes ? ok here is your mortgage. And dont forget the story i broke in my first economic meltdown blog, that some companies were established with the sole purpose of temporarily parking money in a persons bank account so when they went through the mortgage application process they would pass. And when the mortgage was approved the funds were removed, and for this you paid a fee. Some Mortgage firms would recommend this type of service.

Now in the old days when banks would give you a mortgage they would make sure it was sound because the banks plan was to keep your mortgage on its books for the life time of the loan. Not anymore. With the intense feeding frenzy on wall street for as many mortgages as possible, each mortgage firm knew they would be giving a mortgage to a home owner than selling it right away to a wall street bank only to be sold again to an investor in say

china. There was no intimate connection to do the right thing. The mortgage firm had no interest in seeing the mortgage payed off. They got there fee and washed there hands.

And remember no one in the government was watching.

Now the theory was to get as many mortgage loans out as possible, so they gave low or no initial interest rates to make the american dream of owning a home seem within reach. And prices were rising at such a rate, that many sellers of mortgage told their clients that in 3 years when your higher interest rates kick in you would have accumulated so much equity that you will be able to renegotiate your mortgage at a lower rate. This did happen, for years, as long as home prices rose. But could they rise forever? And what would happen if they didnt? Well no and we are living the what happened question.

So you have many parts to the story. The Investor on wall street trying to feed the intense desire of his clients to buy more mortgage backed securities. You have the married couple who is told you can you can now afford your dream. You have the entry level seller at the mortgage firm begging his boss to lower standards and cash in on the rush or he is quitting to join the firm down the block. You have the billionaires in the middle east looking for safe areas to park there money. And you have the Stock Ratings agencies Standard and Poor giving these risky stocks AAA rating when they knew how risky they were.

This is another damning piece to the puzzle. The rating agency happens to be paid, handsomely to rate stocks by the same firms that sell the stock. Stocks that people buy based mostly on there rating. Rating relates risk.

How could they not know the risk in mortgages given out to risky clients would not be a riskier investment as a stock.

The answer is they knew.

Thus another party that should be in jail.

In emails uncovered by the federal goverment there are two quotes from employees at the ratings agencies that gave these risky stocks a safe rating that prove their guilt.

"If a cow asked us to rate a stock we would do it"

and

"I hope we are rich and retired by the time this house of cards crashes".

This is corrupt and illegal, buttom line.

It became a game to unload risk, knowing that the rating agency would polish up any turd you tried to sell with a perfect, safe, AAA rating.

In fact it became so popular to unload RISK as a stock for an investor to buy that firms began looking at any risk they had on their balance sheet to slice up and dump as a security. And the laws were so lax that

even after the security was bundled and sold, the investment bank that bundled it was able to go in and swap in riskier items, and take out items.

And the man that will save America is the Treasury Secretary Paulson. He was ceo of Goldman Sachs investment firm. Surprisingly, a firm that was left untouched by this mess, yet also a firm that did its share of selling this risky stock but getting out in time. It seems like that was the plan all along, from the small mortgage firm to the big wall street banks, get in , make money, get out. But the house of cards fell so fast that hardly anyone got out. All the wall street giants like Bear Sterns and Lehman brothers that sold the stock were stock with billions of dollars worth of shares on their desk ready to sell them when the people buying them smelled something fishy and stopped buying. These big banks were now sitting on billions worth of garbage, much of the money used to by the stock was taken out as loans.

The mortgage firms all around the country were also left holding a bag of garbage that they took out loans to buy with the expectation of selling the next day. At the height of popularity for these risky mortgages stocks being sold, wall street was calling up mortgage

firms daily telling them we need more mortgages. So the mortgage firms began to borrow huge sums of money to buy mortgages, but they were going to sell them tommorrow to wall street.

But when investors stopped buying from wall street wall street stopped buying

from mortgage firms, and many were left with 100 million

dollar+ loans they could not pay back. Fannie Mae and Freddie Mac chose this death.

Another interesting piece of the puzzle that only one man

i read of talked about was speculators. While prices in the real estate

market rose at dramatic

levels it paid for speculators to begin to buy houses, hold them for 6 months and sell for a profit. Some estimates show that 25-40% of the real estate sales in the 2000's was of a speculative nature. Now the mindset of a speculator does not care about adjustable rate mortgage loans or no interest teaser rates because they will use their loan for 6 months tops.

Once again life was great as long as

home prices rose. when they stopped rising there was no

money in speculating and many got out or faced foreclosure. This paper that i am summarizing argued that the high foreclosure rate cannot be blamed solely on the sub-prime market. His statistics show just as many prime market foreclosures as sub-prime.

Which expels the republican myth that this problem

has to do with people who took out mortgages

who could not

afford to and who should have known better. And I hope this blog entry shows that that idea is only 1/1o of the story.

Be A Man America, Lets make some Magic

A friend of mine said a great line the other day. With every animal on earth the theme is that the strong survive. Not so with humans. We make sure the weak not only have a shot, but we let them rise to the top.

Case in point the economy. Welfare for the rich. No competition. Free market when in times of boom Socialism in times of bust. No accountability. Market forces are supposed to set prices, not corporate giants in collusion with each other.

But I'm confused, I thought our country practices capitalism, and free market principles so why is the government bailing out firms? Isn't a tenet of the free market theory to not interfere and let the weak die and the strong survive. Your not the only one who is Confused.

Many confusing ideas have grown more evident over the years. For example, are we a Democracy? If so why did the supreme court select the President of the United States in the year 2000 while stopping the vote count, and expressing in its opinion that it would be safer to pick someone that leave doubt while searching for the truth. Oh and they also ruled that no where in the constitution is their a right to vote for president.

Or do we have Fascist tendencies. Everyone hears the word Fascist and immediately thinks of Hitler and concentration camps for Jews. But that was the philosophy of a crazy man. The idea behind Fascism is the merging of Business and State. To me this idea is seen in America where corporations are said to control congress. They sponsor elections. They not only see most bills they support become law they usually help right them in order to increase business. And usually once the author of a bill passes the law for say the telecommunications industry, said congressman gets a meaty offer to quit congress and work for the telecommunications industry. Bribe? Corruption? Coincidence? Or the natural order of a Fascist state?

Or should we all hang our heads and admit that we live under a dictatorship? A prison with goodies. If i put you in jail, but give you a huge cell, like the size of a house. And I give you a job so you can pay for that nice house. And I let renovate the house. And I let you get a nice job. So you can buy a nice car, an ipod, and a laptop. Maybe take a vacation here and there. And I let you have newspapers (run by my prison guards). I supply your children with schools run by my prison guards. Your job is run by my prison guards. Cross my guards and I take it all away. Praise and support my guards and you get more goodies and a bigger house and better vacations and a nicer car.

This sounds like a system that will support the weak and handicap the strong.

Basically what i wanted to say was about the economy. Were most people shocked even me, yes. Should we have been, no. Forgetting about the mortgage crash for a second and look at the obvious.

As a nation we buy more than we sell. We have more credit than savings. Our government borrow money everyday just to function. If we followed this plan on an individual level we would all be in a soup kitchen and sleepy on the sidewalk. As a nation we have lived like a college kid with his first credit card and not like an adult.

The phrase we should leave our kids a better nation/world than we inherited seems lost. What happened?

As individuals and as a nation we need to grow up an start acting like adults. If your name is Bear Sterns, AIG, or Bank of America and you cannot manage your company you are weak and you should fail. Just like all those mom and pop shops that were put out of business when Walmart rolled into town. No one cried for them and they were our blood. Yet our Congress cries for these corporate monsters that have grown larger than some nations. They have no national loyalty yet we are told they are too big to fall. Borrowing from my favorite phrase, REALLY?

If I was in charge and some used the phrase to big to fall around me I would tell them to shrink. If you are too big to fall than you are too freakin big.

Last year when Joe the plumbers cousin, Susan the Walmert clerk, when she got sick had to be hospitalized and couldn't pay her credit card bills or mortgage and is now homeless was she not big enough to fall? When did the corporate machine become more valuable to our nation than an individual down on their luck?

Bear Sterns took excessive risk, gambles like anyone would go to Vegas to do, and they lost. Susan the Walmart clerk was struck by an act of god. She got sick.

Why is it that France has faster Internet service than America? And better cell phone service? Its because they still practice a little something called competition. If two guys own a deli on the same block in a natural world they will compete to win the customer. Service goes up. Deals pop up. Quality goes up. Innovation shows its face. But what we have in America is only two huge deli's that have gotten together and teamed up against the consumer. They keep prices high, service down, and innovation and quality go out the window.

They believe they are doing good. There stock might even go even and they might even turn a profit. But inside their spirit grow weak. Challenges make men, and complacency makes men weak. Weak men create weak nations. Weak nations attract weak leaders, building weak bridges, creating weak dreams, and creating weak schools, to indoctrinate the next generations for the weak culture.

The weak men have conformed and have been chosen to lead the next generation. And they have been rewarded with stock options and islands, and imported vehicles.

Could you are I create a start up bank today to compete with JP Morgan/Chase/ Bear Sterns, or whatever that gigantic company is called now.

Is it any surprise that our Detroit auto makers cannot compete with foreign car makers. They know no matter how bad business is our government will help them out. What kind of motivation is this for them to innovate and improve.

Why is it that there is still a law on the books from the 70's when oil companies couldn't make money that paid them to stay in business. Subsidies. So that last year when the oil companies made record profits quarter after quarter, breaking new records, these oil companies were still getting subsidies from the government.

Why is it that our Government also subsidizes the farm industry. If left on its own, the farming industry in the U.S. would not survive. But instead of making them take responsibility to live or day the Government pays them enough to continue growing so they can stay in business while putting foreign farmers that they compete with out of business.

What is the worry with giving them the opportunity to sink or swim. We are so afraid of sinking that no one is swimming anymore. We are a nation floating with safety tubes on our arms and its time we grow up and take them off. I mean how silly would it be to see a grown man in the pool with swimmies on his arms. Even my 5 year old daughter would giggle(if i had one). (if i had two they both would giggle)(a lot) ( because one would feed off the other one's giggle, which would create a cyclical effect feeding the other one, and so on an so forth, until both would giggle at maximum giggle capacity).

Where are all our innovators? Where have all our leaders gone? The last ones I remember have been taken out, JFK, Bobby Kennedy, Malcolm and Martin.

Remember when the Brooklyn Bridge was built? Remember when we landed men on the Moon? That was magic. That was innovation. Where has all the magic gone? China made magic at the Olympic games during the opening ceremony. It was glorious to watch.

I want my country to make magic again. I want to make magic. Don't tell me I cant. And I better not here you say you cant either.

700 billion dollar presidential reward

I believe that banking institutions are more dangerous to our liberties than standing armies. (Thomas Jefferson, US President; 1743 - 1826)

Wow. Where to start. While over the summer we had economic problems plaguing the country, now we have disaster, or so we are told. By the White House, the Federal Reserve Bank, the Congress, the Network News, all very reputable sources who would never create a fake crisis in order to force a bill down our throats as quick as possible, while not allowing our elected representatives to read it, very similar to the patriot act after 9-11. Well that was my sarcasm, because actually they have and they are trying again.

700 billion dollar bailout. We need it now or face a complete meltdown. No oversight by congress, judicial system, or any future president ever. This is the Mantra you have heard if you have been watching corporate news. Run by and for the interests of powerful men in this country. Read the Internet and you get a different picture. You get to read opinions of economists, and many who saw this mess coming 5 years ago. And some who saw these trends coming as far back as carter, and some who see this mess through lens of globalization.

So lets go through this mantra one by one. 700 billion dollars is needed. Why? They admit they have not used any formula and have merely picked a large random number. They( treasury Secretary paulson and fed chairman Bernake) admit they wont have time to spend all that money anyway before the next president arives.

Who gets the 700 billion? Well Paulson and Bernake would like to hand it over to wall street banks who are in the mess. There argument is that because of all this bad debt( in the form of mortgages not being paid and investment in mortgages that were packaged as stocks that have declines sharply) on the books of these banks, that they are refusing to lend out any new money thus freezing the economy. So the 700 billion would by the bad debt, taking it off the banks books while giving them cash to begin lending and get the economy flowing again. That is the corporate media side of the story and we all know there are 3000 sides to every story.

Another side of this story is the homeowner. If they are given the money, in theory, it will solve the economic slowdown as well. They pay their mortgage, banks get paid off, banks begin to get of rid of the bad debt, stocks prices go up also as mortgages are paid and the bad investments look better, and the debacle is reversed.

Why has the corporate media reported so favorably for one story, lets give the money to the banks, while painting the homeowner as the wicked witch from the west who should have known better and should not have taken on a mortgage he could not afford. One solution i describes helps everyone, the latter. While the former solution saves the banks, actually rewarding some like JP Morgan Chase who was able to by Bear Sterns and Washington Mutual at bargain basement prices, and Bank of America who bought Meryl Lynch. But in the former solution the homeowner is left in the dust, as is the average investor who was tricked into buying bad stock.

How were they tricked? Well the mortgages of bad credit people were lumped together with mortgages of good credit people and made into a stock, this stock was falsely and illegally given a triple a rating by the two rating agencies who were paid mighty sums by the investment houses.

So for our fraud tally we have bankers 1, homeowner/stock owner 0

So why were these mortgages packaged as stocks anyway? Well as a Bank or a Mortgage firm you are limited with how many mortgages you can have on your books based on a few factors. One factor for a savings and loan bank like Bank of America is how much money in deposits they have on hand. So by bundling up mortgages as stocks and selling them banks and mortgage firms were able to remove the mortgages from their books, thus freeing up room for more mortgages, and more fees.

Fraud tally bankers 2, homeowner/stock owner 0

In an update on the fraud front, today (November 3rd 2008) it was released that operations at Wamu approved every single loan that came through the company. When underwriters refused to approve loans that looked fraudulent workers were reprimanded and put on probation. A few months ago Wamu closed up shop, as the biggest US bank to ever fall. It was later sold to JP Morgan for 1.9 billion dollars. The race to approve mortgages was promoted by executives by offering free vacations to whoever sold the most mortgages each month. One employee won a free month in Jamaica for approving 3.5 million in mortgage loans in one month.

In one particular case, one underwriter remembers denying a very fraudulent loan, getting reprimanded, and her boss approving the loan only for it to go into default 4 months later. Not one months payment was paid.

Fraud tally, Bankers 3, homeowners 0

What about all those people who qualified for prime mortgages, based on their good credit but were sold sub prime so the mortgage lendor could clean up in fees? I read one case in particular of a returning Iraq Vet who qualified of for the best rates yet he was fooled into signing up for the subprime, no interest, no money down loan, and boom he lost his house. How is an average person supposed to know what he qualifies for? Are we not supposed to trust the numbers that mortgage houses crunch?

Fraud tally, bankers 4, homeowner 0

The next part of the mantra we are hearing is this needs to be solved now, using our 700 billion dollar plan, or else you haven't seen nothing yet( in terms of crisis). Really? To me it seems like they are rushing into this, like they want this rushed through, with out review or oversight. Why else do it so close to a congressional recess? But Ian they didn't DO anything, the economy is its own beast and it just crashed. I am not buying that either, the bankers of this country have long history of creating crashes to benefit themselves.

A great great great documentary on this is called money master and can be seen on Google video for free. and One example they give is the farming industry around the 1800's, i forget the year. But the plan was to loan and loan and loan to farmer, (side note is that 95% of farming in this country used to be family owned farms), and than one day all these loans were called in and when most couldn't pay, which was expected, the banks took over huge areas of land. This was done for a few reasons. One was to end family farms and create the rise of corporate farming run by a few companies. And we have we seen from this current economic crisis merging of huge banks, becoming more and more concentrated.

Another result of the farming crisis of the 1800's was now that we have taking away a large portion of the nations jobs, farming. Most Americans have no jobs, and so they were ushered into factories and mines to work for someone else. This is one of the most fascinating times in America for me to study because i see it as the turning point of when Americans stopped sustaining themselves by working for themselves (farming) and were moved like cattle into factories to work for someone else, to rely on someone else for food, money, for life. This is when Americans lost a huge amount of power they had. Now they could be abused, being told "do this if you want to feed your family, do this if you want to pay your mortgage". I read something once that talked about the pride of an American before this farming crisis, and an American would not be caught dead working in a factory, why anyone would sweat all day with their labor for someone else to make a profit was looked upon as crazy, and i agree. But one day this all changed, and i would like to know why and how, and how we get back to that mindset.

So how is 700 billion dollars going to help? If an individual was in trouble with debt from one credit card would opening a new card to pay off the old one solve anything? No, So why try this on a Macro level? Why is only one plan being talked about on the news, and whats the rush? Where is a new deal type plan? Why are we throwing money at the wall street men who got us into this mess? Why is there no talk of jail time? Why was the bush justice department attacking state attorney generals who tried to arrest corrupt bankers? Why are small banks throughout America saying that they are benefiting from this wall street mess? And why wont the corporate media tell us this fact and other facts to paint the whole picture? Do people believe the Bush administration when they tell us this is a buy in and not a bailout, and one day we can sell this debt we are buying with the 700 billion dollars for a profit? Sound like a story I once heard about about a war in the middle east paying for itself and not costing us a billion dollars a month, in a country that rhymes with istack.

One part of the bailout bill that is hardly being discussed says that the 700 billion dollars can be invested in anything on wallstreet not simply banks that are in trouble. This is kind of odd, i thought the point of this is to save banks and mortgage firms that are in trouble? The treasury secratary also has the power to invest in foreign banks. This is the best line of them all. The US economy is in trouble and to save it we will use US taxpayer money to invest in foreign banks, hmmm? To take this further one economist on cnbc claimed that Paulson and the President would veto any bill that did not allow the 700 billion to be spent on foreign banks. This does not make sense to me, the only explanaition i heard is that foreign governments must be making large threats against the US Government to force this administration to act this way.

A solution proposed by Thom Hartmann, and others im sure, is to reinstate a tax on wall street for every trade. The argument goes that Wall Street's main purpose was to raise capitol and give investors a way to make money over a long period of time. But recently speculators have changed the way wall street operates by buying large amounts of stock to raise the price than to dump it all in a few days time. This is called speculative traiding and many blame this for the housing bubble now and before the 1929 collapse.

Historically, from the founding of our country until the last century, most people invested rather than speculated. When rules limiting speculation were cut during the first big Republican deregulation binge during theadministrations of Warren Harding, Calvin Coolidge, and Herbert Hoover(1921-1933), it created a speculative fever that led directly to the housingbubble of the early 20s (which started in Florida, where property values weregoing up as much as 70 percent per year, and then spread nationwide, only toburst nationally starting in 1927 as housing values began to collapse), thenthe falling housing market popped the stock market bubble and produced thegreat stock market crash of 1929. That speculation aggregated enormouswealth in a very few hands, crashed the housing and stock markets, and producedthe Republican Great Depression of 1930-1942. Franklin D. Roosevelt, as part of the New Deal, put into place a series ofrules to discourage speculation and promote investment, including maintaining –and doubling – the Securities Transaction Excise Tax. Other countriesfollowed our lead, and the UK, France, Japan, Germany, Italy, Greece,Australia, France, China, Chile, Malaysia, India, Austria, and Belgium have allhad or have STETs.

This tax is not a completely new idea we used it in the United States from 1914 to 1966, and to fund the civil war and the spanish american war. Other countries right now are using this policy. If we were to instate a .25 percent STET (tax) on everystock, swap, derivative, or other trade today, it would produce – in its firstyear – around $150 billion in revenue.

The Republican Bush Administration is currently suggesting that we borrow$700 billion (or more) from China and Saudi Arabia and other countries and investors, add that to our national debt, and repay it with interest (makingthe actual cost over the next 20 years over $1.4 trillion). This is whatRepublican Herbert Hoover tried in 1931 when he first created the Reconstruction Finance Corporation (later totally reinvented by FDR) to bail out the banks in1931. Hoover’s RFC bailed out the bankers, paid off huge salaries in the banking and investment world, bought him a few months (maybe that’s the realgoal of the Bush/McCain Republicans now – just hold things together until afterthe elections), but ultimately led to the failure within two years of virtually all the banks in the United States.

The bailout failed.

So lets make a list of all the groups that made huge sums of money in America during the Bush presidency during crisis that fucked the American public.

1.Energy/Enron,

deregulation lead to ripping off of Californians,

lead to no change in laws.

2. Oil Men,

made record breaking profit margins each

quarter for the past few years while charging Americans the highest

price for gas ever, up to 4.50$ a gallon. And while supposedly it costs

around thirty dollars to extract, package, and ship a barrel of oil the world

market is selling it for 140$ plus a barrel. Yet they still get subsidies

from the US govt from a time when gas prices were very low that the oil

companies could not turn a profit.

3.Military Industrial Complex,

they got two wars in

Afghanistan and Iraq where two records were broken. More contracts

were given out to private firms than during any other war, and more no bid

contracts were given out. And remember this was war that was sold to

us on a lie, we should not even be there, but many Military contractors made

money hand over fist.

During the tenure of Paul Bremer in Iraq, billions and

billions of dollars went unaccounted for, much like when the defense department

was audited and Donald rumsfeild could not account for trillions of dollars.

4.Health care industry,

During bush's failed presidency congress passed a 700 billion dollar

health care bill making is more expensive for Americans to use the

health care system, and making the system more complex and confusing. This

bill was one of the saddest days on capitol hill for many elected representatives

because of the high level of arm pulling done to get this law to pass, many claimed to have seen members crying they were so upset by the bully tactics used. The time

allowed to vote on this bill ended breaking a record for the most ever

because they had to get the votes.

Many felt they were lied to because the president sold the bill

as a 300 billion dollar bill, than once it was passed it was realized it was closer to 700 billion.

5.Wall Street,

bankers and investment firms had a field day moving around and shifting

mortgages into many different things to make huge profits

on fees until one day it all came crashing down,

at first it was a 400 billion dollar infusion

next was 100 billion each to both Fannie Mae and Freddie mac,

than 85 billion to aig, than a 50 billion dollar loan to JP Morgan chase to buy bear sterns,

than 100 year old firms fell like dominoes, bear sterns,

Lehman brothers, Washington mutual, Meryl lynch.

And now the president is hoping congress pass a quick law with 700 billion dollars given to one man to fix it all, with no oversight, or review, for the eternity.

How do they use the same play from the same play book year after year? How do we fall for it year after year? How do they pass bailouts against the will of America year after year? How do these elected officials who fuck America year after year, continue to be reelected year after year? And does half of America not care, year after year.
If we don't change this here is my prediction, one day we will have One of everything, One bank, One credit card, One store to buy everything, One Media company, One news paper, One health care plan, One retirement plan, One stock to invest in, One utility to buy electricity and oil from, One place to get a mortgage from. A world without choices a world without competition means the shit with stay at the top by force.

So who will the next president reward?

CoLd WaR AgAiN?

If you began following the Battle in the cuacuses recently from america the first thing you would assume by following our news is that Russia attacked and invaded the nation of Georgia, and they must be hell bent on reestablishing the soviet union.

But for every action there is a reaction.

So what the action that lead to our current reaction.

Russia claims that the Nation of Georgia made the first move attacking two regions inside of Georgia. Two independent regions that operate outside of the Georgian government.

South Ossetia and Abkhazia.

To areas that have very strong russian ties, and that are ethnically russian. Russia says they are protecting an unprovoked attack on these two independent regions inside the nation of Georgia. And when i say unprovoked attack, i mean these two regions took a beating, with rockets and artillery that leveled almost every building in the region. Firing indescrimitely at people, killing UN peacekeepers (who happened to be russian) The leaders of these two regions are calling for the president of Georgia to be tried for genocide, and war crimes.

But who is right?

Sounds like Russia, who is protecting these innocent towns. But the Russians have also gone overboard but launching air strikes against the georgian capitol, rolling masive amounts of tanks into Georgia, not just the area of the two regions who need help but deep into Georgia. New reports are coming out of people fleeing the Russians. That the Russians are taking everything from the land they grab.

And Why wouldn't Russian like to expand their holdings.

Georgia is ripe with oil and oil pipelines. Oil is becoming more of a life commodity than air. Maybe the Russians are worrying after the USA's excipade into Iraq. We had Vietnam they tried with Afghanistan, than we cool out. Now we have Iraq and they want to play again too, so they have Georgia. A few years ago when we went back to Afghanistan they partied with the Chechen's.(see my previous posts from 05' on the Chechen issues)( I know what your thinking, hey i looked for your articles on the Chechen issue and i couldn't find it, that cause you looked online, i have not written them yet)

Is the West pushing to hard against Russian?

But than again we have the Georgian president, very pro west, receiving massive amounts of military hardware and training from the USA and Israel. You have massive amounts of evidence saying he came to power in a coup aided by the cia. You have Georgia attacking on the day the olympics start and somehow it gets massive news coverage in the USA that supports Georgia's predicament. Even though by all measure they began it. And How is this issue in the news so much so quick, when i see stories about darfur once a year? You also must factor in that Georgia is seeking nato membership, along with other nations. Nato is basically surounding Russia. We are also planning on placing missle launch sites in the poland and the ukraine. Guess who just signed up after this russian aggression, poland. So from the Russian perspective its easy to see how they might say they are being backed into a corner.

Iraq

It also does not help anyone that the US, who usually can step in and say cut it out, is in the middle of an occupation of a foreign nation. So how can one not sympathize with Russia if they also sympathize with the Removal of the tyrant saddam. Recently Russia tells how the US invaded, overthrew Saddam and Hung him because he was brutal to people living inside his own country, than they say well we are doing the same, the Georgian president is brutalizing his own people, inside his own country why cant we stop it.

WWII

A lesson that came out of wwii was that one nation cannot act militarily around the world on its own accord. Thats what Hitler did and he tried to conquer the world and did conquer europe minus GB. And Bush has started a bad president of invading foreign nations unilaterally, and now Russia has followed suit. Who knows where this will lead

So you decide who is right. Is Georgia right. Is russia right. Is it about oil. Is it about global hegemy. Was this a United States plan to set up and demonize Russia.

Listen to Putins words a few years ago and you tell me:

The unipolar world refers to a world in which there is one master, one sovereign---- one center of authority, one center of force, one center of decision-making. At the end of the day this is pernicious not only for all those within this system, but also for the sovereign itself because it destroys itself from within.… What is even more important is that the model itself is flawed because at its basis there is and can be no moral foundations for modern civilization.”

“Unilateral and frequently illegitimate actions have not resolved any problems. Moreover, they have caused new human tragedies and created new centers of tension. Judge for yourselves---wars as well as local and regional conflicts have not diminished. More are dying than before. Significantly more, significantly more! Today we are witnessing an almost uncontained hyper-use of force – military force – in international relations, force that is plunging the world into an abyss of permanent conflicts. We are seeing a greater and greater disdain for the basic principles of international law. And independent legal norms are, as a matter of fact, coming increasingly closer to one state’s legal system. One state and, of course, first and foremost the United States, has overstepped its national borders in every way. This is visible in the economic, political, cultural and educational policies it imposes on other nations. Well, who likes this? Who is happy about this?

In international relations we increasingly see the desire to resolve a given question according to so-called issues of political expediency, based on the current political climate. And of course this is extremely dangerous. It results in the fact that no one feels safe. I want to emphasize this – no one feels safe! Because no one can feel that international law is like a stone wall that will protect them. Of course such a policy stimulates an arms race. I am convinced that we have reached that decisive moment when we must seriously think about the architecture of global security.”

And what does Mr. Bush and our politicians have to say about it?

That its all russians fault, they should stand down. Mccain actually said this is the 21st centuary and nations just dont go around invading other nations. Really

UPDATE

Us claims the missle defense system that nato is insalling in eastern europe is to keep on eye on rogue nations like Iran, yet last year the president of Russia, Vladimar Putin, offered bush use of a Russian missle sit in Azerbaijan, a nation of hte border of Iran and bush declined,

Mortgage Disaster

I believe that banking institutions are more dangerous to our liberties than standing armies. (Thomas Jefferson, US President; 1743 - 1826)

The Mortgage melt down this year is having a large effect on the economy of the U.S. I have been reading much about it and would like to break it down somewhat. First is a professional journalist breaking down the situation.

"The financial crisis comes from the collapse of an $8 trillion housing bubble.
Banks—and many homeowners—made a lot of bad bets on the
assumption that housing prices would always go up.
The shadow banking system—including the off-balance sheet
entities set up by the commercial banks—borrowed massively to make those bets. They invented exotic securities and over the counter, unregulated credit swaps and the like to add layers and layers to the house of cards. Now it’s collapsed. The real economy is in trouble. Consumers have lost trillions in home equity and are tightening their belts."

The best way i can understand it, is that, mortgage lenders looking for larger markets began selling mortgage more and more to people who could not afford them. The mortgage institutions made the mortgages seem within reach for many families who dreamed of buying a house, but who always thought the American dream was financially out of reach. So lawyers went to work, and packages fancy deals, pay low or no interest, with no down payment. With wording like this even i can afford a house, in theory. As long as the mortgage seller gets their fee who why should they care if the mortgage ever gets paid off.

Hidden deep within the fine print is the word variable, and initial. low interest initially, with steep rises very soon.



Some other shadiness included; firms that rent assets to people to help them fraudulently qualify for a mortgage - like loaning them money to keep in their bank account for a couple months so they can fool the lender with documented savings that evaporate the day after the mortgage is signed. Another popular ruse: The borrower pays an employer to pay him a lot of money in a fake job for a month or two so he can show a fat paycheck in his loan docs. Some real estate agents and mortgage brokers actually refer buyers to these services.

Should home buyers have know better yes, but the people peddling them knowingly broke laws, or treaded very close to the line.

Practices that allowed these tactics to operate under this present Bush administration were illegal under Clinton. Additionally when lines were crossed and local district attorney's pursued the case they were harassed by the Bush administration. Bush not only allowed these illegal practices to occur but he let them FLOURISH by attacking any state that tried to pursue criminal prosecutions against those that broke the law.

Bush's shady tactics can be seen most visibly with the fall of Elliot Spitzer, NY Governor, who was the strongest critique of bush, and was in the process of organizing the governors of all 50 states to file a suit in court against Bush's illegal tactics.

On to the ponzi scheme, low income people were sold a shady illegal bill of goods, i.e a mortgage they could afford temporarily, before rates increased.

The mortgages were sold to bigger mortgage outfits, and bigger, ones, and the initial seller of the mortgage closes his shop door and is long gone by now. One reason the mortgages were packaged and sold quick to other lenders or to investment houses as stock, was because of a federal law limiting how many mortgages a mortgage lender could hold, by moving them quick they could be involved in more sales and more money

Next the mortgages are packaged together and sold as stocks on the NY stock exchange. But who would buy a stock if it was not given a AAA rating by the top ratings firms in the U.S. The stocks were given fake AAA ratings, meaning they were perfectly sound investments. These ratings firms were being paid billions of dollars by U.S. investment banks like Goldman and Sachs, who also sold the bundled mortgage stocks.



So who were the suckers that bought the stocks, normal investors, foreign investors, foreign banks and governments, cities and towns in the USA, pension funds.


And one day when the invisible ink of those mortgage contracts became visible, and interest rates and monthly payments went through the roof. This along with house prices falling in 2006 for the first time in forever, lead to many, many people, not able to pay their mortgages. And that's all it took for the entire house of cards to fall.



Soon enough the AAA rated stocks began to drop and drop and drop. And for all those companies who invested hefty sums in these AAA stocks big trouble was on the way, for some. And if your mortgage firm invested a large amount in these volatile mortgage's than you are also in trouble. And god for bid your state invested your pension in these funds, like Florida teachers.

Bear sterns crashed, their stock was went from over a hundred to ten dollars overnight. If you owned Bear Stern stock you lost. But if you owned JP Morgan stock you won.

When Bear sterns collapsed, they could not really allowed to collapse because a company that size falling could tear down the whole American economy, right? Or so we are told.



So usually the govt via the federal reserve bank (The bank lends the govt money so the govt can give it away to the bank, and the taxpayer pays the bill) will hand over money to the failing banks as kind of an economic I.V. In total close to 400 billion dollars was handed out since Summer 2007 to ensure large banks would not collapse.

Yet Bear Sterns was not given a bail out like many other banks, and like Freddie mac, and Fannie Mae will get this week. Instead JP Morgan was given a bailout in order to buy the dead Bear Sterns. Why not just give the loan to Bear? Well it just so happens that the federal reserve bank of new york, the organization who saved the day with the bail out money is run by a board, who sits at the chairmanship of the board, the CEO of JP Morgan bank. Sweet. and i know what your thinking, who else sits on the board, the CEO of Lehman brothers.

Now if you follow the situation, family cant pay mortgage, bank does not get paid, stock prices fall, banks in trouble, banks restrict loans, housing prices fall, more people in trouble.



The governments solution? Banks get bailed out with 400 billion dollars and counting, And for the people losing homes,they get bail a 2 billion dollar bailout. Why wouldn't the people losing their homes get the bailout? Wont everyone win like that? People pay mortgage, banks get their money and operate normal, stocks go up, investment firms have no problems, no one loses a home.

Yet the government, an institution set up by and for the people, once again chose to help corporations over people. This has been the choice time after time. Will it ever change?



Another theory for the govt backed bailout of large investment houses is, layed out by attorney Sean Olender, is, "The sole goal of the freeze is to prevent owners of mortgage-backed securities, many of them foreigners, from suing U.S. banks and forcing them to buy back worthless mortgage securities at face value – right now almost 10 times their market worth. The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process. "



Another issue is that home prices are depreciating so rapidly that many find it financially beneficial to simply default on there mortgage payment and lose the downpayment which was nothing. It makes sense, why pay your mortgage for a house you pay a total of 500,000 dollars for if its now worth 300,000 dollars a few months later? And California law, where home depreciation reached a staggering 40%, has laws that allow banks to keep only the deposit on defaulted mortgages.



Well the good news is that many states and towns who invested in these shady stocks are suing investment banks. For example, meryl lynch is being sued for for fraud and misrepresentation, of stocks sold to the city of Springfield Massachusetts.



The city of Baltimore sued Wells Fargo Bank for damages from the subprime debacle, alleging that Wells Fargo had intentionally discriminated in selling high-interest mortgages more frequently to blacks than to whites, in violation of federal law.



Cleveland Mayor Frank Jackson has filed suit against 21 major investment banks, for enabling the subprime lending and foreclosure crisis in his city



June 2008, California Attorney General Jerry Brown sued Countrywide Financial Corporation, the nation’s largest mortgage lender, for causing thousands of foreclosures by deceptively marketing risky loans to borrowers. Among other things, the 46-page complaint alleged that:
"‘Defendants viewed borrowers as nothing more than the means for producing more loans, originating loans with little or no regard to borrowers’ long-term ability to afford them and to sustain homeownership’ . . .

"The company routinely . . . ‘turned a blind eye’ to deceptive practices by brokers and its own loan agents despite ‘numerous complaints from borrowers claiming that they did not understand their loan terms.’". . .

Underwriters who confirmed information on mortgage applications were ‘under intense pressure . . . to process 60 to 70 loans per day, making careful consideration of borrowers’ financial circumstances and the suitability of the loan product for them nearly impossible.’
"‘Countrywide’s high-pressure sales environment and compensation system encouraged serial refinancing of Countrywide loans.’"7



In a 2007 ruling in Wisconsin that is now on appeal, U.S. District Judge Lynn Adelman held that Chevy Chase Bank had violated the Truth in Lending Act by hiding the terms of an adjustable rate loan, and that thousands of other Chevy Chase borrowers could join the plaintiffs in a class action on that ground.




AdDiToNal fAcTs
-So far 6 lenders have failed this year

-90 banks are considered to be in trouble

-the current secretary of the treasury is henry paulson, who's last job was ceo of goldman and sachs, the only investment house not hurt by this housing bubble