distortion-free-tradeThe privatization mania is now in total reverse: all our government systems are owned by privateers and foreign powers while all our private banks and industries are being bought up by our government which owns NOTHING.  This deal is the final stage of the corruption and destruction of the once-mighty US empire.  Stocks will shoot upwards on this latest faux rescue. 


For the Sovereign Wealth nations like Japan and China know that this bail out puts the ENTIRE US system in their claws!  They will end up owning us while we get to own only the LOSSES of the entire PRIVATE banking system!  Isn’t that a great bargain?  This is the end game of the US experiment in Free Trade and Floating Currency regimes.


Here is a weekend article about the Derivatives Beast.  He is happily at work, devouring everything.  Being a creature from the dread Cave of Wealth and Death, he is invisible so long as all monetary systems run in the green.  If the numbers that run through our entire financial system’s computers always are positive, the derivative contracts are positive.  They create wealth and profits.


But when they all move in the negative side, when the ‘1’s become ‘0’s or worse, simply VANISH, then all of them do this.  The ‘flip’ with surprising suddenness.  This ‘flip’ trigger system is inherent in the entire concept of using derivatives to hedge.  Hedging used to be, investing in contrary systems that are dormant until there is a financial problem elsewhere.  Then they become profitable.  This way, bankers and investors could be more reckless in bidding up things or lending money to not-so-good debtors. 


But over the last 10 years, the destabilized system of the free trade regime has caused these ‘safety valves’ to be very, very profitable.  So all the bankers and investors decided, all hedges had to be profitable in BUBBLE markets as well as in BEAR markets.  So all the hedges were changed to be constantly running positive numbers when all other investments were positive numbers.


This had a dual effect:

  1. All systems were creating more money that was being dumped into a system swimming in money.
  2. All systems were interlocked into each other so they would all create more money as the money supply grew.


The very favorite venue for making money via interlocking systems was in the floating currency sector: 

  1. The Japanese carry trade which the Bank of Japan set into motion in order to weaken the yen so Japanese industrialists could win the international trade wars.
  2. Placing bets on variable interest rate differentials between rival trade nations that were obviously rigged by Japan so the bets all paid off very handsomely since the dynamics never changed.
  3. Bribing or manipulating negotiators so that the same dynamic in the currency markets would continue in the teeth of increasing trade imbalances.
  4. Hyper-insider trading by organizations which controlled the international currency and banking regulators such as the BIS, World Bank, IMF and other entities.


Citigroup is bankrupt.  Indeed, all our major international banking entities are all utterly and totally bankrupt.  They have been bankrupt for the last 18 months.  They all began to fall like dominos when the Japanese carry trade regime collapsed in July, 2007.  To this day, they all refuse to talk about the dire and direct and to me, obvious, connection between the rise of the yen, the collapse of the Japanese carry trade and the ongoing collapse of the G7 banking system.


As we shall see today, the sole solution being offered in this dynamic collapse is for the US and Europe to inflate their government obligations and debts to recapitalize a bunch of banks that deserve not capitalization but capital punishment: execution.  Indeed, arresting and punishing the people who set this mess into motion and drove it off the cliff is a very, very important part of the solution to our problems.


Business Spectator – A tsunami of hope or terror?

As the world slips into recession, it is also on the brink of a synthetic CDO cataclysm that could actually save the global banking system. 

It is a truly great irony that the world’s banks could end up being saved not by governments, but by the synthetic CDO time bomb that they set ticking with their own questionable practices during the credit boom.

Alternatively, the triggering of default on the trillions of dollars worth of synthetic CDOs that were sold before 2007 could be a disaster that tips the world from recession into depression. Nobody knows, but it won’t be a small event. 

A synthetic CDO is a collateralised debt obligation that is based on credit default swaps rather physical debt securities. 

This is completely insane.  Or rather, the entity the is not physical, as the article above admits, will not suddenly cause a flood of money to flow to anyone.  This money was not even on the level of magic, fake money produced by extending credit.  It is one step deeper into the Cave of Wealth and Death than mere loans.  Mortgages, incidentally, include the word ‘death’ in it.  Our distant ancestors correctly understood the connection between borrowing and the hazards of borrowing.


Bank collapses due to excessive lending to deadbeats like King Edward of England in the Middle Ages, were known since 1350, AD.  Incidentally, this is right about the time banking was being invented by the Northern Italians like my Bardi ancestors.  Their ruin due to default on loans was very well known by bankers who followed in their footsteps.  All of them swore, they would NOT make the Bardi mistakes.


Then they make the exact same mistakes.  We all recognize that money created via lending can vanish like glaciers in a global warming event.  There is NEVER, EVER, any counter-event that can make money appear magically during epic downturns due to major entities not paying off past loans.  These bankruptcy cycles are known as ‘depressions.’  National banks were set up to prevent these inevitable depressions by always inflating the money supply via government spending.


But now, all capital for all the major banks are now government debts.  And these governments are rapidly going bankrupt like we see in Iceland.  


Business Spectator – A tsunami of hope or terror?

Here’s how it works: a bank will set up a shelf company in Cayman Islands or somewhere with $2 of capital and shareholders other than the bank itself. They are usually charities that could use a little cash, and when some nice banker in a suit shows up and offers them money to sign some documents, they do. 

That allows the so-called special purpose vehicle (SPV) to have “deniability”, as in “it’s nothing to do with us” – an idea the banks would have picked up from the Godfather movies. 


Special Purpose Vehicles are like all the bizarre and stupid things rolling about our planetary banking/investment systems.  It brings to my mind, the #7 Major Arcana Tarot card, the Chariot.  It is a vehicle pulled by two horses who are exact opposites of each other, yin and yang.  It is the merging point for male and female.  The modern SPVs the banking system concocted are designed to MOVE money from one place to another.  Offshore to pirate coves owned by the Queen of England or Iceland or the tiny mountain principalities in Europe.  Or to former British and Portuguese colonies carved out of the belly of old imperial China.


The above article is actually a very good summary of all these things.  I recommend reading it.  Now, on to the latest, most insane investment banking rescue operation:


Plan to Rescue Citigroup Begins to Emerge –

Under the proposal, the government would shoulder losses at Citigroup if those losses exceeded certain levels, according to these people, who spoke on the condition that they not be identified because the plan was still under discussion.

If the government should have to take on the bigger losses, it would receive a stake in Citigroup. The banking giant has been brought to its knees by gaping losses on mortgage-related investments.

If approved, the plan could serve as a model for other banks, heralding another shift in the government’s morphing financial rescue. The Treasury Department initially proposed buying troubled assets from banks but then reversed course and began injecting capital directly into financial institutions….Bank of Ireland is 70% owned by overseas institutional investors, with about 10% owned by domestic institutions.

The news came as it emerged that Anglo Irish Bank had secured commitments for a capital-raising exercise believed to be in excess of €1 billion. The bank expects the issue to close early next year.

It is understood that in a lengthy meeting on Thursday night Anglo told Brian Lenihan, the Irish finance minister, it was in a strong position to pursue a course as an independent institution, and it could find enough private capital to bolster its balance sheet. Anglo has retained Morgan Stanley to help it source capital.


I was too tired, after working in the woods, sawing up and moving oak trees for firewood, to post about that impending rescue operation.  I am now fatalist about this.  No one can stop our government from bailing out the bribers who own our government.  


A particularly dire remark in the NYT article is the business about this bail out being the model for the entire banking system from now on.  I say, the French nationalized banks in trouble including even profitable ones.  They do this when the entire system is in trouble.  The British had to take over an offshore bank last year so they nationalized it.  They didn’t give the pirates from Jersey, an island owing allegiance to Queen Elizabeth, a huge government loan.  They nationalized it.


Note the last line in the above article here: Morgan Stanley is going to help Ireland’s banks ‘source capital.’  HAHAHA.  Talk about impossible!  And stupid.   Morgan Stanley’s Letter-to-Shareholders-2007.pdf is hilarious.  It is from last year!  There is no other statements to investors this entire year since then.  Can’t the bosses of Morgan Stanley dictate letters to their secretary?  This pathetic letter that begs investors to be patient!  Well, the stocks back then were $60 a share and are now only $10 a share and going into Citigroup territory.  Citigroup is dropping into Bear Stearns territory.  This letter is the ONLY communication from the gnomes at the top of Morgan Stanley for over a year!  



While the organization becomes increasingly disorganized, silence falls.  I see this at all organizations going bankrupt.  When they run out of ‘good news’ lies, they simply don’t say anything at all. 



Morgan Stanley’s vehicle is crashing in exactly the same way as Citibank, Lehman Brothers and Bear Stearns.  This is due to everyone playing the exact same games at the exact same time: the derivatives games based on the Bank of Japan’s carry trade/floating currency games.  Which collapsed last year.


And frankly, what on earth does this reporter mean by ‘source capital’?  HAHAHA, again!  I will take a wild guess: find some schmuck to buy the stocks of bankrupt banks?  And these schmucks are SWF nations?  Or better still, the US taxpayers who are the biggest and stupidest schmucks on earth?  And how, pray tell, is Morgan Stanley going to do this?


Ah, the art of bribery!  Finessed to the highest degree in Washington, DC.  During the last election, the media focused on how the candidates raised money online via small donors.  And they did.  But when we compare the $10 million raised this way versus the actual $1,000 billion actually raised via powerful organizations using our elections to funnel bribes to the final two candidates and we see clearly that this is ‘source capital’ in the sense of ‘fleecing taxpayers to line the nests of the wealthy and powerful.’


And the bail out of the very rich who own the collapsing Citigroup organization is a lot of fleece!  Ba-ba-blacksheep hasn’t any wool, has he?


Citigroup Gets $306 Billion Loan Guarantee, $20 Billion of Government Cash


(Bloomberg) — Citigroup Inc., facing the threat of a breakup or sale, received $306 billion of U.S. government guarantees for troubled mortgages and toxic assets to stabilize the bank after its stock fell 60 percent last week.

Citigroup also will get a $20 billion cash injection from the Treasury Department, adding to the $25 billion the company received last month under the Troubled Asset Relief Program. In return for the cash and guarantees, the government will get $27 billion of preferred shares paying an 8 percent dividend. Citigroup rose as much as 41 percent in German trading today.

The Treasury, Federal Reserve and Federal Deposit Insurance Corp. said in a joint statement that the move aims to bolster financial-market stability and help restore economic growth. The decision came after New York-based Citigroup’s tumbling share price sparked concern that depositors might pull their money and destabilize the company, which has $2 trillion of assets and operations in more than 100 countries.

“It really was a must-do thing,” said Nader Naeimi, a Sydney-based strategist at AMP Capital Investors, which manages about $85 billion. “If they’d let Citigroup go, that would’ve been disastrous.”



OK, fellow lambs: let’s tally up these numbers!  The US government gave, outright, a total of $40 billion to this pirate organization run by insane banking gnomes.  This $40 billion of taxpayer supported funds bought us a fabulous deal: $27 billion in ‘preferred stocks’.  Oh, how fabulous.  Deals like this break a bank pretty fast, don’t they?  On top of that, the US taxpayers must capitalize these crooks to the tune of…$305 billion more????  This is a total of $345 billion in exchange for $27 billion in preferred stocks!


Good grief.  And does America have any Sovereign Wealth Funds to pay for all this?


NO!  Sorry.  We are deep in debt.  It is no shocker to learn this week that China now holds more US debt than any nation on earth.  Congratulations to the Communist Chinese.  You guys fulfilled your 50 year plan to ‘be bank’ in less than half that time.  The does all this debt going to help us ‘restore economic growth’ when the main thing the US has been growing this last decade has been DEBTS?


Of course, global investors will rush in to buy the new stocks in the Citigroup new incarnation.  Why not rename that former bank to ‘Citisteal’.  They are stealing our future.  To save the corrupted, utterly ridiculous banking system, we are stealing our children’s futures.  


This takes us back to why the privateer bankers who own the Federal Reserve—yes, they OWN it—should be removed, their bank closed down and the US government take over the whole thing by nationalizing our central bank.  The entire excuse used by the conspirators who went to Jekyll Island to plot the creation of this irresponsible banking system was, this would prevent bubbles and depressions.


Their track record STINKS.  Not only has this not prevented depressions, it has devalued the US dollar immensely since its launching.  And now, it has destroyed our entire economy.  How DARE they talk about fixing our economy when they are destroying it, not fixing it.  This latest rescue operation makes rich speculators richer.  And makes us poorer.  If our government lent US directly, the $3 trillion they are lending the irresponsible bankers who control the Federal Reserve, we would be out of the hole, long ago!


But all this loot is being used to prop up the stock markets and foreign entities who now own most of our debt.


Insurers Seek to Buy Thrifts To Get Piece of Bailout –

Several major life insurance companies are taking the extraordinary step of trying to buy savings and loan institutions in order to qualify for a piece of the government’s $700 billion rescue fund.

The insurance companies are in relatively healthy shape, analysts say, but they either view the opportunity as too good to pass up or worry about the future.     

“We are taking these actions as a strong and well-capitalized financial institution looking for maximum flexibility and stability,” Ramani Ayer, chairman and chief executive of the Hartford Financial Services Group, said in a recent statement.


The sharks know where the loot is and they are on a major looting expedition.  This is being paid for by our government.  This is why direct bail outs BEFORE bankruptcy are VERY BAD.  This is an important point in banking dynamics: if you excuse people not paying mortgages and let them live in homes for free, no one will ever pay mortgages back and this causes the banking system to collapse.  And if you excuse bankers from capitalizing their banks and let them make loans to people who can’t pay them and then, when the bankers go bankrupt, you capitalize them, NO ONE WILL EVER BOTHER TO DO THINGS RIGHT IN THE FUTURE!  


This is called ‘moral hazard’.  The temptation to be naughty and then be saved is irresistible.  Honest, hard working, sober people who don’t do bad things are milked via the governments to prop up and assist reckless lenders and borrowers who get to keep their ill-gotten gains while the savers who toil lose everything as the currency is devalued.


FDIC and state regulators shutter three banks – MarketWatch

As of Sept. 30, Downey Savings had total assets of $12.8 billion and total deposits of $9.7 billion. PFF Bank had total assets of $3.7 billion and total deposits of $2.4 billion, according to the FDIC.

In addition to assuming all the deposits from the two California banks, U.S. Bank will purchase virtually all their assets. The FDIC will retain any remaining assets for later disposition.

The US is purchasing the assets of all banks that are failing.  The FDIC can’t do this very much longer since it, too, is not sufficiently capitalized.  The entire US debt/banking system has run in the red for so long, none of it has a penny in capital.  The ‘capital’ it has possessed was mostly in the form of…..DERIVATIVES.  Which are part of the Beast.  Which is devouring everything in sight now.


Reckless lending, thus creating repeated housing and stock market bubbles during the last 35 years has finally reached its destiny.  It is dead.  We tried to discover how far one can drive a SPV chariot of fire.  And now the two yin yang horses have bolted and our chariot has crashed.  We flew this Chariot of Fire to the sun and now are crashing just like in the ancient Greek myth of Phaëton:

Phaeton bragged to his friends that his father was the sun-god. One of his friends, who was rumored to be a son of Zeus, refused to believe him and said his mother was lying. So Phaeton went to his father Helios, who swore by the river Styx to give Phaeton anything he should ask for in order to prove his divine paternity. Phaeton wanted to drive his chariot (the sun) for a day. Though Helios tried to talk him out of it, Phaeton was adamant. When the day came, Phaeton panicked and lost control of the mean horses that drew the chariot. First it veered too high, so that the earth grew chill. Then it dipped too close, and the vegetation dried and burned. He accidentally turned most of Africa into desert; burning the skin of the Ethiopians black. Eventually, Zeus was forced to intervene by striking the runaway chariot with a lightning bolt to stop it, and Phaëthon plunged into the river Eridanos.


It is amusing to me that Helios has to swear by the river of death before handing over his great powers to a mere half-human.  And a lightning bolt ends the careening career of this inept young man.  The chariot of fire here is like our entire financial system: the central bankers are not responsible, sober people seeking to keep an even keel and drive safely.


Indeed, Greenspan himself liked to talk about how the economy driving business was more like driving BLIND.  He and his buddies like to tell us, ‘The windshield is blacked out so we can’t see the road,’ and other lies.  I said, years ago, ‘Then let someone who CAN see out the windshield drive the car!’  


The US economy swoops down and then roars upwards, we get hot and cold alternating.  I can remember back to 3 years ago [astonishing, isn’t it?].  Back then, in the olden days, Bernanke walked into the Fed and decided, he better raise interest rates from 1% to 4.5% fast!  So he did it in many close steps.  Then, when it reached about half the level of real inflation [savings had collapsed long ago] he panicked and dropped the rates to BELOW where Greenspan stupidly dropped them in the wake of the Dot Com stock collapse.


Up and down goes our chariot.  Only Zeus got tired of this and threw a Chinese lightning bolt at us.  Now, we are going bankrupt due to the yen getting stronger.  Heh.  A convoluted story.  The Chinese, over a year ago, warned the Japanese to stop joining the US in demands for the yuan to go up in value while Japan merrily made the yen weaker and weaker.  The yen, in July, 2007, was at about 120 to the dollar.  The Chinese began to buy and hold yen and now, everyone is doing this and the yen is now stronger, much stronger: 95 to the dollar, more or less.


Bailout for Bank of Ireland – Times Online

THE Irish government has agreed to take part in a €3 billion (£2 billion) bailout of Bank of Ireland that will be led by private equity. The deal would be the first state aid for an Irish bank.

This week a number of private-equity groups will make proposals to BoI. A condition of the government cash injection will be that new investors are locked in for a set time to ensure they don’t try to sell quickly and make a big profit.

Names already linked with a potential investment include Cardinal Asset Management, an Irish investment firm, Sandler O’Neill, Texas Pacific Group and JC Flowers.

Ireland was one of the first countries to respond to the credit crisis with a guarantee for bank liabilities worth some €440 billion, but until now it has not bailed out or nationalised any banks, and they have not raised equity themselves.


HAHAHA.  The guys buying up the nationalized banking mess in Ireland can’t profit from it too much, too fast?  Ireland is in hock to nearly a trillion dollars?  Ouch.  I notice that JC Flowers, a very rich man, is in the news in this bail out story. He is a major shark swimming in the offshore seas.  Here is one of my old stories that has information about JC Flowers from April 17, 2007:  Money Matters: Sallie Mae: Debtors Can’t Go Bankrupt


pegasus_and_golden_applesSo where to go? The hedge funds tapping into this eternal pool of potential IOUs looked around and discovered, thanks to the moronic, deadly Republican debt laws they passed recently, no one can EVER discharge a student loan by going bankrupt! Haha! There’s gold in them thar hills!

From Market Watch:

Shares of student-loan firm Sallie Mae jumped about 18% Monday after the company agreed to sell itself to a group of private-equity firms and two major banks for $60 a share, or about $25 billion, the companies said Monday.


Shares of Sallie Mae jumped $8.23 to $54.99 Monday morning.

J.CFlowers & Co. and Friedman Fleischer & Lowe LLC plan to take 50.2% ownership in the new firm, with J.P. Morgan and Bank of America each taking 24.9% stakes in the company, formally known as SLM Corp.
“We are pleased to invest in Sallie Mae and help provide increased liquidity, stability and financial strength,” J. Christopher Flowers, managing director at J.CFlowers, said in a statement. “Both Bank of America and J.P. Morgan Chase have fully committed to support the company with short- and long-term financing.”


They are taking over these loans and they love the bad loans the most. While reading all the sad stories of often very badly educated people who were victims of an educational scam, I noticed that the majority were from people who had declared bankruptcy BEFORE the new bankruptcy laws were passed and they were suddenly the victims of these bankers seeking PAST funds they thought were discharged.

So they all got, in the last two years, notices that they had to pay back the full loans plus interest at 8-17% and penalties! This meant, the average past loan dropped when bankrupt could quadruple! So paying off $10,000 meant paying back $40,000 or more. Not only that, the banks set the repayment rates so these are like credit cards only with one huge craveat: they can’t be escaped via bankruptcy!



And finally, two stories from one of the oldest redoubts of the banking gnomes, from Switzerland:


UBS Overstated Property Values by $100 Million, Dismissed Executive Says


They all did this.  All the banks, across the planet, lied about the value of many things.  Now, great wealth is worthless.  Lies worked only for a while.  But now, thanks to the banking collapse, Libra is balancing the books and deducting losses.  And things once valuable are collapsing in value as money vanishes.  Great works of art, yachts, palaces are all falling in value alongside the failure of value of shanties and shacks in California and Florida.  Both are in the same chariot of fire.


BBC NEWS: UBS loses favour with angry Swiss

In Zurich, UBS head office sits astride Paradeplatz – Parade Square to you and me.

But in recent months, the Swiss have renamed it Piratenplatz – or Pirate Square – to signify what they believe is the daylight robbery that has taken place over the last 12 months. Not of their biggest bank, but by it…

“We know of course that investing money is a risk, but we didn’t expect this. Now we want to know who was responsible,” said Roby Tschopp, spokesman for one of the shareholder groups….Management assurances that the bank was on the road to recovery were swiftly followed by a £40bn ($60bn) rescue package from the government, available to all Swiss banks. This caused more fury among taxpayers.

Marcel Ospel stepped down as chairman, and a new pay structure with fewer bonuses was announced.

But Mr Ospel has so far declined to return the rumoured £10m bonus he received last year.

“I think ordinary Swiss feel betrayed by UBS,” banking analyst Hans Geiger says.

It was special to us, it controls 25% of the domestic banking market, which is huge.”

“We believed that UBS had the best risk managers and it turned out the opposite was true,” he adds.

The opposite is now true across the board.  Yin and yang are reversed. Up is down.  All the games of the past are collapsing.  And the rescue operations are doomed to failure since they are all aimed at reviving this mess, to get the Chariot of Fire to fly to the sun yet again.  There are  many mythological stories like the Phaeton story.  Icarus demanding his father give him wings so he could fly. Ignoring his father’s warning not to fly to the sun, he does exactly that: flies to infinity.  And is destroyed.  Then, there is Bellerophon who was given permission to ride Pegasus and slay the Chimera.  He then decides to fly to Olympus and again, Zeus knocks him down.


We all desperately want to go to infinity!  And infinity is verboten.




Filed under .money matters


  1. Jeez, so what the banking gnomes wanted and threatened to get in the letter they had their lawyers send, they gets. And in the end, WE get our entire country, both public and private lands and improvements, repossessed by foreigners. Maybe we should start a betting pool as to when the US will sell Alaska BACK to Russia. Palin would be pleased. NOT. HAHAHA

  2. CK

    Moral Hazard only works if there are some people with morals ( also known as sacrificial lambs ). It’s why so many people just have to be born again and again and again. And the icing on the cake is that if enough folks are loudly moral, none of the thieves ever has to fear real physical hazard. It does help that all the crooks are protected by armed clowns in government costumes.
    The funniest part of the whole thing is that there is a solution. Trade. Among individuals. Of value for value. Not paper, It is impossible to have a “post-industrial” economy until you have a “post-conumption of necessities” population. Unfortunately, evolution has not worked quite fast enough and the population still needs STUFF. Real Stuff. My own expectation is that we will face a large die off in population … agriculture as we have it today cannot feed the population that exists today without a huge and expanding input of fossil derived insecticides and fertilizers. Oh well. We all end up in that cave of death sooner or later.

  3. CK – I think you underestimate humanity’s ingenuity especially when their children (and future unborn children) are literally “at stake”. There are many, many, who are ready to trade locally – individually for that matter. Don’t you think? Well, then its time to evolve rapidly! Or are we too dull for that?


  4. The ideas have been out there for a long time. Implementation is easy if you get the lawyers and the bankers out of the way. We need more engineers and others who like to build and solve problems.

    I think it is a bit of a conflice of interest for the lawyers to be making all the rules and the bankers to be playing with all the money. Screw-em or better yet let them screw themselves into oblivion!


  5. There might be a few good bankers and lawyers left, but the only ones I’ve met have gotten out of the business…..too slimy.

    There definitely good workers in the US of A. Just about everyone I ever met working at a plant was putting in a good honest days work. But the feffef and fuggin lawyers and bankers don’t give a shit about the US workers. Seems that way to me.

    The workers need to take matters into their own hands.


  6. We should all just proclaim independence from the free-trade bullshit artists. Slowly but surely.

    Signing off for the day, but I’ll be around.


  7. Joseppi

    Billions and billions of bailouts (said with the same awe struck accent of Carl Sagan) and the bailout money just keeps materializing like Manna from heaven.
    Where will this money come from if it’s being provided by an already budget deficit laden Fed Government?
    In the back alleys of blogs we hear that there will be a day of reckoning whereby our trade partners will cease funding this largess that can never be repaid and that the few puny points of interest aren’t worth the risk.
    There is a interesting article by Axel Merk
    Elaine, would you please comment on this financial wizardry
    by which the FED creates money which it loans to US banks for next to nothing and they then buy Treasuries with the money and collect interest, thereby there is no need for foreign investment and it keeps the Ponsi scheme going for some time into the financial fiction future.

  8. Duski

    I cannot stop wondering why no one questions the necessity of bailouts in the mainstream. Lets take Iceland: they could not bailout their banks at all. They simply did not have enough wealth to do it. So why did their government decide to do it anyway? Why bankrupt a nation for a failed enterprise? Why not just let the bank fall and the investors take the loss?

    Same goes for every else bank rescue. I guess big bankers have the best connections there is. They play scare tactics on everyone, telling that this corrupt system must be saved or we are all doomed. In reality, only thing that would be doomed is their failed business. And after that they might got charges from several kinds of frauds. So it is clear who is afraid and why.

    But why on earth are governments pouring money for the derivatives beast? Don’t feed it anymore, let it eat the stupid bankers and build a new system with those sensible ones that are left after it. It would mean disorder now and a power shift, but the other option is to reward the ones responsible in this fraud.

  9. Duski

    That carry trade business that is partly behind the mess… It is quite funny how it is very rarely commented in anywhere. When it collapsed, everything collapsed. Debt on debt crashed since no more free money is flowing in USA.

    Although I live in Finland, I really hate all the commentators here going scared about USA possible turning to protectionism and tariffs etc etc. No nation can run on trade deficits forever. It will crash eventually. Soviet Union tried to produce much more to it’s satellites than it gained through trade. It was very good deal for all neighbouring countries… until Soviet Union crashed and caused a big recession here in Finland as well. We had a great trade surplus with them as well.

    It cannot last, the country running deficit does not have infinite wealth to spread around to everyone else. And if they make up all sorts of schemes to keep on doing the impossible, the crash is bigger when it comes. If everyone makes their trade dependent on USA deficit, they deserve what is coming to them.

    What countries should do, is to focus on specializing on different things and then producing them efficiently. And I mean especially high-tech items and science research, food for example should be produced as locally as possible as long as it is more efficient that way. But well, I guess no country trusts another enough to make things like this a reality.

    I don’t see the loss of factory work as negative thing, or automation in general a negative thing. But the problem is, current system stops working when money stops circulating via wages and work. The work that is left should be shared with more people, so everyone gets more free time. Also, the trickling of wealth to the top should be controlled somehow, although greed is good innovator. But greed without control is tyranny.

  10. drkrbyluv

    END the FED move in da‘burgh

    I’m pleased to report that I participated in the Pittsburgh END the FED rally. My preference was to attend a bigger rally – and to bask in the warm camaraderie that comes with activism and being in the company of others with similar contrarian opinions (including and especially the parties after the event). That said, Pittsburgh fielded a small group but the individual attendees were great!

    Our Fed office is located on the same block as a Starbuck’s coffee shop. Being the nice guy that I am, I bought “kegs” of coffee (I didn’t even know they sold them) and had many empty cups, sugar and cream for everyone. This turned out to be a great idea in that I got to personally meet and talk with everyone.

    Pittsburgh is very different than New York, Philly or Washington in that this is a small mid-western town. We had a police cruiser parked at the event, very close to where I set-up my free street coffee-shop. They quickly accepted my invitation to grab some free coffee and welcomed an END the FED brochure.

    Mysteriously; at least from my perspective, other police cruisers and motorcycles began arriving for free coffee (no donuts). Later it was explained that the police have radios and communicate constantly. I’m pleased to report that the police almost unanimously agreed that the bail-outs and Wall Street shenanigans stink. A number of pedestrians and a few homeless people stopped for coffee which helped to add to our numbers.

    To be sure, this type of fraternization may not be recommended or welcomed in the big cities. Oh, one funny thing – I have a relative who is a Pittsburgh motorcycle cop working downtown (he was off-duty). They say he looks just like me but he’s a good two inches taller and probably 50 pounds heavier – the weight difference being the key in that that he is big tough guy and I’m a much smaller tough guy.

    Anyways, many of the cops were friendlier to me because he’s a popular guy – and early on I shared with one of the cops that he was indeed a close relative. I have to guess that somehow this was relayed over the police radio.

    Then the words of Bear of Little Brain began to haunt me…he said “There are too many instances of agents provocateurs planted by the authorities in order to justify their use of force. These trouble makers often forget not to wear their police-issue footwear.” I wondered if some in the group might think that I was an under-cover cop or something worse. Fortunately, I had on regular running shoes – and I hoped that they read Bears post.

    In the end, it was a successful event and I like to think that in some small way, I helped create some goodwill to help further our cause. I’m not naive enough to think that all future demonstrations will be happy smiley events. We are nearing the point where we will see a widespread state of shock – which will turn into a state of anger. Peaceful dissent will turn into public disobedience and I fear that we are soon to see violence and anarchy when the treasury bubble pops.

    On to the next event – The Boston Tea Party, December 14th, 2008

  11. Drkrbyluv,

    Your mention of agents-provacateurs got me wondering: what if they are NOT of the local authorities, but from the Bush Crime Family and the like?

  12. Duski

    Also, I really wish that your great country can shake of the gnomes and war profiteers and once again focus on freedom of people. I think your constitution is maybe the best ever created, but last 8-20 years your governments have been utterly corrupted (long range because I don’t have enough perspective to nail it down). Also, the FED has only brought misery to you all, and made all the insider traders richer. End the FED. Or make your government the one and only owner of it.

  13. emsnews

    Thanks, Drkirbyluv, for the report! We had NO place to get any drinks on our trek into lower Manhattan because that place is nearly deserted on Saturdays. Especially when there is a very stiff wind blowing off the ocean and it is near zero wind-chill!

    We could have used something hot, hot, hot.

    Thank you, Duski, for the kind words about our dear, departed Constitution. The Federal Reserve is unconstitutional since it treads heavily on the feet of the rules concerning currencies and money. The writers of the Constitution were very worried about inflation back then.

  14. drkrbyluv

    Thanks for the quick math on the running bail-out tab Elaine.

    This seems too crazy even for the FED but; the Mogambo Guru claims that:

    “I gasp in amazement that the total sum of Fed-supplied credit to the banks, accumulated bit by bit since the Fed was founded in 1913, totals $2.19 trillion, more than half of which was added in the last nine weeks alone! Hahaha! We are so freaking doomed!”

    Could this possibly be true?

  15. Bear of Little Brain

    I imagine you would go down in history if you could have provoked a police baton charge by handing them coffee. Nice try, though. 😀
    Next time you’ll have to go for the more radical “fresh, crispy doughnut with that coffee” option.
    Maybe the “be nice” tactic will catch on. Well done. Sorry for haunting you.

    A while ago, our war criminal, Blair, was giving a speech somewhere and an anti-war protest was going on outside. There was a ring of police in place. Shown on the TV news, the edgy situation was largely defused when a protester with a loud-hailer shouted, “You may as well give yourself up, Mr. Blair, the police have you surrounded”. Even the police had to smile.

  16. Bear of Little Brain

    Someone on Bloomberg just referred to some financial estimate (maybe it was the expected final bail-out cost, but I don’t really know – I think he said 7 trillion). However, he said that if those were dollar bills and laid end-to-end they would extend beyond the orbit of Pluto! We are truly into astronomical numbers.

  17. Bear of Little Brain

    Perhaps the Pluto thing was this
    “The U.S. government is prepared to lend more than $7.4 trillion on behalf of American taxpayers, or half the value of everything produced in the nation last year, to rescue the financial system since the credit markets seized up 15 months ago.”

    Found at Jesse’s Cafe, referring to a Bloomberg article. Ah, here it is:

  18. drkrbyluv


    You make a good point that hopefully all future protesters will take to heart. You better keep an alert eye out because as we found in Minnesota a few months back, there are often “agents” in the group.

    If they are representatives from the local police, they are probably just there to help prevent chaos – but if they are from clandestine organizations, then they may be up to mischief and mayhem.

    And, there are fringe groups who are simply anarchists. These people are often there for one reason, to instigate trouble. It’s good to continuously take inventory of exactly who is around you – and if they are thugs, you must quickly find a new spot.

    I would also add that if you are participating in public dissension, always make sure you have an open exit. The police will often cut a group off and converge into the crowd to make arrests. If you are cut off in a pincher move, expect to be gassed and maybe worse.

    Crowd dynamics can be dangerous. We’ve often seen crowds stampeded like wild eyed cattle upon fires and quick erupting storms. And, even if you are normally a well behaved and polite person, when you see others being trampled, beaten or pepper sprayed, you may find yourself striking back. I guess it’s a natural response – especially for us males. I hate to sound sexist, but women seem to be better at sensing and avoiding trouble. Maybe because Mother Nature is female – I dunno.

    That said, I hope we all seize on opportunities to take our case to the people via public protests. If we don’t take a stand we will simply be enslaved in a new and tyranical society.

    I sometimes fear public dissension, but, I fear the alternative much more – acquiescence.

  19. drkrbyluv

    Bear said: “Shown on the TV news, the edgy situation was largely defused when a protester with a loud-hailer shouted, “You may as well give yourself up, Mr. Blair, the police have you surrounded”. Even the police had to smile.”

    Funny funny stuff! Thanks, I will borrow that line!

  20. emsnews

    The $7 trillion mess was just posted on the news and I just put up the story about it. This is the result of the Bloomberg reporters suing the Fed and Treasury to cough up the TRUE numbers and some details. The rest of this ugly stuff will be coming out of Bloomberg News in the next several days!

    GADS. ARREST EVERYONE. I wish we could surround DC and all the Fed outfits.

  21. Paul S

    Japan in the 90’s had ‘zombie’ banks. I think the problem in the US of A is we have ‘zombie’ voters. These are the folks who STILL swallow the crap vomited out on corporate propaganda outlets like Fox and on talk radio. In fairness though, a majority of Americans were opposed to the bailout, but Congress voted it in anyway–after loading it up with pork. I DID enjoy hearing Dennis Kucinich more than once ask Neel Kashkari, formerly of Gioldman Sachs, now the Asst Treas. Sec, if Kashkari wished to take the 5th amendment. Kashkari–I hope,along with many others–may actually HAVE to invoke his rights against self-incrimination in the very near future. Fingers crossed.

  22. fingo

    CItibank got the BIg THree’s money. Too bad for us.

  23. citibank owner

    So Citibank gets bailed out by the Govt. (read: tax payers/citizens/We The People) and in turn what does Citbank do? They turn right around and stick it to the citizens again who happen to have accounts with them. OPEN AND READ YOUR STATMENTS!!!!!! (if you have a CitiBank Credit Card) There is a nice little letter regarding “Change of Agreement” stuffed in along with your statement bascially telling you that they are DOUBLING your % Rate.

    So, in essence, we the tax payers loaned/bailedout CitiBank so they could turn around and lend us our own money right back but at a HIGHER % rate. What a scam!

  24. emsnews


    THAT IS NEWS!!!!!

    Dear ‘citibank owner’, if you have such a letter, could you mail it to me? Or scan it? Or something? I would love to see it.

    My address is 209 Greenhollow Rd
    Petersburgh, NY 12138

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