Ireland And US Will Be Devoured By Derivatives Beast

ΩΩThe banking mess in the West continues.  It has rather deep roots.  That is, we decapitalized our own banking system long, long ago.  The fix for this was to create a fake banking system with virtually no real capital reserves at all.  This was possible thanks to the floating fiat currency created when Nixon suddenly cut the gold standard back in 1971.  By 1987, the banking collapse was tremendous during a deflationary time that followed a hyperinflation era.  This fix created conditions that caused the near-total collapse in Western banking.

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ΩΩAnd nothing at all has been fixed: thanks to government-sponsored bank consolidations, there are even fewer banks today in the US than in 1971 and even 1987.

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Here is an old newspaper story sent to me from Ron:

TREASURY NOW FAVORS CREATION OF HUGE BANKS – NYTimes.com

TREASURY NOW FAVORS CREATION OF HUGE BANKS

Top officials at the Treasury Department have concluded that the Government should encourage creation of very large banks that could better compete with financial institutions in Japan and Europe.

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The Treasury plan, which would permit the acquisition of banks by large industrial companies, was also endorsed by Alan Greenspan, in an interview before President Reagan nominated him this week to be chairman of the Federal Reserve Board.

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Mr. Greenspan said the plan would provide multibillion-dollar pools of investment capital for a banking industry that was ”severely undercapitalized.”…No formal policy or legislative agenda has been adopted by the Administration, but George D. Gould, Under Secretary of the Treasury, said in interviews that he favored creating 5 to 10 giant banks that would rival in size the largest banks in Japan, West Germany, Britain and France. The Two Laws Involved

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Formation of such large banks has been hampered by two of the nation’s principal banking laws: the Glass-Steagall Act of 1934, which separates underwriting and commercial banking, and the Bank Holding Company Act of 1956, which prohibits nonbanking companies from owning banks.

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The only avenue left open to banks has been to merge among themselves. But state laws have historically prohibited interstate banking, and only recently have state legislatures begun to open their borders to out-of-state banks. These deals have usually involved a large out-of-state bank’s buying a smaller institution. Mergers, interstate or otherwise, among the giant banks could raise antitrust questions, and none of the few such deals attempted ever progressed very far.

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ΩΩAfter 1987, the number of independent banks have collapsed by over 50% and are still in rapid decline.  The amount of banking debt and systems has more than quadrupled over this same time period.  So the concentration of finances is much, much greater.  The gleeful period of easy lending from 2002-2006 caused a tremendous surge in M1 money and this is the money that continues to vanish as both businesses and private borrowers continue to default on loans—most of which should never have been made in the first place.

ALFRED: ALFRED Graph

ΩΩThe big 5 international banks created by these Greenspan-sponsored reforms created were Goldman Sachs, JP Morgan, Chase Manhattan, Bear Stearns, Bank of America, Lehman and Citigroup.  These guys were, in turn, the creators of the Derivatives Beast.  There are now fewer of these giants as Bear Stearns and Lehman Brothers went down totally while Bank of America and Citicorp were rescued at tremendous cost to the taxpayers, as we shall see in the news below.  First, we go visit the nearly-useless OCC, the Office of the Controller of the Currency, an agency launched after the Civil War to prevent hyperinflation caused by the government printing too much money.

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ΩΩCertainly, the creation of new money via loans was barely regulated by the Federal Reserve which was run by the odious criminal, Greenspan.  He loved the fact that the US now had half a dozen barely-regulated international banks that sucked down immense amounts of Japanese carry trade loans and translated these into lending for the US consumers and businesses and of course, the creation of the Derivatives Beast and using AIG to ‘insure’ the Derivatives Beast meant easy, easy lending at lower and lower interest rates, flooding the economy with a tsunami of new ‘money’ that didn’t create ‘inflation’ thanks to all of this being sucked into vast, immense FOREX holdings created by our dire trade rivals who used this to keep their own currencies weak so they could flood the US with their manufactured goods and this, in turn, destroyed our own industrial base….WHEW.  Say all of that three times in quick succession!

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OCC: OCC’s Quarterly Report on Bank Derivatives Activities

ΩΩOK: the global credit collapse and Great Depression briefly caused the Derivatives Beast to not grow at an astonishing rate.  It actually leveled off somewhat.  But look closely and we see it has resumed growing again!  This is a classic ‘hockey stick graph’ leading to a sudden surge to infinity followed by the death, doom and destruction of whatever tries this miracle. NOTHING IN THE UNIVERSE grows faster and faster to infinity.  Physical and even imaginary things suddenly break and implode when they reach a point of no return.

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ΩΩOnce one has a philosophy that hockey stick graphs are totally evil and are signs of terrible things in the future, it is much easier to look at a system and say, ‘Ooops, time to restrain and rebalance this system before it explodes!’  Of course, we look at this graph above and shriek, ‘What the hell are they thinking???  They are insane!’  I mean, this graph is talking about derivative deals that are over 210 TRILLION.  These were less than $40 trillion in 1998!  It grew more than five times bigger in less than 12 years!  How insane is this?  In another decade, will this be over $1,000 trillion, that is, a quadrillion???  And what impact will this have on inflation in the future?

ΩΩThese stupid 5 gigantic banks that were all bailed out by the taxpayers in 2009 don’t just ‘dominate’ the derivatives mess, they ARE the derivatives mess!  If they hold over 90% of the derivatives, this is a BAD THING.  And should CEASE IMMEDIATELY.  Alas, energy for banking reforms is collapsing due to our corrupt Congress.  I was fooled by Obama who, during the election, had Volcker by his side all the time.  Once the ballots were cast, Volcker was cast aside and replaced by the tax cheater, Geithner.  All pushes to fix this mess vanished.

ΩΩALL of these big monsters who hold nearly all of the derivatives have seen their EXPOSURE drop.  So, where did this exposed crap migrate to?  Take a wild guess: into our own backyards.  We, not the big 5 banks, now have the credit risk exposure.  Who owns AIG?  We do, not the Big 5.  This is a con job, of course.  Infuriating.  But the point we must understand here is simple: business and consumers both want cheap, easy credit to return.  And any hook or crook (very crooked crooks!) system that can be devised is fine with most people.  Fixing things so our system is recapitalized is NOT being pushed and is NOT popular, either.

ΩΩAnd here it is: Goldman Sachs is making oodles of loot trading on derivatives!!!!  They make lots and lots of money this way which is why the Derivatives Beast is growing again: it is a vehicle for bankers to get much, much richer.  And the micro-second derivatives back and forth worthless trading flooding our markets is all fake, crooked and hooked to the Derivatives Beast and is the most worthless way to get rich but boy, does it work like a charm!

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ΩΩBack in 2007, I was so alarmed by this monster, I called for slaying the Derivatives Beast altogether and resuming the older banking methods.  Instead, the Fed and Treasury protected this insane creature and now it will stomp all over us, even more thoroughly.  The immense overhang it has created is now bigger than all the wealth on earth.  But the Chinese won’t pay for this creature, they are capitalized!  We, on the other hand, are not capitalized and so we are much, much more exposed and remember: if an international banking consortium uses any country as its home base, the inhabitants will be forced to pay off the Derivative Beast, not the bankers.

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Asia Times Online :: Asian news and current affairs

Post-Apocalyptic zombie finance

By Spengler

By 2014, International Monetary Fund official John Lipsky remarked March 21, the debt-to-gross domestic product (GDP) ratio of the Group of Seven countries will reach 100%, and the governments of the industrial world will carry the highest debt burden since shortly after the end of World War II.

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That is bad news; (No shit, Sherlock!!!) worse news is that governments are shoveling money into the world banking system to finance the debt expansion. Following the great bank bailout of 2008, the global banking system is socialized de facto, shifting its resources towards government debt and away from private sector financing.

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Governments averted a financial apocalypse in 2009 by bailing out the bankrupt banking system. But who will bail out the governments? The answer for the time being is that they will bail themselves out at the expense of the private economy.

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ΩΩSo far, governments in the West are being bailed out by Asia.  And this is being done so Asia can continue to rapidly expand its own industrial base.  This savage business gets worse and worse over time due to the self-feedback system of this debt expansion: you get more credit from export powers via letting them export even more to your own home base.  So as capital vanishes, the need for debt shoots upwards and the system continues to get more and more unbalanced.

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ΩΩAnd worse: China desires very much that the G7 nations that hammered on China for a decade, suffer this fate!  HAHAHA, says the Dragon, counting its pfennings in a dark cave.  Well, what do we expect?  Mary Poppins?

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Fed Reveals Bear Stearns Assets It Swallowed in Firm’s Rescue – Bloomberg.com

The Fed’s vehicle known as Maiden Lane LLC has securities backed by mortgages from lenders including Washington Mutual Inc. and Countrywide Financial Corp., loans that were made with limited borrower documentation. More than $1 billion of them are backed by “jumbo” mortgages written by Thornburg Mortgage Inc., which now carry the lowest investment-grade rating. Jumbo loans were larger than government-sponsored mortgage buyers such as Fannie Mae could finance — $417,000 at the time.

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“The Fed absorbed that risk on its balance sheet and is now seen to be holding problematic, legacy assets,” said Vincent Reinhart, a resident scholar at the American Enterprise Institute in Washington who was the central bank’s monetary- affairs director from 2001 to 2007. “There is both an impairment to its balance sheet and its reputation.”… .

…Central bankers also created moral hazard, or a perception for investors that any financial firm bigger than Bear Stearns wouldn’t be allowed to fail, said David Kotok, chief investment officer at Cumberland Advisors Inc. in Vineland, New Jersey.

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Policy makers’ resolve was tested months later by runs against the largest financial companies. Lehman Brothers Holdings Inc. collapsed into bankruptcy in September 2008. The ensuing panic caused the Fed to take even more emergency measures to push liquidity into markets and institutions. It rescued American International Group Inc. from collapse and allowed Goldman Sachs Group Inc. and Morgan Stanley to convert into bank holding companies, putting them under greater oversight by the central bank….

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…For example, 94 percent of the mortgages in one security, called WAMU 06-A13 2XPPP, required limited documentation from borrowers, meaning the lender often didn’t ask customers for proof of their incomes. Almost 10 percent of the borrowers whose mortgages make up the security have been foreclosed on, and almost a quarter are more than two months late with payments, according to data compiled by Bloomberg.

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The portfolio also includes $618.9 million of securities backed by Countrywide, mortgages now rated CCC, eight levels below investment grade. All the underlying loans are adjustable- rate mortgages, with about 88 percent requiring only limited borrower documentation, according to Bloomberg data. About 33.6 percent of the borrowers are at least 60 days late. Countrywide is now part of Charlotte, North Carolina-based Bank of America Corp….

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…Assets in Maiden Lane II totaled $34.8 billion, according to the Fed, which set their current market value in its weekly balance sheet at $15.3 billion. That means Maiden Lane II assets are worth 44 cents on the dollar, or 44 percent of their face value, according to the Fed.

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Maiden Lane III, which has $56 billion of assets at face value, is worth $22.1 billion, or 39 cents on the dollar, according to the Fed’s weekly balance sheet. A similar calculation for the Bear Stearns portfolio couldn’t be made because of outstanding derivatives trades.

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ΩΩThe Fed pretended they are open and are happily supplying us with this horrible information.  But Bloomberg News had to sue in court to force the Fed to cough up basic information.  Why the secrecy?

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ΩΩWell, the Fed is a bank, too!  It has to pretend to be capitalized with assets,  not taking on infinite losses.  A negative bank doesn’t last very long in the real world, this is why we have the word, ‘Bankrupt’ to explain going too deep in the red and then capsizing and dying rather suddenly.  This old Northern Italian word means ‘smashing the bench’ which is what happened when a moneychanger suddenly had no cash on hand to settle accounts and enraged savers beat the banker to death with the bench.  Literally.  Not figuratively. Now, let’s leave the wretched shattered benches of the Federal Reserve and visit poor Ireland.  Like Iceland, the Irish people woke up to discover they, not the bankers, are supposed to fix this mess by starving to death to pay off foreign depositors and foreign bond holders:

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Adam M. sent me this email:  Elaine,

Ireland is falling down the black hole….. darker than Guinness stout….More trouble in Ireland….. the govt is going to be overwhelemed by all this in the end. After all it is a small population country and this debt is
huge. Can potatoe famine be far behind? Instead of liquidating the debt, they are trying to save a rotting whale…… just like the US has. The stench is unbearable.
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adamm
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Ireland to launch €81bn bad loan bank

By John Murray Brown in Dublin

Ireland will on Tuesday begin operating a new “bad bank” to house €81bn in bad property loans left over from the financial crisis and set out new capital requirements that are expected to see the further nationalisation of its banking sector.  Irish bank shares fell sharply on Monday amid fears that the new financial requirements could prove crippling.

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duhhhh
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Irish banks face shortfall of €32bn

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Ireland’s banks face a capital shortfall of up to €32bn, the country’s regulator and finance ministry said on Tuesday, with the Irish government liable for up to three-quarters of that figure.  The black hole, equivalent to about 20 per cent of gross domestic product, is far bigger than expected. It emerged after the country’s new bad bank, the National Asset Management Agency, announced the acquisition of €16bn ($21.5bn, £14.3bn) of mostly real estate loans, setting it on the road to become Ireland’s biggest property owner.

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But NAMA paid only €8.5bn for the loans, applying a bigger discount than expected – a reflection of their poor quality.  The Irish government, which has already nationalised one bank, Anglo Irish, is now widely expected to end up as the majority owner of every big bank in the country, bar Bank of Ireland. Even Bank of Ireland, which must raise €2.66bn as part of the regulator’s capital demands, is expected to end up with the government as a near-40 per cent shareholder, compared with 16 per cent today.


Analysts said Allied Irish, which has an equity shortfall of €7.4bn, compared with a market capitalisation of just €1.2bn, could end up more than 70 per cent government owned.  Up to €24bn of the combined capital shortfall – which includes up to €18.3bn at Anglo Irish and a combined €3.6bn at the building societies – could end up funded by the government, with €8.3bn of that due to Anglo Irish this week. The burden outstrips the whole of Ireland’s €18.7bn fiscal deficit this year….

…The regulator’s capital shortfall calculation is based on a requirement that banks increase their capital ratios – to 7 per cent for tier one equity, and 8 per cent for core tier one by the end of the year – as Ireland seeks to insulate its banks from the impact of ongoing loan losses.

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One of the comments was that the losses would be the equivalent of several years worth of taxes of the people. At 100% rates!!! And for what????  They all played the game. Piling on the state debt is not going to solve anything but make the books look better at the lenders.

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Irish GDP was very large for a country of 1/10the the number of people of Canada, almost 180 bn Euros in 2008. A lot of this was money laundering no doubt. So per capita GDP was very high.  It is now falling, heavily…. 12%?? last year alone. There is a long way to go.. down.  They are still dreaming if they thing this govt bailout is the end of it.

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They just went wild with lending:

Irish property developers speculated billions of Euros in overvalued land parcels such as urban brownfield and greenfield sites. They also speculated in agricultural land which, in 2007, had an average value of €23,600 per acre ($32,000 per acre or €60,000 per hectare)[30] which is several multiples above the value of equivalent land in other European countries.[citation needed] Lending to builders and developers has grown to such an extent that it equals 28% of all bank lending, or “the approximate value of all public deposits with retail banks. Effectively, the Irish banking system has taken all its shareholders’ equity, with a substantial chunk of its depositors’ cash on top, and handed it over to builders and property speculators…..By comparison, just before the Japanese bubble burst in late 1989, construction and property development had grown to a little over 25 per cent of bank lending.[31]

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It was just a big ponzi scheme and has gone bust….And what do they produce???  Nice whiskey. Racehorses.  Its Iceland 10x over. Or more. Todays news….. even worse..
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The Irish Times – Wednesday, March 31, 2010

Banks move will double national debt, Bruton warns

MARIE O’HALLORAN…It was the “final bill of reckless economic management that we’ve had to put up with for 10 years”.  He added: “Today’s decisions will bring to €40 billion the amount that the Irish taxpayer will be asked to put into Anglo Irish Bank, which was run in a truly buccaneering way by Seán FitzPatrick and his colleagues.

”The money “has gone into a black hole. Despite the rapid deterioration, every day we look at Anglo, it gets worse. But despite that the policy remains the same. There is no budging in the Government’s policy. The policy is that the taxpayer should be first over the hill to rescue this bank, not those who invested in it. And I can’t understand why this policy isn’t changing as the evidence comes out of what an abnormal bank Anglo Irish was, to the extent that it is jeopardising our future as a nation.”…

….“Its creditors take over and try to recover as much as they can. That’s what happens in capitalism. When people make investments that go sour, they take the consequences. . . . I have heard time and again it argued by spokesmen for the Government that to fail to protect bondholders in these banks would amount to an Irish default by the Irish people on its obligations. That is simply not true.”

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Thats something, it like Canada adding 500 bn$ to its national debt….Or in the UK it would be a much bigger number….850 bn$ worth, but then there are more people. But in proportion about the same.
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The US however is in a different league altogether….. 12.8 trillion as a matter of fact, 5+ trillion of which is mortgage debt taken off the books onto the govt shoulders … but even though totally 100% liable the US govt has not yet added this debt to their total 13 trillion $ … for some reason. There has been debate about this…. but it would be to much of a shock to the us citizens to see it in writing.
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The U.S. government placed Fannie Mae and Freddie Mac in conservatorship in September 2008: “This means that the U.S. Taxpayer now stands behind $5 trillion of GSE debt,” according to the Congressional Research Service.The problem is that $5 trillion of so-called agency paper is not treated as if it is a debt of Uncle Sam for accounting purposes, says Richard Suttmeier, chief market strategist at Niagara International Capital andValuEngine.com.   “Get it on the balance sheet – that’s where it belongs,” Suttmeier says. “Add it to the $14.2 trillion in [federal] debt and let’s move on.”

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End of email.  Thank you, Adam.  Wow.  Scary stuff and remember: this is OUR future, too.  There is some more Irish news we should all read carefully since it is an exact mirror image of what is wrong with the US:

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Irish Banks Need $43 Billion on ‘Appalling’ Lending (Update4) – Bloomberg.com

Ireland’s banks need $43 billion in new capital after “appalling” lending decisions left the country’s financial system on the brink of collapse. .

The fund-raising requirement was announced after the National Asset Management Agency said it will apply an average discount of 47 percent on the first block of loans it is buying from lenders as part of a plan to revive the financial system. The central bank set new capital buffers for Allied Irish Banks Plc and Bank of Ireland Plc and gave them 30 days to say how they will raise the funds. .

“Our worst fears have been surpassed,” Finance Minister Brian Lenihan said in the parliament in Dublin yesterday. “Irish banking made appalling lending decisions that will cost the taxpayer dearly for years to come.”

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ΩΩThe entire concept of a second mortgage is odious.  One does this only when one is in special circumstances such as buying a new home while temporarily living still in the old one or building a new house and using the collateral of the old house to fund the construction of the new house.  I have done this in the past for these reasons.  But to my horror, I saw ads on TV during the credit bubble, telling people to take on a second mortgage not even to fix their own homes but to go on vacation!  Or do other fun but non-profitable things.

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ΩΩI knew, back then, this would all end badly. This is the infamous ‘Home ATM Machine’ business.  The reason 50% of more people getting government lending aid go bankrupt anyway within just one year of getting rescued is obvious: they are deep in debt not due to mortgages but due to secondary debts dumped on their garbage dump homes!  NO ONE can fix this except the Goddess of Zero who simply wipes everyone out.

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ΩΩThis is why caution has to be applied to all financial systems: if they are not closely supervised and controlled, they go first to infinity and then to zero.  A terrible problem.  Easily solved via restraints and controls.  Note how the OCC which was supposed to prevent too many dollars being made via debt, was turned into a toothless tiger that simply passively notes the collapse of the value of our currency due to too much easy debt.

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ΩΩSure, we have little inflation except in important commodities but this is due to the Goddess of Zero slashing away at the mountain of debt, using the default tool to fix this mess in a very brutal way.  Unfortunately, the bankers still control our ‘democracy’ so they are moving all their losses onto our books and far from things going to zero, it is actually heading towards infinity: infinite debts owed by the taxpayers who want to continue stupidly cutting taxes while increasing credit based on virtually no capital at all!  Sheesh.

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ΩΩWe got to collectively grow up and figure out that Santa Claus is a con artist.

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28 Comments

Filed under .money matters

28 responses to “Ireland And US Will Be Devoured By Derivatives Beast

  1. flipspiceland

    We have already been devoured.

    But it’s like we are Jonah in the whale, thinking we will be shat out, but we won’t be. We will just stew slowly in digestive derivative juices until we are waste products.

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    ELAINE: HAHAHAHA…disgusting digestive metaphors!

  2. justiceatsqualor

    Better the world blames the banks for the derivatives beast than blames the US for defaulting on the national debt and the dollar. Jailing bankers is better than WWIII.

    One or both are a done deal once the peak-oil wolf at the door comes knocking and world production tanks. Who knows, maybe the derivatives beast will corral and feed the wolf three little PIIGS first. Keep the dollar strong as long as possible so we can keep buying JP-8 until the curtain gets pulled back.

  3. DeVaul

    I agree with your summary of banking: to infinity and back again in the blink of an eye, but I disagree with this:

    “Easily solved via restraints and controls.”

    The history of banking is the fight against restraints and controls of any kind. Bankers tried to take over our country right from the start, but the first few presidents shut them down or held them at bay. After Andrew Jackson, it was a hockey stick graph of banker power and greed headed straight towards infinity.

    I see no future for banking, except as a corner craps game or parlor roulette game for those who have no desire to work. This is based on Peak Oil happening, but I could be wrong here.

    I remember at college that the top students were all focused on some kind of career, whereas the bottom half were all Econ majors whose only goal was to get rich. They went on to become our economists and professors and CEO’s and, of course, bankers. Many could barely read or write. I used to rewrite and edit and then type their papers for them.

    These “students” should have become farmers and laborers, but since their parents were wealthy, they were entitled to a life of privilege which they did not earn.

    The “get rich quick” people are some of the most dangerous people alive, yet there is no law against this kind of activity — which destroys countries, nations, and empires.

  4. Duski

    Why on earth are nations bailing out bankers in the first place? Let them fall, that is THE way to cure the rot in the system. But no, it’s like they’d rather pull everything down with them, with politicians support.

    I wonder if Iceland will not pay after 95+% of populace said NO, we will not bail out your bad bets!

  5. emsnews

    Iceland sets the example here! I agree.

  6. don

    I was just discussing this topic with a friend and now you have shed more light on the subject. We came to the conclusion that
    Ireland will beat out Greece for MSM headlines.
    http://www.commondreams.org/headline/2010/04/01-8

  7. PFO

    DeVaul!

    WoW I couldn’t agree more with your analysis of 1970’s college students.

    I’d only add that out here in the Soviet of Washington, the students that were the teacher’s pets or social climbers have ended up running the state and local governments or working for the feds and they have skull*&^%ed literally EVERYTHING back into the 19th. Century!

    Regards,
    PFO

  8. CedarS

    Speaking of financial decisions with no votes needed by the population.

    http://www.freep.com/article/20100312/NEWS05/3120317/Sale-of–250-million-in-bonds-successful

    Suddenly, tax revenue collected state wide is now used to underwrite Detroit’s bonds. Detroit is broke. Michigan is broke. Goldman Sachs collects their fees.
    Nice world we live in.

  9. justiceatsqualor

    @DeVaul: “I see no future for banking, except as a corner craps game or parlor roulette game for those who have no desire to work. This is based on Peak Oil happening, but I could be wrong here.”

    Yes. But I think they’ll be repo men and pawn shop owners before they’re left with a gutter and a pair of dice.

    When production falls, money either contracts or inflates. Either way, no more profitable credit expansion. No more banking.

    As production falls, anyone who was maxed out on credit goes bankrupt. Isn’t that almost everyone? Ooops! That’s what our kleptocrat bankers fear. They will lose their money machine and their power structure built from the patronage of directing credit expansion. Even if they can stay out of prison, their outsized gains will likely be taxed into genteel poverty during relentless budgetary shortfalls by the new powers that be.

  10. CedarS

    Let’s not forget other bad deals from Detroit’s past.
    A $400 million penalty due to an interest-rate swap deal gone bad held by the bank UBS, an unsecured creditor!

    http://www.freep.com/article/20091129/COL33/911290422/Detroit%5C-s-compounding-debt-points-to-disaster

  11. Dibbles

    Shrub didn’t find the OCC useless. He resurrected an old post-Civil War law that denied states the ability to investigate real estate/banking/derivatives fraud being committed. And the timing of changing bankruptcy laws? Tell me this collapse and debt-peonage was not intentional.

    By the way – it’s “Sir” Alan Greenspan to us peasants. I wish we could beat the banker to death with a lot more than the bench.
    _______

    “HAHAHA, says the Dragon”…yes indeed. They’ve now derivatives trading.

  12. Dibbles

    Oops.
    They’ve now BANNED derivatives trading.

  13. Gus

    California closes its last auto factory.
    Its just so damn sad!

    http://www.breitbart.com/article.php?id=D9EQEAHG0&show_article=1

  14. Jim Dandy

    In Xanadu did Kubla Khan
    A stately pleasure-dome decree:
    Where Alph, the sacred river, ran
    Through caverns measureless to man
    Down to a sunless sea.

  15. justiceatsqualor

    And what rough beast, its hour come round at last,
    Slouches towards Bethlehem to be born?

  16. Gus

    GS with its dark and
    sunless pools….

    controls the NYSE

    http://www.alliancefb.com/blog/?p=64

  17. Joseppi

    “Iceland sets the example here! I agree.”

    A while ago in previous threads I suggested that we all should refuse to pay our mortgages, that we should, ourselves, declare a debt jubilee to protest an unjust and corrupt financial system.
    You said it was our personal responsibility to pay back our debts.
    So now, you say, it’s OK for a sovereign country not to pay it’s debts because the system whereby bankers can burden the populous (I liked the Latin influence too because history does repeat itself) them with debt is wrong – But this same system that burdened the US populous with debt that the creditors knew there was no possible way to be repaid – should be honored? I don’t understand.

  18. Dibbles

    The citizens of Iceland didn’t borrow the money. Why are they responsible for debt they did not sign for?

    “Global” (British) investment bankers set up shop in Iceland expecting Iceland’s taxes to pay for risk and loss. Sound familiar?

  19. emsnews

    My mother in law had to be put back into the intensive care unit and I have been unable to do the usual stories today but will hopefully post one tonight.

    Will be busy tomorrow with this sad business, too. Mortality is relentless.

  20. DeVaul

    Sorry to hear about that, Elaine. Take your time with that. It is more important than articles, no matter how well written.

    Did I say “1970’s”? I actually meant early to mid 1980’s. (Maybe this really was a trend.)

    Regarding sovereign debt:

    If my neighbor hocks his house to the bank so his family can go to the Bahamas, guess what? The bank does not demand repayment from me. I signed nothing.

    Same with sovereign debt. The people did not sign on to a bank bailout of over 1 trillion and also did not sign on to a “missing” 2 trillion from the Pentagon and countless other shenanigans. Attempts by anyone to collect on these types of debts from entire populations by foreigners often result in revolutions, insurrections and war.

    I doubt China plans to collect on these debts. I think they just plan to kill our currency and then take the high road while European aristocrats and others try to collect on these type debts. China does not want a nuclear war, no matter how hard our government pushes one. European aristocrats, Jews, and Arab oil sheiks, on the other hand, do not know when to stop, nor will they ever acknowledge their role in creating these debts.

    My wife is from Thailand. She just returned recently and from what I learned, more and more things there are made in China and not in Thailand. The Chinese are creating new markets while withdrawing from ours.

    I have no idea how China plans to deal with Peak Oil. Solar power will not run millions of cars and whatnot. However, it is far easier to transport goods downriver or over rail lines to Thailand than to float them across the Pacific to America.

    In the long run, this is good for us. We need to learn how to make things again for ourselves, but we cannot do it the old capitalist way. It has to be a different way, or we will end up at square one again.

  21. Dibbles

    I’m sorry to hear your mother-in-law is still not doing well. My best regards to her and to you.

    Stay well.

  22. Dibbles

    DeVaul @ at 11:43 pm

    Yes, I agree with you. The US still does a surprising amount of manufacturing on a small scale, particularly within states and communities. If needed, I think it could be ramped up to rebuild an internal economy.

    Also, I heard an interview a couple of months ago by the author of Shock Doctrine. She stated that there is a great deal of goodwill toward the American people. It is our government that they are tired of. I guess that’s our responsibility.

  23. Gus

    Sorry to hear about your
    mother-in-law. I had to
    deal with similar sad
    affairs years ago, its a
    rough time.

  24. Gus

    I was shocked to find out
    GS generates about half
    of all volume on the NYSE.

    High Frequency trading
    trades the same stock
    hundreds of times a day.

    About 70% of trades on the
    NYSE are super computer
    controlled. Most of that is
    by one firm.

    ΩΩΩΩΩΩΩΩΩΩ

    ELAINE: Correct. It is that stupid computer trade flipping where they trade over and over again, the same stuff. It should be OUTLAWED.

  25. flipspiceland

    With Goldman Sucks owning 50% of the trades it wouldn’t be so bad if they had made an arrgangement with the Treasury and Federal Reserve to BE the buyer putting a bid under which no security would sell. In essence they would not allow a security to trade below a certain value. That would add a boundless measure of stability to an inherently unstable system.

    But absent that baseline, it is merely a way for Lord Blankfein’s and his devils disciples to engage in multiple manipulations of multitudinous magnitudes.

  26. emsnews

    Thanks, everyone. My mother in law nearly died last night and is still in danger. More medical interventions. I pushed very hard to have her remain in the hospital rather than being sent to a rehab center.

    Today, the hospital agreed with me (two weeks too late). I think they got the gist (lawsuits in the future).

  27. IndianaJohn

    So who is on the losing side of these Goldman flips? It must be savings, pensions, social security and the common shares of the US, the dollar. Just my guess.

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