Activecitizen54's Blog

Double Dip, On The Way

Posted in 1 by activecitizen54 on March 11, 2010

Double Dip, On The Way

This is the best explanation I’ve seen of exactly what the Corporate Communists accomplished in stealing, by fraud, from every US Citizen and enslaving our children.

The Economic Populist reports what we all know to be true; there is no change in Wall Street and Banking Regulations or performance.  None of the existing laws are enforced and George W Bush’s policy is what allowed and encouraged this melt-down from lack of regulation that began with Clinton’s destruction of Glass-Steagall and continues through the Goldman-Sachs Obama White House.

The Best Way To Rob A Bank Is To Own One, is an enlightenment from Bill Black.

The Economic Populist article reports:

“The year long stock market rally has managed to push bank equity values up and give them the appearance of health, but their underlying portfolios are still full of toxic assets that have continued to fall in price. Thus the insolvency of the banks has continued. William Black says that this is all by design.

The administration and industry do not want the public to know that the financial system brought us to the brink of a Great Depression and that Treasury and the Fed only delayed that catastrophe by adopting policies that (1) increased “moral hazard”, which makes future crises more likely, and (2) combine the worst elements of “crony capitalism” and the “socialized losses.”

There has been no honest examination of the crisis because it would embarrass C.E.O.s and politicians…

Instead, the Treasury and the Fed are urging us not to examine the crisis and to believe that all will soon be well. There have been no prosecutions of the chief executives of the large nonprime lenders that would expose the “epidemic” of fraudulent mortgage lending that drove the crisis. There has been no accountability.

The first step toward fixing this mess is creating accountability. The idea that it was a “few bad apples” has been floated, but few have fallen for it. Very quietly, Wall Street has been losing one lawsuit after another from angry investors. Wall Street has paid out $430 Billion in damages to victimized investors in 1,500 different lawsuits. Yet the SEC is unable to bring a single criminal charge against a bank CEO.
It isn’t just Black who thinks the crisis was caused by fraudElizabeth Warren also suspects massive fraud, as does Janet Tavakoli, Congress woman Marcy Kaptur, economist Max Wolff, and economics professor James K. Galbraith.

You had fraud in the origination of the mortgages, fraud in the underwriting, fraud in the ratings agencies.

Instead of doing what is right, both the Bush and Obama Administrations have worked hard to eliminate accountability. If anything, there appears to be an ongoing cover-upthat spans both White House administrations and both parties in Congress. The fraudeven appears to stretch into the Federal Reserve itself.
The news media has participated in this sham by covering the crisis in a way that takes all the human elements out of it.

What’s a little fraud among friends?

A systemic Ponzi Scheme.  That’s the best description I’ve heard and the fraud is real and Americans are paying it.  Where are the criminal charges?

There was a three year gap between the 1929 stock market crash and the Pecora Commission, which exposed to the public massive fraud and conflicts of interest that caused the crash. During that three year period the country sank into Depression. The results of the Pecora findings was the Glass-Steagall Banking Act of 1933, the Securities Act of 1933, and the creation of the SEC.

The economy would never have recovered without these reforms, the reforms would never have happened without the Pecora Commission, and the Pecora Commission would never have been created without a collective decision that people had to be held accountable for the fraud.

Until the collective outrage of the American citizens overwhelms the politician’s loyalty to their corporate sponsors, and some of these criminals are prosecuted, then we will continue to follow the path of Japan. One year of sluggish growth and high unemployment will follow the next, while the government runs up enormous deficits in the false hope that the next stimulus bill will finally do the trick.

This is one of the instances where the moral and just thing also happens to be the smart thing to do. The criminals must be exposed and punished. The speculators on Wall Street must recognize their losses. The financial monopolists must be broken up.
It seems so simple. What lies between us and this logical outcome is a broken political system and a wealthy criminal class.”

The Economic Populist reports.

William K Black’s book, his clarity on this issue and the reality of Americans’ failure to demand accountability.

Where is the Pecora Investigation?

The site Naked Captialism reports in a piece by Yves Smith of the pure propaganda driving this continuing fraud against the American Citizens by outright lies, double-speak and the erroneous mindset that believes the American Citizens do not deserve the truth.

The choice here was obvious. A refusal to investigate was tantamount to a refusal to reform. A good understanding of what had happened was essential, not merely to develop sound new rules, but also to keep the industry from muddying the waters, which would be easy to do, given how complex and opaque many of the products are.

More compelling evidence of the Administration’s lack of interest in reining in the money-changers came via Treasury Secretary Timothy Geithner’s first presentation on his reform plan, which was more accurately a plan to have a plan. It was widely criticized for its sketchiness, but most observers missed the true significance. Had the Obama transition team done any serious thinking about the financial crisis? Obviously not, because you don’t need to think too hard if the game plan is to go back to business as usual to the extent possible. Geither’s presentation came nearly three weeks after Obama was sworn in, and all its initiatives were Bush/Paulson wine in new bottles: a new go at the failed idea of having the government overpay for bad bank assets; “stress tests” to put more discipline around the process of handing out TARP funds to the needy; and a mortgage modification program which pretended to be able to square the circle of saving borrowers without taking on investors in mortgage securitizations.

Geithner’s not-much-of-a-plan exemplified the second tool in the Obama campaign to sell doing as little as possible to the financiers: the Theory of Positive Thinking.

That notion has a proud tradition in America and was much in evidence in the run-up to the crisis. It promises that the economy will be fine as long as everyone thinks happy thoughts about it. For instance, I noted in a March 2007 blog post that while the tone of the Financial Times as of March 2007 had become generally grim, the US had become a Tinkerbell market, where valuations are held aloft by faith, and participants conspire to stoke true belief. And as the crisis wore on, other magical personages intervened. As a hedge fund manager who writes as Augustus Melmotte noted,

The market responded with enthusiasm to reports that the Tooth Fairy has agreed to acquire Lehman. The purchase price has not yet been determined and will be set by Dick Fuld wishing upon a star, clicking his heels three times, and being transported back to that magical place where Lehman still sells for over $70 per share….. Meanwhile, the SEC has announced an investigation of mean, evil, bad short-seller David Einhorn. …. Einhorn reportedly suggested that the Tooth Fairy does not exist and that wishing upon a star is not a wholly reliable price discovery mechanism. Christopher Cox, chairman of the SEC, said, “Vicious rumors attacking the Tooth Fairy will not be tolerated. Our entire financial system and indeed the American way of life depend on the Tooth Fairy and wishing upon a star…” The SEC is reportedly planning to set up re-education camps for short-sellers.

Remember that the US has an entire cable channel devoted to the Theory of Positive Thinking, namely CNBC, and a goodly portion of the financial media falls into CNBC-style cheerleading with more than occasional abandon.

Indeed, the adoption of the Theory of Positive Thinking has virtually guaranteed that nothing will change, unless there is sufficient deterioration in the real economy or the financial markets to provide compelling counter-evidence. One example is the “paying back the TARP” charade. As the banks continued to post improved earnings, no matter how phony they were, they argued that they were now healthy and should be allowed to pay back the TARP funding that had been crucial to their survival. The reason they were so keenly motivated to do should have been reason enough to deny their request: namely, that they wanted to escape restraints on executive compensation, virtually the only demand that the government had made. But overpaying staff and keeping too little in the way of risk reserves was precisely the behavior that led to the near collapse of the financial system. Going back to business as usual would virtually guarantee more looting of major financial firm and another series of collapses.

But the Obama administration miscalculated badly. First, it bought the financiers’ false promise that massive subsidies to them would kick start a economy. But economists are now estimating that it is likely to take five years to return to pre-crisis levels of unemployment. Obama took his eye off the ball. A Democratic President’s most important responsibility is job creation. It is simply unacceptable to most Americans for Wall Street to be reaping record profits and bonuses while the rest of the country is suffering. Second, it assumed finance was too complicated to hold the attention of most citizens, and so the (non) initiatives under way now would attract comparatively little scrutiny. But as public ire remains high, the press coverage has become almost schizophrenic. Obvious public relations plants, like Ben Bernanke designation as Time Magazine’s Man of the Year (precisely when his confirmation is running into unexpected opposition) and stories in the New York Times that incorrectly reported some Goldman executive bonus cosmetics as meaningful concessions have co-existed with reports on the abject failure of Geithner’s mortgage modification program. While mainstream press coverage is still largely flattering, the desperation of the recent PR moves versus the continued public ire and recognition of where the Adminsitrations’s priorities truly lie means the fissures are becoming a gaping chasm.

So with Obama’s popularity falling sharply, it should be no surprise that the Administration is resorting to more concerted propaganda efforts. It may have no choice. Having ceded so much ground to the financiers, it has lost control of the battlefield. The banking lobbyists have perfected their tactics for blocking reform over the last two decades. Team Obama naively cast its lot with an industry that is vastly more skilled in the the dark art of the manufacture of consent than it is.

Unless and Until the American Citizens rise up and demand the investigation, the criminal charges, the prosecution of these liars, thieves and frauds we have the Bush status quo with a purchased Washington, DC capitalizing on the special interests of Wall Street and Banking driving the mid-term election funding and continuing their investment into criminal activities at the expense of the American Citizens.

America is in a world of hurt here and the focus of this government, this Obama administration is the preservation of the status quo and Bush Business as usual.  More and more the issues of health care reform, the wars, the acts of government are becoming clear as the Oligarchy’s declaration of war on the American Citizens and we are just laying down and taking it.  We have no voice in our government with the current conditions and the “ruling class” is best serving its self in the policy as demonstrated.

This is not just an alarmist cry for real reform, regulation and repair of reputation by Americans for America but a repeated demand for an honest Wall Street and Banking system regulated to level the playing field.  The European Union has effectively banned the Wall Street Greed from infecting their systems as of today.

The posting from Michael Collins at the Economic Populist enlightens us:

On Tuesday, the EU announced that it was banning Wall Street banks from the lucrative government bond business in Europe. They didn’t express official concern or fire off a warning shot. They simply banned Wall Street from financing government bond deals like the one Goldman Sachs sold to Greece. The Guardian pointed out that Wall Street bond business from European governments has gone down over the last two years. Now the business is gone period. In effect, the EU has labeled Wall Streets business tactics as too dangerous for their governments to handle.

Then on Wednesday, the President of the European Commission said that the EU was considering a ban on government debt speculation through Credit Default Swaps(CDS) President José Manuel Barroso announced that, “the Commission will examine closely the relevance of banning purely speculative naked sales on Credit Default Swaps of sovereign debt.” While not an outright ban, the threat of banning CDS on national debt would be a major loss for the world’s financial speculators, particularly those in the United States and Great Britain.

These two hostile moves toward Wall Street by Europe were discussed by officials in the context of the current Greek debt crisis. Wall Street firm Goldman Sachs has been implicated in helping the Greek government hide the true nature and size of the debt. Discovery of this sleight-of-hand action exacerbated an already challenging crisis.

The reality that the European Union is banning United States firms, the Wall Street liars and frauds, from their markets is a compelling reason for real Wall Street and Banking Reform NOW!

At the Economic Populist in an article by Robert Oak the productivity and errors in the economic accounting of the American Labor increase in productivity being founded in Overseas Outsourcing of American jobs is best defined by this quote:

“U.S. workers are now considered dirty diapers, commodities, disposable and replaced easily by putting an ad on monster.com or through people importation.”

This is the reality of today as seen in the tremendous increase in the unemployment rate of US Labor over 50 and this is no accident.  The Corporate Communists made clear decisions to outsource and ship overseas the need for labor to enhance their bottom lines at the expense of the American Labor and effectively destroyed the economy within which they intend to sell their products.  Short term greed won out over real investments in America and Loyalty to Community, Country and Credibility within the global market.

There is a great mistrust of Wall Street, Banking and Corporate Communists within the United States as the American Citizens have seen this looming depression becoming reality with the actions of the Oligarchy.  The Global Community is now making corrections that America is too stupid, too frightened of or just flat out ignorant of to accomplish through a broken Washington that is purchased by the Corporate Communists and is a wholly owned subsidiary of Wall Street and Banking interests.

Graphic demonstrations of this exist within the current system but none is so glaring as the special tax exemptions provided to select entities like Goldman-Sachs, Morgan Stanley and the Blackstone investment group as reported by James Woolly in the Economic Populist.

There are more democratic societies than the United States and Iceland is looking like a great place to live with this report.

It’s long past time that We The People provide a real attitude adjustment to the Oligarchy and the wanna-be ruling class of America.  We have that opportunity presenting in November and the anti-incumbent movement is only one piece of this puzzle to be muddled through.   We know the politicians are purchased by the Corporate Communists but the Corporate Communists have forgotten who and how they got there by the labor of the American Citizens.  American Citizens are poised to reclaim their nation and this revolution will be Oligarchy-shattering.  I have faith.

On the American front:

Advertisements

3 Responses

Subscribe to comments with RSS.

  1. legal music downloads said, on March 11, 2010 at 9:41 pm

    Wow! This could be the most comprehensive info I have found about this issue on the net. Would you accept hosting guest posts from others?

  2. Katelyn Bolfa said, on March 12, 2010 at 12:04 am

    Hello,I love reading through your blog, I wanted to leave a little comment to support you and wish you a good continuation. Wishing you the best of luck for all your blogging efforts.

  3. florida health insurance said, on March 13, 2010 at 6:41 am

    Wall Street reform is going to fail for the same reason that health care reform was eviscerated. An obstructionist Republican Party that is voting as a bloc in order to cause the failure of the Obama presidency. Nothing that Obama supports is going to pass.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: