Text of President Bush's address to the Nation, Tuesday, 30th September, 2008:
Yet our distress comes from no failure of substance. We are stricken by no plague of locusts. Compared with the perils which our forefathers conquered because they believed and were not afraid, we have still much to be thankful for. Nature still offers her bounty and human efforts have multiplied it. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. Primarily this is because the rulers of the exchange of mankind's goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.
True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.
The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.
Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort. The joy and moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits. These dark days will be worth all they cost us if they teach us that our true destiny is not to be ministered unto but to minister to ourselves and to our fellow men.
Recognition of the falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, on unselfish performance; without them it cannot live.
Restoration calls, however, not for changes in ethics alone. This Nation asks for action, and action now.
Oh - I made a mistake. That was F. D. Roosevelt's inaugural address in 1933.
Well, you shouldn't need me to tell you how bad things are...except that they're a lot worse than the media outlets are saying. Their job isn't to report the news - it's to prevent mass panic. And they're doing a capital job! Keep up the good work lads; I still need to buy some supplies. Item #1: a handgun.
Muslim children are gassed in a Mosque by right wing Americans - riled up by a Republican anti-Muslim DVD.
On Friday, September 26, the end of a week in which thousands of copies of Obsession: Radical Islam's War Against the West -- the fear-mongering, anti-Muslim documentary being distributed by the millions in swing states via DVDs inserted in major newspapers and through the U.S. mail -- were distributed by mail in Ohio, a "chemical irritant" was sprayed through a window of the Islamic Society of Greater Dayton, where 300 people were gathered for a Ramadan prayer service. The room that the chemical was sprayed into was the room where babies and children were being kept while their mothers were engaged in prayers. This, apparently, is what the scare tactic political campaigning of John McCain's supporters has led to -- Americans perpetrating a terrorist attack against innocent children on American soil.
The most disturbing aspect of this?
The presidential campaign edition of the Obsession DVD, currently being distributed by the Clarion Fund, carries the endorsement of the chair of the counter-terrorism department of the U.S. Naval War College, using the name and authority of an official U.S. military institution not only to validate an attack the religion of Islam, but to influence a political campaign. For these reasons, this endorsement has been included in MRFF's second lawsuit against the Department of Defense, which was filed on September 25 in the Federal District Court in Kansas.
For years I've been calling these assholes "fascists" and "brownshirts". It was not, and is not hyperbole. What we have is a thinly veiled white supremacist christofascist 'subculture' dominated by the lowest form of dimwits. These disgusting reptiles exist in vast numbers - NOT a majority, but a substantial minority. About 1/3 of the population would have no problem becoming "Hitler's Willing Executioners".
They are immune to reason. Sufferers of the "Authoritarian Personality" syndrome, they want to be lead. They do not like to think. They want to be ordered. These are the ones who still, in spite of all empirical evidence, approve of George W. Bush.
We have a long way to go before we hit bottom. If this is the kind of thing that happens when times are relatively good, I shudder to imagine events in the near future, when oil and food is not just expensive, but scarce.
Check out this disturbing music video found by survivalacres - a "Der Sturmer"ish attempt to recruit rubes into the National Guard. QED.
Kudos to SpaceX, the first private company to send a spacecraft into orbit. (Burt Rutan's SpaceshipOne was a sub-orbital art-piece). SpaceX is also working on a larger version of their rocket, to be launched next year. They're even developing a manned capsule.
SpaceX was founded by Elon Musk, the creator of PayPal. His ambition is to transform humanity "into a space-faring civilisation". I won't be able to afford a ticket to Mars; hopefully he'll raffle some off.
McCain's midsummer move to begin campaigning on a platform of more offshore drilling has only hardened Simmons's position. "What a hypocrite," says Simmons..."Here's a man who for at least the past 15 years has strenuously, I mean strenuously, opposed offshore drilling. And now it's 'drill, drill, drill.' And he doesn't have any idea that we don't have any drilling rigs. Or that we don't have any idea of exactly where to drill." (As for McCain's running mate, Sarah Palin, Simmons says: "She's a very colorful person, but I don't think there's a scrap of evidence that she knows anything about energy.")
For the record, Simmons has been advocating more drilling off the coast of the United States since the early 1990s, but now he says that treating it as our salvation is misguided. "I'm not saying we shouldn't do it," says Simmons. "We should, and the sooner the better. But we shouldn't think that it'll have any impact for a decade or two." The exception, he says, is the reservoir in the hotly debated Arctic National Wildlife Reserve. "ANWR," he says, "is the only place that we could drill right now and it might actually make a difference in a year or two."
As for some other currently voguish sources of fuel coming to the rescue, he's dismissive. Oil shale? "Buck Rogers stuff. It just can't work." Ethanol? "It's a joke. The numbers just don't add up."
Simmons believes that a radical change in the way we live is inevitable. "We should basically be going back to creating a village economy, so that we really reduce the energy intensity of how we live," he says. "We need bigtime conservation, not feel-good conservation. Make things where they're used. You'll end long-distance commuting, and we have the tools to do that now with webcams. Grow food locally. Grow food in your backyard. If they're not commuting, people will have time to do that."
The Energy Department's Sept. 24 inventory report may show that U.S. gasoline supplies fell 8.5 million barrels from a four-decade low as Texas refineries assess damage from Hurricane Ike, a department official said.
``Probably the max is an 8.5 million draw in gasoline because demand is down, and it could be as low as 6.5 million'' barrels, John Duff, survey manager for the Energy Department's weekly petroleum status report, said in an interview. The report will show ``the real impact of the hurricane on the refining sector,'' he said. Supplies will fall ``substantially.''
In American and Britain, and to a lesser extent other Western countries, a type of market fundamentalism became the guiding philosophy. The collapse of American power that is underway is the predictable upshot. Like the Soviet collapse, it will have large geopolitical repercussions. An enfeebled economy cannot support America's over-extended military commitments for much longer. Retrenchment is inevitable and it is unlikely to be gradual or well planned...
...Having created the conditions that produced history's biggest bubble, America's political leaders appear unable to grasp the magnitude of the dangers the country now faces. Mired in their rancorous culture wars and squabbling among themselves, they seem oblivious to the fact that American global leadership is fast ebbing away. A new world is coming into being almost unnoticed, where America is only one of several great powers, facing an uncertain future it can no longer shape.
Preliminary tests have found the chemical melamine in Cadbury's Chinese-made chocolates, the company says.
At least 50,000 Chinese babies have been sickened and four killed by milk tainted with the industrial chemical.
Cadbury had earlier recalled 11 chocolate types from mainland China, Hong Kong, Taiwan and Australia because of fears of contamination.
It remains unclear how much melamine was in the recalled products, a Cadbury spokesman told the BBC.
"It's early days, as these are preliminary findings from the tests," the spokesman said.
Click here to see a map of countries affected
He emphasised that the only goods affected were those made in the company's Beijing factory, and not those produced in the UK or elsewhere.
Palin told him that "dinosaurs and humans walked the Earth at the same time," Munger said. When he asked her about prehistoric fossils and tracks dating back millions of years, Palin said "she had seen pictures of human footprints inside the tracks," recalled Munger, who teaches music at the University of Alaska in Anchorage and has regularly criticized Palin in recent years on his liberal political blog, called Progressive Alaska.
Don't be fooled by the manipulated shenanigans of The Dow. The best stock exchange in terms of high numbers?
It's ZIMBABWE, baby! Hyperinflation's a bitch. Learn to love it.
The financial system is blowing up. Don't listen to the experts; just look at the numbers. Last week, according to Reuters, "U.S. banks borrowed a record amount from the Federal Reserve nearly $188 billion a day on average, showing the central bank went to extremes to keep the banking system afloat amid the biggest financial crisis since the Great Depression." The Fed opened the various "auction facilities" to create the appearance that insolvent banks were thriving businesses, but they are not. They're dead; their liabilities exceed their assets. Now the Fed is desperate because the hundreds of billions of dollars of mortgage-backed securities (MBS) in the banks vaults have bankrupt the entire system and the Fed's balance sheet is ballooning by the day. The market for MBS will not bounce back in the foreseeable future and the banks are unable to roll-over their short term debt. Game over. The Federal Reserve itself is in danger. So, it's on to Plan B; which is to dump all the toxic sludge on the taxpayer before he realizes that the whole system is cratering and his life is about to change forever.
the derivatives monster is about to be let loose on the planet, gaining strength with every single bank failure, like a virus feeding off weakened hosts. The UK government is about to nationalize another Northern Rock, in Bradford and Bingley, Belgian giant Fortis Bank is on life-support (its liabilities are three times the GDP of Belgium), and in the US Wachovia may have been sold as we speak.
We haven’t even started. And when the monster is done, we will have very few banks, if any at all, left. Not a lot of jobs either, for that matter. Retirement funds? You go to be kidding. By Christmas, you'll be lucky if you recognize the town you live in.
U.S. financial institutions borrowed a record $187.75 billion per day on average directly from the Federal Reserve in the latest week, showing the central bank went to extremes to keep the financial system afloat amid the biggest crisis since the Great Depression.
Federal Reserve data showed on Thursday the total amount borrowed nearly quadruples the previous record of $47.97 billion per day notched just the week before and comes as the Bush administration and U.S. lawmakers work on hammering out an agreement on a $700 billion rescue package for the financial system.
"This looks like the balance sheet of a central bank that is keeping the financial system on life support," said Michael Feroli, U.S. economist with JPMorgan in New York.
Banks have scrambled for extra funding at this week's regular cash auction by the Bank of England.
Commercial banks asked for £89.2bn ($165.5bn) in the auction - far more than the £52.8bn that was available.
Strains in the money markets have risen rapidly following the collapse of the US investment bank Lehman Brothers.
Banks are turning to the Bank of England for loans because it is currently too expensive to borrow from other banks as they would usually do.
Wachovia dropped to $8.90 at 6:12 p.m. today from its $10 close during regular New York Stock Exchange trading after the New York Times reported that New York-based Citigroup was in early talks to buy the Charlotte, North Carolina-based bank. The Wall Street Journal said bids may come from San Francisco-based Wells Fargo and Spain's Santander.
Takeovers can wipe out bank shareholders if they occur after regulators seize the company. That's what happened yesterday to Seattle-based Washington Mutual Inc., the nation's biggest thrift and now the largest bank failure in history. JPMorgan Chase & Co. paid $1.9 billion for deposits and branches of WaMu, leaving the company with about $28 billion in debt according to Bloomberg data and little means to pay it off.
The seizure of B&B would be explosive, taking more than £40 billion of assets and liabilities on to the Government balance sheet and would be certain to trigger a backlash from shareholders who have only just injected £400 million into the business to beef up its balance sheet.
Belgian and Dutch central banks and regulators were discussing measures to restore confidence in Fortis, the financial-services company whose stock plunged 35 percent in Brussels trading last week.
``We are working on enhancing the confidence in the market of the Fortis share,'' Hein Lannoy, a spokesman for the Belgian financial regulator CBFA, said today by telephone. He declined to be more specific. The parties will hold a conference call and ``if necessary there will be a physical meeting,'' Lannoy said.
Brussels and Amsterdam-based Fortis needs more capital after spending 24 billion euros ($35 billion) on ABN Amro Holding NV assets last year just as the U.S. subprime-mortgage market started to collapse. Fortis tumbled a record 20 percent two days ago, when the company picked Filip Dierckx to replace Herman Verwilst as chief executive officer. The move was aimed at reassuring investors concerned that a plan to raise 8.3 billion euros would force Fortis to sell assets at knock-down prices.
The Dutch-Belgian financial services firm Fortis is very much the keystone of banking in Holland and Belgium. It's also the ninth biggest firm of its type in the world.
The issue at stake this week is whether the banking arm of Fortis will face a run on its deposits in the same way that Northern Rock did in the autumn of 2007.
So far customers have withdrawn nearly 5bn euros of their money, still only 3% of the bank's total deposits but enough to send a shiver down the spines of European financiers and policy makers.
The problems for Fortis started in January this year when it announced it faced around $1.5 bn of losses in the American sub-prime catastrophe.
None of this surprises industry watchers such as Matt Simmons, the chairman of Houston energy industry investment bank Simmons & Co. and chief spokesman for the Peak Oil movement. I recently wrote a profile of Simmons for Fortune ("The prophet of $500 oil") and I can report that he has been warning about the potential of gasoline shortages in the U.S. for months.
"Our system is so fragile," he told me recently. "All you need is a tiny change to go from 'Oh, we're in fine shape' to an unmitigated disaster."
Simmons points out that the gasoline weekly stock reports have been trending sharply downward since last winter (with a brief upturn in the spring), and that even before Gustav and Ike we were in "just in time" supply mode.
Getting back to a safer level of extra capacity isn't simple, either. Once the refineries get back up and running, they'll drain the already low crude oil inventories. Unless gasoline demand stays low, Simmons believes, we'll have a hard time clawing back to stability.
That's why he worries about a top-up catastrophe that could cripple the trucking industry and disrupt food deliveries.
As he told me the other day: "If we end up having gasoline shortages, the odds are about 90% that Americans will do what we always do: We'll top up our tanks. And in topping up our tanks, within three or four days we'll drain the pool dry and then within seven days we'll run out of food."
North Carolina Gov. Mike Easley promised that more gas was on the way from other states, but WXII-TV found many stations dry or with only one or two grades of fuel left.
Easley had asked drivers to conserve fuel until the new supplies arrived and the situation returned to normal, but some consumers remain concerned.
"No gas. What will we do? We won't be able to do anything. We can't go to work. We can't do anything," one driver said.
Greetings from Asheville, NC .. america’s no-go headquarters.
Although authority is trying to downplay this as much as it possibly can … no joke here, I have personally seen fistfights, and one guy get knifed. I have heard reports about cops with heavy ordinance “guarding” those few stations with gas.
The veneer of civilization is indeed quite thin.
As for me, well, I have ~ 150 gallons stored here, and I have a biodiesel vehicle, just for this exact purpose.
an ounce of preparation …
Studying the problem from a sociological perspective, it is interesting to watch how people react when they are forced to finally admit to the idea that one day, the gas might be gone, for good. The truly scary thing is: even amongst the bright, prepared folks, the most common refrains are: “Why isn’t the government doing more about this ? ” “When will they ?”
sigh.
Crikey. Just watched a fascinating documentary about epigenetics. When I heard the phrase a few years ago I thought it was new-age woo-woo, but it's quite real. Here's the doc (1 hour):
To summarise: if you smoke, it won't just affect your health, but the health of your children and grandchildren. Parents' lifestyles are inherited by their immediate descendants.
“This is the derivative nightmare that everyone has been warning about,” says Peter Schiff, the president of Euro Pacific Capital at the author of “Crash Proof: How to Profit From the Coming Economic Collapse.”
“They booked all these derivatives assuming bad things would never happen. It was like writing fire insurance, assuming no one is ever going to have a fire, only now they’re turning around and watching as the whole town burns down.”
People who believe they have the greenest lifestyles can be seen as some of the main culprits behind global warming, says a team of researchers, who claim that many ideas about sustainable living are a myth.
According to the researchers, people who regularly recycle rubbish and save energy at home are also the most likely to take frequent long-haul flights abroad. The carbon emissions from such flights can swamp the green savings made at home, the researchers claim.
Stewart Barr, of Exeter University, who led the research, said: "Green living is largely something of a myth. There is this middle class environmentalism where being green is part of the desired image. But another part of the desired image is to fly off skiing twice a year. And the carbon savings they make by not driving their kids to school will be obliterated by the pollution from their flights."
Some people even said they deserved such flights as a reward for their green efforts, he added.
Only a very small number of citizens matched their eco-friendly behaviour at home by refusing to fly abroad, Barr told a climate change conference at Exeter University yesterday.
Of course, there are a committed minority who do walk the walk. The irony is that every watt and calorie that they conserve gets used up by someone else - either a car-zombie or a faux-greenie ("We just went on a sustainable eco-hol to Guatamala. The villagers were laaaavely").
The pointlessness of efficiency/conservation was explained over 150 years ago by "Jevon's Paradox". Conservation is futile - but if it makes you feel better, go for it. It's just a placebo - totem behaviour to expiate guilt...nothing more.
The truth is that 99.999% of the people on this planet are not serious about tackling the overwhelming environmental issues confronting us. Want proof? Ask them if they think 3% global economic growth is a good thing - all will cluelessly say "Yes" - with no comprehension about the implications of said growth on the natural world.
The good news is that we don't have to do a THING to solve the eco-problems. Reality is going to solve them for us in the time honoured fashion: Plague, Famine, War and Death (to which we can now add Floods and Drought).
40% of America (at least) is batshit nuts. One of the 40% is Sarah Palin, who can be seen in this video from 2005 enjoying a blessing from her pastor, protecting her from witchcraft. Quote from her Holyman:
We need God taking over our education system... If we have that in our schools, we will not have kids being taught how to worship Buddha, how to worship Mohammed. We will not have, in their curriculum, witchcraft, and sorcery. Is anybody hearing me? The other area is in the area of media. We need believers in the media. We need God taking over the media in our lands... And the last area is in the area of government. Hello? We need believers there. We need men and women of integrity. You know, as the secretaries of state. We need them right there. People that are born again, spirit-filled; people who know God, and who are serious with God.
I'm guessing Palin & HolyJoe aren't big Harry Potter fans.
Worried that welfare costs are rising as the number of taxpayers declines, state Rep. John LaBruzzo, R-Metairie, said Tuesday he is studying a plan to pay poor women $1,000 to have their Fallopian tubes tied.
"We're on a train headed to the future and there's a bridge out," LaBruzzo said of what he suspects are dangerous demographic trends. "And nobody wants to talk about it."
LaBruzzo said he worries that people receiving government aid such as food stamps and publicly subsidized housing are reproducing at a faster rate than more affluent, better-educated people who presumably pay more tax revenue to the government. He said he is gathering statistics now.
Now before we go jumping all over this guy - OK, this f_cking asshole, let me make this clear: I think he's half right. We should sterilise people - but not just the poor. This option should be available to everyone who wants it. I'd offer a little more than $1,000, to make it more palatable to the middle classes as well. At this point, $3,000 will have them lining up at the clinic for their little baggie of Weimar Dollars. This way, we'd get some decent population reduction, in a humane manner. I'd make the program global - a better way to reduce global conflict than all the cack-handed UN interventions put together.
Making suicide kits available might also be considered. I'm currently looking into that to see how feasible it is.
But we're in this mess, ultimately, because our political elites thought it was good social policy to encourage banks to give mortgages to uncreditworthy people, resulting in what Sailer months ago called the "Diversity Recession" (if this doesn't work, make that the Diversity Depression). In other words, if poor people in general, or blacks or Hispanics in particular, were less likely to be approved for a mortgage, the only possible reason was racism or classism or whatever. Thus "creditworthiness" was an illegitimate, dead-white-male concept, like middleclassness. Because, after all, isn't everyone entitled to credit? Therefore, I propose any bailout bill start with these words: "It is the sense of Congress that credit is not a civil right."
Impressive that he was able to type that with a triangular white hat on his head.
Thankfully, in India, poor people still have spine enough to murder corrupt CEOs:
“CEO murdered by mob of sacked Indian workers” runs the newsflash going around the internet, and we regard it in the spirit of gentle approval. Beatifications all around, perhaps?
The poor—whom we have always with us, because they’ve got systems in place to make sure we’ve got a plentiful supply on hand to do the dishes—occasionally assert that their lives have some worth. As is correct. Except here in the USA, where for some reason the underclass rolled over and said the hell with it sometime after the 1930s, and we haven’t had a decent mob action since. What is it with this sick acceptance of contempt and abuse past the point when even Jesus himself would say, “I’ve had it, get my nunchucks”? How can it be that ex-Enron executives walk the streets without fear, that Katrina sufferers didn’t do the Cheney Stomp when he showed up there for his photo op? Kudos and all to that guy who said, “Fuck you, Mr. Cheney!” on camera, right to his face—beatification on that one, stat—but that’s a palliative, a nice thought, shows his heart’s in the right place. What we need is action, mob action, torches optional.
European banks face greater capital shortages than their U.S. counterparts, but have become too big for any one European country to save, according to an article published Saturday by European economists Daniel Gros and Stefano Micossi on the Centre for European Policy Studies’ Web site.
That means a rescue of the European financial sector like the $700 billion plan proposed by the Bush administration over the weekend would be difficult, requiring coordination by the European Central Bank with the participation of all European countries.
The “overall leverage ratio” - a measure of total assets to shareholder equity - of the average European bank is 35, compared with less than 20 for the largest U.S. banks, the economists say, and relatively small writedowns on their assets could have a devastating impact on a bank’s capital.
“If ever they were forced into a firesale, they could go very quickly into insolvency,” said Gros, who is director of the Centre for European Policy Studies.
If America is to adopt socialism, why not have socialism for the poor, rather than for the rich? Why should American households that earn $50,000 a year subsidize Goldman Sachs partners who earn $5 million a year?
Believe it or not, there is a rational explanation, and quite in keeping with America's national motto, E pluribus hokum. Part of the problem is that Wall Street, like the ethnic godfather in the old joke, has made America an offer it can't understand.
It's probably going to be another freaky week, so let me try to start with some fun! Watch this video of a dead-behind-the-eyes RNC delegate (is there any other kind?) expound his views on the need for bombing Iran:
Well, what happened to this charming young patriot? Did he volunteer to join the military, and put his ass where his mouth is? Ohhh Nooo....something far more interesting happened to our murderous half-man:
He met her in the bar of the swank hotel and invited her to his room. Once there, the woman fixed the drinks and told him to get undressed.
And that, the delegate to the Republican National Convention told police, was the last thing he remembered.
When he awoke, the woman was gone, as was more than $120,000 in money, jewelry and other belongings.
Hooray for thieving whores!!!
If America's "free press" were run on the basis of informing the public, Mike Whitney would have a primetime TV show, instead of being confined to the dark corners of the internet: Grasping at straws.
The problems cannot be resolved by shifting the debts of the banks onto the taxpayer. That's an illusion. By adding another $1 or $2 trillion dollars to the National Debt, Paulson is just ensuring that interest rates will go up, real estate will crash, unemployment will soar, and foreign central banks will abandon the dollar. In truth, there is no fix for a deleveraging market anymore than there is a fix for gravity. The belief that massive debts and insolvency can be erased by increasing liquidity just shows a fundamental misunderstanding of economics...Besides, why should the taxpayers be happy that the stocks of Morgan Stanley, Washington Mutual and Goldman Sachs surged on the news that there would be a government bailout yesterday? These banks are essentially bankrupt and their business models are broken. Keeping insolvent banks on life support is not a rescue plan; it's insanity.
The next stage will be a run on thousands of highly leveraged hedge funds. After a brief lock-up period, investors in such funds can redeem their investments on a quarterly basis; thus a bank-like run on hedge funds is highly possible. Hundreds of smaller, younger funds that have taken excessive risks with high leverage and are poorly managed may collapse. A massive shake-out of the bloated hedge fund industry is likely in the next two years.
Even private equity firms and their reckless, highly leveraged buy-outs will not be spared. The private equity bubble led to more than $1,000bn of LBOs that should never have occurred. The run on these LBOs is slowed by the existence of “convenant-lite” clauses, which do not include traditional default triggers, and “payment-in-kind toggles”, which allow borrowers to defer cash interest payments and accrue more debt, but these only delay the eventual refinancing crisis and will make uglier the bankruptcy that will follow. Even the largest LBOs, such as GMAC and Chrysler, are now at risk.
We are observing an accelerated run on the shadow banking system that is leading to its unravelling. If lender-of-last-resort support and deposit insurance are extended to more of its members, these institutions will have to be regulated like banks, to avoid moral hazard. Of course this severe financial crisis is also taking its toll on traditional banks: hundreds are insolvent and will have to close.
The real economic side of this financial crisis will be a severe US recession. Financial contagion, the strong euro, falling US imports, the bursting of European housing bubbles, high oil prices and a hawkish European Central Bank will lead to a recession in the eurozone, the UK and most advanced economies.
How much more can the US taxpayer take? It sounds insane, but the liabilities being taken on by the Fed and the US Treasury are now so enormous that the government itself could default. No?
Tim Bond of Barclays Capital, while conceding that the rescue was necessary to avoid the risk of depression, said: “The volume of fresh government borrowing and the fast expansion of the Fed’s balance sheet are both negatives for the dollar, carrying a potential risk of increased inflation.”
It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.
Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.
“When you listened to him describe it you gulped," said Senator Charles E. Schumer, Democrat of New York.
Take a minute to digest that. As late as THURSDAY NIGHT, Washington's political class were clueless as to the scale of the danger in the financial system. What are they doing? What are they reading? Do they have a clue? Do they live in a F_CKING FANTASY LAND? The most cursory reader of this website was better informed (until Thursday night) of the situation than the political "elite" in DC.
Who am I kidding? You're STILL more informed!
Maybe they've spent too much time trolling for sex in men's bathrooms, screwing hookers, trying to bugger teenage congressional pages, having BJs in the oval office and "raising money" for their sqaulid campaigns to notice the real world falling apart around them.
What else don't they know? Do you even want to hazard a guess?
So much for the hope that they will "help" us.
These moral and intellectual abortions will not save you, or your family.
One more time: "YOU'RE ON YOUR OWN".
Sometimes updating this site is like shooting fish in a barrel:
Bush says he didn't realise how serious it was.
Unlike you GWB, I've spent the last few weeks years reading books, papers and websites. I've been screaming into the digital ether about the dangers of financial collapse for months. Others have predicted this years earlier. I first read about the danger posed by the Derivative Bubble in 1996. Meanwhile, you were slapping the asses of beach volleyball players at the Olympics (and who knows what else...)
Hey, I'm just an obscure half-drunk cartoonist, and you're the full-drunk President of the United States.
I suppose I should be more tolerant of your pitiful ignorance.
President George Bush had some sobering words. He acted so boldly, he said yesterday, only after realising just "how severe the problems were".
The President said his first instinct was to let the free markets work [Yeah, stick to Plan-A, you dimwit. Finish the destruction of your country]. But then he heard from experts who said the problem was so significant and so deep that massive federal help was needed. "America's economy is facing unprecedented challenges, and we are responding with unprecedented action," Mr Bush told reporters in the White House rose garden.
Unprecedented. Yup. That sums up Dubya's era, most nicely. Permit me borrow an acronym from recent Irish political history that may be unfamiliar to most readers:
GUBU.
Grotesque, Unbelievable, Bizarre, UNPRECEDENTED.
Hail to thee, President GUBU.
...the status of America as a functioning democracy becomes ever more questionable. Yesterdays anouncement by the government, and the gigantic new rescue plan -the next in a by now long list- that will be unveiled within the next 72 hours, made some European leaders cast doubt on US claims of propagating a free market.
The way in which this process is undertaken can perhaps best be illustrated by the founding of the Federal Reserve in 1913. The Constitution explicitly and expressly reserves the control over the nation’s money supply to Congress. 95 years ago, an interpretation of this was accepted that stated that this meant Congress could hand over the control to whomever it pleased. And it decided, in a weird session, to cede its Constitutional power to the Federal Reserve, which was and is made up of a select group of private bankers.
But let’s seek an analogy here. Say that I have, with the consent of both teams, been named the referee in a football match. Does that imply that I have the right to, at any point during the game, hand over the whistle to the local drunk, to the coach of one of the teams, or to the town bookmaker who has vested interest in a favorable outcome? It may be a hard question to answer, but I would venture to say no such right is implied...
...As the misery among the American people increases, you may think back of when and why I talked about a potential political crisis. It is easy to fool and manipulate a prosperous people. And as the past decade has shown, it's even easy to fool and manipulate people into thinking they're -still- prosperous. But it is an entirely different matter to convince cold and hungry people that they are warm and well-fed.
One last thought: $700 billion doesn't even begin to to buy a dent into to the "wealth" of stinking mob Kleenex that is out there. What are these guys thinking? I don't know, perhaps it's just another giving it to you piecemeal event. I sure as hell am not going to volunteer to be downwind of the smell of this operation. And I humbly suggest you don't either.
There are a number of signs that the financial system is at the brink of collapse and that Wall Street is headed for a 1929-type crash. Depositors have begun to withdrawal their savings from money market funds alarmed by the gyrations in the market and the daily deluge of bad economic news. According to the Washington Post, funds dropped "by at least $79 billion, or about 2.6 per cent" on Wednesday alone. The withdrawals are the equivalent of a slow bank run just at the time when stressed commercial banks need access to cheap capital to finance daily operations and provide loans for a steadily weakening economy. There's also been a surge of panic-buying of US Treasurys which is considered the safest of investments. According to the Wall Street Journal, during Wednesday's market-rout, "investors were willing to pay more for one-month Treasurys than they could expect to get back when the bonds matured. Some investors, in essence, had decided that a small but known loss was better than the uncertainty connected to any other type of investment. That's never happened before."...
...If ever there was proof of Plunge Protection Team activity; Thursday's market is it. The market was sinking fast at midday even though the Fed just added nearly $250 billion in liquidity to the global system. Investors were buying short-term Treasurys in record numbers, the VIX "fear gauge" was soaring, money markets were collapsing, and the aftershocks from defaulting AIG and Lehman were still being felt around the world. Were investors really that eager to buy back battered investment bank stocks or was the PPT busy panic-buying up futures and forcing the market upwards 617 points?...
"Asia’s savings have, in essence, bankrolled American spending for decades (but) Asian interest in American assets is wilting, a trend that seems to have started over the summer...Little-noticed data released by the Treasury Department on Tuesday showed that a sharp shift in international capital movements began in July. Private investors pulled a net $92.9 billion out of the United States, after putting $46.8 billion into American securities in June.
Foreign central banks and investors have turned off the spigot. They can see that the US financial system is teetering and that the dollar is weakening. "The perceived risk of U.S. government debt, long held to be absent of any default risk, also climbed to a record yesterday as the government's involvement in bailing out financial markets weighed on its own balance sheet." The "full faith and credit" of the United States government is slipping. US debt will be downgraded. Triple A is no longer guaranteed. America's stock just moved to Level 3 assets. The US is now a subprime economy on life support.
Presently, "there is roughly $6.84 Trillion in bank deposits. $2.60 Trillion of that is uninsured. There is only $53 billion in FDIC insurance to cover $6.84 Trillion in bank deposits. Of the $6.84 Trillion in bank deposits, the total cash on hand at banks is a mere $273.7 Billion."
$273.7 Billion is a paltry sum, insufficient to meet the needs of even a minor run on the banking system. The storm hasn't even touched ground in middle America, and already the system is buckling. 2009 is shaping up to be bleak, indeed.
The claim of the Chicago School that prosperity will spring from markets left free of government interference is challenged by developing facts. Recurring financial crises appear have jelled into a pattern of 10-year cycles, as evidenced by the crashes of 1987, 1997 and 2007. By now, after three decades of hegemonic dominance in government policy and private enterprise philosophy, the Chicago School theology can no longer rest on its secure platform of political power disguised as theoretical supremacy.
The collapse of market fundamentalism in economies everywhere is putting the Chicago School theology on trial. Its big lie has been exposed by facts on two levels. The Chicago Boys' claim that helping the rich will also help the poor is not only exposed as not true, it turns out that market fundamentalism hurts not only the poor and the powerless; it hurts everyone, rich and poor, albeit in different ways. When wages are kept low to fight inflation, the low-wage regime causes overcapacity through over investment from excess profit. And monetary easing under such conditions produces hyperinflation that hurts also the rich. The fruits of Friedman test are in - and they are all rotten.
But the Chicago School is more than just a movement of economic theory. In recent decades, it has become an aggressive agent of intellectual imperialism, taking on the dusty mantle of social Darwinism, applying its economic doctrines to other disciplines such as political science, legal theory, history, sociology, international relations and even theology.
Getting rich has become the equivalent of doing God's work in market capitalism. Yet many religions consider the attitude toward money as often more indicative of a person's true worth than the mere possession of it. The same is true for civilizations. This explains why modern societies, whose members can be be obsessed with a single-minded quest for material wealth, are constantly faced with recurring crises of values. The pursuit of maximization of wealth leads inevitably to the betrayal of human values that would otherwise forbid unconscionable exploitation of and impersonal disregard for others. Human values cannot be intermediated through price, notwithstanding the infamous World Bank memo by Larry Summers on the economic efficiency gained by allocating pollution to the Third World.
Here's a headline we should have caught a year ago:
Lehman hires Jeb Bush as private equity advisor
Thu Aug 30, 2007 5:36pm EDT
NEW YORK, Aug 30 (Reuters) - Lehman Brothers has hired Jeb Bush, brother of the President of the United States, as an advisor to its private equity business, a source familiar with the situation said.
Lehman hired another relative of U.S. President George W. Bush last year--George Walker, a second cousin, who heads up the bank's asset management business.
Jeb Bush is the former governor of Florida.
Lehman Brothers declined to comment.
Why the extraordinary measures for Fannie, Freddie and AIG?
The answer may have less to do with saving the insurance business, the housing market, or the Chinese investors clamoring for a bailout than with the greatest Ponzi scheme in history, one that is holding up the entire private global banking system. What had to be saved at all costs was not housing or the dollar but the financial derivatives industry; and the precipice from which it had to be saved was an "event of default" that could have collapsed a quadrillion dollar derivatives bubble, a collapse that could take the entire global banking system down with it...
...derivative trades have grown exponentially, until now they are larger than the entire global economy. The Bank for International Settlements recently reported that total derivatives trades exceeded one quadrillion dollars – that’s 1,000 trillion dollars. How is that figure even possible? The gross domestic product of all the countries in the world is only about 60 trillion dollars. The answer is that gamblers can bet as much as they want. They can bet money they don’t have, and that is where the huge increase in risk comes in.
Citigroup asserts that gold will benefit from both the "gloom & doom" and "muddle-through & monetization" scenarios, possibly regaining $1,000 per ounce at year-end and even doubling or tripling in the long term.
"Frankly, we're surprised, that gold is not already at $2,000 an ounce," declared Citigroup analysts John H. Hill and Graham Wark.
In an analysis published Wednesday, Hill and Wark suggested, "Gold appears to be entering a powerful new phrase of investment demand tied to safe-haven and monetization themes."
"We have been surprised that gold has been so heretofore quiet, and have expected a much strong and more immediate response to the government takeover of GSE [Government Sponsored Enterprises]/mortgage insurance entities, and broker-deal bankruptcies," they wrote. "It is notable that hard-core goldbugs have been proven correct in the decade-long contention that an overwhelmingly vast and complex pool of nested financial derivates would ultimately result in cascading defaults and ruin for major portions of the banking system. Frankly, we're surprised that gold is not already at $2,000 per ounce."
"Our sense is that gold has been temporarily depressed by a series of ephemeral, short-term trading dynamics that served to mask strong physical off-take in what is ultimately a tiny market," the analysts said. "We continue to regard as a barometer in the grand battle between hard assets and paper assets."
To hear Donald Coxe tell it, the commodity selloff ripping through Canada's stock market is no accident. It is the result of a deliberate, brilliantly executed plan hatched at the highest levels of the U.S. Federal Reserve and Treasury.
Mr. Coxe is no paranoid conspiracy theorist. As the chairman and chief strategist of Harris Investment Management in Chicago, he is one of the most respected investment authorities in North America...
...“This has done more damage to my personal wealth than anything in the last 20 years,” he said in an interview yesterday. But he has too much respect for how the U.S. authorities engineered the collapse in commodities – a move he said was necessary to shore up the global financial system – to be bitter.
“My attitude is, goddamn it, they're good … it was brilliant.”
New York Mayor Michael Bloomberg warned Wednesday a "next wave" of financial pain may come from overseas if foreign entities stop buying U.S. debt.
The billionaire mayor spoke before an audience at Georgetown University, telling them it's not clear who is going to continue buying U.S. debt as financial firms try to cope with a crisis of confidence on Wall Street.
“Institutions so far have written down $550 billion globally of bad debt,” said Daniel Alpert, managing director of Westwood Capital. “We think that when you add up all the problems in the residential housing market still to come — further erosion of housing prices, mortgage foreclosures and so on — we are going to need another $1 trillion of write-downs.”
In other words, for all the toxic securities that Wall Street has acknowledged holding, there will be yet more mortgage-backed paper that will go bad as the housing market continues to fall. As much as we all hope the worst is over, it’s probably not.
And as much as we might hope that the government finally has the answer, it probably doesn’t.
This is the denouement of the 25-year debt buildup which was undertaken mostly by the financial sector putting themselves on steroids to-- get bigger and bigger and bigger. And we've finally gotten to the point where the bubble isn't sustainable anymore but a lot of Wall Street is dedicated to minimizing the spattering of the bubble, so to speak.
With the nationalisation of Fannie and Freddie, comrades Bush, Paulson and Bernanke started transforming the US into the USSRA (United Socialist State Republic of America).
This transformation of the US into a country where there is socialism for the rich, the well-connected and Wall Street (ie, where profits are privatised and losses are socialised) continues today with the nationalisation of AIG.
McCain thinks that Health-care should be run like the banking system. Thank you Lord, for this skrag-end poser. I need a good laugh from time to time.
Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.
I guess the fact that Palin's "HAWT" isn't saving her from the fact that she's the most underqualifed candidate for the Whitehouse since - well, since Georgie boy. She only got her passport LAST YEAR! Well, if she wins, at least she'll get to see the world, and make an utter ass of herself on the World Stage. Make a cartoonist happy - VOTE McCAIN/PALIN 2008!
In the intertwined world of energy and geopolitics, it is the Ukrainians who likely will be the first to feel the wrath of Gazprom's New World Order for their temerity in attempting to join NATO. Kiev currently pays Gazprom $179.50 per tcm but has been put on notice that prices by year's end will reach European prices, which will put further pressure on the already fractious government as energy prices effectively double.
As for European and U.S. supporters of pipeline chimeras such as Nabucco, the handwriting seems to be on the wall for the most naive. Wall Street had best take its declining billions and look elsewhere for energy, as the Russian bear has effectively extended its paw over the Caspian for the foreseeable future.
In reflex tests of 46 political partisans, psychologists found that conservatives were more likely than liberals to be shocked by sudden threats...
"People are experiencing the world, experiencing threat, differently," said University of Nebraska political scientist John Hibbing. "We have very different physiological orientations."
The study, published today in Science, has not yet been duplicated, but adds a potentially troubling piece to the puzzle of biology, behavior and politics...
Though the Science study's authors cautioned against an overly broad interpretation of their findings, the results suggest that fear leads to political conservatism.
"Threatening situations do indeed seem to increase people's affinity for politically conservative opinions, leaders, and parties," said New York University psychologist John Jost.
Maybe if they'd stop watching the piece-of-shit "entertainment" known as "24", they'd grow a spine.
Among the environmental casualties of Wasilla's frenzied development was Palin's own front yard, Lake Lucille. The lake was listed as "impaired" in 1994 by the Alaska Department of Environmental Conservation, and it still carries that grim label. State environmental officials say that leaching sewer lines and fertilizer runoff caused an explosion of plant growth in the lake, which sucked the oxygen out of the water and led to periodic fish kills.
"Sarah," a recent biography of Palin by Kaylene Johnson, features a photo of a beaming Palin, sitting in a rowboat on Lake Lucille clutching a fishing rod. But, according to local fishermen, the Republican vice-presidential candidate would have to be very lucky to reel in something edible.
The Alaska Fish and Game Department dutifully stocks the lake with coho salmon and rainbow trout each year -- but the fish don't last long.
Fishing on the lake "was tough," reported Alaska fishing guide Carlyle Telford on his Web site when he tried his luck on Lake Lucille last year, "because the vegetation is decaying and floating. When you retrieve every cast, the fly comes back with crud on it."
Aw, who cares? In the infantile jargon of American pop culture, Palin is "HAWT".
At some point these so-called "dwarf planets" are going to be recognised as "planets". So, say hi to Haumea.
Russia snubbed its nose at the United States today by announcing plans to sell military equipment to both Iran and Venezuela.
The head of the state arms exporter said that Russia was negotiating to sell new anti-aircraft systems to Iran despite American objections...
...Reports have circulated for some time that Russia is preparing to sell its S-300 surface-to-air missile system to Iran, offering greater protection against a possible US or Israeli attack on the Islamic republic's nuclear facilities. The missiles have a range of more than 150 kilometres and can intercept jets approaching at low altitudes.
Arctic sea ice has reached the second lowest extent ever recorded, according to the US national snow and ice centre, and a new map shows how far the 2008 melt has receded compared to the historical average.
The map, produced by Collins, illustrates that the area of ice that is at least five years old has fallen by more than half since 1985. It comes as the Northwest Passage, above north America, and the Northeast Passage, over the top of Russia, are both free of ice for the first time.
As usual, the election is a popularity contest run for dimwits. And to elect a dimwit, which is worse. We’ve got this woman Palin, an angry Betty Crocker, absolutely unqualified for the presidency in case McCain goes tits up. She’s ignorant of foreign affairs, at best moderately bright, a whackjob Christian, and a “pit bull.” This is said admiringly.
Oh good. An aggressive ignorant dull-witted pit bull. How is that better than a passive ignorant torpid pit bull?
Oh god, McCain. A senescent replica of Bush who says he wants to stay in Iraq a hundred years. Actually, the idea has its appeal. Why doesn’t he go there and get a start? A perfect match for Palin, another pugnacious dunce, bottom of his class in boat school—the Naval Academy, I mean. He says he plans to “confront Russia.” Now there’s a plan. It seems that American policy is to make enemies of everyone who has oil or nuclear weapons. Or doesn’t.
Meanwhile the Pentagon prepares for war with China. Is it something in the water?
Next we have Obama, whose only qualification is that he’s maybe a tad less bellicose than the rest of these Oprah Neanderthals. His veep, Biden, is a grey nonentity, a cipher with no characteristics. Well, that’s better than the other three. I mean, he’s as close to no candidate as we can come.
What are we doing? The country has gone nuts. If a giant squirrel began collecting us and storing us for winter, I’d understand. Three hundred million people, and these factory rejects are the best we can do?
Bush was AWOL during Vietnam. He was AWOL during 911. He was AWOL during Katrina. He was AWOL during the 2008 Republican Convention.
And guess what?
The witless blueblood coward is AWOL AGAIN.
Are you surprised? President AWOL, ladies and gents - the Born Again MBA President. I present to you, for your delectation and delight - a "lump of shit in a silk stocking". Too busy sleeping off the booze and pills to DO HIS JOB.
Heck of a job, Georgie!
I now have $100 in a bank. The rest is - let's say - well hidden. I've enough food to see me through 2 to 3 months in my current residence. I'm not saying that the big one is about to hit - The System has proven itself to be incredibly resilient. What I am saying is that the chances of a serious discontinuity are now so high, and the economy so unstable, that extreme measures are vital. A week from now we might be laughing about this, or chewing tree bark and scraping chewing gum off the sidewalk.
Another thing: "merger" = "failure". When two banks merge, it means that one of them is effectively bankrupt. The same thing has been happening in the energy scene for years now - where once there were many energy companies, now there are about a dozen. Mergers serve to mask bankruptcy.
Keep your ears open for the "D" word - DERIVATIVES. If this blows, it's game over - by that, I mean people dying in the streets: an economic Hurricane Katrina in every village, town and city on the planet. I've been waiting for this particular horror movie since 1995...and the ground is starting to rumble. PRAY that the powers that be can hold it together. This graph should make the scale of the problem clear:
Whatever happens in the next few days, the threat of something nasty happening is going to be hovering over us for months to come. Yippee.
As for the Feds? They can't even take care of 300 national guardsmen. Think about that - they can't even provide drinking water for 300 of their own soldiers. Do you want to trust your life, and the lives of your families to these criminally incompetent buffoons?
This is a bit different than a recession, although we’ll likely have one of those as well. A recession simply means that the economy stops growing for a little while. Countries typically shake those off within 6-12 months or so. What effect some of the largest banks in the world collapsing upon one another will have is as yet unknown, but public policy experts can’t rule out the possibility that we’ll soon all be clad in leather clothes, wandering a sun-parched wasteland searching for petrol. The experts also state that they can’t discount the possibility that the survivors will envy the dead.
In the 21st century, the US economy has been kept going by debt expansion, not by real income growth. Economists have hyped US productivity growth, but there is no sign that increased productivity has raised family incomes, an indication that there is a problem with the productivity statistics. With consumers overloaded with debt and the value of their most important asset--housing--falling, the American consumer will not be leading a recovery.
A country that had intelligent leaders would recognize its dire straits, stop its gratuitous wars, and slash its massive military budget, which exceeds that of the rest of the world combined. But a country whose foreign policy goal is world hegemony will continue on the path to destruction until the rest of the world ceases to finance its existence.
Most Americans, including the presidential candidates and the media, are unaware that the US government today, now at this minute, is unable to finance its day to operations and must rely on foreigners to purchase its bonds. The government pays the interest to foreigners by selling more bonds, and when the bonds come due, the government redeems the bonds by selling new bonds. The day the foreigners do not buy is the day the American people and their government are brought to reality.
This is not the financial position of a superpower.
Officials were initially cool to the idea of rescuing AIG, the nation's largest insurer with $1.1 trillion in assets, but are reportedly changing their mind as the ramifications of such a failure become clearer...
...If AIG were to fail, the global ripple effects would be unprecedented, said Robert Bolton, managing director at Mendon Capital Advisors Corp. It has $1 trillion in assets and operates in 130 countries.
AIG is a major player in the credit default swaps market, an insurance-like contracts that guarantee against a company defaulting on its debt. Also, it is a huge provider of life insurance, property and casualty insurance and annuities.
"If AIG fails and can't make good on its obligations, forget it," Bolton said. "It's as big a wave as you're going to see."
The impact yesterday was clear for Jan Ziebell, 66, a retired probation agency employee from Pewaukee, Wisconsin, who was vacationing in Manhattan when the Standard & Poor's 500 Index fell the most since the September 2001 terrorist attacks.
"We're watching our nest egg for retirement shrink," Ziebell said.
"We Ought to Sue"
Jay Leslie, 60, of East Brunswick, New Jersey, said he may not be able to retire as planned in five years.
"I may have to work longer," said Leslie, who sells women's clothes. He said he blamed Washington, not Wall Street. "The government didn't have any idea how serious this was," he said. ...
...For Chaz Harris, the developments didn't convince him that the U.S. was in any trouble.
"The economy's pretty bad, but people are still spending money on what they want," said Harris, 20, an unemployed warehouse worker who lives with his parents in Weehawken, New Jersey. Referring to the Take-Two Interactive Software Inc. video game, he said, "I mean, `Grand Theft Auto' did half a billion in seven days. So the economy's not that bad."
This might lighten the mood - a great Richard Dawkins TV show, "Enemies of Reason". Richard takes a stroll in loo-loo land. It's worth watching for the expression on his face as he encounters angelologists and assorted strangelings. Pure comedy!
"You have 8 paths of energy flowing through you." he is told by a healer.
"Can they be seen with a microscope?" he replies.
I love him! (In a Viking, non-gay way).
Enemies of Reason Part 1 Enemies of Reason Part 2
Chemical in cans (Bisphenol-A) can give you diabetes, and heart disease. I don't know why this is news now - I commented on it in October 2007. The health risks of this stuff are well known.
Dennis Perrin nails what's wrong with American political satire - in this case SNL (though it also applies to "The Daily Show" and "The Colbert Report", though to a lesser degree).
This is network "satire," 2008. A comedy celeb gently imitating an emerging political celeb, who could very well be the next vice-president. Nothing too sharp or penetrating. Nothing that exposes the criminality just beneath the false, bleached smiles. Whatever it might have been a thousand years ago, SNL is currently part of the propaganda process, not making public figures uncomfortable, but making its audience comfortable with public figures. The routines are repeated all over the news channels and online, which drives home the perception that it's all in good fun, that those who seek to rule us aren't all bad, especially if they laugh along with the comics portraying them.
Oilseed rape can clean toxic soils. If you haven't seen rapeseed in a field, you can't imagine the color. It pops out of the background like nothing else. It has a unique, acid quality - almost alien.
The Central banks are printing money to keep the boat afloat. And well they should. Dow's up, down, sideways.
The U.S. Federal Reserve pumped in $50-billion (U.S.) Tuesday morning, and signalled there would be more to come later in the day if necessary.
The Fed said it “stands ready to arrange further operations later in the day, as needed.”
The Fed move comes on the heels of a $70-billion injection on Monday, and follows up on massive injections from central banks in Europe and Japan overnight.
The Bank of Canada intervened with $2.3-billion on Monday, but has not made public any action on Tuesday.
The liquidity injections are aimed at bringing down the cost of inter-bank lending on global money markets. By that measure, the central bank actions have not been overly successful. Spreads are well above their credit-crisis peak from last December.
“The global money markets are completely frozen right now,” said Derek Holt, vice-president of economics at Scotia Capital. “Nobody wants to deal with anybody else in this market.”
But central bank liquidity measures may well be mitigating the plunge in equities, he added. That's because most central banks, and the Fed in particular, have broadened the type of collateral they will take. The Fed's announcement on the weekend that it would even take equities as collateral could well be preventing a major rout in North American stocks, Mr. Holt said, since “there's less of that stuff going into the market.”
Canada's banks seem to be in good shape, according to the article above.
Foreclosures hit another record high in August: 304,000 homes were in default and 91,000 families lost their houses.
More than 770,000 homes have been repossessed by lenders since August 2007, when the credit crunch took hold.
Guys, if you're not scared, then YOU'RE NOT PAYING ATTENTION!
On the heels of Lehmans, is AIG - an organ that I hadn't heard about until 24 hours ago. That's the terrible beauty of this - so many entities, all capable of tearing the global economy to shreds. The powers that be still have many levers to pull, but if they fail then I suggest that you acquire a copy of "Mad Max 2". It'll be a window into the future.
What did I do yesterday? Pulled another $700 out of WAMU, and bought a lot of canned food. No kidding. If I'm wrong, no biggie. I like beans, and I like little pieces of green paper. If you're wrong, God help you.
The latoc forum has two financial gurus - Jeromie and Robert Denner. Here's Jeromie's take on the situation:
[A failure of] AIG, tanks the system. I have been messing around all night looking for hints about what is going on. Reading between the lines, they have no option but to carve it up and present a fait accompli as in the Merrill deal last night. I got some input that a huge piece of it might well be taken by Berkshire Hathaway. The only way they can get out from under is to end run the Credit Default Swaps. Essentially, I suspect, the proceeds from the carve up go to pay off the CDS claims. In short, the shell left at the top has whatever cash is available and that is that.
This is the ultimate melt down week in the money system. They contain it now or never. F&F were going concerns and still are going concerns. Here no one seems to know but obviously from Gov Patterson's press conference the problem was underway all weekend.
Robert's take is here. A little less doomerish - but only slightly.
American International Group Inc.'s credit ratings were downgraded by Standard & Poor's and Moody's Investors Service, threatening efforts to raise emergency funds to keep the company afloat.
The ratings downgrades occurred after two people familiar with the situation said that the biggest U.S. insurer by assets is seeking $70 billion to $75 billion in loans arranged by Goldman Sachs Group Inc. and JPMorgan Chase & Co. to replenish capital.
AIG Chief Executive Officer Robert Willumstad has tried to raise cash to forestall debt-rating downgrades that could hobble the insurer. A ratings cut may have ``a material adverse effect on AIG's liquidity'' and trigger more than $13 billion in collateral calls from debt investors who bought swaps, the insurer said in an Aug. 6 filing...
..."I don't know of a major bank that doesn't have some significant exposure to AIG," said Kenneth Lewis, chief executive officer of Bank of America Corp., in a CNBC interview. An AIG collapse would "be a much bigger problem than most that we've looked at."
The backseat generals started early. On August 16, a week after the fighting between Russian and Georgian troops started, the neocon magazine Weekly Standard featured a chirpy, upbeat article listing all the hardware we could ship to the Georgians to help them fight a nice, long, bloody guerrilla war.
It was classic Tom Clancy stuff, all based on the idea you make war with stuff, not people. These guys just won’t face the fact that for the guerrilla, the key weapon, the only weapon that matters, is people—and starting a guerrilla war means sentencing most of the people in your address book to a very nasty death.
Now we’ve got Sarah Palin, everybody’s favorite sniper-mom, volunteering to go to war with Russia over South Ossetia.
As far as I know, Palin isn’t volunteering to go there herself. She sticks to targets that don’t shoot back, like moose. But then that’s what all these eager volunteers have in common: none of them are actually going to go over and fight the Russians themselves, and as far as I know none of them even thought about asking the poor Georgians whether they’re up for the sheer Hell of a guerrilla war. All the Georgians wanted was to join NATO, make a little money and maybe get a used car. They’re like a guy who joins the Army for a college scholarship and finds himself on the front lines—except they’re not even in NATO yet. We’re volunteering them to make the ultimate sacrifice and we haven’t even let them in the club yet.
The city was almost destroyed in The Great Storm of 1900 which struck on September 8 of that year and killed 6000 people. The Thomas Edison Company has historic film footage of the destruction. So it seems a bit odd (I understate) that the geniuses at the Department of Homeland Security and NIH decided that Galveston was a good place for one of the first two high containment biodefense laboratories to be built after 9/11 (the other is situated in a densely populated neighborhood in Boston, another sterling choice). But put in Galveston they did and now it's almost built. And another monster storm (track it in real time here) i
