Mike Whitney: Mushroom Cloud over Wall Street

September 23, 2008

In his latest post on his blog at The Smirking Chimp, Mike Whitney paints a very dark picture ahead for the U.S.:

“One bank to rule them all;
One bank to bind them…”

These are dark times. While you were sleeping the cockroaches were busy about their work, rummaging through the US Constitution, and putting the finishing touches on a scheme to assert absolute power over the nation’s financial markets and the country’s economic future. Industry representative Henry Paulson has submitted legislation to congress that will finally end the pretense that Bush controls anything more than reading the lines from a 4′ by 6′ teleprompter situated just inches from his lifeless pupils. Paulson is in charge now, and the coronation is set for sometime early next week. He rose to power in a stealthily-executed Bankster’s Coup in which he, and his coterie of dodgy friends, declared martial law on the US economy while elevating himself to supreme leader.

“All Hail Caesar!” The days of the republic are over.

Section 8 of the proposed legislation says it all:

“Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”

Right; “non-reviewable” supremacy.

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Read the remainder of this post here.

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Arianna Huffington: The Bailout Plan: Welcome to Economic Shock and Awe

September 23, 2008

In the preface to her post, Arianna Huffington has this to say about the Paulson bailout package:

“Over the past 30 years, Americans have been bombarded with sermons evangelizing for the free market religion of the Right. In the course of selling us on buying, the market-worshippers tried to convince us that all concerns about the most vulnerable members of society could be left up to the soulless, self-correcting calculus of supply and demand. Government involvement was an anachronism, regulatory oversight an impediment. The last few weeks have demolished that notion. In the battle over the proper role of government, the high priests of the church of the Free Market — including Bush, Paulson, and the Masters of Wall Street — have suffered a monumental defeat. So why are we allowing them to dictate the terms of their surrender?

Arianna begins her corresponding article The Bailout Plan: Welcome to Economic Shock and Awe with this:

See if this sounds familiar:

There is a gathering threat to the safety of the United States. We must take immediate action. Congress must quickly grant the President and the Secretary what they want and also give them full and unfettered authority to execute the plan.

Welcome to Economic Shock and Awe (or as some have dubbed it, according to Paul Krugman, “the Authorization for Use of Financial Force”).

Even the amount of taxpayer money being bandied about — $1 trillion — is similar. Think you got your money’s worth for the Iraq war? Congratulations — you’re about to buy another pricey debacle.

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Read the rest of this article here.


Dirty Secret Of The Bailout: Thirty-Two Words That None Dare Utter

September 23, 2008

This post by Jason Linkins in The Huffington Post sheds light on the proposed Bush Administration bailout package:

A critical – and radical – component of the bailout package proposed by the Bush administration has thus far failed to garner the serious attention of anyone in the press. Section 8 (which ironically reminds one of the popular name of the portion of the 1937 Housing Act that paved the way for subsidized affordable housing ) of this legislation is just a single sentence of thirty-two words, but it represents a significant consolidation of power and an abdication of oversight authority that’s so flat-out astounding that it ought to set one’s hair on fire. It reads, in its entirety:

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

In short, the so-called “mother of all bailouts,” which will transfer $700 billion taxpayer dollars to purchase the distressed assets of several failed financial institutions, will be conducted in a manner unchallengeable by courts and ungovernable by the People’s duly sworn representatives. All decision-making power will be consolidated into the Executive Branch – who, we remind you, will have the incentive to act upon this privilege as quickly as possible, before they leave office. The measure will run up the budget deficit by a significant amount, with no guarantee of recouping the outlay, and no fundamental means of holding those who fail to do so accountable.

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Read the rest of this article here.


Mike Whitney: Full-Spectrum Breakdown

September 23, 2008

Mike Whitney calls Henry Paulson’s bailout plan “a band-aid approach to a sucking chest wound”. He goes on to say: “The debts are enormous and the pain will be substantial, but the problem cannot be resolved by crushing the middle class or destroying the currency”. Whitney’s article condemns and explains the deregulated US financial system: “Now taxpayers will pay for the lawless system which men like “industry rep” Henry Paulson put in place. That’s deregulation in a nutshell; a system that allows Wall Street banksters to create credit out of thin air and then run weeping to Congress when their swindles backfire. shows the dire consequences of an unsupervised marketplace where individual players are allowed to create as much credit as they choose”.

The system is at the breaking point, and despite Wall Street’s elation from the proposed $1 trillion dollar bailout to remove toxic mortgage-backed debt from banks balance sheets, the market is still correcting in what has become a vicious downward cycle. This cycle will persist until the bad debts are accounted for and written off for or until the exhausted dollar-system collapses altogether. Either way, the volatility and violent dislocations will continue for the foreseeable future.

And more…

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. That’s why Henry Paulson is the worst possible person to be orchestrating the so called rescue project. Paulson comes from a business culture which rewards deception, personal acquisitiveness, and extreme risk-taking. Paulson is to finance capitalism what Rumsfeld is to military strategy. His leadership, and the congress’ pathetic abdication of responsibility, assures disaster. 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.

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Read Mike Whitney’s entire article here.


Global Research: The Real State of the US Economy

August 5, 2008

This is a brutally honest, sobering piece on the US economy, which your government or the mainstream media definitely won’t tell you:

When Henry Paulson agreed to leave his job as chairman of the powerful Wall Street investment bank, Goldman Sachs to go to Washington as Treasury Secretary in 2006 he demanded extraordinary powers as de facto economic czar. He got it. Paulson is also head of the President’s Working Group on Financial Markets — the secretary of the treasury and the chairmen of the Federal Reserve Board, the Securities and Exchange Commission and the Commodity Futures Trading Commission. The Working Group is the financial world’s equivalent of the Pentagon war room. Paulson, not Fed chairman Bernanke, is the person running the Administration’s crisis management. And his recent actions indicate he has lost control as the snowballing problems from the semi-government mortgage companies Freddie Mac and Fannie Mae to the collapse of the multi-trillion dollar market in Asset Backed Securities (ABS) to the real economy are compounding into the worst crisis since the 1930’s Great Depression.

‘The US banking system is sound…’
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Read rest of this article by William F. Engdahl on Global Research here.