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Audio: 9/11 & Globalist Crash-Con-omics
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Joined: 07 Jan 2008
Posts: 967

PostPosted: Mon Oct 06, 2008 5:17 pm    Post subject: Reply with quote

Just one more example of what is unfolding on a global basis.

In extremis, the Treasury/Fed can swoop into any market to shore up asset prices. They can buy Florida property. They can even buy SUV guzzlers from the car lots in Detroit, and mangle them in scrap yards. As Bernanke put it, the Fed can “expand the menu of assets that it buys.”

There is a devilish catch to this ploy, of course. It assumes that foreign creditors will tolerate such action.

Japan entered its Lost Decade as the world’s top creditor, with a vast pool of household savings to cushion the slump. America starts its purge with net external liabilities of $3 trillion, and a savings rate near zero. Foreigners own over half the US Treasury debt, and two thirds of all Fannie, Freddie, and other US agency bonds.

But the risk of a dollar collapse is one for the distant future. Right now the world faces the opposite problem. There is a wild scramble for dollars as a $10 trillion pyramid of global lending based on dollar balance sheets “delevers” with a vengeance.

One has to ask; Who has crafted such a perfect storm, one not merely by accident? When to call the ball, so to speak.

This is a “short squeeze” on those who have used the dollar for a vast global carry trade. International banks are facing margin calls on their dollar leverage. It is why the Fed is having to provide $1.25 trillion in dollar liquidity for the entire global system, according to estimates by Brad Setser from the Center for Geoeconomic Studies.

The crisis engulfing Europe, Asia and emerging markets, makes life easier for Washington. The United States is becoming a safe-haven again.

The Fed can now hope to pursue monetary stimulus “a l’outrance” without being slapped down by the currency, debt, and commodity markets. Take comfort where you can

I'm confident in predicting that many entities will have to offer some collateral( over and above the norm ) in exchange for liquid going forward well into the next year. Ah but what will this collateral be? Here's a hint: lol~~ a precious metal who's per 0z price was recently $1,000.00 per. So goes the World Bank and IMF's vicious cycle of " Policy "

Oh how I'd love to secure a billion dollar loan with a trunk full of Gold! Laughing Laughing Knowing full well the lender could care less if I ever paid any of it back. Of course the only problem with this line of thinking is the fact that the Gold in question never really leaves the banks vaults and that they ultimately control the price by events such as these you're witness to today. So a market for such is just folly.


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PostPosted: Mon Oct 06, 2008 5:32 pm    Post subject: Reply with quote

Ok, I admit I haven't enough knowledge and understanding of
economics. So I've just given my feelings and, in so doing, I may have
played some propaganda game rather than giving a reasoned and
informed argument. Embarassed

Absolutely nothing to be embarrassed about. Use this forum as a learning tool. Fintan has done some fantastic work here. There's no doubt about that: ZERO.

When he speaks of G8 he's thinking ( I BELIEVE ) in terms of this kind of " TRICKLE DOWN EFFECT " as it relates to common man. A Noble thought indeed, one I respect and envy.

Despite that warning, he said, “Mr. Fuld depleted Lehman’s capital reserves by over $10 billion through year-end bonuses, stock buybacks, and dividend payments.”

Waxman quoted Fuld as saying in one document, “Don’t worry” to the suggestion that executives go without bonuses.

That suggestion came from Lehman’s money management subsidiary, Neuberger Berman. Waxman quoted George H. Walker, President Bush’s cousin and a Lehman executive who oversaw some Neuberger Berman employees, as responding with a dismissive tone to the idea of going without bonuses.

“Sorry team,” he wrote to the executive committee, according to Waxman. “I’m not sure what’s in the water at 605 Third Avenue today.... I’m embarrassed and I apologize.”

Rep. Elijah Cummings, D-Md., said: “I wonder how he sleeps at night.”

Fuld said in his statement that the company did everything it could to limits its risks and save itself.

“In the end, despite all our efforts, we were overwhelmed, others were overwhelmed, and still other institutions would have been overwhelmed had the government not stepped in to save them,” he said

You see these Bushers are every freaking where and if you're willing to read and open your mind you too shall see the picture as it really is and not what one wants you to see.

He's leaving office, his duty is done and they are taking every phucking thing not bolted down with them as they go. Even a cousin gets in on the act. Evil or Very Mad


As I've said before I'm no expert when it comes to economics but I can see the trees for the forest on this one, It's crystal clear to me.

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Wu Li

Joined: 20 Feb 2007
Posts: 573

PostPosted: Mon Oct 06, 2008 6:36 pm    Post subject: Reply with quote

HEY Hombre
I believe I am where you are somewhat.
Let's see,
in short

YES Paulson with China
I will add the 90's under Clinton (Bushes other great son)

Propping up China=Yes

Consolidation taking place by the Ex?? HE HE!!! GOLDMAN boys
NO chance for the little guy cashing out now!
MONETIZATION is what I see for the American people (my personal thought)

My scare is China deciding to say we want assets backed on these junk instruments/Bonds. We bought them and the people should give them up.

Could we beyond monetizing the American economy maybe be thinking about world WAR?
OR a formulated War/Conflict in order to scare the world into a new WORLD SYSTEM?

Either way I see a few things taking place relatively soon:
Many more small to medium banks being swallowed up (by design since the great MSM has been helping this cause)
I see the stock market plummet to the point that states in the US of A ask for emergency rescue from the FEDS which will ensure state destruction fully (the destruction of state sovereignty and therefore the legal Republic)
I see a new system being born in fetal position where the stock market may rally enough to ensure No Civil Unrest while the dumb asses place more trust in the system. (buying into the rally "Dead Cat Bounce" while it's meant for termination?)

I see a call for a new financial institution which may call for regional collective markets to ensure a stop gap/peak stop in pricing of commodities. (at least based on the same idea of world collectiveness)

I see a call for union of all Americans which will include those in Central and South America.

I am getting ahead of myself of course.

My main concern is the emergence of a new large scale "THREAT" of world war with some small events which will scare people into a Collective World state of "BANKER love" which will be nothing less than the very Bankers controlling the world in Fiat.

I am moving quick because I have little time but I feel I have gotten the gist out to you.
I will wait for the derivatives to truly hit and see the panic happen before my eyes.

Will China decide to say enough is enough. I think the fear of this threat will be good enough.
I think India is to dam scared to jump on our bandwagon (even if they are a British owned state).

I am weary and physically tired.
I hope you all respond with true interesting opinions.

A world of Events etched in history that we all are living
What a world we live in.
We can stop this by stop beating each other up first.
We are all here together and are experiencing the same events.
We can transform these events by moving together in unison as a force for love and anti to the destruction they wish us to be.
My contention is we are great and that is the reason why they are so afraid to let us move towards a time when no man is left to apathy and insignificance. No matter what I love you all and I espouse to be free in appreciation of you all.
Ultimately what we are seeing is the politics of fear at it's pinnacle.
They sycophants will loose.
I think I wrote it write
Crying or Very sad Cool Arrow

"Fear is the passion of slaves."
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PostPosted: Mon Oct 06, 2008 6:42 pm    Post subject: Reply with quote


Markets routed in global sell-off

By Chris Giles in London, Michael Mackenzie in New York and James Politi and Alan Beattie in Washington

Published: October 6 2008 19:27 | Last updated: October 7 2008 00:31


Stock prices collapsed around the world on Monday amid growing fears that the credit crisis would trigger a global recession.

The wave of selling swept through markets despite a scramble by governments to tackle the crisis, leading to rampant speculation that co-ordinated emergency rate cuts by the Federal Reserve and other central banks might be in the offing.

The FTSE Eurofirst 300 index had its third worst day ever, plunging 7.75 per cent, as France’s CAC 40 slumped 9 per cent, its second worst day on record.

In London, the FTSE 100 suffered its biggest one-day points loss.
The Dow Jones Industrial Average closed down 3.6 per cent at 9,955.50 after falling as much as 7.75 per cent, to 9,525.32, during the day.

“There is a need for confidence in solvency and liquidity [in banks] but there is a lack of trust,” said Mark Kiesel, portfolio manager at Pimco.

“People are far too hesitant to take risk and stocks are reacting to the outlook that as leverage is reduced, return on equity will be much lower.”

Emerging markets were particularly hard hit. The MSCI Emerging Markets Index slumped 11 per cent, its largest daily decline since 1987.

Trading was temporarily stopped in some major emerging economies, including Russia, where the market fell by just over 19 per cent, and Brazil, where stocks fell as much as 15 per cent before closing 5.4 per cent lower.

“This has been the biggest day so far for the capitulation of the long emerging markets trade, which has been in the works for weeks,” said Alan Ruskin, chief international strategist at RBS Greenwich Capital.

Robert Zoellick, president of the World Bank, said the crisis in Europe and the US could prove a “tipping point” for many developing countries as falling exports and worsening credit conditions triggered business failures and banking emergencies.

The falls came despite a rash of government initiatives around the world, which seemed to have no positive effect on confidence, leaving investors to rush to the safety of government bonds.

The Fed on Monday announced a series of new measures designed to revive the credit and commercial paper markets, including discussions with the US Treasury that would mark a dramatic step into unsecured lending.

By the end of the trading day US stocks bounced higher, partly on the expectation that the next move would be a Fed rate cut co-ordinated with other central banks, on the grounds that this would have a much greater impact on credit markets than action by the Fed alone.

In Europe, investors earlier took no comfort in statements from the continent’s leaders at the weekend promising a co-ordinated approach and followed by individual actions.

Across Europe, governments followed Germany’s weekend move to guarantee retail savers’ deposits, with similar steps taken in Denmark, Sweden and Austria.

In Iceland, the currency fell 30 per cent. Antje Praefcke, of Commerzbank, said: “We would also not be surprised to see the Icelandic krona lose its function as a medium of payment.”

Earlier, Japan’s benchmark Nikkei 225 index plunged 4.3 per cent to a 4½-year low. Jakarta suffered a 10 per cent drop.

Additional reporting by John Aglionby in Jakarta


Terror as Iceland faces economic collapse

From The Times
October 7, 2008

Hildur Helga Sigurðardóttir in Reykjavik, Helen Power and Peter Stiff


The Icelandic Government seized control of the country’s biggest banks last night in an attempt to fend off wholesale economic collapse.

Turmoil at the banks, whose shares were suspended by the Government yesterday afternoon, had sparked panic in the tiny state, which has a population of 300,000, about the size of Coventry.

Queues formed at petrol stations as Icelanders rushed to fill up before reported fuel shortages, while savers who tried to withdraw money from banks or sell bank shares on the internet found websites were not working.

Meanwhile, fears mounted in Britain that the deterioration of Iceland’s two biggest banks - Kaupthing and Landsbanki - could have disastrous consequences for savers, City staff and the high street.

Sources said that Landsbanki and the country’s third-biggest bank, Glitner, will soon be fully nationalised, while Kaupthing had been forced to take state loans.

In a late-night sitting, parliament approved a Bill giving the Government wideranging powers over the banks, including the ability to seize their assets, force them to merge or compel them to sell off their overseas subsidiaries, many of which are in London.

Icelandic banks have lent hundreds of billions of pounds overseas and their position in the world’s financial system far outweighs the size of the country’s tiny economy, the GDP of which was only $20 billion last year.

The country’s banks have been under pressure for most of the year, struggling with rampant inflation, the collapsing value of the currency and fallout from an overheated economy.

In Reykjavik, the capital, confusion reigned among a public unsure whether their savings and investments were safe, even after the Government moved to guarantee deposits. The country’s state surgeon even warned politicians and the media to ensure that they did not alarm old people.

Savers in Britain also face fallout from the collapse of the Icelandic banking system. Fears mounted yesterday among the 300,000 British savers holding bank accounts with Landsbanki that their deposits were at risk. In the event of a collapse, savers with Kaupthing are entitled to compensation of up to £50,000 from the British authorities - as much as depositors in any British bank - but British savers with Landsbanki are not.

British savers tempted into high-interest Icesave accounts would have to rely on a much smaller Icelandic government fund to guarantee their first £16,317 of savings should Icesave collapse, with Britain only picking up the remaining £33,483 under the government depositor guarantees.

Times readers reported yesterday morning that they could not withdraw their money from Icesave accounts over the internet. But a spokesman for the bank said that Icesave was now operating normally and depositors could withdraw money. He added that the Icelandic Government had ample foreign reserves to cover the £4bn of British deposits in the event of any collapse.

Icelandic banks have lent money to British retailing and pub groups, raising fears that their collapse could lead to a firesale of British assets. Baugur, the Icelandic investment group that owns stakes in House of Fraser, Debenhams, Woolworths, Moss Bros, French Connection and the supermarket chain Iceland, said that its British businesses were not affected. But well-placed City sources said that Baugur had held private discussions about selling some assets and persuading banks to lend fresh money against others. “There are covert conversations taking place,” one source said.

A spokesman for Baugur denied that there had been an increase in such conversations in the past week.

Hundreds of jobs in the City of London are also linked to the fate of Iceland’s banks. Market sources said yesterday that Singer & Friedlander, the asset manager owned by Kaupthing, was being informally offered for sale. Other sources said that Teather & Greenwood, the stockbroker recently sold by Landsbanki to Straumur, another Icelandic bank, could be put up for sale again. Straumur said that it had no plans to sell the broker, but this was before the Icelandic Government had announced its nationalisation plans.

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PostPosted: Mon Oct 06, 2008 10:31 pm    Post subject: Reply with quote

Ahem, guys.....
Earth calling realism.....
Come in realism....

Nikkei drops below 10,000 as sell-off continues

New Zealand index dives under 3,000
Sony hits lowest since November 1995

By V. Phani Kumar, MarketWatch 9:27 p.m. EDT Oct. 6, 2008

HONG KONG (MarketWatch) -- Asian markets fell sharply again Tuesday
after deep losses on Wall Street, with Japanese stocks suffering a sell-off
as exporters like Canon Inc. were hit hard by a strengthened yen, and
while resource stocks like Woodside Petroleum shrank after crude-oil
prices tumbled overnight.

The Nikkei 225 Average dropped below the 10,000-point level for the first
time since December 2003, moving as low as 9,916.21 during the session
before recovering. The Average was down 3.3% at 10,125.67 in
midmorning trade, while the broader Topix index lost 3.5% to 963.87.

Both benchmarks took losses into a fourth straight session, as investors
were gripped by nervousness over the spreading malaise in the global
credit markets and doubts about the effectiveness of the U.S.
government's $700 billion financial-sector bailout.

Australia's S&P/ASX 200 lost 2.3% to 4,435.70, and South Korea's Kospi
shed 1.4% to 1,339.52. New Zealand's NZX 50 index gave up 2.6% to
2,968.65, dropping below the psychologically-important 3,000-point level
for the first time since June 2005.

The regionwide losses came after the Dow Jones Industrial Average ($INDU: 9,955.50, -369.88, -3.6%) fell as much as 800 points to itself
trade below the 10,000-point level on Wall Street, before ending 3.6%,
or 369.8 points, down at 9,955.50.


Panic as Russian stock market falls by almost 20%

Published on 06-10-2008
Source: RIA Novosti

The Russian stock market gave in to panic on Monday with the MICEX dropping 18.6% to 752 points and the RTS falling by 19.1% to 866.39 points - the worst losses since the 1998 crash.

Russia's financial system has been affected by a global credit crunch which started in the U.S. and quickly spread to Asia and Europe leading to record losses on Russia's financial markets, rising interest rates and a liquidity shortage.

Sergei Sheikov, managing director for corporate clients at the Olma Company said: "Monday became one of the blackest days for most market participants - for the first time since 2005 the RTS index closed below the psychologically important benchmarks of 900 and 1,000 points."

Losses for many blue chip stocks exceeded 20% with Norilsk Nickel shares worst hit as they plunged 30.2%. The losses forced the closure of the MICEX, Russia largest index, and RTS three times on Monday.

Fears regarding the spread of financial crisis caused all world markets to plunge, which contributed to Russia's market losses. Britain's FTSE 100 experienced its worst day since 1987 as stocks plunged 7.85% and France's Cac 40 index fell 9.04%, and in the U.S. shares fell below the 10,000 point level for the first time in four years as they shed 4.65%.

Pakistan facing bankruptcy

Pakistan's foreign exchange reserves are so low that the country can
only afford one month of imports and faces possible bankruptcy.

By Isambard Wilkinson in Islamabad
Last Updated: 6:44PM BST 06 Oct 2008

Officially, the central bank holds $8.14 billion (£4.65 billion) of foreign
currency, but if forward liabilities are included, the real reserves may be
only $3 billion - enough to buy about 30 days of imports like oil and food.

Nine months ago, Pakistan had $16 bn in the coffers.

The government is engulfed by crises left behind by Pervez Musharraf,
the military ruler who resigned the presidency in August. High oil prices
have combined with endemic corruption and mismanagement to inflict
huge damage on the economy.

Given the country's standing as a frontline state in the US-led "war on
terrorism", the economic crisis has profound consequences. Pakistan
already faces worsening security as the army clashes with militants in
the lawless Tribal Areas on the north-west frontier with Afghanistan.

The economic crisis has already placed the future of the new government
in doubt after the transition to a civilian rule. President Asif Ali Zardari has
faced numerous but unproven allegations of corruption dating from the
two governments led by his wife, Benazir Bhutto, who was assassinated
last December.

The Wall Street Journal said that Pakistan's economic travails were "at
least in part, a crisis of confidence in him".

While Mr Musharraf's prime minister, Shaukat Aziz, frequently likened
Pakistan to a "Tiger economy", the former government left an economy
on the brink of ruin without any durable base.

The Pakistan rupee has lost more than 21 per cent of its value so far this
year and inflation now runs at 25 per cent. The rise in world prices has
driven up Pakistan's food and oil bill by a third since 2007.

Efforts to defer payment for 100,000 barrels of oil supplied every day by
Saudi Arabia have not yet yielded results, while the government has also
failed to raise loans on favourable terms from "friendly countries".

Mr Zardari told the Wall Street Journal that Pakistan needed a bail out
worth $100 billion from the international community.

"If I can't pay my own oil bill, how am I going to increase my police?" he
asked. "The oil companies are asking me to pay $135 [per barrel] of oil
and at the same time they want me to keep the world peaceful and
Pakistan peaceful."

The ratings agency Standard and Poor's has given Pakistan's sovereign
debt a grade of CCC +, which stands only a few notches above the
default level.

The agency gave warning that Pakistan may be unable to cover about $3
billion in upcoming debt payments.

Mr Zardari is expected to ask the international community for a rescue
package at a meeting in Abu Dhabi next month.

This gathering will determine whether the West is willing to bail out


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They only function when open.
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PostPosted: Mon Oct 06, 2008 11:05 pm    Post subject: Reply with quote

Read between
the lines here:

It was a wild ride for the Dow Jones Industrial Average, which fell
straight out of the gate this morning, breaching 10,000, then 9,900 and so
on. The blue-chip index ended down just 369.88, or 3.6 percent, at
9955.50, after being down as much as 800 at one point. It was the first
time in four years that the Dow has closed below 10,000.

To put the Dow's day in perspective, at its lowest point today, the index
was still 300 points from the first circuit-breaker trigger level
by the NYSE last week. According to the fourth-quarter guidelines, an
1100-point drop in the Dow before 2 p.m. will halt trading for one hour, a
2200-point drop before 1 p.m. will stop trading for two hours, and a 3350-
point drop will shut down trading for the rest of the day, regardless of
what time it occurs.

So the plunge protection team kicked in to halt
the Dow before it hit the trigger to stop trading.

And they drove it back up but still
couldn't get it to close above 10,000.

Tuesday's gonna be interesting.

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They only function when open.
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PostPosted: Tue Oct 07, 2008 8:52 am    Post subject: Reply with quote

All roads lead to AIG's London based Financial unit Investing in " CREDIT SWAPS " that tipped the balance and set the wheels of carnage into motion. Yet it's just the tip of the iceberg as to how far this really goes.

I'm now thinking that Paulson isn't protecting a China interest but rather some closely held friends and certain politicians who are in this mess up to their necks. The reporters are starting to make headway in " WHAT REALLY HAPPENED " in certain closed door meetings as the shit started to hit the fan.

Take " John Mack " for example. He was protected by someone within the SEC and this is clearly a huge conflict of interest and more than likely it isn't/wasn't legal.

The SEC gave "preferential treatment" to Wall Street executive John Mack during an insider trading investigation three years ago because Mack was about to become CEO of the Morgan Stanley investment banking firm, the SEC's inspector general concluded in a report obtained by ABC News.

I remember this like it was yesterday, Lynch was also under investigation at he time and later settled for 100 million or something like that. So they've been at this for 3 plus years or so which would mean that Hank Greenberg is lying about the Credit Swaps when he says that they took place while someone else had the wheel.

Here's how the game is played at this level:

I was told that it would be very difficult to get approval to take his testimony because of his powerful political connections," Aguirre told ABC News in an interview for Good Morning America.

When he says he persisted, he was told to go on vacation and then notified he had been fired.

"We were trying to immediately sit the people down and nail them down to a story, this was the sole exception," Aguirre said.

Aguirre said the inspector general's findings are "about as close to the truth as you can expect from an agency whose mission has been so deeply compromised."

The report concluded, "there was a connection between the decision to terminate Aguirre and his seeking to take Mack's testimony."

"Wall Street has long tentacles," said Aguirre, "and those tentacles reached into the SEC and cost me my job."

The Inspector General found Aguirre's superiors at the SEC provided Mack and his lawyers with information that "could prove very useful in preparing a defense."

This smells of a few well placed people simply trying to protect their power and position and at the same time trying to right a ship headed for disaster at the hands of that which they created in the first place. This is what Paulson is trying desperately to keep under wraps. ( JMHO ) The who what and how aspect of this fuzzy math.


Hank Greenberg was set to attend a meeting today on the hill yet he's pulled out saying he's sick. I'll bet he was told to stand down. It's pretty obvious that AIG and Greenberg specifically were targeted by someone yet to step into the light. ( jmho ) He's lost 95% of his net worth and is ready to start singing.


Greenberg tells CNBC he's taken stake in Lehman
By Alistair Barr
Last update: 4:51 p.m. EDT June 9, 2008

SAN FRANCISCO (MarketWatch) -- Maurice "Hank" Greenberg, former chief executive of American International Group (AIG:
American International Group, Inc
told CNBC on Monday that his firm took a sizable stake in Lehman Brothers (LEH:
Lehman Brothers Holdings Inc
Greenberg, who is now chief executive of C.V. Starr & Co., said a team did due dilligence and committed money to Lehman over the weekend. Lehman may take more write-downs, but that won't hurt the brokerage firm much, Greenberg explained

Some research his crack staff did don't ya know Wink
There is now no doubt that this mess has political fingerprints all over it.

Here's the latest on AIG's involvement which Congress is rapidly closing in on and will more than likely end up making them the scapegoat.

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PostPosted: Tue Oct 07, 2008 9:59 am    Post subject: Reply with quote

After the huge sell-off Monday, the market manipulation is today
focussed on tossing bones of any kind of good news to affect sentiment:

Sentiment in Europe picked up after the Federal Reserve said it would
buy commercial paper in an attempt to unleash frozen credit markets.

U.S. stocks on Tuesday opened higher, halting the bashing that pushed
the major indexes to four-year lows, after the Federal Reserve said it
would start buying commercial paper
to ease frozen credit markets.
Ahead of the opening bell, the Fed announced its unprecedented move
to restart a market that has virtually shut down in recent weeks.

The volume of the rally is paper thin however.

The 'good news' onslaught continued with this:

Fears that ongoing financial turmoil could wreck the world's banking
system and worsen a global slump fueled speculation Tuesday that major
central banks will deliver a rare round of coordinated interest-rate cuts if
conditions don't improve.

Japan is already at 0.5% interest rate --it hasn't eased the stagnation.
Interest rate cuts is just pushing on a string.

They have got to stop the DOW falling, as it would trigger a mass
withdrawal from markets by the general public and inevitably intensify a
run on US banks.

Good luck with that.

Despite the sackfulls of PPT money available,
managed implosion is the best they can hope for.

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PostPosted: Tue Oct 07, 2008 1:08 pm    Post subject: Reply with quote


Plan to recapitalise banks edges closer

By Alex Barker, Political Correspondent

Published: October 7 2008 18:25 | Last updated: October 7 2008 18:25


Gordon Brown moved closer to part-nationalising Britain’s ailing banks on Tuesday as crisis talks continued to avert a collapse in confidence in the financial sector.

As shares in UK banks tumbled amid speculation that executives had requested a state capital injection, the prime minister called an emergency meeting of the Bank of England, the Treasury and the Financial Services Authority to discuss swift action.

No announcement of a “rescue package” is expected on Tuesday evening. However, a taxpayer-funded plan to recapitalise banks by issuing preference shares to the government could be unveiled as soon as Wednesday morning, before the market opens. Insiders estimate its value could approach £50bn.

Alistair Darling and his Treasury team have been scrambling to prepare a comprehensive plan to contain the crisis as the collapse in banks’ stocks prompted charges that government “dithering” was further undermining confidence.

Mr Darling on Tuesday continued discussions with banking executives for a second day on the details of the plan, including the form of equity the government would accept in return for fresh capital.

Officials think their hand was forced after leaks from a meeting on Monday between the Treasury and the UK’s top banking executives spooked investors and prompted a run on financial stocks.

Recriminations were flying on Tuesday night over the cause of a 39 per cent plunge in Royal Bank of Scotland’s shares, which came in spite of the bank denying reports that it had asked the government for extra capital. Investors attributed the rout to fears over funding and the prospect of shareholders stakes being diluted by a state capital injection.

Expectations have mounted since Monday that ministers will be forced to launch a taxpayer-funded recapitalisation of banks – a proposal supported by Mervyn King, the governor of the Bank of England. A government spokesman insisted any proposals would be announced in “a calm and orderly way”.

Some investors have been angered that the Treasury were unwilling to clarify the details of any recapitalisation plan, even as shares in major banks were plunging.

Opposition parties have offered conditional support for such a plan, arguing that an injection of extra capital was “the only way banks are going to survive the storm”.

Vince Cable, the deputy leader of the opposition Liberal Democrats, said the Treasury “will have to come forward with a proposal earlier than it is comfortable with simply to deal with the uncertainty”.

Meanwhile, the Conservatives reiterated their support for government measures to inject capital into banks, provided taxpayers were first in line for repayment.

“We can’t allow the banking system to fail because when it does every family then suffers,” said George Osborne, shadow chancellor. ”The Conservatives are saying we are here to offer constructive support to the government.”

Copyright The Financial Times Limited 2008
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PostPosted: Tue Oct 07, 2008 5:17 pm    Post subject: Reply with quote

A world of Events etched in history that we all are living
What a world we live in.
We can stop this by stop beating each other up first.
We are all here together and are experiencing the same events.
We can transform these events by moving together in unison as a force for love and anti to the destruction they wish us to be.
My contention is we are great and that is the reason why they are so afraid to let us move towards a time when no man is left to apathy and insignificance. No matter what I love you all and I espouse to be free in appreciation of you all.
Ultimately what we are seeing is the politics of fear at it's pinnacle.
They sycophants will loose.

loose or lose... the first is propbably what's happening now, but the latter may be where it ends up.
anyway, may i steal these words? they are poetic.

funny, looking back at YTD on all those Cramer-pumped stocks... MON, POT, MOS, the solars, etc... those were all at their highest around June-July, and now.... tada... THEY ARE GETTING CREAMED!!!!
Shorters looking for high-priced stocks to rape - yes
Investors selling actual shares to get the fuck out - yes
Somebody(ies) is/ are making up for their corporate and private losses here, i only suspect.
Mom and Pop's IRA and 401K - depends if they have control over it and whether their holding investment house bails out
Privatization of Soc Sec would have been so nice, wouldn't it?

Fuck yeah, I'm taking my $35 out of the bank. Just hoping whenever I deposit a check, it'll be there after it clears for me to come rescue it.

Good lord. Dow's another -500 today. Your taxes at work. (Just like all those road-side construction crews drinking coffee and repaving the same stretch of road every September.)


just cos things are fucked up doesn't mean it isn't progress...
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PostPosted: Wed Oct 08, 2008 9:21 am    Post subject: Reply with quote

Scott Burchill
October 7, 2008
A jittery world is questioning the fundamental tenets of the economic system.

AS THE world's financial markets have unwound, three simultaneous crises have become apparent. The fallout goes beyond the immediate effect on either individuals or on the workings of the global economic system to call into question the viability of modern capitalism.

The first crisis relates to confidence. This is a deeper problem than the normal investor's gamble on when to sell stock in a volatile market. Many workers, worried about their superannuation holdings, wonder why their funds' managers have been paid so handsomely for such a poor performance. They also question the value of the ratings agencies such as Moody's and S&P, which have misled them so badly.

At the centre of the crisis of confidence is a failure of leadership. As the tortuous passage of the $US700 billion ($A969 billion) plan to buy up toxic debt illustrated, neither the lame duck in the White House nor those on Capitol Hill have either the financial or political capital to lead the world economy out of this mess. Public opposition to bailing out rich, incompetent bankers, approaching elections and ideological puritanism have resulted in a paralysis of policy.

There is little confidence, even on Wall Street, that the Emergency Stabilisation Act mark 2 will live up to its name.

The second is a systemic crisis. How can the collapse of the global financial system be averted and how did it become so anarchic? Bail-outs, buy-outs, arranged marriages and infusions of capital have been the initial responses of central bankers and treasury officials. But they are making policy on the run without any clear understanding of the new challenges they will face tomorrow.

Wall Street has a vested interest in overstating systemic risk and has convinced Washington that in an election year Fannie Mai, Freddie Mac and AIG needed to be saved because of the system-wide effects of their collapse. They were less successful in persuading the Bush Administration to bail out Lehman Brothers and the investment banks that have fallen in its wake.

If you are big enough to bring the system down with you, it seems capitalism can be risk-free. Questions about moral hazard and commercial risk remain embarrassingly unanswered. What we are witnessing is the privatisation of profit and the socialisation of risk.

The systemic crisis has been sparked by private avarice, the need for instant consumer gratification through credit, and reckless lending practices by private investment banks. It has been underwritten by complex, innovative and opaque financial instruments used by hedge funds (such as collateralised debt obligations, credit default swaps, binary options, etc.), which defy understanding, let alone regulation. Relentless competitive pressures (there is no copyright on financial instruments, hence the constant demand for innovation), a naive faith in a self-correcting market, and short-term speculation rather than long-term investment, have driven the system to the point of collapse.

The third, and most serious, is a legitimation crisis. What will happen if, as a consequence of this financial disaster, there is a withdrawal of mass support for the existing economic order? There may be no viable socialist alternative with any credibility, but the loyalty of the population to an increasingly crisis-prone economic system will be severely tested.

Governments will need to restore public confidence in a system that is beyond stable management. After this debacle, few investors will be pacified with mantras about "market corrections", the "fundamentals" being "sound" or the science of "risk management". We are living with the consequences of deregulation, liberalisation and globalisation - which we were told were both inevitable and desirable. Opposition to corporate globalisation and unfettered market forces was said by both Labor and conservative governments to be irrational. It doesn't look that way now.

One response to the legitimation crisis has already appeared. Nostalgia for the free market heydays of Reaganism is now evident among economists and much of the business press, who call for a strict adherence to free market principles. It's ideology based on mythology.

First, Reagan was the most protectionist president in postwar US history. As a champion of military Keynesianism, he called on the Pentagon to create the "factory of the future" to teach advanced Japanese production strategies to backward US management, founded Sematech to rescue the US semiconductor industry, bailed out Continental Illinois (then the largest bail-out in US banking history), and vastly expanded the military sector with boondoggles such as "Star Wars".

Second, US governments have always been deeply involved in the nation's economy. Anyone employed in agribusiness, the military (or the industrial sector that services it), who uses a computer and the internet, flies in a plane or takes medicine, can thank the investment, subsidies and guaranteed markets provided by the US taxpayer. American capitalism, defined in free market terms, has always been a myth despite the economists, politicians and businessmen who pledge their faith in it.

Comparisons with earlier economic crises, including the Great Depression, are a limited guide to alleviating the problems we now face. There are no obvious solutions to such unprecedented challenges and simultaneous crises. But if nothing else emerges from the maelstrom, the role of the state in rescuing American capitalism from its internal contradictions will be the final antidote to free market hagiography.

Dr Scott Burchill is a senior lecturer in international relations at Deakin University.

The Age
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PostPosted: Wed Oct 08, 2008 9:23 am    Post subject: Reply with quote

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