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Banned
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Originally Posted by ottopilot
Propose a solution. Let's talk about it.
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The Market Ticker - Entries from Saturday, September 6. 2008
CALL TO ACTION: Government Fraud And You
Ok folks, it appears that indeed Fannie and Freddie (which I will hereafter refer to as "Phoney and Fraudie") will indeed be "bailed out" in some fashion, as will their debt.
Let's first start with what these firms are. The political types like to claim that these firms are "necessary" or "vital" to the functioning of the housing market in America.
This is a lie.
The Truth is that Phoney and Fraudie are the reason we had a housing bubble.
The Truth is also that these firms have engaged in systematic and intentional compounding of risk at unsustainable, inappropriate and even fraudulent levels, and that we the people have refused to demand that our government put a stop to it.
Yet that is the purpose of government - to stop the "big and powerful" from screwing the "less big and less powerful."
Right?......
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ottopilot, what happens in reaction to what is coming......devaluation of housing , common stock, and other assets that are the concentrated holdings of those below the top ten percent of wealth holders in the US, due to higher interest rates that will be triggered by "the solution" to Fannie and Freddie insolvency....is, what always happens.
In Venezuela, Hugo Chavez, with the support of the mass of "have nots", to do what government is supposed to do;
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to stop the "big and powerful" from screwing the "less big and less powerful."
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Many would say that the political movement led by Chavez has "gone overboard". In the German Weimar republic, the backlash to economic dislocation came from the extreme right....the emergence of Hitler. In Louisiana in 1928, as in Venezuela more recently, the reaction was popular support for Huey Long.
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http://www.ssa.gov/history/hueychapt4.html
Excerpts From Huey Long's "Second Autobiography"
Chapter 4-
Wherein The New President Encounters The Masters Of Finance And Destiny
ONE morning shortly after the inauguration my secretary handed me a letter which had been delivered to the White House by special messenger. It was from J. Pierpont Morgan, the New York capitalist and international banker. The letter read : click to show
JOHN PIERPONT MORGAN Glen Cove, New York
January 27, 1937. My dear Mr. President:
I and some of my associates regard your effort to decentralize wealth through the confiscation of individual fortunes in excess of five million dollars, gradually to be reduced even below that to something less than two million dollars, as one of the most autocratic governmental undertakings ever attempted in this or any other civilized country. We regard it not only as an effort to confiscate wealth, but as the first step in changing the economic order upon which all American progress has rested in the past.
We cannot lose sight of the fact that private capital has been the backbone of American progress in industry, commerce and trade. To seize it by governmental decree, we believe to be a violation of the fundamental guaranties of the American Constitution.
We are eager as individuals and good citizens to help our American government restore prosperity, provide ease and comfort for all our citizens through the orderly and constitutional processes laid down by our forefathers, but we shall resist any and every unconstitutional effort to seize the wealth, created by individual achievement in a wholly lawful and constitutional manner.
We believe that a full and free opportunity must be preserved in this country to win the traditional reward of superlative individual achievement, whether that reward be counted in hundreds of dollars or hundreds of millions of dollars. We do not express opinion now as to the advisability or constitutionality of a revenue law limiting the size of fortunes to be accumulated in the future. We content ourselves now with protesting against a law which would take from American citizens, in defiance of their constitutional rights, fortunes already accumulated.
We believe it fitting and proper for the federal government to impose inheritance taxes and estate taxes as a means of providing revenue, but we are forced, Mr. President, to resist in the courts your proposal to seize property outright, without due process of law. With the highest respect for your office, we feel compelled to notify you that we shall utilize every protection of the courts and Constitution to protect our properties against the seizures contemplated in your Share Our Wealth program.
Very truly yours,
( Signed) J. P. MORGAN.
Honorable Huey Pierce Long, President of the United States, The White House, Washington, D. C.
This threat from the dean of Wall Street's international bankers was the first sign of revolt against the Share Our Wealth program. I welcomed his declaration of war.
Calling a stenographer, I dictated the following reply:
THE WHITE HOUSE
January 28, 1937
My dear Mr. Morgan:
I am in receipt of your letter alleging that the Share Our Wealth program is unconstitutional, and announcing that you will resist its execution in the courts of the land. You are entirely within your rights in pursuing such a course.
I trust upon reflection you will perceive that I was the genuine defender of your wealth when I proposed a five million dollar limitation (gradually to be reduced below two million dollars) upon family fortunes in the Share Our Wealth plank of the platform upon which I was elected President of the United States. I will undertake sincerely to carry out the promise by which I secured my election. You are aware, or you would be if you had kept in touch with the sentiment of our American people, that there has been a good deal of whispered complaint against my plan on the ground that it is unjust to permit men of your kind to retain so much as five million dollars of wealth.
In the last campaign you will recall I was bitterly assailed by some speakers for not limiting wealth to one million dollars for each family. In the few days I have occupied the White House, there have been some newspaper editorial comment and numerous "letters from the people" published on editorial pages, demanding a reduction in the five million dollar limit of the Share Our Wealth program to a million dollar maximum at once.
One editorial that I hold in my hand asks this question:
"Why should anyone desiring justice start by proposing such rank inequalities between human beings, all of whom deserve the equal blessings of God and of government ?"
Before me is another newspaper in which a letter is published containing the following sentence:
"Is not our President making a mistake in starting his redistribution of wealth by allowing one family to have one thousand times as much share of the wealth as other families are permitted?"
If you observe the signs about us, my dear Mr. Morgan, you will see that the insignificant quantity of such muttering at this time is insignificant only because our American people as a whole believe they will secure happiness and the comforts of life through the limits placed on huge fortunes by the platform on which I was elected. I concede that my allowances were probably much too high, but I nonetheless told the American people that we could care for all of them bountifully and yet allow men of wealth such as yourself fortunes of about five million dollars, until gradually reduced below two million dollars. I also told them that we would limit fortunes only to the point necessary to guarantee comfort, convenience and education to the balance of our people.
I have felt that this moderated program, which allowed enough wealth to any family to inspire effort, service and achievement, but proposed such a limit as would curb needless greed, would create a proper balance between wealth and poverty, thereby insuring the maximum of inspiration to all our people. That being the case, I anticipate no difficulty from the common people of our country in securing to you the maximum limit of five million dollars of wealth, which the Share Our Wealth program would permit you to wholly own and manage in your own name until gradually reduced.
I am surprised, naturally, that as a banker and business man of reputed sagacity, you do not realize that my program is a real benefit to you. In my campaign for the Presidency I promised a return to Constitutional government. Needless to say, I am convinced the capital tax levies are constitutional. If they had not been, this republic could have never begun. I concede, too, that men may dieter with me on this legal question. I therefore shall be content to permit a test of its constitutionality in the Supreme Court of the United States before carrying it generally into effect.
We are about to engage upon a governmental survey of wealth and of the requisites of our common people for their comfort, convenience and education. When that is completed, Congress will reassemble and will enact the Share Our Wealth program. If in the meantime you should have a change of heart, Mr. Morgan, on the wisdom of resisting this equitable redistribution of wealth, I shall be only too happy to have you volunteer your services in helping to carry this program quietly into effect without needless disturbance of business, commerce or industry.
Very truly yours,
HUEY PIERCE LONG.
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In Cuba, the change came through violent revolution, due to the wealth inequity and repression of the US backed, Batista regime.
The point is, it's too late to control the reaction in the US. Half the country believes that the press is "too liberal", so there is a disconnect in even seeking and digesting information:
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Freddie/Fannie Plans In Motion; Why Are They Being Underplayed? - Seeking Alpha
....Underplayed?
Is the Freddie/Fannie bailout plan being underplayed? News late today that Treasury plans are likely to be announced imminently strikes many people, myself included, as one of the biggest financial events in modern memory, and yet it feels underplayed.
Why do I say that? Well, until recently, it was the second story on the front page of the WSJ this afternoon, and it hadn't even made the front page of the NY Times site last I looked. Marketplace on NPR, which I listen to most afternoons, shrugged it off in a 15-second drive-by comment as some late-breaking news that the market may have noticed.
Remarkable stuff. Here is the Federal Government backstopping a massive financial services organization; okay, two of them; okay, the whole frickin' financial services industry plus the stock market, with China and the rest of the world watching nervously, and it's being treated as just another day in those nutty ol' markets.
But it isn't just another day in the markets. This is set to be epochal, a true "Where were you when..." moment, a before/after sort of of thing. You can't make these kinds of massive financial commitments -- more than a trillion dollars, at least in notional terms -- with so many contingencies, without imagining the kinds of consequences, financial and political, that come with it. After all, the current U.S. administration desperately wanted to punt this past November elections, and it now seems clear that it can't.
The underlined point in the prior paragraph is important to understand. As much as the Treasury and the Bush Administration didn't want to get saddled with this bailout baggage at all, put that to the umpteenth power and you'll get how desperate they were to move this past election day in November. Bush, Paulson, et al., wanted it to be the next Administration's problem, not theirs; and they didn't want it to be fodder in the current electoral cycle. They failed on both counts, which tells you fast and out-of-control this apple cart is.......
RNC / DNC: Crisis? What Crisis? - Seeking Alpha
RNC / DNC: Crisis? What Crisis?
by: Paul Kedrosky posted on: September 06, 2008
Now they're planning the crime of the century
Well what will it be?
Read all about their schemes and adventuring
It's well worth a fee
-- "Crime of the Century", Supertramp (1974)
What continues to amaze me is the not-so-benign neglect being accorded by politicians to the current financial crisis in the U.S. Granted, it's usually better being ignored by such people; and granted, the current debacle is more complicated than saying "Ken Lay is a bad man". But if you had watched the just-completed Democratic and Republican National Conventions, you wouldn't have known the U.S. is stumbling through the worst financial crisis since the Great Depression. Nor would you have known, of course, that we're queuing up for a bill that could exceed total Iraq War expenditures.
To prove the point to my own satisfaction, I combined the Palin/McCain acceptance speeches in one block of text, and the Obama/Biden speeches in another. I then set up some keywords to compare across the text blocks. The following summary table shows keywords in the left column, and then respective keywords counts for each party' slate in the appropriate DNC or RNC column. This isn't the usual exercise in cute tag clouds, but an attempt to understand whether important language concerning the current financial crisis penetrated the political radar over the last few weeks.
And it hasn't -- unless, of course, the repeated utterance of the word "God" came in a context more like "Oh God, we're screwed!" than I think it did.
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Ottopilot, there is nothing but denial driven indifference to all of this, including in this forum. Consider my track record....look at the date this thread was started, and the title. Almost no one is even reading this thread....yours is the only response.
I have no solutions to offer, because it is too late for that.....there isn't even a reaction, yet. When it comes, it will take the form of an emotional wave, demanding quick solutions, or a series of them. If we're lucky, it will look more like Louisiana, circa 1928, or Venezuela, in this new century. If not, our government will foment war until the ability to finance it with fiat script is exhausted.
Almost no one even agrees there is a wealth and power imbalance in the US, or that it is a bad thing....or that there is only one political party, the property party, with two right wings.... so, lights out!
Last edited by host; 09-06-2008 at 11:02 AM..
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