Archive for the ‘Financial crisis’ Category
The financial system established in England after 1688, based on usurious lending to the state by private bankers, is reaching its final blowout in the form of a series of devastating bubbles and a massive bailout of the financiers with public money. But the issuance of money doesn’t have to be in the hands of a private consortium: another credit system is possible.
Posted by seumasach on October 21, 2008
Michael Hudson
Counterpunch
20th October, 2008
Treasury Secretary Paulson’s bailout speech on Monday, October 13, poses some fundamental economic questions: What is the impact on the economy at large of this autumn’s unprecedented creation and giveaway of financial wealth to the wealthiest layer of the population? How long can the Treasury’s bailout of Wall Street (but not the rest of the economy!) sustain a debt overhead that is growing exponentially? Is there any limit to the amount of U.S. Treasury debt that the government can create and turn over to its major political campaign contributors?
In times past, national debt typically was run up by borrowing money from private lenders and spent on goods and services. The tendency was to absorb loanable funds and bid up interest rates on the one hand, while spending led to inflationary price increases for goods and services. But the present giveaway is different. Instead of money being borrowed or spent, interest-yielding bonds are simply being printed and turned over to the banks and other financial institutions. The hope is that they will lend out more credit (which will become more debt on the part of their customers), lowering interest rates while the money is used to bid up asset prices – real estate, stocks and bonds. Little commodity price inflation is expected from this behavior.
The main impact will be to reinforce the concentration of wealth in the hands of creditors (the wealthiest 10 percent of the population) rather than wiping out financial assets (and debts) through the bankruptcies that were occurring as a result of “market forces.” Is it too much to say that we are seeing the end of economic democracy and the emergence of a financial oligarchy – a self-serving class whose actions threaten to polarize society and, in the process, stifle economic growth and lead to the very bankruptcy that the bailout was supposed to prevent?
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Posted in Financial crisis | Tagged: financial collapse, ponzi scheme | Leave a Comment »
Posted by smeddum on October 21, 2008
Wall Street Monsters & Meat (You)
Jim Willie CB
Jim Willie CB is the editor of the “Hat Trick Letter” 321gold.com
Oct 17, 2008
The tag team of JPMorgan as the monster and Goldman Sachs as its harlot represent a powerful pair that is more responsible for destroying the entire US financial system than 95% of the American public has any awareness. The colossus of JPMorgan is a monster, a predator, nurtured by pond scum. It has gobbled up Chase Manhattan, Manufacturers Hanover, Chemical Bank, Bank One, and more over the past two decades. Their profound presence in keeping the USTreasury Bond yields down can never be understated. They do so by managing 85% of the credit derivatives on the planet. They distorted usury prices, as in price of borrowed money, thus aggravating the LIBOR (London InterBank Offered Rate) market in a very visible manner. The oblong usury prices have contributed mightily to the destruction of the USEconomy itself, created bubbles, killed jobs, and wrecked savings. The ugliest hidden activity for the JPMorgan monster is to manage the Bank of Baghdad, where they manipulate the crude oil price, where drug trafficking money is funneled from Afghan sales, under management by the USMilitary aegis (guys with no uniform stripes or markings). Maybe such illicit money offsets Credit Default Swap losses, making America strong for freedom and liberty. Goldman Sachs is clearly the investment banking agent for the USGovt, given the privilege of insider trading in unspeakable proportions. They manage the Plunge Protection Team efforts to intervene in financial markets, making America strong for freedom and liberty. The new kid on the block is the FDIC. The Federal Deposit Insurance Corp is steering fresh meat into the corralled JPMorgan stockyards for slaughterhouse feeding. The label of harlot might be too kind, especially from the perspective of senior bond holders. But JPMorgan requires fresh meat (capital) periodically, thus making America strong for freedom and liberty. Nevermind the fires caused after its hearty meals and flatulence. Read the rest of this entry »
Posted in Financial crisis | Tagged: financial collapse, reserve currency | Leave a Comment »
Posted by seumasach on October 20, 2008
Whereas in Britain the oligarchy is taking advantage of the crisis to massively increase their wealth and power, in Russia the opposite is happening.
David Litterick
Telegraph
20th October, 2008
The collective wealth of the 25 wealthiest Russian businessmen has fallen by $230bn (£132bn) since May, when the commodities boom peaked, according to Bloomberg calculations. Since then, equity markets across the world have tumbled, with Russia’s benchmark Micex index losing 61pc. Concerns over Russia’s strategy in Georgia have added to the impact of the credit crisis.
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Posted in Financial crisis | Tagged: financial collapse | Leave a Comment »
Posted by seumasach on October 20, 2008
“UK public finances have deteriorated further, recording the biggest half-yearly shortfall since 1946 when Britain was emerging from the ravages of the second world war.”
Now we have not only the ravages of the Iraq and Afghanistan wars, but the ravages of a new war: against the British people themselves on behalf of the financiers.
Norma Cohen
FT
20th October, 2008
UK public finances have deteriorated further, recording the biggest half-yearly shortfall since 1946 when Britain was emerging from the ravages of the second world war.
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Posted by seumasach on October 19, 2008
Cailean Bochanan
19th October, 2008
Despite the fact that the world map no longer shows massive areas in the red of the British Empire, I have characterised Great Britain as an empire, or rather, the base or rump of such. However, the British people may see their nationality, as British, English, Scottish, Scottish but British, Irish, loyal etc. at a certain level, at the level of the elite, the financiers above all, Britain is a base for operations.
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Posted in Drive to Global War, Financial crisis, Multipolar world | Tagged: Financial crisis | 5 Comments »
Posted by smeddum on October 19, 2008
U.S. in Crisis Mode — What’s Next?
By Olivier Garret, CEO
Casey Research – The Casey Report goldseek.news
In the last few weeks, it has become clear that the current financial meltdown is not our usual, run-of-the-mill crisis. It’s supersized, inexorably linked to the rest of the world, ruled by chaos, and precariously perched atop a mountain of debt. ”What makes this crisis different from some of the earlier ones,” says IMF Historian James Boughton, “is that the interlinkages among financial institutions are much greater now than they used to be.” Read the rest of this entry »
Posted in Financial crisis | Tagged: depflation, depression, Financial crisis, recession, stagflation | Leave a Comment »
Posted by seumasach on October 18, 2008
Jean Shaoul
WSWS
18 October 2008
Within days of announcing an unprecedented £37 billion bailout of three high street lenders—the Royal Bank of Scotland (RBS), Lloyds TSB and HBOS—that will involve the British government taking shares in the banks, Chancellor of the Exchequer Alistair Darling has caved in to the City’s demands for the banks to make dividend payouts.
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Posted in Financial crisis | Tagged: financial collapse, stop the bailout | Leave a Comment »
Posted by seumasach on October 18, 2008
As we have been at pains to stress, purchase of shares does not in any constitute, in itself, nationalization.
“One problem with Plan B was that it did not really mean nationalization (public ownership and control of the participating banks). Rather, it came closer to what has been called “crony capitalism” or “corporate welfare.” The bank stock being bought would be non-voting preferred stock, meaning the government would have no say in how the bank was run. The Treasury would just be feeding the bank money to do with as it would. Management could continue to collect enormous salaries while investing in wildly speculative ventures with the taxpayers’ money. The banks could not be forced to use the money to make much-needed loans but could just use it to clean up their derivative-infested balance sheets. In the end, the banks were still liable to go bankrupt, wiping out the taxpayers’ investment altogether. Even if $700 billion were fanned into $7 trillion, the sum would not come close to removing the $180 trillion in derivative liabilities from the banks’ books. Shifting those liabilities onto the public purse would just empty the purse without filling the derivative black hole.”
Ellen Brown
Web of Debt
16th October, 2008
Last night, the Presidential candidates had their last debate before the election. They talked of the baleful state of the economy and the stock market; but omitted from the discussion was what actually caused the credit freeze, and whether the banks should be nationalized as Treasury Secretary Hank Paulson is now proceeding to do. The omission was probably excusable, since the financial landscape has been changing so fast that it is hard to keep up. A year ago, the Dow Jones Industrial Average broke through 14,000 to make a new all-time high. Anyone predicting then that a year later the Dow would drop nearly by half and the Treasury would move to nationalize the banks would have been regarded with amused disbelief. But that is where we are today.1
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Posted in Financial crisis | Tagged: financial collapse, financial sovereignty | Leave a Comment »
Posted by smeddum on October 17, 2008
European leaders press for new economic order
By JOHN LEICESTER – 17 oct 2008
“Sarkozy cast his net even wider. The conservative — who has in recent weeks sounded increasingly like a leftist — wants discussion on tax havens, hedge and sovereign wealth funds, the “folly” of big pay bonuses for risk-taking executives and even how many major currencies the world needs.
Some of his harshest words were for ratings agencies, hinting that he wouldn’t be sorry to see them disappear altogether in the financial architecture that he and Brown say they want built.
“Do we keep them?” he asked. “What do we replace them with?
“Should they only be American?” he added, in a statement bound to get attention from U.S.-based Moody’s and Standard & Poors.
As always, Sarkozy is in a hurry. Waiting three months until John McCain or Barack Obama is sworn in runs the risk of the crisis getting worse or getting better, which could frustrate the drive for fundamental reform, the French leader warned.” The credit agencies ‘oversaw’ deregulation.
(AP) — The idea is ambitious: World leaders joined by aides to the new U.S. president-elect would gather before the year’s end in New York and attempt to forge a new vision for the global economy. Read the rest of this entry »
Posted in Financial crisis | Tagged: credit agencies, EU leaders | 1 Comment »
Posted by seumasach on October 17, 2008
Jose Saramago
Avisora
La historia es conocida, y, en aquellos tiempos antiguos en que la escuela se proclamaba educadora perfecta, se le enseñaba a los niños como ejemplo de la modestia y la discreción que siempre deberían acompañarnos cuando el demonio nos tentara para opinar sobre lo que no conocemos o conocemos poco y mal.
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Posted in Financial crisis | Tagged: financial collapse | Leave a Comment »
In These New Times 