German Wirehaired Pointer Club of America Forum Index German Wirehaired Pointer Club of America
AKC Parent Club for the German Wirehaired Pointer
 
 ForumForum FAQFAQ   SearchSearch   MemberlistMemberlist   UsergroupsUsergroups   RegisterRegister 
 ProfileProfile   Log in to check your private messagesLog in to check your private messages   Log inLog in 
 gwpca bulletin boardGWPCA Home Page   gwpca bulletin boardBulletin Board   gwpca bulletin boardGWPCA Rescue Page 

Blame-OT
Goto page 1, 2  Next
 
Post new topic   Reply to topic    German Wirehaired Pointer Club of America Forum Index -> General Chat
View previous topic :: View next topic  
Author Message
whiskerdog1
Master
Master


Joined: 01 Apr 2005
Posts: 256
Location: Rustbelt

PostPosted: 10/09/08, 1:44 pm    Post subject: Blame-OT Reply with quote

Who should we blame?
Actually, 3 culprits stand out in this mess. Alan Greenspan, Phil Gramm, and George W. Bush.

Alan Greenspan loved the derivatives and their bonus programs, and as Fed Chairman, he pushed this insanity further along on Wall. He praised the 'model efficiences' ie Credit scoring modules implemented, ripe for Fraud, & also encouraged ARM (adjustable) Loans, while rates were near all time lows. This was stated by him, in 2005.

Phil Gramm, as Senator, UBS bank VP and lobbyist, and chief economic adviser to John McCain, personally made hundreds of millions, while pushing forward the massive deregulation of our financial industry. Had Phil failed, we might still face a recession (these cycles can never be broken), but not the deep depression we now face.

And then we come to George.
His push for ever more sales, ill-advised home ownership, and more deregulation, acted like jet fuel poured on a massive forest fire. His anti-government mantras hid the fact that his cronies were enriching themselves, while deliberately turning a blind eye to out and out theft and fraud. (the countless billions lost in Iraq alone could save 20 million American families)
And those parts of the federal government tasked with preventing this insanity? For the most part, they were cheerleaders, making sure that the haves and have mores kept getting ever richer.

As a measure of how screwed up our country has become, we have squandered more than $120,000 per person in Iraqi. That ignores the fact that we caused the deaths of more than a million of them, and made 4 million others homeless, jobless, or starving refugees in nearby countries. By any objective, rational measure, Iraq was, is, and will be an abject failure, despite John McCain's obscene claims to the contrary.

For the past 8 years, the entire US economy has amounted to little more than a fraud, a Potemkin Economy, of sorts. Prince Grigori Alexandrovich Potemkin, lover of Catherine the great, lord of the Russian armies, and commander of its navies, was accused of orchestrating fake villages to convince Catherine and foreign visitors that her economic plans actually worked, while the serfs continued to suffer in utter destitution. In reality, Potemkin was given a bum rap because jealous German historians feared Mother Russia above all else.

As much as the Potemkin Villages were a fiction, our "strong" economy is even more of a fiction.
The only thing strong about it is the stink it sends downwind. The only thing worse is watching Treasury Sec. Paulson and hapless Ben Bernanke flail away each day, calling for emergency press conferences, assuring us that all is well, while the building in background collapses in flames. Hurricane Katrina had nothing on these guys.

Sure, there are other culprits, especially Dem and GOP leaders from both houses of congress. It is a pity that we no longer cherish brains and ability when electing congresscritters and senatwhores.
In fact, if we took John Bolton's prescription for the UN and applied to those currently infesting our Congress, then replaced them with 100 new senators and 435 new congressmen by simply picking them randomly off the street, it is unlikely that they could do any worse.

But back to my original point.
We already are in a quiet revolution. The question is where we will go from here. Will we remain quiet? or will we get as angry as circumstances and enraging facts suggest we should?

1 choice, our best choice, is a quiet revolution with massive bankruptcy law changes, moratoriums on foreclosures,(and return to property for those evicted this past year), the federally enforced rewriting of the most outrageous mortgages, indictments and convictions of many of the Wall Street barons, and a thorough federal take over & change of the entire usury credit card industry.

The other choice is far less appealing.
It is quite possible that if we continue along today's path, we face a violent revolution. And many people will die in the process. It is not beyond anyone's imagination that evicted families take to the streets, and take aim at the execs who created this mess, and profited from it. It won't be simply a Lehman CEO getting punched in the face at his health club (ah, to be a fly on the wall), instead, it will be locking up each executive and his family in one of their mansions, and watching it burn to the ground.

Those 2 and only those 2 are our choices.
The second is much closer than most of us realize, and those in charge of our country had better recognize it. Anger is growing, as is desperation. Desperate people lose their inhibitions, their rational behavior, and will strike out. And then, America as we know it will cease to function.
www.capitolhillblue.com/cont/node/11525
_________________
Real men hunt Wire Dogs


Last edited by whiskerdog1 on 10/10/08, 7:38 am; edited 1 time in total
Back to top
View user's profile Send private message Visit poster's website
Jon
Senior
Senior


Joined: 04 Apr 2006
Posts: 117

PostPosted: 10/09/08, 7:04 pm    Post subject: Reply with quote

Bill,
You need to relax ... double up on the Prozac for the next couple of days.

Our system provides the opportunity for abuse and greed...but, it is still the place I want to live....and I have lived in Austria, Germany, Switzerland, Brazil, India and Japan. Trust me...inspite of our failings..you don't want to live in any of these places.

BTW...don't any of the folks that took out the 5 million mortgages that they couldn't afford have any responsibility? Don't get me wrong, after Sarbannes/Oxley, I don't understand how any of these financial firms could represent themselves as solvent over the past few years.
Back to top
View user's profile Send private message Visit poster's website
whiskerdog1
Master
Master


Joined: 01 Apr 2005
Posts: 256
Location: Rustbelt

PostPosted: 10/09/08, 8:52 pm    Post subject: Reply with quote

BS Jon
Youve been a cheerleader with the 'its just a cycle' and lets do the blame game. Maybe Carter or Clintons fault..

This country is done.
The Asian markets are CLOSED,Finished their worst week Ever, in history
AmeriKa is Broke.
2 Losing wars-about to start a thid for Israel,
Osama & McAmnesty are the 2 'best' choices we were given to select from.

Theres No more liquidity. No trust, No lending.
Libor, Eurobor, Ted Index
tell it all. Theres NO Lending! Interbank.
FDIC cant cover losses, theryre too vast, not to mention they have 10 years to pay you back. 1500+ banks will fail in the next year.

Get you money out now while you can.
I warned eveyrone almost 2 years ago & Stated buy Gold, short the dollar. Saw this coming.
Another swindle, just as 1929 & the Weimar Republic.

Little to do with the Mortgages. Im in the business.
Subprime is only 6.8 % of the Mortgage Market.

Greenspan orchestrated the scandal with his pal, Holocaust survivor, now deceased, multi Billionaire CEO Ameriquest & Bush appointee to the Netherlands-FOUNDER OF the Subprime-Roland Arnall..

The '5 million' that took out loans CANT Refi. 286 National & regionnal Lenders have Imploded. THeres no more money.
And the economy sucks. They cant Refi their ARMS. ARMS that Greenspan encouraged them to take out..back in 2005
We have Declinging values in 90% of America. Most folks are upside down & Therefore cant qualify. Standards are ungodly now.

The FED Controls the Money supply.
THey created a Bubble & Now burst it

JP Morgan was leveraged 2000:1
Fractional Reserve banking. Fiat dollars not backed by anything.

Create loans, use those assets to buy 10xs your intitial investment, and use those assets to buy more. Only it was with derivatives. Bets on bets.
Warren Buffet called them Financial Weapons of Mass destruction.
Even he couldnt understand them. Takes a PHD literally, to understand them.
And our entire system ins invested in them & exposed.
Theres 562 Trillion with a 'T' in them. We are done
Buy guns, Ammo & Supplies. Youll need them

I agree with you on dogs, hunting, DDs & Breeding, but not this swindle & crisis we face. It will be unlike anything ever seen

You doubt Greenspan?
He himself called it a
Quote:
'Once in a Century Crisis'
about 3 weeks ago.
Thats code my man.

Take care
No Prozac for me. Just a Heinekan & some Drambuie

I liked it here, but this isnt my Grandfathers America.
We are looking at Ireland, Argentina, Malaysia & new Zealand now
Once Obama gets in, guns will be taken, socialized medicine, ( not to mention Socailized Banks, Insurance & Mortgage companies under Bush) for all and eventually the THUG government goes into Fascist Mode for the NWO.
And Americans have no fight in them. All gung ho about killing off Iraquis that never threatened us but wont do squat about the Neo CON traitors at home.
Too distracted, pre occupied, & apathetic. They deserve what they permit.
No thanks
_________________
Real men hunt Wire Dogs


Last edited by whiskerdog1 on 10/10/08, 8:44 am; edited 1 time in total
Back to top
View user's profile Send private message Visit poster's website
whiskerdog1
Master
Master


Joined: 01 Apr 2005
Posts: 256
Location: Rustbelt

PostPosted: 10/10/08, 8:24 am    Post subject: Reply with quote

Black Friday: US Stocks to plunge, Lehman derivatives to unwind; Dozens of banks may fail with credit default swaps

Today could be the beginning of the end as "the perfect storm" of financial bad news comes together.

As of 9:15 AM Eastern US time, Asian and European stock markets are in chaos with double-digit percentage losses that have been so profound, that exchanges in Austria, Russia, Australia and Indonesia SUSPENDED all trading!

The Dow Jones Industrial Average is already expected to open "sharply lower."

At 2:00 PM EDT today, the final price of the Lehman Brothers credit default swaps will be publicly released by the Bankruptcy court, which will tell everyone who insured against a Lehman default, how badly they must pony-up. The unraveling of those Lehman derivatives could take out a number of large US banks.
The US stock market opens at 9:30 AM today; it's going to be a wild day.



Money creation, interest, debt.... these are the powers of the world. Not guns, or armies, or business. Interest rules our world.

Quote:
"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."
-Henry Ford


Quote:
"If the American people ever allow private banks to control the issuance of their currencies, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their prosperity until their children will wake up homeless on the continent their fathers conquered."
-Thomas Jefferson

_________________
Real men hunt Wire Dogs
Back to top
View user's profile Send private message Visit poster's website
whiskerdog1
Master
Master


Joined: 01 Apr 2005
Posts: 256
Location: Rustbelt

PostPosted: 10/10/08, 9:07 am    Post subject: Reply with quote

The National debt was created because the private corporation named the Federal Reserve Bank, signed a piece of paper making trillions of dollars come into existence out of thin air.
You work 3 months out of the year to help pay interest to a private corporation because they signed that piece of paper.

This occurred in 1913, on Christmas Eve, with just a few members of Congress (under the influence) signed into law by Wilson.
The Federal Reserve is Neither Federal, NOR a Reserve.
Its a Private Cabal of Bankers, never audited, with 75% Foreign Ownership.
Rothschild is the primary owner. Schiff, Warburg, Goldman, Lehman etc

Also, every dollar you own is constantly devalued by inflation, caused by the fractional reserve banking system.
Deposit banks, like the one you have a checking account with, add to the money supply -- everyday, all the time. Every time a dollar is deposited into a bank, many more are created out of thin air and then loaned out at interest.

This scam, known as fractional reserve lending, has its roots in history when goldsmiths would give out receipts for gold deposited into their vaults. People began to use these gold receipts like paper money, and the goldsmiths soon realized that only a small fraction of people would redeem their gold receipts for actual gold. The goldsmiths began printing extra gold receipts -- for more gold than actually existed in their vaults -- and loaning the gold receipts out at interest.

They were printing money; counterfeit money.
They added to the money supply, causing inflation, which devalued everyone elses gold receipts. When inflation gets out of control, they call in their loans and reduce the money supply, deflating the currency. Deflation is the banker's friend.

Deflation means the currency is worth more wealth, and the banker has lots of currency because they just called in all of their loans made with fraudulent money. As Jefferson said, first by inflation, then by deflation, the banks will rob the people of all of their wealth.
_________________
Real men hunt Wire Dogs
Back to top
View user's profile Send private message Visit poster's website
whiskerdog1
Master
Master


Joined: 01 Apr 2005
Posts: 256
Location: Rustbelt

PostPosted: 10/10/08, 10:32 am    Post subject: Reply with quote

Jon & Chris...For you

Peter Schiff & Jim Rogers, 2 widely respected investors & traders, called it 2 years ago in this debate with a globablist Neo CON apologist.. Who was right?

Hopefully you learn something..


http://www.youtube.com/watch?v=7Q4UzCunFhU&feature=related

http://www.youtube.com/watch?v=zhLPNdjyjyg
_________________
Real men hunt Wire Dogs
Back to top
View user's profile Send private message Visit poster's website
whiskerdog1
Master
Master


Joined: 01 Apr 2005
Posts: 256
Location: Rustbelt

PostPosted: 10/10/08, 11:31 am    Post subject: Reply with quote

Berlusconi Says Leaders May Close World's Markets (Update1)

By Steve Scherer

Oct. 10 (Bloomberg) -- Italian Prime Minister Silvio Berlusconi said political leaders are discussing the idea of closing the world's financial markets while they ``rewrite the rules of international finance.''

``The idea of suspending the markets for the time it takes to rewrite the rules is being discussed,'' Berlusconi said today after a Cabinet meeting in Naples, Italy. A solution to the financial crisis ``can't just be for one country, or even just for Europe, but global.''

The Dow Jones Industrial Average fell as much 8.1 percent in early trading and pared most of those losses after Berlusconi's remarks. The Dow was down 0.5 percent to 8540.52 at 10:10 in New York.

Group of Seven finance ministers and central bankers are meeting in Washington today, and will stay in town for the International Monetary Fund and World Bank meetings this weekend. European Union leaders may gather in Paris on Oct. 12, three days before a scheduled summit in Brussels, Berlusconi said today, while Group of Eight leaders may hold a meeting on the crisis ``in coming days,'' he said.

Berlusconi didn't give any details about what kind of rules leaders were looking to change, except to say that leaders are ``talking about a new Bretton Woods.''

The Bretton Woods Agreements were adopted to rebuild the international economic system after World War II in a hotel in Bretton Woods, New Hampshire. The aim of the agreements was to establish a monetary management system, initially by pegging currencies to gold. The IMF was set up later to help manage the international financial system.

To contact the reporter on this story: Steve Scherer in Rome at scherer@bloomberg.net
Last Updated: October 10, 2008 10:15 EDT
_________________
Real men hunt Wire Dogs
Back to top
View user's profile Send private message Visit poster's website
whiskerdog1
Master
Master


Joined: 01 Apr 2005
Posts: 256
Location: Rustbelt

PostPosted: 10/10/08, 12:50 pm    Post subject: Reply with quote

http://www.youtube.com/watch?v=xIsHD7nwTbU

Friday, October 10, 2008

Legendary investor Jim Rogers warned during a CNBC interview this morning that global central banks are creating the environment for an inflationary holocaust by their ceaseless overprinting of currency, a measure that isn’t even successful in stabilizing the stock market.

Rogers said that the only solution to the market crisis was to let failing banks and speculators go bankrupt and stop pumping endless amounts of liquidity into the system, labeling it outrageous that responsible investors and taxpayers are being made to bail out crooks on Wall Street.

“The way to solve this problem is to let people go bankrupt,” Rogers stressed, “All of this pumping money into the system is not going to save it - see what the market is saying, it’s saying we don’t buy that, let people go bankrupt,” he added.

“Then you will hit bottom and then you start over. The people who are sound will take over the assets from the people who aren’t sound and we will start over. This is the way the world has worked for a few thousand years,” said Rogers.

Rogers warned that the reliance on governments printing money would not aid a recovery and would only lead to the problem becoming worse in the future.

“We’re setting the stage for when we come out of this of a massive inflation holocaust,” he said.

Rogers said that excesses of credit and people becoming over-leveraged meant that they would now have to take some pain.

“Never before in world history were people able to buy houses with no money down, many people bought four or five houses with no money down and no job and then they did it with cars and student loans and credit card loans, you just think we say well that’s too bad we’re gonna start over nobody loses his job….be realistic,” said Rogers.

Rogers said that the G7 leaders, who are meeting this weekend, should “go down to the bar, have a beer and leave the rest of us alone, let the people who are sound succeed and let the other people fail.”

“What I’m afraid of is they’re gonna keep doing what they’ve been doing - which the market hates, you can see the market hates it - because this is going to unleash rampant inflation around the world, rampant confusion in the currency markets and you’re gonna have currencies gyrating all over the world,” said Rogers, repeating that the central bankers were unleashing an “inflationary holocaust”.

A CNBC expert then expressed his confusion at Rogers’ argument that overprinting of currency caused hyper inflation, seemingly displaying less grasp of basic economic cause and effect principles than a 5-year-old would.
Rogers again made the point, “When you print gigantic amounts of money and you flood the world with money, throughout history that has led to inflation.”
_________________
Real men hunt Wire Dogs
Back to top
View user's profile Send private message Visit poster's website
whiskerdog1
Master
Master


Joined: 01 Apr 2005
Posts: 256
Location: Rustbelt

PostPosted: 10/11/08, 12:03 pm    Post subject: Reply with quote

2 Nuns put on Homeland Security Terrorist Database, for being outspoken Anti War, peace activists...

Thats where we are folks. 1st Amendment be damned.
Click on a website, & you can be there too. Or ARE already.
Im off to clean my guns

Sister Ardeth, 72, & Sister Carol, 60, returned to their Baltimore home to find letters and an e-mail from the Maryland State Police saying they were labeled as suspected terrorists in a federal database between 2005 and 2006." heres a link to the story..

www.foxnews.com/story/0,2933,436424,00.html
_________________
Real men hunt Wire Dogs
Back to top
View user's profile Send private message Visit poster's website
whiskerdog1
Master
Master


Joined: 01 Apr 2005
Posts: 256
Location: Rustbelt

PostPosted: 10/12/08, 7:01 am    Post subject: Reply with quote

'In 1930 America did not lack industrial capacity, fertile farmlands, skilled and willing workers or industrious families. It had an extensive and efficient transportation system in railroads, road networks, and inland and ocean waterways. Communications between regions and localities were the best in the world, utilizing telephone, teletype, radio, and a well operated government mail system.

No war had ravaged the cities or the countryside, no pestilence weakened the population, nor had famine stalked the land. The United States of America in 1930 lacked only one thing: an adequate supply of money to carry on trade and commerce.

In the early 1930s, bankers, the only source of new money and credit, deliberately refused loans to industries, stores and farms. Payments on existing loans were required however, and money rapidly disappeared from circulation. Goods were available to be purchased, jobs waiting to be done, but the lack of money brought the nation to a standstill.


By this simple ploy America was put in a "depression" and bankers took possession of hundreds of thousands of farms, homes, and business properties. The people were told, "times are hard" and "money is short." Not understanding the system, they were cruelly robbed of their earnings, their savings, and their property.

No Money for Peace, but Plenty for War.
World War II ended the "depression." The same Bankers who in the early 1930's had no loans for peacetime houses, food and clothing, suddenly had unlimited billions to lend for army barracks, K-rations and uniforms.

A nation that in 1934 could not produce food for sale, suddenly could produce bombs to send free to Germany and Japan! (More on this riddle later).

With the sudden increase in money, people were hired, farms sold their produce, factories went to two shifts, mines reopened, and "The Great Depression" was over!

Some politicians were blamed for it and others took credit for ending it. The truth is the lack of money (caused by Bankers) brought on the depression, and adequate money ended it. The people were never told that simple truth and in this article we will endeavor to show how these same bankers who control our money and credit have used their control to plunder America and place us in bondage.

Power to Coin and Regulate Money When we can see the disastrous results of an artificially created shortage of money, we can better understand why our Founding Fathers, who understood both money and God's Laws, insisted on placing the power to "create" money and the power to control it ONLY in the hands of the Federal Congress.

They believed that ALL Citizens should share in the profits of its "creation" and therefore the Federal government must be the only creator of money. They further believed that all citizens, of whatever state, territory or station in life, would benefit by an adequate and stable currency. Therefore, the Federal government must also be, by law, the only controller of the value of money.

Since the Federal Congress was the only legislative body subject to all the citizens at the ballot box, it was, to their minds, the only safe depository of so much profit and so much power. They wrote it out in simple, but all inclusive manner: "Congress shall have the power to Coin Money and Regulate the Value Thereof."

How We Gave Control to the Federal Reserve

Instea of the Constitutional method of creating our money and putting it into circulation, we now have and entirely unconstitutional system. This has brought our country to the brink of disaster, as we shall see.

Since our money was handled both legally and illegally before 1913, we shall consider only the years following 1913, since from that year on, all of our money had been created and issued by an illegal method that will eventually destroy the United States if it is not changed. Prior to 1913, America was a prosperous, powerful, and growing nation, at peace with its neighbors and the envy of the world. But in December of 1913, Congress, with many members away for the Christmas Holidays, passed what has since been known as the Federal Reserve Act. (For the full story of how this infamous legislation was forced through our Congress, read "Conquest or Consent", by W. D. Vennard).

Omitting the burdensome details, it simply authorized the establishment of a Federal Reserve Corporation, run by a Board of Directors (The Federal Reserve Board). The act divided the United States into 12 Federal Reserve "Districts."

This simple, but terrible, law completely removed from Congress the right to "create" money or to have any control over its "creation", and gave that function to The Federal Reserve Corporation. It was accompanied by the appropriate fanfare. The propaganda claimed that this would "remove money from politics" (they did not say "and therefore from the people's control")and prevent "boom and bust" economic activity from hurting our citizens.

The people were not told then, and most still do not know today, that the Federal Reserve Corporation is a private corporation controlled by bankers and therefore is operated for the financial gain of the bankers over the people rather than for the good of the people. The word "Federal" was used only to deceive the people.

Billions in Interest Owed to Private Banks
We shall start with the need for money. The Federal Government, having spent more than it has taken from its citizens in taxes, needs, for the sake of illustration, $1,000,000,000. Since it does not have the money, and Congress has given away its authority to "create" it, the Government must go to the "creators" for the $1 billion.

But, the Federal Reserve, a private corporation, does not just give its money away! The Bankers are willing to deliver $1,000,000,000 in money or credit to the Federal Government in exchange for the government's agreement to pay it back -- with interest. So Congress authorizes the Treasury Department to print $1,000,000,000 in U.S. Bonds, which are then delivered to the Federal Reserve Bankers.

The Federal Reserve then pays the cost of printing the $1 billion (about $1,000) and makes the exchange. The government then uses the money to pay its obligations. What are the results of this fantastic transaction? Well, $1 billion in government bills are paid all right, but the Government has now indebted the people to the bankers for $1 billion on which the people must pay interest!

Tens of thousands of such transactions have taken place since 1913 so that in 1996, the U.S. Government is indebted to the Bankers for more than $5,000,000,000,000 (trillion). Most of the income taxes that we pay as individuals now goes straight into the hands of the bankers, just to pay off the interest alone, with no hope of ever paying off the principle. Our children will be forced into servitude.

But wait! There's more!
You say, "This is terrible!" Yes, it is, but we have shown only part of the sordid story. Under this unholy system, those United States Bonds have now become "assets" of the banks in the Reserve System which they then use as "reserves" to "create" more "credit" to lend. Current "reserve" requirements allow them to use that $1 billion in bonds to "create" as much as $15 billion in new "credit" to lend to states, municipalities, to individuals and businesses.

Added to the original $1 billion, they could have $16 billion of "created credit" out in loans paying them interest with their only cost being $1,000 for printing the original $1 billion! Since the U.S. Congress has not issued Constitutional money since 1863 (more than 100 years), in order for the people to have money to carry on trade and commerce they are forced to borrow the "created credit" of the Monopoly bankers and pay them usury-interest!


Manipulating Stocks for Fun and Profit

In addition to almost unlimited usury, the bankers have another method of drawing vast amounts of wealth. The banks who control the money at the top are able to approve or disapprove large loans to large and successful corporations to the extent that refusal of a loan will bring about a reduction in the selling price of the corporation's stock.

After depressing the price, the bankers' agents buy large blocks of the company's stock. Then, if the bank suddenly approves a multi-million dollar loan to the company, the stock rises and is then sold for a profit. In this manner, billions of dollars are made with which to buy more stock. This practice is so refined today that the Federal Reserve Board need only announce to the newspapers an increase or decrease in their "discount rate" to send stocks soaring or crashing at their whim.

Using this method since 1913, the bankers and their agents have purchased secret or open control of almost every large corporation in America. Using this leverage, they then force the corporations to borrow huge sums from their banks so that corporate earnings are siphoned off in the form of interest to the banks. This leaves little as actual "profits" which can be paid as dividends and explains why banks can reap billions in interest from corporate loans even when stock prices are depressed. In effect, the bankers get a huge chunk of the profits, while individual stockholders are left holding the bag.

The millions of working families of America are now indebted to the few thousand banking families for twice the assessed value of the entire United States. And these Banking families obtained that debt against us for the cost of paper, ink, and bookkeeping!

The interest amount is never created
The only way new money (which is not true money, but rather credit representing a debt), goes into circulation in America is when it is borrowed from the bankers. When the State and people borrow large sums, we seem to prosper. However, the bankers "create" only the amount of the principal of each loan, never the extra amount needed to pay the interest. Therefore, the new money never equals the new debt added. The amounts needed to pay the interest on loans is not "created," and therefore does not exist!

Under this system, where new debt always exceeds new money no matter how much or how little is borrowed, the total debt increasingly outstrips the amount of money available to pay the debt. The people can never, ever get out of debt!

The following example will show the viciousness of this interest-debt system via its "built in" shortage of money.

The Tyranny of Compound Interest
When a citizen goes to a banker to borrow $100,000 to purchase a home or a farm, the bank clerk has the borrower agree to pay back the loan plus interest. At 8.25% interest for 30 years, the borrower must agree to pay $751.27 per month for a total of $270,456.00.

The clerk then requires the citizen to assign to the banker the right of ownership of the property if the borrower does not make the required payments. The bank clerk then gives the borrower a $100,000 check or a $100,000 deposit slip, crediting the borrower's checking account with $100,000.

The borrower then writes checks to the builder, subcontractors, etc. who in turn write checks. $100,000 of new "checkbook" money is thereby added to the "money in circulation."

However, this is the fatal flaw in the system: the only new money created and put into circulation is the amount of the loan, $100,000. The money to pay the interest is NOT created, and therefore was NOT added to "money in circulation."

Even so, this borrower (and those who follow him in ownership of the property) must earn and take out of circulation $270,456.00, $170,456.00 more than he put in circulation when he borrowed the original $100,000! (This interest cheats all families out of nicer homes. It is not that they cannot afford them; it is because the bankers' interest forces them to pay for nearly 3 homes to get one!)

Every new loan puts the same process in operation. Each borrower adds a small sum to the total money supply when he borrows, but the payments on the loan (because of interest) then deduct a much larger sum from the total money supply.

There is therefore no way all debtors can pay off the money lenders. As they pay the principle and interest, the money in circulation disappears. All they can do is struggle against each other, borrowing more and more from the money lenders each generation. The money lenders (bankers), who produce nothing of value, gradually gain a death grip on the land, buildings, and present and future earnings of the whole working population. Proverbs 22:7 has come to pass in America. "The rich ruleth over the poor, and the borrower is servant to the lender."

Small loans do the same thing If you have not quite grasped the impact of the above, let us consider an auto loan for 5 years at 9.5% interest. Step 1: Citizen borrows $25,000 and pays it into circulation (it goes to the dealer, factory, miner, etc.) and signs a note agreeing to pay the Bankers a total of $31,503 over 5 years. Step 2: Citizen pays $525.05 per month of his earnings to the Banker. In five years, he will remove from circulation $6,503 more than he put in circulation.

Every loan of banker "created" money (credit) causes the same thing to happen. Since this has happened millions of times since 1913 (and continues today), you can see why America has gone from a prosperous, debt-free nation to a debt-ridden nation where practically every home, farm and business is paying usury-tribute to the bankers.

Checking Up On Cash
In the millions of transactions made each year like those just discussed, little actual currency changes hands, nor is it necessary that it do so.

About 95 percent of all "cash" transactions in the U. S. are executed by check. Consider also that banks must only hold 10 percent of their deposits on site in cash at any given time. This means 90 percent of all deposits, though they may actually be held by the ban, are not present in the form of actual cash currency.

That leaves the banker relatively safe to "create" that so-called "loan" by writing the check or deposit slip not against actual money, but against your promise to pay it back! The cost to him is paper, ink and a few dollars of overhead for each transaction. It is "check kiting" on an enormous scale. The profits increase rapidly, year after year.

Our Own Debt is Spiraling into Infinity
In 1910 the U. S. Federal debt was only $1 billion, or $12.40 per citizen. State and local debts were practically non-existent.

By 1920, after only six years of Federal Reserve shenanigans, the Federal debt had jumped to $24 billion, or $228 per person.
In 1960 the Federal debt reached $284 billion, or $1,575 per citizen and state and local debts were mushrooming.
In 1998 the Federal debt passed $5.5 trillion, or $20,403.90 per man, woman and child and is growing exponentially.

State and local debts are increasing as fast Federal debts. However, they are too cunning to take the title to everything at once. They instead leave us with some "illusion of ownership" so you and your children will continue to work and pay the bankers more of your earnings on ever increasing debts. The "establishment" has captured our people with their debt-money system as certainly as if they had marched in with an uniformed army.

Gambling Away the American Dream
To grasp the truth that periodic withdrawal of money through interest payments will inexorably transfer all wealth in the nation to the receiver of interest, imagine yourself in a poker or dice game where everyone must buy the chips (the medium of exchange) from a "banker" who does not risk chips in the game.

He just watches the table and reaches in every hour to take 10 percent to 15 percent of all the chips on the table. As the game goes on, the amount of chips in the possession of each player will fluctuate according to his luck.

However, the total number of chips available to play the game (carry on trade and business) will decrease steadily.

As the game starts getting low on chips, some players will run out. If they want to continue to play, they must buy or borrow more chips from the "banker". The "banker" will sell (lend) them only if the player signs a "mortgage" agreeing to give the "Banker" some real property (car, home, farm, business, etc.) if he cannot make periodic payments to pay back all the chips plus some extra chips (interest). The payments must be made on time, whether he wins (makes a profit) or not.

It is easy to see that no matter how skillfully they play, eventually the "banker" will end up with all of his original chips back, and except for the very best players, the rest, if they stay in long enough, will lose to the "banker" their homes, their farms, their businesses, perhaps even their cars, watches, and the shirts off their backs!

Our real life situation is much worse than any poker game. In a poker game no one is forced into debt, and anyone can quit at any time and keep whatever he still has. But in real life, even if we borrow little ourselves from the "bankers," our local, State and Federal governments borrow billions in our name, squander it, then confiscate our earnings via taxation in order to pay off the bankers with interest.

We are forced to play the game, and none can leave except by death. We pay as long as we live, and our children pay after we die. If we cannot or refuse to pay, the government sends the police to take our property and give it to the bankers. The bankers risk nothing in the game; they just collect their percentage and "win it all." In Las Vegas, all games are rigged to pay the owner a percentage, and they rake in millions. The Federal Reserve bankers' "game" is also rigged, and it pays off in billions!



In recent years, Bankers have added some new cards to their deck: credit cards are promoted as a convenience and a great boon to trade. Actually, they are ingenious devices from the seller and 18% interest from buyers. A real "stacked" deck!

Yes, it's political too
Democrat, Republican, and independent voters who have wondered why politicians always spend more tax money than they take in should now see the reason. When they begin to study our money system, they soon realize that these politicians are not the agents of the people but are the agents of the bankers, for whom they plan ways to place the people further in debt.

It takes only a little imagination to see that if Congress had been "creating," spending and issuing into circulation the necessary increase in the money supply, there would be no national debt. Trillions of dollars of other debts would be practically non-existent.

Since there would be no original cost of money except printing, and no continuing costs such as interest, Federal taxes would be almost nil. Money, once in circulation, would remain there and go on serving its purpose as a medium of exchange for generation after generation and century after century, with no payments to the Bankers whatsoever!

Continuing Cycles of Debt and War
But instead of peace and debt-free prosperity, we have ever-mounting debt and cyclical periods of war. We as a people are now ruled by a system of banking influence that has usurped the mantle of government, disguised itself as our legitimate government, and set about to pauperize and control our people.

It is now a centralized, all-powerful political apparatus whose main purposes are promoting war, confiscating the people's money, and propagandizing to perpetuate its power. Our two main political parties have become its servants, the various departments of government have become its spending agencies, and the Internal Revenue Service is its collection agency.

Unknown to the people, it operates in close cooperation with similar apparatuses in other nations, which are also disguised as "governments."

Some, we are told, are friends. Some, we are told, are enemies. "Enemies" are built up through international manipulations and used to frighten the American people into going billions of dollars further into debt to the bankers for "military preparedness," "foreign aid to stop communism," "the drug war," etc.

Citizens, deliberately confused by brainwashing propaganda, watch helplessly while our politicians give food, goods, and money to banker-controlled alien governments under the guise of "better relations" and "easing tensions." Our banker-controlled government takes our finest and bravest sons and sends them into foreign wars where tens of thousands are murdered, and hundreds of thousands are crippled (not to mention collateral damage and casualties among the "enemy" troops.)

When the "war" is over, we have gained nothing, but we are billions of dollars further in debt to the bankers, which was the reason for the "war" in the first place!

And There's More
The profits from these massive debts have been used to erect a complete and, almost hidden, economic colossus, over our nation. They keep telling us they are trying to do us good, when in truth they work to bring harm and injury to our people. These would be despots know, it is easier to control and rob a ill, poorly educated, and confused people, than it is a healthy and intelligent population, so they deliberately prevent real cures for diseases, they degrade our educational systems, and they stir up social and racial unrest. For the same reason, they favor drug use, alcohol, sexual promiscuity, abortion, pornography, and crime. Everything, which debilitates the minds and bodies of the people, is secretly encouraged, as it makes the people less able to oppose them, or, even, to understand what is being done to them.

Family, morals, love of country, the Christian religion, all that is honorable, is being swept away, while they try to build their new, subservient man. Our new "rulers" are trying to change our whole racial, social, religious, and political order, but they will not change the debt-money-economic system, by which they rob and rule. Our people have become tenants and "debt-slaves", to the Bankers, and their agents, in the land our fathers conquered. It is conquest through the most, gigantic fraud and swindle, in the history of mankind. And we remind you again: The key to their wealth and power, over us, is their ability to create "money" out of nothing, and lend it to us, at interest. If they had not been allowed to do that, they would never have gained secret control of our nation. How true Solomon's words are: "The rich ruleth over the poor, and the borrower is servant to the lender "(Proverbs 22:7).

God Almighty warned, in the Bible, that one of the curses, which would come upon His people, for disobeying His laws was: The stranger that is within thee shall get up above thee very high; and thou shall come down very low. He shall lend to thee, and thou shall not lend to him; he shall be the head, and thou shall be the tail. Deut. 28:44-45

Most of the owners of the large banks, in America, are of eastern-european ancestry, and connected with the Rothschild European banks. Has that warning come to fruition in America?
_________________
Real men hunt Wire Dogs
Back to top
View user's profile Send private message Visit poster's website
whiskerdog1
Master
Master


Joined: 01 Apr 2005
Posts: 256
Location: Rustbelt

PostPosted: 10/14/08, 9:31 am    Post subject: Reply with quote

"The essence of a credit-expansion boom is not overinvestment, but investment in wrong lines, i.e., malinvestment."

"What is needed for a sound expansion of production is additional capital goods, not money or fiduciary media. The credit boom is built on the sands of banknotes and deposits. It must collapse."
"If the credit expansion is not stopped in time, the boom turns into the crack-up boom; the flight into real values begins, and the whole monetary system founders."

"Credit expansion is the governments’ foremost tool in their struggle against the market economy. In their hands it is the magic wand designed to conjure away the scarcity of capital goods, to lower the rate of interest or to abolish it altogether, to finance lavish government spending, to expropriate the capitalists, to contrive everlasting booms, and to make everybody prosperous."
"The final outcome of the credit expansion is general impoverishment."

-Ludwig von Mises, excerpts from The Theory of Money and Credit
(Probably turning in his grave)
_________________
Real men hunt Wire Dogs
Back to top
View user's profile Send private message Visit poster's website
whiskerdog1
Master
Master


Joined: 01 Apr 2005
Posts: 256
Location: Rustbelt

PostPosted: 10/15/08, 12:50 pm    Post subject: Reply with quote

Not Enough Money in the World: The Real Monster in the Meltdown Closet
by Chris Floyd


The myth has quickly taken hold that the global financial crash was caused by bad mortgages.
This has allowed rightwing hatemongers to blame the meltdown on the "liberal" programs that encouraged home ownership among a small percentage of lower-income people (a poisonous canard that parts of the mainstream media have actually done a fairly good job of knocking down), while "progressives" of various stripes have denounced banks and other financial institutions for pushing over-easy credit on people who couldn't really afford it.

Unsustainable mortgages are a factor in the global crash, of course. And many people (most of them white, by the way) did take out mortgages they would not be able to afford if the housing bubble ever burst, which it has, most spectacularly. And yes, it is undeniable that the financial services industry has been tempting people with easy credit like schoolyard pushers flashing reefers.

All of this was bound to end badly, and did.
But this alone would not have been enough to threaten the destruction of the entire global financial system, nor cause the blind, screaming panic that has strangulated the financial markets, seized up the vital flow of money between banks, and caused the "free" market-worshipping governments of the Western world to carry out nationalizations and interventions that, in sheer numbers, dwarf anything ever seen following a Communist revolution.
(As John Lancaster notes in the London Review of Books, the Bush Administration's takeover of Fannie Mae and Fannie Mac alone was "was, by cash value, the biggest nationalisation in the history of the world." And that was just the beginning.)

What has struck mortal fear in the heart of markets and governments is not bad mortgages, But the almost incomprehensibly huge and complex market for "derivatives," based in part on mortgage debt -- but also on a vast array of other sources that were "securitized," turned into tradable if ghostly commodities then sold off in a bewildering variety of increasingly arcane forms.
This was accompanied by the expansion of yet another vast market in insurance mechanisms designed to protect these derivatives -- mechanisms which themselves became "securitized."

At the same time, the financial services industry used its paid bagmen in governments around the world to loosen almost all restrictions not only on securitization and the trading of derivatives, but also on the amount of debt that institutions could take on in order to play around in these vastly expanded and deregulated markets. For example, as Lancaster points out, UK's Barclays Bank had a debt-to-equity ratio of 63 to 1:

Imagine that for a moment translated to your own finances, so that you could stretch what you actually, unequivocally own to borrow more than 60 times the amount. (I’d have an island. What about you?)

The result of all this has been the construction of a gargantuan house of cards, based on next to nothing, and left alone in the shadow of building "perfect storm" of greed, deregulation and political corruption.

That storm has now struck.
The house of cards has fallen down, and revealed a hole of derivatives-based debt that could not be filled, literally, by all the money in the world, much less by the mere trillions that national governments are frantically throwing at it today

Yes, "mere" trillions. As Will Hutton explains in the Observer:
...the dark heart of the global financial system [is] the $55 trillion market in credit derivatives and, in particular, credit default swaps, the mechanisms routinely used to insure banks against losses on risky investments. This is a market more than twice the size of the combined GDP of the US, Japan and the EU. Until it is cleaned up and the toxic threat it poses is removed, the pandemic will continue. Even nationalised banks, and the countries standing behind them, could be overwhelmed by the scale of the losses now emerging.

Try to imagine that: a $55 trillion market now at risk of complete destruction. Even the derivative debt owed by individual institutions stands at nation-wrecking levels. For example, a single bank in Britain, Barclays again, holds more than $2.4 trillion in credit default swaps, the tradable "insurance" mechanism against securities default. This is more than the entire GDP of Great Britain. If all this paper goes bad, there are not enough assets in the entire country to pay it off. And that's just one bank, in one country.

Hutton gives the details:
This market in credit derivatives has grown explosively over the last decade largely in response to the $10 trillion market in securitised assets - the packaging up of income from a huge variety of sources (office rents, port charges, mortgage payments, sport stadiums) and its subsequent sale as a 'security' to be traded between banks.

Plainly, these securities are risky, so the markets invented a system of insurance. A buyer of a securitised bond can purchase what is in effect an insurance contract that will protect him or her against default - a credit default swap (CDS). But unlike the comprehensive insurance contract on your car which you have with one insurance company, these credit default contracts can be freely bought and sold.
Complex mathematical models are continually assessing the risk and comparing it to market prices. If the risk falls, the CDSs are cheap; if the risk rises - because, say, a credit rating agency declares the issuing company is less solid - the price rises.
Hedge funds speculate in them wildly.

Their purpose was a market solution to make securitisation less risky; in fact, they make it more risky, as we are now witnessing. The collapse of Lehman Brothers - the refusal to bail it out has had cataclysmic consequences - means that it can no longer honour $110bn of bonds, nor $440bn of CDSs it had written. On Friday, the dud contracts were auctioned, with buyers paying a paltry eight cents for every dollar. Put another way, there is now a $414bn hole which somebody holding these contracts has to honour. And if your head is spinning now, add the three bust Icelandic banks. They can no longer honour more than $50bn of bonds, nor a mind-boggling $200bn of CDSs....

While every bank tries to pass the toxic parcel on to somebody else, the system has to find the money. So will compensation for the near valueless contracts and thus now uninsured debt ultimately be made - and by whom? And because nobody knows - not the regulators, banks or governments - who owns the swaps and whether they are credit-worthy, nobody can answer the question. Maybe holders of insurance policies will get the cash due to them, but will that weaken somebody else? The result - panic.

This is the ultra-dangerous downward vortex in which the system is locked. It is why share prices are plummeting. As recession deepens, there will be defaults on securitised bonds and the potential collapse of more banks outside the G7 ring-fence. Nobody knows what proportion of the $55 trillion of credit default contracts that have actually been written will be honoured and who might bear losses running into trillions of dollars.

This is the beast in the dark that is haunting the feckless leaders of the developed world: $55 trillion of unaccountable debt, and no way of knowing how much of it is even now being flushed down the toilet, taking the global economy with it.

The massive interventions we are seeing might stabilize the markets temporarily, or at least arrest their free fall long enough to come up with some kind of massive restructuring of the global financial system. Or they might not. For it is by no means certain that the wisdom, and the political courage, to come up with a more viable system can be found among the world's political leaders -- all of whom, as we noted here the other day, have risen within the present system and, to one degree or another, owe their own power and privilege to the "malefactors of great wealth" and the extremist cult of market fundamentalism.
There is no indication anywhere that the circle of collusion and corruption between governments and Big Money has even lessened, much less been broken, by the economic catastrophe. All of the various bailout plans and "coordinated actions" still have as their chief aim the preservation of the malefactors in their current state of wealth, privilege and domination. As Jonathan Schwarz notes:

Still, U.S. elites will try to impose as much of a structural adjustment as they can get away with, in order to make the bottom 80% of America pay the price for the elites' spectacular screw-ups. The Washington Post has already started writing about how the current crisis demonstrates that we must cut Social Security. Look for much more of this to come.

The only slim hope we have for any genuine reform -- even an imperfect, conflicted, compromised reform, which is the only kind we will ever have in this world, until the lion lies down with the lamb -- is that the sheer scale of the real problem -- the $55 trillion beast, the very real potential for the complete destruction of the global economy, and the state power that depends upon it -- might force some politicians to turn apostate, renounce the market cult, and bite the hands that have fed them for so long.

Absent this near-miraculous possibility, we will be left with yet another rickety house of cards, slapped together on the fly -- largely at the malefactors' direction and for their benefit -- while the beast gapes wide his ponderous jaws, and prepares to swallow us whole. Back to Top
_________________
Real men hunt Wire Dogs
Back to top
View user's profile Send private message Visit poster's website
whiskerdog1
Master
Master


Joined: 01 Apr 2005
Posts: 256
Location: Rustbelt

PostPosted: 10/17/08, 1:17 pm    Post subject: Reply with quote

The New Deal Revisited


Today’s credit crisis is very similar to that facing Franklin Roosevelt in the 1930s. In 1932, President Hoover set up the Reconstruction Finance Corporation (RFC) as a federally-owned bank that would bail out commercial banks by extending loans to them, much as the privately-owned Federal Reserve is doing today. But like today, Hoover’s plan failed.
The banks did not need more loans; they were already drowning in debt. They needed customers with money to spend and to invest. President Roosevelt used Hoover’s new government-owned lending facility to extend loans where they were needed most – for housing, agriculture and industry.
Many new federal agencies were set up and funded by the RFC, including the HOLC (Home Owners Loan Corporation) and Fannie Mae (the Federal National Mortgage Association, which was then a government-owned agency). In the 1940s, the RFC went into overdrive funding the infrastructure necessary for the U.S. to participate in World War II, setting the country up with the infrastructure it needed to become the world’s industrial leader after the war.

The RFC was a government-owned bank that sidestepped the privately-owned Federal Reserve; but unlike the private banks with which it was competing, the RFC had to have the money in hand before lending it. The RFC was funded by issuing government bonds (I.O.U.s or debt) and relending the proceeds.
The result was to put the taxpayers further into debt. This problem could be avoided, however, by updating the RFC model. A system of public banks might be set up that had the power to create credit themselves, just as private banks do now. A public bank operating on the private bank model could fan $700 billion in capital reserves into $7 trillion in public credit that was derivative-free, liability-free, and readily available to fund all those things we think we don’t have the money for now, including the loans necessary to meet payrolls, fund mortgages, and underwrite public infrastructure.


Credit as a Public Utility
"Credit" can and should be a national utility, a public service provided by the government to the people it serves. Many people are opposed to getting the government involved in the banking system, but the fact is that the government is already involved. A modern-day RFC would actually mean less government involvement and a more efficient use of the already-earmarked $700 billion than policymakers are talking about now. The government would not need to interfere with the private banking system, which could carry on as before. The Treasury would not need to bail out the banks, which could be left to those same free market forces that have served them so well up to now. If banks went bankrupt, they could be put into FDIC receivership and nationalized. The government would then own a string of banks, which could be used to service the depository and credit needs of the community. There would be no need to change the personnel or procedures of these newly-nationalized banks. They could engage in "fractional reserve" lending just as they do now. The only difference would be that the interest on loans would return to the government, helping to defray the tax burden on the populace; and the banks would start out with a clean set of books, so their $700 billion in startup capital could be fanned into $7 trillion in new loans. This was the sort of banking scheme used in Benjamin Franklin’s colony of Pennsylvania, where it worked brilliantly well. The spiraling-interest problem was avoided by printing some extra money and spending it into the economy for public purposes. During the decades the provincial bank operated, the Pennsylvania colonists paid no taxes, there was no government debt, and inflation did not result.7

Like the Pennsylvania bank, a modern-day federal banking system would not actually need "reserves" at all. It is the sovereign right of a government to issue the currency of the realm. What backs our money today is simply "the full faith and credit of the United States," something the United States should be able to issue directly without having to draw on "reserves" of its own credit. But if Congress is not prepared to go that far, a more efficient use of the earmarked $700 billion than bailing out failing banks would be to designate the funds as the "reserves" for a newly-reconstituted RFC.

Rather than creating a separate public banking corporation called the RFC, the nation’s financial apparatus could be streamlined by simply nationalizing the privately-owned Federal Reserve; but again, Congress may not be prepared to go that far. Since there is already successful precedent for establishing an RFC in times like these, that model could serve as a non-controversial starting point for a new public credit facility. The G-7 nations’ financial planners, who met in Washington D.C. this past weekend, appear intent on supporting the banking system with enough government-debt-backed "liquidity" to produce what Jim Rogers calls "an inflationary holocaust." As the U.S. private banking system self-destructs, we need to ensure that a public credit system is in place and ready to serve the people’s needs in its stead.

All the king’s men cannot put the private banking system together again, for the simple reason that it is a Ponzi scheme that has reached its mathematical limits. A Ponzi scheme is a form of pyramid scheme in which new investors must continually be sucked in at the bottom to support the investors at the top.
In this case, new borrowers must continually be sucked in to support the creditors at the top. The Wall Street Ponzi scheme is built on "fractional reserve" lending, which allows banks to create "credit" (or "debt") with accounting entries. Banks are now allowed to lend from 10 to 30 times their "reserves," essentially counterfeiting the money they lend. Over 97 percent of the U.S. money supply (M3) has been created by banks in this way.
The problem is that banks create only the principal and not the interest necessary to pay back their loans. Since bank lending is essentially the only source of new money in the system, someone somewhere must continually be taking out new loans just to create enough "money" (or "credit") to service the old loans composing the money supply. This spiraling interest problem and the need to find new debtors has gone on for over 300 years — ever since the founding of the Bank of England in 1694 – until the whole world has now become mired in debt to the bankers’ private money monopoly. As British financial analyst Chris Cook observes:

"Exponential economic growth required by the mathematics of compound interest on a money supply based on money as debt must always run up eventually against the finite nature of Earth’s resources."

The parasite has finally run out of its food source. But the crisis is not in the economy itself, which is fundamentally sound – or would be with a proper credit system to oil the wheels of production. The crisis is in the banking system, which can no longer cover up the shell game it has played for three centuries with other people’s money. Fortunately, we don’t need the credit of private banks. A sovereign government can create its own.
_________________
Real men hunt Wire Dogs
Back to top
View user's profile Send private message Visit poster's website
whiskerdog1
Master
Master


Joined: 01 Apr 2005
Posts: 256
Location: Rustbelt

PostPosted: 10/17/08, 1:19 pm    Post subject: Reply with quote

Coming Soon: The 600 Trillion Derivatives Emergency Meeting

October 13, 2008
The Prudent Investor

Here is an update on the size of the derivatives market with the latest official figures from the Bank for International Settlements (BIS).
Hold your breath, as we are not anymore talking paltry billions but TRILLIONS of whichever fiat currency.

Current emergency meetings on banks and markets are still only in the stage where politicians and central bankers are bickering over how to create a few more hundred billions Euros and FRNs. But toxic MBS pale in comparison to the mushrooming growth of the derivatives market. According to figures released in the quarterly review of the BIS (pp A103) in September the total notional amount of outstanding derivatives in all categories rose 15% to a mindboggling $596 TRILLION as of December 2007.

Two thirds of contracts by volume or $393 TRILLION fell into the category of interest rate derivatives. Credit Default Swaps had a notional volume of $58 TRILLION, seeing the sharpest relative increase after a volume of $43 TRILLION a year earlier.

Currency derivatives reached a volume of $56 TRILLION.

Oh, and every grand balance sheet comes with a trash can. Unallocated derivatives with a notional amount of $71 TRILLION are looming over the heads of the disintegrating investment community too.

However You Look At It, This Is an Accident Waiting To Happen
Don't lose your sleep because of these numbers that KO my desktop calculator. In an ideal world - in which we are not - long and short derivatives would net out each other, leaving only a fraction of risk. The BIS tries to assess this net risk with a total of $14.5 TRILLION (2006: 11.1 TRILLION) in gross market value for all contracts but comes up with a second figure.

The so called Gross Credit Exposure appears almost moderate at $3.256 TRILLION after $2.672 TRILLION a year earlier.

Even when taking the lowest of these figures shudders run down my spine. All emergency talks have so far focused on a few hundred billions in fiat currencies, but the current nervousness demonstrated by hectic talks of finance ministers and central bankers all over the globe should give everybody a vague idea that something here may blow up any day. This pool of so far silent derivatives without a major bust can come to life any day with the failure of a multinational financial firm.

The BIS review is a good way to grasp the dimensions long term monetary expansion has brought upon us. A net risk of $14 TRILLION compares with the annual GDP of the USA. Nobody, absolutely nobody can afford this tab in the case of an unorderly unwinding of this market that is roughly 12 times the size of the global economy. I conclude a lot more paper promises will be burnt in the coming derivatives tsunami. As a reminder, most of these contracts have been moved off balance sheets into under capitalized subsidiaries that profited from the good rating of the parent company. But in case of a default it is this nasty, nasty huge notional amount that becomes a liability.

As the vast majority of these contracts have no market, failure will come in the form of counterparty risk. This makes all the current emergency meeting a bit more understandable if politicians are already aware of the biggest bubble that may find no other way of deflation than a sudden burst. I base my sense of urgency on the rapid growth of the net risk in only one year, rising a stunning 30% at a time when the first signs of the credit crunch appeared.

German chancellor Angela Merkel said ahead of an emergency meeting with French president Nicolas Sarkozy in a TV interview that she would present a rescue package for German banks on Monday. This is also expected from several other European countries. Italian president Silvio Berlusconi went so far as to suggest a concerted stock exchange holiday. It would fit the other crooked nails in the coffin of free markets.
_________________
Real men hunt Wire Dogs
Back to top
View user's profile Send private message Visit poster's website
whiskerdog1
Master
Master


Joined: 01 Apr 2005
Posts: 256
Location: Rustbelt

PostPosted: 10/17/08, 6:19 pm    Post subject: Reply with quote

Lahde Quits Hedge Funds, Thanks `Idiots' for Success (Update1)

By Katherine Burton

Oct. 17 (Bloomberg) -- Andrew Lahde, the hedge-fund manager who quit after posting an 870 percent gain last year, said farewell to clients in a letter that thanks Stupid traders for making him Rich and ends with a plea to legalize marijuana.

Lahde, head of Santa Monica, California-based Lahde Capital Management LLC, told investors last month he was returning their cash because the risk of using credit derivatives -- his means of betting on the falling value of bonds and loans, including subprime mortgages -- was too risky given the weakness of the banks he was trading with.

``I was in this game for money,'' Lahde, 37, wrote in a two-page letter today in which he said he had come to hate the hedge-fund business. ``The low-hanging fruit, i.e. idiots whose parents paid for prep school, Yale and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government.

``All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other sides of my trades. God Bless America.''

Lahde, who managed about $80 million, told clients he'll be content to invest his own money, rather than taking cash from wealthy individuals and institutions and trying to amass a fortune worth hundreds of millions or even billions of dollars.

``I do not understand the legacy thing,'' he wrote. ``Nearly everyone will be forgotten. Give up on leaving your mark. Throw the Blackberry away and enjoy life.''

Request for Soros

He said he'd spend his time repairing his health ``as well as my entire life -- where I had to compete for spaces at universities, and graduate schools, jobs and assets under management -- with those who had all the advantages (rich parents) that I did not.''

He also suggested that billionaire George Soros sponsor a forum in which ``great minds'' would come together to create a new system of government, as the current system ``is clearly broken.''

Lahde ended his letter with a plea for the increased use of hemp as an alternative source of food and energy that segued into a call for the legalization of marijuana.

``Hemp has been used for at least 5,000 years for cloth and food, as well as just about everything that is produced from petroleum products,'' he wrote. ``Hemp is not marijuana and vice versa. Hemp is the male plant and it grows like a weed, hence the slang term.''

`Innocuous Plant'

He added, ``The evil female plant -- marijuana. It gets you high, it makes you laugh, it does not produce a hangover. Unlike alcohol, it does not result in bar fights or wife beating. So, why is this innocuous plant illegal? Is it a gateway drug? No, that would be alcohol, which is so heavily advertised in this country.''

Lahde said the only reason marijuana remains illegal is because ``Corporate America, which owns Congress, would rather sell you Paxil, Zoloft, Xanax and other addictive drugs, than allow you to grow a plant in your home without some of the profits going into their coffers.''

Lahde graduated from Michigan State University with a degree in finance and holds an MBA from the University of California, Los Angeles. He worked at Los Angeles-based hedge fund Dalton Investments LLC before founding his own firm two years ago with about $10 million.

Lahde wasn't available for comment. A woman at his firm, who asked not to be identified, confirmed the authenticity of the letter.
_________________
Real men hunt Wire Dogs
Back to top
View user's profile Send private message Visit poster's website
Display posts from previous:   
Post new topic   Reply to topic    German Wirehaired Pointer Club of America Forum Index -> General Chat All times are GMT - 5 Hours
Goto page 1, 2  Next
Page 1 of 2

 
Jump to:  
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum


Powered by phpBB © 2001, 2005 phpBB Group