The Royal Scam Must Be President Obama's Favorite Song!

The Royal Scam was a great song written and sung by one of the greatest bands ever—Steely Dan. We have currently taken to have this song realized and absorbed into our daily lives. And, not by choice! I believe many Internet pundits have caught on. I went into it in my last posting, “The Team Obama Rip-off”.

The story told in the last posting suggesting that the banks would be able to dump their toxic mortgage debt into a shell investment facility created by them is very likely. Now, as stated in the previous post, the FASB (Financial Accounting Standards Board) has re-written the rules allowing the mega-banks to decide what the toxic mortgage debt is worth (a self-determined value) when they decide to make a deal with Treasury. It appears that Geithner is ready to offer inflated values two to three times the actual mark-to-market street value.

This would be like if you paid $200,000 for your house but now, it has dropped to $100,000, but you were allowed to reassess it yourself placing the value at $250,000, and then proceeding to be able to borrow off of that new value. That stuff just does not work for those living in the Real Economy.

Treasury has $2T available to them to make these deals, which will eventually get laid upon the taxpayers to pay it off. But here is the rub, it is estimated that what the 5 mega-bank’s want for their mortgage debt is likely to be around $4T or more!!! What is Geithner going to do? Will he let one or more of these banks hit the wall and fall into receivership, or will he tell the Wall Street Crime Syndicate, “hey boys, I only got a stinkin’ $2T for ya. I will have to offer you the stress-tested price.” OOHH. These guys aren’t going to like that because they might not end up with a positive balance sheet. There might be significant write-downs, and a big fall in their stock values. There will be blood. Here are the opinions of other experts.

Karl Denninger, the trader and entrepreur, as well the sole contributor to market-ticker.denninger.net wrote in his 4-9-09 informative piece called “Tired Of Getting ROBBED America?” the following:

“You are seeing near-zero (or actual zero) interest earned on money you loan to the bank (when you make a deposit or buy a CD you are loaning money to the bank) and yet when you go to borrow money you're being screwed with record-high spreads that the bank is pocketing [200 basis points, he claims- broker (and direct bank) mortgage pricing vs. Fannie and Freddie bond pricing] - in mortgage and credit card interest rates charged. How much does this add up to? About $4,000 in extra profits per mortgage on top of the "usual" $1,000 profit. That's right - the banks are making five times the "usual and customary" profit per loan, and it is coming right out of your hide. I've been hollering about this for months (as has Mish Shedlock) but it appears that both our intrepid lawmakers and the mainstream media simply refuses to talk about it.

When does this stop? When you, America, are tired of being ripped off and demand that it stop. Remember, the mantra of both government and The Banks is "never waste a crisis”."

This is what another verse of that great song The Royal Scam sounds like.

Mr. Denninger went on to say in his daily entry, “Jamjob-Wells Fargo and more”, “So Wells comes out this morning and says they're going to make a "record" profit, claiming an expected 55 cents (vs. mid 30s expectation). It must be nice to be able to keep loans on the books at whatever price you feel like, receive billions of taxpayer money including "assistance" in rolling up Wachovia, and then turn out to not need it, right?

That is, if these numbers are accurate. Wells pre-market is ramping from $14.89 at the close yesterday and now trading pre-market at $18.10, up over $3 or some 30%.

This leads one inescapably to the following:

Either, Wells [Fargo] is lying (obfuscating losses through unrealistic marks, etc), OR

these "bailouts" were no such thing - they were a simple and transparent

looting operation by the banks that is now showing up directly in "earnings"

(and will shortly show up in the bonuses of executives too!) 

So which is it folks?

Are the banks really that healthy?  Because if they are, you've been robbed to the tune of tens of thousands of dollars per person in this country, and it is long past the time that you act to stop it.”

We will have a chance on April 24 to see what their first-quarter reports will reveal.

Professor Simon Johnson, former IMF chief economist, and currently Professor of Entrepreneurship at MIT's Sloan School of Management, wrote on his baselinescenario.com site “What Is Next For The Banks” (4-9-09) “The latest credit default spreads data for the largest banks show a speculative run underway. As the system stabilizes, it becomes more plausible that a single bank will fail or be rescued in a way that involves large losses for creditors. This would like[ly] trigger further speculative attacks on the other banks...The government’s own policies are facilitating these attacks because as the Fed and Treasury make progress towards easing credit conditions, this makes it easier and cheaper for the large hedge funds and others to take larger short positions. And keep in mind, the underlying loss of confidence is self-fulfilling: as you lose confidence, you want to go short, and selling the credit causes further loss of confidence- and banks are forced out of business.”

And now, Larry Summers, President Obama’s economic advisor, came out and said that the economy has now ceased to be in free-fall. “The economic free-fall could end in the next couple of months.” I guess he had not looked at the figures defining unemployment, under-employment and those no longer able to find any work(15%). Or, he missed the number of foreclosures now over 4M, with 2M waiting in the wings. Or, he has missed how consumers continue to feel their incomes are extremely unstable, but we are no longer in free-fall according to Larry Summers. I think someone credible needs to advise him!

If you have not read the post below, I encourage you to do. This is an extension of the last one.

As I write this on Good Friday, I realized that Abraham Lincoln had been assassinated 144 years ago. President Lincoln said this on the economy, "What has once happened, will invariably happen again, when the same circumstances which combined to produce it, shall again combine in the same way."

President Obama needs to read this over and over again.

Thanks for reading, jerry. Also, don’t forget to check out the video collection.

The Team Obama Rip-off-The Financial Stability Plan

The rip-off seems to be continuing. The only real decision that occurred at the G-20 summit was that the top 5 representatives formed a new Doo-wop singing group—

The Great Dee-Fleck-Tors. All kidding aside, the big news was the passing of the G-20 economic hat that filled up with a modest $1 trillion that will go to crumbling, struggling and barely developing countries. No doubt, that money will go to make sure that those countries don’t default on their debt payment loans that the IMF is hungrily waiting for. That was not what we heard from President Obama. He framed it so we are to believe that the money is for more economic purposes, but I doubt it very much.

Back here at home, Professor Michael Hudson (How the Scam Works, Counterpunch.org) made it perfectly clear how the new Financial Stability Plan to subsidize the sale of “legacy assets”, ie, toxic mortgage debt, will be ripping us off. He explained that if a bank says that their package of collateralized debt obligations (CDO) is worth to them $10 million, it is likely they have overstated that fact. In late 2007, a recent Fitch rating agency study discovered that most of these junk mortgage debts are riddled with financial fraud, and the bank’s $10M package is likely only worth $2M. Isn’t this reassuring since the taxpayers are hoofing up 85% of the costs. Now, if another bank, hedge fund or equity fund decides to pony up $3M, then the scam becomes enhanced. The more money offered for the debt, the more TimmyG puts in, so why not make it a cool $5M. What we got now is the Treasury, with its 85% contribution, laying down $4,250,000. All the “investor” has to fork up is an easy $750,000—its 15% share. The legacy asset seller, B of A, or Goldman Sachs, or JPM, for example, which might even be hiding behind their own sacrificial equity fund they set up to buy the toxic debt which they might later fold up into bankruptcy disposing of the debt altogether, now gets $4,250,000 for its junk mortgage bond that was really only worth $2M! What a way to recapitalize an insolvent and bankrupt banking system! The $2T used for this Ponzi scheme is debt created into bond securities, none of which the private sector wants to touch, from credit cards, commercial loans, student loans, auto loans, and such through the Public-Private Partnership Investment Program (PIPP).

This is like taking the dead body (toxic mortgage debt), stuffing it into a sack (transferring this debt onto the bankster's shell company's balance sheet), allowing the bankster to steal the contents inside the wallet and then deposit the amount into their re-capitalized bank account (taking Geithner's 85% taxpayer contribution for over inflated toxic mortgage debt). Now they dump the body (the transferred toxic mortgage debt) encased in cement booties into the Hudson River allowing the shell company with the toxic mortgage debt as its only holding, to go bankrupt erasing the debt, while the bankster ends up making out like the bandit he has been allowed to be. All done with the White House's golden seal of approval given by Geithner, Summers,  Bernanke and Obama. If this isn't the Royal Scam of century, I don't know what is! The banking emperors get their toxic debt incinerated through bankruptcy, and they end up with a big reward, ie, Geithner paying them two to three times what that toxic mortgage debt was worth at taxpayer's expense. Walla! Now the zombie banks have nothing to write down on their balance sheets. They have been magically re-capitalized by the Treasury and Fed. And no one is the wiser, but you and me. PIPP, PIPP Hurray!

A missing piece for the banks to get the Accounts-keeping Seal of Approval for jacking up the market value of the toxic debt that is really barely worth anything is to get the Financial Accounting Standards Board (FASB) to rewrite the financial accounting rules allowing the mega-empire-banks, 5 in total, to decide for themselves what the value of the toxic mortgage debt is worth to them. These new rules and guidelines give the bankstas a veil of fabricated legitimacy of which they needed to drape upon the value of their toxic mortgage debt. This would allow Geithner to go forward with his inflated and subsidized offers to the banks with the cover needed from the quasi-governmental agency--FASB. We don't need no stinkin' mark-to-market rules! We are the crime bosses of Wall Street! Step aside. WE make the rules around here, mista! Mista Obama, we are comin' through. Geithner, get your checkbook out and ready! These magical rules were back dated to cover the last few weeks to make sure all bases are covered.

Now, what is worth-less, is now worth-more. A lot more! You have to admit it is a beautifully designed Royal Scam. All bases covered. The banks can now get their worthless debt valued at gleefully inflated amounts thanks to new FASB rule changes. The banks can set up their own shell equity funds to sell, ie. transfer, the toxic mortgage debt onto a new balance sheet, at a 15% cost. The banks, in return, get to receive from Treasury a subsidized purchase price (at 85%)  for the toxic mortgage debt, now valued 2 to 3 times its actual mark-to-market value. Now the banks have no toxic paper on their balance sheets thanks to all of us, China, and the Fairy God Mother. This is what is referred to as a "Clusterf**k"! The plot against Caesar Americus by Brutus Geithnerslut and Da' Boys has finally arrived. 

Here is another kicker. F. William Engdahl wrote in Geithner’s Dirty Little Secret, that there are only 5 mega-banks that hold “96% of all US bank derivatives positions in terms of nominal values, and an eye-popping 81% of the total net credit risk exposure in event of default”, as was reported by the Federal Office of Comptroller of the Currency, in its Quarterly Report on Bank Trading and Derivatives Activity. JPMorgan holds $88 trillion in derivatives. Bank of America holds $38 trillion; Citi holds $32 trillion; Goldman-Sachs holds $30 trillion; Wells Fargo-Wachovia Bank holds $5 trillion. And, out of Britain, HSBC USA holds $3.7 trillion.

Mr. Engdahl called this a banker’s coup d’etat. The $180B bailout to AIG went to rescuing the 5 mega-banks, since they were AIG’s biggest counterparty clients.

Tim Geithner says, “We need better, smarter, tougher regulations”, so TimmyG, why hasn’t the Glass-Steagall Act been reactivated? Why hasn’t the Commodity Futures Modernization Act 2000 been trashed? Yet, TimmyG is still blowing his rusty horn and wanting to bring in better, smarter and tougher regulations. Let’s hear ya play another tune for us because this one is down right bad. What is amazing is that Timmy, when he was chairman of the New York Federal Reserve, reporting to Bada Bing Ben Bernanke, was supposed to enact regulatory rules, but he says that was not his role. Yet, according to his job description, he was to act as a banking regulator. Watch William K. Black, a former regulator and economist say so to Bill Moyers.

Dr. Dean Baker, economist, wrote in “Geithner’s Plan Will Tax Main Street to Make Wall Street Richer”, “Oh, by the way, some people will get very rich off the Geithner plan. Some hedge and equity fund managers could make hundreds of millions or even billions off the Geithner plan. And, under current law, they will pay a lower tax rate on this money than a schoolteacher or firefighter. Are you sold yet?”

Michael Whitney quoted the economist Jeffrey Sachs in “Geithner Hog Wild”, “Geithner and Summers have now announced their plan to raid the Federal Deposit Insurance Corporation (FDIC) and Federal Reserve to subsidize investors to buy toxic assets from the banks at inflated prices. If carried out, the result will be a massive transfer of wealth—of perhaps hundreds of billions of dollars—to bank shareholders from the taxpayers (who will absorb losses at the FDIC and FED)…”

It sure seems to me that the Geithner plan is like allowing gangstas who have terrorized the village store owners by breaking windows and knocking down doors, as well as looting the cash registers while stuffing their pockets with merchandise as they run out the door, to then be given government neighborhood block grants to open up their shops in the places where the former businesses had been established. And then, tell the villagers they will be spending their money in the gangsta’s new shops. This is the kind of nation we seem to be living in from my perspective.

TimmyG now wants Congress to grant him full regulatory power so he can decide which institutions need to be shut down because they maybe dangerously too large of a risk to go own without HIS form of regulation. So now, we have place Brutus (Tim Geithner) as Caesar’s (Obama and US) bodyguard. Or, you might say that now that the three little pigs have hired on the wolf to do their housecleaning.

Dr. Baker went on to say, “The core problem is that many of the largest banks are bankrupt. They are currently concealing this bankruptcy by listing assets on their books at prices that are far above their market value. In principle, they can do this for a long time, unless the government forces them to write-down the value of these assets. As long as the banks are bankrupt, they will not make new loans, limiting the ability of many businesses to get capitalized.”

So, what would be the incentive for these government subsidized mega-banks to risk the “gifts” Geithner has given them through Treasury and Federal Reserve hand-outs in the form of TARP, TALF, and Federal Fund Window exchanges during a time when the economy is shrinking, unemployment figures show we may see 700-800,000 unemployed per month as the year progresses (1 in 4 or nearly 14 million unemployed: a 25 year high now at 8.5%; average full-time work week hours are down to 33.2 per week- a record low, over 5 million jobs lost; 2.4% jobs lost over the last 4 months; 1 in 4 people have been looking for work over the last 6 months).

What appears clearer and clearer is that the Obama presidency’s prime players are not willing to upset or disrupt the function, structure, or process within the financial sector, but they are very willing to increase the lines outside the nation’s unemployment offices and continue to hurt the American working people as they sacrifice in order to stay solvent without one penny of a bonus, or an increase in their expense accounts, or when finding themselves on the street not having the opportunity to land upon a cushy Golden Parachute.

Once the stimulus begins to circulate through the paychecks of working America, we will be able to assess if there will be a noticeable impact in spending. I believe out of the $900B stimulus there will only be around $200B filtering through the hands of workers spreading out throughout the entire country. This is so small in comparison to the $12 trillion (pledged, promised, and portioned) that has been leveraged on behalf of only a handful of mega-banks through this Trickle Down economic policy in hopes that this economy will begin borrowing in the face of a shrinking and unstable consumer market. Does any of this make a speck of sense?

There has been no tough talk to the bankstas. The Obama Team has not said that if you don’t write down your mortgage debt at the mark-to-market price, and raise private capital within a 30-day time, then you will otherwise have to go into receivership. If taken over, then the government would handle the write-downs of the toxic assets (debt) and own the assets.

Had they done what Dr. Dean Baker suggested, which was for the bondholders to be guaranteed full protection if their bankstas unwound in 30-days, but if the process were to take longer, dragging it out, then the bondholders would be less protected. How brilliant!! So, why isn’t Dr. Baker our Treasury Secretary? Oh, I forgot, he is not a Trojan Horse for Wall Street. That appears to be a requirement for joining Team Obama.

The contrast between the breakneck speed that was used to bailout Bear Stearns, in March 2008, that took only a weekend, or the sale of Merrill Lynch to Bank of America, or the initial bailout of AIG, or the impressive speed that was engineered when Washington Mutual was placed into the hands of JPMorgan-Chase, or the 5 insolvent mega-banks that Washington found new capital to bathe them with, or the overnight firing of Mr. Goodwrench Wagoner over at GM, so demonstrates that Team Obama has put finance before labor, as they diminish, lessen, reduce the interests of labor, and the nation’s need for labor and manufacturing in order to rescue the country from further collapse and give favor to what is called the “real” economy over the “monopoly-financial-capitalist” economy.

thanks for reading, jerry

President Obama, Whose Free Market?

President Obama continues to capture the audience. The Republicans have resorted to Bobby Jindal, and that did not turn out too well. Now, they are inciting tea parties. Do you get finger sandwiches with that? I am not sure it makes much sense. Former Little Boy Bush doubled the national debt while president. He ushered in a massive housing bubble that broken spreading recessionary fallout all over the nation causing homeowners to run from their nests by the millions; manufacturing companies began to lock up their doors and pull the blinds; working people were checking their mailboxes only to find letters saying their retirement savings got contaminated for life; 36,000 laid-off workers per week have been roaming the streets desperate for answers; all occurring as the fallout from the Bush presidential legacy drifted all across the globe. Yet what we hear from the Republican Jihadists is that President Obama must NOT spend money to help working Americans come out from under their desperation. It is all their fault and no one else is to blame. So now, the Republican Jihadists are hosting tea party protests to complain that the new budget is too high and the stimulus costs are too much. Did any of these naysayers ever tell Little Boy Bush, or Johnnie-man-to-the-rescue-McCain, as he ran to the Senate floor during the presidential campaign, that the Toxic Asset Relief Program (TARP) was a bad idea and the bankers need not get handed $700B to squander on fancy plane rides, and lavish luxury pay bonuses? I guess not. I guess all of this is Barack Obama’s fault. He is the big bad wolf in a nice tailored suit with a commanding presence. And, of course, don’t forget that he can give a darn good speech, too. Wow! He can even articulate what the problems are and what his plan is, even though there are many who do not agree with the objectives.

My problem with President Obama is that because of his economic plans, he continues to stand too far in the middle for my taste. I do believe he could be setting himself up for a big fall that will damage the Democratic Party if he is not careful. He is taking too long to move in more aggressive directions to salvage our very damaged economy.

I have to ask, what free market system does he support? Free, as in free from bondage enforced by the predatory private power brokers? Or, a neo-liberal free-for-the-taking-market? Free as a bird? The free lunch counter type of market where it is all you can eat without getting a check, but the cook pays the customer as a thank you for allowing him to be in the free market economy? A market free from regulation, and controls, and along the way, given a free hand to create an economic monopoly. Free from as much competition as possible. As Professor Michael Hudson wrote in his 2-24-09, Counterpunch.org article, “The Language of Looting”--

“…today’s “neo-liberal” advocates of “free” markets seek to maximize economic rent—the free lunch of price in excess of cost-value, [and] not to free markets from rentier charges. [Or] attempts to regulate “free markets” and limit monopoly pricing and privilege [which] are conflated with “socialism”, [and] even with the Soviet-style bureaucracy. The aim is to deter the analysis of what a “free market” really is: a market free of unnecessary costs: monopoly rent, property rents, and financial charges for credit that governments can create freely.”

What I believe he is saying is that through monopoly and debt-finance economic principles, of which our mega-corporate and financial systems have been freely enjoying without much interruption from The Regulatory Enforcers, most of us working in small and moderate sized business enterprises, and those who own them, have felt significant downward pressures that high rents, and compounding bank finance charges have squeezed against their limited profit margins, ability to expand, engagement in research and development projects, opportunities to increase wages and benefits, and/or hire new employees, thus, might find themselves pushed outside of the competitive playing field by those heavy power brokers controlling the monopoly and financial capitalist economy. This world ain’t big enough for the both of us, pal!

Professor Hudson also wrote that those progressive economists living a century ago would never have thought that “a world run by venal and corrupt bankers, protecting as their prime customers the monopolies, real estate speculators and hedge funds whose economic rent, financial gambling and asset-price inflation is turned into a flow of interest in today’s rentier economy. Instead of industrial capitalism increasing capital formation we are seeing finance capitalism strip capital, and instead of the promised world of leisure we are being drawn into one of debt peonage.” (Rentier is defined as someone who has a fixed income, as from stocks, land, etc.)

We have watched this happen over the last 30 plus years, as industrial capitalism diminished in its usefulness as a prime economic generator of wages, and products to be used domestically and exported, as well as a major source of revenue for the federal Treasury, state and local governments, giving meaning, value and prestige to a product-dollar-based currency. A currency given value through the production of real tradable and tangible goods had been gradually upstaged by our current esoteric, paper-generated-based financial capitalism economy (40% of our GDP) funded through securitization and the interest payments received from such debt, or as some would call assets, has now significantly disappeared into the wild blue yonder. Most of our production has been handed over to rising industrialized developing nations. More than likely not to be seen again unless dragged back onto our own soil kicking and screaming from those monopolistic capitalists very happy to have them operating elsewhere and far away from unions, U.S. government scrutiny, regulation and laws. This is President Obama’s most important dilemma from my point of view. What type of “free market” does he wish to establish under his presidency? Is he more in favor of debt-asset values replacing product-asset values?

Professor Hudson asks, “Exactly what does a free market mean? Is it what the classical economists advocate—a market free from monopoly power, business fraud, political insider dealing and special privileges for vested interests—a market protected by the rise of public regulation from the Sherman Anti-Trust law of 1890 to the Glass-Steagall Act and other New Deal legislation? Or, is it a market free for predators to exploit victims without public regulation or economic policemen—the kind of free-for-all market the Federal Reserve and Security and Exchange Commission (SEC) have created over the past decade or so? It seems incredible that people should accept today’s neo-liberal idea of “market freedom” in the sense of neutering government watchdog. [And] loot without hindrance or sanction, plung[ing] the economy into crisis and then use Treasury bailout money to pay the highest salaries and bonuses in U.S. history. [And] when neo-liberals use the word “nationalization” they [really] mean a bailout, a government giveaway to the financial interests.” (All [ ] had been inserted by this author.)

Professor Hudson wrote further in a terrific enumeration that “Today’s clash of civilization is not really with the Orient; it is with our own past, with the Enlightment itself and its evolution into classical political economy and Progressive Era social reforms aimed at freeing society from the surviving trammels of European feudalism. What we are seeing is propaganda designed to deceive, to distract attention from economic reality so as to promote the property and financial interests from whose predatory grasp classical economists set out to free the world. What is being attempted is nothing less than an attempt to destroy the intellectual and moral edifice of what took Western civilization eight centuries to develop, from the 12th century Schoolmen discussing Just Price through 19th and 20th century classical value theory.” “Any idea of “socialism from above” in the sense of “socializing the risk”, is old-fashioned oligarchy-kleptocratic statism from above.”

So, where will President Obama take the nation and all of us inside it riding the bus with him and his Inner Circle? I surely hope it won’t be over the cliff, but instead, down a road that maybe rutted and bumpy, which will require skilled steering and navigation, so as to end up on the road that will lead us into a new, and balanced mature economy that protects workers, worker rights, while freeing the nation from its grip upon fossil fuels by embracing sustainable energy and agriculture, with available health care for all, and sustainable job opportunities working in manageable industries, with regulated investments, without wars, and bloated defense and security department budgets. We have to ask, “So Mr. President, where are you taking us? And, what type of free market are you choosing?”

Thanks for reading, jerry

Toxic Banking Bailout- The September Surprise!

The political system is once again, creating a new quandary for our nation due to its failure to build a transparent government. Without appropriate supervision of its operations, and a necessary level of regulation to make sure the system responds to its own best interests and practices, and not for a select few, our democracy cannot work effectively.

This is how the derailment occurred under the direction of Alan Greenspan, the former chairman of the Federal Reserve, our nation's central bank dating back to 1913. Along with a capitulating series of presidents, who followed the prescribed philosophy of unbridled and secretive capitalism under a trickle-down theory through a pyramid-style economic methodology. Alan Greenspan, Ben Bernanke, Hank Paulson, Phil Gramm, and many within the Republican and Democratic Parties have presented us with the unbelievable meltdown we are all witnessing.

The late John Kenneth Galbreith, claimed that the trickle-down theory was responsible for the Panic of 1896. It was called by the elites of the time "The Horse and Sparrow Theory", meaning that if you fed the horse enough oats, the horse would pass on its good fortune to the sparrows hanging out along the road. No Sh*t! There is absolutely no example of trickle-down theory working anywhere in the world, as far as I have found, that would justify continuing it, beyond this point in time. It is only an idealistic, pie-in-the-sky theory.

I am no economist, but only a lay person intrigued by the crime story that has surrounded the privileged elite controlling the credit markets starting with the most powerful on top and moving on down to those who wanted to buy a piece of the wealth-accumulating dessert. 

This 30-year run has led us to where we are today. 30 years ago this crime story began establishing its foothold, building its operations and soldiers creating a cyber-wealth empire, which has amounted to somewhere between $450-500 trillion in worldwide toxic derivatives now woven throughout the fabric of foreign central banks, financial institutions, private equity funds, hedge funds, pension funds and sovereign wealth funds. Now this cyber-wealth is on the verge of melting down exposing deceptive, secretive, greedy, and extremely under-capitalized practices. 

What has been uncovered is that President Reagan's free market, trickle-down economic express-train policy, driven by his senior engineer Alan Greenspan, has finally hit the inevitable wall. Its theory was to let those at the top of the pyramid acquire all the wealth they could, and through its basic fundamentals trickle-down as a stimulus to those "sparrows" hanging along the roads of Main and Side Street. We just saw that it failed. Those 10% at the top have acquired massive amounts of wealth, while the economy has failed leaving the middle class to suffer with foreclosures and the shrinking of real wages. What we also witnessed was the top of the pyramid collapse, and and the top-tier wealth accumulators seeing their lending financial institutions fall into conservership, insolvency or bankruptcy because of their trickle-down principles. These institutions have ended up holding toxic debt that was virtually worth-less requiring them to activate their distress calls to congress and the White House. "Help, help. Save our wealth."

Now the Treasury, Fed, and President have decided to create a new Pyramid Scheme but not molded out of private free market theory, but from a socialistic, unitary executive model, which would allow the Federal Reserve, a private entity, to use taxpayer funds to buy private corporations, as they consolidate power over the private economy. 

By infusing the largest failing financial institutions with the previous recipients of the Fed's 2% open window, we will witness over one trillion dollars of taxpayer-treasury funds being given out to the Bush "Haves and Have-Mores". In addition, the Fed has provided foreign sovereign wealth funds, and foreign central banks with taxpayer-treasury funds because they're angry over their losses resulting from the Pyramid Scheme, since they ended up buying leveraged-out, AIG insured (through credit default swaps that are worth-less), and collateralized debt obligations made mostly out of mortgage debt. YIKES! Those countries took a major wealth-loss hit and want the U.S. government to bail them out, too. They seem to have forgotten that such investments are NOT safe, nor guaranteed by the U.S.  government, but risky. This has been the Great Unwinding for those at the top, or close to the top of the Pyramid Scheme. If you were not such a big player, you ended up drowning. As with the Titanic, only the elite and privileged got to the lifeboats in time leaving those in steerage to meet their fate. Remember, they all were told that the Titanic was unsinkable. That was what Greenspan and the financial institutions told their trickle-down investors, as well. SOL, as they say.

The new trickle-down fundamental is to privatize the earnings and socialize the losses. This is what McCain means when he says the fundamentals are good. They are good for the wealthiest 10% of Americans, not the many who have seen a $300 per year loss in real wages.

So how will it all unwrap over the next month, three months, 12 months? If I knew, I would be a rich guy, too. I'd be on Letterman, Oprah, Leno, and Larry King. O'Reilly would be begging me to go on his show, but I would refuse and call him a jerk on the phone. I'd be on a big-time tour, with Bono, and Krugman, and Roubini, giving out advice and selling my book and Internet newsletter. I'd have a cottage by the lake, and a loft in the city. I'd be sitting pretty during the Great Unwinding. There would be groupies wanting me to analyze their investment portfolios. You know the schtick.

But based upon my gut intuition, the Bush Bailout Plan is unsustainable. The Bush Crime Family Conspiratorial Mothership has one goal in mind, and that is to retain power for their constituents at the top of the Pyramid. The only way to do this is to get McCon elected. If and once elected, the Bush/Cheney crime bosses will hop off the White House grand cruise ship and onto their exiting water craft for safer ground. McCon and McPalin will be left to drift in the dangerous economic waters for 4 years as they so desperately campaigned for.

What the McCons don't realize is that the U.S. does not have any money of its own left to spend, therefore, they must print more for the Grand Infusion. They rely on foreigners to supply us with funds to shore up and patch up a leaking dyke. Will there be a time they will curtail their generosity toward a nation who has squandered it for "more wars, my friends", or the Halliburton/Blackwater/etc war machine, or the huge spying enterprise, or the aggression and hostility directed toward others? There is a strong possibility of it ended up backfiring into their faces affecting their own self-interests. Can the dollar improve under this new socialized economy? Or will we see that these emperors, in fact, have no clothes, as the credit market fails to loosen up out fear as cash-strapped consumers put up the duct tape and plastic around their lives waiting for the economic fallout to pass further freezing up the economy. Does this sound like 1931?

Deflation is not to be disregarded. Nor is inflation, for that matter, as it impacts upon many life-sustaining essentials. A value-less dollar is a possibility. Can banks go under while holding on to their government/taxpayer-paid-for and issued treasury life preservers? Yes! How can the U.S. repair and rebuild Iraq and Afghanistan while we, too, crumble under the tribulations of war right here at home? I don't see much time left.

The top-tier banksta gangstas wanted a guarantee that no "economic insurgents" would fire upon their financial institution's value, which remains weak, rotten, and vulnerable. Plus, these CEO administrators want to make a ton more money by wagering on themselves without the threat of the big, bad "economic insurgents" betting against them. This is how neo-fascism works. The government protects its own and, in this case, it's the big political party supporters and holders of the oligarchy's wealth. It all comes at a price! The Republicon Party and those making up the Demo-Con sub-party capitulators, such as Lieberman, will see bigger and fatter contributions fill their purses unless congress stands up to the Paulson/Bernanke/Bush/Banksta criminals.

The Bush administration responded to those he refers to as "my base" who wanted to protect themselves form the "economic insurgents", who are also known as "short sellers". These are investor/traders who bet that the stock price would fall because the company's fundamentals are not strong. Short selling has now been declared illegal for 800 chosen stocks, including G.E., allowing the "haves" to bet on themselves without the fear of the "insurgents" coming after their unbridled speculation.

Bush once said, "we fight them there, so we don't have to fight them here." But the war is right here in America and most people don't realize it, although it has been very clear to many more of us this week. The war in Iraq and Afghanistan was partly created as a distraction from the economic war right here in America brought to us by the Wall-Street Gangstas, and their crime bosses. There is a war between Wall-Street, and those living on Main and Side Street. Protect Wall-Street first. They get the U.S. backed Protection Service. March forward and manipulate the heck out of the markets. Give protection money to foreign central banks and sovereign wealth funds to keep them from dumping their U.S. Treasury bills and bonds, or dollars on the open market. By showering them with bailout funds, Hank "The Paulie" Paulson, and "Bada Bing" Bernanke, along with the White House crime bosses, have encouraged those international bankers to continue to fund our debt, USING OUR GOVERNMENT ISSUED BAILOUT MONEY. WOW! What a deal!

I believe if the government wants to socialize these financial institutions, then take them over. Cut the investors out. Let them take their hits. Replace the greedy CEOs. Remove their golden parachutes, bonuses, salaries, stock options and send them home. Raise taxes on the top-tier wage earners. Carve up these mega-financial institutions into smaller, more controllable, transparent and regulated entities. These corporate thieves, foot soldiers and "benefactors" must feel the pain and not the middle class who were victimized by their rise and fall.

In addition, we need to realize our hegemonic failure in the Middle East and shut the wars down. Leave the bases and stop the human and economic losses. Orchestrate a massive industrial rebuilding movement that would focus on alternative energy and re-engineer an alternative energy grid. And finally, provide single-payer health care allowing workers to move between employers, or start their own businesses without the fear of losing coverage,  and remove the heavy health care burden experienced by businesses, which drains valuable capital needed for expansion. 

You have just read my views from only one set of eyes and one mind.