September 15, 2008
© 2008 – NewsWithViews.com
“I told all four that there were going to be some times where we don’t agree with each other. But that’s OK. If this were a dictatorship, it’d be a heck of a lot easier, just so long as I’m the dictator.” Gov. George W. Bush (R-TX), President-elect, December 18, 2000
Fascism: A philosophy or system of government that is marked by stringent social and economic control, a strong centralized government usually headed by a dictator, and often a policy of belligerent nationalism; oppressive or dictatorial control.
A little over a week ago, these united States of America took another gigantic step towards Fascism when the U.S. Department of Treasury and the unconstitutional, privately owned “Federal” Reserve” bailed out two more private corporations ostensibly to calm fears in the market:
“Fannie Mae and Freddie Mac play a central role in our housing finance system and must continue to do so in their current form as shareholder-owned companies,” Paulson said in a statement. “Their support for the housing market is particularly important as we work through the current housing correction.”
This would be accomplished in a plan Il Duce would applaud:
“First, as a liquidity backstop, the plan includes a temporary increase in the line of credit the GSEs have with Treasury. Treasury would determine the terms and conditions for accessing the line of credit and the amount to be drawn,” Paulson said. “Second, to ensure the GSEs have access to sufficient capital to continue to serve their mission, the plan includes temporary authority for Treasury to purchase equity in either of the two GSEs if needed.”
Rounding out the stringent economic control is ‘a strong centralized government’ awash in agencies with powers never intended when the U.S. Constitution was ratified:
“The ousted chief executives of Fannie Mae and Freddie Mac have the potential to exit with golden parachutes, but the government could cut the strings. The new regulatory agency that seized control of the mortgage-funding giants and forced out their chief executives Sunday has broad but untested power to prohibit severance payments. Under federal law, it could do so on a variety of grounds, including if it found that the former executives were responsible for the companies’ financial troubles.
“We are working through the compensation issues and have nothing to say at this time,” Federal Housing Finance Agency spokeswoman Corinne Russell said by e-mail yesterday.”
Compensation for CEOs who ran their corporations into the ground will be rewarded by a massive injection from the sweat off your back despite the rhetoric:
“The severance packages could be worth as much as $14.9 million for Richard F. Syron, the former Freddie Mac chairman and chief executive, and as much as $9.8 million for Daniel H. Mudd, the former Fannie Mae chief executive, said David M. Schmidt, a senior consultant for the executive pay consultancy James F. Reda & Associates.”
Is this good for America? Not according to some of the finest minds in this country who truly understand the danger of what just happened:
“In the latest example of financial market madness, the recent government “bailout” of Freddie Mac and Fannie Mae has perversely resulted in a sharp rise in the value of the U.S. dollar. If the markets were functioning rationally, the transference of staggering new liabilities to the U.S. Treasury would have been immediately seen as catastrophic for the dollar. Instead the markets have ignored the obviously negative long-term implications and have remained fixated my worst fears, and increase the chances for a hyper-inflationary outcome….
“Had the government done the right thing and not guaranteed Freddie and Fannie debt, I believe we would now be experiencing an outright financial crisis. The dollar would be falling sharply along with real estate prices, the government has merely delayed the crisis. The borrowed time will cost us dearly, as the day of reckoning will now likely involve much steeper losses for our currency.
“The Freddie and Fannie takeover does nothing to address the underlying problems that forced the companies into bankruptcy in the first place. All of the bad mortgage debt still exists. In fact, based on this bailout, there will be trillions more in bad mortgages insured over the next few years. The only thing that has changed is how the losses will be distributed. Instead of falling solely on bond holders, who had chosen to invest in mortgage debt, they will now be dispersed among U.S. taxpayers and all holders of U.S. dollars, who made no such choices.”
The jackals feeding on the American people and the fruits of their labor do not care and neither does Congress. On September 28, 2004, I wrote yet another column warning Americans Congress would do nothing; many more were to follow. On March 17, 2005, Dr. Edwin Vieria, began writing his brilliant analysis on the coming financial meltdown and the only real solutions. And, still, Americans voted back in the same Congress to fix a problem they continue to ignore. Where was Congress ten days ago to stop this lunacy?
Doris Matsui [D-CA] Corrine Brown [D-FL] Barney Frank [D-MA]
Mazie Hirono [D-HI) Randy Neugebauer [R-TX] Hillary Clinton [D-Ny]
Why wasn’t Nancy Pelosi standing on the House floor demanding her colleagues halt this latest bail out? Probably because her colleagues are holding paper from those two corporations and to deflect the blame from this House of Incompetents:
“According to the Center for Responsive Politics, 28 lawmakers had between $598,100 and $1.7 million of their own money invested in the two companies last year. Of them, 12 members of Congress owned between $60,800 and $246,700 of stock in the two companies, which is practically worthless now that the government has seized Fannie Mae and Freddie Mac to keep them afloat as more of their customers in 2007, worth between $537,400 and $1.5 million. (Lawmakers disclose their finances in ranges, annually, making it difficult to determine their assets’ precise values.) Rep. Mary Bono (R-Calif.) held bonds in the companies worth between $126,050 and $365,000, making her investments in Freddie Mac and Fannie Mae more valuable than those of any other member of congress.
“Four members of either the House Financial Services Committee or the Senate Banking, Housing and Urban Affairs Committee were invested in these companies: Rep. Carolyn McCarthy (D-N.Y.),who held $32,216 in bonds; Sen. Mike Enzi (R-Wyo.), who held at least $2,002 in bonds; Sen. Charles Schumer (D-N.Y.), with at least $2,002 in stocks; and Rep. Ron Klein (D-Fla.), who held at least $1,001 in bonds.
“Republican presidential candidate John McCain, who called the federal bailout “outrageous” (but necessary), also reported having up to $10,000 invested in the two companies–up to $9,000 worth in bonds and up to $1,000 worth of stocks.”
Just like the 151 members of Congress who directly benefit financially from the war in Iraq; click here. For that matter, where was Barack Hussein Obama, aka Barry Soetoro, aka Barry Obama, aka Barack Dunham, and aka Barry Dunham or Juan McCain? Dr. Edwin Vieira comments:
“So far, whatever remedy the Administration, McCain, or Obama has proposed has presumed that the General Government in Washington and its pet banks in the Federal Reserve system must keep America’s present hypertrophic financial bubble expanding indefinitely, or at least prevent it from significantly contracting in the near future. So they advocate such policies as “bail outs” of both private and public enterprises (Bear Stearns, Fannie Mae, and Freddie Mac being the most prominent so far) and pitiful “stimulus packages” of some “free” cash for average Americans, all effected through the injection of new “liquidity” into the markets in the form of Federal Reserve’s endless inflation of the supplies of currency and credit..
“….That candidates for the highest office in the land – not to mention the incumbent – would be making reform of the Federal Reserve System the central issue in the presidential campaign and the most important task to how the Federal Reserve operates; why it endangers America’s economic, political and social stability; and what steps must be taken gradually and safely to return this country permanently to a constitutional monetary system based upon gold and silver, which will prevent public officials and bankers thereafter from redistributing wealth from society to special interest groups through manipulations of currency and credit.
“Unfortunately, that these events are not taking place proves that most top-ranking public officials and politicians are neither patriotic nor competent.”
The nonsense being fed to the American people by Obama and McCain is little better than sawdust blowing in the wind. Obama is a Marxist who wants to strip you of every last penny in your wallet, and McCain, in his own words, knows nothing about the economy; see short video. Experts who deal in the markets are finally uttering the dreaded word:
“The end result of the global economic slowdown may be the U.S. announcing national bankruptcy as the government cannot afford the bailouts that it promised and the market will not bail out the government, Martin Hennecke, senior manager of private clients at Tyche, told CNBC on Thursday. “We expect a depression in the United States. We expect a depression, very possibly, also in Europe,” Hennecke said on “Worldwide Exchange.”
This toxic path of bailing out private corporations took a foot hold back in 1983 with Chrysler and the camel’s backside is now in the crowded tent. It’s odd, however, that Congress and the Department of Treasury pick and choose which private corporations they wish to keep from the frying pan. Two major industries, automobile and mortgage lending, got the big jolt, so why didn’t Congress and the FED jump to save ENRON, one of the biggest energy concerns in America at the time? Actually, the 7th largest corporation with a market capitalization of nearly $60 billion dollars. Didn’t those ENRON employees who were sold “buy our stock, it’s solid!” by Ken Lay, matter to Congress when they lost everything – many at retirement age left with nothing? (See links below) Why wasn’t ENRON “back stopped”?
The layoffs will continue while Congress votes to bring in another 550,000 cheap foreign workers! The economy will continue to stagnate because as the American people are squeezed to meet just basics like food, clothing and a roof over their heads, the less disposable income they have to inject into the economy. The “Ho, ho, ho kiss under the mistletoe” retailers won’t see many gifts under their tree this year. Increasing numbers of Americans have lost faith in the system; for tens of millions, their credit is like the Kalahari during a bad rain year. Also, traditionally (no pun intended), the pink slips usually roll out in December. As bankruptcies were already up 29% in a 12-month period by August, how much will those strapped Americans drop to give retailers that all important boost at the end of the year?
A thousand more “economic stimulus packages” will do nothing; it’s akin the emptying the ocean with a teaspoon. This past wave of foreclosures will birth new ones and Americans will continue to sink into quicksand while Obama and McCain blather on with their gibberish. Congress will continue spending when the people’s purse is overdrawn $9.6 TRILLION dollars.
For those of you who might have missed Carolyn Lochhead’s September 12, 2004, column, Speeches Ignore Impending U.S. Debt Disaster, you will see nothing has changed this election cycle with the two front runners and their VP picks as they ignore the warnings from four years ago.
“Laurence Kotlikoff, Economics Chairman at Boston University, who has written abundantly on this subject, offers up a shocking response on how to close a $51 trillion dollar fiscal gap: “To give you idea how big the problem is, you’d have to have an immediate and permanent 78 percent hike in the federal income tax.” More than double the payroll tax, immediately and forever, from 15.3 percent of wages to nearly 32 percent; Raise income taxes by two thirds (roughly 78%), immediately and forever; Cut Social Security and Medicare benefits by 45 percent, immediately and forever;”
I must repeat myself in hopes that new readers will grasp how dire the situation is: Every penny spent to bail out these private corporations has to be borrowed since there is no money in the treasury. How do you write a $100 million dollar check to Freddie and Fannie when your bank account is already overdrawn $9.6 TRILLION dollars? The hundreds of thousands of Americans who are the beneficiaries of these bail outs, mortgage freezing and other madness by Congress for votes, simply no longer care about the constitutional issues. They’re desperate and want only to be saved.
What private corporation will be next? How about I start a corporation which sells diapers. I mean, the country can’t do without them, just like we need automobiles and mortgage lenders. Officers of the Corporation follow my lead making stupid business decisions while paying ourselves a king’s ranson in salary and over extending ourselves, until, uh, oh, we’re in trouble. I call Helicopter Ben Bernanke and he bails out my company by stealing from you. See what I mean? At some point the whole thing blows just like a balloon with too much air.
Mega-billionaire, world government advocate, George Soros, is busy buying gold. Why? When he’s not busy buying Democrats, his knowledge of financial markets is legendary; synopsis at bottom. If you are as concerned as you should be, I recommend you call Eric at El Dorado Gold and talk to him. Learn why gold is the only refuge as a hedge against the hyper inflation that can eat a country alive fast as a falling star. How safe is your 401(k)? Oh, yes, there are supposed to be safeguards in place. Are you sure? With all these corporations fudging their numbers until it’s too late, Americans would do well to question now. What about pension plans? A very troubling post appeared on Le Metropole Cafe a few days ago:
“Bill – a friend of mines girlfriend works a N.Y. trading desk for Lehman – she tells my friend today that $8B has been evaporated from the employees pension fund and that the company has told office staff that an announcement will be forthcoming before the Asian markets open this Monday.”
I shudder to think this is true, but I suppose we’ll find out soon enough. It appears others are also concerned about pension funds:
“Now we know. The giant black hole of derivatives at JPM is about to become the size of Jupiter. With the utter failure of Fannie and Freddie (a culmination of what I predicted 12 years ago) Fannie and Freddie’s massive derivatives portfolios can now be hidden from public scrutiny. These trillions of derivatives, which in likelihood have already failed, can now be whitewashed with the able assistance of the US taxpayer. Also the true values of their mortgage portfolios gets deep-sixed. This is no doubt the single largest financial failure in the history of the world. The Fed had every reason to previously discontinue M-3 reporting.
“Can you imagine what is about to happen to the dollar supply once this catastrophe starts getting paid for? The derivatives may now become hidden from view, but the inflationary implications will become VERY evident. Another ominous problem facing FNM and FRE is a collapse in their pension plans and retirement funds. Retirees and current employees holding FNM/FRE stock will get wiped out, however a pension fund collapse would mean open revolt. This is another side-bailout I see coming.”
I encourage you to read the link one below (Warning) because the worst is yet to come and just like the top sand in the hour glass, it will come.
1 - Feds To ‘Backstop’ Fannie Mae and Freddie Mac
2 - Ousted Fannie, Freddie CEOs Could Still See Big Paydays
3 - Last Gasp of a Doomed Currency
4 - Congressmen Who Were Invested
5 - USA Tomorrow Newspaper, Issue Two, Dr. Edwin Vieira, Jr.
6 - Bailouts Will Push US Into Depression
7 - Lochhead related column
8 - Le Metropole Cafe (for serious investors)
9 - The Fannie/Freddie Mess
1 - Internet book I highly recommend ($9.95) No Foreclosures – this can help you stay in your home while you work with lenders
1 - WARNING by Congressman Ron Paul at the Financial Services Hearing
on Sovereign Wealth Funds DIMP Subcommittee September 10, 2008
2 - Congress’ recent $300 billion housing bill is a theft of taxpayer money.
3 - Job cuts announced by U.S. employers last month jumped
12 percent over a year ago
4 - Retail Sales Unexpectedly Drop 0.3%
5 - August foreclosures hit another record high
6 - Consumer debt defaults looming large
7 - 50% Of BofA’s Builder Loans ‘Troubled’
8 - Global meltdown means just that; who gets to be the last domino?
9 - FDIC: 117 troubled banks
ENRON: No oceans of money from Congress or the FED