It was easy to come away from the senate hearing today with the impression that there is, "....no guarantee that the taxpayers won't get caught holding bad debt that can't be recovered."
Actually there was a guarantee stated during the hearing today. It was easy to miss because the senators and the technocrats did not want to talk about it openly so they used code.
The guarantee is that YOU will pay the "hold to maturity price" for these bonds, notes, etc. That means their full remaining value.
If the instrument is a 30 year mortgage the "hold to maturity price might be 98% of the total principal and interest involved in the mortgage. That means if the loan was $100,000 with a fixed interest rate of 10% for 30 years the total value of the mortgage is $322,599.60.
YOU will pay $316,147.60 for this item. IN THEORY a 2% profit would mean that you would then make $6,452.00.
I say ‘in theory’ because YOU must remember that these are "toxic" loans - meaning they are not "profitable." Most have probably already been "monetized" - sold to and redeemed by an investor - one or more times. Most are probably already in default.
That is why they are "toxic" - the fascio-corporatist financiers and bankers of the wall street cabal cannot use them to borrow money from other investors. They have no value.
Anyone who sold them to an investor would be sent to prison for fraud because when the investor comes to redeem them there will certainly be no money with which they can be paid.
The shareholders of the institutions which monetized them are suppose to pay the investors but they DO NOT want to pay the investors.
They want to sell them to YOU at full price. YOU will SAVE their houses, their cars, their money, their retirements amd their rear ends.
Who are they? Some of them are the same people who were talking to the senate committee today demanding that YOU bail them out. Some of them are the politicians the technocrats were meeting with and who ARE going to bailout the collective "them."
What will you get for this act of stupidity - I mean kindness?
Like Tennessee Ernie Ford use to sing, "Another day older and deeper in debt."
You are about to learn that there was a reason for all those old union songs. They knew what it was to be exploited - and YOU will also.
So go ahead. YOU bail them out.
Showing posts with label Economic Equality. Show all posts
Showing posts with label Economic Equality. Show all posts
Tuesday, September 23, 2008
Monday, September 22, 2008
Conflict of Interest - The chairman of the U.S. Securities and Exchange Commission (SEC) Must Resign.
SEC chairman Christopher Cox was a partner in the law firm of Latham and Watkins. At the time of his retirement in 1986 Cox was the Partner in Charge of the Corporate Department of the Orange County office and was a member of the firm's national management.
Latham and Watkins is ranked among the largest law firms in the world. Notable clients include Goldman Sachs, Deutsche Bank, Merrill Lynch, and ICICI Bank Ltd. Of India.
On January 31, 2008 ICICI Bank (formerly Industrial Credit and Investment Corporation of India) reported losses of $264 million as a result of the subprime mortgage crisis.
As a retired partner of the Latham and Watkins LLP Cox undoubtedly owes a great deal of allegiance to Latham and Watkins. Latham and Watkins involvement with Goldman Sachs, ICICI Bank and others constitutes a conflict of interest which can not be tolerated during the current financial crisis.
Christopher Cox must resign his position as Chairman of the SEC. If he does not resign, he must be fired.
Latham and Watkins is ranked among the largest law firms in the world. Notable clients include Goldman Sachs, Deutsche Bank, Merrill Lynch, and ICICI Bank Ltd. Of India.
On January 31, 2008 ICICI Bank (formerly Industrial Credit and Investment Corporation of India) reported losses of $264 million as a result of the subprime mortgage crisis.
As a retired partner of the Latham and Watkins LLP Cox undoubtedly owes a great deal of allegiance to Latham and Watkins. Latham and Watkins involvement with Goldman Sachs, ICICI Bank and others constitutes a conflict of interest which can not be tolerated during the current financial crisis.
Christopher Cox must resign his position as Chairman of the SEC. If he does not resign, he must be fired.
How To Solve The Current Economic Crisis.
Henty Paulson - the secretary of the treasury - is a former chairman and ceo of Goldman Sachs where he was responsible for selling the same type of worthless securities he is now making the people of the United States pay for.
Paulson's estimated personal wealth is more than $700,000,000.
That is about 1% of the proposed bailout. All we need is 99 more of the fascio-corporatist financiers and bankers of the wall street cabal to ante up what they owe and this little problem is solved.
Paulson's estimated personal wealth is more than $700,000,000.
That is about 1% of the proposed bailout. All we need is 99 more of the fascio-corporatist financiers and bankers of the wall street cabal to ante up what they owe and this little problem is solved.
Friday, September 19, 2008
Banking 201 - How to Make Money by Going Broke
In a previous post entitled “Banking 101" (link below) I explained that the U.S. banking industry engages in fractional banking. This means that only a small amount of the money “deposited” in a bank is required to be kept in the bank’s vault. Most of the money is loaned to other customers.
When a customer obtains a loan - let’s say for $1,000 - the bank records the amount of that loan as an asset because the bank will collect interest on the loan. The amount of the loan - $1,000 -is also recorded as a liability by the bank because the money is now in “circulation.” The banks “books” are in “balance” (pay-out of $1,000 equals the loan asset of $1,000).
If the borrower is unable to make payments on the loan it ceases to be a bank “asset” and the $1,000 loan asset disappears from the bank’s books. The $1,000 liability remains, however, because the money is circulating through the economy.
Eventually someone will demand payment of that $1,000 from the bank. The bank can use $1,000 from the profits made with other loans to pay that liability. If that is not possible the $1,000 must then be paid by the banks owners - the shareholders.
At this point it is important to remember that we aren’t really talking about loans for $1,000. We are talking about loans for hundreds of billions of dollars. It is also important to remember that it isn’t people that the banking industry is concerned about. It is organizations - corporations and governments - which the industry is concerned about.
The financiers and the bankers want these organizations to be paid. They and the organizations are intertwined. They serve on each other’s boards of directors, and own each other’s stocks and bonds. It is they who profit from building the infrastructure of these nations. In effect, it is the financiers and the bankers who are demanding to be paid.
The financiers and the bankers want the debts paid just as they wanted the governments to build infrastructure with the money which they loaned to them. Both activities generate profits for them. They just don’t want to pay themselves with their own money. That would not be profitable for them.
The banking industry created the Federal Reserve, the FDIC and the other monetary agencies for just this purpose. The “government” representatives of the financiers and the bankers now step forward to ensure that the financiers and the bankers continue to make profits. How? By paying them with YOUR money.
Their representatives in government will say that it’s the government’s money but it is YOU who will guarantee that the financiers and the bankers make their profits. It is YOU who will pay the costs imposed by inflation. Prices do not get higher. Your money becomes more worthless.
The financiers and the bankers simply increase their profits. They can continue to buy whatever they want. Can YOU?
Link
When a customer obtains a loan - let’s say for $1,000 - the bank records the amount of that loan as an asset because the bank will collect interest on the loan. The amount of the loan - $1,000 -is also recorded as a liability by the bank because the money is now in “circulation.” The banks “books” are in “balance” (pay-out of $1,000 equals the loan asset of $1,000).
If the borrower is unable to make payments on the loan it ceases to be a bank “asset” and the $1,000 loan asset disappears from the bank’s books. The $1,000 liability remains, however, because the money is circulating through the economy.
Eventually someone will demand payment of that $1,000 from the bank. The bank can use $1,000 from the profits made with other loans to pay that liability. If that is not possible the $1,000 must then be paid by the banks owners - the shareholders.
At this point it is important to remember that we aren’t really talking about loans for $1,000. We are talking about loans for hundreds of billions of dollars. It is also important to remember that it isn’t people that the banking industry is concerned about. It is organizations - corporations and governments - which the industry is concerned about.
The financiers and the bankers want these organizations to be paid. They and the organizations are intertwined. They serve on each other’s boards of directors, and own each other’s stocks and bonds. It is they who profit from building the infrastructure of these nations. In effect, it is the financiers and the bankers who are demanding to be paid.
The financiers and the bankers want the debts paid just as they wanted the governments to build infrastructure with the money which they loaned to them. Both activities generate profits for them. They just don’t want to pay themselves with their own money. That would not be profitable for them.
The banking industry created the Federal Reserve, the FDIC and the other monetary agencies for just this purpose. The “government” representatives of the financiers and the bankers now step forward to ensure that the financiers and the bankers continue to make profits. How? By paying them with YOUR money.
Their representatives in government will say that it’s the government’s money but it is YOU who will guarantee that the financiers and the bankers make their profits. It is YOU who will pay the costs imposed by inflation. Prices do not get higher. Your money becomes more worthless.
The financiers and the bankers simply increase their profits. They can continue to buy whatever they want. Can YOU?
Link
Don't Tell Congress no - Tell them HELL NO
The choice is simple - the financiers and the Wall Street bankers can have a better life - or YOU and your CHILDREN can have a better life.
They have enjoyed the benefits, the tax write offs and the income from extortionist interest rates but they never had any intention of using THEIR money to pay the piper. The Federal Reserve, the FDIC and the other monetary agencies have always quickly stepped forward to their rescue. That has always been their plan.
They say that it is the government’s money which is to be used, but we know better. Once again OPM (Other People’s Money) is being used to make their profits. This is leverage on a macroeconomic scale.
They say the tax payers must pay for their losses. Did the tax payers reap the benefits of their greed? Certainly not. Why then, should the tax payers carry the burden of their debts for them?
Don’t just say no - tell them HELL NO !
For this much money we could pay EVERYONE unemployment for YEARS !
The choice is simple - the poltroons and the charlatans can have a better life - or YOU and your CHILDREN can have a better life. You decide.
Link
They have enjoyed the benefits, the tax write offs and the income from extortionist interest rates but they never had any intention of using THEIR money to pay the piper. The Federal Reserve, the FDIC and the other monetary agencies have always quickly stepped forward to their rescue. That has always been their plan.
They say that it is the government’s money which is to be used, but we know better. Once again OPM (Other People’s Money) is being used to make their profits. This is leverage on a macroeconomic scale.
They say the tax payers must pay for their losses. Did the tax payers reap the benefits of their greed? Certainly not. Why then, should the tax payers carry the burden of their debts for them?
Don’t just say no - tell them HELL NO !
For this much money we could pay EVERYONE unemployment for YEARS !
The choice is simple - the poltroons and the charlatans can have a better life - or YOU and your CHILDREN can have a better life. You decide.
Link
Thursday, September 18, 2008
Bernanke Must Go
Ben Bernanke - the current chairman of the federal reserve must be fired
Bernanke is a graduate of the London School of Economics. The school was founded by the socialist Fabian Society of Great Britain. Members of that society established the World Bank and the International Monetary Fund at the Bretton Woods Conference.
The economic philosphy of these organizations favors the redistribution of wealth from the industrialized nations to the less wealthy more authoritarian regimes of the third world.
Bernanke is a recognised authority on the Great Depression. He understands very well the massive shift in wealth which was the real cause of that tragedy.
The defense of western economic prosperity cannot be effectively championed by an opponent of that prosperity. Bernanke must go.
Bernanke is a graduate of the London School of Economics. The school was founded by the socialist Fabian Society of Great Britain. Members of that society established the World Bank and the International Monetary Fund at the Bretton Woods Conference.
The economic philosphy of these organizations favors the redistribution of wealth from the industrialized nations to the less wealthy more authoritarian regimes of the third world.
Bernanke is a recognised authority on the Great Depression. He understands very well the massive shift in wealth which was the real cause of that tragedy.
The defense of western economic prosperity cannot be effectively championed by an opponent of that prosperity. Bernanke must go.
Wednesday, September 17, 2008
Banking 101 - How to Make Money Out of Nothing
The federal reserve is a bank for bankers. It is a central bank just as The Bank of England is a central bank for the United Kingdom. The federal reserve is, in fact, the third central bank which has plagued the citizens of the United States. Both of the others were dismantled because they destroyed the nation’s money through inflation.
The primary function of the federal reserve is to create money. If a U.S. government security for $1,000 is held by the federal reserve it can then have the Treasury Department to print $1,000 worth of federal reserve notes which Treasury then gives to the federal reserve.
The federal reserve now has $1,000 in cash, or more properly "fiat" money. The federal reserve retains a percentage of this cash, say 10%and loans the remainder to a second bank. This is known as "fractional banking" because only a fraction of the money is actually on-hand at the bank.
The second bank also retains a percentage of the $900 - say $100 - and let’s say two of the bank’s customers obtain loans for $400 each and this money is deposited to the customer’s bank accounts. The bank deducts a percentage, say $100 and this bank now has an additional $700 which it then loans to a consumer.
The original $900 which was loaned to the bank by the federal reserve has been transformed into $1,700. How? Fractional cash reserves at bank total $200. Loans to customers one and two total $800. The loan to customer three is $700. Loans of $1,500 plus cash in bank of $200 equals $1,700.
This process can go on and on and on. At least until people ask for more cash than is actually in the bank. Then the federal reserve send more "money" and the process starts all over.
Until people ask for more cash than is in the federal reserve system. Then congress has to authorize an increase in the national debt so more money can be created by the federal reserve.
That is why one of the items in the bailout just passed by congress was an authorization increasing the national debt - which basically is the money we citizens owe the federal reserve.
Now take that $700,000,000,000 authorization and multiply by at least 9 - fractional banking. Remember? That is at least$6,300,000,000,000 in new money that could soon be in existence.
The real question is, what is the financial oligarchy going to do with that mone. One word - CHINA.
Let’s say that customer one writes a check to a merchant against his loan account for $400. The merchant brings the check to the bank. How much cash is actually at the bank? That’s right, $200. Can the merchant get $400? Not no - but heck no.
The real tragedy is, this can go on almost endlessly - or at least until people demand more cash than there is actual cash to be given to them. That is what is now happening all over the banking industry. People are demanding that they be given their money. Those who do get their money will only get it because the federal reserve has treasury print more.
Does this sound like a mess? Consider this, we haven’t even talked about inflation yet. It all gets more unsavory - a great deal more unsavory. That, in a nut shell, is the world banking system.
© 2008, R.G. Brooks
The primary function of the federal reserve is to create money. If a U.S. government security for $1,000 is held by the federal reserve it can then have the Treasury Department to print $1,000 worth of federal reserve notes which Treasury then gives to the federal reserve.
The federal reserve now has $1,000 in cash, or more properly "fiat" money. The federal reserve retains a percentage of this cash, say 10%and loans the remainder to a second bank. This is known as "fractional banking" because only a fraction of the money is actually on-hand at the bank.
The second bank also retains a percentage of the $900 - say $100 - and let’s say two of the bank’s customers obtain loans for $400 each and this money is deposited to the customer’s bank accounts. The bank deducts a percentage, say $100 and this bank now has an additional $700 which it then loans to a consumer.
The original $900 which was loaned to the bank by the federal reserve has been transformed into $1,700. How? Fractional cash reserves at bank total $200. Loans to customers one and two total $800. The loan to customer three is $700. Loans of $1,500 plus cash in bank of $200 equals $1,700.
This process can go on and on and on. At least until people ask for more cash than is actually in the bank. Then the federal reserve send more "money" and the process starts all over.
Until people ask for more cash than is in the federal reserve system. Then congress has to authorize an increase in the national debt so more money can be created by the federal reserve.
That is why one of the items in the bailout just passed by congress was an authorization increasing the national debt - which basically is the money we citizens owe the federal reserve.
Now take that $700,000,000,000 authorization and multiply by at least 9 - fractional banking. Remember? That is at least$6,300,000,000,000 in new money that could soon be in existence.
The real question is, what is the financial oligarchy going to do with that mone. One word - CHINA.
Let’s say that customer one writes a check to a merchant against his loan account for $400. The merchant brings the check to the bank. How much cash is actually at the bank? That’s right, $200. Can the merchant get $400? Not no - but heck no.
The real tragedy is, this can go on almost endlessly - or at least until people demand more cash than there is actual cash to be given to them. That is what is now happening all over the banking industry. People are demanding that they be given their money. Those who do get their money will only get it because the federal reserve has treasury print more.
Does this sound like a mess? Consider this, we haven’t even talked about inflation yet. It all gets more unsavory - a great deal more unsavory. That, in a nut shell, is the world banking system.
© 2008, R.G. Brooks
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