Oil's energy contribution has declined by about 12% since 1999. The world's economies have also declined by about 12%. (Using conventional metrics, which are time delayed determinations, this will only be seen in hind sight). The massive destruction of asset values now occurring testifies to it happening.
Peak is well behind us, world economies have peaked and will continue to decline.
Posted: Sat Sep 20, 2008 10:38 pm Post subject: Re: Text of Financial Crisis Legislation - yup, it's a coup
perdition79 wrote:
The only hope left for the American people is to realize their strength over the global economy, and default on all mortgages and consumer loans en masse, effective immediately. Any action short of that will be either ineffective or too damn bloody.
You might want to add quit your job too. The only way to stop this fascist monster is draw a line in the sand and say no more.
Posted: Sat Sep 20, 2008 11:31 pm Post subject: Re: Text of Financial Crisis Legislation - yup, it's a coup
perdition79 wrote:
Game over. Bloodless financial coup, fascism fully active. I want to piss on Woodrow Wilson's grave right now.
The only hope left for the American people is to realize their strength over the global economy, and default on all mortgages and consumer loans en masse, effective immediately. Any action short of that will be either ineffective or too damn bloody.
That is what they ARE doing. Not by volition of course, but by the simple fact the companies they worked for went out of business so they have no jobs so they can't pay their mortgages.. What you are talking about here proceeds apace AS WE SPEAK, the pace increasing all the time. The ball really got a nudge with Bear Stearns, started rolling with Fannie & Freddie, with AIG its now moved past rolling and into free fall.
Its an immutable law of Nature, what goes up MUST come down. Like all accelerations, its a square law. Geometric expansion. The Velocity is 1/2 the Acceleration multiplied by the Time Squared. WE are only a little ways into this fall, but we are moving mighty fast already.
Here is the current draft for the latest plan. It's elegantly simple. The three key provisions: (1) The Treasury Secretary is authorized to buy up to $700 billion of any mortgage-related assets (so he can just transfer that amount to any corporations in exchange for their worthless or severely crippled "assets") [Sec. 6]; (2) The ceiling on the national debt is raised to $11.3 trillion to accommodate this scheme [Sec. 10]; and (3) best of all: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency" [Sec. 8].
Put another way, this authorizes Hank Paulson to transfer $700 billion of taxpayer money to private industry in his sole discretion, and nobody has the right or ability to review or challenge any decision he makes.
What is more intrinsically corrupt than allowing people to engage in high-reward/no-risk capitalism -- where they reap tens of millions of dollars and more every year while their reckless gambles are paying off only to then have the Government shift their losses to the citizenry at large once their schemes collapse? We've retroactively created a win-only system where the wealthiest corporations and their shareholders are free to gamble for as long as they win and then force others who have no upside to pay for their losses.
Watching Wall St. erupt with an orgy of celebration on Friday after it became clear the Government (i.e., you) would pay for their disaster was literally nauseating, as the very people who wreaked this havoc are now being rewarded
More amazingly, they're free to walk away without having to disgorge their gains; at worst, they're just "forced" to walk away without any further stake in the gamble. How can these bailouts not at least be categorically conditioned on the disgorgement of ill-gotten gains from those who are responsible? The mere fact that shareholders might lose their stake going forward doesn't resolve that concern; why should those who so fantastically profited from these schemes they couldn't support walk away with their gains?
This is "redistribution of wealth" and "government takeover of industry" on the grandest scale imaginable -- the buzzphrases that have been thrown around for decades to represent all that is evil and bad in the world. That's all this is; it's not an "investment" by the Government in any real sense but just a magical transfer of losses away from those who are responsible for these losses to those who aren't.
What's most vital to underscore is that the beneficiaries of this week's extraordinary Government schemes aren't just the coincidental recipients of largesse due to some random stroke of good luck.
The people on whose behalf these schemes are being implemented -- the true beneficiaries -- are the very same people who have been running and owning our Government -- both parties -- for decades, which is why they have been able to do what they've been doing without interference. They were able to gamble without limit because they control the Government, and now they're having others bear the brunt of their collapse for the same reason -- because the Government is largely run for their benefit.
If there is any "pitchfork moment" -- an episode that understandably would send people into the streets in mass outrage -- it would be this.
Nobody really even seems to know how much of these losses "the Government" -- meaning working people who had no part in the profits from these transactions -- is undertaking virtually overnight but it's at least a trillion dollars, an amount so vast it's hard to comprehend, let alone analyze in terms of consequences.
What's probably most amazing of all is the contrast between how gargantuan all of this is and the complete absence of debate or disagreement over what's taking place. It's not just that, as usual, Democrats and Republicans are embracing the same core premises ("this is regrettable but necessary"). It's that there's almost no real discussion of what happened, who is responsible, and what the consequences are. It's basically as though the elite class is getting together and discussing this all in whispers, coordinating their views, and releasing just enough information to keep the stupid masses content and calm.
Can anyone point to any discussion of what the implications are for having the Federal Government seize control of the largest and most powerful insurance company in the country, as well as virtually the entire mortgage industry and other key swaths of financial services? Haven't we heard all these years that national health care was an extremely risky and dangerous undertaking because of what happens when the Federal Government gets too involved in an industry? What happened in the last month dwarfs all of that by many magnitudes.
The transactions are way too complex even for the most sophisticated financial analysts to understand, let alone value. Whatever else is true, generations of Americans are almost certainly going to be severely burdened in untold ways by the events of the last week -- ones that have been carried out largely without any debate and mostly in secret.”
Posted: Sun Sep 21, 2008 5:21 am Post subject: Re: Text of Financial Crisis Legislation - yup, it's a coup
Blah. While a lot of folks here wish to ascribe al this to a conspiracy theory (at the hands of Zionists, Inscrutable Chinese, whatever) the real problem here is not that anyone is so SMART they are manipulating this, its that they are all so STUPID.
The ONLY people who have *some* idea of what this sort of economic collapse means are central bankers, mostly Ph.D.s in Economics. I personally spit on that subject in my college years, preferring physics as an exercise in mathematical gymnastics. At least with physics you can put a finger on what you are talking about. Your typical congressman is as clueless about economics as Joe Sixpack is.
Be it known, Hank and Ben know precisely what this means economically, but they have palyed all the cards to keep the colapse from occuring and it did anyhow. So now they are in the business of trying to save their asses.
I will tell you with NO DOUBT in my mind, the members of this board have a FAR greater understanding of what is going on than the members of Congress do. The fact we know about it though doesn't really make US any better able to stop the crash EITHER. The mistakes were made a long time ago and have been accumulating. It HAS to spin down in some form, what you see here is those at the top in power trying to make it spin down in their favor.
It cannot hold up long. This HAS to result in social anarchy. Hope to see some of you on the Other Side. In the lyrics of Ozzy Osbourne:
<Voices, a thousand, thousand voices
Whispering, the time has passed for choices
Golden days are passing over, yeah
I cant seem to see you baby
Although my eyes are open wide
But I know Ill see you once more
When I see you, Ill see you on the other side
Yes, Ill see you, Ill see you on the other side
Leaving, I hate to see you cry
Grieving, I hate to say goodbye
Dust and ash forever, yeah
Though I know we mus be parted
As sure as stars are in the sky
Im gonna see when it comes to glory
And Ill see you, Ill see you on the other side
Yes Ill see you, Ill see you on the other side
Never thought Id feel like this
Strange to be alone, yeah
But well be together
Carved in stone, carved in stone, carved in stone
Hold me, hold me thight, Im falling
Far away. distant voices calling
Im so cold. I need you darling, yeah
I was down, but now Im flying
Straight across the great divide
I know youre crying, but Ill stop you crying
When I see you, I see you on the other side
Yes. Ill see you. see you on the othe side
Im gonna see you. see you on the other side
God knows Ill see you, see you on the other side, yeah
Ill see you. see you on the othe side
Im gonna see you. see you on the other side
God knows Ill see you, see you on the other side, yeah
I wanna see you, yeah, yeah, yeah, see you on the other side
God knows Ill see you, see you on the other side, yeah
Im gonna see you. see you on the other side>
Joined: Apr 06, 2006 Posts: 3626 Location: 3 miles NW of Champoeg, Republic of Cascadia
Posted: Sun Sep 21, 2008 7:20 am Post subject: Re: Text of Financial Crisis Legislation - yup, it's a coup
Quote:
Past: will the nation grow? Prosperity may last. Can we look at the problems ahead? With our heads in the sand, we might as well be dead! Cheer him on: "The Leader Of The Team." He'll push on through at all cost to win! But are we
free to think for ourselves or doomed to repeat our mistakes? Can you hear them call your name? Can you count the lives they take? Do you have to see the body bags before you make a stand? Just a little bit too late. Watch the cheerleaders
call our their names on the sidelines. They can feel the players sweat. I wonder if that is all they see? All the rallies will never set them free!
But here is the truly offensive section of an overreaching piece of legislation:
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
This puts the Treasury's actions beyond the rule of law. This is a financial coup d'etat, with the only limitation the $700 billion balance sheet figure. The measure already gives the Treasury the authority not simply to buy dud mortgage paper but other assets as it deems fit. There is no accountability beyond a report (contents undefined) to Congress three months into the program and semiannually thereafter. The Treasury could via incompetence or venality grossly overpay for assets and advisory services, and fail to exclude consultants with conflicts of interest, and there would be no recourse. Given the truly appalling track record of this Administration in its outsourcing, this is not an idle worry.
But far worse is the precedent it sets. This Administration has worked hard to escape any constraints on its actions, not to pursue noble causes, but to curtail civil liberties: Guantanamo, rendition, torture, warrantless wiretaps. It has used the threat of unseen terrorists and a seemingly perpetual war on radical Muslim to justify gutting the Constitution. The Supreme Court, which has been supine on many fronts, has finally started to push back, but would it challenge a bill that sweeps aside judicial review? Informed readers are encouraged to speak up.
Nouriel Roubini does not think it passes the smell test:
`He's asking for a huge amount of power,'' said Nouriel Roubini, an economist at New York University. ``He's saying, `Trust me, I'm going to do it right if you give me absolute control.' This is not a monarchy.''
_________________ Cogito, ergo non satis bibivi
C'mon man, who're you gonna believe?
Posted: Sun Sep 21, 2008 7:51 am Post subject: Re: Text of Financial Crisis Legislation - yup, it's a coup
idiom wrote:
Upper limit of $700 Billion? Wonder how long that will last.
Oh and the debt limit gets raised too... $11.3 Trill?
I think that is 700 billion dollars at any one time. There is no upper limit on how much debt can theoretically be absorbed by the looks of things, only that there can't be more than this amount outstanding...
Quote:
"The Secretary's authority to purchase mortgage-related assets under this Act shall be limited to 700,000,000,000 dollars outstanding at any one time"
Posted: Sun Sep 21, 2008 7:54 am Post subject: Re: Text of Financial Crisis Legislation - yup, it's a coup
Starvid wrote:
I disagree completely. One of the key reasons why the Swedish banking crisis was resolved so successfully is because the company formed to deal with the toxic debt had extremely free hands and was granted the power to ignore ordinary financial legislation.
And considering the guys who solved the Swedish situation have just come home from New York after lecturing to the FED... Draw your own conclusions; from Sweden with love!
Sweden wouldn't have happened to be solvent at the time, would it?
Joined: Oct 23, 2004 Posts: 5928 Location: New Jersey
Posted: Sun Sep 21, 2008 7:57 am Post subject: Re: Text of Financial Crisis Legislation - yup, it's a coup
Based upon what virgincrude and The Dude have posted above, there is nothing to stop the new Treasury fund from buying, for example, and paying $100 billion for a batch of mortgages, worth maybe $80 billion, then selling them for $70 billion.
All the profits accrue to the financial sector, unless for some reason, the Treasury buys the mortgages for less than they are worth - or they hold onto them in a period of falling interest rates. With interest rates low now, it appears that the Treasury will lose on just about all transactions.
The potential profits to the sellers and buyers of these mortgages are enormous. Since the dealings can't be legally reveiwed, this puts more financial power in the hands of one person - the Treasury Secretary - than ever before in US history.
Not mentioned in their plan, is also the huge disruption it will cause the credit markets when the Treasury attempts to issue $700 billion in new debt in a short time period. _________________ It's already over, now it's just a matter of adjusting.
Joined: Apr 27, 2005 Posts: 245 Location: new york city wacko
Posted: Sun Sep 21, 2008 8:51 am Post subject: Re: Text of Financial Crisis Legislation - yup, it's a coup
I didn't see this mentioned yet, but check out this gem:
Quote:
(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;
So now, if Paulson thinks they should, Goldman Sachs, JPM and all the pals on wall street are agents of the government!
That's right - every bank and other financial institution in the United States has just become a de-facto organ of the United States Government, if Hank Paulson thinks they should be, and he may order them to do virtually anything that he claims is in furtherance of this act.
This might include things like demanding that a bank or other financial institution sell him its paper, even if it forces that firm to collapse and be assumed by the FDIC!
You didn't buy any bank stocks last week did you?
_________________ "If you're always looking for the invisible hand to guide you, you will find that the invisible hand often gives you the invisible finger." - some guy on CNBC
"Here is a paragraph from the Treasury Fact Sheet released last night:
Asset and Institutional Eligibility for the Program. To qualify for the program, assets must have been originated or issued on or before September 17, 2008. Participating financial institutions must have significant operations in the U.S., unless the Secretary makes a determination, in consultation with the Chairman of the Federal Reserve, that broader eligibility is necessary to effectively stabilize financial markets.
So this bailout covers any securities issued on or before last week! Why would we be bailing out activity from this year? Or even after Feb 2007 when the subprime crisis woke everyone up? I'd argue for an even earlier date ...
But the second sentence is even more surprising: eligibility has been changed from "financial institution having its headquarters in the United States" to "significant operations in the U.S." - and even "broader eligibility" if Paulson so decides.
According to this fact sheet, under the Paulson Plan, U.S. taxpayers may bailout foreign financial institutions and even foreign governments."
_________________ "When fascism comes to America it will be wrapped in a flag and carrying a cross." --Sinclair Lewis
Joined: Dec 27, 2004 Posts: 13192 Location: naive idiot fantasy world
Posted: Sun Sep 21, 2008 9:34 am Post subject: Re: Text of Financial Crisis Legislation - yup, it's a coup
You can only pay taxes if you have an income. The way things are going, are we likely to even have jobs? _________________ "...powerdown so soft and fluffy you'll think you're living in a pillow." - jboogy
Joined: Oct 06, 2006 Posts: 1371 Location: East Texas
Posted: Sun Sep 21, 2008 10:21 am Post subject: Re: Text of Financial Crisis Legislation - yup, it's a coup
DantesPeak wrote:
Based upon what virgincrude and The Dude have posted above, there is nothing to stop the new Treasury fund from buying, for example, and paying $100 billion for a batch of mortgages, worth maybe $80 billion, then selling them for $70 billion.
My understand of what will happen is more along these lines:
Treasury puts up $20 bil in cash for auction; the bank or group that offers the largest pool of mortgage loans for that $20 bil gets the cash in exchange for all those mortgages. Basically reestablishing the true market value of those notes; something that was not honestly done when they were first written. The Bank in turn gets a clean chunk of cash, and a clean expense item, and is able to remove the non-performing loans from their books.
The feds then become the holders of that note and will, through the new corp collect the monthly payments, default settlements, foreclosure auctions, etc. _________________ Yes, we are. As we are.
And so shall we remain; Until the end.
Joined: Oct 23, 2004 Posts: 5928 Location: New Jersey
Posted: Sun Sep 21, 2008 12:00 pm Post subject: Re: Text of Financial Crisis Legislation - yup, it's a coup
AgentR wrote:
DantesPeak wrote:
Based upon what virgincrude and The Dude have posted above, there is nothing to stop the new Treasury fund from buying, for example, and paying $100 billion for a batch of mortgages, worth maybe $80 billion, then selling them for $70 billion.
My understand of what will happen is more along these lines:
Treasury puts up $20 bil in cash for auction; the bank or group that offers the largest pool of mortgage loans for that $20 bil gets the cash in exchange for all those mortgages. Basically reestablishing the true market value of those notes; something that was not honestly done when they were first written. The Bank in turn gets a clean chunk of cash, and a clean expense item, and is able to remove the non-performing loans from their books.
The feds then become the holders of that note and will, through the new corp collect the monthly payments, default settlements, foreclosure auctions, etc.
Thanks but that doesn't mean the government will get $20 billion of mortgage products for $20 billion cash. Then there is the problem of disposing those securities.
The banks that write down the assets have the cash, but may realize losses and therefore will have to raise new capital to meet capital requirements.
Once the market value is set, then all financial companies will have to mark to market and probably raise new cash. Since we are close to the end of the quarter, financial companies probably won't write down all mortgage related assets until December 31. But they will have to realize losses on deals with F & F, Lehman, and AIG in the third quarter.
We could see some huge loss announcements over the next two weeks. _________________ It's already over, now it's just a matter of adjusting.
Joined: Feb 20, 2005 Posts: 2888 Location: Uppsala, Sweden
Posted: Sun Sep 21, 2008 12:36 pm Post subject: Re: Text of Financial Crisis Legislation - yup, it's a coup
peripato wrote:
Starvid wrote:
I disagree completely. One of the key reasons why the Swedish banking crisis was resolved so successfully is because the company formed to deal with the toxic debt had extremely free hands and was granted the power to ignore ordinary financial legislation.
And considering the guys who solved the Swedish situation have just come home from New York after lecturing to the FED... Draw your own conclusions; from Sweden with love!
Sweden wouldn't have happened to be solvent at the time, would it?
I don't think the Swedish state has had stronger finances ever before than we have today. _________________ Peak oil is not an energy crisis. It is a liquid fuel crisis.
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