60 Minutes - Wall Street's Shadow Market
By Nicole Belle Monday Oct 06, 2008 5:45am60 Minutes' Steve Kroft looks at what caused the financial crisis and the under-capitalized house of cards built on shifting sands that the financial giants thought would bring them big money with little risk. It also shows how the bailout money for which Congress capitulated to Bush and Paulson's pleas will do nothing to fix the problem.
On Friday Congress finally passed - and President Bush signed into law - a financial rescue package in which the taxpayers will buy up Wall Street's bad investments.
The numbers are staggering, but they don't begin to explain the greed and incompetence that created this mess.
It began with a terrible bet that was magnified by reckless borrowing, complex securities, and a vast, unregulated shadow market worth nearly $60 trillion that hid the risks until it was too late to do anything about them.
Login or Register to post comments.
Common folks, what is a couple of hundred billion dollars when compared to well over 600,000 documented civilian deaths and a military we feed 515 billion dollars a year to support that you had no problem with?
The new $612 Billion 'Defense' Budget just passed with hardly any notice. The NYT noticed it in several paragraphs tacked onto another article.
http://www.youtube.com/watch?v=N31zdUWDcLA
Obama wants to INCREASE the military. Change indeed!
Naomi Wolf warns of the creeping police state and the most dangerous aspect of the bail out, a private treasury controlled directly by president.
Naomi Wolf: A Handbook For American Revolutionaries
http://votersthink.org/?p=573
Welcome to Zimbabwea
Obama's children health care plan $80 Billion. AIG bailout of $85 billion. Naomi Klein warns, even if elected there would be no money left for Obama's promises.
Naomi Klein: Wall St. Crisis Should Be for Neoliberalism What Fall of Berlin Wall Was for Communism
http://www.democracynow.org/2008/10/6/naomi_k...
I think it would be obvious to anyone that if Obama weren't at least nominally in favor of increased military spending he wouldn't stand a snowflakes chance in hell of being elected. National security is the only area where McCain ever had an edge even if that is largely a matter of perception. I'd like to see what Obama plans to cut after the election.
come on ALICE you know obamas owned by the war whores, what do you expect him to do bring back all thoes troops home and throw them in the unemployment lines ? isnt it better to do as bush would !keep our guys over there killing folks for the tax payers? obama loves him some more war in afganistan , think about it ! if were not killing them dam afganys by useing up our bullets tanks f22 raptors artillery pieces we'll have to lay off the workers building the weapons of death, so lets do as obummer wants expand the war in afganistan , its the american way! as obama and his clone mccain says[never give an inch]
Market is down another 250 points this morning. Honestly, someone needs to be held accountable for this mess. We can't just throw money at it and hope the problem is solved.
Wall Street tumbles amid global sell-off
AP - 1 minute ago
NEW YORK - Wall Street tumbled Monday, joining a selloff around the world, as fears grew that the financial crisis will cascade through economies globally despite bailout efforts by the U.S. and other governments.
We're at the mercy of the coke snorting Wall Street maniacs now.
And we're nearly a trillion dollars poorer. Thanks, Congress!
In the Steve Kroft's CBS segment (see the VIDEO! Nicole provides one-click LINK above)for the first time the CRIME word/ CRIMINAL ACTIVITY is prominent, describing WallStreet shenanigans that destroyed the US and world economy.
And, they say loud that although the unwashed masses had a part in subprime debacle, the REAL CRIME happened with the related DEBT SWAPS: coke snorting imbecyles BETTING with the money/value that was NEVER there ! 'Insuring' the SWAPs without having coverage! Betting to the tune of TRILLIONS in a TOTALLY UNREGULATED sector.
Who will bring Bernanke's head on a platter ?
VOTE OUT any of the pols (R&D) who voted for the bailout last week, giving unprecedented DICTATORIAL power to Treasury Sec., just breath away from FASCISM.
Just the non-payment of the subprime mortgages (total of 6% of the US mortgage market) would NOT break the banks, economy, etc. Betting on it DID.
Euro banks (except of UK) did NOT go into subprime mortgages. Some (with links to the US banks) did BETTING/SWAPs though - these are the ones in trouble there. UK is in the biggest trouble since they blindly followed the US. In Germany they were upset over the wknd bc of $30 bln or so 'donation' for a bank. Chancellor Merkel declared Sunday that ALL (100%) of private accounts will be secured by German govt.
Nothing coming close to our disaster, even they also cover up as much of their CRIMES as possible.
http://moneycentral.msn.com/investor/charts/c...
All fingers point at OBAMA and ACORN. That's where this whole debacle started. Look into it!! You will be furious!
The ACORN rumor has been thoroughly debunked. Do a site search for ACORN.
Unless you can show links that prove your lies, STFU.
HA-HA! ...way to go, Nicole!
Sure the economy is a disaster due to years of deregulations from a GOP Congress...
Sure John McSame and his party were 'setting the table' for this disaster ever since the Keating-5 incident...
Sure this corporate welfare program will cost US taxpayers even more than our current Iraq adventure ....
But did you know that Barack Obama sorta knows a guy who allegedly commited some crimes half a century ago but was never convicted of anything ???!?!?! YES, IT'S TRUE !!
Good, finally some real investigative reporting. I haven't had time to watch it yet. Does it indicate how Paulson himself was one of the primary individuals responsible for this mess? By lobbying to deregulate the leveraging margins that the big companies could use, allowing them to go from leveraging 12 times as much money as they had capital to 40 times as much as they had?
there was no mention of Paulson being the fox in charge of the hen house.
No one in the main stream media has bothered to mention that Paulson pushed the button to save AIG on behalf of Goldman Sachs. AIG owned Goldman Sachs about 20 billion, most of which they would have lost in case AIG went belly up.
Not to mention that Paulson has a cool 500 million sitting in Goldman Sachs... And no one cares to say "conflict of interest".
God knows what manner of deals went down this past weekend in the Hamptons wine cellars and below-decks among the Chesapeake Bay sailboat fleet. All these hidey-holes must have been dank and fetid with the sweat of mortal fear. Will the US Government declare itself a subsidiary of General Electric?
It was all them illegal aliens fault. They never should have picked this planet and country to land on.
But seriously, I can't believe the GOP actually blamed the undocumented migrants. I'm glad to see that some journalists digging into this.
But I think it's to late.
Sub-prime mortgages were just a drop in the bucket. At an estimated trillion dollars in derivative trading, they pale in comparison to corporate loan derivative trading, which was nearly 60 trillion dollars.
As usual, the GOP and media are scapegoating those without the means to defend themselves, while letting the real crooks (Wall Street's derivative traders and the congress which deregulated them) pass unscathed.
Your exactly right the sub prime was less than 30 billion dollars compared to the 55 trillion dollar debt that was place on the 5 trillion dollar World bond market.Most people dont understand that these trade were unregulated and you didnt even have to own the bonds to purchase the secutity on the corp bonds very shady business practice that should be illegal if you ask Me
"The numbers are staggering, but they don't begin to explain the greed and incompetence that created this mess."
Incompetence had NOTHING to do with it: they were very competent at gaming the system to destruction and then getting our money.
Yeah, throw a ton of money at the problem and that'll solve it....worked well for the Yankees this year...and my beloved Cubs.
There was a great program on NPR yesterday explaining this exact subject,it explained in both layman terms and technical terms how this happened and why it happened.I think it was called this American Life you can find it on there web site take the time to listen to it if You can.The same thing that has caused the price of oil to go up is basiclly the same thing that caused this crisis.Speculators who didnt even own the bonds the were securing caused this mess.there are 5 trillion dollars worth of secured bonds in the world and they are secured for like 60 trillion dollars.When the companies start to collapse those secured bonds have to be paid that is why AIG had to be bailed out after they let Lehman Brothers fall And in order to scare the people in to supporting them they had to let a big one fail.It really pissed Me off when i heard the explanation these bastards should all be arrested and put away for life
This was a very good explanation but, as usual, with NPR, had to find the silver lining at the end. There was a program earlier with an explanation about subprime loans which was excellent. Their main argument was that there was too much money looking for higher interest rates than Greenspan was offering. Find both at www.thisamericanlife.org
This was a very good explanation but, as usual, with NPR, had to find the silver lining at the end. There was a program earlier with an explanation about subprime loans which was excellent. Their main argument was that there was too much money looking for higher interest rates than Greenspan was offering. Find both at www.thisamericanlife.org
right on.
But Palin would rather accuse Obama of hanging out with terrorist. Wonder why they are so fast to change the subject? Seems to me they would want to submit a plan to get us out of this financial mess instead of bringing up bullshit stories. Obama's campaign will release today a video all about the Keating 5. I have a feeling McCain is going to wish Palin hadn't opened this particular character can of worms.
The bailout was simply a promise of money we don't have. How could it help anything except make our debt even larger? When bush and paulson were in such a hurry to do this, you had to know it was the wrong thing to do. But they left little choice, I guess.
Will Sarah Palin's fellow Six-packers line up around the parking lagoons of the suburban banks trying desperately to withdraw the last seventy bucks in their checking accounts?
Anti-American Terrorist Friends BS stories? You wish. The facts are the facts. If you know the truth and support Mr. Obama, you are being blinded by his charisma and eloquence. Everyone has a dark side, but Obama's is deeper and darker than most.
Gee, what an eloquent argument you present, anonymous. No one can refute those "facts" of yours.
I mean, you didn't provide any, but if you did, I'm sure they would be the best facts ever.
After all, if an anonymous right-wing, College Republican troll who needs the extra cash to keep gas in the beemer his parent's bought him for not dropping out of private school says it's true, it must be. Pay no attention to the fratboy behind the curtain.
Not to suggest that all right-wing trolls fit that profile...
"" at noon Eastern on Monday, October 6th, we're releasing a 13-minute documentary about the scandal called "Keating Economics:
John McCain and the Making of a Financial Crisis" -- it will be available at KeatingEconomics.com, along with background information that every voter should know
Watch the video to see why John McCain's failed philosophy and poor
judgment is a recipe for deepening the crisis:
http://my.barackobama.com/keatingvideo
It's no wonder John McCain would rather spend the last month of this
election smearing Barack's character instead of talking about the top
priority issue for voters.
The documentary will be live at noon Eastern at
http://www.KeatingEconomics.com
A cascading collapse of international finance is underway. While many fixers may jump heroically into the tumbling wreckage hoping to rescue this-and-that, the outcome by Friday is liable to be an unrecognizable smoldering landscape of the G-7's hopes and dreams.
Will the supermarket shelves of chipoltle-flavored crunchy snacks and power drinks go empty as truckers refuse to deliver their loads without up-front payment? And how long does it take a hungry public to turn mean?
not very freakin' long LA. Since we went to the "on demand" distribution system with little warehousing there is little in the way of food available in each of our metropolitan areas. Add in the fact that few urban dwellers have any food storage, water storage or the ability to heat their homes independent of the grid with winter coming on and you've got a real mess at least on the short term.
I'd give it less than a week before you have riots in the streets, domestic unrest on a level never seen before (simply because of the numbers involved)and then of course, martial law.
It's not looking good LA but then that's not a surprise to either of us.
while times are going to get tough i suggest as obama and mccain would agree , the answer to food riots is conserving road kill, get on your bicycle little chicken and cruise the highways near your trailor house, pickup any squashed porkypines rabbits opossums any thing but dogs or cats, start your own food bank , just be carefull to only pick up fresh road kill , stick your nose in the meat take a sniff ,if it smells worse then your bathroom its not edible! good luck on stopping martial law with your efforts at conserving mixed meat!
I'm glad you mentioned Just in Time inventory management. That also contributed to the degradation of rail transport, and was all predicated on the availability of cheap fuel since it required over-the-road transport to keep shelves stocked.
No national transport policy. No national energy policy.
Of course, I didn't make one myself, but then again, I'm not the Preznit.
John and George said the economy is fundamentally sound?!?!
Waaah hoppined?!?!
The above quote, BTW, is from James H Kunstler's blog.
http://jameshowardkunstler.typepad.com/cluste...
And as a side note the 700 billion figure wont touch this mess try about 3 trillion dollars and then it will only clean up what is left after they merge everything into there friends pockets.
Bernanke has gone AWOL. Notice, he has vanished from the media landscape?
I think I saw his picture on a milk carton at the Federal Reserve commissary.
Most European stockmarkets fell 5% on opening as a fresh wave of nervousness hits the traders.
Iceland is suffering badly - and has stopped trading in all financial shares.
German Government will not proceed with legislation to protect depositors savings - despite Angela Merkel's promise over the weekend.
Russia's benchmark RTS exchange stopped tradin for an hour following a 14% slump. The other Micex exchange closed following a 15% slump.
General mood in UK/Europe is for leaders to come up with an overall plan, come clean on the extent of the black holes in the balance sheets and stop this series of knee-jerk, Band-Aid fixes for the next bank to start to wobble.
...last week? Last year? How long has this been building up?
Now that regular people can't do anything but react to it (too late to call our Congresspeople, even), all that's left is to pump up the fear and frustration level.
Thanks, MainStream Media. You really know how to inform. --MaryK
This mess started in early 2000 when in Dec of 1999 Ghramm snuck the deregulaion into a last minute bill that was pushed through right before Christmas break,Bill Clinton signed it into law and all the Greedy Wall Street bastards were having a hay day.
Gee. I think I'm beginning to get the agenda of the "secret" closed meeting in Congress this past March:
http://www.youtube.com/watch?v=kB-JGqDukbY
It's been leaked that the meeting was about the "impending collapse of the U.S. economy sometime in the Fall" and that this might lead to civil war and martial law etc.
Here's a new video about "the bailout":
http://www.youtube.com/watch?v=h9-tBGxVU6o
After watching the "60 Minutes" piece up top, then this video, then considering that "the bailout plan" was written "months ago", it now seems logical that the March "secret" meeting WAS about the impending economic turmoil.
And to think that these Congressional SNAKES had the nerve to vote for this bailout with at least 90% of their constituents lobbying them NOT TO DO IT!!
Good thing for all of them that they have Diebold and Sequoia to switch the votes around for them in a few weeks. I for one will be voting for ANYONE on the ballot who doesn't happen to have a D or R next to their names. No wonder so many Republicans tried to trick the stupid voters by placing "GOP" after their names!
I'm writing in Pissed off Patricia for everything when my absentee ballot shows up! At least I feel I can TRUST her!
(How much is 2+2?!)
Dow down to 9944.59. They should have given the money to each taxpayer. That would have stimulated the economy better than throwing it away. The bailout is supposed to fix things so that people can get credit. I don't need credit, I need to be able to buy groceries and pay the electric bill. How will getting in more debt help "mainstreet".
Well at this rate me and my wife will be wiped out by the end of today.
If it's of any comfort.
This is scary shit. I had no choice but to "invest" a large sum of money in January. If I hadn't I would have had to pay approximately 50% in taxes and penalties. That was my retirement. I see a large cardboard box in my future if this keeps up.
It is no comfort to me, to see anyone be wiped out. Hope you and your wife will be ok.
How is it that with two working adults in our family, making $80,000 a year, we can barely make ends meet? We live in an 1100 sq. ft. home, we drive two cars that are 12 and 7 years old, we haven't had a family vacation in 5 years, we don't have new, fancy clothes, we can't send our 17 year old son to college (we make too much for aid and don't make enough to pay the bills), we can barely afford gasoline, heat, food. We have no money in savings, and I've tapped out my 401(k) just to pay the bills. We've canceled the cable tv, the cell phones, the blockbuster online, etc. We're eating more home-grown food because we can't afford our usual Friday night out for pizza. We have to watch our son march in the high school band from outside the fence because we can't afford $10 ($5 each) to get into the football game. My wife rides her bike to work to save gas (fortunately it's only 2 miles), but I am considering doing the same thing, but my work is 15 miles one way.
What the f*ck is going on?
Who took away our American Dream?
Hearing Live now in progress - Cspan
CEO Testifies on Lehman Failure
--> Open the Books Waxman
4:10 AM - French President Nicolas Sarkozy Calls For "New World"
http://globaleconomicanalysis.blogspot.com/20...
I'm watching c-span too. Very interesting!
There is definitely something strange "in the air".
If it unravels this week the sheeples may actually be interrupted from the munching on Angus burgers and avidly watching sports and Idol. The question may form in their brains concerning how they may pay for future Angus burgers if their job shoveling asphalt patch in cracked pavement suddenly evaporates.
I'm a pacifist but if I come across a Wall Street trader I'm going to punch him right in the nose.
:-)
The Raygunauts sttarted dismantling regulatory supervision in the early 80s. That sorry fuckwit and Ayn Rand acolyte (shoulda been a tip-off, shitheads!), Mr. Andrea Mitchell, was appointed to the Fed in '87, iirc. The Clenis kept him on--and HIRED the GOPuke Rubin for Treas--to placate the money guys the DLC wanted to triangulate.
"Jump, you fuckers!"
Saw that the other day gave Me some comic relief in a very serious time
This American Life did a report this past weekend on the same subject, albeit without visuals.
http://www.thislife.org/Radio_Episode.aspx?ep...
This not good.
Not good at all
Glad C&L posted this, now maybe people will start to understand why the next president cannot fix this. There is still one other piece 60 minutes missed. At the heart of this problem is a gold crisis, we would never have gotten this far out if their were a baseline gold standard which Nixon took us off in 71, sabotage is more like it.
Gold stabilizes interest rates, we lost that and this time bomb was known about for the last 30 years. The next bomb are the retiring baby boomers who have all their 401k's and IRA's wrapped up in the stock market, never before in history have so many bet their retirement on the stock market.
If Obama is change we can believe in, then we are going to need to point it out to him in stark terms because as of now no candidate has a clue.
We all are going to feel this, but I'd say anyone under the age of 50, is going to have an especially hard time. That's a lot of people.
The under 50 group doesn't remember adult life without credit cards.
I do. Of course that's because my wife and I don't buy it if we can't pay for it right then. We bought our cars used and paid for them on the spot, we rent our house, and we use only our debit cards for purchases.
Not necessarily, Gold is still an arbitrary entity subjected to speculation.
People who think an arbitrary standard like silver or gold would have prevented this, either don't know basic macro economics or they haven't forgotten their history.
The current crisis has a lot of parallels with the conditions of the crash of 29, and there was a full fledged gold standard then.
When I refer to the gold standard I should be more accurate and refer to silver as well. Silver historically is more valuable than Gold, China, which had a silver standard, almost avoided the depression entirely.
People erroneously believe gold was the problem in the crash of 29, however the Federal Reserve had not been following a strict gold standard prior to the onset of the Depression. Indeed the Fed and other central banks’ deliberate “management” of the gold-exchange standard prevented monetary adjustment in the period from 1929 to 1933 from resembling the pattern of equilibrium typical of the classical gold standard.
The real culprit in the monetary system of that era was the Real Bills Doctrine, which was then the working blueprint of the policymakers in the Federal Reserve System. Silver and gold have been recognized as real money for thousands of years, fiat currency has failed historically again and again and society always returns to gold and silver as a monetary base when fiat paper currencies collapse. Gold and silver will always have a value, paper can and does easily drop to zero.
Not to rain further "on anyone's parade", but Social Security is a "filing cabinet" full of I.O.U.'s. That money was spent a long time ago.
You're/we're now all "Negative Externalities", as I'm sure it's the same in Canada. (The financial equivalent of collateral damage: a brand new --gltizy?-- phrase.)
So, everyone is to blame but the CEOs and the Cons. The poor, the mathmeticians, the scientists, the shmuck at the bottom of the totem pole at the big Wall Street firms. But the Cons and the CEOs are just hapless victims, right?
There were some great comments and discussions here last week when the bailout was passed by those idiots in Congress. We all knew that it wouldn't do anything, that by passing that bailout Congress officially put a stamp on our future and the future of our children and grandchildren.
Well, DOW today has already plunged close to 500 points and is way under 10,000 - we all predicted here that the shit would start hitting the fan this week and it looks as though it's started. Those traitors in Washington put us into this mess along with the rich oligarchy that actually runs the country.
Be ready folks - I see some very rough and dark times ahead.
Hooray for Reaganomics! How could a bunch of hucksters shuffling paper and enriching themselves in an imaginary market that is bigger, literally, than all the money that has ever existed in the world be a bad thing?
I mean, really, after you make/get your first billion, isn't that enough?
During the last two weeks Paulson, Bernanke, Reps and the media have gone from calling the economic crisis a "BAILOUT"....then a...."Rescue" then an "investment". WTF
My humble take was that Paulson was the inside hit man for Wall Street for the biggest Treasury heist of all times. Paulson was saying to taxpayers and our Reps "the nations family jewels (balls) are nailed to the floor or the Treasury". To deal with the problem Paulson handed the taxpayers and our Reps a pack of matches or a butcher knife and said "choose"
Plse see my comment above:
Not subprimes, but BETTING /SWAPs BROKE the system
All the defaulted subprimes are only 6% of US mortgage market.
The CRIMINAL speculation/ BETTING = SWAPS caused this catastrophy, all in TOTALLY UNREGULATED sector.
They repeat ad nauseam the guilt of the unwashed masses - all the subprime is a tiny %% of the debacle, which is NOT connected to the poor and dirty.
The coke snorting WallStreet created this ALL.Poor were just a minimal tool needed to pull the whole scam.
The market's only been open for 2 hours and the bottom's falling out. What are bank branches going to see this morning? Is this going according to a neocon plan or has this taken on a life of its own?
An inquiring mind is really interested in your thoughts.
Why is Congress still busy congratulating themselves?
you have a chioce this november on wich corporate whore sees your ejected from your trailor park home, my advise is keep your sports collectors cards in your panties little chicken they are going to be worth more then you think, you might take that tv you know the one with the typewriter below it and sell it along with your meager mobile home furniture at a garage sale, both barack and mccain will see you thru the comeing melt down, and meals on wheels will feed you once a day under the bridge you will be liveing under, anyway good luck son your going to need it,
Wow I've got my very own personal troll. How cool is that?
Must have hit a nerve the other day. Poor tyree, I'm in awe of your skills at transference. Given your abilities at both spelling and grammar, reading your posts is an exercise in puzzle solving. I do enjoy the challenge of trying to figure out what's going on in that prodigious mind of yours.
Since you don't know anything about me I'm going to let you in on something. No matter what the economy does my family and I have more food than we can eat (we actually produce goods and sell them), power, heat and water regardless of what happens to the grid and a vehicle that doesn't require petroleum products to run. That said old son, perhaps you should keep your "good luck" for yourself. I appreciate your good wishes but I suspect you will need "luck" more than I do.
PS Maybe you could compose your epic posts in some application that has a built in spell checker. They still won't make sense but at least you won't look like a total idiot.
Last week on David Gregory's news program "RAce to the White House" Former Republican Secretary of the Treasury Paul O'Neil said that TWO YEARS AGO 30% of the people who had been able to access these home loans did not make their FIRST PAYMENTS. He said that these loans should have been shut down then...2 years ago. Paul O'Neil also said why bailout these companies when you can guarantee loans. Can you explain what he meant by this?
Why did Paulson and Bernanke wait so long to deal with this crisis?
Again this has very little to do with sub prime mortgages and everything to do with unregulated Wall Street if you took all the bad loans from all over the world they would not account for a 10th of what is going on,Wall Steer Speculators bought for lack of a better word insurance on Corp bonds they did not own, there are aprox. 5 trillion dollars worth of bonds in the world and they were insured for 60 trillion dollars. it was a very complex pyramid scheme once some of these companies started to fall because there werent any jobs being created in this country and the Repukes sunk the economy into the gutter, The issueing companies were having to pay out on these nonregulated insured bonds hence the fall of the pyramid begins.In order to get public support for some kind of a bail out they had to let one of the Big traders fail that was Lehman Bro. after they fell all hell was breaking loose
If you watch the video, at 10:44, post-production seems to have killed the audio on Kroft as he's listing insurance companies. What's up with that? Any ideas? Did he mistakenly rattle off someone not implicated, or is there another big fish about to hit the fryer and we're not supposed to hear the name so we don't, uh, run screaming into the night?
I've seen A LOT of people saying we shouldn't give Wall Street a bailout. I wish this were possible; however, the banking industry has pissed away our money by gambling that OTHER banks would not fail. This gambling was/is in the form od CDS's ( http://en.wikipedia.org/wiki/Credit_default_swap ) which end up linking all of the words financial institutions into a huge spaghetti like mess. The banking industry is about to completely collapse IMHO and it needed this immediate injection of cash to stabilize it. We didn't stabilize Wall Street, just a few companies(banks) so the Dow and S&P and NASDAQ numbers don't paint the full picture.
We had to get this check written. I don't like it one iota. Not one; however, it needed to be done.
NOW, when Obamma comes into office we can get some regulation put back in place to end this greedy free-for-all that has destroyed the worlds(well Asia is doing better than we are but Europe...) banking industry. Hopefully this will give employers the message that using stop-gap credit for day-to-day business is wrongheaded. The sate of California is seeing the folly of relying on credit to make payrolls and to pay for other government projects.
The worst thing about deregulation IMO was the expanded use of credit at an employer and a consumer level. Hopefully we as a nation can get some regulation in place to make sure credit markets are not gambling away out $$$ and hopefully people/businesses will see that credit---while not inherently evil---may not be in the best interest of the entity applying for it.
This strange drive to expand a company beyond its means just to show growth is self defeating and I have never seen the wisdom in doing this yet MANY companies do expand beyond their means and pay the price for it. We need to stop rewarding this philosophy of expansion over prudence.
you might wanna take a look at.
The 'crisis' began when the CorpoRat bosses decided to uncouple productivity and wages.
USer productivity SKY-ROCKETED during the Tech "bubble."
This spelled monster profits for the bosses, but only if they could defray the costs of increased consumption without actually spending money on it via wages.
So, since about 1984, the wages paid USer workers has not kept pace with either inflation or productivity.
But with so much money around, the bosses knew they had to give the workers a bone, to make 'em feel like their lives were improving with their improved productivity. But they were loathe to actually let the workers have actual money.
So they collaborated and colluded with the shills, whores, pimps, and pigs in Congress (ALL of them) to loosen credit requirements. That way, the drones and peons could seem to be having the best days of their lives when, in fact, they were indenturing themselves to lives of penury aas they tried to make their interest payments.
It worked phenomenally well. How well? Well, have you heard of any brokers defenestrating themselves? No. QED...
I hope everyone reading this has already been to the nearest ATM ...
I thought that this mess, along with every other problem in the United States, was the fault of Bill Clinton?
No, the Republicans have finally moved beyond that. It's the Dems fault because they (the Dems) have had control of congress for less than two years.
Republicans blamed Clinton for 4 years yet try and pass the blame for their own misdeeds to a congress that they (the republics) have stonewalled since they lost control less than 2 years ago.
and he "proudly" signed the Gramm/Leach/Bliley act.
So he's no 'innocent,' getting just as dirty as anybody else in the process of distributing the riches to the rich and the debts to the poor...
Some of those guys on the "levy ... drinking whiskey and rye" today, actually probably sitting in a private club in London or New York drinking top shelf stuff, KNOW they are about to be "blown up" today which of course is why they are out drinking.
Imagine for a moment if GW had been successful in investing SS in these markets??????????
Just some observations.
I'm not surprised that the market is down today, but don't assume it is simply about the bailout being insufficient or not timely. Global markets are reacting. There is going to be major fallout on the dollar by FX specialists and speculators. This has bleed through to pretty much everything else that comprises an economy...it will further reduce domestic asset values, whether real estate, stocks, debt..everything. The market will have to adjust for that...and it is doing so.
The bigger issue is what can be done about it, and the answer is...not much...unless big decisions are made. Now, I don't give a shit WHO gets elected, those decisions are not going to be made. The biggest decision is with regards to cutting spending. Ain't gonna happen, so it is not worth arguing about. The other is with regards to taxes. Here's a newsflash...taxes are going up...its just a question of who pays...and THAT answer is pretty simple. Big business and high income folks are going to pay, because the middle classs U.S. taxpayer really is tapped out. Now, I know the trollies are going to jump up and down saying that now my political leanings are showing. Well, not so. Willie Sutton was asked why he robbed banks...his answer..."cause that's where the money is". Well, big companies and rich folks got the money, so that's where its coming from.
I know the collary argument is to cut spending. Well, there is NEVER going to be the political will to cut spending on Social Security or the military. Not gonna happen. Never has, never will. There MAY be some marginal cuts on some military projects, projects that would have been cut anyway because they are either already obsolete systems or simply bad products, but there will not be any real meaty cuts.
This recovery is going to be long, slow and painful. I wouldn't even fathom a guess as to how long. What I do believe is that our whole econonmy is going to fundamentally change. Our whole way of conducting business is going to fundamentally change. I'm not so sure that there are going to be as many "major" players as there once were. At least one American car company is going to die. You can bet on that one. There is going to be fallout in telecommunications and energy, and the funny thing will be that we'll wind up with defacto oligarchies if not outright monopolies in those industries, which was essentially where we started. You may actually see energy companies, not oil companies, I'm talking electrical energy delivery companies, nationalized. It would not surprise me.
Things are gonna change. Big time.
Translation, we're dead in the water. I would not be surprised if a "Financial Emergency" is declared before the "Election".
I've been sorta' also sayin' this for 'bout two years. Cheney & Bush and their buds in the Congress did not put all of the Presidential Directives and other legislation in place for nothing.
And, Cheney is so evil, I'm pretty sure he doesn't want to go away without having just a little fun here at home.
For a while, I was feeling better about the possibility of martial law and FEMA camps actually being used, I thought that Posse Comitatus law had been reinstated by the Congress in 2006 - but I recently learned that Georgie added a signing statement, saying he would be ignoring the reinstatement and following the previous law
(which I think was in the Military Commission Act).
And, for all the folks posting here at C&L who still think these little problems we're having were just due to the stupid folks who got a mortgage without reading the fine print, or that the consolidation of our wealth into just a very few financial institutions was due to "an oversight" or even dumb politicians - please WAKE UP!
There had better NOT be. And I don't like the implication thaqt it's somehow wasteful, in the manner of the Military.
Social Security is FULLY FUNDED. It pays for itself (and the rest of the fucking shit the wastrels in Congress do). I paid into it for almost 50 fucking years. If you wanna cut it, please come to my house (where I'll kick your ass, and leave you for dead in the street.).
Jumping up and down doesn't solve problems.
We can all rant and rave as much as we want. Not going to change anything.
Nationalization of certain industries is a real possibility in a situation that does not provide many options. It is what all 3rd world countries do. If you can't keep the lights on, there is anarchy. If you can't keep the heat on, there is anarchy.
As far as your point about Social Security being fully funded, that is the debate. However, if there is a need for additional funding...it is very easy to solve. Raise the maximum income level for the Social Security tax. Raise it to $250,000. Problem solved.
As for the military, there is plenty of "waste" there, if you define waste as systems that simply are not viable, or are no longer needed. How many years passed from the time that superior and almost undetectable spy satellites were in use to the time that the SR-71 Blackbird was retired? Don't know? Wanna know why...cause it's classified.
There is plenty of "old" technology out there that can be retired to cut the budget, that can already be replaced with systems already in place that can be run more cheaply and efficiently.
I don't want to stretch this out too much, as this is not the thread for this type of discussion. But the fact is that carrier groups are inherently expensive, bloated and in most cases entirely inefficient in modern warfare. We have sufficient bases, combined with mid air fueling, to extend our reach anywhere on the globe. The carrier groups exist as a sop to the Navy. And while we're on the subject...do we really need two Air Forces?
I'm as much in favor of national defense as any American, but facts are facts and there is shit we simply can't afford anymore.
Nope.
Cleaning my weapons?
Yup.
Just sayin'...
So...you're disgruntled and clutching your weapons? ; 0 )
Fully funded with what? Promises?
Social Security is a pile of I.O.U.'s, the money being spent ages ago. It'll be the last to get taxpayer money, as long as Wall Streeters have to drink 10 year old scotch whiskey, insytead of the good stuff.
Can we dust off, or build, the guillotines now?
is a national security concern, then there is NO argument that should (in the logic of "national security" itself) prevail against nationalizing the whole industry.
The U.S. Government’s total downstream liabilities and unfunded commitments (including Medicare, Social Security, Public Debt, Pensions, etc.) have now exceeded $53 trillion dollars (according to David Walker, the U.S. Comptroller General and Head of the Government Accountability Office). $53 trillion translates into a de facto debt of $455,000 for every American household.
Walker of course quit in frustration but keep in mind this was put out during Bushes first term.
No one cared, or noticed
its not that no one cared, its that bush used the war in iraq to cover up what his main goal was
to rape the treasury so that every new deal program would be dismantled
it took 26 years, but they did it
now we can look forward to living in a 3rd world country
Three guesses who the "shadow meister trio" happen to be? Bush, Gramm and McKeating. Looks like a Keating Five Scandal redux, folks!
It's time to "out" the real criminals in the deregulation activities which led to this meltdown. It's none other than own very own "homegrown criminals" right here under our noses - George W. Bush, John Sydney McCain, and Phil Gramm.
If McCain and Bush had gotten their way, our elders would be out on the street right now. John McCain pressed very hard to privatize social security (and health care) and invest it in Wall Street. Remember that?
Most people probably don't remember.
Some, a few, remember EVERYTHING and forget NOTHING.
I hope the people responsible for this mess have hired a good security detail. Then again, maybe I don't. The easier it is to get to them... I'll just stop right there.
What kind of idiots are our congresscritters? If prez fucksupalot indicated his willingness to sign a bailout law, they should have known that it would be bad for the average citizen but good for the rethugs.
Thanks a lot, you pathetic fools! You played right into the rethugs' hands!
Is it illegal to subtract the amount of the bailout from my income when I pay my taxes?
the Crisis.
They own it now. What now follows is their responsibility, no matter what happened before.
We Are SOOOOOOOOOOOOOOOOOOO Fucked...
see the problem with this story is its always referring to "these people." Name them, put their picture on the screen.
While they're at it, how about their addresses too?
Final interviewee: Ultimate Crook and Liar. Why are these people in business again? And why is there an unregulated shadow market destroying the world economy again? Anybody?!
Barf
http://tinyurl.com/3n8pka
Choose your "leaders" wisely, as once you take the first step into hell you will not recognize the rest.
September 23, 2008, 10:42 a.m.
White House Deputy Press Secretary Tony Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials...
http://www.rollcall.com/news/28599-1.html?typ...
--> "months and weeks..."
Follow the money... conflict of interest
and the after Shock Doctrine
Whistleblowers Tried to Stop This and Need to be Protected
http://www.myconfinedspace.com/wp-content/upl...
Could someone who watched 60 Minutes and knows what 'SWAPS' are, explain them?
Sounds like an insurance contract that is not insurance and is not backed by funds to guarantee payment if a mortgage turns out bad.
Anyone have the facts on this sort of thing?
It's to complicated. Computerized "trading-algorithms" are partly to blame for this disaster. Plus the next shoe to drop is derivatives.
About $50 trillion of worthless NOTHINGS.
But I have the impression that these crooks bundled subprime with good mortgages and sold them off with a guarantee - insurance if you will, but didn't call it insurance because that would require a cash reserve which they didn't have - and they are now at odds whether the problem is with these SWAPS that were unfunded, or the underlying mortgages.
Just like selling a product that doesn't work, but guaranteed by someone who has no money?
Again this has very little to do with the sub prime sector that is less than a 10 th of the major problem, it was caused by greedy Wall Street thugs who over leveraged the bond market, there are 5 trillion dollars worth of bonds on the world market that are leveraged (insured) for 60 trillion dollars, Speculators again caused most of this problem because of easy money in a world of deregulation.They didnt even have to own the bonds to leverage them.
And to think we could have used the Clinton Surpluses to start purchasing the debt of other countries and in not to long a time impose fiscal discipline on them.
So much for that.
Yes, imagine leaving this idiot a surplus! Now he's tanking the world economy.
George Bush stole both elections and never was "elected by the people" in the first place. It goes without saying that this "faux president" built on "faux ground" so the greater he built (8 years of corruption), the greater is the ruin (this country).
We thought tanking every business he owned was bad enough; now he's tanked this country and the world economy.
George Bush belongs in jail for what he's done.....errors of comission and errors of omission. We need to throw the book at this criminal now.
This isn't just his fault. He's more of a compliant idiot. This needs to be laid at the feet of all deregulating Cons!! DUHbya will be gone in a few months. The Cons will still be around. We need to tie this anchor around their necks and laugh as it pulls them under.
Moosie and Bill Kristol: Two fascists in the same pod.
Keep putting this airhead out there on national television....and watch how fast your numbers plummet!
This woman is downright dangerous at this point and has become McCain's "Mushroom Cloud". I've never seen anyone with so little intelligence pretending to have even the first qualification for ANY office in the country.
I don't believe Sarah Palin is successful as a Governor of Alaska - whose population, BTW, is less than the city of Austin, Texas. Essentially, the Mayor of Austin, Texas is running as a veep - sad, very sad.
Just points up McCain's senile dementia to actually put her in this position. It's doom for him and will be the "turning point" in people's minds across this country.
Keep the fool in the limelight, guys! It's tanking your campaign.
The system and government is way to big, complex and complicated for me to partake. But I will say that maybe folks need this to correct themselves in a system that has way to many conflicting DISCLAIMERS. Sure these people are good at what they do but instead of just referring someone to a certain law they write their own disertation of that law and then it is off to the races sonny. Hang onto to your britches it will be a great ride!
Troy from Montana
Even Bush's personal "airhead du jour" Dana Perino knows more than Palin!
Now...THAT...is a disturbing statement.
Since I can't seem to comment on Mike's Roundup and I gotta go, I will post my comment here and hope the SM allows it.
Back in her time as a Christian culture warrior in Wasilla, Alaska, Sarah Palin demanded total transparency from her moderate Republican opponent.
I am not focused on the birth thing, just the hypocritical transparency thing. This is how dirty she plays.
All repug congress people should be forever banned from getting involved in any laws dealing with money.
Just look what they have accomplished. Reagan by tax-cutting (which repugs will tell you increases revenue) have started us on the way to huge deficits, and ever increasing the national debt which we are not downpaying, instead owing large sums of interest on.
Bill Clinton came along, whittled down the deficits every year until he achieved a surplus which the WH Crook gave away to the rich instead of doing the smart thing of lowering the national debt, then the WH Crook proceeded to repeat what the Reagan Crook did, cut taxes and got us even bigger deficits and a national debt now exceeding 10 trillion dollars - $10,000,000,000,000.00 - That is more than the average Joe Sixpack or a Moose hunter makes in a week.
60 Minutes - Wall Street's Shadow Market
http://www.youtube.com/watch?v=2QbNbuhWkrw
)O(
I Told ya.
Sacxtra! - May 2008
Submitted by phil on Wed, 2008-04-23 15:07.
Sacxtra! TV
Episode: The 65 Trillion Dollar Debt
http://sacxtra.com/mbs/node/224
I'm watching the news here in Europe, and it is very very grim indeed. Everybody is in a panic, and all the nations seem to be acting on their own rather than as the EU -
Bush's financial idiocy has contaminated all markets throughout the world - today is officially called Black Monday here in Europe because of how much stocks tumbled. Scary - governments trying to calm people so there are no runs on the banks....
McCain is done. Finished. Kaput.
Dow below 10,000
George Bush probably couldnt go out in public at this point.
There doesn't seem like much one can hope for at this point, everything over the past 8 years has been so disastrous.
But, I do think McCain is done - it's hard to argue with the reality of what is happening now.
Democrats have to clean up the mess after the Republicans have another drunken orgy of excess.
54 minutes ago
WASHINGTON (AFP) - The Federal Reserve and the US Treasury announced measures Monday to confront a rapidly escalating financial crisis under new emergency powers as panicked investors fled stock markets.
The money shot:
"Well they turned out to be wrong."
"Why's that?"
"Because you can't model human behavior with math."
"Because you can't model human behavior with math."
That should be put on the tombstone of every genius math mathmetician that ever thought his math skills qualified him to be an economist.
It turns out, even the rocket scientists that designed this system, don't even understand it. But, let's blame undocumented workers picking lettuce.
Bail out
Mon, 10/06/2008 - 08:04 — JHR1956
Imagine for a moment if GW had been successful in investing SS in these markets??????????
_______________________________________________________________
http://www.ww2incolor.com/gallery/albums/germ...
You mean he hasn't?
Obama, is just another crook senator, voted yes on the bail out to help his friends in Wall street that have given him a lot of money. From the center from Responsive Politics:
Top 10 Corporate PAC Contributors:
Obama:
Goldman Sachs $739,521
UBS AG $419,550
Lehman Brothers $391,774
Citigroup Inc $492,548
Morgan Stanley $341,380
Latham & Watkins $328,879
Google Inc $487,355
JPMorgan Chase & Co $475,112
Sidley Austin LLP $370,916
Skadden, Arps et al $360,409
It is time to vote for a real leader. Save this Country and VOTE THIRD PARTY. DON'T vote for McCain insanity or NO CHANGE OBAMA.
I see it as more of a general condition of who has the money now and who has the most to politically lose.
These guys are greasing anything that has influence now.
I won't countenance calling Obama a crook senator.
He is a politician who does what politician's do.
I believe Jeremiah Wright said something along those lines.
A shocking report. There's little to say, except the citizenry was defrauded by the politicians entrusted to administer their financial institutions and the institutions themselves. The bailout's effects, such as they are, won't enter into the market's financial bloodstream for nearly a year, and in the meantime, consumer spending will plummet and about one-third of the 94% of mortgages that are being paid consistently will likely be taken down by the roaring recession to come (incredibly, and statistically, it hasn't even arrived yet!). The bottom may be when the Dow hits 5,000 - 6,000, but the simple truth is that stock values will still be overpriced even then. Wherever the bottom is, it will be far, far deeper than most suspect.
It's horrendous....horrendous. Certainly the greatest financial crime in U.S. history...likely World history for that matter.
A shadow market that hid the risks?
More like a shadow govt and media that hid the critics.
Never mind $60 trillion. I've seen estimates of as high as $500 trillion. And it's not just sub-prime mortgages, it's commercial properties and other commercial loans. At the heart of this is of course the default-swaps. What I still have trouble comprehending is why, if the most toxic sub-primes are the root issue for the mortgage crisis, the government doesn't simply guarantee the mortgages? Wouldn't this stabilize all the crap derivatives that it supports? As part of the deal tighten up the oversight and of course put teeth into the mortgage loan requirements.
But the repugs woudn't like it.
Didn't McCain consider himself the great deregulator and the bitch got up and said "get the government out of my way!" Don't all the repugs believe in a free market that regulates itself with all the greedy bastards within?
And the band played on. . . Virtually no one from Wall Street who brought us this financial disaster will be punished for their actions. While credit default swaps were disastrous for the American economy they were very profitable for the traders and executives of Wall Street. People will soon forget this latest financial crisis, just as we forget the S&L crisis before it, and the same men will be running Wall Street working on new ways to enrich themselves.
You make it sound like you think everything will bounce back to normal after a rough patch. The USA is bankrupt. Has anyone forgotten the Great Depression. I know my father certainly hasn't.
Dad: "When we were kids..."
Oil is 90 a barrel all of a sudden but prices didn't go down, does that mean they dropped the price of oil to offset, the loss of value, to the dollar? Just thinking..........
Now get this, how can you claim a loss? You put $100.00 in, it jumps to a $1000.00, you sell when it drops back to $150.00. They claim they lost something like $850.00 in that trade. Then they show that as a loss? Pretty smart HUH!
Troy from Montana
They are playing on peoples FEAR!
How many of the GOP, the party of personal responsibility, have stepped forward to take ANY responsibility??? They're all running for cover, pointing fingers of blame.
This whole mess on Wall Street is just one of the largest Pyramid Schemes to happen in our lifetime. The CEO's of all these Major Companies were gambling with our money knowing what the consequences would be and are getting away with it. They are bailing out and taking our money and running. They should have to answer to us the poor saps bailing them out. I can not even imagine why the Government is letting them get away with this unless they are sharing in the profits. This has been coming on for years and they just let it happen. Well good luck people starting with nothing again.
Login or Register to post comments.