You know the feeling you get when you are on a ferris wheel or a roller coaster and after hitting the peak, you start the descent? Feels like your stomach has been left “up there” somewhere? We’re there. I get that feeling every day while I read the “news”. Countries that are thriving and working on solutions do not behave this way:
– Hillary we-came-we-saw-he-died Clinton gleefully announces that her joint task force on counterintelligence (this is where the State Dept., now run by anti-diplomatic diplomats, teams up with a few college frat boys) has been able to pull a good one on al Qaeda. They hacked into some overseas websites and changed the ads so they read as anti-al Qaeda. Oh, psych! Pwn’d ’em. High five!
– The president has issued executive orders to sanction some foreign countries and persons – and in at least one case, sanctions Americans – without going to Congress.
– He also recently issued an executive order which allows him to take over all food production, roads, private companies, infrastructure, oil supplies, etc., and to conscript any American deemed fit into military service. This can be implemented at his discretion, in both times of war or of peace. The liberal blogs either ignored this one or brushed it off as unimportant because Clinton and Bush had the same executive orders in place. He is just doing what presidents do now. Duh. No big deal, get a grip. He could have, had he been so inclined, rescinded both the Clinton and the Bush orders. He chose not to, instead strengthening the wording in theirs to issue his own kingly proclamation.
– The president gave a speech at a Joplin, Mo high school the other day. Joplin had been flattened last year by one of the deadliest tornadoes on record. In his speech – and I am looking at his actual words, not just depending on the fawning media to “interpret” them for me, I can read, for God’s sake – there is no mention of climate change as the causative agent of the violent tornado outbreaks across the country. The devastation was just a blind attack from mother nature, no particular reason. Hard luck. I particularly like the part where he tells the students – I guess he was hit suddenly with the need to be honest – that their generation will have to figure out all by themselves how to make higher education affordable. And rebuild the economy. And make sure that everyone who is willing to put in the effort can find a job. Oh, and drill here, drill now, Joplin. None of these things are up to the president or Congress, who clearly have no intention of working on these issues on your behalf – you little slackers are on your own now.
“[…] And that’s the spirit that has allowed all of you to rebuild this city, and that’s the same spirit we need right now to help rebuild America. And you, Class of 2012, you’re going to help lead this effort. You’re the ones who will help build an economy where every child can count on a good education. (Applause.) You’re the one that’s going to make sure this country is a place where everybody who is willing to put in the effort can find a job that supports a family. (Applause.) You’re the ones that will make sure we’re a country that controls our own energy future, where we lead the world in science and technology and innovation. America only succeeds when we all pitch in and pull together, and I’m counting on you to be leaders in that effort, because you’re from Joplin and you’ve already defied the odds[….]”
– One of the “progressive” websites celebrates the latest “amazing” “scientific” “break-throughs” in an article sent out today. Our best think-tanks and scientists have developed some great stuff. Well, okay, they haven’t perfected the hydrogen engine, found a solution to peak fish, peak oil, fracking earthquakes, toxins in the waterways, the sixth great species die-off [see: http://en.wikipedia.org/wiki/Holocene_extinction] or anything, but by Jove, they have solved the problem of getting that last bit of catsup out of the bottle. Yay! Another high five! And this is what a liberal website finds momentous.
– After letting the derivatives market grow to over one quadrillion dollars, our Congress is suggesting that they may be ready to
enact regulation end the bank bailouts end the Fed dismantle Wall Street altogether as a money-laundering scheme bailout the derivatives market.
The government has been bailing out the giant, insolvent banks for years. (Many of the bailed out banks are foreign.)
That is preventing the economy from recovering … like countries that have grabbed the bull by the horns.
The government has allowed the amount of derivatives to reach 1.2 quadrillion dollars.
That is feeding the parasite of casino gambling … which is preventing the real economy from recovering and is killing the host of actual productivity.
What is the government doing for an encore? Bailing out the derivatives clearinghouses.
As the Wall Street Journal reported yesterday:
Little noticed is that on Tuesday Team Obama took its first formal steps toward putting taxpayers behind Wall Street derivatives trading — not behind banks that might make mistakes in derivatives markets, but behind the trading itself. Yes, the same crew that rails against the dangers of derivatives is quietly positioning these financial instruments directly above the taxpayer safety net.
The authority for this regulatory achievement was inserted into Congress’s pending financial reform bill by then-Senator Chris Dodd.
Specifically, the law authorizes the Federal Reserve to provide “discount and borrowing privileges” to clearinghouses in emergencies.
To get help, they only needed to be deemed “systemically important” by the new Financial Stability Oversight Council chaired by the Treasury Secretary.
Last year regulators finalized rules for how they would use this new power. On Tuesday, they began using it. The Financial Stability Oversight Council secretly voted to proceed toward inducting several derivatives clearinghouses into the too-big-to-fail club. After further review, regulators will make final designations, probably later this year, and will announce publicly the names of institutions deemed systemically important.
We’re told that the clearinghouses of Chicago’s CME Group and Atlanta-based Intercontinental Exchange were voted systemic this week, and rumor has it that the council may even designate London-based LCH.Clearnet as critical to the U.S. financial system.
U.S. taxpayers thinking that they couldn’t possibly be forced to stand behind overseas derivatives trading will not be comforted by remarks from Commodity Futures Trading Commission Chairman Gary Gensler. On Monday he emphasized his determination to extend Dodd-Frank derivatives regulation to overseas markets when subsidiaries of U.S. firms are involved.
If there’s one truth we’ve learned about government financial backstops, it’s that sooner or later they will be used. So eventually taxpayers will have to bail out one derivatives clearinghouse or another. It promises to be quite a mess.
Indeed, Nobel prize-winning economist George Akerlof demonstrated that if big companies aren’t held responsible for their actions, the government ends up bailing them out. So failure to prosecute directly leads to a bailout. Bailing them out- in turn – creates incentives for more economic crimes and further destruction of the economy in the future.
As financial incentive expert William Black notes, we’ve known of this dynamic for “hundreds of years”.
Note: It’s not just banks. The government has bailed out hedge funds and companies like McDonald’s and Harley-Davidson. Indeed, drug dealers kept the banking system afloat during the depths of the 2008 financial crisis. So are the biggest drug cartels “systemically important” and “too big to fail”? Will the U.S. government backstop the Colombian drug lords? Sure, their actions don’t help society, and instead harm a lot of people. But so do those of the giant banks speculating in derivatives.
And there may be more overlap than admitted in polite company.
– Despite crashing the economy and receiving continuous bailouts which have totaled over 17 trillion (that we know about so far), despite the astonishing number of people hurt in the depression by losing their savings, jobs and homes, the big banks continue to rake in record profits quarter after quarter. Nobody notices. Nothing about this is considered weird or counterproductive or insane. (What the president worries over, in fact, is that JPMorgan may have lost a little money in their latest gaming at the table; he suggested that we need more regulation to prevent such losses for the oligarchs in the future.)
US bank profits soar while lending drops
By Patrick Martin 26 May 2012
US bank profits rose sharply during the first quarter of 2012, according to figures compiled by the Federal Deposit Insurance Corporation (FDIC), the eleventh consecutive quarter in which net earnings were higher than the previous year.
Aggregate profits of all the banks and savings institutions insured by the FDIC rose to $35.3 billion in the January-March period, up from $28.7 billion in the fourth quarter of 2011 and the highest quarterly profit figure since 2007.
The five-year record profits come on top of bumper earnings in 2011, the most profitable year for banking since 2006. While jobs and wages for working people remain deeply depressed, the financial sector, which caused the economic slump, is doing better than ever.
This applies particularly to the financial giants. Two-thirds of all US financial institutions reported increased profits, but the vast bulk of these profits were concentrated in the largest banks, those with assets over $10 billion. While they make up only 1.4 percent of all banks, these institutions raked in 81 percent of the net earnings.
While profits rose 23 percent compared to a year earlier, net operating income revenue was up only five percent. This means most banks boosted their profits not from lending activities, but through bookkeeping operations, like reducing the amount they set aside to cover loan losses (down $6.6 billion compared to the same quarter in 2011).
Overall, banks cut their total lending by about one percent in the first quarter of 2012 compared to the previous quarter. This once again disproves the rationale for the Bush-Obama bank bailout: the claim that rescuing the banks would enable them to resume lending on a wider scale and thus fuel an economic recovery in the United States.
Consumer lending fell in most categories, with the biggest drop in credit card debt, $38.2 billion, a 5.6 percent decline typical of the post-Christmas quarter. Home mortgages fell by $19.2 billion and home equity lines of credit by $13.1 billion. Auto loans rose by $4.5 billion.[…]
Bernanke said that large companies and wealthy individuals could find credit easily, but admitted that for small business owners the conditions were “challenging,” a word that should be translated into ordinary English as “desperate.”
Bank loans to small businesses were still 15 percent below their 2008 peak at the end of last year, he said.[…]
– Congress just passed, and Obama signed, a new law which makes it easier for us to be ripped off by Wall Street. This law further deregulates trading, I guess under the school of thought that if you are going to be raped anyway, why not lay back and try to enjoy it? In an effort to disguise the reality of what they were doing, Congress named it the JOBS Act. I’m sure they worked hard at coming up with words to make up that acronym. These days, every bill must be given a name diametrically opposed to the real intent of the bill. Hell, they spend more time on the names of the bills than on the bills themselves, which are all written by lobbyists anyway.
– The top-ranking Democrats in the House and Senate, Nancy Pelosi and Harry Reid, are signalling their (continuing) willingness to go after Social Security and Medicare. This is but one example of the Democrats switching over to the “Austerity for the Masses” theme park fun ride downwards in the USA. http://www.huffingtonpost.com/2012/04/27/nancy-pelosi-simpson-bowles-social-security-medicare_n_1453323.html We are operating under a one-party system. In case you did not notice.
– Obama is working out the details of a major international trade agreement in secret. Like, without going to Congress or giving any notice to the unwashed public. As was the case with his signature health-care “reform”, he is bargaining with the big corporations behind closed doors. The trade agreement in question will be devastating to the US consumer. That’s you and I, by the way. We are not citizens, the public, or people any longer, we are just consumers. http://rt.com/usa/news/obama-trade-wyden-senator-117/
– The House just passed a bill which eliminates most of the funding for the mortgage fraud investigation. Remember when the States Attorney agreed to a settlement with the banks over mortgage fraud and assured the public that there would nonetheless be investigations into the fraud? Yeah, that was such a long time ago, how could you possibly still remember? Anyway, there are no offices or personnel for the fraud investigation team, and now there’s no money, either. You know why? Because, as with every other issue concerning the public weal in the past 12 years, when Congress made the promise that they would look after our best interests, they were just joshin’ our upper lip.
Of course, they wanted to take the money for the fraud investigation from the NASA budget, which is kind of an interesting idea in and of itself considering that our weather satellites are getting ready to discombobulate due to lack of funding and the ages of the satellites. In regards to the loss of funding to NASA and NOA, one Republican in office remarked that if we wanted to hear about the weather, we could just watch the Weather Channel. (Do I need to point out that without the weather satellites, the Weather Channel also loses its ability to track hurricanes and predict weather?) Apparently all that weather prediction stuff is hocus-pocus and anti-biblical. Nothing like a good old unexpected out-of-the-blue hurricane or tornado to get the blood racing, by golly.
– Congress approved the use of drones over US air space. That is remarkable and unsettling enough, but now we are going to allow them to be weaponized. http://rt.com/usa/news/us-domestic-drones-armed-090/
We have a situation here, people. You might say we are in a bit of a pickle, have hit a wee sticky wicket. The president claims he can target and assassinate foreigners and Americans at his whim. He has already done so. Congress claims the right to capture anyone on the planet, even Americans, and detain them forever without charges or trial. Congress threatens to start another war, this one with Iran, while at the same time they wage covert war in Syria, and overt war in 6 other countries. The newspapers run with whatever oddball figures come out of some governmental office regarding employment, poverty, inflation, housing, and debt burden of the US, despite the ever changing methods of compiling the figures and the rank absurdity of the numbers. Cops are confiscating cash as a routine part of traffic stops in several states. Lawmakers are trying not only to make abortions illegal, but to disallow heath insurance companies from covering the cost of birth control. Most of our states are selling off their infrastructure to foreign companies as fast as they can find buyers. All of our money is going the banks, or to subsidize oil companies, pharma, and big agriculture, wage global war and produce weapons, while the society at large is being robbed and any remnant of safety net is shredded. We are at peak oil, peak fish, and peak fresh water. People are getting sick or dying from the massive amounts of toxins in the water, food, and air. Anyone who attempts to let us know about these things is labeled crazy – or even thrown in jail and prosecuted by the current administration. We are no longer entitled to the right of protest – we have to beg for permits and submit to the corral of “free speech zones”. The list of crap that I posted above is just a small portion of the response we get to this situation from our leaders and media.
This is not the way a healthy country behaves. This is the behaviour of a country on the way down to third world status. It is going to get worse – by design. You can ignore all the evidence and just hope the fools in charge suddenly get smart, that the grifters suddenly get morals, that the insane suddenly find reason, that our leaders once again find us irresistibly attractive enough to stop the divorce proceedings. Let me clue you in, American Woman: your husband, the Political Body, is kicking you to the curb. It’s not that you haven’t been a real good sport and all – you have. You let him dumb down the schools and send the kids off to die in wars of choice. You didn’t say a word when he brought home the bacon and it turned out to be crawling with e-coli, you just spiced it up as best you could with some corn syrup and served it to the family. When he lied about where he’d been and came home reeking of the perfume from one of his concurrent mistresses, Greed, Money, and Crony Capitalism, you merely cast your eyes down and pretended not to notice. You stood by him in earnest, steadfast solidarity when the neighbors pointed out that he’d been torturing a few of them and killing millions of them. Well, okay, that one didn’t bother you all that much, but you were loyal dammit, is the point. Now you sit in long-suffering silence as he takes the house, the car, and your job. He is not going to be enticed back to your bedroom. And he ain’t paying no stinking child support, either. You are on your own for this ride, be-otch.
You can sit and watch all of it as we race at sickening speed on the down-side of the ride – but carry a barf bag, will ya? There are people below you on the ferris wheel.