Stock market falls 372 points, gold back over $900. Another ho-hum day at the government run casino

[metalman]

Re: Stock market falls 372 points, gold back over $900. Another ho-hum day at the government run cas

I think Ash is aware of the dangers. We're basically talking about a name. I used to use the word fascist to describe some things i did not like. Then I read "The Third Reich" by Michael Burleigh. Facism as paractised was so horrible that I cannot use the word to describe any other current conspiracy.

The word 'Facism' is often used these days. I believe the common use of the word lowers the effectiveness of warnings of its actual rise.

My comments here should not be interpreted as any criticism of anyone's stance or warnings on the matter.

I do recommend 'The Third Reich' to anyone who has serious concerns. The insidious rise of facism in germany and the total horror makes it compelling reading and shakes your soul.

how'd this turn into a thread about fascism?

anyhow... we are all reacting to the fact that we are getting screwed and there appears to be nothing we can do about it.

then we think, well, if they can screw us like this with impunity, why not throw us all in prison if we don't go along with the next scheme to separate us from our money?

then the imagination wanders... too far.

it's not like there's nothing we can do, but it is true that there is nothing we can do for nothing... for free.

it's going to cost us... for some of us our freedoms, our wealth.

but it has to get a lot worse first.

[bart]

Re: Stock market falls 372 points, gold back over $900. Another ho-hum day at the government run cas

how'd this turn into a thread about fascism?

anyhow... we are all reacting to the fact that we are getting screwed and there appears to be nothing we can do about it.

I probably went overboard with those graphics in responding to "the government run casino" in the thread headline, but my point is that it is time to stand up and do whatever can be done. The dangers are real and abundant, both of the *ism in question and also hyperinflation, currency controls, "social unrest" etc.

Even just faxing or calling one's Congress critters and expressing opinions, with or without rants, beats the hell out of nothing. Emailing has the least weight and effect but its also better than nothing.
My marketing & PR training is showing but - "What will be your answer when someone in the future asks if you even spoke up?"


And continue in CYA mode on one's net worth and safety.

[Guest]

Re: Stock market falls 372. Ho, hum.

Your comments greatly sadden me.

OK Bart. Your point is very well taken. I just came across this post by Jtabeb and get a glimpse of potential underlying risks in the issue - described here in a nutshell.

Quote:

Originally Posted by $#* If we do nothing, they will do it again... Sheeple don't deserve to be free, because they are happy to be confined to their assigned pastures (giving them an illusion of choice), well guarded by shepherd dogs which are ready to round the poor dumb animals whenever the shepherd wants to milk them, decides it's time for shearing the wool or loading the slaughter house truck.

It's a little scary, but that's the way the Military Brass always describes our role in society - sheep dogs. Seriously, it was in a speech by Gen David Goldfein. We had to read his book "Sharing Success, Owning Failure: Preparing to Command in the Twenty-First Century Air Force," and then listen to him speak as part of our intermediate level officer development curriculum. The "shepherd" is the Gov according to the brass, BTW.

[raja]

Re: Stock market falls 372 points, gold back over $900. Another ho-hum day at the government run cas

I'm not saying Hitler is about to spring on us, but think of the situation this way:

Number of Iraqis killed since the invasion:

Anywhere from 50K to over 1M.

Number of US soldiers in Iraq: 200K give or take.

Is it safe to say that - on average - each soldier or platoon of American soldiers has killed a person?

Most Iraqi's were killed by other Iraqi's or Al-Qaida sympathizers.

[c1ue]

Re: Stock market falls 372 points, gold back over $900. Another ho-hum day at the government run cas

Most Iraqi's were killed by other Iraqi's or Al-Qaida sympathizers.

Certainly true.

But unless Iraqis are doing for 90% of the killing or more, we're still talking a range of 20K/200K Iraqi deaths caused by American troops.

Still seems like a lot to me.

[phirang]

Re: Stock market falls 372 points, gold back over $900. Another ho-hum day at the government run cas

Certainly true.

But unless Iraqis are doing for 90% of the killing or more, we're still talking a range of 20K/200K Iraqi deaths caused by American troops.

Still seems like a lot to me.

My friends who fought in Iraq said there was no shortage of "collateral" damage.

[jtabeb]

Re: Stock market falls 372 points, gold back over $900. Another ho-hum day at the government run cas

Stock market falls 372 points, gold back over $900. Another ho-hum day at the government run casino

Gold and oil investors on the other side of the trade roared back after cowering in the corner for a few weeks after the US Treasury, the Bank of Japan and a few other friends of the Fed ganged up on the short financials/long commodities trade popular among the world's hedge funds, desperate to protect their clients' wealth from the ravages of currency value destruction. That intervention sent oil and gold tumbling, but with the prospect of an exchange of a trillion bonars for a pile of now worthless high-concept securities, the trade is back with a vengeance.

Over the weekend our Finance Minister Hank Paulson poured out promises of a quick fix and return to "normal" – endless asset price inflation and over-consumption funded by it. All it will cost is the next generation’s savings on top of the current generation’s already committed.

In for a penny in for a dollar.

Yesterday our Congress shocked us not only by showing up for work but showing the audacity to step up to – gasp! – ask questions about the Treasury's power grab. Here on C-SPAN, US Congressman Peter DeFazio puts on a rousing Mr. Smith Goes to Washington performance. The golden key is a nice touch.

For the first time since this crisis started in the spring of 2007 Congress pushed back on our Finance Minister’s demands. If not directly confronting or even doubting they at least wondered aloud why we need allow him and his unknown successors and assorted minions to do whatever they deem necessary for a period of two years, at the pleasure of the secretary’s office, to return the US financial system to its rightful place as the world’s most deep and transparent, even as the veneer of trust flakes off to reveal shallowness and opacity. As Marshall McLuhan once said, "Mud sometimes gives the illusion of depth."

One US representative reared up on his hind legs to suggest that perhaps, just maybe, the Minister might recuse himself from these proceedings as his former employer is counted among the now very limited two item menu of investment banks remaining of a 150 year tradition of capitalism in America, Goldman Sacks and JP Morgan, all other competitors now summarily wiped out. Also, and, well, gee (and – gosh) while we're on the subject, they aren't even investment banks anymore. The Fed on Monday made the two winners of the US Investment Bank Survivor Show – presto! – into bank holding companies so that they may swallow what is left of the assets of 1,000 or so bank failures, as estimated by reliable sources, waiting in the wings.

Is that, you know, like, constitutional?

Last time this happened, after the Savings & Loan fiasco, the government created the Resolution Trust Corporation so that any value that might possibly be recovered in the assets of those Frankenstein creations of deregulation and corruption stood a chance of recapture by tax payers, to minimize the damage. Fair value for those assets was assured by their sale on the open market. Not this time. We may never know what Goldman and JP Morgan will in the future pay for the assets that they are now politically lined up to receive at a discount. Of course, the truth is that most of the securitized debt is completely worthless – so should we complain that any value they might have will be snagged by private banks behind closed doors?

Too late now. Instead of decision making authority Congress will demand transparency, dutiful reporting of decisions after the fact.

Transparency. There’s a word I’d like to see banished from the finance lexicon. Let’s replace it with a venerable yet less popular word: honesty.

Enron was transparent. It provided all of the data it was asked for in unfathomable volumes and right on time. US accounting firms with once honored names swore by them.

But they were all lying.

Can Secretary Paulson be trusted? Maybe so or maybe not. But if Congress passes this measure to give him even a fraction of the power he is asking for, they may as well cancel the upcoming presidential election in the same vote.

It won’t matter anyway.

iTulip Select subscribers can read our extensive analysis published today on the possibility and implications of capital and currency price controls in:

US exchange rate and capital controls or bust?
September 23, 2008, iTulip

When inflows become outflows: Avoiding the Sudden Stop at the end of the multi-decade long American capital flow bonanza.

Moreover, it may well be asked whether we can take it for granted that a return to freedom of exchanges is really a question of time. Even if the reply were in the affirmative, it is safe to assume that after a period of freedom the regime of control will be restored as a result of the next economic crisis.
—Paul Einzig, Exchange Control, MacMillan and Company, 1934

Exchange rate and capital controls are viewed by our modern economics orthodoxy as the retrograde policy of desperate third world countries that can’t hack free markets. However, history teaches us to not discount the possibility that major economies even in our current times may use them as a last resort. Each day the front page of the newspaper is plastered with reports of one last resort measure after another. It’s time to give the possibility of exchange rate and currency controls serious consideration. More ($ Subscription) …

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__________________

I am proud that Peter Defazzio is my congressman.

Here is his response to me on the Bush Adminsitration's bail-out proposal.

Dear Mr. Tabeb:

Thank you for contacting me about the Bush Administration bailout. I am vehemently opposed to this bailout.

I was the first Member of Congress to take to the House floor and stand up in opposition to this $700 billion bailout. The financial crisis we face today does not need to be resolved by forking over $700 billion from the taxpayer to the "Masters of the Universe" on Wall Street.

The fundamental premise of the $700 billion Bush Administration bailout is flawed, reckless, and foolish. It is flawed because it is not clear it will achieve its stated objective of injecting commercial banks with liquidity and it ignores the needs of main street America, it is reckless because there are better alternatives, and it is foolish because giving away $700 billion will limit our ability to deal with the myriad of other problems we face such as healthcare, energy independence, and job creation.

To put the sheer audacity of this bailout plan in perspective, a compromise has been talked about that reduces the initial payments to "only $250 billion". $250 billion would more than double our investment in bridges, highways, transit, and rail in the United States for five years. Investing in infrastructure creates jobs and stimulates the economy. According to the U.S. Department of Transportation, for every $1.25 billion we invest in infrastructure, we will create over 30,000 jobs and $6 billion in additional economic activity. In President Roosevelt's Works Progress Administration, we invested in building roads, bridges, dams, hydroelectric systems and other public works projects to mend our nation's broken economy. That money trickled up to Wall Street from Main Street and rebuilt our economy. We did not just throw money at Wall Street with the hopes that the taxpayer might some day be paid back.

I think Congress should respond, but the basic premise of the Bush Administration bailout is flawed. Almost 200 economists wrote to Congress stating "As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson"[1]. The letter went on to raise the issues of fairness, ambiguity, and the long-term effects. The former chairman of the Federal Deposit Insurance Corp in the Reagan Administration wrote, "I have doubts that the $700 billion bailout, if enacted, would work. Would banks really be willing to part with the loans, and would the government be able to sell them in the marketplace on terms that the taxpayers would find acceptable?"[2] And James Galbraith, an economist at the University of Texas, has asked "Now that all five big investment banks -- Bear Stearns, Merrill Lynch, Lehman Brothers, Goldman Sachs and Morgan Stanley -- have disappeared or morphed into regular banks, a question arises. Is this bailout still necessary?"[3] I believe the answer is No. I have called on my colleagues to slow down this debate and seriously debate the alternative proposals.
For example, many economists have argued that directly helping mortgage holders save their houses would be astronomically cheaper and a more effective in resolving this crisis. And helping working Americans restructure their homer mortgage will increase the value of Wall Street's depreciated assets. As the New York Time opinioned recently:

"We could make a strong moral argument that the government has a greater responsibility to help homeowners than it does to bail out Wall Street. But we don't have to. Basic economics argues for a robust plan to stanch foreclosures and thereby protect the taxpayers ."[4]

Another serious consequence is the $700 billion hole in the budget deficit this bailout will create. The next administration, Democratic or Republican, will be unable to initiate new proposals as it charts a new course for our nation. The Bush tax cuts blew the surplus created by the last Democratic Administration and the Bush Administration bailout will prevent the next administration from implementing its mandate.

My biggest concern of this bailout is who pays the $700 billion tab. The $700 billion is to protect Wall Street investors, therefore the same Wall Street investors should pay for this infusion of taxpayer money. I have proposed a minimal securities transfer tax of ? of one percent. A securities transfer tax would have a negligible impact on the average investor and provide a disincentive to high volume, speculative short-term traders. Similar tax proposals have been supported by many esteemed economists such as Larry Summers, John Maynard Keynes and Nobel prize winners Joseph Stiglitz and James Tobin.

There is considerable precedent for this. The United States had a similar tax from 1914 to 1966. The Revenue Act of 1914 levied a 0.2% tax on all sales or transfers of stock. In 1932, Congress more than doubled the tax to help finance economic reconstruction programs during the Great Depression. In 1987, Speaker of the House Jim Wright offered his support for a financial transaction tax. And today the UK has a modest financial transaction tax of 0.5 percent. This is a reasonable approach to protecting taxpayers and ensuring the federal budget doesn't fall further into the fiscal hole.

I will continue to challenge this bailout every step of the way. Again, thanks for reaching out to me. Please keep in touch.


________________________________
[1]
http://faculty.chicagogsb.edu/john.cochrane/research/Papers/mortgage_protest.htm
[2]
Washington Post. A Better Way to Aid Banks. William M. Isaac. Sept 27, 2008. A19.
[3]
Washington Post. A Bailout We Don't Need. James K. Galbraith. Sept. 25, 2008. A19
[4]
New York Times. Editorial. What About the Rest of Us? Sept., 26, 2008. A26.

Sincerely,
Rep. Peter DeFazio
Fourth District, OREGON
******Please do not respond directly to this email*****
Please submit further correspondence from http://www.house.gov/writerep