Mark Stapleton

Time for some light relief. A friend of mine told me on the weekend that he had lost $100 K in the current financial debacle. "Really", I said. "Yes", he said. "One fifth of my net wealth just got sliced off like salami"

Steve Keen is Professor of Economics at the University of Western Sydney (UWS). Steve runs a website called OzDebtwatch with articles and blogs: http://www.debtdeflation.com/blogs/ He outlines the basic causes of the current dilemma--there's stats and graphs aplenty--and concludes abruptly that we've only just begun. After reading the article then the blog I have to agree. It's much worse than I thought. It's almost unbelievably bad. The blog is a must read. These are mostly markets professionals and these posts were posted today. The rough consensus is that the bailout plan was mostly aimed at stalling a run on the banks and hopefully pumping some liquidity through the financial system. The banks have been freed from the debt but not the borrowers. The potential downside is horrendous. Massive tax hikes will be required, US assets will be shunned and the massive US debt will cause the dollar to fall, which could send the price of oil and other commodities through the roof. It could be a hyper inflation scenario. This is really bad.

The great bailout plan: http://www.telegraph.co.uk/money/main.jhtm...npaulson122.xml Financial Crisis: US calls on world to save banking system By Yvette Essen Last Updated: 12:04am BST 22/09/2008 The US government last night urged other countries to follow its model of bailing out stricken banks after Treasury secretary Hank Paulson unveiled an unprecedented $700bn (£380bn) rescue plan to prevent a collapse of the financial system. President Bush with US Treasury secretary Hank Paulson, who has announced plans to buy up 'toxic' debts The proposal would allow the Treasury to buy up "toxic" mortgage-related debts from financial institutions, including US arms of foreign banks, to try to stem the worst financial crisis since the Great Depression. With Congress set to vote this week on the emergency legislation, Mr Paulson took to the airwaves, warning that the massive bailout was the only way to avoid catastrophe and that other countries must take similar measure. "We have a global financial system and we are talking very aggressively with other countries around the world and encouraging them to do similar things and I believe a number of them will," Mr Paulson said. Dealers doubt market surge will be sustained More on banking However, Prime Minister Gordon Brown looks unlikely to follow suit, with a Treasury spokesman saying: "We're not working toward implementing a US-style resolution regime. But the Prime Minister and the Chancellor [Alistair Darling] have made clear that we will take whatever action is necessary in the interest of financial stability." Mr Paulson and Fed chairman Ben Bernanke have taken the drastic measures in an attempt to stem dramatic losses caused on Wall Street by the collapse of investment bank Lehman Brothers and demise of AIG, once the world's largest insurer. advertisementUnder the US Treasury's bailout proposals, the US government's debt limit would rise to $11.315 trillion from $10.615 trillion. This would fund the acquisition of up to $700bn home and commercial mortgages and related assets from US-based banks and other institutions over the next two years. A factsheet released by the US Treasury department said in consultation with the Fed, it will have the authority to purchase other assets, "as deemed necessary to effectively stabilise financial markets". It added the price of these purchases will be set "through market mechanisms where possible, such as reverse auctions". However, market analysts predict it will be able to buy these assets at a "significant discount" to provide US taxpayers who are expected to fund the scheme with the chance of getting a return on the assets in the longer term. A vote on the legislation to enact the scheme could be held as early as today. Tim Harris, senior portfolio manager at JP Morgan Asset Management, said the bailout cannot afford to fail. "I think it will work - I cannot contemplate what will happen if it does not work," he said. However, Mr Harris added the sudden "flood of liquidity" increases the chances of "a thumping great recession" as the financial system is no longer paralysed. "The risks move from the financial sector to the retail and service sectors," he explained. "If anything, last week has increased recession risk. Policymakers and politicians have thrown the book to saving the financial system and damn the consequences." Jeremy Batstone-Carr, equity strategist at Charles Stanley, cautiously welcomed the US Treasury's intervention. "Whilst wholehearted applauding the package, we need to look at the fine print of the publicly-funded lifeboat," he said. "We could see more volatility as the details emerge." In France, finance minister Christine Lagarde warned: "We have a whole series of obstacles to overcome and difficulties to face." Traders predicted the dollar would come under pressure as Washington raises borrowings. David Woo, London-based global head of foreign exchange strategy at Barclays, said: "The downdraft on the dollar from the hit to the balance sheet of the US government will dwarf the short-term gains from solving the banking crisis." Liberal Democrat's Treasury spokesman Vince Cable said the Government would be right not to follow the US. "This was a desperate throw by the US authorities to stop what was virtually the meltdown of western capitalism."

The article quotes Obama as supporting the current administrations proposal for a multi trillion dollar bailout of the financial sharks. That doesnt show a great deal of leadership. They have had to cede ground to Treasury Secretary Henry Paulson and Federal Reserve chair Ben Bernanke, who prepared the largest taxpayer bailout in American history – a package that could be worth as much as $1 trillion – during a week in which the venerable Wall Street firm Lehman Brothers collapsed, Merrill Lynch was unloaded in a fire sale and American International Group was bailed out by Washington for $85 billion. At week's end, stock markets rebounded, but uncertainty abounded. Obama endorsed the administration's plan yesterday. "This is a worldwide issue, and while the United States can and will lead in stabilizing the credit markets, we should ask other nations, who share in this crisis, to be part of the solution as well,'' Obama said in Miami. He spoke following a meeting with his economic brain trust, many of the same advisers who helped Bill Clinton preside over eight years of prosperity in the 1990s. They included billionaire investor Warren Buffett; former Federal Reserve chair Paul Volcker; former treasury secretaries Robert Rubin, Lawrence Summers and Paul O'Neill; and Laura Tyson, former head of the Council of Economic Advisers under President Clinton. I see your point Terry, but he's not going to pick a fight with the Fed or the Treasury at this pivotal moment, imo. It just proves he's got brains. I've got faith in Obama. I like him. Not too much bullxxxx. I think he'll try to do the right thing after he's sworn in. Although I'm a little worried about the self confessed Zionist standing behind him. But that's the real issue. The Federal Reserve System is bankrupt. I'd like to see Obama push the idea of bankruptcy reorganization modeled on the precendent set by FDR. This bailout wont work because there is no wealth there; there's no value there. This is purely financial speculation. This is gambling, it's a gambling house. Where's your production? Where's your production of wealth? Where do you have people employed in making things? What happened to the auto industry? What happened to all kinds of other industry? What's happening to agriculture? What kinds of employment are there? It's make-work. It's exactly the way in which we came to the point of the collapse of the House of Bardi; exactly this method. Agreed. It's a hell of a mess. America's nuclear global dominance makes it even messier. Unemployment's going to be a massive problem globally but especially in the west. Without the cushion of wealth and cheap energy, there'll have a be a return to new labor intensive agriculture at least to some extent. Hemp plantations would be a start. The kind you can't smoke. I wish Obama the best of luck.

Good to see you posting again, Michael.

The article quotes Obama as supporting the current administrations proposal for a multi trillion dollar bailout of the financial sharks. That doesnt show a great deal of leadership. They have had to cede ground to Treasury Secretary Henry Paulson and Federal Reserve chair Ben Bernanke, who prepared the largest taxpayer bailout in American history – a package that could be worth as much as $1 trillion – during a week in which the venerable Wall Street firm Lehman Brothers collapsed, Merrill Lynch was unloaded in a fire sale and American International Group was bailed out by Washington for $85 billion. At week's end, stock markets rebounded, but uncertainty abounded. Obama endorsed the administration's plan yesterday. "This is a worldwide issue, and while the United States can and will lead in stabilizing the credit markets, we should ask other nations, who share in this crisis, to be part of the solution as well,'' Obama said in Miami. He spoke following a meeting with his economic brain trust, many of the same advisers who helped Bill Clinton preside over eight years of prosperity in the 1990s. They included billionaire investor Warren Buffett; former Federal Reserve chair Paul Volcker; former treasury secretaries Robert Rubin, Lawrence Summers and Paul O'Neill; and Laura Tyson, former head of the Council of Economic Advisers under President Clinton. I see your point Terry, but he's not going to pick a fight with the Fed or the Treasury at this pivotal moment, imo. It just proves he's got brains. I've got faith in Obama. I like him. Not too much bullxxxx. I think he'll try to do the right thing after he's sworn in. Although I'm a little worried about the self confessed Zionist standing behind him.

The financial meltdown has also melted McCain's already slim chances. Watching McCain or Palin talking credibly about economic issues--complex and controversial right now--could be quite funny, imo. http://www.thestar.com/News/USElection/article/502841 It's going to be a massive landslide. The only rider being the disastrous possibilty that a pre-emptive strike on Iran or a sudden war with another country or a terrorist attack on the US changes the game again.

Definitely Bush. His sheer stupidity gets him over the line. I share John's doubts about Obama being able to fix the post Bush economy because of the magnitude of the problems. But LBJ was by far the greater psychopath.

That was your provocative, bumbling and ill informed comment to which I responded. I believe the standard of living in the US will fall, as well as other western economies but most notably the US. Terms such as China Syndrome and chicken little are all products of your fertile imagination as I certainly didn't say them. You were wise to back down.

It will be interesting to see what genius plan Henry Paulsen and his colleagues come up with to rid the US financial system of its 'toxic debt' problem. http://www.reuters.com/article/wtMostRead/...l=0&sp=true My spies tell me they plan to bury it deep underground somewhere near New Mexico.

Now you're really showing your ignorance. If you think Friday's stock market bounce means everything is now fine and dandy, then you're forgetting that the US Government has assumed combined corporate debts of about $700 billion, on top of all the other problems in the US economy. That's a lot of debt for US citizens and their future generations to bear. The rest of the world has stepped in to save the US economy from collapse. The US is still the world's highest energy consumer but remains a net energy importer. The US outspends the rest of the world combined on the military, including 700 or so foreign military bases, while the country is becoming increasingly foreign owned. Economic commentators are predicting the US dollar will slide. Unemployment is rising alarmingly and many thousands are unable to pay their mortgage and will be evicted. The way I see it, living standards will fall sharply. Gravity always wins in the end.

It's no contest. If they elect McCain they deserve the consequences. They can't be that stupid.

I saw a market dealer on TV today who described this week as capitalism's Armageddon. He's right, imo. The massive debt burden which the US taxpayers have inherited from this and the subsequent lowering of living standards will destroy the US capitalist paradigm once and for all. But capitalism isn't going down without a fight. It's fanatical wing has just opened a new front targeting 'Soviet aggression' against freedom loving democracy. Connie Rice has come out breathing fire: http://www.telegraph.co.uk/news/worldnews/...ing-itself.html Great stuff---and right on cue.

http://www.freeople.com/blog/financial-cri...nday-ahead/1483 In Australia, I've read that some churches and charities have exposure to Lehmans' neatly bundled 'assets'. St. Vincent de Paul in particular. A bit surprising for them to have been such eager capitalists, imo.

You could try Tom Mangold's 'Cold Warrior--James Jesus Angleton: The CIA's Master Spy Hunter', Simon and Shuster, (1991). I haven't read it. Just excerpts. FWIW

Well I agree with that. Newman's analysis fits for me. JJA was Mossad. I'm not certain how many trips he made to Israel but I've read it was close to fifty. Does anyone know? The first page of this thread makes fascinating reading, imo.

How are the free-market advocates dealing with this issue in America? Or is everybody now in favour of government intervention? Yes, I wouldn't mind hearing the opinions of free market disciples myself. I don't like our chances, John.

Isn't that great Mark? Irrational prejudices are so equally obvious and annoying aren't they? Slavish submission to Israel and its interests is compulsory for all mainstream US politicians it seems. I don't know if you're hinting that my pointing this out makes me guilty of irrational prejudices, but given your past history, you probably are. If you are suggesting that Israel should be free of criticism, given the nature and behavior of its Government, including the occupation of Palestinian lands and the cruelty of Israel towards others in the region, then you are one poor educator indeed.

Looks like Palin now has the all-clear to participate in the US election. A swiftly convened session with AIPAC has her now declaring her 'deep, personal and lifelong commitment to the safety and well-being of Israel'. Whew, that was close.....I thought for a minute there that one had slipped through the net. http://www.counterpunch.org/glunts09052008.html September 5, 2008 How the Republicans Solved Sarah Palin's Jewish Problem A Lesson Before Lying By IRA GLUNTS Politically powerful American Jews tend to be uncomfortable with evangelical Christians, unless they are the kind that unconditionally support Israeli foreign policy and are members of organizations which send boatloads of money to the Jewish state. Reverend John Hagee and his Christians United For Israel (CUFI) come to mind in this regard. Republican Vice Presidential candidate Sarah Palin, unlike Hagee, is an evangelical for whom Israel does not play an important role. It did not, at least, until a few days ago when the colorful, gun-toting, Christian conservative Alaska governor stepped on to the national political stage. Suddenly Palin had a Jewish problem. According to critics, she is not sufficiently sensitive to Jewish interests and Israeli security, and may be an anti-Semite. According to the McCain campaign, the solution to this problem was to send Palin, escorted by Senator Joseph (Mr. Right-Wing Jewish American) Lieberman to seek absolution and approval at the throne of the American Israel Public Affairs Committee (AIPAC). Palin had been accused by Jewish Democratic Obama supporters of backing Rep. Ron Paul and the 2000 presidential candidacy of Pat Buchanan. Both men have expressed their opposition to the U.S./Israel “special relationship.” The Alaska governor was also rebuked for her recent attendance at a sermon given by Jews for Jesus founder, David Brickner, at which he stated that the reason for violence against Israelis is that Jews do not embrace the Christian god. These accusations against Palin mirror those that have been leveled against Barack Obama and have about as much credibility. The Democratic Presidential candidate has been called a pro-Palestinian Hamas devotee, a Muslim hater of Jews, and a closet terrorist who is an al Qaeda mole. These ludicrous charges have been made mostly by Jewish McCain supporters and are as about as believable as the anti-Jewish, anti-Israel criticisms lodged against Palin. Both smear campaigns are promoted through extensive e-mailings. The criticisms of both candidates rely heavily on guilt by exaggerating personal associations and distorting the views of those with which the candidates are excused of being associated. Just as Obama is charged with attendance at certain sermons given by Pastor Jeremiah Wright, Palin is accused of sitting through a Brickner sermon. It is not clear to what extent either candidate agreed with what he or she heard. Obama has rejected many of Wright’s remarks. I do not believe that Palin has had the opportunity to comment on the Brickner sermon. My opinion is that the actual perniciousness and inappropriateness of the Wright and Brickner positions are greatly overstated. Even though the anti-Jewish accusations against their bible- praising, hockey mom candidate were scurrilous and spurious, the McCain campaign thought that the best antidote against Palin’s burgeoning Jewish problem was immunization from a group of hastily assembled AIPAC directors, who, I assume, were in town for the Republican convention. The group met with Palin at her hotel. Ironically, she was chaperoned by the man she had replaced as John McCain’s choice for a running mate, Senator Lieberman (Ind., CT, Israel, CUFI). Apparently, it was decided that Lieberman was too liberal on social issues for the Republican base. Predictably, Palin’s appeal to the quickly assembled pro-Israel lobbyists was successful. After the meeting, Josh Block, a spokesman for AIPAC, announced, “We had a good productive discussion on the importance of the U.S./Israel relationship, and we were pleased that Gov. Palin expressed her deep, personal, and lifelong commitment to the safety and well-being of Israel…. Like Sen. McCain, the vice presidential nominee understands and believes in the special friendship between the two democracies and would work to expand and deepen the strategic partnership in a McCain/Palin Administration." Palin, who is reported to be a quick learner, found out in a most public lesson that genuflecting to the directors of AIPAC is an important part of what passes for foreign policy experience and acumen these days. The youthful Vice Presidential candidate, who has already acquired an impressive list of descriptive phrases which are associated with her name, can add one more. Lifelong supporter of Israel. Welcome to American politics, Sarah Palin. Ira Glunts is a secular American Jew who opposes the Israeli occupation and oppression of the Palestinian people. He lives in Madison, NY where he and his wife own and operate a used and rare book business. Mr. Glunts will vote for neither John McCain nor Barack Obama.

This is a link to an article by Joel Gulledge, a member of the Christian Peacekeeping Team in Palestine. http://www.commondreams.org/view/2008/08/29 The settlers have now resorted to murdering Palestinian children, which doesn't surprise me because they are nothing more than murderous fanatics whom Israel allows almost complete freedom. The blogs at the end are quite incredible, imo. Some might dismiss bloggers on a 'progressive' website like CD as unrepresentative of broad public sentiment but such a bitter, unequivocal and unanimous condemnation of Israel as I have ever read, indicates a sea change in public perception of Israel and its actions is occuring or may have already occurred. Israel is now a pariah.

A gratuitous insult to all who have hitherto posted here. Hard to believe, really. Are you suggesting that they are all insane or are you just lifting sentences out of my posts out of context for amusement? Ah, it appears I read the thread in haste and took your post out of context Andy. My apologies. Damn these noisy, crowded internet cafes.

A gratuitous insult to all who have hitherto posted here. Hard to believe, really.

Fascinating, John. The marvels of technology. Although anyone who might think LBJ was really spilling his guts need only remember that the total of 642 recorded calls would represent a small fraction of the calls he made during his five years of Presidency. If he made just ten a day, which is probably a conservative estimate, then that would be about 19,000 calls.

Unfair enough. I'm put in mind of a classic Groucho-ism: "I wouldn't join a club that would have me as a member." Here in the Great Democracy, voter roles routinely are purged of individuals considered likely to support Democratic candidates. One of the criteria used to justify removal: So-and-so is a convicted felon. I mention this in asking for reconsideration. Charles Well, you gave it a shot Charles. It looks like you're overqualified--so to speak. Your clinical and mercilessly funny dispatch of Andy Walker was worth the price of admission alone. I notice Moe, Larry and Curly Joe have preceeded your post--yes Craig, you're Curly Joe. I think they're here just to keep the humour flowing but that's just my theory. p.s. is Peter Lemkin still with us?