MONEY - POLITICS & POWER

 

Chapter XVI

Rise or Fall of American Empire?

 

By

Doug Krieger
Part 2

 

 

 

 

THE MECHANTS OF THE EARTH

 

Now, in the midst of all these political-financial skullduggeries, wherein the magnanimous McCain-Feingold financial reforms (whatever platitudes to which they aspired) have been thrown to the wind, we still have those who trade in the bodies and souls of men outside our shores calibrating their interests to mesh with the American political process—i.e., it’s time to wade in on ultimate economic policies which may be disadvantageous to our commercial interests!

 

“BEIJING: The leading Chinese state-run newspaper said Monday that Barack Obama was unlikely to bring the dramatic changes he has promised if he wins the U.S. presidency and that his rise confirmed, rather than challenged, racial divisions.

 

“The Chinese government has avoided comment on the U.S. presidential contest, but the commentary in the overseas edition of The People's Daily shed a little light on how the Communist Party views the prospect of the Democratic Party hopeful winning the November election.

 

“In the view of newspaper, which is the party's mouthpiece, Obama is unlikely to usher in a promised transformation of Washington politics if he defeats the Republican contender, John McCain.” (State-run Chinese paper voices doubts about Obama, Ding Gang, Reuters & The People’s Daily, Overseas Edition, June 19, 2008)

 

A slight “Google” of “Obama vs. the Chinese” and one can easily conjecture that Obama’s stance on Chinese commercial endeavors has been slightly acrimonious, to say the least—ipso facto, the Chinese would rather deal with the devil they know than the one who’s got their number.

 

POWER AND MONEY – MONEY AND POWER

 

Meanwhile, the Empire’s ceaseless wars of liberation continue unabated . . . notwithstanding the Altruist himself:

 

“Congressman Dennis Kucinich (D-OH) called on the House Leadership to give the America people what they were promised a year ago and take America in a new direction in Iraq.

 

“‘When the American people went to the polls last November, they overwhelmingly voted for Democrats. They voted for Democrats because they wanted to see a new direction in Iraq -- and that direction is out,’ Kucinich said.

 

“‘Today, the House of Representatives approved HR 4156, an emergency supplemental appropriations bill that will provide an additional $50 billion for the Iraq war. This money will be used to keep the United States in Iraq indefinitely.

 

“‘For the past 11 months, all the House Leadership has done is play into President Bush’s hand. They have approved every war funding bill the President has asked for.

 

“‘Leadership could have told President Bush they will not continue to fund the war. They could have said: Use the money you already have to bring the troops home. That is what the American people want.

 

“‘They did not have to bring a bill to the floor. They could have forced the President to bring the troops home by refusing to provide any money for the war. Enough money exists to bring the troops home -- without further appropriations.

 

“‘But by offering the emergency supplemental appropriations bill today, the House Leadership is taking this Congress and this country down the same path: a path of destruction, chaos and death.’” (Kucinich Slams Congressional Democrats for Funding Bush’s War, Congressman Dennis Kucinich, NewsandPolicy.com, June, 2008)

 

HEADED FOR ONE MONSTROUS STOMACH ACHE – “OPERATION MALICIOUS MORTGAGE”

 

Money makes the world go around – as “they” say.  And, what keeps Babylon booming is the extension of these pursuits which insure that with money in hand (most of it created out of nothing) there will be no end to our ceaseless wars and concomitant commercial quests.

 

Printing more of this stuff does not a panacea make for military endeavors.  There is, after all, this persistent gnawing within the bowels of Babylon that our digestive tract is about to experience the great heave!  The consequences of this financial vomit will (not “could”) have grave consequences in the short and interim run in so far as our international exploits concern.  Now that we’ve managed to dump on the likes of those financial manipulators – those greedy nare-do-wells who make all of our merchants of the earth look bad – who managed to persuade their stockholders that all was well within the sub-prime fiasco of their investment bank until the FBI was sent in to expose their lot; what else can we now do to insure that such manipulations shall forestall our inevitable throw up?  Shocked?  Read the whole article and take some Tums to quail your gurgling stomach seizure as “sold to the highest bidder” continues its relentless pursuit for the truth . . .

 

“WASHINGTON -- With Wall Street executives handcuffed and paraded in front of TV cameras and dozens of alleged mortgage scam artists arrested in cities nationwide, federal authorities Thursday signaled the beginning of the penalty phase of the mortgage meltdown.

“The Justice Department said that more than 400 real estate industry players, including dozens in the last few days, had been charged with crimes since March in a federal crackdown on incidents of mortgage fraud that have contributed to the country's housing crisis. Those arrested in Operation Malicious Mortgage included brokers, appraisers, bankers, and lenders.

 

“The announcement came on the same day that two former hedge fund managers at Bear Stearns were arrested on suspicion of misleading investors about a fund that invested in subprime loans and collapsed at a cost of US$1.4 billion. The executives became the first to face criminal charges in the subprime mortgage debacle. The charges against them could provide a road map for authorities to hold other Wall Street executives to account.

 

“The FBI put the losses to homeowners and other borrowers who were victims of mortgage fraud schemes at over US$1 billion. That is a small fraction of the nearly US$1 trillion in losses worldwide that have been chalked up to the U.S. mortgage fiasco, but federal officials said the number of cases under investigation continues to grow rapidly.

 

“California has been a center of mortgage fraud, and Justice Department officials in Los Angeles on Thursday announced the formation of a nine-agency federal task force to target those crimes.

 

“‘Whether committed by unscrupulous lenders, real estate professionals or desperate homeowners, mortgage fraud affects all of us,’ said Thomas P. O'Brien, the U.S. attorney in Los Angeles.

 

“‘Defaults on inflated loans and resulting foreclosures impose huge monetary and social costs, as well as making it more expensive for everyone to obtain credit.’

 

“In Washington, FBI Director Robert S. Mueller III said the number of cases of possible mortgage fraud the bureau is investigating has doubled in the last three years to more than 1,400 as of May 31.

 

“‘To persons who ... are involved in such schemes, we will find you. You will be investigated, and you will be prosecuted,’ he said. ‘To those who would contemplate ... engaging in such schemes, you will spend time in jail. That is the message we're sending out.’

 

“While Operation Malicious Mortgage focused on individual cases and smaller crime rings, officials said they are also probing 19 companies, including investment banks and hedge funds, that may have engaged in accounting fraud or other crimes related to mortgage securities.

 

“FBI officials also said they are investigating cases in which gangs and organized crime members are suspected of committing mortgage fraud. ‘It is a means by which individuals could launder their money,’ said Sharon Ormsby, chief of the FBI financial crimes section.

 

“Prosecutors said their crackdown resulted in 60 arrests on Wednesday alone, in places such as Chicago, Miami and Houston. Mueller said the FBI had seized more than US$60 million in assets -- including luxury cars, speed boats and a helicopter -- as part of the sweep.

 

“The 400 cases cover a range of mortgage scams, the officials said. The defendants include a suburban Washington, D.C., couple charged with running a US$35 million foreclosure rescue operation called the Metropolitan Money Store.” (Mortgage Fraud Crackdown Begins with String of Arrests, By Richard B. Schmitt, Kim Christensen and E. Scott Reckard, Los Angeles Times, June 21, 208 – as found in The China Post)

 

So while we’re damning the politico machinations of our foremost leaders, let us listen and observe the rumblings of our financial intestinal tract—knowing full well, it’s only a matter of time before we descend to the toilet bowl until our dry heaves overtake us all or there’s a “run” on the banks—banks which are about to be NATIONALIZED.

 

And, how is this possible? – given the fact that having sensual pleasure for a season appears the norm around here . . . like stuffing ourselves to death at a sumptuous table of delicacies prior to our much-vaunted rush to the water closet!

 

“For all nations have drunk of the wine of the wrath of her fornication, and the kings of the earth have committed fornication with her, and the merchants of the earth are waxed rich through the abundance of her delicacies” (Rev. 18:3).

 

Before we get to the nationalization (via the FED) of our biggie banks and their bundle of blather brokered by bankers about ready to go bust, let us ponder the imponderable:

 

“Virtually every major bank, brokerage and investment house in the United States and Europe is looking at the possibility of multibillion-dollar losses. Nobody knows how much. Even now the questions that have hung over the universe of subprime and kindred mortgages and loans for the past two or three years still hang in the air.

 

“Exactly how stinky these loans are, how much was paid out for them, how much was borrowed, who owns them, what happened to them--these questions have not yet been publicly resolved. The banks and other Wall Street institutions may know and may not be telling for fear that if the facts got out, it would look as though they were on the ropes or even bankrupt. Or they may not know themselves, strange as that may seem to those of us who are compelled by circumstances to account for each and every one of our dollars.” (The Subprime Bailout, Nicholas Von Hoffman, The Nation, Nov. 14, 2007)

 

So now it’s time to scrutinize after the fact . . . and those who “may not be telling” are going to jail?

 

“In the hectic high noon of subprime borrowing it has become obvious that nobody was scrutinizing these bits of paper. In fact the prospective profits on them seemed to be so big that a close look would have spoiled the party. From the local real estate dealers, appraisers and mortgage brokers on up, everybody was making these loans by the tens of thousands and asking no questions.

 

“What we know for a certainty is that the mortgages were packaged by the big banks and investment houses in many different ways, then chopped up and sold as bonds of various kinds, some high-risk, with commensurate interest rates, and some low-risk. We now know that billions of dollars worth of those bonds were sold and billions were retained by the banks, which either put them in their vaults or used them to play complicated games that would make it look as though they weren't on the books and the banks had no responsibility for them.” (Ibid.)

 

Let the bailout begin!  But it’s not the consumers who benefit – it’s the little bankers borrowing from the FED – but, eventually, we all lose . . . .

 

“In the face of a mounting panic on US financial markets, the Federal Reserve Board on Tuesday (early March, 2008) announced it would lend major Wall Street investment banks up to $200 billion in Treasury bonds and accept as collateral mortgage-backed securities for which there are currently no buyers on the market.

 

“The so-called ‘term securities lending facility’ announced by the US central bank was coordinated with four other central banks—the European Central Bank, the Bank of England, the Bank of Canada and the Swiss National Bank.

 

“Under the plan, the Fed will loan up to $200 billion of its more than $700 billion hoard of Treasury bonds for a period of 28 days, in effect vouching for the credit-worthiness of mortgage-backed assets that have plummeted in market value along with the collapse in US home sales and prices, and which otherwise would have to be written off as losses by the finance houses.

 

“By accepting privately originated mortgage-backed securities—in the past the Fed had accepted only securities issued by the government-sponsored mortgage lenders Fannie Mae and Freddie Mac—the US central bank agreed to take as collateral some $1 trillion in securities that previously would not have qualified (i.e., the bogus subprime paper).

 

“In announcing the massive debt relief plan for Wall Street, the Fed said it was prepared to take further action if market conditions warranted, suggesting it would be willing to roll over the loans for additional 28-day periods.” (US Federal Reserve Injects $200 Billion into Credit Markets to Avert Financial Meltdown, Barry Grey, World Socialist Web Site, March 13, 2008). 

 

WILL THE FED GO BUST?

 

But, alas!  None of this – nor the subsequent extensions to “come to the FED window” have helped.  Now, what an awful thought is this: Will the FED itself go bust?

 

“As of March 12, 2008 the Fed had almost $900 billion in assets, of which $700 billion were in Treasury bills and notes and the rest in an assortment of repos, the TAF facility, etc. The most recently announced programs like the TSLF ($200 billion), the open-ended discount window facility for investment banks/brokers and the $30 billion loan to Morgan (i.e. Bear's toxic assets) are not shown yet.

“When those hit the books in the next few weeks, the asset mix will change drastically. The Treasury holdings will go down and be replaced by an assortment of GSE and private label securities. The Fed’s risk exposure will jump higher, and significantly so.

“Like any other bank, the Fed does not have an unlimited amount of money to lend - all it has is about $700 billion in Treasuries that it can exchange for other, less marketable securities (and it has already announced programs for a big part of that). In contrast, US home mortgages alone amount to $10.5 trillion; if things keep unraveling, the Fed’s balance sheet will prove very small for the role it has now chosen for itself.

“As for the liability side, the Fed has issued about $800 billion of its own Federal Reserve Notes, i.e. dollars. Our currency is thus increasingly going to be backed by lower quality, riskier assets that no one else wishes to buy or lend against, instead of Treasuries. In effect, Mr. Bernanke (FED Chairman) is betting the farm on a quick real estate/mortgage turnaround and a very shallow recession. Worse still, instead of charging a higher interest rate for the loans made against the riskier collateral, the Fed keeps cutting rates.” (The FED as Bank, Sudden Debt, Wednesday, March 19, 2008)

 

WHAT A TANGLED WEB WE WEAVE!

 

Now to get your economic tummy truly upset – ponder this little ditty and you’ll be going back to the toilet for a second round!

 

“The Commodity Futures and Trading Commission (CFTC) is investigating trading in oil futures to determine whether the surge in prices to record levels is the result of manipulation or fraud. They might want to take a look at wheat, rice and corn futures while they're at it. The whole thing is a hoax cooked up by the investment banks and hedge funds who are trying to dig their way out of the trillion dollar mortgage-backed securities (MBS) mess that they created by turning garbage loans into securities. That scam blew up in their face last August and left them scrounging for handouts from the Federal Reserve. Now the billions of dollars they're getting from the Fed is being diverted into commodities which is destabilizing the world economy; driving gas prices to the moon and triggering food riots across the planet.
 
“For months we've been told that the soaring price of oil has been the result of Peak Oil, fighting in Iraq, attacks on oil facilities in Nigeria, labor problems in Norway, and (the all-time favorite) growth in China. It’s all baloney. Just like Goldman Sachs prediction of $200 per barrel oil is baloney. If oil is about to skyrocket then why has G-Sax kept a neutral rating on some of its oil holdings like Exxon Mobile? Could it be that they know that oil is just another mega-inflated equity bubble---like housing, corporate bonds and dot.com stocks—that is about to crash to earth as soon as the big players grab a (golden) parachute?” (The Great Oil Swindle – How Much did the FED Really Know?, Mike Whitney, Information Clearing House, May 30, 2008)

 

Oh, your tummy can handle more gastroenteritis:   

 

“Of course, there is one other possibility, but if that possibility turned out to be right than it would cast doubt on the legitimacy of the entire financial system. In fact, it would prove that the system is being rigged from the top-down by our friends at the Banking Politburo, the Federal Reserve. Here goes: 
 
“What if the investment banks are trading their worthless MBS and CDOs at the Fed's auction facilities and using the money ($400 billion) to drive up the price of raw materials like rice, corn, wheat, and oil? (OUCH, THAT BITES!)
 
“Could it be? Could the Fed really be looking the other way so it can bail out its banking buddies while they drive prices skyward?
 
“If it is true; (and I suspect it is) it hasn't done much good. As the Associated Press reported yesterday:
 
“‘The Federal Reserve announced Thursday that it will make a fresh batch of short-term cash loans available to squeezed banks as part of an ongoing effort to ease stressed credit markets. The Fed said it will conduct three auctions in June, with each one making $75 billion available in short-term cash loans. Banks can bid for a slice of the available funds. It would mark the latest round in a program that the Fed launched in December to help banks overcome credit problems so they will keep lending to customers.’” (Ibid.)  (Note:  The rest of Whitney’s article makes for grotesque indigestion and cries for immediate relief!)

 

Incredible?  Astounding?  Unbelievable?  Conspiratorial?  Where in the world is the truth?  Seems like these conspiratorial concoctions have indeed cast their doubts upon the ENTIRE FINANCIAL SYSTEM – we all await the BIG PUKE! 

 

CONCLUSION

 

 The Master of Deception is hard at work to manipulate his kingdom – the Kingdom of Darkness – in order to consolidate his gains for the final surge and outcry for a Messianic figure to put Humpty Dumpty back together again.  The “Great Train Wreck” is just around the corner.  The pertinent question abides:  If the FED folds (notwithstanding the countless millions of dollars they will print as worthless paper to stave off the crumbling of this financial house of cards) what will the Christopher Dodds (who got a fat-cat loan from Countrywide Mortgage—the same guys he’s bailing out) of the Democratic Party and the Richard Shelby types of the Republican Party do then?

 

And, if one can easily conclude – the mortgage bandits who’ve taken their subprime paper, given it to the FEDS at their discount window, and then taken their bailout bundles and commenced playing the commodities markets, driving up “futures” until we’re paying $10 p/gal. at the pumps – come on now, how much of this bankers’ nightmare are we going to take?  Or do we have any options?  Considering the fact that Obama has received immense contributions from the same bandits who’ve given and then taken back the American dream of home ownership from what appears to be millions – our options are or have run out, big time!  Look at Obama’s contributors and weep.

 

Go figure . . .

 

“Illinois Sen. Obama, who captured the Democratic presidential nomination on Tuesday after a lengthy primary battle against New York Sen. Hillary Clinton, has received $7.9 million in contributions from the securities and investment industries, according to the Center for Responsive Politics.

 

“His opponent, Republican Sen. John McCain of Arizona, banked a little under $4.2 million, putting him behind fellow Republicans Rudolph Giuliani and Mitt Romney, who have long since dropped out of the race.

 

“Overall, Democrats garnered 57 percent of the contributions from the securities and investment industry. If that trend continued through November, it would mark the first time since 1994 that they have drawn more Wall Street cash than Republicans in a presidential election year, according to the data complied by the Center for Responsive Politics.” (Wall Street Puts Its Money Behind Obama, Emily Kaiser, Reuters, June 5, 2008)

 

Yes, I know we didn’t excoriate the money grubbers and their religious enterprise – good grief, how much can your stomach take?  It’s enough that “her heads judge for a bribe” – let alone “her priests teach for pay, and her prophets divine for money” and then to think that the lot of them “lean on the LORD, and say, “Is not the LORD among us?  No harm can come upon us” – so, time to give your innards a break!

 

Yet, the prattler of this people sees in all this some silver lining – a glimmer of hope that “change is on the way” – just what kind of “change” is anyone’s fallible guess – our track record bodes us all ill in that we’ve become experts of going from the frying pan into the fire on numerous occasions . . . to such an extent that our disappointment is only surpassed by our enthusiasm for more of the same.