Add the next post, #-2 , and the one after that, #-3, and you get a pretty good picture of what's going on.
Finally, take the last one (#4), with a grain of salt ( source unconfirmed, could be fantasy, I really don't know)
1.Hey U.S., welcome to the Third World!
It's been a quick slide from economic superpower to economic basket case.
September 18, 2008
Dear United States, Welcome to the Third World!
It's not every day that a superpower makes a bid to transform itself into a Third World nation, and we here at the World Bank and the International Monetary Fund want to be among the first to welcome you to the community of states in desperate need of international economic assistance. As you spiral into a catastrophic financial meltdown, we are delighted to respond to your Treasury Department's request that we undertake a joint stability assessment of your financial sector. In these turbulent times, we can provide services ranging from subsidized loans to expert advisors willing to perform an emergency overhaul of your entire government.
As you know, some outside intervention in your economy is overdue. Last week -- even before Wall Street's latest collapse -- 13 former finance ministers convened at the University of Virginia and agreed that you must fix your "broken financial system." Australia's Peter Costello noted that lately you've been "exporting instability" in world markets, and Yashwant Sinha, former finance minister of India, concluded, "The time has come. The U.S. should accept some monitoring by the IMF."
We hope you won't feel embarrassed as we assess the stability of your economy and suggest needed changes. Remember, many other countries have been in your shoes. We've bailed out the economies of Argentina, Brazil, Indonesia and South Korea. But whether our work is in Sudan, Bangladesh or now the United States, our experts are committed to intervening in national economies with care and sensitivity.
We thus want to acknowledge the progress you have made in your evolution from economic superpower to economic basket case. Normally, such a process might take 100 years or more. With your oscillation between free-market extremism and nationalization of private companies, however, you have successfully achieved, in a few short years, many of the key hallmarks of Third World economies.
Your policies of irresponsible government deregulation in critical sectors allowed you to rapidly develop an energy crisis, a housing crisis, a credit crisis and a financial market crisis, all at once, and accompanied (and partly caused) by impressive levels of corruption and speculation. Meanwhile, those of your political leaders charged with oversight were either napping or in bed with corporate lobbyists.
Take John McCain, your Republican presidential nominee, whose senior staff includes half a dozen prominent former lobbyists. As he recently put it, "I was chairman of the [Senate] Commerce Committee that oversights every part of the economy." No question about it: Your leaders' failure to notice the damage done by irresponsible deregulation was indeed an oversight of epic proportions.
Now you are facing the consequences. Income inequality has increased, as the rich have gotten windfalls while the middle class has seen incomes stagnate. Fewer and fewer of your citizens have access to affordable housing, healthcare or security in retirement. Even life expectancy has dropped. And when your economic woes went from chronic to acute, you responded -- like so many Third World states have -- with an extensive program of nationalizing private companies and assets. Your mortgage giants Fannie Mae and Freddie Mac are now state owned and controlled, and this week your reinsurance giant AIG was effectively nationalized, with the Federal Reserve Board seizing an 80% equity stake in the flailing company.
Some might deride this as socialism. But desperate times call for desperate measures.
Admittedly, your transition to Third World status is far from over, and it won't be painless. At first, for instance, you may find it hard to get used to the shantytowns that will replace the exurban sprawl of McMansions that helped fuel the real estate speculation bubble. But in time, such shantytowns will simply become part of the landscape. Similarly, as unemployment rates continue to rise, you will initially struggle to find a use for the expanding pool of angry, jobless young men. But you will gradually realize that you can recruit them to fight in a ceaseless round of armed conflicts, a solution that has been utilized by many other Third World states before you. Indeed, with your wars in Iraq and Afghanistan, you are off to an excellent start.
Perhaps this letter comes as a surprise to you, and you feel you're not fully ready to join the Third World. Don't let this feeling concern you. Though you may never have realized it, you've been preparing for this moment for years.
Why more than 1,000 banks are still in danger of collapsing no matter what Washington does ...
Why scores of household-name companies are still at risk for huge stock losses or even bankruptcy ...
And what you must do now to protect and grow your wealth.
IMPORTANT: Plague to Pandemic — the crisis briefing we created to help you insulate your money and profit — MUST go offline TOMORROW. Click here to watch it now or you could miss it forever!
It was a surreal moment: Senator Christopher Dodd told ABC's "Good Morning America" that Treasury Secretary Paulson and Fed Chief Bernanke had just informed Congressional leaders "We're literally days away from a complete meltdown of our financial system."
Things got even scarier when he told CNN, "There was dead silence in the room for five to 10 seconds. The oxygen went out of the room."
No wonder Congress is falling all over itself to pass the $700-billion bailout bill to buy toxic mortgages!
Combined with the $25 billion spent to bail out Bear Sterns, $100 billion each for Fannie and Freddie and $85 billion for AIG, Washington has now pledged more than $1 TRILLION to fight this crisis so far — and still, it's only the beginning:
- Yesterday, Paulson announced he's adding another $50 billion to ensure the money market funds ...
- He's also expanding the bail-out to include car loans, credit card debt and more ...
- And Democrats in Congress are clamoring for hundreds of billions more for a second economic stimulus package, for a bailout of homeowners at risk for losing their homes and more!
And still — even if Congress gives Paulson everything he asks for and more — there's still one, glaring, "inconvenient truth" nobody's talking about ...
None of these unprecedented actions
are enough to end this massive debt crisis!
1. They do little to guarantee that more financial institutions won't fail: Sure — Washington is going to buy toxic loans from the institutions that invested in them. But don't think for a moment banks and other companies are going to get top dollar for the poison in their portfolios.
Although the details of the bailout are still sketchy, it's clear that Washington will pay a deeply discounted price for that bad paper. That means the financial institutions that own those lousy investments are still going to take huge losses.
And in many cases, those losses are likely to be large enough to push many of these teetering firms over the brink.
Our forecast: Despite this massive, historic, unprecedented bailout, you will still continue to see a chain reaction of bank failures and corporate bankruptcies.
2. They do little to slow the explosion in mortgage defaults that caused this mess in the first place: With the economy slowing, unemployment surging, home values still plunging and monthly payments on six million adjustable rate mortgages set to rise, the tidal wave of mortgage delinquencies and defaults we've seen so far is almost certain to grow larger, not smaller.
As Senator Chuck Schumer (D-NY), chairman of the Joint Economic Committee, told FOX News Sunday, "If you don't solve the mortgage crisis, you're not going to solve the financial crisis."
3. They do nothing to address the $180-trillion derivatives time bomb at U.S. commercial banks: Thirty years of deregulation have allowed a parallel financial system to arise in America in which more than $180 trillion dollars in derivatives are held and traded by U.S. banks with scant government supervision or accounting.
The truth is, no one has any idea of the magnitude of the deleveraging ahead or the size of the debts that will ultimately have to be written down!
4. They do virtually nothing to cause lenders to end the credit drought that's spreading the contagion to other sectors: To survive, banks are desperately raising credit requirements ... slashing lines of credit for corporations and spending limits on credit cards ... turning down all but the most highly qualified borrowers.
And that's what's causing so much pain at companies making products that consumers buy on credit: Autos, home improvement products, electronics and other high-end merchandise.
BOTTOM LINE: As massive as it is, the Paulson-Bernanke plan can't even begin to resolve this crisis. In fact ...
This $1 trillion bailout virtually guarantees
this crisis will spin wildly out of control!
Look: Until last week, the White House projected that the 2009 federal deficit would be $482 billion. Now, just with the bailouts announced and proposes so far, Congress is tacking on 1 trillion to that number, or even more.
That means plunging prices for Treasury notes and bonds plus soaring interest rates. And that, in turn, means rapidly rising payments on ARMs — a coup de grâce for millions of homeowners who are barely clinging to their homes as it is.
It also means the recession will be deeper and longer than it otherwise might have been. And it means scores of U.S. companies that manufacture and sell products requiring consumer credit will be hit even harder.
Our recommendation is unchanged: As we've told you from the outset of this crisis, every time the government attempts to fight this, it spurs a temporary rally, giving you a golden opportunity to sell any stocks you still have.
And it's also the very best possible opportunity to position yourself for huge gains as the crisis continues to spread — with contrarian investments like inverse ETFs and put options.
Watch our Crisis Briefing —Plague to Pandemic— for critical guidance to help protect your wealth and how to USE this crisis to go for huge profits right now.
But I must warn you ...
Events are unfolding so fast,
we MUST take this critical briefing offline TOMORROW:
Watch it now, or you could miss it forever!
Tens of thousands of investors are already using the startling revelations and recommendations we delivered in this timely Crisis Briefing to help insulate their wealth and profit in the next phase of this great credit crisis.
We answered the most pressing questions you have now about how the disaster at Lehman Brothers — in the wake of the great Fannie-Freddie bailout — will impact the stocks, bonds, mutual funds and ETFs you own:
- Will this set off a chain reaction of failures on Wall Street? Or can it be contained?
- What about the Fannie-Freddie bailout? Will it really save the housing market? Is it time to pick up historic bargains in real estate and real estate stocks? Or should you continue avoiding them like the plague?
- What about companies whose survival depends on the souring commercial real estate, sinking credit cards and other defaulting loans that are not getting a penny out of this bailout?
- U.S. retailers and manufacturers are ALSO not getting bailed out. What will happen to them?
Plus, we gave you clear, unhedged ACTIONABLE recommendations to help protect your wealth and profit as this credit crisis continues to spread — including ...
- Our list of the widely held stocks you shouldn't touch with a ten-foot pole now; shares that are sitting ducks for massive declines.
- Hard evidence that diseased lenders are now dooming the sales and earnings of many of America's most widely held companies.
- The sectors that are already feeling the pain and that are most likely to be crushed first.
- Investment vehicles and strategies that fit this new environment hand-in-glove and that offer you huge profit potential as the weakest stocks crater.
The information and recommendations we delivered are crucial to help protect your wealth and grow it in this treacherous environment. So, in case you missed part of this all-important event or want to watch it again, we're leaving it online for a very short time.
But events are developing so quickly we CAN NOT leave the recording of this historic event online much longer. So be sure to click this link and watch this all-important briefing while you still can!
Martin D. Weiss, Ph.D.
Safe Money Report
3. We Now Live in a Dictatorship
Three men now control virtually every aspect of your financial life. Find out how to defend yourself from them!
by Adam Lass, Senior Editor, WaveStrength Options Weekly
The greatest coup ever attempted is almost complete.
Forget about the sitting U.S. president. Every time he spoke, last week, he was greeted by resounding boos from the only audience that votes 24 hours a day, five days a week: the global stock market.
Forget about those two guys running for president, too. By the time either can take the oath of office, the office itself will be little more than a sinecure.
Forget about the heads of state in Europe and Asia, for that matter. Nothing they have had to say has mattered a bit (and that includes that KGB upstart in Russia).
The world's various legislatures, including the U.S. Congress? Impotent.
The central banks of Europe? China? Japan? Sidelined.
The entire world economy now jumps at the beck and call of three men: Henry Paulson, Ben Bernanke and Timothy Geithner.
They may have official titles like "U.S. Treasury secretary," "chairman of the Federal Reserve," and president of the Federal Reserve Bank of New York"… but you probably should get used to the idea of addressing them as "The Great Triumvirate."
For years now, Washington has systematically destroyed the value of the dollar.
This campaign of destruction led directly to the real estate bubble, its demise and the ensuing mortgage crisis.
The entire time, these three men have quietly assured the public that all was well, that no precipitous actions were needed to be taken to forestall the troubles that were bearing down on us like a 300-car coal train barreling down Thunder Mountain.
One can only imagine what their private conversations were like. However, Paulson has been quoted as saying that he only took the job at Treasury to prepare for the inevitable crisis that was coming. Curiously enough, the trading house where he worked for 34 years bet heavily against mortgage derivatives when everyone else was wading in neck deep.
Bernanke's entire career has been devoted to the study of Depression economics. And Geithner is a master of international currency manipulation who has served under Henry Kissinger, Robert Rubin, Lawrence Summers, not to mention stints in the International Monetary Fund and the Group of Thirty, a private club of international financiers currently helmed by Paul Volcker.
And now that the crisis is upon us, now that virtually every Wall Street house except Paulson's own Goldman Sachs has gone under or been bought up, now that the rot in our dollar has spread to all our global competitors, now that all other official and semi-official organizations that could lay claim to any power are defunct or paralyzed, these three have stepped up and literally bought up our country.
And they did it entirely with your blessing… and your money. Because right now, you'll pay them anything to pry your foot loose from their bear trap.
For weeks now, these three have decided who will get billions from the magical Federal piggy bank. And who will be gutted on the trading room floor.
Bear Stearns? You get sold to our friends. Lehman Brothers? Sorry, champ, but you are road kill. AIG? We get 80% of your assets, and you get to pretend like you still run your company.
So far, these three have doled out half a trillion dollars one way or another. But not a nickel of it was free. No, no, as the terms come to light, these negotiations begin to resemble something out of a popular organized crime romance.
You know all those billion-dollar "short-term loans" the Fed has been making to every bank in the country? Each and every borrower has put up matching collateral in the form of junk mortgage bonds.
Technically speaking, since these bonds cannot be valued, the Federal Reserve is required is required to value them at zero. Zed. Zippo.
The fact that they have not done so does not mean that they never will. Indeed, these three gentlemen are now in the position of instantly bankrupting virtually any and every bank in the country.
Don't tow the new line? You're dead meat.
You say the FDIC will cover the banks? It ran out of money back when Indymac went under. Right now, it has roughly 10 times more debt than assets. And 15-20 more banks are slated to go under at any moment.
In fact, as I sit to write this, the FDIC is begging for more funds. Want to guess who they have to go through to get it? That's right: Treasury Secretary Paulson.
The tactic of lending billions in cash against assets that can be revalued at a whim has proven so effective, Emperors Paulson Bernanke and Geithner are now proposing to extend it to virtually every major Wall Street investor via their new "Department of Bad Debt."
Think the Princes of the New World Order care a fig about your house, your job or your retirement fund? Think again: You are now, have always been and will always be a pawn in their grand scheme.
Every aspect of your life is on the line now. Not just your stock portfolio, but your bank accounts, your credit cards, the heat and lights in your house, even the value of the dollars in your wallet. They have put it all on the line to pull off this mad coup.
You simply must protect yourself if you have any hope of surviving. An immediate step would be to buy shares of PowerShares' US Bearish Dollar Index (UDN:AMEX). Beyond that, Justice and I are working up a detailed defense plan.
This is no time to quibble about dollars and cents when so much more is on the line. So we will make this summit available for free to any and all who perceive the depths of this crisis.
Taipan Special Reports
- September 22, 2008
4.Russia-China Prepare Massive Gold 'Shock' For Global Economy
A visibly angry Prime Minister Putin addressing the media during his visit with French Prime Minister Francois Fillon in Sochi blasted the United States plans for dealing with the collapse of the Western Banking system by stating, "We all need to think about changing the architecture of international finances and diversifying risks. The whole world economy cannot depend on one money-printing machine".
Putin's warning, however, has fallen upon deaf ears in the United States as that financially beleaguered Nation prepares to further implode their economy by injecting a staggering $1 Trillion into their stock and banking markets by doing nothing more than printing up more money as they have completely bankrupted themselves, and which has brought them to this latest crisis.
Not being explained to the American people, in the millions of words currently assaulting them by their propaganda media about their economic collapse, is the almost childlike equation that their Nations debt is virtually worthless on the World markets as the US Dollar has no real value as their US Federal Reserve System is broke, and as we can read from their own statement, but in much more convoluted terms designed to completely confuse their own people:
"The Federal Reserve has announced a series of lending and liquidity initiatives during the past several quarters intended to address heightened liquidity pressures in the financial market, including enhancing its liquidity facilities this week. To manage the balance sheet impact of these efforts, the Federal Reserve has taken a number of actions, including redeeming and selling securities from the System Open Market Account portfolio.
The Treasury Department announced today the initiation of a temporary Supplementary Financing Program at the request of the Federal Reserve. The program will consist of a series of Treasury bills, apart from Treasury's current borrowing program, which will provide cash for use in the Federal Reserve initiatives.
Announcements of and participation in auctions conducted under the Supplementary Financing Program will be governed by existing Treasury auction rules. Treasury will provide as much advance notification as possible regarding the timing, size, and maturity of any bills auctioned for Supplementary Financing Program purposes."
In simple terms: When the US Federal Reserve System announced it was broke, the US Treasury turned on its printing presses to create new Treasury Bills which have no value whatsoever, except giving the illusion of liquidity to the unsuspecting American public so they will cease withdrawing their dollars from their crashing banks and stock markets prior to their savings becoming completely worthless.
To the astounding plan unveiled by the US Government to address their financial collapse, one could justifiably be confused to if they are reading a pronouncement from the old Soviet Politburo, instead of the largest capitalistic economy system in the World, and as we can read as reported by the Bloomberg News Service:
"The Bush administration sought unchecked power from Congress to buy $700 billion in bad mortgage investments from financial companies in what would be an unprecedented government intrusion into the markets.
Through his plan, Treasury Secretary Henry Paulson aims to avert a credit freeze that would bring the financial system and the world's largest economy to a standstill. The bill would prevent courts from reviewing actions taken under its authority.
"He's asking for a huge amount of power,'' said Nouriel Roubini, an economist at New York University. ``He's saying, `Trust me, I'm going to do it right if you give me absolute control.' This is not a monarchy.'"
As we had reported in our September 20th report, 'Seven Days That Shook The World': Democracy In America Dies, US Senator Jim Bunning was, indeed, correct when he stated, "The free market for all intents and purposes is dead in America. The action proposed today by the Treasury Department will take away the free market and institute socialism in America."
But, to the fullest extent of this US financial crisis we can read as reported by the Washington Post News Service:
"What we are witnessing may be the greatest destruction of financial wealth that the world has ever seen -- paper losses measured in the trillions of dollars. Corporate wealth. Oil wealth. Real estate wealth. Bank wealth. Private-equity wealth. Hedge fund wealth. Pension wealth. It's a painful reminder that, when you strip away all the complexity and trappings from the magnificent new global infrastructure, finance is still a confidence game -- and once the confidence goes, there's no telling when the selling will stop.
But more than psychology is involved here. What is really going on, at the most fundamental level, is that the United States is in the process of being forced by its foreign creditors to begin living within its means."
And, what the American economy, and its people, are not even close to being prepared for is how both China and Russia are going to be dealing with the new "Peoples Republic of Wall Street" in demanding their debts be paid immediately in full.
One particularly crushing response to the United States current crisis circulating in the Kremlin today, written by Alexander Dugin, described as the "New sage of the Kremlin", advocates the combining of both Russia's nearly $500 billion and China's 20,000 tons [est.]gold reserves to back a new gold-backed Eurasian Currency modeled on the Euro, and which if implemented would 'shock' the American dollar to such an extent that it would cease to exist on International markets.
This report further notes that the United States is already preparing for such a response from Russia and China by this past weeks invoking of the Gold Reserve Act of 1934 by the US Government in a desperate move to protect their money markets for the first time since the Great Depression, and of which the vast majority of Americans remain oblivious to the fact that their personal gold holdings can still be confiscated by their officials at anytime of their choosing despite the 1975 laws allowing these people to own gold again.
In all of these events, and as we have mentioned many times before, the greatest enemy of these American people appears to be their own ignorance as they, seemingly, have absolutely no idea on how to protect themselves, but which even Russian schoolchildren knows is the exchanging of a collapsing currency for one that is doing better, and which millions of ordinary Russians did during the collapse of the Soviet economy by purchasing American Express Travelers Cheques in US Dollars and British Pound Sterling.
To whatever becomes of these American people entering what is, in essence, a Third World Economy, it remains a main fact that they continue to ignore the many warnings from outside their country of the many catastrophes still to come, even to their false bravado of laughing these warnings off as they plunge into the abyss.
© September 22, 2008 EU and US all rights reserved.