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Thread: You Mean Our Corporate Overlords Don't Really Care About Us?

  1. #231
    Atypical is offline
    Corporate Media Continues to Pump Out Fake News on Wall Street Crash of 2008

    By Pam Martens and Russ Martens: August 15, 2017

    When there is an epic financial crash in the U.S. that collapses century old Wall Street institutions and brings about the greatest economic collapse since the Great Depression, one would think that the root causes would be chiseled in stone by now. But when it comes to the 2008 crash, expensive corporate media real estate is happy to allow bogus theories to go unchallenged by editors.

    What is happening ever so subtly over time is that the unprecedented greed, corruption and unrestrained manufacture of fraudulent securities by iconic brands on Wall Street that actually caused the crash are getting a gentle rewrite. The insidious danger of this is that Wall Street is never reformed or adequately regulated – that it remains a skulking financial monster with its unseen tentacles wrapped tightly around every economic artery of American life, retaining its ever present strangulation potential.

    On August 10 of this year, Wall Street Journal reporter James Mackintosh penned the following astonishing sentence: “The global financial crisis began 10 years ago this week, when a French bank suspended three money-market funds. What savers thought was money turned out to be merely credit, and the realization rapidly trashed U.S. money-market funds and the global banking system.”

    Three days earlier, on August 7 of this year, Jim Puzzanghera of the Los Angeles Times stated in print that “The 2008 financial crisis was triggered by the failure of Lehman Bros” which filed for bankruptcy on September 15, 2008.

    The factual reality is that the financial crisis certainly did not start with money market funds nor did it start with the 2008 failure of Lehman Brothers. As a mountain of documents obtained by the Financial Crisis Inquiry Commission (FCIC) and the General Accountability Office (GAO) prove beyond question, the financial crisis was well underway in the spring of 2007.

    In February 2007, HSBC, one of the largest subprime lenders in the U.S. at the time, announced that it was increasing its provision for losses by a whopping $1.8 billion. The next month, New Century, which ran a close second to HSBC in subprime loans, said in an SEC filing that federal investigators were “conducting a criminal inquiry under the federal securities laws in connection with trading in the company’s securities, as well as accounting errors regarding the company’s allowance for repurchase losses.” The following month, April of 2007, New Century filed bankruptcy. Two months later, June 2007, two of Bear Stearns’ multi-billion dollar hedge funds were teetering. Bear conceded to counterparties that it lacked the cash to meet the margin calls on the funds and asked for a reprieve. None came. On July 31, 2007, both funds filed for bankruptcy.

    By July 2007, the credibility of the pay-to-rate model of the U.S. rating agencies was collapsing. The tens of billions of dollars of structured subprime debt that had been given the preposterous rating of AAA, began its descent to junk bond status as the rating agencies began their downgrades.

    According to documentation obtained by the FCIC, on August 14, 2007 the Federal Reserve sent a confidential memo to the Fed’s Board of Governors concerning Countrywide, another major subprime lender. The memo stated: “…The ability of the company to use [mortgage] securities as collateral in [repo transactions] is consequently uncertain in the current market environment. . . . As a result, it could face severe liquidity pressures. Those liquidity pressures conceivably could lead eventually to possible insolvency.”

    Three days later, on August 17, 2007, the insured deposits held by a Countrywide owned bank were experiencing a customer panic and bank run. The Los Angeles Times reported: “Anxious customers jammed the phone lines and website of Countrywide Bank and crowded its branch offices to pull out their savings because of concerns about the financial problems of the mortgage lender that owns the bank.”

    All of this was occurring a full year before Lehman Brothers filed bankruptcy.

    On November 4, 2007 the deeply troubled Citigroup was forced to fess up to its problems. In a press release, it said it had experienced “declines since September 30, 2007 in the fair value of the approximately $55 billion in U.S. sub-prime related direct exposures in its Securities and Banking (S&B) business.” It estimated that “the reduction in revenues attributable to these declines ranges from approximately $8 billion to $11 billion (representing a decline of approximately $5 billion to $7 billion in net income on an after-tax basis.)”

    The Government Accountability Office, which issued a 252-page report on the crisis, unequivocally stated that the crisis began in the summer of 2007. The report noted: “During the financial crisis that began in the summer of 2007, the Federal Reserve System took unprecedented steps to stabilize financial markets and support the liquidity needs of failing institutions that it considered to be systemically significant.”

    Then there is the fact that the Federal Reserve secretly invoked its emergency lending authority in August 2007 and began sluicing what would eventually become a cumulative $16 trillion in almost zero interest loans to shaky Wall Street banks and their foreign peers. Reporters at Bloomberg News wrote in 2011 after the Fed was forced to disclose the secret loans:

    “Citigroup was tapping six Fed programs at once. Its total borrowings amounted to more than twice the federal Department of Education’s 2011budget.

    “Citigroup was in debt to the Fed on seven out of every 10 days from August 2007 through April 2010, the most frequent U.S. borrower among the 100 biggest publicly traded firms by pre-crisis market valuation. On average, the bank had a daily balance at the Fed of almost $20 billion.”

    The most tragic part of this story is that the U.S. Congress passed the Dodd-Frank financial reform legislation in 2010 without an in-depth understanding of the severity of the crisis, the trillions of dollars in backroom bailouts by the Fed, and without an appreciation of the dangers that Wall Street continued to pose to the financial system. Details of the Fed’s secret loans were not revealed until 2011, following a lengthy court battle waged by the Fed.

    http://wallstreetonparade.com/2017/0...crash-of-2008/

    _______________________________

    Have you noticed that there is nothing going wrong in the country?; or, if there is it's no ones fault; or, if someone screwed up it was only a small error; things just happen.

    There are few who now work to inform us of the real reasons why the country, in many ways, is in decline. A lot of money and effort is at work rewriting history to gloss over the truth as this article shows.

    We will all pay for this. It's happening now.
    Last edited by Atypical; 08-16-2017 at 07:30 PM.

  2. #232
    Atypical is offline
    Plunder Capitalism

    by PAUL CRAIG ROBERTS
    DECEMBER 5, 2017

    I deplore the tax cut that has passed Congress. It is not an economic policy tax cut, and it has nothing whatsoever to do with supply-side economics. The entire purpose is to raise equity prices by providing equity owners with more capital gains and dividends. In other words, it is legislation that makes equity owners richer, thus further polarizing society into a vast arena of poverty and near-poverty and the One Percent, or more precisely a fraction of the One Percent wallowing in billions of dollars. Unless our rulers can continue to control the explanations, the tax cut edges us closer to revolution resulting from complete distrust of government.

    The current tax legislation drops the corporate tax rate to 20%. This means that global corporations registered in the US will be taxed at a lower income tax rate than a licensed practical nurse making $50,000 per year. The nurse, if single, faces in 2017 a 25% marginal tax rate on all income over $37,950.

    A single person is taxed at a rate of 33% on all income above $191,651. 33% was the top tax rate extracted from medieval serfs, and approaches the tax rate on US 19th century slaves. Such an upper middle class income as $191,651 sounds extraordinary to most Americans, but it is so far from the multi-million dollar annual incomes of the rich as to be invisible. In America, it is the shrinking middle and upper middle class incomes that bear the burden of income taxation. The rich with their capital gains from their equity holdings are taxed at 15%.

    Even single individuals who earn between $1 and $9,325 are taxed at 10% on their pittance.

    The neoliberal economists who are the shills for the rich, Wall Street, and the Banks-Too-Big-Too-Fail claim, erroneously, that by cutting the corporate income tax rate to 20% all sorts of offshored profits will be brought back to the US and lead to a booming economy and higher wages. This is absolute total nonsense. The money won’t come back, because it is invested abroad where labor costs are lower, if invested at all instead of buying back the corporation’s stock or buying other existing companies. After 20 years of offshoring US manufacturing and professional tradable skills and the incomes associated with the jobs, who is going to invest in America? The American population has no income with which to purchase the goods and services from new investment, and the American population’s credit cards are maxed out.

    All that is going to happen is that Wall Street will calculate the lower tax rate into a higher equity price. Wall Street can do this without any of the offshored earnings coming home. Suddenly, everyone who owns equities will experience a boost in wealth, or the boost has already occurred in anticipation of the handout.

    The deficit-conscious Republicans have put into the Bill for Enhancement of the Rich’s Wealth, cuts in social services in order to “save workers from higher interest rates from budget deficits.” This is more dishonesty. If the Fed lets real interest rates rise to any meaningful amount, derivatives will unwind, and the Fed will have to create trillions more in new dollars to keep its Ponzi scheme in place. The deficit that results from the tax cut will be covered by the Fed purchasing the Treasuries, not by a rise in interest rates.

    What we are witnessing in the US and indeed throughout the western world is the total failure of capitalism. Capitalism is now merely a looting machine. The financial sector no longer supplies capital for production. What the financial sector does is to turn discretionary consumer income into interest and fee payments to banks. Aggregate demand can only grow through debt expansion, and the consumers reach a point where they cannot expand their debt.

    Capitalism, hiding behind “globalism,” which is misrepresented as a good thing when it is death itself, locates production where labor is cheapest, thus depriving First World labor of good wages and work opportunities and putting First World countries on the path to becoming Third World countries. Short-term profits and executive and board bonuses and stock options are maximized at the cost of the destruction of the domestic consumer market.

    Plunder Capitalism also privatizes as much of the public sector, such as the military, as possible, thus driving up the cost of the Pentagon’s budget. Jobs that the soldiers themselves formerly did are given to politically-connected firms. What was once KP (kitchen patrol) is now provided by an ouside private service. Private mercenaries hired by the Pentagon collect as much in a month as troops in the line of fire earn in a year. I don’t know that the army any longer has a supply organization other than the private business that has the contract.

    Medicare and Medicaid are the next to be privatized, along with Social Security. The tax cut will result in deficit and high interest rate hype, and these lies will be used to save the workers from high interest rates on their mortgage, credit card, and student loan debt by scaling back or privatizing Medicare, Medicaid, and Social Security.

    The environment and public lands will be sacrificed to the private profits of timber, mining, and energy companies. Grizzly bears and wolves are losing their protection under the endangered species act so that states can sell trophy hunting licenses to men who have to prove their manhood by killing an animal with a high-powerful rifle at a safe distance.

    What we are witnessing is the complete looting of America and the entirety of the West. While the Western World collapses, the insouciant, submissive people sit there sucking their thumbs while they are being ruined.

    Nothing is left of the West except looters at work.

    This tax bill is an abomination, an act of brutal plunder. Its sponsors should be tarred and feathered and ridden out of town on a rail, if not hung from a lamp post.

    https://www.counterpunch.org/2017/12...er-capitalism/

    Paul Craig Roberts is a former Assistant Secretary of the US Treasury (under Reagan) and Associate Editor of the Wall Street Journal. Roberts’ How the Economy Was Lost is now available from CounterPunch in electronic format. His latest book is The Neoconservative Threat to World Order.
    ________________________________________________

    This, and more, is what conservatives do. It is not hyperbole to say they are destroying the country for their greedy benefactors. The Democrats are not blameless.
    Last edited by Atypical; 12-06-2017 at 08:17 PM.

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