U.S. to invite wealthy to invest in bailout: reportFri Mar 6, 2009 2:23am ESTWASHINGTON (Reuters) – The U.S. government plans to invite wealthy investors to invest in the bailout of the crippled financial system, The Washington Post reported on Friday.The investors would be invited to buy up recently issued, highly rated securities that finance consumer lending — without the risk of massive losses, the report said.The idea is to entice the investors to put their huge cash piles to work to stimulate the financial system, the Post said.The program, which could involve the government lending nearly $1 trillion to these investors, exceeds the size of every other federal effort to address the financial crisis so far, the newspaper said.The initiative adopts an approach that could be the model for future federal efforts to aid the credit markets, sources familiar with government planning were quoted as saying.(Editing by Bill Trott)© Thomson Reuters 2008.

… and how exactly would this f**kery occur “without the risk of massive losses”???

first try to take their wealth away, then ask them to invest their good money to invest in their bad assets for the good of the country…

Wondering if others saw this following ‘forecast’. It was posted here the other day (but I don’t remember who did, sorry).On this page http://www.leap2020.eu/English_r25.htmlYou’ll find this article listed firsthttp://www.leap2020.eu/GEAB-N-32-is-available!-4th-quarter-2009-Beginning-of-Phase-5-of-the-global-systemic-crisis-phase-of-global-geopolitical_a2805.html?PHPSESSID=de4d1267ef87b33e713d2cf0052713a3and this one listed secondhttp://www.leap2020.eu/End-of-2008-The-world-enters-the-decanting-phase-of-the-global-systemic-crisis-Anticipations-over-2008-2013-for-six_a2756.htmlHere are some snips:Back in February 2006, LEAP/E2020 estimated that the global systemic crisis would unfold in 4 main structural phases: trigger, acceleration, impact and decanting phases. This process enabled us to properly anticipate events until now. However our team has now come to the conclusion that, due to the global leaders’ incapacity to fully realise the scope of the ongoing crisis (made obvious by their determination to cure the consequences rather than the causes of this crisis), the global systemic crisis will enter a fifth phase in the fourth quarter of 2009, a phase of global geopolitical dislocation.According to LEAP/E2020, this new stage of the crisis will be shaped by two major processes happening in two parallel sequences:A. Two major processes:1. Disappearance of the financial base (Dollar & Debt) all over the world2. Fragmentation of the interests of the global system’s big players and blocksB. Two parallel sequences:1. Quick disintegration of the current international system altogether2. Strategic dislocation of big global players.We had hoped that the decanting phase would give the world’s leaders the opportunity to draw the proper conclusions from the collapse of the global system prevailing since WWII. Alas, at this stage, it is no longer possible to be optimistic in this regard (1). In the United States, as in Europe, China and Japan, leaders persist in reacting as if the global system has only fallen victim to some temporary breakdown, merely requiring loads of fuel (liquidities) and other ingredients (rate drops, repurchase of toxic assets, bailouts of semi-bankrupt industries,…) to reboot it. In fact (and this is what LEAP/E2020 means ever since February 2006 using the expression « global systemic crisis”), the global system is simply out of order; a new one needs to be built instead of striving to save what can no longer be saved.History is not known to be patient, therefore the fifth phase of the crisis will ignite this required process of reconstruction, but in a harsh manner: by means of a complete dislocation of the present system, with particularly tragic consequences in the case of several big global players, as described in this 32nd issue of the GEAB (see the two parallel sequences).According to LEAP/E2020, there is only one very small launch window left to prevent this scenario from shaping up: the next four months, before summer 2009. Practically speaking, the April 2009 G20 Summit is probably the last chance to put on the right tracks the forces at play, i.e. before the sequence of UK and then US defaults begin (2). Failing which, they will lose their capacity to control events (3), including those in their own countries for many of them; and the world will enter this phase of geopolitical dislocation like a “drunken boat”. At the end of this phase of geopolitical dislocation, the world will look more like Europe in 1913 rather than our world in 2007.Because they persisted in bearing the ever-increasing weight of the ongoing crisis, most states, including the most powerful ones, failed to realise that they were planning their own trampling under the weight of History, forgetting that they were merely man-made organisations, only surviving because they matched the interest of a large majority. In this 32nd edition of the GEAB, LEAP/E2020 has chosen to anticipate the fallout of this phase of geopolitical dislocation so far as it affects the United-States, EU, China and Russia.It is high time for the general population and socio-political players to get ready to face very hard times during which whole segments of our societies will be modified (4), temporarily disappear or even permanently vanish. For instance, the breakdown of the global monetary system we anticipated for summer 2009 will indeed entail the collapse of the US dollar (and all USD-denominated assets), but it will also induce, out of psychological contagion, a general loss of confidence in paper money altogether (these consequences give rise to a number of recommendations in this issue of the GEAB).Last but not least, our team now estimates that the most monolithic, the most « imperialistic » political entities (5) will suffer the most from this fifth phase of the crisis. Some states will indeed experience a strategic dislocation undermining their territorial integrity and their influence worldwide. As a consequence, other states will suddenly lose their protected situations and be thrust into regional chaos.From the second article – and you should go see the charts there:The global financial crisis, which went through a major tipping point in September 2008 as anticipated by LEAP/E2020 last February (1), is only the detonator of the global systemic crisis. The financial and monetary chaos of the past months were only the triggers of a series of economic, social and political crises that will from now on give the pace to the last phase of this global systemic crisis. The most severe consequences – in human, social, economic and political terms – are still ahead of us, not behind. In this October edition of the GEAB (N°28), we therefore chose to establish the anticipatory schedule of the so-called « decanting phase », i.e. a phase along which the outcome of the crisis begins reshaping the global system (2). Our studies thus enabled us to make anticipations for the 2008-2013 period and for 6 groups of countries differently impacted by the 4 specific sequences of this phase: financial crisis, economic crisis, social crisis and political crisis.Indeed, if the first three phases of the crisis were common to the whole planet because they affected the same global system inherited from 1945 and 1989, the fourth phase takes place very differently according to the country and to the specific impact of the crisis for each country. The shock was common, but the trajectories will be different from now on. In fact they constitute the process of reorganisation of the global system and prefigure the new equilibriums that will appear in the coming decade.

I just posted this on the last thread in response to a discussion I was having with Miss America.

So what you think they, meaning everyone at the top of the ladder, still believes in Reagan’s Trickle Down Theory? Including Obama and his entire team.That would explain their actions so far.To me that theory never made any sense but it has been the guiding principal of our tax and economic policies for 30 years. I have read some recent essays and articles still touting it. Reagan’s theory about less, OR IMO more sensible regulations had some merit at that time but his Trickle Down Theory was the total opposite of Henry Ford’s theory of paying people enough so that they could be a driving factor in demand. Of course in his case, it was to build up the demand for Ford automobiles. I have always thought the theory made a lot of sense and seemed to actually work out until unions got to powerful. Not that unions are not beneficial, they are just like everyone, to much power and power corrupts. They have kept a lot of innovation from occurring and kept people in jobs that should have been automated. And between regulations and unions are an underlying force in off shoring our manufacturing sector. Of course regulations wouldn’t have been such a factor if real fair trade agreements would have been written and signed but that was just more of the Trickle Down Theory where those at the top got most and then they could, as Masters, decide who got to work.Some on this blog have discussed the income distribution in our system and that is basically the issue I am at. I sure don’t know what would work better than what we have but I do know that what we have has come to the end of its road of usefulness and change is being forced down our throats.I could suggest some tax policy changes and some attitude changes but until Reagan’s Trickle Down Theory has been finally rejected, it would be of little use and NO one in power is listening. Just like they didn’t listen to many of us that have been pointing out for maybe 10 years the consequences of the failures of Reagan’s Trickle Down Theory. And the consequences of to much debt and especially in using housing as a debt vehicle and an ATM. Those in power wanted desperately to keep their gig going and conning the public deeper and deeper into debt with the illusion of gain was very effective, although very short sighted.Greed destroyed our system because those at the top could never have enough and yet had so much more than they could put to productive use that speculation became the game. Speculation is no way to run an 14 trillion dollar economy. And it has come to this. What we are witnessing. A meltdown and probably of epoch proportions.I have said this before. It isn’t what is going on today that is important but how we deal with it. And I have to tell everyone that so far I am not impressed.

One basic question:Are stock markets a zero-sum game or not ?

Ask Investors that got in in the past decade and held on until now.

Dow could break under 6500 today. That would put it below the current trading channel .. possibly heralding a stronger downward move. This is consistent with the arguments I have made this week that it looks like we’re headed towards a new period of strong deleveraging.Thanks to the folks at Contrary Investor for pointing out the short-term trading channel for the Dow. It’s a short-term trend, but about all that investors have got right now. It’s all “thin air” below the Dow from here.PeteCA

where oh where will it be safe overseas though? this is a genuine question.

you clearly cannot blame our current financial crisis solely on the Bush Administration. The Clinton administration absolutely had a play into this current catastrophe.

a,zero sum is being generous. think of all the wasted talent. it is tragic! the time! what has it been in service of?

It’s Trickle up and trickle down. They’re hitting both sides… BUT NOT WITH NEARLY ENOUGH!The trickle up-ers will take every penny and save of pay off a small portion of their indebtedness……and the trickle down-ers are using what they can to recapitalize, but still at a shortfall. Thus leading to them having to make more cutbacks (layoffs), which put the trickle up-ers in an even deeper hole.It’s just not enough from both sides. It’s F.A.I.L.I.N.G. It needs to be an immediate multi trillion dollar move. THAT HITS BOTH SIDES! … and other economies need to do it in synch! (to not disrupt the global economy even more through inflationary runs.)Miss America

“damage Obama (and by extension the citizens of this country)”Wow, you just raise the bar of idiotcy by miles.

Why All Of The Administration’s Schemes Are SuspectJoe Weisenthal|Mar. 6, 2009, 9:58 AM|13Tags: Economy, Barack Obama, Bailout, StimulusWe can go back and forth debating the merits of various recovery schemes: TALF, TARP, the homeowner mortgage mod scheme, healthcare reform, and so on. But leaving out facts and logic for a moment, there’s a broader reason why we ought to be skeptical of the plans put forth so far: They’re almost all about feeling good, with little actual pain for anyone.Consider:On taxes, we like to imagine that we can pay for all our spending with just a modest tax increase on 2% of the population. The 98% of us who make up the rest get a tax cut!On matters of equality, we think that we can just cap pay and some arbitrary level and that will create fairness.On growing the economy, we’re lead to believe that spending more on ourselves — more TVs, more refrigerators, more dinners out at a fancy restaurant — will be good overall. Of course, we’d love to believe that eating out more and buying TVs is a good thing, but deep inside we probably know otherwise.With the banks we’re supposed to believe that we can keep them going with very little pain, keeping the creditors whole.Green. Windmills and solar will have a role in our energy future, but much of the green movement is about feel-good stuff, and dare we say, smugness. That’s why when we talk about energy independence, coal and nuclear are villified, even though they would clearly help us achieve that.Education. Again, we’d like to imagine that everyone is educable if only we threw more money at it. Education makes us feel good. Educated people feel especially good about seeing others get educated.Homes. Everyone knows that the answer is to let the damage be done and let prices fall to where they may. Problem is, foreclosures make us feel bad. Homeownership makes us feel good, and so even if we know that keeping people in houses they can’t afford without reducing their debt doesn’t really do anything, it feels good that people can keep our houses longer.Bottom line: So far, everything we’ve done makes people feel good in their minds, but the connection between feeling good and actually solving problems is tenuous. The fact that almost none of the “solutions” involves real, immediate pain for the majority of the people now should make us deeply suspicious of it all.

I don’t know what his solution is, but mine is decent viable jobs, of which the government continuously fails to address.

Go to http://www.washingtonpost.com/ and read the entire article (“Private Investors Seen as Key”). Pay particular attention to the leverage and loss control provisions. It might be a very attractive offering, particularly if the toxic ABS is priced well beneath its intrinsic value (e.g. current market: $0.35/dollar, intrinsic value: $0.50/dollar).The risk is whether or not a market will develop for these assets during the three-year holding period (the gov’t won’t require leverage repayment for three-years).What’s upsetting is the gov’t willingness to forego any upside participation; investors retain all profits but losses are limited to their original level of participation.

Let me know how that works out for ya!

How would this ******* occur? Answer: The FP subsidiary of AIG will step up to the plate and issue some CDSs. The US will back up (i.e. guarantee, loan, or buy, etc.) the creditors owning the CDSs. The Senate Banking Committee hearings of yesterday disclosed this gig in some detail.

And that article by Mr Panzner was …”Getting Uglier By The Minute”.Commentary on http://www.financialsense.com, Thursday, March 5PeteCA

In private vaults in Switzerland & other countries.PeteCA

MA,Could not agree more. In general I think TPTB get too focused on one theory (trickle down). it should be viewed as one of many tools to be used just like any business, army or society looks at any variety of options/tools to survive and grow. Trickle down has it’s place, it’s just not the end all be all. Neither is trickle up. There has to be a reliable steady mix of tools to make things work.

this is on the money

Wow! I had to listen to the cspan video of the hearing three (3) times and still did not glean half as much information as this post presents. Thank you.

MA

The trickle up-ers will take every penny and save of pay off a small portion of their indebtedness…

Wouldn’t that be good? It would lower their indebtedness and that money floats the banks from the bottom up.. I mean if it was in adequate amounts.Yes there is a problem with the banks still as their current business plan is to get commission on making more and more debt. Sorry, the world has changed and that business plan is dead and will be for quite some time now. If they can’t make money the old fashioned way, maybe they need to close down.But YES it is failing and at this point and any discussion of cause and effect would only be relevant IF anyone actually cared that could do anything about anything. Otherwise it is just to make me feel good because I said it.I don’t think a multi trillion dollar move will do it unless it was targeted directly at the debt that is causing the problem. In other words, directed at the consumer. Not to lend them more but borrowing in their name with the understanding that they get to pay it back over 50 years in taxes. You know the old routine of refi and consolidate.Then the consumers have disposable income to purchase and the economies of the world have someone to produce for. The way things are going under the current plan, the money is being poured into a black hole and no one is benefiting except maybe a few top execs.

Dow crossing through the bottom of the current trading channel (6500) at about 2 pm Eastern time today. Bye Bye market.I don’t think that Obama is going to get his wish about stabilizing US unemployment. It’s headed the other way. This is going to cause a lot of angst in Washington DC.PeteCA

via CR (A must Read)Fed’s Hoenig: ‘Too Big has Failed’http://www.kc.frb.org/speechbio/hoenigPDF/Omaha.03.06.09.pdfhttp://www.calculatedriskblog.com/2009/03/feds-hoenig-too-big-has-failed.html

The man sounds more like an anarchist than a vice president of the United States.”His words leap across rivers and mountains, but his thoughts are still only six inches long.” E.B. White: World Government and PeaceGod help us!

Good news guys! Turns out we here at RGE are all just suffering from a particularly acute case of “irrational pessimism”! Prescient? Nah. Pessimistic, apparently.Get a load of this:Markets face ‘irrational pessimism’Friday March 6, 1:45 pm ETBy Rachel Beck, AP Business WriterNew extreme in US stock sales leads to ‘irrational pessimism’ among investorsNEW YORK (AP) — You’ve heard of “irrational exuberance,” right? That’s the expression Alan Greenspan coined more than a decade ago when he warned that investors could be bidding stock prices too high. His worry was that escalating asset values were trumping reality.ADVERTISEMENTThese days, the opposite seems to be the case. Call it “irrational pessimism,” a fear that stock prices are headed in only one direction — lower and lower — because asset values and profits seem certain to fall.Caught in the vortex of this new hopelessness are once-pristine blue chip stocks like General Electric Co., whose share price has plunged 45 percent in the last month to below $7 a share. Investors have become increasingly worried that losses at its financing arm could put a crippling dent in the conglomerate’s capital base.But before buying into the notion that all is lost, it’s worth remembering that stock indexes today are almost exactly where they were in 1996 when then-Federal Reserve Chairman Greenspan issued his warning.Investors ignored him then, pushing stocks higher for more than three years until the Internet stock bubble burst in 2000. Now, a growing number of markets experts are saying the time may be near when the Cassandras of doom should also be ignored.”You can get to emotional extremes in both directions of the market,” said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors. “Savvy investors think in those terms and they know how to get that to work in their favor.”By that, he points to the short-sellers who are playing a big role in what the market is doing today. They make money betting stocks will drop, and have set the tone in this current decline, which began after the market reached record highs in October 2007.Peter Sorrentino, senior portfolio manager at Huntington Asset Advisors, takes that one step farther. “The shorts are staging raids on our companies,” he said. “For the last two years, the best bet you could make on the market was against it.”Sorrentino knows that because his firm owns 6.4 million shares of GE, and he can’t understand why the stock is trading where it is given that parts of the Fairfield, Connecticut-based company by his count are worth a lot more than where its shares are trading now.He’s convinced the shorts have made it tough for anyone in the market — at GE and beyond — to think positively because they could get burned. Therefore, investors have decided it is easier to follow than fight them, even if a company’s finances say something else.A case study of GE illustrates how this may be playing out. Even though GE is in many different businesses from jet engines to entertainment to lending, investors seem to be focused entirely on its finance arm, GE Capital. Once a major profit generator for the company, now there are worries that it is short on liquidity and could post big losses.GE’s CFO Keith Sherin went on GE-owned CNBC Thursday to get the message out that there was no “time bomb” brewing at the unit, which he said would be profitable in the current quarter, had ample capital and had set aside money to cover any of its losses.That followed lots of other efforts in recent days from the executive suite — insider stock purchases, video statements from CEO Jeffrey Immelt and other spin — to shift investors’ thinking about such gloom.”GE put out a press release (Wednesday), citing all the good things it is doing to drive away the demons, but Jeffrey Immelt is no Harry Potter,” said Kathleen Shanley, an analyst at the bond research firm Gimme Credit.That investors haven’t responded positively may be due to the fact that 1.5 percent of GE shares are out on loan to short sellers, nearly double the level at the start of the year, according to Data Explorers, a short-selling data research firm based in New York.The shorts’ efforts have then been backed by nervous individual investors who now have reason to sell since GE announced plans Feb. 27 to cut its dividend for the first time since 1938 to save $9 billion a year. GE will pay shareholders a 10-cents-a-share dividend beginning in the third quarter, 68 percent lower than the company’s original plan of 31 cents.All that selling is putting fund managers on edge, especially foreigners like sovereign wealth funds that had counted on GE as a safe investment. Of particular concern is whether GE’s triple-A credit rating could be in jeopardy if its finance arm lacks capital.And then adding to the downside pressure is what is going on in the credit-default swaps and options markets. Investors are taking out additional insurance to protect themselves in case GE defaults on its debt, and then they are hedging that with the purchase of put options, which gives them the right to sell shares at a specific price. Some investors in recent days bet the stock would fall to $2.50 by June.All that shows how GE’s stock has been ravaged by “irrational pessimism” — fed by the shorts but potentially without much to back it up.Analysts at Deutsche Bank said Thursday that they valued GE’s industrial arm at $12 a share — almost double where the stock currently trades.Sorrentino goes even higher, putting the industrial business at $20 a share. Add to that, he says, its NBC Universal entertainment division, which could fetch somewhere around $4 to $6 a share, and around $7 to $9 a share for its medical systems business.The negative environment in the overall market is driving away prospective buyers, said Darin Newsom, senior analyst at the Omaha, Nebraska-based market information company DTN. “Right now no one wants to support this market,” he said.That may be driven by fear instead of reason.Rachel Beck is the national business columnist for The Associated Presshttp://biz.yahoo.com/ap/090306/na_us_wall_street_blues.html

Where is confidence? Most of your posts are intellectual drool. What does mom do with the spit? Wipe it up. Then feed another spoonful of mashed peas.It might take longer than expected. The results will not be as rosy and as soon as the big baby Rush would like. But someone has to plug in the pacifier into this man’s dirty mouth and his bad attitude which is very, very anti-AMERICAN.Long live freedom, not a person who wants to squash it.

Second.

I’m not sure all these folks are buying much these days….Broader Unemployment Rate Hits 14.8%If a half-percentage-point increase in unemployment rate isn’t ugly enough for you, there’s more from your government statisticians: almost a full percentage point jump in a broader measure of unemployment.The Labor Department reported today that its most comprehensive measure of joblessness hit 14.8% in February, from 13.9% in January. That’s just about 1 out of 7 Americans who are either unemployed and looking for a job, want a job but stopped looking, or part-timers who want full-time jobs.We’ve already blown through the prior high point of the data series, which the Bureau of Labor Statistics started in 1994. An even broader (since discontinued) series hit 15% in late 1982, and we’re likely to fly right through that one next month.The 8.1% official unemployment rate, up from 7.6% in January, only counts people who are available for work and actively looked for a job in the prior four weeks. The 14.8% figure (known as the “U-6” by the BLS) includes everyone in the 8.1% figure, plus people who say they want a job and looked for work recently, along with people working part-time because they couldn’t get a full-time schedule.How high can the U-6 go? Just looking at forecasts for the main unemployment rate, the broader measure would hit 17% by the end of next year. Some economists say 18% to 20% — 1 out of 5 people unemployed in some way — wouldn’t be terribly surprising. If employers aren’t hiring, job hunters would be more likely to give up hope and stop looking even if they do want jobs. After the 2001 recession, employers took roughly two years to resume meaningful hiring and competition was stiff for the jobs available. Anyone searching for a job during this recession is already aware of that grim reality. –Sudeep ReddyPermalink | Trackback URL: http://blogs.wsj.com/economics/2009/03/06/broader-unemployment-rate-hits-148/trackback/

Just Crossed 6500 again

When the national saving rate went negative in 2005, it wasn’t as bad as it was made out to be because “savings” had taken on a new form.The new world savings had become 401k. That effectively replaced peoples long term savings plan, thus allowing them to spend their current/short term savings.The backup to that plan was the house. The house was the medium to long term savings plan (and short for the flippers).So the savings going “negative” didn’t really reflect the true overall savings……but the horror story was… the “new savings” was being priced incorrectly, giving people a false belief of what their “new savings” looked like. The house dropped, the 401k dropped. Both in ways that 3 years ago would’ve been called IMPOSSIBLE!!! (except to the few of us who saw this wreck coming)So for the trickle up-ers, the new level of what they need is very large. Funding their indebtedness, and trickling up through savings accounts at banks, doesn’t provide banks the revenue to grow. All it provides is the ability to make some of the payments.That maintenance level sounds fine… but that does not allow for the downstream net payments of overall worldwide debt to be paid.Look at it like this… You know the current debt load is HUGE. Tomorrow’s is even bigger. With that in mind, sustainable cash is not good enough. GROWTH is needed no matter what to meet the obligations that are both existing (and massive) and coming into creation (which will be even larger).Debt needs destroying. …but when debt is destroyed, so is credit. (The repayment of a loan is like a dollar expiring) Yet credit is needed to meet the current obligations to which we are short on. …and why are we short? The gutting. The float of nonservicing redemptions from the financial system. All of the alchemy that in turn was spent, was destroying 2 dollars for every 1 that really existed. This cycle repeated itself to where alchemy (monopoly money) was muuuuuuuuultiiiiiiplyyyyyying. 4 spent for every real dollar. 8 spent… 16 spent……and the float existed on this thanks to 401k, pensions, HouseATMS, etc……and now that money isn’t there for the trickle up-ers, so the funding needs to be huge!!! …and Hugex2 if it’s to preserve the growth that is needed by our financial system to meet its obligations.Miss Americap.s. Eco<M I lie the way you write. You stream your thoughts together in a much more concise way then I seem to be able to. Keep up the good woork and I’ll catch you at BT.

Did he say they weren’t? Seems to me he’s one of the few making the accusation. Credit should be given where credit’s due, IMHO.

this is how we get to dow 4000Current 40003m Co $41.01 $25.02Alcoa $5.03 $3.07Amex $9.87 $6.02AT&T $22.04 $13.44BOA $3.10 $1.89Boeing $29.70 $18.12Caterpillar $22.73 $13.87Chevron $57.07 $34.81Citigroup, Inc. $1.01 $0.62E.I. du Pont $ 16.63 $10.14Exxon Mobil $62.48 $38.11G E $6.96 $4.25General Motors $1.41 $0.86HP $26.59 $16.22Intel Corporation $12.18 $7.43IBM $84.25 $51.39J&J $47.28 $28.84JPM $15.34 $9.36Kraft $21.34 $13.02McDonald’s $51.45 $31.38Merck $22.45 $13.69Microsoft $15.02 $9.16Pfizer Inc $12.49 $7.62Coke $38.65 $23.58Home Depot $17.63 $10.75Procter & Gamble $44.77 $27.31United Technologies $38.00 $23.18Verizon $26.73 $16.31Wal-Mart $48.29 $29.46Walt Disney $15.49 $9.45

A comment from ‘Terry’ over at Baseline Scenario:”OK, someone has to ask the question: What of economic value is left in the global or US financial system that makes it worth saving by governments and taxpayers?Whenever the phrase “increased systemic risk” or “too big to fail” is thrown out, it is almost always because the speaker, in hushed and worried tones, expresses concern about the stability of the financial system. What is left in the system that makes it worth saving? How much should we pay to save those parts (& no others)? What would really happen if AIG, C, BAC, HSBC, RBS, GE,… were denied access to public funds and went bankrupt?I’m tired of the innuendo about the massive global financial and economic chaos that would be generated by upsetting this financial system. Someone has to spell out what would happen and why we should care.”Thoughts?

Ha ha ha! last second save in the market today? Could be just some program trades – based on the current trendline. Or might be a little bit of interference. Doesn’t matter. The deleveraging process is inevitable. Falling sonsumer demand. You can’t fight that.PeteCA

VERY good question. Not all banks are created equal. Some banks have remained conservative and maintained good loan standards. Why should these banks be lumped with the bad ones?? I don’t blame them a bit for raising objections.PeteCA

President Obama was in Columbus, Ohio, today to promote the economic stimulus package; why not from Washington, D.C.?Because, addressing the 25 recruits in the graduating class of a police academy whose salaries will be funded by the stimulus funds provides a nice photo op. And the tough, investigative, hard-as-nails White House press corps hits the airwaves this a.m. with…actual news lead-in:“President today sees first jobs created from his stimulus package.”No mention I could find about the extra costs the stimulus incurs selling it to the people…like the taypayer-paid national sales trip to sell the taxpayer-funded program to the taxpayers by the taxpayers’ chief executive. Air Force One floats along at around $68,000 an hour — giving new meaning to the phrase…letting your money work for you!Pity some of our founders’ respect for the duties of the chief executive and protection of the public purse didn’t come down to recent presidents.Jefferson, for example, never made a single public address while he was president, even sending along his first inaugural address in written form to Congress for someone else to read.

If the world is collapsing do you really think you’re getting your electronic air money out of a foreign country without resistance. Or are you hiring a huge truck to cart around your gold bars to be ambushed. What exactly would be the plan. I was thinking about it this morning, showing up in Cayman only to see a gun pointed at my face, and being told it’s gone, we needed it. Might be a better idea if you had items to barter with besides money if this is the direction we’re going.

Krugman has a new piece up. A couple snips:”by using taxpayer funds to subsidize the prices of toxic waste, the administration would shower benefits on everyone who made the mistake of buying the stuff. Some of those benefits would trickle down to where they’re needed, shoring up the balance sheets of key financial institutions. But most of the benefit would go to people who don’t need or deserve to be rescued.And this means that the government would have to lay out trillions of dollars to bring the financial system back to health, which would, in turn, both ensure a fierce public outcry and add to already serious concerns about the deficit. (Yes, even strong advocates of fiscal stimulus like yours truly worry about red ink.)”and this, which I found interesting:”it’s very hard to rescue an essentially insolvent bank without, at least temporarily, taking it over. And temporary nationalization is still, apparently, considered unthinkable.”Taking a page out of Dr. Roubini’s pagebook? And ever so gently pushing forward his agenda? Interesting…

From an above post of Leap statement:”the global system is simply out of order; a new one needs to be built instead of striving to save what can no longer be saved.”@ We sure do live in interesting times! on 2009-03-06 09:31:28imo this is correct and the term “simply” is also correct.However, as function proceeds form, designing a new economic system is not yet possible as we do not have enough data to form an opinion as to what the primary function of the next economic system will be!One thing that is certain however, it will NOT be a consumer driven (toys 4 us) economic model and once you get your Mind around this, the clearer your ‘fish-tank’ model becomes.SOoooo, I posit further rapid decline; much more as we are nowhere near the bottom and the balmy calms that will be found there and,as the dust has not yet settled, we have no possibility of grasping the energized trends that will define context of the future and hence the design details (read: parameters) of the new global economic systems.time to focus on survival and the consideration of the values that you would like to define the essential and basic fractal (building block) for the next Epoch and this should be done at family and tribal or community levels.As I have said before, “leadership” is done and is focused on its own survival which is unsustainable; they will soon greet their hard fate of natural justice; their work is done, here.If you wish to build ‘civilization’ choose not “leadership” from the noisy and eager; this is your lesson of the day – as it is so written and remember, “all that needs to be said, has been said”.If you choose pioneering; trust only yourself. We are pioneers.Ho hum

Words you need to take to heart.

Wow at this rate there will be 7500 jobs by the end of the year minus the ones lost due to the cost of photo ops.

Gosh, you’ve given me some more short ideas. Take a look at Kraft — stripping out non-recurring events, NI + depr – Cap ex < dividends; it has negative net worth; it has continued to use its cash to buy its own shares; it likely has debt coming due. The drawback is a short player must pay the 5% dividend to the long holder.It’s a fine company. It’s just overleveraged. Maybe that is a metaphor for the American economy.

I think in the new system we should have a flat rate tax system and people should be taxed on their savings anually not on their earnings or spending. This would ensure that more money will remain in circulation and savings can be used to run credit system hence creating jobs ect. Resulting system will also make it possible to have smaller govnmt. Any input:)

What do you mean by taxing savings annually? Do you mean taxing the value of the account from year to year (meaning that the principal, if not added to, would deplete on an annual basis), or do you mean taxing the earnings on savings (ie–interest). Would it only apply to savings accounts, or also to anything left in checking accounts too? Does that mean property taxes would be done away with? How about CDs and 401Ks and other retirement accounts? For that matter, how would those approaching retirement age be able to save for the time when they’re not working?

Well there’s a beautiful line of propaganda .!! If it was’nt for the uncontrolled financial mess this past 10 years,no one would have to intervene in the Market Place.I’ts funny how Obama is suddenly responsible for the 10 year old mess.The “Remedy”is being proposed by the same people who allowed it to happen in the first place.All they are doing so far is bail out the Bank CEO’s and other Controlling Interest investors who were legally scamming the system.No one in a position of power wants to be the person who takes the Hair Cut.In the meantime they are being bailed out at the public’s expense.So what else is new.They control the system .

You’re talking about high rollers here. Some of the financial elite of this country. They can do things that the little guys (like you or me) can’t consider. It’s set up through companies that operate outside the US sphere of influence. When the elite want to move assets, they can do it. They don’t get their fingernails dirty in the process.PeteCA

FYI – a whole lot of changing going on…Is it time to overhaul the Dow index? NOTE DATE: FEBRUARY 23 2009February 23, 2009 — NEW YORK (Reuters) – There was a time when a tumble below $10 in the share price of a company in the Dow Jones industrial average meant ignominy.Now, after vertiginous stock market falls in recent months, five of the venerable index’s 30 components are trading under that price, including its two oldest members, conglomerate General Electric and automaker General Motors .Citigroup stock plunged below $2 on Friday, making it cheaper than a medium cup of coffee at Starbucks.Continued membership in the Dow of these battered stocks, which include aluminum producer Alcoa and Bank of America , is raising questions over whether the index should overhaul its lineup to include the likes of bank Goldman Sachs or Internet company Google .It has also stoked a decades-old debate over whether the 112-year-old index is really an accurate snapshot of the overall U.S. economy.”It’s been out of touch for a while,” said Jocelynn Drake, an equities analyst at Schaeffer’s Investment Research.”There are companies out there that are more significant to the market and they have not appeared in the Dow and there are others that should have been kicked out.”But expelling stocks because they are cheap would fail “to tell the story of the U.S. economy,” said John Prestbo, editor and executive director of the Dow Jones Indexes.”Companies that have sunk so far down we’ve kept because they were still telling the story of the financial industry,” said Prestbo, who helps select the companies in the Dow.He declined to comment on the possibility of an index makeover but did not rule out the idea…ELITE GROUP FACES CHANGEThe index is rarely altered but when it is, it is done so at the discretion of a team of editors at The Wall Street Journal. Changes in its makeup affect funds such as Diamonds Trust , an exchange traded fund that mirrors the Dow.It was last changed in September when food company Kraft Foods replaced American International Group after the U.S. government took a large stake in the insurer.Now as shares of Bank of America and Citigroup plumb fresh lows, criticism is growing that the Dow has lost its luster.”I was surprised Citigroup was still a part of it,” analyst Drake said. “GM is another one. I understand them trying to get a slice of the automotive sector but … it’s not a market mover anymore.”Drake added that Google and computer giant Apple are more influential in the stock market.Citigroup and Bank of America should be swapped for a financial company with a higher share price, such as insurer The Travelers Co or Goldman, said James Bianco, chief executive officer of Bianco Research Securities.This would paint a more accurate picture of the financial sector because the Dow is a price-weighted index, where cheaper stocks count for less. For every $1 lost on a Dow component’s stock price, the index sheds roughly 8 points.That means if the three current cheapest stocks — Citigroup, Bank of America and GM — shrank to zero, the Dow would lose less than 60 points or 0.8 percent based on Friday’s close, a sign of how much the sector has declined.”The financials have a much larger bearing on the market than is reflected in the Dow,” Bianco said.However, while the two banks have small market caps, their fate is key to the overall economy and therefore stock prices, countered David Joy, chief market strategist at RiverSource investments.”Symbolically what happens with them has a lot of important implications for the broader economy,” Joy said.Added Prestbo: “I read somewhere that GM is a metaphor for the U.S. economy because it’s in damn trouble.”If a company is still big enough to be considered a metaphor for the U.S. economy, then wow.”http://news.moneycentral.msn.com/ticker/article.aspx?Feed=OBR&Date=20090223&ID=9633652&Symbol=AACURRENT COMPANIES IN THE DOWCompany-Symbol-Industry3M-MMM Diversified industrialsAlcoa-AA-AluminumAmerican Express-AXP-Consumer financeAT&T-T-TelecommunicationBank of America-BAC-Institutional and retail bankingBoeing-BA-Aerospace & defenseCaterpillar-CAT-Construction and mining equipmentChevron Corporation-CVX-Oil and gasCitigroup-C-BankingCoca-Cola-KO-BeveragesDuPont-DD-Commodity chemicalsExxonMobil-XOM-Integrated oil & gasGeneral Electric-GE-ConglomerateGeneral Motors-GM-AutomobilesHewlett-Packard-HPQ-Diversified computer systemsHome Depot-HD-Home improvement retailersIntel-INTC-SemiconductorsIBM-IBM-Computer servicesJohnson & Johnson-JNJ-PharmaceuticalsJPMorgan Chase-JPM-BankingKraft Foods-KFT-Food processingMcDonald’s-MCD-Restaurants & barsMerck-MRK-PharmaceuticalsMicrosoft-MSFT-SoftwarePfizer-PFE-PharmaceuticalsProcter & Gamble-PG-Non-Durable household productsUnited Technologies Corporation-UTX-Aerospace, heating/cooling, elevatorsVerizon Communications-VZ-TelecommunicationWalmart-WMT-Broadline retailersWalt Disney-DIS-Broadcasting & entertainment’Chevron and Bank of America were added in February 2008, and Kraft Foods, September 2008.http://en.wikipedia.org/wiki/Dow_Jones_Industrial_AverageThe top 10 stocks typically account for about 20% of the S&P 500 index weight and performance, as shown in the table below.Top 10 Components of S&P 500 Index By Weight As of March 2008Company-Float Adjusted Market Cap(Millions of dollars)-Index WeightExxon Mobile 453 3.93%General Electric 370 3.21%AT&T 231 2.01%Microsoft 227 1.97%Procter & Gamble 216 1.87%Johnson & Johnson 184 1.60%Chevron 177 1.54%Bank of America 168 1.46%International Bus. Machines 159 1.38%JPMorgan Chase & Co. 146 1.27%Top Ten Total: 20.2%Source: Standard & Poor’s.http://www.investopedia.com/articles/exchangetradedfunds/08/index-debate.aspCOMPARISONDow Price v. Cap Weighted (posted May 4, 2007)Stock- Cap Weight- Actual WeightAA –0%-2%AIG-3%-4%AXP-0%-4%BA-0%-6%C-7%-3%CAT-0%-5%DD-0%-3%DIS-1%-2%GE-21%-2%GM-0%-2%HD-1%-2%HON-0%-3%HPQ-1%-3%IBM-1%-6%INTC-4%-1%JNJ-3%-4%JPM-3%-3%KO-1%-3%MCD-1%-3%MMM-0%-5%MO-1%-4%MRK-1%-3%MSFT-14%-2%PFE-7%-2%PG-3%-4%T-6%-2%UTX-0%-4%VZ-2%-3%WMT-5%-3%XOM-12%-5%http://247wallst.com/2007/05/04/dow_price_v_cap/image-3-indu_theor_table_3_tphqjpg-for-post-11619/

F**kery… I first heard this in Jamaica 80s. Refers (no pun) to any messed up situation or loosely to anything going on in Amerika.

@ spirit. above..worlds on worlds.He , who through vast immensity can pierce,see worlds on worlds compose one universe,observe how system into system runs,what other planets circle other suns,what varied Being peoples every star,May tell why Heaven has made us as we are..alexander pope, essay on man

Ahh yes; but if they do not invest their monies it will be inflated away now won’t it? Hold onto them accounts with all you can as they will ‘halve’ their value come ‘heck or floods’ (figure out that one son).Hardee har har har har. Ain’t this grand fun?

Biden – I say his thoughts are 5 cm long!he makes Obama look good, simply because he is small in stature.brilliant he said?we were duped by the election hpye. Time will tell that we made a mistake.

Obama led tax increase on all hard working American will crowd out private economic growth and bring Obama led depression. Try get a government paid job, I heard, it is better paid than private sector and best benefit, health care, and pension fund benefit. Too bad, all your hard-money will be tax away.

“just start cutting costs”??? doesn’t matter!!! the government is expending at all level. soon the government will raise tax on you and spend your money on your behalf. Especially with Obama and Democrats led congress.

why not just abolish/confiscate all kind of saving. so all money will remain in circulation? why dont you come out and suggest that? your freaking COMMIE. GO BACK TO RUSSIA, SICK COMMIE.

g,if you missed it, go back two threads and check the mike whitneypiece on blowing up an economy as it relates to this.the more you have, the more you have to lose. period.risk of loss can only be “eliminated” by a perversion of truth butyou will find this perversion corrupts the store of what you have.so it goes.

Nobody ‘knows’ when this current deprecession (not quite a depression and certainly not quite a typical recession) will come to an end. Nobody. I hope that more of the elite minds start stating that they just don’t know. To say otherwise will provide false hopes or instill misguided reactions.This is an open-ended crisis which unfortunately will only react to corrective actions (if there are any) in bits and pieces. The entire picture is too complex to define much less forecast an outcome. The derivative calculus alone proves it.I believe this deprecession moving target will end when it’s damn good and ready. Plan accordingly.AM

@Guest II 09:59:34: “What is your solution, Guest [to Obama’s recipe for disaster]?”There needs to be an end to these investment banker bailouts and we have to let the “Too Big to Fail” who’ve failed, remain failed. It does no good to talk about a solution when a cartel of underworld banker businessmen control America’s money supply, and thus all commerce and industry, not for the benefit of the economy but for the benefit of their portfolios and power. It’s just not worth the time or space—although the answers are all there, in the cornucopia of wealth produced by America’s miraculous economic beginnings, in Ludwig von Mises’ correct theory of the business cycle, in the writings of F.A. Hayek and Murray Rothbard, in the brilliant works of Henry Hazlitt and the writings of Ron Paul.In the 1960s, the once-arch Keynesian London “Economist” proclaimed that “Keynes is Dead,” and he remained dead until about a year ago when the FDR tax-and-spend economists such as Krugman came out of ignominious shame, emboldened by the public disgrace of George Bush and the failed policies of his “neo-conservative” Trotskyites.Up until that point, it was grudgingly being acknowledged that the money supply and bank credit play a leading role in the Mises theory of the business cycle. If, as Murray Rothbard said, when that rediscovery, that renaissance, comes once and for all, “the whole concept of a Council of Economic Advisors will be swept away, and America will see a massive retreat of government from the economic sphere.“But for all this to happen, the world of economics, and the public at large, must be made aware of the existence of an explanation of the business cycle that has lain neglected on the shelf for all too many tragic years.”I predict that within the year we will either see Keynes reburied once and for good, or time will run out for the United States as a free, economically vibrant society.FDR’s New Deal represented failure and LBJ’s Great Society represented false prosperity. The heart of the American economic miracle always was and is freedom: its lifeblood free enterprise.Which will it be — freedom or free lunch?Guest

Likely the best concisive analysis I have read to date on why Obama’s administration is acting the way it is and why we’re where we are. Credit must be given to Lew Rockwell’s site for having this columnist. Absolutely brilliant in illuminating the obvious which most of us by now have ferreted out but have not articulated quite as well.William L. Anderson needs more exposure.This is a must read. Impressive to say the least.AM”It Is Time to Admit the Obvious: The Political Classes Deliberately Are Blocking an Economic Recovery”http://www.lewrockwell.com/anderson/anderson240.html

Lucy, I’m sorry all this has happened to you. So disappointing for you and your family, I’m sure.

I would respectfully disagree. Google produces TRUTH. The Truth is invaluable. Can’t imagine they can gave the equity of Truth away at a measely 85 bucks.With Obama getting elected the ‘safety’ of the suburbs and the need for a car will become irrelevant.P1AQL

Stop denigrating anarchists! Some of the finest thinkers have been anarchists. These folks can’t compare!Mark

Notice how all these Ditto Heads hide (as “Guest”)?I’d love to see Limbaugh in as president. I’d be able to finally collect on a wager that beheadings of leaders would make a come back…Mark

HSBC has NOT collected any bailout money.Mark

Rich, I’m going on a 2 week drive down thru Nevada, Arizona and back thru New Mexico and Southern Utah and will be mostly out of touch. Will have a lap top but know the area and there is little chance for a wifi connection most places. We are camping mostly with a tear drop trailer. Getting away from all the noise for a few weeks and hopefully talking to people who don’t have a HDMI port in their foreheads.Sounds like the system is going to implode, no matter what THEY do. I’ll have enough cash and gold in case the credit system goes down while I’m out. I am starting to wonder how bad and what if while away.Crazy times we are living thru. Some where lost between Orwell and Heinlein. Or the shows Lost and Damages. This shouldn’t be happening to the US.I loved our discussion. Thanks. It helps to knock these things around to get a better grasp on them.I sure hope this doesn’t get as bad and messy as I think it could. Wouldn’t be good for anybody. Us or TPTB types. No one is going to win if this melts down and gets out of control.As for the BT, I haven’t felt much like posting there as it seems a little confused still. Goals are good but so far the system by which this kind of dialogue happens is awkward. I have intended to email Tom and let him know but just get so busy inside my own head and time goes by so fast. Hope it is smoother soon. Will check in as I can.

The Professor needs some new adjectives to describe the recession. “Ugly,” “Protracted,” and “U-Shaped” are getting kinda old.May suggest, “Sweaty,” “Filthy,” “Disgusting,” and “Smelly.”

Change is in the air. For those that gots, change is bad. For those with nothing, change is good.Good to see you lurking LB.

LB,If you are still lurking, I would be interested to hear if the people you refer to in your corner of the world are paying any attention to the depletion of resource base and other physical constraints resulting from our existence in the closed system of our little planet…it seems to me that most of the “economically literate” fail to be “biosphere literate”As a wise individual recently stated “I’m afraid Gaia is going to be a real hardass when it comes to grading this final project in “ecology 100″ and a lot of people are going to fail the course.”

Short answer is “not much”. Everyone still aspires to the big house, big car, luxury life style ideal they have imported from American TV and movies.Looks like Gaia is going to get an assist from Deflation in making her point about the need for thrifty use of resources. Perhaps a time out due to economic collapse is what mankind needs for a basic reassessment of life style targets.

Humans are not pollution. Humans are the resource that gives value to all other resources.I feel sorry for those of you who hate the humans.are you “…Keeping one step ahead of the persecutor within…” (Bob Dylan)oh and: NEW THREAD

You’re right, the alternative would have been soooo much better, as Grandpa McCain is demonstrating every day.

On pay cap, what we really need is to go back to the rules when the stock holders actually controlled the boards of directors who then worked for the stock holders again. Instead of this incestuous relationship whereas the the CEO picks the board and the board picks the CEO and they all get together to decide what they are worth. We don’t need pay caps, we need functioning companies that respect the stock holders. In the current set up, the lien holders are more important than the owners of the company and the CEO and Boards are a bunch of incestuous predictors.On education, it isn’t that everyone can’t be educated to some level. The trouble is that everyone is different and there are many different ways different people learn. Some do well with conventional books and others need audio video and others really need hands on. Then there is the difference in what people are interested in. Some students and society would be better off if they were outdoors planting plants while others as an apprentice in an mechanics shop or learning about electricity. The trouble with our educational system is that it was designed for the Industrial Revolution where thing were less complex and students really only needed rudimentary math and writing skills. Our society has changed and become much more complex yet we are still trying to cram all students into a one sized fits all box with an outcome more applicable to the needs of society 50 years ago. So many students are totally bored and feel totally out of touch with what is being crammed… Garbage in equals garbage out.But the solutions are just to make more laws and spend more money on the same production line that is failing. I see our educational system in the same light as GM. Yes they still produce a product but it is overly expensive and not suited to the needs of the customer. Their solution to growth wasn’t to make a better car but to buy up other producers who also couldn’t make a decent car. So they got to be the world’s biggest by acquisition rather than innovation.And yes it is the incestuous management who some how believe that paying themselves ungodly sums of money make them valuable. It is also the country’s health care policies and the unions and the …. the bottom line is US education and US manufacturing were both unable to change with the times, for similar reasons, so are now failing us.We probably will be better off allowing them to fail and then picking up the pieces so as to not be forced to recycle all the garbage attached to their current form.

“Any leader who is not complicit in the torture and murder of innocents in the name of furthering the Corporations of America will do, actually, AM.”Well then as I said, please give us a name of that leader that represents a nation which operates its business under a lily white idealogy and at the same time also affords its citizenry a Constitution, Bill of Rights, and other sundry details that at least adhere in principle to equal protections under the law.Please.AM

Prof Peter singer says that America is least charitible among all the industializes countries by gdp ratio.

A couple of minor points. Homo Sapiens is nowhere near four million years old. 100,000 max. Plus, I believe there will be massive evidence of human existence on this planet for millions of years to come, IMHO.

But I, I’m the PRIMERO! URRRAAAAA

Quid pro quo, KPMG, tax shelters, audits of DOJ and unemployment. U-6 unemployment is 15% yet KPMG remains employed by many of its clients including the DOJ. Word on the street is KPMG’s revenues are down at least $300 million which seems low given the number of failed financial institutions KPMG audits whose financial statements were riddled with tax fraud (at least according to Mike Hamersley) and accounting fraud (which apparently only the markets could figure out, right Citi). When are the massive layoffs at KPMG going to start as apparently accounting fraud is out of vogue? Word on the street is KPMG not only audits a disproportionate amount of Insurance companies engaging in accounting fraud and tax fraud but KPMG’s own purported Bermudian fraudulent Captive insurance company, Park, was engaging in accounting and massive tax fraud. How can this be? KPMG as part of its deferred prosecution agreement with the DOJ was given the audit of the DOJ, perhaps, a quid pro quo for KPMG agreeing to throw several of its tax partners under the bus and destroying theirs’ and their families lives, pay a large fine, be monitored by a fellow who used to work for the government as head of the SEC, Breeden (millions in fees earned by a former government official (more quid pro quo)); a deal struck by Flynn, Loonan, Bennett, Taft and Holmes. Which partners will KPMG throw under the bus next to help in avoiding indictment by the DOJ for the massive $100s of Billions in accounting fraud KPMG assisted their financial clients in purveying against the public and the markets. Is it possible the KPMG partners believe that since KPMG audits the DOJ the massive accounting fraud they purveyed will be allowed? Are the DOJ accounting statements riddled with fraud like most of KPMG’s clients? If I were a KPMG partner I would not count on it judging by what the U.S. Government did to Sadam once a good friend of the U.S., is the same type of devastation and destruction coming to KPMG? Word on the street is KPMG through its captive insurance company, Park, not only defrauded its partners (and the KPMG Board of Directors) by kiting current legal claims into insurance liabilities with the help of none other than AIG but committed massive tax fraud itself with the approval of KPMG’s internal legal counsel Loonan and Taft . In fact, the world renowned whistleblower Mike Hamersley testified to the Senate and DOJ, that the type of “tax structuring” KPMG’s captive insurance company entered into (and many of KPMG’s clients) was in fact, tax fraud. And believe me, Hamersley claims he knows tax fraud when he sees it since while at KPMG he purveyed much of this type of tax fraud for his clients, the very same tax fraud he decried to the Senate and DOJ about while destroying the lives of many families, the emails are there for the world to see yet no one looks, why? Does KPMG believe it and its partners are immune from prosecution for continued and massive accounting and tax fraud because of the “deal” it struck to audit the DOJ? If the U.S. government’s behavior in the past towards its presumed friends, KPMG should not count on it and if you are a partner at KPMG that purveyed accounting and tax fraud (at least according to Hamersley), you can only expect to be thrown under the bus for a life of ass raping just like KPMG, Flynn, Loonan, Bennett, Taft and Holmes did to its tax partners (over rather trivial sums compared to the massive financial fraud presently destroying this country). Of course there may be hope since Hamersley a tax fraudster by his own definition has a high level government job destroying lives over the very same type of tax fraud he used to commit not withstanding the fact the government knows he committed tax fraud (based on Hamersley’s own emails), Quid pro quo?

Thanks for the link. I tend to have time only for Nouriel – but obviously there is a lot more to RGE.

You mean like all the other countries that gave their part of $15B to Africa to fight aids?AM

Or like all the other countries that provide massive medical and subsistence assistance when natural catastrophes hit around the globe like the U.S. does?Yeah, the Netherlands. Sure.AM

Canada has more corporate corruption than the U.S. It’s just that they hide it well, taking advantage of goodwill and a reputation built during times gone by, when Canada was genuinely a country with principles. Canada today never punishes their corporate gangsters. In fact, the country seems to be some sort of safe heaven for these types. May I bring your attention to Nortel and it’s former CEO John Roth, who presided over the company’s destruction. He walked away with 150M during this mess and no one said boo. We also export these types. May I have a hand please for Canadian born Former WorldCom Inc. chief executive Bernard Ebbers. How about police brutality aplenty? More recently an agitated traveler, a visitor from Poland named Robert Dziekanski was electrocuted (tasered) to death at the Vancouver airport. Obvious abuse of police power. Some would say plain murder, and there is video to prove it. In this case it was decided up front that not one of the four officers responsible will face any disciplinary action.