financial crisis (part what? like, 38?!?)

you know, i have read countless news and opinion articles and blogposts over the last several months about the financial crisis, bailout and other related issues and yet, i still find it confusing. for that reason i have been making a conscious effort to grasp what i consider the most important and yet simple concepts and ideas about it all.

one opinion i have formed and am passionate about is that our current woes have been caused by credit default swaps at least as much and most likely more than by bad mortgages. in spite of my ideas, it seems obama's appointment for treasury, tim geithner, has an agenda which involves bailing out aig and bear stearns to the detriment of some smaller institutions, which were nearly solvent and based on behaviors, likely deserved to be protected more than these. if you want to get into the details, read this article. or, you might even read this blogpost, which actually pointed me to the other article in the first place.

reading the blogpost from oxdown it occurred to me that when numbers start being rattled off i get completely lost. these numbers are just too big for me. i guess it is because i cannot relate to them that once several of them appear in succession, i lose all context. so, here is the thing... (talk about burying the lead.) that main article is advocating the idea of declaring credit default swaps illegal and in that way, providing zero protection for them. this would certainly piss off a lot of influential people, (read: people with money, money invested in swaps either as protection buyers or protection sellers,) but it would be the best thing to do for the economy.

that said, obama's appointment of geithner, (along with the fact obama voted in favor of the initial bailout,) foreshadows the fact that what is best for the economy will not be forthcoming any time soon. it is disappointing obama, geithner and the american public at large do not have the will and fortitude to do the right thing in this case. that said, i believe it is true that politics is the art of the possible, hence why i voted for obama. it is likely this is not really within the realm of the possible (in much the same way ralph nader for president was never really in the realm of the possible.) still, we need to move in the right direction so that the political will to do the right thing exists in the (near) future.

addendum: processes and discussion abound for helping at risk homeowners but action is at a serious premium. read about it here.

epoch

what kind of person are you? as unemployment skyrockets, banks collapse, major industrial giants falter, credit tightens, bailouts are administered without oversight, and every manner of chicken little proclamation can be heard, are you the type of person who just keeps going about daily life as usual or are you the type of person who is seriously concerned and taking personal action you consider appropriate?

i ask because i want to know if you believe things are really all that bad, worse than anything you have seen in your lifetime if you are under say, 70-years-old, anyways.

on one hand we have seen banks collapse before. we have endured higher unemployment. we have bailed out major companies previously. when our economy goes into recession, the world has always followed suit.

on the other hand, our current circumstances look like the perfect storm. it seems as though there is much evidence to suggest things will get substantially worse:

• many businesses which expect to make their profits in the christmas season while only managing to sustain the business during the rest of the year are expected to fail in early 2009 because of the thrifty nature this christmas is expected to be.


• a european newsletter has predicted the collapse of the dollar in summer of '09, which would mean a re-valuing of the dollar or replacing it altogether.


• as businesses fail, employment will continue to rise.


• as our federal government issues bailout after bailout and extends unemployment benefits with those claims rising, all while trying to make payments to china and others on our record, bush-induced, deficit, there has been some speculation we could default on our loans.


• the stock market continues its decline which is severely affecting retirement savings.

driving around town today i thought everything looked normal. traffic seemed normal. the behaviors of the people i saw seemed typical. i could not help but wonder if many people yet to feel the realities of the financial crisis are just going on with life like ostriches. as much as some would suggest that people need to "shop," or spend, thereby showing some confidence in our economy, in order to help loosen credit, restore confidence and get money moving again, that idea is completely wrong-headed. rather, now is the time to save, reduce, re-use, minimize your consumer footprint, in order to be ready for whatever the future holds.

your perspective on all of this could be crucial to you and your family.

ian welsh

i have to direct you to this firedoglake blog entry from ian welsh. if you click on his name in the header, you will go to the post.

ian welsh is pointing out that ben bernanke and henry paulson and all the rest are basically screwing us all over. if welsh is correct america will be the land without opportunity for some years to come. those who have administered this economic bailout, have taken great care to ensure those who caused it will not have to pay for the massive amounts of money recently printed by the federal reserve.

the idea seems to be, according to welsh, that the guy's who hold the levers of control are trying to keep things just barely acceotable to the masses so that later as any amount of prosperity returns, it can be gleaned right off the top to pay for the investment that is this printed cash.

it is a great age we live in. the internet affords us a previously unfathomable ability to communicate. so if bernanke and paulson and obama and even krugman, are willing to sell us all down the river by signing off on all this, we are fortunate to have people like ian welsh who blog about it and are able to translate economic facts and theory into layman's terms. hence, why i am sharing this with you.

martial law in the united states?!?

remember when all those house representatives were standing firm against the bailout bill? in spite of how we were told time was of the essence and we had to pass this thing as soon as possible, nothing too out of the ordinary occurred when it was voted down. so they went back to the table and re-wrote the thing adding hundreds of pages to the piece of legislation.

what else happened? well, representative brad sherman, (democrat from california's 27th district,) enlightened us regarding the tactics which occurred behind the scenes in that interim. it seems bush and paulson and the other major proponents of the bill pressured those who had voted no by warning that if it did not pass, "the sky would fall, the market would drop two or three thousand points the first day, another couple of thousand the second day, and a few members were even told that there would be martial law in america if we voted no."

MARTIAL LAW IN AMERICA?!

sherman goes on to highlight how it was all about employing fearmongering to get this bill passed. he said the sense of urgency was unjustified as he wanted to write a better piece of legislation, sans the pork and without buying back bad investment from the saudi royal family and the bank of china. (his amendment was not accepted.)

if you watch the entire embedded video above you will see that sherman, who was an accountant who worked for the government of the phillipines to track down and acquire deposed dictator ferdinand marcos' money and who taught tax law at harvard, debunks many of the lies associated with the bill.

it is all water under the bridge now as the bill has passed but it is worth watching anyway so you know the details of what is wrong with the bill. ultimately, the bill is a ruse at best. all american citizens should be plenty upset about it.

bail out.

william john cox published an op-ed piece today at thousandreasons.org regarding the bailout. i heard today that naomi klein is advocating some sort of american revolt and i can't help thinking about how george w. bush looks like one of the greatest champions of the wealthy class in all of history.

sign of the apocalypse? newt gingrich is calling for "reforms," including greater deregulation, school vouchers and all the rest of the reagan-thatcher agenda.

i agree with cox. this is betrayal and barack obama is participating, along with for me, feinstein, boxer, and dreier, (of course.) why? obviously they're indebted to the principals.

i guess they have a rationale that posits the bad things that will happen to the economy without it are so bad and will weigh heaviest on the masses, but i went to obama's website and could not find anything but his economic plan without mention of the bailout legislation.

i am not suggesting that anyone should vote for john mccain. but obama has always been the best of those who are electable, (since he despatched hillary clinton anyway.) you would not find dennis kucinich or ralph nader supporting this bailout.

please consider reading cox's article, then please think about voting for someone a bit more radical and less interested in being beholden to anyone other than the people, four years from now. we need real change.

start a new country up

rem's cuyahoga unplugged

i read this piece on a blog this morning and immediately thought of a line from rem's cuyahoga, (off of 'life's rich pageant,) "let's put our heads together to start a new country up."

anyone who feels confused about the bailout and how we arrived where we are today should read this particular article, as well perhaps as the blog on a regular basis. it is an amazing source of little known information.

be forewarned though, it is a depressing story, filled with deceit, cronyism, criminal behavior, lies and subterfuge.

as i read the piece i realized i know someone who has amassed a fortune gambling, as the article describes, on derivatives. this person has dealt with credit default swaps and as the article describes, i believe they have played both sides as a "protection buyer," and a "protection seller." i see too, how as mortgages default and various entities come to bankrupty, the person i know is protected, as the article explains, by the sheer convoluted and confusing nature of all that has transpired, (relative to any single piece of paper.)

it does make one want to go start a new country up. if only... i remember 1983, or whenever it was, when i first heard the song and i thought the line was so hopeful. it conjured like-minded souls for me, who i might meet some day and run off with to explore the world and start up our own new country as it were.

now i am thinking about how we can't start a new country up. we have a country and while we're in poor shape at the moment, it is up to us to fix it. i think the fixing starts with readnig articles like this one, (and you can also click on my title to link to it,) and becoming educated and self-motivated as it relates to questioning authority and pursuing the insight we need to possess to beat back the wolves who would corrupt our country, society, or system again.

not to cause greater depression but here is another article i read from the same blog. this one talks about how the cia began working out new forms of propaganda on the american people many years ago. (it included this picture, which i thought was priceless since this is certainly how i have always seen ronald reagan in my nightmares.)

the article is titled; "the doors, part one," a reference to blake's, (or huxley's,) doors of perception. it is epic in its proportion and it details a great number of things i knew about but without the level of detail the article provides. i suppose some would read this and think it is science fiction but i freely admit, i believe it.

it's long but check it out and if you have a chance, let me know your thoughts.