James Stewart: "I want everyone in every pub and club in the UK to be talking about Financial Services Frauds, Rip Offs and Scams and stopping themselves from being a victim"
Please tell at least 10 of your friends about this web site - the following three links are absolute mathematical fact - the Big Financial Institutions ARE stealing everyone's money - absolute proof - eliminate yourself and your friends from this deliberate FRAUD
America's economy risks the mother of all meltdowns
By Martin Wolf , Tue Feb 19, 1:25 PM ET
"I would tell audiences that we were facing not a bubble but a froth - lots of small, local bubbles that never grew to a scale that could threaten the health of the overall economy." Alan Greenspan, The Age of Turbulence.
That used to be Mr Greenspan's view of the US housing bubble. He was wrong, alas. So how bad might this downturn get? To answer this question we should ask a true bear. My favourite one is Nouriel Roubini of New York University's Stern School of Business, founder of RGE monitor.
Recently, Professor Roubini's scenarios have been dire enough to make the flesh creep. But his thinking deserves to be taken seriously. He first predicted a US recession in July 2006*. At that time, his view was extremely controversial. It is so no longer. Now he states that there is "a rising probability of a 'catastrophic' financial and economic outcome"**. The characteristics of this scenario are, he argues: "A vicious circle where a deep recession makes the financial losses more severe and where, in turn, large and growing financial losses and a financial meltdown make the recession even more severe."
Prof Roubini is even fonder of lists than I am. Here are his 12 - yes, 12 - steps to financial disaster.
Step one is the worst housing recession in US history. House prices will, he says, fall by 20 to 30 per cent from their peak, which would wipe out between $4,000bn and $6,000bn in household wealth. Ten million households will end up with negative equity and so with a huge incentive to put the house keys in the post and depart for greener fields. Many more home-builders will be bankrupted.
Step two would be further losses, beyond the $250bn-$300bn now estimated, for subprime mortgages. About 60 per cent of all mortgage origination between 2005 and 2007 had "reckless or toxic features", argues Prof Roubini. Goldman Sachs estimates mortgage losses at $400bn. But if home prices fell by more than 20 per cent, losses would be bigger. That would further impair the banks' ability to offer credit.
Step three would be big losses on unsecured consumer debt: credit cards, auto loans, student loans and so forth. The "credit crunch" would then spread from mortgages to a wide range of consumer credit.
Step four would be the downgrading of the monoline insurers, which do not deserve the AAA rating on which their business depends. A further $150bn writedown of asset-backed securities would then ensue.
Step five would be the meltdown of the commercial property market, while step six would be bankruptcy of a large regional or national bank.
Step seven would be big losses on reckless leveraged buy-outs. Hundreds of billions of dollars of such loans are now stuck on the balance sheets of financial institutions.
Step eight would be a wave of corporate defaults. On average, US companies are in decent shape, but a "fat tail" of companies has low profitability and heavy debt. Such defaults would spread losses in "credit default swaps", which insure such debt. The losses could be $250bn. Some insurers might go bankrupt.
Step nine would be a meltdown in the "shadow financial system". Dealing with the distress of hedge funds, special investment vehicles and so forth will be made more difficult by the fact that they have no direct access to lending from central banks.
Step 10 would be a further collapse in stock prices. Failures of hedge funds, margin calls and shorting could lead to cascading falls in prices.
Step 11 would be a drying-up of liquidity in a range of financial markets, including interbank and money markets. Behind this would be a jump in concerns about solvency.
Step 12 would be "a vicious circle of losses, capital reduction, credit contraction, forced liquidation and fire sales of assets at below fundamental prices".
These, then, are 12 steps to meltdown. In all, argues Prof Roubini: "Total losses in the financial system will add up to more than $1,000bn and the economic recession will become deeper more protracted and severe." This, he suggests, is the "nightmare scenario" keeping Ben Bernanke and colleagues at the US Federal Reserve awake. It explains why, having failed to appreciate the dangers for so long, the Fed has lowered rates by 200 basis points this year. This is insurance against a financial meltdown.
Is this kind of scenario at least plausible? It is. Furthermore, we can be confident that it would, if it came to pass, end all stories about "decoupling". If it lasts six quarters, as Prof Roubini warns, offsetting policy action in the rest of the world would be too little, too late.
Can the Fed head this danger off? In a subsequent piece, Prof Roubini gives eight reasons why it cannot***. (He really loves lists!) These are, in brief: US monetary easing is constrained by risks to the dollar and inflation; aggressive easing deals only with illiquidity, not insolvency; the monoline insurers will lose their credit ratings, with dire consequences; overall losses will be too large for sovereign wealth funds to deal with; public intervention is too small to stabilise housing losses; the Fed cannot address the problems of the shadow financial system; regulators cannot find a good middle way between transparency over losses and regulatory forbearance, both of which are needed; and, finally, the transactions-oriented financial system is itself in deep crisis.
The risks are indeed high and the ability of the authorities to deal with them more limited than most people hope. This is not to suggest that there are no ways out. Unfortunately, they are poisonous ones. In the last resort, governments resolve financial crises. This is an iron law. Rescues can occur via overt government assumption of bad debt, inflation, or both. Japan chose the first, much to the distaste of its ministry of finance. But Japan is a creditor country whose savers have complete confidence in the solvency of their government. The US, however, is a debtor. It must keep the trust of foreigners. Should it fail to do so, the inflationary solution becomes probable. This is quite enough to explain why gold costs $920 an ounce.
The connection between the bursting of the housing bubble and the fragility of the financial system has created huge dangers, for the US and the rest of the world. The US public sector is now coming to the rescue, led by the Fed. In the end, they will succeed. But the journey is likely to be wretchedly uncomfortable.
*A Coming Recession in the US Economy? July 17 2006, www.rgemonitor.com; **The Rising Risk of a Systemic Financial Meltdown, February 5 2008; ***Can the Fed and Policy Makers Avoid a Systemic Financial Meltdown? Most Likely Not, February 8 2008
_________________ "The conflict between corporations and activists is that of narcolepsy versus remembrance. The corporations have money, power and influence. Our sole influence is public outrage. Extract from "Cloud Atlas (page 125) by David Mitchell.
Joined: 25 Jul 2005 Posts: 18335 Location: St. Pauls, Bristol, England
Posted: Fri Mar 14, 2008 12:17 am Post subject: Dollar Down on Speculation Fed Rescue Package Will Fail
Dollar Declines on Speculation Fed Rescue Package Won't Succeed
Last Updated: March 12, 2008 07:48 EDT
By Gavin Finch
March 12 (Bloomberg) -- The dollar fell against the euro and the yen on speculation the Federal Reserve's plan to provide funds to banks won't be enough to break the gridlock in money- market lending and stem credit losses.
``Read the need for such new measures as being a symptom of what ails the world and not a panacea for its problems,'' said David Simmonds, the London-based global head of currency research at Royal Bank of Scotland Plc, the world's fourth-biggest foreign-exchange trader. ``Stay short dollars.''
The U.S. currency also declined as traders wagered the Fed will cut rates by as much as three quarters of a percentage point to prevent a recession, while the European Central Bank keeps borrowing costs unchanged. The yen advanced against the dollar and the euro after a government report showed Japan's economy grew faster than forecast in the fourth quarter.
The dollar fell to $1.5469 per euro by 7:47 a.m. in New York, from $1.5338 yesterday, when it declined to $1.5495, the weakest level since the European single currency's debut in 1999. It slipped to 102.49 per yen from 103.42 yen. The euro was at 158.59 yen from 158.61.
The U.S. currency also dropped to $2.0168 against the U.K. pound from $2.0064 before Chancellor of the Exchequer Alistair Darling delivers his first budget statement to Parliament at noon in London today.
The yen climbed as a revised Japanese government report showed gross domestic product increased an annualized 3.5 percent in the three months through December, faster than the 2.3 percent median forecast of 27 economists surveyed by Bloomberg News.
European Industry
The euro extended its gains against the dollar after a European Union report showed industrial production in the region increased for the first time in three months in January. It rose 0.9 percent from January, more than twice the rate forecast by economists surveyed by Bloomberg.
The U.S. currency was also weighed down by speculation that Gulf central bankers will consider dropping the dollar peg when they meet next week. A Qatari official denied in a telephone interview that the meeting will discuss currency revaluation.
The euro earlier gained on speculation ECB President Jean- Claude Trichet will highlight inflation risks today at a press conference with fellow policy maker Axel Weber.
The ECB's key interest rate is 1 percentage point more than the Fed's 3 percent target rate for overnight loans between banks.
Policy makers in the U.S., U.K., Canada, Switzerland and the euro region agreed yesterday on a second round of emergency-loans to curb rising money-market rates. The Fed said it will lend as much as $200 billion of Treasuries through a new lending tool and widen the collateral it accepts to include mortgage-backed securities.
`Aspirin' for Dollar
This is ``not a panacea, more like an aspirin for the dollar,'' analysts led by Daniel Tenengauzer, New York-based head of global currency strategy at Merrill Lynch & Co., wrote in a research note today. ``There is a reasonable risk that this Fed move reflects the depth of their concern with U.S. asset markets, not a Fed formula to resolve U.S. asset-market difficulties.''
The euro interbank offered rate, or Euribor, for three month euro loans rose for a seventh day, climbing 1 basis point to 4.61 percent, the highest since Jan. 7, the European Banking Federation said today.
The collapse of the U.S. subprime mortgage market has caused losses and writedowns of $190 billion at the world's biggest financial institutions. Concerted action announced Dec. 12 temporarily eased the shortage of cash in money markets at the end of last year.
Bloomberg Survey
The dollar will extend its decline against most major currencies in the next six months as the U.S. economic slowdown deepens, a survey of 5,430 Bloomberg users showed.
The Dollar Index traded on ICE Futures in New York, which compares the currency to those of six trading partners, declined to 72.72. It was at a record low of 72.462 on March 7.
The synthetic euro, which estimates the European currency's value before its inception in 1999, advanced to the strongest level since at least January 1989, when Bloomberg's data on the measure began. The euro has strengthened 17 percent against the dollar in the past year. The U.S. currency has weakened 13 percent versus the yen.
Traders bet the Fed will cut its target rate as much as 0.75 percentage point on March 18, from 3 percent, to keep the U.S. from dropping into a recession. The likelihood of a reduction to 2.25 percent was 62 percent, according to futures on the Chicago Board of Trade. The balance of bets is on a cut to 2.5 percent.
Corporate Media Snowjobs Dollar Crisis
CNN claims ailing greenback is good for U.S. economy
Paul Joseph Watson
Prison Planet
Thursday, March 13, 2008
CNN has echoed the Bush administration's snowjob policy on the dollar crisis by ludicrously citing "experts" who claim that the unprecedented plunge of the greenback is "not necessarily a bad thing for the U.S. economy."
An article by CNN Money's David Ellis entitled, Experts: Don't fear the weak dollar, lulls Americans gently back to sleep by reassuring them that the wholesale sacking of their own currency is nothing in particular to worry about, at the same time that food costs skyrocket and prices at the pump accelerate every day, while basic commodities like wheat reach record price levels.
The "expert" that CNN referenced in claiming that inflation worries were "overblown" was the Federal Reserve's own Frederic Mishkin, who "said in a speech that the dollar's decline only poses a limited inflation threat to the United States, arguing that there is little correlation between consumer inflation and changes in the exchange rate."
As Ron Paul forced Fed chairman Ben Bernanke to all but acknowledge last month, the weakening dollar directly impacts consumers - and the real rate of inflation, from numbers tracked by private sources due to the government's insistence of keeping the data secret - is a staggering 16 per cent.
"Inflation comes from the unwise increase in the supply of money credit....to argue that we can continue to debase the currency, which is really the policy of that you're following, purposely debasing value of currency - which to me seems so destructive....it just puts more pressure on the federal reserve to create capital out of thin air in order to stimulate the economy," Paul pointed out.
With China threatening the "nuclear option" of jettisoning their dollar assets due to the greenback's increasing worthlessness, American's living standards are teetering on the brink of meltdown. As the pioneer of Reaganomics and former Treasury Secretary Paul Craig Roberts points out today, "US living standards, which have been stagnant for years, will plummet once dollar decline forces China off the dollar peg."
Thanks to encouragement from traitors like Alan Greenspan, who last month urged Gulf states to abandon their dollar peg, foreign investors are already deserting the greenback at accelerating speeds.
Even CNN's snowjob piece is forced to admit that, "According to the most recent Treasury International Capital report, a monthly reading on foreign investment flows, net foreign purchases of long-term U.S. securities were $69.1 billion in December, down from net purchases of $70.3 billion in November and $118 billion in October."
CNN states that the dollar's fall "Won't hurt the economy unless the greenback enters a prolonged slump."
Just how far down the toilet does the dollar have to be before it can be recognized as having entered into a "prolonged slump"?
The greenback has already lost more than 60 per cent of its value against the Euro since the Euro's introduction. The dollar was down 10.2 per cent in 2006 and lost another 9.5 per cent in 2007.
Surely that would be characterized as a prolonged slump? What kind of fantasy world are CNN's financial journalists living in if they don't believe the dollar has yet to suffer a prolonged slump?
Furthermore, if the plunging greenback is good news for the economy as CNN and their "experts" claim then why are Bush administration talking heads scared to even mention its slide?
When White House press secretary Dana Perino was asked about the dollar during a press conference this week, she refused to talk about it for fear of losing her job.
While experts outside of government and establishment media desperately warn of the danger of a "dollar crash," hyperinflation and financial chaos, the press are busy aping the government's ludicrous position in claiming that the dollar's continued plunge is not something Americans should be concerned about.
In the meantime, top investors are dumping the greenback, buying gold, and hunkering down for an economic firestorm that some fear could rival the great depression of 1929.
This whole thing smacks of the deliberate destruction of the USA. _________________ "The conflict between corporations and activists is that of narcolepsy versus remembrance. The corporations have money, power and influence. Our sole influence is public outrage. Extract from "Cloud Atlas (page 125) by David Mitchell.
Feb. foreclosures up 60 percent over year before Nevada, California, Florida have highest rates of those losing their homes
updated 12:31 p.m. ET March 13, 2008
LOS ANGELES - Nearly 60 percent more U.S. homes faced foreclosure in February than in the same month last year, with Nevada, California and Florida showing the highest foreclosure rates, a research firm said Wednesday.
A total of 223,651 homes across the nation received at least one notice from lenders last month related to overdue payments, up 59.8 percent from 139,922 a year earlier, according to Irvine, Calif.-based RealtyTrac Inc.
Nearly half of the homes on the most recent list had slipped into default for the first time.
Nevada had the nation’s highest foreclosure rate, with one in every 165 households receiving at least one foreclosure-related notice. It had 6,167 properties facing foreclosure, a 68 percent increase from a year earlier and up 1 percent from January, RealtyTrac said.
Most of the troubled properties were located in California, Florida, Texas, Michigan and Ohio — states where home prices have plunged as the housing boom went bust.
The overall U.S. foreclosure rate last month was one filing for every 557 homes.
February’s total represents a 4 percent dip from January, but the decline was just a seasonal blip, said Rick Sharga, RealtyTrac’s vice president of marketing.
“We seem to be settling in at a new plateau in terms of monthly activity, but it’s a much higher plateau than we were at a year ago,” he said.
February marked the 26th consecutive month with a national year-over-year increase in foreclosure-related filings.
Meanwhile, the number of foreclosed properties that didn’t sell at auction and ended up going back to lenders soared more than 110 percent last month versus February 2007, RealtyTrac said.
Countrywide Financial Corp. said Thursday its home loan delinquency rate dipped slightly in February compared to the previous month, but foreclosure rates kept climbing.
The nation’s largest mortgage lender and servicer said loan delinquencies as a percentage of unpaid principal balance fell to 7.44 percent last month from 7.47 percent in January.
Delinquencies still remained far higher than a year earlier, when they stood at 4.48 percent.
The lender’s foreclosure rate increased to 1.64 percent in February, compared to 1.48 percent in January and 0.80 percent a year earlier.
Overall last month, some 46,508 properties were repossessed by lenders, up from 22,114 a year earlier.
In some areas such as Riverside County, east of Los Angeles, the trend was stark.
The county has seen home values plummet since the end of the speculator-driven demand that triggered a boom in home construction, sales and prices.
In February 2007, it had only 65 homes go unsold at auction and returned to a lender. Last month, the total was 1,346.
“You look at that kind of growth and it’s just mind-numbing,” Sharga said.
Los Angeles County saw a similar rate of growth. Some 215 homes went back to the banks in February 2007, compared with 1,670 last month, RealtyTrac said.
The company follows default notices, auction sale notices and bank repossessions. Lenders typically consider borrowers delinquent after they fall three months behind on mortgage payments.
In the 12-month period ended in February, 45 states saw an increase in the number of homes that had received at least one filing.
The latest data suggest many homeowners across the nation continue to struggle with mortgage payments, despite highly publicized efforts by government, financial institutions and consumer advocacy groups to modify loan terms or work out long-term repayment plans for troubled borrowers.
The number of homes facing foreclosure is still a small percentage of all U.S. homes. But the increases are further exacerbating a protracted housing downturn that some economists warn could tip the nation into a recession.
California had the second-highest foreclosure rate, with one in every 242 households receiving a foreclosure-related notice. The state had 53,629 properties on the foreclosure track, the most of any state. The total increased 131 percent from a year earlier but declined 6 percent from the previous month.
In Florida, 32,447 homes reporting at least one filing, up more than 69 percent from February last year and up more than 7 percent from January.
Rounding out the top 10 states with the highest foreclosure rates were Arizona, Colorado, Michigan, Ohio, Georgia, Indiana and Tennessee.
_________________ "The conflict between corporations and activists is that of narcolepsy versus remembrance. The corporations have money, power and influence. Our sole influence is public outrage. Extract from "Cloud Atlas (page 125) by David Mitchell.
Lengthy article at above link which contains the following:-
Quote:
Roubini's Nightmare Scenario;
A Vicious Circle Ending In A Systemic Financial Meltdown
By Mike Whitney
13/03/08 "ICH" -- - "It's another round of the credit crisis. Some markets are getting worse than January this time. There is fear that something dramatic will happen and that fear is feeding itself," Jesper Fischer-Nielsen, interest rate strategist at Danske Bank, Copenhagen; Reuters
Quote:
Roubini's Testimony before Congress:
“There is now a rising probability of a "catastrophic" financial and economic outcome; a vicious circle where a deep recession makes the financial losses more severe and where, in turn, large and growing financial losses and a financial meltdown make the recession even more severe. The Fed is seriously worried about this vicious circle and about the risks of a systemic financial meltdown....Capital reduction, credit contraction, forced liquidation and fire sales of assets at below fundamental prices will ensue leading to a cascading and mounting cycle of losses and further credit contraction. In illiquid market actual market prices are now even lower than the lower fundamental value that they now have given the credit problems in the economy. Market prices include a large illiquidity discount on top of the discount due to the credit and fundamental problems of the underlying assets that are backing the distressed financial assets. Capital losses will lead to margin calls and further reduction of risk taking by a variety of financial institutions that are now forced to mark to market their positions. Such a forced fire sale of assets in illiquid markets will lead to further losses that will further contract credit and trigger further margin calls and disintermediation of credit.
To understand the risks that the financial system is facing today I present the "nightmare" or "catastrophic" scenario that the Fed and financial officials around the world are now worried about. Such a scenario – however extreme – has a rising and significant probability of occurring. Thus, it does not describe a very low probability event but rather an outcome that is quite possible.”
Roubini has been right from the very beginning, and he is right again now. Bernanke can place himself at the water's edge and lift his hands in defiance, but the tide will come in and wash him out to sea anyway. The market is correcting and nothing is going to stop it.
_________________ "The conflict between corporations and activists is that of narcolepsy versus remembrance. The corporations have money, power and influence. Our sole influence is public outrage. Extract from "Cloud Atlas (page 125) by David Mitchell.
Dollar's clout sinks worldwide
By ALAN CLENDENNING, AP Business Writer
Thu Mar 13, 3:04 PM ET
SAO PAULO, Brazil - Antique store owners in lower Manhattan, ticket vendors at India's Taj Mahal and Brazilian business executives heading to China all have one thing in common these days: They don't want U.S. dollars.
Hit by a free fall with no end in sight, the once mighty U.S. dollar is no longer just crashing on currency markets and making life more expensive for American tourists and business people abroad; its clout is evaporating worldwide as foreign businesses and individuals turn to other currencies.
Experts say the bleak U.S. economic forecast means it will take years for the greenback to recover its value and prestige.
Negative dollar sentiment is growing in nations where the dollar was historically accepted as equal or better than local currency — and dollar aversion is even extending to some quarters in the United States.
At the Taj Mahal, dollars were always legal tender, alongside rupees, for entry into the palace. But because of the falling value of the dollar, the government implemented a rupees-only policy a month ago. Indian merchants catering to tourists have also turned bearish on the dollar.
"Gone are the days when we used to run after dollars, holding onto them for rainy days," said Vijay Narain, a tour operator in the city of Agra where the Taj Mahal is located. "Now we prefer the euro. It gives us more riches."
In Bolivia, billboards feature George Washington's image on a $1 bill alongside a bright pink 500 euro note, encouraging savers to turn to the euro to tuck away money earned abroad or sent home in remittances.
"If the dollar's going down ... save it in Euros!!!" say the signs popping up around La Paz for Bolivia's Banco Bisa.
And in neighboring Brazil, the Confidence Cambio money-changing service was the first to start offering yuan so travelers to China no longer have to change the money into dollars first. The service is already a hit because Brazil does big business with China, and lots of Brazilians are heading to the Olympics this summer.
"Now we tell people not to take dollars when they go abroad, it's better to change it directly to the local currency," said Fabio Agostinho, one of the firm's managing partners. "If people leave here with dollars and go abroad, they lose when they exchange them. It's the same thing whether they're heading to China, Europe or even Argentina."
In Manhattan's Bowery district, Billy LeRoy, the owner of Billy's Antiques & Props, prefers payment in euros so he can stockpile the currency for his annual antique buying trip to Paris.
"Whip out dollars at the French flea market now, and they'll shoo you away," he said at his store near apartment buildings where Europeans are snapping up units because they've become dirt cheap. "Before it was like the second coming of Christ, but now they don't want it or if they do take dollars, they're going to take their pound of flesh."
The dollar has steadily eroded in value against the euro and other currencies since 2002 as U.S. budget and trade deficits ballooned, but fears of an American recession and credit crisis have sent the dollar to stunning lows amid predictions the slump will continue for a long time.
The euro traded for a record $1.5625 before declining to $1.5586 Thursday while the dollar dropped below 100 Japanese yen for the first time since November 1995. It traded as low as 99.75 yen before recovering some ground to 101.68 yen. The dollar also recently hit a 10-year low against the Chilean peso, and fell to its lowest level against Brazil's real since the nation floated its currency in 1999.
While low dollar cycles have come and gone for decades, experts caution that it's now much more difficult to predict when this one will end because the euro didn't exist as competition for the dollar before.
During previous U.S. economic downturns, big foreign funds typically snapped up U.S. treasuries, helping to shore up the dollar to a certain degree. But the euro and currencies from other nations are now seen as legitimate options, and interest rates are higher outside the United States — meaning the funds can get better returns on investments elsewhere.
"You have the U.S. still holding this trade deficit, but now you have the possibility of a U.S. led recession, and you have a weakening currency. So it's a very dark outlook for the dollar," said Gareth Sylvester, senior currency strategist with the British firm HIFX Inc., which executed $40 billion in currency trades last year.
Nations that were once seen as incredibly risky for investments — such as Brazil — are now seen as good long-term bets. And countries such as China and Russia, with burgeoning coffers of money to invest abroad, are thought to be shifting some of their reserves or diversifying fresh income to destinations and currencies outside the United States.
It used to be important for most countries "to accumulate dollars as a precautionary element against rainy days, but the accumulation of reserves has become so large in most emerging market countries that the balance is way beyond what's needed for precautionary reasons," said Eliot Kalter, a fellow at Tufts University's Fletcher School of Law and Diplomacy and a former International Monetary Fund official.
While most experts believe the dollar will eventually regain strength, no one is willing to predict when that will happen.
"I think the factors that are affecting the weakness of the dollar will be reversed, but no time soon," Kalter said.
The problem right now, is that "people just don't want to be holding U.S dollars and U.S.-based equities," Sylvester added. "If you are an investor with a million dollars to invest, you look for the highest yield — you're looking at South Africa, Australia, New Zealand."
And it's not only the big time investors that are looking for other options.
In Peru, where savings in U.S. dollars were long a popular hedge against inflation, many citizens are closing dollar accounts in favor of Peruvian soles.
At the same time, businesses like supermarkets, movie theaters and cable TV companies that used to accept dollars are now demanding soles.
Edwin Figueroa, a 29-year-old systems engineer, switched his checking account from dollars to soles seven months ago as the dollar's decline started worrying him. He doesn't think he'll be going back anytime soon.
The Peruvian sol "is stable now," he said. "And maybe in a year, the dollar will even go lower."
_________________ "The conflict between corporations and activists is that of narcolepsy versus remembrance. The corporations have money, power and influence. Our sole influence is public outrage. Extract from "Cloud Atlas (page 125) by David Mitchell.
Paulson admits deregulation has failed us all
Commentary: Mortgage proposals spell end to decades of looking other way By MarketWatch
WASHINGTON (MarketWatch) -- You know things are very very bad on Wall Street when a guy like Henry Paulson -- Treasury secretary, solid Republican, and former Goldman Sachs CEO -- joins the crowd calling for more regulation over the financial markets.
Paulson spared no one in his criticism Thursday of the excesses of deregulation that has now created the worst global financial crisis in a generation, threatening the health of the U.S. economy, the savings of millions of Americans, and the survival of some of the biggest financial institutions in the world.
Wall Street and Washington both failed big time, he said. Wall Street invented new ways to make money by selling securities so complicated that no one could really follow which shell the pea was under. Fortunes were made on the paper Wall Street sold.
At the same time, Washington's watchdogs were dozing, tranquilized by the false assurance that Wall Street would police its own.
It's been obvious for years now that Wall Street could not be trusted, and finally official Washington agrees. The markets need a tougher cop to make sure that money-center banks, investment banks, credit-rating agencies, hedge funds, mortgage brokers and the rest don't let their own greed and arrogance ruin it for the rest of us.
"Regulation needs to catch up with innovation," Paulson said, and he was backed up by the rest of President Bush's working group on financial markets, including Federal Reserve Chairman Ben Bernanke and Securities and Exchange Commissioner Chris Cox. Not a commie among them.
The housing bubble wasn't a flaw; it was a predictable outcome of a system that rewarded smart people small fortunes for conjuring up ways to persuade people to borrow more than they could ever hope to pay back. All the profits were taken off the table quickly, but the staggering costs are only now being paid by homeowners, shareholders, builders and the rest of society.
Paulson's proposals won't necessarily prevent a recurrence, but they are a humble recognition that the centerpiece of two decades of Republican economic policy have failed.
I hope Thatcher is still around to see the consequences of free market forces and de-regulation. It has taken over twenty years but the inevitable consequences of having a party by selling the family silver and squandering our inheritance is finally coming to pass. _________________ "The conflict between corporations and activists is that of narcolepsy versus remembrance. The corporations have money, power and influence. Our sole influence is public outrage. Extract from "Cloud Atlas (page 125) by David Mitchell.
Panic in stock markets as U.S. banking giant Bear Stearn 'on verge of collapse'
Daily Mail, Friday, March 14, 2008
The world banking system was plunged into fresh crisis today as one of America's biggest banks teetered on the verge of collapse.
Wall Street giant Bear Stearns admitted it could go bust despite emergency government funding - prompting panic in stock markets around the world.
Wall Street shares plunged and Bear Stearns lost half its $20 billion (£9.8 billion) value in seconds. Analysts said they feared every bank - including the British high street Big Four - were now at risk because of the credit crunch. Their shares were down sharply.
The FTSE-100 index at was down 62.0 at 5630.4 just before 4pm today.
Michael Klawitter of Dresdner Kleinwort in London said: "The situation is that Bear Stearns was very close to the edge and it was much worse than we all thought. It raises severe concerns over other banks."
Today U.S. President George Bush insisted the American economy was "resilient".
The bank had been facing rumours that it was in financial trouble. Today it revealed it had received emergency funding overnight from JP Morgan and the Federal Reserve, after a week of firm denials.
Bear Stearns lost half of its value within 30 minutes of the market's open today.
While it was not clear exactly how much money Chase would pump into Bear, a person familiar with the bailout, who spoke on condition of anonymity because the talks are private, said Chase may end up buying Bear Stearns outright.
The ultimate size of Federal Reserve efforts to prop up the investment bank are uncertain and depend on the ability of the firm to provide collateral for credit, senior Fed staff said on Friday.
Bear Stearns said in a statement it is working with JPMorgan Chase to find permanent strategic alternatives to alleviate the liquidity problems, but could not guarantee they would be successful.
JPMorgan Chase is providing secured funding to Bear for 28 days, backstopped by the Federal Reserve Bank of New York. Bear Stearns and the Federal Reserve approached JPMorgan Chase about the financing and a potential deal, according to the source.
Rumours have persisted throughout the week that Bear Stearns was facing major liquidity problems, but the investment bank's chief executive initially denied those rumours.
"Bear Stearns has been the subject of a multitude of market rumours regarding our liquidity," Bear Stearns president and chief executive, Alan Schwartz, said in a statement.
"Amidst this market chatter, our liquidity position in the last 24 hours had significantly deteriorated."
In a memo sent to employees, Schwartz said the temporary financing would allow the company to "get back to business as usual".
The company has struggled since the middle of 2007 due to the fallout in the mortgage and credit markets. Last summer, two hedge funds worth billions of dollars managed by Bear Stearns collapsed because of bad bets on securities backed by subprime mortgages - loans given to customers with poor credit history.
JPMorgan Chase said the financing would not expose its company to any material risk.
Shares of JPMorgan Chase fell 5.4 per cent.
The Federal Reserve has not yet released its own statement and did not immediately comment on the news.
_________________ "The conflict between corporations and activists is that of narcolepsy versus remembrance. The corporations have money, power and influence. Our sole influence is public outrage. Extract from "Cloud Atlas (page 125) by David Mitchell.
Paul Craig Roberts, Prison Planet , Friday, March 14, 2008
I’ve been watching the dollar die all my life. I sometimes think I will outlast it.
When I was a young man, gold was $35 an ounce. Today one ounce gold bullion coins, such as the Canadian Maple Leaf, cost more than $1,000.
Our coinage was silver. Our dimes, quarters, and half dollars had purchasing power. Even the nickel could purchase a candy bar, ice cream cone or soft drink, and a penny could purchase bubble gum or hard candy. If a kid could collect 5 discarded soft drink bottles from a construction site, the 2 cents deposit on the returnable bottles was enough for the Saturday afternoon movie. Gasoline was 32 cents a gallon. A dollar’s worth was enough for a Saturday night date.
Our silver coinage was 90 per cent silver. People sometimes melted coins in order to make silver spoons, known as coin silver, which can still be found in antique shops. Except for the reduced silver (40 per cent) Kennedy half dollar which continued until 1970, 1964 was the last year of America’s silver coinage. The copper penny departed in 1982. As Assistant Secretary of the Treasury, I opposed the demise of America’s last commodity money, but I couldn’t prevent the copper penny’s death.
During World War II (1941-1945), nickel was diverted from coinage to war, and the US mint issued a wartime silver (35 per cent) nickel.
It is not easy to find items to purchase with today’s US coins, but the silver coins of the same face value still have purchasing power. The 10 cent piece of my youth contains $1.42 worth of silver at today’s silver price. The quarter is worth $3.55, and the half dollar contains $7.10 of silver. The silver dollar is worth 15.2 times its face value. These are just the silver values of coins that might be worth far more depending on condition and rarity. The silver in the wartime nickel is worth $1.10, which is 22 times the coin’s face value. Even the copper penny is worth 2.5 cents.
When I was a young man enjoying travels in Europe, the German mark or Swiss franc traded four to one US dollar. The euro, which is today’s equivalent to the mark, costs $1.55.
People who haven’t accumulated much age have little idea of the corrosive power of “acceptable” inflation. Unlike gold and silver, fiat money has no intrinsic value. When money is created faster than goods and services it drives up prices, thus driving down the value of the money. If freely traded currencies are excessively printed or if inflation, budget deficits, and trade deficits drive currencies off their fixed exchange rates, prices of imports rise as the foreign exchange value of the currency falls.
Today the US, heavily dependent on imports, is subject to double-barrel inflation from both domestic money creation and decline in the dollar’s foreign exchange value.
The US inflation rate is about twice as high as the government’s inflation measures report. In order to hold down Social Security payments, the government changed the way it measures inflation. In the old measure, inflation measured the nominal cost of a defined standard of living. If the price of steak rose, up went the inflation rate. Today if the price of steak rises, the government assumes that people switch to hamburger. Inflation doesn’t go up. Instead, the standard of living it measures goes down.
This is just one of the many ways that the government pulls the wool over our eyes.
With the dollar value of the euro rising through the roof, today a vacation in Europe is far more costly than in the past. Thanks to China, so far Americans have been sheltered from the greatest effects of the dollar’s declining value. Our greatest trade deficit is with China. The prices of the goods from China have not risen, because China keeps its currency pegged to the dollar. As the dollar goes down, China’s currency goes with it, thus holding down price rises.
The resignation of Admiral William Fallon as US military commander in the Middle East probably signals a Bush Regime attack on Iran. Fallon said that there would be no US attack on Iran on his watch. As there was no reason for Fallon to resign, it is not farfetched to conclude that Bush has removed an obstacle to war with Iran.
The US is already over stretched both militarily and economically. An attack on Iran is likely to be the straw that breaks the camel’sback.
Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. He is coauthor of The Tyranny of Good Intentions.He can be reached at: PaulCraigRoberts@yahoo.com
_________________ "The conflict between corporations and activists is that of narcolepsy versus remembrance. The corporations have money, power and influence. Our sole influence is public outrage. Extract from "Cloud Atlas (page 125) by David Mitchell.
Major Stock Markets in Asia Tumble
By MARTIN FACKLER
Published: March 17, 2008
TOKYO — Major Asian stock markets fell sharply Monday as pessimism continued to spread despite the Fed’s dramatic moves over the weekend, sending Tokyo’s benchmark index to a three-year low.
The markets responded negatively to the purchase of Bear Stearns over the weekend by JPMorgan Chase. The acquisition, backed by the Federal Reserve, underscored the severity of the credit crisis in the United States and the weakness of the American economy.
In Tokyo, the region’s largest stock exchange, the benchmark Nikkei 225 index was trading at an almost three-year low. The index closed down nearly four percent, finishing the day at 11,787.51, falling below 12,000 for the first time since August 2005.
Elsewhere in Asia in mid-day trading, South Korea’s benchmark Kospi index was also down 2.4 percent. Australia’s S&P/ASX 200 index fell 2.4 percent, and in New Zealand, the NZX 50 index dropped 1.9 percent.
The declines in Tokyo came even as the Japanese central bank, the Bank of Japan, moved to shore up financial markets by injecting $4.1 billion into short-term money markets.
Asian stocks have also been hurt by the weakness of the dollar, which erodes the value in local currencies of overseas profits and forces big exporters like Toyota and Sony to raise prices in foreign markets.
_________________ "The conflict between corporations and activists is that of narcolepsy versus remembrance. The corporations have money, power and influence. Our sole influence is public outrage. Extract from "Cloud Atlas (page 125) by David Mitchell.
Markets tumble after Bear Stearns rescue fails to reassure
Fiona Walsh, business editor guardian.co.uk, Monday March 17 2008
Share prices around the world fell sharply today as shockwaves from the collapse of US investment bank Bear Stearns swept through financial markets.
The FTSE 100 tumbled 132.5 points in early trading, to 5499.2 down, a fall of 2.4%, having been down by 160 points at one stage, and is on course to close at its lowest level this year so far. There also were sharp falls in other European markets .
Banking shares were particularly hard hit, with billions of pounds slashed from from their stock market value. HBOS was the biggest faller in the FTSE, tumbling almost 12%; Alliance & Leicester were down over 10%; Royal Bank of Scotland fell 9% and Barclays lost 7.7%.
The Bank of England moved to stabilise the markets this morning, saying it would offer £5bn of three-day funds in a move designed to bring overnight interest rates down.
"This action is being taken in response to conditions in the short-term money markets this morning," it said in a statement.
"The Bank will take actions to ensure that the overnight rate is close to Bank rate. Along with other central banks, the Bank of England is closely monitoring market conditions."
Money markets meanwhile moved to price in even more interest rate cuts than already expected from central banks.
UK rate futures are now pricing in a whole percentage point of base rate cuts by year-end. In the US, traders fully expect tomorrow's policy meeting to conclude with a whole percentage point cut in one fell swoop.
Some even expect the move before the Fed's scheduled meeting.
Earlier today in Tokyo the Nikkei 225 had ended the day down 3.7% or 454.09 points, its lowest level since August 2005.
Futures trading indicated a fall of more than 200 points on the Dow Jones industrial average when it opens today.
The $2 a share JP Morgan takeover of Bear Stearns was put together rapidly over the weekend, with the US authorities keen to tie up a deal before the Asian markets opened.
The US Federal Reserve took emergency action on Sunday, cutting its discount rate – the rate at which banks lend to each other - by a quarter of a point. It also said it would set up a new lending facility for investment banks - something it has not done since the Great Depression in the 1930s.
But the Fed's actions failed to reassure the markets and traders remained in a state of near-panic, with many fearing that Bear Stearns will not be the last casualty of the credit crunch that has gripped the global financial system since last August.
Leading City figures said the scale crisis is virtually unprecedented: "It does scare me," said veteran trader Terry Smith, chief executive of specialist inter-bank broker Tullett Prebon.
"I have been working in finance in the City and worldwide for 34 years and I have never seen anything like this," Smith told BBC Radio 4's Today programme.
"I don't think anybody alive has seen events of this seriousness and magnitude affecting the financial markets."
He doubts that lowering interest rates will have any real effect: "High interest rates didn't cause this problem, so lowering interest rates isn't going to solve it. It is hard to see exactly what tools the authorities do have."
The dollar extended its recent heavy losses, falling to around ¥95.72 at one stage, the lowest level against the Japanese currency since August 1995.
Gold, a traditional safe haven in times of turmoil, jumped by more than 3%, hitting a new record of $1,030.80 an ounce. Oil, reflecting the plunging dollar, spiked up to a new peak of $111.80
_________________ "The conflict between corporations and activists is that of narcolepsy versus remembrance. The corporations have money, power and influence. Our sole influence is public outrage. Extract from "Cloud Atlas (page 125) by David Mitchell.
Last edited by blackcat on Tue Mar 18, 2008 6:53 am; edited 1 time in total
America was conned - who will pay? The South Sea Bubble ended in riots as trust was lost. Wall Street also duped the public
Larry Elliott, economics editor The Guardian, Monday March 17 2008
Bear Stearns marks the moment when the global financial crisis went critical. Up until last Friday, it had been possible - just about - to believe that the worst was over and that things were about to get better. That pretence was stripped away when JP Morgan, at the behest of the Federal Reserve, stepped in when the hedge funds pulled the plug on the fifth-biggest US investment bank.
It is now clear that no end is in sight to the turmoil, and the reason for that is that the Fed and the US treasury are no closer to solving the underlying problem than they were eight months ago. The crisis will only end when house prices stop falling and banks stop racking up huge losses on their loans. Doing that, however, will require the US government to intervene directly in the real estate market to end the wave of foreclosures. Ideologically, it is ill-equipped to take that step and, as a result, property prices will fall and the financial meltdown will go on and on.
Ultimately, though, action will be taken because there will be political pressure for it. Indeed, it is somewhat surprising that there is not already rioting in the streets, given the gigantic fraud perpetrated by the financial elite at the expense of ordinary Americans.
The US has just had its weakest period of expansion since the 1950s. Consumption growth has been poor. Investment growth has been modest. Exports have been sluggish. But if you are at the top of the tree, the years since the last recession in 2001 has been a veritable golden age. Salaries for executives have rocketed and profits have soared, because the productivity gains from a growing economy have been disproportionately skewed towards capital.
Patriotic
For ordinary Americans, though, it has been a different story. Real wages have been growing slowly; at just 1.6% a year on average over the latest upswing, well down on the experience of earlier decades. Business, of course, needs consumers to carry on spending in order to make money, so a way had to be found to persuade households to do their patriotic duty. The method chosen was simple. Whip up a colossal housing bubble, convince consumers that it makes sense to borrow money against the rising value of their homes to supplement their meagre real wage growth and watch the profits roll in.
As they did - for a while. Now it's payback time and the mood could get very ugly. Americans, to put it bluntly, have been conned. They have been duped by a bunch of serpent-tongued hucksters who packed up the wagon and made it across the county line before a lynch mob could be formed.
The debate now is not about whether the US is in recession but how deep and long that recession will be. Super-bears have started to say that this is perhaps "The Big One", by which they mean the onset of a new Great Depression. The need to rescue Bear Stearns has done little to still those voices.
As the economics team at HSBC recently pointed out, there has been a "catastrophic breakdown" of trust, and when that has happened in the past - the US in the 1930s, Japan in the 1990s - chucking extra money at the banks in the hope that they will start lending again proves ineffective.
It's not hard to see why trust has become such a rare commodity: Wall Street at the height of the securitisation mania had, in effect, become London at the time of the South Sea Bubble crisis in 1720. Vast quantities of funny paper were changing hands even though those involved in the deals had no idea of their true worth. Nor did they care. Inevitably, now the bubble has burst and the huge Ponzi securitisation scam has been exposed, there has been a reaction. The securitisation market is dead, there is less money sloshing round the system, banks are hoarding their cash.
Having allowed the housing boom to rage out of control for too long and then delaying cuts in interest rates until the housing market was gripped by recessionary forces, the Fed is now trying to make up for lost time with a burst of hyperactivity. It will cut interest rates on Wednesday and keep cutting them: financial markets expect the Fed funds rate to be 1% by the summer, and they are probably right. In most downturns, easier monetary policy does the trick. Lower interest rates make it cheaper to borrow and also change the trade-off between saving and spending. This may not be the usual sort of downturn, however, with consumers going through a period of debt revulsion after the excesses of recent years, even so the consensus is that after two or three quarters of falling output, a slow and sluggish recovery will be under way.
Deflation
These hopes are likely to be dashed, unless there is intervention at home and internationally to tackle the crisis. Domestically, the priority should be to stop homes that have been foreclosed being auctioned on the open market, since by selling them at a 50% discount property prices are driven down. The US does not seem to have learned the lessons from Japan, which encouraged a fire sale of property in the 1990s and was sucked into a classic debt deflation trap as a result. Those who argue, with some force, that it would be counter-productive to intervene in the market because the US needs to work the rottenness out of its system must recognise that the cold turkey option will be very long and painful.
The second form of intervention should be to shore up the dollar, the collapse of which is worrying countries that rely heavily on exports and is the main reason for the surge in commodity prices. Co-ordinated intervention by the major central banks needs to be at the top of the agenda at next month's G7 meeting in Washington, and there could be action even sooner if the dollar continues to tank.
In the longer term, lessons must be learnt from the turmoil. One is that you don't solve the problems of a collapsing bubble by blowing up another, which is what Alan Greenspan did after the dotcom fiasco in 2001 - the most irresponsible behaviour of any central banker in living memory.
The second lesson is that there has to be far stricter regulation not just of the US real estate market but of Wall Street, to prevent the return of irresponsible lending as soon as the recovery is firmly under way. If this is, heaven help us, The Big One, one of the only consolations will be that the repugnance at the orgy of speculation that has sapped the strength of the US economy will put a new New Deal on the political agenda.
But for this to happen there has to be a political response and even though this year's presidential election will be held in the shadow of recession, there appears not to be a potential FDR among the contenders for the White House. Yet if this crisis really does get as bad as some are forecasting, the public will rightly demand more than a slap on the wrist for Wall Street.
larry.elliott@guardian.co.uk
_________________ "The conflict between corporations and activists is that of narcolepsy versus remembrance. The corporations have money, power and influence. Our sole influence is public outrage. Extract from "Cloud Atlas (page 125) by David Mitchell.
Posted: Tue Mar 18, 2008 1:38 am Post subject: By TOBY ANDERSON, AP Business Writer Mon Mar 17, 9:07 AM ET
Global markets plunged Monday on news that JPMorgan Chase, backed by the U.S. government, had to rescue troubled Bear Stearns and investors struggled to gauge how much worse financial markets could get.
"Its difficult to call where the bottom is," said Richard Hunter, a broker at Hargreaves Lansdown in London.
Oil prices hit a record in Asian trading, U.S. stock index futures fell sharply and the dollar hit record lows.
JPMorgan said Sunday it would buy Bear Stearns for $236.2 million — $2 a share — in a stunning fall for one of the world’s largest and most venerable investment banks. The bank was dragged down by its exposure to bad mortgages, the same burden that has led to more than $150 billion in write-downs worldwide.
The Bank of England on Monday offered an extra 5 billion pounds — around $10.1 billion — of reserves for short-term money markets because of the dire conditions.
The U.K.’s benchmark FTSE 100 dipped 2.5 percent to 5,493.8 while France’s CAC 40 slid 2.7 percent to 4,473.39. Germany’s DAX slipped 3.4 percent. Financials were especially hard hit, with Switzerland’s UBS down 14.5 percent.
The head of the International Monetary Fund said Monday that the global financial crisis is more serious and more widespread than even a few weeks ago.
The "economic environment is still worsening," said Dominique Strauss-Kahn.
Strauss-Kahn urged a global response, though he said central banks have been handling the crisis well.
Investors, however, were stunned by the latest bout of very bad news from Wall Street.
"There is persistent credit uncertainty. Market players have been repeatedly let down which shows the subprime mortgage problems are so deep-rooted," said Atsuji Ohara, global strategist of Shinko Securities in Tokyo.
Investors were already skeptical about the JP Morgan deal, which was completed with the backing of the U.S. government.
"Just buying an investment bank does not solve the problem," Hunter said. "Markets are prodding (the U.S. government) to inject public funds."
News of the acquisition of Bear Stearns stunned investors just before markets opened in Tokyo and Seoul. Both fell sharply before paring some losses in afternoon trading.
Japan’s benchmark 225 index sank 3.7 percent to close at 11,787.51 points, its lowest in more than 2 1/2 years. Hong Kong’s Hang Seng index fell 5.2 percent to finish at 21,084.61.
Across the Asia-Pacific region, all major stock indexes were down, including markets in Australia, China, South Korea, Indonesia and the Philippines. India’s Sensex dropped 5.1 percent in afternoon trading.
"We are worried" about what comes next, Shim Jae-youb, a strategist at Meritz Securities in Seoul, said of concerns that other banks may collapse.
Shim said investors were on guard ahead of the release of quarterly earnings reports from big U.S. investment banks this week, including Lehman Brothers Holdings Inc., Goldman Sachs Group Inc., and Morgan Stanley. Bear Stearns called off its report.
In an extraordinarily move, the Federal Reserve cut the discount rate, its lending rate to financial institutions, to 3.25 percent from 3.5 percent, effective immediately. The Fed also created another lending facility for big investment banks to secure short-term loans that would be available to big Wall Street firms on Monday.
The Fed was also widely expected to again cut its headline interest rate, the fed funds rate, by as much as a full percentage point to 2 percent at a regular meeting set for Tuesday.
In currency trading, the dollar plunged as low as 95.72 yen — its lowest since August 1995 — dragged down by a gloomy outlook for the American economy and prospects for lower interest rates. The euro rose to a record high $1.5903.
Japanese officials quickly called for calm in the currency markets, but did not announce any plans for intervention to shore up the greenback by buying up dollars.
Oil prices, meanwhile, hit an all-time trading high in Asia as the greenback’s tumble and the decline in stock markets prompted investors to seek shelter in commodities such as crude oil. Light, sweet crude for April delivery spiked to a record $111.80 a barrel in electronic trading on the New York Mercantile Exchange.
On Friday, U.S. stocks sank after the announcement of a Fed plan in conjunction with JPMorgan to alleviate the liquidity crisis at Bear Stearns touched off concerns about the severity of credit troubles in the world’s largest economy. The Dow Jones industrial average fell 194.65, or 1.60 percent, to 11,951.09.
Wall Street appeared poised for another drop when trading resumed Monday morning. Dow index futures were down 164 points, or 1.4 percent, to 11,818, while the Standard & Poor’s 500 index was down 21.7 points, or 1.65 percent, to 1,291.6.
Further slides in Asian markets are likely, said Ismael Cruz, the governor of the Philippine Association of Securities Brokers and Dealers, Inc.
"The outlook is very grim," he said.
Associated Press writers Chisaki Watanabe in Tokyo, Gillian Wong in Singapore, Anthony Deutsch in Jakarta and Kelly Olsen in Seoul contributed to this report.
Welcome to the Future
Sun, 03/16/2008 - 22:50 — manystrom
by Michael Nystrom, March 16, 2008
Last Friday we got a taste of what the future is likely to be like as we make our way further into the belly of the second great depression. The Fed rushed to bail out a venerable Wall Street institution, which was rumored to be insolvent. Sunday evening, that rumor was confirmed to be true, as Bear Stearns agreed to sell itself to JP Morgan for a paltry $2 per share. Two dollars! This for a firm that was trading at $170 just over a year ago, and was as high as $54 just Friday! If Bear Stearns is only worth $2 per share, how can we possibly say with any confidence what other "investment banks" are worth?
While this bankruptcy comes as a shock to nearly everyone, it should be a surprise to no one. The global financial system has been teetering on a precipice for years if not decades, pumped up by unsustainable amounts of debt at every level of the economy, and is primed for a crash. That the crash has been postponed countless times by even easier money lent to yet poorer credit risks has served only to instill a false sense of confidence in markets and to magnify the impending calamity that seems finally to be at hand. Warnings that have been sounded on websites such as this one appear finally to be coming true, as confirmed by none-other than the venerable Wall Street Journal in a front page article titled, "Debt Reckoning: US Receives a Margin Call."
The US is at the receiving end of a massive margin call: Across the economy, wary lenders are demanding that borrowers put up more collateral or sell assets to reduce debts.
The unfolding financial crisis - one that began with bad bets on securities backed by subprime mortgages, then sparked a tightening of credit between big banks - appears to be broadening further. For years, the US economy has been borrowing from cash rich lenders from Asia to the Middle East. American firms and household have enjoyed readily available credit at easy terms, even for risky bets. No longer.
Did you ever think news like that would ever make it off the internet and into the pages of the Wall Street J? Even I was beginning to have my doubts. But the news is seeping even further into the mainstream. This week's Time Magazine has an article titled "10 Ideas that are Changing the World." Idea #8 is "The New Austerity:"
Americans simply don't have enough money to pay back the mortgage and credit-card debt they've run up. That reality is forcing banks to retrench as loans gone bad shrink their capital bases and falling house prices shrink the collateral that homeowners can borrow against. And it will presumably force chastened consumers to change their ways as well.
Americans simply don't have enough money... What does it mean? It means defaults, economic loss and a spiral of fear and more loss. It means more Bear Stearns. Time's article quotes David Rosenberg, an economist at Merrill Lynch: "I'm not saying we're going back to our parents' level of frugality, but what we have witnessed in the past 20 to 30 years - and especially the parabolic credit growth of the last five years - is going to be bursting in the next decade." If not back to our parents' level of frugality, then what? To our grandparents' level? How can anything less be avoided, in an era when most people are already working full speed, maxed-out and yet still need credit to survive? And now they're cutting off the credit!? The result for households will be the same as for Bear - massive liquidation. And the Fed is in no position to do anything about it. The Fed is currently operating in triage mode - desperately trying to aid the banks and save the global financial system as we know it. But what ammunition does the Fed have to save the average American working stiff, who is up to his eyeballs in debt?
In 2002, Bernanke - concerned with the possibility of deflation - concluded that "under a paper-money system, a determined government can always generate higher spending and hence positive inflation" simply by creating more money. But so far it appears that only half of this equation is correct. Positive inflation, definitely. But by lowering nominal interest rates below inflation, the Fed has made it irrational for individuals to save. Why keep money in a savings account that pays 0.5%, or even in a money market at 3% when the "official" B(L)S inflation rate is 4% and reality-based inflation is closer to 10%? The Fed assumes rational people will simply spend the money instead of saving it, thereby generating increased economic activity. But there is in fact a third alternative that Bernanke did not address, and that is that citizens might choose - Gasp! - to pay off their debts. Time goes on to say that debt is the new four-letter word, and that citizens are catching on to the predatory ways of consumer lending. "Several polls have shown that large majorities are planning to use the tax rebate coming later this year to pay off debt rather than buy new stuff," it says.
Deflation was the scourge of the first great depression, and it is what Bernanke was hired to prevent. With his years of study and deep knowledge of the Great Depression Bernanke is one of the world's foremost academic experts on the Depression. It would be a supreme irony if the second great depression were to unfold on his watch. But as I write this - 10pm on Sunday night - news across the wire is that the Fed has cut the discount rate another .25%, effective immediately, and is offering more ways for financial institutions to borrow money to help prevent another institutional bank run Monday Morning. All this on a Sunday night. This is unprecedented, and shows just how panicked the Fed is to soften the crisis. Meanwhile, Asian markets are down 2-3%, as are US futures indices. So Far, the Fed has proven powerless.
Meanwhile, take a look at these charts of the debt insurers MBIA and Amabac from the latest Elliott Wave Theorist (subscription required). Notice how quickly the reversals came. The report states:
When optimisim toward a market continues unrestrained despite deteriorating conditions, the only possible resolution is a "light-switch" type of reversal. When bulls have committed capital to a market and borrowed more to keep investing, and when the rising prices fund even more borrowing to keep them going, there is simply no cushion when the trend reverses. There is no cash on the sidelines waiting to scoop up bargains; it has all gone into investments and the loans that back them. Additionally, there is no contingent of bears waiting for an entry point, and there are no short positions to cover. So there is nothing to stem a free fall.
The report goes on to state that Moody's & Standard and Poors' still has AAA ratings on both of these firms. And if you believe that, there are plenty of banksters and brokers out there that would love to talk with you.
If these charts say anything it is how ephemeral confidence is and how quickly wealth can evaporate when that confidence is destroyed. The same pattern will likely play out for any number of securities, companies and even households in the weeks and months ahead: Everything appears fine until suddenly it isn't.
The question now becomes - how far will the Dow itself fall before this is all over? What is fascinating is that in spite of Friday's panic, the Dow still managed to close within its range and above its lows for the week. Perhaps traders felt optimistic that the Fed would get everything sorted out over the weekend. That didn't quite happen.
Some excellent comments at the link at the top of this post. _________________ "The conflict between corporations and activists is that of narcolepsy versus remembrance. The corporations have money, power and influence. Our sole influence is public outrage. Extract from "Cloud Atlas (page 125) by David Mitchell.
Last edited by blackcat on Tue Mar 18, 2008 7:50 am; edited 1 time in total
There is a good side to all this. Fewer junk credit card offers in the mail.
Yes - "its an ill wind" etc.
The following quote from the article says it all really.
Quote:
But there is in fact a third alternative that Bernanke did not address, and that is that citizens might choose - Gasp! - to pay off their debts.
But this does not address the fundamental flaw built in to "Fractional Reserve" money systems ie - there is more money printed than there is actual wealth that it represents. _________________ "The conflict between corporations and activists is that of narcolepsy versus remembrance. The corporations have money, power and influence. Our sole influence is public outrage. Extract from "Cloud Atlas (page 125) by David Mitchell.
A VERY passionate chap talks about how Bernanke is making life impossible for people like Bear Stearns. SIX MONTHS before it nosedived!!! _________________ "The conflict between corporations and activists is that of narcolepsy versus remembrance. The corporations have money, power and influence. Our sole influence is public outrage. Extract from "Cloud Atlas (page 125) by David Mitchell.
Designed to fail. The hoi polloi that is - not the "elite".
Quote:
Neuroeconomics on 'The Planet of the Apes'
By Paul B. Farrell, MarketWatch
Last update: 7:33 p.m. EDT March 17, 2008
Cornelius continues reading from the Scrolls: "Yea, he will murder his brother to possess his brother's land. Let him not breed in great numbers, for he will make a desert of his home and yours. Shun him; drive him back into his jungle lair, for he is the harbinger of death." Yes, evolution has reversed: Apes, Gorillas, Orangutans and Chimps rule. Our brilliant brains sabotaged us, knocked us out of our rightful place at the top of the jungle's food chain.
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Fiction? Or a disturbing metaphor of today's reality? Evidence is everywhere:
The slow agonizing collapse of America's economy and markets, with the endless write-offs, bankruptcies, foreclosures and the humiliation of clueless leaders still trying to stem the tide by sticking their little fingers in the cheap-dollar dike with one-after-another photo-op moments spouting more of the same magical thinking that got us in this mess, while promising us they'll stop the inevitable recession from doing what comes naturally in every economic downturn.
Yes, this silly predictable drama unfolding in Washington and Wall Street reminds me of the "Planet of the Apes" films.
Unfortunately, in the bull market of recent years, the wisdom of the ages written in America's "scrolls" was totally lost on our so-called leaders. In bull markets our greedy business and financial leaders and their doting minions simply deny comparisons of their fantasy world to the primitive jungles on the "Planet of the Apes."
But here is what the "Beasts" have wrought: A credit meltdown, a growling bear and a nasty recession.
Nobel economist does 'Planet of the Apes' cameo
This insane drama also reminds me all too much of the revolutionary insights in the brave new world of neuroeconomics, behavioral finance, investment psychology and the 'science of irrationality.' For 210 years, from 1792 when the NYSE was formed under the Buttonwood Tree by a small band of New York brokers, until 2002 when Daniel Kahneman, a Princeton psychologist, won the Nobel Prize in economics, the market was held together by the theory of the "rational investor."
But in 2002, Kahneman destroyed 210 years of bad drama with his revolutionary "irrational investor" theory. It was as if Kahneman was doing a cameo on the "Planet of the Apes," questioning their theories about investors and forcing one of Cornelius' scientific buddies to retort:
"Experimental brain surgery on these creatures is one thing, and I'm all in favor of it. But your behavior studies are another matter. To suggest that we can learn anything about the simian nature from a study of man is sheer nonsense. Why, man is a nuisance. He eats up his food supply in the forest, then migrates to our green belts and ravages our crops. The sooner he is exterminated, the better. It's a question of simian survival."
As University of Chicago Professor Richard Thaler put it in his classic, "Advances in Behavioral Finance II," Wall Street insiders can only get rich playing the market if the market is populated by "investors who are irrational, woefully uninformed, endowed with strange preferences, or for some other reason willing to hold overpriced assets."
In short, you have been investing not in a market intelligently-designed for "rational investors," but in a cleverly designed fantasy world in which Wall Street's programmed our brains to "see" ourselves as "rational investors," when we are, in fact, actually living in a jungle on the real Planet of the Apes. Get it?
You are an irrational humanoid investor brainwashed to believe you are rational, held captive in a mental cage, and manipulated by the primates running this the new Planet of the Apes, like a holographic video game.
25 rulers on your Planet of the Apes
Seriously, take a close look at the following lists of all the interrelated species running your world. Then tell us, how many of them have you seen recently in the news, on television or even in person? Most likely you'll recognize many of them, if not all:
Giant Apes. Capitalists ruling the Jungle through asset management
Orangutans. Puppet leaders in power positions, yet controlled by Apes
Gorillas. Enforcers whose brute strength protects the Apes power
Chimpanzees. Masses of workers manipulated like the Humanoids
Flying Monkeys. New high-tech species immigrated from Land of Oz
Now, here's the key in this exercise. If you think any one of the 25 species listed below is directly or indirectly skimming from your investment returns and income, add 4 points to your total. Suggestion: First print a copy of this column so you can pencil in the scores. Then add them up (25 skimming primates times 4 points each = 100 maximum), and add a comment about the results:
Giant Apes: Kings of the Jungle
1. Wall Street investment bankers. Megabonuses amid firings, huge write-offs
2. Mutual fund company owners. Yale manager: "investors lose, managers win"
3. Fund company portfolio managers. Even losers paid $400,000+ annually
4. Private equity & hedge fund bosses. Top 25 hedgers averaged $530 million
5. Pension fund managers. Tax laws help them personally make megabucks
6. Managers of 401k & 529 retirement plans. Skimmers piling on hidden fees
7. Corporate CEOs. Buffett warns: executive pay is skyrocketing out-of-control
Orangutans: Puppet Leaders
8. Politicians, Congress & Executive. Follow lobbyists' orders; love perks, status
9. Securities and Exchange Commission. Always favors industry over investors
10. Mutual fund directors. Paid over $250,000 annually, favor their insiders
Gorillas: Heavy Enforcers
11. Special interest lobbyists. Wall Street is largest political campaign donor
12. Investment Company Institute. Fund industry insiders employ 100 lobbyists
Chimpanzees: Day Laborers in Jungle
13. Commissioned brokers. Most securities are sold not bought thanks to loads
14. Online brokers. Research clearly proves buy and hold beats trading
15. Exchange-traded funds. Brokers just love this new source of income
16. Insurance annuity brokers. Sales best to elderly with 12-year-old minds
17. Professional financial advisers. Many favor products with high kickbacks
18. Stock and fund data trackers. Data suspect, often biased against investor
19. Securities analysts. Despite scandals, they still say buy most of the time
20. Investment newsletters. Like P.T. Barnum said: A sucker's born every minute
21. Mortgage lenders. Maybe not primates yet, more ostriches and dodo birds
Flying Monkeys: New 'High-Tech' Robots
22. Madison Avenue advertisers. Wall Street's main brainwashing weapon
23. Cable news channels. Hot mad-money races making addicts of investors
24. Ad-driven press. Advertisers subtly influence news content
25. Behavioral finance experts. Neuroeconomic quants brainwashing the masses
Now please add a comment along with your point total: With 4 points each times 25 species = 100 points max on the Planet of the Apes. And one last request, pick the two or three worst offenders that you think are most responsible for manipulating America's 95 million "irrational investors" and skimming our returns.
_________________ "The conflict between corporations and activists is that of narcolepsy versus remembrance. The corporations have money, power and influence. Our sole influence is public outrage. Extract from "Cloud Atlas (page 125) by David Mitchell.
The Great Bank Robbery
Reprinted from America's Promise Newsletter (September 1985)
Banking is a ponzi scam. Banking is nothing but a government sactioned, giant multi-level game. It is a pyramid scam that makes all other scams look like child's play. At the top of the pyramid is the Federal Reserve Board, and their owners. At the bottom are the little local branches of all the different state and national banks. As in all pyramid scams, the small branches at the bottom will fall first, taking most of the heat off those at the top. But eventually the pyramid must topple. In fact, we already hear the rumble of the pyramid starting to fall.
But what most people do not know is that the banking system (scam) was designed to fail, and make certain people very wealthy in the process. The process is called USURY. Banks loan us ten dollars, and require us to repay eleven dollars. Since banks are the creators of the money when they lend it to us, we have nowhere to turn to get that eleventh dollar to repay. We are faced with two options: 1. Live without borrowing money, which means you would never go in debt to the banks, or 2. borrow an extra dollar, either from another banker or from another victim, with which to repay the bank. The result of number two is that you would now be two dollars short when the debt comes due again, and if you borrowed the eleventh dollar from another citizen, then that citizen also would be two dollars short when his debt comes due.
Not only is our modern Babylonian banking system designed to eat up all privately owned property, it also causes us to cannibalize each other. Since there is never enough money in circulation to pay back that eleventh dollar, it forces us to compete with each other for survival: to try to wrench some dollars away from our neighbour so we can pay back our eleventh dollar debt, even though it will make it impossible for our neighbour to repay his debt.
The premise of this game is that someone must fail. There are three players. 1. You 2. Your family member, friend, colleague or neighbour, and 3. The banker. Of the three, the banker is the only one that is assured a profit without having to borrow money. He gets the interest from the money he loaned to you and the other person. That leaves you and the other person as the debtors, fighting it out to see who will get part of the other's money to use to pay back that eleventh dollar to the banker. Thus, the banker has cleverly put you at war with another person, and in fact has caused you to "rob or be robbed". Either you will survive or your neighbour will survive - and at the expense of the other. All three players cannot survive. Someone must fail! That means that only you and the other person are the debtors, and are left to compete for survival. Then, as soon as the other person has fallen, that leaves only YOU as the banker's prey.
This evil Babylonian system can be stopped cold by one simple act of law. Make USURY illegal. Nothing less will cure the problem. Without usury, banks die. With usury, you and the other person die. Usury-banks and free people are contrary to one another. Someday Congress must stop defending usury-banks, and start defending people. There are currently about 400 bills in Congress seeking to protect the US usury-banking economic system. Isn't it odd how far politicians go to protect Babylon while ignoring the crying and pleading of suffering familes across this land, and the world?
Farmers have been tricked into participating in this scam. Banks have taken the farmers to the claeners. Banks are like vampires: to live, they must suck blodd from their victims. For the farmer, this means that when the bank demanded the eleventh dollar, and the farmer didn't have that eleventh dollar, in lieu of the cash the banker accepted a little piece of his farm instead. Over the years, the banker's portion of the farm became larger and larger, and the farmer's portion became smaller and smaller. Eventually, the farmer's portion of the farm became so small that its value was insufficient to back the annual operating loan. This is called "foreclosure."
The point is this: bankers are perpetrating adevious plan, the premise of which is that an unresolvable debt must occur. The eleventh dollar can never be repaid, thus the debt is unavoidable and unpayable. This debt is foisted off on the farmer, who, being ignorant of the slick schemes of the banker, does not realize that the debt cannot be avoided. Consequently, the farmer thinks he is to blame for the outstanding debt: that unrepayable eleventh dollar. Actually it is the banker who is the criminal, but he allows the farmer to take the blame. All the farmer is guilty of is being naive.
There is nothing new under the sun. Nineteen hundred years ago, John wrote this concerning the fall of Babylon: the collapse of this pyramid scam: "Your merchants were the great men of the earth, because all the nations were deceived by your sorcery. And in her was found the blood of prophets and of saints and of all who have been slain on the earth. Rejoice over her, O heaven, and you saints and apostles and prophets, because God has pronounced judgement for you against her." (Rev.18:23-24 & 20)
_________________ "The conflict between corporations and activists is that of narcolepsy versus remembrance. The corporations have money, power and influence. Our sole influence is public outrage. Extract from "Cloud Atlas (page 125) by David Mitchell.
Rogers: Fed Has "Given Up" On The Dollar Investor slams Bernanke for destroying greenback to bail out friends on Wall Street
Paul Joseph Watson, Prison Planet, Wednesday, March 19, 2008
Expert investor Jim Rogers has slammed the Federal Reserve for destroying the dollar in order to rescue Wall Street, calling it "outrageous" that Ben Bernanke used $230 billion of taxpayers money to bail out Bear Stearns and other banks last week, and urged people to shift their assets completely out of dollars because the Fed had "given up" on the greenback.
"I find it outrageous that the Federal Reserve is just throwing the dollar out of the window - I happen to be an American citizen and they're signaling to the whole world that they have given up on the dollar," said Rogers during an appearance on Bloomberg, adding that everyone should "get out of the dollar because the Fed has given up."
Rogers himself shifted nearly all of his dollar assets into Chinese yuan in October 2007, citing the fact that it was "The official policy of the central bank and the U.S. to debase the currency."
Rogers dismissed rhetoric that the U.S. supported a strong dollar, asking the host, "do you even still report that?" adding that the best place to be was in real assets like gold and currencies like the Swiss Franc and the Chinese Renminbi.
_________________ "The conflict between corporations and activists is that of narcolepsy versus remembrance. The corporations have money, power and influence. Our sole influence is public outrage. Extract from "Cloud Atlas (page 125) by David Mitchell.
Jim Rogers Calls For Bernanke's Resignation Top investor continues to rail against Federal Reserve
Paul Joseph Watson, Prison Planet, Thursday, March 20, 2008
Top investor Jim Rogers has publicly called for Federal Reserve chaiman Ben Barnanke to resign, blaming him for destroying the dollar and bailing out his friends on Wall Street at the cost of the American taxpayer, in the latest savage attack on the Fed amidst the latest round of economic turmoil.
"I think the Fed should be abolished, we'd all be better off without the Fed....in my view their day is done," said Rogers during an appearance on CNBC yesterday.
Rogers pointed out that concerns over a vacuum of power were trite considering America had successfully lived without a central bank before and the first two central banks had failed.
Asked if Bernanke should resign, Rogers responded, "He should be fired, we can't fire him unfortunately under the terms of his contract he's there for another 12 years....I think eventually things are gonna get so bad we're gonna get rid of him one way or the other he'll resign."
Rogers said that the Federal Reserve's mandate was to protect the dollar but that the Fed was "letting the dollar collapse" and "filling the Federal Reserve's balance sheet with a bunch of garbage."
Despite the fact that Rogers admitted he was still making money due to his heavy investment in commodities, he said that he didn't approve of what the Fed was doing.
Rogers has been on a crusade over the past few weeks, slamming the Federal Reserve with every opportunity he gets.
On Tuesday he appeared on Bloomberg News and told viewers that the Fed had "given up" on the dollar, advising people to dump the greenback and buy gold as well as currencies like the Chinese Renminbi and the Swiss Franc.
He also slammed Bernanke for bailing out his banking friends on Wall Street so they could keep their bonuses at the expense of American taxpayers and the value of the dollar.
During a CNBC appearance last week, Rogers called for the Fed to abolished outright after Bernanke dumped $280 billion in liquidity into the market, a move that put 400 points on the Dow but contributed to the dollar hitting new lows and inflation continuing to skyrocket. Rogers said the action would only cause "a worse recession in the end".
_________________ "The conflict between corporations and activists is that of narcolepsy versus remembrance. The corporations have money, power and influence. Our sole influence is public outrage. Extract from "Cloud Atlas (page 125) by David Mitchell.
Joined: 25 Jul 2005 Posts: 18335 Location: St. Pauls, Bristol, England
Posted: Sat May 25, 2013 12:04 am Post subject:
Mark 'Dracula' Carney is in charge of, chair of, Financial Stablity at BIS
Rather MORE important than his Canadian job
The inside story of the central bankers' secret bank is an 80 year history of an institution that was designed to escape public scrutiny and to emphasize discretion, even as it became a leading architect of the global financial system. It's the engine at the heart of the financialization of everything. Six times a year, the world's most powerful and exclusive club meets in an unexceptional office building in Basel, Switzerland. They are central bankers, the presidents of national banks, such as the US Federal Reserve, the Bundesbank of Germany and the Bank of England. They have come to Basel to attend the Global Economy Meetings at the Bank for International Settlements. The discussions at the BIS meeting, the information that is shared there, the deals that are brokered and the subsequent decisions that the bankers take, shape all of our lives. The main job of a central banker is coordinate interest rates, regulate credit and the money supply and, especially in these austerity-obsessed times, work to prevent inflation. In short: these men control fiscal policy in the developed world. That means that the men gathered at the BIS influence how much money we have in our pockets and bank accounts, how much that money is worth and how safe it will be. Central bankers now "seem more powerful than politicians," wrote the Economist, "holding the destiny of the global economy in their hands". The Economist understated the case. Thanks in part to the global financial crisis, the attendees at the BIS bi-monthly meetings have seen their power reach unprecedented levels. Central bankers now shape the destiny, not just of their national economies and of the global economy, but of nations themselves.
http://www.amazon.co.uk/dp/161039254X _________________ www.lawyerscommitteefor9-11inquiry.org www.rethink911.org www.patriotsquestion911.com www.actorsandartistsfor911truth.org www.mediafor911truth.org www.pilotsfor911truth.org www.mp911truth.org www.ae911truth.org www.rl911truth.org www.stj911.org www.v911t.org www.thisweek.org.uk www.abolishwar.org.uk www.elementary.org.uk www.radio4all.net/index.php/contributor/2149 http://utangente.free.fr/2003/media2003.pdf
"The maintenance of secrets acts like a psychic poison which alienates the possessor from the community" Carl Jung
https://37.220.108.147/members/www.bilderberg.org/phpBB2/
2014, year of the tsunami?
Real Rulers of Western World: Swiss #BIS chief fears fresh Lehman frm worldwide debt surge
http://t.co/xwNjel3O2c _________________ --
'Suppression of truth, human spirit and the holy chord of justice never works long-term. Something the suppressors never get.' David Southwell
http://aangirfan.blogspot.com http://aanirfan.blogspot.com
Martin Van Creveld: Let me quote General Moshe Dayan: "Israel must be like a mad dog, too dangerous to bother."
Martin Van Creveld: I'll quote Henry Kissinger: "In campaigns like this the antiterror forces lose, because they don't win, and the rebels win by not losing."
Zürich is located on the delta of the river Limmat as it connects to Zürich, approximately 30 km north of the Alps. Today it is the largest in Switzerland and the capital of the canton of Zürich. It is also by far the wealthiest city in the world being the real centre of capital markets of private banks and insurance for over 700 years.
Origin of Zürich
Similar to Munich, Zürich is said to have begun as Salt store and taxing station. A thousand years ago Salt was considered as valuable as gold and for many cultures represented a defacto currency.
It is claimed in some historical accounts that Louis the German granted the lands to the Benedictines as early as 835. However this is impossible as the real benedictines-- the Cistercian monks did not come into being until the early 12th century under Bernard of Clairvaux (1090-1153).
From the early 12th Century, under the reforms of Bernard of Clairvaux, the Cistercian monks were given the authority as tax collectors and administrators for the legitimate Catholic Church. Monastaries were deliberately built around ancient Roman salt and tax stations to protect the valuable salt and the monks. This is the most likely date for the establishment of a Cistercian monastery and fortifications.
Similar to other salt and tax forts such as Munich, Zürich would have thrived as a centre of trade, exchange and wealth. While the claims that King Henry III in 1045 permitted markets, collected tolls and minted coins are deliberately false (by at least 100 years), by the 12th Century is certain the monastery did mint coins and permit markets for trade and exchange.
The origin and meaning of the name Zürich
It is important to note, that there is no credible evidence to suggest the name of the trade settlement was called Ziu-richi prior to the 13th Century. The name is from Old High German -- a language that did not exist prior to the 11th and 12th centuries. So any claimed evidence to the contrary must be considered fraudulent.
Indeed the name Zürich which comes directly from the combination of the two Old High German words Ziu-richi is especially significant. The name literally means "A place where the Ziu rule over the land"--or more simply "the city of the gods".
The name is no coincidence. It is a deliberate named created by none other than Rudolph Habsburg when he succeeded in seizing control of this valuable tax and trade settlement .
The rise of the Habsburgs and Zürich
Until the beginning of the 13th Century, the lands upon which Zürich is placed had been under the control of the House of Zähringen for a little over 100 years. When Duke Berchtold V of Zähringen (1186-1218) --the founder of the city of Bern--died, his lands were split between a number of competing groups of nobles.
The Counts of Kyburg were eventually successful in defending their claim to the most valuable lands of Zürich (and the tax/trade post). However, the House of Kyberg were all eventually killed off and at the death of Count Hartmann VI of Kyberg and his family in 1264, Rudolph of Habsburg claimed Zürich and the adjacent lands for himself.
The nobles lines of the Habsburg's prior to Rudolph are highly questionable, with the stories of his relationship to Emperor Frederick II and his con Conrad IV of Germany simply bold faced lies. It is quite possible he entered the nobility through marriage, to the daughter of Ulrich, Count of Kyberg and therefore used this as his "claim" when the Kyberg family were killed.
In a striking similarity to the lords of rival city Munich --the Wittelsbachs -- Rudolph showed no qualms in using the war between the legitimate Catholic Popes and the AntiPopes of the Roman Cult as well as the feud between the Hohenstaufen and the Welfs for his own personal and family gain.
In 1268, Conrad (falsely split into two characters to make historical analysis difficult) was captured and executed in Naples. With only a two year old son as heir, the Hohenstaufen were finished. In a bold move, Rudolph petitioned AntiPope Gregory X (1271-1276) to be officially recognized as King of Germany --a heretical and wholly unfounded act. However, thanks to the alliance with the Lombardy Princes, Rudolph prevailed with his false claim and focused on making Zürich a great city.
The creation of the great "lie" of usury and Zürich
While Zürich and the Habsburgs profited in their unholy alliance with the AntiPopes of the Roman Cult, it was the creation of one of the greatest lies and confidence tricks in human history in 1276 the guaranteed Zürich would remain the wealthiest city in the world and the future of the Roman Cult -- the lie of "usury".
In 1276 Rudolph I with the assistance of AntiPope Gregory simultaneously declared "usury" or the charging of interest and financial transactions -- vital for trade and business -- a mortal sin for any Christian publishable by death. Meanwhile Rudolf declared the infamous servi camerae ("serfs of the treasury"), in which the wealthiest Jewish merchants were press-ganged into the service of the Roman Cult and the Habsburgs.
Rudolph then moved many of these wealthy Jewish trading families to his home base of Zürich to now manage the greatest financial monopoly ever created in history. Incredibly, it is falsely believed by most people to this day that original Christian teaching as formed by Emperor Constantine in 326 forbid usury as a crime -- a horrendous and ridiculous lie. Similarly, many scholars believe that only Jewish Sephardic families had control over finance during the middle ages -- again a complete lie until 1276.
The size of this Great Lie defies belief. Within ten years of this supreme heresy by the AntiPopes and their vassals, Zürich was the wealthiest city in the world -- a position it has held and protected for 700 years. _________________ --
'Suppression of truth, human spirit and the holy chord of justice never works long-term. Something the suppressors never get.' David Southwell
http://aangirfan.blogspot.com http://aanirfan.blogspot.com
Martin Van Creveld: Let me quote General Moshe Dayan: "Israel must be like a mad dog, too dangerous to bother."
Martin Van Creveld: I'll quote Henry Kissinger: "In campaigns like this the antiterror forces lose, because they don't win, and the rebels win by not losing."
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