And this officer tells the townhall meeting protester, "It ain't [America] no more, OK?" Then what is it that we are in, officer?
From Lewrockwell.com's LRC Blog.
The best news I read today was the last post, Barney Frank saying Ron Paul's Audit the Fed bill will probably pass in October.
However, aside from that one piece of news, and buried underneath the extensive coverage of Ted Kennedy, news continues to be 5D to me - dismaying, disheartening, depressing, disingenuous, or demoralizing.
Bill would give president emergency control of Internet (Declan McCullagh, 8/28/09 CNET; the author of the article is a CBS writer who dare asked questions about health care bill H.R. 3200. See my post.)
The ever-obliging and eager-to-please Senator Jay Rockefeller has crafted a bill S. 733. The recently revised version of this bill would "allow the president to "declare a cybersecurity emergency" relating to "non-governmental" computer networks and do what's necessary to respond to the threat. Other sections of the proposal include a federal certification program for "cybersecurity professionals," and a requirement that certain computer systems and networks in the private sector be managed by people who have been awarded that license. "
(Has the United States elected a king? or worse?)
Students' take-home assignment: Census kits (8/26/09 USA Today)
To counter the growing fear that the 2010 Census is a gross invasion of privacy, the government has already started a preemptive strike. They are arming school children with "Census kit" to take home and basically educate the parents.
"Anyone tempted to ignore the 2010 Census will have a tough time doing it — especially if they have kids in school.
"The government has launched Census in Schools, an all-out campaign targeting superintendents, principals, teachers, students and, indirectly, parents, as schools open across the nation this month and next. The message: The Census is coming and here's why everyone should care. "
The government is also partnering with Sesami Street to sell the concept to pre-schoolers.
(Red Guard of Mao's China, Komsomol of Soviet Russia, Hitler Youth in Germany under Hitler. Obama Youth Brigade in the U.S. 2009.)
The National Endowment for the Art of Persuasion? (Patrick Courrielche, 8/25/09, Big Hollywood)
"Backed by the full weight of President Barack Obama’s call to service and the institutional weight of the NEA [National Endowments for the Art], the conference call was billed as an opportunity for those in the art community to inspire service in four key categories, and at the top of the list were “health care” and “energy and environment.” The service was to be attached to the President’s United We Serve campaign, a nationwide federal initiative to make service a way of life for all Americans."
With the other key categories being "security and safety", "education", and "community renewal". Artists to be the lackeys of the government. (Again, nothing new. Stalin did it. Hitler did it. Mao did it.)
(In case you are not aware of it yet, "community" may not mean what you think, just like "gay" doesn't mean "merry" or "cheerful" any more.)
That's the bill H.R. 1207, which now has 282 co-sponsors in the House. Barney Frank, answering the question in his townhall meeting, says he wants to curtail the power of the Federal Reserve, and that the bill will probably pass in October.
The video was posted on Mish's Global Economic Analysis. (Transcription is probably by Mish.)
More on the mainstream media coverage on the administration's health care "reform" and on-going debate among citizenry.
ABC (who aired the special program on health care from within the White House) and NBC (the CEO of the parent company, GE, is an economic advisor to President Obama, who also happens to be a director at New York Federal Reserve Bank) refuse to air an ad critical of Obama Administration's health care "reform".
ABC, NBC Won't Air Ad Critical of Obama's Health Care Plan
(8/27/09 Fox News) [emphasis is mine]
"The refusal by ABC and NBC to run a national ad critical of President Obama's health care reform plan is raising questions from the group behind the spot -- particularly in light of ABC's health care special aired in prime time last June and hosted at the White House.
The 33-second ad by the League of American Voters, which features a neurosurgeon who warns that a government-run health care system will lead to the rationing of procedures and medicine, began airing two weeks ago on local affiliates of ABC, NBC, FOX and CBS. On a national level, however, ABC and NBC have refused to run the spot in its present form."
The ad was created by the League of American Voters (according to Fox article, a national nonprofit group with 15,000 members who advocate individual liberty and government accountability).
"[Bob] Adams [executive director of the League of American Voters] said the advertisement is running on local network affiliates in states like Louisiana, Arkansas, Maine and Pennsylvania. But although CBS has approved the ad for national distribution and talks are ongoing with FOX, NBC has questioned some of the ad's facts while ABC has labeled it "partisan.""
""The ABC Television Network has a long-standing policy that we do not sell time for advertising that presents a partisan position on a controversial public issue," spokeswoman Susan Sewell said in a written statement. "Just to be clear, this is a policy for the entire network, not just ABC News."
"NBC, meanwhile, said it has not turned down the ad and will reconsider it with some revisions."
No one, not even Obama, seems to know exactly what's in the House bill H.R. 3200, what's in the Senate version, what's in the versions that different committees in the House and the Senate have been discussing. However, NBC apparently knows all the "facts" to dispute the ad (I wonder it's a "fact sheet" provided by the White House/Democratic Party, instead of "facts"), and ABC labels it "partisan", totally oblivious to the fact that by rejecting the "partisan" ad the network itself is taking a "partisan" position.
As the article cites Dick Morris (a FOX News political analyst and the League of American Voters' chief strategist, who was a onetime advisor to former President Bill Clinton):
""It's the ultimate act of chutzpah because ABC is the network that turned itself over completely to Obama for a daylong propaganda fest about health care reform," he said. "For them to be pious and say they will not accept advertising on health care shuts their viewers out from any possible understanding of both sides of this issue.""
Speaking of being partisan, ABC is clearly excited about the return of "Harry and Louise" ad, this time promoting their dear leader's health care "reform". The ad, as I wrote in my posts, was created by a pharmaceutical industry lobby PhRMA who reportedly has had a secret deal on health care with the White House and whose slogan on their website says "Disease is our enemy. Working to save lives is our job."
And here I was, thinking the days of militarizing everything was over and done with, with the previous administration. By the way, as I mentioned in my post also, the health care bill H.R. 3200 is full of "corps" and "force" for the "positive" "change".
Even the mainstream media seems to have started to read the health care "reform" bill H.R. 3200 and started asking some relevant questions.
Democratic Health Care Bill Divulges IRS Tax Data
(Declan McCullagh, 8/26/09 CBS News)
"One of the problems with any proposed law that's over 1,000 pages long and constantly changing is that much deviltry can lie in the details. Take the Democrats' proposal to rewrite health care policy, better known as H.R. 3200 or by opponents as "Obamacare." (Here's our CBS News television coverage.) "
After that preamble, the article goes on to actually list specific sections of the bill H.R. 3200 and discuss potential problems: [emphasis is mine]
"Section 431(a) of the bill says that the IRS must divulge taxpayer identity information, including the filing status, the modified adjusted gross income, the number of dependents, and "other information as is prescribed by" regulation. That information will be provided to the new Health Choices Commissioner and state health programs and used to determine who qualifies for "affordability credits."
[And remember, this Health Choices Commissioner is to be appointed by the President, and accountable only to the President. No confirmation by Congress is required, ever.]
"Section 245(b)(2)(A) says the IRS must divulge tax return details -- there's no specified limit on what's available or unavailable -- to the Health Choices Commissioner. The purpose, again, is to verify "affordability credits."
"Section 1801(a) says that the Social Security Administration can obtain tax return data on anyone who may be eligible for a "low-income prescription drug subsidy" but has not applied for it. "
Whether they want to apply for it or not.
"Over at the Institute for Policy Innovation (a free-market think tank and presumably no fan of Obamacare), Tom Giovanetti argues that: "How many thousands of federal employees will have access to your records? The privacy of your health records will be only as good as the most nosy, most dishonest and most malcontented federal employee.... So say good-bye to privacy from the federal government. It was fun while it lasted for 233 years."
"I'm not as certain as Giovanetti that this represents privacy's Armageddon. (Though I do wonder where the usual suspects like the Electronic Privacy Information Center are. Presumably inserting limits on information that can be disclosed -- and adding strict penalties on misuse of the information kept on file about hundreds of millions of Americans -- is at least as important as fretting about Facebook's privacy policy in Canada.)
"A better candidate for a future privacy crisis is the so-called stimulus bill enacted with limited debate early this year. It mandated the "utilization of an electronic health record for each person in the United States by 2014," but included only limited privacy protections."
Bingo.
A very important component of the so-called health care "reform" by the administration is already SIGNED INTO LAW, because it was buried in the so-called "stimulus" (so far all it has stimulated is government, local, state and federal) bill that no one read (and the Democratic Congressman of my area actually expressed pride in not having read it - that would be so below him). In other words, the administration/Democrats can make any concession to please Republicans and skeptical Democrats regarding the privacy issue in the health care bill, and the concession is basically irrelevant.
The opponents of this bill and the health care "reform" as presented by this administration and Democratic Congress should start thinking about ways, if any, to repeal this part of the stimulus bill. (I will discuss the particular segment of the stimulus bill that is related to health care in a later, separate post.)
The writer concludes:
"If we're going to have such significant additional government intrusion into our health care system, we will have to draw the privacy line somewhere. Maybe the House Democrats' current bill gets it right. Maybe it doesn't. But this vignette should be reason to be skeptical of claims that a massive and complex bill must be enacted as rapidly as its backers would have you believe. "
Well, it's not given that we will have to have such government intrusion. But I am glad to see the mainstream media like CBS News is starting to ask questions, instead of simply being a spokesperson for the government like certain other networks (the one that starts with "N" comes to mind, whose parent company starts with "G").
If you go to the linked site, be sure to check out the comment section. The writer is bombarded with the supporters of the bill and/or the administration's "reform" calling him all sorts of names, but there are opponents to the bill who seem rather surprised that CBS has allowed this article to be published at all.
--------------------
(Talk about health... Sorry for tardy posting today. There were many topics that I wanted to write about, but I couldn't concentrate enough to write anything while those drummers on the beach (not the beach right nearby but several blocks away) just bonging and bonging, creating low-frequency sound wave that physically pressured my skull and my heart, making me ill. Think twice before you consent to a power-generating wind turbine near you.)
Back to a serious topic. Dead serious.
In case you haven't noticed, the "threat" of H1N1 flu, a.k.a. swine flu has been quietly but steadily ramped up, and since mid August it's been raised to a fevered pitch, as the administration's health care "reform" continues to lose support.
Half the US could get swine flu, says Baltimore Sun.
Swine flu could hospitalize 2 million in U.S. this winter, says Los Angeles Times.
Swine flu vaccine not enough to go around, says ABC News.
National Guard drill at high school to prepare for possible H1N1 riot, says Sun Journal in Maine.
Then I saw this today, at Lewrockwell.com. The article was written by Andrew Bosworth.
Exposed: The Swine Flu Hoax (Andrew Bosworth, 8/26/09 Lewrockwell.com) [emphasis is mine]
Dr. Bosworth starts the article by stating that the flu pandemic of 1918 evolved out of very unique conditions that arose during the World War I and right after (e.g. U.S. soldiers packed like sardines and shipped back home).
What caught my particular attention, though, is the section on origin of the swine flu virus:
"The Mysterious Origins of the H1N1 "Swine Flu" Virus
"If the current H1N1 swine flu virus does become abnormally lethal, there would be three leading explanations: first, that the virus was accidentally released, or escaped, from a laboratory; second, that a disgruntled lab employee unleashed the virus (as happened, according to the official version of events, with the 2001 anthrax attack); or third, that a group, corporation or government agency intentionally released the virus in the interests of profit and power.
"Each of the three scenarios represents a plausible explanation should the swine virus become lethal. After all, the 1918 flu virus was dead and buried – until, that is, scientists unearthed a lead coffin to obtain a biopsy of the corpse it contained. Later, researchers similarly disturbed an Inuit woman buried under permafrost.3
"The US Armed Forces Institute of Pathology, with a scientist from the Mount Sinai School of Medicine, then began to reconstruct the 1918 Spanish flu. Had Iran or North Korea engaged in Frankenstein experiments (complete with ransacking graves) to reverse engineer the 1918 virus the US and the UK would have gone ballistic at the UN Security Council.
"Interestingly, numerous doctors and scientists suspect that the swine flu virus was cultured in a laboratory. A mainstream Australian virologist, Adrian Gibbs – who was one of the first to analyze the genetic properties of the 2009 swine flu – believes that scientists accidentally created the H1N1 virus while producing vaccines. And Dr. John Carlo, Dallas Co. Medical Director, "This strain of swine influenza that’s been cultured in a laboratory is something that’s not been seen anywhere actually in the United States and the world, so this is actually a new strain of influenza that’s been identified."4 Because of this, the 2009 swine flu virus – which has yet to be detected in any animals – has a rather suspicious pedigree."
What?? This virus is yet to be detected in any animals? Why is it then called swine flu?
It seems it is called swine flu because "the closest relatives to the new virus are viruses that were isolated from pigs in the United States in the past few years", according to a CNN report back in May. "It's origin is unknown", says Wikipedia.
In the next section, he talks about the media coverage and the administration's campaign.
"The Propaganda Campaign
"Across the mainstream media, reports announce one swine flu death after another (even though ordinary flu kills about 35,000 Americans each year). Upon closer scrutiny of what passes for journalism, the victims have "underlying health problems," or "a common underlying health condition," or "significant medical conditions."
One news headline even blared: "Swine flu mother dies after giving birth, leaving her premature baby fighting for life," and only later, buried deep in the story underneath, did it explain that she had "other medical problems" which included being confined to a wheelchair because of a serious car accident.
"Citizens the world over are increasingly skeptical of hyped headlines followed by smaller-print caveats. They are uneasy with the effort to create "doublethink" – a term coined by George Orwell in 1984 and a reference to holding two contradictory ideas in one’s mind simultaneously, paralyzing critical thought.
"The media has never been in the habit of reporting the cases of people who, for no known reason, die of the flu. Out of the 35,000 Americans who die each year from flu-related illnesses, some are bound to be relatively young and healthy. It happens. This year, however, their stories are front-page news.
"More recently, news reports now claim that the H1N1 swine flu can affect people in the lungs and lead to pneumonia. This, however, is what separates the flu from the common cold in the first place; and this is why tens of thousands of elderly people die of flu-related symptoms each year. Fox News even claimed that "this one morphs and mutates and comes back in different ways…," (like all flu viruses). In short, the media now uses the flu’s own ordinary symptoms to fuel fear.
"Fortunately, a growing wave of online media challenges the propaganda. Back in 1976, there were no rival voices, and the Center for Disease Control’s manipulative television commercials dominated the airwaves. Fortunately, as a testament to official shamelessness, these videos are now archived and searchable on the Internet under the title of "1976 Swine Flu Propaganda."
"Now, like then, the US government’s pandemic policy alternates between the ridiculous and the repugnant. The government’s flu website is revealing. First, the historical section on the 1918 virus is intellectually dishonest, making absolutely no link between the unique conditions of World War I and the flu pandemic; instead, the site propagates the erroneous notion that this virus came out of the blue.5
"Second, the site announces an absurd American Idol-style video contest: "Create a Video About Preventing or Dealing With the Flu & Be Eligible to Win $2500 Cash!" (Congress has earmarked 8 billion dollars for swine flu prevention and can only offer $2,500 to the proles – or, rather, to the one prole who, rising above mediocrity, best parrots the Party Line.)
"And third, the site encourages the use of Twitter to "stay informed…" There is something mildly disturbing about the US federal government promoting Twitter as a form of resistance to foreign authoritarianism, while, simultaneously, using social networking to further federalize and protect the abuse of power at home.
"1976 + 1984 = 2009
"In sum, it appears that the 2009 swine flu pandemic will not be 1918. It might be a 1976-style hoax, however, serving profit and power – with a bit of Orwell’s 1984 thrown in for good measure.
Notes
Google did it again! My site is hosting a supposedly context-based ad, fed by Google AdSense.
Is it Timmy Geithner? Or is it Elvis Presley that triggered the feed?
Your stimulus money hard at work.
Feds: Stimulus money sent to 4,000 cons (8/26/09 Boston Herald)
"One day after the Herald reported some surprised Bay State inmates - including murderers and rapists - were cashing in $250 stimulus checks, federal officials revealed the same behind-bars bonus was mailed to nearly 4,000 cons nationwide.
"A federal watchdog is now probing how the cons were cut the checks. The same cash also may have been sent to fugitive felons, people kicked out of the country and even individuals now deceased.
"It’s all part of the massive American Recovery and Reinvestment Act of 2009 - and what is becoming an accounting nightmare for red-faced feds."
Convicts, felons, deceased... Does that ring a bell?
Now that Wall Street got the central banker that they wanted (partly due to the self-promoting campaign by the Fed chairman himself), they may be getting bolder in their calls.
Goldman Sach's chief U.S. economist Jan Hatzius thinks the Federal Reserve's balance sheet, which has been at $2 trillion since last September, could double to $4 trillion in order for the Fed to support the economy.
Goldman’s Hatzius Says Fed Balance Sheet Could Hit $4 Trillion (8/25/09 Bloomberg)
"Aug. 25 (Bloomberg) -- Jan Hatzius, chief U.S. economist at Goldman Sachs Group Inc., said the Federal Reserve could double the size of the central bank’s balance sheet again if needed to support economic growth.
"A rise in the balance sheet to $4 trillion is a “possibility,” Hatzius said in an interview on Bloomberg Radio in New York. “It is going to depend on not just what inflation does, but also on whether the economy does move back to a slower growth pace.”
"The Fed must now guide the world’s largest economy back to growth and reduce unemployment approaching 10 percent while shrinking the balance sheet to prevent a surge in inflation, Hatzius said.
"“Rates need to stay low,” he said. The Fed “could become more aggressive in purchasing assets. They have not gotten a lot of bang for the buck on that policy so far.” "
Hmmm. Aren't the last two statements contradicting with each other? If the Fed aggressively purchase more assets, that's going to increase the balance sheet, not shrink it.
Let's go back again to the Fed's balance sheet and look at the components on Assets and Liabilities. These are selected components so they do not balance.
The top table is created from the balance sheet as of May 20, 2009, and the bottom one from the latest as of August 19, 2009. The Fed's various loan programs do seem to be winding down, for which the Fed is compensating with increased purchase of Treasuries, agency bonds, and MBS backed by Fannie, Freddie, and Ginnie. (Hardly anyone wants the last two types of government securities these days.)
Now to the Liabilities side. Notice the currency in circulation (M1) has had a slight increase, and the deposits from depository institutions (i.e. banks) have decreased markedly. That's 14% decrease. Is it possible that banks have started to put the money to use?
In order to double this balance sheet, I see only two ways to do it. One is to expand the lending programs again (assets) and have the banks deposit the money back into the Fed (liabilities). That presupposes another financial disaster, a huge disaster. The other way is to double the size of the government securities holdings (assets) and either figure out the way to entice the banks to park the money at the Fed or print more money into circulation (liabilities) or both.
If the Fed doubles the balance sheet by buying more government securities and at the same time devises a plan to keep or increase the deposits from the banks, that defeats the purpose of stimulating the growth, doesn't it? Can we say "inflation"?
See also my post on Bernanke's so-called exit strategy.
Goldman Sachs is also calling for oil price to go back up to 2008 high.
(They must know what we do not yet know.)
- and perhaps, not at all. Uh-oh.
Feingold: No health care bill before Christmas
(8/25/09 Lakeland Times) [emphasis is mine]
"U.S. Sen. Russ Feingold told a large crowd gathered for a listening session in Iron County last week there would likely be no health care bill before the end of the year - and perhaps not at all.
"It was an assessment Feingold said he didn't like, but the prospect of no health care legislation brought a burst of applause from a packed house of nearly 150 citizens at the Mercer Community Center.
""Nobody is going to bring a bill before Christmas, and maybe not even then, if this ever happens," Feingold said. "The divisions are so deep. I never seen anything like that."
Senator Feingold, who is the proponent of health care reform in principle, doesn't think the "reform" that's on the table right now is a right one. He favors experimentation and evidence-gathering before proceeding:
"The senator, a declared proponent of health care reform in principle, nonetheless did not seem too concerned about a potential failure of the Obama administration's effort. He said there was merit to the idea of trying a variety of proposals in various states first.
""Lindsay Graham and I sponsored legislation to have pilot programs in five states," Feingold told the audience. "Maybe we should try some different things. There might be a single-payer state. There might be a co-op state. Let's get some evidence on the ground. This thing right now is not going in the right direction. We might be in a situation where there won't be a bill worth passing.""
The Senator allayed some fears regarding several contentious issues in the current health care "reform". He said the public funding for abortion, which was removed from the House bill, won't be re-introduced in the Senate bill. He was also willing to join the "rest of us" in the health care plan, if he was eligible. (Under the current "reform", Congress would be exempt.)
What I liked most about Senator Feingold, though, was his repudiation of Harry Reid's "evil-mongers" comment:
"Finally, Feingold repudiated Senate Majority Leader Harry Reid's remarks calling vocal critics of health care reform at town hall meetings "evil mongers." Feingold called Reid's remarks unfortunate and inappropriate. "I've been listening to the people for 16 years, and I have never impugned their motives," the senator said."
One participant in the Senator's townhall meeting seems to summarize the national sentiment quite well:
""This issue has definitely awakened a sleeping giant," the man said. "We're mad as hell and we're not going to take it anymore.""
Senator Feingold does not support cap and trade scheme, and he opposes "legislation to require gun registration, and he said such legislation would die a quick death in the Senate."
If you recall, he was the only Senator who voted no on the original Patriot Act. He also voted no on the resolution that authorized President Bush to invade Iraq. He is a Democratic Senator from Wisconsin.
(On these issues, he seems like my kind of Senator. Instead, here in California we have Feinstein and Boxer.)
Is it possible that banks have been increasing lending?
I do not have hard evidence, and most of the news I read continue to talk about unwillingness of the nation's banks to lend to businesses and consumers. But I have this distinct feel that the money that's been stashed away at the Federal Reserve as excess reserves has been on the loose (albeit very slowly), say for about a few months.
Here is anecdotal evidence that I suspect the money may have gotten loose...
Anecdote 1: Bank of America advertisement
B of A seems to be back heavily advertising their mortgage products on TV (I heard it from people with TV). I saw their ad myself on the Internet several weeks ago, inviting the home buyers and people who want to refinance to contact them. Up to $3 million dollars, no less. That means jumbo loans are back. For quite a while, there was no jumbo loan available here, and that at least partly contributed to pricey beach properties in multi-million dollar range not moving. (Here's B of A web page that says jumbo loans up to $3 million.)
Anecdote 2: Leveraged loans are back
See my yesterday's post. Big national banks like J.P. Morgan Chase, Bank of America and Citigroup are rushing to finance leveraged deals again. In the case of Warner Chilcott, the combined total loan amount of $4 billion may seem tiny, but I suspect that's because of the government rescue and stimulus packages ever since last September - they carry price tags above $700 billion, and by comparison $4 billion loan looks small.
Anecdote 3: Cup and handle formation in M1 Money Multiplier?
I have no idea if one can treat that kind of index as if it were stock price chart. But if I do treat it that way, what I see is a "cup and handle" breakout about to happen. (The chart was created using St. Louis Fed's FRED. Data is from FRED, too.)
And indeed, the M1 Money Multiplier has been increasing since May this year, crawling back to 1, backing my suspicion.
The money multiplier could snap back hard, particularly because the drop since last September was so severe. If that happens, we can forget about deflation.
It's surely the change we can believe in.
Obama to Reappoint Bernanke as Fed Chief (8/25/09 Wall Street Journal)
"President Barack Obama will announce the nomination of Ben Bernanke to a second term as Federal Reserve chairman on Tuesday, opting for continuity in U.S. economic policy despite criticism in Congress of the low-key central banker's frantic efforts to rescue the financial system.
"Mr. Obama's decision had become a subject of growing speculation and uncertainty in financial markets and in Washington policy circles.
"The president called the Fed chairman to the Oval Office Wednesday evening to offer him another term. Mr. Bernanke then flew off to Wyoming where he gave a spirited defense of his controversial policies at the Fed's annual meetings in Jackson Hole. Mr. Obama left for Martha's Vineyard, Mass., where he will deliver the news Tuesday with Mr. Bernanke at his side."
You can read the rest of the article by following the link above.
The Fed Chairman has been mounting a campaign in recent weeks to get reappointed. The media pundits have been split: those in favor, those against. Some, who are in favor, recommended reappointment because Big Ben was a much better choice than Larry Summers.
This reappointment by President Obama comes when the court orders the Federal Reserve to disclose the details of $2 trillion emergency bank loans under the Freedom of Information Act request by Bloomberg LP within five days.
It also comes when in the House of Representatives Ron Paul's Audit the Fed bill H.R. 1207 languishes even though it has now 282 co-sponsors, and when Rasmussen survey finds 75% of Americans favor auditing the Fed.
Even the Democrats in Congress express doubts about giving the Federal Reserve and its Chairman greater power via Obama's financial restructuring plan.
What do I think? I think Bernanke, along with Paulson, effective killed what was left of the free-market capitalism with their frantic plans starting early September 2008. Fannie Mae and Freddie Mac takeover by the government, same for AIG, letting Lehman Brothers go bankrupt and see the world seize up. He and Paulson (and let's not forget President Bush) paved the way for an autocratic statist government we have now.
Well, well. I didn't expect the next Presidential czar to be this one: Torture (or High-Value Detainee Interrogation) czar.
Obama spokesman announces interrogation unit
(8/24/09 AP via Breitbart.com) [emphasis is mine]
"WASHINGTON (AP) - President Barack Obama has approved creation of a new, special terrorism-era interrogation unit to be supervised by the White House, a top aide said Monday, further distancing his administration from President George W. Bush's detainee policies.
"The administration has also decided that all U.S. interrogators will follow the rules for detainees laid out by the Army Field Manual, according to senior administration officials who spoke on condition of anonymity because they were not authorized to discuss the decision. That decision aims to end years of fierce debate over how rough U.S. personnel can get with terror suspects in custody.
"The unit would be led by an FBI official, with a deputy director from somewhere in the government's vast intelligence apparatus, and members from across agencies. It will be directly supervised by the White House, but the senior administration officials insisted the unit's agency bosses will make operational decisions, not the White House.
"The new interrogation unit will be known by the acronym HIG."
That acronym stands for "High-Value Detainee Interrogation Group", according to Time Magazine.
The Army Field Manual is available online.
Remember me? Wall Street repackages debt for sale
(8/24/09 AP via Yahoo Finance)
"WASHINGTON (AP) -- Wall Street may have discovered a way out from under the bad debt and risky mortgages that have clogged the financial markets. The would-be solution probably sounds familiar: It's a lot like what got banks in trouble in the first place.
"In recent months investment banks have been repackaging old mortgage securities and offering to sell them as new products, a plan that's nearly identical to the complicated investment packages at the heart of the market's collapse."
"In recent months, banks have been tiptoeing toward a possible solution, one in which the really good bonds get bundled with some not-quite-so-good bonds. Banks sweeten the deal for investors and, voila, the newly repackaged bonds receive AAA ratings, a stamp of approval that means they're the safest investment you can buy.
""You've now taken what was an A-rated security and made it eligible for AAA treatment," said Richard Reilly, a partner with White & Case in New York.
"As for the bottom-of-the-barrel bonds that are left over, those are getting sold off for pennies on the dollar to investors and hedge funds willing to take big risk for the chance of a big reward.
[Arizona State University economics professor Herbert] "Kaufman said he's optimistic about the recent string of deals because, unlike during the real estate boom, investors in these new bonds know what they're buying.
"The sweetener at the heart of the deal is a guarantee: Investors who buy into the really risky pool agree to also take some of the risk away from those who buy into the safer pool. The safe investors get paid first. The risk-taking investors lose money first.
""We're back to financial engineering, absolutely," he said. "But I think it's being done at least differently than it was before the meltdown."
""There's no voodoo going on here. It's just math," said Sue Allon, chief executive of Allonhill, which helps investors analyze such hard-to-price investments.
"Financial gurus call it a "resecuritization of real estate mortgage investment conduits." On Wall Street, it goes by the acronym Re-Remic (it rhymes with epidemic)."
Soooo... What's the difference this time around? The previoius round of securitization that ended up in disaster also had the "guarantee" that the article talks about - the safe investors (AAA tranche) get paid first, the risk-taking investors lose money first.
"It's just math" - that's what people said the first time around.
This time it's different because they are repackaging the already packaged "hard-to-price" assets, they say. But the concept is the same. Instead of raw inputs (mortgages) bundled for the first time into a security, they are simply treating these securities thus created as raw inputs for the higher-order security.
The only difference I can tell is that "investors in these new bonds know what they are buying". I sure hope so, and I hope they won't turn to the government when those bonds blow up in their faces.
As long as they (bankers and investors) don't ask for the government bailout in case of another disaster, I'm for the free-market solution.
Another article from Wall Street Journal says leveraged loans are coming back: "Leveraged P&G Deal Has Banks Jumping In" (8/24/09 Wall Street Journal)
"Specialty drug maker Warner Chilcott Ltd. is expected to announce as early as Monday the acquisition of Procter & Gamble Co.'s prescription-drug business for more than $3 billion, say people familiar with the matter, a sign that the market for loans on more highly levered deals may be loosening.
"Six banks, led by J.P. Morgan Chase & Co. and Bank of America Corp. and including Credit Suisse Group AG, Citigroup Inc., Barclays PLC and Morgan Stanley, are expected to put up as much as $4 billion in financing for the transaction. Roughly $3 billion will go toward the acquisition, with the remainder refinancing $1 billion in existing Warner Chilcott debt.
"This would be the fourth-largest "leveraged loan" of 2009 in the U.S. and the largest globally for an acquisition, according to data provided by Dealogic. The last leveraged loan of this size for a deal in the U.S. was in April 2008, when Mars Inc. announced its planned purchase of Wrigley.
"A leveraged loan is typically defined as a loan made to a borrower with a credit rating below investment-grade or that already carries a good amount of debt."
I have to give it to these bankers. They got burned badly, just recently, and they are back doing the same things that caused the injury. I almost wish the other sectors of the economy were just as foolhardy and reckless, or I should say risk-taking.
The one-year anniversary of the Cascading Market Crash of September-November 2008 is fast approaching, I thought I'd better get on with this project of listing events that led up to and constituted the crash through news headlines.
So, this is Part IV of "What the @#$% Happened in September-November 2008" series. (Here are Part I, Part II, and Part III.) It covers from October 6 to October 10, 2008.
The bank bailout bill just passed the House on Friday October 3, and contrary to what the financial media pundits had been warning us ("If the bill doesn't pass, imagine what that would do to the stock market!") the stock market went down 4% that day. The same pundits' spin was "it's a sell-the-news event, just a profit-taking".
They couldn't have been more wrong. The week of October 6 was when the stock markets around the world took a sharp nose-dive. They kept going down, day after day. It was downright scary.
With that in mind, let's go to the headlines of Investor's Business Daily front pages. As before, the indices' numbers are those of the day prior to the date; the same goes for the news headlines.
Tuesday October 7, 2008
(Dow Jones Industrial 9955 (-370), S&P 500 1056 (-42), Nasdaq 1862 (-84))
Friday October 10, 2008
(Dow 8579 (-678), S&P 909 (-75), Nasdaq 1645 (-95) )
Monday October 13, 2008
(Dow 8451 (-128), S&P 899 (-10), Nasdaq 1649 (+4))
During this week,
Dow went from 10325 to 8451, -1874 points or -18%.
S&P 500 went from 1099 to 899, -200 points or -18%.
Nasdaq went from 1947 to 1649, -298 points or -15%.
And we thought (or hoped) this was the bottom. I remember watching TV and seeing every news anchor, financial analyst, trader, pundit, government official looking like death. I do remember also that certain financial shows kept recommending stocks to buy. Just like during the Nasdaq crash of 2000, I thought.
"We have to do something." "American people want us to do something." They did something, like passing a very costly $700 billion bank bailout bill, rate cuts, new lending programs by the Federal Reserve. And nothing worked. A hasty trade in a panic is always a bad trade.
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