NEWS DISSECTOR September 24, 2008

THE STEAMROLLER IN ACTION: GOV’T PRESSES BAILOUT, SPARKS RESISTANCE

“Just because God created the world in 7 days doesn’t mean we have to pass this bill in 7 days.” Rep Joe Barton, R-TEXAS

TO SCREW AND UNSCREW (Harpers.org)

“The world,” explained Iranian President Mahmoud Ahmadinejad, “no longer has the capacity to absorb fake U.S. dollars.” (He later told the UN “The American Empire is Near Collapse.” That evening he went on the Empire’s most watched talk show to talk with Larry King.)

Global stock markets lost $3.1 trillion in four days, and American International Group (AIG), the world’s biggest insurance company and a leader in the $62 trillion credit-default swap market, was nearly bankrupted. “The private market has screwed itself up,” said Representative Barney Frank (D., Mass.), “and they need the government to come help them unscrew it.”

PAULSON AND BERNANKE SAY PASS IT
CRITICS SAY: NOT SO FAST
CHALLENGING WALL STREET ON WALL STREET

OVERNIGHT: The Federal Reserve Bank pumped $40 BILLION into money market funds overseas.

The fight back is starting. As Secretary Paulson and his colleague Ben Bernanke told Congress how important it is, how urgent it is, how necessary it is to immediately pass the bailout bill or face a recession (translation: Depression) opposition to the measure is growing. Even as Democrats win some concessions in exchange for their votes. more skepticism is heard. It is expected to pass by the weekend in an atmosphere on unreflective panic and anxiety.

There is a kind or blackmail going on reminiscent of the pressures put on legislators to authorize the Iraq war:

Paulson, Bernanke Tell Lawmakers Urgent Action Needed on Treasury Plan

Mr. Paulson cautioned lawmakers against letting the plan get bogged down in a debate over unnecessary additions.

Interestingly, many law makers were not impressed or bumrushed by the warnings.

“THIS SHOULD BE ENOUGH”

Firelake reports: “”Whitehouse Deputy Press Secretary Tony Fratto insisted that the plan was not slapped together and HAD BEEN drawn up as a contingency OVER PREVIOUS MONTHS and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough.”

WE HAVE TO GO

NY Times Blog: “After the hearing stretched about two hours past the chairman’s initial estimate, the Treasury Secretary blurts out, “We do have to go.” After some concluding remarks in which he thanked the witnesses, Mr. Dodd adjourned the hearing. Amid the sounds of chairs moving and shoes shuffling along the hearing room floor, screams about the “fox guarding the hen house” from a protester provided a bit of chaos to an absolutely sober marathon of economic debate.”

Here’s more of what they had to say:

Bernanke: Recession more likely without bailout

Treasury chief Paulson on verge of historic new powers

09/23/2003
Paulson Testimony on Turmoil in U.S. Credit Markets

OBAMA SEEMS TO BE THE BENEFICIARY OF ECONOMIC CHAOS

A national Washington Post/ABC News poll released at 12 am ET Wednesday finds that, among likely presidential voters, Obama now leads McCain by 52 percent to 43 percent. Two weeks ago, in the days immediately following the Republican National Convention, the race was essentially even, with McCain at 49 percent and Obama at 47 percent.

ENTER THE FBI: WAS THERE FRAUD INVOLVED?

AP – The FBI is investigating four major U.S. financial institutions whose collapse helped trigger a $700 billion bailout plan by the Bush administration, The Associated Press has learned. Lehman, AIG, Fannie and Freddie are among the first being probed. CNN Named Countrywide as another of the firms under investigation. The FBI earlier had opened 1200 cases on mortgage fraud and indicted 400 people, mostly small fry. 26 firms or more are now under a new investigation.

There is a problem here. The FBI focuses on crimes against investors, not the people who were scammed into taking subprime loans. Their emphasis is on accounting fraud, insider trading and failure to describe the real value of their products, the crime of misrepresentation. This is not an investigation of the destruction of neighborhoods and people’s lives. Its not an investigation into predatory lending and racially discriminatory practices.

Fannie Mae, for example, was accused of cooking its books while at the same time it spread “contributions” and donations around Washington with massive political contributions. What a web of deception and theft. Will the FBI find it all? Are they even looking?..For a long time as readers know, I have been defining the causes of this problem in CRIMINAL terms. Will the FBI concur???? CNN reported last night that executives will GO TO JAIL. What I fear is that they will make an example of the small fish and not go after the CEOs. John Fund of the Wall Street Journal was on CNN comparing Fannie Mae and Freddy Mac to public-private Enrons.

REMEMBER THIS?: ELIOT SPITZER’s LAST OP-ED BEFORE HIS FALL: Predatory Lenders’ Partner in Crime By Eliot Spitzer

HELL NO

Meanwhile, there is a ramping up of criticism across the spectrum.

In the center, questions are being raised and skepticism grows as the NY Times reported:

As economists puzzle over the proposed details of what may be the biggest financial bailout in American history, the initial skepticism that greeted its unveiling has only deepened.

Some are horrified at the prospect of putting $700 billion in public money on the line. Others are outraged that Wall Street, home of the eight-figure salary, may get rescued from the consequences of its real estate bender, even as working families give up their houses to foreclosure.

On the right, there is fear of socialism (or at least what they call socialism) moving stealthfully into the center of power, The Financial Times writes about:

Republican anger at ‘financial socialism’

“FECKLESS INCOMPETENCE” DENOUNCED

The right seems divided. The Bush loyalists back the bill to DO SOMETHING. Some of his supporters see Paulson as a secret leftist, former head of the Nature Conservancy, a Semocrat and liberal infiltrator. Others like Webster Tarpley are over the top in denouncing this as the mother of all plots:

WASHINGTON DC – The grand theft bailout now being rammed through Congress by Treasury Secretary Paulson, Federal Reserve Chairman Bernanke, and other officials of the Bush regime with the help of accomplices Pelosi, Majority Leader Harry Reid, and other parliamentarians is a monstrosity for the ages, combining every hideous feature of monetarism, elitism, oligarchism, and sheer feckless incompetence. It is to all intents and purposes a national suicide note of the United States of America, a contract with the devil that absolutely guarantees irrevocable national decline. For any person of goodwill there can be only one impulse at the present moment, and that is to stop this bailout – to block it, to sabotage it, to bottle it up, to load it with killer amendments, and to do everything legally possible to stop this insane design from going through.

Aaron Krowne: ARE HEDGE FUNDS TO BLAME?

THE PROGRESSIVE RESPONSE

Now Is the Time to Resist Wall Street’s Shock Doctrine

By Naomi Klein

The best summary of how the right plans to use the economic crisis to push through their policy wish list comes from Former Republican House Speaker Newt Gingrich.

GREIDER: GOLDMAN SACHS SOCIALISM-THE NATION

GOLDMAN HAS FRIENDS

FYI: The FT reports: Goldman Sachs is to raise $7.5bn from Warren Buffett and other investors, fortifying its financial base as it begins its transition from Wall Street broker to Federal Reserve-regulated bank holding company.

READ: NOMI PRINS, A FORMER GOLDMAN SACHS BANKER, ANALYZING THE BAILOUT ON ALTERNET

OTHER NEWS:

GOOD NEWS TUESDAY NIGHT: TROY DAVIS EXECUTION STOPPED

AP: The U.S. Supreme Court has granted a last-minute reprieve to a Georgia man less than two hours before he was to be executed. Supporters of 39-year-old Troy Davis have called for a new trial as seven of the nine witnesses who helped put him on death row recanted their testimony. ?

MEANWHILE, OUT OF MEDIA SIGHT AND OUT OF MIND AS POWERFUL RAIN STORMS HIT HAITI ONCE AGAIN

CBC: 300,000 children in Haiti need aid: government

Urgent action is needed to deliver assistance to hundreds of thousands of Haitian children affected by four storms that have hammered the Caribbean country since August, UNICEF said Tuesday.

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PROTESTING THE BAIL OUT: MANY ARE JOINING THE FIGHT BACK

The unions are up in arms with a protest planned next Monday on Wall Street,

Other groups are reacting spontaneously:

Thursday, September 25, at 4pm, join a giant protest in the Financial District
Where: Southern end of Bowling Green Park, in the plaza area
What to bring: Banners, noisemakers, signs, leaflets, etc.
Why: To say we won’t pay for the Wall Street bailout
Who: Everyone

Here’s their appeal on Facebook:

“Bailout This!”

Since Bush wants to buy up Wall Street’s worthless investments with
Main Street’s hard-earned tax dollars, some folks are planning to
bring their OWN junk to Wall Street to see if they can get a bailout,
too. Bring your 8-track tape collection, high-school yearbook,
Grampa’s old recliner, and that snow globe from Great Adventure ? not
to mention your mortgage statements and student loan invoices – and
add ‘em to the pile! And tell Secretary Paulson why you deserve a
bailout, too! Bring your most audacious junk. Junk that has a story.
Make your case. (Ordinary garbage discouraged.)

This action inspired by www.facebook.com/l.php?u:http://www.buymyshitpile.com.

IN THE LION’S DEN

Yesterday, I was on Wall Street to join Reverend Jesse Jackson to protest this one-sided measure. I was also promoting my book PLUNDER which I believe will fill in a many of the blanks for people on how this crisis happened and who is responsible. You will be amused to know that this press conference including a photo of me holding up the PLUNDER cover made PAGE l—in Amsterdam!’’

My man Ray was there to shoot it for us. It is now up on You Tube. Spread the URL around – WATCH VIDEO HERE: www.youtube.com/watch?v=fzE0BUEEmVc

Being on Wall Street, surrounded by temples of mammon, looking up at the Stock Exchange and being surrounded by the people who work and worship there, I felt like a Daniel in Lion’s Den, taking it to the streets and The Man. Few listened, of course.I had been there after 9/11 at a time of fear and loathing and deep palpable insecurity. That feeling seems to have returned.

HOMEOWNERS TO MARCH ON CONGRESS

On Thursday, homeowner members of NACA, the Neighborhood Assistance Corporation of America (NACA.COM} will march on Congress to protest the bailout. The march will be led by NACA CEO Bruce Marks who writes Wednesday in The Boston Globe:

Congress and the Administration must address the underlying issue to this financial crisis -Foreclosures. The only real solution is to restructure mortgages based on what the homeowners can afford. This solution can be achieved on scale with little or no taxpayer money.

This unprecedented bailout of the predators is beyond comprehension. Wall Street and their advocates say that it was so complicated that no one could have predicted it. Yet now the administration is so sure of the solution that the American taxpayer must sign a blank check for $700 Billion to purchase these “toxic” mortgages and bailout these companies. We have trusted them before and are still paying the price in Iraq. Now Congress is ready to support them on a second request for a blank check.

It is unacceptable to provide such a huge amount of taxpayer monies to be used in the sole discretion of the decision makers who use the “Idiot” defense. How ironic is it that Treasury Secretary Henry Paulson, who was Chairman and CEO of Goldman Sachs could not have predicted this crisis, even though eight years ago I predicted this economic devastation. As the CEO of NACA, I testified in Congress on the role of Fannie Mae and Freddie Mac (”GSE’s”) in subprime lending and the proposed regulatory legislation (HR 3703).
?
We must tell Congress and the Administration ? It’s the “Foreclosures Stupid” and have them address this underlying issue. They must immediately put a moratorium on foreclosures for owner-occupant homeowners. Then through regulation, legislation and/or economic incentives have homeowner’s mortgages restructured to make them affordable for the remaining term of the loan. If NACA as a non-profit can achieve affordable solutions for thousands of at-risk homeowners, the government with its regulatory and legislative power can achieve the same results from these servicers and investors.

IS THE MEDIA CODDLING THE BANKS?

Press Coddles Banks With Pulled Punches
Ryan Tate, Gawker

Have the Media Been Too Easy on the Financials?

In July, when Richard Fuld was blaming rumormongers and short-sellers for
troubles as Lehman Brothers, the Times ran a column by finance writer Andrew
Ross Sorkin echoing his complaints and calling one of the rumors, that Barclays
would acquire Lehman, “absurd.” Today, with Barclays buying Lehman’s U.S.
operations, the Times is still siding with investment banks over investors,
depositors and others who benefit from the free flow of information. Here’s
some data the paper won’t be providing about the mess on Wall Street, according
to an article it published today:

“?said Lawrence Ingrassia, business editor of The Times. “We aren’t going to
say, ‘Here are three or five institutions that might fail next week.’ It’s one
thing to say an industrial company is having trouble paying its debts, and
another thing to say it about a financial institution.”

The Wall Street Journal is also censoring itself on behalf of large banks. Its
spokesman said the newspaper would “stay away from” the words “crash,” “panic,”
“pandemonium” and “apocalypse.”

HERE IS AN EXAMPLE FROM CNN?COURTESY OF BRADLEY LAING

CNN Blaming the people, not the powerful companies:

Personal wealth adviser Louis Barajas blamed irresponsible individual spending
for the economic problems. “We’ve gotten ourselves into this mess because of
us. The stuff that we’ve done. We’ve borrowed, we’ve purchased homes we can’t
afford,” Barajas charged, “You need to take personal responsibility. Forget
about everybody else,” as he recommended people cut back on spending and
increase savings. CNN’s Christine Romans heartily agreed with Barajas’ call for
cautious spending. “You have to be living within your means,” she reminds.
“This is a giant wakeup call that overindulgence just isn’t going to do it.”

While acknowledging the serious turmoil and challenges facing the economy, CNN’s
Ali Velshi and Christine Romans squeezed some positive remarks out of the
guests they interview from the financial industry. Despite the episode’s
dramatic background music and facts of the country’s worrisome economic status,
this “Emergency Edition” portrayed a more optimistic tone compared to other
news networks doom-and-gloom predictions.

ENVIROMENTALIST CONCERN

Sierra Club Executive Director Carl Pope points out that $700 billion “is roughly equal to this year’s bill for imported oil. So if we really took ending our addiction to oil seriously, we could repay the Treasury for the bailout.” Grist’s David Roberts notes that at the current rate of U.S. government spending on renewables, $750 billion could pay for 375 years of renewable R&D. Joseph Romm of the Center for American Progress asks whether the financial crisis is more dire than the climate crisis, and then answers his own question: “Not even close.” In a different vein, Adam Stein of TerraPass argues that “the ‘let Wall Street burn’approach won’t do anybody any good, least of all the environment.”

CREDIT CARD REFORM VICTORY

There was some good news in the fight for economic justice. Despite a statement by the White House that President Bush will veto a bill reforming credit card regulations, the Congress passed the Credit Card Bill of Rights by a whopping margin or 312 to 112 Tuesday today, the first time the House has done this. The problem is that the Senate is unlikely to go along. On Tuesday night, NIGHTLINE on ABC is expected to carry a report on deceptive credit card practices. Recently, 56,000 people responded to a request for comments on propsed credit card rules by the Federal Reserve.

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THE FEAR MACHINE AT WORK: THERE WILL BE RIOTS IF OBAMA LOSES

MARK CRISPIN MILLER: THE FEAR THE FEAR

Here Dennis Prager propagates the line that BushCo has been floating for some time: that, if Obama loses, the USA will burn, baby, burn!

This alarmist jive is not an earnest warning. It’s pre-propaganda, laying down a terroristic story-line that will be very useful if and when McPalin steals the race, and people (of all colors) dare to protest over it. Then the cops?and military personnel?will crack down hard, for “our” protection.

BushCo is all ready for this move. First of all, Bush now has a free hand to deploy the National Guard of any state and send them anywhere he wants to: a right he got when Congress passed the National Defense Authorization Act in 2006. (This law was passed despite the strenuous objections of the nation’s governors,

MAKING NEWS IN WASILA
What’s making front-page news in Wasilla’s local newspaper?:

MICHAEL BLOMQUIST WRITES ON THE BAILOUT

This is complete BS. They are avoiding providing equity when there is no equity. This is not a liquidity issue it is solvency and fraud. These bailouts attempt to rewrite the laws of math and gravity. Borrowers can’t afford the loans they obtained and our entire economy has been based on this fraud. We have NO IDEA what the bottom of the housing market will be or how much this will cost. I hope you are willing to help stop these heinous criminals. This will be exponentially larger than $700 billion and remove all leverage we have with foreign investors.

It will be much more difficult to survive as a nation if we continue to throw good money at these criminals. Once we bail out foreign investors and the banks the underlying problems will still exist. I have seen dozens of loan modifications where borrowers were provided $300-400k principal reductions along with changing interest rates to 2%. MORAL HAZARD? This is a slippery slope we must avoid. All of the prudent Americans will revolt.

The prudent greatly outnumber the Execs and borrowers who got us in this mess and as their jobs are lost, etc. Patriotism will be completely DISTROYED. Our entire economy and consumers are over-burdened with debt and more debt is not the solution. WE ARE BANKRUPT. PERIOD. It is time we work with foreign investors while we have leverage to address these problems. As soon as they are paid off they will disappear. S&P, Moodys and Fitch may have helped mislead the investors, but the investors were dealing with billions and should have conducted more diligence. The investors essentially aided and abetted the crisis and made it exponentially worse.

Paulson should not be in charge of these solutions nor should we look to him to orchestrate this remedy. Paulson and his ilk created this mess. Paulson has been involved in countless debt offerings (convertibles) of companies who were known to be insolvent with bad business models. Once these companies started to go under the I-banks found buyers in order to protect their wealthy clients. Now we are facing a crisis that is not only a mortgage/credit crisis, but the culmination of Mr. Paulson’s et. al. years of fraud and deception. This will be exponentially larger than $700 billion. The FEDs keep stating that this was a flaw in the state regulatory level, but GS was one of the worst in underwriting bogus subprime loans. Paulson has been wrong from day one; containment, housing has bottomed, stimulus act that bribed Americans with $600 in order to increase loan limits at Fannie and Freddie. Now Fannie and Freddie is being used as the scapegoat; sure they joined in the madness, but not to the same magnitude as the Lenders and I-banks. Fannie Freddie loans were limited to $417k until the stimulus act that Pelosi and Paulson championed.

I WANT MEDIA.COM

Google Challenges U.S. Plan to Fight Piracy
Bloomberg
Internet companies led by Google are joining groups representing Web users in challenging the Bush administration’s bid to toughen international enforcement against pirates of music and movies: “What is good for Disney” may not be the same as “what is good for Yahoo and Google.”

YouTube Clips May Show Finnish Gunman
Sky News
Police are studying videos posted on Google’s YouTube shortly before nine students were shot dead in Finland on Tuesday. The uploads were made hours before a 20-year-old gunman went on a rampage at a vocational college near Helsinki, killing nine of his classmates.

Google-Powered Phone Set to Make Debut
Associated Press
On Tuesday, T-Mobile USA revealed the first phone to use Android, Google’s software platform, at a New York news conference. The product is expected to sell for $199 and carry the Google brand. Analysts say it could quickly rival the BlackBerry, the iPhone and other “smart” phones.

CBS iPhone App Targets Citizen Journos
TechCrunch
CBS is announcing that Eyemobile for iPhone is available in the iTunes App store for users that want to submit photo and video content to the company’s new citizen journalism site, CBSeyemobile.com. Eyemobile lets users upload content from their iPhones.

EJC: Americans text more than they talk

American cell phone users are sending more text messages than they are making phone calls, according to a Nielsen Mobile survey released Monday. For the second quarter of 2008, U.S. mobile subscribers sent and received on average 357 text messages per month, compared with making and receiving 204 phone calls a month, according to Nielsen. The new statistic is a clear indication that Americans have jumped onto the SMS text bandwagon. In the first quarter of 2006, Americans sent and received 65 text messages per month. The number of messages sent and received today has increased 450 percent. But even though people are texting more, it doesn’t mean that they’ve stopped talking on the phone. According to Nielsen, the number of phone calls that people make and receive each month has remained relatively flat over the past two years. The surge in text messaging is being driven by teens 13 to 17 years old, who on average send and receive about 1,742 text messages a month. Teens also talk on the phone, but at a much lower rate, only making and receiving about 231 calls per month. The report even suggests that teens or kids under the age of 12 are also heavy text users, averaging about 428 messages per month.

Jackie Newberry writes:

I Paypaled a contribution to MediaChannel yesterday. This is too precious to lose. I ordered Plunder from Amazon. It should arrive in a couple of days. I’m finishing Thom Hartmann’s “Screwed” – fantastic – and have a couple of other audio books waiting in the wings. But Plunder is next. I decided it was a good time to cram on the economy?and I should have done it earlier. Hope things come around Danny.

Finally this internet type letter passed on by Richard B:

Dear American:

I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion USD. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gramm, lobbyist for UBS, who (God willing) will be my replacement as Ministry of the Treasury in January. As a former U.S. congressional leader and the architect of the PALIN / McCain Financial Doctrine, you may know him as the leader of the American banking deregulation movement in the 1990s. As such, you can be assured that this transaction is 100% safe.

This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.

Yours Faithfully Minister of Treasury Paulson

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