Infinite Unknown

“I can calculate the movement of the stars, but not the madness of men.”
- Sir Isaac Newton, after losing a fortune in the South Sea bubble

Something extraordinary is going on with these government bailouts. In March 2008, the Federal Reserve extended a $55 billion loan to JPMorgan to “rescue” investment bank Bear Stearns from bankruptcy, a highly controversial move that tested the limits of the Federal Reserve Act. On September 7, 2008, the U.S. government seized private mortgage giants Fannie Mae and Freddie Mac and imposed a conservatorship, a form of bankruptcy; but rather than let the bankruptcy court sort out the assets among the claimants, the Treasury extended an unlimited credit line to the insolvent corporations and said it would exercise its authority to buy their stock, effectively nationalizing them. Now the Federal Reserve has announced that it is giving an $85 billion loan to American International Group (AIG), the world’s largest insurance company, in exchange for a nearly 80% stake in the insurer . . . .

The Fed is buying an insurance company? Where exactly is that covered in the Federal Reserve Act? The Associated Press calls it a “government takeover,” but this is not your ordinary “nationalization” like the purchase of Fannie/Freddie stock by the U.S. Treasury. The Federal Reserve has the power to print the national money supply, but it is not actually a part of the U.S. government. It is a private banking corporation owned by a consortium of private banks. The banking industry just bought the world’s largest insurance company, and they used federal money to do it. Yahoo Finance reported on September 17:

Continue reading »

Tags: AIG, bailout, Bank, Bear Stearns, bubble, Congress, Derivatives, Derivatives market, Economy, Fannie Mae, FDIC, Fed, Federal Reserve, Freddie Mac, Gold, Government, Henry Paulson, Lehman Brothers, Politics, Stock Market, taxpayers, Treasury, U.S., Wall Street

Back in 2002, when his reputation as “The Man Who Saved the World” was at its peak, Alan Greenspan, former chairman of the Federal Reserve, came to Britain to pick up his knighthood. His biggest fan, Gordon Brown, now the UK prime minister, had ensured that the citation said it was being awarded for promoting “economic stability”.

During his trip, Mr Greenspan visited the Bank of England’s monetary policy committee. He told them the US financial system had been resilient amid the bursting of the internet bubble. Share prices had halved and there had been massive bond defaults, but no big bank collapses. Mr Greenspan lauded the fact that risk had been spread, using complex derivative instruments. One of the MPC members asked: how could this be? Someone must have lost all that money; who was it? A look of quiet satisfaction came across Mr Greenspan’s face as he answered: “European insurance companies.”

Six years later, AIG, the largest US insurance company, has in effect been nationalised to stop it blowing up the financial world. The US has nationalised the core of its mortgage industry and the government has become the arbiter of which financial companies should survive or die.

Continue reading »

Tags: Alan Greenspan, Ben Bernanke, bubble, Credit Crisis, credit crunch, Economy, Fed, Federal Reserve, Government, Henry Paulson, Politics, Recession, Treasury, U.S.

Added: Sept. 17, 2008

Source: YouTube

Tags: bubble, Credit Crisis, credit crunch, Dollar, Economy, Fannie Mae, Fed, Federal Reserve, fiat money, Freddie Mac, Gold, Goldman Sachs, Government, Inflation, Morgan Stanley, mortgage crisis, Mortgages, Politics, Ron Paul, Silver, U.S., Warren Buffet

Eight years ago, Yale superstar professor and MacroMarkets chief economist Robert Shiller famously called the top of the stock market in his book Irrational Exuberance. Then, a year before the housing bubble peaked, he predicted the colossal bust we are now experiencing.

If you recognize Shiller’s name, it’s because the Standard & Poor’s/Case-Shiller home price indexes, which he developed with Wellesley College economist Karl Case, have become the nation’s most authoritative source for home price trends.

In part one of my one-on-one with Shiller, we discuss the grim outlook for U.S. housing, which he tackles in-depth in his new book The Subprime Solution. Highlights of our first discussion include:

• Home price declines are already approaching those in the Great Depression, when they plunged 30% during the 1930s. With prices already down almost 20%, it’s not a stretch to think we might exceed that drop this time around.
• There are about 10 million homeowners whose debt is higher than their home value, which has broad implications for how Americans feel about their wealth and spending habits (read: more pressure on consumer spending).
• The current hopeful consensus — that house prices will bottom soon and then begin to recover — is most likely a dream. Housing markets don’t usually have “V-shaped” recoveries. And even if house prices stabilize in nominal terms, after adjusting for inflation, most homeowners will continue to lose money. Continue reading »

  Tags: bubble, Credit Crisis, credit crunch, Depression, Economy, Foreclosures, Great Depression, Inflation, mortgage crisis, Mortgages, Standard & Poor's, U.S.
  

Ron Paul discusses his non-interventionist policies vs. the current top two candidates interventionism on CNN.

Added: August 28, 2008

Source: YouTube

Tags: Barack Obama, bubble, Dollar, Economy, Fed, Federal Reserve, Georgia, Government, John McCain, Military, Politics, Republicans, Russia, U.S., War

At least 29 states plus the District of Columbia, including several of the nation’s largest states, faced an estimated $48 billion in combined shortfalls in their budgets for fiscal year 2009 (which began July 1, 2008 in most states.) At least three other states expect budget problems in fiscal year 2010.

Continue reading »

Tags: Alabama, Arizona, Arkansas, bubble, budget deficit, California, Connecticut, Delaware, Economy, financial crisis, Florida, Georgia, Government, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New Hampshire, New Jersey, New York, Ohio, Oklahoma, Politics, Recession, Rhode Island, South Carolina, Taxes, taxpayers, Tennessee, U.S., Vermont, Virginia, Wisconsin

Something is going to break, and soon. Banks are insolvent and failing by the hundreds if not thousands. Hedge funds are on the edge of oblivion. Only a tiny percentage of toxic waste losses in real estate and other asset classes of collateral, which will eventually amount to over $1.4 trillion in the US alone, has to date been recognized by the lying bankster fraudsters. Bonds are producing negative rates of return even based on ludicrously understated official rates of inflation (until this month, when we finally got some data bordering on the truth).

Continue reading »

Tags: Bank, bank failure, bankruptcy, Ben Bernanke, bonds, bubble, Constitution, crash, Credit Crisis, Depression, Economy, Facism, Fannie Mae, Fed, Federal Reserve, financial crisis, financial system, Freddie Mac, Gestapo, Gold, Government, hedge funds, Henry Paulson, hyperinflation, Inflation, Meltdown, Military, mortgage crisis, Mortgages, Nazis, Politics, Silver, U.S.

“But, realistically, all ordinary people can do today is try to survive, perhaps by working with friends and neighbors in planting food and living within the underground economy. At least people might not then have to starve to death, because hard as it is to believe that “it could happen here,” widespread famine in the U.S. seems a real possibility over the next several years. Nations take such risks when they allow capitalist agribusiness to destroy local agriculture.”

With the economic news of the week of July 14-the continuing crisis among mortgage lenders, the onset of bank failures, the announced downsizing of General Motors, the slide of the Dow-Jones below 11,000-we are seeing the ongoing collapse of the U.S. economy.

Even the super-rich are becoming nervous as cries for an emergency suspension of short selling ring out.

What is really taking place, however, is that the producing economy of working men and women is being crushed by the overall debt burden on households, businesses, and governments that could reach $70 trillion by 2010. The financial system, including mortgage giants Fannie Mae and Freddie Mac, is bankrupt, as the debts it is based on cannot be repaid.

Continue reading »

Tags: Alan Greenspan, Bank of England, bankruptcy, bubble, crash, debt, Economy, famine, Fannie Mae, Fed, Federal Reserve, financial crisis, financial system, Food Prices, Food shortages, Freddie Mac, Freemasonry, George Bush, Government, Henry Kissinger, Iraq, Middle East, Nazi Germany, Oil, U.S.

Source: YouTube

Related articles and videos: Continue reading »

Tags: bailout, Ben Bernanke, bubble, Congress, Dollar, Economy, Fed, Federal Reserve, Gold, Inflation, mortgage crisis, Mortgages, Oil, Oil Prices, Recession, Ron Paul, Taxes, Treasury, U.S.

If the situation would not be so damn serious, this would be very funny.
Maybe it’s still funny, if you “Always look on the bright side of life”.

Related video: - How the markets really work

___________________________________________________________________________________

WASHINGTON - A panel of top business leaders testified before Congress about the worsening recession Monday, demanding the government provide Americans with a new irresponsible and largely illusory economic bubble in which to invest.

“What America needs right now is not more talk and long-term strategy, but a concrete way to create more imaginary wealth in the very immediate future,” said Thomas Jenkins, CFO of the Boston-area Jenkins Financial Group, a bubble-based investment firm. “We are in a crisis, and that crisis demands an unviable short-term solution.”

A prominent finance expert asks Congress to help Americans rebuild their ficticious dreams.

The current economic woes, brought on by the collapse of the so-called “housing bubble,” are considered the worst to hit investors since the equally untenable dot-com bubble burst in 2001. According to investment experts, now that the option of making millions of dollars in a short time with imaginary profits from bad real-estate deals has disappeared, the need for another spontaneous make-believe source of wealth has never been more urgent.

“Perhaps the new bubble could have something to do with watching movies on cell phones,” said investment banker Greg Carlisle of the New York firm Carlisle, Shaloe & Graves. “Or, say, medicine, or shipping. Or clouds. The manner of bubble isn’t important-just as long as it creates a hugely overvalued market based on nothing more than whimsical fantasy and saddled with the potential for a long-term accrual of debts that will never be paid back, thereby unleashing a ripple effect that will take nearly a decade to correct.”

“The U.S. economy cannot survive on sound investments alone,” Carlisle added.

Continue reading »

Tags: bubble, Citigroup, Congress, Economy, Funny, Government, mortgage crisis, Mortgages, Recession, U.S.