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The Battle with the Banks is On: Protests and Pitchforks
As New Bank Bailouts Seem Likely, There Is More to Speak Out Against
There's phrase that's worked its way into the Japanese language: "Lehman Shokku" - translated as Lehman Shock. It refers to what happened to 460,000 people after Hank Paulson and Tim Geithner let the global Lehman Investment Bank collapse. A former Lehman executive told me over Matzoh at a Passover seder that she believes the decision reflected a competitive conflict and ego battle between the former Goldman Sachs chief turned Treasury Secretary and the bullheaded CEO of Lehman.
The clash of two power-crats in New York triggered a hard rain across the world.
Bloomberg reports on a forty year old former bank employee, Miki, who "now sleeps in cardboard boxes under the elevated Hanshin expressway in Umeda, Osaka's central business district...as the global recession triggered by the implosion of Wall Street banks batters Japan. ... Miki's loss of housing shows how Japan's 2.95 million unemployed people threaten to fuel a rise in homelessness."
Bloomberg is doing more than reporting bad news; it is also suing the Federal Reserve Bank for information that the privately run "public institution" wants to hide. Bloomberg wants the FED to disclose securities the central bank is accepting on behalf of American taxpayers as collateral for $1.5 trillion of loans to banks.
As the sun creeps through and the weather warms, there's an expectation that the new season will wipe out the winter's bad karma and lead to a desperately needed economic recovery. Obama Advisor Larry Summers, like an evangelist from the Elmer Granty era, sees the signs in small upticks of business activity. Now, according to the News n Economic blog comes an analyst, Roger Shealy, who has examined the footnotes and available data concluding "The Fed is holding a larger share of risky assets as collateral for its riskless currency and Treasuries lent on the open market."
Translation: We are living on Quicksand.
The Fed also admits that its consumer credit plan is faltering. Reports TIME: "The second round of the Federal Reserve's attempt to restart the nonbank consumer-lending market, the so-called TALF program, went even worse than the faltering first round did last month. The poor performance is causing some Fed officials to doubt the entire premise of the effort to restart nonbank credit markets."
On top of that, as the Treasury Department runs so-called "stress tests on the soundness of the banks," the Fed wants the banks to stay silent on the results. Again, Fed watcher Bloomberg is on the case: "The U.S. Federal Reserve has told Goldman Sachs Group Inc., Citigroup Inc. and other banks to keep mum on the results of "stress tests" that will gauge their ability to weather the recession, people familiar with the matter said."
On this Easter weekend of "He Has Risen," a lot seems to be still falling.
For the most cogent explanation of what's going on, visit the Baseline Scenario website run by former IMF exec and MIT Professor Simon Jenkins:
"Just as global financial liberalization created the potential for capital to move violently across countries and greatly facilitated speculative attacks on currencies, so financial deregulation within the United States has made it possible for capital markets to attack - or, in less colorful terms, go short or place massive negative bets on - the credit of big banks and, in the latest developments, the ability of the government to bailout/rescue banks.
The latest credit default spreads data for the largest banks show a speculative run underway. As the system stabilizes, it becomes more plausible that a single big bank will fail or be rescued in a way that involves large losses for creditors. This would like trigger further speculative attacks on other banks, much as the shorting of countries' obligations spread from Thailand to Indonesia/Malaysia and then to Korea in fall 1997."
In other words, them chickens will soon be coming home to roost.
The banks seem confident that having learned the disastrous lessons on Lehman Shokku the government will keep bailing them out. Quiet as its kept, Insolvency in many banks suggests another wave of bailouts is coming.
The banks seem confident that they have "captured" the government and can depend on taxpayer monies to pay off their crimes and mistakes. At the same time, they are worried about something else: US.
JP Morgan Chase overlord Jamie Dimon fears that the public anger will torpedo the schemes the banks are running, saying, ‘"if you let them vilify us too much, the economic recovery will be greatly delayed."
Comments Jenkins:
"The "center vs. the pitchforks" idea fundamentally misconstrues the current debate. This is not about angry left or right against the center. It's about centrist technocrat (close to current big finance) vs. centrist technocrat (suspicious of big finance; economists, lawyers, nonfinancial business, and - most interestingly - current/former finance, other than the biggest of the big, particularly people with experience in emerging markets.)"
If anything, this seems the time to get the pitchforks going, to intensify the pressure, to make noise and press for change. Paul Krugman tells us that the policy world and the bankers want to rebuild a corrupt system, writing:
"Despite everything that has happened, most people in positions of power still associate fancy finance with economic progress. Can they be persuaded otherwise? Will we find the will to pursue serious financial reform? If not, the current crisis won't be a one-time event; it will be the shape of things to come."
That's why events like this weekend's banking protests organized by a new force, A NEW WAY FORWARD, is crucial. Their three-word phrase, NATIONALIZE, REORGANIZE and DECENTRALIZE sums up the aims spelled out at ANewWay.org
They have issued a call:
- "Pledge to Break Up the Banks: Tell Obama and Congress, "If it's too big to fail, it's too big to exist.
- Dismantle the power of the financial elite and make policies that keep a new crop from springing up.
- We want our economy and politics restored for the public."
23 Comments so far
Show All"Something wicked this way comes"
Think about it?
It is like we are at the circus and the Magic act is to make money out of nothing...but more debt.
If we remember in school that was called counterfeiting or a gambler's dream.
Nobody knows or is saying where all these trillions of our money has gone but we know we are stuck with the bill.
Big new Inflation will hit if this money ever gets into circulation or spent on something,
It will be great if folks start getting new jobs from all the trillions we are in hock just for a stimulus plan when if they would have sent a check to every citizen for a fraction of what they threw away down the Bank Hole, the economy would be Stimulated and could be gauged to find the amount of inflation, compared to the new job growth.
We have no way of even knowing how our economy works anymore and maybe that is why it is not working.
I am beginning to feel that just as Bush Blew it by goin to war instead of making acts of terror an international driven law enforcement project instead of making the War economy bring the world down, Obama is making similar huge mistakes and it may be too Late to fix,
He is still acting like the USA Has lots of cash to throw around with the biggest rise in new military spending on wars that he should be ending. All this talk about al Queda and he hasn't even talked to one ... it is like the enemy can't talk or be acknowledged unless there are some women and children lying dead where a drone spotted a real live terrorist... who was acting suspicious to a joy stick operator in a college basement.
I'll be at the demonstration in SF today. Encourage everyone to go to their local demo. I realize they won't do much good - so do the organizers - but it's a first step.
"That's why events like this weekend's banking protests organized by a new force, A NEW WAY FORWARD, is crucial."
A weekend protest here and there is a waste of time. A New Way Forward should be organizing rallies during business hours on a weekly, if not daily, basis.
In the country of Georgia, they've been at it almost a week already. "Protesters supporting a coalition of parties marched from Parliament to the presidential administration and moved to block main roads in the country's capital..."
Only in America do we protest between 10 and 2 in front of an empty AIG building on a Saturday and wonder why nobody is paying attention...
Probably because the organizers thought no greedy, credit-strapped Americans would give up a day's pay to come out on a weekday, so make it a Saturday.
It comes down to having more to lose by not fighting. Nothing ventured, nothing gained.
Sioux Rose
There were enough economists--notably a few major prize winners--on hand to recommend SANE remedial action; but instead Obama went WITH the thieves and perpetrators to do MORE HARM. It was and remains impossible to treat the problem from the top when it is the persons on the bottom of the proverbial pyramid who need assistance. Had their interests (like remaining in homes with sounder mortgage agreements negotiated) "been stimulated" commerce might have returned to its previous flow. The sound of trickle down is about as impressive as that of receded glaciers that no longer send water flowing to downstream communities. Of course this may be nature's way of stopping the spickets on so much over-consumption so that the great Mother Earth/Goddess Gaia has a chance to rest and regroup. So many of her ecosystems are endangered or otherwise being battered at once. It is an assault on life... and now that the dollars will be inflated, more and more will be needed to buy all this stuff (much of it unnecessary). All this hacking at the tree of life and so little appreciation or thanksgiving for the much that many of us already possess. The Transition has begun.
If you wish to understand the absolute depths of the financial elites depravity please take the time to read:
Obama's New World Order
Michael Hudson's analysis of the financial crisis
It can be found at www.globalresearch.ca Sorry, most of the links to the articles there do not work on this site.
At this point, it's even safer to say that it's high time more folks joined us in switching to local banks and credit unions. Now there's a peaceful protest that can pack a lot of whallop. I don't see any other way these big banks will learn their lessons.
Hit the streets!
EZEFLYER:
"Hit the streets!"
Exactly! Very well said and right to the point!
IN NEED OF AN ECONOMIST'S RESPONSE!
Over the last two days a thought has appeared to me. The Federal Government is buying derivative "assets" from investment institutions, "removing" these "assets" from investment institutions' books, providing them an instantaneous profit, explaining Obama's claim of a recovery. This acquisition is justified by Geithner asserting the assets will be reacquired when achieving their "true value." Housing, commercial property, credit card, student loan, payments "underlying" these "securities" being unrealizable, how can Geithner rationalize his claim of reacquisition of these derivative "assets?" ANSWER: Geithner intends to create a new independent market initially stocked with these "assets," which can increase as these "assets" are divided and/or combined into new derivative "assets" ad infinitum. So doing, Geithner will have created a competitor to the stock market, necessary because investment institutions confront radically reduced investment opportunities. After investment institutions expended the initial bailout funds in commodities speculation last year, riots broke out in fourteen or more countries, threatening political collapse. Such speculation being disallowed, nothing is left for these institutions except "harmless" abstractions, and Geithner and Obama's just acquired "junk-zombie-assets" fit the bill perfectly. After all, economic value is exchange, independently of what is exchanged. Content being irrelevant when abstractions can multiply more quickly than tangibles, a market in inadequately denoted "derivatives," which now "derive" from nothing, constitutes an unsurpassable source of "wealth" creation.
Sioux Rose
PHILANDREL: You provide an apt explanation and metaphor. This fraud is so brazen and so unbelievable that people are lulled into believing there must be someTHING to it. Barnum style, the financial circus has found its audience.
"This fraud is so brazen and so unbelievable that people are lulled into believing..."
Yes.
Only the small secrets need to be protected. The big ones are kept secret by public incredulity. - Marshall McLuhan
"This fraud is so brazen and so unbelievable that people are lulled into believing..."
Yes.
Only the small secrets need to be protected. The big ones are kept secret by public incredulity. - Marshall McLuhan
"JP Morgan Chase overlord Jamie Dimon fears that the public anger will torpedo the schemes the banks are running, saying, ‘"if you let them vilify us too much, the economic recovery will be greatly delayed."
That's Right!
Cancel your Chase Bank credit cards and accounts - and any other bank that got a taxpayer bailout and decided to reward the "little people" with late and over-limit fee increases. The only thing these banksters care about is MONEY; so stop giving your money to them!
Don't let your money trickle up.
The credit cards one can get at credit unions or even local banks aren't so bad as the big ones.
I tried telling people about this decades ago and no one wanted to hear. I realized that things would have to get really bad before they got better. Hence, silence is golden -let things take care of themselves. Truth and consequences.
This collapse has become a comedy of public relations lies and subterfuge. The web of deceit springs from criminal enterprises almost beyond the scope of the imagination. A vortex of criminality reigns in Washington and Wall Street posturing as legitimacy. The marriage of finance and politics is an abomination of historic proportions, one quadrillion dollars in derivatives and growing by the day. We are witnessing the greatest robbery in the history of the world.
Sioux Rose
STONE: Well-said.
Simon Jenkins = Simon Johnson, former IMF chief economist.
The worm has turned.
What's PUMA for "I told you so"?
how about
remember the Enron Scandal???
check it out, via the web...bbc.com...
too big to fail?
HAH!