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Markets of Shame Before the Collapse: Crisis, Crisis, Everywhere
Earlier this week, Stephen Colbert announced dramatically that there were important developments underway in Europe that we should know about.
True to form, Colbert’s Repor didn’t talk about the big problem. His story, ha ha ha, was about a butter shortage in Norway. Talk about going from the obscure to the ridiculous.
We all know that European countries have been wrestling with what to do about saving the Euro.
There have been warnings of an economic catastrophe if the Euro falls, and it's plain that the already shaky American economy will take a big hit if it happens.
The drama in Europe seems to be beyond the ability of both comedy and financial programs to explain. Perhaps it’s more of a divine comedy in the Dantean sense, because we are all perched on the edge of circle of hell that many of us don’t want to wrap our minds around.
While many news outlets prefer to recycle endless soundbites of Gingrich bashing Romney and vice versa, and as American diplomats seem to be cranking up a war against Iran as if that can save the economy the way World War 2 pulled us out of a depression, the world economy is tottering thanks to all the debt American firms sold Europeans who then managed it so stupidly and corruptly.
Now we have Timesman Paul Krugman, for years an economist holding up the liberal middle, finally admitting that nothing is working;
“It’s time to start calling the current situation what it is: a depression. True, it’s not a full replay of the Great Depression, but that’s cold comfort. Unemployment in both America and Europe remains disastrously high. Leaders and institutions are increasingly discredited. And democratic values are under siege."
The Obama Administration, with an election to try to win, is in full panic mode with Tim Geithner hop-scotching all over Europe to try to push Angela Merkel to act, forthwith and with dispatch, to recognize the emergency and pump money at it.
Germany’s conservative Chancellor, who was disgusted when given an unwanted back rub by George Bush, is resisting the unwanted snow job by Barack Obama who is jumping up and down to push her to play the game of bailout.
The Germans may or may not be right about wanting a longer term solution because they have historic fears of inflation and a return to the wheel barrows of money it took to buy bread after the last depression. They don’t want a new Hitler to emerge either. They know their society better than Americans do.
The US keeps saying, “wrong lesson, wrong lesson.” Remember the thirties, not the twenties, and stop an economic collapse, before it occurs. This very emphasis shows that their fears of a collapse are well advanced.
Berlin, aware of how ineffectual Obama’s “recovery” effort has proven in the US, is not taking his unwanted advice. Many Europeans see the US financial industry as the source of all evil, as, ironically, does Occupy Wall Street, and want to use the crisis to impose restraints on it.
They want strict new budget rules and more “centalization.” (ie German influence)
Britain’s David Cameron pulled out of negotiations because he opposes a tax on financial transactions, a step that most reformers think is a very good idea.
So, welcome to the Thunderdome of finance. The stalwarts of the status quo don’t want to budge, and only the self-interested define what national interests should be.
Fortunately for them, the German economy is strong and can, in effect, dictate to a divided Europe which lacks the wherewithal to challenge them. France has already buckled, as Sarkozy faces a new electoral challenge to his rule and looks as if he has aged in a month.
So now, it's up to “The Markets," an elusive instutution, driven, they say, by “animal spirits” or market psychology. Markets don’t like change, especially when it constrains powerful companies but they like instability even less.
Germany is banking that they will ultimately see it’s not in their interest to bring the house down.
Don’t think of markets as beyond manipulation. Moe Saceriby, once a VP at Standard and Poors told me for my film Plunder, “I think we had a transition from what truly was a free- market system to something now that is out of control and probably what I would define as a predatory system, where we are not so much dealing anymore about the notion of fair prices, and the notion of markets that – that work transparently. In fact frequently markets are manipulated for the end of maybe a few out there, a few investors, mega-investors. Even that’s very difficult to tell.”
The Treasury Department operates a shadowy Exchange Stabilization Fund. Reports the libertartian Daily Bell, “Officially in charge of defending the dollar, the ESF is the government agency which controls the New York Fed, runs the CIA's black budget, and is the architect of the world's monetary system (IMF, World Bank, etc).”
Add this to another shadowy entity in Treasury, The Working Group on Financial Markets, better known as the Plunge Protection Unit, that directly intervenes in markets.
It is, as I discuss in my book the Crime of Our Time, a “secret branch of government that has a sophisticated war room, using every state of the art technology to monitor markets worldwide. It has emergency powers. It doesn’t keep minutes.”
There is no freedom of information access to its deliberations. There are l47,000 entries in Google on this powerful body, but I could only access ten. The reports on it are sketchy, including one from the Washington Post:
“These quiet meetings of the Working Group are the financial world’s equivalent of the war room. The officials gather regularly to discuss options and review crisis scenarios because they know that the government’s reaction to a crumbling stock market would have a critical impact on investor confidence around the world.”
New York Magazine hinted at a conspiracy, noting many suspect, ‘it’s just a backroom market-rigging cabal for the Establishment. Or, you could think of it as the Wall Street Superfriends, equipped with X-ray vision to see deep into our financial malaise, and magic.”
Is it magic or manipulation?
Remember this administration claims to worship an unregulated “free market,” and yet, here they are, freely big footing these very same markets.
No doubt there is some connection here to recent reports of Members of Congress tapping secret information to engage in Insider Trading.
Talk about corruption. It's pervasive. The less our compromised media investigates all these wheelers and dealers, the more we will not get at the truth and will soon experience the consequences. And they won’t be pretty!
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22 Comments so far
Show Allthe consequences are already far from pretty
the circle is small - buy the government - use the military to rape rob and kill and then lay the austerity on the sleeping masses
simple enough aint it
And "austerity programs" will not reduce governments' deficits because austerity is nothing more than redirecting funds from domestic programs into corporate welfare programs including bank bailouts and military industrial complex costs.
Government deficits will continue to grow and the serial solution will be more "austerity".
"the more we will not get at the truth and will soon experience the consequences. And they won’t be pretty! "
The consequences are already butt ugly and getting worse. The existing dung piles will grow exponentially once the truth emerges.
I think we can put Goldman Sachs at the head of these fascist kleptocratic market manipulations.
In fact both of the new leaders in Italy and Greece at one time worked for Goldman Sachs.
Obama's got more than 20 ex-goldman people running the White House economic team.
Couple that with their propietary software that allows Goldman to front run the market and it points to corruption at the highest levels forcing coups upon democratic nations worldwide.
The scary problem is Goldman is Winning.
Goldman Sachs represents an expression of the problem, not the cause of the problem.
As long as Goldman employees and alumnae continue influencing government lawmaking and enforcement, and benefiting from it the way they have for 30 years they will continue to be the cause of the problem AND an expression of the problem.
More importantly, these " unelected zombies such as European Central Bank (ECB) President Mario Draghi (formerly vice-president of Goldman Sachs International), [and] European Council President Herman van Rompuy (member of the Trilateral Commission and the Bilderberg club)" http://www.aljazeera.com/indepth/opinion/2011/11/201111875829175119.html
Additionally, "Lucas Papademos...is a Trilateralist and Bilderberg." http://globalresearch.ca/index.php?context=va&aid=28203
It's a minor point, perhaps, but I found the opening reference to Stephen Colbert kind of... well, just dumb.
"True to form, Colbert’s Repor [sic] didn’t talk about the big problem. His story, ha ha ha, was about a butter shortage in Norway. Talk about going from the obscure to the ridiculous."
WTF? Um, the "Report" is comedy; it's satire.
Yes, for years now there have been endless observations regarding the ironies and paradoxes of corporate mass-media comedy and satire programs being more popular, reliable, informative, and truthful than corporate mass-media "news" and "analysis" programming.
Because the lines are blurred and the wires crossed, comedians like Colbert and Jon Stewart can be, and often are, referenced as if they are "serious" news and opinion sources-- for lack of a better term-- in pop culture discourse. I get that.
Still, I consider this worth mentioning because one would think, or hope, that a "news dissector" would be more careful about using and framing such references instead of glibly buying into, and thereby contributing to, the metastasizing irrational surrealism.
Thanks, Obedient Servant! I agree with your analysis!
I don't have TV, just a DVD player hooked up to mine, but my son has cable. Once in while, when he's gone, I tune in, and learn very little. I can't stomach watching any of the so-called liberal/progressive programs that are broadcast on M$M. That said, each morning I still watch Amy Goodman, and Democracy Now! on my computer.
And, as a "news dissector," Mr. Schechter could also talk about the REAL unemployment numbers, which Noam Chomsky often quotes on Democracy Now! as being "near depression level," numbers at about 23%.
Even Amy Goodman parrots, each month, the faux government statistics on unemployment numbers, and fails to do any further analysis of the job crisis. Some cities have an unemployment rate of 50%. Here in NYC, homeless people are everywhere, and soon, I've read, Mayor Bloomberg wants to make it mandatory for people who sleep in shelters to have to produce some kind of financial proof that they have NO money and NO place to sleep. The Mayor's answer is to make the people, who have already been completely demoralized by losing their jobs, and in turn, their apartments/condos, jump through even more hoops to find refuge from the storm. Bloomberg has NO heart and he has NO soul. He is a sociopath/psychopath with his army of cops at his command.
If anyone wants to know more about the unemployment numbers, you can go to John Williams' site, www.shadowstats.com. Mr. Williams continues to crunch the numbers using the same guidelines that were used in 1980.
GOP President Ford and Democratic Party President Carter respectively lost their 1976 and 1980 re-election bids, at least partly due to high inflation rates and somewhat high unemployment rates. Both parties then reformulated how the US Goverment calculates those statistics to make them appear lower than they really are.
Understating the rate of inflation has given the Federal Reserve cover for keeping interest rates too low, thereby enabling serial bubbles and busts, including the recent housing bubblebust, and has caused working class income to diminish and the 1%'s income to soar to unprecedented levels for 30 years.
Yes, Kay, Bloomberg and many other 1%'s are sociopaths. Think Obomber with his cowardly drone warfare, that embraces American exceptionalism. But this exceptionalism, including the murder of brown people in other lands, is only exceptionalism for the elite nowadays. The 1/5 of hungry kids here, the growing unemployment, homelessness, death from starvation and exposure and no medical care stinks to me of some sort of mass extermination. They want it all for themselves. So purge the world population by forced austerity. Put Monsanto in charge of food, sell off water all supplies to private corporations, and drive us into a bloody revolution so there will be an excuse to kill people off quicker. Man, I wish I could sleep or rest at night, instead of having these thoughts reeling through my brain!
There is something seriously missing in this article, which becomes evident considering the passage,
"The Treasury Department operates a shadowy Exchange Stabilization Fund. Reports the libertartian Daily Bell,'Officially in charge of defending the dollar, the ESF is the government agency which controls the New York Fed, runs the CIA's black budget, and is the architect of the world's monetary system (IMF, World Bank, etc).'
Add this to another shadowy entity in Treasury, The Working Group on Financial Markets, better known as the Plunge Protection Unit, that directly intervenes in markets."
Manifested is the conspiracy paranoia which, lo, over these many years, I have concluded is endemic to progressives. Assumed is a small financial cabal which, like the Wise Men of Zion, manipulate the world like puppeteers. Although I seriously doubt reality of this image, even if real, missing is Time Magazines current "Person of the Year: The Protester." True to the dogma of academic economics when abandoning the designation "political economy," unconsidered in calculation is the political response. Indeed, there may be a cabal of financial puppeteers manipulating global policy, but if so, they are still human. Being so, as Louis XVI and Tsar Nicholas II discovered, when the mob comes calling, you may be unable to keep your head.
The first quote in your response was one of a libertarian group not a conspiratorial paranoid progressive one. Just sayin...
It is becoming more and more common for libertarian and right wing propaganda to resonate with a faction of people calling themselves progressives. Libertarian lobbying groups have become expert at inserting right wing narratives into the progressive organizations.
We see people posting here everyday on with theories based on "the assumption a small financial cabal which, like the Wise Men of Zion, manipulate the world like puppeteers." That is pure right wing propaganda.
Let us hope you are correct. What does give me hope is how quickly, indeed almost instantaneously, the expressions of the "99%" and the "1%" became a part of the popular lexicon in the U.S. As is better discussed in the European media, rather than a cabal of the cool, calculating, "Wise Men of Zion," the financial/political elite is floundering about in a desperate attempt to keep together the structure which maintains their status. This, while discovering the wonderous self-adjusting economic system of the Austrian School is indeed a human creation, and like all human creations, ain't self-adjustin'.
Exactly.
We are seeing the financial/political elite is floundering about in a desperate attempt to keep together the structure which maintains their status.
It is the structure that is being defended, and various people who benefit from that are fighting to keep the structure in place on a variety of fronts at all levels of society, in a more or less disjointed and chaotic way. There is a shared interest among the people in the ruling class. but there is not a master coordinated plan coming from some shadowy "elite." The nature of Capitalism is such that they fear each other as much as or more than they fear us.
I think it's something more than chaotic floundering, and something less than co-ordinated master plan. There are, afterall, those bilderberger, trilateralist, and CFR meetings. I think those are more than social chit-chats. There is bungling, floundering efforts, I think, because what they are trying to achieve (total control) is an impossibility. I know that, at least in europe, there are families with histories of many centuries duration, organized around the maintenance & increase of family funds (the fondi) and family fortunes, who co-operate with other families similarly situated. I think they are just like the mafia, capable of a great deal of co-operation & co-ordination & planning (ie. conspiring towards common aims), AND capable of inter- and intra- familial warfare (when not particularly threatened by "outsiders" to their game, in whch case they pull together against a common threat to their common game). This is the very stuff of which empires are made. This is the reality on the ground. The "-isms" are made up later (such as capitalism) to try and give it a handy label for rallying against, or rallying around.
The bilderberger, trilateralist, and CFR phenomenon are effects, not causes.
Rich people hang together and make plans, just like all of the rest of us do. More often than not, rich people are in cutthroat competition with one another, since cutthroat competition is how they got where they are.
Capitalism acted largely to destroy the old system of inherited power, and to create a new class of people, people who were presumed to have the "right" to control and dominate the rest of us by virtue of having more money, rather than by being born into certain "bloodlines."
You are correct when you draw parallels between the new and the old aristocracy. We do need to pay attention to the differences though, as well. The two are very similar in effect, but very different in methods.
Almost all people in the US see monarchy and its predecessor, feudalism, as "bad." What few can see is how similar the current system is to that. Rather than certain people being presumed to have a "right" to power based on birth, we now have a system where certain people are presumed to have a right to power according to control over wealth. Fewer yet can see that the current system is in most ways worse than the older systems, more oppressive in more insidious ways, more authoritarian and totalitarian, more destructive, and resting more on an illogical and irrational foundation of justification and rationale.
"On August 16th, a 54 page report authored by Goldman strategist Alan Brazil was distributed to institutional clients. The general public was not intended to see this report. Fortunately, some folks over at the Wall Street Journal got their hands on a copy and they have filled us in on some of the details. It turns out that Goldman Sachs secretly believes that an economic collapse is coming, and they have some very interesting ideas about how to make money in the turbulent financial environment that we will soon be entering." http://online.wsj.com/article/SB10001424053111903895904576542703587784540.html?mod=WSJ_hp_LEFTWhatsNewsCollection AND http://goldsilver.com/article/even-goldman-sachs-secretly-believes-that-an-economic-collapse-is-coming/
Although some believe "We are told that liquidating the overhang of bad debt, leverage and hedges would "destroy the world as we know it." The truth is that keeping the zombie system from expiring and covering up the corruption with propaganda is what's actually destroying the world as we know it.
Thus the collapse of the current financial system of central banks, pathological Wall Street and insolvent banks would be the greatest possible good and the greatest possible positive for the global economy and its participants." http://goldsilver.com/article/charles-hugh-smith-the-collapse-of-our-corrupt-predatory-pathological-financial-system-is-necessary-and-positive/
Like baby Bush said "This sucker is goin' down" I think the central banks all over the world, along with the political class that serve the elite, have kicked this can about as far as it can go. Sarkozy and Merkel are already toast and will not win reelection. Europe first, then all of the dominoes fall. One by one. This is a global event and all get to join the party. If I get lucky, maybe I'll see some of ya all on the other side.
The real economy is basic, it's made up of the daily needs of people. The financial part of the economy is a construct, it is unreal. There is no such thing as a free market economy, that is a fantasy, like the tooth fairy. In a well regulated market economy, there would only be enough currency or money to allow the basic economy to function smoothly. When there is to much money in the system, as it relates to the real economy, it becomes toxic. The economy is not broke, there is not to little money. There is way to much of it.
Good post.
Yes, economy is basic, it's made up of the daily needs of working class people, and those needs are provided by the labor of the working class people.
The "too much money" you see is the accumulated capital - wealth extracted from the working class people - wealth that is always seeking new "investment opportunities" which always means more wealth extracted from the working class people, and more resources destroyed or exploited, more scarcity, and more destruction of working class communities.