Crisis Time for Wall Street’s Creatures in Congress
By GLEN FORD
In their role as mercenaries in service of finance capital, three-fifths of Democrats joined one-third of Republicans in a (temporarily) failed heist of $700 billion of the people’s funds - a nest-egg the public needs to hold onto to weather the unfolding collapse of the Lords of Capital. In the aftermath of Monday’s bloody siege, it was difficult to tell who Wall Street guns-for-hire John McCain and Barack Obama hated most: each other, or the citizens who despite their outraged confusion had the presence of mind to bar the doors to the national treasury.
Understandably disoriented from having had to charge backwards - pretending to lead the people while simultaneously assaulting them - Obama peered across the field at the hastily-erected barricades that had broken Hank Paulson’s Charge. “I’m confident we’re going to get there,” said the frustrated thief-enabler, “but it’s going to be rocky.”
To paraphrase Oscar Brown, Jr., “What you …
Lisa:
Not One Dime!
By Mike Whitney
01/10/08 - “ICH” - — The mystery has been solved.
For nearly a year, we have been asking ourselves why the investors and foreign banks that bought up hundreds of billions of dollars of worthless mortgage-backed securities (MBS) from US investment banks have not taken legal action against these same banks or initiated a boycott of US financial products to prevent more people from getting ripped off?
Now we know the answer. It’s because, behind the scenes, Henry Paulson and Co. were working out a deal to dump the whole trillion dollar mess on the US taxpayer. That’s what this whole $700 billion boondoggle is all about; wiping out the massive debts that were generated in the biggest incident of fraud in history. Rep Brad Sherman explained it like this last night to Larry Kudlow…
So, why hasn’t the Treasury Secretary explained the real purpose of the bailout to the American people? Could it be that he knows that his $700 billion bailout would end up like the Hindenburg, vanishing in sheets of flames?
…This is a terrible bill, and it confers absolute authority on one of the central players in the scandal, Henry Paulson, who was the Chairman of Goldman Sachs at the time this MBS garbage was being peddled around the planet to credulous investors. Now Paulson will be in a position to buy up any “troubled asset” he that he believes could pose a threat to “financial market stability”. That’s just great! It is clear that Paulson will use his unchecked powers to wipe the slate clean and remove any possibility that foreign investors will take legal action against the real perpetrators; the giant Wall Street investment banks…
…The country has no time for this cynical scavenger-hunt. The system is listing badly and we have ONE chance to get this emergency bill right. There is no way an industry rep like Henry Paulson, who has spent his entire career feathering his own nest and handing out plums to his buddies, can operate in the best interests of the American people. Paulson has got to go!…
Full article:
http://www.informationclearinghouse.info/article20915.htm
1 October 2008, 9:01 pmLisa:
“Grand Larceny” on a Monumental Scale: Does the Bailout Bill Mark the End of America as We Know It?
By Richard C Cook
Global Research, October 2, 2008
OCTOBER 1, 2008—Tonight the Senate passed the $700 billion Wall Street bailout bill by a vote of 74-25. This follows the rejection of the bill by the House on Monday. In an MSNBC poll, 62 percent of Americans oppose the giveaway, but the lobbyists are doing everything possible to assure the rejection is overturned. According to Bob Borosage, co-director of The Campaign for America’s Future, House leaders “are bringing in the small business lobby and the banking lobby to buy the twelve Republican votes they need.”
The Senate took up the bill in order to pressure House members who voted against it to change their positions when it returns to a vote on the House floor on Friday. This procedure may be unconstitutional, because revenue bills must originate in the House, but there is no time or political will for anyone to mount a challenge on constitutional grounds. As another means of inducement—or blackmail—the bill includes the repeal of the wildly unjust alternative minimum tax.
Every reputable economist commenting on the bill opposes it, including NYU’s Nouriel Roubini, who says the plan is “totally flawed.” He says the plan is:
“a disgrace: a bailout of reckless bankers, lenders, and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer.”
My own view is that the plan is worse than that: a crime; grand larceny on a monumental scale.
Full article:
http://www.globalresearch.ca/index.php?context=va&aid=10413
2 October 2008, 12:56 pmcharles:
http://arxiv.org/abs/cond-mat/0002075
Finite-time singularity in the dynamics of the world population, economic and financial indices
2 October 2008, 2:33 pmLisa:
Get Your Dollars Out Now! FAST!!!
By Adrian Salbuchi
03/10/08 “ICH” — - The events of the last two weeks have clearly revealed that the global financial, monetary and banking system imposed on the world by the power structures promoting “globalization” is fundamentally flawed, unviable and immoral in its effects upon the most all of Mankind. After allowing a small cabal of shady characters to illegitimately accumulate vast amounts of wealth and power over markets, corporations, industries, media, armed forces and entire nations, like the World Trade Center towers on 9/11, this entire System is now in free-fall, collapsing into itself in one massive implosion.
This loathsome and unjust Global Power System was designed and implemented over the past seven decades by the geopolitical and geoeconomic strategic planners serving the New World Order power structures, most notably its network of discrete, low-profile but highly powerful private think tanks, such as the Council on Foreign Relations (CFR, founded in New York in 1919), The Trilateral Commission (founded in 1973), The Bilderberg Conference (formed in Holland in 1954), and others like the Cato Institute, American Enterprise Institute (AEI), and the notorious Neo-con Project for a New American Century (PNAC) (1).
Considering the enormous complexity of the process that is taking place right now; the vast amounts of information we are bombarded with every minute of the day, and the apparent difficulty in foreseeing just how this global crisis will finally be resolved, we would summarize certain important aspects and key data which we believe will help us put together this veritable jig-saw puzzle, so that we may begin to fathom what the true face of this horrendous creature euphemistically called “globalization”, is really like. As Argentine citizens, we have a huge advantage over other peoples including US citizens when it comes to understanding and coping with this kind of crisis. I say this because in our own lifetimes we have suffered in Argentina all of what is now happening globally - albeit on a much smaller scale in our case. We’ve seen this movie… We’ve been there, and done that… We’ve been pushed and dragged through the entire hysterical hocus-pocus of inflation, hyperinflation, systemic banking collapses, currency changes, Debt Bond Swaps, Mega-Debt Bond Swaps, financial “armouring”, banking holidays, freezing of bank accounts, etc., etc… And we have also suffered the end-results: bank bail-outs paid for by taxpayers (or through inflation, or through the confiscation of savings), disappearance of pension funds, destruction of job posts and overall impoverishment of the population.
Full article:
http://www.informationclearinghouse.info/article20939.htm
3 October 2008, 6:32 pmLisa:
10 REASONS NOT TO BAILOUT WALL ST., By Catherine Austin Fitts and Carolyn Betts, Esq Print
Thursday, 02 October 2008
(1) Crime that pays, is crime that stays.
There is reason to believe that Wall Street and those they represent are holding loans without collateral, multiple loans secured by the same properties, and other fraudulent instruments among the “troubled assets.” Based on the secret “Treasury Conference Call” with 800 Wall Street insiders, we know the deal proposed to be passed by Congress isn’t the real deal promised to Wall Street.
(2) This smells like obstruction of justice.
Bail-out without due diligence of so called “troubled assets” is a perfect way to hide documentation of financial crimes. It is also a perfect means to launder both the past ill-gotten gains and new federal money spent recklessly and without necessary safeguards and oversight mechanisms. Be very suspicious when they tell you “we just can’t tell what’s in these troubled assets.” We can assure you the federal government has field offices all across the country that deal with significant amounts of real estate and mortgage assets. If Treasury refuses for more than a decade to comply with the laws, with approximately $4 trillion missing (and counting), it is not competent to manage $700 billion of taxpayer money while its arm is twisted by Wall Street.
(3) Wall Street owes the federal government money.
[long quote clipped, see URL for entire text]
[…]
The Administration wants to drain the real economy to bail out Wall Street. Seems to us that the more appropriate plan would be to require Wall Street to return $4 trillion plus that is missing and use that to rebuild the real economy.
We think the time has come to reverse the flow. Go to any business school in the country. That is what they teach. Money should move out of unproductive sectors into productive sectors. The bail-out does just the opposite.
“Just say NO!”
http://carolynbaker.net/site/content/view/763/1/
3 October 2008, 7:25 pmLisa:
Some good news about the economy.
by Sarvis
10/05/2008, 11:25 AM #
Reply
Actually, no.
Go here and look at the graph.
It is followed by a bunch of headlines. At the bottom is this analysis:
The Wall Street Bust:
…We are today witnessing the Acute Stage of Bursting Credit Bubble Dynamics. It’s an absolute debacle, and there’s little our well-intentioned policymakers can do about it other then try to slow the collapse…
…It is today impossible both to generate sufficient Credit and to main previous patterns of spending. Economic upheaval and adjustment are today unavoidable…
The “Freidmanites” thought they understood the (post-crash) policy mistakes that led to The Great Depression. They believed the “Roaring Twenties” was the “Golden Age of Capitalism.” The great bust could have been avoided with a simple ($5bn or so) banking system recapitalization. As we are witnessing today, the issue is not some manageable amount of new “capital” to replenish banking system losses. Instead, the predicament is the massive and unmanageable amount of new Credit necessary to, on the one hand, sustain a mal-adjusted Bubble Economy and, on the other, the Trillions more required to accommodate a gigantic speculative de-leveraging. I have a very difficult time seeing a way out of this terrible mess.
Full article:
http://fray.slate.com/discuss/forums/thread/1911538.aspx
6 October 2008, 12:33 pmLisa:
October 6, 2008
Still on the Edge of the Abyss
By MIKE WHITNEY
…”It is now clear that the US financial system - and now even the system of financing of the corporate sector - is now in cardiac arrest and at a risk of a systemic financial meltdown. I don’t use these words lightly…The Commercial paper market is shut down…Corporations have no access to long or short term credit markets. Brokers are increasingly not dealing with each other. The interbank market is seizing up…This cannot continue for more than a few days. It is the economic equivalent to cardiac arrest.” (Nouriel Roubini’s Global EconoMonitor)
The levies have already broken, and the water is flooding into the city. The Federal Reserve will be forced to act. Expect an emergency rate cut of 50 basis points or more in the next 10 days coordinated with cuts in the other G-7 countries. Also, expect another bailout by the time Obama or McCain take office. As the French premier, Francois Fillon, warned on Saturday the world is “on the edge of the abyss”.
Full article:
http://counterpunch.org/whitney10062008.html
6 October 2008, 12:39 pmLisa:
Lessons from the Collapse of Wall Street
By Prof James Petras
The ongoing collapse of the stock market and the loss of hundreds of billions of dollars managed by Wall Street investment banks illustrate the pitfalls and danger of free market capitalism facing the entire working population of the United States…
…No economic recovery is possible now or in the foreseeable future as long as the US Congress and executives provide trillion dollar bailouts to Wall Street’s insolvent speculators, bankroll 700 billion dollar budgets of ever expanding war spending and while Zionist power brokers dictate US Mideast policies.
Full article:
http://www.globalresearch.ca/index.php?context=va&aid=10446
6 October 2008, 12:41 pmLisa:
Debt Bondage: A Christian Perspective on the Paulson Bank Bailout
by Dr. Michael Hudson
An unprecedented popular protest led Congress to reject the Treasury’s initial bailout plan on Monday, September 29. Most commentators have noted how ironic and seemingly out-of-character it was that the bailout was defeated mainly by Republicans, and indeed by the party’s right-wing Bible Belt Conservatives. But would it be too much to hope that these Congressmen bore in mind the Christian ethic embodied in Matthew 18 – almost literally a Biblical condemnation of the bailout’s terms?
Full article:
http://www.globalresearch.ca/index.php?context=va&aid=10458
6 October 2008, 12:43 pmLisa:
Some commentators are blaming the current mortgage problem on the pressure that the US government put on banks to lend to unqualified borrowers. However, whatever breaches of prudence there may have been only affected the earnings of individual institutions. They did not threaten the financial system. The current crisis required more than bad loans. It required securitization and its leverage. It required Fed chairman Alan Greenspan’s inappropriate low interest rates, which created a real estate boom. Rapidly rising real estate prices quickly created home equity to justify 100 percent mortgages. Wall Street analysts pushed financial companies to improve their bottom lines, which they did by extreme leveraging…
…The deregulation of the financial sector was achieved by the Democratic Clinton Administration and by the current Secretary of the Treasury, Henry Paulson, with the acquiescence of the Securities and Exchange Commission.
The Paulson bailout saves his firm, Goldman Sachs. The Paulson bailout transfers the troubled financial instruments that the financial sector created from the books of the financial sector to the books of the taxpayers at the US Treasury.
This is all the bailout does. It rescues the guilty…
…The impotence of Congress traces to the Great Depression. As Theodore Lowi in his classic book, The End of Liberalism, makes clear, the New Deal stripped Congress of its law-making power and gave it to the executive agencies. Prior to the New Deal, Congress wrote the laws. After the New Deal a bill is merely an authorization for executive agencies to create the law through regulations. The Paulson bailout has further diminished the legislative branch’s power.
…An alternative to refinancing troubled mortgages would be to attempt to separate the bad mortgages from the good ones and revalue the mortgage-backed securities accordingly. If there are no further defaults, this approach would not require massive write-offs that threaten the solvency of financial institutions. However, if defaults continue, write-downs would be an ongoing enterprise.
Clearly, all Secretary Paulson thought about was getting troubled assets off the books of financial institutions.
6 October 2008, 12:48 pmLisa:
Full article for the above:
http://counterpunch.org/roberts10062008.html
6 October 2008, 12:49 pmCliss:
It’s becoming fairly obvious that the U.S. economic system is falling apart. For those of us who have been watching, none of this comes as a surprise.
Even back then it was clear that the system was not sustainable. I think banks, brokerages and other financial institutions probably started feeling desperate about 1 year ago. Since then, the situation has worsened. Henry Paulsen flew around the world to raise cash, and at this point the rest of the world is tapped out.
So they turned in desperation to the U.S. treasury. While the bankers knew that $700 billion was just a drop in the bucket, they figured it was their last, best hope. One last heist. Corporate executives will probably help themselves to most of this money as their last golden parachute.
I would like to suggest that rather than feeling despondent about the above Greek Tragedy, we should start turning the attention onto ourselves.
Watch out for falling Dinosaurs.
Back in the dinosaur days, researchers have discovered there was a small animal which started to emerge, just as the dinosaurs became gigantic creatures.
It was an early mammal, some researchers think it was like an opossum. Or a rat-like creature.
When the dinosaurs started to succumb from unknown reasons, this early mammal survived and was able to survive into the new age.
I run a small company. It’s a bootstrap operation. Every penny is watched. We avoid debt and try to pay as we go. We don’t have access to enormous credit, so we have to survive as best we can.
I’m that small opossum. I’m always hustling, husting scurrying in between the legs of these gigantic entities.
It’s survival, baby.
7 October 2008, 9:59 pmStan:
The preparations for this crisis began with the systematic constriction of access to bankruptcy protection for the masses. In addition to the bailouts we are seeing, the backstop was to ensure that no one could keep their home if they went off-grid via bankruptcy. The ruling class now depends on the debt owed by the rest of us to continue their revenue streams; and they needed this measure to prevent voluntary defaults.
8 October 2008, 9:16 amY.K.:
All true Stan.
Plus, education loans have it worse than mortgages. This affects the poor and youth more than most people (over 40 usually) realize especially as education is one of the few ways to keep climbing on the slippery slope. You can’t discharge the debt at all and they have many more means to collect than the average collector.
In other words, you are indebted for cultivating your mind, but if you bought garbage houses and cars you still have a chance to free yourself from debt. In my view, this is a big factor in the lack of “youth” or “student” movement… many young people are a few months / weeks away from severe permanent credit report damage.
8 October 2008, 2:10 pmLisa:
“To the Bunkers!”:
Central banks slash rates in emergency “midnight” meeting
By Mike Whitney
08/10/08 “ICH’
…The present crisis, which has its roots in the unsupervised expansion of credit in the United States, has spread from subprime mortgages and toxic securities, to the entire global financial system, where it has roiled equities markets and is now threatening to do incalculable damage to the US and European banking systems.
Yesterday, Fed chairman Ben Bernanke announced plans to pump an estimated $1 trillion of short-term loans (commercial paper) to head off a growing liquidity squeeze. Unlike, Treasury Secretary Paulson’s $700 billion bailout, which was opposed by over 200 economists, Bernanke’s plan targets the source of the problem and could actually succeed. (ed: Commercial paper is a low-cost source of cash for companies to meet short-term financial needs. It’s cheaper than tapping a line of credit at a bank) The Fed will start providing businesses and financial institutions with the short-term credit they need to maintain normal day-to-day operations…
…The US is caught in a deflationary downdraft that could have catastrophic long term effects. That’s why Bernanke has pulled out all the stops and doubled the Fed’s loans (via auction facilities) to banks to $900 billion while allowing financial institutions to use mortgage-backed securities and other dodgy structured investments as collateral. The Fed has also started paying interest on reserve balances held at the central bank. This helps to push down the overnight lending rate below the Fed Funds rate which helps to reliquify the banks…
… The United States is headed into another Great Depression and has probably dragged the rest of the world along with it. The global financial system will look very different by the time we reach the other end of the tunnel.
Full article:
http://www.informationclearinghouse.info/article20976.htm
8 October 2008, 8:18 pmY.K.:
I didn’t give much credence initially to the talk about the return of a US military unit to control “civil disobedience”. Of course I didn’t put it past them, but I needed more evidence. But it seems that the German parliament is about to allow domestic military deployment, an intensely charged issue.
Of course the liberal SPD is capitulating. There has been a gradual militarization of the German police on the heels of enthusiasm about the German military since the undermining and attacks on Yugoslavia, involvement in Afghanistan and Iraq, all of an imperialist nature. But this brings it to a new level and shines a light on the recent US military domestic deployment.
To my mind, this indicates that the finance and internal security ministries of the US and EU have started regular discussions about social disorder and protest due to the collapse of the financial system. It confirms that the domestic military deployment in the US is without any accidental or “innocent” motive. This means that the capitalists in Europe have overcome their initial shock and realize that it will get much worse. Of course, the German state is intensely derivative of US policies and they admire the US for saving them from their own fascism. Their admiration is rather disgusting at times … of course, no role is assigned to the USSR to saving them from themselves, but west Germans continue to control the state and media after all. But it is precisely this derivative character of German policies that forces a reassessment of the US deployment. Does this not also mean that some wish to reestablish a semi-fascist or authoritarian system for themselves in Europe, which cannot be so bad because it’s “liberal” and “American”, right?
Anyway, it is an ominous sign and shows the economic AND political coordination of NATO states in the face of this financial crisis.
http://www.iht.com/articles/ap/2008/10/06/europe/EU-Germany-Fighting-Terrorism.php
9 October 2008, 9:26 amY.K.:
PS I should add that Iceland took a Russian loan that may end up giving the Russians access to abandoned US bases, hence more power over Atlantic shipping lanes. This is after the US refused to help Iceland. So it’s not totally coordinated.
9 October 2008, 9:37 amRev, José M. Tirado:
Y.K.,
9 October 2008, 2:11 pmI live in Iceland. They have asked the Russians to help out to the tune of 4 billion but that is not a done deal by any means. Events over here are changing hourly and while a few bloggers have speculated on the trade-off for the old US base in Keflavik, it´s all just talk now.
Lisa:
Behind the Panic: Financial Warfare and the Future of Global Bank Power
By F. William Engdahl
Global Research, October 9, 2008
What’s clear from the behavior of European financial markets over the past two weeks is that the dramatic stories of financial meltdown and panic are deliberately being used by certain influential factions in and outside the EU to shape the future face of global banking in the wake of the US sub-prime and Asset-Backed Security (ABS) debacle. The most interesting development in recent days has been the unified and strong position of the German Chancellor, Finance Minister, Bundesbank and coalition Government, all opposing an American-style EU Superfund bank bailout. Meanwhile Treasury Secretary Henry Paulson pursues his Crony Capitalism to the detriment of the nation and benefit of his cronies in the financial world. It’s an explosive cocktail that need not have been…
…US Goldman Sachs ex CEO Henry Paulson, as Treasury Secretary, is not stupid or incompetent. Quite the oppositie. There is serious ground to believe that he is actually moving according to a well-thought-out long-term strategy. Events as they are now unfolding in the EU tend to confirm that. As one senior European banker put it to me in private discussion, “There is an all-out war going on between the United States and the EU to define the future face of European banking.”…
Using panic to centralize power
As I document in my forthcoming book, Power of Money: The Rise and Decline of the American Century, in every major US financial panic since at least the Panic of 1835, the titans of Wall Street—most especially until 1929, the House of JP Morgan—have deliberately triggered bank panics behind the scenes in order to consolidate their grip on US banking. The private banks used the panics to control Washington policy including the exact definition of the private ownership of the new Federal Reserve in 1913, and to consolidate their control over industry such as US Steel, Caterpillar, Westinghouse and the like. They are, in short, old hands at such financial warfare to increase their power.
…Now they must do something similar on a global scale to be able to continue to dominate global finance, the heart of the power of the American Century…
Full article:
http://globalresearch.ca/index.php?context=va&aid=10495
9 October 2008, 2:45 pmMichael Anderson:
Looks like Legume Sam was right about martial law. The bailout isn’t stopping the market plunge. Funny, it was going up before Congress chickened out and blinked.
http://www.alternet.org/rights/101958/?page=entire
9 October 2008, 3:17 pmLisa:
Interview with Michael Hudson:
“The New Kleptocracy” with economist Dr. Michael Hudson on Treasury Secretary Hank Paulson’s “Plan” passed by Congress on October 3, 2008. We discuss what is being purchased, the congressional vote, what this means for the oligarchs, and what this means for the rest of us.
http://www.kpfa.org/archives/index.php?arch=28790
9 October 2008, 10:36 pmLisa:
October 10 / 12, 2008
Run on the System
Black Friday
By MIKE WHITNEY
Stock markets across the world are in a state of hysteria. The tidal wave of sell-offs, which began when Henry Paulson announced the Bush administration’s $700 billion bailout plan for the sinking banking system, has swelled into a global tsunami racing round the globe. Shares fell sharply across Europe and Asia for the fifth straight day following a 679 drop on the Dow Jones. Nearly $900 billion was wiped off the value of U.S. equities in just one trading day.
White House press secretary, Dana Perino said Thursday that President Bush will address the country on Friday morning:
“He will assure the American people that they should be confident that economic officials are aggressively taking every action to stabilize our financial system. The Treasury Department is moving quickly to use new tools to improve liquidity, which is the root cause of this problem.”
Bush still believes that the problem is “liquidity” rather than “insolvency”. When liabilities vastly exceed assets, liquidity does not help. The bad banks need to be closed so the good ones can be strengthened with capital injections…
…Lehman’s credit default swaps, (the derivatives which Warren Buffett calls “financial weapons of mass destruction”) are “unwound” on Friday. It could be a “non event” or it could trigger another sell off; it is impossible to know. If tens of billions of dollars are drained from already weakened balance sheets in counterparty deals that have turned sour, the market will react violently. Wall Street is on tenterhooks waiting for the news from Lehman.
There is general agreement among economists about what needs to be done to stabilize the financial system. The banks have to be recapitalized, all deposits have to be guaranteed (beyond the $100,000 FDIC limit) and additional stimulus has to be provided to increase consumer demand. Otherwise the United States is on the lip of another Great Depression. Too much time has been wasted on Paulson’s failed bailout for G-Sax and his friends on Wall Street. Buying the bad assets of underwater banks does not fix the problem. The banks need capital so they can resume lending and transmit credit to consumers and businesses…
Full article:
http://counterpunch.org/whitney10122008.html
10 October 2008, 1:39 pmRev. José M. Tirado:
My own observations from here in Iceland:
11 October 2008, 12:06 pmhttp://www.counterpunch.org/tirado10122008.html
My suspicions are that more countries will be heading down this path (IMF bailouts, adoption of strict austerity measures to get “back on track”, and a loss of sovreignty).
Wm. Terry Leichner, RN:
I’ve read all the articles about the causes of the current crash of the market but read little about solutions for the worker who has been forced to place money into 401k and 403b defined contribution plans.
Unions have long opposed these plans because of the possibility of the current crash happening. It was only a matter of time before the hyper-inflated market would come crashing down with lack of regulation, short selling and just outright corruption and greed.
Even the venerable Wall Street Journal admitted the defined contribution plans (401k type plans) for retirement resulted in an 11% decrease in worker savings.(http://www.thestreet.com/funds/belowradar/10016126.html)
Today a Yale economist says the money invested in the market is just a “fallacy”. It isn’t “real” money, he says:
“Robert Shiller, an economist at Yale, puts it bluntly: The notion that you lose a pile of money whenever the stock market tanks is a “fallacy.” He says the price of a stock has never been the same thing as money — it’s simply the “best guess” of what the stock is worth.
“It’s in people’s minds,” Shiller explains. “We’re just recording a measure of what people think the stock market is worth. What the people who are willing to trade today — who are very, very few people — are actually trading at. So we’re just extrapolating that and thinking, well, maybe that’s what everyone thinks it’s worth.”
Shiller uses the example of an appraiser who values a house at $350,000, a week after saying it was worth $400,000.
“In a sense, $50,000 just disappeared when he said that,” he said. “But it’s all in the mind.” (http://news.yahoo.com/s/ap/20081011/ap_on_bi_ge/where_s_the_money)
I asked my wife if she felt the 403b deductions taken from her paycheck as a RN working in the public sector was real money. She seemed to think an earned wage with money taken out for retirement is real. But looking at her AIG quarterly statement yesterday showed she just lost 20% of her retirement. That was “real” money she lost.
11 October 2008, 2:17 pmWhen I look at my PERA funds and think about all the years spent in public psychiatric hospitals as a RN, I think of the money taken from my paycheck for retirement as “real” money. I earned it. My wife earned her money. Wall Street corruption stole 20% of our retirement funds. Now that’s real.
So, we can play all these mind games about the reasons the markets crashed but the real pain isn’t on Wall Street. The real pain is with the workers who worked 40 hours (plus overtime) and allowed their wages to be used by brokers to play Monopoly. That was real working hours spent to earn real wages that went into retirement plans dictated by employers who went to defined contribution plans so they could lessen their contributions.
Professor Shiller can play all his intellectual bullshit games about the concept of playing the market but he’s useless in coming up with any “real” solution for all the workers who trusted the corrupted system to keep their retirement funds safe.
I read about senior citizens living in their cars because of foreclosure in the AARP Bulletin and think of Henry Fonda playing his role in John Steinbeck’s “Grapes of Wrath”. He was playing a role but the seniors and all the others sent packing are real.
And the beat goes on with the taxpayers rescuing Wall Street swindlers and not a damn thing happening to rescue workers or former workers. Where’s all the intellectual geniuses of economics who have a solution to help ease the real pain of workers? Quit your interviews and all the intellectual posturing and come up with real solutions. We don’t give a damn about deriatives and all the other manipulations to steal if there isn’t a solution that the people can get behind and demand it be implemented.
charles:
Wm. Terry Leichner, RN:
^^^
14 October 2008, 2:41 pmWell said
Y.K.:
Good news! The law to deploy German military units in German has been blocked at this point.
Of course, in the anti-democratic US, we are still in the same crappy situation.
14 October 2008, 3:14 pm