Call me crazy (people have), but I rarely accept the propaganda from the corporate media without some questioning. For example, those of you who have read my posts in the past know that I do not believe that the twin towers were knocked down by a few bumbling middle-eastern pilots who had difficulty with their Cessnas and had less than 200 hours flying experience. I won't bore you with the details, except to say that:

1. Certain interests were DETERMINED to gain control of Iraq's oil, starting in 1991.

2. After the USSR fell, those interests formulated their plans via PNAC.

3. Somehow, after Bush was installed as president by SCOTUS, the Cheney energy group met (we will never get the memo on that one) and decided to invade Iraq. They needed a "Pearl Harbor Event" to catalyze American support. They got it. How is not the issue here either.

So here we are, in 2008, with a banking crisis. We all knew it was coming because the greedy Ba$tards on Wall $treet have been selling AAA rated kaka all over the world but the party is over and everybody knows it. THEY HAVE PAINTED THEMSELVES INTO A CORNER. THERE IS NO ESCAPE. THEY KNOW IT.

So what is to be done? How about a false-flag operation, aka Melt-Down? Make it so bad that even a bunch of free-market ideologues like the Bushies will have NO CHOICE but to step in and TAKE OVER THE WHOLE MESS.

So... in June, Cox lifts a 70 year-old ban on short selling on the up-tick. That was to prevent "piling-on". During the next few months, we start the fun. Hedge fund CEO Rick calls his buddy Dave at another hedge fund and says, "hey, Dave, who shall we bomb today?" Dave says, "Well, Rick, I've been studying the financials on Bear, Stearns, and they are pretty shaky. I think maybe $40-50 million in shorts could put them under and make us a bundle. Got any friends you can get in on this one? I can only pony up $5 mil."

So they hammer the Bear. and Bernanke takes the bait.

Then they hammer Lehman, and Bernanke passes.

They hammer Merrill and B of A comes to the rescue (a perfect fit: BOA has been looking for a retail outlet for years, and now they get one on sale. What could be better?).

Now, the coup de gras. AIG: a well-known, long standing insurance giant who now has moved from buildings, boats, and planes, into the casino business, has insured over $60 TRILLION in credit default swaps and has NO WHERE NEAR THAT KIND OF MONEY to pay off if they all go down. If AIG can be hammered, the government will HAVE TO TAKE CONTROL OF THIS DISASTER.

Well, there you have it.

I can't prove a thing.

But the pieces sure fit together well.

And we, the taxpayers, are the suckers.

Again.

http://www.nytimes.com/2008/09/20/washingt...nd-cong.html?hp

September 20, 2008
Congressional Leaders Stunned by Warnings
By DAVID M. HERSZENHORN

WASHINGTON — It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.

Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.

“When you listened to him describe it you gulped," said Senator Charles E. Schumer, Democrat of New York.

As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program “Good Morning America,” the congressional leaders were told “that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.”

Mr. Schumer added, “History was sort of hanging over it, like this was a moment.”

When Mr. Schumer described the meeting as “somber,” Mr. Dodd cut in. “Somber doesn’t begin to justify the words,” he said. “We have never heard language like this.”

“What you heard last evening,” he added, “is one of those rare moments, certainly rare in my experience here, is Democrats and Republicans deciding we need to work together quickly.”

Although Mr. Schumer, Mr. Dodd and other participants declined to repeat precisely what they were told by Mr. Bernanke and Mr. Paulson, they said the two men described the financial system as effectively bound in a knot that was being pulled tighter and tighter by the day.

“You have the credit lines in America, which are the lifeblood of the economy, frozen.” Mr. Schumer said. “That hasn’t happened before. It’s a brave new world. You are in uncharted territory, but the one thing you do know is you can’t leave them frozen or the economy will just head south at a rapid rate.”

As he spoke, Mr. Schumer swooped his hand, to make the gesture of a plummeting bird. “You know we’d be lucky ...” he said as his voice trailed off. “Well, I’ll leave it at that.”

As officials at the Treasury Department raced on Friday to draft legislative language for an ambitious plan for the government to buy billions of dollars of illiquid debt from ailing American financial institutions, legislators on Capitol Hill said they planned to work through the weekend reviewing the proposal and making efforts to bring a package of measures to the floor of the House and Senate by the end of next week.

Lawmakers in both parties described the meeting in Ms. Pelosi’s office on Thursday night with Mr. Paulson and Mr. Bernanke as collaborative, and that they were prepared to put politics aside to address the needs of the American people.

While Democrats initially said after the meeting that they planned to use the administration’s proposal of a huge rescue effort to win support for an economic stimulus package, they pulled back slightly on Friday morning, saying that their top priority was to help put together the bailout package and stabilize the economy.

But it was clear they continued to examine ways to make clear that the government was stepping up not just to help the major financial firms but also to protect the interests of American taxpayers and families by safeguarding their pensions and college savings, and by preventing any further drying up of consumer credit.

In addition to potential stimulus measures, which could include an extension of unemployment benefits and spending on public infrastructure projects, Democrats said they intended to consider measures to help stem home foreclosures and stabilize real estate values.

Among the potential steps Congress can take include approving legislation to allow bankruptcy judges to modify the terms of primary mortgages — authority that the bankruptcy laws do not currently allow and that the banking industry has strenuously opposed.

But the Democrats said it was too soon to discuss such details, and that they were awaiting a draft of the proposal from the Treasury Department.

“We have got to deal with the foreclosure issue,” Mr. Dodd said. “You have got to stop that hemorrhaging..If you don’t, the problem doesn’t go away. Ben Bernanke has said it over and over again. Hank Paulson recognizes it. This problem began with bad lending practices. Those are his words, not mine, and so this plan must address that or I’ll be back here in front of a bank of microphones at some point explaining the next failure.”

Even before the drafting of the plan was complete, the Bush administration and the Fed began efforts to sell the idea of a huge rescue to potentially skeptical rank-and-file members of Congress. Mr. Paulson and Mr. Bernanke held a conference call with House Republicans to explain their thinking.

Senator Richard C. Shelby of Alabama, the senior Republican on the Senate banking committee, said in a television interview that cost to the government of purchasing bad debt could run to $1 trillion — a potential warning sign since Mr. Shelby is a longtime skeptic of government intervention in the private market.

Until Mr. Shelby was interviewed on Friday morning, officials on Capitol Hill had been careful not to discuss specific figures, though the rescue envisioned by the Treasury Department clearly entails a government appropriation of hundreds of billions of dollars.

sure sounds like the same lead up to the Patriot Act and Iraq to me

What's next? Cancel the elections for the good of the people?

http://www.truthdig.com/report/item/200809...warned/Economic Meltdown: Don’t Say We Weren’t Forewarned
http://www.truthdig.com/report/item/200809...ent_forewarned/
Posted on Sep 19, 2008

By Robert Scheer

Editor’s Note: This article is a reprint of Robert Scheer’s column, “Bush Overplays the Terror Card,” that originally ran in the Los Angeles Times on June 25, 2002.

Has the war on terrorism become the modern equivalent of the Roman Circus, drawing the people’s attention away from the failures of those who rule them? Corporate America is a shambles because deregulation, the mantra of our president and his party, has proved to be a license to steal. Yet to question our leaders’ stewardship of the economy has been made to seem unpatriotic.

Although combating terrorism is of compelling importance—and should have been before Sept. 11—one is likely to be branded a nut for daring to suggest that the administration might be using current security threats as a smoke screen to obscure our floundering economy.

Yet, after the miserable performance of the stock market these past five weeks, the forced resignations and indictments of corporate titans (not to mention the conviction of a top accounting firm), the humbling of the dollar and a rise in the trade gap, isn’t it time to ask whether the war on terrorism isn’t being milked as a convenient distraction?

The question seems particularly relevant when our man in the White House has had close personal and financial ties to the company—Enron—whose demise is the most glaring symbol of the broad moral disarray of the nation’s corporate culture.

Is there any doubt that the chicanery of Enron executives and that of a growing Who’s Who of top CEOs has done more long-term damage to the U.S. economy than the efforts of anti-American terrorists? And while sending in the Marines to clean up the boardrooms is not feasible, we ought to wake up to the reality that business greed is subverting the American way of life—and hurting the image of American capitalism and democracy—more effectively than the ploys of any foreign enemy.

When even Martha Stewart is ethically suspect and her company’s stock has plummeted—though not quite to the depths of Enron, Global Crossing, Tyco, Dynergy, Wal-Mart and Rite Aid—it is time to return to the wisdom of Franklin Delano Roosevelt, the Depression-era president who saved capitalism from itself.

Wealthy from birth, FDR had a healthy awareness of the tendency of the upper classes to destabilize society and even destroy themselves with their greed and hubris. Unlike Karl Marx, however, he believed the unraveling of capitalism was not inevitable if these excesses could somehow be corralled. Thus was born the idea of government regulation as the vital support structure for the powerful, fertile but unstable free market.

Unfortunately, greedy people and institutions don’t like being monitored, and they have the means to corrupt governments and skirt laws.

Since the so-called Reagan Revolution, powerful corporate interests have succeeded in profoundly damaging the foundation of a properly regulated economy. Company auditors, for example, have become accomplices to deceptions of the public that should be considered criminal but that often do not violate statutes written by corporate lobbyists.

Enron provides a startling illustration of a company jumping through loopholes that its D.C. lobbyists have created. In fact, the Enron scams made possible by deregulation in the first Bush administration are still being revealed, such as last week’s reports that the company hid billions in income during the California energy crisis while publicly denying it was profiting excessively.

Yet former Enron officials continue to play an important role under Bush the younger. The Bush family, in fact, has never been seriously confronted by the media or Congress as to its questionable ties to former Enron Chief Executive Kenneth Lay, a close family friend and top contributor to Bush family presidential campaigns.

To be fair, the corporate corruption of our political system has long been bipartisan. The Clinton White House, for example, sponsored major deregulation acts, including the Financial Services Modernization Act, which reversed consumer protections enacted under Roosevelt, and the Telecommunications Act of 1996, which effectively ended all public accountability for the communications industry and has permitted a few media giants to gobble up vast markets.

Clearly, the problem is bipartisan when a Democrat-controlled Senate moves so hesitantly to confront the myriad examples of sickness in our economy and corporate culture.

The politicians hesitate to act because candidates of both parties are lavishly financed by the very people who are conning a gullible public.

http://www.truthdig.com/eartotheground/ite..._1_trillion/?ln

Paulson Bailout Plan Could Reach $1 Trillion
http://www.truthdig.com/eartotheground/ite...ach_1_trillion/
Posted on Sep 19, 2008

If you thought the Iraq war was expensive, try an estimated $1-trillion bailout of major finance firms to prevent a meltdown of the U.S. economy. President Bush and Treasury Secretary Henry Paulson outlined such a “bold approach” Friday morning, yet detailed plans still remain forthcoming.

Politico:

Congressional leaders said after meeting Thursday evening with Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke that as much as $1 trillion could be needed to avoid an imminent meltdown of the U.S. financial system.

Paulson announced plans Friday morning for a “bold approach” that will cost hundreds of billions of dollars. At a news conference at Treasury headquarters, he called for a “temporary asset relief program” to take bad mortgages off the books of the nation’s financial institutions. Congressional leaders had left Washington on Friday, but Paulson planned to confer with them over the weekend.

“We’re talking hundreds of billions,” Paulson told reporters. “This needs to be big enough to make a real difference and get to the heart of the problem.”

I'm sorta disappointed that nobody has taken a shot at my theory here. I though somebody would have rung in.

"Bush team, Congress negotiate $700B bailout"

By JULIE HIRSCHFELD DAVIS and DEB RIECHMANN, Associated Press Writers

20 SEPTEMBER 2008

WASHINGTON - The Bush administration asked Congress on Saturday for the power to buy $700 billion in toxic assets clogging the financial system and threatening the economy as negotiations began on the largest bailout since the Great Depression.

The rescue plan would give Washington broad authority to purchase bad mortgage-related assets from U.S. financial institutions for the next two years.

It does not specify which institutions qualify or what, if anything, the government would get in return for the unprecedented infusion.

Democrats are pressing to require that the plan help more strapped borrowers stay in their homes and to condition the bailout on new limits on executive compensation.

Congressional aides and administration officials are working through the weekend to fill in the details of the proposal.

The White House hoped for a deal with Congress by the time markets opened Monday; top lawmakers say they would push to enact the plan as early as the coming week.

"We're going to work with Congress to get a bill done quickly," President Bush said at the White House.

Without discussing specifics, he said, "This is a big package because it was a big problem."

But lawmakers digesting the eye-popping cost and searching for specifics voiced concerns that the proposal offers no help for struggling homeowners or safeguards for taxpayers' money.

The government must bail out the financial system "because if we don't, it will have a tremendous impact on American consumers, homeowners, taxpayers and the rest," House Speaker Nancy Pelosi, D-Calif., said at a citizens' workshop in San Francisco.

But, she added, "We cannot deal with this unless this bailout helps families stay in their homes."

Sen. Chuck Schumer, D-N.Y., called the plan "a good foundation," but said it was missing "some kind of supervisory authority, and some kind of protection for homeowners and taxpayers."

The proposal would raise the statutory limit on the national debt from $10.6 trillion to $11.3 trillion to make room for the massive rescue.

"The American people are furious that we're in this situation, and so am I," the House's top Republican, Ohio Rep. John A. Boehner, said in a statement.

"We need to do everything possible to protect the taxpayers from the consequences of a broken Washington."

Signaling what could erupt into a brutal fight with Democrats over add-on spending, Boehner said "efforts to exploit this crisis for political leverage or partisan quid pro quo will only delay the economic stability that families, seniors, and small businesses deserve."

Bush said he worried the financial troubles "could ripple throughout" the economy and affect average citizens.

"The risk of doing nothing far outweighs the risk of the package."

"... Over time, we're going to get a lot of the money back."

He added, "People are beginning to doubt our system, people were losing confidence and I understand it's important to have confidence in our financial system."

Neither presidential candidate took a position on the proposal.

GOP nominee John McCain said he was awaiting specifics and any changes by Congress.

Democratic rival Barack Obama used the party's weekly radio address to call for help for Main Street as well as Wall Street.

"We need to help people cope with rising gas and food prices, spark job creation by repairing our schools and our roads, help states avoid painful budget cuts and tax increases, and help homeowners stay in their homes," Obama said.

"And we must also ensure that the solution we design doesn't reward particular companies, or irresponsible borrowers or lenders, or CEOs, some of whom helped cause this mess."

Their language reflected a tricky balance that politicians in both parties are trying to strike, just six weeks before Election Day: Back a plan that doles out hundreds of billions to companies that made bad bets and still identify with the plight of middle-class voters.

Besides mortgage help and executive compensation limits, Democrats are considering attaching middle-class assistance to the legislation despite a request from Bush to avoid adding items that could delay action.

An expansion of jobless benefits was one possibility.

Bush sidestepped questions about the chances of adding such items, saying that now was not the time for posturing.

"I think most leaders would understand we need to get this done quickly, and you know, the cleaner the better," he said about legislation being drafted.

Treasury officials met congressional staff for about two hours on Capitol Hill on Saturday.

Discussions centered on how the plan would work, and Democrats proposed adding the executive compensation limits and new foreclosure-prevention measures.

Among the key issues up for negotiation is which financial institutions would be eligible for the help.

The proposed legislation doesn't make it clear, leaving open the question of whether hedge funds or pension funds could qualify.

The proposal does not require that the government receive anything from banks in return for unloading their bad assets.

But it would allow the Treasury Department to designate financial institutions as "agents of the government," and mandate that they perform any "reasonable duties" that might entail.

The government could contract with private companies to manage the assets it purchased under the rescue.

Treasury Secretary Henry Paulson says the government would in essence set up reverse auctions, putting up money for a class of distressed assets — such as loans that are delinquent but not in default — and financial institutions would compete for how little they would accept.

If enacted, the plan would give the treasury secretary broad power to buy, manage and sell the mortgage-related investments without any additional involvement by lawmakers.

It would, however, require that the congressional committees with oversight on budget, tax and financial services issues be briefed within three months of the government's first use of the rescue power, and every six months after that.
___

Associated Press Writer Terence Chea contributed to this report from San Francisco.