"Always a Scam" (Baloney Again)

Lawrence Summers, Timothy Geithner, Nancy Pelosi, Joe Biden et al. are straining at the leash to get the Bailout Ball rolling once again. The stabilization of the financial sector, as elusive as it has been so far, has become the Holy Grail of Economic salvation. That makes $8.5 trillion worth of trying and $0 of result.

Julian Barnes informs us in his latest tome about our mortality Nothing To Be Frightened Of:

I heard a specialist in consciousness explain how there is no center to the brain - no location of self - either physically or computationally; and that our notion of a soul or spirit must be replaced by the notion of 'a distributed neuronal process.'

I liked his take on this, but the explanation that I liked best before reading his is one I read some time ago in one of E.O. Wilson's masterpieces (and I'm paraphrasing for your extra added enjoyment) that defined all sentient creatures as electrical-chemical mixtures operating from perceived cultural messages gained over the eons of existence through the processes of evolution. So, granted it may be hard for the average citizen to follow. It's not that I think that many people aren't capable of understanding what is happening right before their eyes, but you've got to take into account that most are not able to organize their neuronal processes as quickly as the most clever scam artists always make necessary. Until they have to. Andrew Hughes has his own view of this state of consciousness organization, which he shares with us as he tries to fathom how easily the population was and is still being fooled about the current economic/financial meltdown and its ensuing unemployment/poverty/catastrophe end game. I don't think I need to add that he agrees with my prior judgment (which I've hoped is not correct but don't see how it couldn't be). (Emphasis marks are added and some editing was necessary - Ed.)

Idiocy is usually described as "endlessly repeating the same process, hoping for a different result". Lawrence Summers, Timothy Geithner, Nancy Pelosi, Joe Biden et al are straining at the leash to get the Bailout Ball rolling once again. The stabilization of the financial sector, as elusive as it has been so far, has become the Holy Grail of Economic salvation. That makes $8.5 trillion worth of trying and $0 of result. The Knights of the Oval Table are gathered to plan their mission as their beleaguered subjects are trying to batter down the castle gates. It's no small wonder that Geithner wants to get the money out the door as soon as the end of this week. The most recent report from the Comptroller of the Currency seems to have gone unnoticed in Washington and the press. If banks are not lending because of increased capital requirements in the face of Credit Default Swaps, other derivatives and loan defaults, then the report goes a long way in describing exactly why.

Bank___________Assets____Derivatives__Credit Exposure _________________________________to Capital Ratio J.P. Morgan Chase_$1,768,657_/$87,688,008__/400.2 Citi____________$1,207,007_/$35,645,429__/259.5 Bank Of America__$1,359,071_/$38,673,967__/177.6 HSBC__________$_181,587_/$_4,133,712__/664.2 The assets (consist) largely of real estate, residential mortgage, student, car and credit card loans. With the rise in defaulting mortgages, delinquent credit card and other debt, the problem can only get worse. To recapitalize the banks to the point where exposure is low enough to encourage lending would take trillions and that's before any more fallout from the collapsing economy. Lending also requires creditworthy borrowers, the number of which is in a nosedive. The $165 trillion in notional derivatives and the associated credit risk related to $15 trillion in Credit Default Swaps illustrated below is the poison apple that the taxpayer has been forced to bite into. Bank___________ Total Credit Derivatives J.P. Morgan Chase__ $9,177,731 Citi____________ $2,939,783 Bank Of America___$2,480,672 HSBC___________$1,152,948 When the "credit crunch" began and Washington began the rush to solve the problem with taxpayer cash, no accounting of this derivative nightmare was ever brought to bear. In all the deliberations and press releases there was not a single mention of the fact that the primary cause of the bank collapse was due to these "instruments of mass destruction". It was widely discussed in the blogosphere but, like the real reasons for invading Iraq, never made it in to the mainstream media. As with Iraq, one would have to assume that the reason was to obfuscate the facts and cajole a shocked public in to accepting as a remedy whatever was proposed by Paulson, Bernanke and Bush. The latter had to be completely aware of the OCC data at the time and to assume that they did not is simply not credible. It would have been completely obvious that $700 billion would do absolutely nothing to alleviate the crisis. As witnessed in the ensuing months since the TARP bill, how the money was used has been obfuscated and concealed.This was always a scam. Even as the economic indicators broke one record after another, the recipients of the TARP funds were selling Credit Default Swaps to each other, betting on each other's downfall. They knew the game was up and wanted to profit on the way down as much as they had on the way up. All the major Banks on Wall St. are seeing mounting losses and the failure of one will increase the losses of the other. They are joined at the hip and will fall like a house of cards. The question begs to be asked, and this is where the cynic in me dominates, what's the plan? When they do fall will the Government nationalize the last one standing for the good of the country and socialize even more of the losses? This would be the coup of the millennium and give birth to a new Governmental paradigm. To have this complete before the economy and society have completely broken down would be a good reason to declare a real National Emergency and declare Martial Law, the legislation, executive orders and infrastructure of which are already in place. How can one not be a cynic when we reflect on what has happened so far? The numbers are in and the scam stands exposed to those who will look. Which way the story unfolds from here is anyone's guess. But I am ready to bet that Congress will not include the OCC data in the upcoming debate on the next round of cash for the Banks. Anyone ready to ask for a special prosecutor yet? Wonder how crowded the Bushies' gated community in Dallas is? Suzan ______________________