Wednesday, February 24, 2010

Dennis K Says "Retire at 60!" (Inside Bankster News) Wall Street Was Given a "License to Steal" (Thus, the Bonuses & Next Crash Planned)

I want to give a shout out to my friend-in-arms Danny Schechter. Danny is always out in front of the words mob with the economic news that we all need in order to make good choices for the future. Dennis Kucinich is no slouch either - see his video below for why we should change retirement age to 60, create a million job openings and allow these people to be included in the Social Security system (and do it with the TARP money - it's only fair!). Simon Johnson, one of the most intelligent, informed economists in the world today, reveals to us (as the banksters are already well aware of it) The Doomsday Cycle. As if we hadn't guessed. (Emphasis marks added - Ed.)

Over the last three decades, the US financial system has tripled in size, as measured by total credit relative to GDP. Each time the system runs into problems, the Federal Reserve quickly lowers interest rates to revive it. These crises appear to be getting worse and worse – and their impact is increasingly global. Not only are interest rates near zero around the world, but many countries are on fiscal trajectories that require major changes to avoid eventual financial collapse.

What will happen when the next shock hits? We believe we may be nearing the stage where the answer will be – just as it was in the Great Depression – a calamitous global collapse. The root problem is that we have let a ‘doomsday cycle’ infiltrate our economic system.

Robert Scheer reports in No Banker Left Behind (emphasis marks added - Ed.)

They do have a license to steal. There is no other way to read Tuesday’s report from the New York state comptroller that bonuses for Wall Street financiers rose 17 percent to $20.3 billion in 2009. Of course that is less than the $32.9 billion for bonus rewards back in 2007, when those hotshots could still pretend that they were running sound businesses.

The economy is anything but sound, but you would hardly know that from looking at the balance sheets of the big investment banks. The broker-dealer firms on Wall Street made a record profit, estimated at greater than $55 billion by the comptroller, and the only thing holding back even more grotesque bonuses was concern over criticism from a public that was hardly doing as well.

The enormous rewards last year come not from their having righted the ship of finance by lowering the rate of mortgage foreclosures for ordinary folks, one of four who are now “underwater” on their loans. Consumer confidence this month is the lowest in 27 years, and unemployment is expected to hover near 10 percent for the next two years. No, they get bonuses because the Federal Reserve, backed by the Treasury, bought the toxic mortgage securitization packages that Wall Street banks were left holding. They, and they alone, were made whole.

The way the scam worked is that the Treasury deposited taxpayer dollars with the Federal Reserve, which in turn purchased a whopping $1.25 trillion in toxic mortgages. That’s the figure after the Treasury on Tuesday committed to depositing $200 billion more with the Fed to increase spending on this program—one that was ostensibly designed to increase credit availability to small businesses and others but has hardly accomplished that goal. Credit is still very tight because the big financiers have used the low-cost cash they received from those charitable government programs to solidify their own positions through acquisitions and the like.. [More here →]

Dennis Kucinich, man of the hour, any hour for me, states assuredly that a:

"Good Use For the TARP Funds — Create 1,000,000 job openings by lowering Social Security Age to 60." Listen to Dennis' common sense for the common citizen below (as the MSNBC talking head tries to confuse the audience).

Hundreds of Banks Could Go Under

TheStreet.com: FDIC’s ‘Problem Bank’ List Grows “More than 700 banks, or nearly one out of every 11, are at risk of going under, according to a government report.” James Kwak offers an explanation on BaselineScenario.com: “Sheila Bair blames the large banks: “Bair said that the vast majority of the decline was the result of lending cutbacks by the largest banks, which have tightened qualification standards and increased the proportion of money that they hold in reserve against unexpected losses.”

Undoubtedly many small banks are cutting back on lending because losses are eating into their capital and forcing them to contract. But I think what frustrates Bair is that the larger banks — which are more profitable (in part by charging higher fees) and which enjoyed more government support — are also cutting back.” In other words, the big banks took care of themselves with TARP money – and the rest of the industry and the economy be damned. Jesse’s Cafe American Blog: Stealth Bailout In The Works By Federal Reserve.

Perspectives:

The Final Scenes of the Death of US Capitalism - Warren Buffett's long-time partner, Charlie Munger says "It's Over" for America. Yes, "o-v-e-r," America's in decline, at the end-of-days, coming to "financial ruin.

Optimism has always been the enduring spirit that made us a great nation, brought us back from overwhelming challenges and impossible odds -- WW II, the Civil War, the 1776 Revolution. Yes, that spirit still burns in our soul, says the poll.

But we also know, as we said earlier in "The Death of the Soul of Capitalism," that over the long-term, through many centuries, historians give nations an average of about 200 years before they burn out. Why? Because the "blind optimism" that makes a nation great in the early years of its rise to power and glory becomes, paradoxically, its worst enemy in the end-days.

Their arrogance traps them in a self-sabotaging cycle that weakens their resolve, makes them vulnerable to new, unpredictable challenges, ultimately destroying them from within. That happens over and over throughout history, even as their optimistic brains tell them they're still the greatest.

Seeking Alpha, How Far Is US From Becoming Another Greece? DEBT DYNAMITE DOMINOES: THE COMING FINANCIAL CATASTROPHE The current crisis is not merely a failure of the US housing bubble, that is but a symptom of a much wider and far-reaching problem. The nations of the world are mired in exorbitant debt loads, as the sovereign debt crisis spreads across the globe, entire economies will crumble, and currencies will collapse while the banks consolidate and grow. The result will be to properly implement and construct the apparatus of a global government structure. A central facet of this is the formation of a global central bank and a global currency. The people of the world have been lulled into a false sense of security and complacency, living under the illusion of an economic recovery. The fact remains: it is only an illusion, and eventually, it will come tumbling down. The people have been conned into handing their governments over to the banks, and the banks have been looting and pillaging the treasuries and wealth of nations, and all the while, and making the people pay for it. THE DRIVE TO ELIMINATE SOCIAL SECURITY IN AMERICA MARTIN WEISS CALLS THE INTERNATIONAL DEBT CRISIS “ARMAGEDDON” QUICKLY AND WITHOUT WARNING: ECONOMIST NIALL FERGUSON SPEAKS ABOUT THE SUDDEN COLLAPSE OF EMPIRES In an article for the March/April issue of Foreign Affairs, “Complexity and Collapse: Empires on the Edge of Chaos,” due out later this week, author and historian Niall Ferguson posits that the life cycles of great powers might not follow the long-accepted pattern of gradual rise and fall. Rather, he says, “it is possible that this whole conceptual framework is, in fact, flawed,” and that empires fall quickly and without warning. With that in mind, Ferguson explores what it might mean for the geopolitical status quo.

Confidence Falls Again

AP: NEW YORK – A monthly poll showed consumers’ confidence took a surprisingly sharp fall in February amid rising job worries. The decline ends three straight months of improvement and raises concerns about the economic recovery.

The Conference Board said Tuesday its Consumer Confidence Index fell almost 11 points to 46 in February, down from a revised 56.5 in January. Analysts were expecting only a slight decrease to 55.

So, take heed my friends. Suzan _________________

5 comments:

rjs said...

suzan, i gotta disagree with dennis's propasal; if we're going to eventually solve to compounding deficit problem, the elephants in the room are social security and medicare, and the eligiblity ages on them will have to be raised

Suzan said...

RJ,

I disagree. Have you actually looked at the evidence? This is a favorite right-wing ploy to continue to shred the safety net of those on the bottom - just a scare tactic without any good data demanding such (and already paid for by the contributors - see the raises in rates under the Greenspan Commission in the 80's - which provided the money for the Bush tax cuts and weren't safeguarded as solely for the funding of Social Security as publicized by those in power like Gore asked for in his "lock box" issue).

I've studied it thoroughly and any shortfall can be met by very insubstantial raises of rates (not anywhere near as drastic as those in the '80s were) for all or as many have already suggested, raising the rates for those above the artificial $109K top that exists now.

Study up on it and get back to me.

S
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libhom said...

Kucinich is wonderful. Thanks for publicizing his proposal.

As for banks failing, it's mostly small banks, and that should set off alarm bells. I see it less as a general problem with the financial system and more as big banks using financial manipulation to drive their smaller competitors out of business.

Suzan said...

And eat them alive.

Thanks for your comment, Libhom.

Let's publicize Dennis' thoughts on the web!

S
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rjs said...

even if you raise taxes on the wealthy to pay for entitlements, we still have a demographic problem where there will be an increasingly large number of retirees supported by a shrinking younger workforce...

social security was designed for retirement at 65 when the life span was shorter & the majority of workers were broken by a lifetime of hard labor; not so much now, so there's no reason people of my age should be on the dole...