(Illustration courtesy of I can haz bailout?)
Bold architect of Amerika's Brave New Socialist Order, Benjamin "Lenin" Bernanke: Socialism isn't "dead," it simply adapted.
Unlike the Creator, Who rested from his labors on the seventh day, the architects of our kleptocratic State do their most important work over the weekend.
The arrival of each week's two-day market sabbath is heralded by the announcement of yet another bank failure tied to the collapse of the real estate/mortgage/debt refinancing bubble, with the bad tidings disclosed after the final bell sounds on Wall Street.
The most recent episode involved Nevada's Silver State Bank, which appropriately enough has ties to high-ranking personalities in both branches of the Ruling Party. (Washington Mutual is presently the leading candidate for this week's high-profile failure.)
At irregular intervals, the weekend also brings news of the latest installment of the incremental nationalization of the investment markets. This began several months ago with the federally backed and brokered buy-out of Bear Stearns. Over the most recent weekend this process reached an important milestone when Fannie Mae and Freddie Mac were transformed from fascist entities -- that is, "public-private" partnerships -- into fully realized, federally owned socialist organs.
Legendary investor Jim Rogers, as usual, speaks the unalloyed truth when he observes that the Fannie/Freddie bailout demonstrates that "America is more socialist than China right now," with government redistributing wealth for the benefit of the politically connected super-rich. (That's how socialism always works in practice, of course.)
Once again, to the surprise of nobody who has been paying attention, this development was praised by the presidential candidates from both wings of the Ruling Party. And as with all such socialist undertakings, the very first priority of the officials who seized Fannie and Freddie was to assure the apparatchiks that their jobs were secure.
"Clearly, this [seizure of Fannie Mae by the feds] is a very significant regulatory action, and I know many of you will be concerned about how it will affect you and your work at Fannie Mae," wrote James B. Lockhart III, the agency's new conservator in a memo to its "officers, employees, and other personnel."
"I hope the following information will allay those concerns. First, your jobs are secure. There will be no change in your employment status with Fannie Mae as a result of the conservatorship. Your jobs, compensation, and benefits will continue without interruption." (Emphasis added.)
"Pretty sweet deal, huh? We pocket huge profits off of trillions in fraudulent mortgage loans, and the taxpayers pick up the bill!" Fannie Mae CEO Mudd (left) and Freddie Mac CEO Syron enjoy a moment of smug mutual self-approval during a recent congressional hearing.
Fannie CEO Daniel H. Mudd, and Freddie CEO Richard Syron engaged in fraudulent bookkeeping right up to the eve of the federal takeover by deliberately overstating their capital holdings and financial health. However, neither of them faces criminal or civil prosecution. In fact, strictly speaking they're not even being fired: They will both eventually "step down" from their current posts, but will be given sinecures of some kind.
Solicitude of this kind is routinely displayed toward those who had helped generate hundreds of billions of dollars in perfectly rotten mortgage loans as part of a corrupt scheme to boost executive compensation through dishonest accounting methods. Fannie and Freddie practiced Enron-onomics and Arthur Andersen-style accounting on steroids, in the serene confidence that the taxpayers would eventually have to absorb the costs and that nobody of any consequence in those agencies would suffer significant repercussions.
That confidence, as we can see, was entirely justified.
The announcement of the takeover was timed to assure foreign bondholders in Asia, Russia, and elsewhere that they wouldn't have to eat hundreds of billions' worth of bad paper issued by Fannie and Freddie. That foul feast will be served to the taxpayers who had no stake in that nasty business, but whose earnings will be plundered in order to keep foreign domestic political criminals comfortable, and foreign central bankers happy.
This process isn't finished, of course. We're being ordered to believe that the $200 billion line of credit being used to "backstop" Fannie and Freddie will be adequate to cover the rotting mortgage loans.
Those two Government-Sponsored Entities account for roughly half -- $5 trillion -- in outstanding U.S. mortgages.
Believing that $200 billion will cover the damage at Fannie and Freddie is even sillier than thinking that I could still fit into the uniform I wore more than a quarter-century ago as the starting fullback on our state championship football team.
Just as there is no logical stopping point between "backstopping" Fannie and Freddie and nationalizing them outright, there's no reason to assume that the cost of nationalizing those corrupt enterprises will fall far short of the full $5 trillion, an amount equivalent to roughly half the existing National Debt.
Monetizing this bailout will wipe out the savings and earnings of tens of millions of American households -- but no sacrifice extracted from the productive citizenry is too great, given that the objective is to protect the interests of the Power Elite.
Here's how justice operates under the kleptocratic state that rules us:
If you're a politically protected corporate leader who helps perpetrate a $5 trillion fraud through a federally chartered "private" entity, your crimes will be forgiven and the costs will be passed along to the taxpayers.
Bearing needless indignity with a smile: Heidi Dalibor, arrested and booked for a library fine by the armed revenue farmers of the appropriately named Grafton, Wisconsin city government.
However, if you're a young woman living in a small Wisconsin community who neglects to pay a $180 library fine (perhaps because you're too busy working two jobs to pay your other bills), you can expect to feel the unyielding steel of handcuffs around your wrists.
If you, like Peter Tubic of Milwaukee, Wisconsin, are a severely disabled man who neglected -- amid the turmoil of tending to a dying elderly father and cancer-stricken mother -- to pay a $50 ticket for storing an unregistered vehicle on your own property, you can expect to lose your $245,000 home to a tax lien and foreclosure imposed by the city government. (The citation, incidentally, was the result of a telephone tip from Tubic's estranged brother,who obviously has more than a little bit of Pavlik Morozov in what passes for his soul.)
There goes the homestead: In one Florida community, the government will seize your home if you fail to pay a single parking ticket on time.
In Brooksville, Florida, failure to pay a $5 parking ticket can result in foreclosure on one's home, or seizure of his car.
A similar fate awaits those who resides in Sarasota County, Florida. Under an ordinance recently enacted by the County Board of Commissioners, any motorist who is merely accused of failing to pay a traffic ticket issued by a for-profit red light camera system would suffer foreclosure on their home or seizure of other personal assets. This sentence would be imposed by a "special master," rather than a judge. A lien against the property would be filed against motorists who "ignore" a ticket issued in any amount. And this would be done in defiance of Florida state law, which expressly forbids the use of red light cameras. But the law offers no effective impediment to an esurient county government expecting to collect $2.25 million in annual revenue harvested through a projected 18,000 illegal citations.
The proliferation of predatory, extortionate measures of this kind at the local level reflects a trend I described nearly a year and a half ago: A dramatic escalation of enforcement efforts (involving traffic, parking, code enforcement, and "quality of life" measures) by revenue-starved municipal and county governments.
This is how such governments act when inflated home values collapse, taking property and sales tax revenues with them. And it's a tidy illustration of the way our current system is rigged to wring every penny from the productive class before expropriating them entirely.
Some might object that it's unfair to treat local and county governments as part of the same system of institutionalized plunder that gave us Fannie and Freddie. But we really should dispense with the illusion that anything resembling a federal system still exists in the United States.
Every government agency at every level is merely an administrative unit of the monolithic, fiat currency-fueled, Warfare/Welfare/Homeland Security Leviathan that must collapse -- and the sooner, the better -- if civilization is to recover.
Yes, the collapse is coming, and neither Ben Bernanke nor Henry Paulson can prevent it. What they can and will do, of course, is draw out and magnify the agony in order to provide platinum parachutes for their cronies, both here and abroad.
On sale now!
Dum spiro, pugno!
Just so you know, Bernanke's first name is not Benjamin. It's Ben Zion.
It really should be Ben Dover.
Soooo then, A collapse won't happen before the election -- wouldn't be fair to the ruling party, certainly won't happen during the holidays -- too much money changing hands.
Looks like it's going to be a cold winter no matter the outside temprature.
I would think taking a person's home for forgetting to pay a ticket could be a life threatening situation for all involved.
Hey everyone Digg Will's Article:
If, tomorrow, the government announces it's going to nationalize all of the US automakers, guaranteeing the continued employment and salaries their workers, and the pensions of their retirees, would there be any significant public outcry? I don't think there would be.
Americans are not committed to freedom, and certainly not free markets. They are quite happy when the state uses its power to redistribute money, especially when it spends on in things they see as benefiting them personally or on highly visible public projects that they see as "bringing in money into the area" (stadiums, convention centers, etc.).
So, I can't image any significant resistance to the idea of nationalizing our auto manufacturing industry. It would be sold as "saving domestic manufacturing," "keeping good jobs in the US", etc., which the average voter doesn't have the discernment to object to.
It will take a collapse like the one you speak of to get people to wake up, but I'm not sure even that will do it, with the government-controlled public schools and the media there to blame it on capitalism and greedy speculators.
The above poster has it right. My family and my home are my lines in the sand. Attempt to take either of them and there will be bloodshed.
The only consolation I have is knowing Jim Rogers made a killing shorting FNM and FRD stock.
Watch for the dollar to weaken and oil to strengthen soon.
The problem I have with you is that you make it very hard to write anything original. All I can do is link to your entry with a note, "What he said."
What a disgrace associating that man in the picture with HH. HH had success in other chapters of his life as opposed to the man pictured who has been a silver spoon fed, teat sucking, reptile from day one-if that is possible.
'The proliferation of predatory, extortionate measures of this kind at the local level reflects a trend I described nearly a year and a half ago: A dramatic escalation of enforcement efforts (involving traffic, parking, code enforcement, and "quality of life" measures) by revenue-starved municipal and county governments.' -- Will G.
Here's another example. I live in a town with a municipal water department. After moving out of my house while renovating it, water usage went way down. But the water department, not believing the meter, continued to send "estimated bills" based on previous consumption.
Eventually, I caught on to the scam. I informed them that water consumption had declined dramatically, because no one was there to use water. But they refused to back down from the phony estimated bills .. and I refused to pay.
Finally, they threatened to list my house for tax sale for an unpaid, fraudulent 19-dollar water bill. I threatened to take them to small claims court, and the bureaucrats relented (after claiming that the meter was broken, was running backwards, needed to be replaced, etc. ... anything but acknowledging the simple, obvious facts which I had already furnished to them in five (5) separate letters).
Two lessons can be derived from this:
1. Avoid government utilities if at all possible. Private utilities are government regulated. Government utilities regulate themselves, meaning they can ride roughshod over you.
2. As Will points out, there is one law for the elite, and one for the little people. Or to generalize, the constitution (specifically, the 14th "equal protection" amendment) has been suspended.
A nation without the rule of law is a banana republic. A nation which tolerates rule by decree (as in the GSE bailout, which was simply announced to Congressional 'leaders') is a banana republic.
The jakeleg GSE bailout means massive debt, and massive dilution of the dollar's value. One can only follow the Realtor's mantra: "BUY NOW, BEFORE PRICES GO UP."
You know, this is actually starting to be pretty funny-assuming you have enough to provide food and shelter for yourself. The disjunction between the girl with the library fine and the criminal activities of the elite are too much for me to get my head around.
Joseph Conrad captured this incongruity perfectly in Hear of Darkness: "By Heavens!-there is something after all in the world allowing one man to steal a horse while another must not look at a halter. Steal a horse straight out. Very well. He has done it. Perhaps he can ride. But there is a way of looking at a halter that would provoke the most charitable of saints into a kick."
A couple random thoughts . . .
It has been several (many by some measures) years since I read Marx ten planks of the communist manifesto. But, I remember at the time I felt that we here in amerika had implemented them all - fascism/marxism-lite.
I liked the observation that there will be "A dramatic escalation of enforcement efforts (involving traffic, parking, code enforcement, and "quality of life" measures) by revenue-starved municipal and county governments". I have noticed this on the highway lately as the radar detector goes off much more than a year ago - motorists have always been easy money to the state.
I did have the opportunity recently to see a speed trap on my evening bike ride, and as in the past, made my view of such distasteful conduct pretty obvious - unless "hey parasite, take that s*** somewhere else" didn't penetrate the state consciousness. Sometimes it is good to be almost 50 on a bicycle :), what are they going to do?
Sic Semper Tyrannis
Nobody can top (in a manner of speaking) your own comment, #2 up above. You are priceless! Thank you for that moment of sunshine.
You said it all. Nothing to add.
You know, in anticipating the erasure of the parasitic classes from the face of the earth, I am reminded how good it feels to have a really fine bowel movement. You with me here? You know that feeling of relief I'm talking about?
I sometimes wonder to myself if the sight of spraying brains and spilling guts will be hard on my delicate sensibilities, but then, I think about that bowel movement and say..."Nah. It'll feel sooooo good!!"
A new day. A breath of fresh air. A return to freedom and the community of man.
Ah, I can feel the turds moving within me already.
PS: Dear Will,
You will like this true story. Put it up or not as you wish. Barrick Gold of Canada is today one of the richest gold-mining companies in the world. For years, throughout the Reagan and Daddy Bush administrations, Barrick tried without success to buy a gold claim in Nevada from the Interior Department. In November 1992, having lost his bid for re-election, Daddy Bush forced through the sale of the claim to Barrick. The value of that gold deposit (which theoretically belonged to the US people,) at today's prices? $30 billion. How much Barrick paid the US Treasury for the claim? $10 thousand. Not a typo: Ten grand.
Six months after leaving office, guess who became a Special Consultant to Barrick Gold? Right. George H.W. Bush. How much his fees were? Nobody knows - he is a private citizen and only the IRS can access that information.
Bruce Babbit's (Clinton's Interior Secretary's) opinion of this deal: "The biggest gold heist since Butch Cassidy and the Sundance Kid." Too bad. All legally signed and filed.
Nice work if you can get it, no? And we wonder why they are all so eager to get elected to "public office."
The best trick of the ruling class is getting Joe Sixpack and Jane Handbag to think they have their interest at heart. That is laugh out loud funny. I feel sorry for anyone who believes some sugardaddy santa claus exists in gov. who cares about them or their offspring. I feel bad for the children coming up the debts that they didn't run up that they'll have to pay it might even inspire some real change.
This morning brings the news that Senator Dodd is going to hold a hearing on the GSE bailout. He wants to know "where the regulators have been for the past eight years." His House counterpart Rep. Frank is going to hold a hearing, too.
Doesn't this perfectly follow the screeching dictum of the Red Queen in Alice in Wonderland: "Verdict first; trial later"? Or "Bailout first; hearings later" if you will.
Someone should remind these simpering, gray-helmeted parliamentarians that Fannie and Freddie were CONGRESSIONALLY- CHARTERED companies. So where have our KongressKlowns been for the past forty years? Fellating each other in the cloakroom?
Senator Shelby, quoted in Bloomberg, completely cracks me up:
Fannie counted $20.6 billion in so-called deferred tax credits toward its $47 billion of regulatory capital as of June 30, according to company disclosures. Freddie applied $18.4 billion in deferred-tax assets toward its $37.1 billion in regulatory capital in the second quarter.
Fannie and Freddie have posted four straight quarterly net losses totaling a combined $14.9 billion and have said they anticipate more. The tax credits don't have any value unless the companies are generating profit.
"That's not even real money," Shelby said.
Oh, Senator? You know those peachback paper "dollars" that you're counting in? That ain't real money either, pal!
It's interesting how fully the nominal 'business party' (the Republican party) has signed on to the idea that the government is the creator of wealth -- and the idea that the gov't has to provide a "safety net" (in this case for bankers and shareholders).
Not that the Democrats' instincts are any better. Witness how T. Boone Pickens has already bought Nancy Pelosi, anticipating a trillion dollar payoff.
@Sic Semper: I'll see your bicycle and raise you a couple of years.
I have the good fortune to live in a state which restrains its various police agencies somewhat more than the average. Who can say how long that will last? Here's hoping in the coming chaos we become a refuge of relative liberty. I am too cynical to expect much more than that.
Very impressive article on 911 at
..."let him get Hooverized." Al "Ozoneman" Gore 11/2000
Funny how financial illusions fool even the kleptocrats. They thought that their unprecedented GSE bailout -- taking $5 trillion of impaired assets onto Usgov's balance sheet -- would finally stop the illiquidity spiral.
But barely 48 hours later, almost half of Lehman's stock value has vaporized in a single day -- rhyming with what happened to Bear Stearns in March, just before its jakeleg $29 billion bailout.
Oh well, in for a penny, in for a pound, eh Hank? Why not just take a page from the Japanese plan and establish "Price Keeping Operations" -- minimum prices for all assets? Call it a "People's Market" for a "People's State" -- a/k/a "Mark to Marx."
Who woulda thunk that a "conservative Republican" businessman president would turn out to be a frickin' commie?
Another story to add to
Lemuel Gulliver's list:
I live on an inland waterway that
is used to barge petroleum products.
During George H.W. Bush's presidency
we had 2 oil spills from barge collisions.
Also, during H.W.'s term there was
a "double hull" barge bill in congress
that was repeatedly being stalled.
After H.W. Bush left office the bill passed.
Guess who owned (heavily invested in)
the barge company that was spilling
oil into my river? Guess who sold
all of his stock in same barge
company before leaving office?
Correct! H.W. Bush!
Hollywood barge company was the most
cited barging company in America
during Bush's term due to spills
and violations. Corrective measures
were stalled in congress until
H.W. sold his stock and left office.
Aside from the coming of Jesus Christ
to judge the quick and the dead,
America's greatest hope is the total
abject collapse of the fiat dollar.
Thanks for the article.
Incidentally, the river I have
described is on the Texas Gulf
coast, the San Bernard river.
Best of all however is that I live
next door to the only honest pol
to serve in a hundred years: Ron Paul.
Yes, I live in Ron Paul's fighting
14th district and I get to STICK IT
to the government every couple of years
by voting him BACK into office.
I love it.
Go Ron! GO!
I feel as though I am merrily a passive witness to a slow motion catastrophe. You cant believe what you are witnessing and you just hope that the "flying debris" wont impact your little space. Yet you intuitively know that eventually it will and the fallout will destroy everything around you. The key question is - what do you do about it?
Republicans seem to be okay with the idea of socialism when they're the ones being bailed out of a mess (i.e., FannieMae and FreddieMac).
Republicans have been in favor of Socialism for a long. long time. There's very little about this country and how it operates now that is not Socialism.
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