September 30, 2008 MSNBC Rachel Maddow Show
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September 30, 2008 MSNBC Rachel Maddow Show
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By Patti Bielling
Sep 29, 2008
Soldiers at Great Lakes Naval Station, Ill., practice skills they will use when their units assume a consequence management response mission Oct. 1. Photo by U.S. Army North
FORT STEWART, Ga. (Army News Service, Sept. 29, 2008) – The exercise scenario was a sobering one: a 10-kiloton nuclear device detonated in America’s heartland, quickly overwhelming civilian responders.
Military leaders who recently trained for this response say they are now thinking differently about how to move equipment, extract the injured and take care of people following this type of attack.
By Scott Lanman and Craig Torres
Sept. 29 (Bloomberg) — The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression.
The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide. The Term Auction Facility, the Fed’s emergency loan program, will expand by $300 billion to $450 billion. The European Central Bank, the Bank of England and the Bank of Japan are among the participating authorities.
Stocks plunge on Wall Street as bailout fails in Congress
By Bill Van Auken, Socialist Equality Party vice presidential candidate
30 September 2008
Wall Street suffered its biggest one-day point fall in history amid panic selling, as the proposed government bailout of the major banks and finance houses went down to defeat Monday in the US House of Representatives.
The Dow Jones Industrial Average plummeted 777 points, or 7 percent. The other major indexes fell even further, in percentage terms, with the Nasdaq Composite Index plunging more than 9 percent and the Standard & Poor’s 500 Index falling 8.8 percent. A total of $1.2 trillion, or 9 percent, of total market value was wiped out.
After the bill was voted down, Obama delayed making a statement until he could consult with Paulson. Then he insisted that the proposal was “required for us to stabilize the markets.” He continued: “Democrats and Republicans in Washington have a responsibility to make sure an emergency rescue package is put forward that can at least stop the immediate problems that we have.”
For his part, McCain issued no immediate statement, while a campaign aide echoed the ludicrous claim of the Republican House leadership that the measure’s defeat was a response to a partisan attack in the remarks of Democratic House Speaker Nancy Pelosi before the vote was taken.
In the end, the program of these opponents of the bailout is one of even more tax cuts for the rich and the destruction of what little remains of a social safety net in America, transferring all public monies to big business, albeit by a different route.
If these imbecilic demagogues are able to exploit the popular opposition that exists to the bailout, it is only because the leadership of the Democratic Party is so solidly unified behind the interests of finance capital and so indifferent to the concerns of the masses of working people. They are utterly incapable of offering the slightest substantive alternative to the demands of Wall Street.
A way out of the crisis—the deepest to confront American and world capitalism since the Great Depression of the 1930s—requires a rejection not only of the bailout, but of the entire framework in which the debate in Washington is being conducted.
The capitalist system has failed, and there is no reason to doubt the warnings from Bush, Paulson, Obama and others that it is preparing a social catastrophe.
This video may contain images depicting the reality and horror of war/violence and should only be viewed by a mature audience.
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The Republican leaders of the House of Representatives grabbed a half dozen bags of sincerity, looked directly into every TV camera they could find, and lied.
The House had just defeated, 228–205, a bipartisan $700 billion bailout bill. But it was the Democrats who were the subject of vicious rhetoric.
Speaker of the House Nancy Pelosi (D-Calif.) “poisoned our conference,” screeched Rep. John Boehner (R-Ohio), the Republican minority leader. He said the House would have voted for the bill “had it not been for the partisan speech the Speaker gave on the floor of the House.” Rep. Roy Blunt (R-Mo.) specifically said that Pelosi’s speech changed the minds of about a dozen Republicans who voted against the bill. Rep. Eric Cantor (R-Va.), waving a copy of Pelosi’s speech, screamed out, “Here is the reason I believe why this vote failed!” The speech, he said, “frankly struck the tone of partisanship that frankly was inappropriate in this discussion.” Douglas Holtz-Eakin, a senior advisor to Sen. John McCain, was equally blunt—and equally wrong. The bailout failed, he said, because “Barack Obama and the Democrats put politics ahead of country.”
But it wasn’t the Democrats who brought about the bill’s defeat. The Democrats voted 140–95 for the bill; the Republicans voted 133–65 against the bill. Sens. Barack Obama and John McCain reluctantly supported the bill. Nevertheless, the viciously partisan Republican leadership, eager to paint anything Democratic as vicious partisanship, couldn’t even get a majority of their own members to agree to the bailout, one that now had added protections for the taxpayer.
What infuriated the Republican leaders was Pelosi’s accurate portrayal of the Bush–Cheney Administration’s economic policies as “built on recklessness, on an anything-goes mentality, with no regulation, no supervision and no disciple in the system.” While driving America into the deepest deficit in its history, the Administration had usurped its own campaign lies that breathlessly panted the fear that the enemies of American consumers are “tax-and-spend liberals,” as if it was one word.
There are several reasons why this version of the bailout failed. Every member of the House is facing re-election in less than six weeks, and their constituents are angry. They’re angry at the government’s lack of oversight and regulation, supported and encouraged by Bush and McCain, that helped bring about the crisis. They’re angry at the failing mega-mammoth financial institutions that sacrificed the middle class to a horde of unbridled greed and incompetence. They’re angry at corporate executives who make millions while their companies are failing, and then get multi-million dollar “golden parachutes” that let them float into retirement, while the average taxpayer’s 401(k), with only a few thousand dollars may now be worth only half what it once was. They’re angry at “house flippers,” aided by easy-to-get mortgages and some unscrupulous real estate brokers, who made minor fortunes and helped raise housing prices to the point where middle-class families could no longer afford to own a home in an economy that was being held up by toothpicks.
But, most of all, consumers and members of Congress are furious at President Bush, Vice-President Cheney, and their Neocon gaggle who no longer have credibility. For seven years, the Bush–Cheney Administration has used fear as a bargaining weapon.
Six weeks after 9/11, the U.S. had the PATRIOT Act, a 342-page law, which few members of Congress read before voting for it, that pretending to stop terrorists essentially stripped much of our constitutional protections. And the people and their elected leaders agreed to it.
Using the tactics of fear, the Bush–Cheney Administration lied to the people, almost abandoned the hunt for Osama bin Laden in Afghanistan, and invaded Iraq, which had no connection to 9/11. And the people and their elected leaders agreed to it.
For the morally bankrupt Bush Corp., dissent is unpatriotic, un-American, and maybe even treasonous. “You’re either with us or against us,” President Bush told Americans. Because the people didn’t want to be seen as opposed to America, they and their leaders agreed to being bullied. “Support the troops,” Bush told Americans, but meant “Support me and my policies.” And Americans didn’t want to be seen as not supporting America’s soldiers, even if the Bush–Cheney Administration, didn’t give the troops pay raises, adequate body armor or medical care.
The Bush–Cheney Administration said they were “compassionate conservatives.” But, Katrina put an end to that lie.
This is an Administration that believes the environment is important only if it doesn’t interfere with private business. For years, Bush said he believed global warming doesn’t exist, and if it does it wasn’t caused by mankind. Only under the crushing weight of scientific evidence did Bush reluctantly have to modify his beliefs.
Almost eight years of incompetence and lies, with the President’s credibility lower than that of Three-Card Monty dealers in New York City, led Americans to finally realize they have been scammed. Bush had cried out “fear” once too often.
But, it wasn’t the PATRIOT Act, the Iraq War, or the destruction of the environment that brought about the people’s anger. It was their self-interest. In Bush’s Wild West economy, Americans have seen inflation, increased unemployment, foreclosures, and bankruptcies; they have seen their retirement plans dwindle in the vapors of economic chaos. The vote against the bailout was simply political reality by members of Congress who no longer were about to be stampeded by fear, scammed by lies, and whose own self-interest is to be re-elected.
[Dr. Walter M. Brasch is an award-winning social issues columnist, former newspaper and magazine reporter and editor, and professor of journalism at Bloomsburg University. He is president of the Pennsylvania Press Club, and former president of the Keystone state chapter of the Society of Professional Journalist. He is also the author of 17 books, including America’ s Unpatriotic Acts: The Federal Giovernment’s Violation of Constitutional and Civil Rights (January 2005) and Sinking the Ship of State: The Presidency of George W. Bush (November 2007), available through amazon.com and other bookstores. He frequently writes about the media, social and political issues. You may contact Brasch at firstname.lastname@example.org or through his website at: www.walterbrasch.com.]
by The Other Katherine Harris
Sept 30, 2008
Wall Street wants us to panic, but stocks are just way overpriced.
If you’re hyperventilating about the stock market this morning, please calm down. What’s underway is simple Market Justice. Artificially inflated prices can’t be sustained forever — not for $700 billion or any amount of cash.
For years and years, the housing bubble fed the stock bubble and vice versa. Far too much money poured into both asset classes, so this isn’t a problem more money will solve.
In every speculative market, there comes a time when those who bought too high get rebuked by reality. Wall Street doesn’t like reality any more than homeowners who paid too much do, but the fall has to happen. It’s healthy.
Just as the housing market will recover when the median price of a home regains its logical relationship with the median household income, stock prices will stabilize at a level that reflects their fundamental value. Trying to keep these prices unreasonably elevated by any sort of heroics is destined to fail.
Housing will find a realistic bottom less painfully than many stocks will, because 1) buildings and land are useful things and 2) the prices weren’t juiced as much. A total fall of 40 percent in the most overheated markets is right, which is why banks are now selling off mortages in bulk at 60 cents on the dollar and finding plenty of buyers. (They should be offering that price to the residents, of course, but this is a topic for another day.)
Stock prices often veered much farther from sanity, particularly in the zany shadow realm of derivatives (secondary bets derived from the presumed value of debt and other underlying assets). More than a QUADRILLION DOLLARS’ worth of them are currently outstanding. This is nuts, considering that the entire world’s annual GDP was only $60-65 trillion in 2007, the domestic capitalization of every stock exchange on the planet comes to barely over $60 trillion and combined personal wealth around the globe was measured last year at $109.5 trillion. To make a quad takes 1,000 trillion: more money than even exists!
Such craziness is possible because, in the surreal alternate universe of derivative securities, leverage goes as high as 100-200 percent. Their hyperinflated “notional” value acquires a hyperinflated real-world price tag when one party to a bet is proved right and the other wrong. Styled as hedging devices, most derivatives are pairs representing opinion and counter-opinion — but they go far beyond normal risk management, in that you can buy the same coverage over and over and it can involve matters that don’t otherwise concern you. (Imagine taking out 200 insurance policies on somebody else’s $25,000 car and expecting $5 million, if it’s wrecked.) Complicating things still further, the paper migrates among owners, when someone is willing to take it as payment or collateral. Eventually contracts expire, due to a specified timeframe — usually five years, so tons will keep ticking well into the next decade — but up to half of the total face value of active derivatives COULD turn terrifyingly actual at any moment, requiring the loser or insurer of his bet (e.g., the defunct AIG) to pay the other.
The whole world couldn’t come up with even half of a quad, at gunpoint, yet that’s what today’s “financial innovators” have stupidly obligated themselves to pay on derivative contracts, if each ends up with a winner and a loser.
Can’t be done and the players know it, but they’re still trying to squeeze some profit out of these dog bets by selling the worst of them to us: those marked Level III, which are based on subprime debt. In the real market, they’re going for six cents on the dollar, but Hank Paulson kindly hopes to overpay.
If the banks really wanted to get back to ordinary business, they could start immediately, simply by agreeing to nullify these contracts and refund whatever sums were paid up-front. Some firms might need taxpayers’ help to pay the refunds, but it would be a manageable figure, a tiny fraction of what they’re trying to get out of us for frighteningly overleveraged garbage.
Nobody’s ever happy about losing paper wealth, but that doesn’t mean it can or should be sustained forever.
UPDATE (3 PM Mountain Time) – See, the sky didn’t fall because the banksters weren’t able to railroad Congress into a wrongheaded $700 billion bailout. Wall Street just closed its best day in six years, as buyers picked over the merchandise that sellers kicked over yesterday. Stocks that are still hurting deserve to be!
As for the credit markets, their remaining tight isn’t for want of money. If cash were the issue, they’d be in puppydog heaven, based on Bernanke’s plans to pump another $630 billion into the system. He announced this yesterday BEFORE the House vote, while nobody was looking in the Fed’s direction. (See the Bloomberg story quoted HERE and weep. Then don’t miss the rest of what Karl Denninger has to say. I just read his no-cost plan for financial recovery and it’s much in line with what I’ve been thinking, although it doesn’t call for outright nullification of derivative bets.)
Political Leaders and Pundits Are Clueless About Bailout Rejection
Stephen Pearlstein is the Washington Post’s Pulitzer Prize-winning business columnist. In print and as a TV talking head—like on Chris Matthews’ Hardball late last week—Pearlstein is one of the foremost media cheerleaders for the $700 billion Wall Street bailout bill. Continue reading
replaced video March 5, 2010
October 06, 2008
September 30, 2008 C-SPAN
Sent to me by the author.
“Truth is not told; it is realized.” Author Unknown
Americans on Main Street have been urgently requested to take the plunge with Treasury Secretary Paulson and Ben Bernanke to bailout Wall Street’s bad debt to the tune of $700 billion and counting. We have been told that this must happen in order to not only stabilize Wall Street but the economic system itself. Or else! As of this writing 9/29/08, the House has just voted to reject the bailout.
Sent to me by the author.
While the public is distracted by the “bailout bill” and its rejection, trillions are pumped in to keep financial balloon inflated
The media is falling all over itself to report on every minutiae of the so-called Wall Street “bailout bill” and its rejection by Congress yesterday (just a few of the thousands of examples can be seen here and here and here and here). And why not? The media’s breathless coverage of the bill has produced a furious backlash by the public and hysteria on Wall Street in a self-justifying feedback loop that makes the media attention seem merited.
and World Science staff
Sept. 29, 2008
NASA’s Phoenix Mars Lander has detected snow falling from Martian clouds, scientists say, and spacecraft soil tests have given evidence of past interaction between minerals and liquid water, processes seen on Earth.
A laser instrument designed to gather knowledge of how the atmosphere and surface interact on Mars has detected snow from clouds about 4 kilometers (2.5 miles) above the spacecraft’s landing site, the researchers reported. Data show the snow vaporizing before reaching the ground.
L’Shana Tova Umetuka Tikatevu
May you be inscribed in the book of a Good and Sweet Year.
Please try to listen to at least the first 3 of these videos, lots of great info. ~ Lo
Today on Flashpoints: Another special extended edition of Community Business with Catherine Austin Fitts, as we continue to cover the meltdown on Wall Street and its reverberations on Main Street; we’ll feature listener calls and a close look at the implications of a $700 billion dollar bailout.
01:00 Intro: Economic Meltdown and the Sub-Prime Culprit Penny Pritzker
Dennis and Nora
06:00 Community Business with Catherine Austin Fitts: A Crumbling Empire
Catherine Austin Fitts, solari.com
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I’ll parse as few words as possible. We don’t need this bailout. The economy will not crash if Congress doesn’t pass it. What is more, the bailout itself could sink the economy.
No economists were consulted about this bailout. No one knows where Paulson came up with the $700 billion figure. Investor Marc Faber, who is considered a reliable judge of these things, believes the actual amount of the bailout necessary will be closer to $5 trillion.
Every economist worth his or her credentials has gone on record against this bailout. Nobody has offered any details on what they want to do with this money. The best we can figure is that Paulson intends on giving extravagant Christmas presents to all his banking buddies.
So how’s this for a bailout package. We use this $700 billion to develop a reliable mass transit system throughout the country, and to rebuild our communities so they can go back to being more self-sufficient. That means relocalizing production and agriculture, and placing the necessary markets within walking distance. And while we’re at it, we can refurbish our homes for energy efficiency.
Now I haven’t run the figures on all this, but I am willing to bet it will not cost $700 billion. And all of this retooling would actually provide jobs and stimulate local economies, instead of swelling some financiers’ pockets.
Unfortunately, between the war debt and the bailouts, we are wasting any chance we might have to do something positive for the people of this country. Our future security is being mortgaged to pay off a pack of thieves.
This amounts to a banker’s coup on the US government and the taxpaying public. As a part of this legislation, the financial institutions which benefit from this bailout will become agents of the government. According to the most popular definition, that is fascism.
The $700 billion bailout will cost every man, woman and child in this country $2,000. My nephew’s newborn daughter will be indebted before she is even a month old. And if the true amount of the bailout is actually $5 trillion, then the amount owed by every man woman and child in this country will jump to $14,000. A family of four will accrue $56,000 of debt in order to pay off the imbeciles who got us into this mess in the first place.
And with all that, the bailout will not solve the problem. It may delay disaster for a few months, but the fall will be even harder when it does come. The next swing of the pendulum could bring down our entire country. So what would happen if the US was placed into receivership?
It is too late to stop the bailout. But we can make damn sure our politicians know how we feel about it. I sure as hell will not vote for anyone who supports this bill — including presidential candidates.
Anyone for a tax rebellion?
Nations come and go, rise and fall as elites and the wealthy make victims of most citizens and plutocracies prevail. Current dogma is that we live in the greatest nation on Earth. Perhaps in terms of ideals there is some truth to that. But with another trillion dollars that we now must borrow at higher costs because of the meltdown of the financial sector, solidifying our position as the greatest debtor nation, Americans have little to be proud of. Our government and politicians as well as the corporate state have failed us. What do our young people and future generations have to look forward to? Be prepared to eat your cats and dogs.