OK Dog, Its time to back off that Kool-aid stand for awhile. There's this little kid hanging out on the parade route and he's still shouting about something having to do with the sartorial deficiencies of a certain eminent personage who's making quite a display of himself these days. You would think that kind of exposure would not be the strong suit, so to speak, of somebody who has so much to hide. But there it was for all to see as Jay Leno, the very unfunny conservative shill who collects vintage cars like Imelda Marcos once did shoes, helped the commander in chief to exhibit more of his considerable backside.
I personally had no interest in this spectacle as an aversion for television in general and media narcissism in particular is only compounded by the inane exhibitionism of the political animal. And yet in bouncing around the internet I happened to come across a portion of the video on the Huffington Post. It all left me wondering what there was to recommend the supposed vaunted rhetoric of the selfstyled national savior much less the substance of anything that was said. Here instead was the condescending schoolmaster alternately shmoozing and lecturing a classroom of unruly children, the arch-pedant who with cloying smugness rewards the toadies who laugh on cue.
Though at times projecting an affable and even charming persona, one could sense the palapable undercurrent of inflexible dogmatism which has characterized less casual encounters such as his address to enthusiastic supporters of Planned Parenthood on his firm committment to abortion on demand, or either of his addresses to equally adamant American Israeli Public Affairs Committee gatherings concerning his unshakeable support for the Zionist State. Following the lead of so many others who with paid homage to the Great One with such notable fawning and obsequious servility, Leno at one point proffered what was most obviously a seeded question with appropriate and exagerrated deference, asking, almost fearfully as if he were importuning a lord, why, if all these monies have been allocated to the various banks and lending agencies, were these said agencies not extending the instruments of credit to the hopeful and yet still expectant peasantry.
With an eagerness borne not only of his profound desire to fulfill the hope of those expectations but also of his mission to instruct the masses in abstruse financial matters of which they had no apparent understanding, the apogee of humankind, with a characteristic humility which belied his obvious greatness, declared that the banks and lending agencies have not yet accrued a sufficient amount of capital to embark upon the process of supplying credit to the nation, which they would certainly provide as soon as it was within their capacity to do so. And furthermore these institutions would all be tested and tuned up through the auspices of Mr. Goodwrench and his factory trained experts (laughter and applause). And in addition, through agents of "securitization" further funds would flow to student loans, environmental programs, infrastructure, etc...(let it be noted here that securitization markets provide more funding to the economy at large than do banking systems).
And so in a mere 40 seconds or so the supreme prestidigitator had reduced the most complex financial and economic matters freighted with the gravest consequences not only for the nation but the entire world and which are much in dispute even amongst the most distinguished economists and financial experts, to an offhand, highly simplistic, and laughable commonplace. A sound bite. But such is the level of our national discourse, a cheap side show in which endless electioneering and slick advertising have pre-empted public policy, and media whoring for mass consumption masquerades as effective leadership. The Big Top is in town replete with ringmaster, dancing bears, circus clowns, and high wire act all to the fustian din of delirious throngs wild with enthusiasm, weeping with joy.
Meanwhile, all across the nation, there are other tents springing up, whole cities of them, full of a new discarded underclass America. But nevermind that, Dog, Videobama is mounting a charm offensive. Next stop-Iran! Like some peripatetic latter day Wizard of Oz, the World Manager is flying from screen to screen, his electronic fiz flashing across oceans to deliver yet another appearance along with benevolent greetings to the 6,000 year old kingdom of Ahura Mahzda on the occasion of the Persian New Year. Holy Zoroaster! The pan- African American Schoolmaster goes global urging harmony and brotherhood to the minions of Mohammed, rankling his AIPAC denizens, howling as they usually are for a bloody fight to the death with the miscreant mullah mongers. Petitions fly to the White House along with fearful rumor. Betrayal! We warned you about that polack anti-semite Zbig!
And yet the colored conciliator can countenance such dissonance, his political capital flowing like honey from the rock. After all are there any Arabs in the White House? And if there were, they'd be cleaning floors like Emmanuel Sr. said. What with "Irgun" Rahm, Axelrod, and Orszag in place you should worry? Oy Vey! And thus Hussein closes his address seraphically in Farsi, gently baracking the cradle of civilization. Meanwhile back in the Holy Land, Dr. Iran, a.k.a. Bibi Netanyahu, is busy preparing a different kind of greeting for the Shitites. The mad doctor, finally in the driver's seat after all these years, is priming his brand new fuel efficient Harop killer drones(with 1000km range) for a test run to preempt the Russian S-300 missile defense systems ready for deployment around Iranian nuclear facilities in support of Rapier SAM missiles already in place. The S-300s deterrent capabiities definitely change the strategic balanceonce so heavily weighted in Israels favor. They need to be nuetralised prior to the planned concentrated ballistic missile attack on the Isfahan facility and the Natanz nuclear enrichment plant. General Mike Mullen, chairman of the Joint Chiefs of Staff is preparing contigency plans in support of the planned Israeli attack, involving air support from the U.S. Sixth Fleet.
Perhaps it was these eventuations which prompted the Iranians to reject the blandishments contained in Videobama's overtures as disigenuous at best. Also of interest in this respect was the flap which arose recently over the appointment of Chas. Freeman as deputy director of National Intelligence. Freeman subsequently withdrew from consideration after what he characterised as an unprecedented campaign of slur, innuendo and outright slander mounted by AIPAC former foreign policy director Steven Rosen who is curiously currently under indictment along with Keith Wasserman for violation of the 1917 Espionage Act for passing top secret U.S. documents to Israel in 2005, involving former National Intelligence staffer Larry Franklin. Hmmm... Freeman, with impeccable credentials and wide support from the intelligence community, ran afoul of the Israel Lobby for his oppostition to what he considered to be the unwarranted and illegal influence of AIPAC in U.S. government policy.
Ray McGovern, former intelligence officer aired the same fears, suggesting that the Obama administration had been seriously compromised in its ability to conduct foreign policy by its shameful acquiescence to the Israel lobby, echoing the open secret in the intelligence community that national security itself has been seriously undermined by the ongoing penetration of Mossad moles. The director of U.S. intelligence, Admiral Dennis Blair, in a report to the Senate Intelligence Committee on potential threats to U.S. security as foreseen by 16 intelligence agencies forecast war between Israel and Iran before the end of the year, a clear signal that the clandestine activities spoken of above have had their intended and potentially horrific effect.
Interestingly enough another significant threat mentioned in the intelligence report was the economic meltdown itself, concerning the devastating effects of which the Treasury Secretary was busying himself back at the ranch. "Zombie Tim", as he has come to be known, is pumping trillions and trillions of dollars into the sagging and attenuated conduits of U.S. credit and bond markets, ostensibly in an attempt to revive an economy which has gone into terminal arrest. The simplistic explanation adumbrated by our erstwhile late night entertainer as to the present financial difficulties was obviously intended for mass consumption, and cannot even begin to penetrate the arcane and abstruse workings of high finance which for most mortals remains as opaque and impenetrable, so inaccesible to ordinary reason as the laws of astro or quantum physics.
Suffice it to say that two signal events occured in these past weeks of March which constituted 1) a continuation of the economic policies first witnessed last September 2008 by the then Treasury Secretary and former Goldman Sachs CEO Paulson, and continued by the Obama administration this January 2009, in other words the massive infusion of electronically created currency into banks, investment agencies, and of most recent note, the insurance giant AIG in an attempt to save them from imminent collapse. In common parlance and on the froth of many lips this is of course known as the "bailout", and 2) a reintensification and augmentation of these efforts which took the process to a whole new superheated level of outright desperation to right the ship of finance and its denizen bankers before it crashes upon the shoals of irrevocable ruin. The primary method employed for this purpose is what economists call "quantitative easing", i.e. printing more money. In the latest phase though, the extremity of these measures is better conveyed in the more vernacular phrase "the nuclear option".
In the first trillion dollar payout, Geithner authorized the purchase of $700 billion of Treasury notes, and the assumption of $300 billion of mortgage backed securities on the books of the giant lending agencies Fannie Mae and Freddie Mac, effectively opening up the flood gates of the Treasury in a tsunami of federal paper. The dollar value of gold soared more than $50 in ten minutes following the announcement, blowing past its range bound upper resistance of $960, reflecting the fears of hyperinflation. Scarcely a week later "Zombie Tim" truly earned his moniker when he authorized the trillion dollar purchase of the notorious "toxic assets" of insolvent banks, effectively insuring their survival.
As Nobel Laureate Paul Krugman said later "the zombie ideas have won" also expressing His "deep personal despair" over this action. Joseph Stiglitz, also a Nobel Laureate, former president of the World Bank and colleague of Geithner, called the Treasury action nothing short of "robbery of the American people". James Galbraith, University of Texas economist and former economic adviser to the Obama campaign, suggested that federal prosecutions and jail time might be a more appropriate response to the depredation of the banksters rather than the sweetheart deal they had been rewarded with by the Treasury which effectively unloaded the colossal debt off their balance sheets and dumped it into the laps of the American taxpayers. The gigantic confidence game that "Zombie Tim" had just pulled off also had its intended effect. The Stock Market soared 500+ points, largely on higher earnings in the banking and financial sectors. The living dead were partying again on Wall Street....
I suppose a word is necessary here in closing about the basic aspects of the Geithner scam as I understand it which will then lead to some more general speculations. First of all these "toxic assets" are just that, dangerous and possibly fatal to come into contact with. No investor in his right mind would want to have anything to do them. Part of this lies in the fact that their exact valuation in quite unknown. Perhaps they have no value at all. They are the end product of complex financial instruments of relatively recent origin called Over the Counter Derivatives and Credit Default Swaps, "privately created entities traded between major financial institutions, which rely heavily on counter parties in these transactions meeting their obligations when they fall due. If one major counter party fails, it could trigger a domino effect collapsing major financial institutions one after another."(Sound familiar?)
Apparently these"instruments" were created in the rush to deregulation of financial markets at the turn of the century(2000) For example the CDS were created by a team at JPMorgan Chase and signed into law by Slick Willy Clinton in December. This time Undersecretary of the Treasury for Foreign Policy (1998-2001) was one Timothy Geithner, working under the Treasury tag team of Larry Summers and Robert Rubin. "Toxic Tim" (minor rechristening) was widely recognized as Rubin's protege'. Rubin opposed regulation of derivatives in 1997 and in 1999 joined CitiGroup as a board member, which subsequently experienced losses of 70% which resulted in an investors lawsuit against CitiGroup in 2008 which alleged that executives sold shares at inflated prices.
Rubin along with Wall Street investment banker and White House economic adviser Rahm Emmanuel(currently White House Chief of Staff) were instrumental in crafting NAFTA. Also under Rubin's tutelage was current Director of White House Office of Management and Budget, Peter Orszag, who worked on the White House council of economic advisers(1993-98) under Rubin prior to which time he was chief economic adviser for the Russian Ministry of Finance during the "period of rampant financial criminality" during which time Russia's mineral assets were looted by the oligarchy, creating instant billionaires who subsequently fled the financial chaos they had unleashed and settled comfortably in London and Europe.
The other bookend(1998) of Orszag's stint at the Clinton White House was at the head of an economic consulting group with Joseph Stiglitz called SEBAGO Associates, client of the World Bank and advisers to the Central Bank of Iceland, which subsequently collapsed largely due to the disastrous policies implemented by Whoresbag. Investigative journalist Christopher Bollyn who has followed Whoresbag's swath of destruction, sizing up domestic economic policies over which Whoresbag has purview, trenchantly observed, "Expect a trainwreck". But I really do digress. Back to Geithner's piece de resistance, more wholesale looting of the treasury and betrayal of the public trust. Ahem, as was said, the pesky "toxic assets", stewing away in some financial Yucca Flats, have to be disposed of. Toxic Tim's plan is to sweeten the deal enough to attract the "private investor" in partnership with whom?, you guessed it, the American taxpayer! (Too bad they can't find some Indian Reservation to bury this stuff on)
At any rate the deal goes something like this. Using as a model $100, "the private investor" ponies up say $12 and the "taxpayer" another $12 while the Federal Deposit and Insurance Corporation picks up the remaining $76. I don't know the exact figure but it's something like that. Good enough? Wrong. Now we come to the tricky part which all of the eminent economists have their underwear all bunched up in knots about. Any profit or upside which might be realized on the future market of these assets is to accrue to the "private investor", while any loss, downside, default or indebtedness will be absorbed by the FDIC and the taxpayer. I don't know the exact proportionality here but you get the basic idea. What a deal! No wonder Krugman called it "heads I win, tails you lose". Like some shell game you'd find in a side show tent. As if this wasn't bad enough, Galbraith voiced even further suspicions, namely, who's to say the banksters themselves as "private investors" or even through a third party can't buy up their own assets for pennies on the dollar?
Well, chap my hide! They'd make a killing even before the pigs went to market and well, anything else would be more cherries on the parfait especially absent any significant risk. Tim boy, you'ze a genius!... Privatization of profits, socialization of losses. Privatization of profits, socialization of losses....Privatization...of profits....socialization.... of losses....Well Dog, they're throwing a lot of pasta against the wall, hoping something is gonna stick, but it looks like it will all end in disaster anyway. All the money is going out the back doors to some miserable crooks and into off shore bank accounts. The losers are left holding the bag. They keep adding 0s to those banknotes to cover the difference. The country is bankrupt, the almighty dollar is like yesterdays newspaper. The party's over Dog.
There's only one more matter I want to discuss here. Its mere technicality actually, one that has to do with these"major financial institutions" and their friends in government. All throughout this imbroglio, the opinion has been voiced that these "institutions" cannot be allowed to fail. That our very lives as a viable human society depend on the continued existence of these entities. In this respect, they assume an almost omnipotent and even god-like status, and yet they remain, along with the government which shares and partakes of this status as to be almost indivisibly connected with it, in remote and inaccesible domains like Kafkaean monoliths, which we have no understanding or immediate connection with, and yet which exert an inexorable and plenipotentiary force upon us. And so as these idols totter and sway and appear to be on the verge of imminent collapse, a great deal of fear and anxiety, as so much of our identity as a people and indeed our very physical welfare and well being has been invested in them, is subsequently generated and most acutely felt. (Was 911 and the collapse of the WTC the tangible symbol and foreshadowing of all of this?)
But more to the matter at hand. The FDIC is the regulatory agency responsible for insuring that if banks become insolvent, bankrupt, the deposits therein will be guaranteed. In other words the theory is at least that these banks can fail without substantial financial loss to the depositors. My question is then why didn't the FDIC step in and put these banks into receivership as is its government mandated policy? A simple enough question. This question was put to James Galbraith and his response was unequivocal. When these financial institutions pour vast amounts of money into presidential campaign coffers then they exert a directly proportional influence on government policy especially where their own vested interest is concerned. "At the top of Obama's contributor list is Goldman Sachs, followed by UBS, JPMorgan Chase, Citigroup, Lehman Brothers, and Morgan Stanley."
Be that as it may and not wanting to belabor the obvious I think is befits us to delve a little deeper into the matter. And this brings us back to those devilish financial instruments, the OTC derivatives and Credit Default Swaps. We must recall what was averred above about these entities, notably, "there is a grave risk of counter party failure" etc. Now much in the news these days is the most recent and perhaps the last "bailout", of AIG Insurance to the tune of $180 billion and counting. AIG really broke all records for losses. In late 2008, AIG lost $500,000 every minute for 13 weeks in a row, eventually racking up losses of $61 billion for the last quarter of 2008 alone, the largest such loss in history. The reason for these losses? OTC and CDS derivatives.
When the smokescreen of the executive pay bonuses finally blew over, some of the more astute commentators directed their attention to the fact that most of the bailout monies allocated to AIG were flowing out the back door to none other than Goldman Sachs and other assorted investment and European banks. A great hue and cry went up. But those more knowledgeable about financial matters weren't surprised. AIG was a counter party failing on its obligations and Goldman and the rest were just collecting on their CDS bets. And who was paying on those bets? Toxic Tim and the U.S. Treasury.
Even a guy with as great an analytical mind as Alf Field eventually came to wonder why these bankers whom he characterized as "very clever and cautious people", would expose themselves to the incredible risks entailed in dealing with these derivative instruments. And in the end he concluded that THEY KNOW SOMETHING WHICH WE DONT (actually his emphasis). And what they knew he suggested was that their backs and their assets were covered by the U.S. government. Do you scent the whiff of conspiracy here? as in "with intent to defraud"? And isn't it so characteristic of the major financial institutions and the government and the perpetually revolving door between them to engage in a kind of exalted musical chairs with the various roles, offices, cabinet positions, posts, and appointments all mutually interchangeable? Isn't that the classic definition of Fascism?
It was Mike Ruppert who exposed the CIA's role in this melange, noting the fluency with which investment banker morphed into intelligence operative into White House chief of staff, all in the service of corporate and government power interests. After all what's a little bank fraud or insider trading by white collar criminals in the tangled web of the organized criminal enterprise of drug and gun running,corporate money laundering, covert operations, assassins, bag men and influence peddlers that this government has become? Well, the chickens have really come home to roost for good now, Malcolm....Are you still with me Dog? Or is it time for the six o'clock news and all that regurgitated slop you been lapping up. Mmmmm. Must taste good with the Kool Aid....