US House: bail-out gets a 205-228 losing vote

a 228-205 vote defeats the bail-out attempt #1

--mindbowler

this sucker could go down

Quote of the day.

If money isn’t loosened up, this sucker could go down.

- President Bush, as his $700 billion bailout package foundered amid opposition from House Republicans.

--mindbowler

I cannot wait to see the debates

--mindbowler

Obama Slam Dunk

Obama Slam Dunk

--mindbowler

Letterman flexes his Worldwide Pants

Dave and Paul, Dave and Keith Olbermann.
from Wednesday, September 24, 2008.

John McCain snubs Dave and cancels his appearance.

--mindbowler

McCain crosses Letterman

McCain crosses Letterman and cancelled Wednesday night,
Olbermann replaces him last minute. Comedy ensues ..

--mindbowler

Eliot Spitzer

Video originally posted 20 March, 2008

Why was Eliot Spitzer taken out? ...

http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783_pf.html

--mindbowler
Roger Stone is the longtime dirty-trickster who knocked off Eliot Spitzer in a scandal of high-priced trysts that forced the resignation of the NY Governor, and cost him his job earlier this year.

With a Republican pedigree stretching back to Watergate, Roger Stone needed little inducement more than Spitzer's capital "D" affiliation.

But, as the nation's taxpayers await the terms of our financial extortion by the Bush Administration's 'exempt from oversight' bankers' club under a plan -- including full immunity -- led by Henry Paulson, it's time to consider the political assassination of another White House enemy for what it was.

Sure, Spitzer should have ended his affairs with other women before his career-ending indiscretion. But we should revisit the prophetic message that was lost in the media storm of the Spitzer's scandal two weeks later.

Predatory Lenders' Partner in Crime: How the Bush Administration Stopped the States From Stepping In to Help Consumers,
Feb. 14, 2008. Washington Post.

Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders...These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.

Spitzer's omen went further to note that not only did the White House do nothing, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye after 50 state Attorneys General and many legislative attempts failed to halt the worst of the predatory lending excesses.

The AGs and their banking superintendents fought the Bush Administration's use of a Civil War era banking provision which established federal preemption of all state predatory lending laws and the new rules which emasculated state consumer protections from national banks.

Shortly before Roger Stone's November tip finally mobilized national law enforcement to rescue Americans from the perverse activities of Spitzer and his calf-length socks, he left a final warning:

When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.

We're now to let the Industry's insider dictate the terms under which we'll spend the heritage of our grandchildren to repurchase the bloody bag of instruments of our rape? Paulson has a liquidity problem with his assets invested in Goldman Sachs. That is why he is so frightened, he fears losing the whole nut. Mr. Paulson stopped making any sense days ago.

Elliot Spitzer warned us and was taken out.

http://www.washingtonpost.com/wp-dyn/content/article
/2008/02/13/AR2008021302783_pf.html

Criminal Activity, looks like fraud

Looks like fraud on a massive scale ... so the
F.B.I. and Mueller to investigate.
--mindbowler

September 24, 2008
New York Times
F.B.I. Looks Into 4 Firms at Center of the Economic Turmoil
By ERIC LICHTBLAU

WASHINGTON — The Federal Bureau of Investigation, under pressure to look at possible criminal activity in the financial markets, is expanding its corporate fraud inquiries in the wake of the tumult in the last 10 days, officials said Tuesday.

The F.B.I. has now opened preliminary investigations into possible fraud involving the four giant corporations at the center of the recent turmoil — Fannie Mae and Freddie Mac, Lehman Brothers and the American International Group, The Associated Press reported.

A government official, speaking on condition of anonymity because he was not authorized to discuss the issue publicly, said it was “logical to assume” that those four companies would come under investigation because of the many questions surrounding their recent collapse.

F.B.I. officials said Tuesday that the total number of corporate fraud investigations at the bureau was 26, an increase from the 24 open cases cited just a week ago by Robert S. Mueller III, director of the F.B.I. That number stood at 21 as recently as July, but the bureau has not named most of the targets.

Mr. Mueller told members of the Senate Judiciary Committee that the major corporate investigations are aimed at companies that “may have engaged in misstatements in the course of what transpired during this financial crisis.”

He added that “the F.B.I. will pursue these cases as far up the corporate chain as is necessary to ensure that those responsible receive the justice they deserve.”

In addition to the major corporate cases, the bureau said it had about 1,400 open investigations into smaller companies and individuals suspected of mortgage fraud.

Nonetheless, the bureau and the Justice Department have come under pressure from some critics who assert that investigators need to take a broader and more comprehensive approach to the financial inquiries. But Attorney General Michael B. Mukasey has rejected calls for the Justice Department to create the type of national task force that it did in 2002 to respond to the collapse of Enron.

Mr. Mukasey said in June that the mortgage crisis was a different “type of phenomena” that was a more localized problem akin to “white-collar street crime.”

Officials at the Justice Department declined to comment on Tuesday on which companies were under investigation by the bureau. “As part of our investigative responsibility, the F.B.I. conducts corporate fraud investigations,” Brian J. Roehrkasse, spokesman for the department, said in a statement. “The number of cases fluctuates over time. However, we do not discuss which companies may or may not be the subject of an investigation.”

In a major case in June, federal prosecutors in Brooklyn brought conspiracy and securities fraud charges against two portfolio managers at Bear Stearns, which nearly collapsed in June before it was bought for a fire-sale price.

When that prosecution was announced, Deputy Attorney General Mark R. Filip acknowledged that the mortgage crisis “includes a wide variety of criminal acts that have proved devastating to American families.”

Still, several senators at last week’s hearing by the judiciary committee made it clear that they wanted to see the F.B.I. take aggressive steps to investigate possible criminal wrongdoing in connection with the crisis.

Senator Patrick J. Leahy, the Vermont Democrat who leads the committee, told Mr. Mueller that “obviously everybody’s concerned where the U.S. government’s on the hook” for up to $1 billion in bailout costs.

“And if people were cooking the books, manipulating, doing things they were not supposed to do, then I want people held responsible. And I suspect every American taxpayer — I don’t care what their political background is — would like them held responsible,” he said.

Peter DeFazio video: says NO!

Peter DeFazio says NO! ... to the bail-out.

Keeping their feet to the flames, way to go Peter DeFazio.
--mindbowler

1992 Sweden example

September 23, 2008 New York Times
Stopping a Financial Crisis,
the Swedish Way

By CARTER DOUGHERTY

A banking system in crisis after the collapse of a housing bubble. An economy hemorrhaging jobs. A market-oriented government struggling to stem the panic.

Sound familiar?

It does to Sweden. The country was so far in the hole in 1992 — after years of imprudent regulation, short-sighted economic policy and the end of its property boom — that its banking system was, for all practical purposes, insolvent.

But Sweden took a different course than the one now being proposed by the United States Treasury. And Swedish officials say there are lessons from their own nightmare that Washington may be missing.

Sweden did not just bail out its financial institutions by having the government take over the bad debts. It extracted pounds of flesh from bank shareholders before writing checks. Banks had to write down losses and issue warrants to the government.

That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well.

“If I go into a bank,” said Bo Lundgren, who was Sweden’s finance minister at the time, “I’d rather get equity so that there is some upside for the taxpayer.”

Sweden spent 4 percent of its gross domestic product, or 65 billion kronor, the equivalent of $11.7 billion at the time, or $18.3 billion in today’s dollars, to rescue ailing banks. That is slightly less, proportionate to the national economy, than the $700 billion, or roughly 5 percent of gross domestic product, that the Bush administration estimates its own move will cost in the United States.

But the final cost to Sweden ended up being less than 2 percent of its G.D.P. Some officials say they believe it was closer to zero, depending on how certain rates of return are calculated.

The tumultuous events of the last few weeks have produced a lot of tight-lipped nods in Stockholm. Mr. Lundgren even made the rounds in New York in early September, explaining what the country did in the early 1990s.

A few American commentators have proposed that the United States government extract equity from banks as a price for their rescue. But it does not seem to be under serious consideration yet in the Bush administration or Congress.

The reason is not quite clear. The government has already swapped its sovereign guarantee for equity in Fannie Mae and Freddie Mac, the mortgage finance institutions, and the American International Group, the global insurance giant.

Putting taxpayers on the hook without anything in return could be a mistake, said Urban Backstrom, a senior Swedish finance ministry official at the time. “The public will not support a plan if you leave the former shareholders with anything,” he said.

The Swedish crisis had strikingly similar origins to the American one, and its neighbors, Norway and Finland, were hobbled to the point of needing a government bailout to escape the morass as well.

Financial deregulation in the 1980s fed a frenzy of real estate lending by Sweden’s banks, which did not worry enough about whether the value of their collateral might evaporate in tougher times.

Property prices imploded. The bubble deflated fast in 1991 and 1992. A vain effort to defend Sweden’s currency, the krona, caused overnight interest rates to spike at one point to 500 percent. The Swedish economy contracted for two consecutive years after a long expansion, and unemployment, at 3 percent in 1990, quadrupled in three years.

After a series of bank failures and ad hoc solutions, the moment of truth arrived in September 1992, when the government of Prime Minister Carl Bildt decided it was time to clear the decks.

Standing shoulder-to-shoulder with the opposition center-left, Mr. Bildt’s conservative government announced that the Swedish state would guarantee all bank deposits and creditors of the nation’s 114 banks. Sweden formed a new agency to supervise institutions that needed recapitalization, and another that sold off the assets, mainly real estate, that the banks held as collateral.

Sweden told its banks to write down their losses promptly before coming to the state for recapitalization. Facing its own problem later in the decade, Japan made the mistake of dragging this process out, delaying a solution for years.

Then came the imperative to bleed shareholders first. Mr. Lundgren recalls a conversation with Peter Wallenberg, at the time chairman of SEB, Sweden’s largest bank. Mr. Wallenberg, the scion of the country’s most famous family and steward of large chunks of its economy, heard that there would be no sacred cows.

The Wallenbergs turned around and arranged a recapitalization on their own, obviating the need for a bailout. SEB turned a profit the following year, 1993.

“For every krona we put into the bank, we wanted the same influence,” Mr. Lundgren said. “That ensured that we did not have to go into certain banks at all.”

By the end of the crisis, the Swedish government had seized a vast portion of the banking sector, and the agency had mostly fulfilled its hard-nosed mandate to drain share capital before injecting cash. When markets stabilized, the Swedish state then reaped the benefits by taking the banks public again.

More money may yet come into official coffers. The government still owns 19.9 percent of Nordea, a Stockholm bank that was fully nationalized and is now a highly regarded giant in Scandinavia and the Baltic Sea region.

The politics of Sweden’s crisis management were similarly tough-minded, though much quieter.

Soon after the plan was announced, the Swedish government found that international confidence returned more quickly than expected, easing pressure on its currency and bringing money back into the country. The center-left opposition, while wary that the government might yet let the banks off the hook, made its points about penalizing shareholders privately.

“The only thing that held back an avalanche was the hope that the system was holding,” said Leif Pagrotzky, a senior member of the opposition at the time. “In public we stuck together 100 percent, but we fought behind the scenes.”

Shock and Awe II

a crisis in need of immediate action now, now. Haven't I seen this movie before?.....

http://www.dipTV.us/

--mindbowler

Go Go Peter DeFazio

Peter DeFazio, 4th District - Oregon


DeFazio is one cool cucumber. That dog will hunt.
--mindbowler

Kabuki dance

Kabuki dancing with the American economy.
Does anybody else get the feeling that Henry Paulson is just a hollow kimono?

If Krugman's analysis below is correct, then why is everybody so damn frightened? Calm and rational behavior is required. To that end, don't believe the hype. Somebody is trying to scare you. Please ask WHY?

Big bomb blamed on terrorists in Pakistan. Big United Nations General Assembly meeting in New York this week. Every world leader is scheduled to be in attendance. new york. coincidence?

This is being crammed down our throats so as to keep it from further thoughtful analysis. Is it truly the correct course of action? Please stand-up and ask WHY? Why this plan?
Will this solve the problem? Why now? Why so much panic?
--mindbowler

Paul Krugman: Cash for Trash

New York Times

September 22, 2008

Op-Ed Columnist

Cash for Trash

By PAUL KRUGMAN

Some skeptics are calling Henry Paulson’s $700 billion rescue plan for the U.S. financial system “cash for trash.” Others are calling the proposed legislation the Authorization for Use of Financial Force, after the Authorization for Use of Military Force, the infamous bill that gave the Bush administration the green light to invade Iraq.

There’s justice in the gibes. Everyone agrees that something major must be done. But Mr. Paulson is demanding extraordinary power for himself — and for his successor — to deploy taxpayers’ money on behalf of a plan that, as far as I can see, doesn’t make sense.

Some are saying that we should simply trust Mr. Paulson, because he’s a smart guy who knows what he’s doing. But that’s only half true: he is a smart guy, but what, exactly, in the experience of the past year and a half — a period during which Mr. Paulson repeatedly declared the financial crisis “contained,” and then offered a series of unsuccessful fixes — justifies the belief that he knows what he’s doing? He’s making it up as he goes along, just like the rest of us.

So let’s try to think this through for ourselves. I have a four-step view of the financial crisis:

1. The bursting of the housing bubble has led to a surge in defaults and foreclosures, which in turn has led to a plunge in the prices of mortgage-backed securities — assets whose value ultimately comes from mortgage payments.

2. These financial losses have left many financial institutions with too little capital — too few assets compared with their debt. This problem is especially severe because everyone took on so much debt during the bubble years.

3. Because financial institutions have too little capital relative to their debt, they haven’t been able or willing to provide the credit the economy needs.

4. Financial institutions have been trying to pay down their debt by selling assets, including those mortgage-backed securities, but this drives asset prices down and makes their financial position even worse. This vicious circle is what some call the “paradox of deleveraging.”

The Paulson plan calls for the federal government to buy up $700 billion worth of troubled assets, mainly mortgage-backed securities. How does this resolve the crisis?

Well, it might — might — break the vicious circle of deleveraging, step 4 in my capsule description. Even that isn’t clear: the prices of many assets, not just those the Treasury proposes to buy, are under pressure. And even if the vicious circle is limited, the financial system will still be crippled by inadequate capital.

Or rather, it will be crippled by inadequate capital unless the federal government hugely overpays for the assets it buys, giving financial firms — and their stockholders and executives — a giant windfall at taxpayer expense. Did I mention that I’m not happy with this plan?

The logic of the crisis seems to call for an intervention, not at step 4, but at step 2: the financial system needs more capital. And if the government is going to provide capital to financial firms, it should get what people who provide capital are entitled to — a share in ownership, so that all the gains if the rescue plan works don’t go to the people who made the mess in the first place.

That’s what happened in the savings and loan crisis: the feds took over ownership of the bad banks, not just their bad assets. It’s also what happened with Fannie and Freddie. (And by the way, that rescue has done what it was supposed to. Mortgage interest rates have come down sharply since the federal takeover.)

But Mr. Paulson insists that he wants a “clean” plan. “Clean,” in this context, means a taxpayer-financed bailout with no strings attached — no quid pro quo on the part of those being bailed out. Why is that a good thing? Add to this the fact that Mr. Paulson is also demanding dictatorial authority, plus immunity from review “by any court of law or any administrative agency,” and this adds up to an unacceptable proposal.

I’m aware that Congress is under enormous pressure to agree to the Paulson plan in the next few days, with at most a few modifications that make it slightly less bad. Basically, after having spent a year and a half telling everyone that things were under control, the Bush administration says that the sky is falling, and that to save the world we have to do exactly what it says now now now.

But I’d urge Congress to pause for a minute, take a deep breath, and try to seriously rework the structure of the plan, making it a plan that addresses the real problem. Don’t let yourself be railroaded — if this plan goes through in anything like its current form, we’ll all be very sorry in the not-too-distant future.

October Surprise

Coup d'Etat (French) means a state stroke, and the term is applied to one of those bold measures taken by Government to prevent a supposed or actual danger, as when a large body of men are arrested suddenly for fear they should overturn the Government.
The famous coup d'état, by which Louis Napoleon became possessed of absolute power, took place on December 2nd, 1851.

Wall Street Coup d'Etat --
An early October Surprise, marching toward fascism.

The regulation, control, and discretion of government officials into the day-to-day operations of corporations, and corporate interests, does appear to be fascism to me.

What about the manufacturing sector? why no bail-out? why no infrastructure bail-out? why no modern energy initiatives?

Health care for every American would be cheap compared with this anticipated bail-out. I remember the tech-sector, when it failed? Why no bail-out? Does Wall Street really deserve to be bailed-out? Why specifically these people? Why AIG, and not Lehman Brothers?

The fate of fannie and freddie were anticipated, and not discussed much beforehand. As quasi-governmental agencies they were not going to be allowed to fail.

I want to know WHY the financial sector deserves to be bailed-out? And, specifically WHY are some allowed to fail? AIG, and those who were more fortunate deserve increased scrutiny. Who made the decision? Why? What? Where? When? How? ... and again, Who?

Maybe it is just me, but this is beginning to smell fishy? These explanations are sounding weird, combining elements of corporatism, totalitarianism, nationalism.
--mindbowler

illiquid mortgage assets

$700 Billion Financial Bailout expected

Illiquid mortgage assets, and fact that they have lost value ....caused this?

So a "temporary guarantee for the US Money Market Industry" and a "troubled asset relief program" have been drafted to save the national financial markets from further decline.

--mindbowler

Here is the proposal so far:

LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY

TO PURCHASE MORTGAGE-RELATED ASSETS

Section 1. Short Title.

This Act may be cited as ____________________.

Sec. 2. Purchases of Mortgage-Related Assets.

(a) Authority to Purchase.--The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.

(b) Necessary Actions.--The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:

(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;

(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;

(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;

(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and

(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.

Sec. 3. Considerations.

In exercising the authorities granted in this Act, the Secretary shall take into consideration means for--

(1) providing stability or preventing disruption to the financial markets or banking system; and

(2) protecting the taxpayer.

Sec. 4. Reports to Congress.

Within three months of the first exercise of the authority granted in section 2(a), and semiannually thereafter, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate with respect to the authorities exercised under this Act and the considerations required by section 3.

Sec. 5. Rights; Management; Sale of Mortgage-Related Assets.

(a) Exercise of Rights.--The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act.

(b) Management of Mortgage-Related Assets.--The Secretary shall have authority to manage mortgage-related assets purchased under this Act, including revenues and portfolio risks therefrom.

(c) Sale of Mortgage-Related Assets.--The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act.

(d) Application of Sunset to Mortgage-Related Assets.--The authority of the Secretary to hold any mortgage-related asset purchased under this Act before the termination date in section 9, or to purchase or fund the purchase of a mortgage-related asset under a commitment entered into before the termination date in section 9, is not subject to the provisions of section 9.

Sec. 6. Maximum Amount of Authorized Purchases.

The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time

Sec. 7. Funding.

For the purpose of the authorities granted in this Act, and for the costs of administering those authorities, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure.

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Sec. 9. Termination of Authority.

The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act.

Sec. 10. Increase in Statutory Limit on the Public Debt.

Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.

Sec. 11. Credit Reform.

The costs of purchases of mortgage-related assets made under section 2(a) of this Act shall be determined as provided under the Federal Credit Reform Act of 1990, as applicable.

Sec. 12. Definitions.

For purposes of this section, the following definitions shall apply:

(1) Mortgage-Related Assets.--The term “mortgage-related assets” means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.

(2) Secretary.--The term “Secretary” means the Secretary of the Treasury.

(3) United States.--The term “United States” means the States, territories, and possessions of the United States and the District of Columbia.

I guess I am going to end the week with the Inquirer

How much do those things cost these days? So, I guess I am -- Off to the Quicky-mart.

--mindbowler

Not OK, another ...

This one hits closer to home, because ...
the man on the radio told me (ABC radio news 10pm pacific) wow ...

--anywho
the man said sell, or at least beware ..
WaMu
http://www.nytimes.com/2008/09/18/business/18wamu.html?
_r=1&ref=business&pagewanted=print&oref=slogin

----------------------------------------------------
--mindbowler

One last thought today

This is ultimately going to require an approach which begins with
the first and most egregious offense, and of course then to commence with the next step -- such as .. to like to unravel the onion.

Thanks to Mike Malloy and Vincent Bugliosi

see the matter summarized by Bugliosi here:
http://prosecutegeorgebush.com/
-----------------------------------------------------------
--mindbowler

Gesundheit!

I just heard an advertisement for Washington Mutual Bank on morning radio.

Would there be some money better spent on ??? Anything else? Something like saving their boat instead of some stupid ad on clear channel radio (air america). The radio station is a clear channel owned radio station, and it is still running the WaMu ad just as they are on rocky ground and in danger of going down.

WaMu ... ..Gesundheit!

--mindbowler

Oh Schultz

yeah, I just saw another commercial
for these folks on late-night television.

As if the money they are spending cannot be cut-off.
it just happened.. but the shXt cannot be stopped and the bleeding is just beginning.

--mindbowler

Eighty-five Billion

Mindbowling ...
trying to make strikes.
All I hear is rosy-rosy talk.
This is when everyone needs to do a performance evaluation on those folks ordained as intellectual icons. Whatever school or such nonsense ...

Imagine that you are the Human Resources manager conducting the annual evaluation.
--mindbowler

Analysis: Are economy's fundamentals actually OK?

By TOM RAUM –

WASHINGTON (AP) — Unemployment is at a five-year high. Financial firms that withstood the Great Depression are failing. Congress and a lame-duck president are gridlocked. So when John McCain declared that "the fundamentals of our economy are strong," it drew ridicule from Democrat Barack Obama.

McCain later toned down his remarks, but his observation reflected a debate among analysts and policymakers about the economy's underlying health. Plenty of them think he's right.

Polls show a majority of voters put the economy as their No. 1 concern with seven weeks to go until the presidential election. Many economists believe we are now in a recession. Signs of economic distress are everywhere as housing prices continue to fall and the nation's financial system is pounded by a series of shocks, including a 504-point drop in the Dow Jones industrials on Monday.

"Strains in financial markets have increased significantly and labor markets have weakened further," the Federal Reserve said in a sober assessment Tuesday. But in deciding against lowering interest rates, the central bank signaled that it didn't see the economy's present situation as dire.

"When you have jobs being lost, industrial production down, personal incomes down and so forth, the economy's not in good shape," said Nariman Behravesh, chief economist at Global Insight, a Lexington, Mass., forecasting firm.

Still, he added, "If the issue is whether the U.S. had a dynamic, resilient economy, and that the long-term trends are positive, I completely agree. ... It's important not to get carried away with gloom and doom."

And David Wyss, chief economist for Standard & Poor's, said that while there is a serious financial-sector problem "the fundamental economy actually isn't in that bad a shape." But, Wyss added, "I still think we're in a recession."

That dichotomy is at the heart of the dispute over McCain's remarks.

McCain declared Monday that "the fundamentals of our economy are strong," a phrase he has used before. After Democrats pounced, he backtracked and declared the economy to be in a crisis and said "fundamentals are threatened."

Democrats kept up their assault. "How can John McCain fix our economy if he doesn't understand it's broken?" asked an Obama TV ad.

While the housing and financial sectors are in near meltdown, the larger economy is plodding along, the numbers suggest.

After turning negative in the final three months of 2007 and growing at an anemic 0.9 percent in the first three months of 2008, the nation's gross domestic product — helped by government stimulus checks — grew at 3.3 percent in the April-June quarter. A relatively weak dollar has helped U.S. exports. High prices for food and other commodities have helped agriculture and the energy and mining industries.

A survey of CEOs by accounting firm PricewaterhouseCoopers found that, while the unemployment rate jumped to 6.1 percent in August, a majority of the top corporate leaders surveyed said they are not planning significant cutbacks of people, products or services. Instead, the CEOs are focusing on opportunities to improve efficiency and ways to emerge from the slowdown in a better position to compete.

That doesn't mean all is rosy.

"If all of this should lead to a tightening of credit, which it very well might, that would be a serious concern to manufacturers," said Hank Cox, a spokesman for the National Association of Manufacturers.

Despite being the first U.S. chief executive with a master's degree in business administration, President Bush has left most of the heavy lifting in handling the crisis to Treasury Secretary Henry Paulson.

"Adjustments in the financial markets can be painful, both for people concerned about their investments and for the employees of the affected firms," Bush said Monday. He added, "In the long run, I am confident that our capital markets are flexible and resilient and can deal with these adjustments."

With the economy now at center stage, both McCain and Obama must try to overcome the fact that neither has much experience with markets or finance, nor do their running mates.

McCain may be at a bigger disadvantage because his party has controlled the White House for eight years — and voters often blame the party in power for hard times.

Still, new polling suggests the Wall Street tumult is helping McCain, at least for now. He and Obama now are trusted equally on the economy, with 34 percent of voters saying each would do a better job, according to an Associated Press-Yahoo News poll conducted last week. Previously, Obama had held a solid advantage on the issue.

Democrats also have been seeking to link McCain with unpopular Bush economic policies — something McCain has been pushing back against.

In a recent McCain television ad, an announcer asserts, "We're worse off than we were four years ago."

That not only takes a dig at Bush, but also evokes the memory of Ronald Reagan, who famously asked voters in 1980 if they were better off than four years earlier.

Reagan also had a ready definition of economic downturns. A recession was when your neighbor lost his job, and a depression was when you lost yours. Recovery, he liked to add, would come when then President Carter lost his.

___

EDITOR'S NOTE — Tom Raum has covered national, political and economic affairs for The Associated Press since 1973.

(This version CORRECTS Corrects style on PricewaterhouseCoopers, and to AP-Yahoo News poll, sted AP-GfK. Moving on general news and financial services. AP Video.)

Copyright © 2008 The Associated Press. All rights reserved.

I Know Nothing!

...(Sgt. Schultz) ... but,
Mindbowler remembers .. back when, ... back to Gulf War-One and George Herbert Walker Bush (Bush41). I spent the summer of 1991 on Okinawa and witnessed the preparation and part of the Marine Corps build-up. A traditional pump and dump. Much to do about nothing. Over before it required the full application of forces. They spent a lot of money to get prepared, and as usual it was a nice boost to the Military Industrial Complex.

http://en.wikipedia.org/wiki/George_P._Shultz

Special Reports
9/11 and the Greenberg Familia
By Jerry Mazza
Online Journal Associate Editor

Sep 29, 2006, 01:06
Democratic Underground Demopedia reports in Who Killed John O’Neill that at the time of 9/11, AIG, the world’s largest insurance company, and subsidiaries Marsh McLennan, ACE and Kroll, were run by the Greenberg family. With Council on Foreign Relations (CFR) member Maurice “Hank” Greenberg as the AIG godfather, the Familia’s tentacles curled around the heart of the tragedy.

Hank’s son Jeffrey, a CFR member as well, was chairman of Marsh & McLennan, situated on floors throughout the North Tower of the World Trade Center as well as the top floors of the South Tower. Marsh also had ties to the CIA. Son Evan Greenberg, a CFR member, was CEO of ACE Limited, situated in Tower 7, which also contained AIG subsidiary Kroll, closely related to the CIA, also with an office in Tower 7.

Tower 7 also contained offices of the FBI, Department of Defense, IRS (which contained prodigious amounts of corporate tax fraud corporate, including Enron’s), US Secret Service, Securities & Exchange Commission (with more stock fraud records), and Citibank’s Salomon Smith Barney, the Mayor’s Office of Emergency Management and many other financial institutions.

Greenberg’s cousin, Alan “Ace” Greenberg, was former CEO of Bear Sterns, where the Bush family, Cheney family George Schultz, James Baker, et al, did business. It is the leading brokerage firm of the great and all-powerful Bush Familia.

Also reported by Democratic Underground, AIG’s Kroll “provided protection services,” among other things, to high level Americans at home and abroad. Kroll had military teams in their company and merged with Armor Holdings on August 23, 2001, adding Defence Systems Limited, another private military corporation, to their operation, and an ex-KGB team called Alpha Firm earlier acquired by Defense Systems Limited. These four teams could have been used on 9/11, part of a “corporatizing” of black ops in tandem with military teams.

According to whistleblower Richard Grove, who worked as a senior manager for SilverStream Software on Marsh and AIG accounts, Kroll also managed the Enron fraud once Kenneth Lay stepped down.

Marsh, immediately after 9/11, established a specialized terrorism team called Marsh Crisis Consultancy (led by L. Paul Bremer III), adding the teams Control Risks Group, a British ex-SAS team and Versar, bio-terrorism and homeland defense team. These players could have known each other from 9/11, bringing in new assignments and profits.

Democratic Underground also reports, AIG allegedly was laundering drug money, and was involved in the Afghanistan oil and gas pipelines. Greenberg and the Adnan Khasshogi family allegedly benefited from the Afghanistan narcotics trade and interests in the oil and gas pipelines, as well.

Greenberg’s Law Firm Connections to Bush

According to www.sourcewatch.org, the Greenbergs were and are connected to the Bush Familia via their Miami-based law firm Greenberg Traurig, LLP, a 1,350-lawyer, full-service international firm. Here are a few connects . . .

1) G-T represented George W. Bush in the Bush-Gore 2000 Florida election vote recount.

2) They personally represent Florida Governor Jeb Bush.

3) They hired son of Supreme Court Justice Antonin Scalia on Election Day 2000 -- after which Justice Scalia cast one of the 5 to 4 deciding votes that placed Bush in the White House.

4) They partially funded/sponsored a delegation to Israel by House-Senate Armed Services Committee members and government contractors to witness and be briefed on interrogations resistance procedures and torture techniques.

5) The firm has prominent administrative positions in Massachusetts 9/11 Fund, which also involves Bush family banking house Brown Brothers Harriman (the same BBH involved with Prescott Bush’s bankrolling the Nazis in World War II).

6) Traurig Greenberg works with 9-11 victims on planning their US government “hushmail/bribery estates.” That is, to receive the money, the victim’s family must sign an agreement never to sue the government for any reason. Victim-wife Ellen Mariani is currently being legally harassed for not signing and for holding the Bush government’s feet to the fire.

7) Bush still owes the Greenberg Traurig firm nearly $1 million for work done by dozens of lawyers and paralegals, leaving questions why a Republican candidate would hire a Democratic lawyer from a Democratic firm. See Greenberg Traurig link above for more scandals.

Greenberg’s Relationship to Larry Silverstein

On July 24, 2001, six weeks before 9/11, Larry Silverstein took control of the lease of all the WTC buildings. This followed the Port Authority decision on April 26.

According to democraticunderground.com, the three companies who originally insured the WTC were AIG, Marsh and ACE, all run as mentioned by the Greenbergs at the time. They then sold stakes of the original contract to their competition, a technique called reinsuring.

Once the Towers came down, the reinsurers got caught holding the bag. This would inextricably tie the Greenbergs to Silverstein and the larger conspiracy of 9/11. If they had no foreknowledge of events to occur, why would the Greenbergs have unloaded so many stakes in their contract?

According to Michel Chossudovsky in Financial Bonanza behind the 9/11 Tragedy, “On October 17, 2000, eleven months before 9/11, Blackstone Real Estate Advisors, of The Blackstone Group, L.P, purchased, from Teachers Insurance and Annuity Association, the participating mortgage secured by World Trade Center, Building 7.1.” [Blackstone in 2000 also purchased a 50 percent stake in Universal Studios, producers of the myth-perpetuating Flight 93.]

“April 26, 2001 the Port Authority leased the WTC for 99 years to Silverstein Properties and Westfield America Inc.

“The transaction was authorised by Port Authority Chairman Lewis M. Eisenberg. This transfer from the New York and New Jersey Port Authority was tantamount to the privatisation of the WTC Complex. The official press release described it as ‘the richest real estate prize in New York City history.’ The retail space underneath the complex was leased to Westfield America Inc.

“On 24 July 2001, 6 weeks prior to 9/11 Silverstein took control of the lease of the WTC following the Port Authority decision on April 26.

“Silverstein and Frank Lowy, CEO of Westefield Inc. took control of the 10.6 million-square-foot WTC complex.

"Lowy leased the shopping concourse called the Mall at the WTC, which comprised about 427,000 square feet of retail space.”

“Explicitly included in the agreement was that Silverstein and Westfield ‘were given the right to rebuild the structures if they were destroyed.'’

“In this transaction, Silverstein signed a rental contract for the WTC over 99 years amounting to 3.2 billion dollars in installments to be made to the Port Authority: 800 million covered fees including a down payment of the order of 100 million dollars. Of this amount, Silverstein put in 14 million dollars of his own money. The annual payment on the lease was of the order of 115 million dollars.

“In the wake of the WTC attacks, Silverstein is suing for some $7.1 billion in insurance money, double the amount of the value of the 99 year lease.” In fact, some $5 billion was actually returned, given the multiple court-case protests of the insurers.

“The mortgaging of the WTC was handled by The Blackstone Group, headed by Peter J. Peterson, current head of the Council on Foreign Relations (CFR). The Blackstone Group also bought a piece of Kroll in 1993 at the very same time AIG took over majority control. Henry Kissinger sits on the board of the Blackstone Group.”

By his own admission Silverstein had Tower 7 pulled by controlled internal demolition eight hours after the first two hits. No plane hit Tower 7. There were two small fires in it that were under control. In fact, it takes weeks, months to set up a building to be pulled. So his order to “pull it” catches him in a huge lie. Tower 7 may have been the nexus of the operations. That may have been the real reason to pull it. In fact, it may have been set up weeks in advance with Towers 1 and 2 for demolition. Ironically, Tower 7 is the only tower that has been rebuilt, and more opulently than its predecessor, although tenancy is about 18 percent.

Towers Taken Down for Profit and to Blame Muslims

Given the involvement of the Greenbergs and Silverstein, and other commercial entities that stood to profit hugely, it is difficult to believe 9/11 occurred at the hands of 19 rag-tag Muslims with box-cutters and the help of their leader, Osama bin Laden, sitting in a cave somewhere in Afghanistan with his laptop and dialysis equipment. The real reasons behind 9/11 were financial greed and the willingness to demonize Muslims for the “Pearl Harbor-type” act that would instigate America to wage a war on terror, pursuing PNAC’s (Project for a New American Century) goal of World Hegemony.

The latest documentary on the WTC, The 911 Mysteries from 911WeKnow.com, provides highly convincing proof that the buildings were taken down in six fatal steps. They involved the use of high-powered explosives, including thermite and/or thermate, with techniques more advanced than those of traditional controlled-demolition companies, most likely the military’s, given their bunker buster technology. The six steps are . . .

1. Pre-collapse sub-basement explosions
2. Pre-collapse interior blasts
3. Pre-collapse ground level explosions
4. Top level collapse initiation
5. Mid Collapse Squibs (explosions)
6. Final time-delayed rolls (explosions)

Without all these steps, the Towers could never have free-fallen in 10 seconds, the speed of gravity. Any obstacles or pancaking had to be eliminated otherwise the number of seconds of fall would increase dramatically. The documentary also reminds us that on February 13, 1975 there was a major fire on the 11th floor of the North Tower that did not topple it, though the loss was estimated at over $2 million, no mean event. Check it out.

It is possible that in 1996, when Securacom took over WTC security and installed a new $8.3 million security system, that the explosives and charges were also put in place. Sitting on the board of Securacom was the director Marvin Bush, George Bush’s younger brother.

In any case, this is patently the confluence of the military/industrial complex with a healthy dose of Wall Street, earning millions if not billions in put and call options on companies involved with the catastrophe, including airlines on the down (put) side and military suppliers on the up (call) side. In addition, there is the missing gold from the basement of Tower 4, $200 million of which was retrieved, and an untold amount stolen.

The real bottom line was that the Towers were two financial white elephants. And both Silverstein and Greenberg had to know that. The tenancy was dropping. They were out of date. And most dangerously, they were asbestos bombs, loaded with the dangerous building material when they were completed in 1972-73.

By law the buildings could not be taken down by internal demolition. And since it would cost a billion dollars or more to take the towers down beam by beam, it would be at great loss to the Port of Authority or its leaseholder. Thus the reasons are obvious to take WTC down in act of terror also a false-flag operation. Remember, the concept for the WTC Towers originated with the Nelson and David Rockefeller, members of the Council on Foreign Relations and among the world’s elites. A “New Pearl Harbor” would serve those interests well.

Additional Connections to Greenberg

John O’Neill, mentioned in the first paragraph, was the FBI anti-terror chief who spent years trying to track down bin Laden and “al Qaeda” members. At every point, he was stopped or frustrated by his superiors. Finally, O’Neill parted company with the FBI. Jerome Hauer, who formerly worked for Kroll, got him the job as chief of security at the WTC. On 9/11, O’Neill lost his life in the North Tower.

Mr. Hauer’s job as Kroll chief was also held by Michael Cherkasky, who came out of the New York County District Attorney’s Office, which also brought us Rudy Giuliani, Elliot Spitzer and Patrick Fitzgerald. Mr. Cherkasky also brought Mr. Spitzer into the NYC County DA’s office. Today Cherkasky is a substantial contributor to Spitzer’s campaign for New York State Governor. Cherkasky was bumped up to head Marsh McLennan in 2004.

As an aside, there were about 200 electrical engineers working in the World Trade Center around the time. Additionally, AMEC and Tully Construction played a major role in the clean up of Ground Zero and both have specialized controlled demolition companies.

Lastly, can you believe that one of the Council on Foreign Relations members who engaged President Mahmoud Ahmadinejad of Iran in a debate about the holocaust at CFR’s reception last week was none other than Hank Greenberg, who said he witnessed the Dachau camp as Germany fell? Could it all possibly be payback and then some?

Jerry Mazza is a freelance writer living in New York. Reach him at gvmaz@verizon.net.
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--mindbowler

No there ...there

http://www.nytimes.com/2008/09/15/business/15lehman.html?ref=worldbusiness&pagewanted=print

"Lehman was expected to seek bankruptcy protection for its holding company by late Sunday in what would be the largest failure of an investment bank since the collapse of Drexel Burnham Lambert 18 years ago." NYT

By Andrew Ross Sorkin Published: September 14, 2008

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-wow ..
From a former para-legal lackey who spent over five years working in Bankruptcy firms, those boys and girls are up to their eyeballs in shXt right now.

If the rumors are true about why Barclays and B.of A. walked away from a rescue purchase ....?
Lehman Brothers may very well be super-duper insolvent. It is extra difficult to create a Bankruptcy protection plan under pressure, without all the facts, and in a situation in which it is difficult to determine where and if there is any "Value" left to protect. It sounds like they might just throw in the towel. Liquidate.
Then what? A trustee to oversee the liquidation. This is why it is called an emergency Bankruptcy filing. I am unsure though whether filing for Bankruptcy protection will truly have any effect, if there is no value left to protect. This sounds like a really bad liquidation. More to follow I am sure.

So, unfortunately this will ultimately lead directly toward more consolidation and risk avoidance type behavior. Consolidation by attrition. Grit your teeth tomorrow, it is going to be a bumpy ride.

--mindbowler