No subject

AUTHORITY TO PURCHASE MORTGAGE-RELATED ASSETS

"(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".


Market Ticker's Karl Denninger summed this up best:

"This is the de facto nationalization of the entire banking, insurance
and related financial system ... That's right - every bank and other
financial institution in the United States has just become a de-facto
organ of the United States Government, if Hank Paulson thinks they
should be, and he may order them to do virtually anything that he claims
is in furtherance of this act ... The bill gives Paulson the ability to
nationalize unlimited amount of private debt and force you and your
children to pay for it".

Denninger again:

"The claim is that this is intended to 'promote confidence and
stability' in the financial markets. It will do no such thing. It will
instead strike terror into the hearts of investors worldwide who hold
any sort of paper, whether it be preferred stock, common stock or debt,
in any financial entity that happens to be domiciled in the United
States, never mind the potential impact on Treasury yields and the
United States sovereign credit rating.

"I predict that if this passes it will precipitate the mother and father
of all financial panics." (Market Ticker)


Amen. The transformation from a free market to a centralized,
Soviet-style economy run by men whose judgment and credibility is
already greatly in doubt, does not auger well for the markets or the
country. Anyone with a lick of sense would cash in their chips first
thing Monday and look for capital's Elysium Fields overseas or as far as
possible from the circus sideshow now run by G-Sax ringleader, Colonel
Klink.

Paulson's Chicken Little routine might might have soiled a few
senatorial undergarments, but let's hope the American people are made of
sterner stuff and will reject this charade. The conversation should be
shifted from conceding more authority to hucksters in pin-stripes to
indictments for securities fraud. Even the most economically-challenged
nation ought to be able to afford a few sets of leg-irons and a couple
hundred jail cells. That's all it will take. That, and a couple brisk
dunks on the waterboard. Glub, glub.

Paulson's plan to revive the banking system by buying up hundreds of
billions of dollars of illiquid mortgage-backed securities (MBS) and
other equally poisonous debt-instruments ignores the fact these complex
bonds have already been "marked to market" in the recent firesale by
Merrill Lynch. Just weeks ago, Merrill sold $31 billion of these CDOs
for roughly twenty cents on the dollar and provided 75 percent of the
financing, which means that the CDOs were really worth approximately six
cents on the dollar. If this is the settlement that Paulson has in mind,
than the taxpayer will be well served. But this will not recapitalize
the banks balance sheets or mop up the ocean of red ink which is
flooding the financial system. No, Paulson intends to hand out lavish
treats to his banker buddies, while interest rates soar, pension funds
collapse, the housing market crashes, and the dollar does a last,
looping swan-dive into a pool of molten lava. Thanks, Hank.

Economist and author Henry Liu summarized the current maneuvering like
this: "The Fed is merely trying to inject money to keep prices not
supported by fundamentals from falling. It is a prescription for
hyperinflation. The only way to keep price of worthless assets high is
to lower the value of money. And that appears to be the Fed's unspoken
strategy."

Indeed. The Fed and Treasury have decided to backstop the entire global
financial system (foreign banks can access the Fed's facilities, too!)
with paper money which is rapidly losing its value. Watch the greenback
tumble tomorrow in currency trading.

Congress is getting steamrolled and the American people are getting
snookered. Consumer confidence - already at historic lows - is headed
for the wood-chipper feet-first. Something has got to give.

One minute everything is hunky-dory; the subprime meltdown is
"contained" and "the fundamentals of our economy are strong". (Paulson)
And, less than a week later, congress is forced to surrender their
constitutionally-mandated right to oversee spending in order to
forestall economic Armageddon. Which is it? Or is the real objective
just to keep the country on an emotional teeter-totter long enough for
all state-power to be subsumed by the Wall Street Politburo?

No one knows what will happen next. We are in uncharted waters. And no
one knows what the political landscape will look like after the dust
settles from this outrageous power grab. According to Paulson, things
are so dire, the entire nation will be reduced to smoldering rubble and
twisted iron. But can we trust him this time after his long litany of lies?

Isn't it about time to send the cockroaches scuttling back to their
hideouts and bring in the cleaning crew to hose the whole place down? It
sounds like a job for Ralph Nader, a man of vision and unshakable
integrity. Give Ralph a badge and let him deploy his Raiders to Wall
Street armed with bullwhips and tasers. Let them post a guard in every
CEOs and CFOs office and every boardroom on the Street - and if even one
decimal is accidentally moved to the right or left on the corporate
ledger; clap them in leg-irons and drag them off squealing to
Guantanamo. That's how you clean up Wall Street!

Don't let the prospect of a national crisis trick you into giving up
your freedom, America. The people behind this scam are the same
landsharks and flim-flam men who polluted the global marketplace with
their snake oil and toxic sludge. These are the fraudsters who
manufactured the crisis to begin with. This is just the latest
installment of the Shock Doctrine; engineer a crisis, and then, steal
whatever is left behind. Same sh**, different day. Be resolute. Don't
budge. Our economic foundations may be crumbling, but or determination
is not. This is our country, not Goldman Sachs'. The people who
destroyed America must be held to account. Their time is coming. Justice
first.

http://www.informationclearinghouse.info/article20839.htm


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