Busted: Bankers and The Global Economy

December 2, 2008

Housing Pressure On: Drop of 40%

Filed under: economy, investment, money — Tags: , , , , — digitaleconomy @ 10:02 am

value crisis

value crisis

Selling a home is this recessionary market is challenge enough, but considering that the average homeowner that needs to sell real estate is competing with more than a million bank-owned homes fresh out of foreclosure at low ball reductions of 40%, the downward economic pressure in the housing market persists.

Even in California, the former mecca of high home prices, prices are facing the same downward pressure, forcing home sellers to take huge losses in order to relieve themselves of their property.

As far as home foreclosures are concerned, lenders left holding the bag have already been deluged with expenses in administrative costs, property taxes, insurance, maintenance coupled with the loss of missed payments. As home prices continue to freefall, these bank-owned foreclosures continue to depreciate in a dwindling market as more foreclosures are added to the barrel of distressed properties.

shooting-foot1Once the strength and fire of the U.S. economy, the housing market is facing a correction of unprecedented proportions, further impacting those that have managed to maintain their lifestyles and employment in the face of the progressing recession.  The relunctance and inability to stop foreclosures is bringing about an economic defeat of colossal proportions. An antiquated and inadequate system is shooting itself in the foot. Remember that all of this has stemmed from the unending greed of bankers and investors. Neither education or the lack of it has meant a thing. So much for the economic brain trust. ~ E. Manning

September 23, 2008

Global Liquidity Crisis: On the Brink

crisis solution

crisis solution

Turn on the TV, read the paper or peruse the latest internet news. You’ll be told that we’re on the brink of imminent crisis, a lock down of liquidity that must be remedied immediately. The Fifth Avenue Rush is on. The only solution is bipartisan unity in Congress to turn over vast power to the Bush administration and the U.S. Treasury without accountability. The Republican feel-good legislation is in place to save the home of the brave. We can do it if we can do it together. We will save the world for democracy.

The American taxpayer must trust that Henry Paulsen will use $700 billion wisely to snatch up worthless securitized bonds. Sound familiar? In the same way that the Federal Reserve Bank is totally unaccountable and is never subject to audit, the current proposal contains this proviso:

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.

Henry Paulson, because of the massive liquidity freeze, is about to receive kingly authority to solve the current liquidity crisis. Even after the nation spends an initial sum of $700 billion, there is no guarantee of success beyond maintaining the current business, investor climate and monetary markets, shaky though they may be. The entire proposal is designed to bailout the collapsing U.S. financial system and save the world so that the current power structure can continue unchanged, further supporting control over the failing system. In the words of the administration, the fate of every American’s retirement and savings hangs in the balance. That makes many Americans nervous, at least for those that have managed to prosper, save and invest.

bailout money grab

bailout money grab

In one more segment of authority, the executive branch of the Bush administration wants to perform another magnanimous service while exempting itself from any chance of responsibility or review for the pending results.

While the media and Congress are fussing about the lack of oversight on the project or who Henry Paulson uses to assist him in the huge money grab, the Federal Reserve Bank and the International Society of Bankers sit quietly by watching the drama like ripe fruit ready for picking. A few have pointed out that the lack of oversight is a grand opportunity for abuse or profitaking.

This current idea proposed is bold and transparent in simplicity. Have the Federal Reserve wave its monetary wand, giving buddies in the former investment banking industry piles of cash for rooting out the bad bonds and making a huge chunk of debt go away as the Federal Reserve apportions more American gold to send quietly to Swiss vaults while clueless Americans aren’t watching. No rush about the physical location of gold. International Bankers will count it anyway as their personal profit and add it to the national debt. Never mind that the Fed is already holding all the nation’s gold. Fort Knox is an illusion.

fort knox gold

fort knox gold

The funding credits will never actually need to leave the Fed. The entire process can be done electronically without a trace. The craft is in the paperwork that the U.S. Treasury will alter, permanently erasing a mountain of fraudulent debt that only the banking community and authorities can see. The scheme is perfect because the scheme is all about semantics anyway.

Never has such a bailout been proposed with such secrecy. Even the federal bailouts during the Great Depression and during the Savings and Loan collapse of the 80s never suspended judicial review. Enter an emboldened U.S. Congress led by a Democrat majority that seeks oversight and taxpayer protections. Congress claims to be keenly interested in recouping any possibility of future income derived from currently worthless securitized bonds as the Bush Administration claims. Yet, the American taxpayer will never see a penny from these worthless pieces of paper.

homeowner bailout

homeowner bailout

Democrats want to be certain that going forward, any institutions that benefit from financial insurance also bear the cost of that insurance. Congress is also interested in bailing out beleaguered homeowners that face losing their homes. On “The View,” Whoopi Goldberg and Bill Clinton agreed that enraged Americans need the same bailout consideration that Wall Street and the financial system is getting. Unlike Congress, Whoopi and Bill weren’t talking about new bankruptcy laws that Barney Frank thinks will do the trick. Americans want cold hard cash that they can retire on, like the bankers that robbed the nation.

While all of these opportunities can be justified and even supported, the possibility of pork barrel spending is likely to escalate as Senators and Representatives see the opportunity to bolster their interests. That is the part and parcel of shameless American politics in this age.

credit addiction

credit addiction

Meanwhile, a desperate executive administration and U.S. Treasury Secretary are prepared to do most anything to get legislation through Congress. Reputations are now on the line.

Paulson and President Bush have argued that the alternative is that credit markets will remain frozen. Businesses will fail because they can’t get the loans they need to operate. The economy will grind to a halt because consumers that account for two-thirds of U.S. economic activity, won’t be able to get the credit they need to keep spending. Just think, it all started with broadening the profits of bankers by using compound interest instead of simple interest. We’ve come a long way baby.

national security

national security

Unbridled credit is the insanity that this nation has been built on in the last four decades. Unbridled credit is what has enabled this nation to rise prices without raising wages. Unbridled credit is what has allowed the American consumer to sell himself into slavery to financial interests. Unbridled credit is what has built the power that politicians and business have come to depend on. Unbridled credit is why even Big Business seeks cheap Federal Reserve funding. The Federal Reserve and the International Bankers hold the key to that credit through the auspices of the federal government. The spectacle is all about power and the fear of change. This is the nation’s new national security issue. ~ E. Manning

September 22, 2008

Robbery from American Taxpayers

bailout or pork barrel?

bailout or pork barrel?

“It is a big package because it’s a big problem,” Bush told reporters at a news conference. “The risk of doing nothing far outweighs the risk of the package.” Yet, most Americans seems to be irritated, if not entirely incensed about the prospect of bailing out wealthy bankers and insurance companies along with buying up worthless securitized bonds built by greed and corruption. Do Americans seem to care, even though authorities say that the alternative is total economic devastation? Americans do care, but realize that what the Bush Administration intends to do is not without substantial risk. Even more important are the real moral principles involved in the bailout. Moral and ethical concerns is exactly what the Bush Administration, Republicans and the Congress have been bereft of during the last two terms of office. An undercurrent of seething rage foments in the underground of American souls.

Americans have focused most of their indignation on having to foot the bill for irresponsible lenders and borrowers. The fact that little benefit to the economy or decent jobs for the American people will result from the trillion dollar bailout doesn’t make the bitter pill easier to swallow. However, the fact that Main Street America will suffer has some Americans rethinking their position.

the legacy of Bush

the legacy of Bush

What Americans fail to realize is the economic devastation that will plague America regardless of a bailout. The U.S. economy is in a king-sized pickle with a stalled economy and poor prospects. Politicians and economists alike seem to have temporarily forgotten that bailout or not, stagflation is on the way, a difficult prospect that the panicked authorities have suddenly ignored in the interest of saving their immediate power. The trillion dollar economic bailout is not a miracle, just a different road down the same mountain of decline.

A few have suggested that the bailout is not a bailout. The government is not handing out cash and have advertised that they might actually stand to make a great deal of money out of this. The bottom line is that when the bad securitized bonds gain value, that value will trickle down to the American taxpayer. The big problem is that most Americans no longer believe in the lie of “trickle-down economics,” a political theory that seems to have been fully subverted by bad business practices, corrupt politics and even more incompetent regulators while Americans follow the rules. Furthermore, money doesn’t trickle down from government except through the welfare system. This make the prospect of “trickle down” even more unlikely and unpalatable. The taxpayer does not expect to see the money, but knows that the government will continue to spend with wild abandon. The national rage is palpable as American taxpayers are made to bail out the world. ~ E. Manning

September 17, 2008

Bailout Fever Strikes U.S. Again

The world of insurance will never be the same. AIG, a major insurance corporation and the world’s largest insurer has averted the worst financial collapse in history by accepting an $85 billion Federal Reserve loan and giving the government a majority stake in the company. The U.S. Treasury was fearful of a “disorderly failure” that would lead to larger national failures.

American International Group was a wild card with failure creating an enormous and unknown measure of system risk to the entire economy. The federal government gets 79.9 percent take of the firm and senior managers give up their jobs.

panic on the street

panic on the street

Meanwhile, the Federal Reserve loan with a 2-year term will allow AIG (in theory) to divest itself of assets in a timely manner without creating an immediate crisis. Stockholders have been effectively squeezed out and are subject to losing any dividends.

AIG was huge in the credit default market, insuring contract guarantees that companies would not fail in large financial deals. A default contract buys protection against the threat of default by a company, municipality or a package of debt backed by mortgages. A buyer pays the seller a premium over a set term. The seller pays out if the default occurs. Defaults on mortgages and securitized bonds brought AIG to the verge of oblivion.

The complexity and global reach is huge, likely affecting every fund on the market in one fell swoop. Even with the loan in place to protect AIG for the short-term, Wall Street is reeling from the effects. A future bankruptcy would also play havoc on business contracts. There are reports that people are hording cash. Derivatives have been a highly profitable on Wall Street until now. The financial world is changing quickly as repercussions from the subprime mortgage crisis ripple across the globe.

~ E. Manning

August 28, 2008

IBM Continues to Escalate Global Tracking

IBM’s strong financial performance lately can be attributed in part to the growth of IBM’s System z10 mainframe. On an increasing basis IBM has been developing global banking and tracking software to serve the needs of multinational corporate clients. In fact, IBM has received a notable patent for tracking which could be used for the creative tracking of not only data and products, but human beings as well.

The IBM mainframe allows for additional protection of sensitive data such as credit card information and client’s personal information from hackers which is a very attractive feature in banking operations. From a computer standpoint, the beauty of the mainframe allows for a policy-based system that distributes, manages and tracks all data in a simplified fashion over older computing. Multinational bankers are investing in the system because of huge expandability promises combined with flexibility in use for multiple types of banking simultaneously: commercial banking, Islamic banking, investment banking and insurance.

If you use your imagination, you can visualize where this advance in computing is taking the global banking system and other multinational corporate capabilities. IBM is almost single-handedly creating the means to elevate a digital revolution in the global economy, quickly becoming a completely digital economy. ~ E. Manning

August 4, 2008

U.S.: What Banking Fraud Means to Depositors

There have been a number of bank failures and the recent accumulation is increasing in pace. The FDIC sees many bank failures down the road. If you are uncertain why banks should fail, you are at the right place. “Busted: Bankers” highlights corruption and fraud in the global banking industry without the restrictions of mainstream media and politics.

The public word is that regulators are bracing for 100-200 bank failures over the next 12-24 months. If the FDIC is anywhere near right, the United States has what could be considered to be an alarming increase in the number of U.S. commercial bank failures. This debacle, despite props from the Federal Reserve, has been caused by creative banking instruments and outright fraudulent activities in the name of profits for bankers and investors. The resulting contraction of the housing market and credit squeeze on a global basis are of their making, a hefty portion at taxpayer expense.

FDIC insurance is the ultimate standard for protecting the assets of banking depositors in the United States. The FDIC has raised their mandatory banking insurance rates to cover the expected expense of bailout. The government claims that the FDIC has ample resources. While this reality is debatable if several shoes drop at once, the U.S. federal government backs the FDIC. Deposits that meet requirements under the $100,000 account limit are fully protected, as good as the government that backs them.

How do you protect your money and keep that money in a safe bank? To begin, always look for the FDIC logo at your bank branch. If you are using online services or a bank, look for the logo as well. However, don’t assume that the FDIC label is accurate in the name of safety and healthy skepticism.

Simply go to the fdic.gov and locate “bank find“. In this way, you can be certain that the bank that you selected is FDIC insured. The FDIC also has a list of bank rating agencies on its Web site that can evaluate the financial stability of a bank. To get a free evaluation, check out bankrate.com, remembering where your loyalty lies. Banking information is generally set up to secure confidence. The information you are given is designed to that end. However, regardless of bank strength, FDIC insurance will secure compliant deposits. That is what you really need to know about.

As an individual, personal deposits are insured up to $100,000 in an FDIC-insured institution, including savings, checking, certificates of deposit and money market accounts. This assumes that your accounts are non-brokered. When you register with the bank directly, make sure that your deposits are non-brokered and will reside with the institution instead of being handled by a third-party. This will ensure your financial safety.

While banking fraud has meant plenty as far as creating a troubled economy, as a depositor, you are fully protected with FDIC insurance. The protection is as good as the government protection that is trusted in, which in essence, comes straight out of taxpayer pockets. Bank runs and panic aren’t a necessary part of your reactions.

In the meantime, investing and spending with a certain amount of prudence is importance. If you are involved in large financial transactions, plan ahead without waiting until the last moment. Some depositors with IndyMac put off dealing with large transactions until the last moment, putting a financial kink in meeting their obligations. The problems could have been prevented by securing a cashier’s check a few days ahead instead of at the last minute. A good rule of thumb is to avoid putting off anything that you can do today, especially where your financial life is concerned. ~ E. Manning

July 26, 2008

More U.S. Banks Close Amid Pain

Friday at the last moment seems to be an FDIC favorite process for dealing with bankrupt financial and banking institutions. The Federal Reserve filed an order for First National Holding Company of Scottsdale, Arizona to cease and desist their actions, while providing certain documentation to the Federal Reserve Board.

The FDIC closed First National Bank of Nevada and First Heritage Bank. The FDIC moved quickly before the situation at the banks became worse, stating that the takeover of the failed banks was the least costly resolution and all depositors, including those with funds in excess of FDIC insurance limits, will switch to Mutual of Omaha with “the full amount of their deposits.” The FDIC has made certain that account holders have full access to their funds with the ability to write checks and make ATM transactions.

Local authorities have warned against the “need” for a bank run as (more…)

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