Best of the Week
Most Popular
1.UK General Election Exit Polls Forecast Accuracy - Nadeem_Walayat
2.What's Next for the Gold Price? - Axel_Merk
3.UK House Prices Correctly Forecast / Predicted Conservative Election Win 2015 - Nadeem_Walayat
4.15 Hours to Save England from SNP Scottish Nationalist Dictatorship - Election 2015 - Nadeem_Walayat
5.Exit Poll Forecasts Conservative UK Election 2015 Win - Nadeem_Walayat
6.Gold And Silver China’s Pivotal Role: More Questions Than Answers. Not So For Charts - Michael_Noonan
7.Conservative Win 2015 UK General Election, BBC Forecast of 329 Seats - Nadeem_Walayat
8.Investing and the Lollapalooza Effect - Niels C. Jensen
9.Gold Price Target - Rambus_Chartology
10.Gold Price Nearing An Important Pivot Point - GoldSilverWorlds
Last 5 days
Time To Get Real About China - 22nd May 15
Gold Lifeboat to Global Economies “Titanic Problem” Warn HSBC - 22nd May 15
One Investment Could Save Two Generations' Retirements - 22nd May 15
Investing is About Identifying Gifted and Talented Camps - 22nd May 15
One of Europe's Latest Debt Nightmares - 22nd May 15
UK Immigration Crisis Could Prompt BREXIT, Propelling Britain Out of EU Despite German Factor - 22nd May 15
America Superpower 2016 - 21st May 15
Stock Market Secular Versus Cyclical Investing - 21st May 15
Banking Stocks Break Out with Higher Bond Yields - 21st May 15
The Tech Portfolio Built to Beat the Market - 21st May 15
Gold “Less Sexy” Than Bitcoin … For Now - GoldCore on CNBC - 21st May 15
The Russia-West Rivalry in the Balkans - 21st May 15
The US Dollar and the Precious Metals Complex - 21st May 15
Gold GLD ETF Drawdown Continues Unabated - 21st May 15
Who’s Killing the Stock Market? - 21st May 15
Your Best Way to Profit from the Narrowest Market in 20 Years - 21st May 15
Government Regulation and Economic Stagnation - 20th May 15
It’s Time to Hold More Cash and Buy Gold - 20th May 15
Choppy Asian Stock Markets - 20th May 15
Countdown to Global Financial Collapse - 20th May 15
Will Interest Rates Ever Rise? - 20th May 15
How to Cash in on Amazon Stock’s Amazing Cloud Success - 20th May 15
Three Hidden Forces Pushing Crude Oil Price Back Up - 20th May 15
U.S. Housing Market Strong Numbers in Perspective - 20th May 15
Greece Debt Crisis - Obama Has A Big Fat Greek Finger - 20th May 15
Now Is the Time to Own the Oil & Gas Leaders - 20th May 15
UK Deflation Warning - Bank of England Economic Propaganda to Print and Inflate Debt - 20th May 15
Trading Gold and Silver along with the Pros - 19th May 15
Gold Ticks Higher as London Housing Market Crash Looms? - 19th May 15
Global Stock Market, Commodities Group Analysis - 19th May 15
How Stock Investors Could Profit from the Dark Net Pattern That Few Others See - 19th May 15
The Patriot Act is now USA Freedom Act - 19th May 15
Investing in Europe? 5 Critical Insights to Boost Your Portfolio Now - 19th May 15
Gold Price Trend Forecast - 19th May 15
Stock Market Continues Defying Gravity, Dow New All Time High - 19th May 15
Are Gold and Interest Rates About To Take Off Higher? - 18th May 15
Nikkei Japanese Stock Index Set To Get Smashed - 18th May 15
Silver Price Projections For 2020 - 18th May 15
The IMF Leaks Greece, Institutions Forcing a Debt Default - 18th May 15
Europe's Stocks Bull Market Continues After Correction - 18th May 15
European Banks Vulnerable Today As 2008 Financial Crisis - 18th May 15
Payments, Currencies, and Broken Money - 18th May 15
Learning to Trade Markets - Dealing with Losing Trades - 18th May 15
Stock Market Sell in May and Go Away - Last Hurrah - Take2 - 18th May 15
The No. 1 Reason Stocks Will Climb Higher - 17th May 15
Gold, Silver Distorted Markets, Financial Sophistry, and Moral Hazard - 17th May 15
Stock Market CAC40 Trend Forecast - 17th May 15
Stock Market Diagonal Pattern Nearly Complete - 16th May 15
Gold And Silver - Elite's Game Of Jenga In Place. Your Move - 16th May 15
You’ll Never See a Better Moment to Invest in China - 16th May 15
Are Gold and Silver Stocks Breaking Out? - 16th May 15
War On Cash - Why the IRS Seized All the Money from a Country Store - 16th May 15
Is China Economy a Fire-Breathing Dragon or a Dragon on Fire? - 16th May 15
Silver Buying Only Starting - 16th May 15
Why Opinion Pollsters Got UK Election 2015 Badly Wrong - 15th May 15
Double Black Diamond - What a Bond Bear Market Looks Like - 15th May 15
This “Bubble” Is Set to Kick Off New Energy Profits - 15th May 15
German Gold Demand "Spikes"- Investment Demand Surges 63% - 15th May 15
How GDP Metrics Distort Our View of the Economy - 15th May 15
McDonald's Future Is Hard to Digest (NYSE: MCD) - 15th May 15
Dry Bulk Shipping Index Chart Analysis Update 2015 - 15th May 15
Economic Expansion Ahead? World Stock Markets Analysis - 15th May 15
Why Not Tell Greece How To Run A Democracy? - 15th May 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Biggest Debt Bomb in History

Can We “Fix” The Oil And Financial Crisis Before Its Too Late?

Politics / US Politics Jun 20, 2010 - 03:19 PM GMT

By: Danny_Schechter

Politics

Best Financial Markets Analysis ArticleIt seems clear that BP can’t seem to fix the catastrophic gusher the press calls a “leak,” and that President Obama can’t fix the economy because its problems are structural and won’t respond to soaring rhetoric emanating from his bully pulpit.

Meanwhile, most of the world’s people really don’t get the fix we are all in. I take that back; the million Americans who have just lost their benefits probably do.  The deficit hawks voted that down without doing anything about the growing deficit of jobs.


43 members of the Congress and the Senate are tinkering with an increasingly diluted financial “reform bill.” Lobbies like the powerful Business Roundtable have pushed the White House to weaken proposed curbs on executive compensation while former Fedhead Tim Geithner is maneuvering behind the scenes to save dangerous derivative trading from too much regulation.

It is for this reason that financial writer Ilan Moscovitz worries about a coming financial meltdown, writing, “one of the biggest contentions remains what to do about the mind-boggling, vast, and opaque derivatives market owned by the nation's too-big-to-fail megabanks. The problem is getting worse. Notional amounts of derivatives held by federally insured banks have risen to more than $200 trillion.”

Hmm…..

And on the corporate crime front, the FBI has busted no less than one thousand plus mortgage fraudsters last week, but has yet to go after the firms that securitized these mortgages and pedaled them with inflated values, or then overleveraged their deals and insured themselves against expected defaults. Most of Wall Street’s financial criminals are still at large.

Gonzalo Lira, writing from Chile, sees a link between BP’s crime against the environment and Wall Street’s crimes against investors, homeowners and workers:’’

“The BP oil spill is part of the same problem as the financial crisis: The BP oil spill and the banking crisis are two examples of the era we are living in, the era of corporate anarchy.

In a nutshell, in this era of corporate anarchy, corporations do not have to abide by any rules—none at all. Legal, moral, ethical, even financial rules are irrelevant. They have all been rescinded in the pursuit of profit—literally nothing else matters.

As a result, corporations currently exist in a state of almost pure anarchy—but an anarchy directly related to their size: The larger the corporation, the greater its absolute freedom to do and act as it pleases.”

In many ways, we have been here before in our one nation under the dollar sign. Economist Gary Gorton of Yale and the National Bureau of Economic Research explains the dark side of a capitalist system that has failed repeatedly:

“Yes, we have been through this before, tragically many times.

U.S. financial history is replete with banking crises and the predictable political responses. Most people are unaware of this history, which we are repeating…..

So, the panic in 2007 was not like the previous panics in American history (like the Panic of 1907, … or that of 1837, 1857, 1873 and so on) in that it was not a mass run on banks by individual depositors, but instead was a run by firms and institutional investors on financial firms. The fact that the run was not observed  by regulators, politicians, the media, or ordinary Americans has made the events particularly hard to understand. It has opened the door to spurious, superficial, and politically expedient “explanations” and demagoguery.”

Today’s well-endowed financial institutions use advertising, PR and media influence to downplay their own responsibility. They spin the news to tell us recovery is just around the corner. Former Bank Regulator Bill Black debunks this view in an interview with Yahoo’s Finance program:

 “It’s in the interest of the financial community to send this propaganda out,” Black says. “It’s remarkable not that they do it but that it still works.”

In other words, this isn’t the first time we’ve been told “the crisis is over” and that “banks are well capitalized” – and probably won’t be the last.The professor and former financial regulator foresees another wave of foreclosures and future bank losses of more than $2.5 trillion vs. the government’s $599 billion estimate.”

Eric Von Berg, a California Mortgage Banker, worries that no new regulations are yet in place. Contrary to many media accounts, he challenges the idea Wall Street is too complicated to be regulated.

”Nuclear power is complicated – We regulate that. Why? Because it can blow up in OUR FACES! But finance is not that complicated. Ask a kindergartner: What is a loan? If you lend a classmate a dollar, you expect him to pay it back. What is loan underwriting? If that classmate is unlikely to pay it back, do not lend him the dollar.

Explain a credit default swap to a kindergartner? You offer a quarter to the friend of the kid to whom you lent the dollar, if he guarantees his friend will pay you back. A derivatives market? You go to your fellow kindergartners and take bets on whether the borrower-classmate will or won’t pay his debt. It is not that complicated. It should not be that hard to regulate.”

The failure to regulate is not just a political failure; it’s a sign of the unchecked power by an economic oligarchy that’s bought up our Congress. They dominate the economy through a process called “financialization.”

The President, who is clearly a corporate booster – and recipient of their largess, is now being spanked by major business media for daring to criticize BP. The usually constrained Economist labels Obama “Vladimir “ (After Putin, not Lenin) for attacking economic oligarchs even though BP’s stock price went up after it agreed to set up a $20 billion dollar fund to compensate victims.

I have often felt alone in suggesting there is major criminality behind the financial crisis. Now, several academics like Brown University’s Ross Levine seem to toying with the idea. He writes, “the evidence indicates that regulatory agencies were aware of the growing fragility of the financial system due to their policies and yet chose not to modify those policies, suggesting that “negligent homicide” contributed to the financial system’s collapse.” Negligent homicide is a capital crime!

He adds, “Thus, the evidence is inconsistent with testimonies before the Financial Crisis Inquiry Commission by Robert Rubin (former Treasury secretary and former director of Citigroup), Charles O. Prince III (former CEO of Citigroup), and Alan Greenspan (former Chairman of the Fed), who claim that the crisis was an unprecedented and unpredictable accident. The crisis did not just happen. Policymakers and regulators, along with private sector coconspirators, helped cause it. …

The evidence indicates that financial sector policies during the period from 1996 through 2006 precipitated the crisis. Either by becoming willfully blind to excessive risk taking or by maintaining policies that encouraged destabilizing behaviors, policymakers and regulatory agencies contributed to the financial system’s collapse. As noted by Senator Carl Levin, “The recent financial crisis was not a natural disaster; it was a manmade economic assault. It will happen again unless we change the rules.”

To their frequent full-page ads, BP has now added a vague phrase of contrition.

“We may not always be perfect, but we will make this right.” Really?

And who will make our economy right?

News Dissector Danny Schechters film and book will be released in April by Disinformation. For more information, Http://www.plunderhecrimeofourtime.com.

    News Dissector Danny Schechter has made a film and written a book on the “Crime Of Our Time.” (News Dissector.com/plunder.) Comments to dissector@mediachannel.org

    © 2010 Copyright Danny Schechter - All Rights Reserved
    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors


© 2005-2015 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Biggest Debt Bomb in History