Best of the Week
Most Popular
1.UK House Prices BrExit Crash NOT Likely Despite London Property Market Weakness - Nadeem_Walayat
2.BrExit Morning - New Dawn for Britain, Independence Day! - Nadeem_Walayat
3.LEAVE Wins EU Referendum - Sterling and FTSE Hit Hard, Pollsters, Bookies and Markets All WRONG! - Nadeem_Walayat
4.BrExit Implications for UK Stock Market, Sterling GBP, House Prices and UK Politics... - Nadeem_Walayat
5.Trading BrExit - Stocks, Bonds, Sterling, Opinion Polls, Bookmaker Odds and My Forecast - Nadeem_Walayat
6.FTSE and Sterling Brexit Trading, Deconstruction of the EU Referendum Result - Nadeem_Walayat
7.UK Interest Rate Cut to 0.25% Imminent and More QE Money Printing - Nadeem_Walayat
8.Trading BrExit - British Pound Plunges, FTSE Stock Futures Slump on LEAVE Shock Referendum Win - Nadeem_Walayat
9.The Stock Market is Reading it Wrong! - Chris_Vermeulen
10.Breakouts Galore in Gold and Silver - Jordan_Roy_Byrne
Free Silver
Last 7 days
Gold and Silver Bull Phase 1 : Final Impulse Dead Ahead - 30th July 16
SPX Stock Market Uptrend Resumes - 30th July 16
Gold And Silver – Merkel: Example Of How Clinton Is A Globalist Puppet - 30th July 16
Some Thoughts at the Stock Market Mountain Top - 30th July 16
Gold Stocks Benchmark Battle - 30th July 16
Top 10 Pokemon GO Playing Tips, Tricks and Secrets! - 30th July 16
Asset Bubbles Tend to Crash with a Vengeance - 29th July 16
Retirees Are Risking Their Life Savings on Junk Bonds - 29th July 16
The Next Recession is Coming - Expect Around 0% Returns for the Next 7 Years - 29th July 16
SPX is Shaking and Rolling - 29th July 16
Stock Market Insiders Are Secretly Selling, Cycle Top Next Month - 28th July 16
FOMC Interest Rates and Their Impact on the US Economy - 28th July 16
The State Of The Economy - 28th July 16
Elliott Wave Crash Course - 3 Ways the Elliott Wave Principle Enhances Your Trading - 28th July 16
Japan's "Helicopter Money" Play: Road to Hyperinflation or Cure Debt Deflation? - 27th July 16
Monetary Zika - The Insidious Nature of Credit Expansion - 27th July 16
Gold and Pork Bellies - 27th July 16
Silver Is Insurance Against The Worst Part Of This Depression - 27th July 16
Don’t Buy The SPX Hope Stock Market Rally! - 27th July 16
Bitcoin $650 Still in Play - 26th July 16
Deutche Bank Stock Price Crash - The EU Has Problems Far Beyond the Brexit - 26th July 16
The Forex Markets Are Getting Exciting! - 26th July 16
Underpriced Silver Is the “Rip Van Winkle” Metal - 25th July 16
Declines in Multiple Market Indexes - 25th July 16
Retailers Are Doomed as Most Americans Are Too Poor to Shop - 25th July 16
Here’s One Currency That Could Go to Zero - 25th July 16
Stock Market Top is Expanding - 25th July 16
Silver Manipulation – Because They Needed the Eggs - 25th July 16
Silver Market COT Stuns: What's Going On Here? - 24th July 16
Gold Demand Remains Stable During Sector Weakness - 24th July 16
Sernova, Diabetes and Haemophilia - 24th July 16
Russia: Tensions, Turmoil, and Western Hubris - 24th July 16
Soybean Commodity Price to Soar Again - 23rd July 16
SPX Stock Market Uptrend Continues - 23rd July 16
Gold And Silver – Debt Addiction Will Carry Precious Metals Higher, Guaranteed - 23rd July 16
Pokemon Go - How to Play, First Use, Balls, Stops, Catching Pokemon's... Great Excercise! - 23rd July 16
7 Signs That the Gold Market Remains Resilient - 23rd July 16
Basic Income in The Time of Crisis - 23rd July 16
Silver Bull Faces Correction - 22nd July 16
The Serious Warning No One’s Talking About - 22nd July 16
Stock Market Insight from Greed, Volatility, and Put/Call Ratio - 22nd July 16
What Will Happen To the Stock Market When Interest Rates Rise? - 22nd July 16
How to Escape the World’s Biggest Ponzi Scheme - 22nd July 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Power of the Wave Principle

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


© 2005-2016 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

Catching a Falling Financial Knife