Obama and the Clintonistas Play Wall Street

"Thank you very much. You've been a great audience."

In general, there does not seem to be strong empirical support for the proposition that derivatives increase volatility in financial markets. Volatility is not higher where derivatives are most prevalent.

Timothy Geithner March 2007 | Credit Markets Innovations and Their Implications

U.S. stocks on Friday surged on a report President-elect Barack Obama would nominate New York Federal Reserve President Timothy Geithner as Treasury secretary. The leap higher in the final hour of trade came on the heels of a two-session freefall and halved the market's weekly decline.

After a volatile session, equities rocketed higher in the wake of an NBC report that Obama would appoint Geithner to head the Treasury Department.

CNN | Stocks Trim Weekly Losses On Word Geithner Will Head Treasury

David Kotok, chairman of the money-management firm Cumberland Advisors in Vineland, N.J., welcomed the news about Mr. Geithner in particular, but he attributed the market rally to relief that Mr. Obama seemed to have made a decision. “The most important thing for the market and for the economy is that these decisions are made and uncertainty is removed,” Mr. Kotok said. “It probably would have been the same rally had it been someone else on the short list.”

New York Times | For Treasury, Geithner Said to Be Choice

Geithner has been deeply involved in virtually every step of the federal government's response to the financial crisis, from the subsidized sale of Bear Stearns last spring to the rescue of American International Group (AIG) this fall.

That experience could stand him in good stead as the Obama Administration takes office amid what is likely to be a bad recession, and possibly a continuing financial crisis. At the same time, it also opens him to criticism by those who say the government's response has been tepid, chaotic, and poorly conceived.

BusinessWeek | Geithner: Obama's Likely Treasury Choice

Mr Geithner has worked closely with outgoing Treasury Secretary Henry Paulson in addressing the credit crisis and finding ways to boost the economy. The 47-year-old played a crucial role in talks with Lehman Brothers before the investment bank went bankrupt. He was also instrumental in the deals involving insurer AIG and JP Morgan, another bank.

The NBC report was enough to counter concerns over the finance sector and in particular the future over banking giant Citigroup, which saw its shares plummet 20% as board members met.

BBC | US shares up on 'Treasury choice'

"The market's message is Geithner is a good choice. He's young, he's intelligent and he's experienced. What this country needs are people who are young, full of energy, and can put in 26-hour days. There's nothing like leverage," said Hugh Johnson, chairman of Johnson Illington Advisors.

MarketWatch | Stocks rally on report Geithner will head Treasury

An avalanche of reports on the economy next week, which will be shortened by the Thanksgiving holiday on Thursday, could also provide further evidence of the depth of the recession. But "there's a possibility that we have a decent week because there won't be many people at their trading terminals," said Paul Nolte, director of investments at Hinsdale Associates.

MarketWatch | Stocks look for respite in holiday-shortened week

Over the past few months, I've been trying to take our Global Economic Crisis (GEC) seriously. In fact, I've gone as far as following the markets — the blue-chip Dow in particular. I've come to realise that there is much that is bent and twisted about the so-called "markets" and that any bearing they might have on economic reality is purely coincidental. Even so, it seems some things follow each other as surely as night does day. Economy down = markets down and vice versa are supposed to fall into this category.

So could somebody please explain to me how Obama's forthcoming announcement that career-thug Timothy Geithner will succeed fellow Dartmouth old-boy King Henry should send a deeply troubled Dow, having lost ten percent of its value through a week spent in an economy destined for the dustbin, soaring 500 points.

Really. I've tried to wrap my head around this one, but can't. All I come up with is:

"Economics as practised on the trading floor is bullshit."

or

"The American capacity to indulge childlike behaviour is infinite."

Nothing else explains it. It seems that if Mr. Obama were to pay the NYSE a personal visit, the economy would experience a Siegessäule Moment — and the GEC would be behind us.

I've bolded several telling comments and acronyms above. They tell their own story — one which, to my untutored mind, is far more revealing than the verbiage in which the words reside.

The BBC article contains a gem of British journalistic wit, i.e. Geithner's chief qualification for the job: "The 47-year-old played a crucial role in talks with Lehman Brothers before the investment bank went bankrupt," deadpans the Beeb.

MarketWatch goes the other way and, in an aside to the Geithner story, offers us this telling insight on Citi's woes from Oaktree Asset Management market strategist Robert Pavlik: "When a major institution has to consider selling itself up or selling assets at a discount value, that's not a good sign."

I wonder what he charges for such analysis.

I've not included in my overview an observation made by that most heinous of tabloids, the Wall Street Journal. On the timing of the "Geithner leak", it opines:

Amid the brief market euphoria, it is hard not to notice the leaks and air of disorganization coming from the Obama transition team on these important appointment decisions. The new President may come to appreciate George W. Bush's experience with lower-tier political players who put their own compulsions above his desire to govern.

Now, everybody knows the Wall Street Journal's a bit past it for a fanatical right-wing dishrag but, c'mon, given its acceptance of the Bush regime's history of planned leaks, how the hell does the WSJ expect anybody to take such a comment seriously?

I suppose they're pandering to the question on everybody's lips these days: "How low can we go?"

Paul Nolte's comment is wonderful. Next week Monday sees reports on October existing home sales. On Tuesday, the S&P/Case-Shiller home price index for September and the Conference Board's consumer confidence index for November are due. Wednesday will see new home sales figures, weekly jobless claims, another reading of third-quarter growth, personal income data, a manufacturing survey from the Chicago region in November, and durable goods orders for October.

But everybody will be on holiday. So none of it matters.

If Nolte's statement doesn't inspire fear, surely that of Johnson Illington Advisors chairman Hugh Johnson, commenting on Geithner's appointment, must: "There's nothing like leverage," he says.

It's leverage that got us into this mess in the first place. Ask the twenty-second banker.

A right-of-centre Obama presidency — highlighting the business-as-usual nature of Geithner's likely nomination and the absurdity of Wall Street's response to it, is starting to look more like a Michael Jackson concert filmed by Disney than a shot at economic recovery.

Really, I give up. It's all beyond me.

Let the band play on. It's a real crowd pleaser.

Credit market innovation does not appear to have resulted in a large increase in leverage in the corporate sector, as some had feared.

Timothy Geithner March 2007 | Credit Markets Innovations and Their Implications

Note: The National Intelligence Council report, Global Trends 2025: A Transformed World, pointed to above, is a 8.5 MB pdf download. You might wish to save the bandwidth. Written by the usual suspects, it reads like Reader's Digest ...

... which this week features president-elect Obama's plan to save the U.S. economy.

Dow closes below 8,000 Nasdaq down 7 percent

Dow closes at 7,997.28

Stocks fell hard on Wednesday as a selloff gained momentum near the close and the major indexes tumbled to 5-1/2 year lows.

The Dow closed below 8,000 for the first time since March 2003 as investor confidence dried up amid ongoing worries about the economy and the future of the auto industry.

The Dow Jones industrial average (INDU) shed more than 400 points to close down about 5%, according to early tallies. All 30 Dow components ended lower.

The Standard & Poor's 500 (SPX) index slid 6% to its lowest level since March of 2003. And the Nasdaq composite (COMP) lost 6.5% to settle at its lowest point since April 2003.

CNN | Dow below 8,000 - 1st time since '03

Massive US trade deficits have been financed by giving up US assets to foreigners, who now own the income flows as well. Budget deficits from 6 years of pointless wars and from unsustainable levels of military spending have helped to flood the world with dollars and to drive down the dollar’s exchange value. Consumers themselves are drowning in debt and can provide no lift to the economy. Millions of the best jobs have been moved offshore, and research, design, and innovation have followed them. Considering America’s dependency on imports, part of any stimulus package that reaches the consumer will bleed off to foreign countries.

Generally, when countries acquire more debt than they can service, they inflate away the debt. If foreign creditors do not save the Obama administration, the Treasury will print bonds and give them to the Federal Reserve, which will issue money.

The inflation will be severe, particularly as Americans will not be able to pay for the imports of manufactured goods from abroad on which they have become dependent. The exchange value of the dollar will decline with the domestic inflation. Once inflation is off and running, the printing press dollars will only have goods made in America to chase after. The real crisis has not yet begun.

Paul Craig Roberts | The Crisis Has Hardly Begun

Trust me ... him. Whoever.

Back in March 2003, when the first U.S. Marine Corp boot crossed the line in the sand dividing Kuwait and Iraq, millions called an end to U.S. hegemony. What we see today was determined back then.

Early in November 2005, mythic former-CIA asset Osama bin Laden proclaimed:

We gained experience in guerilla warfare and in conducting a war of attrition in our fight with the iniquitous, great power, that is, when we conducted a war of attrition against Russia with Jihad fighters for 10 years until they went bankrupt, with Allah's grace; as a result, they were forced to withdraw in defeat, all praise and thanks to Allah. We are continuing in the same policy — to make America bleed profusely to the point of bankruptcy, Allah willing. And that is not too difficult for Allah.

I guess today it's a case of Mission Accomplished.

Alternatively, you could think of it as Dubya's parting shot. He and his fellow travelers got what they wanted. We merely got what we deserved.

Market in Tatters — Dow Bludgeoned to 7553

... by auto dealers without shame.

Ah well, we saw it coming, didn't we? By the bell Thursday, the S&P 500 had plummeted 6.7 percent to a '97 low.

Looks like the chickens are finally finding their flight path. They're coming home in droves.

Cluck cluck ...

Christ, I don't believe it can get any worse than this. Brokers are weeping openly and slashing their wrists on the trading floor. It's embarrassing.

And why the hell is GM still listed on the Dow?

I see FOXNews tracked down Ayman al-Zawahiri (Al Cader's 2iC) for comment on the above. A talkative chap — he lectures Obama at length, he finally reiterates the message from The Man to The American People:

As for my final message, it is to the American people. I tell it: you incurred defeat and losses from the foolish actions of Bush and his gang, and at the same time, Shaykh Usama bin Ladin (may Allah preserve him) sent you a message to withdraw from the lands of the Muslims and refrain from stealing their treasures and interfering in their affairs. So choose for yourself whatever you like, and bear the consequences of your choice, and as you judge, you will be judged.

I'd listen to these buggers. They mean business. When they speak of consequences, they're speaking Chalmers Johnson-type shit. The Dow's looking pretty reasonable right now at 7,550 but you never know ...

Were I The Kenyan, I'd pack my bags and leave Kandahar by morning. It'd be nice to know there's still a global economy worth saving.

Touch and Go ...

Squeezing through ...

U.S. stocks fell Tuesday, with the major indexes headed to their lowest close in more than five years, after a gauge of home building sank, erasing optimism that came as retailer Home Depot Inc. reported better-than-anticipated results.

"My personal bottom line is however the dream or nightmare ends, we're not close to the end yet," said Linda Duessel, equity market strategist at Federated Investors.

After shifting between positive and negative territory, the Dow Jones Industrial Average was off 154.28 points to 8,119.3, putting the blue-chip index on pace to its lowest finish since April 1, 2003.

MarketWatch | U.S. stocks fall, on track to close at five-year lows

Not quite but, at 2:50PM, it looked to be a close-run thing ...

Not that a surge to 8,425 is too difficult to fix in a low-volume market so volatile reporters should know better than to file a story an hour before the close.

OK, the pretense passing for market forces — bearing only a passing likeness to reality, is set for a fall. Lows have been tested and retested and they look anything but difficult to break. (How is it that the market rallies on HP's lowered expectations but ignores some of the most dire reports ever to leave the statisticians' desks?)

It certainly won't require GM going bust to break the already broken back of our global economy and, as Barack Obama leads his merry band of Clintonistas into the corridors of power, he'd do well to listen to Republican Mitt Romney.

GM CEO Rick Wagoner can bleat all he likes, but common sense is stacked against him and the dying city of Detroit. What is it with these people? The U.S. economy has already undergone "... a catastrophic collapse ..." yet US$4.2845 trillion has been spent trying to pretend it didn't happen. That's over and above the US$32 trillion erased from the value of global equities this year.

It's money that — if it existed, might have been put to far better use.

America's "Futurama" is defunct. The famous walk-through diorama of a car-and-suburb world, imagineered by Norman Bel Geddes for General Motors at the 1939 New York World's Fair, has weathered into a dreary emblem of our national backwardness. While GM bleeds to death on a Detroit street corner, the steel-and-concrete Interstate landscape built in the 1950s and 1960s is rapidly decaying into this century's equivalent of Victorian rubble.

Mike Davis | Why Obama's Futurama Can Wait

Killers on the Road

Cape Point

Riders on the storm | Riders on the storm | Into this house we're born | Into this world we're thrown | Like a dog without a bone | An actor out on loan | Riders on the storm

Escaping the city for Cape Point early Saturday, I passed a dead cyclist. His body, lying at the curbside and encircled by police and several civilians, was covered by the ubiquitous white blanket of death. I experienced a familiar sickening lurch; the momentary realization of a life abruptly ended and a black hell of despair befalling an innocent family.

Creslin Attwood, 54, a member of the SuperCycling team, was brutally murdered on the Glencairn Road at 06:00 by a drunken tourist driving a Black VW Polo. Fleeing the scene, the driver almost took out several other cyclists. He apparently handed himself over to the police on Sunday.

Actually, according to this report, he didn't. That should make it murder. And who said he was a tourist? Or a 'he'?

Let's get a couple of things straight. 'Spandex Bullets', training for the Argus Cycle Tour, are a pain. Too many ride abreast and abuse motorists who ask them to get into line. In short, they're a cocky bunch and I don't like them. I mean, why cycle when you can drive? Alternatively, why not walk?

That said, cycling is a major sport and Cape Town's coastal roads offer arguably the world's most exhilarating training routes. Natural-born fetishists, cyclists adorn themselves in the most garish, sickeningly colorful bodysuits imaginable. They're a bloody eyesore, stick out a mile and, no matter their misbehavior, there is no good reason — bar out-and-out accidents, to hit them.

Unless it's proved otherwise, I assume the driver of the Black VW Polo did not have good reason to kill Creslyn Attwood. Clubs and bars disgorge their drunken patrons in the early hours and, with the traffic police sleeping late, death reaps a rich harvest Saturday and Sunday mornings. I assume our errant Polo driver was drunk, stoned, asleep, or a mix of the three.

I travel that road most weekends and I do not drive slowly. There is a speed limit and I stick to it — most of the time. Moreover, the road on which Creslyn was killed — outside Dixie's, allows me to. It's broad, enabling cars to overtake each other while cyclists drive abreast. Driving defensively, one should not be involved in an accident unless it's a head-on collision.

Had Creslyn's killer handed himself in, he'd probably have been found guilty of culpable homicide and fined ZAR3,000. That's US$300. Life is "cheap" in Cape Town.


Cape of Good Hope

There's a killer on the road | His brain is squirmin' like a toad | Take a long holiday | Let your children play | If ya give this man a ride | Sweet memory will die | Killer on the road, yeah

All I can do is hope that Creslyn's family comes to terms with his death as soon as possible and that they are supported by friends now and in the future. I doubt they could give a toss about what happens to the driver. It won't bring Creslyn back.

What troubles me more is the road rage I experienced inside the Reserve.

Conditions need to be ideal to visit the caves beneath Cape Point. If you don't know the walk, don't do it. An incoming tide and an inadequate knowledge of the ledges will see you trapped. Even a walk that beautiful doesn't warrant R10,000 or R20,000 in rescue fees — around six times the probable financial value that will be attached to Creslyn Attwood's life.

A small swell, spring low tide, and some cloud cover suits photography best. The sun was out but, what the hell, I wanted to see how winter's storms had altered the coast. They'd changed it appreciably. The coast has been stripped of sand and the boom of the wreck of the Shir Yib, an Iranian barge that went aground in the mid-70s, has been flattened by falling rocks.

The shore's a dangerous, rock-strewn mess; but with the tunnels beneath the cliffs having been cleaned out by the sea, it's a beautiful mess.

The two most precarious transit points on the short walk from Dias's Beach have been made more so by the sand's erosion, i.e. immediately before and after the wreck. More, as I discovered the weekend before, Dias Beach has had the sand gouged from it at the Cape Point end, creating a steep dune drop to the sea.

On the other side, you can walk up to Cape Maclear and across to the Cape of Good Hope — there's a beautiful cove, densely birded, on the way.

I left the Point around 15:00 and, having had the good karma washed from me by the hordes of tourists atop the cliffs, headed for the gate. From the Point, I was followed by a white VW Golf which, like me, was traveling with its lights on. Right up my exhaust.

Bugger it. I was doing 60 km/h and this was, after all, a national park. This guy wanted to go faster and I wasn't going to let him. Especially after what I'd seen in the morning.

On the stretch past Buffelsfontein, I upped my speed to 80km/h and readied my camera. The Golf overtook me on a curve and there was no way I could get a picture. Angered, I followed it from the top of the Smitswinkel Flats to the Olifantsbosch turnoff at 100km/h but the driver picked up speed all the way.

Heading up to the Smitswinkelbaai lookout, he overtook a tourist bus on a blind curve and disappeared.

I felt an asshole. Here I was, in Cape Town's most sacred place, traveling 100 km/h. I still feel bad about it. Had a buck, ostrich, baboon, tortoise or anything else crossed the road, either the Golf driver or I would have hit it. But I badly wanted a picture of that car.

I wanted that guy banned from the reserve.

Because such people — people like me, who occasionally lose it — kill people like Creslyn Attwood.

Girl ya gotta love your man | Girl ya gotta love your man | Take him by the hand | Make him understand | The world on you depends | Our life will never end | Gotta love your man, yeah

The Doors | Riders on the Storm

Note: I stopped riding a bicycle about fifteen years ago. One morning while riding to work, a large truck brushed my elbow. I decided to call it a day. I'm also the guy who "thinks bike". Having ridden a motorcycle some twenty to thirty years ago, I watch for bikes in my rear-view mirror and pull over for them — enjoying the thanks and recognition of a raised gauntlet. Also, I see too many wrecks on my way to and from the Point, both cars and motorcycles. Our roads are fucking insane. Nevertheless, like those who drive without a thought for the driver in front of or behind them, I'm not immune from the odd rush of blood to the head.

I'd like to think Creslyn Attwood did not die in vain. Tens of thousands of cyclists remain out there and all should complete the Argus Cycle Tour. For that, we're responsible.

AIG Execs Party On ...

The money pit ...

Even as the company was pleading the federal government for another $40 billion dollars in loans, AIG sent top executives to a secret gathering at a luxury resort in Phoenix last week.

Brian Ross investigates the insurance giant's "seminar" at a posh resort.
Reporters for abc15.com (KNXV) caught the AIG executives on hidden cameras poolside and leaving the spa at the Pointe Hilton Squaw Peak Resort, despite apparent efforts by the company to disguise its involvement.

"AIG made significant efforts to disguise the conference, making sure there were no AIG logos or signs anywhere on the property," KNXV reported.

A hotel employee told KNXV reporter Josh Bernstein, "We can't even say the word [AIG]."

A company spokesperson, Nick Ashooh, confirmed AIG instructed the hotel to make sure there were no AIG signs or mention of the company by staff.

"We're trying to avoid confrontation, keep our profile low," said Ashooh. "Some of our employees have been harassed."

ABCNews | Another AIG Resort "Junket": Top Execs Caught on Tape

The above records this past weekend. A bit of background...

AIG has been in the hot seat since a few days after the federal government committed $85 billion to bailout the company, when it was revealed that the company spent $440,000 for a week-long retreat at a luxury resort and spa.

Still battered by that outrage, AIG later called off plans to hold a second retreat at the exclusive Ritz-Carlton Resort in Half Moon Bay, California. It was reported today in the "New York Daily News" that AIG executives spent $86,000 on a partridge hunt in the English countryside the same week that AIG got a second bailout loan of $37.5 billion.

Cuomo's office sent a cease and desist letter to AIG, ordering them not to use taxpayer funds to take any more trips.

ABCNews | 'The Party's Over' for AIG Says Cuomo

"Fuck Cuomo," say the fat cats at AIG.

American International Group Inc.'s losses from the collapsing mortgage market account for almost half the $123.6 billion inflicted on North American insurers, helping push the tally for the world's biggest financial firms toward the trillion-dollar mark.

AIG, which posted a record third-quarter loss yesterday, accounts for $60.9 billion of the writedowns and credit losses. Bond insurer Ambac Financial Group Inc. is second among the insurers with $10.6 billion, and life insurer MetLife Inc. is third at $7.2 billion. The industry losses are three times as costly as Hurricane Katrina, the worst natural disaster in U.S. history.

Bloomberg | AIG's Losses Lead Insurers as Tally Nears $1 Trillion

What does Paulson do for his buddies? He gives them a further $27 billion. Go figure ... you Americans are crazy.

GM and Chrysler Chapter 7 Candidates

Bankrot ... Photo: Google Images

As GM and Chrysler idle plants and facilities, more employees are laid off the employee related liabilities of GM/Chrysler will increase by hundreds of millions. Since GM and Chrysler are insolvent, who will pay these increased costs? Can any of these costs be avoided in a Chapter 11 case of Chrysler or GM?

The Truth About Cars | Why the GM/Cerberus/Chrysler Bailout is bad for taxpayers and doomed to fail without the benefits of a Chapter 11 filing for both Chrysler and GM

Part of an analysis sent TTAC by "... a New York City bankruptcy lawyer who wishes to remain anonymous," the above editorial argues for GM and Chrysler to file for Chapter 11 bankruptcy before they and the dubious Cerberus Capital inflict further damage the U.S. economy.

The assessment is logical but, bearing Delphi in mind, why Chapter 11? These companies, kept alive by a sentiment worthy of Hallmark, are finished.

The Delphi case is raised by a commenter. It's well worth reading.

Chapter 11 calls on management to bargain with unions in good faith to reduce costs, but also permits management to petition the court to void labor contracts and substitute whatever terms it chooses. Properly stage-managed and set in motion, the restructuring process can steamroll the union, peel away retiree benefits and dump pension obligations onto the PBGC.

That's exactly what happened during Miller's 19-month tenure as chief executive of Bethlehem Steel. Some 95,000 retirees and dependents lost their health-care plan in 2003 when the bankruptcy judge sold the company's assets to International Steel Group, a company controlled by billionaire financier Wilbur L. Ross.

Mark Reutter | How Chapter 11 is demolishing Employee Expectations

Read that again. Yep ... Chapter 11 is the Fat Cat's Bailout or Exit Strategy. Employees get stiffed. And, in Detroit, with the UAW's motives being called into question, the Venture Vultures and their hitmen are circling.

Should the remains of GM and Chrysler approach the courts with a view to a merger, Chapter 11 (meaning 35,000 layoffs translating to 5 times as many jobs in the broader economy) should not be allowed on the table.

These are not companies "too big to fail." They have failed. And should file for Chapter 7. At least the many hundreds of thousands then laid off — rather than the bloated members of management — retain some claim on their retiree health care benefits and severance packages.

Mark Reutter's site lends great weight to Naomi Klein's words:

Now that the election has been won, this movement's new missions should be clear: loudly holding Obama to his campaign promises, and letting the Democrats know that there will be consequences for betrayal.

Naomi Klein | Real Change Depends on Stopping the Bailout Profiteers

So, go ahead. Force their hand.

The End of Kakistocracy

The End of Kakistocracy

One way or another, South Africans understand your feelings on this one.

Trust me.

Left Behind - Again

Obama's economic advisers have included former U.S. Federal Reserve Chairman Paul Volcker, University of Chicago economist Austan Goolsbee, former Clinton White House aides Jason Furman and Gene Sperling, and Clinton-era Treasury Secretaries Robert Rubin and Larry Summers. Speculation will now turn to the shape of Obama's Cabinet, with particularly keen attention focused on the selection of a Treasury secretary to replace Henry Paulson, economists said.

Media speculation has centered on a range of potential nominees, including New York Federal Reserve Bank President Timothy Geithner and J.P. Morgan Chase CEO James Dimon.

MarketWatch | World awaits Obama's response to economic woes

Ok, so The Rapture has come and gone. George W. Bush and the 200 million or so who — at some stage before changing their minds — sailed with him, have flown off to savor the fruits of their ill-gotten gains.

We're left with a world trashed by ignorance, malice, and ineptitude. As a species, we remain riddled with uncertainty, fear, and our perennial favorite, greed.

Things have never looked so grim.

Except, of course, for the election of Barack Obama to the U.S. presidency.

Make no mistake, this is what we in the trade call a very good thing. Obama lends value to the maxim "Cometh the hour, cometh the man." He is now, as so many African American comedians bemoan, The Man. He offers hope, clarity, intelligence, insight, and stability.

So what's the first thing we ask of him? Before he takes over the presidency?

"Fix the economy. Or else."



From the global economic meltdown to war, we have to find a new way. This is a rare moment when party lines are breaking down. Yet if Obama buckles to the corporate lobbyists, how will his passionate supporters pressure him? They have built a historic campaign operation—but they don’t control it. People need strong, independent grass-roots organizations to effect genuine, long-term change. This is how movements are built. As Obama heads to the White House, his campaign organization needs to be returned to the people who built it, to continue the community organizing that made history.

Amy Goodman | Organizer in Chief

No wonder The Rapture was too good for us. Barack Obama ain't ever gonna fix an economy that has as much chance of recovery as our dear, nearly departed friend, Ariel Sharon. And we are going to burn in Hell, with Arik and the equally fast-decomposing economy, if we continue to make such demands of the American president-elect.

The U.S. president's job is to serve and uphold the Constitution. In short, and contrary to everything achieved by George W. Bush, his job is to not break anything or allow anything to be broken.

To carry out the latter duty, he appoints a Cabinet or administration.

And this is where MarketWatch's article highlights the potential for an early misstep by the incoming U.S. president. A product of the plutocracy, he is now — to use a good Anglo-Saxon phrase, deep in the mire. Check out the names punted for Treasury Secretary.

Paul Volcker. Robert Rubin. Larry Summers. Timothy Geithner. Jamie Dimon.



The surest way to destroy the economy is to hand over control of the financial system to investment banks and speculators. That's what transpired before the Great Depression and Wall Street has restaged the same coup today. By overturning critical market regulations, the investment alchemists have created a toxic stew of exotic debt-instruments, shadowy off-balance sheets operations, and opaque derivative contracts, all designed to avoid prudent capital requirements.

Mike Whitney | Obama's Little Red Book

This is what's left after Sarah Palin leaves the room? We must surely be in Hell. I'd sooner have Tim LaHaye as Treasury Secretary than any of these fools.

Face it. The euphoria following Obama's election had more to do with George W. Bush's demise than it did with the candidate's individual, undoubted brilliance. He cannot 'fix' the economy (as so many have worked for so long to do). We're in for four or five years of economic misery and grinding poverty.

Starvation and Depression-era unemployment loom.

What Obama can do, is put a few of his brighter economic prospects to work — perhaps Austan Goolsbee, Jason Furman, and Gene Sperling are equal to the task — so that, when the 81-year old Volcker turns up his corrupted toes and the 70-year old Robert Rubin starts peeing on the carpet or drooling on the balance sheet, they can step in.

As for Geithner, Summers, and Dimon... well, he can just take them outside and shoot them. Why not? Until recently, some of the U.S.'s best friends engaged in such sport.

Look at it this way. The American people are not going to precipitate or participate in any revolution, so it has to come from within the ranks of the ruling elite. With Obama's appointment of Chief-of-Staff Rahm Emanuel, an affable-but-hardcore Zioncon and deal maker (he voted for the invasion of Iraq), it's unlikely the new elite will be asking Obama to upend the system anytime soon.

Rahm's reputation is deservedly that of an 'enforcer'.

And, yeah, isn't that dear old Madelaine Albright — yet another Council on Foreign Relations graduate, ducking into that doorway over there? As for the rest? A team is taking shape and things are looking good.

So it's back to business as usual ... for now.

There is a better way to fix a broken financial system. ... The possibilities of what could be done if a chunk of the banking system were genuinely under public control — from a moratorium on home foreclosures to mandatory investment in green community redevelopment — are limitless.

Because here is what George Bush and Henry Paulson are hoping we won't figure out: When a society no longer has enough money to pay for its most pressing needs, there are worse things than discovering you own the banks.

Naomi Klein | The New Trough

Fuck the Crackers

Thanks to Zo, Frank, and Brian

You do realize 60 million cretinous retards voted Palin—McCain?

They're being divided into groups of two million and will be dispatched to rebuild countries their dumb arrogance destroyed.

Thereafter, they'll be shipped to the DRC for a ceremonial genocide we'll swiftly erase from the records.

Nah... for now, God bless America and all those who elected Barack Obama their president.

And remember ... given a fast-tanking global economy, we've more than enough time to crucify The Kenyan and Lunchpail Joe should they not perform.

Spider Bait

The Web of Debt ...

"Secretary Paulson, out in the real economy, the unbridled pursuit of greed that you and your friends on Wall Street have celebrated as a national religion has taken a terrible toll on ordinary Americans. Jobs with stagnant real wages have now given way to massive lay-offs, home foreclosures and real suffering."

Leo Gerard (USW) | Letter to Treasury Secretary Henry Paulson October 28, 2008

The shifting of the political "site of struggle" from the bloodied sands of Mesopotamia to Wall Street was accompanied by a growing realization that the global economic crisis is far graver and more complex than many of us care to admit — but the solution far simpler.

However, economic illiteracy obscures both the problem and its solution.

If you read one book over the next year, choose The Web of Debt. Should you find yourself changing one or two misperceptions, you'll find Ellen Brown's skilfully researched reportage from the front lines of the global economy changing your view of economics radically and unequivocally.

The nut of it? We've fallen lock, stock, and barrel for one of the simplest, oldest, most dangerous, and frequently-practiced con tricks of all time.

Put simply, a private elite is charged with issuing money — created out of nothing — to the public and private sectors, for which it charges interest (not issued). The result is a dog-eat-dog world in which income disparity, scarcity, and the absolute concentration of wealth are inevitable. Bailouts of the uber-wealthy banking fraternity are not new and a derivatives collapse, worth several hundred trillion dollars and against which there is no insurance, looms.

In short, if you think the past few months have been rough ... When it comes to money, regulating a private sector given carte blanche to legally create its own wealth at the expense of others ain't gonna cut the mustard.

The scam is as blunt as it is craven. Rigging, fixing, and manipulation are entrenched, pandemic, pervasive and legal — infecting every part of the system. Share and gold prices will never again behave rationally.

Not for nothing is the current contrived charade posing as an economy derided as a Ponzi scheme. Yet, because we fail to question or do anything about it, it's hidden in plain sight. We are living in a cocoon of self-delusion and that's something for which we cannot blame the banks, the government, the economists, or the stockbrokers.

They have not deceived us. We have built our castles in the air and, a long time ago, decided to take up permanent residence. They're merely collecting the rent. We have conned ourselves and sought refuge in denial.

It's time to wake up and move beyond calls for Roosevelt-style New Deals to systemic change. Will Obama go the distance? It's not his call. It's up to the American people and central bankers worldwide to salvage a fundamentally sound infrastructure from the terminal folly of fiscal fools.

The author of Forbidden Medicine, Brown's remarkable work — unashamedly draws on the likes of Von Mises, Hayek, Rothbard, and LaRouche¹, runs to 500 pages but, covering every rejoinder she might encounter to proposed solutions, it is current, immediately relevant, and reads as easily as a novel.

There is a way out of this mess — and it does not include cooperatives and credit unions, which do not address the interest problem; but it demands economic literacy (which this book provides in great measure), a willingness to take on the most powerful vested interests in the world, and the fortitude needed to endure changing to an equitable, sustainable system.

The good news? As it stands, and epitomized by the private Federal Reserve, much of the dysfunction tacked to the present system has been around less than a century — the 1913 Federal Reserve Act formed a tipping point. It forms a mere blip on the history of economics. Its solution, wholly American and capitalist — refining age-old European economic practices, was the norm in saner times.

Better still, it worked (you can blame the Brits and the gargoyles of Wall Street — watering away the wealth of taxpayers, for its disastrous demise).

It's time to spread the wealth.

¹ On making a couple of references to the controversial Lyndon LaRouche (an undoubtedly brilliant but morally repugnant man), Brown comments:

"On LaRouche, I'm neither a supporter nor a detractor; I'm just a researcher, reporting what I read that seems interesting and worth repeating, and his researchers have some of the most interesting material available on the subject, as you acknowledge."

To her credit, Brown's research rigorous and all-inclusive shows neither fear nor favor. She eschews embellishment and partiality to 'tell it like it is'. Our practice of economics, underpinning our daily reality, is far stranger and infinitely more terrifying than any fiction.

Note: If anyone can point to comprehensive reviews by recognized economists criticizing or highlighting technical or substantive shortfalls in The Web of Debt, please send me the links. I doubt there will be many. It'd take a sage or a fool to argue the veracity of the fundamentals espoused by this most necessary antidote to the malignant tumor destroying our global economy.

"And perhaps the most important, there's been — the Fed in 1989 created what is called the Plunge Protection Team, which is the Federal Reserve, big major banks, representatives of the New York Stock Exchange and the other exchanges, and there — they have been meeting informally so far, and they have kind of an informal agreement among major banks to come in and start to buy stock if there appears to be a problem."

Clinton economic advisor George Stephanopoulos [September 17, 2001]

OBL?

The Rising ...

The great farce of the GOP, which soon became the tragedy of the nation and the world, was to actually govern. They would have been so much better off to retain their natural role as carping cranks, spreading disinformation at every turn, making up scandals for the other guys, proliferating and hiding their own, occasionally impeaching presidents. But they made the mistake of actually seizing power, after which an entire world could see what they’re really about, the destructiveness of their policies, their breathtaking arrogance, as well as their astonishing incompetence at providing for the basic functions of governance.

Obama By Landslide (OBL for short) is, satisfyingly, on the cards. That Barack Hussein Obama will front the massive tide sweeping back the regressive faces of a putrescent regime supported and populated by war criminals pleases me no end.

Why?

I like the guy. He has a pleasing manner, a balanced outlook, and is extremely intelligent. More, having carried the prospect of the presidency with such grace and ease, one suspects he was born to lead.

How the hell the farce that has played out in the media can be spun as a democratic election is beyond me. Palin and McCain were never in it. They made a mockery of electoral politics, offered no opposition whatsoever, and contributed only in that they fed the money-and-resource guzzling addiction of the sick and sordid.

As a stand-in for electoral opposition, the Palin-McCain ticket has been thoroughly unpleasant, insulted global intelligence, given Americans a bad name, and has served only to remind us how dumb Joe the Plumber and his compatriots are.

And if anybody had any doubts as to whether Palin was a joke in bad taste, she's finally dispelled all such doubt.

It's also highlighted, in small part, just how much damage has been inflicted on the globe by a criminally murderous and rapacious Republican regime over eight years.

More of the same? I think not. Were McCain to take it, the U.S. and other economies would disappear overnight. The world has tired of business as usual and demands change.

Is Obama a change for the better? Yes. Superficially so, but yes he is. Think Bill Clinton before Ken Starr. Think Clinton during his 100-day honeymoon. It was all good news from the networks then and, while we can't expect the same result (a budget surplus), the demise of a carping, bitching, and whining radical right will prove as much change and deliver as much benefit as a much-needed holiday.

Beyond style and presentation, who knows?

Obama faces a changed government confronting an economy that has, despite fictive Wall Street rallies, flatlined. (I'll take a side bet on Paulson pulling down the markets before he's run out of town — if, indeed, he is.) How the hell can the fiction papering the pretense be sustained for another four years?

It can't. The U.S. has done everything but renege on repaying its foreign debt and even that can't be too far off.

Facing a better-informed electorate and a more intelligent and discerning constituency, Obama knows he has to fix a financial system beyond fixing. Is he capable of turning the infrastructure bequeathed him by a gutted fiscus and increasingly rabid fractional-reserve banking system into a working, solvent, and growing economy?

I think he is. However, whether he's willing to take on those benefitting from a system impoverishing 95 percent of the world's population, only time will tell.

For now, though, forget any thoughts of a honeymoon. Time's not on his side.

I suppose we can’t entirely blame them for their own self-destruction. I mean, who knew that imploding economies, drowning cities, oceans of debt, disastrous wars based on lies, alienation of centuries-old allies, dismantling of Social Security, falling worker salaries, rising costs, diminishing healthcare, a massive terrorist attack while the president was on vacation, the national shame of torture, or catastrophic environmental disaster – who knew these would be unpopular policies?

David Michael Green | The Implosion of John McCain and the Demise of the Regressive Right

By the by, this post is for those who — like Frank Paynter and Tamar Jacobson — have been used their blogs to relentlessly punt the Obama-Biden ticket because they know Americans are better than the twisted remnants of the GOP.

From Moscow to Melkbos to Melbourne, thank you.