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Published Monday through Friday about 8 AM Central Time Except Holidays

 

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Bank Bailout Breakdown?

Barney Frank says it's a battle between factions of the GOP that's keeping a bailout deal from being struck.  

 

The headlines from places other than US MSM are that the proposed "US bank bail-out breaks down", "Wild Day, No Deal",  and even domestically, "Obama, McCain say no deal yet on financial -markets rescue plan".  But Wait!  Notice that phrase?  Follow along here...

 

CorpGov/MSM Spin

I was shocked this morning at how the linguistic spin is being ratcheted up by the corpgov/MSM  It's as though the major (under-the-corporatist's thumb) media have almost universally started referring to the "bail-out" as the "financial rescue plan".  The more accurate, but emotionally hotter term "bailout" is being banished by the bankster's buddies & buffoons.

 

IF you ever had any question as to whether you were watching a news operation that would give a balanced and fair assessment of things, all you need to do is notice whether they call this a 'rescue plan' or a 'bail out'.  If they are not using the term "bailout", I reckon they have been 'sold' the idea that Americans need to be led by the the folks who have hijacked the Constitution.

 

If the Constitutional humans that are supposed to be in direct control of America (as opposed to the 'corporate entities' NGO's, lobbyists, and other corporate minions,) ever actually kick/vote/or maneuver the money-changers out of the temple democracy, remember who was spinning you to support a hurry-up high dollar "rescue plan", eh?

 

We'll just watch Google's news search engine.  This morning, "bailout" has 129,656 hits (you can check it yourself, as results may vary by which Google server you hit possibly, while "rescue plan"  had 34,174 hits.  That's a total of 163,830 'hits'.    My back-of-the-envelope theory suggests the Google News Search engine can be used as a "truth detector" for some things.

 

Now that we've made a note of it, let's see how things score along toward the end of next week.

20.8954% of referencing is to "rescue plan" presently.  Corpgov 'spin doctors' being what they are, I wouldn't be surprised to see something like 25% to 30% given a week for them to gear up their campaign, apparently thinking that people will remain almost universally unaware that it's how imagery is 'sold' into your head at a preconscious/unchallenged level that the MSM controls your beliefs down at a level you're not aware of.

 

Unless you hang out around here, of course.

 

Shotgun Marriage Department: WAMU This Time

Uncle Sam has brokered a deal for JP Morgan to buy assets of Washington Mutual.  WAMU has been at the financial wall for weeks - and the cool thing about this is that it prevents WAMU from drawing down the funds out of FDIC if I'm following the plan correctly.  FDIC may need a $150 billion bailout itself. 

 

Limited Freedoms Department

Information/Freedom advocates "...Demand Congress put bailout details on Internet" but you know that bank- room deals just don't work that way.  Still, daylight democracy sure sounds like it would be compatible with the Constitution we used to enjoy in America back when it was unimpeded by Executive Orders/ Executive Limitations...

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"No to all incumbents" - that's the ticket I'm voting this year.  Figure a bunch of greenhorns couldn't be much worse than what we've got now...

 

Ford, Dylan and AAFCPS

The conversation with my friend The Bond Dude was more instructional than usual Thursday.  He put a lot of items on the table that are going by largely unnoticed in the mainstream financial press, mostly I suppose because the financial press doesn't manage 10 digits to the left of the decimal point for a living, and thus innumeracy runs amok as a disease among financial "reporters"..

 

"You can see quite clearly how the Big Spin is going," he began.  "For one thing, the republicans will be long gone when the actual consequences of the bailout package/mess comes home to roost on the average American household, so quite cleverly the republicans are going to 'let' the democrats call it the democratic bailout plan and from the perspective of the future, it will be republicans getting off with no harm, no foul..  Cute, huh?"

 

I had already been wondering why the democrats didn't just form up in a long solid unbreakable alliance and simply refuse to let the advocates of Wild West Capitalism/ Cannibal Finance just clear the table on their own by having the decency to just sequentially go bankrupt and leave us the hell out of their games.  Now, it was coming clear since both parties suck from the same corporate checkbooks when push comes to shove...

"You still there?"  The phone was still to my ear - I was still grinding through the sociopolitical (or was that political pathology of the crisis) intrigue.  "...uhhh...yeah...go on," I stammered.

 

"OK, next thing:  You see how the republicans are trying to drag out everyone who was a democrat who ever got near any of this, even going back to Clinton in 1999?  Well, that's part of the big lie, too.  You know why?  I'll tell you:  The whole portfolio of Fannie and Freddie turns over about every five years - so going back to even 2003 is a stretch...but most people don't know this.  It's just the ugly end of trickle-down economic theory."

 

That got me to thinking about setting up a new think tank which I've been tentatively thinking about called the "Project for a New Broke American Century" as the sequel to the first round of misguided whateverism.  "Focus George," I told myself...

 

"Here's the thing:  You remember the Tennessee Ernie Ford song 16-tons?  'You load 16-tons, what do you get?  Another day older and deeper in debt..." right? That's where we are now:  Things are so tight that the American worker can't load any more than 16-tons, yet this bailout stuff is going to push people to produce more - maybe 20-tons - and there just is nothing more to produce so whatever the deficit is will eventually have to come out of stockholders and equity - and there will be all kinds of screaming as that sets up..."

 

"So what does that mean for the Country?"

 

"Oh, Bastille Day comes to mind.  Look, we're already at the point where people are being told 'let them eat cake' by their elected "leaders" - what do you expect them to do?

 

"Bob Dylan?" I wondered - thinking back to "Like a Rolling Stone"  The lyrics, how did they go?  Something about Bob Dylan as a latter day Nostradamus writing...

"Princess on the steeple and all the pretty people

They're drinkin', thinkin' that they got it made

Exchanging all kinds of precious gifts and things But you'd better lift your diamond ring, you'd better pawn it babe

You used to be so amused At Napoleon in rags and the language that he used

Go to him now, he calls you, you can't refuse

When you got nothing, you got nothing to lose

You're invisible now, you got no secrets to conceal."

"Hey, I've gotta go..."  The Bond Dude doesn't have too much time these days -- Most of his folks are still wading into the repricing of old LEH paper, a task bound to go on for weeks to come, and as explained earlier, because there aren't enough 'third parties' to handle all the paper that an AIG or other big failure would cause, no more could be allowed.

 

"You serious about Bastille Day/French Revolution stuff?"

 

"It's happened before.  Look:  I had a math teacher once who used to write in big letters on the blackboard 'AAFCPS' - you know what that means, right?"

 

"What's that mean?"

 

"As Any Fool Can Plainly See.  I gotta go..."

 

To Our Illiterates In DC Department

Hard to get much better perspective than Thomas Jefferson's letter to Treasury Secretary Albert Gallatin in 1802:

“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

But who is Washington these days is listening to wise Jeffersonian counsel? "When the government fears the people there is liberty; when the people fear the government there is tyranny."  Now THAT'S a President.  Seems to me Jefferson ddn't need waterboarding, Patriot Acts, or what amounts to a line item veto of the Constitution with Executive Orders....

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I am so old I remember when being called a Republican was not the worst possible insult imaginable.  The second worst insult these days is being called a Democrat.  Me?  I'm more of an  American Whig Party thinker:

"In particular, the Whigs supported the supremacy of Congress over the Executive Branch and favored a program of modernization and economic protectionism. Their name was chosen to echo the American Whigs of 1776, who fought for independence, and because "Whig" was then a widely recognized label of choice for people who saw themselves as opposing autocratic rule."

Being a Libertarian is about the next best thing, but in neither case is an insult implied as in the former two.

 

Let Our Illiterates, II

In case you haven't seen it, three Nobel Prize laureates and a couple of hundred other economists have sent a petition to Capitol Hill urging CONgress to go slow and be methodical on the bail-out measures.  Wonder if anyone will take the time to read it....

 

There Goes "Our" Energy

"Venezuela to book crude oil exports to China by 25%" says a headline.  The question reduces to is whether with the Russia ship (and possibly submarine) visit to Venezuela going on, are Russia and China competing for presence in resource-rich South and Central America (China more or less owns the Panama Canal now) or are Russia and China cooperating in just the same way the NATO countries are cooperating to expand their influence east toward Russia?  An incredibly important strategic question to keep an eye on.  One driver: The birth rate of Russia plummeted during the post Soviet 1990's...
 

Iran Bombing Sought

No question about what's ahead - just a matter of when more than anything as "Israel asked US for green light to bomb nuclear sites in Iran" this past spring.  Now, with the US approving the sale of bunker-busters to Israel, I expect the answer will be different once Israel gets its government in shape .  A war with Iran might be a good 'spinner' to get American's attention off the bailout and bankster holdup now in progress. Unless you're in Iran, of course.  Then again, you-know-what happens.

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By the way - a year or two back I mentioned my assessment that Israel had as many as 250 nuclear weapons?  Well, here's an article that says 100 to 200 may be closer.  I'll stick with my guess, though.

 

Money Saving Crime Fighters

Police in Palm Bay Florida may stop responding to certain kinds of crimes as a budget saving measure.  If the next year or two goes as I expect, this is only the far-distant leading edge of the kind of reductions in local services that will become epidemic as real estate tax revenue declines (from the housing market collapse) work their way into the system,.

 

Markets: Everyone Out of the Pool?

I look for markets to sell off a fair bit today.  Yeah, sure, the opening is pointing down on the WAMU story and the lack of a final deal on the bailout, but more important, there seems to be a fair amount of risk to holding positions over a weekend when so much could change within hours.  So, barring a breakthrough deal announcement of some kind, I'd look for speculators to hit the exits in the last hour or two of trading today.

 

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Coping: Erin Burnet Fan Club

I have to hand it to Erin Burnett for getting the bailout nailed.  Something to the effect that it could be a 'seriously heinous interfinancial transfer'.  If you coffee hasn't kicked in yet, go back and check the first letters of each word...

 

Math Lesson 1: Email to Watch For
As long as we're talking about perceptions and such, be on the lookout for an email that goes to this idea (and it's spreading on the internet like crazy...):  If we took the bailout money and gasve it to every adult over age 18, everyone in the country would get $425,000.

 

Sounds great?  Well it may sound good, but the originator of the email - and again this thing is going bananas around the web - didn't do their match right.  $700 billion divided by 200 million.  is not $425,000 each...and it's much less appealing. 

 

The lesson?  Whenever you get one of these emails - check the math yourself.  People do make errors and then send them out all over the internet...

 

Math Lesson 2: From a Reader

This is pretty good:

Here's something I quickly put together for a friend, about the mathematics of the financial mess. You might find it useful.

 -----Original Message-----

Subject: Re: About Saturday's conversation...

 

> Goodbye taxable income base.

 

The mathematics of borrowing trillions of dollars doesn't make sense in America, especially with the Baby Boomers retiring. Under Bush, more than four trillion dollars was added to the national debt and we're paying over 400 billion dollars a year in interest alone.

 

Corporations have gotten skilled at avoiding taxes. According to the IRS, 2/3 of corporations pay no taxes, and about 1/6 of income taxes collected now comes from businesses, mostly the "mom and pop" variety of small business.

 

Let's assume that the average immigrant worker is making the federal minimum wage of $6.55 per hour. It's safe to assume that would mean less than $15,000 a year in income per immigrant worker.

 

The IRS has wage and tax data in Excel spreadsheets, and the last year they have it for is 2006.

http://www.irs.gov/pub/irs-soi/06in11si.xls

 

In 2006 the average American taxpayer paid $11,041 in income taxes, while people in the $10,000 to $15,000 group paid $411 in income taxes.

Generally, if you are working for minimum wage, you are only paying Social Security and Medicare. That's mainly due to a low tax rate, the 1040 standard deductions, earned income credits if you have kids, etc.

 

At that rate, you'd need a billion workers in that tax bracket, just to pay the interest on the existing national debt,