MORE BAILOUTS COMING AS OUR SPACESHIP FOUNDERS
As angry Americans panicked by Wall Street's scary freefall change their minds and call for a bailout, the Bush administration “signaled strongly” that greedy CEOs shouldn't expect more rescues from Washington.
Back at the till, neither Bernanke nor Paulson is explaining how an extorted $700 billion bailout will begin to address a total of $2.5 trillion in subprime mortgages.
After the former CEO of Goldman-Sachs hands out sacks of cash to his cronies, overpaying for their worthless assets with money conjured from overheated printing presses and America's landlords in the Middle East and Beijing… at least another 100 U.S. banks with collective assets exceeding $800 billion will fail in 2009, predicts Christopher Whalen
And the Federal Deposit Insurance Corp. will have to cover many of those losses.
“It won't take many more failures before the FDIC itself runs out of money,” Bloomberg reports. “The agency had $45.2 billion in its coffers as of June 30, far short of the $200 billion Whalen says it will need to pay claims by the end of next year.”
The grandchildren of U.S> Taxpayers
And get this: As America enters the era of the Swinging Swindles, this new $200 to $400 billion “emergency” federal lending to the FDIC will come in addition to the $700 billion Wall Street bailout.
“Given the magnitude of the bad loans still on bank balance sheets, it would be miraculous for the FDIC to squeak by with losses of less than $200 billion,” Whalen says. [bloomberg.com]
Happily for the FDIC, it won't have to cover $2.6 trillion in uninsured bank deposits.
But it is liable for $4.4 trillion more.
And as Dubya likes to say, that's not all folks.
By William Thomas
In Washington-speak, the opposite of official pronouncements is invariably the case.
MORE MORE MORE MORE MORE MORE MORE MORE MORE
In addition to the $200 to $400 billion to bail out the FDIC on top of the $700 billion Wall Street bailout, Bush needs another quick $50 billion to drive Iraq
Ditching a promised drawdown of U.S. forces, the unelected president's new $50 billion request comes on top of the $147 billion already requested to continue wrecking Iraq and handing
Afghanistan
Plus about $460 billion for still more American weapons this year.
[Washington Post Aug 29/07; Christian Science Monitor Sept 25/08]
That's a lot of solar panels - and green jobs.
DROWNING IN A DOLLAR DELUGE
Will all these bailouts work?
Put another way: Why should such an unprecedented crisis restore international confidence in the U.S. banking system and the U.S. dollar by further diluting its purchasing power, unleashing a ravenous inflation tiger, and compounding the already unmanageable U.S. deficit?
Uncertainty is never good for any currency, AP's Greg Keller points out.
And large deficits undermine a country's currency.
HAIL TO THE SUN KING
After the latest borrowed bailout money is blown on nearly worthless junk paper, Bush's successor will likely be looking at a record trillion dollar annual federal deficit next year. Paid for in one dollar bills, this trillion dollar annual debt trail will stretch more than 130 million kilometers - nearly to the sun.
But that's impossible. Because even if China loads seven aircraft carriers to the brim with $700 billion Wal-Mart dollars and sends them over as loans to fund the latest bailout, America's newly minted trillion dollar annual debt will exceed the total $829 billion in U.S. bills and coins currently circulating this planet!
[La Presse Sept 25/08]
In a year or two at the most, there will come a reckoning for all those dubious Dubya dollars.
Is putting America's foreign policy into deeper hock to the Chinese and the Middle East to buy a few more years of deep recession instead of a shakeout depression worth rewarding the “many Wall Street executives whose malfeasance, greed, and stupidity got us into this mess in the first place?” asks Robert Reich.
And priming an even bigger meltdown?
What about “re-regulation, recovery, and retribution?” asks Steve Fraser, co-director of the American Empire Project
Indeed.
But it's still the only game on loan.
INCREDITABLE
So will all these bailouts work?
“Much of the discussion assumes that the problem is just bad subprime loans and that house prices will bounce back once the credit markets are working properly,” writes Dean Baker, author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer.
“Most of the loans that will go bad will not be subprime, since price declines have hit all segments of the housing market. Furthermore, there is no reason to think that house prices will rise from current levels… Prices are continuing to decline at an extraordinary rate.”
In the face of declining home prices, this means that even bailed out banks will continue imposing tight lending limits. As Baker goe son to explain, “It would be foolish to issue a mortgage loan without a very substantial down payment, since the expected decline in house prices will quickly destroy much or all of the equity held by the homeowner. In other words, it is the drop in house prices that is causing banks to demand 20% down payments in many markets, not their lack of capital. Improving the financial conditions of banks will make little difference.”
[conservativenannystate.org]
Oh oh.
And as Senator Bernie Sanders told the Senate after voting no on the bailout bill, “This bill does not effectively deal with the issue of foreclosures… This bill does not effectively address the issue of what the taxpayers of our country will actually own after they invest hundreds of billions of dollars in toxic assets. This bill does not effectively address the issue of oversight because the oversight board members have all been handpicked by the Bush administration.”
Another slight problem:
The $700 bailout bill does not address “the deregulatory fervor which created trillions of dollars in complicated and unregulated financial instruments such as credit default swaps and hedge funds,” Sanders stormed. “Maybe I'm the only person in America who thinks so, but I have a hard time understanding why we are giving $700 billion to the secretary of the Treasury, the former CEO of Goldman Sachs, who along with other financial institutions, actually got us into this problem.”
The Senators' proposed five-year, 10 percent surtax on families with yearly incomes of more than $1 million and individuals earning over $500,00 to raise $300 billion to help bankroll the bailout was pushed aside by his fellow Senators.
Why not? They aren't feeling any pain.
As Sanders pointed out, in seven years of Bush's plutocratic puppeteering, the wealthiest 400 Americans have seen a $670 billion increase in their wealth. With the top 1% of Americans owning more wealth than the bottom 90%, making every woman, child and man in the USA fork out $2,200 to bail out the rich is a no-brainer.
For the rich.
Meanwhile, under Bush's illegitimate reign, six million Americans fell from the middle class and are in poverty, three million ended up on the streets, seven million lost their health insurance and four million lost their pensions as consumer debt doubled, oil prices spiked, and foreclosures set records.
A backlash is building. With the Republicans suddenly facing a rout at the November polls, the coming election landslide for Obama may be too big to rig.
CAN YOU BREATH METHANE?
Given Obama's most influential advisers and biggest corporate donors, expectations that this superb orator will don a Superman cape and save “Money For Nothing” America are bound to disappoint. Meanwhile, all this digital legerdemain is distracting almost everyone from a very real, very big and extremely terminal bankruptcy.
Neither Bernanke nor Paulson, Bush nor McCain, Palin nor Obama are even mentioning methane.
With fresh evidence of 400 billion tons of frozen methane coming unglued in the thawing arctic tundra, and another 540 billion tons of icy methane clathrates now beginning to bubble up from the warming seafloor to the largely ice-free surface of the Arctic sea, scientists everywhere are freaking out over what they term rapidly approaching “catastrophic global warming."
[Der Spiegel Apr 17/08; Baltimore Sun Dec 16/04]
But they are being ignored in all this dither over dollars.
A dollar is worth whatever people decide it's worth. But one molecule of methane traps 21 times more heat than a molecule of carbon dioxide.
[EPA]
Methane is a Much Bigger Deal than Wall Street's current woes. About 251 million years ago, methane released by warming caused by volcanic activity sent oxygen levels on our space colony plummeting. As global temperatures spiked more than 10-degrees C, terrestrial life basically went away. More than 94% of marine species also disappeared.
So far, calculates the U.S. Geological Survey, we have released 150-times more carbon burning fossil fuels than was emitted by all those methane-releasing volcanoes.
[Baltimore Sun Dec 16/04; Reuters July 20/08]
And you thought the current money market meltdown is bad…
It took 25 million years for even rudimentary coral reefs to re-establish themselves after the last methane meltdown. And another 226 million years for Wall Street geniuses to bring the world economy close to insolvency.
At a time when everyone onboard must be focused on doing whatever they can to curtail carbon burning and keep our spaceship afloat in the cold, irradiated vacuum of deep space - fighting over our place in the cafeteria lineup would be knee-slapping hilarious.
If it wasn't so terminally shortsighted.
BAILOUT YOUR MOM
We need an Earth Bailout now. We need to spend $700 billion on clean jobs, clean energy and infrastructure upgrades now.
Where will the money come from? Take it away from weapons and war. Tax the obscenely profitable oil companies driving us toward extinction. Tax the very rich for their exploitation, too. The money's there. It's just in the wrong hands. Giving more to the greed-addled idiots who have brought us to the brink is definitely not a good plan.
from seafloor - dollars evaporate from Wall Street