Category Archives: Bailout

Principal Reductions – Some Are Waking Up To What Could Be A Win Win Situation

Mortgage debt

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This is a must read story published in the NY Times by Joe Nocera of a breakfast meeting he had with Laurie Goodman, a senior managing director of Amherst Securities.

Enter Laurie Goodman. One of the country’s foremost authorities on mortgage-backed securities, she is also one of the most data-driven people I’ve ever met; at breakfast, she was constantly pointing me to one chart or another that backed up her claims. “She’s not into politics,” says my friend, and her client, Daniel Alpert of Westwood Capital. “She is using data to tell us the truth.”

It always seemed to me that in order to correct his crisis, writing down everyone’s principal would be the only solution.  For those that do not have mortgages on their homes and own them free and clear some sort of tax break would be in order to compensate them for the decline in the value of their home.

Values declined not because of the market, they declined because those very same banks who oppose these write downs created this mess by providing mortgages to almost anyone creating a housing boom that was destined to crash.  Yes, they know what they were doing but greed took control of corporate governance and patriotic spirit.  The attitude of  let’s rake in as much cash as we can then when it all fails we can take back all those homes and rake in even more cash for homes we have no investment in.

The housing crash was created by the banks unlike what New York City’s Mayor Bloomberg says.  He says blame it on Congress (and Fannie Mae who he says makes loans – wrong!).  Yes, while I believe it was a direct mandate from the White House beginning with Bill Clinton, the banks could have and should have used their better judgment and declined the push from above.  But GREED is a very dangerous intoxicant.   Given the green light by those high up in our political circles – the ones in charge – they quickly did what they believed was their patriotic duty to comply and fill their own pockets

The idea of helping struggling homeowners by writing down some principal on their mortgages — as opposed to reducing the interest or reconfiguring the terms to lower the monthly payments — is much in the air right now. Banks loathe the idea of principal reduction; they fear that people who are current on their mortgages will start defaulting just to get their principal reduced. They also don’t want the hit to their balance sheets.

Yes, of course banks would “loathe” the idea of reducing principal.  For one, the reduction of principal to real value would lower their net worth and show that many of them are actually insolvent.  Their solvency is basically falsified books whereby they keep real estate owned on their books at its value when they first financed it.  We all know that most of us will never see housing values come back to these artificially high values.

Second, the fact that most of the banks REO’s – real estate owned – is also a falsified book entry.  This is where my gripe continues with the greed and dishonesty of this entire industry.

The “bank” made a loan.  The “bank” SOLD the loan to a Wall Street firm who in turn packaged that loan with thousands of others into a security which they sold to investors around the world.  NOTE:  It is the security owned by thousands of investors who actually own the note – NOT THE BANK.

In addition, the bank taking all the action is NOT REALLY A BANK!  You see, the entity taking the foreclosure action is actually a servicing company – a collection agency if you will – that is owned by “the bank” but is not in itself a bank under any situation or charter be it federal, state or local.

The servicing company often uses the same name as “the bank” and lead everyone to believe that it IS “the bank”.  They have everyone convinced including the courts – judges and Clerks of the Courts as well.

When a servicing company like  – listen now – Bank of America Home Loans (not “the bank”) gets the court to award the foreclosure, the court just hands them the title because they are falsley led to belive that they are the bank, they own the mortgage note and therefore can claim the property without paying.

Once they take – no – STEAL the property, the non bank servicing company everyone thinks is the bank – which in the illustration above would be Bank of Amercia – then takes the property and gives it to “the bank” (illustratively Bank of America) who now owns the property free and clear on their books valued at an inflated artificial value.

Not only are the banks using these artificial values to bolster their books (fraudulently inflate their net worth) they are using stolen property to do so as well.

Of course they do not want to write down mortgages.  Actually they CAN’T.  Neither the bank nor the banks servicing company has the authority to do so.  Only the investors who own a share of the bond issue that the mortgage note resides in have the authority to do so.  In fact, only these same bondholders (and it would take 100% of them to do so) can initiate a court action to foreclose.  They are the true owners who along with the rest of American have been swindled – a milder term the screwed – out of their money by “the banks”.

But the states’ attorneys general who sued over the robo-signing scandal have made principal reduction the central plank of the settlement they are close to completing. The settlement will force the big banks to begin a sustained program of principal reduction, and will heavily penalize banks that don’t comply. From what I hear, the goal of the states is to prove to the banks that principal reduction will not cause the sky to fall — and is, ultimately, less damaging to bank profits than foreclosures.

In spite of all I say above, I feel forcing the write downs is a positive.  Not only will it stop the bleeding of continued declining values due to continued massive foreclosures, it will right the wrongs to many of the investors worldwide.  By writing down the mortgages thus allowing homeowners to continue living in their homes and making payments – albeit lower payments – it is a win – win situation for everyone.

The homeowner wins for obvious reasons.  The neighborhood wins as there will no longer be vacant and unattended deteriorating homes.  The investors win as they will get some return of their investment which is better then the zero they are getting now.  The economy wins as it will begin to turn the entire housing market around.  America wins as we can then begin to move forward again and make the American Dream of homeownership possible once again.  And we all know if the housing market is moving the economy moves.

Read Joe Nocera’s entire article To Fix Housing, See the DataPublished: November 4, 2011…click here

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IndyMac Sale To One West and The Mod/Short Sale Scam

FDIC placard from when the deposit insurance l...
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The FDIC, working hard to insure your demise.




We linked this video once before but think it important enough to repost.  This is actually a follow up to the original.  Hear how the FDIC encourages One West NOT TO modify or work out lonas.  They need to lose a set amount of money and when they do the FDIC will subsidize losses.

This is just another of the continuing scams the government is pulling in the name of helping homeowners.  The truth is the government and the banks DO NOT want to help homeowners which leaves us no other recourse but to FIGHT BACK.

Fight your foreclosure, write your Congressmen and women about your failed modification attempts.  Make your stories heard.  If we fight hard enough and scream loud enough they will have no choice but to begin listening.

Let all encumbants know that you will not vote for them until they begin representing the people not the institutions led by the biggest, baddest banksters of all time.

If you think Jesse James and Bonnie and Clyde were bad these modern day thieves are the worst the world has ever known.  Click on the link and listen to the short vidio.  These guys are good!

Click This Link To View Video

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Emergency Banking Act

Is another “Bank Holiday” coming to America? Frankly, few people – this writer included – never knew what a Bank Holiday meant until receiving an email referencing and quoting Bob Chapman’s THE INTERNATIONAL FORECASTER.

I never heard of Bob Chapman either so I looked him up. He seems like he knows what he is talking about and from his bio has many, many years of experience in investment banking specializing in gold. If you view his web site above you can read all about him.

I did find the article interesting but it required some research. First I needed to get the meaning of and the background of “Bank Holiday” since the post began…

Bank Holiday Coming? Prepare?

In my research I found this same article posted on several sites and blogs. I have just picked one that I have linked above since I found the comments very interesting.(you should read them). In addition, the article references Harry Schultz who also seems to have credibility so to make your research easy I have linked his name to the bing search engine page where you can read about him as well.

This blog’s effort is to uncover the truth and report it as well as offer my own thoughts and opinions, let’s be clear about one thing and that is that just because it is on the internet it is not necessarily so. However, I believe there can be validity to this as I feel – as does Bob Chapman and Harry Schultz – that the worst is yet to come. I base this on information, research and knowledge of the mortgage industry as it relates to the banking industry.

So I offer all this up to you and you can form your own opinion. To be well informed is a necessity for our survival in what I have always maintained will be the most disastrous economic times in the history of our country.

Now to the basis of this story. Take a moment and go to the link below which details the Emergency Banking Act established under President Franklin D. Roosevelt, who our current President holds in very high regard and partially models his administration after his.

Emergency Banking Act – Wikipedia, the free encyclopedia

Here is the beginning of the outline of this Act.

The Emergency Banking Act (the official title of which was the Emergency Banking Relief Act) was an act of the United States Congress spearheaded by President Franklin D. Roosevelt during the Great Depression. It was passed on March 9, 1933. The act allowed a plan that would close down insolvent banks and reorganize and reopen those banks strong enough to survive. In summary, the provisions of the act were as follows:

Title I, Section 1. To affirm any orders or regulations the President or Secretary of the Treasury had given since March 4, 1933.

Title I, Section 2. To give the President the ability to declare a national emergency and have absolute control over the national finances and foreign exchange of the United States in the event of such an emergency.

Title I, Section 3. To authorize the Secretary of the Treasury to order any individual or organization in the United States to deliver any gold that they possess or have custody of to the Treasury in return for “any other form of coin or currency coined or issued under the laws of the United States”.

Title I, Section 4. To make it illegal for a bank to do business during a national emergency (per section 2) without the approval of the President.

Title II. To enable the Comptroller of the Currency (a post in the US Treasury) to take complete control of and operate any bank in the United States or its territories and to establish the terms and conditions under which bank is administered.

Title III. To allow banks to disown their debts with the permission of the Comptroller of the Currency and a majority vote of their stockholders.

Title IV, Section 401. To allow Federal Reserve banks to convert any US debt obligation (such as a bond) into cash at par value and any check, draft, banker acceptance, etc, into cash at 90% of its apparent value.

To read complete summary of the ACT please go to the link above

Basically it allows the President to declare a “bank holiday”, close the banks nationwide and then determine which ones can or will reopen. It was also the

Act that enabled the Treasury to remove gold bullion held by citizens.

Armed with this brief explanation of a Bank Holiday here is the Bob Chapman story. You can also view this article on BBS RADIO/The Original TNT Bulletin Board.

Sunday, June 21, 2009

Bank Holiday Coming? Prepare?

From Harry Schultz:

Dear Bob:

Bob Chapman’s Int’l Forecaster newsletter revealed (5/20) this startling intelligence (from within US State Dept & embassies):

”Some US embassies worldwide are being advised to purchase massive amounts of local currencies; enough to last them a year. Some embassies are being sent enormous amounts of US cash to purchase currencies from those govts, quietly. But not £’s. Inside the State Dept there is a sense of sadness & foreboding that ‘something’ is about to happen, unknown re a date—just that within 180 days, but could be 120-150 days.”

Bob quotes another source that “Panasonic has told their people to be back in Japan by Sept 09.”

Harry Schultz, dean of newsletter writers, has quoted the Chapman letter of May 30 regarding US embassies being sent large amounts of cash with which to buy local *currencies, to last them a year. Here is Harry’s remarkable take on the situation:

“My HSL suspicion is that the elite plan another FDR style “bank holiday” of indefinite length, perhaps very soon, to let the insiders sort-out the bank mess which is getting more out of their control every day.*Insiders want/need to impose new bank rules. Widespread nationalization could result, already under way. It could also lead to a formal US$ devaluation, as FDR did by revaluing gold (& then confiscating it). But devalue against what? The euro? Doubtful. Gold? Maybe. Or vs. the IMF basket of currencies (which seems more likely)—& much in the news recently. Any kind of bank holiday will push the US$ lower, which may be a bonus benefit to their ongoing scenario of letting the $ fall. Such a fall would get the devaluation they want without having to declare it. In sum, the insiders want more bank & system control, fewer banks & a lower US$. A bank holiday would suit all their needs.

Obviously, U can’t open safeboxes if the banks are closed, so plan accordingly. All this is speculation, but we have to go with what we’ve got, scraps of info that point to certain possibilities. In any case such a closure will, IMO, come sooner or later, as the worst of the embedded derivatives are still to be faced. We are years away from solving them because the controllers don’t want to; their fingerprints are all over them. ***

PS: during the FDR bank holiday, thousands of banks never reopened; it was a face-saving way of shutting them down. I would guess the same would occur today; thousands have little or no net value, loaded with debt, bad mortgages.

••• *PPS: A Bob Chapman subscriber reported overhearing 2 FEMA jacketed men talking to a police chief in Calif. They wanted to federalize the police across the US. They (govt) would be closing banks in late Aug, early Sept & that it will get ugly.” Prepare for worst case, as any good Boy or Girl Scout would do.

I believe that our banks are still insolvent even though we are being told they are not. Wells Fargo and it new acquisition – Wachovia – are broke. CitiBank is broke, Fifth/Third Bank is broke, Bank of America is broke and the list goes on. We must ask the question concerning their solvency and we should get an answer.

If in fact, as Chqpman, Schultz and I believe, they are then it is iminent that the government will have to act to prevent a run on the banks. A run would certainly cause the demise of most banks as those banks do not have sufficient cash 0 nor are they required to have sufficient cash to cover everyone’s withdrawals. THE GOVERNMENT WOULD HAVE TO ACT which is what makes this story both believable and alarming.

Another reference to this letter I found intersting is the reference to PPS qupted from a Bob Chapman subscriber…

A Bob Chapman subscriber reported overhearing 2 FEMA jacketed men talking to a police chief in Calif. They wanted to federalize the police across the US. They (govt) would be closing banks in late Aug, early Sept & that it will get ugly.” Prepare for worst case, as any good Boy or Girl Scout would do.

I find some believability to this even though there is no evidence to verify it. I can believe this because FEMA is a National Federal Police Agency not a disaster emergency aid agency. It is believed that they are prepared for any civil unrest with the ability to act quickly and swiftly to put down any mass public activity. In fact, they have already termed civil unrest as low level terrorism giving them the power to arrest in mass. Detention centers are already in place around the country in a program called REX 84. These detention centers – mainly abandoned military bases are manned and equipped. It is also believed that FEMA has a contract with Wackenhut to provide prison buses to cart these masses to these detention centers.

There is even a story (rumor?) that these buses are driving around Phoenix, AZ as a test and training.

Does all this seem outrageous? Perhaps it does. but on the other hand, if you really take a look at what is happening, the transfer of wealth, the diversionary tactics by the government to lead us to believe things are getting better, that we are going to get health care and that the recession is almost over. None of which are happening. Most independant economists will tell you the same.

Conditions are worseningn. Commercial credit is in default and can be the next “meltdown” like the mortgage meltdown that seems to have precipitated this economic crisis. Consumer credit is defaulting by leaps and bounds and foreclosures are increasing.

Unemployment will hit double digits and is already much higher then the 9.5% being reported. In fact, a recent report indicated that we have had more unemployed in the past 16 months then in the past 8 years – well over 5 million people including professionals, white collar and blue collar employees not to mention the millions of recent college grads looking for work and finding it difficult to do so which will lead to a massive amount of student loan defaults..another down for the economy.

Believe it or not, that is up to you. But we must all be aware and be cautioned for as I have said many times in the past two years, “fasten your seat belts, this is going to be a long, rough ride”.

Be aware and be prepared for the worst. You owe it to yourself and your families. If the worst never comes so much the better but if it just might come then better to have been prepared then not prepared at all.

Is another “Bank Holiday” coming to America?

Executive Compensation…The Greed Is Still There…The "Elite" Ride On

Here is the latest email notice I received from the HOUSE COMMITTEE ON FINANCIAL SERVICES Chaired by Rep. Barney Frank.

For Immediate Release:
July 16, 2009

Frank Statement on Executive Compensation

Washington, DC – Financial Services Committee Chairman Barney Frank (D-MA) issued the following statement today on executive compensation:

The recent news of compensation on Wall Street shows that some financial leaders yearn for the stirring return of yesteryear and demonstrates the need to adopt legislation on executive pay. It’s a question of empowering the shareholders to decide the appropriate level because it’s their money and giving regulators the ability to prevent compensation incentives that encourage taking inappropriate and excessive risk. We do not know the specifics, but recently reported bonus pools do suggest that there may be a return to the old ways which caused such damage to our economy. It reinforces our determination to adopt a reasonable set of legislative goals.

“The Financial Services Committee will be marking up legislation next week to give shareholders a say on pay for top executives, which is similar to legislation the House passed in 2007. In addition, we will consider legislation to empower federal regulators to proscribe inappropriate or imprudent compensation practices as part of solvency regulation of all financial firms. The committee is acting because of a broad consensus of leading national and international finance experts including Paul Volcker and the Group of 30 and Lord Turner of the United Kingdom who believe that compensation structures were a factor in the financial crisis. Both the United Kingdom and the European Union are contemplating similar rules.”

What a sad commentary on our society as a whole where once our corporate citizens were patriotic and sympathetic to the country and the people.

How much money is enough? Many of these high flying corporate “bankster” exec’s have more money then they, their children and grandchildren can spend in their collective lifetimes. If they earned nothing from this point on they could maintain thier lifestyles of the “Rich and Famous” for decades.

They all must know – in their heart of hearts – what they have done to not only this, their country but to the world.

They are all conspirators and co conspirators in the largest and greatest fraud of all time. Bernie Madoff is a small fry in their company yet he has been singled out to take the heat for all of them while they continue to rob, lie and de fraud everyone.

We have a new gangster here that even Elliot Ness of the Untouchables would have a difficult time bringing down. The Mafia and other forms of organized crime we have seen in the past don’t come close to this new breed of well dressed, well educated and well compensated group of thugs.

As I see it, we have a say in the way things operate especially since it is our money they are operating with and taking as their compensation. We made it possible for them to exist and continue.

We – which includes our kids, their kids and unborn kids will be paying for this for quite some time to come therefore, it is up to us to STAND UP and BE HEARD.

I have always said, “Two wrongs don’t make a right” and “The law is the law for everyone”.

It is up to us to come out, be not afraid and be vocal on this and many other issues that are affecting our daily lives and will affect the daily lives of generations to come.


Where’s The Help? Government Bailout Programs Are For Who?

From where I sit, the economy is bleak and getting bleaker everyday. There is still a lot of talk about a recovery coming soon – but mostly by those who are paid by an industry to make those evaluations. Even President Obama continues to say it will take some time to get out of this mess.

Yet those optimistic reports continue to flow as if it will wash away the actual situation. Come on, the public is not that stupid. How can you convince those struggling to survive, to eat, to pay rent that things are not so bad?

The ranks of the unemployed are growing. The homeless population is growing with many more families homeless then was ever visible before. Yes visible. I don’t have statistics on homeless but just look around your city, you will see them – a new breed of homeless who know that things are not better.

How about all of those people whose retirement plans were wiped out? Those that should have retired or would be retiring now looking for work just to survive. They don’t see the pending recovery all of those “paid” optimists are reporting.

Each day I encounter more and more people that are affected by what we are still calling a Recession. To so many this economic crisis feels like and lives like a full blown Depression.

Let’s look at some real numbers and statistics.

U.S. Food-Stamp Recipients Reached Record 33.8 Million in April as reported in

Fed: Unemployment rate will top 10% in 2009 as reported in the Denver Business Journal

…”In April, the Federal Reserve predicted that unemployment would top out between 9.2 to 9.6 percent this year, but the rate already reached 9.5 percent in June – a 26-year high.

Can we believe the Fed? They seem to be wrong so perhaps they are wrong again and those figures will be higher then 10%. I certainly hope not but only time will tell.

Reports and Articles From

Unemployment rate unchanged at 12.2 percent

Oregon’s unemployment rate remains a record-high 12.2 percent, state officials said Monday.

Unemployment rising, but companies still hiring

The national unemployment rate is on the brink of double digits, job fairs are mobbed and layoffs continue.

Georgia unemployment claims jump 95% in June

The Georgia Department of Labor reported Thursday evening that 88,756 laid-off workers filed first-time claims for state unemployment insurance benefits in June — up 94.8 percent from
June 2008.

Minority unemployment almost double white joblessness

The National Council of La Raza on Tuesday reported June unemployment figures, noting minority workers have been disproportionately affected by the recession.

Report: Charlotte-area unemployment to average 12.6%

The area’s jobless rate will average 12.6 percent this year, up from 6.6 percent in 2008, say the report by N.C. State economics professor Michael Walden

Unemployment continues to rise, Arizonalags national average

Nearly one third of the 372 metropolitan areas surveyed have a jobless rate of more than 10 percent, up from just six regions in May 2008, according to the U.S. Labor Department. Fifteen cities have rates over 15 percent. May was the fifth month in a row that every major metro area saw its unemployment rate rise year-over-year.

Once again, Portland unemployment spike leads nation

For the second consecutive month, the Portland metro area recorded the highest annual jump in unemployment in the nation, according to new data from the U.S. Department of Labor’s Bureau of Labor Statistics.

The area’s 6.7 percent increase in unemployment in May was slightly higher than Detroit (6.6 percent).

Depressing as this may be – IT IS REALITY – and we must deal with the reality in order to survive. We cannot afford any false sense of hope or illusions as these would lead us all to total destruction.

Our leaders don’t seem to be doing the job – at least not for the majority. The banks seem to be flourishing as are their top executives. I am sure they do not feel this Recession Depression one bit.

Oh, I know, some of them are flying commercial instead of in their private corporate jets – but President Obama repeatedly says we all have to make sacrifices.

All of these so called bailout programs with all their acronyms (ie. TARP, which to me means a cover up such as when you put a TARP on the roof of your house after a storm) seem to be covering up the reality of what is really happening. It seems to me that there is a definite emergence of an “elite” class who are getting richer with these government bailout programs while the rest of us are getting hungrier.

Goldman Sachs reported a profit last quarter with a little help from the Government indirectly by way of AIG. JP Morgan Chase reported a profit last quarter thanks to TARP. Bank of America reported a profit last quarter again thanks to TARP even after the acquisition of TWO FAILED companies.

General Motors is emerging from Bankruptcy after only 40 days – with a little help from our government to the tune of $60 billion.

Again, I must ask, “What have you (The Government – whoever you may be) done for us down here on Main Street now called Foreclosure Alley?

A note to our “leaders”. This country is made up of us, the people and children, not “we” the corporations.

The most shocking statistic was recently published in MSM Money .

The headline read,

With 15 Million Kids Expected to Go Hungry This Summer, Boys & Girls Clubs of America Partners With Morgan Stanley to Launch ‘Million Meal Summer’ Program

June 12, 2009 9:30 AM ET

ATLANTA, June 12 /PRNewswire-USNewswire/ — In an effort to feed the millions of young people expected to miss meals or go hungry this summer, Morgan Stanley MS announced today a partnership with Boys & Girls Clubs of America (BGCA) to provide more than a million meals to children this summer

So, Mr. Obama, while you are flying your children around the world in your private jet provided and paid for by the people – other people’s children are going hungry – right here in your own country. Let me ask, how many children could we feed with the $60 billion you are giving General Motors? How many children could be feed with the money used to launch the shuttle yesterday? And how many children could be feed if every member of Congress and your Administration took a 10% pay cut?

So – Where’s the Help? When can we, the American people, expect to be bailed out directly before we bail out the ones that got us here to begin with. Mr. Obama, is teaching your children that you get rewarded for failing the lesson in life you want them to learn?


If you become “too big to fail”?

Another wrong message being sent.


Financial Services Committee to Examine “Too Big to Fail” Institutions

Washington, DC – Rep. Barney Frank (D-MA), Chairman of the House Financial Services Committee, today announced the committee will hold a hearing titled “Systemic Risk: Are Some Institutions Too Big to Fail and If So, What Should We Do About It?” on Monday, July 13.

Let me see if I can help Rep. Barney Frank answer the question, “What Should We Do About It?” My answer and perhaps those of the majority of Americans today would be “LET THEM FAIL” give us the money so we can feed our children and ourselves.

Too Big To Fail

Watch out America. I believe a new wave of corporate mergers and acquisitions are about to happen.

It is obvious that if a company is too big to fail then the government – which we should all remember is us – will without question or accountability keep them in business. Yet so many other businesses are let to fail – even some big ones like Lehman Bros.

There, of course, has been much outrage surrounding the AIG executive bonuses but not as much as for the massive bailout effort.

The too big to fail syndrome is sending a bad message to large corporate America and to all the small businesses that are failing. The message is get so big that you can’t control your business, can’t manage it properly, take large salaries and bonuses and don’t worry about profitability. In fact, losing money is good and necessary to gain government benefits.

Bigger is not better and in fact not even manageable by anyone. Even Shiela Blair – Chair of the Federal Deposit Insurance Corporation (FDIC) said on a recent television interview that banks should not be allowed to grow as large as they are and their size should be restricted. I agree with her statement.

The average person in this country and the average small business in this country has to jump through hoops in hopes of getting a loan – the too big to fail company – just needs to make a phone call and it’s done.

History many of us teach our children is a good teacher yet it seems no one in our elected government and unelected government – ie. Ferderal Reserve Chairman and Secretary Treasurer – seem to have learned that lesson. I am sure somewhere along the line one of their parents must have said something like that to them. Well, maybe not but certainly somewhere in their lives they have been exposed to that comment and maybe even said it themselves.

What is really wrong here is that we, the people, who employ our government representatives say and do nothing. Sure we gripe about it to our friends and neighbors but never out loud. Are we too affraid of the too big?

We now have ownership stakes in the banks and especially in AIG where we – the government who is really us – owns 80% of that company. To me that means we the people and collective owners do have a say on what is paid out and to whom. If our Congressional leaders will not assert our ownership rights and decision making process then we should do so individually. I am a stockholder and owner – however small – but just the same I am an owner not the government. We too often treat our government as a separate entity, a separate power with its own voice. This is wrong. If this is still America then we the people still are its rulers who elect others and pay those others to run our country on a daily basis. They are still responsible to us.

Back to AIG, Citigroup, Bank of America and all those others that have taken our money and spent it not for our benefit but for theirs. They are accountable to us – if not by demand of our government officials then by demand of those they owe the money to and to those that do have an ownership interest in them – us.

Keep in mind that us – meaning you and me – also says U.S., the United States. If us is U.S. and U.S. is us then you and me together – us – have a right to direct the acitons of these too gib to fail thieves.

Of course, this is just my opinion, I could be wrong.

Have We Lost Control of Our Democracy?

Harpers Magazine posted a report titled, George W. Bush’s Disposable Constitution” By Scott Horton.

Included in this article is a video from MSNBC which I have embedded. As always, please turn off Bloomberg TV on the left panel. Thank you.

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The article and the MSNBC piece discuss how the Presidency was given broad powers which many – myself included – feel are unconstitutional. The article closes with a very interesting statement.

We may not have realized it at the time, but in the period from late 2001-January 19, 2009, this country was a dictatorship. The constitutional rights we learned about in high school civics were suspended. That was thanks to secret memos crafted deep inside the Justice Department that effectively trashed the Constitution. What we know now is likely the least of it.”

While this article deals primarily with Presidential War Powers, unauthorized surveillance and other Constitutional violations or disregard, I believe it is also relevant in terms of our economic crisis and how our government is dealing with it.

If there is any truth to the article at all – Harper’s is a long recognized journal but that in itself does not necessarily validate any of its’ reports – it does further my belief that there may be what I call a “shadow government”. A group of people – not our elected officials – that really run our country.

It is somewhat obvious to me that our large, major corporations – be they financial, oil or automotive – certainly have a privileged seat at the “round table”. Our central banking system – The Federal Reserve – a secretly owned, privately held corporation – not only controls all of our nations money but will hold each and every one of us for generations to come hostage to the debt we owe them. We pay interest each and every year on each and every dollar in circulation.

The question we should all be asking ourselves and our government representatives is – as we the people crumble economically – what truly are our rights under our Constitution?

There is selectivity in our judicial system currently being exhibited to a large extent in the mortgage foreclosure ciris where “due process” and “proper standing” to litigate are not necessarily adhered to. There is a large constitutional and legal issue here on what could well be an illegal enterprise.

There is obviously selectivity on who we “bail out”. If, for example, if AIG is too big to fail then are not the American people as a whole too big to fail? If so, why then is cash not being injected as quickly and easily into the population on Main Street as it is on Big Street?

It appears to me that the Rothschild Plan – developed by Meyer Amshiel Rothschild in the late 1700’s is being carefully executed. For those of you not familiar with Rothschild, he actually created the concept of a central banking system, established the prominence of the Bush’s, J. P. Morgan and others into the prominent positions they have today.

It is Rothschield that once said, “let me control the money of a nation and I care not who makes its’ laws”. Big money today is the ruling force. Google The Federal Reserve and you will find that Rothchild always comes up in the search. If you are interested, do the research for yourself. I think you will be amazed at what you find.

I often stated, that no matter who becomes President certain actions and policies would remain the same. While I favor President Obama for appearing to be a people’s President, I already see where some of his policies are following the same old route. Is this his choice or is there a higher power to be answered to?

I find it interesting that the Harpers article called the past seven years a “dictatorship”. I find it interesting as I have been calling it a “democratic dictatorship” – one where we freely elect our government representatives but one where our majority opinions matter not.

An example of this would be the additional funds being given to AIG. $30 billion would seem to do more for our economy and our citizenry if it were given directly to education, health care, unemployment insurance funds, small business enterprises to jump start the larges employer of all or to a multitude of other efforts. A direct injection of that amount of cash into the street economy would certainly jump start the battery. It always seems odd to me that finding money for the people always is difficult with much debate and budgetary constraints but magically that amount of money can appear from thin air with no debate or budgetary constraints.

It sure makes me wonder, how about you?

Former AIG Chairman Sues AIG For Securities Fraud

While our government is shelling out more billions to attempt to save a bankgrupt AIG, its’ former Chairman of the Board is suing them for securities fraud. In reality he is suing all of us since we already own almost 80% of the company.

Just yesterday, its’ current Chairman of the Board and CEO announced that the companies insurance divisions are all healthy and doing well and that all policy holders are safe. Interesting to note in the comments made on CNBC today by Mr. Greenberg that they are not healthy at all.

When are we – the American People – going to say ENOUGH? I for one say, let them all fail as says Mr. Rogers in the following quote also taken from another CNBC interview.

“The U.S. bailing out troubled financial’s is not going to remove systemic risk. In fact, it is making the problem worse, says Jim Rogers, author, adventure capitalist and international investor. He tells CNBC’s Martin Soong & Sri Jegarajah why it is better to let financials fail.

I have embeded both CNBC interviews. Come to your own conclusions after watching. I for one believe the people of this country need the “cash” in their hands as putting billions upon billions into the coffers of failing institutions serves only to secure their executives salaries and bonuses.

Many of you out there are – or were – in business and your business may be or already has failed. Do not all of us in business deserve the same bailout assistance? Actually, I don’t think so. I do believe however, that if the cash were injected into the population our business would survive due to the availability of consumer “cash” spending.

Increasing debt to cure the debt problem is not a concept that can work. If consumers are already in debt and our government is in highly in debt then what form of economics or mathematics dictates that more debt eliminates existing debt? I am not a rocket scientist nor a PhD economist nor a mathematician. But one does not have to be to see that it will not work.

In order to view these CNBC stories, please turn off the Bloomberg TV feed on the left side of this page. Click the square on the lower left side of the embed to turn it off. Thank you.

Greenberg Sues AIG…from CNBC

Rogers: Better to Let Financials Fail…from CNBC

Financial Services Democrats Call on Northern Trust to Repay TARP Funds

It is good to see that Congress is paying attention to how our money, given out under TARP is being used. My hat is off to Barney Frank and the other members of Congress who joined him in challanging Norhtern Trust Bank for – as Frank put it – frittering away the money on lavish events.

The entire letter from Barney Frank to Northern Trust is contained in full below as part of this press release email.

For Immediate Release: February 24, 2009

Financial Services Democrats Call on Northern Trust to Repay TARP Funds

Washington, DC – House Financial Services Committee Chairman Barney Frank, along with 17 Democrats on the committee, sent a letter today to Frederick H. Waddell, the President and CEO of Northern Trust, in response to published media reports that, the company hosted a PGA golf tournament and several related parties. Democratic members of the committee “…insist that you immediately return to the federal government the equivalent of what Northern Trust frittered away on these lavish events”

Below is the text of the letter:

Mr. Frederick H. Waddell
President and Chief Executive Officer
Northern Trust
50 South LaSalle

, IL 60603

Dear Mr. Waddell:

We are dismayed and angered to learn that Northern Trust recently spent millions of dollars on a PGA golf tournament sponsorship and associated parties at the same time it has taken over $1.5 billion in federal stabilization funding under the Troubled Asset Relief Program. According to published media reports, your bank not only sponsored the Northern Trust tournament at the Riviera Country Club, but also hosted clients and employees at places like the Beverly Wilshire and Ritz Carlton hotels and gave away Tiffany souvenirs. If this is accurate, we are demanding you take corrective action.

At a time when millions of homeowners are facing foreclosure, businesses and consumers are in dire need of credit, and the government is trying to keep financial institutions – including yours – alive with billions in taxpayer funds, this behavior demonstrates extraordinary levels of irresponsibility and arrogance.

We insist that you immediately return to the federal government the equivalent of what Northern Trust frittered away on these lavish events. Federal taxpayers should not and will not stand for such abuses, and we will insist that any future Treasury support for Northern Trust be conditioned on a thorough reform of your company’s policies and practices.

We look forward to your reply and immediate reimbursement of these funds.


Reps. Barney Frank, Carolyn Maloney, Brad Sherman, Dennis Moore, Wm Lacy Clay, Stephen F. Lynch, Brad Miller, Al Green, Gwen Moore, Paul W. Hodes, Keith Ellison, Charles Wilson, Bill Foster, Andre Carson, Mary Jo Kilroy, Steve Driehaus, Alan Grayson, Gary Peters

Bank Exec’s Say Nothing

Listening to the Congressional hearings chaired by Barney Frank today just reaffirms to me that the banking executives are toying with Congress and the American public.

In their written and prepared testimony few facts of any relevance were given. Yes, they all did talk about how lending is up and how much money they have loaned out. Yes, they did say that they were making more mortgages. It all seemed like very carefully crafted statements – more propaganda in an attempt to lead people to believe that they were all doing the right thing with our money.

What the people of this country as well as Congress was looking for – at least I was looking for – was some admission of wrong doing, mismanagement or admission of ill conceived business plans. I want to see them take some blame for causing a worldwide crisis. What they did was not very different then what Bernard Madoff did. The banking ponzi scheme that even overshadows Madoff.

Yet no one ever asks the question, “what happened to all the money you made these past six or seven years?” Indeed there were billions of dollars made by all those institutions represented by their chief executives at the hearings. They were more profitable these past years then ever before in their corporate histories – so how come many of them were broke?

Bear Stearns- no longer represented as they are owned by J.P. Morgan was one of the leaders and innovators in sub prime lending. Merrill Lynch, also no longer represented as they are owned by Bank of America, was another leader and innovator. Where did all of their profits go?

The same holds true for the banks. All of them were generating record sales and profits. Washington Mutual, Wachovia and Indymac – all lending, buying and selling mortgages. Both were on the brink of disaster and had to be “purchased” (?) by other not so solvent banks.

I just don’t get it. We are focused on what they did with all the government bailout money but shouldn’t the question really be; “What did they do with all the other money – their record earnings?”

We are still being duped and going broke as a nation while these exec’s fly in their private corporate jets, dine in lavish establishments, travel, vacation and continue the good life.

As to the new stimulus plan and the reported controls for the balance of the TARP funds – there is some merit – but not enough to help any of us in the short term. I believe it will be at least two years until we see some results. In the meantime the potential for another six million unemployed exists. (I base this on the average of 500,000 new unemployed for the past three months). In addition, foreclosures will continue to climb into the multi millions.


I am not an economist, a politial scholar, a professor or dean of anything. I am just your average American (not Joe the plumber) who sees relief only when and if those bailout dollars start hitting the street. I maintain that the first $350 billion would have been better utilized if it were counted out in one dollar bills and dropped by helicopter all across the country. We all would have picked some of it up and spent it on food, clothing, shelter, health care and other consumables. That would begin to circulate cash which is what is lacking from our economy now.

One thing, I, as an average person does know is that you cannot eliminate debt by creating or issuing more debt. If we are already overburdoned with debt, how does allowing us to go deeper in debt help solve anything? What will solve the problem is injecting cash directly to the consumer – us – allowing us to pay cash thus injecting and circulating this lacking commodity.

Another solution could be re thinking the prime rate. The prime rate is defined as the interest rate banks charge their larges corporate customer – primarily those multi national giants such as Exxon/Mobile. Then the rest of the small business community pays one or two percent over this rate.

To begin with, small business is, was and always has been the backbone of our economy. It produces more jobs then the large corporate sector, produces more goods and services and even accounts for the majority of funds deposited into our ailing financial institutions.

This being the case, loan small business money at the “prime” rate and let the large corporations pay the higher interest rates which they can most certainly afford. I have always believed the functionality of the prime rate was backwards.

Small business grows with this concept and small business will pick up the slack for any large or too large corporation upon their failure. Yes, I am prpoposing to let the giants fail just like we allow our small business to fail. Difference is that when giants fail smaller companies grow into larger companies.

Consolidation is not better. Bigger is not better. If GM fails then is it not possible that a GM split back into their original pieces could survive? Perhaps even better as the entrepreneurial spirit would return along with less overall costs.

This lesson was learned back in teh 1980’s when mergers and acquisitions ran wild. Companies acquiring not only their competion but other non related companies as well. Eventually they found they were not as profitable or profitable at all and began their divestitures.

Now mergers and acquisitions are happening all over again.

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