Doing God’s Work in Iraq (How the GOP Helped Derivatives Kill America’s Financial System)

Hope is always a good thing.   I want to agree with the many articles written that say America is facing a new economic downturn which is part of an historical cycle.  But I cannot.  These are unchartered waters.  Never has our country faced any economic cycle or downturn with a 10 Trillion dollar National Debt.  At least another additional Trillion dollars, our leaders have already spent and funded with more Chinese loans.  America has never before teetered on the precipice of such debt.  The price of fighting unlawful wars against Bush’s Axis of Evil, is costly.  Do I know what this holy war spending and debt means or what it forebodes?  No, I am not a Warren Buffet, but even he probably does not know what the future holds with this new tag of nation-breaking debt.  So will markets behave normally, as before?  Well, one thing we do know is that we never saw a mortgage meltdown like this one upon us now.  Never in the lives of most readers have we ever seen banks, insurance companies and major investment banks implode for all the Derivatives and Subprime mortgages they held before going down the drain.  Even in 1929 we did not have this monstrous 10-Trillion Dollar debt hanging over us.  So something different is cooking in our financial state of affairs than pre and during the Great Depression. 

It is rumored by several reputable financial prophets and economists that Derivatives make for new kinds of perils the world has never seen.  Just what are they?  These are nothing more than "bookie bets" that have no substance, no value.  They are a bet that tranches (channels, like an invisible shipping container) of real securities like Ginnie Maes and Freddie Macs will pay down principle at predefined rates by and/or on certain dates.  Or not.  You win or you lose on the "bet" which is not a valid security or a valid instrument of value.  There is always a loser.  There is always a winner.  The winners have bought condos in Dubai, Switzerland, and stuffed their proceeds offshore.  The losers have walked away from their homes and have seen their investments tank by 50% and more due to the ripples in the Dow caused by no confidence in the GIANT Investment Banking Houses and Banks, and you know who they are.  The losers are us.  The Insiders, the monsters who pushed for deregulation, got what they wanted.  They got the money by selling scams like Derivatives that bankrupted Orange County a while back and the state of California as we speak.  They got the money and got out of town. 

Did you see how much the CEO of Lehman Bros got, was it over 400 Million dollars?  The losers are us indeed, and the total destruction of our economy is almost complete.  Historically, there is no reference point for comparison to today.  We have been a pay-as-you-go world until just in recent times.  But while they were at it, they picked the pockets of homeowners by getting them to sign ticking time bombs of subprime mortgage deals which when ballooned, would explode in the homeowner's faces.  They had no choice but to walk away.  I hear talk that it's the homeowner's fault that they bit off more than they could chew.  Maybe so, but when lenders are showering money on you, saying, "Take it, you deserve it, you can make the payments." the homeowners were duped into thinking it would be okay.  The lenders got big commissions, stashed it offshore, bought a one-way ticket to their favorite tropical island, and the rest is history.

Merrill Lynch sold billions of these "bookie bet" Derivatives they called CMOs, CROs, etc. and packaged them and bundled them as BONDS.  Deregulation allowed such a crime.  Can you say Neocons?  GOP?  Remember Harvey Pitt?  He was the Department Head of the Securities and Exchange Commission who the Shrub let off the hook when Bush sold off most of his holdings of Harken Oil without filing a Form 4.  You see, Bush was then CEO of Harken.  He saw the Tsunami coming of Harken lower earnings and sold off the vast amount of his shares that went from 4 to 1 buck a share months after the sale.  When a CEO insider like Bush sells off his own personal shares in the company, the law says you are supposed to file a Form 4 IRS form to let the shareholders and the world who invests in stocks know that a big insider selloff is about to occur.  A headsup is not only fair; it is the law.  Bush waited for over 6 months, and by then Harken stock had tanked, and Pitt said he didn't think Bush did it on purpose so he let him off.  Deregulation.  Want to know who appointed Harvey Pitt to head the SEC?  Poppy Bush, you know, the father.  Seems more important these days, Deregulation, does it not?  But we did not pay attention to Deregulation that Reagan, Bush, and the Neocons in Congress said would help the Free Market, right?  Right.  Derivatives helped run over the American people like a Bush Hawg.  And our continued borrowing off-budget to finance Bush’s ongoing wars of occupation has the patient (America’s financial system) on life-support.

But what about those CMOs (another name for Derivatives)?  Guess what?  They ain't BONDS.  They nothing but AIR.  And now it is rumored and verified that the world now holds these Liar's Poker BONDS called Derivatives in numbers that exceed 500 TRILLION DOLLARS!  GASP.   Yes, TRILLION, not billion.  When you “Google” it, many accounts say that Chase Bank (like in JP Morgan) holds the lion's share, figured at about 90 TRILLION DOLLARS.  Think Chase will be able to cash your paycheck at the teller window if this is true and the bookie markers get called in like when the billions of Derivatives got called on Lehman Brothers?  Think the US Gummint FDIC guarantees to now pay up to 250 thousand dollars a head will work if Chase goes down?  If so, where will the government get the money to reimburse each investor with enough to buy a snow cone?  Bank of America reportedly holds 45 TRILLION, and so on, all over the world.  If this is true, there will be no choice eventually, but to reset the world meter on currencies and start over.  No other choice but to write off these amounts and start over with new currency.  Sigh.  Know what that means?  Sure you do.  I do too, and, once you swallow the gallon of Castor Oil, you thank the heavens you're still alive and can proceed down the road of life best as you can.  That's worth everything.  It's priceless.  But history is not germane any more, given the world debt mountain to climb. 

We can no longer predict how the markets will behave because everything now is new.  Debt is the new terror.  It has and will continue to bring down the buildings and firms on Wall Street like bin Laden brought down the Twin Towers.  Debt will continue to cause banks to fail.  A little debt would have worked for our good, but when they started with the Derivatives and the shell game subprime mortgages, they rang the death knell for our economy.  Do the arithmetic.  Answer the question, how do you liquidate a debt?  After you get past the two ways of 1.  You pay it or 2.  You disavow it, tell me if there is a third choice.  I think not.  Choices 1 and 2 seem to be the only possibilities at this point.  The first seems impossible and the second, catastrophic. 

Remember when Reagan said, "Deficits don't matter?"  He said it with a wink and a smile.  Did he know something we didn't?  Keep that thought.  Bush perfected Reagan's borrow-and-spend Voodoo Economics, and now McCain/Palin promise to continue the theft and destruction by borrowing and spending to keep fighting in Iraq, etc., etc., etc.  Borrow and spend, dudes.  It's okay when you're fighting Evil.  That's how we got here.  Pay no attention to that war corporation crony behind the curtain who is picking your pocket.  Pay no attention to Erik Prince, CEO of Blackwater Mercenaries that we paid a Billion dollars to supplement our troops in Iraq.  And to shoot Iraqis for target practice.  By now they have collected maybe 2 Billion dollars from our bankrupted Treasury, thanks to the wisdom of our leaders who say deficits don't matter when you're fighting Evil and as Palin says, "Doing God's work in Iraq."  Too bad Russia, Reagan's Evil Empire didn't stay on their knees from all our borrowing and spending off-budget and on-budget for wars.  Heck they got a 2 Trillion Dollar Surplus, now.  Their leaders didn't cheat the people out of their future the way ours did.  Makes you really wonder who's evil and who's not, doesn’t it?