Who's really getting bailed out

[autorank]

Derivative holders - The current value of derivatives is $1,000 Trillion. The US GDP is $15 Trillion or so. Derivatives are an out of control financial product, like gambling to hedge your bets in all cases. If any financial institution - bank, investment bank, insurance company - goes down and the you know what hits the fan with derivatives, it's "the end." Buffet calls these 'products' "weapons of mass financial destruction."

Here's the best explanation I've read on this, terrific stuff:

Headlined on 9/18/08: OpEdNews.Com (OEN)
It's the Derivatives, Stupid! Why Fannie, Freddie and AIG Had to Be Bailed Out

by Ellen Brown

What's going on here? Why not let the free market work? Bankruptcy courts know how to sort out assets and reorganize companies so they can operate again. Why the extraordinary measures for Fannie, Freddie and AIG?

The answer may have less to do with saving the insurance business, the housing market, or the Chinese investors clamoring for a bailout than with the greatest Ponzi scheme in history, one that is holding up the entire private global banking system. What had to be saved at all costs was not housing or the dollar but the financial derivatives industry; and the precipice from which it had to be saved was an "event of default" that could have collapsed a quadrillion dollar derivatives bubble, a collapse that could take the entire global banking system down with it.

Also see: Money Party to Citizens: Drop Dead! The Money Party (4)

[Me.]

1. So Where Are We Now?

What happens next?

[kristopher]

3. What happens next? We should raise hell!

Where is the discussion of alternatives that do not involve this massive welfare for mismanagement and greed?

The nearly one trillion dollars this is going to cost would, if directed by direct investment into manufacturing facilities, provide the basis to making this country energy independent within a decade. Obama has committed to spending 150 billion over 10 years to stimulate a market driven approach. However they want to spend this trillion to "Get the economy back on track so it can grow.""We need to get credit put some money in consumer's hands" they said.

Fuck that. Put the money DIRECTLY into manufacturing infrastructure to make solar panels, wind turbines geothermal plants, wave energy, and energy storage for EVs. Get some high quality jobs in redoing our entire automobile, and electric generation and transmission infrastructure.

DIRECT INVESTMENT would put that money in consumers hand - and it wouldn't be credit based. It would be spending that is goiing to return massive dividends over the next century and beyond.

This is a bullshit last rape of the citizens of this country and it is so very effin wrong.

[Union Thug]

5. What happens next? In a just system many very wealthy people would

be going to federal prisons.

AIG should be left to die, along with all the others. This should be the final indictment of 'unregulated markets.' And then we reinvent the new deal, implement capital punishment for white collar crimes and turn the system over to the people once and for all.

America today is no better than the mafia. It's a criminal enterprise.

[autorank]

10. It's looking that way - socialism for the rich, free enterprise for the rest of us

It's a rigged game.

The people who make the rules keep winning. Then they congratulate each other on how brilliant they
are. It's easy to win when you make up the rules and you own the "refs." But they give each other high
fives for being such geniuses.

What do we get? The big smack down if we speak to loudly, join a union, demonstrate, compete with
the wrong organization, reveal the wrong information.

Wonder why nobody has covered this? Could it be ...

[JDPriestly]

18. Agreed.

[autorank]

9. Youve got the only way out - make something of value and sell it

Buy things of value and use them.

I do NOT superscribe to theory that we're washed up or a nation of the uninformed. The people have
the truth now and in every poll except the presidential race*, they're on the right side of issues
by a large majority - Iraq, environmental concerns, NAFTA, taxes, etc. Plus there are lots of talented
people who can come up with ideas and others who can craft the results, do the work.

Bad news - it's not one trillion, it's one thousand trillion dollars (1,000 trillion) in these
mysterious financial products that Warren Buffett says even he fails to comprehend. This is the
greatest theft of all time. Kid steals a car radio for $200 and it's a felony. The 'leaders'
steal everything they can lay their hands on and they get ... the medal of freedom (to steal).

*That will change shortly. Say bye bye to McCain and Palin

[truedelphi]

14. I like every word you are posting, and

Your last sentence sums up exactly how I feel.

This is nothing more than rape. And WHY THE HELL doesn't Congress spend some time sorting out the fact that NOW WE own the damn companies - not their "managers," their executives or their dividend holders.

We are really getting the last tip of a very bad stick, and it may turn out that the stick is a snake that does us in.

[JDPriestly]

17. I'm with you. American business does not invest in American business.

That's been the problem for many, many years. They prefer to invest in countries with cheap labor. They spend their money over there and then come to the U.S. for bail-outs. Let's just spend the money right here.

[autorank]

8. Well, there's another shoe to drop. They did this, "the adults"

I'll never forget that one after 9/11 - good thing the 'adults' are in charge.

Yep, it is if you want to destroy the country.

Next up - exposure, the light of day, for this fraud.

It's too easy to figure out. The International Bank of Settlements lists all this informatoin.

When I cited them a few months ago, I used 'notational derivatives' through June 2007. It was $516
Trillion, a mind boggling amount. It's more than doubled since then, it seems, so we're seeing them
picking every apple from this orchard, leaving nothing behind.

Best investment: real estate in Dubai;) There will be a big demand.

[glitch]

47. Picking every apple from the orchard, then mowing every tree under.

And yes I do believe they are that malevolent.

[lostnotforgotten]

12. The 30 Something Derivative Titans Take Their Money To Tahiti

And we are left holding the bag.

[lutherj]

2. 1,000 trillion? There's no way. It doesn't represent anything. It's phony money.

We are going down. They are trying to prop up a mirage.

[autorank]

6. It's amazing isn't it. "They" did it

It is "them" and not "us" - that's an important point. This is just crazy stuff, imaginary money.

The Wall Street "genius" is really a class clown on steroids.

Obama: Say good night Mr. Greenspan
Greenspan: Good night Mr. Greenspan

That guy belongs in court over this nonsense.

[Phoebe Loosinhouse]

43. Explained to me as " more poker chips on the table than there is money in the world"

Now someone explain to me how all the bright people and the Nobel mathmeticians didn't realize this.

[ihavenobias]

4. Thanks for posting. This is a bit much to read right before bed, but it's bookmarked for tomorrow nt

[autorank]

7. The power of nightmares;)

[shifting_sands]

11. Thank you for

this Autorank. It saves me a lot of time trying to figure out exactly what are they doing and why, how does it benefit them because I know it sure as heck isn't something that will benefit us. It helps to really know what the game actually is, it can give one a leg up on their own game.

I think what's hard for us to really grasp is the system isn't just broken, the "system" doesn't work and we need a new system a bit more equitable. It just seems that generation after generation we all follow the game in our assigned roles, with the same families coming out on top, one or two are added each generation. Maybe just maybe there is a committee who would come along one of these generations that can figure out a way to break the pattern and turn the tables. Now that would be fun

[autorank]

49. Welcome!!!!

This is really a major truth that's not discussed - we're leveraged 11 times the worlds wealth. 1,000 trillion dollars. It really becomes meaningless. The United States is dangerously close to a system of pervasive hereditary bias. The philosophy of "free markets," meaning free for them not us, comes out of this and gets reinforced again and again. Fix the rules, win the game, tell yourself that you're just terrific, superior. Those in power, who I call "The Money Party," won't reform themselves. We have to do it - fair rules and regulations applied equally with a bias towards talent and new opportunities, innovation and progress on major problems. We'll be find.

McCain was wrong. The fundamentals of the economy stink. But the fundamentals of the citizens are
excellent - if McCain and his privilege crowd would just play by the rules; more appropriately, if we just make them play by the rules.

:hi:

[bleever]

13. Okay, that was cheery.

Maybe the consolation is that the effect of derivatives is global, and not just national, so that we all go down together?

If the global banking system goes down, where does it land?

Is it Lord of the Flies? Or is it only the Endtimes if you happen to be a Global Banker?


In any case, I think it's good to be able to grow your own vegetables.


(Looking forward to what you might have to say about AIG).

[JDPriestly]

19. Let Dubai and the Cayman Islands rescue Wall Street.

Let the American government rescue the American people.

The American government is supposed to serve the American people.

The Bush administration is not serving the interests of the American people. Not at all.

[autorank]

20. AIG

Just doing their thing as part of the big casino. They might have tipped the scales, so they got saved.
An insurance company. Good grief! I'm looking forward to a side by side of who gets to 'drop dead and
who doesn't. It just might have something to do with 'friends of the Bush cartel.' This is way beyond
Junior. It's the whole ball game. Now the good news - you're right - it's egalitarian in a global
sense. Everybody goes down - a zero sum game.

What a bunch of clowns. They have the Golden Goose and they poison it. The worst elite in the history
of the world controls our political apparatus. I'm watching Barton Fink, doing some work - that's
about appropriate to all of this;)

[truedelphi]

15. It is being said again and again that they are doing this bailout to save us.

I am sorry for the cynicism but I suspect not. The bailout monies will only guarantee that someday very soon we will all be millionaires, as a loaf of bread will cost 100,000 bucks.

This bailout set up is simply a way to transfer more of the wealth to the inner crowd. We are getting the shaft. And I hate seeing my tax money putting the CEOs, the managers and executives into the remaining lifeboats. The ship is going down, and as far as I am concerned, let it go down in the free market theory that they preached to us for so long.

[autorank]

22. "We are nothing to them."

"In return for contributions, the election winners come through by fixing the laws so that The Money Party cleans up. Lower taxes, highly favorable business regulations, laws that shield their businesses from real competition all start with the nonstop flow of Money Party funds. Cost is no object, because in the end it’s all paid for with our tax dollars.

"The Money Party gets no-bid contracts as well as the ability to lay off their employees and dump their pension plans just about any time they want. It doesn’t get much better than that. It's welfare for big money and survival of the fittest for the rest of us.

"We are nothing to them.

Michael Collins (if I do say so myself)
http://www.scoop.co.nz/stories/HL0709/S00549.htm

[Greyhound]

16. Sounds like a perfect time to re-invent a currency control system. n/t

[HCE SuiGeneris]

21. A "quadrillion dollar derivatives bubble"

Oh, crap.

Where to now... :shrug:

[autorank]

48. Every time we think we've heard the worst, they surprise us

I wonder if they're trying?
:shrug:

[autorank]

23. Kick for the truth

:kick:

[eridani]

24. Can we stop looking at phony mirages here?

What we need to survive is food, water, energy and raw materials to make stuff. And of course the human mental and physical capital to use all of that. If you were God and said as of this instant, that 1000 trillion ceases to exist, we still have all of the really necessary things. (OK, we have population and resource shortage problems, but these aren't financial.

[autorank]

25. Right, we decouple from their madness

Oh, so sorry, your numbers are absurd. Therefore, they don't impact the rest of us.

The banking system would have to be federalized but so what. it could't be any worse and
the public would have some input.

There's so much work to do, productive for the country and the world. Time to get busy.

[truedelphi]

37. I agree with you.

Today they are saying that there will be a ban on short selling - that the valuations of companies like Lehman Brothers, like AIG, and also Morgan Stanley and Goldman Sachs - that all these companies may have been facing a devaluation of their companies' worth based upon nothing more than "rumors" that flew about. These rumors were set up to enable those who sell short to benefit from the rumors and devaluation. (I don't mean to slight any and all who sell short - but anyone creating rumors is truly despicable.)

Boy what a way to run an economy!!

[Hubert Flottz]

26. The Ghost of Tom Joad is stalking King George's Court...

And Andrea Mitchell's hubby helped Tom Joad up from the graveyard.

Snip...

"The point everyone misses," wrote economist Robert Chapman a decade ago, "is that buying derivatives is not investing. It is gambling, insurance and high stakes bookmaking. Derivatives create nothing."1 They not only create nothing, but they serve to enrich non-producers at the expense of the people who do create real goods and services. In congressional hearings in the early 1990s, derivatives trading was challenged as being an illegal form of gambling. But the practice was legitimized by Fed Chairman Alan Greenspan, who not only lent legal and regulatory support to the trade but actively promoted derivatives as a way to improve "risk management." Partly, this was to boost the flagging profits of the banks; and at the larger banks and dealers, it worked. But the cost was an increase in risk to the financial system as a whole."

http://www.opednews.com/articles/IT-S-THE-DERIVATIVES-STUP-by-Ellen-Brown-080918-354.html

And everyone knows that the "Mavericks" are gambling fools.

The fix was in all the way back when...Federal Reserve Act of 1913

Woodrow Wilson after creating the Federal Reserve said:

"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world. No longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men."
~ Woodrow Wilson

***************

Paul Moritz Warburg

The German-American banker and banking theorist Paul Moritz Warburg (1868-1932), as spokesman for the large bankers of America, favored a highly centralized banking system. In much modified form, this became the Federal Reserve System.

http://www.answers.com/topic/paul-warburg


UBS Warburg...

US demands names of UBS customers

The US Government moved a step closer yesterday to ripping off the veil of secrecy that for centuries has protected the identity of UBS clients as a federal court took the unprecedented step of demanding that the Swiss bank hand over the names of as many as 20,000 of its customers.

A federal judge in Miami issued an order authorising the Internal Revenue Service (IRS) to retrieve from UBS information about US taxpayers who may be using Swiss accounts to evade income taxes.

The order, signed by Judge Joan Lenard and announced after the markets closed, directs UBS to produce records identifying US taxpayers with accounts in Switzerland who have elected to have their accounts remain hidden from the IRS. The US Government’s Justice Department believes that as many as 10,000 UBS customers collectively have about $20 billion of assets in “undeclared” accounts and that the bank has helped them to avoid about $300 million in taxes.

The law requires a US taxpayer to report all financial accounts in a foreign country if the total value of the accounts exceeds $10,000. Failure to report a foreign account can lead to a penalty of up to 50 per cent of the amount in the account at the time of the violation.This is the first time that the US courts have authorised such a request over a foreign bank and the move could put it on a collision course with the authorities in Switzerland, where it is illegal for banks to disclose confidential information without client approval. MORE...

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4251600.ece

UBS Warburg Sees Life In Enron Division


Financial-services firm to acquire failing energy company's trading unit

By Steve Konicki
InformationWeek
January 21, 2002 12:00 AM (From the January 21, 2002 issue)


UBS Warburg will take control of Enron Corp.'s wholesale energy trading unit later this month and become the owner of some of the most advanced online energy trading technology. The financial-services firm unveiled plans to acquire Enron's online trading business last week in a 10-year profit-sharing deal.

The crown jewel of the IT assets UBS Warburg is getting from Enron is the custom analytical tools the energy company developed since its founding in 1985. "Enron's secret sauce was its ability to look at all the independent factors that could affect the market and, in a risk-conscious way, create a sophisticated analysis that gave it a real edge," says Ethan Cohen, an Aberdeen Group senior analyst.

Enron's analytical technology let it maintain data on the effects of business conditions, weather, energy commodity prices, political strife, and other factors that affect energy markets. That data, along with real-time information on the markets, fed Enron's analytical tools that allowed it to spot buying or selling opportunities well in advance of competitors, Cohen says.
Knowmadic Inc. in Santa Clara, Calif., was Enron's primary provider of real-time market data. "That kind of real-time information is what a trader needed to make sure he had the upper hand," says Brian O'Neill, Knowmadic's chief operating officer. MORE...

http://www.informationweek.com/news/software/enterpriseapps/showArticle.jhtml?articleID=6500526

Phil Gramm's UBS work raises new lobbyist questions for John McCain

U.S. Sen. John McCain's presidential campaign faces questions regarding a top economic adviser's work for Swiss banking giant UBS Warburg.

Economist and former U.S. Sen. Phil Gramm is vice chairman of UBS Investment Bank and has lobbied Congress on the company's behalf.

UBS has been hit hard by the U.S. housing and mortgage meltdowns. The investment banking and mortgage industry has lobbied for less regulation in past years and is worried about potential federal actions to address the housing subprime bust.

Arizona is one of the hot spots for the slow housing market and problems with subprime mortgages. MORE...

http://www.bizjournals.com/phoenix/stories/2008/05/26/daily15.html?ana=from_rss

Phil Gramm joins UBS Warburg

Texas Republican, who fought corporate reform act, to advise clients on corporate finance issues.
October 7, 2002: 10:28 AM EDT



NEW YORK (CNN/Money) - Senator Phil Gramm will become vice chairman of UBS Warburg, the financial services company said Monday.

The Texas Republican, who is retiring at the end of his current term after 24 years in Congress, will "advise clients on corporate finance issues and strategy," according to a UBS Warburg news release.

"Senator Gramm's experience gained from more than 35 years in academia and government make him uniquely suited to assist our clients to meet the challenges presented by today's business environment," UBS Warburg CEO John Costas said in a release.

Gramm drew criticism for being one of the few legislators who objected to the Sarbanes-Oxley corporate reform bill, passed this summer and signed into law by President Bush.

The act was the most sweeping reform of corporate accounting since the Great Depression, and it came in response to a series of corporate accounting scandals that began with the collapse of Enron Corp., once the seventh-largest U.S. company. Gramm's wife Wendy was a member of Enron's board of directors and a member of the board's auditing committee. MORE...

http://money.cnn.com/2002/10/07/news/companies/warburg/index.htm

The Hitler Project

Bush Property Seized--Trading with the Enemy

snip...

Max Warburg replied on March 27, 1933, assuring his American sponsors that the Hitler government was good for Germany...Much more on the Paul & Max Warburg/Bush/Hitler connection.

http://www.tarpley.net/bush2.htm

Keep in mind through all of this, that Phil Gramm/Warburg would probably be McCain's man pullin all the strings on Wall Street, if McCain fools the people in November.

[autorank]

35. Excellent!

Thanks for this. Vital information on the rigged game where the rules are made by the owners who seem
to win every time, which they take to mean that they're superior.

I like this from your reply:

"The US Government moved a step closer yesterday to ripping off the veil of secrecy that for centuries has protected the identity of UBS clients as a federal court took the unprecedented step of demanding that the Swiss bank hand over the names of as many as 20,000 of its customers."


Oops!

[Hubert Flottz]

42. We've been bushwhacked, sacked and stampeded by team

BushCo and the people who own them.(the international super-bankers)

When Gary Allen wrote the 'Rockefeller File' he was seeing these past few days of Wall Street insanity coming, from nearly 40 years ago.

http://www.mega.nu:8080/ampp/gary_allen_rocker/

When the SCOTUS installed Bush on 12/12/2000, they drove the final nail in the coffin of the founder's "American Dream."

McCain has been playing this screw the working man game all the way down the line too. That Maverick has that(Lying W)BushCo brand all over his old ambitious, arrogant, 90% complicit hide.

[truedelphi]

39. You guldarn conspiracy theorist!! Why these established banking practices

Such as derivatives are jsut an outgrowth of the need for the free markets to sustain themselves.

And to think you cite the Federal Reserve as some type of abomination. If the Federal Reserve was bad as people like you make out, wouldn't we have had a Great Depression a good two or three years earlier that the one we had??

:sarcasm:

[Hubert Flottz]

40. Read this three times and say your "Heil Rothschilds"

http://www.scribd.com/doc/2683321/The-Rockefeller-File-by-Gary-Allen

Now go...and spin no more! :evilgrin:

[truedelphi]

46. Am on my way there to read your link. I must say -

I'd rather believe in a conspiracy theory that was true than believe in a lot of nonsense that the Authrorities tell me is true although it looks and behaves like nonsense.

[Joe Chi Minh]

27. Only 18% of middle-class families have three months' worth of accumulated

income, the amount needed to have a chance of surviving a financial crisis! The scariest words I've heard in my now geriatric life-time.

[Joe Chi Minh]

28. Oddly enough, the next scariest is that the current value of derivatives is $1000 trillion.

[Hubert Flottz]

30. Are you better off now than you were 8 years ago...

The GOP is sure failing that Saint Reagan who to vote for test. And the flop flops never stop.

[autorank]

36. It makes no sense and it can't really exist

How do you redeem something that's 11 times the total value of the worlds economies combined?

They'll have an answer but we won't be able to understand it. It's a 'leet thing.

:hi:

[Joe Chi Minh]

41. Mike, you keep making me revise my "scariest things I've read in

my life-time! I'd overlooked that. Perhaps it was too much to contemplate, still less, grasp.

[autorank]

50. We're in the same club

I've known about this since this - "Us" versus "Them" but Ive never been able to grasp the way the scheme works until I read this article from the OP. As Ricky said to Lucy, 'Somebody's got some splainin' to do.'

[Taliesan]

29. Ponzi scheme is right.

[autorank]

32. The day of the "high flyer" is over

They're leveraged too but it's time to come back to earty, make things people use, keep
your customers satisfied, look out for family and others.

It will be interesting when this breaks.

[Karenina]

31. Ellen Brown is FANTASTIC!

Thanks for this!

[autorank]

33. She's very clear -

I've been trying to get a handle on the implications of derivatives which blow my mind.

When she connected up these bailouts with protecting that scheme, it all made sense.

Welcome

[Karenina]

38. Another kick for DUers!

:kick:

[wiggs]

34. This is one reason why increasing taxes on the wealthiest among us -- those

who have benefitted the most from crazy capitalism -- makes sense. One percent of us have made incredible amounts of money and they hope to hang onto it by spreading the cost of decline around to the rest of us. Those who made billions from derivatives should either be taxed to get some back or should otherwise kick in now to save the system.

[autorank]

51. Right and 2%-3% isn't nearly enough. This has been a looting!

[truedelphi]

52. Actually last week the media was TOUTING that the American banks were putting together

Fifty billion bucks to help bailout those insititutions that are suffering.

But the media didn't mention that by this week's end, the American taxpayer has been stiffed 900 billion dollars - eighteen times more than the Fifty Billion the banks are pledging.

[robertpaulsen]

44. K & R!

:kick:

[autorank]

54. You showed up!

Busy times:)

[Phoebe Loosinhouse]

45. Kick! (Already R'd)

[Raksha]

53. Could someone please explain derivatives in layman's terms?

What are derivatives, how do they work, and how did they get so out of control?

[lligrd]

55. Good Description Here

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4038459&mesg_id=4038652