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Colossal Financial Collapse: The Truth behind the Citigroup Bank “Nationalization”
- Text size
F. William Engdahl
Global Research
November 24, 2008
On Friday November 21, the world came within a hair’s breadth of the most colossal financial collapse in history according to bankers on the inside of events with whom we have contact. The trigger was the bank which only two years ago was America’s largest, Citigroup. The size of the US Government de facto nationalization of the $2 trillion banking institution is an indication of shocks yet to come in other major US and perhaps European banks thought to be ‘too big to fail.’
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| Paulson demanded, and got from a labile US Congress, Democrat as well as Republican, sole discretion over how and where he can invest the $700 billion, to date with no effective oversight. It amounts to the Treasury Secretary in effect ‘spitting into the wind’ in terms of resolving the fundamental crisis. | |
The clumsy way in which US Treasury Secretary Henry Paulson, himself not a banker but a Wall Street ‘investment banker’, whose experience has been in the quite different world of buying and selling stocks or bonds or underwriting and selling same, has handled the unfolding crisis has been worse than incompetent. It has made a grave situation into a globally alarming one.
‘Spitting into the wind’
A case in point is the secretive manner in which Paulson has used the $700 billion in taxpayer funds voted him by a labile Congress in September. Early on, Paulson put $125 billion in the nine largest banks, including $10 billion for his old firm, Goldman Sachs. However, if we compare the value of the equity share that $125 billion bought with the market price of those banks’ stock, US taxpayers have paid $125 billion for bank stock that a private investor could have bought for $62.5 billion, according to a detailed analysis from Ron W. Bloom, economist with the US United Steelworkers union, whose members as well as pension fund face devastating losses were GM to fail.
That means half of the public’s money was a gift to Paulson’s Wall Street cronies. Now, only weeks later, the Treasury is forced to intervene to de facto nationalize Citigroup. It won’t be the last.
Paulson demanded, and got from a labile US Congress, Democrat as well as Republican, sole discretion over how and where he can invest the $700 billion, to date with no effective oversight. It amounts to the Treasury Secretary in effect ‘spitting into the wind’ in terms of resolving the fundamental crisis.
It should be clear to any serious analyst by now that the September decision by Paulson to defer to rigid financial ideology and let the fourth largest US investment bank, Lehman Brothers fail, was the proximate trigger for the present global crisis. Lehman Bros.’ surprise collapse triggered the current global crisis of confidence. It was simply not clear to the rest of the banking world which US financial institution bank might be saved and which not, after the Government had earlier saved the far smaller Bear Stearns, while letting the larger, far more strategic Lehman Bros. fail.
Some Citigroup details
The most alarming aspect of the crisis is the fact that we are in an inter-regnum period when the next President has been elected but cannot act on the situation until after January 20, 2009 when he is sworn in.
Consider the details of the latest Citigroup government de facto nationalization (for ideological reasons Paulson and the Bush Administration hysterically avoid admitting they are in the process of nationalizing key banks). Citigroup has more than $2 trillion of assets, dwarfing companies such as American International Group Inc. that got some $150 billion in US taxpayer funds in the past two months. Ironically, only eight weeks before, the Government had designated Citigroup to take over the failing Wachovia Bank. Normally authorities have an ailing bank absorbed by a stronger one. In this instance the opposite seems to have been the case. Now it is clear that the Citigroup was in deeper trouble than Wachovia. In a matter of hours in the week before the US Government nationalization was announced, the stock value of Citibank plunged to $3.77 in New York, giving the company a market value of about $21 billion. The market value of Citigroup stock in December 2006 had been $247 billion. Two days before the bank nationalization the CEO, Vikram Pandit had announced a huge 52,000 job slashing plan. It did nothing to stop the slide.
The scale of the hidden losses of perhaps the twenty largest US banks is so enormous that if not before, the first Presidential decree of President Barack Obama will likely have to be declaration of a US ‘Bank Holiday’ and the full nationalization of the major banks, taking on the toxic assets and losses until the economy can again function with credit flowing to industry once more.
Citigroup and the government have identified a pool of about $306 billion in troubled assets. Citigroup will absorb the first $29 billion in losses. After that, remaining losses will be split between Citigroup and the government, with the bank absorbing 10% and the government absorbing 90%. The US Treasury Department will use its $700 billion TARP or Troubled Asset Recovery Program bailout fund, to assume up to $5 billion of losses. If necessary, the Government’s Federal Deposit Insurance Corporation (FDIC) will bear the next $10 billion of losses. Beyond that, the Federal Reserve will guarantee any additional losses. The measures are without precedent in US financial history. It’s by no means certain they will salvage the dollar system.
The situation is so intertwined, with six US major banks holding the vast bulk of worldwide financial derivatives exposure, that the failure of a single major US financial institution could result in losses to the OTC derivatives market of $300-$400 billion, a new IMF working paper finds. What’s more, since such a failure would likely cause cascading failures of other institutions. Total global financial system losses could exceed another $1,500 billion according to an IMF study by Singh and Segoviano.
The madness over a Detroit GM rescue deal
The health of Citigroup is not the only gripping crisis that must be dealt with. At this point, political and ideological bickering in the US Congress has so far prevented a simple emergency $25 billion loan extension to General Motors and other of the US Big Three automakers—Ford and Chrysler. The absurd spectacle of US Congressmen attacking the chairmen of the Big Three for flying to the emergency Congressional hearings on a rescue loan in their private company jets while largely ignoring the issue of consequences to the economy of a GM failure underscores the utter lack of touch with reality that has overwhelmed Washington in recent years.
For GM to go into bankruptcy risks a disaster of colossal proportions. Although Lehman Bros., the biggest bankruptcy in US history, appears to have had an orderly settlement of its credit defaults swaps, the disruption occurred before-hand, as protection writers had to post additional collateral prior to settlement. That was a major factor in the dramatic global market selloff in October. GM is bigger by far, meaning bigger collateral damage, and this would take place when the financial system is even weaker than when Lehman failed.
In addition, a second, and potentially far more damaging issue, has been largely ignored. The advocates of letting GM go bankrupt argue that it can go into Chapter 11 just like other big companies that get themselves in trouble. That may not happen however, and a Chapter 7 or liquidation of GM that would then result would be a tectonic event.
The problem is that under Chapter 11 US law, it takes time for the company to get the protection of a bankruptcy court. Until that time, which may be weeks or months, the company would need urgently ‘bridge financing’ to continue operating. This is known as ‘Debtor-in-Possession or DIP financing. DIP is essential for most Chapter 11 bankruptcies, as it takes time to get the plan of reorganization approved by creditors and the courts. Most companies, like GM today, go to bankruptcy court when they are at the end of their liquidity.
DIP is specifically for companies in, or on the verge of bankruptcy, and the debt is generally senior to other outstanding creditor claims. So it is actually very low risk, as the amount spent is usually not large, relatively speaking. But DIP lending is being severely curtailed right now, just when it is most needed, as healthier banks drastically cut loans in the severe credit crunch situation.
Without access to DIP bridge financing, GM would be forced into a partial, or even a full liquidation. The ramifications are horrendous. Aside from loss of 100,000 jobs at GM itself, GM is critical to keep many US auto suppliers in business. If GM failed soon most, possibly even all of the US and even foreign auto suppliers will go under. Those parts suppliers are important to other auto makers. Many foreign car factories would be forced to close due to loss of suppliers. Some analysts put 2009 job losses from a GM failure as high as 2.5 million jobs due to the follow-on effects. If the impact of that 2.5 million job loss is seen in terms of the overall losses to the economy of non-auto jobs such as services, home foreclosures caused and such, some estimate total impact would be more than 15 million jobs.
So far in the face of this staggering prospect, the members of the US Congress have chosen to focus on the fact the GM chief, Rick Wagoner, flew in his private company jet to Washington. The Congressional charade conjures up the image of Nero playing his fiddle as Rome goes up in flames. It should not be surprising that at the recent EU-Asian Summit in Beijing, Chinese officials mooted the idea of trading between the EU and Asian nations such as China in Euro, Renminbi, Yen or other national currencies other than the dollar. The Citigroup bailout and GM debacle has confirmed the death of the post-1944 Bretton Woods Dollar System.
The real truth behind Citigroup bailout
What neither Paulson nor anyone in Washington is willing to reveal is the real truth behind the Citigroup bailout. By his and the Republican Bush Administration’s adamant earlier refusal to take an initial resolute action to immediately nationalize the nine or so largest troubled banks, he has created the present debacle. By refusing on ideological grounds to instead reorganize the banks’ assets into some form of ‘good bank’ and ‘bad bank,’ similar to what the Government of Sweden did with what it called Securum, during its banking crisis in the early 1990’s, Paulson and company have created a global financial structure on the brink.
A Securum or similar temporary nationalization would have allowed the healthy banks to continue lending to the real economy so the economy could continue operating, while the State merely sat on the undervalued real estate assets of the Swedish banks for some months until the recovering economy made the assets again marketable to the private sector. Instead, Paulson and his ‘crony capitalists’ in Washington have turned a bad situation into a globally catastrophic one.
His apparent realization of the error of his initial refusal to nationalize came too late. When Paulson reversed policy on September 19 and presented the nine largest banks with an ultimatum to accept partial Government equity ownership, abandoning his original bizarre plan to merely buy up the toxic waste asset-backed securities of the banks with his $700 billion TARP taxpayer money, he never revealed why.
Under the original Paulson Plan, as Dimitri B. Papadimitriou and L. Randall Wray of the Jerome Levy Institute at Bard College in New York point out, Paulson sought to create a situation in which the US ‘Treasury would become an owner of troubled financial institutions in exchange for a capital injection—but without exercising any ownership rights, such as replacing the management that created the mess. The bailout would be used as an opportunity to consolidate control of the nation’s financial system in the hands of a few large (Wall Street) banks, with government funds subsidizing purchases of troubled banks by “healthy” ones.’
Paulson soon realized the scale of crisis, largely triggered by his inept handling of the Lehman Brothers case, had created an impossible situation. Were Paulson to use the $700 billion to buy up toxic waste ABS assets from the select banks at today’s market price, the $700 billion would be far too little to take an estimated $2 trillion ($2,000 billion) in Asset Backed Securities off the books of the banks.
The Levy Economics Institute economists state, ‘It is probable that many and perhaps most financial institutions are insolvent today — with a black hole of negative net worth that would swallow Paulson’s entire $700 billion in one gulp.’
That reality is the real reason Paulson was forced to abandon his original ‘crony bailout’ TARP plan and opt to use some of his money to buy equity shares in the nine largest banks.
That scheme as well is ‘dead on arrival’ as the latest Citigroup nationalization scheme underscores. The dilemma Paulson has created with his inept handling of the crisis is simple: If the US Government paid the true value for these nearly worthless assets, the banks would have to write down huge losses, and, as Levy economists put it, ‘announce to the world that they are insolvent.’ On the other hand, if Paulson raised the toxic waste purchase price high enough to protect the banks from losses, $700 billion ‘will buy only a tiny fraction of the ‘troubled’ assets.’ That is what the latest nationalization of Citigroup is about.
It is only the beginning. The 2009 year will be one of titanic shocks and changes to the global order of a scale perhaps not experienced in the past five centuries. This is why we should speak of the end of the American Century and its Dollar System.
How destructive that process will be to the citizens of the United States who are the prime victims of Paulson’s crony capitalists, as well as to the rest of the world depends now on the urgency and resoluteness with which heads of national Governments in Germany, the EU, China, Russia and the rest of the non-US world react. It is no time for ideological sentimentality and nostalgia of the postwar old order. That collapsed this past September along with Lehman Brothers and the Republican Presidency. Waiting for a ‘miracle’ from an Obama Presidency is no longer an option for the rest of the world.
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November 24th, 2008 at 9:42 am
Rubin helped to make a mess at Citigroup,n ow he is working for Obama.
November 24th, 2008 at 10:05 am
Paulson’s made no mistakes.
This was his desired end result.
It’s all a con job, and he performed his role flawlessly.
Engdahl is making excuses for ‘bad decisions’ that are wholly unwarranted.
Their agenda is failing forward.
We are on the edge of the abyss today because that is what was deisred by the MoneyMasters.
November 24th, 2008 at 11:09 am
Seriously, when are we gonna start putting people in PRISON for these crimes?
November 24th, 2008 at 11:13 am
“The absurd spectacle of US Congressmen attacking the chairmen of the Big Three for flying to the emergency Congressional hearings on a rescue loan in their private company jets”
So how do the Congressmen fly around.
November 24th, 2008 at 11:14 am
i dont know about you all-if we gonna bail out some more crooks-i want my ten thousand dollar christmas bonus-that is were i get my income for the year-i only make 23 thousand a year-no welfare-no insurance-no medicade-no foodstamps-no government handouts-there are a lot of people worse off than me-i have a job and a roof over my head-me and my dog live in a 12×12 ft. room to save energy-my computer is my heater-i supose that so long as i have a job(on a farm=the government is trying to shut down the farms in america;the folks like us that supply food at little prophit)i dont exactly call this doing my part for the enviroment and energy conservation-HARD TIMES USA-i wish they would hurry up and turn the middle class into paupers so they can wake up-you can laugh at me and my dog living in a shack-pretty soon-you all will be poor-welcome to the 700(billion)club
November 24th, 2008 at 11:22 am
7.4 TRILLION DOLLARS was just STOLEN from you , your children,, and your childrens children,,, and their childrens children… THIS ,,,is going to get ugly very, very fast now. Make your peace with God!
November 24th, 2008 at 11:37 am
I think its painfully obvious what is going on here behind the scenes. What amazes me is these people have spouses and children and somehow they manage to sleep at night. The next 6 months is going to be seriously ugly. And by next summer our unemployment will be 10% and climbing daily. Virtually all small business is going to suffer to the point of bankruptcy. Maybe we should all get govt jobs, thats an area you know will keep expanding.
November 24th, 2008 at 11:38 am
Excellent article! Someone has finally laid out where we are today. That will change tomorrow but we can deal with that once we are on the right track of getting the truth. This era has redefined what an economic depression really is. If you were waiting for the 4 quarters of consecutive negative GDP then wait no further. Do your own math. Forclosures and the loss of Lehman, Bear-Stearns, WAMU, Wachovia, Indy Mac, Downey, Merrill Lynch, AIG etc and the low ball stock prices of Ford, GM, GE, Citi etc tell a story.There is no possible way of recovering due to the new climate for business. Where are M&A activity? What about the IPO market or the backing of large bond deals? That is what made the big bucks for the banks and investment houses. They don’t make it on passbook savings and the spread on loans. All the cards have been played.
November 24th, 2008 at 11:45 am
What does a bank holiday mean? Is there a limit on what can be withdrawn from an ATM? Are bills still due or do creditors “understand” that any check you send will not clear till the holiday is over? Someone please ’splain me, I are confused.
November 24th, 2008 at 11:47 am
Everyone makes light of the few remaining people who are decent enough to be appalled by the self-gratifying largesse of nearly every corporate figurehead in the world, but the simple fact is that those few decent ones are right – private jets and other personal luxuries, typically written off to the shareholders of both their employer and our nation, are an fundamental part of the mindset that enthralls our whole society – money is good, no money is bad. Cash value has replaced every other real value in our society, so everyone is out for their own, which is fine by me, just don’t make me pay for it, and don’t blame me, when it doesn’t go your way.
November 24th, 2008 at 11:48 am
I really am planning to meet with the Grim Reaper within the next 2-3 years because of all this. Seriously, life is going to get tough for a lot of people, and many will want to find easy ways to die. Others will die for lack of food, water and subsequent health issues that arise. Honestly, the new trend will be people looking for easy ways to die. After living half of your life in America as it was, having to face a hard core America in the future as a middle aged person of 50+ is going to trigger a lot of suicides all across the country. The rate is high already among women especially in that age bracket.
November 24th, 2008 at 11:50 am
All things considered.. What is money actually work? WHat is labor worth?..
We are addicted to a literal finacial “placebo” and cannot justify affording to take the placebo nor can ne convince the doctor not to make us take it.. even it if has no effect..
The shell game is over.. there is nothing under any of the shells. Why do they keep trying to play?
The economy is dead.. But no one will admit it because of the consequences they may face. Whether it was killed on purpose or not is now irrelevant. They keep delaying for the purposes of [oliticians getting “re-elected”,, one idiot leaving the higghest office in the US only to be repalced by another.
To those of religious values who hunt the “magic anti-Christ” .. Bush and Obama are not the anit-Christ.. they are juggling to avoid the position of being the next “sacrificial lamb” in the history of the US. If they can just make it through… history will do the lies about them in a favorable light.
November 24th, 2008 at 11:56 am
They are setting us up for a checkmate, all the pieces are in place and their just moving into position.
November 24th, 2008 at 11:57 am
Surprise…Saudi Prince Talal announced just before this huge robbery of the American people that he is buying more of the Citigroup stocks since they are so undervalued.
See..
http://money.aol.com/news/arti.....ake/255069
This country’s stocks are purposefully being short sold by Arabs to clean up on cheap stocks..DISGUSTING..and they are being paid for their “charity” by us the US Taxpayers!
November 24th, 2008 at 12:02 pm
Yes it will eventually happen!! But I don’t think the economy will crash this year because the globalist are not as hungry since we have given them 2 trillion dollars to feast on for the next 1 to 2 years!! So I am predicting that it will happen in November of 2009!! These luciferic devils can’t wait to have their final goal met of world domination!! And it will happen soon so they can play god!! But there could very well be World War 3 first; and then Martial Law; and then the ANTICHIRST BEAST CHIP SYSTEM THAT I HAVE BEEN RANTING AND RAVENING ABOUT FOR 1 TO 2 YEARS!! And if you take their ZOMBIE MAKING beast chip; you will forever be cursed by the Almighty God and His Great Lamb and His Holy Angels!! As you will be thrown into the GREAT LAKE OF FIRE AND BRIMSTONE WITH lucifer and his fallen angels and his beast chipped children!! BUT REMEMBER ALEX; YOU SHOULD COME TO GOD ALL THE WAY TO FULFILL YOUR APOSTOLIC DESTINY where you will find a greater satisfaction and peace and fulfillment!!
November 24th, 2008 at 12:24 pm
To #11:
Don’t give the bastards the satisfaction of forcing you to off yourself. Make the lying bastards kill you.
I got good news…
The good news is that the very tv networks the rulers rely on to keep the population soothed with lies and propaganda are on the brink of becoming 24-7 infomercial stations just to stay afloat.
All the lying sacks from the broadcast networks soon to be defunct “news divisions” can all go get jobs at PBS or NPR and deliver lies to the public while openly being on the government payroll instead of working through middlemen.
When the going gets tough…The tough turn pro…
November 24th, 2008 at 12:35 pm
When will americans learn that america is subserviant to the highest bidder? MOre than one, and antigmos were pretty close to understanding the larger picture of the world financial elite noticing how the arabs seem to always be the ones buying something here in the usa that has been devalued or totally went bankrupt altogether. Middle eastern nations have bought the best and most technological military in the world when they continued to bail out america’s debt, thus making us their personal slaves to fight the wars they don’t want their own people dying in! Now that all we as a nation have left to offer the arabs are our banking systems and the control over them, we will continue to feed our children into the meat grinder and sell more land and other mineral rights to these arabs! Soo dusgusting and heartbreaking!
November 24th, 2008 at 12:39 pm
religious rantings about a loving God burning people in a lake of fire is getting on my nerves. Those that claim a loving God could do such a thing…are themselves worshipping a God lower than Satan…who IS in control of the world. He has duped you….THINK
He would never torture people. the Lake of fire is the second death….read the Scriptures carefully.
Eccl 9:5
times will continue to worsen. the “mark of the beast” is worship of country…not some chip…..Daniel spoke about beasts and revealed they were the march of world powers. To suppose any man-made government is capable of solving the problems now culminating in a global economic meltdown….is actually taking on the mark. Remember…in the name of religion…millions of lives are destroyed yearly. In the name of a country…..a man will kill another. One world government is certainly the answer….but NOT anything from these wicked new world order elite.
God’s Kingdom is the only answer for mankind’s woes….
November 24th, 2008 at 12:51 pm
NO BAILOUT FOR ANYONE!!!!!!!!!!!!!!!!
DON’T LET THEM SPEND YOUR LIFE SAVINGS AND HARD EARNED “”MONEY”" TO ENRICH THEMSELVES MORE
Let GM fall.. Let them all fall..
Our whole economy is collapsing because it has no foundation.
WHERE IS OUR REAL MANUFACTURING??>>Overseas
WHAT DOES ‘CREDIT’ HAVE TO BACK IT?? Federal Reserve Notes
WHAT VALUE DOES A DOLLAR OR FEDERAL RESERVE NOTE HAVE?>> Absolutely none..
We cannot stop this..
“”"”"”"”"”"”"”"”"”"”"”"”"”"”"”"”"”"”"
#12 Casual Observer
The shell game is over.. there is nothing under any of the shells. Why do they keep trying to play?
The economy is dead.. But no one will admit it because of the consequences they may face. Whether it was killed on purpose or not is now irrelevant. They keep delaying for the purposes of politicians getting “re-elected”,, one idiot leaving the higghest office in the US only to be repalced by another.
“”"”"”"”"”"”"”"”"”"”"”"”"”"”"”"”"”"”
(S)He is ABSOLUTELY right..
We might be able to “bail-out” companies through socialism, but they will only flounder and teeter more until their ultimate and eventual demise.. Why does no one see it? Oh yeah thousands of economists do but they get the HUSH HUSH. Censonered!!! thanks for playing.
Millions of people will lose their jobs. It’s unavoidable. My father lost his company he had for 13 years in construction. These people will not die, things will just change. These people will be pissed and want someones head… Us truthers will show them why this is really happening.. The GOV is trying to stop this economic flat-spin so the masses don’t get pissed and unite.. That’s their greatest fear.. They want us to riot so they can Martial Law us. But they are more scared of the people uniting and digging up these corrupt roots that absorb the health and well being of all of us for the benefit of a very few.
IT’S TIME TO STOP THEM TO
REVOLUTION MY FRIENDS
ITS 1776 ALL OVER AGAIN
WE DO NOT HAVE ENEMIES TO FEAR ACROSS THE OCEANS
EXCEPT WE MUST FIGHT THIS D O M E S T I C THREAT
aequitas2686@hotmail.com
I’m not scared
Are you?
[come together, right now..
Over me]
November 24th, 2008 at 12:58 pm
HAHAHAHAHAHA………….You laugh at us “Jesus Freaks” ????!!!!!!??????
I knew when I was 12 years old that there was a one world government coming with evil intentions and that its main power would be FINANCIAL !!!!!
I also knew that America would become the chief persecuter of Christians in the world.
The “Jesus Freaks” have known this was coming for the last 2000 years, and actually Daniel in Babylon prophesied this about 3000 years ago. WHERE HAVE YOU BEEN??????
I also know just about exactly how this will all end.
Long story short……The world gets more wicked, the global kingdom of Satan exists for a short time and is then revealed to the universe for what it truly is.
… after the whole Satanic revolution against Jesus is naked and unmasked before the universe, and EVERYONE sees what a colossal mistake it was, Jesus returns to Earth, raises all that He has saved and takes them to Heaven. Satan stays alone on this world for 1000 years, at the end of which Jesus returns to Earth, raises up the wicked dead to their judgement. They are then consumed in a great fire that melts the earth, and the wicked dead, the wicked angels and Satan are all consumed in the fire. After they are dead and gone, Jesus makes the New Earth and then the real celebration starts. No HELL for the wicked. They are just dead.
And all this global banking, false flag terror, NWO crap will just be a distant memory.
Give your life to Jesus while you can. John 3:16
November 24th, 2008 at 1:00 pm
” If the American People ever allow the banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property, until their children will wake up homeless on the continent their fathers occupied. The issuing of money should be taken from the banks and restored to Congress and the People to Whom it belongs!”
-President Thomas Jefferson http://www.saveamericanow.com
November 24th, 2008 at 1:05 pm
” If the American People ever allow the banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property, until their children will wake up homeless on the continent their fathers occupied. The issuing of money should be taken from the banks and restored to Congress and the People to Whom it belongs!”
-President Thomas Jefferson http://www.saveamericanow.com ,!
November 24th, 2008 at 1:36 pm
So, what is one to do in a practical sense? Deflation would seem to call for paying down all debts, and buying up productive assets. Inflation would call for taking on debt to purchase things known as a store of value (gold, silver, real estate). What will YOU be doing?
Me, I don’t know. Saving wherever I can, as anyone should do at all times ANYWAY. But I don’t know whether to buy some truly beaten down stocks, or to liquidate my IRA and go to cash in hand, gold and silver coins, guns & ammo and food.
November 24th, 2008 at 1:50 pm
I was called Friday by a father of two who was just informed Citi will be taking his house in early January. The new ARM payment overwhelmed him and the debt is higher than the appraised value. He wanted to know how to get benefit of the bailout. I told him to call and write his congressman (whose identity the man was unaware of). I pity this family, and their cluelessness, but even more I wonder what will happen to the profiteers in these banks when millions of Dads are watching their kids starve, freeze or be shipped off to camps – a very real possibility in the near future, since there is no known fix at this point.
God help us.
November 24th, 2008 at 2:13 pm
My dad works for Smith Barney (Citigrou). He told me that 6 days ago the CEO Vikram Pandit met with his office and assured everyone that the company was solid. 6 days later my Dad is now a federal employee.
November 24th, 2008 at 2:38 pm
The Answer is still the same for the American People.
Grid-Lock DC with the 18 Wheeler Trucks, and Motor Cycle Gangs, litterally shut them all down, and throw Every last one of the lying ass bums out of DC. Then the People can Replace every last one of them with Real American’s that unemployed by the Millions right now.
There is ALWAYS an Answer for every problem in life that any Nation or People find themselves facing.
Don’t Give up to The NWO Plans that are Finally Exposed. The American People Have The Power in their hands right now.
YES YOU CAN Grid-Lock DC and Throw The Lying Ass Stealing Bums Out for Good !!!
November 24th, 2008 at 2:41 pm
Juan, I agree with everything you said.
So, exactly what do we do “Now”? A little pain, hunger, personal violations, I can take it. But the mental pain of watching those around us suffering, dieing, that’s what really affects us.
November 24th, 2008 at 3:41 pm
Here in South Africa, we watch with wry humour at the unfolding debacle in the US. I was warned some ten years ago that one must “never underestimate the financial and industrial powerhouse that is the USA”…..Well, out here in the third world, we tend to think a little before we do anything. I bought as much gold as I could at the then price of $256.00 per ounce. I have done well, very well. I have great roads, wonderful neighbours, DSL, clean running water, stable electricity supply and mile upon mile of exquisite beaches.
Having travelled regularly to Zambia, Namibia, Botswana and other African countries, )as well as the states on business),I have but one simple piece of advice, you had better batten down your hatches because it is going to get a hell of a lot worse for you. Out here in Southern Africa, we shall not go unscathed by any means, but we will still have a wonderfully good life, with wonderful people.
We have been through the financial mess about thirty years ago, fighting a “war” we did not understand, spending fortunes on military development, being financially raped by government controlled banks etc etc being attacked by “terrorists”…….and now, we smile more than anyone in Europe or the USA, or even Canada for that matter, maybe the “Ist world leading country can tell us why???
November 24th, 2008 at 4:14 pm
Hi all,
Stop waiting for GOD to showup. God doesn’t do palor tricks or request!!!!! For evil to win all good men have to do is NOTHING!!!! God helps those who help themselves. How would GOD know you deserve something if you don’t struggle for it? TIME TO START BUCKING UP AND BEING MEN. Violence is the last resort but start going to your Congressmen and start complaining. BE MAD YOU HAVE BEEN VOILATED. BEING ANGRY IS NOT A SICKNESS. ARM YOURSELF WITH FACTS AND CONFRONT THEM.
November 24th, 2008 at 4:38 pm
Over the past several weeks of reading various articles and those who ‘post’ their editorial comments, I have concluded that people who author the articles and the readers do not realize that there is an ‘economist’ that has proposed a solution to this ‘global economic and financial collapse’. The ‘economist’ is Lyndon LaRouche and the solution is placing the ‘global economic and financial system’ into bankruptcy, and developing a ‘credit-based system’ as prescribed in our USA-Constitution. USA must join the team with Russia, India, China, Brazil, France, Italy, and other potential players to force implement this new strategy. The one party that must be left out of the team are the British ‘financial world’ in the City of London.
FYI – Visit ‘www.larouchepac.com’ for a thorough economic and financial education.
Good Day:)
November 24th, 2008 at 4:52 pm
The only way we will get out of this mess is for the U.S. to begin producing our own steel, our own oil – via easing offshore drilling regulations; making all our own clothes and shoes and other textiles once again, and generally producing everything we need right here in the United States once again as we had done in the 40’s and 50’s. Rogue elements in the U.S. federal government have created trade agreements (WTO, GATT, NAFTA) that have devistated the U.S. economy and put millions of Americans out of work. Add to this an almost deliberate lack of financial oversight of hedge funds and derivative financial instrument that nobody can understand or figure out and our financial system has been ruined by it. Abraham Lincoln once said: “All that serves labor, serves the nation; All that harms is treason. There is no America without labor, for to fleece one is to rob the other.” Another important quote is Ben Franklin stating: “Any people willing to surrender basic liberty for security deserve neither.” Amen.
November 24th, 2008 at 4:53 pm
Dump the banks as they are a private corporation ripping us off. Start are own via States and Federal Constitutional Law. These crooks should be stopped. Lets go back to bartering and grow our own food. Who needs the banks that are the hight of thievery. JFK wanted them out and got shot. Lincoln wanted them out and got shot. They attack the highest honchos to do their dirty work and if they step out of line, they shoot them. What to do????
November 24th, 2008 at 5:46 pm
I agree with other posters, this is not the end of capitalism, this is the end of globalism. We will survive American ingenuity cannot be beat!
November 24th, 2008 at 6:39 pm
Nothing we are seeing here has anything to do with capitalism. We can say that we are seeing an end to interventionism, fascism, socialism, globalism, pretty much everything, but we cannot say this is an end to capitalism. We have never, in history, had a truly free market and we’ve never had true capitalism. Early America was a good experiment, but sooner or later Government has always stepped in to “lend a helping hand.” The result is the same every time: bigger government and loss of economic freedom.
Ludwig von Mises wrote repeatedly that government intervention in a market always leads to full blown socialism, because one intervention leads to another leads to a 7.4 trillion dollar bailout / massive theft. None of these problems we are seeing in the market would have occurred if the government were not involved in it; we are seeing exactly why government always fails. Let’s give free markets and capitalism a chance to fix this mess.
November 24th, 2008 at 7:54 pm
The only solution to this financial mess is to take this wonderful opportunity to DEcentralize banking. The federal reserve and large banking/investment institutions are the reason that we are in this mess. Now all we are doing is making them more centralized. The MSM does not discuss this. We are doing the only thing we should NOT be doing.
November 24th, 2008 at 8:03 pm
Abashira, pull your head out of your a&&! Lyndon LaRouche is an NWO hack. Spread your lies elsewhere.
November 24th, 2008 at 9:37 pm
It is sad that a lot of people do not know WTF they are talking about. When the government steps in and rescues a bank or a company like GM, this is in fact a socialistic economic approach for the better good of the entire population. If the government does not intervene and allows these huge corporations to fall, this is a capitalistic economic approach. Socialistic vs Capitalistic economic plans DO NOT MIX! It is like trying to mix oil with water. Either you decide to bail out companies that are in trouble and thus keep people working OR you allow these companies to fail and put up with the consequences. You can’t have it both ways!
November 24th, 2008 at 9:48 pm
Alex, why are my comments being censored? What is wrong with the following statement?
It is sad that a lot of people do not know WTF they are talking about. When the government steps in and rescues a bank or a company like GM, this is in fact a socialistic economic approach for the better good of the entire population. If the government does not intervene and allows these huge corporations to fall, this is a capitalistic economic approach. Socialistic vs Capitalistic economic plans DO NOT MIX! It is like trying to mix oil with water. Either you decide to bail out companies that are in trouble and thus keep people working OR you allow these companies to fail and put up with the consequences. You can’t have it both ways!
November 24th, 2008 at 9:53 pm
Paulson in his continued looting cannot stop the falling house of cards. Soon the globalist will be forced to let him allow it to collapse. They, the globalist bankers will have to be happy and settle with what they have been able to steal. He is so inept as he babbles and stutters his way through that it is almost comical. Soon the banker boys will run out of fingers with which to plug the dike and the flood waters of financial and human tsunami will consume them. When that happens we must move in unison and finish the job. Let the tsunami of American anger be felt. Let it ’s wave roll across this nation till all responsible and the orchestrator’s and benefactors of this disaster perish.
November 24th, 2008 at 10:46 pm
I can’t stand this slimy maggot Paulson, you’re gonna pay in eternity Paulson.
November 24th, 2008 at 10:51 pm
#36 Rakkur, a voice of reason. Thank you.
#37 BDog I concur
John Galt as usual to the point. There is an enlightenment coming I can feel it in the air.
November 24th, 2008 at 11:05 pm
A nation asleep.
A nation of fools
A nation of cowards
A nation that deceives themselves
A nation that cares not if they are slaves
A nation that cares not if their children are slaves
A nation is destroyed and it’s people stand idle
The chains of slavery are being riveted upon you
Why stand we here idle? What is it that gentlemen wish? What would they have? Is life so dear, or peace so sweet, as to be purchased at the price of chains and slavery? Forbid it, Almighty God! I know not what course others may take; but as for me, give me liberty or give me death!
Patrick Henry
November 24th, 2008 at 11:30 pm
thanks for the informative article. the end paragraph didnt make sense to me, though. as long as the us, eu and uk have private central banks, how do the governments take resolute action? so far govt action has been criminal and bumbling, and has just exasperated the situation in the irreal economy of paper. obama looks set to play the fdr script but he doesn’t know how. fdr packed govt with real live socialists and communists while obama is stacking it with same old same olds who are in on the scam.
also, did i dream this up or wasn’t citibank (citi) the successor bank to bcci? what are the chances that a global banking crisis shakes all the black budgets out into the light of day? enron was just doing the same thing the intelligence/terrorist/drug cartel-run banking underground do, cooking books, bait and switch, fear and loathing, whatever you want to call it.
naive question: isn’t it strange 2 trillion went missing at DoD around 2001 and 2 trillion gets mentioned a lot for bailing out NY banks in 2008?
November 25th, 2008 at 12:08 am
The only banks and companies that will be assisted are the ones that hold assets of base value and shall be bought up by the bankers with the help of taxpayers money, your children’s money, the rest shall be left to fail at your expense. So with the help of, the taxpayers money, the bankers shall buy the companies effectively nationalizing the banking system. Stealing your wealth. Pushing you into subjugation and slavery. Consolidating further the financial powers that have stolen your wealth to sustain their existence.
They are Traitors.
Let this be our Night of the Long Knives.
November 25th, 2008 at 12:08 am
Please stop posting these ‘it’s incompetence’ articles. Post the TRUTH! It is BY DESIGN. They are giving the $ away 2 their criminal conspirators ON PURPOSE! It’s no ‘accident’ or ‘mistake’. They R robbing U.
November 25th, 2008 at 12:20 am
from the article above: “It is only the beginning. The 2009 year will be one of titanic shocks and changes to the global order of a scale perhaps not experienced in the past five centuries. This is why we should speak of the end of the American Century and its Dollar System.”
You now see who is ruling and we are now under siege by our own government. This is a Coup de Tat, and we are experiencing the beginning of a One World Order. With one Government, one Money System, One Religion……the Trinity of Satan has raised its ugly head. President Bush is finishing his assignment as quickly as he can, a member of the Skull & Bones, and Illuminiti, and the Clintons are members of the Bilberbergers. The Rockefellas, the Rothchilds, the JP Morgans, The Bush Family, are the real rulers of the entire monetary system.They want complete power and all the money and all the property……which they just confiscated this last month. They will tell us soon, there is no money left. It’s a lie, its a scam of course. They have it all that’s all. There will be no money for the middleclass, the poor….cuz the very wealthy have just taken it all. The World Bank has just made their transfers from the USA Treasury. No other banks will have any money to loan. All businesses will fail, no jobs, no cars, a total collapse. The Wealthy will wisk off to some rondavue, leaving the Black President to handle the violence in the streets. While they are in their safe havens, the Bush’s on his 100,000 acres in Peru and probably the Cheney’s as well. And the Mark of the Beast is next, the money system, will now collaspse, we will be told to take a chip in our hand, all purchasing power will go through a chip, no more money to exchange. If you want to buy food , show your chip, gas, show your chip. Total Starvation should take about 31/2 years. =The Great Tribulation. Then once the population has decreased in the USA……all the Paulson’s and the Bush’s think that they will come back and live like Kings and all the peasants will be dead and gone and they will have a lot more oxygen to breathe and no longer will millions of people be a burden to them……besides the Mexicans will be their slaves now and grow their food for them, and work for food! Slavery will return. The men in our society have been demasculinized….they have worshipped other men whether they were a football player or a soldier, a boss, or a President. They are out of the protection mode of their family…….they have become confused with woman making more than men do. 1.5 millions of babies allowed to be aborted each year. Presidents create wars and take our young men and destroy them. Woman leaving men for woman, men leaving woman for a man. The confusion of their sin has destroyed their masculinity, therefore they will not see in time what has happened, nor do they care anymore….we will go down just like Hitler did to the 6 million jews……this time tho it will be 300 million gone..WWIII will take down the entire world by Fire. I hope this is only my opinion, in my mind, and that it doesn’t happen but if it does than it will be a prophetic warning……Jesus will return……don’t take the Mark of the Beast! God will destroy the evil and the earth before he will let Satan win over His creation. Jesus will come out of the sky, so don’t believe the false prophet that will arise out of mankind. He will be in the End Times, the Great Deceiver…..wait on the Lord .
November 25th, 2008 at 1:32 am
What made America strong and the leader of the the free world? And the envy of those nations that wanted to be free, is our determination, our ability to be self sufficient, to produce our own food, fuel, steel, arms, textile products, shoes, automobiles, airplanes, medical supplies and equipment, the many things that we now take for granted, but most of all it was our ability to supply to our nation, the education to our youth, that gave us the power and strength to make America really great. More small business men than large CEO’s, more engineers than lawyers, more machinists than accountants, more ironworker’s than doctors, more construction workers than city employees. In the days that the world knows as Americas greatness, that present the challenge to the youth who readily accepted that challenge . Because they were afraid of nothing. They are/were Americans. We have NEVER shrunk from a fight, we shall not shrink now. Of all the battles America has ever fought I tell you now this is the most important, the most critical and significant engagement we have had in the history of this nation. We must stand resolute against our enemy. This is the Concord and Lexington of our time. as the enemy approaches the bridge we must be prepared, willing and able to do all that we can and must do all to stop them at the bridge. Or suffer the pain of the boot heal of tyranny and oppression. It is your Freedom, your Liberty, fight. Live free or die.
Time for Atlas to Shrug.
Are you ready?
I am!!!
November 25th, 2008 at 2:55 am
The current US economic sunami that is engulfing the world is the parting gift of the neoCon cabal that had hijacked the US government for the past eight years. It is just another operation of the Chicago School of Economics Milton Feidman disciples who have subverted democracy around the world since the 1970’s. Their tactics are spelled out in NAOMI KLEIN’S THE SHOCK DOCTRINE published last year. By wrecking an economy, and “shocking” the population with unemployment and financial dislocation, that leads to everything from homelessness to hunger, you can get the people to accept anything that looks like a solution. This eliminates the need to spend time trying to convince people that “your” plan is the best way – you simply shock them into submission. Before you know it policies and programs that the people would have previously found repugnant and anti-American suddenly become acceptable. The subversion of the Constitution that began on September 12, 2001 will be complete by the time this plays itself out.
November 25th, 2008 at 5:26 am
I won’t keep money in a bank.Ever since I was 19 and got doubletalked intoEstablishing a checking account just to cash my damned paycheck.I used the overdraft protection,and then lost my job.A few weeks later reading the banking statements I saw somany finpring screwover angles than meant paying $500 to close an account I had only overdrawn $250 on.And THEY come after YOU with avengance.They use the full wight of the courts to hammer thier $$ out of YOU.Now these same bastards hold thier hands out while most working people never get to see thier own kids if they owe the Banks money?The economy is why Columbine happened and it’s why the youth boomed into a rash of crime.You can’t effectively raise your children if both parents have to work inorder to tread water financialy.Having a nice house and nice things isn’t really rich.These bankers have SEVERAL in differand countries and thier own fleets of cars complete with drivers.Now so they can be so rich and thumb thier noses at US we should add to the alread 28% of our income that never even makes it into our own bank accounts.I say in response to Obama’s “I am going to be forced to make decisions that are unfavorable.”.I wouldn’t do that if I were You Barry.Screw re-election you’ll be lucky to survive it at all.Not due to some lone racist sniper, but that bunch of people who believed in you.If you burn and disgrace them then they will equally damn you to a fate I can only call worse than death.Now to my fellow MEN and WOMEN?
Buy Local.
Buy Small.
Buy AMERICAN.
Let’s stop supporting this BS and do like I do. Cash your check.Then Buy what you NEED.I don’t mean stop getting the small once in 5 years toy.I obviously have this PC.But look at where your clothes,toold,vehicles,furnishings,food, etc. come from?Once you’ve spent that $$ you have gotten what you need, but if you leave paper in a bank then you will find a day they leave you holding a pile of worthless paper.And go basic.Get a hand powered grain mill.Get HAND TOOLS.When the S*** hits the fan all the conveniences will betray you.You can get solar power , but that’s not going to produce what the average household consumes with all the luxuries.There won’t be electricity letalone Internet for most.Cellphones ? Forget it.Get a Handcrank radio that gets shortwave.I told my own brothers not to keep buying all those cheaply made powertools.”Go to fleamarkets and buy crates of old handtools.They can be depended on when you need them.Most of them have survived 60 to 200 years of use.” .We Have to fix our own Local economy from the inside out.And boycott every penny back out of thier pockets that we can.Stop feeding the beast.If you have a dog and it attacks you then you don’t go making it stronger by feeding it more.You put it on a diet after slapping a muzzle on it.When we start buying local and American we strengthen our community and our standing in this fight.TRADE AGREEMENTS?I don’t remember signing anything.And that’s because I DIDN”T agree to a damned thing.
November 25th, 2008 at 6:06 am
git me another bud so that i can wash this down. i dint like math but if you have a big enough problem and dump enough money over it, does it not get covered. at least then you dont have to look at it right???????? tcb
November 25th, 2008 at 6:10 am
heeeey paulson and pals. i am so excited for our group session on pentecost 2012. i will ask my boss if we can include finance 101 but time may not allow. he is extremely angry with you. till the day pals……………elohim, the remnant hurry and have fun because the clock is ticking and the bell now tolls for you also
November 25th, 2008 at 6:11 am
I’m sad to say I don’t believe In the “American Dream” Anymore. It doesn’t exist anymore….and now we’re heading into socialism…who could have EVER guessed?!! America, Totalitarian Socialist country.
It LITERALLY broke my heart when i found out America wasn’t what i was raised to believe. And Believe I did!! I hold America as dear to my heart as God. But elitists have enslaved us! Sold us, up…or down river,,,whichever is worse. Most importantly they have completely thrown the constitution out the window. We are sooooo far from where we should be according to the constitution. judges who supersede the wishes of the people and const. etc. Our words, desires, and needs are ignored and forgotten. We have no power at all anymore! The government knows this and controls US!! They’re laughing the whole time because they know it’ll take a HUGE act (sacrifice perhaps a better word) of the people and most folks are not willing to make it to get back to the basics. People nowadays will give up ANYTHING (rights) In order to keep the status quo., To not have to work at something. If they can keep they’re basic way of life, ….. Starbucks cable… then they’ll give an inch until they have nothing left. That cable is filled with information and ads the Elistist are paying for and sending out anyway. Sad thing is that they will take that too.
YOU CAN’T GIVE THEM AN INCH,,,just like terrorists….you can’t make they happy by giving in here and there until they own you!! And all this conceding we do….just to not have to fight or stand up for anything.. to stay in complacency for one more day. What ever happened to the Gov. working for US?!
They’re now holding people indefinitely without charge and/or basic rights like the right to a jury trial before your peers, legal representation etc. Our founding fathers are turning in their graves! I feel helpless too, like there’s nothing i …we….can do. The only way to get OUR America back will be through bloodshed. Revolution against the tyrannical gov. The boston tea party was about an amazinly small tax even by those standards back then and yet at a time when we are taxed thousands of times those numbers then, we still letting them do it. I wish we had the guts to stand up like they did back then. Those were REAL Americans, people who knew what they believed in and wouldn’t let anyone run their lives for them. Revolution will come… Mark my words. Those days will come.
“America – Freedom to fascism” a Movie by Aaron Russo is a great film…along with that Youtube video called “Zeitgeist – federal reserve”
The thing that baffles me the most is how evil these men are and the lack of caring for others. It’s not about money for the most part because they can print all they want…it’s about power. I never understood that, as power over others never made me feel good. Love and compassion…however always have.
I was surprised to hear (funny enough during the Nicholas Cage flick, National Treasure) That the constitution calls upon the people.. LITERALLY COMMANDS THEM to revolt and start a revolution to take the country back by means of force if the government becomes totalitarian over it’s people. We are called upon to rise up and take our country back. It’s our DUTY!! Scary, cause most of us don’t want any trouble and so we allow them to take one small piece at a time just so we can go home and watch tv and eat dinner and chill out for a few hours before the next days work. We don’t want to have to deal with it, but FREEDOM ISN’T FREE!! There will come a day when we will RE-ESTABLISH the constitution and what it means to all and get back to the basics. I pray I’m there to see it. God Help us.
D.
November 25th, 2008 at 8:28 am
There are alot of perks for the individual who lets these banks “borrow the taxpayers exemption” to function.
#51. If you signed a SS card, than you signed up for this. If your parents and doctor signed your birth certificate and turned it into the state of processing…than you signed up for this. These are real security instruments used regularly everyday (as well as the death certificate).
Use the commercial processes available to you and take them on. It’s truly the only sucessful way to do it anyways. The only reason they get away with what they do is because few are pointing out the obvious.
November 25th, 2008 at 11:40 am
Looks like this is the right time to really begin believing in the Bible and what it says…”In the last days there shall be rumors of wars and increasing earthquakes and calamaties..men will be lovers of themselves..ect…Jesus Christ has the answers to all our problems! Trust in Him and you will live forever and happy!!!
November 26th, 2008 at 6:17 am
на края луны, без вины, без вина, она одна о_0 пробило еп*
November 29th, 2008 at 10:35 am
#57 – It’s delusional comments such as yours that have pertetuated Santa Claus, the Easter Bunny and the bibles version of salvation. Where do people actually learn that crap? Is that your own originating thought? Absolutely not. No body will save you, but you. However, if the intent of the bible is to condition the mind to NOT THINK FOR ITSELF because someone will save you, than it has successfully worked.
Don’t disservice your community by repeating unhealthy and unnatural behaviors.