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The G-20 Washout

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http://www.informationclearinghouse.info/article21252.htm

By Mike Whitney

November 17, 2008 “Information Clearinghouse” — As expected, the G-20 Economic Summit in Washington turned out to be a total bust. None of the problems which have pushed the global economy to the brink of disaster were resolved and none of the main players who gamed the system with their toxic securities were held accountable. Instead, the visiting dignitaries gorged themselves on stuffed quail and roast rack of lamb before settling on a toothless “Statement on Financial Markets” which accomplished absolutely nothing. The one noteworthy clause in the entire document is a two paragraph indictment of the United States as the perpetrator of the financial crisis. At least they got that right.

From the text:

“Root Causes of the Current Crisis: During a period of strong global growth, growing capital flows, and prolonged stability earlier this decade, market participants sought higher yields without an adequate appreciation of the risks and failed to exercise proper due diligence. At the same time, weak underwriting standards, unsound risk management practices, increasingly complex and opaque financial products, and consequent excessive leverage combined to create vulnerabilities in the system. Policy-makers, regulators and supervisors, in some advanced countries, did not adequately appreciate and address the risks building up in financial markets, keep pace with financial innovation, or take into account the systemic ramifications of domestic regulatory actions.

Major underlying factors to the current situation were, among others, inconsistent and insufficiently coordinated macroeconomic policies, inadequate structural reforms, which led to unsustainable global macroeconomic outcomes. These developments, together, contributed to excesses and ultimately resulted in severe market disruption.”

Bingo. The contagion started on Wall Street and that’s where the responsibility lies. It was the result of the Fed’s reckless low interest rates and lack of government oversight. This allowed market participants to create massive amounts of leverage via speculative bets on under-capitalized debt-instruments. The resulting collapse in value of all asset-classes across the spectrum has created a gigantic multi-trillion dollar capital hole in the global financial system which has precipitated violent swings in the stock markets, tightening credit, currency dislocations, soaring unemployment and deflation. Almost all of todays economic woes can be traced back to legislation that was promoted by key members of the Clinton and Bush administrations. (Many of who will now serve in the Obama White House) The G 20s statement puts the blame squarely where it belongs; on the Federal Reserve and Wall Street. More

Iceland says NO! to bailing out banks!

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Thursday evening update on the global financial collapse

Excerpted from the article:
“The Prime Minister of Iceland, Geir Haarde, sent shivers through the global financial system when he asserted that Iceland can not, and will not pay the foreign liabilities of its banking sector and that the interests of Iceland will have first priority.
 
Yesterday, Haarde told a press conference: “The point is this. The total indebtedness is such that there is no way that the Icelandic population can take responsibility for the debt these private companies have incurred. It happens everyday in bankruptcies, that some are burnt.”
 
British PM Gordon Brown calls Iceland’s behavior “totally unacceptable” and warned of legal action to recover the US $ 1.74 billion loss in Iceland, especially after the Icelandic government this week passed this week emergency legislation to deal with the banking collapse. Unlike the British or U.S. plans, this was not a bank “rescue” plan but legislation that gave the government the authority to seize any bank or financial company, put it through a bankruptcy or other procedure that would put the interests of the Icelandic nation over that of the banks.
 
Next door to us, Mexico’s peso lost 24% of its value against the US dollar, making its imports of wheat, corn, beans, milk, and rice 24% more expensive. The Peasant Association reported yesterday that remittances for the month of September fell 29.6%, causing panic in Mexico. Remittances from the U.S. are Mexico’s second highest earner of foreign exchange.” (end excerpt)
Read full article here:
 

How the markets really work (from 2007) BRASSCHECK TV/video

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           http://www.brasschecktv.com/page/187.html 

       How did these comedians see it coming
when financial reporters did not?

Yes, it really is this bad

Another example of humor that is deadly accurate.

I worked on Wall Street for a few years, elbow to elbow with “top” investment bankers.

It was one big casino with the saps in pensions funds and savings and loans (and us) being used to finance the game and cover the losses.

Amazingly, this was recorded in 2007.

 

 

If you don’t fully understand what’s happening in the financial markets – the cause and the likely outcome – this short video will make it crystal clear.

 

http://www.brasschecktv.com/page/187.html

 

– Brasscheck

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