by Al Martin

(2-9-09) What we have seen in market reactions is that Obama has everyone pumped up into believing that he can fix everything and mitigate the effects of the current recession.

Obama is now being billed by the Democrats as some sort of a miracle worker, even though he’s promising things he can’t deliver, namely mortgage relief that is unworkable and tax relief that isn’t going to happen. He keeps saying that we’re going to be able to create 4 million new jobs.

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Steve Watson - Nov 4, 2008

In an incredulous display of ignorance symptomatic of the underlying causes of the financial crisis, CNBC anchors laughed their way through an interview with respected economist Peter Schiff yesterday as he attempted to explain how an Obama presidency would negatively impact the U.S. economy.

Erin Burnett and Mark Haines of CNBC’s Squawk on The Street persistently interrupted Schiff, CEO of Euro Pacific Capital, barely allowing him to finish sentences or even complete thoughts as he sought to explain how ‘Obamanomics’ will not address the problems at the core of the crisis and will instead perpetuate them.

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The Midnight Sun - October 21st, 2008

“The American crash is a delight to behold, and it’s far from over.”

Karl Marx to Frederick Engels, 1857

Reports that Marx’s Das Kapital are literally ‘flying off the shelves’ in a bookshop in once Communist controlled Berlin have delighted and fired up journalists all over the world. Check out the links here.

Karl Marx, now a pile of bones in a hole in the ground, or a tortured spirit in an afterlife somewhere, is entirely unaware that his failed ideology is enjoying a renaissance of sorts amongst a generation that only knows that ideology from the romanticized writings of those who never had to live under it. The most unashamed leftist doctrinaire media sources, the Times, BBC and ABC are gloating. For these are the corridors where closet and not-so-closet Marxists have lurked since their big heyday in the mid twentieth century.

Is Germany, gloating over the distress of America, so quick to rush out and embrace the ideology of her arch enemy?

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Richard C. Cook - September 11, 2008

Fannie Mae and Freddie Mac, the twin giants of the home mortgage industry, own or guarantee assets of $5.3 trillion, almost half of the $12 trillion housing market in the U.S. These assets have been disappearing in value due to the collapse of the housing bubble.

Fannie and Freddie are government-chartered corporations. They are shareholder-owned companies required by their charters to provide low-cost capital to the mortgage industry, supposedly to further the American dream of home ownership. In recent years, as the housing bubble inflated and the mortgage industry extended more and more credit to marginal purchasers through the use of “exotic” lending instruments, Fannie and Freddie followed suit.

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Joan Veon - September 15, 2008

The Great 2008 Transfer of Wealth

Americans are confronted with what appears to be the worse economic situation since the Great Depression. What will history say about the U.S. credit crisis turned global financial crisis? At every turn investors are faced with new problems, new crises, and less than desirable solutions which include debt, deflation and a transfer of wealth.

With regard to debt, the American taxpayer has been made the lender of last resort for international bank Bear Stearns and now the two Government-sponsored Enterprises-GSEs, Fannie Mae and Freddie Mac. On top of the $29B for Bear Stearns, Fannie and Freddie’s debt of $5.4T has been effectively transferred to the balance sheet of the USA. This is equal to the entire publicly traded debt of the U.S. which is also the same as the total of America’s mortgage-related assets. In addition to personal debt, every American now has a financial responsibility for Bear Stearns and Fannie and Freddie.

We, the people, have saved the foreign investors such as China which owns $376B, Japan which owns $228B, South Korea which owns $65B, Taiwan which owns $55B, and Australia which owns $33B, from losing faith in America. It is the stockholders, both common and preferred, that have been given the raw end of the deal. While large financial institutions such as JP Morgan, which owns $1.2B of Freddie and Fannie stock, said a complete loss would only erase one or two months of profits, contrast this to smaller banks such as the Central Virginia Bank in Richmond which has $20M in shares of Freddie and Fannie. That type of loss will put them in the same kind of trouble as Lehman Brothers, not enough capitalization. There are 15 other banks that hold 10% or more of their capital in shares of Freddie and Fannie.

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UK report on the crisis at Lehman Brothers.

Patrick Wood - September 10, 2008

There’s going to be no end of controversy over the bailout of Fannie Mae and Freddie Mac.

On September 9, 2008, CNBC’s popular financial show “Squawk Box Europe” interviewed Jim Rogers (CEO of Rogers Holding) on his view of the government takeover of Fannie and Freddie:

“You can see that this is welfare for the rich. This is socialism for the rich. It’s bailing out the financiers, the banks, the Wall Streeters… This is outrageous. Who are these people who are taking our money and doing this and ruining America?”

Who, indeed!

On March 21, 2008, The August Review wrote,

“As the global financial crisis unfolds, one thing is certain: The major investment and commercial banks who have wrecked our economy and financial system are now successfully sucking unlimited amounts of money from the people’s Treasury to bail themselves out.”

The August Review has demonstrated repeatedly that the net effect of the New International Economic Order (term coined by the Trilateral Commission in 1973) was to devise new and more effective ways to divert money from the public sector into certain private hands.

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Squawk Box Europe: American Socialism

Patrick Hosking, The Times - September 2, 2008

British banks soon could be scrambling for short-term funding once more amid reports that supplies from Threadneedle Street and from Frankfurt may be drying up.

The Bank of England explicitly ruled out extending its Special Liquidity Scheme (SLS), while the European Central Bank is reportedly considering tightening its lending criteria.

The two central banks have been huge suppliers of liquidity to British banks. The SLS is thought to have provided £50 billion or more, while the ECB has lent banks €467 billion (£378 billion) - much of it thought to have gone to UK institutions.

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