Elizabeth Warren On The Daily Show: If We Don’t Act ‘The Game Really Is Over’
| The Daily Show With Jon Stewart | Mon - Thurs 11p / 10c | |||
| Elizabeth Warren | ||||
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I've always liked Elizabeth Warren because she is right.
Just as I posted earlier, people are waking up to the fact that politics is theatre and that politicians do not represent us (at least most of them). It's angering but it's important to get a third party or more going in America.
My solution to making third parties real is laws stating that all elections are to be instant run-off. Instead of voting for one candidate, you prioritize them. If the one you chose first doesn't have enough votes your next in line is thus counted as your choice. So, you could have voted in the last Presidential Election like this
- Ron Paul
- Cynthia McKinney
- Ralph Nader
- Dennis Kucinich
- Barack Obama
How sweet would that be? If none of your other choices had a chance, you still could have helped to defend against McCain (or visa versa). You could actually vote based on your principles instead of the lesser of two evils. If course it must be said that our political party election system is more like voting for the one evil as they really are the same party with different faces. I ask you, what would McCain have done substantially different from Obama? And how is Obama any different than Bush?
Fractional Reserve, Banks, and Foreclosures
I've been thinking a lot recently about the banking system in the USA and how banks create money out of thin air (if they have the reserves).
Under the fractional reserve system, banks are allowed to create money through a multiple of their reserves. When they create the money, it becomes the reserves for the next bank and so on and so forth. The reason why this is corrupt is because the banks don't create value. They only create money. They only create money through loans, meaning they own the real value until you pay them back with their fake, newly minted, money
As this crisis continues they have stopped lending.... This has an important side effect. When a bank lends, they create new money. This is the only way a bank will lend because it's virtually risk free for them. They now see money creation as too risky.
The problem we are running into now is that the banks aren't creating new money, ahem, they aren't lending. This can be seen here in the recreated M3:
As banks continue to go bankrupt, their creation of new money dwindles. The effects of which can be seen in the decreasing M3 over the last few months.
This is why the banks continue to get preferential treatment over average citizens. They create the money. New money is ESSENTIAL to the functioning of our economy.
The reason is quite simple actually. When the bank system loans new money, they don't lend out the interest payment. Meaning, a new loan must be taken out by the economy in general to pay the interest of that person (or company). Thus, new money is essential to keeping the race going.
Without new money, more and more people won't be able to pay back their loans. We are already seeing this happen with the never ending "foreclosure crisis."
Until new money is being created by the banks then there is less and less money to be able to pay the banks their interest.
What's really cool about this is that the government has been doing EVERYTHING they can to buoy the balance sheets of banks and they still aren't creating new money. In fact, the banks don't want government money because they can't give themselves billions in bonuses.
The decreasing M3 is due to people paying off their loans. This has an amazing effect of causing less money to be in the system. In essence, if all loans were paid off, there would be no money anywhere.
So in the mean time, more foreclosures will occur both in residential and now commercial real estate. The banks will continue to be in bad shape regardless of how much they legally or illegally manipulate their books. This will cause no new money to be issued thus making the problems worse.
All those people talking about a "recovery" have no idea what's really going on. A company's balance sheet may look good but until the banks start issuing new money, the public will stay in a world of hurt. Foreclosures will remain high and jobless numbers will keep being massaged downwards.
So what are we to do? Well, the government has been trying to fund projects to inject money into the system. The problem here is that the government is getting the money... from the banks! Our government must pay back the interest on that... meaning.... you, me, our children, grandchildren, and, well, generations will be paying back that money.
If the government actual did the constitutional thing, and took the money creation powers back from the banks and reinstalled it with Congress, we may actually have a chance to make it. As it is, I am very pessimistic about the economy due to the fraudulent ponzi scheme run by the Federal Reserve.
Last note, the Federal Reserve has a mission to have a stable currency and try to maintain high employment. They have failed on both account horribly. They have debased the dollar by 95% over the last century, and unemployment is now 20%+ using actual numbers and not the fudged ones produced by the government. A stable currency would mean 0% inflation/deflation over 100 years. A target of 2% inflation per year is NOT stable. It's exponential growth.
Recent World Events Indicate Impending Market Chaos
Recent World Events Indicate Impending Market Chaos
For the past couple years we have been covering every nuance of the economic collapse and in almost every instance we have come to the conclusion that 2010 would be the year that the U.S. would see an incredible downturn, possibly resulting in the inflationary disintegration of the Dollar, and a major stock market revolt which would destroy any remaining illusion Americans still have that a recovery is in progress:
http://neithercorp.us/npress/?p=74
http://neithercorp.us/npress/?p=167
We are now on the edge of winter 2009, and recent events across the globe indicate more and more that our predictions for 2010 were correct. Let’s examine some of those events and their implications now…
Dubai: Why Should We Care?
Chinese Banks Frantically Try To Raise Capital?
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Either way, as soon as the Chinese begin pulling capital out of U.S. markets (in which they are heavily invested) we can expect to see the DOW falter drastically.
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Trouble Brewing In Japan
Gold Buying Bonanza By Foreign Central Banks
Bad Signs On The Homefront
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REAL unemployment... is around 18%.
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Real Estate continues to be incredibly weak, and mortgage payment delinquencies and bankruptcy have grown unabated
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Over 125 banks across the country have been closed in 2009.
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The FDIC has announced that it has officially run out of funds
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A climactic economic event is on the horizon, and the train is already in motion.
This article has some good info in it. For more information, go deeper.
Elizabeth Warren: Financial Rules ‘Literally Don’t Work Anymore,’ Regulations Should Be ‘Clear And Painful’
Elizabeth Warren, a professor at Harvard Law School who has more recently assumed the role of chairwoman of the Congressional Oversight Panel for the Troubled Asset Relief Program (TARP), sat down with The New Yorker's James Surowiecki recently. The topic was Warren's brainchild, the Consumer Financial Protection Agency Act, which is currently being debated in Congress.
The agency would demand transparency in consumer financing, which Warren detailed in her essay, "Unsafe at Any Rate," published in Democracy in the summer of 2007.
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Surowiecki pointed out that critics charge that consumer financial protection would restrict consumer credit too much, making it difficult for people to borrow money. Warren's response: "the point is not to say, 'Thou shalt not charge somebody more than X,' which would have restrictive consequences. It's to say, you've got to be really clear about it."Warren added that last year's historic bailout of the financial sector necessitated a different set of rules regulatory principles:
"...The old rules of regulation just literally don't work anymore. Because now we're under this giant shadow of implicit and explicit government guarantees ... we said in effect ... we will throw as many taxpayers as we need to throw under the bus to keep your business functionally operational in the way that it was functionally operational before without a cost to you personally, and to your shareholders personally. That's a whole new world."
According to Warren, financial institutions need a regulator regime that is both "clear and painful."
She has been warning about the financial system for a long while.
Derivatives for the rest of us
What are Derivatives?
A derivative is essentially a binding contract for a person to buy or sell an asset at some point in the future, but the person is paying for it in the present.
Ah. This is a good start.
Derivatives are important in the world of finance because they allow for hedging and managing risk. They are one of the fastest growing segments in the financial market. However, since derivatives have no value themselves and are dependent on the value of another asset, there is a larger risk associated with them. While they can lead to quick profits, derivatives are best taken up by those who can understand the relationships between product volume, price trends and consumer interest.
So in other words, no one understands? Is this why derivatives are all computer generated? Did the creator of the program which derives derivatives know how they work? I highly doubt that.
"We view them as time bombs both for the parties that deal in them and the economic system .. In our view ... derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal."
- Warren Buffett, the Chairman of Berkshire Hathaway and his critique of the derivatives market. (March 2003)
"These increasingly complex financial instruments have especially contributed, particularly over the past couple of stressful years, to the development of a far more flexible, efficient and resilient financial system than existed just a quarter-century ago,"
- Alan Greenspan, Chairman of the Federal Reserve and his summary of the derivatives market (2002)
Derivative (finance) @ Wikipedia
Rather than trade or exchange the underlying asset itself, derivative traders enter into an agreement to exchange cash or assets over time based on the underlying asset.
Derivatives are often leveraged, such that a small movement in the underlying value can cause a large difference in the value of the derivative.
So from my reading Derivatives are leveraged risk via contract for profit. By themselves they have no value but represent a future scenario. The total "value" of the contracts is now $1.5 quadrillion.
These derivatives tie together banks and other institutions into one big mega corporation. That's the definition of too big to fail. Like dominos, push one over and they all go down. If one corporation that deals with derivatives fails, then the others which depend on them for their derivatives will also have to write down a loss (or maybe a profit for risking that they'd fail). Derivatives are so leveraged that a small failure could multiply and bring down one and thus them all. I don't buy Greenspan's idea that derivatives make the market more stable. Quite the opposite, they make the system less stable. This can be seen in the bank bailouts of 2008. Without the bailouts, we were told that nothing would survive and that martial law would follow.
Should derivatives be regulated? Absolutely. Should too big to fail not be allowed to continue? Absolutely. Even the FDIC is calling for action against the too big to fail situation. Could the system be put at risk again? Absolutely. Have we learn from our situation? Not in any way. Have we done anything to rectify the situation? Not in any way.
Foreclosure Costs: Get paid to leave
Basically, as people are evicted from their house they are destroying it for the banks in "retaliation." This is what people do to property:
- put concrete in the toilet
- break the granite
- destroy the carpet
- unwire the electrical boxes
- break the heater and A/C unit
- break the water heater
- destroy the wood (cabinetry and floors)
- destroy the condenser
At least the prior owners were trying to jump start the economy by forcing the banks to spend money on replacing these products.
In this regard i can think of a few other things to help turn the foreclosures into an economic boost. Buy a single 1 gallon can of bright orange paint and put "X"s on all the wall, ceilings, and doors. Then dab a small on parts of window and door frames,. Messing up sections of fences, garage doors, dry wall, and insulation. Take a ball hammer to all tiles. Destroy the garbage disposal and sump pump. Block off any radon and exhaust vents with epoxy or concrete. Block up the chimney. Cut out a long section of the telephone wires outside. Scratch or sand paper all the windows. Epoxy the locks. Remove and toss all the doors. Admittedly, this is extreme and I don't recommend anyone do any of these things. This is a form of economic violence with which I do not agree. Despite this, you should capitalize on others doing it.
All this said, lenders are now offering $1k to $3k to lendees to peacefully leave. Be sure to get this statement IN WRITING or they will screw you again. They offer $1k - $2k if you clean up a bit before you leave and up to $3k if you leave within a week as well. To me, this is cheap given the damage people could do to their homes before they leave. Banks could easily spend $25,000 to fix the damage a miffed person could inflict on a house. This bribe money may increase if this phenomenon expands and damage increases.
Lastly, some people put excrement in the halls.