• A million Iraqis are dead thanks to genocidists Bush and Cheney.
• Bush is ready to move in on Iran thanks to Cheney's constant needling, and he may not bother to question Congress or wait for a "terrorist attack." As I've said many times, the kind of attack they plan could cause a tactical nuclear exchange, the destruction of the United States and maybe the whole world, which is what Bush and Cheney want.
Among all today's news stories, the really potent one is what is happening to the world economy. But, you don't get that from the fluffy reporting even reputable news organizations produce. The real story isn't about people going belly up with their rental property mortgages, it's about currency valuation.
The reason you don't get good news coverage on this topic is the same reason I am not qualified to thoroughly describe what's happening, predict what will happen or give advice about what to do. Economists are a strange breed, and real experts are few and far between. Furthermore, world markets are mindless entities incapable of protecting prosperity or maintaining balance. In spite of past catastrophes, people whose decisions determine what happens to the macroeconomy remain clueless about how to protect people's interests or what to do when trouble appears. The last couple years in particular we've been warned by central banks abroad that America's growing budgetary deficit could cause widespread economic disaster, and that remedial steps were necessary; that is, we should end the war and its gigantic expense.
But since our legislative and executive branches don't want any idiots to think they are chicken, it doesn't happen. Because it doesn't happen, you can know these people are not only cowards, they are profoundly stupid cowards. Economic inequality kills more people than war, and economic inequality is the result of currency devaluation, making these profoundly stupid cowards murderers also—and as I've said before, you don't have to be polite to them.
Bush's executive order "blocking property" of persons considered to be thwarting Iraqi stabilization (whatever that means) comes at the end of a long line of orders and laws designed to strip people of their assets without due process. Certainly the White House is preparing for some earthmoving, landmark change in the world. Because so much of what they have done is fashioned after the German Nazis, it seems a safe bet they envision fascist authoritarianism, and Claude Lanzmann speaks volumes:
...the destruction of people is always accompanied by that of their assets: the confiscation or "Aryanization" of the latter, right up to the ripping out of gold teeth after the gassings. He showed the branding, segregation, ghettoization, etc. He laid bare the implacable mechanism of what he held to be a bureaucratic process of destruction. From the moment the German bureaucracy made it its object, it could only go all the way, as though carried by its own logic.The stock market has been fluctuating wildly the past few weeks, but last week something different happened: large investment organizations suddenly didn't have any money.
• Mike Whitney:
We are now beginning to feel the first tremors from the massive credit expansion which began 6 years ago at the Federal Reserve. [...]That's a great article. Scary, huh? It's pretty serious stuff. By week's end, we saw the crisis extend to financial institutions worldwide. With nary a mention in the mainstream press, my hair is now standing on end.
Ludwig von Mises summed it up like this:
"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The question is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." (Thanks to the Daily Reckoning)
It doesn’t matter if the "underlying economy is strong". (as Henry Paulson likes to say) That’s nonsense. Trillions of dollars of over-leveraged bets are quickly unraveling which has the same effect as taking a wrecking ball down Wall Street.
This week a third Bear Stearns fund shuttered its doors and stopped investors from withdrawing their money. Bear’s CFO, Sam Molinaro, described the chaos in the credit market as the worst he'd seen in 22 years. At the same time, American Home Mortgage Investment Corp--the 10th-largest mortgage lender in the U.S.--said that "it can't pay its creditors, potentially becoming the first big lender outside the subprime mortgage business to go bust". (MarketWatch)
This is big news, mainly because AHM is the first major lender OUTSIDE THE SUBPRIME MORTGAGE BUSINESS to go belly-up. The contagion has now spread through the entire mortgage industry--Alt-A, piggyback, Interest Only, ARMs, Prime, 2-28, Jumbo--the whole range of loans is now vulnerable. That means we should expect far more than the estimated 2 million foreclosures by year-end. This is bound to wreak havoc in the secondary market where $1.7 trillion in toxic CDOs have already become the scourge of Wall Street. [...]
AHM’s stock plunged 90% IN ONE DAY. Jittery investors are now bailing out at the first sign of a downturn. Wall Street has become a bundle of nerves and the problems in housing have only just begun. Inventory is still building, prices are falling and defaults are steadily rising; all the necessary components for a full-blown catastrophe. [...]
Economic policy is not "accidental". The Fed’s policies were designed to create a crisis, and that crisis was intended to coincide with the activation of a nation-wide police-state. It is foolish to think that Greenspan or his fellows did not grasp the implications of the system they put in place. These are very smart men and very shrewd economists. They knew exactly what they were doing. They all understand the effects of low interest rates and expanded money supply. And, they’re also all familiar with Ludwig von Mises, who said:
"There is no means of avoiding the final collapse of a boom brought about by credit expansion."
A crash is unavoidable because the policies were designed to create a crash. It’s that simple.
• Bloomberg, Friday:
Countrywide Financial Corp. and Washington Mutual Inc. led shares of U.S. mortgage companies lower. Societe Generale SA fell, while ABN Amro Holding NV dropped the most in a year on speculation financial-market turmoil may derail the biggest banking takeover. Macquarie Bank Ltd. paced declines in Asia.That's a very great deal of very bad news coming from far too many places all over the planet for one day. Then, there's this kind of statement we're hearing from different sources:
"Investor sentiment is poor and will likely get worse as we work our way through the wreckage," said Simon Carter, who helps oversee $3 billion at Aegon Asset Management in Edinburgh.
The Morgan Stanley Capital International World Index lost 1.7 percent to 1527.99, while the Dow Jones Industrial Average sank 0.7 percent to 13180.46 at 2:16 p.m. in New York. The MSCI World has dropped 7.6 percent since touching a record on July 19 on concern the rout in U.S. subprime mortgages may spill over into the economy, erode earnings growth and curb takeovers.
Treasuries rose and credit-default swaps on European corporate bonds increased as the subprime mortgage debacle rattled credit markets.
Europe's Dow Jones Stoxx 600 sank 3.1 percent to 362.77. The U.K.'s FTSE 100 dropped 3.7 percent, France's CAC 40 lost 3.1 percent, and Germany's DAX decreased 1.5 percent.
Japan's Nikkei 225 Stock Average declined 2.4 percent, the most since March 14, as all markets fell. Benchmark stock indexes in Brazil, Mexico, Turkey and Sweden also dropped.
A gauge of U.S. stock market volatility climbed to the highest since April 2003. The Chicago Board Options Exchange Volatility Index gained 10 percent to 29.12. Higher readings in the so-called VIX, derived from prices paid for S&P 500 options, indicate traders expect bigger price swings in the next 30 days.
Central banks in the U.S., Europe, Japan, Australia and Canada added about $132.7 billion to the banking system in an attempt to avert a crisis of confidence in global credit markets. The Fed pledged to provide liquidity through its discount window to cover "unusual funding needs" at some banks.
"The fact that the Fed, ECB and BOJ all had to inject short-term liquidity is worrying as they may know more than most about how significantly the financial system is being impacted," Carter said.
In the U.S., all 10 S&P 500 industries fell. Telephone shares dropped the most, losing 1.6 percent, while an index of industrial stocks slipped 1.2 percent.
Countrywide sank $1.81, or 6.3 percent, to $26.85. The company said mortgage-market disruptions may crimp profit and it may have difficulty obtaining financing from creditors.
Washington Mutual Inc. dropped 82 cents to $35.94. The biggest U.S. savings and loan said in its own filing that liquidity in the market for mortgages made to borrowers below the top credit grade had "diminished significantly."
"The secondary market and funding liquidity situation is rapidly evolving, and the potential impact on the company is unknown," Countrywide said in a filing with the U.S. Securities and Exchange Commission. "These conditions may continue or worsen in the future."
Citigroup Inc., the largest U.S. bank, lost 37 cents to $46.53. Goldman Sachs Group Inc., the biggest securities firm, dropped $3.51 to $178.74.
ABN Amro lost 3.5 percent to 33.85 euros. The largest Dutch lender is the target of a takeover battle between Barclays Plc and a group consisting of Royal Bank of Scotland Group Plc, Banco Santander SA and Fortis. Barclays this week won European Union approval to buy ABN Amro.
The market turmoil "does jeopardize the ABN Amro deal," said Mike Trippitt, a London-based analyst at Oriel Securities Ltd. ABN Amro spokesman Jochem van de Laarschot said there were "no new developments on the offer process."
Shares of Barclays fell 6.4 percent to 638 pence, and Royal Bank of Scotland declined 3.9 percent to 562 pence.
Societe Generale, France's second-biggest lender, fell 5 percent to 122.2 euros. Deutsche Bank, Germany's biggest bank, fell 2.6 percent to 95.50 euros. UniCredit SpA, Italy's biggest, sank 3.6 percent to 6.04 euros.
Macquarie, the largest Australian securities company, declined 7 percent to A$72.10. Its Macquarie Fortress Investments Ltd. unit, which had $873 million in two high-yielding funds, said on July 31 it was forced to sell assets to avoid breaching loan agreements.
Toyota, set to become the world's largest automaker by sales, retreated 2.5 percent to 7,090 yen. Samsung, Asia's top maker of computer chips and mobile phones, fell 2.9 percent to 603,000 won.
BHP Billiton Ltd., the world's largest mining company, declined 6.7 percent to 1,261 pence in London. Shares of Rio Tinto Group, the third biggest, dropped 6.2 percent to 3,008 pence.
Copper, nickel and zinc headed for a third straight week of declines in London on speculation that losses linked to U.S. subprime mortgages will spread to commodities, damping metal demand. Oil prices fell to a five-week low in New York.
Man Group Plc, the world's largest publicly traded hedge fund company, tumbled 8.4 percent to 482.5 pence as investors shunned companies that rely on stock markets. Man Group indefinitely delayed plans to sell shares of Man Dual Absolute Return Fund in the U.S. because of volatile markets, Reuters said today. A spokesman for Man declined to comment.
Old Mutual Plc fell 4.6 percent to 154 pence after the U.K. insurer that makes most of its profit in South Africa said first- half operating profit fell more than analysts estimated, hurt by the weakness of the South African rand and the U.S. dollar.
Washington Mutual Inc. lost $1.06 to $35.70. The biggest U.S. savings and loan said yesterday that liquidity in the market for mortgages made to borrowers below the top credit grade had "diminished significantly."
Nvidia Corp. fell $2.92 to $43.21 after the world's second-largest producer of computer-graphics chips said third-quarter sales will increase between 5 percent and 7 percent, with an inventory shortage and limited manufacturing constraining growth. Investors were looking for a forecast of at least 10 percent, Caris & Co. analyst Nicholas Aberle said.
General Electric Co., the world's second-biggest company by market value, fell $1.31, or 3.4 percent, to $37.63. The company, which makes everything from jet engines to medical imaging equipment, posted its largest two-day decline since 2002 amid speculation higher financing costs will reduce global demand.
• French bank BNP Paribas:
"The market for the assets has just disappeared," said Alain Papiasse, head of BNP Paribas's asset-management-services division. "Since the start of this week, there are no prices for instruments that carry, directly or indirectly, some types of U.S. assets."Absolutely chilling. Some writers hypothesize that this is nothing more than a small bump in the road, and it will even out in the next few days. I disagree. I believe we're seeing the beginning of the harvest of the conservative economic agenda to exterminate everyone but the few richest individuals.
• Thom Hartmann:
Since Bush has been president:It's pretty hard to give advice or make predictions about all that. And, you should be wary of those who say how they think it will all turn out. Once again, I hope there's nothing to it. Yet, I can't help but be impressed by how much the Bush administration and conservatives in general have pushed, and for how long, to destroy the world with war and economic calamity, and take away everything that makes life worthwhile—not just for us little people, but them as well. Should you worry? No, but only because worry won't help you. I can say that in over a half century of life, I've never seen such a big mess. That it coalesced so quickly is deeply troubling, and I'd describe the situation as "extremely terrible."• over 5 million people have slipped into poverty;
• nearly 7 million Americans have lost their health insurance;
• median household income has gone down by nearly $1,300;
• three million manufacturing jobs have been lost;
• three million American workers have lost their pensions;
• home foreclosures are now the highest on record;
• the personal savings rate is below zero - which hasn’t happened since the great depression;
• the real earnings of college graduates have gone down by about 5% in the last few years;
• entry level wages for male and female high school graduates have fallen by over 3%;
• wages and salaries are now at the lowest share of GDP since 1929.
That seems a poor end for an article. Instead: counterbalance the evil of greed and war with whatever good you can do.
