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Only about a month ago, most of us ordinary folks were shocked to learn that the greatest Economic Empire the World has ever known was basically rotten to it's core.
Ancient and venerated financial giants on Wall $treet began toppling like hollow images of themselves. And hollow they were -- we came to learn -- as we watched in awe as they collapsed, one by one, like the World Trade Center Towers did at the other end of GwB's rule.
These were not attacked by foreign terrorists. They were carved away from the inside with a razor sharp scalpel of greed -- lethally removing muscle and bone -- right down to their foundations, until the slightest breeze could bring them down.
GwB was warned of a possible terrorist attack on the US when he came into office. He ignored it.
For many months, GwB has been warned about the impending collapse of Wall $treet. He ignored it.
How could the $treet be in trouble when it was soaring into the stratosphere? Yet those inside knew -- as they stuffed their bags with bonus cash on the way out -- when what they were entrusted to protect began folding. Why should they leave empty handed? StealAllUcan, whileUcan.
We should have guessed something was up when our banks started stripping the word 'trust' out of their names.
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But why hasn't anyone been arrested? Hometown bankers made bad mortgage loans, on houses worth 2, 3, 4 times what the borrower could afford. Even when houses by hundreds of thousands across our land went into foreclosure, they kept making impossible loans, betting they could take houses back and sell them again. Now, 20% of America's homes are worth less than their mortgages. Dare we call these bankers "home wreckers"?
When that didn't work, they bundled bad mortgages together and discounted them to Wall $treet Bankers, sight unseen. After all, this was the full thrust of GwB's much touted Ownership Society.
Then, whiz kids with Harvard MBAs and Uncle Miltie Friedman's urging, started inventing financial instruments out of nothing at all. Using stacks of contractual papers that only an advanced calculus major could understand, they invented "derivatives".
Worthless sub prime mortgages were repackaged in sparkling tensile, tied up with fancy bows they called credit default swaps, an insideous form of derivative.
Senator Phil Gramm (R-TX) had tacked a Rider onto an Appropriations Bill in the last hours of a Session, saying that derivatives, whatever they were, would NOT be regulated like stocks and bonds. Derivatives are sold 'over the counter' by private agreements.
Derivatives are NOT investments, never were. They are bets against both sides loosing. Hedge Funds hedged these bets. Big insurance companies, like AIG, insured them. Derivatives are nothing but gambling, pure and simple.
It's a giant Shell Game that Wall $treet played expertly, always one step ahead of getting caught. Until -- someone figured out -- there never was a pea under any Shell, not from day one.
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So why does this affect the price of tea in China? If banker boys are just jerking each other off over in a dark corner, who cares?
Because, like the silent killer Aids, a similar virus was traveling incognito into Financial Markets around the World. Based on 'trust' (remember that word?) of the American Financial Empire, Global banks bought instruments stuffed with derivatives, and were happy to do so, trusting the indecipherable sales contracts.
Banks bought them, Investment Funds bought them, Nations bought them, worldwide. For years.
Then somebody peeked. It was like the Emperor's new clothes. When someone said, "Hey! there's nothing there!" it all started collapsing like a House of Cards. Worse than a House of Cards. With that, at least you have the Cards to pick up.
It was so pervasive, into every nook and cranny of the World's Economy, that no Financial Institution was spared. Falling Dominoes is too mild a description.
Crash. Meltdown. Collapse. Ruin. Those are the words we hear, but are just beginning to understand. Another generation of Americans is about to learn what the word Depression means.
Why hasn't anyone been arrested?
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US Treasury Secretary Hank Paulson, formerly of Goldman $achs, knew it was coming, and tried to cover by inoculating some -- but not all -- financial institutions with injections of cash. The one's he didn't, collapsed, toppling Wall $treet, which in turn plunged $tock Markets worldwide into panic, followed by chaos.
American financial giants peddled junk to everyone. Junk. And the World's banks became junkies. None of them knew how much of Wall $treet's viral infection was inside their Investment Portfolios. What's worse, they didn't know how much was in someone else's portfolio. If they made uncollectible loans to others, they might also topple. So they froze, afraid to take a step in any direction. And things only got worse.
Hank Paulson, with help of Federal Reserve's Ben Bernanke, are flipping through the blank pages of their Economics Book, trying to write their next Chapter before anyone catches on that they don't know what they're doing. Why, they wonder, are those said to be "too big to fail," falling?
Former FED Chair Alan Greenspan testified before Congress that he had no idea this could happen, even after he was warned time and time again. It was a complete surprise to him that Free Markets DO NOT operate in their own self-interest. Ayn Rand's Objectivism is as full of holes as a sieve.
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Self-regulation is dead. Reaganomics is dead. Trickle down is dead. Derivatives are dying. Good riddance.
But in their wake, as much as $1.4 Trillion in worthless derivatives are buried in International Bank portfolios, like ticking time bombs, waiting to go off. All of this was produced by greed on our Wall $treet. It's why whatever Paulson and Bernanke try to do will fail in the long run. They're just nailing tin cans over rat holes, while the dreams of a whole generation of Americans slowly sink.
When I came into this World, 7 months before Pearl Harbor, America provided a moral imperative for all to look up to. America was the World's hero.
Here at the ending of my life, America is providing a moral degeneracy for all to curse.
Tens of Trillions of dollars are being lost in a Global Confidence Scheme. Sullying America's reputation, Wall $treet polluted our Planet with their Junk.
Why hasn't someone been arrested?