Another Crisis Brewing

From Chris Hedges’ column at Truthdig:

These deeply stunted and maladjusted individuals, from Treasury Secretary Timothy Geithner to Robert Rubin to Lawrence Summers to the heads of Goldman Sachs, Morgan Stanley, J.P. Morgan Chase and Bank of America, hold the fate of the nation in their hands. They have access to trillions of taxpayer dollars and are looting the U.S. Treasury to sustain reckless speculation. The financial and corporate system alone validates them. It defines them. It must be served. This is why e-mails from the New York Fed to AIG, telling the bailed-out insurer not to make public the overpaying of Wall Street firms with taxpayer money, were sent when Geithner was in charge of the government agency. These criminals sold the public investments they knew to be trash. They used campaign contributions and lobbyists to turn elected officials into stooges and gut oversight and regulation. They took over retirement savings and pensions and wiped them out. And then they seized some $13 trillion in taxpayer money so they could lend it to us with interest. It is circular theft. This is why we will endure another catastrophic financial collapse. This is why firms like Goldman Sachs are more dangerous to the nation than al-Qaida.

These corporations don’t make anything. They don’t produce anything. They gamble and bet and speculate. And when they lose vast sums they raid the U.S. Treasury so they can go back and do it again. Never mind that $50 trillion in global wealth was erased between September 2007 and March 2009, including $7 trillion in the U.S. stock market and $6 trillion in the housing market. Never mind that the total amount of retirement and household wealth trashed was $7.5 trillion or that we saw $2 trillion in 401(k)s and individual retirement accounts evaporate. Never mind the $1.9 trillion in traditional defined-benefit plans and the $2.6 trillion in nonpension assets that went up in smoke. Never mind the job losses, the foreclosures and the 35% jump in personal and small-business bankruptcies. There are bundles of new money, taken again from us, to make deals and hand out outrageous bonuses. And when these trillions run out they will come back for more until our currency becomes junk. Not that any of these people have thought this through. They are too busy focused on the pathetic, little monuments they are building to themselves and the intricacies of court intrigue.

“We will have another crisis,” [Nomi Prins, the author of It Takes a Pillage and a former managing director at Goldman Sachs] lamented. “I don’t know when, but it is brewing. If you don’t fundamentally change the foundation of the banking system you are piling on capital and time into something that is faulty. This does not result in decades of stability. They are banking on trading. Nothing has changed. The rest of the consumer economy is continuing to deteriorate. These losses go into banks. You gain on trading and lose on more solid practices. The foundation has not changed. The regulations are bullshit. The old assets are still crap. The new assets created off the old assets are still crap. The banks are still levering them and still doing the same practices they did before. We will have another liquidity crunch. Banks will again stop trusting their assets and each other. . . . The buying of complex assets will stop, although this time more quickly. People will remember what happened before. You will have a repeat of credit constricting between financial institutions. It is already constricted on the consumer side. The banking system will use up this federal capital and then go back for more.”

This entry was posted in Uncategorized. Bookmark the permalink. Post a comment or leave a trackback: Trackback URL.

Post a Comment

Your email is never published nor shared. Required fields are marked *

*
*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Home of 3Sig. Bane of the z-vals.