Psst: There Is No World-Wide Credit Crunch! It's Yet Another Big Lie to Screw American Taxpayers

[David Zephyr]

The American public is being sold on, yet still another big lie by the Bush Administration and its corporate masters, and this time the big scary lie isn't about non-existent weapons of mass destruction, but it is, nonetheless, an equally wicked lie and it's called "the credit crunch". And what a spectacular marketing job they are doing this time. McDonald's and Coca Cola should be envious as hell because every American consumer, taxpayer, homeowner and small business person knows all about the "credit crunch".

An untouchable extra-governmental body reaches right into our pockets and awards JP Morgan with a $10/share purchase of Bear Stearns after passing along all the bad debt to us, the taxpayers. There were no public hearings in the House of Representatives or any special committees formed within the Senate or even a peep from the White House to clue us all in that we were going to be robbed of $30 Billion while we were sleeping. $30 Billion!

How did they get away with it? Well, first they had to create the climate of fear with the big "credit crunch" lie. And once you buy into it, then you can accept that there was "an emergency" that required the Fed and the White House to act...to "save us".

Your corporate controlled news conglomerates dutifully passed along the lie of the credit crunch with as much ease as they sold us on Iraq's fake yellow cake and nuclear and biological weapons. Turn on your television, read the papers, baby. "There's a credit crunch and the banks must be saved or we will all be swept away into a financial meltdown."

The government is printing dollars like crazy, the dollar is being purposely devalued while inflation skyrockets. And as one would expect, every single commodity on earth (from precious metals and energy to food stock and water) is soaring in price with one single exception...the value of American homes. Yes, what a glaring exception that is! "Well, haven't you heard? There's a credit crunch," or so they say.

And yet the Fed and the government are pumping hundreds of billions of dollars into these very banking institutions at eye-brow-raising low interest rates, buying up their bad "assets" as a favor to them, all the while these same institutions are raising credit card rates, business loan rates, and yes even mortgage rates to the average American. And after the shocking drops in the Fed Rates over the past 6 months, has anyone really thought about how precious little mortgage rates have dropped? Don't bother asking why because the answer already exists: "There's an international credit crunch."

And so the "credit crunch" mantra permits banks to force struggling homeowners to refinance their loans at higher rates and longer terms (50 years). It reminds me of how the banks cheerfully loaned money to the farmers of Oklahoma in the 1920's and 1930's only to take back their farms and turn them over to large agri-business corporations all done within cushy corporate towers back East. Collusion between corporations and their governmental whores led to Hoovervilles and the Grapes of Wrath as good, hardworking, honest Americans lost their homes, their livelihoods, and everything they owned. Remember, when a dollar is lost, it is usually made somewhere else.

There is no more a credit crunch than there was a a world-wide oil "shortage" during the short-lived presidential term of Jimmy Carter. It's a fabrication by the handful of the world's most powerful in order to further enrich themselves. With wealth and media consolidation, manipulation of markets, currencies and commodities has become the easiest game in town for the world's elite. Want a war? You got it, baby! Need more margin for your mega-investments? No problem, baby! It can all be arranged within hours.

Talk about your invisible hand!

Our very war in Iraq now preserves the Sunni Saudis from an expansion by their enemies, Iranian/Shia, to their doorstep. And, yet the Saudis will not pump a single drop more of all the oil that they swim in to help lower our energy costs here in the U.S., but they are more than happy to "loan" Bush's government hundreds of billions of dollars at a nice interest rate to fund his war that benefits them most. What a deal.

Credit Crunch? It's complete bullshit!

[KoKo]

1. I thought your post was mistakenly titled. "There is no 'Subprime Credit Crunch'"

was what it seemed to be better titled.

There is indeed a "World Wide Credit Crunch" because banks aren't lending...and auctions of Muni-Bonds are still shut down.

There are many articles about that just today post in the SMW site here on DU. :shrug:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3258237&mesg_id=3258237

Here's just ONE...good read, snip from DU SMW:


Mike Whitney: Fed Up: Bernanke joins G-7 to Stem Global Financial Meltdown

Edited on Mon Apr-07-08 08:31 AM by DemReadingDU
4/6/08
In a recent interview with the New York Times, former Secretary of the Treasury Paul O' Neill, was asked how the problems with subprime mortgages could lead to a financial crisis of global proportions. O' Neill said,

“If you have 10 bottles of water, and one bottle has poison in it, and you don't know which one, you probably won’t drink out of any of the 10 bottles; that’s basically what we’ve got here.”

Bulls-eye. O' Neill's answer is the best yet for explaining a complex situation in simple terms. The term “subprime” is a red herring; it is used by the media to minimize what is really going on. The meltdown in financing extends across the entire range of mortgage-security products. No loan-type has been spared. The wholesale market for anything connected to mortgages is frozen and the details are being intentionally withheld from the public. Two years ago, more than 65 percent of all mortgages were converted into securities and sold off to Wall Street. No more. That scam unraveled in July when two Bear Stearns hedge funds blew up and their were no takers for billions of dollars of mortgage-backed junk. Since then, bankers and hedge fund managers have been scrambling to conceal the facts about what mortgage-backed securities (MBS) are really worth; nothing. The fear is that when the public finds out what is really going on, they'll draw the logical conclusion that the banking system is bankrupt, which it probably is.

lots more...
http://www.informationclearinghouse.info/article19683.h...

[David Zephyr]

8. The title was intentional and it is correct.

The "subprime" lie has just enough truth to it to make the fear-mongering of an entire international credit crunch and financial meltdown believable and, thereby creating the environment that permits taxpayers to grant the un-granatable: breathtaking financial favors to mega-institutions from U.S. taxpayers while they themselves are sacrificing.

The so-called credit mistrust between banking institutions that "even" froze up lending in France is fabricated and manipulated by those who can. Why? Because they can. Smaller institutions are being eaten up by bigger ones and we are being asked to underwrite it.

Ask yourself this: How did JP Morgan already have a seriously complex "deal" to buy Bear Stearns prepared and all in advance to pick off Bear Stearns and with the Fed ready to give away $30 Billion of precious U.S. tax dollars to "buy off" the bad assets? The sudden and "unexpected" collapse of Bear Stearns which was such a "great surprise" to everyone apparently wasn't a surprise to Bernanke and to J.P. Morgan, was it?

The "credit crunch" is fabricated, engineered just as the emergency of waging war with Iraq was engineered. There's no more a credit crisis for the big guys than there was a crisis with the potential for "nuclear clouds over American cities". Whether the lie is from Condi Rice or from Mr. Bernanke, whether the fear-mongering is from Judy Miller at the New York Times or from Bloomberg News, the "emergencies" always have the pre-determined winners ready to reap obscene profits from the misery of others.

There is no credit crisis. Not to those who are manipulating the game.

[northzax]

10. lemme guess

an international cabal of bankers? Jews, perhaps?

[David Zephyr]

15. WTF?

This has nothing to do with Jews.

[northzax]

17. well that's a relief

normally when people start talking about international banking conspiracies, we get blamed. nice to know you people are at fault this time.

seriously, you think there's a conspiracy among basically every banker in the world to freeze capital? why? to swallow up smaller banks? why? those guys who lost their shirts at Bear, Sterns, why aren't they screaming bloody murder about being robbed by the global banking conspiracy? remember, for every dollar it looks like Citi got a good deal on Bear, someone lost that money overnight at Bear.

[truedelphi]

25. It is very hard to feel any type of sympathy for the robber barons at the banks

They have owned this country lock stock and barrell starting with the creation of the Federal Reserve in 1913. (Ostensibly created so we would avoid bank panics - and if that is the case then why did we have the Great Depression just sixteen yrs after the Fed Reserve's creation?)

Between the banking de-reg bill of 1999 and the banking "reform" bill of 2005, the banks have had the ability to Enron-ize the entire world of finance such that the games played at Enron start to look mild.

When power institutions in New York City can use 30 million dollars worth of collateral to hold on to 30 billion dollars worth of prime NYC real estate, something stinks to high heaven.

You ask what the point of all this might be - well, dammit follow the money! The same players at the top through their insider seats of privilege and their connections at the WH will now arrange all the aspects of "managing" the crisis.

It will work out for seven or eight people in the inner circle just as well as it always has.

[KoKo]

11. I'll go with what Demeter says......though. n/t

[dkf]

34. Wow. That is exactly what I was thinking of posting...

O'Neill's 10 bottles of water is the best example I have read on the fear that is out there.

[Demeter]

2. It Would Be Truer To Say That There's A World-Wide Scheme to Defraud

which has resulted in a credit crunch in the US and United Kingdom and Switzerland, for certain, massive destruction of small peoples' jobs, pensions and lives, and chaos for cities and towns.

The fraud was perpetrated by our very own Federal Reserve and member banks, aided by all our fine Ivy League business school graduates including of course, that jewel of Harvard, George W Bush.

There are lots of little details, but that's the gist of it.

[KoKo]

4. Demeter...just reading the links in DU SMW up there (thanks to your help) would inform

folks about how vast it all is. So many good links to read there ...today (thanks to you) and as usual with OZY and the Regulars keeping us informed.


http://www.democraticunderground.com/discuss/duboard.ph...

[Demeter]

5. Thank You KoKo!

I learned from the best. (And if Ozy doesn't show up pretty soon, I may be stuck with it, not that that would be such a bad thing....)

[KoKo]

6. lol's...you've been doing a great job...but I can imagine it isn't easy

keeping that all together and doing the inteface....:yourock:

[Hannah Bell]

27. nothing at your link. n/t

[Speck Tater]

3. just keep saying "Na Na La La I can't hear you."

to remain disconnected from reality. Better that than face the scary truth.

[samsingh]

7. isn't bush subservient to the saudia's?

[David Zephyr]

14. The Bush family are the preferred gatekeepers for the Saudis to American wealth.

George W. Bush pimped cheap Arabian oil against his fellow Texan oil tycoons infuriating them enough to support Democrat Ralph Yarborough in the 1964 Senate race there.

The Bush family, beginning with Prescott Bush, have secured their role as the gatekeepers for the Saudis and other Arabian oil-rich dictators. James Baker provided the legal legwork in this toxic marriage that still haunts our republic even to this very day.

[KoKo]

22. But...there is a REAL CREDIT CRUNCH...Banks Afraid to Lend but Using Taxpayer Money

(from Helicopter Ben and Fed) by borrowing to pump up balance sheets ... to "look" solvent. They aren't...

[lonestarnot]

9. They've taken the money and offshored it rather than lending it.

[northzax]

13. off shored it?

to where? and what are those banks doing with it? you know they have to pay interest, too, right? so unless your money is being hidden under a mattress in cash somewhere, it's being loaned to someone, at some rate.

[lonestarnot]

16. Chase bank to Phillipines.

[northzax]

19. so there are a couple of trillion dollars

sitting in the Phillipines? maybe as much as ten trillion? in what? twenties? gold? copper? plastic beads? wampum?

[Zynx]

20. Got a credible source on that or is this some whacky bullshit?

[lonestarnot]

29. Yes, I will dig it up.

[lonestarnot]

33. Fuck I read it here just recently and I've look at economy forum,

my bookmarks, lbn and done a google search and can't find it. I am very tired. I will look more later. Sorry. I was just in the last couple of days and a link was provided.

[unblock]

12. you obviously don't work in the industry

i see it up close and daily. investment-grade companies are having trouble raising capital. those that are raising money are paying spreads that last year only junk would trade at.

leanding in the u.s. is virtually shut down and europe is not much better. we have to go far down our calling list to find funds for our clients. we ARE finding money out there, but where we find it and at what price makes it very obvious that there is a severe credit crunch going on all over the world.


you can argue that shrub and the gang talked us all into this somehow with his smoke and mirrors, if you like, and that there would never have been a crisis if he hadn't talked us into a banking panic. i'd disagree with you as well (there were very real triggers, not just talk), but you'd have more of a case than you do in simply denying reality.

[Zynx]

18. Exactly. The European Central Bank had its own multi-hundred billion interventions for a reason.

[David Zephyr]

21. That's not my "argument" at all.

There is a thinning of the herd within the big financial houses. And the thinning isn't an accident. It's intentional and with some having the favor of taxpayer bailouts while others are allowed to collapse and to be "bought" for a nickel on the dollar.

Is there a credit squeeze? Yes. But one man's extremity is another man's opportunity. The "credit crunch" is manufactured and intentional. The smaller banking institutions are being squeezed out without the need the capital layout involved with standard takeovers (hostile or friendly) through large stock purchases, but rather through manipulating capital availability.

When Americans are led to believe there is an "emergency" they are willing to let $30 Billion of their tax dollars be used to buy bad assets to help JP Morgan pick off a nice little company. Without an "emergency" there can be no favors.

[unblock]

24. manufactured and intentional?

i'm more than willing to believe that the extreme right is that evil, but i'm simply not going to give you that they're that smart.

the credit crunch was a result a quick downturn after an extented period of over-extending, which was facilitated by consistently low interest rates, low capital requirements, and more than a little of the euphoria that comes from financial bubbles. you can certainly argue that greenspan kept rates too low too long, but i can't accept that it was all a plot to sucker banks into lending too much so that they could later screw them into consolidating with larger banks.

it's too clever by much more than a half. if consolidation was the aim, they could have accomplished in a far more straightforward fashion.


now it certainly is true that the right wingers are great at taking full advantage of any catastrophe that comes along. shock doctrine and all. 9/11, katrina, etc., all used as excuses to funnel government money to preferred corporations headed by donors. and yes, the credit crunch is another such opportunity, and it galls that jpmorgan gets a bonanza for very little risk and bear shareholders get anything at all, and worst, taxpayers get almost no upside potential (it IS possible, but only if the bad debt performs remarkably well).

they're opportunists, not engineers.



btw, as part of the deal that upped the sale price to $10/share, jpmorgan agreed to accept the first $1 billion of losses, thus reducing the fed's exposure to a "mere" $29 billion.

[Zynx]

32. I agree entirely. This mess is far too complicated with too many moving parts

to be intentional. It did not have to happen and was a creature of Wall Street, but they are not in control of it.

[truedelphi]

26. It is so-o-o questionable that somehow a specific entitiy

(In this case, J P Morgan) is given the first pickings at the fire sale.

Why J P Morgan? What is the relationship of various officials within Morgan to the Federal Reserve?

And to the White House?

[Zynx]

30. JPMorgan was far and away the largest institution that is still stable.

Citi is hopelessly fucked up. Bank of America is currently choking on its Countrywide deal. Wells Fargo doesn't want an investment bank and won't expand into that part of the country. Wachovia is too screwed up and not large enough. We didn't want foreign ownership. This wasn't as nefarious as you pretend.

[northzax]

39. it was either jpmorgan

or the emir of Dubai. I bet there would be just as Many complaints then, don't you think?

[unblock]

35. it's not like you heard all the other banks complaining and offering more

well, whining, yes. but offering to step up to the plate, no.

[truedelphi]

23. If you read the Constitutuion, you realize that Congress and Congress should be in charge of the

banking system.

But hey - Chris Dodd gets enough in campaign contribututions to keep mum abt the inside deals - which means he's an insider too.

[Zynx]

31. And that is a wretched idea. I can't conceive of Congress setting our daily economic policies.

[MadHound]

28. Well, two things that I can tell that you're not an expert in

One is economic and the second is the petroleum industry. I would suggest you educate yourself in both of those fields before coming out and spewing bullshit like your OP around. Tell you what, as a beginning link, I suggest that you study the deregulation of the banks during the nineties, including the dismantling of Glas-Steagle, just so you can see how the ground was prepared for this mess. Then I suggest that you go back and study Greenspan's nice little move, shifting the recession caused by the tech boom bust back into the housing and financial sector. Then go study how mortgage backed securities work, and discover why Bear-Stearns collapsed.

As far as the oil bust of the seventies go, go read up on the peak of US domestic oil, how our oil fields dried up or became unprofitable, then go study how OPEC screwed their own selves for the next twenty years after we came out of that oil shortage.

Perhaps after that we can talk. Until then all you're doing is spouting off meaningless nothings, seeing a conspiracy behind every door. Does that mean that there weren't and aren't conspiracies going on, no. But you are targeting the wrong people, the wrong areas, or just making them up out of thin air.

[BooScout]

41. Exactly!

Waaaaay back in the 1980's I remember one of my Banking Professor predicting today's crisis if they ever deregulated the banks.

For the OP to be spouting some major worldwide conspiracy theory backed by various bogeymen with the help of various governments, purposely putting hundreds of thousands worldwide out of work, devaluing properties causing runs on banks with not a shred of evidence is laughable.

[sendero]

36. All one has to do to verify...

... whether or not a credit crunch exists is look at the lending numbers of banks. They are not just down, they are in the toilet.

One could argue the origins of the current situation, but you have to ignore the facts completely to believe we don't have a credit crunch.

Not only do we have one, but it's going to be here a long time.

All this "Bush is a genius, he got exactly what he wanted" crap is amusing.

No, he is a fool who beleived he could be a hero by taking bold action. Bold action in Iraq, bold action in the economic sphere.

Both have worked out horribly, and the economy is going to drive a wooden stake through the heart of the Republican party for a very long time and these fuckers know it. That is why they have the Fed taking UNPRECEDENTED and TOTALLY UNWARRANTED moves to try to stem the flow of blood. It will slow down the collapse, but it cannot prevent it.

[truedelphi]

37. You Say: It will slow down the collapse, but it cannot prevent it.

You would never come to that conclusion by listening to the M$M.

One good day on Wall Street and you would never know from hearing them spin it, that happy days aren't here again!

[sendero]

38. Yeah...

.. you have to be some kind of thick to believe anything hear on the MSM, CNBC in particular.

Just like the rest of the "news", it's all about getting ratings by telling you what you want to hear, not anything like the truth. :)

[chaska]

40. NUCKIN' FUTS.

As in you're....