Bankers Shake Down Congress and the G-20

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http://counterpunch.com/


"Our Trash for Your Cash"


The financial press has been negligent in reporting how last week’s two top financial stories are linked: first, the testimony by Treasury Secretary Henry Paulson and his evasive Interim Assistant Secretary Neel Kashkari defending why they followed a completely different giveaway plan to the banks (their own Wall Street constituency) than what Congress authorized; and second, the G-20 standoff among the world’s leading finance ministers this weekend.

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Congress has caught onto the game being played. Now that the bailout looks like a last-minute giveaway to insiders while the giving is good, Congress held hearings last week to ask why the Treasury abandoned its plan to buy the “troubled assets” (junk mortgages) that Mr. Paulson had originally said was the problem. Why has the Treasury bought $250 billion of ersatz “preferred common stock” in banks at prices far above what private investors such as Warren Buffett paid?

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To put matters bluntly, the issue at the G-20 meetings is mistrust of the unregulated U.S. banking system and, behind it, government “regulators” who refuse to regulate. China and other foreign dollar recipients have been treating the dollar like a hot potato, trying to spend it on buying foreign minerals, fuels and other assets from any country that will accept payment in dollars. Most of the takers are third world countries still committed to paying the heavy dollarized debts owed to the World Bank and other global creditors. The price of their remaining in the Bretton Woods system is to sacrifice their public domain in a kind of pre-bankruptcy sale rather than repudiating their debts under the “odious debt” and “fraudulent conveyance” escape valves. What is needed is not to “reform” the World Bank and IMF, but to replace them. But that is another story, one that other countries dared not even bring up at the November 15-16 meetings.

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The banks and Wall Street are threatening to wreck the economy by “going on strike” and creating a credit squeeze forcing foreclosures and economic collapse, if Congress and the Federal Reserve don’t save them from taking a loss on their bad loans and financial derivatives. Foreigners also must play a subordinate role in this game, or the international financial system itself will be collapsed. Financial customers must absorb the loss.
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[Greyhound]

1. Return of the Banksters. Will we stand up to them or will we pull a "Gray Davis"?

Stay tuned, there's more to come.
:kick: & R

[midnight]

2. If congress was smart. They would give the American people

some relief. Forgive our loans for college, and or mortages. Why do the rich need one more hand out?