Washington Bailout a Bust: Depression to Follow

The Fed can't print enough money to paper over the $531.2 trillion in derivatives and credit swaps, the trillions in the overbuilt commercial real estate market ready to collapse, the multi-trillions in leveraged buyouts going bust, and other "exotic" financial instruments that have turned toxic.

(RHINEBECK, N.Y.) - Once again, Washington has proven that anything it touches is doomed to failure. Unable to win wars, repair levees, fix voting machines or rebuild its Twin Towers, the colossal $700 billion bailout package passed last week by Congress proved to be an instant bust.

As we predicted in our 26 September 2008 Trend Alert® Put the Bailout on the Ballot -- "The bailout plan will only bail out CEOs and preferred stakeholders of failing financial firms while sinking the American people deeper in debt."

With not one major success to their credit and a long history of unmitigated disasters to pin their reputations on, the Wall Street rescue package did nothing to solve the credit crisis as those in Congress who rammed it through had promised.

"Without immediate action ... America could slip into financial panic and a distressing scenario would unfold," said President Bush, urging quick passage of the bill. In a fearsome tone reminiscent of the nation's rush to war with Iraq, Bush warned that quick passage was "essential to the financial security of every American."

"Think about it," said Barack Obama promoting its immediate passage. "If your neighbor's house is burning you're not going to spend a whole lot of time saying well that guy was always irresponsible ... his house could end up affecting your house. And that's the situation we're in right now," he said on the campaign trail while also taking time to arm-twist the congressional Black Caucus to support the bailout plan.

Weighing in with his brand of fear, the self-professed economically uneducated John McCain warned, "... the direct consequences of inaction will be far more damaging to the economic security of American families, and the fault will all be ours."

One after another, the leaders of both houses in both parties pushed for passage of the bailout bill that was pushed on them by the Treasury Czar and the Wall Street Gang. (See DC Heist: Wall Street Gang Hijacks Washington, Trend Alert®, 22 September 2008.)

"Supporting this legislation is the only way to make the best of a crisis and return our country to a path of economic stability, prosperity and growth," championed Democratic majority leader Harry Reid, who had admitted several days earlier that "no one knows what to do."

"This isn't about a bailout of Wall Street, it's a buy-in, so that we can turn our economy around," declared Democratic House leader Pelosi. Her Republican counterpart Boehner urged "every member whose conscience will allow them to support this," giving assurances, as did the others, that the $700 billion taxpayer-funded package would stop financial panic from spreading.

But even before the ink dried on the pork-infused bill that fattened greedy congressmen and lined financial insiders' pockets, the news of its passage sunk the Dow 157 points on the day.

When the overseas markets opened Monday, they reacted to the bailout by registering one of their worst market crashes in decades. And with each passing day, the economic news just kept getting worse, and with each passing day the Federal Reserve just kept throwing good money after bad.

Beyond the $1 trillion subprime problem that's been erroneously targeted as the prime culprit behind the credit crisis are more serious financial catastrophes that are barely reported, mostly overlooked and can't be remedied. The Fed can't print enough money to paper over the $531.2 trillion in derivatives and credit swaps, the trillions in the overbuilt commercial real estate market ready to collapse, the multi-trillions in leveraged buyouts going bust, and other "exotic" financial instruments that have turned toxic.

Trendpost: The Panic of '08 is "On." Yet, the instant the Dow crashed 678 points today, Bloomberg Radio brought on an expert who declared "most of the crash is behind us" and said the market plunge presented "a good buying opportunity." We see things differently. Yesterday's lowering of interest rates and the continual Fed action to flood the markets with money will lead to an era of hyper-inflation, the likes of which no living American has ever seen.

Gold prices shot up some $24 after being down over $20 earlier in the day. We continue to forecast gold $2000. And once again, we urge you to take precautionary measures in view of a worsening global market meltdown.

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Henry Ruark October 12, 2008 4:01 pm (Pacific time)

Jenna et al: Thank you for your insightful participation...you beat me to it with the JFK quote.

Henry Ruark October 12, 2008 2:31 pm (Pacific time)

Sanchez: You wrote: "As you may surmise it's almost mandatory to have an educational background when designing this type of software."

Yes, I know. I had three years of Ed.D.work at IU in one of first groups working on media production, prior to digital, and had special coursework at Pyle Journalism School, with "four gentlemen from VA" on content analysis and other exotic special-area stuff. Then published, edited the leading media mag. in Chicago, followed by full decade of communications consulting, including media production, for wide list of clients.

YOU assumed this background check, so there it is...SO if you know allathatstuff, why question facts laid down via "see with own eyes" and call it "assumptions' ?? Or by implication and direct words denigrate writer's experience and qualifications, while anointing your own ??

Again, prove up your claimed MBA. Also state business you ran, and location by city name and state. Then we can check via Google to see if exists, without using more time consuming methods open to networks and server savants.
IF you unwilling to ID when challenged, why should we pay any attention to your other assertions ?
They sound like "assumptions" to me...

Henry Ruark October 12, 2008 1:59 pm (Pacific time)

To all: Here's definition of key work in Sanchez' comment:
"supposition (as in "guess") n.: a message expressing an opinion based on incomplete evidence."

Our ongoing emphasis here can hardly be charged with "supposition". SO skim his and see where this really fits --a symptom of psychological denial, clear and obvious, in my opinion. What does your mind tell you ?

Henry Ruark October 12, 2008 12:56 pm (Pacific time)

Sanchez et al: We await your acknowledgment re correct historical reference to Reagan era as root and trunk of neoco (neolib allasame) economic policies. IF you have further quarrel, it is with Stiglitz and other world authorities, not my reports here. OR do you deny and defy the Nobel-stature of Stiglitz ?

Percy Sanchez October 12, 2008 12:12 pm (Pacific time)

Henry et al could you please enlighten me regarding where I attacked your qualifications as a staff writer (your below 8:44 post)? Possibly you are misunderstanding my use of facts in contrast to supposition?

Henry Ruark October 12, 2008 9:30 am (Pacific time)

To all: Here’s “see with own eyes” re reality in the Reagan era highly relevant to this thread:: “The financial crisis has brought down the curtain on a wide range of basic and enduring tenets also closely linked with the Reagan era, those associated with neoliberal economics, the system that the Nobel Prize-winning economist Joseph Stiglitz has called “that grab-bag of ideas based on the fundamentalist notion that markets are self-correcting, allocate resources efficiently, and serve the public interest well”. -------------------- Quoted verbatim from Financial Fallout; David Rothkop; WPost writer; in Sunday Edition of Register/Guard 10/12.

Jenna P. October 12, 2008 8:58 am (Pacific time)

Where was this major distrust in our economic system and what's left of our democracy throughout this Bush game? NOW you're worried? Have you been under a ROCK? We haven't. JFK wrote: ""Those who make peaceful revolution impossible will make violent revolution inevitable"-- John F. Kennedy. Remember him? Stand with us, or we will surely leave you guilty parties in the dust as we move to a smarter, more honest and truthful administration. You guys started that "love it or leave it" line, now you'll learn what it means.

Henry Ruark October 12, 2008 8:44 am (Pacific time)

Sanchez: This for the record, per your note. You attack my qualification as STAFF-writer here, yet refuse to honor documenting your own, on repeated civil request. Mine are legally on record, so why should civil request to you trigger your obviously suspicious refusal --unless there is good reason ??
Communications and computer revolution historically driven by academic research, paid for by Pentagon wartime funds, as you should surely know, but built on academic foundation already responsible for nations' rapid growth and prosperity. That's consequence of historic landgrant actions by Congress in early years to establish college/university system nationwide. "Arrogant exuberance" often follows business success --as demonstrated in current world financial crisis brought on by damaging operations initiated by Reagan's cabal.

Henry Ruark October 12, 2008 8:05 am (Pacific time)

Friend Percy S. et al: "Sincere" despite appearances here. My role is to instigate dialog and cogitation, and we seem to be "succeeding", but perhaps on wrong points and levels, too often. Our sole major difference is that you refuse any ID and expect your words-alone to be accepted by all. Sure, we all get "intense" in Comments,sometimes, me surely included. After all I'm Irish (mostly !) and damned verbose, too ! May be why I write Op Eds, which demand time needed for salable product for other clients. I'm still "starving free-lancer" for sure... BUT nobody should listen to masked man making massive claims without any proof, and refusing to remove mask. Would you do that if he came to your home ? This is equivalent... That is one main reason we ALL find nation and world where it is --listening to those who guaratee their stuff without either proof OR open dialog. That produces the kind of "intense" understandings on view here from others, reflecting continued distrust of governance system which can only operate on full reliance, one on the other.As John Dewey stated "Conversation is the heart of democracy". ANY civil conversation among equals depends upon, hangs on, must be built from, sure and certain good faith on both sides. Works for owner and workers, too, when done in all good faith by both. ID for any writer in public channels is foremost courtesy for all readers thereof, which is why we seek it here. Look for it on every major piece in any responsible publication; equivalent here is ID civilly requested for accountability. DO appreciate your now-civil and good points, and request, one more time,after repeated (perhaps verbose !) explanations, that you remove mask and prove up what you have been providing for us. Without that, in political climate today for sure, we still see and hear only that masked man at door, with big poster filled with unproven claims.

sts October 11, 2008 8:00 pm (Pacific time)

9/11 was orchestrated by the elite running the western world. There will be no president unless they allow it. They have been doing this for a long time and are good at it. The monetary collapse is also orchestrated by the elite. THe more they can put fear into you, the more they can make you a slave. THey did the same thing in 1929, history proves it. The IRaq war is nothing but the elite and their wanting to take over the world. Look up "gulf of tonkin", :the USS Liberty, and "operation Northwoods". THe U.S. has become a thorn in their side. We are too patriotic, and blessed. So, they first started to infiltrate the school system to dumb down the kids. They bought the media to dumb down everyone else. They are NOT nice people, but their plans are coming to fruition. After almost 100 years of patience and diligence. I, myself, could live poor, but I cannot live in slavery, I cannot live in tyranny, and I certainly cannot live with the dictatorship that has now taken place in the U.S. Bush does NOT run the government, neither did clinton, nor reagan. The Rothshichilds, the Rockefellers, Kissinger among about 100 other elites run the government. Bush is a puppet, mccain is a puppet, and obama is a puppet. So were clinton and reagan. THe only one that was not a puppet was jfk and they killed him. wake up! Clinton signed over all our jobs to other nations. Jobs are the only thing that can bring us out of a depression and we have none. Clinton also raided the social security fund to balance the budget. Then Bush came along and closed the deal. There is a one party system, and while you all keep fighting on one side or the other, they are raping you of your dignity. On an easier note: here is a cartoon where they put Ron Paul/Chuck Baldwin/and STS in jail.. http://www.youtube.com/watch?v=gqpFm7zAK90 I have studied this stuff for decades. Any comments are welcome, but be warned, I will run you into the ground, unless you also have decades of study. Henry is closest in reality. I will be watching this specific post. by the way...congress legislates the laws????? are you crazy??? yes, the constitution says so, but are you not listening?? They declared martial law in the senate/congress during the bailout. Congress has no power now. You are living in a dream world. read hr1955, or talk to governors that are afraid of going against bush because bush will start some type of an emergency, and become dictator. It is all law now. Bush can become dictator under current law. Posse commatus (sp?) has already been suspended, and now we have 14,000 army soldiers in the U.S. This stuff has been going on since 1776, and was crowned in 1913. The federal reserve bank is now your leader. Not obama, not mccain, not bush, not congress. The federal reserve bank, and the elite, are now your owners, and your leaders. Have friggin fun for sleeping and watching tv. I could see this coming many years ago, but actually seeing it in front of my face now that it is happening is a bit surreal. I have prepared for this time financially etc , but one thing I am too small to fix, is how to stop them from taking our civil rights, and liberty. I need help, and there seems to be little. This election is worse than american idol. turn off your tv!!

Percy Sanchez October 11, 2008 12:53 pm (Pacific time)

Henry et al what I have been doing for over forty years is making a payroll and making sure my people can take care of their families. Have you done that? I have also done some teaching Henry and was one of the early ones designing educational software back in the late 70's early 80's before any graduate schools even introduced that into the curriculum outside of MIT, Cal Poly and Northwestern. As you may surmise it's almost mandatory to have an educational background when designing this type of software. It's amazing how some people think they can take some "theory" courses in grad school, do a little teaching and think they know everything. Same goes for running a sucessful business. I have been around Henry, now I offer some observations and comments at this website. It is not my intention to be abusive, just accurate. Have never made a personal attack on anyone here, can you name one? Not talking about differences of interpretations either.

Henry Ruark October 11, 2008 10:57 am (Pacific time)

Hi, Aspen ! Assume you in Colorado. Great state, my 97-yr.old sister resident there for her last 20 years, near Aspen. Thank you for your very relevant participation, sir !

Henry Ruark October 11, 2008 10:54 am (Pacific time)

Sanchez: Mine own record more than 60 years, on public check here. Where's yours except hidden by anon-mask and hide-name ? IF "historical errors", cite sources and give details,other than your own interpretative wording. No reason you cannot so write for your own point of view, as welcomed here ever since you arrived, but demanding proof other than your own very subjective statements, as we have shown repeatedly. Sorry, friend S., but fact is fact. If you have it, flourish it openly for all to see and check, as we do. Re "teaching it", have done so at every level from k-12 to grad and corporate seminar. Never been "admonished" albeit often attacked by those unable to do otherwise. You ever taught, at any level? Any professional experience, in education, communications or other than business ? Also mine published nationally and thus vulnerable to very solid exam by experts. You ever publish anything ? If so, cite it with date and issue of publication as done here. Personal attack unwarranted here; in a civil society we can deal in the checkable kind of source and fact. That's our version of open, honest, democratic dialog reflecting American tradition, with "see with own eyes" and repeated admonition to evaluate with own mind. To others: Forgive necessity for detail; writer-defense is reverse side of attack-coin in any responsible publication. Facts stated are on public record already with S-N.

Percy Sanchez MBA October 11, 2008 8:25 am (Pacific time)

Henry et al you are historically in error and I stand by that with forty-two unbroken years (incl. 1987) of having my businesses in the black. You are no doubt perceiving history in a subjective manner that if you were teaching it that way in a public school setting you would be admonished.

AspenFreePress October 11, 2008 5:55 am (Pacific time)

The GOP which handed us a flawed 2000 presidential election where we couldn't count the Florida vote and non-existent WMB with musroom cloud in Iraq, doesn't care about the world economy. The GOP just wants gas prices to fall to $2 per gallon by election day so they won't wiped out at the polls. Sterling Greenwood

Henry Ruark October 10, 2008 6:49 pm (Pacific time)

R.M.: History is history. Situation began before Reagan, was greatly multiplied during his time.
Clinton and Rubin complicit, as I already so stated. Since Clinton signed, he had no other course. But that in no way precludes my points, which refer to earlier actions by Reagan and others.
Congressional action re G-S by never denied, that's history, too. Only question is consequences, which is what I show. Allarest you mention remains personal interpretation. I stand by what I wrote, and it in no way is subject to your points, despite links which will reflect spirit and discussion of the time.
Facts are facts; Reagan era multiplied deregulation, changed the attitudes of many in business and finance, and eased transitions which brought on current crisis and other consequences, some more drastic yet to come, driven by worldwide trends also set in train by Reagan era actions.

Rich Millison October 10, 2008 6:10 pm (Pacific time)

I have repeatedly posted on this site myself, including a multitude of links (including video\'s of Clinton acknowledging that it was the subprime loans brought on during his administration by democrats that caused our current financial crisis). To try to assign this situation to Reagan displays a complete lack of understanding basic economics either on an elementary micro or macro level. I can provide congressional links showing how Sen. Chuck Schumer and Barney Frank bent over backwards applauding Glass-Steagal. I appreciate loyalty and partianship, but to argue against factual information is radical.

Andruw October 10, 2008 5:14 pm (Pacific time)

The high cost of fuel negativly affects every aspect of our economy yet little is said about it. We need to become energy independent. Check out the Manhattan Project of 2009 by Jeff Wilson. I just got my copy in the mail today from Amazon and it is amazing. www.themanhattanprojectof2009.com

Henry Ruark October 10, 2008 11:14 am (Pacific time)

Sanchez continues to distort history to fit his personal beliefs while offering nothing more than his own b/b feeling. The principle cause of the current crisis is clearly the deregulation permitted to end separation of commercial and investment banks. That's what pushed over the crucial economic domino in the whole line now collapsing so disastrously. That occurred by osmosis and continued financial interest pressures from Reagan era onwards by lobbyist and corporate lush dollars lavished to take over control of governing bodies from agency to White House.
Sen. Gramm opened the last door via killing safeguard of Glass-Steagal, with Clinton's Treasury Secretary Rubin, from Wall St., cheerleading. See: http://www.salem-news.com/articles/september212008/op_ed.php Clinton then made himself complicit via approval, BUT worldwide trends were set into motion via GOP policies.

For the record, Sanchez continues to refrain from offering up school for his claimed MBA.

Percy Sanchez MBA October 10, 2008 8:07 am (Pacific time)

This disaster has it's roots in subprime loans that even Clinton admitted that it started on his watch and he also has stated publically that it was republicans that tried to rein in these loans but via parlimentary moves (including filibusters) the democrats stopped it. This is all a matter of public record. By the way it is congress that legislates the laws not the executive branch. I have some big beefs with Bush, but this current financial mess is not his.

Marc Yacht MD October 10, 2008 6:35 am (Pacific time)

It's easy to blame the government but it is better to look at who currently is running the government. The Bush administration bringing curruption, irresponsible chronism for agency appointments, an expensive unnecessary war, and 8 years of inept leadership brought this financial catastrophy to America. Government agencies can do things very well if talented leadership is selected to run them. This disaster is Bush driven and lays at his feet. This is not about the ability of government to regulate and oversee. When agencies are run properly and allowed to do their jobs they run just fine. Now everybody pays including the ones that brought this financial disaster to us. MJY

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Washington Bailout a Bust: Depression to Follow

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