Yankin Hank Paulson! heres your answers!

this from George Ure at www.independencejournal.com

"Yank Hank!" Department

What Paulson Doesn't Mention

Not often we do special updates around here, but the glaring spin and bias in the Treasury Secretary's remarks this morning demands a rational response - one you won't likely hear on MSM because it's too simple and far too honest. First a snip from Hank Paulson's remarks which you can find in their entirety here:

"We have acted on a case-by-case basis in recent weeks, addressing problems at Fannie Mae and Freddie Mac, working with market participants to prepare for the failure of Lehman Brothers, and lending to AIG so it can sell some of its assets in an orderly manner. And this morning we've taken a number of powerful tactical steps to increase confidence in the system, including the establishment of a temporary guaranty program for the U.S. money market mutual fund industry.

Despite these steps, more is needed. We must now take further, decisive action to fundamentally and comprehensively address the root cause of our financial system's stresses.

The underlying weakness in our financial system today is the illiquid mortgage assets that have lost value as the housing correction has proceeded. These illiquid assets are choking off the flow of credit that is so vitally important to our economy. When the financial system works as it should, money and capital flow to and from households and businesses to pay for home loans, school loans and investments that create jobs. As illiquid mortgage assets block the system, the clogging of our financial markets has the potential to have significant effects on our financial system and our economy. "

What Mr. Secretary fails to inform you of is a couple of key points. These are that:

There wasn't just one bubble in America recently - which most people believe because it came under the general heading of "Housing Bubble". There were in reality two bubbles. One was on the retail side, where yes, there were excesses in lending practices. But, the real bubble which Paulson is dealing with is the bubble within a bubble' which is all about the excesses within the credit market.

These excesses within the credit markets meant that individual home loans which were never designed to be 'flipped' in the first place became a financial spigot from which all the greedy sunovab*tches, who could find a way to flip and swap themselves into fat bonuses which now that they've been paid will never be recouped, drank freely and want to drink even more right now.

So, as long as you don't skip past asking "what do they mean "illiquid assets?" - and as long as you don't understand that your mortgage got 'flipped' in the recent gyrations on Wall Street -sometimes several time - this Greatest Yet CON of America will move forward.

Forget that you're putting your very Nation's financial future on the line and puffing up a nearly bankrupt paper currency. Ignore the future impact on generations to come. Just suck it up and than the First of the BOHICAns (bend over, here it comes again) for the fine job they're doing.

That's to you, not for you.

My view at the moment is pretty simple: If your faith and credit as a mortgage holder is an illiquid instrument - and if your honestly submitted mortgage payment is not enough because the schemes and dreams of the super-rich are blowing up in their face, they I say let them drink from the entrails of their own killings and go bankrupt if that's the outcome.

I am calling my CONgressional DELEGATEs today to demand they do something other than rubber stamp this corporate/ socialist (corpgov) hijacking of America.

If you're mortgage payment is not enough, screw 'em. If that means tough times and bankrupcies, maybe a return to less leveraged times is a good idea. And, while we're at it, an honest currency backed by gold and silver, too.

But then again, what do I - or the Framers of the Constitution - know about such things? Hell, they thought Congress had the job of controlling the money supply. OMFG what were they thinking?

Yank Hank.

Soar Spot: Markets Now Officially Rigged!

The stock market is about to put on a big rally this morning. No, not because the problems of the financial world have been solved, but because the SEC and UK authorities have gotten together to ban short-selling of financial stocks:

SEC Halts Short Selling of Financial Stocks to Protect Investors and Markets

FOR IMMEDIATE RELEASE 2008-211

Commission Also Takes Steps to Increase Market Transparency and Liquidity

Washington, D.C., Sept. 19, 2008 — The Securities and Exchange Commission, acting in concert with the U.K. Financial Services Authority, today took temporary emergency action to prohibit short selling in financial companies to protect the integrity and quality of the securities market and strengthen investor confidence. The U.K. FSA took similar action yesterday.

The whole text of the order may be found here.

The order expires at 11:59 PM EDT on October 2. Enjoy it while you can.

No doubt a government "rescue plan" will be unveiled shortly. But, cynical me, I'd offer only one comment: Sit on your wallet. This ain't about making you money.

Suing To Stop the AIG Bailout

Not a lot of MainStreamMedia (MSM) attention to this, but here's a little 'sand in the gears' for the PowersThatBe who are anxiously extending federal (e.g. our) tax dollars to bail out the formerly private insurance company AIG:

"Federal Lawsuit Filed to Stop AIG Bailout

U.S. Lacks Constitutional Authority for Emergency Loan

Queensbury, NY -- On the day following the 221st anniversary of the signing of the U.S. Constitution, WTP Chairman and constitutional activist Robert Schulz today filed a federal lawsuit in United States District Court in Albany seeking to halt the execution of the emergency bailout of American International Group, Inc. (AIG) by the United States Government and the Federal Reserve.

The lawsuit asserts that the commitment of public funds and credit for the direct benefit of privately owned AIG is an ultra vires action by the United States Government and Federal Reserve, i.e., beyond the limited legal authority granted by the Constitution. The lawsuit asks for a "show cause" hearing demanding that the Government produce evidence of its legal authority to commit public funds for such a purpose, as well as emergency and permanent injunctions halting the bailout transaction.

According to available information regarding the transaction, the Federal Reserve will loan AIG $85 billion dollars to stabilize its financial crisis, in effect, using taxpayer money to fund the loan. In consideration of taxpayer financing of the private bailout, the U.S. will receive stock warrants for 79.9% of AIG stock.

Schulz believes that, "Beyond the moral hazard and dangerous precedent established by this action, it is of vital importance that the American people recognize that the present financial crisis is a direct and predictable result of decades of constitutional violations by the Federal Government. Through a longstanding policy of disinformation and collusion with the Federal Reserve and Wall Street financial elite, the United States Federal Government has denied public access to information about the secretive operations of the privately owned and operated Federal Reserve and its monopoly control of America’s money system. This monopoly control of our currency by a private banking cartel has resulted in increasing distortion, volatility and cyclical (boom and bust) economic conditions in the U.S. and abroad. America’s fiat currency (produced from thin air) is manipulated by the Federal Reserve for the benefit of its owners, major Wall Street financial institutions and the Federal Government and is not unaccountable to the taxpayers. These abuses of the Constitution have taken our financial system to edge of the abyss. The chickens have come home to roost."

Since 2002, the We The People Foundation and its supporters have tried, thus far unsuccessfully, to get the Government to respond to a number of First Amendment Petitions for Redress of violations of the Constitution, including the Federal Reserve System’s violation of the money clauses of the Constitution. Had the Government honored the Constitution and its obligation to respond to the citizens’ Petitions for Redress, many of the nation’s financial and monetary problems could have been avoided."

If you're wondering about my opinion on this, I guess I'll just say "actions speak louder than words" and I bought a highly speculative/don't try this at home/use under adult supervision short-term put option on the S&P 500 index for the October expiration.

While it expires on October 16th hopefully worthless, there's still that matter of the October 7th 'hot date' in the predictive linguistics.

The other thing to keep an eye on is that a yield on some of the panic-driven deals in the fixed income markets are pushing upwards of 20%. That would be an equivalent to a Dow Jonjes Industrial average of 5, so with the Dow at a PE about 3-times that5, the Dow could arguably fall to one-third of it's present pricing (think about 4,500 here) and then only be valued fairly relative to fixed incomes.

But, like I say, I am hoping this doesn't pay off.

That Short Selling Cloud

Not to sound too conspiratorial here, but now that 'terror' alerts are high (and I expect them to be publicly raised before October 7th -October 2 or 3 when the shorting rules come off would be timely ), one can sit back with a cup of coffee and wonder about whether the recent 'sudden' changes in short-selling rules both here in the US and in the UK will not somehow figure into events yet to come.

A commentary by Bill Cara this morning says "SEC will ban short selling: America's Leaders break down".

Recall that immediately prior to the attack on 9/11, the SEC was reported to have a huge investigation of naked short-selling underway and that key records disappeared in the events of that day. And, let's not forget that former Italian President who claim that 9/11 was an inside job by the CIA and Mossad.

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A little reading of various conspiracy boards suggests that there might have been some kind of cooperation between a few US alphabet-agencies and other intelligence services around the world, including the KGB which Vlad Putin used to head, and this theory says that an earlier Bush at the CIA might have built an 'exit plan' for the Russian KGB-types during his vice presidential tenure.

When I think about it, that actually could make sense. How could the fall of Russia be coordinated without some pay off to those who could [violently] oppose a planned collapse? Recall George H.W. Bush was head of the CIA long before the breakdown of the Soviet empire. Such contingencies would have had to been obvious to strategic planners.

And, it wouldn't have been a bad plan, either. If you're going to help to facilitate the roll-over of something as big as the former Soviet Union, there would of course be palms to be greased to keep things moving along just so. And George H.W. Bush was VP under Reagan and then President when the Wall in Berlin finally came down, so the timing of this speculation is interesting. If there were to be favors passed around to make sure the rollover of Russia happened smoothly, this would be the platform to manage it from.

A little research on the web will find things like this:

"For example, the offices conducting then-Congresswoman Cynthia McKinney's investigation of 2.3 trillion - that's TRILLION - dollars missing at the Pentagon (9/10/01 C-SPAN) were destroyed in the attack on the Pentagon. Evidence relevant to the Security & Exchange Commission (SEC) investigations of Worldcom and Enron - re: the $70 billion electric power swindle in California - was destroyed when Tower # 7, which housed SEC offices, collapsed a few hours after the Twin Towers. Both investigations disappeared. "

All coincidental, I'm sure, along with the later McKinney events, but nevertheless with a 'hot date' Oct. 7th and the ever-present possibility of terrorism striking at America's heartland, we'll just watch to see if an October 7th (or thereabout) event occurs. If it's terrorism, the close proximity to the announcement of new rules of short-selling and naked-shorting might be almost too coincidental to ignore.

That would be about the best evidence for an all-out 'war between the factions' of the PowersThatBe" I could imagine. So, I'll just watch the calendar.