Tuesday, September 23, 2008

The Financial 911

What we are now experiencing in the financial markets is a second 9/11.  The end began roughly on September 11th:

Early in the day, most bank stocks sold off on nervousness about Lehman Brothers' announcement Wednesday that it planned to sell its investment-management unit and spin off its commercial real estate assets. The company is seeking to raise cash after making bad bets on holdings tied to real estate.--Washington Post

From there things started to really get ugly and we were soon hearing the phrase “financial crisis” in the media where no such terms of generalized fear had been previously uttered.  We have been told, just as we were after the first 911, that “things are completely different now”.   Proclamations of “the end of an era” abound.

And now we have a present day analogue to the Patriot Act.  It’s generally referred to as the “Bailout Bill”.  And just as we were forced to give up civil freedom for security through intimidation and fear of a terrorist boogieman, so now we are being threatened with “disaster” and “unimaginable consequences” if we should fail to rush a $700 billion care package to the financial Masters of the Universe.  This ransom payment, we are told, will keep us safe from a catastrophic economic collapse.  The rush to action, the hurried, hyperventilated squeals of future dire consequences...it all seems a little familiar and, well, contrived.

I was watching Treasury Secretary Paulson’s testimony in front of Congress today.  He strung together a line of fear-inducing hyperbole about the certain, disastrous consequences that awaited the average American if the Congress failed to act by forking over the dough to his cronies immediately.  And then suddenly, I got it.  The mafia Don was making a threat.  You know, like in the old gangster movies.  “Now, if ya don’t follow my advice, I dunno but somethin’ BAD could happen to ya.  See?  And I’d hate to see anythin’ BAD happen to ya, seein’ as ya got a wife and kids to worry about.  I’m just lookin’ out for ya.  See?”

Don Comrade Paulson and his henchman Ben “The Helicopter” Bernanke are THREATENING that if Congress and the American people don’t buckle under and hand them a cash payoff and unlimited (and I might add illegal and unconstitutional) power over the economy then they will unleash economic hell on America.  And they can do it.  Any number of manipulations can easily cause the stock markets to crash, the dollar to plunge and the economy to grind to a halt.  Without financial and monetary liquidity, which they control through many mechanisms, our financial system and economy cannot function.  Our addiction to the drug of Fed funny munny is total.  And they know it.  Because they are the pushers.

I’d like to mention another overlooked aspect of this setup.  Recently, Don Cox of the SEC mob family prohibited “short selling” in his territory, the stock exchanges.  Now, when you sell a stock short, you make money when the stock goes down.  And to a limited degree, it can force the price of a stock or a market down.  However, the only way to realize that profit is to BUY the stock to close your position.  And it is frequently the panicked buying of short sellers which puts the brakes on a declining market.  It is a critical reserve of demand for stock which PREVENTS, rather than causes, stock market crashes.

Now, if the Dons of Wall Street decide that they need to fire a bullet into America’s kneecap in order to get her to pay up and knuckle under, they are set up to do it.  Having banned short selling in the financial stocks, there is no reserve of buying power which could stop a waterfall decline in the financial stocks should one begin now.  Such a sudden drop in market value would cause one financial institution after another to go bust in rapid succession, leading to a cutoff in the supply of that drug that the addict desperately needs and causing convulsions throughout the economic body.  This is a very plausible scenario.

And so the Dons will stand over America’s quivering body, her kneecap bleeding and begging for an injection of Fedoine to kill the pain.  And they’ll say, “See, we told ya so.  SO PAY UP, SHUT UP AND DO WHAT WE TELLS YA!”

This payoff to the Dons is not necessary, not politically or economically healthy, and it is quite simply BLACKMAIL.  It is a second Patriot Act after a second 911 meant to shake our confidence, and make us roll over and beg for safety and security from a criminal protection racket.  It is a shakedown, a railroad and a SCAM.  Fortunately, enough Americans are not falling for it that the low level street thugs in Congress are crying to the Dons, “But Boss, we can’t enforce this, too many of those bums don’t wanna play ball.  They’re not goin’ for it!”

We’ll see how this plays out.  Could be if we pay them off now, we buy ourselves six months or so of relative normalcy.  But if not, get ready for a .45 caliber blast to your kneecap courtesy of the Armani Mafia Family.

Steven Vincent
End the Fed!

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