MARKET AND DOLLAR DROP
DEBATING THE ORIGINS OF THE CRISIS
WHAT CAN BE DONE TO FIX IT?

First, a personal update as I try to get my voice heard in the midst of this crisis. I had quite a day. The crisis seems to be providing me with some opportunities to speak in the media and to the public.

9 AM— Interview for national Show on Pacifica Radio
l0:30 Screening of In Debt We Trust and Talk To Senior Citizens about Plunder and current crisis
12: PM Radio interview with the Global Research Radio Hour while taking the M 103 Bus to Lower Manhattan. Finish Up interview on a bench at City Hall Park
l PM Walk to Wall Street
l:30 Join Reverend Jesse Jackson at an outdoor press conference over the loud din of construction noise. He calls for RECONSTRUCTION Trust company, says bailout too narrow and whole economy needs a redirction. Reverend invites me to speak. Only one NY TV station there. CNBC shoots a few minutes of his talk and then packs up and leaves before I speak with a big PLUNDER sign in front of me. Good response from the crowd. Spoke to a few journalists and sold a few books. Interview with Lenny Charles for his news program on Free Speech TV..
2:30 Word Reaches us that Hillary Clinton is speaking outside the Federal Reserve Bank. We go up there and shoot some of it. Run into Jesse who also dropped in on Hillary and he tells us that the SEIU Union and Transport Workers Union Are Planning a Rally on Wall Street Next Monday at l PM. They could pack THE STREET!
3: 30 Rush back to the office to check email, review current projects and start blog
5: 30 Leave Office To go back downtown to East Village for another screening of In Debt We Trust organized by Sandra Chapin for organizers in the consumer movement
8: 30 Go Home to write blog and wait for 9: 40 Radio interview in Santa Barbara California.

Do it again tomorrow: Have interviews slated with WVON Chicago, Real News Network and KALW San Francisco. Still no interviews on mainstream US TV. Hoping for invites to speak at colleges. Can anyone help? Will need honorarium, travel.

MORE BAD NEWS

I was outside the stock exchange today. On the inside it was another day in the dumper as stocks fall 500 points. Reports the Times:

NYT: Stocks Drop on Lingering Fears About Wall St. Rescue

Anxiety lingered in the markets as lawmakers hashed out the details of the biggest government bailout in history….

SKEPTICISM GROWS ABOUT TREASURY PLAN

Experts agree that crisis is severe but disagree on what to do about it…The Treasury’s proposal, reports the Times this morning, is “being challenged as fundamentally deficient.”

WHAT IS IN THE ORIGINAL “PLAN”

DEMS WIN CONCESSIONS

Meanwhile AP reports: “Scrambling for a quick accord on the $700 billion bailout, the Bush administration and leading lawmakers have agreed to include mortgage aid and strong congressional oversight along with unprecedented help for failing financial institutions, a key lawmaker said Monday. Senator Dodd of Banking Committee is taking the lead in redrafting.

PANIC IN THE WHITE HOUSE

NYT: Bush Urges Democrats to Act Quickly on Bailout

As Congressional Democrats began to set their own terms for a rescue plan, President Bush sought to convey a sense of urgency…Another story says Older Americans are “TERRIFIED.”

THE SENATE HOLDS HEARINGS WED MORNING

NY Times reprorts “anger and skepticism” in Congress…They demand oversight and limits on Executive Pay

Senator Bernie Sanders is outraged:

For years, we have heard the Bush administration tell us how “robust” our economy was and how strong the “fundamentals” were. That was until a few days ago. Now, we are being told that if Congress does not act immediately and approve a $700 billion Wall Street bailout proposal there will be an unprecedented economic meltdown in the United States and an unraveling of the global economy.

Shockingly, having looked the other way while Wall Street hucksters looted the economy, the Bush administration now wants American taxpayers (and our children) to pick up the tab. I say “no way.” But I need your help to let officials in Washington know that Americans don’t want to be saddled with the cost of this bailout – a bailout made necessary by the Bush administration’s deregulatory fever and Wall Street’s insatiable greed.

Of course I didn’t see Bernie or his views represented on Anderson Cooper’s “fun news” program last night….There was a panel, tilting right of course—centrist NY Times writer playing the Explainer—Cranky Wall St Journal Editorial Writer saying no changes should be made in plan and that it is a bad bill but will probably pass because Congress has to be seen to be doing something, and aide to Ron Paul who forecasts a disaster loss of free market…..Typical CNN approach….

WHATS IN THE “PLAN?”

And from Peter B. Collins:

Just a brief note to draw your attention to the remarkable language proposed by Treasury for the bailout bill. It sets the Secretary up as the dictator of the plan, allowing him to deputize individuals or subcontract with corporations with no oversight or controls. And then:

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

In a single sentence, the administration is attempting to upend the Constitution, preventing Congress or the courts from any review of the bailout. This is an invitation to fraud greater than the problems purported to be addressed. Ordinarily, David Addington writes signing statements that assert these executive powers, this time they are so bold they put it right up front.

Please do all you can to expose this to public scrutiny, and urge the House and Senate to debate this and amend it to stop this power grab, maintain separation of powers, and provide proper oversight and regulation of this trillion dollar package.

FOREIGN BANKS WILL BENEFIT (REMEMBER WE ARE DEPENDENT ON FOREIGN INVESTORS)

And they have bought into bogus subprime securities represented to them as AAA…..But no other countries have offered yet to help save the USA….

NY CITY CONSIDERS RAISING PROPERTY TAX 7% (WOULD INVALIDATE OR CUT EXISTING 7% CUT)

Other cities will probably follow suit as tax base erodes with foreclosures etc….

SOME NUMBERS—AGORA FINANCIAL

So… how much is $700 billion?

* It’s equal to the yearly economic output of every man woman and child in Saudi Arabia and Denmark, combined.
*
In $100 bills, it’s about 15 million pounds of money. That’s almost as heavy as all the steel and iron in the Eiffel Tower.
*
Laid end to end in $1 bills, it’s around 70 million miles… enough to touch Mars most times during its elliptical orbit around the sun each year.
*
Every single person in the U.S. would have to write you a check for $2,000 to total $700 billion.

And… for all the whining done about the cost of the Iraq war, in one three-page proposal sent to Congress over the weekend, the Bush administration asked for as much as the entire five-year engagement in Iraq has cost. The plan will rescue the forlorn and helpless “masters of the universe” on Wall Street this week.

That $700 billion figure, mind you, was guesstimated by the same folks who announced in July 2007 that they thought subprime losses could total a staggering $50-100 billion.

So you can expect the $700 billion to be like a “starter wife” — a temporary convenience while planning for an upgrade.

Let’s scribble on the back of our proverbial envelope for a moment:

$700 billion bailout package for Wall Street
$438 billion projected deficit in the federal budget for FY 2008
$200 billion for Fannie Mae and Freddie Mac
$150 billion in rebate checks under the guise of “stimulus”
$85 billion for AIG
$29 billion for Bear Stearns

Hmnn… $1,602 billion…. that’s quite a bill for the year… not to mention the nearly $1.6 trillion in Treasury swaps and short-term paper the Federal Reserve has lent out during its auction facilities.

Who’s going to pay for all this?

The national debt ceiling will have to be raised for the second time in as many months to accommodate the request… this time to $11.3 trillion… boosting the national debt to over 70% of GDP.

The highest the national debt got during the Great Depression was 44% of GDP.

DOLLAR ON THE DOWNWARD TIP: Dollar falls sharply on concerns over US bank rescue plan

LONDON (AFP) — The dollar fell sharply on Monday as concerns grew that Washington’s 700-billion-dollar rescue plan to take over the mountain of bad debt at US banks will further burden US finances.

Dealers said that after the euphoria Friday on the markets when news of the US bank bailout plan began to circulate, investors on Monday had grown more wary, especially as to who would pay the final bill and what it could mean for US government debt levels

CONSIDERING THE BAILOUT: DIFFERENT VIEWS ON THE REAL STORY

MIKE WHITNEY: MUSHROOM CLOUD OVER WALL ST.

“These are dark times. While you were sleeping the cockroaches were busy about their work, rummaging through the US Constitution, and putting the finishing touches on a scheme to assert absolute power over the nation’s financial markets and the country’s economic future. Industry representative Henry Paulson has submitted legislation to congress that will finally end the pretense that Bush controls anything more than reading the lines from a 4′ by 6′ teleprompter situated just inches from his lifeless pupils. Paulson is in charge now, and the coronation is set for sometime early next week. He rose to power in a stealthily-executed Bankster’s Coup in which he, and his coterie of dodgy friends, declared martial law on the US economy while elevating himself to supreme leader.”

UNELECTED PAULSON AND BERNANKE SEIZE POWER IN COUP

Frank Shostak: Can the Rescue Plan Fix the US Economy?

Given last week’s dramatic events — the bankruptcy of Lehman Brothers, the end of Merrill Lynch’s independence, and an $85 billion US-government bailout of insurer AIG — most financial institutions are likely to become more sensitive to the state of their net worth.

For instance, all it takes for a financial institution that has a net worth of $30 billion and assets of $600 billion to go under is for the value of assets to fall by 5%. In the current financial climate, it can easily happen; hence, most financial institutions are not immune from the potential threat of going belly up.

One of the major reasons why the Fed rescued AIG was to prevent a fall in the value of bank assets, a fall that would in turn expose their true net worth and cause (it is generally believed) a run on banks that would decimate the entire banking system. As long as the AIG can keep paying the banks’ losses for their suspect (but insured) investments, those banks don’t need to reappraise their true values.

But there is always the lingering fear that at some stage banks will be forced to disclose market-related valuations and that this could set in motion a financial tsunami.

IF YOUR BANK FAILS, YOU WON’T KNOW IT UNTIL IT’S TOO LATE

“In the rare event that the FDIC couldn’t find a buyer and a new bank were not created, then the bank would shut down and you’d be without access to your money for a few days. Debit cards and ATMs would not work, and checks that hadn’t cleared would be returned with a “bank closed” notation. On the Monday after the closure, the FDIC would begin sending checks to customers for the amount of their insured deposits.”

CHARLES HUGH SMITH: MARK YOUR CALENDARS FOR A WALL ST. CRASH OCTOBER 7

THE END OF AMERICA AS YOU KNEW IT–IT WAS A GOOD 232 YEAR RUN

SPJ: Wall Street Bailout Proposal Grants too Much Unchecked Authority to Executive Branch

INDIANAPOLIS – As Congress prepares to pass a $700 billion aid package for troubled Wall Street financial firms, leaders of the Society of Professional Journalists are concerned that certain provisions of the proposed emergency legislation unduly expand the powers of the executive branch.

The legislative proposal, which would grant the authority for the federal government to purchase large amounts of mortgage-backed securities, gives the U.S. Treasury Secretary power to act drastically unchecked. In particular, SPJ is at odds with Section 8 of the bill, which would yield broad, unfettered and unchecked authority to the Treasury Secretary. The contentious section reads:

“Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”

“Secrecy is what got us in trouble in the first place, and now the administration wants to make the fix secret too?” said SPJ President Dave Aeikens. “Americans demand more accountability and transparency in their government, not less, especially when $700 billion of their own money is at stake.”

SPJ is not taking a stance on the validity of the aid package or the economic effects it intends to achieve. Rather, as an organization that advocates for Freedom of Information-related issues, SPJ opposes the idea that any government institution be granted such sweeping, unbalanced control.

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William Bowles: The media’s moola madness

W does it take for the corporate media to speak the truth about the economic meltdown? Take the BBC Website for example: It has a page titled ‘Q&A: Financial crisis and you’ where you would expect to find an explanation of this, the latest crisis of capital. Dream on folks, dream on.

Actually the best place to look (aside from this and many other progressive sites) is the press that serves the interests of capital (don’t bullshit a bullshitter as the saying goes):

“As we get to the other side of this, the dollar will get crushed,” said John Taylor, chairman of New York-based International Foreign Exchange Concepts Inc., the world’s biggest currency hedge-fund firm, which manages about $15 billion.

“The dollar fell against 14 of the world’s most-traded currencies on Sept. 19, including the euro, as Paulson unveiled the plan, while the Standard & Poor’s 500 Index rose 4 percent. The plan may end the rally that began in June and drove the U.S. currency up 10 percent versus the euro, 2 percent against the yen and almost 13 percent compared with Brazil’s real, strategists said.”