"The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse." -- James Madison - (1751-1836)

"We are fast approaching the stage of the ultimate inversion: the stage where the government is free to do anything it pleases, while the citizens may act only by permission; which is the stage of the darkest periods of human history, the stage of rule by brute force. " :
Ayn Rand in "The Nature of Government"

"Throughout history there have been tyrants and murderers. And for a while they seem invincible, but always they fall. Always."-Mahatma Gandhi

Science may have found a cure for most evils; but it has found no remedy for the worst of them all -- the apathy of human beings: Helen Keller

The notion that a radical is one who hates his country is naive and usually idiotic. He is , more likely, one who likes his country more than the rest of us, and is thus more disturbed than the rest of us when he sees it debauched. He is not a bad citizen turning to crime ; he is a good citizen driven to despair.--H.L Mencken

"When even one American-who has done nothing wrong-is forced by fear to shut his mind and close his mouth-then all Americans are in peril" Harry S. Truman

"The power of the Executive to cast a man into prison without formulating any charge known to the law, and particularly to deny him the judgment of his peers, is in the highest degree odious and is the foundation of all totalitarian government whether Nazi or Communist."- Winston Churchill, Nov. 21, 1943

"When you see that in order to produce, you need to obtain permission from men who produce nothing - when you see that money is flowing to those who deal, not in goods, but in favors - when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you - when you see corruption being rewarded and honesty becoming a self-sacrifice - you may know that your society is doomed: Ayn Rand - (1905-1982) Author - Source: Atlas Shrugged, Francisco's "Money Speech"

"Loss of freedom seldom happens overnight. Oppression doesn't stand on the doorstep with toothbrush moustache and swastika armband -- it creeps up insidiously...step by step, and all of a sudden the unfortunate citizen realizes that it is gone." ~ Baron Lane

U.S. Constitution - R.I.P.

Monday, July 21, 2008

The Creeping Crud of Contagion

Bank of China may hold huge US debt

Bank of China Ltd may own about $20 billion of debt issued by Fannie Mae and Freddie Mac, representing two-thirds of total holdings among the six largest Chinese banks, according to CLSA Ltd.

Feds can't fix Fannie and Freddie

Fannie Mae (FNM, news, msgs) and Freddie Mac (FRE, news, msgs) do not have a liquidity problem that can be solved by the Federal Reserve or even by an injection of Treasury capital. It's a solvency issue. Short-term cash isn't the real problem. Over time, the mortgage giants' liabilities are quite likely to swamp their assets. Thus their assets are contingent, but their debts are forever.

Fannie, Freddie spent $200M to buy influence

If you want to know how Fannie Mae and Freddie Mac have survived scandal and crisis, consider this: Over the past decade, they have spent nearly $200 million on lobbying and campaign contributions.

But the political tentacles of the mortgage giants extend far beyond their checkbooks.

The two government-chartered companies run a highly sophisticated lobbying operation, with deep-pocketed lobbyists in Washington and scores of local Fannie- and Freddie-sponsored homeowner groups ready to pressure lawmakers back home.

They’ve stacked their payrolls with top Washington power brokers of all political stripes, including Republican John McCain’s presidential campaign manager, Rick Davis; Democrat Barack Obama’s original vice presidential vetter, Jim Johnson; and scores of others now working for the two rivals for the White House.

Global economy won't bail out the US

This nation is the world's biggest consumer, so a slowdown here means a slowdown everywhere. And there is no safe harbor -- not in tech nor in the media's market misconceptions.

Commercial bankruptcies soar, reflecting widening economic woes

Driven by a sour economy and skittish consumers, U.S. business bankruptcies saw their sharpest quarterly rise in two years, jumping 17 percent in the second quarter of 2008, according to an analysis by McClatchy.

Commercial filings for the first half of 2008 are up 45 percent from last year, as the national climate for commerce continues to deteriorate amid rising energy and food costs, mounting job losses, tighter credit and a reticence among consumers to part with discretionary income.

Wachovia, WaMu still in big trouble

Think we've seen the worst of the credit crisis? Not so fast: America's mortgage problems won't be over anytime soon, analysts say, and that means more bad news for these big lenders.

Those ill-fated twins of the mortgage calamity, Washington Mutual (WM, news, msgs) and Wachovia (WB, news, msgs), are getting clobbered again, after some dramatic housecleaning at the top.

Could your bank be the next to fail?

Surprisingly, about 37% of the nation's $7.07 trillion worth of deposits at the end of the first quarter was uninsured, according to a Wall Street Journal report. One reason may be that a lot of people have several accounts at a single bank and don't realize that it's the sum of all their deposits at a bank that counts -- not how much they have in any single account.

Many businesses and local governments also probably exceed the $100,000 limit.

Credit fallout is just beginning

A shrewd observer of the US credit mess says the problems are 'considerably worse' than reported. He's betting on financial-system upheaval, failing companies and an even-slower economy.


Anonymous said...

There's something that really sticks in my craw about police keeping people from their bank deposits (IndyMac). What kind of free market is that? Of course, when you have some of the banks' money (mortgaged real property), it's the cops who come around to take it from you so the bank can have it. Man, I'm so monumentally naive. Phil

Melinda L.Secor said...

Isn't it interesting that public law enforcement is protecting a private corporation against the citizens who pay their salaries...citizens who are simply trying to withdraw money that rightfully belongs to them? It shows how twisted our system has become, the free market has been gone for a long time now. Open your own branch of the Sealy Savings Bank....the only secure place for deposits. Better yet, convert that cash into something that will still be worth a damn after the crash.

The Militarization of Our Police