The Untold Facts About Money & Wealth

مواطنون دونما وطن

2010-02-25T02:58:00.000-08:00

مطاردون كالعصافير على خرائط الزمن مسافرون دون أوراق ..وموتى دونما كفن نحن بغايا العصركل حاكم يبيعنا ويقبض الثمن نحن جوارى القصريرسلوننا من حجرة لحجرة من قبضة لقبضة
من مالك لمالك ومن وثن إلى وثن نركض كالكلاب كل ليلة من عدن لطنجة ومن عدن الى طنجة نبحث عن قبيلة تقبلنا نبحث عن ستارة تسترنا وعن سكن.......وحولنا أولادنا احدودبت ظهورهم وشاخوا وهم يفتشون في المعاجم القديمة
عن جنة نظيرةعن كذبة كبيرة ... كبيرةتدعى الوطن************ ***مواطنون نحن فى مدائن البكاء قهوتنا مصنوعة من دم كربلاء حنطتنا معجونة بلحم كربلاء طعامنا ..شرابناعاداتنا ..راياتنا زهورنا ..قبورناجلودنا مختومة بختم كربلاءلا أحد يعرفنا فى هذه الصحراء
لا نخلة.. ولا ناقةلا وتد ..ولا حجر لا هند ..لا عفراءأوراقنا مريبة أفكارنا غريب ةأسماؤنا لا تشبه الأسماءفلا الذين يشربون ال! نفط يعرفونناولا الذين يشربون الدمع والشقاء ***معتقلون داخل النص الذى يكتبه حكامنا معتقلون داخل الدين كما فسره إمامنا
معتقلون داخل الحزن ..وأحلى ما بنا أحزاننا مراقبون نحن فى المقهى ..وفى البيت وفى أرحام! أمهاتناحيث تلفتنا وجدنا المخبر السرى فى انتظارنا يشرب من قهوتنا ينام فى فراشنا يعبث فى بريدنا ينكش فى أوراقنا يدخل فى أنوفنا يخرج من سعالنا لساننا ..مقطوع
ورأسنا ..مقطوع وخبزنا مبلل بالخوف والدموع إذا تظلمنا إلى حامى الحمى قيل لنا : ممنـــوع وإذا تضرعنا إلى رب السماقيل لنا : ممنوع وإن هتفنا ..يا رسول الله كن فى عوننايعطوننا تأشيرة من غير ما رجوع وإن طلبنا قلماً لنكتب القصيدة الأخيرة أو نكتب الوصية الأخيرة قبيل أن نم وت شنقاً
غيروا الموضوع ************ ********* *********يا وطنى المصلوب فوق حائط الكراهية يا كرة النار التى تسير نحو الهاويةلا أحد من مضر ..أو من بنى ثقيف أعطى لهذا الوطن الغارق بالنزيف زجاجة من دمه أو بوله الشريف لا أحد على امتداد هذه العباءة المرقعة**********
أهداك يوماً معطفاً أو قبعة
يا وطنى المكسور مثل عشبة الخريف مقتلعون نحن كالأشجار من مكاننا مهجرون من أمانينا وذكرياتناعيوننا تخاف من أصواتناحكامنا آلهة يجرى الدم الأزرق فى عروقهم ونحن نسل الجاريةلا سادة الحجاز يعرفون نا ..ولا رعاع الباديةولا أبو الطيب يستضيفنا ..ولا أبو العتاهية إذا مضى طاغيةسلمنا لطاغية ************ ********* ****
مهاجرون نحن من مرافئ التعب لا أحد يريدنا من بحر بيروت إلى بحر العربلا الفاطميون ..ولا القرامطةولا المماليك …ولا البرامكة ولا الشياطين ..ولا الملائكةلا أحد يريدنالا أحد يقرؤنافى مدن الملح التى تذبح فى العام ملايين الكتب لا أحد يقرؤنا فى مدن صارت بها مباحث الدولة عرّاب الأدب
************ ****** مسافرون نحن فى سفينة الأحزان قائدنا مرتزق وشيخنا قرصان مكومون داخل الأقفاص كالجرذان لا مرفأ يقبلنالا حانة تقبلناكل الجوازات التى نحملها أصدرها الشيطان كل الكتابات التى نكتبهالا تعجب السلطان ************ *****مسافرون خارج الزمان والمكان
مسافرون ضي عوا نقودهم ..وضيعوا ! متاعه مضيعوا أبناءهم ..وضيعوا أسماءهم..وضيعوا إنتماءهم..وضيعوا الإحساس بالأمان فلا بنو هاشم يعرفوننا ..ولا بنو قحطان ولا بنو ربيعة ..ولا بنو شيبان ولا بنو 'لينين' يعرفوننا ..ولا بنو 'ريجان'يا وطنى ..كل العصافير لها منازل إ لا العصافير التى تحترف الحرية فهى تموت خارج الأوطان

تجارب "السلاح الزلزالي" التي أجرتها مؤخرا القوات البحرية الأمريكية هي التي تسببت في وقوع كارثة هايتي

2010-01-23T03:45:00.000-08:00

في ذروة تداعيات كارثة هايتي ، فوجىء الجميع بتقارير صحفية تؤكد أن الزلزال المدمر ليس الجاني الحقيقي فيما أصاب تلك الجزيرة التي تقع في منطقة الكاريبي وإنما للأمر أبعاد أخرى قد لا يتصورها كثيرون وتتعلق أساسا بتجارب علمية أمريكية وإسرائيلية حول حروب المستقبل التي ستحدث تدميرا واسعا وستظهر في الوقت ذاته وكأنها كوارث طبيعية.ففي 20 يناير / كانون الثاني ، خرج الرئيس الفنزويلي هوجو شافيز بتصريحات مثيرة كشف خلالها أن هناك تقريرا سريا للأسطول الشمالي الروسي يؤكد أن تجارب "السلاح الزلزالي" التي أجرتها مؤخرا القوات البحرية الأمريكية هي التي تسببت في وقوع كارثة هايتي.وأضاف شافيز في تصريحات لصحيفة "آ بي سي" الإسبانية أن التقرير السري يشير إلى أن الأسطول البحري الشمالي الروسي يراقب تحركات ونشاط القوات الأمريكية في بحر الكاريبي منذ عام 2008 حين أعلن الأمريكيون نيتهم في استئناف عمل الأسطول البحري الرابع الذي تم حله عام 1950 وهو الأمر الذي دفع روسيا للقيام بمناورات حربية في تلك المنطقة عام 2009 بمشاركة الطراد الذري "بطرس الأكبر" وذلك لأول مرة منذ انتهاء الحرب الباردة.وتابع شافيز قائلا :" التقرير الروسي يربط بين تجارب السلاح الزلزالي التي أجرتها البحرية الأمريكية مرتين منذ بداية العام الجديد والتي أثارت أولا هزة قوتها 6.5 درجة في مدينة أوريكا في ولاية كاليفورنيا لم تسفر عن أية ضحايا ، وثانيا الهزة في هايتي التي أودت بحياة حوالي 200 ألف بريء".ونسب للتقرير القول أيضا إن واشنطن ربما توفرت لديها المعلومات التامة عن الأضرار الفادحة التي قد تتسبب بها تجاربها على السلاح الزلزالي ولذا أوفدت إلى هايتي قبل وقوع الكارثة الجنرال كين قائد القيادة العسكرية الجنوبية للجيش الأمريكي ليراقب عملية تقديم المساعدة إذا اقتضى الأمر.تحذير لإيرانهوجو شافيز وبجانب ما جاء في التقرير الروسي ، فقد أبلغ شافيز الصحيفة الإسبانية أن وزارة الخارجية الأمريكية ومنظمة "يوسيد" الأمريكية والقيادة العسكرية الجنوبية بدأت في غزو هايتي تحت ذريعة المساعدات الإنسانية وأرسلت إلى هناك ما لا يقل عن 100 ألف جندي ليسيطروا على أراضي تلك الجزيرة بدلا من الأمم المتحدة.واختتم شافيز تصريحاته قائلا إن فنزويلا وروسيا اتفقتا على رأي مفاده أن تجربة السلاح الزلزالي الأمريكي تستهدف في آخر المطاف إيران عن طريق إعداد خطة ترمي إلى تدميرها من خلال إثارة سلسلة من الهزات الأرضية الاصطناعية والإطاحة بالنظام الإسلامي فيها.ورغم أن البعض قد يشكك في تصريحات شافيز بالنظر لعدائه الصارخ لواشنطن إلا أنه لم يكن الوحيد الذي يكشف عن التجارب الأمريكية السرية ، فقد كشفت صحيفة "الصباح العربي" المستقلة المصرية أيضا عن قيام البنتاجون بإجراء أبحاث مشبوهة للتحكم في المناخ يمكن أن تكون مسئولة عن الإخلال بالتوازن الطبيعي في منطقة الكاريبي التي تقع بها هايتي.وأشارت في هذا الصدد إلى تقارير تحدثت في الفترة الأخيرة حول قيام الرئيسين الأمريكيين السابقين بيل كلينتون وبوش الإبن بتمويل تجارب ميدانية ضمن مشروع "الكيمتريل" الذي يسعى للتدخل في هندسة الأرض والسيطرة على التفاعلات الكونية الرئيسة وخاصة في منطقة الكاريبي التي تعتبر الحديقة الخلفية للأمن القومي الأمريكي .وعزت الصحيفة مسارعة إدارة أوباما بإرسال قوات كبيرة وفرض وجودها العسكري الكامل على المطارات والموانيء بالرغبة في إخفاء أية دلائل تكشف تورط البنتاجون في تنفيذ إحدى التجارب العلمية ذات الصلة بأبحاث "الكيمتريل" بالقرب من هايتي ، مشيرة إلى أن مبادرة بوش وكلينتون لتبني خطط إنقاذ المنكوبين تبدو وكأنها جاءت في إطار شعورهما بالذنب تجاه تداعيات التجربة الكارثية. العرب في مرمى التجارب بعض ضحايا الكارثة جريدة "آخر خبر" التي تصدر بالعربية في الولايات المتحدة لم تذهب هي الأخرى بعيدا عما سبق ، حيث كشفت في تقرير لها أن كارثة "تسونامى" التي ضربت جنوب آسيا قبل سنوات نجمت عن تجارب نووية أمريكية فى قيعان البحار وأعماق المحيطات ، قائلة :" تحاول واشنطن الآن خداع دول وشعوب العالم أيضا بأن ما أصاب هايتى هو كارثة طبيعية نتيجة زلزال مدمر إلا أن العلم الجيولوجى ومراقبة ورصد حركات الأرض تعطى مؤشرات ونذير بوقوع الأخطار وحدوث الزلازل من خلال المتغيرات التى تطرأ على الأوضاع الطبيعية حيث تظهر بوادر انقسامات أو تسطحات وتصدعات فى قشرة الأرض أما التصدع الكبير والمفاجىء فهو يكون علميا ناجما عن محدثات صناعية متمثلة في تجارب نووية لمعرفة مدى تأثيرها وما تحدثه من تدمير أو تغير على شكل الطبيعة فى الأرض والبحار ". وتابعت قائلة :" التجربة في هايتي أثبتت النجاح والآن يتم تجميع المعلومات وتحليلها وتسجيلها وهي إعادة لتجربة تسونامى وأصبحت الآن تجربة علمية عسكرية أمريكية نجحت بامتياز ". وعن أسباب اختيار هايتي لإجراء مثل تلك التجارب المميتة ، أضافت الصحيفة " هايتي منطقة نساها التاريخ وصنعتها قوة الاستعمار الفرنسية حيث جلبت لها شعبا من الأفارقة ليعملوا فى زراعة البن والقطن وعاشوا لسنوات طوال وهم عبيدا على الأرض وبعد ذلك أخذوا يسلكون طريق النضال إلى أن حصلوا على الاستقلال وأعلنوا تشكيل أول جمهورية على وجهة الخارطة الجغرافية والسياسية وهي من المناطق المصنفة ضمن القلاقل الأمنية وتعيش في أزمات سياسية واقتصادية نتيجة الصراعات على السلطة بين المتناحرين وعدد سكانها لا يتجاوز 10 مليون نسمة يعيشون ضمن ظروف متردية وأكثر من 60% من سكانها ما دون خط الفقر ولا يتمتعون بأي رفاهية اجتماعية وهم بالعرف الأمريكى لا يستحقون الحياة ومن أجل كل هذا فإن وقوعهم فى مختبرات التجارب الأمريكية العسكرية والعلمية يعتبر من الحقائق غير القابلة للشك ، لقد نجحت تجربة تدمير هايتى التى عمتها الفوضى الأمنية والسرقات وأصبحت من المناطق التى تنعدم فيها القوانين وكل ذلك بفعل الزلزال الأمريكى ، واشنطن تختار لكل منطقة ما يناسبها لإخراجها من منظومة الحياة ".وبجانب هايتي ، فقد حذرت الصحيفة الدول العربية وأفغانستان والصومال واليمن وفلسطين بأنهم الهدف التالي ، قائلة :" ما حدث في هايتي غير بعيد عن التجارب الإسرائيلية على مقاومة الكوارث الطبيعية وغير مستبعد أن المنطقة العربية مرشحة لتجربة مماثلة خاصة وأن التجربة الأمريكية في هايتى أصبحت مجدية بعد نجاحها في إحداث خسائر فادحة تعجز الحروب المباشرة عن تحقيقها ". إعاقة عمليات الإغاثة عراقيل أمام وصول المساعدات ويبدو أن الأحداث التي تلت وقوع الكارثة ترجح صحة التقارير السابقة ، فقد أعاقت سلطات المراقبة الجوية الأمريكية في مطار بورت أو برانس بهايتي مهمة الطائرة التابعة لوزارة الطوارئ الروسية في نقل الإمدادات الإنسانية من فنزويلا وذلك بسبب تأجيلها الدائم لمواعيد الرحلات الجوية وعدم منحها الطائرة الروسية ترخيصا. وكانت روسيا بدأت في 17 يناير/ كانون الثاني في تنفيذ العملية الخاصة بتقديم المساعدة الإنسانية إلى هايتي عبر فنزويلا ، إلا أن أفراد السلاح الجوي الأمريكي يسيطرون على المدرج الوحيد القابل لاستقبال الطائرات في مطار بورت أو برانس وهو ما أعاق عملية الإغاثة الروسية . وكشفت صحيفة "تليجراف" البريطانية في هذا الصدد أن العسكريين الأمريكيين المسيطرين على المطار يعيقون وصول طائرات الدول الراغبة بالمساعدة ، كما أعلنت منظمة "أطباء بلا حدود" الإنسانية الدولية أن الجنود الأمريكيين رفضوا منح الترخيص بالهبوط لطائرة تحمل مستشفى متنقلا ، الأمر الذي اضطر الطيارين إلى تغيير المسار والهبوط في جمهورية الدومينيكان المجاورة .وجاء رد الفعل الفرنسي الغاضب ليؤكد هو الآخر أن المهمة الأمريكية في هايتي لها أبعاد أخرى ، حيث انتقد وزير الخارجية الفرنسي برنارد كوشنير الولايات المتحدة على خلفية عدم سماح العسكريين الأمريكيين لطائرة فرنسية تحمل الإمدادات الإنسانية بالهبوط ، كما هاجم آلان جواياندي وزير الدولة الفرنسي لشئون التعاون واشنطن واتهمها بأنها تتصرف وكأنها لا تزال تحتل الجزيرة ، قائلا : " المهم الآن مساعدة هايتي وليس احتلالها".وبجانب روسيا وفرنسا ، فإن تعاظم الوجود العسكري الأمريكي في هايتي أثار أيضا قلق دول أمريكا اللاتينية التي وصفته بأنه تهديد مباشر لأمنها القومي ، وأعلن رئيس بوليفيا إيفو موراليس في هذا الصدد أن حكومته ستطالب الأمم المتحدة بعقد اجتماع استثنائي لمناقشة الاحتلال الأمريكي لهايتي ، وأضاف أن الأموال التي تخصص لإقامة العدد المتزايد للعسكريين الأمريكيين يجب إنفاقها لمساعدة ضحايا الزلزال.وفي السياق ذاته ، نقلت وكالة " أي اف أي " الإسبانية عن نائب رئيس بوليفيا ألفارو غرسيا لينيرا قوله : " إن هذا الوضع خطير جدا لأن الولايات المتحدة لا تساعد المتضررين من جراء الزلزال ولا تنقذ المرضى والجرحى بل ترسل المزيد من الجنود إلى القواعد العسكرية المرابطة في كولومبيا وبيرو وحاليا إلى هايتي ".ولم يقف الأمر عند بوليفيا ، حيث أعرب ممثلو كل من فنزويلا ونيكاراجوا وأوروجواي عن قلقهم تجاه تصرفات الولايات المتحدة في هايتي .تباهي أوباما هايتي تدفع ثمن تجارب أمريكا وما يضاعف القلق تجاه نوايا واشنطن هو قيامها بتبرير العراقيل أمام الدول الراغبة بإغاثة هايتي بأن جنود البحرية الأمريكية في مطار بورت أو برانس لا يريدون أن يوزعوا كميات قليلة من الغذاء والماء وهم بانتظار وصول كميات أكبر كما أنهم قلقون من توجه وكالات الإغاثة إلى المدينة التي لا يحكمها قانون بدون دعم مسلح .التبرير السابق غير المنطقي دفع صحيفة " الفايننشيال تايمز " البريطانية لانتقاد الدور الأمريكي ، قائلة :" إنه وسط الرعب الذي تعيشه هايتي فإن المناكفات بين الدولتين اللتين احتلتاها في الماضي (الولايات المتحدة وفرنسا) لا يساعد بأي حال من الأحوال في إغاثة المنكوبين".وتطرقت الصحيفة إلى موقف الرئيس الأمريكي باراك أوباما ، قائلة :" إنه ينفذ النصيحة التي قدمها له رام إيمانويل كبير موظفي البيت الأبيض بألا يضيع فرصة أي أزمة كبيرة لتحسين وضعه ، ففي مقال له بمجلة النيوزويك دعا أوباما الأمريكيين إلى التبرع بمعونات أكبر لهايتي ووجه أنظار القراء إلى صندوق كلينتون - بوش من أجل هايتي" ، وفي المقابل ، خصص جزءا كبيرا من المقال للحديث عن عظمة وكرم الولايات المتحدة".وأضافت " الفايننشيال تايمز " قائلة :" هذا الحديث الاستعراضي لن يخدع مواطني هايتي الذين لا يحملون مشاعر دافئة إزاء السياسة الأمريكية ، الولايات المتحدة احتلت هايتي ما بين عامي 1915 ـ 1934 بعد شكاوى من البنوك الأمريكية حيث أجبر الجيش الأمريكي الفلاحين هناك على المساعدة في بناء الطرق وقتل الآلاف من الثوار الذين حاولوا استعادة استقلالهم " .واختتمت قائلة :" مأساة هايتي تدعو الدول الأجنبية وخاصة أوباما إلى الكف عن المواقف الاستعراضية وإلى زيادة المساعدات ، لا يجب التباهي بتقديم المعونة الأجنبية خاصة حينما لا يكون هناك ما يستدعي التباهي به ، كما في حالة الولايات المتحدة التي ارتكبت الكثير من الأخطاء في هايتي ". ويبدو أن الفضيحة لم تقف عند حدود التجارب السرية أو المتاجرة بمأساة ضحايا الكارثة لإنجاز أمور عسكرية وسياسية ومنع هايتي من الانضمام لتحالف كوبا وفنزويلا المعادي لواشنطن ، وإنما امتد الأمر ليشمل أيضا جريمة سرقة أعضاء قتلى الكارثة .ففي 21 يناير ، كشف الناشط الأمريكي " ت. ويست" الذي يعيش في سياتل ويدافع عن حقوق السود عن قيام البعثة الطبية الإسرائيلية التي دخلت هايتي بذريعة مساعدة منكوبي الزلزال بسرقة الأعضاء البشرية لضحايا الكارثة .ونشر الناشط الأمريكي شريط فيديو على موقع "يوتيوب" الإلكتروني يتهم فيه جنودا إسرائيليين يشاركون في عمليات الإغاثة في هايتي بالتورط في سرقة أعضاء بشرية من ضحايا الزلزال ، وقال في هذا الصدد :" هناك أشخاصا لا ضمير لهم يستغلون المواقف دائما ومن بينهم الجيش الإسرائيلي الذي يعمل في هايتي الآن"، مذكرا بالاتهامات السابقة التي وجهت إلى جنود إسرائيليين بسرقة أعضاء شهداء وأسرى فلسطينيين.الفضيحة السابقة وإن كانت تؤكد الوجه القبيح لإسرائيل ، إلا أنها تبعث في الوقت ذاته برسالة قوية للعالم بأن من يشكل خطرا على الجميع ليس حركات المقاومة أو إيران وإنما أمريكا وإسرائيل اللتين تمثلان العدو الأول للبشرية .

لا تصالح

2009-12-22T07:24:00.000-08:00

.. فنظر كليب حواليه وتحسر, وذرف دمعة وتعبر, ورأى عبدا واقفا فقال له: اريد منك يا عبد الخير, قبل ان تسلبني, ان تسحبني الى هذه البلاطة القريبة من هذا الغدير, لاكتب وصيتي الى اخي الامير سالم الزير, فأوصيه باولادي وفلذة كبدي...فسحبه العبد الى قرب البلاطة, والرمح غارس في ظهره, والدم يقطر من جنبه... فغمس "كليب" اصبعه في الدم, وخط على البلاطة وانشأ يقول

...لا تصالح!... ولو منحوك الذهبأترى حين افقأ عينيك, ثم اثبت جوهرتين مكانهما ..هل ترى ؟هي اشياء لا تشترىذكريات الطفولة بين اخيك وبينك,حسكما -فجأة- بالرجولةهذا الحياء الذي يكبت الشوق ..حين تعانقهالصمت -مبتسمين- لتأنيب امكما ...وكأنكماما تزالان طفلين!!تلك الطمأنينة الابدية بينكما:ان سيفان سيفكصوتان صوتكانك ان مت:للبيت ربوللطفل ابهل يصير دمي -بين عينيك- ماء؟اتنسى ردائي الملطخ..تلبس - فوق دمائي- ثيابا مطرزة بالقصب؟انها الحرب!قد تثقل القلب...لكن خلفك عار العربلا تصالحولا تتوخ الهرب!لا تصالح على الدم .. حتى بدم!لا تصالح! ولو قيل رأس برأس!أكل الرؤوس سواء؟أقلب الغريب كقلب اخيك؟أعيناه عينا اخيك؟وهل تتساوى يد .. سيفها كان لكبيد سيفها أثكلك؟!سيقولون:جئناك كي تحقن الدم..جئناك. كن - يا أمير- الحكمسيقولون:ها نحن أبناء عمقل لهم: انهم لم يراعوا العمومة فيمن هلكوأغرس السيف في جبهة الصحراء..الى ان يجيب العدمانني كنت لكفارساو أخاو أباوملك!لا تصالحولو حرمتك الرقادصرخات الندامةوتذكر( اذا لان قلبك للنسوة اللابسات السواد ولاطفالهنالذين تخاصمهم الابتسامة)ان بنت اخيك "اليمامة"زهرة تتسربل -في سنوات الصبا-بثياب الحدادكنت, ان عدت:تعدو على درج القصرتمسك ساقي عند نزولي ..فأرفعها - وهي ضاحكة-فوق ظهر الجوادها هي الآن .. صامتة.حرمتها يد الغدر:من كلمات ابيها,ارتداء الثياب الجديدة,من أن يكون لها -ذات يوم- أخ!!من أب يبتسم في عرسها..وتعود اليه اذا الزوج اغضبها..واذا زارها.. يتسابق احفاده نحو احضانه,لينالوا الهدايا..ويلهو بلحيته ( وهو مستسلم)ويشدو العمامةلا تصالح!!فما ذنب تلك اليمامةلترى العش محترقا.. فجأة,وهي تجلس فوق الرماد؟!لا تصالحولو توجوك بتاج الامارةكيف تخطو على جثة ابن ابيك ..؟وكيف تصير المليك..على أوجه البهجة المستعارة؟كيف تنظر في يد من صافحوك..فلا تبصر الدم..في كل كف؟ان سهما أتاني من الخلف..سوف يجيئك من الف خلففالدم -الآن- صار وساما وشارةلا تصالح!ولو توجوك بتاج الامارةان عرشك: سيفوسيفك: زيفاذا لم تزن -بذؤابته- لحظات الشرفواستطبت -الترفلا تصالحولو قال من مال عند الصدام".. ما بنا طاقة لامتشاق الحسام.."عندما يملأ الحق قلبك:تندلع النار ان تتنفسلا تصالح,ولو قيل ما قيل من كلمات السلامكيف تستنشق الرئتان النسيم المدنس؟كيف تنظر في عينى امرأة ..انت تعرف انك لا تستطيع حمايتها؟كيف تصبح فارسها في الغرام؟كيف ترجو غدا .. لوليد ينامكيف تحلم او تتغنى بمستقبل لغلاموهو يكبر -بين يديك- بقلب منكس؟لا تصالحولا تقتسم مع من قتلوك الطعاموارو قلبك بالدم..وارو التراب المقدس..وارو اسلافك الراقدين ..الى ان ترد عليك العظام!لا تصالح,ولو ناشدتك القبيلةباسم حزن "الجليلة"ان تسوق الدهاء,وتبدي -لمن قصدوك- القبولسيقولون:ها أنت تطلب ثأرا يطولفخذ -الآن - ما تستطيعقليلا من الحق..في هذه السنوات القليلةأنه ليس ثأرك وحدكلكنه ثأر جيل فجيلوغدا..سوف يولد من يلبس الدرع كاملة,يوقد النار شاملة,يطلب الثأريستولد الحقمن أضلع المستحيل.لا تصالح,ولو قيل ان التصالح حيلةانه الثأرتبهت شعلته في الضلوع..اذا ما توالت عليها الفصول..ثم تبقى يد العار مرسومة (بأصابعها الخمس)فوق الجباه الذليلة!!لا تصالح,ولو حذرتك النجومورمى لك كهانها بالنبأ..كنت أغفر لو أنني مت..ما بين خيط الصواب وخيط الخطألم أكن غازيا,لم أكن اتسلل قرب مضاربهمأو احوم وراء النجوملم أمد يدا لثمار الكرومأرض بستانهم لم أطألم يصح قاتلي بي: "انتبه"!كان يمشي معيثم صافحنيثم سار قليلاولكنه في الغصون أختبأ!فجأة:ثقبتني قشعريرة بين ضلعين..واهتز قلبي -كفقاعة- وانفثأوتحاملت, حتى احتملت على ساعديفرأيت: ابن عمي الزنيمواقفا يتشفى بوجه لئيملم يكن في يدي حربة,او سلاح قديم,لم يكن غير غيظي الذي يتشكى الظمألا تصالح,الى أن يعود الوجود لدورته الدائرة:النجوم .. لميقاتهاوالطيور.. لأصواتهاوالرمال.. لذراتهاوالقتيل لطفلته الناظرةكل شيئ تحطم في لحظة عابرة:الصبا -بهجة الامل- صوت الحصان .. التعرف بالضيف - همهمة القلب حين يرى برعما في الحديقة يذوي -الصلاة لكي ينزل المطر الموسمي - مراوغة القلب حين يرى طائر الموتوهو يرفرف فوق المبارزو الكاسرةكل شيئ تحطم في نزوة فاجرةوالذي اغتالني: ليس ربا..ليقتلني بمشيئتهليس أنبل مني.. ليقتلني بسكينته,ليس أمهر مني.. ليقتلني باستدارته الماكرةلا تصالح,فما الصلح الا معاهدة بين ندين..(في شرف القلب)لا تنتقصوالذي اغتالني محض لصسرق الارض من بين عينيوالصمت سطلق ضحكته الساخرة!لا تصالح,ولو وقفت ضد سيفك كل الشيوخ,والرجال التي ملأتها الشروخ,هؤلاء الذين يحبون طعم الثريد,وانتطاء العبيد,هؤلاء الذين تدلت عمائمهم فوق اعينهم,وسيوفهم العربية قد نسيت سنوات الشموخلا تصالح,فليس سوى ان تريدانت فارس هذا الزمان الوحيدوسواك .. المسوخ!لا تصالحلا تصالح!!"أقوال اليمامة""فلما جاءت الوفود ساعية الى الصلح, قال لهم الامير سالم: أصالح اذا صالحت اليمامة.. فقصدت اليمامة امها الجليلة ومن معها من نساء سادات القبيلة, فدخلن اليها, وسلمن جميعا عليها, وقبلت الجليلة بنتها وقالت: أما كفى؟ فقد هلكت رجالنا وساءت احوالنا, وماتت فرساننا وابطالنا. فأجابتها اليمامة: أنا لا أصالح, ولو لم يبق احد يقدر ان يكافح.."أبي .. لا مزيد!أريد أبي عند بوابة القصر,فوق حصان الحقيقة,منصبا .. من جديدولا اطلب المستحيل, ولكنه العدل:هل يرث الارض الا بنوها؟ولا تتناسى البساتين من سكنوها؟وهل تتنكر أغصانها للجذور..(لأن الجذور تهاجر في الاتجاه المعاكس؟)هل تترنم قسثارة الصمت..الا اذا عادت القوس تذرع أوتارها العصبية؟والصدر ! حتى متى يتحمل ان يحبس القلب..قلبي الذي يشبه الطائر الدموي الشريد؟هي الشمس, تلك التي تطلع الآن؟أم أنها العين -عين القتيل- التي تتأمل شاخصة:دمه يترسب شيئا فشيئاويخضر شيئا فشيئافتطلع من كل بقعة دم: فم قرمزي..وزهره شر..وكفان قابضتان على منجل من حديد؟هي الشمس؟ أم انها التاج؟هذا الذي يتنقل فوق الرؤوس الى ان يعودالى مفرق الفارس العربي الشهيد؟أقول لكم: أيها الناس كونوا أناسا!هي النار, وهي اللسان الذي يتكلم بالحق!ان الجروح يطهرها الكي,والسيف يصقله الكير,والخبز ينضجه الوهج,لا تدخلوا معمدانية الماء..بل معمدانية النار..كونوا لها الحطب المشتهى والقلوب: الحجارة,كونوا.. الى ان تعود السماوات زرقاء,والصحراء بتولا..تسير عليها النجوم محملة بسلال الورود,أقول لكم: لا نهاية للدم..هل في المدينة يضرب بالبوق, ثم يظل الجنودعلى سرر النوم؟هل يرفع الفخ من ساحة الحقل.. كي تطمئن العصافير؟ان الحمام المطوق ليس يقدم بيضته للثعابين..حتى يسود السلام,فكيف الدم رأس ابي ثمنا؟من يطالبني ان أقدم رأس أبي ثمنا.. لتمر القوافل آمنة,وتبيع بسوق دمشق: حريرا من الهند,أسلحة من بخارى,وتبتاع من بيت جالا العبيد؟"مراثي اليمامة"صار ميراثنا في يد الغربائوصارت سيوف العدو: سقوف منازلنانحن عباد شمس يشير بأوراقه نحو أروقة الظل,ان التويج الذي يتطاوليخرق هامته السقف,يخرط قامته السيف,أن التويج الذي يتطاوليسقط في دمه المنسكب!نستقي -بعد خيل الاجانب- من ماء آبارناصوف حملائنا ليس يلتف لا على مغزل الجزية,النار لا تتوهج بين مضاربنابالعيون الخفيضة نستقبل الضيفأبكارنا ثيبات..وأولادنا للفراش..ودراهمنا فوق صورة الملك المغتصب..أيادي الصبايا الحنائن تضم على صدره نصف ثوبوتبقى عيون طكليب" مسمرة في شواشى الجنائن.أسائل:من للصغار الذين يطيرون -كالنحل- فوق التلال؟ومن للعذارى اللواتي جعلن القلوب:قوارير تحفظ رائحة البرتقال؟ومن سيروض مهر الخيال؟ومن سيضمد -في آخر الصيد- جرح الغزال؟ومن للرجال..أذا قيل "ما نسب القوم"؟فانسكبت في خدود الرمال دموع السؤال؟بنات أبي -الزهرات الصغيرات- يسألنني:لم أبكي أبي!!ويبكين مثلي,ويخلدن للنوم حين أغالب دمعي,وأروي لهن الحكاياعن الملك النسروالملك الثعلبفان نمن.. جاء أبي.. ليهز الأراجيح..يلمس وجناتهن..ويعطي لهن اللعب..ويمضي.. وعيناه مسبلتان..وساقاه تشتكيان التعب..أبي ظامئ يا رجالأريقوا له الدم كي يرتويوصبوا له جرعة جرعة في الفؤاد يكتويعسى دمه المتسرب بين عروق النباتات,بين الرمال..يعود له قطرة قطرة..فيعود له الزمن المنطوي..خصومة قلبي مع الله .. ليس سواهأبي أخذ الملك سيفا لسيف, فهل يؤخذ الملكمنه اغتيالا,وقد كللته يدا الله بالتاج؟!هل تنزع التاج الا اليدان المباركتان,وهل هان ناموسه في البريةحتى يتوج لص.. بما سرقته يداه؟خصومة قلبي مع الله..انيأنزه سهم منيته أن يجيء من الخلف,ان الذي يطلق السهم ليس هو القوس..بل قلب صاحبه,والذي يجعل النفس تستقبل الموت راضية.. نبل واهبه,فأنا أرفض الموت غدرا..فهل نزل الله عن سهمه الذهبي لمن يستهين بههل تكون مكان أصابعه.. بصمات الخطاه؟؟خصومة قلبي مع الله .. ليس سواه!كليب يموت..ككلب تصادفه الفلاة؟اذن فلماذا كسا وجهه الصورة الآدمية؟هل كرم الله انسانه؟مات من مات كلبا.. فأين ذهب الآدمي الذيقد براه؟خصومة قلبي مع اللهقلبي صغير كفستقة الحزن.. لكنه في الموازينأثقل من كفة الموت,هل عرف الموت فقد أبيه,هل أغترف الماء من جدول الدمع,هل لبس الموت ثوب الحداد الذي حاكه.. ورماه؟خصومة قلبي مع اللهاين وريث أبي؟ذهب الملك,لكن لأسم أبي حق ان يتناقله ابنه عنهفكيف يموت أبي مرتين؟أيتها الأنجم المتلونة الوجه:قولي له:قد سلبت حياتين..أبق حياه..ورد حياه..خصومة قلبي مع الله.هذا الكمال الذي خلق الله هيئته,فكسا العظم باللحم,ها هو: جسما -يعود له- دون رأس,فهل تتقبل بوابة الغيب من شابه العيب,أم ان وجه العدالة:أن يرجع الشلو للأصل,أن يرجع البعد للقبل,أن ينهض الجسد المتمزق مكتمل الظلحتى يعود الى الله.. متحدا في بهاه؟يجيء أخي هل عباءته الريح؟هل سيفه البرق؟هل يتمنطق فوق جواد السحاب؟يجيء أخي!غافلا عن كتاب المواريثعن دمه الملكي,عن الصولجان الذي صار مقبضه العاج:رأس غراب!!يجيء أخي( كان يعرفه القلب 1)أقذف تفاحةيتصدى لها وهو يطحنها بالركاب!(هي الخطأ البشري الذي حرم النفس فردوسهاالأول المستطاب)أثنى, فأقذف تفاحة..تستقر على رأس حربته!( أيها الوطن المستدير.. الذي تثقب الحرب عذرتهبالحراب).. وتفاحة تتلقفها يده!( هي جوهرة الملك,جوهرة العدل,جوهرة الحب..فالحب آب!)قلوب ثلاثية شارة الزمن القديم المستجابقفوا يا شباب!لمن جاء من رحم الغيب,خاض بساقيه في بركة الدملم يتناثر عليه الرشاش,ولم تبد شائبة الثياب!قفوا للهلال الذي يستدير..ليصبح هالات نور على كل وجه وباب!قفوا يا شباب!كليب يعود.. كعنقاء أحرقت ريشهالتظل الحقيقة ابهى..وترجع حلتها - في سناء الشمس .. أزهىوتفرد أجنحة الغد..فوق مدائن تنهض من ذكريات الخراب!!

What Crisis : Dubai Is Still In Denial

2009-12-16T19:29:00.000-08:00

All Is Well
It was January 2008 when I first set foot in Dubai. It was a land full of grandiose, landmark projects. Few cities in the world could match the sheer number of high-rise buildings and skyscrapers being built in the emirate .
Shopping malls were cropping up everywhere, and the biggest one in the world, Dubai Mall, was then under construction. Retail and the service sector were booming, not just from the significant increase of population in the last several years but also on account of the boost provided by tourism. Needless to say, hotels were flooded with tourists; occupancy rates were over 80%.
Lastly, the real-estate and construction sectors were just spectacular. Stories of investors profiting over 20% in one day by buying and selling off-plan properties were commonplace.
With such a quickly growing economy, the job market could not handle the demand. Expatriates were encouraged to fly to Dubai, having virtual assurance of employment. After all, since the whole world was in the midst of great financial crises and growing unemployment, there was nothing more sensible than to try your luck in the only seemingly immune city in the world.
Early Signs
After a few days settled in the city, one could already notice the signs that something was out of place.
If you wanted to rent a flat, it was quite easy. Just give the real-estate agent one check equal to a whole year of rent. As absurd as it sounds, the common practice in the rental market was 12 months upfront. A very skilled negotiator could manage to settle in two checks instead. But that was not all. After visiting the potential property, you had to make up your mind in a couple of hours because of the possibility of someone else being quicker and outbidding you. There were just too many buyers in the market.
This upfront cash disbursement could not be met by many just-landed expatriates. Thank God we had the banks to provide just the right financing for those eager to rent a place to live. Many expats couldn't afford to pay 12 months in advance. Credit made it affordable to almost everyone.
Once the place to live was found, you had to get yourself a car, otherwise you risked being trapped in an hour-long queue to get a taxi outside a shopping mall. There were just too many visitors.
Auto sales were also booming and there were plenty of car dealerships. It was a simple task to purchase a car; easy and cheap financing was always there. You needed to decide quickly because, again, someone else could buy the last piece with just the color you wanted. If the price seemed a bit high, well, too bad for you, because there were too many people interested in it.
"Credit expansion exerted a drastic force in promoting unviable projects."
Living and transportation matters aside, one had to start working. However, with such an increase in demand and higher workload, you needed to hire more staff. After contacting a recruiting firm, screening CVs, and interviewing a few people, a candidate could be selected. Well, maybe not, he'd already been picked by another company. Not a problem. You could go with the second best option.
The new employee would start working as agreed. All seemed well until, after a couple of days on the job, a surprise resignation letter would be waiting on your desk. He had been offered a bit more by another firm. Such a process had to be repeated a couple of times, but eventually a new employee would be hired.
Most likely the same employee would then get frustrated a couple of months later, because his recently joined peer was hired with a 25% higher wage to do the same job.
The same auction-like procedure could be noticed in the cases of office space and the so-called labor camps for blue-collar workers.
In such a scenario, many companies experienced a lot of trouble in managing and planning their operations. How is a manager expected to plan his business if the expected demand, according to market data, is to increase twofold in six months and threefold in a year? Long-term planning in Dubai was 12 months maximum. No one could risk maintaining a plan unaltered in such a drastically changing environment.
Anyone who worked in Dubai during the boom period will identify himself with the examples described above. These are just a few of a myriad of personal stories that lead to the same conclusion: something was not right.
It was a market of extremes. Demand was so high that two-sided competition was virtually nonexistent. It was like an auction, a one-sided competition of buyers. Whenever such two-sided competition is not present, market forces cannot weed out weak competitors, such as badly managed companies.
Consumers had practically no say in the market back then, since if one refrained from buying from a given seller, a hundred others were queuing behind him to guarantee zero inventories. This hindered the process that forces companies to become more efficient and deliver on their promises.
Whenever the bidding processes, the laws of supply and demand, become so unbalanced, one ought to at least reflect on the matter. The question that few raised was whether all this demand was justified and sustainable.
The Bubble Gets Bigger
The House Price Index rose 78% from Q1 2007 to Q1 2008, encouraging even more potential investors to embark on this buying frenzy.
Their appetite for new developments and projects was endless. One could flip through a newspaper and read articles about new project-release events where all units were sold within hours. During one event there was even tumult. Everyone wanted to ensure that an off-plan property could be purchased immediately.
A neighbor who had just purchased a villa recounted to me that his real-estate agent called him three days later to say that she had a potential buyer who would buy the property at a 20% markup. After so much trouble in finally finding a place, he had to decline the offer by replying to the agent, "I actually want to live in this house."
The market sentiment was that prices could just go up. Dubai's economy was sound and strong, according to analysts. The construction sector was booming and attracting more foreign investors each day.
In September 2008 everything was still unshakable, and even celebrities like tennis pro Boris Becker and Indian actor Shah Rukh were announcing projects worth billions of dollars, and the House Price Index reached its peak at a 116% increase since Q1 2007.
Despite visibly high vacancy rates in many areas, new residential and commercial projects were appearing every day with promises of even more residential and commercial space.
One had to drive through the city of Dubai to try to grasp how such a thing could happen. If there were so many empty flats and offices, why were developers still building more and more before the oversupply could actually subside?
"Resources are scarce. Printing more money can never alter this fact."
It seems that the main motive of buying was quick profit. Flipping real-estate property was becoming a sport. Obviously, such patterns bear much resemblance with the US housing debacle.
In October 2008, Cityscape Dubai, the seventh edition of the already-famous real-estate-investment and -development event, opened its doors to the public.
Meraas Development, a then-new, Dubai-based company, unveiled its grand design for Jumeirah Gardens, a $95 billion city within a city.
Visitors were able to see the status of the Arabian Canal, a $50 billion, 120-square-kilometer city to be built in 15 years, for up to 2.5 million people.
And lastly, Nakheel, the developer responsible for the Palm Islands project, in an official announcement at the dawn of Cityscape, told the press it would construct a "tower more than a kilometer high," which would be unrivaled the world over, eclipsing the Burj Dubai tower.
With such megaprojects in the pipeline, Dubai aimed to be the home of roughly 5 million people by 2020. Population stood at 1.6 million by the beginning of 2008.
Symbolically, the Dubai boom reached its height on November 30, 2008, at the launch of the landmark hotel, Atlantis, located at the tip of Palm Jumeirah, the first of the Palm projects. The $20 million celebration extravaganza drew top music, movie, and sport celebrities, and a record-breaking $3 million in fireworks.
Pricking the Bubble
It is always difficult to identify which precise event caused the chain reaction that led market participants to face reality.
In hindsight, it could be argued that Nakheel's announcement of its decision to lay off 500 employees in order to cope with "short-term business plans and accommodate to the current global environment" was one such triggering event. This occurred a few days after the launching of the Atlantis hotel.
On the following day, the Trump Tower luxury project on Palm Jumeirah was suspended, raising even more concerns that the party was indeed over.
These events paved the way for massive speculation among all parties involved in the construction boom. Suddenly, panic was dominating the market. Everyone was trying to figure out how they could be affected and which measures they should take.
Further projects were either put on hold, suspended, or delayed. Additional redundancies ensued.
Cash, which had flowed freely in the sector, suddenly froze. Developers blocked payments, which had a crippling impact on the whole supply chain.
Several companies were required to operate in a kind of standby mode, barely being able to cover fixed expenses such as payroll.
The House Price Index depicted an even grimmer picture. By the end of 2008 it had already declined 8% over the previous quarter. It plummeted 41% in the first quarter of the following year, dropping a further 9% by July. Due to the impact of the Burj Dubai development, the price index rose 7% during the Q3 2009. If the Burj is left out of the index, an actual additional decline of roughly 10% can be observed.
During 2009, the sentiment in the business community was one of solitude. Without proper information from government and master developers, no one was able to guess where the economy was heading and adjust their operations accordingly.
What took many international investors by surprise was long expected by the local market. Dubai World, the holding company of Nakheel, finally came forward and declared it needed a standstill on its debt obligations until May 30, 2010.
As Mises put it almost a century ago, "every boom must one day come to an end."
Causes
The narrative and events above vividly depict all the effects, but not clearly the underlying causes, behind the emirate's boom.
With a currency pegged to the dollar, the United Arab Emirates' Central Bank pursued the same harmful monetary policies as its American counterpart, the Federal Reserve.
Interest rates in the United Arab Emirates were kept artificially low for too long, following the Fed in every move. Reckless lending standards obviously helped to give a boost to the damaging credit expansion.
In addition to the aggressive lending by international institutions to Dubai's enterprises, the UAE Central Bank and the banks operating in the country also played a crucial role in fueling the construction bubble.
The Central Bank balance sheet spiked in 2007, reaching a staggering 177% increase over the previous year.
Although the monetary authority trimmed down the money pumping in 2008, decreasing its balance sheet 32% at the end of that year (still double its size in December 2006), the damage had already been done.
Money supply measured by M3 had an annual growth rate of 29.4% in the period from 2006 to 2008.
With further scrutiny of the UAE's key indicators, we can verify the extent of the malinvestments encouraged by the banks operating in the United Arab Emirates. The aggregate balance sheet of banks operating in the country grew 31.4% annually in the same timeframe above.
After the UAE Central Bank's massive monetary pumping into the economy in 2007, we may infer that the next great damage was orchestrated by the private banks in 2008.
Loans extended to the construction sector grew 41.7% annually from 2006 to 2008. In 2008 alone such loans increased a whopping 80.7% over the previous year. With all this funding, new projects were being launched constantly. Nevertheless, with all this supply, where was all the demand coming from?
In this regard, banks also ensured there would be enough demand available through the usual means, credit.
In 2006, mortgages to residents climbed 80.1%. During 2007, the increase was 82.1%. Finally, 2008 ended with $18.9 billion worth of additional loans, 122.8% growth over a year.
It can hardly be argued that this demand was real. The United Arab Emirates' population stood at 4.76 million by the end of 2008, an approximate increase of 277 thousand in comparison to the year before.
Taking into consideration that a disproportionately large part of the population are blue-collar workers (mainly from the Indian subcontinent), of whom the vast majority reside in labor camps, one may conclude that mortgages were concentrated in very few hands, suggesting the demand was indeed due to investment rather than ownership.
If there had been no credit expansion, people would not have been able to buy on this massive scale. Without the potential buyers, developers would not have been able to launch so many projects. Likewise, if credit hadn't been readily available for developers, they also wouldn't have been able to fund so many projects. So did credit to consumers lead to more credit to contractors, or was it the other way around?
Instead of trying to solve this conundrum, it suffices to conclude that credit expansion exerted a drastic force in promoting unviable projects.
"Following the Austrian Theory of the Business Cycle, one could clearly see that the emirate's boom had to come to an end."
Production and saving cannot keep up with the pace of credit expansion, because production takes time and labor. The creation of additional money out of thin air does not add to the available amount of goods and services in the economy. If more credit is extended to construction companies, it does not mean there will be enough steel, cement, etc. — certainly not at prices that make the developments profitable. As soon as each company starts bidding for the same resource, it will tend to increase in price, rendering some projects unviable.
Resources are scarce. Printing more money can never alter this fact.
With extremely low nominal interest rates and negative real interest rates (inflation is estimated at over 10% for 2007 and 2008), the rational behavior was to borrow and invest wherever it is possible. A booming real-estate market seemed to be the obvious choice most of the time.
Under these conditions, everyone becomes a brilliant businessman. Entrepreneurial errors seem seldom while credit is abundant.
Psychology clearly plays a role in stimulating a bubble, but only monetary inflation enables it. It is difficult not to succumb to the temptation of profiting astronomic amounts in a short period of time. Resistance is even more difficult if the means to engage in the bubble are easily available at the nearest bank.
In the case of the housing sector, people failed to understand that demand for real estate is only sustainable if the ultimate reason for purchasing a property is to actually reside in it.
Former Fed chairman Alan Greenspan would suggest that "irrational exuberance" has the power to escalate asset prices. He could certainly claim exuberance, but there is nothing irrational in investing in higher-yield projects instead of watching your idle savings lose their purchasing power because of inflation.
In addition to the damage caused by the UAE Central Bank and banks operating locally, state-owned and private ventures from the Sheikh were able to cheaply borrow enormous amounts from financial institutions abroad, fueling the malinvestments even further. Dubai World's standstill request on its immediate debt obligations only made the emirate's underlying complications come to surface.
Dubai's false boom, its unreal prosperity, was based on the illusion of cheap money. It was based on the illusion that credit expansion generates wealth — that money is wealth. Following the Austrian Theory of the Business Cycle, one could clearly see that the emirate's boom had to come to an end.
Further Developments
On the wave of Dubai's opulence, the neighboring emirates also wanted to diversify their economies, embarking in extravagant real-estate projects, many of which were extremely questionable ideas from the outset.
In Ajman, several projects have been canceled as developers have run out of cash, leaving many investors with deposits paid on projects that may never be built.
Led by Dubai, the construction frenzy in the UAE naturally attracted loads of foreign investors looking to diversify. In a world still trapped in a major crisis wherein investment opportunities were scarce, Dubai seemed rather appealing.
Although credit expansion did indeed play a fundamental role, actual saved resources were also drawn into the UAE market, further fueling the malinvestments.
A significant portion of those savings will unfortunately be lost, since many investment decisions were carried out anticipating a continuation of the economic scenario of the boom period.
What remains to be seen is the extent of the total damage in the economy. It is still too early to predict the depth of Dubai's necessary recession, the needed adjustment for its scores of malinvestments. Dubai's government companies and local and foreign private developers embarked on many projects that could only be economically viable under the boom conditions of 2008.
There are two ways to finance a project, through one's own capital (personal savings) or through borrowing. If the developer uses his own capital, and the project turns sour, he can either consume his own capital and complete the development in spite of the losses he will incur or cancel the development altogether and take the current pain, avoiding an even greater loss after completion.
However, when a company borrows to fund projects that prove unviable, there is another party involved in the mess.
Numerous developers are trapped in a situation where ongoing projects are turning red, and customers who purchased for investment purposes are defaulting in fear of not being able to profit from a resale or in true inability to meet the payments. This is all the worse if such a developer is leveraged, like Nakheel.
Analyzing from the perspective of a buyer, pulling out is just the sensible attitude. However, if you have bought an apartment to live in, it matters very little if the expected value of the property declines. In the end, you want to live in it.
However, it's quite another story if you have purchased it as an investment, obviously expecting to sell dear, but are caught off guard with a sudden slump in the expected sale value. Should you fulfill the commitment and face an unknown loss, or take the hit now and cancel the contract outright? In the case of developers it might be even more problematic if the buyer is residing abroad and decides to breach the contract. What is the likelihood of UAE jurisdiction being enforced internationally?
Dubai World's acknowledgment of its financial ordeal is the first step in healing the problems caused by the boom. Once projects finally start being canceled, as some will inevitably have to be, a chain reaction begins that will lead some contractors, subcontractors, and other parties related to the sector to the verge of bankruptcy.
As hurtful as it sounds, many companies need to go out of business so the economy can readjust and leave only the real, profitable companies intact.
The office-space vacancy rate in prime locations is estimated at around 40%. Other sources' estimates arrive at a total 74% occupancy rate in residential and commercial space. Due to the lack of accurate statistics in the market, it is a complex job to reach a precise figure. Ongoing and planned constructions are set to increase real-estate supply even further in 2010. Even if these ongoing developments end up being suspended, the current oversupply combined with declining economic activity will exert a substantial downward pressure on real-estate prices, and there is nothing government or any other entity can do to repeal the law of supply and demand.
Nevertheless, the length and depth of the recession also depends on the monetary policies that the UAE Central Bank will pursue. If it tries to prop up companies that cannot prosper, this readjustment process will just extend itself or even be completely neutralized.
Another piece of the puzzle is the exposure of banks to bad loans.
"Only savings can allow for sustainable economic growth."
When someone borrows and doesn't fulfill his commitment in his own country, he might get into trouble. However, in Dubai, expatriates can just leave and never repay their debt: banks in the UAE have very few ways of attempting to recover such bad loans. The abandoned cars in Dubai's airport illustrate this point. In fact, local laws end up encouraging flight from the country since one faces incarceration if one fails to honor issued checks on debt.
In addition to the debt issue, the recession and readjustment of business may result in downsizing, meaning redundancies. Since 90% of the workforce comes from abroad, chances are that the laid-off employee is a foreigner. According to UAE law, if a foreign worker loses his job, he has to find a new position or leave the country within 30 days.
Therefore, a recession in Dubai can also cause a decrease in population, which could have broad effects in the retail sector too, although to a lesser extent. This scenario is very unlikely to occur in the developed countries facing recession, such as the United States or Spain.
Abu Dhabi and International Investors
There are many lessons to learn from Dubai. Every investor should know by now that he must do his homework and only invest when he's fully aware of the reality of the underlying investment. Many just relied on the Dubai government's backing of debt and if that failed, well, the UAE government in Abu Dhabi would just step in. Now that the former has failed and the latter's extent of help is yet unknown, investors are left scratching their heads to figure out an exit plan. It will be a fresh wake-up call that profit and risk always go hand in hand.
Unlike Dubai, Abu Dhabi derives more than half of its GDP from oil revenues. It owns substantial income-generating assets as well as an impressive sovereign-wealth fund. The means to rescue Dubai are certainly there. However, Abu Dhabi is reluctant to write a blank check and assume all of Dubai's debt, and rightly so. The recent extra $10 billion granted by the capital to help honor Nakheel's maturing bond may have calmed some investors. Nonetheless, the underlying malinvestments are still there. Instead of owing foreigners, Dubai now has an extra debt with Abu Dhabi (though the conditions of this emergency loan are still unclear).
In 2008, the last boom year for Dubai, the emirate's GDP is estimated to have reached $80 billion, while Abu Dhabi's was $142 billion, according to government statistics. It is claimed that Dubai's government debt is well over $80 billion. While the debt-to-GDP ratio truly deserves attention, most important of all is the ability to service the debt. Dubai's assets have declined considerably in value and its ongoing operations' capacity to generate enough income to pay off its debt is severely impaired. As with any investment decision, the UAE is carefully thinking through Dubai's rescue.
Reckless lending by international banks to Dubai Inc. was a major stimulus to the emirate's debacle. When everything was going fine, few questions were raised. Now, after the derailing of the economy, many are left unanswered.
The UAE has never experienced such a crisis before. It is the first severe economic downturn since the federation was formed in the early 1970s. Bankruptcy laws are underdeveloped, partly because they were never really needed. The importance of solid institutions is now clear and UAE's judicial system will be tested to its full extent.
Private companies operating in Dubai may have to seek legal action against developers, which in many cases might be state-owned or -linked enterprises. The success of Dubai in attracting foreign capital will also depend on how Dubai courts act and are perceived by the international community.
Conclusion
The similarities of the real-estate bubble in Dubai with those in other countries like the United States and Spain are enormous.

Only savings can allow for sustainable economic growth. Through inflation, credit flows excessively and distorts the production structure, allocating resources to projects that should have never existed in the first place and paving the way for the ensuing recession, that is, the adjustment of all the malinvestments. Entrepreneurs can and will make mistakes even in the absence of inflation. But it is only through undue monetary expansion that the distortion occurs on a massive scale throughout the economy.
By midyear 2009, whoever flew to Dubai with Emirates Airlines could also have been misled into thinking that credit was not a problem, as one of the airline's video promos before landing read, "Forget the credit crunch … shop."

Unfortunately, Dubai Inc. took its own words too seriously.

رساله الى زيد الرفاعي كبير لصوص الاردن

2009-12-13T19:17:00.000-08:00

بسم الله الرحمن الرحيم
الى اللص الكبير والخائن الحقير والكهل الشرير الذي الى رحمه الله فقير ، لا حفظك الله ولارعاك، ولا أعز لك ملكا ولا ادام عليك ثروهعزيزنا اللص الكهل

اكتب اليك هذه السطور نيابه عن كل الافواه الجائعه التي تنام خاويه البطون وبطنك من اصناف الاطعمه والاشربه يئن ، وابعث لك باسم هؤلاء اطنانا من اللعنات مقرونه بكل استنكار وكره ونقمه ,متضرعين بصادق الدعاء إلى المولى العلي القدير أن يطيل عمرك ويزيل عزك وثروتك ويجعل رغيفك يجري امامك وانت تركض خلفه ولا تدركه, واساله عز وجل ان يقسي قلب ابناءك عليك وان يهجرك زوجك فتعيش ما تبيقى من عمرك وحيدا فقيرا الى اهلك وولدك, ويبقيك مثلا يتعض به كل اللصوص والمارقين من اسيادك الامراء واصحابك الوزراء وكل من امتدت يده ظلما لقوت الشعب الاردني .

عزيزنا العجوز البائس
لقد كرمك الله، جلت قدرته، ومنحك في حياتك عزا ما حلمت به ابدا وغمرك في حياتك بعطفه الكريم، ورعايته الدائمه الساميه واعزك وقد كنت ذليلا صاغرا,ولكنك شكرت غيره وعظمت خلقه وطاطات راسك لامائه من (( نساء كاسيات عاريات مميلات مائلات رؤوسهن كاسنمه البخت المائله لا يدخلن الجنه ولا يجدن ريحها ))مثلك ان فارقت الدنيا على ما انت عليه ,وقد بذلت خلال حياتك قصارى جهدك لأن تكون عند حسن ظن من وزروك ، وفي مستوى ثقتهم الاسامية فعبدت البشر من دون خالقهم,فوقعت في غضب الله.
لقد عشت سنوات حياتك الطويلة ذليل النفس، معذب الضمير، مطأ طىء الرأس،لانك خنت الواجب والامانه، وقدمت كل ما أعانك الشيطان عليه في بيع المقدسات، لخدمة اولياء نعمتك الذين سميت باصحاب العروش الهاشميه الخالده، وما عرفت ان الخلود لا يكون الا لله وحده الذي لا عرش الا عرشه ملك العروش وكل العروش من دون عرشه هباء منثورا,ولا يسئل عن رحمه الا هو الله رب العرش العظيم .
وبعد هذه الخدمة التي تسميها طويلة والتي امتدت على مدى اثنين وخمسين عاما من السلب والنهب ،كان ينبغي عليك ان ترجو الله لا ان ترجو من اسميته بسيدك وانت ذو الشيب الازرق،وهو من جيل ابنائك وكان ينبغي عليك ان تلتمس الرحمه من الله بان يحسن ختامك وان تتوب اليه في ارذل عمرك وان تفيض عيناك من الدمع طالبا من المولى العزيز قبول توبتك وقبول استقالتك من عباده العبيد وعودتك الى عباده رب العبيد الحي الذي لا تغفل له عين عما يفعل عبيده.

كان عليك ان تبتهل إلى المولى، جل في عليائه، أن يتوب عليك، وأن يأخذ بيدك لما فيه مرضاته، وأن يكلل بالقبول والتوفيق توبتك اليه هذا ان كنت صحيحا تائبا بنيه صادقه وان تسعى الى رضاه، من أجل خاتمه حسنه وذنب مغفور، وجنات نعيم مع الفقراء والمساكين,واعلم يا من لا رحمك الله في الدنيا ان قبول الله لتوبتك ما زال مفتوحا ورحمته واسعه وسعت كل شي ولكن لها شروط ابينها لك لجهلك المطلق بهذه الامور ,ابينها لك باسم الاخوه الاسلاميه وصله للارحام فلا بد لي ولك ان نلتقي في فخد ماء لاننا ابناء الاردن وفلسطين نعود بالنسب الى بعضنا البعض.

ما عليك الا اتباع نصائحي هذه لك بالحرف والخطوه خاصه انك ما زلت تملك الملايين في حساباتك البنكيه وان ابناءك وبناتك حصدوا مثلها من المال العام المسروق :

1.الاخلاص في التوبه :ان تكون توبتك خالصه لله تعالى مقترنه بشجاعه مطلقه للاعتراف بالذنب امام الله (مع انك للشجاعه فقير, ولكنه اكثر الدعاء الى الله ان يمنحك الشجاعه ولو لمره اخيره في العمر )هذا ان كنت ممن يرجون لقاء الله.اما ان كنت من عبده الشيطان فلا ردك الله.

قال الله تعالى: {فَمَن كَانَ يَرْجُو لِقَاء رَبّهِ فَلْيَعْمَلْ عَمَلاً صَالِحاً وَلاَ يُشْرِكْ بِعِبَادَةِ رَبّهِ أَحَدَا} الكهف:110
2.الاعتراف بالذنب :عليك الاعتراف بما اقترفت يداك من ذنوب وانت تعلم وتعرف جيدا ما اقترفت يداك كثيره لا تعد ولا تحصى وساذكرك ببعضها على سبيل المثال لا على سبيل الحصر

· اقتحام معان وتقتيل العشرات من الناس الذين كانو يبحثون عن الخبز في ثوره الخبز تلك في عام 1990 والذي اصبح صعب المنال في عهدك الملعون .
· تسجيل الاف الدونمات من اراضي خزينه الدوله في الاغوار الوسطى باسم ابنتكم عاليه وما زالت واعفاءها من رسوم واثمان المياه والضرائب وشحن المحاصيل والخضار والفواكه على متن طائرات الملكيه الاردنيه الى اوروبا لبيعها وجني الارباح الطائله منها لا بل تعدى ذلك الى كل مزارع الدوله فاستوليتم على منتجاتها باسعار بخسه وصدرتها ابنتكم الى اوروبا .
· فضيحه بنك البتراء مع الجلبي وابناء الاسره الحاكمه وجني الملايين منها مما ادى في حينه الى انتكاسه الاقتصاد الاردني المعروفه وانخفاض الدينار الاردني الى الحضيض وما ترتب على ذلك من ارتفاع للدين الخارجي الذي بلغ في ذلك الحين 6 مليارات دينار.
· الاعتداء على المخزون الاستراتيجي للاردن من الذهب وبيعه في الاسواق العالميه باقل من قيمته الحقيقيه وكذلك ابتداع بدعه بيع جوازات السفر الاردنيه بشراكه مع اخو ام سمير سيء الذكر ابو ناصر سامي جوده والذي يحتاج لهذه التوبه مثلك فكن له من الناصحين .
· افلاس الاقراض الزراعي لاوامركم المتتاليه بسداد ديون اللصوص امثالكم وكذلك اعتداءكم واخيكم خالد على اموال شركه الفوسفات وتلزيم خالد الرفاعي اعمال مناوله في شركه الفوسفات بمبلغ 12 مليون دينار وتعيين غازي مديرا لصندوق التوفير البريدي وما نتج عن ذلك من فضائح ماليه وتعثر للصندوق.

3.:الاقلاع عن الذنب
كان ينبغي جعل هذه الاستقاله بنيه العوده الى الله والرجوع اليه ,جاهد نفسك المريضه لاقتلاع جذور المعاصي من قلبك فتصبح لك نفسا اخرى زكيه مدبره من الشر مقبله على الخير متعلقه به منتصره على شيطانك الاكبر الذي غلبك طيله سنوات عمرك ,فانك ان استطعت الانتصار على شيطانك هذا ستفوز في اخر العمر وارذله الذي ردك الله اليه .

4.:الندم
وهو كما قال اهل العلم التحسر من تغيير رأي في امر فائت وهو ركن التوبه كما قال رسول الله (صلعم) ((الندم توبه))

5.:رد المظالم الى اهلها
سيكون هذا الجزء اصعب شي عليك لانك ستصفي على الحديده بس ولا يكون لك فكر ولا تدير بال ,الله ما بقطع ولا بيضيع وهو (الرزاق ذو القوه المتين ) فكما تعلم ان شعب الاردن الان على الحديده ,ابحث بنفسك عن كل محتاج ومسكين ووزعك ما لديك من ثروه عليهم حتى لا تبقي لنفسك شيئا ,وزعك كل مالك فكل مال اتى من حرام واعلم وتيقن واعمل بما قاله رسول الله (صلعم)
" من كانت عنده مظلمة لأخيه فليتحلله منها ، فإنه ليس ثم دينار ولا درهم، من قبل أن يؤخذ لأخيه من حسناته، فإن لم يكن له حسنات أخذ من سيئات أخيه فطرحت عليه "

6.واخيرا اياك اياك اياك والتاخير فانك ما تدري ماذا تكسب غدا وما تدري باي ارض تموت واعلم ((ان الله عنده علم الساعه وينزل الغيث ويعلم ما في الارحام وما تدري نفس ماذا تكسب غدا وما تدري نفس باي ارض تموت ان الله عليم خبير)) صدق الله العظيم _لقمان ايه 43
والله ولي التوفيق .

The Crash, Panic & War of 2010

2009-11-23T19:16:00.001-08:00

Some two decades ago, it was decided by the global financial elites that the framework for the global economy shall consist of:
1) A global derivative-based financial system, controlled by the US Federal Reserve Bank and its associate global banks in the developed countries.
2) The re-location from the West to the East in the production of goods, principally to China and India to “feed” the developed economies.
The entire system was built on a simple principle, that of a FED-controlled global reserve currency which will be the engine for growth for the global economy. It is essentially an imperialist economic principle.
Once we grasp this fundamental truth, Bernanke's boast that the “US can produce as many US dollars as it wishes at no cost” takes on a different dimension.
I have talked to so many economists and when asked what is the crux of the present financial problem, they all respond in unison, “it is the global imbalances... the West consumes too much while the East saves too much and consumes not enough”. This is exemplified by the huge US trade deficits on the one part and China's massive surpluses on the other.
Incredible wisdom and almost everyone echoes this mantra. The recent concluded APEC Summit was no different. This mantra was repeated as well as the call for freer trade between trading nations.
This is a grand hoax. All the current leaders on the world's stage are corrupted to the rotten core and as such have no interest to call a spade a spade and expose the inherent contradictions within the existing financial system.
The call for a multi-polar world is meaningless when the entire global financial system is based on the unipolar US dollar reserve currency. This is the inherent contradiction within the present system and the problems associated with it cannot be resolved by another global reserve currency based on the IMF's Special Drawing Rights as advocated by some countries. It was stillborn, the very moment it was conceived!
The leaders of China, Japan and the oil producing countries of the Middle East are all cursing and pissing about the current situation, but they don't have the courage of their convictions to spell it out to their countrymen that they have been conned by the financial spin masters from the Fed acting on the instructions from Goldman Sachs.
Tell me which leader would dare admit that they have exchanged the nation's wealth for toilet papers?
The toilet paper currency pantomime continues.
We have now reached a stalemate in the current currency war, not unlike the situation of the Cold War between the NATO pact countries and the Warsaw pact countries. Both sides were deterred by the MAD (Mutually Assured Destruction) doctrine of nuclear wars. The costs to both sides were horrendous and it was only when the Soviet Union could not continue with the pace and cost of maintaining a nuclear deterrent and was forced into bankruptcy that the balance tilted in favour of the NATO alliance.
But it was a pyrrhic victory for the US and it allies. What kept the ability of the US to maintain its military might and outspend the Soviet Union was the right to print toilet paper currency and the acceptance of the US dollar by her allies as the world's reserve currency.
But why did the countries allied to the US during the Cold War accepted the status quo?
Simple! They were all conned into believing that without the protection of Big Brother and its military outreach, they would be swallowed up by the communist menace. They agreed to march to the tune of the US Pied-Piper.
The next big question – why did the so-called “liberated” former communist allies of the Soviet bloc jump on the bandwagon?
Simple! They all believed in the illusion that was fostered by the global banks, led by Goldman Sachs that trading and selling their goods and services for the toilet paper US reserve currency would ensure untold wealth and prosperity.
But the biggest game in town was the Asia gambit. Japan, after a decade of recession following the burst of her property bubble did not have the means and the capacity to bring the game to the next level as envisaged by the financial architects in Goldman Sachs.
And China was the biggest beneficiary. The senior management of Goldman Sachs brokered a secret pact with China's leaders that in exchange for orchestrating the most massive injection of US dollar capital and wholesale re-location of manufacturing capacity in the history of the global economy, China would recycle their hard-earned US toilet paper reserve currency wealth into US treasuries and other US debt instruments.
This was the necessary condition precedent for the global financial casino to rise to the next level of play.
Why?
The New Game
The financial architects at Goldman Sachs had a master plan – to dominate the global financial system. The means to achieve this financial power was the Shadow Banking System, the lynchpin being the derivative market and the securitization of assets, real and synthetic. The stakes would be huge, in the hundreds of US$ trillions and the way to transform the market was through massive leverage at all levels of the financial game.
But there was an inherent weakness in the overall scheme – the threat of inflation, more precisely hyperinflation. Such huge amounts of liquidity in the system would invariably trigger the depreciation of the reserve currency and the confidence in the system.
Hence the need for a system to keep in check price inflation and the illusion that the purchasing power of the toilet paper reserve currency could be maintained.
This is where China came in. Once China became the world's factory, the problem would be resolved. When a suit which previously cost US$600 could be had for less than US$100, and a pair of shoes for less than US$5, the scam masterminds concluded that there would be no foreseeable threat to the largest casino operation in history.
China agreed to the exchange as it has over a billion mouths to feed and jobs for hundreds of millions needed to be secured, without which the system could not be maintained. But China was pragmatic enough to have two “economic systems” – a Yuan based domestic economy and a US$ based export economy, in the hope that the profits and benefits of the export economy would enable China to transform and establish a viable and dynamic domestic market which in time would replace the export dependent economy. It was a deal made with the devil, but there were no viable alternative options at the material time, more so after the collapse of the Soviet Union.
The Next Level of the Game
The next level of the game was reached when the toilet paper reserve currency literally went virtual – through the simple operation of a click of the mouse in the computers of the global banks.
The big boys at Goldman Sachs and other global banks were more than content to leave Las Vegas for the mafia and their miserable billions in turnover. The profits were considered dimes when compared to the hundreds of trillions generated by the virtual casino. It was a financial conquest beyond their wildest dreams. They even called themselves, “Master of the Universe”. Creating massive debts was the new game, and the big boys could even leverage more than 40 times capital! Asset values soared with so much liquidity chasing so few good assets.
However, the financial wizards failed to appreciate and or underestimate the amount of financial products that were needed to keep the game in play. They resorted to financial engineering – the securitization of assets. And when real assets were insufficient for securitization, synthetic assets were created. Soon enough, toxic waste was even considered as legitimate instruments for the game so long as it could be unloaded to greedy suckers with no recourse to the originators of these so-called investments.
For a time, it looked as if the financial wizards have solved the problem of how to feed the global casino monster.
Unfortunately, the music stopped and the bubble burst! And as they say the rest is history.
The Goldman Sachs Remedy
When losses are in the US$ trillions and whatever assets / capital remaining are in the US$ billions, we have a huge problem – a financial black-hole.
The preferred remedy by the financial masterminds at Goldman Sachs was to create another hoax – that if the big global banks were to fail triggering a systemic collapse, there would be Armageddon. These “too big to fail” banks must be injected with massive amount of virtual monies to recapitalize and get rid of the toxic assets on their balance sheet. The major central banks in the developed countries in cahoots with Goldman Sachs sang the same tune. All sorts of schemes were conjured to legitimize this bailout.
In essence, what transpired was the mere transfer of monies from the left pocket to the right pocket, with the twist that the banks were in fact helping the Government to overcome the financial crisis.
The Fed and key central banks agreed to lend “virtual monies” to the “too big to fail” global banks at zero or near zero interest rate and these banks in turn would “deposit” these monies with the Fed and other central banks at agreed interest rates. These transactions are all mere book entries. Other “loans” from the Fed and central banks (again at zero or near zero interest rates) are used to purchase government debts, these debts being the stimulus monies needed to revive the real economy and create jobs for the growing unemployed. So in essence, these banks are given “free money” to lend to the government at prior agreed interest rates with no risks at all. It is a hoax!
These “monies” are not even the dollar bills, but mere book entries created out of thin air.
So when the Fed injects US$ trillions into the banking system, it merely credits the amount in the accounts of the “too big to fail” banks at the Fed.
When the system is applied to international trade, the same modus operandi is used to pay for the goods imported from China, Japan etc.
For the rest of world, when buying goods denominated in US$, these countries must produce goods and services, sell them for dollars in order to purchase goods needed in their country. Simply put, they have to earn an income to purchase whatever goods and services needed. In contrast, all that the US needs to do is to create monies out of thin air and use them to pay for their imports!
The US can get away with this scam because it has the military muscle to compel and enforce this hoax. As stated earlier, this status quo was accepted especially during the Cold War and with some reluctance post the collapse of the Soviet Union, but with a proviso – that the US agrees to be the consumer of last resort. This arrangement provided some comfort because countries which have sold their goods to the US, can now use the dollars to buy goods from other countries as more than 80 per cent of world trade is denominated in dollars especially crude oil, the lifeline of the global economy.
But with the US in full bankruptcy and its citizens (the largest consumers in the world) being unable to borrow further monies to buy fancy goods from China, Japan and the rest of the world, the demand for dollar has evaporated. The dollar status as a reserve currency and its usefulness is being questioned more vocally.
The End Game
The present fallout can be summarized in simple terms:
Should a bankrupt country (the US) be allowed to use money created out of thin air to pay for goods produced with the sweat and tears of hardworking citizens of exporting countries? Adding insult to injury, the same dollars are now purchasing a lot less than before. So what is the use of being paid in a currency that is losing rapidly its value?
On the other hand, the US is telling the whole world, especially the Chinese that if they are not happy with the status quo, there is nothing to stop them from selling to the other countries and accepting their currencies. But if they want to sell to the mighty USA, they must accept US toilet paper reserve currency and its right to create monies out of thin air!
This is the ultimate poker game and whosoever blinks first loses and will suffer irreparable financial consequences. But who has the winning hand?
The US does not have the winning hand. Neither has China the winning hand.
This state of affairs cannot continue for long, for whatever cards the US or China may be contemplating to throw at the table to gain strategic advantage, any short term gains will be pyrrhic, for it will not be able to address the underlying antagonistic contradictions.
When the survival of the system is dependent on the availability of credit (i.e. accumulating more debts) it is only a matter of time before both the debtor and creditor come to the inevitable conclusion that the debt will never be paid. And unless the creditor is willing to write off the debt, resorting to drastic means to collect the outstanding debt is inevitable.
It would be naïve to think that the US would quietly allow itself to be foreclosed! When we reach that stage, war will be inevitable. It will be the US-UK-Israel Axis against the rest of the world.
The Prelude to the End Game
The US economy will be spiraling out of control in the coming months and will reach critical point by the end of the 1st quarter 2010 and implode by the 2nd quarter.
The massive US$ trillions of dollars stimulus has failed to turn the economy around. The massive blood transfusion may have kept the patient alive, but there are numerous signs of multi-organ failure.
There will be another wave of foreclosures of residential and more importantly commercial properties by end December and early 2010. And the foreclosed properties in 2009 will lead to depressed prices once they come through the pipeline. Home and commercial property values will plunge. Banks' balance sheets will turn ugly and whatever “record profits” in the last two quarters of 2009 will not cover the additional red ink.
Given the above situation, will the Fed continue to buy mortgage-backed securities to prop up the markets? The Fed has already spent trillions buying Fannie Mae and Freddie Mac mortgages with no potential substitute buyer in sight. Therefore, the Fed's balance sheet is as toxic as the “too big to fail” banks that it rescued.
In the circumstances, it makes no sense for anyone to assert that the worst is over and that the global economy is on the road to recovery.
And the surest sign that all is not well with the big banks is the recent speech by the President of the Federal Reserve Bank of New York, William Dudley at Princeton, New Jersey when he said that the Fed would curtail the risk of future liquidity crisis by providing a “backstop” to solvent firms with sufficient collateral.
This warning and assurance deserves further consideration. Firstly, it is a contradiction to state that a solvent firm with sufficient collateral would in fact encounter a liquidity crisis to warrant the need for a fall back on the Fed. It is in fact an admission that banks are not sufficiently capitalized and when the second wave of the tsunami hits them again, confidence will be sorely lacking.
Dudley actually said that, “the central bank could commit to being the lender of last resort... [and this would reduce] the risk of panics sparked by uncertainty among lenders about what other creditors think”.
To put it bluntly what he is saying is that the Fed will endeavour to avoid the repeat of the collapse of Bear Stearns, Lehman Bros and AIG. It is also an indication that the remaining big banks are in trouble.
It is interesting to note that a Bloomberg report in early November revealed that Citigroup Inc and JP Morgan Chase have been hoarding cash. The former has almost doubled its cash holdings to US$244.2 billion. In the case of the latter, the cash hoard amounted to US$453.6 billion. Yet, given this hoarding by the leading banks, the New York Federal Reserve Bank had to reassure the financial community that it is ready to inject massive liquidity to prop up the system.
It should come as no surprise that the value of the dollar is heading south.
When currencies are being debased, volatility in the stock market increases. But the gains are not worth the risks and if anyone is still in the market, they will be wiped out by the 1st quarter of 2010. The S&P may have shot up since the beginning of the year by over 25 per cent but it has been out-performed by gold. The gains have also lagged behind the official US inflation rate. It has in fact delivered a total return after inflation of approximately minus 25 per cent. When Meredith Whitney remarked that, “I don't know what's going on in the market right now, because it makes no sense to me”, it is time to get out of the market fast.
In a report to its clients, Société Générale warned that public debt would be massive in the next two years – 105 per cent of GDP in the UK, 125 per cent in the US and in Europe and 270 per cent in Japan. Global debt would reach US$45 trillion.
At some point in time, all these debts must be repaid. How will these debts be repaid?
If we go by what Bernanke has been preaching and practising, it means more toilet paper currency will be created to repay the debts.
As a result, debasement of currencies will continue and this will further aggravate existing tensions between the competing economies. And when creditors have enough of this toilet paper scam, expect violent reactions!

التطبيع ولعب مبارة كرة قدم مع اسرائيل هو الحل

2009-11-23T05:10:00.000-08:00

نعم هذه دعوة صريحة ومباشرة للتطبيع الفوري مع إسرائيل، ولنبدأ بمبارة كرة قدم "ودية" فورا معها، على أن نخطط استراتيجيا لإنشاء مجموعة رياضية جديدة للشرق الأوسط تضم دول شمال أفريقيا، للمنافسة على كأس العالم، وأن تقتصرمجموعة أفريقيا على الدول جنوب الصحراء الكبري. بذلك تدخل الدول العربية ومنها مصر مع إسرائيل في مجموعة رياضية واحدة، وهكذا تدخل إسرائيل طرفا في تصفيات رياضية عالمية كل سنتين مع الدول العربية، مرة كأس عالم، ومرة كاس منطقة وهكذا.. عندئذ يمكن شحن الجماهير العربية خصوصا في مصر والجزائر، ضد إسرائيل، وتستعيد تلك الجماهير شعورها الوطني تجاه قضيتها "المنسية" فلسطين، ويمكنها حرق علم إسرائيل "براحتها" في حماية الأمن المركزي بدلا من ضربه، ويمكن للإعلام المصري "الوطني جدا" أن يهاجم إسرائيل ليل نهار دون قيود أو رقابة أو حذف، وأخيرا فسيتمكن النظام الحاكم من إعلان التعبئة القومية ضد إسرائيل دون التعرض للوم أو "قرصة ودن" أمريكية، عندئذ فقط يمكن الأمل في تحرير القدس المحتلة والانتقام للأسرى المصريين الذين قتلتهم إسرائيل، واعترفت بذلك ببجاحة.
سيكون من السهل حينئذ استدعاء ماتم تسكينه وتخديره من مشاعر العداء ضد عدو الأمس واليوم، ولن يملك المجتمع الدولي أن يلوم مصر أو الجزائر على أي أعمال عدوانية ضد المصالح الإسرائيلية في كل من البلدين، فالأمر أولا وأخيرا في ظل المنافسة الرياضية. من هنا تستعيد القضية الفلسطينية حيويتها ويبدأ مسار رياضي لتحرير القدس المحتلة بعد فشل المسارات السياسية المتعددة والمملة.
في القرن الواحد والعشرين قام كل من النظام الحاكم المصري ونظيره الجزائري، بإعادة اكتشاف معاني العزة الوطنية والدفاع عن حقوق الشعب المغتصبة. لقد تعلمت الجماهير في كل من البلدين معاني الشرف الوطني والعزة القومية من خلال التضحية بدم المصابين المصريين في معركة أم درمان بالسودان على يد الكوماندوز الجزائريين المتخفيين!!، وطبعا لم يكن ليفلح فيلق الإبرار الجوي المصري من الفنانين والإعلاميين والحال كذلك.
لم تقتصر الدروس المستفادة من معركة مبارة مصر والجزائر على إعادة اكتشاف مدى "غلاوة" دم الشعب وكرامته هنا أو هناك، حتى ولو كانت مجرد إصابات يحدث أضعاف أضعافها في شوارع مصر يوميا في "الخناقات" العادية بين الفتوات، أو في أقسام البوليس أثناء التحقيقات "الإنسانية جدا"، أو كانت مجازر جماعية في الجبال والقرى النائية بالجزائر في الصراع على السلطة منذ النجاح المدوي الذي حققه الإسلاميون ديموقراطيا في تسعينيات القرن الماضي، ذلك النجاح الذي استدعى تدخل الجيش الفرنسي/الجزائري لقمع تلك الجريمة الديموقراطية الشنعاء، وطبعا تعلم الإسلاميون المصريون والعرب عموما ذلك الدرس، وعلموا أنهم بالديموقراطية وبغيرها لن "يشموا" ريحة الحكم!!.
أخيرا اكتشف النظام المصري قوة مؤسسة الرئاسة عندما أعلنت التعبئة ضد الجزائر دفاعا عن شعب مصر، واكتشفت الدبلوماسية المصرية "الخرعة" رجولتها حين سحبت السفير المصري تعبيرا قويا عن مسئولية النظام المصري عن شعبه. ولنتذكر أن نفس النظام لم يتعرف على تلك المسئولية على أثر تكرار قتل جنود الأمن المركزي على الحدود بالنيران الإسرائيلية من حين لآخر، أو قصف الأراضي المصرية في رفح المصرية أثناء محرقة غزة على يد الجيش الإسرائيلي، مع غض النظر عن معنى تلك المحرقة، حيث اعتبرها النظام المصري شأن فلسطيني داخلي مع جيرانهم الإسرائيليين. من هنا تأتي وجاهة الدعوة إلى قيام علاقات رياضية فورا مع إسرائيل، باعتبار الرياضة وسيلة لاستعادة قوة الدبلوماسية المصرية في الحسم والجدية في التعامل مع الشقيقة إسرائيل، فربما يتذكر النظام المصري من خلال الشرف القومي الرياضي معاني الوطنية والعروبة كما فعل بمباراة الجزائر.
نعم، التطبيع الفورى مع إسرائيل والبدء بمبارة كرة قدم، هو الأمل في تحرير القدس وإعلانها عاصمة الدولة الفلسطينية المستقلة، والتطبيع هو الأمل في تفادي الهجمة الشرسة التي يقوم بها الانعزاليون المصريون ضد العروبة ثقافة وتاريخا والتطبيع هو الأمل في توحيد صفوف المصريين وتناسي بواعث الفتنة الطائفية.

Only One Question To Humanity

2009-08-13T19:39:00.000-07:00

I’d like to share with you some questions--some flies that keep buzzing in my head.
Is justice right side up?
Has world justice been frozen in an upside-down position?
The shoe-thrower of Iraq, the man who hurled his shoes at Bush, was condemned to three years in prison. Doesn’t he deserve, instead, a medal?
Who is the terrorist? The hurler of shoes or their recipient? Is not the real terrorist the serial killer who, lying, fabricated the Iraq war, massacred a multitude, and legalized and ordered torture?
Who are the guilty ones--the people of Atenco, in Mexico, the indigenous Mapuches of Chile, the Kekchies of Guatemala, the landless peasants of Brazil—all being accused of the crime of terrorism for defending their right to their own land? If the earth is sacred, even if the law does not say so, aren’t its defenders sacred too?
According to Foreign Policy Magazine, Somalia is the most dangerous place in the world. But who are the pirates? The starving people who attack ships or the speculators of Wall Street who spent years attacking the world and who are now rewarded with many millions of dollars for their pains?
Why does the world reward its ransackers?
Why is justice a one-eyed blind woman? Wal-Mart, the most powerful corporation on earth, bans trade unions. McDonald's, too. Why do these corporations violate, with criminal impunity, international law? Is it because in this contemporary world of ours, work is valued as lower than trash and workers' rights are valued even less?
Who are the righteous and who are the villains? If international justice really exists, why are the powerful never judged? The masterminds of the worst butcheries are never sent to prison. Is it because it is these butchers themselves who hold the prison keys?
What makes the five nations with veto power in the United Nations inviolable? Is it of a divine origin, that veto power of theirs? Can you trust those who profit from war to guard the peace?
Is it fair that world peace is in the hands of the very five nations who are also the world’s main producers of weapons? Without implying any disrespect to the drug runners, couldn’t we refer to this arrangement as yet another example of organized crime?
Those who clamor, everywhere, for the death penalty are strangely silent about the owners of the world. Even worse, these clamorers forever complain about knife-wielding murderers, yet say nothing about missile-wielding arch-murderers.
And one asks oneself: Given that these self-righteous world owners are so enamored of killing, why pray don’t they try to aim their murderous proclivities at social injustice? Is it a just a world when, every minute, three million dollars are wasted on the military, while at the same time fifteen children perish from hunger or curable disease? Against whom is the so-called international community armed to the teeth? Against poverty or against the poor?
Why don’t the champions of capital punishment direct their ire at the values of the consumer society, values which pose a daily threat to public safety? Or doesn’t, perhaps, the constant bombardment of advertising constitute an invitation to crime? Doesn’t that bombardment numb millions and millions of unemployed or poorly paid youth, endlessly teaching them the lie that “to be = to have,” that life derives its meaning from ownership of such things as cars or brand name shoes? Own, own, they keep saying, implying that he who has nothing is, himself, nothing.
Why isn’t the death penalty applied to death itself? The world is organized in the service of death. Isn’t it true that the military industrial complex manufactures death and devours the greater part of our resources as well as a good part of our energies? Yet the owners of the world only condemn violence when it is exercised by others. To extraterrestrials, if they existed, such monopoly of violence would appear inexplicable. It likewise appears insupportable to earth dwellers who, against all the available evidence, hope for survival: we humans are the only animals who specialize in mutual extermination, and who have developed a technology of destruction that is annihilating, coincidentally, our planet and all its inhabitants.
This technology sustains itself on fear. It is the fear of enemies that justifies the squandering of resources by the military and police. And speaking about implementing the death penalty, why don’t we pass a death sentence on fear itself? Would it not behoove us to end this universal dictatorship of the professional scaremongers? The sowers of panic condemn us to loneliness, keeping solidarity outside our reach: falsely teaching us that we live in a dog-eat-dog world, that he who can must crush his fellows, that danger is lurking behind every neighbor. Watch out, they keep saying, be careful, this neighbor will steal from you, that other one will rape you, that baby carriage hides a Muslim bomb, and that woman who is watching you--that innocent-looking neighbor of yours—will surely infect you with swine flu.
In this upside-down world, they are making us afraid of even the most elementary acts of justice and common sense. When President Evo Morales started to re-build Bolivia, so that his country with its indigenous majority will no longer feel shame facing a mirror, his actions provoked panic. Morales’ challenge was indeed catastrophic from the traditional standpoint of the racist order, whose beneficiaries felt that theirs was the only possible option for Bolivia. It was Evo, they felt, who ushered in chaos and violence, and this alleged crime justified efforts to blow up national unity and break Bolivia into pieces. And when President Correa of Ecuador refused to pay the illegitimate debts of his country, the news caused terror in the financial world and Ecuador was threatened with dire punishment, for daring to set such a bad example. If the military dictatorships and roguish politicians have always been pampered by international banks, have we not already conditioned ourselves to accept it as our inevitable fate that the people must pay for the club that hits them and for the greed the plunders them?
But, have common sense and justice always been divorced from each other?
Were not common sense and justice meant to walk hand in hand, intimately linked?
Aren’t common sense, and also justice, in accord with the feminist slogan which states that if we, men, had to go through pregnancy, abortion would have been free. Why not legalize the right to have an abortion? Is it because abortion will then cease being the sole privilege of the women who can afford it and of the physicians who can charge for it?
The same thing is observed with another scandalous case of denial of justice and common sense: why aren’t drugs legal? Is this not, like abortion, a public health issue? And the very same country that counts in its population more drug addicts than any other country in the world, what moral authority does it have to condemn its drug suppliers? And why don’t the mass media, in their dedication to the war against the scourge of drugs, ever divulge that it is Afghanistan which single-handedly satisfies just about all the heroin consumed in the world? Who rules Afghanistan? Is it not militarily occupied by a messianic country which conferred upon itself the mission of saving us all?
Why aren’t drugs legalized once and for all? Is it because they provide the best pretext for military invasions, in addition to providing the juiciest profits to the large banks who, in the darkness of night, serve as money-laundering centers?
Nowadays the world is sad because fewer vehicles are sold. One of the consequences of the global crisis is a decline of the otherwise prosperous car industry. Had we some shred of common sense, a mere fragment of a sense of justice, would we not celebrate this good news?
Could anyone deny that a decline in the number of automobiles is good for nature, seeing that she will end up with a bit less poison in her veins? Could anyone deny the value of this decline in car numbers to pedestrians, seeing that fewer of them will die?
Here’s how Lewis Carroll’s queen explained to Alice how justice is dispensed in a looking-glass world:
“There’s the King’s Messenger. He’s in prison now, being punished: and the trial doesn’t begin until next Wednesday: and of course the crime comes last of all.”
In El Salvador, Archbishop Oscar Arnulfo Romero found that justice, like a snake, only bites barefoot people. He died of gunshot wounds, for proclaiming that in his country the dispossessed were condemned from the very start, on the day of their birth.
Couldn’t the outcome of the recent elections in El Salvador be viewed, in some ways, as a homage to Archbishop Romero and to the thousands who, like him, died fighting for right-side-up justice in this reign of injustice?
At times the narratives of History end badly, but she, History itself, never ends. When she says goodbye, she only says: I’ll be back.

Dubai : A City Built With The Sweat Of Slaves

2009-07-13T00:28:00.000-07:00

THE PERILS OF AUTOCRACY
by The Economist July 9th, 2009

When things go swimmingly, few people seem to mind being run bybenevolent autocrats. When things get sticky, they are less obliging
IT WAS once hailed as a miracle. New cities, even new islands, werespringing out of the desert or the shimmering turquoise sea. Nowadays,ten months after the financial crisis came crashing in on the UnitedArab Emirates (UAE), nearly destroying its shiniest component, Dubai,hundreds of cranes and dredgers have yet to resume work. The QueenElizabeth II, once the world's smartest liner, due to become yetanother posh Dubai hotel, is a sleeping quayside hulk. Nothing ishappening on three of the most recently man-made islands shaped likepalm trees off Dubai's coast that were the latest flashy projects ofNakheel, the emirate's shaky real-estate developer.
These days, despite defiant protestations of resilience, no one seemsto know when the sweet breeze will return. The UAE is still in thedoldrums. For the first time since the seven Gulf statelets joinedtogether as a union in 1971, people are beginning to mutter--ratherquietly, for sure-- whether there may be something amiss with theautocratic, opaque system that hitherto seemed to work so well behindclosed doors. "Nobody really knows what any of the statistics are,"says a Western analyst. "We haven't seen the half of it yet," says aWestern banker, referring to the debt and the possible defaults. It isnotable that almost nobody in business or government is prepared totalk publicly. Cohorts of public-relations people surround the bigwigsand shield them from scrutiny.
In the past few weeks it has become clear, nonetheless, that the bottomhas yet to be reached. Standard & Poor's (S&P), a credit-ratingagency, has issued a string of recent gloomy assessments, downgradingfour Dubai-based banks and noting that "the risk to Dubai's economy hasincreased as the real-estate sector has entered a sharp correctionperiod." Property values are still about half what they were a yearago.
Some foreign building and dredging companies have not been paid formonths, and some Dubai companies are offering to pay them onlypartially. S&P grimly notes the "increased uncertainty regardingthe government's willingness to provide support to Nakheel, a keygovernment-related entity with sizeable repayments coming due at theend of this year." The amount is $3.5 billion. A visiting British trademinister took the rare step, on July 4th, of publicly declaring, whileinsisting that Dubai would bounce back, that British contractors andsuppliers "need to be paid". Earlier this year a leading Dubai figuresaid that the statelet's consolidated debt was around $80 billion, butno one has issued a detailed breakdown of accounts; only a minority ofDubai companies are listed. Others say that the true sum of debt may becloser to $120 billion.
In February Dubai's department of finance issued the first $10 billionchunk of a bond totalling $20 billion to help stave off the creditors,open new lines of credit and reschedule debt. Now, at a time wheninternational banks are still loth to lend, it has been reported thatthe second chunk will be guaranteed by the UAE's government. More maystill be needed.
It is not clear who is in charge--apart from Sheikh Mohammed bin Rashidal-Maktoum, Dubai's ruler (pictured above), whose big interest isracehorses. He appointed a respected local man, Nasser al-Shaikh, totake over the department of finance and sort out the crisis. It wasreckoned that, for a start, he would be empowered to identify the sizeof the debt, both commercial and government (often one and the same)and the extent of Dubai's toxic assets. But in May he was summarily andmysteriously sacked. Some think he was blocked from looking too closelyinto the accounts at Nakheel, among other firms. Otherwise theold-guard management of Dubai--and the UAE--is still pretty intact. Noone has been held responsible.
PUTTING YOUR HANDS OVER YOUR EARSThe two buzz words in Dubai's business and media circles are "denial"and "bail-out". A persistent complaint is that the authorities--inparticular, the ruling family of Dubai and its acolytes, led by SheikhMuhammad--took far too long to recognise the gravity of the crisis whenit broke in September. "They were splashing about in the water whenthey should have been swimming across the channel," says anotherWestern banker. In October Nakheel was still parading grandiosedevelopment schemes. It was not until January that Sheikh Muhammadsummoned Dubai's top businessmen and ministers to take stock and plan arecovery. For months the Maktoums seemed to be in denial.
In the short run, the much richer and more conservative state of AbuDhabi, with 90% of the UAE's oil reserves, will bail out its miscreant,extravagant neighbour, along with the other five, poorer statelets ifthey need help too. "In the long run, Dubai has enough assets to tideit over," says a banker in Abu Dhabi, pointing to Dubai's hugecontainer trans-shipment business, its airline, aluminium smelter,tourism, and role as a regional services hub. Above all, Dubai and AbuDhabi are too enmeshed to allow one part to fail.
Indeed, the Dubai disaster may prompt Dubai's Maktoum family and AbuDhabi's ruling Nahyans to strengthen the federation and work towards asystem of greater accountability and openness. A half-appointed FederalNational Council is toothless, though it can now call ministers beforeit. The legal system, including commercial law, is weak; there is noproper bankruptcy code; there is no real tax base-- nobody pays tax onhis personal income.
Above all, in the words of a longtime adviser to the government, "youhave a confusion between government and commercial operations. There isnobody in Dubai in government who isn't first and foremost abusinessman." There are "massive conflicts of interest" across theboard. "There are no checks and balances...the incentives for sayingnothing are great."
Abu Dhabi is ahead of Dubai in terms of government openness andefficiency. But in both the emirates all the big decisions are stilltaken behind closed doors. In the mild words of a diplomat, "neitherAbu Dhabi nor Dubai are very good at clarity in decision-making." Vitaldecisions are often not put in writing.
The aim of the two ruling families has been to modernise and open upthe economy without modernising or opening up the politics to theextent that the people might one day dispense with their royal rulers.In the short run, there seems little chance of that happening. Theexpatriates who manage much of business have little say in the runningof the place, but are generally content to live well and ask noquestions about delicate matters of state. An English-languagenewspaper, the NATIONAL, backed by the Nahyans, has opened a healthyspace for discussion, though royal scandals or provocative words like"bail-out" or "in denial" are virtually taboo.
The indigenous emiratis, who count for less than a fifth of the 5mpeople living in the UAE, have hitherto been mollycoddled by benevolentrulers. In a couple of years, a recovery may ensue. A resurgence of oilprices is helping. But if the economy gets stuck, the glory days, atleast of the Maktoums, may be numbered.

Ponzi Scheme Dubai-Style

2009-05-31T10:26:00.001-07:00

Dubai property scandal claim emerges amid media blackout
Fake picture allegations and a member of the ruling family linked to a £428 million Dubai property row that has touched nerves across the city
By Heerkani Chohan
Thursday, 28 May 2009

There is much heavy construction across Dubai?s Jumeirah Lakes Towers development

“Fake” pictures are at the heart of a property scandal that could harm the reputation of the once-booming real estate market in Dubai.
A major property development firm with links to the ruling family of the UAE city-state, and the firm’s marketing agency, are accused by investors, many of whom are UK citizens, of obtaining millions of pounds through the use of false construction photographs.
On Thursday, after local and regional media had been alerted to the situation by angry investors, news agencies across the city said they were silenced by senior representatives of the Government of Dubai, as orders were issued for reports of the storm to be pulled.

Around 500 property buyers of varying nationalities collectively purchased three planned tower blocks named Ebony 1, Ivory 1 and Ivory 2 in the Jumeirah Lakes Towers area of the Gulf city last year from property development firm Al Fajer Properties, at a total cost of £428 million.
The firm is part of the Al Fajer Group, ran by company president Sheikh Maktoum bin Hasher Al Maktoum, brother-in-law to the supreme ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum.
But at the weekend it was claimed that Al Fajer Properties and its marketing agent Dynasty Zarooni misled their customers into parting with millions of pounds by presenting photographs showing construction of three buildings, purported to be Ebony 1, Ivory 1 and Ivory 2, up to the sixth storey.
In fact the photographs were of buildings on neighbouring plots. Today, the plots on which Ebony 1, Ivory 1 and Ivory 2 are to be built, are empty holes in the ground, as our photographs show.
“I only handed over my money because I was shown property under construction,” said UK-based Ebony and Ivory Investor’s group spokesperson Moses Oye. “That’s my simple gripe. It’s a black and white issue.”
Mr Oye, who has parted with a little over £1 million – 20% of his total purchase price – had made the seven-hour flight from London to Dubai specifically to chair a press conference to raise awareness of the mess, after official government channels failed to take action.
“We have not sought legal representation as yet,” My Oye said, “because we have tried to square this correctly. The next step will be to go legal.”
However, the press conference was cancelled at the last minute by the hotel where it was to be held, citing “health and safety reasons.” The hotel, Dubai’s Mina A’Salam, is owned by Dubai Holdings, a Dubai government-controlled holding company.
“I asked for the reason to be put in writing, but the hotel refused,” Mr Oye said. “So I asked for a suite. But they said they did not have anything. I personally believe that the powers that be cancelled the meeting.” When contacted, Mina A’Salam management did not respond.
The conference was called to highlight a petition signed by the 500-strong investor’s group urging the Dubai Real Estate Regulatory Agency (Rera), the government body which oversees the Dubai property market, to force Al Fajer Properties to refund the £86 million that has to date been collected by the firm from investors in the three towers.
After the meeting was axed, news agencies were called to a neighbouring hotel to be told of the escalating situation. But when reports began to surface on news websites, news agencies received phonecalls from senior Dubai government figures ordering them to be pulled.
“I had written half of the article when I was told by my editor to stop,” said a Dubai-based national newspaper reporter who attempted to cover the story. “The investor’s group have records of payment, and it’s obvious that they have been shafted, but we can’t write about it.”
The lack of progress on the three towers is a source of deep concern for the investors. Many real estate projects across Dubai were put on hold or cancelled as the torrent of easy credit that fuelled rampant development in the city ran dry with the onset of the global financial crisis.
“Whether Al Fajer are still going to construct or not is neither here nor there,” Mr Oye said. “They would not have got my money if they had not shown me fraudulent pictures.” Al Fajer Properties also declined to comment.
Fellow investor’s group spokesperson Atul Patel, who has parted with £600,000 added: “A lot of people would not have bought had they not thought the project was in an advanced stage of construction.”
The pictures also appeared in an advertising campaign in a Dubai-based national newspaper last July, with the caption, “Shot at location on 10th June 2008. Ebony & Ivory - Jumeirah Lakes Towers.” The two page spread included the seals of Dynasty Zaronni and Al Fajer Properties. Dynasty Zarooni also neglected to comment.
The news will further dampen the spirits of the once-booming Dubai real estate market – a vital facet of the city’s economy. Last year a number of senior executives from major property developers across the city were arrested in a high-profile fraud clampdown as the government sought to clean up the property sector.
With it, the global recession has brought a host of new problems. Many construction firms operating in the city, some of which are UK-based, are owed millions of pounds by Dubai property developers struggling with a lack of liquidity.
Among them is UK engineering giant WSP. The firm’s finance director Peter Gill revealed that the firm is owed £28 million by Dubai-based developers, some controlled by the city’s government.
Dubai’s property market has been likened by some to a giant ponzi scheme, where bigger and more grandiose projects were announced in a bid to keep investment rolling in until the financial crisis tamed the city’s galloping development.
At Cityscape Dubai, a major property exhibition held last October, government-controlled developer Nakheel, responsible for the giant palm tree shaped islands off the coast of Dubai, announced it was to build the world’s first 1km high tower. The Nakheel Tower – if ever built – will eclipse the current world’s tallest building, Dubai’s own Burj Dubai.
Meanwhile, state-owned developer Meraas unveiled a mammoth £16.3 billion development called Jumeirah Gardens, to be built in place of an existing residential area in the city.
Today, the plot where the world’s new tallest tower should be under construction is little more than a sun-baked stretch of desert. Work on the Nakheel Tower was halted in January, and work on vast swathes of Jumeirah Gardens has also run aground.
The national media blackout over the Al Fajer case is unusual even in a country gripped by a harsh media law, and a pending new law, that has already drawn criticism for its prohibition of free speech.
A report by the US-based Human Rights Watch group into the UAE’s pending media law, Just the Good News, Please, was published last month. “(The pending law) includes troubling content-based restrictions on speech, draconian fines, and harsh registration requirements,” the report said.
It highlighted a number of the new law’s provisions, branding them: “Not only unlawful intrusions by the government into the right of journalists in the UAE to freely express their thoughts and opinions on any subject of their choosing, but also an unjustified attempt to control the independence of the media.”
Words that will do little to inspire confidence in Mr Oye. “This is going to define my faith in the country,” he said. “If I’m dealt with correctly, great. But at the moment, it’s not going that way. We’re in the witching hour now.”

Heerkani Chohan is the pseudonym of a journalist living and working in Dubai.

تعازينا يا سيادة الرئيس

2009-05-27T22:37:00.000-07:00

إن قال لك أحد عظم الله أجركم فلا تعتقله بشبهة أنه اخونجي.. فغالبية شعبك من المؤمنين وان لم يكن لهؤلاء نصيب في الحكم أو التقرب منك. سمعت أن طائرة رئاسية خاصة نقلت حفيدك الى فرنسا بينما تُمنع عربة إطفاء وإنقاذ جلبها متبرعون بريطانيون ومنهم النائب جورج غالاوي من دخول غزة والعمل على رفع الأنقاض من فوق جثث أطفالها.. هل تعلم أن هؤلاء الانجليز قد فقدو الأمل بإدخال العربة وأعادوها الى ليبيا مؤقتا؟؟ وفي اليوم الذي عادت طائرتك الرئاسية بحفيدك بعد أن قضى الله التعجيل بأجله, يتم منع وفد طبي من دخول غزة؟ ماذا لو مُنع الأطباء عن حفيدك وهو في شدة المرض يا سيادة الرئيس؟ ولمَ قبلتم بنقله الى فرنسا؟ أما أخبروك أن أحسن الفرق الطبية الاجنبية يتم احتجازها حاليا خارج معبر رفح المغلق غير بعيد عن مكان اجازتك الدائمة في شرم الشيخ هل أخبرك رئيس مخابراتك أنه في الوقت الذي تدفن فيه أنت حفيدك, يقوم الفلسطينون بدفن الطفل ربحي جندية الذي يصغر حفيدك بعامين والذي مات أمس بعد طول عناء من المرض والوهن هل تعلم أنه كان يتبول دماً منذ أذار الماضي دون أن يقوى الاطباء على تشخيص مرضه أو أن يسمح له بالسفر للعلاج؟؟؟ ربما كان ألم رحيل الولد أخف وطأة من مرارة شعور أب بقلة ذات الحيلة.. وهو يرى جسد ابنه الضعيف يذبل شيئا فشيئا.. بينما يقوم الأمن بحراسة أقفال المعبر المغلق تنفيذا لأوامركم ؟ لم يطلب أحد استعارة طائرتك الرئاسية لنقل الطفل ربحي... بل كان أهله سيكتفون بنقله على حمار عبر معبر رفح فيما لو سمح ذلك البغل الذي يغلق المعبر لهم بالوصول الى الجانب الاخر من السجن الغزّي؟ فراق الحبيب مؤلم يا سيادة الريّس!! لكنه لا يعادل شعور من امتزجت لديه لوعة فقدان الولد بالمرارة من ظلم الأخوة والقرف من سيادتكم وعظّم الله أجركم

لن يصلح حالكم السياسي والاقتصادي والاجتماعي إلا بالحرية..!

2009-05-15T08:31:00.000-07:00

حقيقة من المؤسف مانراه من حالٍ , واحوالٍ داخل المجتمعات العربية ,والتي هي بلا شك نتيجة لأ نظمة سياسية استبدادية عقيمة أصلها قائم على سلوك خاطئ... انظمة أصل بدايتها كانت بداية اغتصاب لحق الاخر ومصادرة كل ما يمت للعدالة و المساواة و الحرية بصلة ...
ما نراه حقيقة في العالم العربي ليس سياسة وإنما هو خياسة !!... خياسة تحكم لها شعب خايس بكل ما تشير له هذه الكلمة من معنى .. شعوب وصلت إلى اعلى درجة من السذاجة على مستوى العالم, شعوب لاتفهم مالها وما عليها, شعوب مخدرة فكريا مهزومة نفسيا شعوب فاشلة علميا ... شعوب تعتاش بالانانية والكذب والنصب والدجل والخداع... شعوب تائهة مشرذمة فكريا واجتماعيا متسولة على تلك الشرذمة السياسية التي حكمت البلاد والعباد بطريقة تبدأ من مبدأ الافساد في الارض ...
حقيقة ذهبنا لمعظم مناطق الوطن العربي ومن لم نذهب إليه رايناه عبر وسائل الاعلام المختلفة ..صراحة شيئ يجلب الحزن والألم, وبنفس الوقت شيئ مقرف... شيئ يؤكد بأن الساسة ورجال الدين إنما هم فئة متآمرة يسلكون بهذه الشعوب طريق آخر طريق بدون إنارة طريق لايؤدي إلى النهضة ولا إلى العزة و لا إلى الكرامة... طريق مليئ بالنفايات طريق يدلل عليه الواقع من أرض الواقع...الوطن العربي اصبح في كل شيئ زبالة من الواقع ..
لاشك بأن التعليم ونتيجة التعليم السيئ وسياسة التعليم الفاسدة هي من اظهرت هذا الواقع الغير سوي الواقع المأساوي, واقع الارهاب واقع الحسد ,واقع الحقد واقع الكراهية والبغضاء ... التعليم اظهر لنا واقع أن يقبل المواطن بالحياة دون ان يكون هناك داعي لتطبيق العدالة أو أي داعي للمساواة أوأي داعي للحرية , التعليم العربي هو مجرد وسيلة لغسل عقول الشعوب من اجل ان تقبل الحاكم على ان له الحق فقط, ,ووقت ما يشاء ومن يريد معه من الناس للحصول على الحرية والعدالة والمساواة دون ان يحصل المواطن العربي الضعيف على المثل .. ذلك المواطن الذي هو مجرد شيئا متسولا على هامش من هوامش العدالة والمساواة والحرية ...
العدالة والمساواة الحرية في الوطن العربي ... ليست مهمة مادام عيال الشيوخ وعيال الفئة الخمس نجوم لهم الحق ان يحصلوا عليها وقت ما يشاؤون ووقت ما يرغبون بل مجاديف العدالة والمساواة تتكسر أمامهم عندما تريد ان تضعهم داخل نطاق ذلك الانسان الضعيف الذي هو يمثل الشريحة الكبيرة من المجتمع ..
لاشك بان الانظمة الحاكمة في العالم العربي اخرجت لنا مجتمعا معاقا... ومن داخل هذا المجتمع المعاق اخرجت لنا مجتمعين مجتمع يطبق عليه القانون الدكتاتوري لأنه الجاهل و الضعيف , ومجتمع آخر قدر له أن يسمو فوق القانون... القانون لايطبق عليه فأصبح المجتمع به مفكك... مجتمع ونقيضه .... مجتمع الانسان به يرى الانسان الاخر اكثر منه حظا و فرصة ومتعة في الحياة .. مجتمع نجد به من يحصل على كامل الحرية دون قيد أوشرط لأنه يمثل القوة... ومجتمع آخر مهان و ملعون ابو اسقافه لأنه يمثل الضعيف!!..
لاشك بأن الانظمة العربية انظمة فاشية على شعوبها... أنظمة سلبت من شعوبها الحرية حتى لاتفضحها وسلبت منها العزة والكرامة من أجل لا تحصل على العدل والمساواة ...
كلمة اهمسها في إذن كل مواطن ومواطنة عربية ...وأقول دون الحصول على الحق الكامل في الحرية مثل ما يحصل عليه المواطن الغربي فإنكم سوف تقبعون داخل حفرة فاسدة حفرة هي بمثابة مقبرة لكم .. حفرة لن تستطبعوا الخروج منها إلا بتطبيق تلك الحرية و التي هي من تجلب لكم العدالة والمساواة...
حقيقة الواقع المأساوي في الوطن العربي لايحتاج من ينتقده... فهو بنفسه أفضل من ينتقد نفسه !!...أفضل ناقد له هو الواقع نفسه, النظروا للواقع انظروا في كل شيئ وعلى كل شيئ !!.... الوطن العربي ظاهره هو أفضل ما ينتقد باطنه...
لاشك بأن الساسة العرب وظفوا وفي كل مكان الكتّاب البارزون ورجال الدين الدجالون من أجل التطبيل لهم في دعم مشاريعم الاستعمارية ... انهم ساسة مستعمرون للشعوب واوطان تلك الشعوب ... ان الشعوب بهم مخدوعة ....
كتبه مشعل الليبرالية

A Corrupt World Financial System

2009-03-13T03:34:00.000-07:00

Prologue
When Benjamin Franklin was called before the British Parliament in 1757 and asked to account for the prosperity in the American colonies. He replied, "That is simple. In the colonies we issue our own money. It is called Colonial Scrip. We issue it in proper proportion to the demands of trade and industry to make the products pass easily from the producers to the consumers. In this manner, creating for ourselves our own paper money, we control its purchasing power, and we have no interest to pay to no one." It was the struggle for financial sovereignty that precipitated the American Revolution when the (Rothschild) Bank of England forced the colonists to give up their own currency.
That war never ended.
Throughout his political life Thomas Jefferson fought off the covert attempts of European bankers to control the nation’s money supply through a privately-owned central bank. Andrew Jackson succeeded in defeating these racketeers, nationalizing the banks and paying off the public debt. Our country then flourished without inflation. When Abraham Lincoln issued ‘greenbacks’ that deprived private bankers of their monopoly control of the nation’s money supply he was assassinated. The international bankers battled for more than a century to establish a private central bank in the United States with the exclusive right to print their own fiat notes and exchange them for government debt. They succeeded in 1913 with The Federal Reserve Act, a covert coup that authorized a private central bank to create money out of nothing, lend it to the government with interest and control the national money supply, expanding or contracting it at will. Representative Charles Lindbergh called the Act "the worst legislative crime of the ages." Fifty years later, President John F. Kennedy almost restored our Constitutional monetary system when he issued debt-free Treasury Notes. He too was assassinated.
The Systemic Usury Parasite
In 1913 our sovereign authority to create interest-free money was unconstitutionally transferred to a transnational private banking cartel that has systemically infected our economy with a staggering national debt in the tens of trillions of dollars. Eighty-five cents of every dollar is now consumed as “interest” by the systemic usury parasite, draining its host of vital resources and collapsing our economy in bankruptcy. Ours is not the only nation to succumb to systemic parasitism.
The Systemic Usury Parasite has infected 170 countries, feeding itself through the central bank syndicate, a shareholder-owned consortium of private banks. Each central bank parasite has an exclusive monopoly on its host government’s monetary system, with the power to create public debt and expand or contract the host’s economy at will. Coordinating their monetary policies with each other through the Bank for International Settlements, the central bankers meet behind closed doors, appoint their own governors and set their own rules. Their books are not subject to audit by the individual governments that host them. The Bank for International Settlements originated as a Nazi money laundering operation and serves today as the cashiers window for the global casino. The IMF and World Bank tentacles of this parasite, infect unsuspecting governments with insurmountable debt, forcing these nations through “structural adjustment” policies to rob their taxpayers, slash beneficial social programs, transfer public assets to private owners and sell the nation’s treasures to transnational predators at fire sale prices. Government treasuries are the parasite’s host. Why rob just one bank when you can rob the whole nation? And why rob just one country when you can rob them all? Flushing the global economy of this systemic parasite begins with understanding how its debilitating web of debt is manufactured.
Although governments have inherent authority to create their own money, they foolishly borrow it from central banks, with interest. A central bank fabricates fiat notes (paper money) and credit by “lending” them into existence, in return for treasury bonds of the host government ~ taxpayer IOUs. This “money” has no pre-existing substance in reality and is conjured up through accounting entries. It is literally created out of nothing. The central bank first lends these accounting entries to its private owners and then to its downline commercial banks with interest. The commercial banks are permitted to lend nine times the amount of their borrowed accounting entries held “in reserve”. This nine-fold multiplication of borrowed accounting entries is described as “fractional reserve banking.” When borrowers accept these accounting entry loans they create massive inflation of the money supply which devalues the currency. These accounting entry loans must be “paid back” with compound interest that multiplies exponentially. More money must then be fabricated to pay this interest. Thus, all “money” that enters circulation is actually debt contrived by fictitious accounting entries. Every fiat dollar is an IOU from a borrower to a lender. A debt-based monetary system can never achieve equilibrium because compound interest always overwhelms the escalating money supply and eventually causes systemic collapse.
Organized Crime
Today the nation is essentially bankrupt and hoping Barack Obama’s team of Wall Street advisors will forestall economic collapse. This expectation is equivalent to hoping that Al Capone will make our streets safe. The economic recovery team is a Trojan horse filled with the same Wall Street racketeers that infected the global economy with a quadrillion dollar derivatives bubble, using deliberately deregulated mechanisms. They have successfully held the nation hostage with a universal credit freeze and threats of systemic collapse if trillions of dollars in ransom demands are not met. But why would our government agree to double its public debt to save ruthless gamblers from bankruptcy? Why would our government re-victimize taxpayers who did not participate in this global fraud and whose investments, retirement savings, pension plans and real estate values have already been eviscerated by these swindlers? The answer is that the Treasury Secretary and Federal Reserve Chairman have historically represented a parasitic transnational crime syndicate, not the host government and its taxpayers.
The US Government is an instrument of the organized crime syndicate described alternatively as the Washington Consensus, the Octopus, the Shadow Government, the New World Order and Wall Street. This syndicate of transnational racketeers includes bankers, interlocking corporate directors, American, European and Asian “royal” families, cocaine and opium drug traffickers, illegal weapons dealers and kingpin controllers of blood diamonds, gold and oil. From the very beginning of America’s fledgling democracy these international predators surreptitiously gained control of the railroads, banks, oil and vital infrastructure, using a maze of corporations, offshore banks and holding companies that disguised foreign ownership of national resources. During the 19th and 20th centuries this syndicate secured private ownership of vital infrastructure and natural resources worldwide by engineering wars and assassinating democratic leaders. They financed Trotsky, Lenin and Hitler, using syndicate members within the Treasury and Federal Reserve to protect “their” international assets. Thomas Lamont, a JP Morgan banker, who was the US Treasury’s representative at the 1919 Treaty of Versailles negotiations, personally raised $100 million to finance Benito Mussolini. William Boyce Thompson, director of the New York Federal Reserve traveled to Russia to destabilize the Bolshevik Revolution, ensuring that railroads, banks, oil and vital resources would remain in private hands.Across the globe democratically elected leaders were deposed or assassinated that dared to return natural resources to their people. Two notorious Nazi collaborators, Allen Dulles (CIA director) and his brother John Foster Dulles (Secretary of State), were Wall Street attorneys who worked for the syndicate to brutally suppress every democratic uprising that threatened their control over national assets that rightfully belong to sovereign nations.
General Smedley Butler is best remembered today for his oft-quoted statement in the socialist newspaper Common Sense in 1935: "I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. The record of racketeering is long. I helped purify Nicaragua for the international banking house of Brown Brothers in 1909-12. I brought light to the Dominican Republic for American sugar interests in 1916. I helped make Honduras 'right' for American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went its way unmolested.... Looking back on it, I felt I might have given Al Capone a few hints. The best he could do was to operate his racket in three city districts. We Marines operated on three continents."
Wall Street racketeers who bribed members of Congress to deregulate Wall Street, could not have held our nation hostage without collusion from the Treasury Secretary and Federal Reserve Chairman. They are members of the crime syndicate that loots governments through the central bank system and private equity firms like JP Morgan, Citigroup, Bank of America, Goldman Sachs and Carlyle. Treasury Secretary Henry Paulson, a Goldman Sachs CEO, is also a member of Robber Barons, Inc ~ the IMF Board of Governors. Treasury Secretary Lawrence Summers organized the looting of Russia, stripping one trillion dollars from Russia’s struggling economy and shifting state-owned assets to private owners. Larry Summers succeeded Robert Rubin as Treasury Secretary in 1999, marking their success in repealing Depression-era laws that banned the merger of banks, brokers, insurance firms and investment banks. A former co-chairman of Goldman Sachs, Rubin joined CEO Sanford Weill at Citigroup, the first financial institution to fully embrace the Rubin-led repeal. At Rubin’s urging, Citigroup thrived by bundling loans as securities (mortgages, credit card loans, auto loans, student loans) and selling them as collateralized debt obligations (CDOs). Concurrently Larry Summers championed the deregulation of financial derivatives, ensuring the globalization of losses from those securities. With $2 trillion in junk loans, Citigroup fraud has metastasized to 100 countries making it too infectious to quarantine (“too big to fail”). Rubin protégés advised Obama that taxpayers should assume responsibility for $306 billion of Citigroup’s junk loans. Rockefeller owns Citigroup and JP Morgan Chase, two of the investment banks that own the Federal Reserve. Obama’s Treasury Secretary, Timothy Geithner, is a Board Director at the central bank headquarters, the Bank for International Settlements, and is a protégé of Henry Kissinger, Robert Rubin and Lawrence Summers.
Financial Terrorism
Author Bernard Lietaer, a former central banker, writes in “The Future of Money:”
"Your money's value is determined by a global casino of unprecedented proportions: $2 trillion are traded per day in foreign exchange markets, 100 times more than the trading volume of all the stock markets of the world combined. Only 2% of these foreign exchange transactions relate to the "real" economy reflecting movements of real goods and services in the world, and 98% are purely speculative. This global casino is triggering the foreign exchange crises which shook Mexico in 1994-95, Asia in 1997 and Russia in 1998. These emergencies are the dislocation symptoms of the old Industrial Age money system."
These emergencies are also the hallmark of the transnational crime syndicate controlling the global economy through financial terrorism. Collapsing healthy economies with currency speculation, fabricating trillions of dollars in fictitious debt and destroying productive businesses with short selling, these vultures have swarmed across the globe devouring one nation after another. The US is their current target.
Another Board Director at the predatory Bank for International Settlements, Federal Reserve Chairman Alan Greenspan, used the standard Rockefeller-Rothschild blueprint for engineering the US financial collapse: deliberately expanding cheap credit to inflate the web of debt, entice rampant speculation and then suddenly withholding credit to violently contract the economy. A tactic used by Rothschild’s Bank of England to rob and control its colonies, this violent contraction catalyzes waves of foreclosures, bankruptcies and layoffs that force sellers to accept pennies on the dollar for their assets. Alternatively described as Milton Friedman’s economic ‘Shock Treatment’ and Henry Kissinger’s blueprint for “making the economy scream,” this financial terrorism is a psychopathic formula to bring a nation to its knees.
Instead of allowing a handful of corrupt Wall Street investment banks to implode from well-deserved bankruptcy, The Swindler Bailout engineered by the US Treasury and Federal Reserve extorts trillions of taxpayer dollars to purchase worthless junk loans from racketeers, reimburse speculators for their gambling losses, finance mergers and acquisitions to devour healthy banks and concentrate unearned wealth in expanded syndicate banking monopolies. Government loans could have been directly issued to victims of predatory lenders to refinance the mortgages that have devastated home values nationwide. Instead, taxpayer loans to the generators of these toxic assets reward criminals and simultaneously drain the US Treasury. Insurmountable debt, engineered by the Systemic Usury Parasite and compounded by the Swindler Bailout, lays the groundwork for “structurally adjusting” the American economy, permanently stripping citizens of their remaining assets, health care protection and their confiscated wages held in trust by the Social Security Administration. This premeditated Grand Theft is the prelude for national insolvency and subsequent sale of the nation’s assets to transnational pirates.
Disintegration is a Blessing
Reuters reported in February that renowned investor George Soros said the world financial system has effectively disintegrated, adding that there is yet no prospect of a near-term resolution to the crisis. We needn’t wait to see how thugs might resolve the crisis. It would be much wiser to take the path of least resistance and prevent economic collapse by making the systemic correction that is long overdue.
Imagine for a moment that worldwide governments had retained their exclusive authority to create money and control credit and had strictly regulated the transparent movement of capital within their own borders. Had they remained autonomous, systemic global collapse would not have been possible. US investment banks could not have infected foreign banks and collapsed Iceland’s economy. Small, autonomous units counteract systemic risk by isolating disease and preventing it from metastasizing to the whole system, as nature wisely demonstrates. This “disintegration” of the world financial system is an opportunity to dis – integrate every transnational conglomerate that binds all systems together in one monolithic web of systemic debt. Autonomous interest-free monetary systems that support small community banks, small farms and local producers of goods and services would protect self-sustaining economies from the systemic risk caused by the contagious collapse of intertwined conglomerates. Monopoly strangleholds on any commodity or economic system are lethal by nature. The greater their scope, the greater the risk of contagious catastrophic collapse ~ a fact we are now witnessing.
Dis – integrating the parasitic central bank syndicate that is strangling every country with insurmountable debt must be accompanied by effective quarantine of the global gambling casino: replace the Glass-Steagall firewall between commercial banks (public savings) and reckless investment banks; strictly regulate commodities futures and derivatives trades; ban over-the-counter transactions that are not transparent; criminalize anti-social speculation that artificially drives up the price of essential commodities and threatens public welfare; prosecute naked short sellers that collapse healthy businesses; enforce anti-trust laws that separate large investment sectors in finance, insurance, and real estate; dis – integrate every multinational conglomerate that is too criminal to care and too big to jail; end the fabrication of accounting entry debt by reforming the monetary system to issue and regulate credit through a transparent and strictly controlled public agency and localize every system that is critical to social functioning.
Isolating and strictly regulating Wall Street and offshore casinos to prevent gambling addicts from devastating the productive economy may eventually protect the global financial system from organized crime but its victims will never be reimbursed for their losses. Productive workers who lost their life savings and retirement pensions slowly accumulated over a lifetime of contributing have been thoroughly robbed by sociopaths who instantly amassed unearned wealth by parasitic gambling that contributes nothing of value. They will retire, without being prosecuted, in luxury.
The Mechanics of Money
Money is not a commodity. It is a token of value. Any two people can transfer whatever they like as a medium of exchange. We agree as a group to use one medium of exchange to simplify transactions. The purpose of inventing a medium of exchange is to sustain the flow of goods and services circulating in an economy. If we agreed to use gold or feathers as tokens, the medium of exchange would be finite and too scarce to meet everyone’s needs ~ and a finite physical commodity can be monopolized by individuals who might hoard the tokens and constrict the flow of goods and services that are needed by everyone in society. Paper is plentiful. In theory, we agree to the fiction that paper money and computer credits have value in order to produce and exchange the commodities we need. But they have no intrinsic value.
The pieces of paper and computer entries that are fabricated by private corporations, what we call money, can and should be created and regulated by a legitimate public agency. It is irrational to transfer this vital social function to private corporations that thrive on usury and destabilize economies by expanding and contracting fabricated credit. Usury is not a fact of life, an inherent condition one finds throughout the natural world. It is a man-made concept that could create opportunities for cultures to expand productive activities but which has been historically used by parasites that eventually kill the host.
Money and credit can and should be used to keep the economy flowing, facilitating the exchange of real goods and productive services that meet the needs of society ~ without fabricating debilitating and fictitious debt. This, in fact, was the intention of Article 1, Section 8 of the United States Constitution that authorized only Congress to coin money and regulate its value. The founders of our nation understood that a government does not need to borrow its money from a private corporation. It has the power to create its own money. We are that government and that power belongs to us.
Our government has the constitutional authority to create money and issue credit without ever charging interest or creating debt. It can directly spend this money into circulation and extinguish excess currency to prevent inflation. Or it can charge a reasonable interest rate and use this revenue in lieu of taxes. Publicly-owned community banks could charge a moderate interest rate that is returned to depositors as dividends, or it could be used to generate revenue for implementing worthwhile social projects. Monetary science comes equipped with mathematical formulas to achieve permanent monetary equilibrium through a set of principles that balance the money supply and maintain currency stability, eliminating recessions, depressions, inflation and deflation forever. A debt-free monetary system can be mathematically regulated to facilitate the flow of goods and services as a public service. The mechanics have been understood for centuries. All that is required is social consensus.
Decentralizing the banking system would dis-integrate the global stranglehold of transnational racketeers and provide protection from future systemic collapse. Geraldine Perry has suggested that if banks are to remain privately owned they must be required to operate as independent businesses with 100% reserves and use their own capital for loans, not fictitious accounting entries and not other people's money. The national money supply would be issued by a public monetary authority. Banks would operate as any other business should and they would be regulated by the local governmental entities where they are located, thereby eliminating the need for a national regulatory scheme.
Completely abolishing the privatization of the national money and credit supply would liberate human energy to create a world of abundance in which every human community could produce and exchange the goods and services it needs without ever being enslaved by fictitious debt. Government control of the national money supply would prevent inflation and escalating debt by issuing constitutional interest-free money. Moderate interest rates could then be used to finance the operations of city, state and federal government in lieu of taxes. Two brilliant authors, attorney Ellen Brown and historian Stephen Zarlenga have articulated sound mechanics for a publicly-owned monetary system. All that remains is public demand for this reform.
What is most essential to liberating humankind from centuries of covert suppression by parasitic racketeers is financial sovereignty. Political freedom without economic freedom is meaningless. The self-induced implosion of a corrupt financial system provides our generation with a precious opportunity to secure the blessings of liberty envisioned by our ancestors and finish the American Revolution.

الويل لإيران من شر أقترب..؟!

2009-03-13T03:17:00.000-07:00

تـنبعث في الأفق إرهاصات "تحدي" بين إيران ودول الخليج العربي ولو غضبت إيران وزمجرت فالويل لها ثم الويل لنا!! لقد أعلن التحدي مع إيران بنيرة الشاعر العربي المفوه: ألا لا يجهلن احد علينا .. فنجهل فوق جهل الجاهلينا!! (بالكلام فقط وما زلنا "كلام نواعم"!! فهذه باكستان الفقيرة التي فتحها غلام من غلمان الطائف امتلكت القنبلة النووية ووضعت لنفسها مركزا في موازين القوى)!! يا ليت شعري يا أبن كلثوم بماذا ستواجه دول الخليج التحدي الإيراني؟ هل تجد الحل في خنجر عماني مذهب مصنوع في كلكتا؟! أم بأكبر وأطول "بيرق" في العالم مصنوع من قماش مستورد؟!! أم أن الحل يأتي من عاصمة البغاء العالمية- المدينة النموذج- (لنا النموذج دون العالمين أو القبر)؟!! فهناك في مدينة ناطحات السحاب العربية جيش جرار يعمل على قدم وفخذ من اجل تأسيس صناعة!! للجنس والفجور على أرض الخير والحبور (أهكذا تشكر النعم يا غشم)؟؟! جلبوا العار باليورو والدولار ولم يرحموا الأخلاق والفضيلة بل ولم يرحموا الإنسانية؟!! هاهم قد مسحوا العنصر النسائي الجميل فقط!! من قرى طاجيكستان واوزباكستان (ولأن عربستان محتلة من إيران فقد حمى الله بناتها من تجارة الرقيق الأبيض!!) وانـتقلوا إلى رومانيا وهنغاريا ثم ومن لزوميات الحمية العربية المخلصة عبثوا بالطول و"العرض" في بلاد (من أحرق السفن وقال قولته الشهيرة "العدو من أمامكم والبحر من وراءكم وانتم اليوم يا عرب أضيع من الأيتام على مأدبة اللئام")!! ثم أتوا بالعربيات الماجدات!! يجرجن أذيالهن!! إلى حيث ألقت رحلها الموبقات والمسكرات والمخدرات!! أسطورة مدينتهم هذه أنها قلبت المعادلة فأصبح نسل مضر هم مصدر الجواري والقيان والراقصات والمومسات وجاء المتفرجون على اللحم العربي الأبيض المتوسط؟! من كل حدب وصوب الفرنج والخرنج والعلوج والهنوج . المدينة النموذج أنـتجت لنا النوع الثالث؟!! من العرب الذين تمنيت أن أموت قبل أن أراهم (العرب العارية- عرب بدون هدوم)!! نموذجهم هذا وصل إلى العالمية من أوسخ الأبواب وقد عمّر صرحاً من خرسانة فهوى في قاع كلخانه (تكرمون)؟!! صدق الوعد يا غثاء السيل، هاهم العرب الحفاة يتطاولون في البنيان ويتفاخرون بأطول برج وأجمل برج وأغرب مبنى وأجمل بناية وإنما في أحشاءها الفجور والخمور وكل ما في العالمين من شرور: أن الأبراج أن طالت مبانيها.. في أحشاءها عند مسيان العطب!! وكل ذلك على بعد فراسخ!! معدودة من ارض عاد وأرم ذات العماد التي لم يخلق مثلها في البلاد وذهبت في صبيحة واحدة لتكون اثأرا مندرسة تحت الرمال؟!! ويل لإيران فلدى دول الخليج قناة العربية وأسلحتها الفتاكة الرمحي والقيسي وعيدان و... (لكم الله يا أخوال الرسول)!! وعندما تـنتفض هذه المسماة .. ري.. ري.. (وش اسمها هذي حقت صناعة الموت)!! هذه المدعوة ريما خربانه ؟! فلن يـبقى في إيران حجر على حجر!! وسيشعر الإيرانيون بالحرج الشديد ويمتـنعون عن القتال مخافة أن يتم تصنيفهم مع أطفال حماس الذين يصنعون الموت لجنود العدو الصهيوني (استغفر الله هل قلت العدو الصهيوني!! جل من لا يهمل)!! ثم هناك "العربية نت"، ويلكم يا فارس جاءكم الموت على رأس فأره؟! ويقف خلفها عدد من "مجاهدي النت" وهم رجال!! أشداء على المؤمنين رحماء على الصهاينة؟! تراهم في المعركة سكارى وهم سكارى وسيلجمون التحدي الإيراني السافر بإحصائيات مهولة عن الشواذ والسحاقيات في دول الخليج وربما دعوا إلى الدفع بهم وبهن إلى الصفوف المنبطحة في المعركة المصيرية!! ولن يهدأ للعرب العارية هذه بال ولن يرتاح لهم سروال؟!! حتى يحشدوا مراكزهم ونواديهم وانجازاتهم الثـقافية لمواجهة التحدي الإيراني؟!! وفي الخط الأول هناك "مركز المسيار الوطني" (ولو نزعت نقطة من تحت الياء فلن يتغير المعنى)!! وهو المركز الوطني الوحيد في العالم وربما في التاريخ الذي يجمع معلومات ويعمل دراسات عن أسرار الوطن وخفايا الوطن وخبايا الوطن وثغرات الوطن (يا عزتي لك يا وطن)!! ثم يـبيعها بالدولار الملعون للاستخبارات الأمريكية والبريطانية والإسرائيلية والروسية واستخبارات سيرلنكا المركزية!! وربما يزود الاستخبارات الإيرانية ببعض المعلومات عن قضية "انـتهاك حقوق الشيعة" في الخليج!! ومشاكل تزويج القاصرات وقصص ظلم القضاة وتسلط الهيئات ولن يتحدث أحد عن تكميم الأفواه وخط الفقر الذي يضغط تحته نصف الشعب الذي يمشي حافيا وتحت قدميه أضخم الثروات في تاريخ الاقتصاد؟!! لعنك الله يا دولار كيف جردت أبناء الوطن من الوطنية؟!! ويل لإيران فلدى العرب المهووسة ذلك الموقع الالكتروني "إيلاف" (ملاحظة: النقط تحت الياء مع إن وضعها فوق الياء لا يغير المعنى)!! هذا الموقع سيكون حجر (غرشة)!! في طريق الأطماع الإيرانية!! فهم في إيلاف لا يعترفون بالموت ويقولون أن الله يأخذ إجازة (تعالى الله عما يقولون)!! ويعتقدون أن محمد (صلى الله عليه وسلم) كان مقاتلا دمويا تحركه الأطماع السياسية (بأبي أنت وأمي يا رسول الله)!! وعندما تدخل إتلاف ساحة الوغى ضد العدو الجديد فسيدوخ!! الإيرانيون من صور هاي رزلوشن!! لكل ما لذ وطاب من الفنانات والمطربات المائلات المميلات النامصات المنمصات ومعهن جوقة من (حليقي الشنبات)!! ولا عزاء للغيورين فقد رفعت المدينة الحجاب عن قاذورات إتلاف استعداد للمعركة ومنعت مواقع السكس والصداقات، وهي لعمري أرحم!! على الأقل الواحد ينظر إلي صور البنيات!! وعقله في رأسه وليس في رأس الماسونية؟!! وقلبه في صدره وليس في صدر البيت الأبيض!! وأين ستذهب إيران من صحافتـنا وكتابنا ورسامي الكاريكاتير وروايات السح الدح امبووو!! وحتى شعبان عبد الرحيم سيقلب الموازين (بكرهك يا إيران أنت وكل العربان العريان انين.... ثم نهيق متـقطع)؟! الويل والثبور لإيران الغبية عندما تـتولاها سياط وأنياب هؤلاء الذين عندما تسلموا ملف "الهيئة" جعلوا الناس بالكاد تنسى (كنتم خير أمة أخرجت للناس تأمرون بالمعروف وتـنهون عن المنكر)!! وعندما تولوا ملف السينما جعلوا من صالات الأفلام متطلب حضاري تـنافسي تـقني سيصعد بنا إلى مصاف موزمبيق؟!! وعندما حشدوا أقلامهم القذرة ضد حماس أصبح الواحد يلعب الكرة بهدوء مخافة أن يأخذ به "حماس" زائد فيصنف (ضد السامية)!! اعتقد انه سيقضي على إيران في ليلة حالكة!! من ليالي العرب الحمراء وسيلاحقهم المخرجون بإنـتاج أول فيلم سينمائي فيه ممثلة خليجية تمتـنع أمام الملأ عن أكل الكباب الإيراني (مرة واحده، يلعن أم التحدي)!! وستهبط النكات على الإيرانيين في "عيال قرية"؟! وليس من المستبعد أن تـنقطع عنهم "روتانا" فيصبحوا على ما فعلوا فرحانين؟! (وهنا نقترح أن تعطي إيران فرصة فليس لها قبل بكل هذه المصائب)!! خلاص، إيران انـتهت ويستعد بعض المثـقفين العرب لعقد ندوة عالمية هل تذكرون ذلك العربي الجاهلي الذي قاد قومه بني وائل (عنزه) وواجه جيوش كسري وحقق أول نصر عربي واضح لم يأت لتحريك المفاوضات أو لجبر الخواطر!! وكل ذلك من أجل امرأة عربية أهينت في بلاط كسري؟!! وهل تذكرون ذلك العربي نحيل جسمه رثة ثيابه دخل على كسري في قمة عنفوانه ورد على سؤاله (ماذا تريدون يا عرب؟) فقال تلك المقولة التاريخية "أتـينا لنخرج العباد من عبادة العباد إلى عبادة رب العباد"!! هذه عرب هلكت، وابتليـنا نحن الذين نعيش في عصر العرب العارية!! برجال رضوا وهم بكامل قواهم العقلية أن يكونوا عبيدا في مزرعة بوش الأب وبوش الابن وأخيرا أوباما الأسود (ليس عنده مزرعة ولكنها شقة ديلوكس في شيكاجوووو)!! وصدق عمر بن الخطاب رضي الله عنه عندما قال "نحن (العرب) قوم أعزنا الله بالإسلام ومهما ابتـغينا العزة بغيره أذلنا الله"!!

We All Must Be Angry

2009-02-10T21:42:00.000-08:00

One of the hardest things to deal with in the current economic depression is the disgusting hypocrisy of the U.S. congress, the new president, and the members of the Federal Reserve System. It is one thing to be told, as we all are, that we must hand over fat wads of our hard-earned money to these warmongering and thieving snakes or face jail terms, but one feels a whole new level of revulsion when these people make statements to the effect that they, and they alone, are in a position to "save the economy" by "creating jobs." These statements are made by people who have done virtually everything in their power to destroy the American economy over the last few decades, but who have now proclaimed themselves to be our saviors. Only the most naïve and unlearned among us could possibly be falling for the idea that a bunch of self-serving politicians, bureaucrats and bankers are going to "save" us from problems they have caused.
On its face, the idea that politicians, bureaucrats, and bankers could "save" the economy is laughable. These are people, after all, who live exclusively at our expense. That is, these are people whose entire livelihoods are dependent upon taking money away from productive people and spending it on themselves and their favorite wasteful projects. It's true that they do not all share the same ideas about how to spend the money they take from us. Some prefer to use it to blow up innocent people in foreign lands, while others simply want to take our hard-earned money without our consent and hand it over to other people. The bankers, on the other hand, merely content themselves with printing vast amounts of new money out of thin air that they either hand over to the Treasury Department, or gift to their other banker-buddies to lend out at a profit at our expense. Nevertheless, it should be crystal clear that these people do not actually produce anything themselves (except the bankers, who are very skilled counterfeiters of money). They take money from us through taxation and inflation, (and threaten us with severe punishments if we refuse to obey), and then spend every last penny of it – and more – on war, socialized boondoggles, and welfare. These are the people who would have us believe that they can "save" the economy? How exactly would they accomplish such a thing? More taxes, more idiotic socialized projects, more war, and more newly-printed green paper? Do these actions really seem likely to produce a vibrant and healthy economy, or do they seem more like the actions undertaken by the Supreme Soviet of the U.S.S.R.?
They would also very much like for us to believe that they are the only people in the world capable of "creating jobs" in the United States. A more ridiculous idea would be hard to find. Again, these people are only in the business of taking money from productive people, and either wasting it entirely (e.g., war), keeping it themselves, or giving it to other people (e.g., entitlement programs, foreign aid, and paychecks for bureaucrats). As such, any actions undertaken by these people will necessarily depend for funding upon those who are forced to pay taxes; namely, the increasingly-dwindling group of productive people who have not yet lost their jobs in the private sector. Does it really seem possible that this sort of parasitism on the productive people of the United States really can create jobs that produce the things that people actually want? If socialized job creation is the only way out of this economic quagmire, as the politicians would have us believe, then why don't they socialize the entire economy? If it were indeed the case that the federal government can "create" productive jobs better than the private sector, then why don't they take over all aspects of the American economy, and we can all live happily ever-after in a brave, new, socialized America where everyone is enslaved, I mean employed, by the State.
And don't think for a moment that the politicians and bureaucrats are themselves going to help the productive people shoulder this onerous tax burden. On the contrary, politicians and bureaucrats do not actually pay taxes.
The heads of the government have simply chosen a complex and misleading accounting device to make it appear that he pays taxes in the same way as any other men making the same income. The UN's arrangement, whereby all its employees are exempt from any income taxation, is far more candid."
Hence, while Mr. Obama is fond of telling us that "we" are going to have to get out of this recession together, what he really means is that those of us who are employed in productive private lines of work in this country are going to have to hand over more and more of our hard-earned money to those people in this country who pay no taxes at all; namely, men like Mr. Obama himself and the rest of the fat, parasitic political and bureaucratic class that infests this country.
Some of the more shameless of the political class in America or their academic lackeys, have even tried to convince us that the trillions of dollars they are wasting in Iraq and Afghanistan are going to help us get out of this depression. They have been taking taxpayers'money and blowing it up in these two dreadfully poor countries year after year, and they would like for us to believe that this senseless destruction of wealth is going to make America richer. Often known as "Military Keynesians," this group is perhaps more aptly described as the "kill ourselves rich" crowd. It doesn't take a rocket scientist to realize that neither you nor I are made better off when the federal government steals our money, hands it over to Lockheed Martin to purchase bombs, and then uses those bombs to blow up Pakistani civilians. The only people who benefit from this forceful expropriation of our money and indifferent murder are the merchants of death occupying lucrative posts at Lockheed, Blackwater and the Pentagon.
What the political and bureaucratic classes are actually accomplishing very well, however, is creating a veritable army of angry men whose lives have been destroyed by the federal government. Many have lost their jobs, thanks to the collapse of the largest artificial economic boom in American history – a boom that was directly caused by the actions of the federal government and the Fed. In addition, thanks to years of merciless and ceaseless money creation by the Fed, this army of men has found that their savings purchase fewer and fewer goods over time. This depreciation of the dollar will inexorably increase astronomically over the next few years as the massive amount of new money the Fed and treasury have already jointly printed, and are planning to print over the coming months and years, floods the system.
This army of angry men has very little to be optimistic about in the near future. At best, they might be able to keep their present jobs in the private sector – shouldering a heavier and heavier portion of the tax burden that funds the congress and president's wars and socialization schemes, while the value of their savings continues to erode into dust. Those who have lost their jobs might be permitted to work on Mr. Obama's "public works" projects, and thereby become virtual slaves to the whims of the political and bureaucratic classes. Many others will simply find it easier to start sucking at the state's teat in the form of unemployment insurance or food stamps, et cetera, and thereby lose all respect for themselves. One thing is certain for every member of this army of angry men, though; every single one of them will now find it very difficult, if not impossible, to carve out a living for himself, on his own terms, and without being at the complete mercy of politicians, bureaucrats, and bankers he has never even met. The age of the independent, responsible, and free American citizen is now dead.
The hour is fast approaching when each and every one of us will have to decide for ourselves whether we will try to fight this devastating government machine, or join it.

دعاء افتتاح القمة العربية

2009-01-18T02:03:00.000-08:00

اللهم ثبتنا على كراسينا ! وبارك لنا فيها ! واجعلها الوارث منا ! واجعل ثأرنا على شعبنا ! وانصرنا على من عارضنا ! ولا تجعل مصيبتنا في حُكمنا! ولا تجعل راحة الشعب أكبر همنا ولا مبلغ عِلمنا ! ولا الانقلاب العسكري مصيرنا! واجعل القصر الرئاسي هو دارنا ومستقرنا ! -------------------- اللهم إنا نسألك فترة ممتدة ! وهجمة مُرتدة ! والصبر على المعارضة ! والنصر على الشعب ! ونسألك الحُسن لكن لا نسألك الخاتمة أبداً ! اللهم ارزقنا معونة لا نسرق بعدها أبدا ! اللهم لا تفتح أبواب خزائننا لغيرنا ! اللهم أعطنا كلمة السر لحسابات الحكام السابقين لنا في بنوك سويسرا ! --------------------- اللهم وفق أمريكا لما فيه خيرنا ! اللهم اغفر لـ (جورج بوش) فإنه لا يعلم أننا لا نعلم ! اللهم وفقه لما فيه 99% من أصوات الناخبين ! اللهم نجهِ من أي إعصار أو كارثة طبيعية لأننا سنلوص مع شعوبنا من غيره ! اللهم عليك بشعبي، أما أعدائي فأنا سأتفاوض معهم ! --------------------- اللهم ارزقنا حب أمريكا ! وحب من يُحب أمريكا ! وحب ما يُقربنا إلى حب أمريكا ! ------------------ اللهم أمركني ولا تأفغني ! اللهم برطني ولا تصوملني ! اللهم فرنسني ولا تسودني ! اللهم ألمني ولا تؤلبني ! ------------------ اللهم أني أبرأ إليك من الاستعانة في حكم شعبي بأحد ! ولا حتى بصديق، ولا برأي الجمهور ! اللهم أني أعوذ بك من كرسي يُخلع ! ومن شعب لا يُقمع ! ومن صحيفة لا تُمنع ! ومن خطاب لا يُسمع ! ومن مواطن لا يُخدع ! وأعوذ بك من أن أجلس على الكرسي ثم أقوم أو أ ُقام عنه ! ------------------------- اللهم ثبتني على الكرسي تثبيتا ! و شتت المعارضة تشتيتا ! ولا تبق منهم شيطاناً ولا عفريتا ! اللهم آآآآآآآآمييييييييين

The Crisis For Dummies

2009-01-01T01:02:00.000-08:00

The 2007–2008 financial crisis had its genesis in the United States housing markets, but it rapidly spread to other economies, first to the United Kingdom, but then almost everywhere else, including such unlikely spots as Iceland whose banking system collapsed.Because events in the United States triggered the crisis, this essay will concentrate on the US causes although they had their many counterparts elsewhere.
There are at least three long-standing background influences that contributed to the financial debacle that dominated the US economy in 2008:
1- For almost 100 years, the US government has not felt constrained to match its expenditure with its revenue. This policy was given intellectual justification by the writings of John Maynard Keynes who argued in the 1930s that, during periods of slow economic growth, active and purposeful government policies would allow the economy to spend its way out of recession. It was simply a matter of time before citizens aped the financial habits of their governments by living beyond their means.
2-The Federal Reserve System (the Fed — created in 1913) has accommodated government's policy of spending to excess by inflating the money supply and keeping interest rates artificially low. Today's dollar will buy what in 1913 would cost less than a nickel. This easy-money policy has not only led to inflation but has resulted in investments taking place that would not be justified had the money supply been constrained, and had interest rates more clearly reflected economic reality.
3- Since the 1960s, politicians parroting the suspect theories of Keynes have fed the public's naïve belief that government can provide ever-increasing living standards by means of its monetary and fiscal policies. Pulling a fiscal lever here and pushing a monetary button there meant that constraints on spending were old fashioned, and living standards would forever improve. The limitations imposed by the laws of economics had been repealed if you voted for politicians who promised to provide you with something for nothing. Fiscal prudence was simply a capitalist lie.
It is against this long term, more philosophic backdrop, that the following, more immediate issues, assumed greater importance.
4- Households collectively made little attempt to save for the future. The United States, in particular, borrowed from China, Japan, and Middle Eastern countries to finance its spending addictions. Financial responsibility was considered an old-fashioned, or even an irrelevant, virtue, and people were led to believe that government could, by waving its magic wand, provide improved housing without the pain of saving or foregoing immediate consumption.
5- The acquisition of a house was viewed by many buyers not so much as having somewhere to live but as a painless way to make money. House prices, they naively believed, would always continue to increase in value while the relative burden of mortgages would continue to fall. Not only that, but as house values increased, a house could be used as collateral for a further loan. The financial equivalent of turning sea water into gold had been created. So long as house prices increased, borrowers were in financial heaven. When house prices fell, the earth opened up under the feet of lenders.
6- Government-sponsored entities like Fannie Mae and Freddie Mac subsidized mortgages for people who, under more-prudent rules of borrowing, would never have qualified for a loan from a conservative banking institution. Congressman Barney Frank in 2003 stated in a moment of candor, "I want to roll the dice a little bit more in this situation toward subsidized housing." Well he certainly did, at the same time accepting with gratitude campaign contributions from Fannie and Freddie.
7- The egalitarian policies of government through such legislation as the Community Reinvestment Act of 1977 "persuaded" lenders, Mafioso style, to lend to low-income borrowers, against their better judgment. Government lawyers made it clear that the consequences of failing to meet politically imposed targets and quotas could be dire.
8- It was a matter of time before a substantial minority of borrowers could not or would not service their mortgages. Partly because astute people predicted this, well-known names in the financial world began to package, or sponsor, mortgage and other debts such as credit-card balances into what were called structured-investment vehicles (SIV), dubbed "financial weapons of mass destruction" by Warren Buffet. So complicated were the terms contained in such instruments that many legal minds and the credit-rating agencies were baffled as to exactly what they meant and where the ultimate risk lay. Banks and others could benefit by lending to people who could not afford to pay interest, far less capital, provided they were able to sell the SIVs to gullible investors. Money managers naively bought such investments for pension funds, money market funds, and (even more surprisingly) for their firms' own accounts. This was the primrose path to unlimited housing ownership, with no painful cash deposit, and no adverse consequences to the first lenders.
9- So long as (a) the value of housing increased, (b) borrowers paid on time, and (c) confidence remained in the credibility of SIVs, everything was hunky-dory. Unfortunately, all three cratered about the same time; house values stagnated or fell as supply exceeded demand; when values stuttered, so did borrowers repayments, and confidence plunged. Borrowers, having promised to pay and having offered security for their promises, were failing to pay because their security had declined in value. They repudiated their debts, and the burden fell on hapless financial institutions. Populist politicians rarely blamed the borrowers, because there are so many of them and they vote; instead they blamed greedy capitalists, speculators, short sellers, anyone except the debtors, and the imprudent economic policies of the US government.
10- As events began to unravel in mid-2008, well-established firms like Lehman Brothers, went to the wall. Others like Bear Stearns and Merrill Lynch were sold at knockdown prices. Yet others, like insurance giant AIG, were effectively nationalized.Meanwhile, the stock-market value of banks and other financial institutions took a nosedive. For example, Citibank stock price fell by 79% between October 2008 and October 2009. The broader stock-market indices like the Dow Jones also plummeted by around 40%. The US government had no systematic policy, and rules were made up as more and more bad news emerged, especially about jobs. Citibank had a labor force of 375,000 in 2007; in November 2008, it was announced that 53,000 jobs would go by the first quarter of 2009. Senior government officials were like shipwrecked sailors (and were spending money like drunken sailors) paddling like mad but with little idea of where they were going, or why. The only consistent rule was that something had to be done, and the US government must be the action party.
It is difficult not to recall the words of Herbert Spencer: "The ultimate result of shielding man from the effects of folly is to people the world with fools."

The financial crisis of 2007–2008 was a Ponzi scheme writ large. A Ponzi scheme, or chain letter, initially succeeds but eventually collapses, just as imprudent loans may at first succeed in their objectives but eventually the laws of economics come into play and expose the futility of the whole exercise. A pyramid scheme is always unsustainable for the simple reason that it is based on faulty principles and built on flawed foundations. Until too late, no one in authority (regulators, risk managers, senior bank executives, credit-rating agencies, investment analysts) asked the key question, namely, how on earth was it possible in the long term to make profits by lending money to people whose chances of paying it back were practically nil?The issue was simply swept under the carpet because loans to deadbeats provided a better short-term return than did lower-risk debt instruments.

In summary, the essence of the subprime crisis is that money was lent (often through the agency of questionable mortgage brokers) at very low interest rates (courtesy of the Fed) to hundreds of thousands of people (all they needed was a credit score and a pulse) who could not afford to pay it back; and it was backed by collateral (a house) that was not properly valued.
Such assets, accurately described as "liar loans," were then packaged into opaque securities, known as structured-investment vehicles (sponsored but not guaranteed by a respected and well-known name), which very few people understood. They were sold on to pension funds, banks, and others whose gullible investment managers also did not understand them and failed to carry out the rigorous analysis that their clients had a right to to expect.
Government encouraged all of this by supporting affordable housing (which was politically correct) and accusing banks of redlining (failing to lend to poor and black people in the same proportion as they lent to the rich and white). When the borrower, already maxed out on his credit cards, predictably failed to make payments, the scale of the problems eventually became apparent to somnolent regulators and financial institutions. Confidence and trust evaporated, because no one knew which institutions held suspect securities, how much the losses were, and who was ultimately safe. A financial system built on debt and excessive leverage was a financial system built on sand.

The errors and fallacies that weave and surround this awful catalog of errors could have largely been avoided by paying attention to a single sentence. written by Henry Hazlitt over 60 years ago:
"The art of economics consists in looking not merely at the immediate but at the long effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups"

The Other Madoffs

2008-12-24T19:56:00.000-08:00

One ingredient was financial intelligence. Madoff had buckets of it. Early in his career, he was the real deal, an actual innovator. He combined this with an amazing lack of conscience, for his scam was rooted most fundamentally in lying and stealing. The difference between him and all who came before was his grand scale, the grandest scale imaginable.The puzzle is not to explain business failures. Those are part of the normal course of life, and the sign of a healthy economy. The puzzle is to explain the “cluster of errors” that appears at the beginning of a recession. How could so many have been so wrong about so much at the same time? The business cycle is a system-wide failure, not merely the mistaken judgment of a few.So it is with Modoff’s scheme. The mystery isn’t how one person was able to fool a few. The scheme in which yesterday’s “investors” are paid off with the money of today’s victims is known in all places and probably all times – and it always goes belly up to the originator’s complete disgrace. It is a classic example of how moral laws are self-enforcing in the world of economics.The critical difference this time is that Madoff ran his scheme during an economic boom, a time when people’s normal sense of incredulity is put on the shelf. This is part of the grave cultural distortion introduced by funny money.
Money is the most widely demanded good in society, and the Fed is making new quantities of it not as a reflection of new real wealth, but purely as an administrative decree.There is a sense in which funny money literally drives everyone crazy, leading to what is sometimes called the “madness of crowds.With artificial stimulation from the credit machine, multitudes are willing to believe in something that cannot possibly be true. In Madoff’s case, it was that he could, even in falling markets, earn 15-20% a year without risk.Why not? Most everyone believed in some version of the myth. We believed that house prices would go up and up despite the reality that houses are physical things that deteriorate from the instant they are finished, just like cars or computers or anything else. Why did we believe this about houses? Again, you have to look to the fraudulent money system to see why.And we believed that we could all become millionaires by putting our money in the stocks of companies that weren’t actually earning money or paying dividends, companies whose wealth was entirely based on infusions of cash from the stock market which in turn were based on the belief that others would buy the stocks and so on. In other words, we believed that something out of nothing was possible, and anyone who didn’t believe it was a chump. It’s exactly what people believed during the other great inflations of history.What’s more, we believed that buying these stocks constituted not consumption, but savings for the future. In fact, people routinely attacked official savings data on grounds that they did not include what people were “saving” in terms of their stock market accounts. In a similar way, people were measuring our national wealth not in terms of accumulated capital, but rather through consumption data, as if granite kitchen counters in bigger houses were a measure of wealth instead of the opposite: the depletion of wealth.The left is big on attacking the salaries of investment bankers, and they were indeed outlandish. But these too represented not a unique problem, but more evidence of inflationary finance.
In a bubble economy, the money chases what is most fashionable, and financial services qualified. So the salaries were market. What was wildly distorted was the market itself.Now let’s talk about government finance during these years. The market tried to correct itself from 1999-2001, but the U.S. government wouldn’t tolerate it. Instead, it used every sign of downturn as an excuse to keep the illusion going, creating billions and billions in new dollars. The Fed drove interest rates lower and lower despite the non-existence of savings available to back them up.(Low interest rates in a sound money system are a reflection of accumulated capital and deferred consumption. When you see the Fed pushing them down during a boom, it is creating a dangerous mirage.)Did anyone stop and wonder where the government was getting all this money to pump up the system?
We are talking about human nature: the desire to believe in things that do not exist. The government was happy to fuel this sense because it gave the Fed, its connected industries, and the state more power and more money in the short term.
Madoff’s scheme played into the belief that wealth was not something to work for, but something to scheme for. It could be generated by playing your cards right, hooking into the right networks, and finding the right “investments.” The people with whom he dealt had, it turns out, some internal sense that there was something a little bit shady about the whole operation. But they dispensed with this sense when the fat checks arrived, and concluded that whatever was making this perpetual motion machine operate, it did work.But listen: the government right now is using the same tactic to convince you that it is saving you from the recession. The whole scheme partakes of the same sense of denying reality that characterized Madoff’s scheme. And I’m not just talking about Social Security, which is almost an exact replica of the Ponzi version, except that at least Charles Ponzi didn’t force people to give him money. I’m speaking of something broader. The entire financial system that is propped up by the Treasury and the Fed is based on the same idea: that something out of nothing is possible.
So they will jail Madoff. Wall Street would flog him if it could. He is disgraced for all of history. But meanwhile, the likes of Bush, Bernanke, Paulson, Obama, and all the rest are still riding high, even though their scheme is far larger and more egregious.Most of us like to believe that we wouldn’t have been tricked by Madoff. But are you being tricked by the elites who claim that they can conjure up a trillion dollars to stabilize our economy by clicking a few buttons on a computer screen? Most people are. Certainly the press seems to have bought it. Many people were outwitted by Madoff. Many more people are today being outwitted by the government and its central bank. And it will all end in disgrace and disaster, only on a far, far grander scale.

اسطورة الحذاء

2008-12-23T12:48:00.000-08:00

مت إن أردت فلن يموت إباء مادام في وجه الظلوم حذاءُماذا تفيدك أمة مسلوبـة أفعالها يوم الوغــى آراءلحِّن أغاني النصر في الزمن الـذي هزَّ الخصورَ المائساتِ غنــاءُواصنع قرارك واترك القوم الأُلــى لا تدري ما صنعت بهم هيفـــــاءُ
هذا العدوُ أمام بيتكَ واقــفٌوبراحتيهِ الموتُ والأشـلاءُفاضرب بنعلكَ كل وجهِ منافق'فالمالكيّ' ونعل بوش سـواءُ
ماذا تفيدكَ حكمةٌ في عالـم قد قال: إن يهوده حكمـاءُفابدأ بما بدأ الإلهُ ولا تكـن متهيباً، فالخائفون بـلاءُواكتب على تلك الوجوهِ مذلـة فرجالُ ذاك البرلمانِ نسـاءُصوِّب مسدسك الحذائيّ الـذي جعل القرار يصوغه الشرفاءُ
إن أصبح الرؤساء ذيلَ عدونـاخاض الحروبَ مع العدى الدهماءُعبِّر، فأصعب حكمةٍ مملـوءةبالمكرمات يقولها البسطـاءُلله أنت، أكادُ أقسم أنهلجلال فعلك ثارت الجوزاءُ
كيف استطعت وحولك الجيش الذي بنفاقه قد ضجّت الغبــراءُ؟كيف استطعت وخلفك القلب الـذي ملأت جميع عروقه البغضـاءُ؟كيف استطعت وفوقك السيف الـذي ضُربت بحد حديده الدهماءُ؟
سبحان من أحياك حتى تنتشـيمما فعلت الشمس والأنواءُلك في الفداء قصيدة أبياتهــاموزونة ما قالها الشعـراءُ
في وجهك الشرقيُّ ألف مقالـةٍ وعلى جبينك خطبةٌ عصماءُولقد كتبتُ بحبر نعلك قصة في وجه 'بوش' فصولها سـوداءُولقد عرفتَ طريق من راموا العلا فهو الذي في جانبيه دماءُفسلكته والخائنون تربصوا ماذا ستبصر مقلةٌ عمياءُ؟
جاءتك أصواتُ النفاق بخيلهـاوبرجلها، يشدو بها الجبنـاءُلا يعلمون بأن صوتك آيـةللعالمين، وأنهم أوبـاءُلو صَحْتَ لاهتز البلاطُ بأسرهوتصدّعت جدرانه الملسـاءُأوَما رأيت الراية السوداء فيظهر الجبان تهزها النكباءُ؟أو ما لمحت يد الدعيّ تصدهـاشلت يمينك أيها الحرباءُلما وقفتَ كأن بحراً هـادراًفي ساعديك وفي جبينك ماءُلما نطقتَ كأن رعدا هائـلاًفوق الحروف وتحتهن سمـاءُلما رميتَ كأن من قد عُذبـواأحياهم الله القدير، فجاءواشيء تحطم في ضميرٍ مظلـمٍكبِّر فقد تتفتت الظلمـاءُ
علّمت دجلة أن فيها موسمـاً للموت تفنى عنده الأشيــــــاءُعاهد حذاءك لن يخونك عهده واتركهمُ ليعاهدوا من شاءواإن صار لون الحقد فينا أحمـراً ماذا تفيد دوائرٌ خضـراءُ؟لا لون في وجه العدو فروِّه بدمائه، فدماؤه حمراءقد كنت غضاً أيها النمر الـذي جعل المروءة تصطفيك الباءُ
ما خفت حولك ألف وغد نـاعموالناعمات تخيفها الأسمـــاءُ
لو ضُخّ بعض دماك في أوصالنا ما كان فوق عروشنا عمـــلاءُيا سيدا عبث الزمان بتاجـه اعتق خصومك، إنهن إمـــاءُ
واصنع حذاء النصر وارمِ به الذيتلهو به وبقلبه الأهــــــــــواءُلما انحنى ظهر الظلوم تنكّسـتمليون نفس باعها الأعــــداءُوسمعت تصفيق السماء كأنمافوق السماء تجمّع الشهـــداءُقف أنت في وجه الظلوم بفـردةٍبنية، فالقاذفات هـراءُوارشق بها وبخيطها الوجه الذيغلبت عليه ملامح بلهــاءُ
أفديك من رجل تقزّم عنـده الرؤساء والكبراء والأمـــراءُأفتَيْتَ بالنعل الشريف فلم نعــد نصغي لما قد قاله العلمــاءُأحييت خالد في النفوس فصار في أعماقنا تتحرّك الهيجـاءُما كنت قبل اليوم أعلم موقنـا أن الحذاء لمن أســـــــاء دواءُ
وبأن في جوف الحذاء مسدسـاًوبأن كل رصاصنا ضوضاءُ

ما كنت أعرف للحذاء فوائـداًحتى تصدّى للذين أسـاءوا

Madoff The American Hero

2008-12-18T12:38:00.000-08:00

The press...investors...regulators...they’re all howling for Bernie Madoff’s head. Of course, I wouldn’t mind if they lynched him. Still, he’s a hero to me. He’s the Rod Blogojevich of money – showing us how the system really works. He’s opened a window on the financial world...giving us all a remarkable and vivid lesson...in investing...in pyramid schemes...in the markets...and in Wall Street.
As a result of such eye-opening instruction, Bernie Madoff will save more investors more money than the SEC ever will. They’ll think twice before giving money to friends to invest for them... They raise their eyebrows and their doubts when someone promises them consistent high rates of returns.The feds are charging Madoff with running a $50 billion Ponzi scheme. Charles Ponzi took money from investors and then used their money to pay out profits to earlier investors. As long as the new money kept coming into the system, it worked like a charm. So what’s the difference between Madoff’s Ponzi scheme and the scheme run by Wall Street...in which all the investment houses, the rating agencies, the mortgage companies, Fannie Mae, Freddie Mac and the regulators themselves were complicit? As long as new money was coming into the system, who complained?
First, let’s look at what is happening on Wall Street now. Yesterday, the markets had a chance to connect the dots...to think more about what Ben Bernanke is up to...and what it will mean.You’ll recall that the Fed cut rates down to zero – effectively firing off all its monetary ammunition in one big salvo. Now, favored financial institutions – namely, the member banks of the Federal Reserve system – can borrow without paying any interest.That should get things moving, right? Well, not necessarily. Credit is frozen, not because it is too expensive...but merely because lenders are afraid they won’t get their money back. Asset prices are falling. So, the collateral that banks lent against is going down in price. Loans that looked solid six months seem dangerously leveraged today. It makes more sense just to hold onto the cash...at least it won’t declare bankruptcy or defraud you. And think about the people scammed by Bernie Madoff. How much are their loans worth? There are big names and little names on the list – including Japan’s Nomura Bank and France’s BNP Paribas. The big banks may be able to repay their debts. But what about the little fellows...the guys who put their entire net worth...perhaps a few million...with Madoff, in order to get his promised returns? That’s the problem with leverage. It works both coming and going. When an economy is growing...it acts like hot gas. Even a small amount quickly expands. But when a bubble springs a leak, the gas disappears. One man’s loss hits the balance sheets of businesses and bankers all over town. The whole system contracts. Suddenly, the whole thing is coming down like the Hindenburg. Which is exactly what is happening. Bloomberg reports that there is no sign of credit easing – despite the Fed’s efforts to give money away. Instead, everything is slowing down...shrinking...deflating:People aren’t buying new cars. So Chrysler says it will shut down its factories for a month. What began as a sleek Le Mans auto race becomes a demolition derby. Property prices in Detroit are getting wrecked. Suppliers to the auto-industry are being banged up. Unemployment in Michigan is rising to depression levels. People can’t even afford to buy the paper any more. The Detroit newspaper says that it will deliver only three times per week. There’s hardly a business or a household in the Detroit area that hasn’t been dented by the calamity. Meanwhile, California announced that it will put $3.8 billion worth of projects on hold. Goldman Sachs reports that its bonuses this year will be 80% lower than the year before. Bristol Myers says it will lay off 10% of its workforce; Yales’ endowment is down 25% and Mexico’s Cemex – one of the biggest suppliers of cement products in the world – says sales in this quarter are down 23%.And so it goes...day after day. Cutting back...reducing...downsizing....And you can imagine what this does to markets. Stocks shot up Tuesday on news of the rate cut. Wednesday, investors had time to reconsider; the Dow fell 100 points.
Now that Bernanke has run out of conventional weapons, investors are beginning to guess what happens next. In short: he’s gonna drop the big one. He’s going to go nuclear. He’s not going to stick with Keynes and Freidman, in other words; he’s gonna go Crazy.Yes, the Fed says it will now use “alternative” means of getting some juice in the economy. It will buy Treasury debt itself. This is what is known as “monetizing the debt,” or turning an increase in U.S. debt into an increase in the amount of currency in circulation. It’s a swell trick. If it works, Bernanke will be able to keep the rate of consumer price inflation above zero. He will probably try to get it well above zero – so as to encourage people to spend their money now, rather than wait for lower prices. The spending is supposed to be the magic that gets the consumer economy going again. We can look ahead and see that the Fed’s policy of going Crazy – effectively printing money – will be disastrous. I can guess, too, that gold will probably be the main – perhaps the only – beneficiary. The price of an ounce of gold rose $25 yesterday...putting it solidly in positive territory for the year. It could easily go over $2,000 before this crisis is over. But I don’t know exactly how...or when...it will happen. Right now, day after day, the dirty laundry from La Bubble Epoque is being unfolded...we never know what awful surprises we will find.
The latest reports say Madoff promised investors steady 13% returns. How could he do that? Of course, he couldn’t. Stocks have gone nowhere for the last 10 years. The average rate of return? Zero. Promising 13% was clearly a flim flam. But investors must have guessed that he was swindling his retail trading customers in order to deliver steady, above-market returns to his investment accounts. They may not have understood how it worked, but maybe they didn’t want to.
Nobody is as easy to scam as a scammer...and Madoff scammed them all. Bravo!Of course, Madoff should get the gallows; I don’t dispute it. But, often, there’s not a lot of distance between the hanged man and mob that is lynching him. The people who most want to see Bernie swing are the people who invested money with him. Most were very sophisticated investors. They knew perfectly well that there is no magic way to transform a zero-return market into a 13% return market. If they were to get 13%, they knew they had to take a big risk. In this case, the risk was that Bernie Madoff was lying. And what about the bubble economy itself? Wasn’t it nothing more than a giant pyramid scheme with a huge, huge risk attached? It promised speculators enormous profits, but how could it deliver? It paid out money from new participants to the old participants. Without new money and credit the thing would implode. As former Citigroup CEO, Chuck Prince, put it: as long as the music was playing, they had to dance. But didn’t they know the music would stop...leaving them in an awkward and embarrassing position? Wasn’t it as obvious to them as it was to us?And what about the investors? Weren’t they trying to get something for nothing out of the whole bubble economy? And the rating agencies? They must have known that sub-prime debt was dangerous. Even we knew it. Why did they give it Triple A ratings? And what about the SEC? It has thousands of smart analysts, accountants and investigators. How could they all be so stupid as to miss the biggest investment bubble in all history...right under their noses? And what about Alan Greenspan, who actually encouraged households to take out sub-prime mortgage loans?Weren’t they all in on the scam? Weren’t they all complicit? Bernie Madoff should hang. But SEC chairman Christopher Cox and former Fed chief Alan Greenspan should hang with him.

The Biggest Fraud Of All : U.S.Treasuries

2008-12-16T14:11:00.000-08:00

In fact, given the hundreds of billions that Wall Street has fleeced investors for in cases of fraud that are astounding not only in dollar size, but in the duration they run for before they collapse under the weight of their bloated treasuries.
Enron, Tyco, and Worldcom are certainly the household corporate words for fraud on Wall Street. Combined, the estimated take from those three scams was a total of $121 billion in total damages.
But hedge funds are collapsing so fast that they number in the dozens every week, and fully one third of the $1.5 trillion asset class is expected to go up in smoke within the next 24 months, dwarfing the carnage of corporate fraud.
Now along comes Bernie Madoff.
Madoff's take of $50 billion demonstrates unequivocally that the entire investment industry is essentially one big confidence game, where appearances mean everything and substance is hard to come by. Listening to the petulant indignation emanating from the victims of that fraud who were "professional" investors elicits little sympathy from a public who watches helplessly as the Fed continues to pump taxpayer-backed dollars into the accounts of the biggest financial institutions. That wouldn't be so bad if we saw some of that cash making its way down into the broad economy, but so far there is absolutely zero evidence of that happening.
Madoff's fraud, improbable as it may seem, brings to mind another massive financial institution that, if the same standards of evaluation were to be applied as to Madoff, would most likely reveal another Ponzi scheme in progress.
A "Ponzi Scheme" is one where early investors are paid non-existent "profits" with the money brought in by new investors. Ponzi schemes always collapse when no more investors can be enticed into the scheme, and payouts stop. This is exactly what happened in the Madoff case, and unless I am very much mistaken, this is what is happening at the United States Treasury right now, with its accomplice, the United States Federal Reserve.
Technically, the Fed prints money when the Treasury issues it a check that it back with the sale of T-Bills. The treasury bills theoretically attract buyers because the revenue generated from taxes as a percentage of GDP are sufficient to justify the number of T-Bills in circulation. If the U.S. Economy was a corporation, T-Bills would be shares in the company, and all of the infrastructure and profit-generating businesses in the United States would be its assets, and the taxes generated across the whole operation would theoretically comprise the corporation's revenue.
In Bernie Madoff's case, the fan was hit with the proverbial excrement when he ran out of new investors, and some old investors wanted to withdraw $7 billion of their money. Bernie ran around Wall Street for a couple of weeks before he realized the jig was up, and he and his two sons concocted a strategy whereby they would turn him in, hopefully thwarting the boys being swept up in the inevitable incarcerations just on the horizon.
Now if Bernie was the United States Treasury, and his sons were the U.S. Federal Reserve, he could have simply called his boys and said, "Look boys…send over $7 billion right away, will ya?" The boys, being family, would have certainly wired the funds over to Bernie, and Bernie could go on his merry way, attracting a growing crowd of innocent (hah!) investors, and paying them off with his sons' printing press. In this case, investors would continue to pile in, and Bernie could keep writing checks to his sons and issuing shares to his victims, because at no point was anybody going to say "Whoa boys! Lets take a look at them books!"
And that's because if Bernie was the U.S. Treasury, and his sons the Fed, everybody who might want to take a peak at the balance sheets already pretty much knows what they'd find there: the ashes of the U.S. economy. Baffed out and beaten, repackaged and resold in a trillion different ways, such that there is no way the entire productivity and asset base of the United States now and for decades to come, could ever justify the trillions upon trillions of dollars worth of shares the massive Ponzi scheme that is the United States has put into circulation.
Nobody wants the illusion to end. Especially not its biggest shareholders - Japan, China and the U.K. For if their own treasuries are based substantially on the fragrant paper originated by the United States government, well then what does that say about the value of the bonds they issue to justify the quantity of their own currency in circulation?
When considered in this light, its no wonder the world's central banks act on a concerted basis to suppress the price of precious metals. For it the metals were allowed to trade freely against these currencies of falsely inflated value, then the market would quite likely demonstrate what it thinks about those currencies by trading them in for gold - a process now underway on the fringe where wise men looking through the fog of deception that is the media, are moving as nonchalantly as possible for the exits of U.S. investment

اضربه بالحذاء

2008-12-15T10:04:00.000-08:00

اضربه اكرمت العراق بضربه.حتى الحذاء ابى يقبل خدهارجعتني للعز من بعد الغيابورفعت رأسي عاليا فوق السحاب.اضربه يا ابن الفرات،،اضربه يا ابن العرب.اضربه حتى نستريح.اضربه قد طال التعباضربه حتى يستفيق ابن البغيضهذا المغولي الشعوبي المريضهذا الذي بجنوده قتل النساءهذا الذي تلعنه اديان السماءهذا الذي لايستحق سوى الحذاء

نشاطركم العزاء by عبدالرحمن الشهيب

2008-11-14T18:20:00.000-08:00

اخوتي الطلبة والطالبات أشاطركم العزاء في بداية العام الدراسي الجديد، عام من أعوام « احفظ وانجح» أعزيكم ونظامنا التعليمي لا يبارح التلقين والتكرار يفهم الشطار! معلومات مكررة ومقررات ثقيلة ومستقبل وظيفي مجهول! أعزيكم في مبانيكم المستأجرة! وهل أصلحت المكيفات المكسرة والصنابير المعطلة وهل لديكم ماء بارد يكفيكم! وأعزيك يا من كان فصلك في المقلط! ربما كنت أوفر حظاً ممن كان فصله في المطبخ.! لن أسألكم ما هي سنة صنع كمبيوتراتكم ولن أسألكم عن مساحة ملاعب مدرستكم لأني أتيت هنا لتقديم مراسم العزاء فقط!مطلوب من وزارة التربية والتعليم أن تستفيد من الطفرة الاقتصادية التي تعيشها المملكة حالياً وتبني كامل مدارسها بمبان نموذجية وأن لا ترتكب غلطة وزارة المعارف في الثمانينات حينما لم تستفد من فوائض الميزانية حينها فانتهت مدارسنا في مبان مستأجرة كحيانة. أعزي أولياء الأمور على أقساط المدارس الأهلية التي تقص الظهر وهي لا تختلف عن المدارس الحكومية إلا في حمامات نظيفة، ومقدرة ولي الأمر على مقابلة مدرس ابنه!
أعزي معلمينا ومعلماتنا السعوديين في المدارس الأهلية وما يعانونه من رواتب زهيدة وأعباء ثقيلة وسوء تعامل، وأعزي معلمة رياض الأطفال السعودية التي ستسلمها مشرفة الروضة (غير السعودية) فصلا من جدران فقط لتقوم بتأثيثه بميزانية باهظة من جيبها وهي بعد لم تستلم راتبها الزهيد والروضة استلمت 18 ألف ريال رسوما سنوية عن الطفل الواحد وقبول مع حب الخشوم! ووزارة العمل تكاد تطبق مقولة « لو أن خادمةً عثرت في العراق!» ووزارة التربية والتعليم وعدت في وقت سابق بأنها ستلحق بكل مدرسة ابتدائية للبنات روضة أطفال لأهمية هذه المرحلة ولكنها وعود طارت مع وعود أخرى، والسعوديون عموماً لا يأبهون لمرحلة الروضة مع أنها هي المرحلة التي تتشكل فيها أذهان أطفالهم. أعزي اخواننا واخواتنا الطلبة والطالبات الذين لم تقبلهم الجامعات السعودية وأقول لمديري الجامعات في المملكة لكم في مصر الشقيقة عبرة، مصر ذات السبعين مليون مواطن والستة ملايين عاطل، مازالت تقبل كل الطلاب المصريين حتى أصحاب معدلات 59% و60%..... هذه المعدلات التي أحس أن ثانوياتنا لم يعد يتخرج منها أحد بهذه النسب. لم يتحججوا في مصر الشقيقة بأن المقاعد شحيحة! ولم يتحججوا بأن خريجي الكليات النظرية هم سبب البطالة! هل كانت خريجة الـ 99% بحاجة إلى فزعة جريدة (اليوم) لكي تقبلها كلية الطب في جامعة الملك فيصل؟لي أصدقاء عملوا في إدارة جامعات محلية يقولون ان جامعاتنا تستوعب أعداد طلبة أكبر ولكن تعنت مسئولي الجامعات السعودية يحول دون قبول أعداد أكبر.
وجود أبنائنا في الجامعات في هذه السن الحرجة من 18إلى 22 سنة ضروري جداً ويحميهم من مغبات الانحراف في الإدمان أو الإرهاب، القهر والظلم الناتج من التبطح في القهاوي والملاحق قد يؤدي إلى مزالق كثيرة. أن يستطيع الشاب أن يرفع رأسه أمام ملاقيف المجالس ويجاوبهم حينما يسألونه أين يدرس فيخبرهم باسم جامعته بكل اعتزاز فهذا يحمي شبابنا وبلادنا من المهالك. أقول لمديري الجامعات في المملكة اقبلوا الطلبة والطالبات بأي معدلات لأن مقابل حيطان المنزل عاقبته وخيمة ولا تصدقوا أن خريجي الكليات النظرية هم سبب البطالة فالبطالة طالت خريجي جامعة الملك فهد للبترول والمعادن، سبب البطالة في المملكة هي عدم تطبيق سياسات الحد الأدنى للأجور المعمول بها في أوروبا وأمريكا وبدونها لن يكون هناك قضاء على البطالة في المملكة، وأبناؤنا لن يعملوا سفرجية شاءت وزارة العمل أم أبت.
الجامعة للتعلم وليست للوظيفة فقط والأرزاق بيد الله، دعوا أبناءنا وبناتنا يدرسون علم نفس فعلى الأقل يعالجون المرضى النفسيين الذين يملأون المجالس والمقاهي ودعوهم يدرسون الأدب فما قيمة أمة بلا أدب ودعوهم يدرسون التاريخ فالتاريخ وحده هو الذي يخبرنا كيف تنهار الأمم، المهم لا تجعلوا أبناءنا وبناتنا ينهارون وحدهم بين الحيطان ينهشهم الفراغ والقهر والموت، ثم لا نستطيع أن نقدم لهم سوى العزاء!

What Went Wrong ?

2008-11-11T19:12:00.000-08:00

Finally there is a 100% consensus between economists, experts, journalists, and government officials that restoring interbank lending will restore the stability of the financial system and will reignite economic growth. Too bad, the consensus has gotten again all wrong. This is a pure myth and nothing can be further from the truth.
The grim reality is very different and already forgotten. The reality is that most markets for the majority of financial instruments have collapsed completely and reviving interbank lending will not resurrect any of those markets. In other words, resolving the problem of interbank lending will not help the economy in any way. It is like an air balloon that has deflated and we desperately need to reflate it again with helium, but we are told that even ordinary cold air will lift it off the ground; since the balloon is stubbornly stuck on the ground, we are told we simply need more air!
I offer little new here, but a precious history of how the tentacles of the Credit Crisis are reaching more and more segments of the financial markets. No amount of interbank lending will recover meaningfully most segments from the firm grip of those tentacles.

The Causes of the Financial Crisis
I do not attempt to explain the fundamental causes of the current Credit Crisis. No doubt that in coming decades tomes will be written on the subject. Nevertheless, the basics are simple – America borrowed and spent for decades driving its savings rate to nil, while printing trillions of dollars in attempt to sustain the (unsustainable) global imbalances caused by its own profligacy and saddling the rest of the world with trillions of bad debt.

The Trigger of the Financial Crisis
The trigger of the crisis can be attributed to the decreased confidence in the markets for mortgage-backed securities following the August 2007 collapse of two Bear Stearns' hedge funds that were heavily exposed to subprime mortgages. Resetting of teaser rates and adjustable-rate mortgages triggered an avalanche of defaults. Once default rates started rising, many institutional investors, both U.S. and global, began to realize that the MBS's and CDO's in their portfolios might not be worth what they initially thought. Investment banks, insurance companies, mutual funds, and hedge funds alike began recognizing losses related to their holdings of mortgage-backed securities. Confidence was shaken. Margin calls forced further liquidations of those mortgage-backed securities, but as few were standing ready to buy, prices dropped even further, invoking even more margin calls. It was a death-spiral. The resulting losses just went snowballing. As a result, the markets for those structured financial products froze up and liquidity suddenly dried up. The Credit Crisis reared its ugly head.

1. Subprime Mortgages
The first indicator signaling the Subprime Meltdown surfaced in February 2007 “when scores of mortgage originators went bust amid rising defaults and tightening lending standards” . In mid-June, a second significant sign of financial collapse became evident as two CDO-focused Bear Stearns hedge funds blew up. Those hedge funds were too big and distracted investors' attention from another smaller in proportions, but still significant bankruptcy - California based brokerage firm Brookstreet Securities. This was the early beginning of the crisis.
In the second week of July 2007, Moody's and Standard & Poor's announced downgrades on billions of bonds backed by subprime mortgages. Though the downgrades did not reveal the unsoundness of the bonds, it signaled the demise of the Ponzi mortgage investment market backed by inflated real estate.
In early August the looming Credit Crunch could already be felt. Several of Wall Street's biggest foreign customers announced enormous losses on their holdings of mortgage backed securities. Once the “teaser rates” began to reset, mortgage defaults spiked. Foreign investors realized that the bond collateral fell short of the bond principal, in banker-speak, the LTV exceeded 100%. Home equity vanished and mortgage payments shot up. Dwindling foreign lending was a sure sign of the impending crisis.
At the end of August many financial institutions began to sense the looming disaster. Calls for various government bailout schemes for homeowners were only meant to bail the lenders out. Amidst the unraveling of the subprime crisis, the Fed responded by aggressively cutting interest rates. However, tightening lending standards, widening credit spreads, and rising down payments exacerbated default rates and mounted further losses for the Leveraged Speculator Community, aka, hedge funds. A common sense of mistrust gripped the markets. Confidence evaporated, and so did liquidity. The subprime market was terminally ill – no amount of Fed cutting and liquidity injections could ever possibly revive it again! This market has been dead for more than year.
2. Jumbo Mortgages
With the meltdown of subprime mortgages, the tentacles of the Credit Crunch began to take firm hold of other sectors of the financial system. The next victim was the market for jumbo mortgages – mortgages of high denominations, technically above $417,000 at the time. Further tightening of lending standards and more realistic perceptions of the underlying risk of those mortgages basically froze the market for Jumbo MBS. The major force behind the inflating California and Florida real estate bubbles was inanimate. Now these markets were set for a spectacular bust; the government's attempt to resurrect the Jumbo market (by raising the limit to $730,000) miserably failed. This market has been comatose for well over a year and jumbo rates remain stubbornly high. No amount of liquidity or interbank lending will revive the Jumbo market any time soon!
3. Home Equity loans
With dying subprime and jumbo markets and tightening mortgage credit, something that for decades was believed impossible, suddenly became inevitable -- real estate prices began to fall. As a result, the tentacles of the credit crisis snatched another victim -- Home Equity Loans and Home Equity Lines of Credit (HELOCs). These loans, commonly referred to as “second mortgages”, allow homeowners to borrow against the value of their home equity to finance a range of expenditures, such as medical bills, home improvements, college tuitions, and well-deserved vacations. The market quickly degenerated with rapidly deteriorating LTV ratios and skyrocketing number of “underwater” mortgages. Consumers fell behind on those loans at the highest level in 15 years. No more refis for consumers who already extracted the last drop of equity. With real estate prices falling, there was equity no more, With equity gone, so were the home equity loans. We can safely say that home equity loans are now a thing of the past and no amount of government stimulus and interbank lending will revive this market for many years!
4. SIVs and Conduits
Structured investment vehicles (SIVs) played a crucial role in the historic expansion of credit. A brainchild of ingenious financial engineers, large investment banks created and sponsored these entities. They invested largely in ABSs and MBSs that were manufactured primarily by the same large investment banks. To finance these investments, they issued investment-grade commercial paper and structured notes to investors around the world. This scheme allowed large financial institutions to remove a major portion of their risk exposure off their balance sheets, while at the same time “consolidating” any profits that resulted from the SIV operations. To put it in simple terms, they kept the profits on the balance sheet, but kept the risk off the balance sheet. This was the ultimate game in finance – return without risk, converting junk into AAA, turning led into gold – this was the Magic of Wall Street, the Alchemy of Finance.
However, with SIVs and Conduits loaded up with subprime, it was only a matter of time before this alchemic dream would turn into an ugly nightmare. Rising defaults and falling real estate prices shook investors' confidence. A series of downgrades inflicted grave damages. Some very risk-averse investors reaped distressing losses. Many risk-averse pension funds and university endowments relied on the AAA ratings and treated the securities as higher-yielding alternatives to safe money-market instruments. Repricing of ABS and MBS resulted in major writedowns for those SIVs and magnified the losses of their leveraged investors. Yet another victim fell into the tentacles of the Credit Crisis. As Doug Noland has pointed out so well, “the collapse of structured investment vehicles has proven to be the ultimate failure of Wall Street Finance in its attempt on risk intermediation between highly risky mortgage-backed securities and perceived safe and liquid money market instruments”. Today, it is accepted that Alchemy doesn't work, and that SIVs were hoped to do just that -- convert led into gold. The reality is that no amount of interbank lending and liquidity injections will do that.
5. CDOs
Some of the most pervasive exposures of leveraged financial institutions have been related to CDOs backed by subprime debt. This was another creature of mad financial engineers that was destined to fall in the tentacles of the Credit Crisis. It was meant to pool dodgy debt that with proper slicing and dicing would magically turn into a AAA-asset; it turned led into gold.
The bulk of the colossal losses of large investment banks, brokerage firms, hedge funds, and other financial institutions have been related to write-downs of CDOs. Their demand stalled as some top-rated classes of mortgage-linked CDOs lost their entire value amid surging foreclosures. Series of CDO downgrades by credit rating agencies led to enormous losses for investors around the world. Top-rated CDO tranches were devalued in late October 2007 due to expectations of excessive future losses from jumbo mortgages, Alt-As and option ARMs. Following the collapse of the two Bear Stearns hedge funds that were heavily invested in subprime CDOs, the CDO market has suffered severe illiquidity and lack of confidence. In late January Merrill Lynch CEO John Thain asserted that “[The company is] not going to be in the CDO and structured-credit types of businesses”. Since then the market has been for all practical purposes dead. It is dead because the underlying assets (jumbo, Alt-A, option ARMs) were never creditworthy in first place. No amount of liquidity injections and interbank lending will make the underlying instruments more creditworthy than before, and therefore cannot resurrect this financial instrument.
6. Commercial Paper
The familiar notion of borrowing short and lending long has come into question since the Credit Crisis began. Thousands of financial institutions have previously met their demise as a result of a maturity gap. Most of the companies engaged in this business were issuing commercial paper backed by MBSs or CDOs. With the unfolding of the crisis, questions about the value of the underlying collateral became ever more pervasive and eroded confidence. As a result, the market for commercial paper (CP) has fallen into the tentacles of the Credit Crisis. The first to experience the difficulties were the investment banks, then the commercial banks, and later other financial institutions. The difficulties spread even to the best investment-grade industrial corporations. As of April 11, 2008 total outstanding commercial paper has contracted by 11.4%. This market is not dead, but on life support, as the Fed has directly intervened to monetize commercial paper. Indeed, this market desperately needs the life support by the Fed in order to stay alive. By monetizing CP, the Fed has become the Lender of Last Resort for major corporations.
7. Private-Label MBS
The market for private-label MBS, which has been central to the creation of easily-available cheap credit, has suffered from a severe liquidity seizure, falling into the tentacles of the Financial Crisis. By securitizing mortgage loans, Wall Street was able to provide endless amounts of credit to homebuyers and homeowners, which led to the inflation of a real estate bubble of extreme proportions. Escalating home prices, in turn, made it possible for mortgage lenders to extend even more credit to borrowers with questionable credit history, without having to worry about being repaid, On the way up, it was a well-oiled Ponzi scheme; on the way down – an unmitigated disaster. The scheme depended crucially on rising real estate prices; once the prices stagnated or began to fall, no amount of liquidity injections or interbank lending could potentially revive this market.
8. Leveraged Loans
The loan market for Private Equity and Leveraged Buyouts (LBOs) is not functioning. Those loans that finance Private Equity deals or LBOs are known as “leveraged loans”. The tentacle of the credit crisis has gripped this market too. As the real economy has suffered a serious slowdown and plunges into a recession, the rate of corporate bankruptcies has been soaring. As a result, in October 2007 some of the major banks, such as Bank of America, Citigroup and JP Morgan, had to write down $2.5 Billion in loans for LBOs. These losses prompted most of the big players to slash their LBO loans. Some estimates indicate that only the very best deal can possibly get any financing; the volume has fallen almost 10 times. With an economy in recession, no amount of liquidity injections and interbank lending can revive this market.
9. Alt-A Mortgages
The Alt-A mortgage sector has not escaped the tentacles of the credit crisis. In a manner quite similar to Subprime and Jumbo mortgages, this market has slowed to a trickle. However, with the nationalization of the GSEs, the government is attempting to revive this market by forcing the GSEs to purchase more of these mortgages. As the GSEs themselves are now “owned” and guaranteed by the Treasury, this is tantamount to the Treasury buying up Alt-A mortgages. Given that the Treasury itself is financed mostly through monetization of the Fed, the ultimate effect is that this market is supported, just like the commercial paper market, with the printing press. The economic interpretation is that of a classic government subsidy financed by an inflation tax – redistributive, inefficient, and replete with moral hazards that sets up the system for a spectacular blowup down the road.
10. Prime Mortgages
The next victim in the tentacles of the Credit Crisis became the prime mortgages. Already in deep trouble, the financial system damaged even its healthiest credit market instrument. Reacting to the defaults in subprime and Alt-A mortgages, investors were compelled to manage risk more carefully. Practically, all sorts of loans became inaccessible for any borrower. This dried the liquidity, further causing huge bankruptcies of the borrowers who cannot refinance their loans. The prime residential mortgage market has been revived with the spectacular “bankruptcy” and subsequent nationalization of the GSEs, backed directly by the Treasury and indirectly by the Fed.
11. Commercial Mortgages
The commercial mortgage market has been practically frozen for many months. As the debacle in subprime, jumbo, Alt-A, and prime mortgages has unfolded, investors turned their attention to commercial mortgages. Over time, it became clear that investing in commercial mortgages is fraught with risk. The first obvious risk was overvaluation. The second obvious risk was a decelerating economy. The evolution of the Credit Crisis introduced a well-forgotten type of risk – liquidity risk. Investors saddled with heavy losses from other mortgage instruments decided to withdraw and stay on the sidelines. This, coupled with shaken confidence was enough to choke this market. Risk premiums have skyrocketed as the perceived risks of commercial mortgages have realigned with reality. Recession has exposed the fundamental weaknesses of many projects. The private sector wants none of this market. The Credit Crisis has extended its tentacles to commercial mortgages. No amount of liquidity injections and interbank lending can revive this market; only a direct intervention by the Treasury can do the trick.
12. Auction-Rate Securities
An auction-rate security is technically a debt instrument, typically a municipal bond, with a long nominal maturity, for which the interest rate is regularly reset through an auction, usually on a weekly basis. One economic interpretation of this concept is that of a fund borrowing with low short-term interest rates and lending to long-term municipal bonds, passing on the low interest rate to the municipal borrower. The other economic interpretation is that illiquid municipal bonds are securitized and transformed into liquid securities that are regularly traded at auctions. As deleveraging tightened its vice grip on the credit market in February 2008, liquidity evaporated from the credit system and the auction-rate securities suddenly crashed out of the blue. It was another nail in the coffin of Wall Street Structured Finance and another victim in the tentacles of the Credit Crisis. This market has been dead for half a year and nothing short of extraordinary amount of liquidity coupled with government guarantees has the potential of reviving it.
13. Corporate Debt
The Credit Crisis has extended its tentacles to the corporate bond market. Credit spreads of investment-grade corporate bonds have been steadily rising and are much higher than even two months ago. Credit spreads for junk bonds have surged from 650 basis points at the end of September 2008 to 950 basis points at the beginning of November. Yes, credit is available to corporations, but the cost is becoming prohibitive. The tentacles have reached the corporate market and are beginning to strangulate it. Just like the market for auction-rate securities, this market desperately needs a torrent of liquidity to overcome the strangling tentacles. A Bloomberg story from October 31 tells the sorry tale of this market: “Corporate debt markets in the U.S. and Europe endured their worst month as the credit crisis spread beyond financial firms to industrial companies amid the prospect of a global recession. Corporate industrial bonds in October are set to post their steepest monthly loss on record, while the gaps between yields on those bonds and government debt soar by the most ever.”
14. Credit Default Swaps
The US monolines are on the verge of bankruptcy as more and more of the credit that they insure defaults. They initially encountered difficulties in the beginning of January 2008. Indices of corporate credit risk widened, showing that the tentacles of Credit Crisis have reached the corporate bond market. The price of credit protection soared.
The monolines staggered because some major insurers were downgraded as investors questioned their ability to perform. Investors' minds were suddenly preoccupied with another well-forgotten risk – counterparty risk. A vicious spiral gripped the monolines -- CDSs lost their attractiveness, resulting in less cash inflows for monolines, which in turn decreased their ability to provide adequate credit risk insurance, lowering in turn their ability to sell CDSs… And another victim fell prey into the tentacles of the Credit Crisis.
The CDS market has not collapsed completely. However, its imminent collapse will indirectly affect international finance. Inability to hedge with CDS will eventually destabilize the US financial system. Many corporate borrowers will be unable to borrow, which in turn will result in higher corporate defaults, and another vicious cycles will inevitably take hold of the financial system.
15. Letters of Credit
The tentacles of the Credit Crisis have recently taken another victim: Letters of Credit. A Bloomberg story from October 29 explains this ugly turn for the worse: the Credit Crisis spreads beyond the financial sector and into the real economy. Do you remember the good old days when Bernanke and Paulson assured us that the Credit Crisis is contained? Here is the Bloomberg story:
“Richard Burnett's lumber company had started loading wood onto ships heading for China. More was en route to the docks. It was all part of an order that would fill 100 40-foot cargo containers. Then Burnett got a call from his buyer at Shanghai VIVA Wood Products Co. The deal was dead. He told Burnett… he couldn't get a letter of credit to guarantee payment for at least six months. ‘It was like a spigot got cut off,' Burnett said… The inability of buyers in China and Vietnam to get letters of credit has cost his company as much as $4 million this year, a third of projected revenue, forcing him to lay off 15 of 35 employees, he said. Suppliers of oil, coal, grains and consumer products from Chicago to Mumbai are losing sales as the credit crisis spreads beyond financial institutions, and banks refuse financing or increase the fees for buyers.”
16. Credit Card Loans
In October 2008 another market has fallen into the tentacles of the Credit Crisis: the market for credit card loans. Credit card companies usually do not retain most of their credit card debt on their balance sheet; instead, they securitize it and sell it. The latest data from Dealogic indicates that the consumer-based securitization market has shrunk in October to $500 million from $50 billion previously. This means that the ability to securitize and sell consumer-based loans has fallen almost 100 times in one year. The implication is clear – credit card companies will be forced to cut consumers from credit card debt. This will bring the American consumer to his knees and means the end of the Consumer Economy. No wonder that in the last three months the media frequency of the word “Depression” has increased hundred-fold.

Going Forward
No amount of interbank lending and liquidity injections will revive most of the markets for various financial instruments. No amount of monetary and fiscal policy can resurrect genuine productive lending in the economy. The tentacles of the Credit Crisis have spread to every sector of the financial markets. The “Real Estate Economy” is dead; the “Financial Economy” is dead; the “Consumer Economy” is dying; and the “Service Economy” is dying. Enter the Depression Economy! Or shall I say, “Enter the Zimbabwe Economy”!?

Major Achievements Of The American Empire

2008-11-11T19:00:00.000-08:00

The failure of Bear Stearns
The failure of Lehman Brothers
The disguised failures of the Goldman Sachs and Morgan Stanley by converting to bank holding companies
Largest bank failures in US history (Washington Mutual, IndyMac)
Other banks merging and/or failing
The failure of Freddie Mac and Fannie Mae and their subsequent nationalization
The failure of AIG (yes, it is a failure otherwise the Government would not have had to step in and become essentially an 80% owner of the company)
Record foreclosures on residential properties
Record losses among many US companies
Rapidly rising personal bankruptcy filings
US Government bail out funding of $700 Billion
Federal Reserve’s creation of numerous “lending facilities”
Record depletion of reserves among the US banks
Direct tax payer funds being injected into the banks balance sheets
$150 Billion Stimulus bill and more to come
Rapidly increasing layoffs
Rising number of retail stores filing chapter 11 and others going out of business
Numerous mortgage companies closed up operations
Collapse of the credit system
Drastic declines in US home prices
The collapse of the economic systems of Iceland
The increasingly likelihood of entire nations becoming insolvent (Hungary, Argentina, Ukraine, etc)
Numerous Federal Reserve emergency rate cuts. And now an effective funds rate of near zero
The near bankruptcy of the major auto manufacturers (General Motors, Ford, and Chrysler)

The Bankers Behind The Economic Collapse

2008-11-09T18:58:00.000-08:00

Most Serious Economic Crisis in Modern History
The October 2008 financial meltdown is not the result of a cyclical economic phenomenon. It is the deliberate result of US government policy instrumented through the Treasury and the US Federal Reserve Board.
This is the most serious economic crisis in World history.
The "bailout" proposed by the US Treasury does not constitute a "solution" to the crisis. In fact quite the opposite: it is the cause of further collapse. It triggers an unprecedented concentration of wealth, which in turn contributes to widening economic and social inequalities both within and between nations.
The levels of indebtedness have skyrocketed. Industrial corporations are driven into bankruptcy, taken over by the global financial institutions. Credit, namely the supply of loanable funds, which constitutes the lifeline of production and investment, is controlled by a handful of financial conglomerates.
With the "bailout", the public debt has spiraled. America is the most indebted country on earth. Prior to the "bailout", the US public debt was of the order of 10 trillion dollars. This US dollar denominated debt is composed of outstanding treasury bills and government bonds held by individuals, foreign governments, corporations and financial institutions.
"The Bailout": The US Administration is Financing its Own IndebtednessIronically, the Wall Street banks --which are the recipients of the bailout money-- are also the brokers and underwriters of the US public debt. Although the banks hold only a portion of the public debt, they transact and trade in US dollar denominated public debt instruments Worldwide.
In a bitter twist, the banks are the recipients of a 700+ billion dollar handout and at the same time they act as creditors of the US government. We are dealing with an absurd circular relationship: To finance the bailout, Washington must borrow from the banks, which are the recipients of the bailout.
The US administration is financing its own indebtedness. Federal, State and municipal governments are increasingly in a straightjacket, under the tight control of the global financial conglomerates. Increasingly, the creditors call the shots on government reform.
The bailout is conducive to the consolidation and a centralization of banking power, which in turn backlashes on real economic activity, leading to a string of bankruptcies and mass unemployment.
Will an Obama Administration Reverse the Tide?
The financial crisis is the outcome of a deregulated financial architecture.
Obama has stated unequivocally his resolve to address the policy failures of the Bush administration and "democratize" the US financial system. President-Elect Barack Obama says that he is committed to reversing the tide:
"Let us remember that if this financial crisis taught us anything, it’s that we cannot have a thriving Wall Street while Main Street suffers. In this country, we rise or fall as one nation, as one people." (President-elect Barack Obama, November 4, 2008, emphasis added)
The Democrats casually blame the Bush administration for the October financial meltdown.
Obama says that he will be introducing an entirely different policy agenda which responds to the interests of Main Street:
"Tomorrow, you can turn the page on policies that put the greed and irresponsibility of Wall Street before the hard work and sacrifice of men and women all across Main Street. Tomorrow you can choose policies that invest in our middle class and create new jobs and grow this economy so that everybody has a chance to succeed, from the CEO to the secretary and the janitor, from the factory owner to the men and women who work on the factory floor.( Barack Obama, election campaign, November 3, 2008, emphasis added)
Is Obama committed to "taming Wall Street" and "disarming financial markets"?
Ironically, it was under the Clinton administration that these policies of "greed and irresponsibility" were adopted.
The 1999 Financial Services Modernization Act (FSMA) was conducive to the the repeal of the Glass-Steagall Act of 1933. A pillar of President Roosevelt’s "New Deal", the Glass-Steagall Act was put in place in response to the climate of corruption, financial manipulation and "insider trading" which resulted in more than 5,000 bank failures in the years following the 1929 Wall Street crash.
Under the 1999 Financial Services Modernization Act, effective control over the entire US financial services industry (including insurance companies, pension funds, securities companies, etc.) had been transferred to a handful of financial conglomerates and their associated hedge funds.
The Engineers of Financial Disaster
Who are the architects of this debacle?
In a bitter irony, the engineers of financial disaster are now being considered by President-Elect Barack Obama's Transition Team for the position Treasury Secretary:
Lawrence Summers played a key role in lobbying Congress for the repeal of the Glass Steagall Act. His timely appointment by President Clinton in 1999 as Treasury Secretary spearheaded the adoption of the Financial Services Modernization Act in November 1999. Upon completing his mandate at the helm of the US Treasury, he became president of Harvard University (2001- 2006).
Paul Volker was chairman of the Federal Reserve Board in the l980s during the Reagan era. He played a central role in implementing the first stage of financial deregulation, which was conducive to mass bankruptcies, mergers and acquisitions, leading up to the 1987 financial crisis.
Timothy Geithner is CEO of the Federal Reserve Bank of New York, which is the most powerful private financial institution in America. He was also a former Clinton administration Treasury official. He has worked for Kissinger Associates and has also held a senior position at the IMF. The FRBNY plays a behind the scenes role in shaping financial policy. Geithner acts on behalf of powerful financiers, who are behind the FRBNY. He is also a member of the Council on Foreign Relations (CFR)
Jon Corzine is currently governor of New Jersey, former CEO of Goldman Sachs.
At the time of writing, Obama's favorite is Larry Summers, front-runner for the position of Treasury Secretary.
Harvard University Economics Professor Lawrence Summers served as Chief Economist for the World Bank (1991–1993). He contributed to shaping the macro-economic reforms imposed on numerous indebted developing countries. The social and economic impact of these reforms under the IMF-World Bank sponsored structural adjustment program (SAP) were devastating, resulting in mass poverty.
Larry Summer's stint at the World Bank coincided with the collapse of the Soviet Union and the imposition of the IMF-World Bank's deadly " economic medicine" on Eastern Europe, the former Soviet republics and the Balkans.
In 1993, Summers moved to the US Treasury. He initially held the position of Undersecretary of the Treasury for international affairs and later Deputy Secretary. In liaison with his former colleagues at the IMF and the World Bank, he played a key role in crafting the economic "shock treatment" reform packages imposed at the height of the 1997 Asian crisis on South Korea, Thailand and Indonesia.
The bailout agreements negotiated with these three countries were coordinated through Summers office at the Treasury in liaison with the Federal Reserve Bank of New York and the Washington based Bretton Woods institutions. Summers worked closely with IMF Deputy Managing Director Stanley Fischer, who was later appointed Governor of the Central Bank of Israel.
Larry Summers became Treasury Secretary in July 1999. He is a protégé of David Rockefeller. He was among the main architects of the infamous Financial Services Modernization Act, which provided legitimacy to inside trading and outright financial manipulation.
Summers is currently a Consultant to Goldman Sachs and managing director of a Hedge fund, the D.E. Shaw Group, As former Treasury Secretary and his contacts on Wall Street, Summers had valuable inside information on the movement of financial markets. Under the helm of Larry Summers and as a direct result of the financial meltdown, the D. E. Shaw Group made record profits. At the end of October 2008, at the height of the financial meltdown, the Shaw Group announced $7 billion in revenue, a 22 percent increase over the previous year, "with nearly three times more cash on hand than a year ago" .
Putting a Hedge Fund manager (with links to the Wall Street financial establishment) in charge of the Treasury is tantamount to putting the fox in charge of the chicken coop.
The Washington Consensus
Summers, Geithner, Corzine, Volker, Fischer, Phil Gramm, Bernanke, Hank Paulson, Rubin, not to mention Alan Greenspan, al al. are buddies, they play golf together; they have links to the Council on Foreign Relations and the Bilderberg; they act concurrently in accordance with the interests of Wall Street; they meet behind closed doors; they are on the same wave length; they are Democrats and Republicans.
While they may disagree on some issues, they are firmly committed to the Washington-Wall Street Consensus. They are utterly ruthless in their management of economic and financial processes. Their actions are profit driven. Outside of their narrow interest in the "efficiency" of "markets", they have little concern for "living human beings". How are people's lives affected by the deadly gamut of macro-economic and financial reforms, which is spearheading entire sectors of economic activity into bankruptcy.
The economic reasoning underlying neoliberal economic discourse is often cynical and contemptuous. In this regard, Lawrence Summers' economic discourse stands out. He is known among environmentalists for having proposed the dumping of toxic waste in Third World countries, because people in poor countries have shorter lives and the costs of labor are abysmally low, which essentially means that the market value of people in the Third World is much lower. According to summers, this makes it far more "cost effective" to export toxic materials to impoverished countries. A controversial 1991 World Bank memo signed by of Chief Economist Larry Summers reads as follows (excerpts, emphasis added):
DATE: December 12, 1991 TO: Distribution FR: Lawrence H. Summers Subject: GEP
"'Dirty' Industries: Just between you and me, shouldn't the World Bank be encouraging MORE migration of the dirty industries to the Less Developed Countries? I can think of three reasons:
1) The measurements of the costs of health impairing pollution depends on the foregone earnings from increased morbidity and mortality.... From this point of view a given amount of health impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.
2) The costs of pollution are likely to be non-linear as the initial increments of pollution probably have very low cost. I've always though that under-populated countries in Africa are vastly UNDER-polluted, their air quality is probably vastly inefficiently low compared to Los Angeles or Mexico City. Only the lamentable facts that so much pollution is generated by non-tradable industries (transport, electrical generation) and that the unit transport costs of solid waste are so high prevent world welfare enhancing trade in air pollution and waste.
3) The demand for a clean environment for aesthetic and health reasons is likely to have very high income elasticity. [the demand increases when income levels increase]. The concern over an agent that causes a one in a million change in the odds of prostrate cancer is obviously going to be much higher in a country where people survive to get prostrate cancer than in a country where under 5 mortality is is 200 per thousand.... "
Summers stance on the export of pollution to developing countries had a marked impact on US environmental policy:
In 1994, "virtually every country in the world broke with Mr. Summers' Harvard-trained "economic logic" ruminations about dumping rich countries' poisons on their poorer neighbors, and agreed to ban the export of hazardous wastes from OECD to non-OECD [developing] countries under the Basel Convention. Five years later, the United States is one of the few countries that has yet to ratify the Basel Convention or the Basel Convention's Ban Amendment on the export of hazardous wastes from OECD to non-OECD countries. (Jim Valette, Larry Summers' War Against the Earth,Counterpunch, undated)
The 1997 Asian Crisis: Dress Rehearsal for Things to Come
In the course of 1997, currency speculation instrumented by major financial institutions directed against Thailand, Indonesia and South Korea was conducive to the collapse of national currencies and the transfer of billions of dollars of central bank reserves into private financial hands. Several observers pointed to the deliberate manipulation of equity and currency markets by investment banks and brokerage firms.
While the Asian bailout agreements were formally negotiated with the IMF, the major Wall Street commercial banks (including Chase, Bank of America, Citigroup and J. P. Morgan) as well as the "big five" merchant banks (Goldman Sachs, Lehman Brothers, Morgan Stanley and Salomon Smith Barney) were "consulted" on the clauses to be included in the Asian bail-out agreements.
The US Treasury in liaison with Wall Street and the Bretton Woods institutions played a central role in negotiating the bailout agreements. Both Larry Summers and Timothy Geithner, were actively involved on behalf of the US Treasury in the 1997 bailout of South Korea:
[In 1997] "Messrs. Summers and Geithner worked to persuade Mr. Rubin to support financial aid to South Korea. Mr. Rubin was wary of such a move, worrying that providing money to a country in dire straits might be a losing proposition..." (WSJ, November 8, 2008)
What happened in Korea under advice from Deputy Treasury Secretary Summers et al, had nothing to do with "financial aid".
The country was literally ransacked. Undersecretary of the Treasury David Lipton was sent to Seoul in early December 1997. Secret negotiations were initiated. Washington had demanded the firing of the Korean Finance Minister and the unconditional acceptance of the IMF "bailout".
A new finance minister, who happened to be former IMF and World Bank official, was appointed and immediately rushed off to Washington for "consultations" with his former IMF colleague Deputy Managing Director Stanley Fischer.
"The Korean Legislature had met in emergency sessions on December 23. The final decision concerning the 57 billion dollar deal took place the following day, on Christmas Eve December 24th, after office hours in New York. Wall Street’s top financiers, from Chase Manhattan, Bank America, Citicorp and J. P. Morgan had been called in for a meeting at the Federal Reserve Bank of New York. Also at the Christmas Eve venue, were representatives of the big five New York merchant banks including Goldman Sachs, Lehman Brothers, Morgan Stanley and Salomon Smith Barney. And at midnight on Christmas Eve, upon receiving the green light from the banks, the IMF was allowed to rush 10 billion dollars to Seoul to meet the avalanche of maturing short-term debts.
The coffers of Korea’s central Bank had been ransacked. Creditors and speculators were anxiously awaiting to collect the loot. The same institutions which had earlier speculated against the Korean won were cashing in on the IMF bailout money. It was a scam. (See Michel Chossudovsky, The Recolonization of Korea, subsequently published as a chapter in The Globalization of Poverty and the New World Order, Global Research, Montreal, 2003.)
"Strong economic medicine" is the prescription of the Washington Consensus. "Short term pain for long term gain" was the motto at the World Bank during Lawrence Summers term of as World Bank Chief Economist.
What we dealing with is an entire " old boys network" of officials and advisers at the Treasury, the Federal Reserve, the IMF, World Bank, the Washington Think Tanks, who are in permanent liaison with leading financiers on Wall Street.
Whoever is chosen by Obama's Transition team will belong to the Washington Consensus.
The 1999 Financial Services Modernization Act
What happened in October 1999 is crucial.
In the wake of lengthy negotiations behind closed doors, in the Wall Street boardrooms, in which Larry Summers played a central role, the regulatory restraints on Wall Street’s powerful banking conglomerates were revoked "with a stroke of the pen".
Larry Summers worked closely with Senator Phil Gramm (1985-2002),chairman of the Senate Banking committee, who was the legislative architect of the the Gramm-Leach-Bliley Financial Services Modernization Act, signed into law on November 12, 1999 . As Texas Senator, Phil Gramm was closely associated with Enron.
In December 2000 at the very end of the Clinton mandate, Gramm introduced a second piece of legislation, the so-called Gramm-Lugar Commodity Futures Modernization Act, which paved the way for the speculative onslaught in primary commodities including oil and food staples.
"The act, he declared, would ensure that neither the sec nor the Commodity Futures Trading Commission (cftc) got into the business of regulating newfangled financial products called swaps—and would thus "protect financial institutions from overregulation" and "position our financial services industries to be world leaders into the new century." (See David Corn, Foreclosure Phil, Mother Jones, July August 2008)
Phil Gramm was McCain's first choice for Secretary of the Treasury.
Under the FSMA new rules – ratified by the US Senate in October 1999 and approved by President Clinton – commercial banks, brokerage firms, hedge funds, institutional investors, pension funds and insurance companies could freely invest in each others businesses as well as fully integrate their financial operations.
A "global financial supermarket" had been created, setting the stage for a massive concentration of financial power. One of the key figures behind this project was Secretary of the Treasury Larry Summers, in liaison with David Rockefeller. Summers described the FSMA as "the legislative foundation of the financial system of the 21th century". That legislative foundation is among the main causes of the 2008 financial meltdown.
Financial Disarmament
There can be no meaningful solution to the crisis, unless there is a major reform in the financial architecture, implying inter alia the freezing of speculative trade and the "disarming of financial markets". The project of disarming financial markets was first proposed by John Maynard Keynes in the 1940s as a means to the establishment of a multipolar international monetary system. (See J.M. Keynes, Activities 1940-1944, Shaping the Post-War World: The Clearing Union, The Collected Writings of John Maynard Keynes, Royal Economic Society, Macmillan and Cambridge University Press, Vol. XXV, London 1980, p. 57).
Main Street versus Wall Street
Where are Obama's "Main Street appointees"? Namely individuals who respond to the interest of people across America. There are no labor or community leaders on Obama's list for key positions.
The President-elect is appointing the architects of financial deregulation.
Meaningful financial reform cannot be adopted by officials appointed by Wall Street and who act on behalf of Wall Street.
Those who set the financial system ablaze in 1999, have been called back to turn out the fire.
The proposed "solution" to the crisis under the "bailout" is the cause of further economic collapse.
There are no policy solutions on the horizon.
The banking conglomerates call the shots. They decide on the composition of the Obama Cabinet. They also decide on the agenda of the Washington Financial Summit (November 15, 2008) which is slated to lay the groundwork for the establishment of a new "global financial architecture".
The Wall Street blueprint has already been discussed behind closed doors: the hidden agenda is to establish a unipolar international monetary system, dominated by US financial power, which in turn would be protected and secured by US military superiority.
Neoliberal with a "Human Face"
There is no indication that Obama will break his ties to his Wall Street sponsors, who largely funded his election campaign.
Goldman Sachs, J. P. Morgan Chase, Citigroup, Bill Gates' Microsoft are among his main campaign contributors.
Warren Buffett, among the the world's richest individuals, not only supported Barak Obama's election campaign, he is a member of his transition team, which plays a key role deciding the composition of Obama's cabinet.
Unless there is a major upheaval in the system of political appointments to key positions, an alternative Obama economic agenda geared towards poverty alleviation and employment creation is highly unlikely.
What we are witnessing is continuity.
Obama provides a " human face" to the status quo. This human face serves to mislead Americans on the nature of the economic and political process.
The neoliberal economic reforms remain intact.
The substance of these reforms including the "bailout" of America's largest financial institutions ultimately destroys the real economy, while spearheading entire areas of manufacturing and the services economy into bankruptcy.

Slaves

2008-11-04T04:41:00.001-08:00

يا شعبي حبيبي يا روحي يا بيبي يا حاطك في جيبي يا ابن الحلال يا شعبي يا شاطر يا جابر خواطر يا ساكن مقابر وصابر وعال يا واكل سمومك يا بايع هدومك يا حامل همومك وشايل جبال يا شعبي اللي نايم وسارح وهايم وفي الفقر عايم وحاله ده حال أحبك محشش مفرفش مطنش ودايخ مدروخ وآخر انسطال أحبك مكبر دماغك مخدر ممشي أمورك كده باتّكال وأحب اللي ينصب وأحب اللي يكدب وأحب اللي ينهب ويسرق تلال وأحب اللي شايف وعارف وخايف وبالع لسانه وكاتم ما قال وأحب اللي قافل عيونه المغفل وأحب البهايم وأحب البغال وأحب اللي راضي وأحب اللي فاضي وأحب اللي عايز يربي العيال وأحب اللي يائس وأحب اللي بائس وأحب اللي محبط وشايف محال وأحبك تسافر وتبعد تهاجر وتبعت فلوسك دولار أو ريال وأحبك تطبل تهلل تهبل عشان مطش كورة وفيلم ومقال وأحبك تأيد تعضض تمجد توافق تنافق وتلحس نعال تحضر نشادر تجمع كوادر تلمع تقمع تظبط مجال لكن لو تفكر تخطط تقرر تشغلي مخك وتفتح جدال وتبدأ تشاكل وتعمل مشاكل وتنكش مسائل وتسأل سؤال وعايز تنور وعايز تطور وتعمللي روحك مفرد رجال ساعتها حجيبك لا يمكن أسيبك وراح تبقى عبرة وتصبح مثال حبهدل جنابك وأذل اللي جابك وحيكون عذابك ده فوق الاحتمال وأمرمط سعادتك وأهزأ سيادتك وأخلي كرامتك في حالة هزال وتلبس قضية وتصبح رزية وباقي حياتك تعيش في انعزال حتقبل حَحبك، حترفض حَلِبّك، حتطلع حتنزل حجيبلك جمااااال

A Must Read

2008-11-02T17:26:00.000-08:00

أيا أيها الحر على من تعيبا............................وحالنا اليوم يلزمه الطبيبا لقد زاد الهوان عن الحدود..........................وأصبح الشرف وحيدا غريبا وأضحى البشر في ضياع.........................جياعا ينادون مكارم من يجيبا والملايين بين مشرد وتائه................................بحلم العودة بعيدا قريبا والجلاد على الأعناق قائم أبدا...................مقيما مستحلا للبلاد ومستطيبا فوالله سابقنا الأمم تهاويا..........................فسادا واستبدادا وتملقا عجيبا ووالله مارأت الأنام يوما.....................الضحية تنصب الجلاد الها وحبيبا فهنيئا لنا هكذا عار.......................................وطوبى لنا بهكذا مصيبة نحن أبناء شآم صرنا.................................مطية الكلام غائبا ومستغيبا وأضحى النفاق دما يسري.......................في العروق والأنفاس مستطيبا ماذا سنقول لتلك الهياكل...................من الجوعى واليتامى ظلما وتعذيبا أن انتظروا اليوم وغدا...............................وبعد غد زمنا طويلا رحيبا والحال هو الحال أيها الرجال......................فلاعتب على الظالم ولارقيبا وبينما نتأرجح شجبا واستنكارا.................يترنح الضعيف عويلا ونحيبا كفانا تملقا لجوقة اللئام ..................................وكفا البلاد سلبا ونهيبا وكفى الجيش الأبي مهازلا.....................ضعفا وخوفا شحاحيطا وقباقيبا وكفى الأعناق ضربا بالصرامي...............وكفى الأجساد السوط والقضيبا وكفا البلاد سلبا ونهبا..........................وتكبيبل أحرارها أغلالا وكلاليبا وكفا اليتامى طول انتظار...........................وكفى الحقائق تقلبا وتقليبا وكفانا وجوما بتعاقب الأيام...........................وكفاك وطني شاحبا كئيبا وكفانا الله شر اللئام ..........................وشر كل منافق مأجورا مستجيبا وكفانا وعودا بنصر قريب..................فلن تجدي الغربان صدحا عندليبا النصربزنود ومضرجات أياد...................واسترجاع الحق شامخا مهيبا فلن تجدي المستبد أبدا........................الا القوة اصلاحا وحزما وتأديبا كما لن ينفع مع الذئاب............................نفاق الثعالب تشذيبا وتهذيبا ولن يجدي الجوقة تمرغا..............بأحضان موسكو وواشنطن وتل أبيبا السن بالسن والبادئ أظلم .........................فكفانا كلاما ظلما وترغيبا لأن للبلاد أحرارا كبارا..........................لايأبهون تابعا ولاعبدا ربيبا أهل حكمة لايرهبون الفتن...................ولا حكم الطوائف مذهبا وتذهيبا شآم بلاد الكل لامكان فيها....................لمن يمعن بالعباد تفريقا وتغييبا فهبوا ياحماة الديار لمجدكم.........................وأرجعوا وطنا غاليا سليبا فلن ينفع مع الظالم أبدا.........................الحوار والدوار تزلفا وترغيبا لأن للثعالب فنونا ومخالبا........................تنهك الضعاف مكرا وألاعيبا ولن يزيد الصبر البلاد.....................الا الهوان مستشريا هدما وتخريبا فأبشروا أهل الشآم بحرية...................حمراء مدادها اخاء شبابا وشيبا لأن للبلاد رب يحميها................................مغيثا للضعيف قويا مجيبا آن أوان الحرية ياشآم...........................وآن أوان العدل حقا وتصويبا ولن ينفع المترنح السقوط ................ولن تنفع المواجع الأنين والتأليبا انما هي تذكرة عل وعسى...........................لكل ذي نخوة حكيما لبيبا فلاتمعنوا في الوطن نسيانا......................وفي الأمجاد شطبا وتشطيبا كفانا دسا للأعناق بالرمال....................وكفانا اختباءا خندقا وسراديبا وكفانا وقوفا على الأطلال...................ورسائل الشوق تباكيا ومكاتيبا يامن تركتم البلاد شبابا........................وعانقتم المنفى هرما ومشيبا أما آن رجوعكم أيها الرجال............لتعانقوا الشيبان والغلمان والشبيبا وتمسحوا غبار السنين والضياع.................وتعيدوا الذئاب الى الزريبة بلادنا وان جارت علينا عزيزة................فهل ينفع المحب المتيم تحبيبا وسترجع البسمة للشفاه يوما.....................بدموع نصر تغمر الأهاديبا وستعلو الأهازيج والزغاريد....................فرحا بعودة الحق خيرا وطيبا

ولكن السعودي لا بواكي له

2008-11-02T01:32:00.000-07:00

بكى العالم ارتفاع أسعار البترول فبكينا معه وقدمنا نفطنا قربانا على مذبح المسئولية الدولية. وأتت الأزمة المالية فافتخرنا بحزمنا وحنكتنا فأبناء الوطن لا منازل لهم فتباع ولا قروض يخشى من عدم سدادها فقد حُجرت رواتبهم وارتُهنت عليها بعد أن فنت في سوق القمار السعودية. وبكت أمريكا شعبها وبنوكها فأبكت العالم معها فقدموا أموالهم وإعلامهم قربانا لإنقاذ بنوك أمريكا ومدخرات أبنائها، ولكن السعودي لا بواكي له.
بلادنا ديار الإسلام، ومعقل لا إله إلا الله فصدق بلا منازع قول الشاعر قــم للوطـــنْ.. وانثــر دماك لـه ثمـن *** واخلع فديتـــك كل أســـباب الوهــــنفــإذا قُتلــتَ فلســت أنــــــت بميــــت *** فانعـم بعيــش لا يبيــد مــع الــزمـــن
أوطن بلا موطن؟ وطني وطن يتبارى شيوخه وشبابه في تقديم نفوسهم رخيصة دون ذرة تراب من أرضه وهم لا يملكون شبرا منه. وطني قد أرهقت أبناءه ديون تلاشت في مقامرات الأسهم 'النقية'. وطني قد قُدم فيه الأجنبي بغير حق لتحقيق غايات ذاتية لقوم لم يحملوا ولن يحملوا قط إلا هم أنفسهم وهم تحقيق أهدافهم الوضيعة. وطني قد وُظف أبناءه بأجور تُعد جريمة استعباد عند الغرب الرأسمالي! فمن يبكي أبناء وطني؟ بكت أمريكا أبنائها الذين فقدوا منازلهم وأبكت العالم أجمعه معها حرصا على أن لا يفقد أبنائها مدخراتهم أوأعمالهم، ولكن السعودي لا بواكي له. وقفت أمريكا حازمة لم تلن ولم تتهاون أمام أطروحات استعباد أبنائها بأجور زهيدة كالتي نفرضها نحن لأبنائنا والتي عند التأمل لوجدنا أن العبد الرقيق في السابق كان أفضل حالا من حيث توفير إطعامه وإسكانه وعلاجه، فهل الآلفان والثلاثة من الريالات قادرة على الإطعام والإسكان و العلاج. في وطني نحن طرفان في الرأسمالية والاشتراكية نأخذ الأسوأ منهما، فاقتبسنا من دول الشيوعية التكتيم والتشكيك وانعدام الثقة وإعطاء المسئول مرتبة الربوبية فلا يُسأل عما يفعل وهم يسألون. واقتبسنا من فكر الرأسمالية الطبقية البغيضة وسحق الطبقة الوسطى. تشدق المتشدقون واشغلوا أبناء وطني في تنظير هذه الأزمة المالية العالمية بالأساطير والتدليس والتلبيس فأين هم عن إقطاعي الأراضي كيف ملكوها وبكم باعوها ولم لا تُأخذ زكاتها وقد أُخذت الزكاة من غُنيمات عجوز بدوية. أين نحن من الرأسمالية؟ نحن لنا فيها الصدر دون العالمين أو القبر. يا من أدعى الإحسان فأقرض الناس فوق جهدهم وطاقتهم بابتداع حيلة ظنا منه أنه يحتال بها على الله هلا ابتدعت حيلة وبحثت عن قول من هنا أو هناك فأرجعت للناس أموالهم التي أحرقتها سوق القمار بمباركة أهل الحيل الذين كان أكبر همهم أن يؤخذ تصديقهم لتنقية الأسهم وتصفيتها لتكون أسهم قمار خالصة لا شائبة فيها. بعد أن عمل على جلب الآلف المليارات لوطنه وبعد أن أسكن الفقير والضعيف، بكى قرينسبان أبناء وطنه يوم الجمعة الماضي وتحمل جزءا من المسئولية عن الأزمة الحالية وأما أبناء وطني فلا بواكي لهم. أين من غذى سوق القمار السعودية وناصر وروج لها ووعد وأخلف من المسئولين والإعلاميين على حد سواء؟ ألا يتقدم أحدهم منهم فيبكينا كما بكى قرينسبان أبناء وطنه ويعترف بشيء من المسئولية فيقترح خطة إنقاذ لنا قد تأخرت طويلا. هناك في معقل الرأسمالية لا توجد حواجز النفاق والتملق التي أعمت أبصار مسئولينا وأصمت أسماعهم فأحست الدولة بآلام أبنائها وسمعت أنينهم فبكت وأبكت العالم معها فتحملت كثير من ديون بنوكها وديون أبنائها على حد سواء فهل بُكي السعودي فتتحمل الدولة ولو إعادة التمويل لديونهم التي تحملوها بفوائد مركبة عالية (يعتبرها الغرب الرأسمالي جريمة ويعاقب عليها كجريمة الربا) فضلا على أنه يسعى في تخليص أبناءنا منها فتدخل لإعادة تمويلها بأسعار فوائد مخفضة! ولكن السعودي لا بواكي له. من أبنائنا من يهدم الوطن بتقريب الأجنبي وإبعاد الوطني. التاكسي رزق شريف لمن لا رزق له وملجأ للعاطل والمطرود من عمله إلى حين. باعد الله الجشع والطمع، في وطني تُطبق الرأسمالية في أقصى صورها فتحتكر قلة قليلة هذه الصناعة فتستولي على رزق الآلف من بُسطائنا ومساكيننا. في وطني مسئولون قد برعوا في التملق البغيض والنفاق الرخيص قد بعثهم الله بعد سبات طويل لعقود من الزمن في دهاليز كهوف النسيان فآثروا حثالة زرق العيون شقر الشعور على ابن الوطن خيانة للأمانة ولأبناء الوطن وجهلا منهم وحسدا. في روسيا ودول الاتحاد السوفيتي سابقا وأوربا الشرقية لا يستطيع القضاء إجبار المالك على الخروج من منزله ولا يسجنه إذا عجز عن سداد الدين ولا يُمكن البنك من الاستيلاء على المنزل المرهون! ويعيب الغرب الرأسمالي ضعف قوانين الرهن عند هذه الدول الاشتراكية (سابقا) وينصحهم بالحزم في تحصيل الديون ببيع البيوت. أين الغرب عن المتشدقين منا من الذين فاضت حكمتهم، فنادوا بالاعتبار من الأزمة المالية العالمية فاقترحوا زيادة الضمانات والتشديد على أبناء وطني في نظام الرهون! فماذا بعد الاستيلاء على راتب الأب وراتب الأم وعلى المنزل والأرض ثم السجن بعد ذلك؟ أساطين الرأسمالية تقف حيارى لا تحسن نطقا ولا تعبيرا. تذكرني هذه الأزمة بقصة تروى عن قوم غزو جيرانهم وعاد فريق منهم إلى ديارهم وتلقاهم البسطاء والعجائز والقُصر من قومهم يسألونهم الخبر حدثوهم بأساطير البطولات والملاحم. فسألتهم عجوز منهم كم قتلت منهم فأجابوها خمسة بتعظيم الصوت وتضخيمه فسألتهم العجوز مرة أخرى وكم قتلوا منكم فأجابوها خميسمية فقط بتصغير الرقم وتخفيض الصوت، فكبر القوم وهللوا واحتفلوا بالنصر المؤزر. خليلي ألا تبكياني ألتمس خليلا إذا أنزفت دمعا بكى ليا

Money Is The Root Of Our Demise

2008-10-14T21:08:00.000-07:00

An irremediable structural flaw lies at the base of our civilization. I call it Separation, and it has generated all the converging crises -- economic, health, ecological, and political -- of our day. It manifests as separation from each other in the dissolution of community, separation from nature in the destruction of the environment, separation within our selves in the deterioration of health. Science is its deep ideology, technology is its accomplice, and money is its agent.
Money as we know it today is intimately related to our identity as discrete and separate selves, as well as to the destruction that our separation has wrought. A saying goes, "Money is the root of all evil." But why should it be? After all, the purpose of money is, at its most basic, simply to facilitate exchange; in other words, to connect human gifts with human needs. What power, what monstrous perversion, has turned money into the opposite: an agent of scarcity?
For indeed, we live in a world of fundamental abundance, a world where vast quantities of food, energy, and materials go to waste. Half the world starves while the other half wastes enough to feed the first half. In the Third World and our own ghettos, people lack food, shelter, and other basic necessities, but cannot afford to buy them. Other people would love to supply these necessities and do other meaningful work, but cannot because there is no money in it.
Money utterly fails to connect gifts and needs. We pour vast resources into wars, plastic junk, and innumerable other products that do not serve human needs or human happiness. Why? It is not difficult to trace it back to greed, to the love of money. Ultimately though, greed is a red herring, itself a symptom and not a cause of a deeper problem. To blame greed and to fight it by intensifying the program of self-control is to intensify the war against the self, which is just another expression of the war against nature and the war against the other that lies at the base of our civilization.
Amidst superabundance, even we in rich countries live in an omnipresent anxiety, craving "financial security" as we try to keep scarcity at bay. We make choices (even those having nothing to do with money) according to what we can "afford," and we commonly associate freedom with wealth. But when we pursue it, we find that the paradise of financial freedom is a mirage, receding as we approach it, and that the chase itself enslaves. The anxiety is always there, the scarcity always just one disaster away. Greed is simply a response to the perception of scarcity. Money, which has turned abundance into scarcity, precedes greed. But not money per se, only the kind of money we use today, the kind of money that is evaporating as we speak, money with a very special characteristic that ensures its eventual demise.
This characteristic appears, in different forms, in the other substructures of our civilization as well. By understanding it, we can clarify the "irremediable structural flaw" of our civilization itself; more importantly, we can design new systems of money to supplant the old and that bear the opposite characteristic. The results will be the opposite as well: abundance, not scarcity; generosity, not greed; and sustainability, not ruin.
The defining characteristic of money today is usury, better known as interest. It is usury that both generates today's endemic anxiety and drives the world-devouring engine of perpetual growth. To explain how, I will quote Bernard Leitaer's now-famous parable The Eleventh Round, from his book The Future of Money.
Once upon a time, in a small village in the Outback, people used barter for all their transactions. On every market day, people walked around with chickens, eggs, hams, and breads, and engaged in prolonged negotiations among themselves to exchange what they needed. At key periods of the year, like harvests or whenever someone's barn needed big repairs after a storm, people recalled the tradition of helping each other out that they had brought from the old country. They knew that if they had a problem someday, others would aid them in return.
One market day, a stranger with shiny black shoes and an elegant white hat came by and observed the whole process with a sardonic smile. When he saw one farmer running around to corral the six chickens he wanted to exchange for a big ham, he could not refrain from laughing. "Poor people," he said, "so primitive." The farmer's wife overheard him and challenged the stranger, "Do you think you can do a better job handling chickens?" "Chickens, no," responded the stranger, "But there is a much better way to eliminate all that hassle." "Oh yes, how so?" asked the woman. "See that tree there?" the stranger replied. " Well, I will go wait there for one of you to bring me one large cowhide. Then have every family visit me. I'll explain the better way."
And so it happened. He took the cowhide, and cut perfect leather rounds in it, and put an elaborate and graceful little stamp on each round. Then he gave to each family 10 rounds, and explained that each represented the value of one chicken. "Now you can trade and bargain with the rounds instead of the unwieldy chickens," he explained.
It made sense. Everybody was impressed with the man with the shiny shoes and inspiring hat.
"Oh, by the way," he added after every family had received their 10 rounds, "in a year's time, I will come back and sit under that same tree. I want you to each bring me back 11 rounds. That 11th round is a token of appreciation for the technological improvement I just made possible in your lives." "But where will the 11th round come from?" asked the farmer with the six chickens. "You'll see," said the man with a reassuring smile.
Assuming that the population and its annual production remain exactly the same during that next year, what do you think had to happen? Remember, that 11th round was never created. Therefore, bottom line, one of each 11 families will have to lose all its rounds, even if everybody managed their affairs well, in order to provide the 11th round to 10 others.
So when a storm threatened the crop of one of the families, people became less generous with their time to help bring it in before disaster struck. While it was much more convenient to exchange the rounds instead of the chickens on market days, the new game also had the unintended side effect of actively discouraging the spontaneous cooperation that was traditional in the village. Instead, the new money game was generating a systemic undertow of competition among all the participants.
There are really only three ways this story can end: inflation, bankruptcy, or growth. The same choices face any economy based on usury. The villagers could procure another cowhide and make more currency; or one of each 11 families could go bankrupt, as Lietaer observes; or they could increase the number of chickens so that new "rounds" would have the same value as before. In a real economy, all three pressures operate simultaneously. The bankruptcy pressure drives a built-in insecurity, which in turn drives people and institutions to "make" more money through inflationary or productive means. Of these two choices, inflation is only a temporary solution (as we are discovering today). It can only push the grow-or-die imperative slightly into the future.
In other words, because of the money system, competition, insecurity, and greed are an inseparable part of our economy. They can never be eliminated as long as the necessities of life are denominated in usury-money. But this is only one reason why money destroys community. The other is related to the third pressure: perpetual growth.
As Lietaer's parable explains, because of interest, at any given time the amount of money owed is greater than the amount of money already existing. To make non-inflationary new money to keep the whole system going, we have to breed more chickens -- in other words, we have to create more "goods and services." The principal way of doing so is to begin selling something that was once free. It is to convert forests into timber, music into product, ideas into intellectual property, social reciprocity into paid services.
Would you like to get rich? Here is a business idea that, in one form or another, has worked spectacularly for thousands of years. Very simply, find anything that people do for themselves or each other for free. Then take it away from them: make it illegal, inconvenient, or otherwise unavailable. Then sell back to them what you have taken. Granted, usually no one does this consciously, but that has been the net effect of culture and technology over the last several thousand years.
Your 13th-century peasant ancestors rarely paid money for food, shelter, clothing, or entertainment (much less in a hunter-gatherer tribe). People were self-sufficient in all these things or, more likely, depended on elaborate gift networks, sharing, and reciprocity. Of these things is community built. Today, we pay strangers to meet most of our physical and cultural needs. You probably don't know the person who grew your food, wove your shirt, built your house, or sang the songs on your iPod. Abetted by technology, the commodification of formerly non-monetary goods and services has accelerated over the last few centuries, to the point today where very little is left outside the money realm. The vast commons, whether of land or of culture, has been cordoned off and sold -- all to keep pace with the exponential growth of money. This is the deep reason why we convert forests to timber, songs to intellectual property, and so on. It is why two-thirds of all American meals are now prepared outside the home. It is why herbal folk remedies have given way to pharmaceutical medicines, why child care has become a paid service, why drinking water is now the number one beverage sales growth category.
The imperative of perpetual growth implicit in interest is what drives the relentless conversion of life, world, and spirit into money. Completing the vicious circle, the more of life we convert into money, the more we need money to live. Usury, not money, is the proverbial root of all evil. Inducing competition and replacing personal relationships with paid services, it rends the fabric of community.
Community is closely linked to gift-giving; when anthropologists seek to understand a culture, they trace the flow of gifts. Unlike money transactions, in which no obligations linger after the transaction is completed, the giving of a gift creates a tie (which is the literal meaning of "obligation"). When gifts circulate, the community bonds. Lending money at interest is utterly contrary to the spirit of the gift. For one thing, a cardinal feature of an authentic gift is that we give it unconditionally. We may expect to be gifted in return, whether by the recipient or another member of the community, but we do not impose conditions on a true gift, or it is not really a gift.
More importantly, a universal characteristic of a gift is that it naturally increases as it circulates within a community, and that this increase must not be kept for oneself, but allowed to circulate with the gift. Interest amounts to keeping the increase on the gift for oneself, thereby withholding it from circulation in the community, weakening community for the benefit of the individual. It is no accident that many societies prohibited usury among themselves but allowed it in transactions with outsiders, who could not be trusted to recirculate a true gift back into the community. Hence the prohibition in Deuteronomy 23:20: "Unto a stranger you may lend upon usury, but unto thy brother thou shalt not lend upon usury."
The ramifications of this injunction when combined with Jesus' teaching that all men are brothers are obvious: interest is forbidden entirely. This was the position of the Catholic Church throughout the Middle Ages, and is still the rule in Islam today. However, starting with the merger of Church and state and accelerating with the rise of mercantilism in the late Middle Ages, pressure mounted to resolve the fundamental tension between Christian teaching and the requirements of commerce. The solution provided by Martin Luther and John Calvin was to separate moral and civil law, maintaining that the ways of Christ are not the ways of the world. Thus spirit became further separated from matter, and religion retreated another step toward worldly irrelevancy.
Abandoning the prohibition on interest was a key step in religion's complicity in the desacralizing of the world. After all, it is interest that drives the conversion of all that is sacred about the world -- its beauty, uniqueness, and living relationships -- into something profane. Why do we intuitively know money is profane? Because it is the one great exception to the irreducible uniqueness of all beings.
In my last Reality Sandwich essay, I described how each drop of water, even each electron, is unique and sacred. But not so each dollar. Money is by design standard, generic. Your dollar is the same as my dollar. Money today lacks even a unique serial number: It is bits in a computer, an abstraction of an abstraction of an abstraction. A forest is unique and sacred; not so the money from its clearcutting. Convert two distinct forests into money and they become the same. Applied to cultures, the same principle is fast creating a global monoculture where every service is a paid service.
When money mediates all our relationships, we too lose our uniqueness to become a standardized consumer of standardized goods and services, and a standardized functionary performing other services. No personal economic relationships are important, because we can always pay someone else to do it. No wonder, strive as we might, we find it so hard to create community. No wonder we feel so insecure, so replaceable. It is all because of the conversion, driven by usury, of the unique and sacred into the monetized and generic.
Because money is identified with Benthamite "utility" -- that is, the good -- this entire process is considered rational in traditional (neoclassical) economic theory. Quite simply, whenever anything is monetized, the world's "goodness" level rises. The same assumption appears in the euphemism "goods" to describe the products of industry. The very definition of a "good" is anything exchanged for money. In other words, Money = Good. Got that?
By definition, when we buy bottled water instead of tap water too polluted to drink, that is good. When we pay for day care instead of caring for our babies at home, that is good. When we buy a video game instead of playing outdoors, that is good.
In terms of conventional economics, it may actually be in an individual's rational self-interest to engage in activities that render the earth uninhabitable. This is potentially true even on the collective level: given the exponential nature of future cash flow discounting, it may be more in our "rational self-interest" to liquidate all natural capital right now -- cash in the earth -- than to preserve it for future generations. After all, the net present value of an eternal annual cash flow of one trillion dollars is only some twenty trillion dollars (at a 5% discount rate). Economically speaking, it would be more rational to destroy the planet in ten years while generating income of $100 trillion, than to settle for a sustainable level of $3 trillion a year forever.
If this seems like an outlandish fantasy, consider that it is exactly what we are doing today! According to the parameters we have established, we are making the insane but rational choice to incinerate our natural, social, cultural, and spiritual capital for financial profit. Amazingly, this end was foreseen thousands of years ago by the originator of the story of King Midas, whose touch turned everything to gold. Delighted at first with his gift, soon he had turned all his food, flowers, even his loved ones into cold, hard metal. Just like King Midas, we too are converting natural beauty, human relationships, and the basis of our very survival into money.
Yet despite this ancient warning, we continue to behave as if we could eat our money: David Korten once spoke of an East Asian minister who said his country's forests would be more valuable clearcut, with the money put in the bank to earn interest. Apparently, the effects of destroying the planet are of little concern to economists. William Nordhaus of Yale proclaims, "Agriculture, the part of the economy that is sensitive to climate change, accounts for just three percent of national output. That means there is no way to get a very large effect on the US economy." Oxford economist Wilfred Beckerman echoes him: "Even if net output of agriculture fell by 50 percent by the end of the next century, this is only a 1.5 per cent cut in GNP."
Must we, like King Midas, find ourselves marooned in a cold, comfortless, ugly, inhospitable world before we realize we cannot eat our money?
Because it builds exponentially, interest feeds a linearity that puts humankind outside of nature, which is bound by cycles. Subtly but inexorably, it drives the assumption that human beings exist apart from natural law. As well, interest drives a relentless anxiety by demanding always more, more, more, propelling the endless conversion of all wealth into financial capital. Part of this anxiety is encoded in the very word, "interest," which implies that self-interest too is bound up in ever-lasting increase.
Interest is a necessary counterpart to the mentality of externalization. Like interest, externalization involves a denial of nature's cyclicity by treating it as an infinite reservoir of resources and an infinite dumping ground for waste. Interest is also akin to fire, the foundation of modern technology. To keep it going requires the addition of ever more fuel, until the whole world is consumed, leaving but a pile of dollars or ash.
Money is a most peculiar kind of property, for unlike physical inventories of goods, "rust doth not corrode nor moths corrupt" it. Cash does not depreciate in value; on the contrary, in its modern, abstracted form of bits in a bank's computer, it grows in value as it earns interest. Thus it appears to violate a fundamental natural law: impermanence. Money does not require maintenance like a plot of farmland to maintain its productivity. It does not require constant rotation of stock like a store of grain to keep it fresh. No accident, then, was money's early and enduring association with gold, the metal most famously impervious to oxidation. Money perpetuates the fundamental illusion of independence from nature; financial wealth endures without constant interaction with the environment. Other forms of wealth are bothersome, because they require a continuing relationship with other people and the environment. But not money, which is now wholly abstract from physical commodities and thus abstract as well from natural laws of decay and change. Money as we know it is thus an integral component of the discrete and separate self.
It is a curious fact that most people are extremely unwilling to share their money. Even among relatives, sharing money is bound by strong taboos: I know countless poor families whose brothers, cousins, or uncles' families are very wealthy. And how many friendships have disintegrated, how many family members have shunned each other for years, over issues of money? Money, it seems, is inextricably wrapped up in the very essence of selfishness -- a clue to its deep association with self. Hence the intense sense of violation we feel upon getting "ripped off" (as if a part of our bodies were being removed) when from another perspective all that has happened is pieces of paper changing hands or bits turning on and off in a bank computer.
We do not usually share our money because we see it almost as part of our selves and the foundation of our biological security. Money is self. Meanwhile, conditioned by science and the origins of separation underlying it, we see other people as essentially just that, "other." Mixing these two realms invites confusion and conflict. The problem is, the more of life we convert to money, the more territory falls into one of these dichotomous realms, mine or yours, and the less common ground there is to share life and develop unguarded relationships. The conversion of life to money reduces everything to an economic transaction, leaving us the loneliest people ever to inhabit the planet. The propertization of the whole world means that everything is either mine, or someone else's. No longer is anything in common.
The violation we feel at being ripped off is much akin to the violation an indigenous hunter-gatherer must feel at witnessing the destruction of nature. When "I" is defined not as a discrete individual but through a web of relationships with people, earth, animals, and plants, then any harm to them violates ourselves as well. Even we moderns sometimes feel an echo of this violation when we see the bulldozers knocking down the trees to build a new shopping center. That is because our separation from the trees is illusory. The buried connectedness can be resisted through ideology, narcotized through distractions, or intimidated through the invocation of survival anxiety, but it can never die because it is germane to who we really are. The love of life that Edwin Wilson has named biophilia, and our natural empathy toward other human beings, is ultimately irrepressible because we are life and life is us.
The regime of separation has deadened us to the self-violation inherent in the despoliation of the planet and the degradation of its inhabitants. In an attempt to compensate for our lost sense of beingness, we transfer it to possessions and particularly to money, setting the stage for disaster. How? Because money (bearing interest) is an outright lie, encoding a false promise of imperishability and eternal growth. Identified with self, money and its associated "assets" suggest that if we stay in control of it, the self might be maintained forever, impervious to the rest of the cycle that follows growth: decay, death, and rebirth.
Obviously, there is a problem when something that does not decay but only grows, forever, exponentially, is linked to commodities which do not share this property. The only possible result is that these other commodities -- social, cultural, natural, and spiritual capital -- will eventually be exhausted in the frantic, hopeless attempt to redeem the ultimately fraudulent promise inherent in money with interest.
They are almost exhausted already. What more of community or of nature can we still commoditize, before the very basis of life and sanity crumbles? All of today's crises originate in the conversion of natural, social, cultural, and spiritual capital into money. Yet even usury is not the deepest root. It is not an accidental feature of our system that, if only someone had made a wiser choice, could be different. It is implicit in our Newtonian-Cartesian cosmology in which, by definition, more for me is less for you. As this cosmology rapidly becomes obsolete, we can glimpse an emerging new money system embodying a very different conception of self and world. Until we transition to it, there is no hope that the current conversion of social, cultural, natural, and spiritual capital into money will ever abate. Under an interest-based money system, it is inevitable that we will cash in the earth.
Our present monetary system generates a necessity for endless growth, embodies linear thinking, defies the cyclical patterns of nature, and drives the relentless conversion of all forms of wealth into currency. Furthermore, the concept of “interest” is the wellspring of our economy's ever-intensifying competition, systemic scarcity, and concentration of wealth. Interest is tied into how we see ourselves as separate, competing subjects seeking to gather more and more of the world within the boundaries of "mine." Today, however, the human identity is undergoing a profound metamorphosis. Part of this shift in our conception of self and world will be a new system of money consonant with the new human being.
Given the determining role of interest, the first alternative currency system to consider is one that structurally eliminates it. One such system, called Frei Geld or "free-money" was proposed in 1906 by Silvio Gesell in The Natural Economic Order. Gesell's free-money bears a form of negative interest called demurrage. Periodically, a stamp costing a tiny fraction of the currency's denomination must be affixed to it, in effect a "user fee" or a "maintenance cost"; another way to look at it is that the currency "goes bad" – depreciates in value – as it ages. (Of course, today this would be done electronically.)
If this sounds like a radical proposal that could never work, it may surprise you to learn that no less an authority than John Maynard Keynes praised the theoretical soundness of Gesell's ideas (with one critical caveat [1]). What's more, the system was actually tried out with great success, and is again in use today.
The best-known example was instituted in the town of Worgl, Austria, in 1932. To remain valid, each piece of this locally-issued currency required a monthly stamp costing 1% of its face value. This anti-hoarding measure spurred citizens to spend their money quickly, even to pay their taxes early. Instead of generating interest and growing, accumulation of wealth became a burden—much like possessions are a burden to the nomadic hunter-gatherer. Worgl's economy took off; the unemployment rate plummeted even as the rest of the country slipped into a deepening depression; public works were completed, and prosperity continued until the Worgl currency (and hundreds of imitators) were outlawed in 1933 at the behest of a threatened central bank.[2]
A similar story transpired in the United States. With national currency evaporating through an epidemic of bank failures, citizens and local governments created their own. By 1933, several hundred cities and even states were preparing to launch, or had already launched, "emergency currencies." [3] Many of these were stamp scrips like the Worgl currency. Despite the vigorous advocacy of prominent economist Irving Fisher, Roosevelt banned all emergency currencies when he launched the New Deal and declared a bank holiday in March, 1933, fearing the new currencies' decentralizing effects. [4]

Today we are at the brink of a similar crisis, and face a similar choice between shoring up the old world through an intensification of centralized control or letting go of control and stepping into the new. It is important to understand that the consequences of a demurrage-based currency system would be profound, encompassing economic, social, psychological, and spiritual dimensions. Money is so fundamental, so defining of our civilization, that it would be naive to hope for any authentic shift in the way we exist in the world that did not involve a fundamental shift in money as well.
Conceptually, demurrage works by freeing material goods which are subject to natural cyclic processes of renewal and decay from their linkage with a money that only grows, exponentially, over time. As established in Part 1 of this text, this dynamic is driving us toward ruin in the exhaustion of all social, cultural, natural, and spiritual wealth. Demurrage currency merely subjects money to the same laws as natural commodities, whose continuing value requires maintenance. Gesell writes:
Gold does not harmonize with the character of our goods. Gold and straw, gold and petrol, gold and guano, gold and bricks, gold and iron, gold and hides! Only a wild fancy, a monstrous hallucination, only the doctrine of "value" can bridge the gulf. Commodities in general, straw, petrol, guano and the rest can be safely exchanged only when everyone is indifferent as to whether he possesses money or goods, and that is possible only if money is afflicted with all the defects inherent in our products. That is obvious. Our goods rot, decay, break, rust, so only if money has equally disagreeable, loss-involving properties can it effect exchange rapidly, securely and cheaply. For such money can never, on any account, be preferred by anyone to goods.
Only money that goes out of date like a newspaper, rots like potatoes, rusts like iron, evaporates like ether, is capable of standing the test as an instrument for the exchange of potatoes, newspapers, iron and ether. For such money is not preferred to goods either by the purchaser or the seller. We then part with our goods for money only because we need the money as a means of exchange, not because we expect an advantage from possession of the money. [5]
In other words, demurrage redefines money as a medium of exchange instead of being a store of value. No longer is money an exception to the universal tendency in nature toward rust, mold, rot and decay—that is, toward the recycling of resources. No longer does money perpetuate a human realm separate from nature.
Gesell's phrase, "... a monstrous hallucination, the doctrine of 'value'..." hints at another effect of demurrage—it makes us question the notion of “value.” Value assigns to each object in the world a number. It associates an abstraction, changeless and independent, with that which always changes and that exists in relationship to all else. It is part of humanity's descent into representation, the reduction of the world into a data set. Demurrage reverses this thinking and removes an important boundary between the human realm and the natural realm. When money is no longer preferred to goods, we will lose the habit of defining a thing by how much it is worth.
Whereas interest promotes the discounting of future cash flows, demurrage encourages long-term thinking. In present-day accounting, a forest that has the capacity to generate one million dollars a year every year into the foreseeable future is considered more valuable if immediately cut down for a profit of 50 million dollars. (The net present value of the sustainable forest calculated at a discount rate of 5% is only $20 million.) This state of affairs results in the infamously short-sighted behavior of corporations that sacrifice (even their own) long-term well-being for the short-term results of the fiscal quarter. Such behavior is perfectly rational in an interest-based economy, but in a demurrage system, pure self-interest would dictate that the forest be preserved. No longer would greed motivate the robbing of the future for the benefit of the present. The exponential discounting of future cash flows implies the "cashing in" of the entire earth as opposed to an immediate wholesale “liquidation” of our remaining resources.
Whereas interest tends to concentrate wealth, demurrage promotes its distribution. In any economy with a specialization of labor beyond the family level, human beings need to perform exchanges in order to thrive. Both interest and demurrage represent a fee for the use of money, but the key difference is that in the former system, the fee accrues to those who already have money, while in the latter system it is levied upon them. Wealth comes with a high maintenance cost, thereby recreating the dynamics that governed hunter-gatherer attitudes toward accumulations of possessions.
Whereas security in an interest-based system comes from accumulating money, in a demurrage system it comes from having productive channels through which to direct it – that is, to become a nexus of the flow of wealth and not a point for its accumulation. In other words, it puts the focus on relationships, not on "having". The demurrage system accords with a different sense of self, affirmed not by enclosing more and more of the world within the confines of me and mine, but by developing and deepening relationships with others. It encourages reciprocation, sharing, and the rapid circulation of wealth.
In today's system, it is much better to have a thousand dollars than it is for ten people to owe you a hundred dollars. In a demurrage system the opposite is true. Since money decays with time, if I have some money I'm not using right now, I am happy to lend it to you, just as if I had more bread than I could eat, I would give you some. If I need some in the future, I can call in my obligations or create new ones with anyone within my network who has more money than he or she needs to meet immediate needs. As Gesell put it:
With the introduction of Free-Money, money has been reduced to the rank of umbrellas; friends and acquaintances assist each other mutually as a matter of course with loans of money. No one keeps, or can keep, reserves of money, since money is under compulsion to circulate. But just because no one can form reserves of money, no reserves are needed. For the circulation of money is regular and uninterrupted.[6]
No longer would money be a scarce commodity, hoarded and kept away from others; rather it would tend to circulate at the maximum possible "velocity". The issuer would ensure stable prices (P) according to the equation of exchange (MV=PQ) by regulating the amount of currency in circulation (M) to correspond to total real economic output (Q). The same result could be achieved by linking the currency to a basket of commodities whose level corresponds to overall economic activity, as proposed by Bernard Lietaer.
The dynamics of a demurrage-based currency system ensure a sufficient amount for all. This is in contradiction to today's economy in which a surfeit of material goods is coupled with their grossly unequal distribution. Hence the deeper contradiction in which, on the one hand, there are hundreds of millions of people who are unemployed or engaged in trivial, meaningless jobs, while on the other hand there is much important, meaningful work left undone—highlighting a disconnect between human creativity and human needs. "With Free-Money demand is inseparable from money, it is no longer a manifestation of the will of the possessors of money. Free-Money is not the instrument of demand, but demand itself, demand materialized and meeting, on an equal footing, supply, which always was, and remains, something material."[7]
When I look at the poverty of this world, the anxiety, the desperate and destructive pursuit of a fraudulent dream of security, I can hardly stifle a howl of protest. Not because it is unjust, though it is, but because it is so unnecessary! We live, after all, in a world of plenty, and we always have. The present money system and underneath it, the enclosure of the wild into the exclusively owned, has created artificial scarcity where none need exist. It is not food or any other necessity that is scarce; it is money, whose built-in scarcity induces the same in everything else.
In a highly specialized, technological society, most of us need to perform exchanges to live. To do so we need a medium of exchange – money. Some people, noting this inescapable fact, can see no alternative but to return to a primitive society, to undo the millennia-long course of civilization, which they quite understandably view as an enormous mistake. The scenario changes if money is used to recreate rather than destroy the social relations of a hunter-gatherer. In those societies, when a hunter killed a large animal, he or she would give away most of the meat, dividing it according to kinship status, personal affection, and need. As with demurrage money, it was much better to have lots of people "owe you one" than it was to have a big pile of rotting meat, or even of dried jerky that had to be transported or secured. Why would you even want to, when your community is as generous to you as you are to it? Security came from sharing. The good luck of your neighbor was your own good luck as well. If you came across an unexpected large source of wealth, you threw a huge party. As a member of the Pirahã tribe explained it when questioned about food storage: "I store meat in the belly of my brother."[8]
A negative-interest currency is a step toward the gift economies of yore that strengthen and define communities. Describing Lewis Hyde's theory of the gift, author Jessica Prentice writes, "Part of the sacred/erotic energy of gifts is that the receiver cannot accumulate them—either a gift needs to be passed on, or another gift needs to be given so that the gift-giving energy keeps moving. Gifts are about flow, and they are meant to circulate."[9] This is a perfect description of free-money, which like a gift collecting dust in the closet loses its value when kept unused. Free-money reverses the compulsion to constantly expand and fortify the accumulation of the private, the realm of me and mine. Just as interest shrinks the circle of self until we are left with the alienated, mercenary ego of modern civilization, demurrage, the opposite of interest, widens it to reunite us with community and all humanity, ending the artificial scarcity and competition of the Age of Usury.
Demurrage recreates, in the realm of money, the hunter-gatherer's disinclination toward food storage or other material accumulation. It resurrects the ancient hunter-gatherer mentality of abundance, in which sharing is easy and natural, in which there is no mad scramble to enclose the world. It promises a return in spirit to the "original affluent society" of Marshall Sahlins, but at a higher order of complexity. It is not a technological return to the Stone Age, as some primitivists envision after the collapse, but a spiritual return.
Consider the !Kung concept of wealth, explored in this exchange between anthropologist Richard Lee and a !Kung man, !Xoma:
I asked !Xoma, ‘What makes a man a //kaiha [rich man]—if he has many bags of //kai [beads and other valuables] in his hut?’
‘Holding //kai does not make you a //kaiha,’ replied !Xoma. ‘It is when someone makes many goods travel around that we might call him //kaiha.’
What !Xoma seemed to be saying was that it wasn't the number of your goods that constituted your wealth, it was the number of your friends. The wealthy person was measured by the frequency of his or her transactions and not by the inventory of goods on hand. [10]
Wealth in a demurrage system evolves into something akin to the model of the Pacific Northwest or Melanesia, in which a leader "acts as a shunting station for goods flowing reciprocally between his own and other like groups of society."[11] Status was not associated with the accumulation of money or possessions, but rather with a huge responsibility for generosity. Can you picture a society in which prestige, power, and leadership were accorded to those with the greatest inclination and capacity to give?
In a system where affluence comes from sharing, our focus is no longer on how to make a living. We focus instead on how to best give of our gifts. A corollary is that money and art are no longer at odds.
Imagine a life where you simply focus on your art, on your gifts, on being of service, in the serene knowledge that your needs will automatically be fulfilled as a matter of course--such an economy is possible. In it, competition is reduced to its proper domain: a yearning for excellence in all that we do. In it, productive work comes from a desire to create a more beautiful world, not to own it; to live and not just survive. We all know in our hearts such an economy is possible. We know it in our dreams, those we deny because we have to "make a living". Life becomes a grim business, a struggle. The Age of Usury presents us with an ineluctable pressure that we can resist but never escape: to make a living is to deny art, purpose, and beauty.

The locution "cannot afford to" reveals just how often money impedes our innate tendencies toward kindness, generosity, leisure, and creativity. Interest-money generates the greed that we mistake as human nature and perpetuates the illusion that security and wealth come from gathering more and more of the world unto the self, carving out a larger and larger exclusive province of "me" at the expense of every other living person, animal, plant, and ecosystem. As well it seems to directly contradict the teaching of karma, which says that what we do to the world, we do to ourselves. In our current money system, giving out to the world means less for me, not more! Free-money reverses this role and brings money into line with karma, reinforcing rather than denying its fundamental principle that by enriching the world we enrich ourselves.
When wealth is separate from accumulation but refers to a richness of relationships, each person's wealth makes everyone wealthier. Art will no longer be limited by what we can afford, for money will be art's ally not its enemy. Business will be the seeking of ways to bestow wealth upon others rather than the stripping of wealth from others. No longer, then, will our lives be full of cheap stuff. Work will no longer be bound to the search for money, but will seek out ways to best serve each other and the world, each according to our unique gifts and temperament. That will be, self-evidently, the way toward riches—both spiritual and financial, for no longer will the two be in conflict.
I would like to comment on the popular New Age idea of "prosperity programming," "opening to the flow of abundance," which is to say, becoming rich through the power of positive thinking. These ideas come from a valid source – the realization that the scarcity of our world is an artifact of our collective beliefs, and not the fundamental reality. However, they are inherently inconsistent with the money system we have today. One of the principles of prosperity programming is to let go of the guilt stemming from the belief that you can only be wealthy if another is poor; that more for me is less for you. The problem, illustrated in Part 1 of this essay, is that under today's money system it is true! More for me IS less for "you". The monetized realm grows at the expense of nature, culture, health, and spirit. The guilt we feel around money is quite justified. Certainly, we can create beautiful things, worthy organizations, noble causes with money, but on some level we are robbing Peter to pay Paul. Please understand that I am not suggesting that you not open to the flow of abundance. On the contrary, when enough people do this, the money system will change to conform to the new belief. Today's money system rests on a foundation of Separation. It is as much an effect as it is a cause of our perception that we are discrete and separate subjects in a universe that is Other. Opening to abundance can only happen when we let go of this identity and open to the richness of our true, connected being. This new identity wants no part of usury.
My dear reader, think about it: Is it really who you are to say, "I will lend you money -- but only if you give me even more in return"? When we need money to live, is that not a formula for slavery? Significantly, the forgiveness of debts for which Solon was famous was prompted in part by the indebted servitude of a growing proportion of the population. Today, young people feel enslaved to their college loans, householders to their mortgages, and entire Third World nations to their foreign debt. Interest is slavery. And since the condition of slavery demeans the slaveholder as much as the slave, in our hearts we want none of it.
The metamorphosis of the human sense of self, the transition from an Age of Separation to an Age of Reunion, is underway today, propelled by a convergence of crises that is rendering obsolete the old self, and the civilization that rests upon it. Each crisis springs from a different facet of separation; each facet of separation contains within it the seed of its own demise. Such is today's financial crisis, the culmination of a Ponzi scheme centuries in the making and based on the delusion that a finite planet can support exponential increase forever. Today, unless we find as yet undreamed of sources of natural and social capital to incinerate, that bubble is about to burst.
The longer we hang on, the harder we scramble to apply one technical fix after another to our tottering money system, the more severe the crisis and its subsequent dislocation will be. The eventual result, however, is assured: a new system of money will emerge that is aligned with the priorities of the connected, interdependent self: sustainability, beauty, and wholeness.
Demurrage-based currency is only part of this transition. Due to space considerations I have ignored key pieces of an economy of Reunion, such as full-cost accounting, JAK banking, local currencies, mutual credit currencies, the leasing economy, P2P economics, and industrial ecology. Yet demurrage is the key. An economy that emulates ecological principles cannot rest on a money system that requires exponential growth. The two are inimical. While usury still reigns, all the other pieces will remain marginal. Nonetheless, the efforts of visionaries such as E.F. Schumacher, Paul Hawken, Herman Daly, and countless others are not in vain. They have planted the seeds for a new kind of economy that will heal our ravaged earth.
Money in the Age of Reunion will be an agent for the development of social, cultural, natural, and spiritual capital, and not their consumption. It will be a mechanism for the sharing of wealth and not its accumulation. It will be a means for the creation of beauty, not its diminishment. It will be a barrier to greed and not an incentive. It will encourage joyful creative work, and not necessitate "jobs". It will reinforce the cyclical processes of nature, and not violate them. And it will accompany a shift in consciousness that we are beginning to experience today, a shift toward a connected self in love with the world. That, after all, is the true self, and that is what we will return to as the pretense of everlasting increase collapses.

Understanding The Financial Crisis

2008-10-14T20:14:00.000-07:00

Suppose you give me a million dollars with the instructions, "Invest this profitably, and I'll pay you well." I'm a sharp dresser -- why not? So I go out onto the street and hand out stacks of bills to random passers-by. Ten thousand dollars each. In return, each scribbles out an IOU for $20,000, payable in five years. I come back to you and say, "Look at these IOUs! I have generated a 20% annual return on your investment." You are very pleased, and pay me an enormous commission.
Now I've got a big stack of IOUs, so I use these "assets" as collateral to borrow even more money, which I lend out to even more people, or sell them to others like myself who do the same. I also buy insurance to cover me in case the borrowers default -- and I pay for it with those self-same IOUs! Round and round it goes, each new loan becoming somebody's asset on which to borrow yet more money. We all rake in huge commissions and bonuses, as the total face value of all the assets we've created from that initial million dollars is now fifty times that.
Then one day, the first batch of IOUs comes due. But guess what? The person who scribbled his name on the IOU can't pay me back right now. In fact, lots of the borrowers can't. I try to hush this embarrassing fact up as long as possible, but pretty soon you get suspicious. You want your million dollars back -- in cash. I try to sell the IOUs and their derivatives that I hold, but everyone else is suspicious too, and no one buys them. The insurance company tries to cover my losses, but it can only do so by selling the IOUs I gave it!
So finally, the government steps in and buys the IOUs, bails out the insurance company and everyone else holding the IOUs and the derivatives stacked on them. Their total value is way more than a million dollars now. I and my fellow entrepreneurs retire with our lucre. Everyone else pays for it.
This is the first level of what has happened in the financial industry over the past decade. It is a huge transfer of wealth to the financial elite, to be funded by US taxpayers, foreign corporations and governments, and ultimately the foreign workers who subsidize US debt indirectly via the lower purchasing power of their wages. However, to see the current crisis as merely the result of a big con is to miss its true significance.
I think we all sense that we are nearing the end of an era. On the most superficial level, it is the era of unregulated casino-style financial manipulation that is ending. But the current efforts of the political elites to fix the crisis at this level will only reveal its deeper dimensions. In fact, the crisis goes "all the way to the bottom." It arises from the very nature of money and property in the world today, and it will persist and continue to intensify until money itself is transformed. A process centuries in the making is in its final stages of unfoldment.
Money as we know it today has crisis and collapse built into its basic design. That is because money seeks interest, bears interest, and indeed is born of interest. To see how this works, let's go back to some finance basics. Money is created when somebody takes out a loan from a bank (or more recently, a disguised loan from some other kind of institution). A debt is a promise to pay money in the future in order to buy something today; in other words, borrowing money is a form of delayed trading. I receive something now (bought with the money I borrowed) and agree to give something in the future (a good or service which I will sell for the money to pay back the debt). A bank or any other lender will ordinarily only agree to lend you money if there is a reasonable expectation you will pay it back; in other words, if there is a reasonable expectation you will produce goods or services of equivalent value. This "reasonable expectation" can be guaranteed in the form of collateral, or it can be encoded in one's credit rating.
Any time you use money, you are essentially guaranteeing "I have performed a service or provided a good of equivalent value to the one I am buying." If the money is borrowed money, you are saying that you will provide an equivalent good/service in the future.
Now enter interest. What motivates a bank to lend anyone money in the first place? It is interest. Interest drives the creation of money today. Any time money is created through debt, a need to create even more money in the future is also created. The amount of money must grow over time, which means that the volume of goods and services must grow over time as well.
If the volume of money grows faster than the volume of goods and services, the result is inflation. If it grows more slowly -- for example through a slowdown in lending -- the result is bankruptcies, recession, or deflation. The government can increase or decrease the supply of money in several ways. First, it can create money by borrowing it from the central bank, or in America, from the Federal Reserve. This money ends up as bank deposits, which in turn give banks more margin reserves on which to extend loans. You see, a bank's capacity to create money is limited by margin reserve requirements. Typically, a bank must hold cash (or central bank deposits) equal to about 10% of its total customer deposits. The other 90%, it can loan out, thus creating new money. This money ends up back in a bank as deposits, allowing another 81% of it (90% of 90%) to be lent out again. In this way, each dollar of initial deposits ends up as $9 of new money. Government spending of money borrowed from the central bank acts a seed for new money creation. (Of course, this depends on banks' willingness to lend! In a credit freeze such as happened this week, banks hoard excess reserves and the repeated injections of government money have little effect.)
Another way to increase the money supply is to lower margin reserve requirements. In practice this is rarely done, at least directly. However, in the last decade, various kinds of non-bank lending have skirted the margin reserve requirement, through the alphabet soup of financial instruments you've been hearing about in the news. The result is that each dollar of original equity has been leveraged not to nine times it original value, as in traditional banking, but to 70 times or even more. This has allowed returns on investment far beyond the 5% or so available from traditional banking, along with "compensation" packages beyond the dreams of avarice.
Each new dollar that is created comes with a new dollar of debt -- more than a dollar of debt, because of interest. The debt is eventually redeemed either with goods and services, or with more borrowed money, which in turn can be redeemed with yet more borrowed money... but eventually it will be used to buy goods and services. The interest has to come from somewhere. Borrowing more money to make the interest payments on an existing loan merely postpones the day of reckoning by deferring the need to create new goods and services.
The whole system of interest-bearing money works fine as long as the volume of goods and services exchanged for money keeps growing. The crisis we are seeing today is in part because new money has been created much faster than goods and services have, and much faster than has been historically sustainable. There are only two ways out of such a situation: inflation and bankruptcies. Each involve the destruction of money. The current convulsions of the financial and political elites basically come down to a futile attempt to prevent both. Their first concern is to prevent the evaporation of money through massive bankruptcies, because it is, after all, their money.
There is a much deeper crisis at work as well, a crisis in the creation of goods and services that underlies money to begin with, and it is this crisis that gave birth to the real estate bubble everyone blames for the current situation. To understand it, let's get clear on what constitutes a "good" or a "service." In economics, these terms refer to something that is exchanged for money. If I babysit your children for free, economists don't count it as a service. It cannot be used to pay a financial debt: I cannot go to the supermarket and say, "I watched my neighbor's kids this morning, so please give me food." But if I open a day care center and charge you money, I have created a "service." GDP rises and, according to economists, society has become wealthier.
The same is true if I cut down a forest and sell the timber. While it is still standing and inaccessible, it is not a good. It only becomes "good" when I build a logging road, hire labor, cut it down, and transport it to a buyer. I convert a forest to timber, a commodity, and GDP goes up. Similarly, if I create a new song and share it for free, GDP does not go up and society is not considered wealthier, but if I copyright it and sell it, it becomes a good. Or I can find a traditional society that uses herbs and shamanic techniques for healing, destroy their culture and make them dependent on pharmaceutical medicine which they must purchase, evict them from their land so they cannot be subsistence farmers and must buy food, clear the land and hire them on a banana plantation -- and I have made the world richer. I have brought various functions, relationships, and natural resources into the realm of money. In The Ascent of Humanity I describe this process in depth: the conversion of social capital, natural capital, cultural capital, and spiritual capital into money.
Essentially, for the economy to continue growing and for the (interest-based) money system to remain viable, more and more of nature and human relationship must be monetized. For example, thirty years ago most meals were prepared at home; today some two-thirds are prepared outside, in restaurants or supermarket delis. A once unpaid function, cooking, has become a "service". And we are the richer for it. Right?
Another major engine of economic growth over the last three decades, child care, has also made us richer. We are now relieved of the burden of caring for our own children. We pay experts instead, who can do it much more efficiently.
In ancient times entertainment was also a free, participatory function. Everyone played an instrument, sang, participated in drama. Even 75 years ago in America, every small town had its own marching band and baseball team. Now we pay for those services. The economy has grown. Hooray.
The crisis we are facing today arises from the fact that there is almost no more social, cultural, natural, and spiritual capital left to convert into money. Centuries, millennia of near-continuous money creation has left us so destitute that we have nothing left to sell. Our forests are damaged beyond repair, our soil depleted and washed into the sea, our fisheries fished out, the rejuvenating capacity of the earth to recycle our waste saturated. Our cultural treasury of songs and stories, images and icons, has been looted and copyrighted. Any clever phrase you can think of is already a trademarked slogan. Our very human relationships and abilities have been taken away from us and sold back, so that we are now dependent on strangers, and therefore on money, for things few humans ever paid for until recently: food, shelter, clothing, entertainment, child care, cooking. Life itself has become a consumer item. Today we sell away the last vestiges of our divine bequeathment: our health, the biosphere and genome, even our own minds. This is the process that is culminating in our age. It is almost complete, especially in America and the "developed" world. In the developing world there still remain people who live substantially in gift cultures, where natural and social wealth is not yet the subject of property. Globalization is the process of stripping away these assets, to feed the money machine's insatiable, existential need to grow. Yet this stripmining of other lands is running up against its limits too, both because there is almost nothing left to take, and because of growing pockets of effective resistance.
The result is that the supply of money -- and the corresponding volume of debt -- has for several decades outstripped the production of goods and services that it promises. It is deeply related to the classic problem of oversupply in capitalist economics. The Marxian crisis of capital can be deferred into the future as long as new, high-profit industries and markets can be developed to compensate for the vicious circle of falling profits, falling wages, depressed consumption, and overproduction in mature industries. The continuation of capitalism as we know it depends on an infinite supply of these new industries, which essentially must convert infinite new realms of social, natural, cultural, and spiritual capital into money. The problem is, these resources are finite, and the closer they come to exhaustion, the more painful their extraction becomes. Therefore, contemporaneous with the financial crisis we have an ecological crisis and a health crisis. They are intimately interlinked. We cannot convert much more of the earth into money, or much more of our health into money, before the basis of life itself is threatened.
Faced with the exhaustion of the non-monetized commonwealth that it consumes, financial capital has tried to delay the inevitable by cannibalizing itself. The dot-com bubble of the late 90s showed that the productive economy could not longer keep up with the growth of money. Lots of excess money was running around frantically, searching for a place where the promise of deferred goods and services could be redeemed. So, to postpone the inevitable crash, the Fed slashed interest rates and loosened monetary policy to allow old debts to be repaid with new debts (rather than real goods and services). The new financial goods and services that arose were phony, artifacts of deceptive accounting on a vast, systemic scale.
Obviously, the practice of borrowing new money to pay the principal and interest of old debts cannot last very long, but that is what the economy as a whole has done for ten years now. Unfortunately, simply stopping this practice isn't going to solve the underlying problem. A collapse is coming, unavoidably. The government's bailout plan will at best postpone it for a year or two (who knows, maybe until 2012!), long enough for the big players to move their money to a safe haven. They will discover, though, that there is no safe haven. As the US dollar loses its safe-haven status (which will happen all the more certainly when the government takes over Wall Street's bad debts), you can expect capital to chase various commodities in an inflationary surge before a deflationary depression takes hold. If a credit freeze overpowers the government's inflationary measures, depression will come all the sooner.
The present crisis is actually the final stage of what began in the 1930s. Successive solutions to the fundamental problem of keeping pace with money that expands with the rate of interest have been applied, and exhausted. The first effective solution was war, a state which has been permanent since 1940. Nuclear weapons and a shift in human consciousness have limited the solution of endless military escalation. Other solutions -- globalization, technology-enabled development of new goods and services to replace human functions never before commoditized, and technology-enabled plunder of natural resources once off limits, and finally financial auto-cannibalism -- have similarly run their course. Unless there are realms of wealth I have not considered, and new depths of poverty, misery, and alienation to which we might plunge, the inevitable cannot be delayed much longer.
In the face of the impending crisis, people often ask what they can do to protect themselves. "Buy gold? Stockpile canned goods? Build a fortified compound in a remote area? What should I do?" I would like to suggest a different kind of question: "What is the most beautiful thing I can do?" You see, the gathering crisis presents a tremendous opportunity. Deflation, the destruction of money, is only a categorical evil if the creation of money is a categorical good. However, you can see from the examples I have given that the creation of money has in many ways impoverished us all. Conversely, the destruction of money has the potential to enrich us. It offers the opportunity to reclaim parts of the lost commonwealth from the realm of money and property.
We actually see this happening every time there is an economic recession. People can no longer pay for various goods and services, and so have to rely on friends and neighbors instead. Where there is no money to facilitate transactions, gift economies reemerge and new kinds of money are created. Ordinarily, though, people and institutions fight tooth and nail to prevent that from happening. The habitual first response to economic crisis is to make and keep more money -- to accelerate the conversion of anything you can into money. On a systemic level, the debt surge is generating enormous pressure to extend the commodification of the commonwealth. We can see this happening with the calls to drill for oil in Alaska, commence deep-sea drilling, and so on. The time is here, though, for the reverse process to begin in earnest -- to remove things from the realm of goods and services, and return them to the realm of gifts, reciprocity, self-sufficiency, and community sharing. Note well: this is going to happen anyway in the wake of a currency collapse, as people lose their jobs or become too poor to buy things. People will help each other and real communities will reemerge.
In the meantime, anything we do to protect some natural or social resource from conversion into money will both hasten the collapse and mitigate its severity. Any forest you save from development, any road you stop, any cooperative playgroup you establish; anyone you teach to heal themselves, or to build their own house, cook their own food, make their own clothes; any wealth you create or add to the public domain; anything you render off-limits to the world-devouring machine, will help shorten the Machine's lifespan. Think of it this way: if you already do not depend on money for some portion of life's necessities and pleasures, then the collapse of money will pose much less of a harsh transition for you. The same applies to the social level. Any network or community or social institution that is not a vehicle for the conversion of life into money will sustain and enrich life after money.
In previous essays I have described alternative money systems, based on mutual credit and demurrage, that do not drive the conversion of all that is good, true, and beautiful into money. These enact a fundamentally different human identity, a fundamentally different sense of self, from what dominates today. No more will it be true that more for me is less for you. On a personal level, the deepest possible revolution we can enact is a revolution in our sense of self, in our identity. The discrete and separate self of Descartes and Adam Smith has run its course and is becoming obsolete. We are realizing our own inseparateness, from each other and from the totality of all life. Interest denies this union, for it seeks growth of the separate self and the expense of something external, something other. Probably everyone reading this essay agrees with the principles of interconnectedness, whether from a Buddhistic or an ecological perspective. The time has come to live it. It is time to enter the spirit of the gift, which embodies the felt understanding of non-separation. It is becoming abundantly obvious that less for you (in all its dimensions) is also less for me. The ideology of perpetual gain has brought us to a state of poverty so destitute that we are gasping for air. That ideology, and the civilization built upon it, is what is collapsing today.
Individually and collectively, anything we do to resist or postpone the collapse will only make it worse. So stop resisting the revolution in human beingness. If you want to survive the multiple crises unfolding today, do not seek to survive them. That is the mindset of separation; that is resistance, a clinging to a dying past. Instead, allow your perspective to shift toward reunion, and think in terms of what you can give. What can you contribute to a more beautiful world? That is your only responsibility and your only security. The gifts you need to survive and enjoy will come to you easily, because what you do to the world, you do to yourself.

Paulson's Bailout Plan Is A Crime

2008-10-02T02:29:00.000-07:00

For nearly a year, Americans have been asking themselves why the investors and foreign banks that bought up hundreds of billions of dollars of worthless mortgage-backed securities (MBS) from US investment banks have not taken legal action against these same banks or initiated a boycott of US financial products to prevent more people from getting ripped off?Now we know the answer. It's because, behind the scenes, Henry Paulson and Co. were working out a deal to dump the whole trillion dollar mess on the US taxpayer. That's what this whole $700 billion boondoggle is all about; wiping out the massive debts that were generated in the biggest incident of fraud in history. Rep Brad Sherman explained it like this last night to Larry Kudlow: "It (The bill) provides hundreds of billions of dollars of bailouts to foreign investors. It provides no real control of Paulson's power. There is a critique board but not really a board that can step in and change what he does. It's a $700 billion program run by a part-time temporary employee and there is no limit on million dollar a month salaries....... It's very clear. The Bank of Shanghai can transfer all of its toxic assets to the Bank of Shanghai of Los Angeles which can then sell them the next day to the Treasury. I had a provision to say if it wasn't owned by an American entity even a subsidiary, but at least an entity in the US, the Treasury can't buy it. It was rejected.The bill is very clear. Assets now held in China and London can be sold to US entities on Monday and then sold to the Treasury on Tuesday. Paulson has made it clear he will recommend a veto of any bill that contained a clear provision that said if Americans did not own the asset on September 20th that it can't be sold to the Treasury. Hundreds of billions of dollars are going to bail out foreign investors. They know it, they demanded it and the bill has been carefully written to make sure it can happen." So, why hasn't the Treasury Secretary explained the real purpose of the bailout to the American people? Could it be that he knows that his $700 billion bailout would end up like the Hindenburg, vanishing in sheets of flames? This is a terrible bill, and it confers absolute authority on one of the central players in the scandal, Henry Paulson, who was the Chairman of Goldman Sachs at the time this MBS garbage was being peddled around the planet to credulous investors. Now Paulson will be in a position to buy up any "troubled asset" he that he believes could pose a threat to "financial market stability". That's just great! It is clear that Paulson will use his unchecked powers to wipe the slate clean and remove any possibility that foreign investors will take legal action against the real perpetrators; the giant Wall Street investment banks.So, how do the American people like paying off Paulson and Co. future legal bills? Is that how taxpayer revenue should be spent instead of on education, health care and infrastructure? There's another reason why Paulson is working so hard to pass the Bailout for Tycoons Bill; it's a windfall for the banking giants. Citi did not simply pick up Wachovia by happenstance nor did JP Morgan purchase Washington Mutual because it wanted to perform its civic duty and prevent a full-system meltdown. No way; they were clearly aware of the way the wind was blowing. In fact, neither case manages to pass the smell test.This is from AP's Sara Lepro: "Citigroup agreed Monday to purchase Wachovia's banking operations for $2.1 billion in a deal arranged by federal regulators, making the Charlotte-based bank the latest casualty of the widening global financial crisis. The deal greatly expands Citigroup's retail franchise—giving it a total of more than 4,300 U.S. branches and $600 billion in deposits—and secures its place among the U.S. banking industry's Big Three, along with Bank of America Corp. and JP Morgan Chase & Co. But it comes at a cost: Citigroup Inc. said it will slash its quarterly dividend in half to 16 cents. It also will dilute existing shareholders by selling $10 billion in common stock to shore up its capital position. In addition to assuming $53 billion worth of debt, Citigroup will absorb up to $42 billion of losses from Wachovia's $312 billion loan portfolio, with the Federal Deposit Insurance Corp. agreeing to cover any remaining losses. Citigroup also will issue $12 billion in preferred stock and warrants to the FDIC.(Ed; Here's the punch line) "The government's proposed $700 billion rescue plan for financial institution, being voted on Monday by the House of Representatives, likely will prove of added benefit to Citi. While the plan broadly aims to prevent banks from profiting on the sale of troubled assets to the government, there is an exception made for assets acquired in a merger or buyout, or from companies that have filed for bankruptcy. This could allow Citigroup to sell toxic mortgages and other assets it gained from Wachovia for a higher price than the bank actually paid for them." ("Citigroup to buy Wachovia banking operations" Huh?!? So Citi not only gets an army of depositors (the cheapest capital available!) but, at the same time, is going to be able to dump it's mortgage-backed junk on the taxpayer? And, guess what? The JP Morgan deal looks nearly identical. Is this "insider baseball" or not? Does anyone want to wager that G-Sax will also get a privileged spot at the public trough sucking up billions of taxpayer dollars to patch together its tattered balance sheet? And what will the net result of Paulson's Bailout for Fraudsters be; more consolidation of the financial industry and the utter annihilation of local and regional banks. That's a sure thing. The mom and pop banks across the country are going to take it in the stern sheets if this bill is passed. Bet on it.The country has no time for this cynical scavenger-hunt. The system is listing badly and we have ONE chance to get this emergency bill right. There is no way an industry rep like Henry Paulson, who has spent his entire career feathering his own nest and handing out plums to his buddies, can operate in the best interests of the American people. Paulson has got to go! According to Bloomberg News , Sept 29: "The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression. The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide. The Term Auction Facility, the Fed's emergency loan program, will expand by $300 billion to $450 billion. The European Central Bank, the Bank of England and the Bank of Japan are among the participating authorities. The crisis is reverberating through the global economy, causing stocks to plunge and forcing European governments to rescue four banks over the past two days alone." (Bloomberg)Get it? The Fed has ALREADY brushed aside Congress's "No" vote and pumped money into the system; and look what happened. Nothing! Libor is still at historic highs, the Ted spread has widened to record levels and interbank lending is grinding to a standstill. There's a run on the money markets that is reducing the ability of businesses to turn over short term debt. The system is shutting down, folks, and Paulson's snake oil won't help. Why throw another $700 billion down a rathole? 400 reputable economists--not the "faith based" industry hacks that work for the Bush administration--are opposed to this bailout. It has to be stopped. This is a "real time" meltdown and it requires real solutions, not bailouts for foreign creditors and Wall Street Goliaths. (Foreign victims of this scam will have to sue the perpetrators not the US taxpayer) As Nouriel Roubini, chairman of Roubini Global Economics, points out, we are on the verge of the "mother of all bank runs", a cross-border savaging of reserves that would crash the entire financial system. Here's Roubini on the next shoe to drop: "The next step of this panic could become the mother of all bank runs, i.e. a run on the trillion dollar plus of the cross border short-term interbank liabilities of the US banking and financial system as foreign banks as starting to worry about the safety of their liquid exposures to US financial institutions; such a silent cross border bank run has already started as foreign banks are worried about the solvency of US banks and are starting to reduce their exposure. And if this run accelerates - as it may now - a total meltdown of the US financial system could occur. We are thus now in a generalized panic mode and back to the risk of a systemic meltdown of the entire financial system. And US and foreign policy authorities seem to be clueless about what needs to be done next. Maybe they should today start with a coordinated 100 bps reduction in policy rates in all the major economies in the world to show that they are starting to seriously recognize and address this rapidly worsening financial crisis." (Nouriel Roubini's EconoMonitor)We have no time for Paulson's self serving shenanigans. This is not how one goes about recapitalizing the banking system or bringing stability to the financial system. It's time to get rid of the lobbyists and banking vermin and bring in the economists and the people with real experience. Paulson's plan is loser. Not one dime should go to this latest Wall Street swindle. No bailout!

الشعب المغربي بدون هوية

2008-09-10T10:25:00.000-07:00

خرج الملك كما يفعل عادة للتجول بسيارته في شوارع المدينة ، وكان معه داخل السيارة ابنه البكر ، الذي هو ولي العهد.

في ملتقى الطرق سيتوقف الملك أمام شرطي المرور الذي ينظم حركة السير ، والتفت إلى ابنه الصغير ذو الخمس سنوات يسأله إن كان

يرغب أن يصبح شرطيا عندما يكبر ، وعوض أن يجيب الصغير أخذ الشرطي المبادرة وأجاب الملك بأنه يتمنى أن يرى ولي العهد الصغير جالسا على عرش أسلافه في أحد الأيام ، وأضاف كلمات يثني فيها على الملك . الملك بطبيعة الحال أعجبه ما سمع من فم الشرطي ، وقبل أن ينصرف كافأه على الفور ب "كريما" ! للإشارة فالملك الذي كان بطلا لهذه الواقعة ليس ملكا آخر غير محمد السادس
إذا صح هذا الخبر الذي أوردته "الجريدة الأولى" في عددها التسعين ، فعلى المغاربة أن يقتنعوا بأن المغرب لن يتغير كما نتمنى حتى في عهد الحسن الثالث
يجب علينا أن نعترف بأن الذي أهلك بلدنا وأوصله إلى هذه الرتبة المخجلة التي يحتلها على الصعيد العالمي في كل المجالات هو اقتصاد الريع ، الذي ينتفع به المحظوظون دون غيرهم من أبناء وبنات الشعب ، وطبعا فلسنا بحاجة إلى استعمال المصطلحات الكبيرة التي يستعملها السياسيون كي نفهم ما هو "الريع" ، فمعناه بكل بساطة هو أن تأخذ حق الآخرين بدون وجه حق ! ورخص النقل أو "الكريمات" التي يوزعها الملك على المواطنين الذين يمدون إليه رسائل الاستعطاف التي يكتبونها بنفس العبارات التي ينطق بها المتسولون عندما يمدون أيديهم إلى الناس على أرصفة الشوارع تدخل بدورها في إطار الريع . فالدول التي تحترم مواطنيها لا تجعل منهم شحاذين يتسولون الأعتاب الشريفة ، بل تصنع لهم المعامل والمصانع كي يشتغلوا ويكسبوا لقمة عيشهم بعزة وكرامة ، وحتى لو افترضنا أن هذه الكريمات لا يتم إعطاؤها إلا لمن يستحقها من ذوي الاحتياجات الخاصة والفقراء والمعوزين ، وهذا أمر مستبعد بطبيعة الحال ، فهذا لا يشرف المواطن المغربي على الاطلاق ، فالشغل والتطبيب والتعليم حق يمنحه لنا الدستور ، لذلك يجب على الدولة أن توفر لمواطنيها سبل العيش الكريم عوض إهانتهم بهذه الطريقة المذلة
ثم إن هذه "الكريمات" لا يجوز للملك أن يتصرف فيها كيفما شاء بدون حسيب ولا رقيب ، ويمنحها لكل من يلقي عبارة مدح في أذنه ، لأن ذلك أولا يساهم في خلق جيوش من المتملقين الذين عوض أن يسعوا إلى كسب معيشتهم بعرق جبينهم يكسبونها بكلمات المدح والإطراء التي تكون في الغالب بلا مصداقية ! ويكون الملك بذلك يشجع شعبه على الاتكال
ولأن ذلك أيضا يجعل منا نحن المغاربة شعبا بلا كرامة ، ما دمنا نعيش على الهبات والاكراميات ، والحال أننا لا نحتاج إلى من يشفق علينا ، بل إلى من يوزع بيننا ثروات الوطن بالتساوي . ألا يكفيكم ما قاله الرئيس الجزائري في حقنا عندما صرح بأن الجزائر لا توزع على مواطنيها الحريرة ، بل تمنح لهم مفاتيح الشقق السكنية المفروشة . ورغم أننا نعرف أننا والجزائريون في الهم سواء ، إلا أن ما قاله بوتفليقة يجدر بالمسؤولين المغاربة أن يضعوه نصب أعينهم ، ويكفوا عن التعامل معنا كمتسولين حقيرين ، يضحك علينا الأصدقاء والأعداء على حد سواء
في نهاية كأس العرش لكرة القدم بين المغرب الفاسي والجيش الملكي ، تسلح المدرب رشيد الطاوسي بصنطيحة من حديد ، وقدم للأمير رشيد الذي ترأس المباراة "هدية" عبارة عن قميص رياضي . القميص تم لفه بعناية داخل كيس بلاستيكي ، وبين ثناياه تم وضع رسائل استعطاف تقدم بها لاعبو الفريق الفاسي إلى سمو الأمير
ومع ذلك يتساءلون عن سبب كل هذه النكسات المتلاحقة التي تحصدها الرياضة المغربية في كل أنواعها . فحتى الرياضيون الذين يعرفون أن رزقهم رهين بكمية العرق التي تتصبب من جباههم يرون ألا جدوى من تعذيب أنفسهم في كسب كسرة الخبز بطريقة شريفة ، ما دام أن استعطاف أحد أفراد الأسرة الملكية يمكن أن يأتي برزق يدوم طيلة الحياة . وبلا عذاب ولا تمارة
وعلى ذكر الرياضيين لابد من الإشارة إلى أن عددا من اللاعبين القدامى المحظوظين يملكون رخصا للنقل يكترونها بالملاين ، رغم أن أغلبهم لا يستحقونها ، وهناك من حصل على هكتارات من الأراضي الفلاحية هدية له على "تشريف" المغرب في الملتقيات الرياضية ، كهشام الكروج الذي حصل على مساحات من الأراضي الفلاحية الخصبة بمدينته بركان
هذه السياسة التي تتعامل بها الدولة مع أبنائها مريضة للغاية وتحتاج إلى علاج مستعجل ، فأي رياضي عندما يدخل إلى ميدان المنافسة يكون هدفه الأول والأخير هو الربح الشخصي قبل أن يفكر في تشريف الوطن ، والدليل هو أن ما يقارب 300 رياضي مغربي تجنسوا بجنسيات بلدان أخرى ، وأصبحوا يخوضون المنافسات الرياضية تحت راياتها ، ليس لأنهم أقل وطنية منا ، بل لأنهم اكتشفوا ذات لحظة أن مستقبلهم سيكون مبنيا للمجهول إذا قرروا التنافس تحت ظل العلم المغربي الأحمر
لذلك فالأراضي التي منحتها الدولة لهشام الكروج مثلا لا يستحقها ، فالرجل جمع مئات الملايين من كل الميداليات التي فاز بها ، ويحصل على راتب شهري من الجامعة حيث يشتغل ، ومن فوق هادشي كامل يبقى ما قام به في حق المغرب واجبا ، ما دام أن المغرب هو الذي وفر له ملاعب التداريب والأكل والمأوى وأشياء أخرى ، ودفع ثمن تذاكر السفر والفندق ... فخدمة الوطن كما قلنا مرارا تبقى واجبا على الجميع ، واللي ما عجبوش الحال يمشي يقلب على شي جنسية أخرى عوض الاستيلاء على أراضي الدولة بدون وجه حق
بالمناسبة ، هل تعرفون مثلا أن سويسرا التي تعتبر واحدة من أغنى دول العالم عندما كافأت بطلها الكبير روجي فيديرير الذي رفع العلم السويسري عشرات المرات في المحافل الدولية الكبرى لم تقدم له هكتارات من الأراضي ، أو رخصة نقل أو حتى بقعة أرضية ، بل اكتفت بمنحه هدية رمزية عبارة عن بقرة من النوع الكروازي ! والعلف ديالها طبعا على حسابو
فالبلدان المتقدمة وصلت إلى ما هي عليه لأنها لا تجامل أبناءها ، بل تتعامل معهم في إطار القانون الذي يجعل الجميع سواسية ، ولأنها لا توزع ثرواتها على المحظوظين كما يحدث عندنا ، بل يستفيد منها الجميع على قدم المساواة ، وهذا ما ينقصنا في المغرب حتى يتخلص بلدنا من هذا الاعوجاج المزمن الذي تعاني منه سياسته العرجاء
وعندما يرى ولي العهد الصغير الذي سيتولى الحكم في يوم من الأيام كيف أن والده يوزع الهبات والاكراميات والكريمات على الناس بمجرد سماع كلمة إطراء أو مدح ، فلا شك أنه سيتصرف بنفس "المنطق" عندما يحكم ، لذلك فما علينا سوى أن نؤجل أحلامنا بمغرب المساواة وتكافؤ الفرص لغاية حكم الملك محمد السابع الذي سيأتي بعد الحسن الثالث اللي هو ولي العهد حاليا

Grand Theft : American Style

2008-09-09T15:55:00.001-07:00

Taxpayers take on trillions in risk. You can call it a bailout, you can call it a safety net or you can call it a rescue package,but the bottom line is the American taxpayer is left footing the bill.
This is the biggest nationalization in U.S. history. Freddie and Fannie finance 3 out of 4 new mortgages. And now, the mortgage industry depends neither on willing buyers and sellers...nor on willing lenders and borrowers...but on the U.S. government. The Land of the Free has put its housing under the control of the state! Yes, there is still plenty of room for private initiative and private decision-making. But, ultimately, millions of Americans now depend on the U.S. government for the roofs over their heads.
I checked the U.S. Constitution for clarification. I am looking for a provision stating that the ‘U.S. Federal Government shall enter the mortgage finance business and use taxpayers’ money to rescue irresponsible lenders and dimwit homeowners from their own mistakes.’ It wasn’t there. But so what? If there is anything the government can’t do, I have yet to find it.
Of course, the idea of taxpayers bailing out the mortgage finance industry is ridiculous; taxpayers can’t even finance existing federal obligations. Not even close. This year for example, they’ll be a half trillion short. If you figured it properly, the deficit would be trillions more.
The government is in the business of stacking one monumental fraud on top of another...trying to give everyone the idea that he can live at someone else’s expense. Sooner or later, the whole mountain of flimflam falls down.
But don’t interpret a new bailout plan for mortgage investors as a sign that the financial stock bear market is over.It’s not – at least for banks holding the worst credit exposures. Over time, these institutions will have to confess losses; take write-downs; and raise new, dilutive capital. Many will be taken over by the FDIC, which wipes out shareholders.’ Investors were encouraged by the bailout anyway.
‘World markets soar after Freddie, Fannie bailouts,’ the AP reported.
The Dow rose 289 points yesterday. The dollar rose – to $1.41 per euro. And gold rose a little too – to $807.
Meanwhile, the Federal Highway Trust Fund went broke. Most likely, there will be many more where that came from.
*** Hmmm...even with the Fannie and Freddie bailout (briefly) propping up Wall Street, today it looks like there is no joy in Mudville, after all. Following the bailout news yesterday, stocks surged...but today is a different story. One the U.S. is more accustomed to.
This morning, the National Association of REALTORS released data from the Pending Home Sales Index, which projects home sales based on contracts signed during a given month (sounds like a fun job). The index for July fell to 86.5 down from the previous month’s reading, and down 6.7% from the same month in 2007.
Also affecting Wall Street this morning are lower oil prices. Even in peak hurricane season, prices for crude are staying in the $105 zone – much lower that the highs the United States faced in July.
All signs point to a sluggish economy, but here is the icing on the cake: the Congressional Budget Office says that the government will run a record $407 billion budget deficit this year...and there’s a very real possibility of it going even higher once you figure in Fannie and Freddie.
‘The economy is likely to experience at least several more months of very slow growth,’ the new report said. ‘Whether this period will ultimately be designated a recession or not is still uncertain, but the increase in the unemployment rate and the pace of economic growth are similar to conditions during previous periods of mild recession.’
But will these high numbers have any effect on Obama’s or McCain’s economic plans? Well, if this is any indication, both parties claim that they will extend Bush’s tax cuts if elected.
However, as the CBO points out, and we point out in I.O.U.S.A. – even if the Bush tax cuts were to expire in 2010, that would only solve about 10% of the United States’ financial hole. As David Walker says in the film:
‘When many Americans think of debt and deficits, their knee-jerk reaction is to blame the war in Iraq, or defense spending. Some people think that we can solve the country’s financial problems by stopping fraud, waste and abuse, or by canceling the Bush tax cuts. The truth is, the United States could do all three of these things and still wouldn’t come close to solving the nation’s fiscal challenges.
‘The U.S. already has $11 trillion in fiscal liabilities, including public debt. To this amount, add the current unfunded obligations for Social Security benefits of about $7 trillion. Then add Medicare’s unfunded promise: $34 trillion, of which about $26 trillion relates to Medicare (parts A&B) and about $8 trillion relates to Medicare D, the new prescription drug benefit which some claimed would save money in overall Medicare costs. Add another trillion in miscellaneous items and you get $53 trillion. The United States would need $53 trillion invested today, which is about $175,000 per person, to deliver on the government’s obligations and promises. How much of this $53 trillion do we have? Nada.’
Does this really promise big change in the course of U.S. financial markets?
After all, both companies trade on the New York Stock Exchange. The basic idea is that these companies supposedly belong to shareholders. These shareholders are owners just like the guy who owns the gas station on the corner or the husband and wife team that runs the French bistro on Main Street.
But Fannie and Freddie were never really private companies like these others. Entrepreneurs usually start businesses. Congress created the mortgage giants by charter (hence, they are called government-sponsored enterprises, or GSEs). And the two giants enjoyed many advantages from that parentage. Fannie and Freddie have long operated in a sort of limbo as a result, neither fish nor fowl. Both carry the implicit guarantee that if something went truly wrong, the government would come along and make it right.
And so it has. Bondholders are happy today. Stockholders are not. As I write, Fannie Mae is down 80% today. Freddie Mac is down 75%. I have no flag in either camp, but I certainly have no sympathy for the stockholders. Anyone who gave them a fair look could see that both GSEs were ticking time bombs.

تموز أنت ربيعنا

2008-08-29T13:50:00.000-07:00

قصيدة للشاعر والاكاديميالفلسطيني الكبير د. أحمد حسن المقدسي( خاص بعرب تايمز)قصيدة مهداة الى المناضل السيدحسن نصرالله ورفاقه في النصر
لله ِ دَرّك قد حَمَيت َ حِـماناوالنصر ُ حَلـَّـَق َ في فـَضاء ِ سمـانايا صانع َ الأمجاد ِ كيف أتيتنا ؟أهديتنا نصرا ً وغيرُ ك خانـاأثبت َّ أن ّ النصر َ محض ُ إرادة ٍ والنصر ُ كان أمامـَنا البُرْهـانـاكنت َ الصَدوق َ وكان وعدُ ك َ صادقا ًلم تَخذِ ل ِ الأنصار َ والخِلانـافَوَثَبْت َ والفرسان ُ حولك َ عُصْبة ٌ أ ُسْـد ٌ إذا داعي الجهاد ِ دعانـاورجالك َ الأبطال ُ حولك َكلهُم ْأنـا التفــت َّ وجدْ تهم عُـقبا نـافإذا علي ٌّ سـاكن ٌ بنفوسِــهم وإذا حسين ٌ يسـكن ُ الأبد انــاأوْلَمْــت َ من جُثث ِ العدو ِ وليمـة ًأشْبَعْـت َ منها الد ُّود َ والغِـربانـافوعدتـَنـا ، وأتيْـت َ بالنصر ِ الكبير ِوعاد َ جيش ُ الخاسـئين َ مُـهـانـا***
ما كنت ُ يوما ً مُنـْشِدا ً في جَوقَـَـة ٍوَفـْق َ العَطاء ِ يُدبِّـج ُ الأوزانـاهي َ سُنة ُ الأحرار ِ في زَمن ِ الرذيلة ِوالخنـا : أن ينصروا الفرسـاناكم كنت ُ أطمح ُ في ارتواء ِ حُشاشتي ورجـعت ُ عن ْ آبارهـم ظمآنـايا أيها الصقـْر ُ المحلـِّـق ُ عاليـا ًوالآخرون تحولوا جـُرذانـانظـِّـف ْ لنا بيروت َ من ْ أوساخِهاوأعـِـد ْ الى عليائـه ِ لبنانـاتلك َ الأفاعي أخرجت ْ أنيابهـا وبـَنـَـت ْ على حـُلـُم ِ الخـَـراب ِ رِهانـاوتبادلوا الأنخاب َ مع ْ أسيادِهم سَـقـْط ُ الرجال ِ يُعاهــد ُ الشيـطانـاأطفَأت َ نا ر َ الطائفية ِ بعدمـا قـَـدَحوا الزناد َ ليُشعلوا النيرانـاأوّاه ُ كم أرْعبْتـَـهم حين َ الحسام ُإلى رقاب ِ الخائنين َ تدانـىفإذا بسَـعْـد يسْتجير ُ بجَـعْجـَـع ٍووليـدُهم يستـَنهِـض ُ الزُّعرانـالا ..لا تـُفاوض ْ زُمْـرة َ الشيطان ِ لا دِيْـن ٌ لمن يتوسَّـل ُ الشيـطانالا تـَلـْمَسَـن َّ يد َ الخيانة ِ والخنوع ِ ولا تـُـشَـرِّف ْ بالعِناق ِ جبانـافأولاء ِ خِـصيـان ٌ لدى أسيادهمدَعْـهُمْ لدى أسيادهم خِصْيانـامِـن ْ بعـد ِ مـا أذللت َ سيدَهمبساحات ِ الوغى ، هل تلتقي الأقنانـا ؟فكبيرُهم شَرَف ٌ لـه لو أنَّ' ليفني ' ترتديــه ِ لِنـَعْـلِها ' جُـربانـــا 'وشريْفـُهم فَخْــر ٌ له لو ' كوندوليزا 'عَـيَّنـَـته ببيتِـها سَـعْدانـادَعْهـم سيحترقون َ في نيرانِـهـمفالنار ُ تأكل ُ بعضـَها أحيانـا***
بيروت ُ يا وَجـَع القصيدة ِ لم أزل رَغـْـم َ المـَشيب ِ بعشقها ولهانـايا أيها الشيب ُ المُـعَـتـَّق ُ في المفارق ِ لـم أزل ْ بـِلـَواعـِجي نشـوانابيروت ُ أعوام تـُفرِّق ُ بيننـا لا هُنـْت ِ أنت ِ ولا ترابُك ِ هانـاهاتي كؤوس َ العشق ِ نشرب ُ خمرَهالا ضـَيْرَ لو خمر ُ الهوى أعمانـافلـَطالما آسَيْـت ِ جرح َ مُناضل ٍولكـل ِّ مُشْـتاق ٍ فـَتـَحْت ِ جَنانـالا تـُرْضِعي قطط َ الطوائف ِ بعدماقتلوا المسيح َ ودنسـوا الفـُرْقـانالافرق َ بين موحـِّـد ٍ ومُـثـَـلـِّـث ٍفـَلِمَسْـلخ ِ الأعداء ِ سِيْــق َ كِلانـالا فـــرْق َ في دين العدو ِ إذاالضحية ُ تعبد ُ الإنجيـل َ أو قرآنـابل ْ مَـن ْ تعَشـَّـى مِــن ْ أهِـلـَّـتِنـاســيجعل ُ – في غد ٍ – إفطارَه صُلباناذبحوك ِ يا بيروت ُ مرات ٍ مضت ْوكما نهضت ِ سَـتـَنهضين َ الآنـا***
يا لابـسا ً وَجَـع َ العروبة ِ حَـرْبَة ً نـَجـْـلاء َ ترقص ُ في صدور ِ عِـدانالولاكَ لــم تُفتـَـح ْ زنازين ٌ ولا حُـرِّية ٌ رفــَّـت ْ علـى أسـرانافـَلـْتـَهنئي أم َ الأسير ِ وزغردي فالشِّــبل ُ عاد َ بمجــدِه ِ مُـزدانـابشراك ِ يا أم الشهيد ِ فهللـي مـا عـاد َ رقـْـمَـا ً في العراء ِ مُهانـاودلال ُ بعد َ اليوم ِ تـَمشـُـط ُ شعرَها وببيـتها .. تتوسَّـط ُ الأحضـانا***
يا راوي َ التاريخ ِ حَـدِّ ث ْ عن فتى ًمَـلأ البلاد َ مَناعـة ً وأمـاناحَـدِّ ث ْ عن الأحرار ِ كيف تـَسَنـَّمواالعليـاء َ وانتـَصبوا بها فرسـاناحـَدِّ ث ْ عن الأمجاد ِ ضيعَها صعاليك ُالفسـاد ِ وضيـَّعوا الإنسـانالو أن َّ موجـات ِ الفسـاد ِ تفجرت ْ فوق َ الهضاب ِ لأحدثت ْ بركـاناتلك َ العـَواهـر ُ قايضت ْ أوطاننـا وتـَرَبـَّعت َ مـِن فوقنـا تيجـانايتحدثون عن الكرامة ِ بعـدمامـَسـَحوا غـُبار َ نِعالهم بـِلِحانافالحاكم ُ العربي ُّ قَـوَّاد ٌ هنـاك َوبيننـا يـَتـَمثــَّـل ُ الرحمـانـاوالحاكم ُ العربي ُّ سمـسـار ٌ يُقد ِّمناإلـى حاخـامهم قـُربانـالـو كان مـِثلـُك َ في العروبـة ِ قادة ٌ ما دنـَّـس َ الأوباش ُ طـُهر َ ذ ُرانـاالكـل ُّ تاجر َ بالقضيـة ِ فاغتنــى والشــعب ُ كان لوحــده ِ الخـَسْـرانـاكي يَـخلـُـدوا في حـُكـْـم ِ هاتيك َ المـزارع ِ أصبحوا لِعـَدونا الأعوانـامَـن ْ باع َ أولى القِـبلتين ِ وخاننــاهـل يـَنـْتـَخي لـِيُحرِّر َ الأوطانـا ؟إني لأسأ ل ُ : أي ُّ جيـش ٍ مِـن جيوش ِ المـُلْهمين َ لأرضـه ِ قد صانـا ؟هـذي جيوش ٌ مـا أتت ْ إلآ لتقمـَـع َ شـعبَها وتـُرَسـِّـخ َ الأدراناونضالـُها قتـْل ُ الشعوب ِ فكلـما ذبَحَــت ْ بريئـا ً ألـْبـِـسَـت ْ نيشـانا***
قــَرْن ٌ مضى من نكبة ٍ لهزيمــة ٍوجيوشــُـهم تـَتـَصَيَّـد ُ الفِئرانـاقـرن ٌ مضى والعاهرات ُ تسوسُــناوتـَسوقـُنا في حَقـْلها قـُطْعانـاحتى إذا عَرَّيْتـَــهم وفضحتـَــهمزادوا علـى طـُغيانِهم طـُغيانـافـَتـَعرَّت ِ الحِمْـلان ُ فـــوق َ عروشِهاوتـَصَنـَّموا بعروشـِـهم حِـملانـاهــم عِـلـَّـة ُ الأوطان عَـز َّ عِلاجها وتـَمـَـددوا في جـِسـْـمنا سَـرَطاناإني أرى ؟ بطـشـا ً وأفواهـا ً مـُكَمـَّمـَـة ً وشعبا ً خانعـا ً ومـُـدانـاها إنهـم ملأوا الجروح َ بِقـَيْحِـهم فأتـَيت َ تـــزرع ُ جرْحـنا ريحـاناإن ْ تـَـرْج ُ من تلك المقابر ِ نـُصْرَ ة ً أوْلـى بأن ْ تـَسْــتـَنـْهِض َ الأكفـانالـو كـان غيـرُك صادقـا ً حَقــَّـا ً لأدَّينـا علـى جـِلبابـه ِ الأركانـالكنـَّه في الحرب ِ أضعف ُ من أتان ٍ فـي الهروب ِ يُسـابِق ُ الغزلانـايـا أمـة ً رَهَــنت ْ مَصائرهـابأيدي المُـفسِـدين َ فأحـْرَزَت ْ خـذلانـاكـم مجرم ٍ سَــــيظل يجثـُـم ُ فوقنــاويَسـومُنا فوق الهوان ِ هوانـا ؟يا أمــة ً بَـلـَغ َ النـِّـفاق ُ بها لأن ْتنسـى الإلـه َ وتعْـبُد الســُّـلطاناما دامت ِ الأوطان ُ تحكمها الفطائس ُسـوف َ نغـدوا كلـُنـا أقـْنـانا***
أللـه ُ أكبر ُ كيف زلزلت َ العُروش َ فكنـت َ تحـت َ عروشـِـهـم بركـانامـا أروع َ النصـر َ الكبير َ لأمـة ٍ كـم عاشـت ِ النكـَسـا ت ِ والخـُسْـراناحـتى غـَـدَ ت ْ أُمْـثـُولة ً وحِكـاية ً أحزانـُهـا تتوالـد ُ الأحزانـانصْـر ٌ يـَهـل ُّ وقد حـَسِبْنا الإنكِسار طـواه ُ مَـع ْ أحلامنـا وطوانـاصِـرت َ الصـُـداع َ لِطـُغـْمة ٍ في غـَفلة ٍ رَكبـت ْ ظُهـور َ الناس ِ والأوطـانالولاك َ لا نصـر ٌ يـُغازل ُ مُقلتـيأو بسـمة تتوسـَّـد ُ الأجفانـاهـذي نواميس ُ الحيـاة ِ فسـوفتـُؤكـل ُ إن ْ تكن ْ مُستضعَفا ً ومُهانـافي الغابة ِ الصـَّمـاء ِ تكمن ُ عِبْرة ٌفالطير ُ فيهـا تأكـل ُ الديدانـاوعلى جبين ِ الدهر ِ تسكن ُ حِكْمــة ٌشـَـرَف ُ الفتى ألا يموت َ جبانـاوفـَـضيلة ُ النصر ِ المـُـظفـَّر أنـهقـد زادنـا بحقوقنـا إيمـانا***تمـّـوز ُ يحملنـا إلى شُـرُفاتِـه ِ ويُـقيـم ُ في صحرائنـا بسـتاناتمـوز ُ بالنصـر ِ العظيم ِ مـُحَـلـِّـق ٌ وقوافـل ُ الأفراح ِ فـوق َ رُبانـاتمـوز ُ بعــد َ اليوم ِ أنــت َ ربيعُنا ولـَـسوف َ نشطب ُ مِـن ْ غـَـد ٍ نـَيْـسانا***
يا سـيد َ النصر ِ الجميل ِ تحيَّـة ًكـل ُّ الشعوب ِ بحبكـم تتفـانىفي الفـِعْل ِ، فعلـُـك َقاطع ٌ، وإذا نطقـْت َنـَطقـْت َ مِنْ سِحر ِ البـَيـان ِ بيـاناأصبحـت َ للتحرير ِ عنوانـا ً وهـُم ْصـاروا لكـل ِّ خيانة ٍ عنوانـا

Worthless Economy & Bankrupted Financial Institutions

2008-08-25T19:48:00.000-07:00

When I first started in the financial industry in 1981 we were worried, but only about one company -the Chrysler Corporation. Prior to that, Continental Illinois was in the forefront. Later in my career, in 1998, it was Long Term Capital Management, the hedge fund founded by John Meriwether that captured our attention. Then we had Enron/WorldCom, and by early 2008 Bear Stearns became a worry and then a problem that needed fixing.
All of these events were isolated, dealt with, often with either direct assistance from Uncle Sam or an effort coordinated by our benevolent/socialist government financial authorities. Markets would become unnerved, fear would grow, and then the Government would step in to make sure that the systemic risk that had finally come to the surface didn't melt the entire planet.
But this is where it is "different this time". Not only is it different, I think it may be unprecedented in nature. When I look at my Bloomberg monitor each day that contains my 100 most important indices, companies, commodities, bonds, bond spreads, preferred shares, etc, I shudder. The reason I shudder is that my screen doesn't have just one "problem child". It looks like a screen that contains many "institutions that are near bankruptcy".
The Failed Fannie Mae/Freddie Mac Experiment
Let us talk about the "Fannie Mae/Freddie Mac Experiment. That experiment has now clearly failed and a bailout/privatization/nationalization of Fannie and Freddie is now being planned. While I have been expecting nationalization for quite a while, I am intrigued as to why the bailout is taking so long to accomplish. This is where it gets interesting and dangerous from a systemic point of view. My hunch is that the reason for the delay is that the Treasury Department is "peeling back the onion" on Fannie/Freddie and finding out just how much of a mess the two of them are in.
At last count, Freddie had Level 3 Assets of $151 billion while Fannie had $65 billion, for a not-so-paltry sum of $216 billion. When Freddie announced their results a couple of quarters back, they disclosed that most of their Level 3 Assets were of the "sub-prime" variety (the type of assets that started the whole Credit Crisis in the first place). They are also littered with Alt-A mortgages and are leveraged to the hilt.
Just how bad is the news at Fannie/Freddie? On Friday morning, Moody's downgraded their outstanding preferred stock 5 notches from A1 to Baa3 (a slight gradation above junk) and their Bank Financial Strength Ratings (BSFR) to D+ from B- (one/half notch above D, which is reserved for companies in default). According to Moody's, "the downgrade of the BFSR reflects Moody's view that Fannie Mae and Freddie Mac's financial flexibility to manage potential volatility in its mortgage risk exposures is constricted.....in particular, given recent market movement, Moody's believe these companies currently have limited access to common and preferred equity capital at economically attractive terms."
Moody stated : "The GSE's more limited financial flexibility also restricts their ability to pursue their public mission of providing liquidity, stability and affordability to the US housing Market. Fannie Mae and Freddie Mac currently make up approximately 75% of the mortgage market in the US. A reduction in the capacity of these companies to support the US mortgage market could have significant repercussions for the US economy. In an effort to thwart broader economic effects, Moody's believes the likelihood of direct support from the United States Treasury has increased."
Let me put it this way. "the american people" are about to become owners in Fannie and Freddie, whether we like it or not. The capital markets have shut on them both as their stocks trade in the $2-5 range, down from the $70-80 level just a year ago. And the yield on the outstanding preferred shares hovers in the 18-23% range, quite the bargain if they keep paying, but also it is the market's way of saying "beware the value trap", as the preferred shares may pay another dividend or two, but that is about it.
When the Treasury peels back the onion, I believe they will find a hornet's nest. I think we will see an initial bailout of $100 billion or so, with 2/3-3/4 going to Fannie (as it is a larger organization). The scenario I foresee however, just as happened at Merrill Lynch, Lehman Brothers and Morgan Stanley, is that they came to the financing window expecting to have borrowed enough, but then find they have to keep coming back repeatedly until the buyers go away or until "We The People" have thrown at least $500 billion at Fannie/Freddie to get them back on their feet again. This will also likely take an Act of Congress to raise the Treasury's Debt ceiling quite dramatically.
I will now identify who might be near bankruptcy.

What strikes me the most about impaired companies, whether they are automakers, airline companies, banks, brokers or GSE's, is that they seem to sing the same tune, or have the same pattern of behavior. This is how I have attempted in the past to identify what would be in trouble in the future (whether that was just to avoid their stocks and bonds from the long side or to try to profit from their missteps on the short side). It is a pattern that is not terribly dissimilar from the emo.
The first tip-off or "tell" is when a company releases earnings or some sort of positive announcement and the stock falls. Another important tell is the credit spreads of the debt as the company begins to widen. Then, the company will usually announce that "all is well" and is so great that they will buy back stock and not "cut the common dividend". After this comes the "acceptance" phase and write-offs/write-downs are announced and then some Sovereign Wealth Fund or Private Equity firm will inject capital or that a company within the same group will buy a "strategic stake". After a brief pop in the stock and short covering rally, the stock begins to fall further and credit spreads begin to blow out and preferred shares get hammered. Then, uh-oh, more write-downs and more write-offs and yes, another capital raise and finally a dividend cut to 'preserve capital'.
Sound familiar yet...?
All of this goes on for quite some time, until your stock price is so low that you would have to issue so many shares in a secondary offering that you dilute your shareholder base until it is unrecognizable. With this new share offering your credit, while still rated investment grade, trades like junk, and your preferred shares rise to double digit yields. Further, the former strategic buyers, Sovereign Wealth Funds and Private Equity firms have taken such a beating that there are no further buyers.
Yet the write-downs and write-offs continue unmercifully as the economy slows and credit is all but cut off. Eventually, dividends go to zero.
There are only a few things that can happen to the companies that are near bankruptcy "The Green Mile". Either you make it to the electric chair (in the movie "The Green Mile" it was called "Old Sparky") and cease to exist or you are eventually forced into the arms of a better capitalized institution. Over time, I expect a bit of both but mostly of the latter.
Keep in mind that if too many are allowed into the arms of Big Sparky", it will have a systemic effect as all the institutions are so intertwined because when one group of institutions are forced to mark their bonds to market, others are forced to do the same, ending in an ugly daisy chain. I think the chain has formed and that many are about to "walk the mile".
In the end, perhaps years from now, many banks and brokers will be merged into an international list of "good banks" or "bankrupted banks". Who are the Good Banks? They are likely Bank of America, Bank of New York, JP Morgan Chase, Northern Trust, State Street, US Bancorp, ABN Amro, Deutsche Bank, BNP Paribas, Royal Bank of Scotland, Barclays, Allianz and a few others.
The cycle begins with denial, and ultimately ends up in despair. At first, the company denounces that anything is wrong, but Mr. Market has a way of sniffing out who is imitating Pinocchio. Ultimately, the company ends up in despair when they need/want to raise capital to just be able to function normally, but alas, they cannot because the window of opportunity to raise capital has shut.
Let's use Lehman Brothers as the poster child of this sort of behavior.Before the credit crisis started, Lehman, at the time known for its savvy timing, suddenly came to market for $5 billion of long-term bonds when they didn't need capital-or did they know something was awry as I suspect? Last year, with the Credit Crisis in its infancy, Lehman announced a $100,000,000 stock buyback. The shares, as you would expect, popped on the news, but of course no stock was ever re-purchased. As the stock began to sell off, they kept saying that capital was not needed.
Then, on June 9, 2008 they sold 143,000,000 shares at $28 per share. As hedge fund manager David Einhorn said, "They've raised billions of dollars they said they didn't need to replace losses they said they didn't have." In between was an enormous preferred stock deal-75,900,000 shares at $25 per share at a rate of 7.95%. Those shares now change hands at $15 per share for a yield of 13.1%. Its pretty hard to turn a profit when your cost of capital is greater than 10%.
During this time, in January, the company actually raised its common dividend by 15% year-over-year. They have written off north of $8 billion since the Credit Crisis began and when they release earnings (or lack thereof) next month, estimates are for another round of $2-4 billion of write-downs. They have reportedly been trying to shop $40 billion of impaired real estate and they are mired in all sorts of Alt A, sub-prime, CMBS and CDO's and CLO's.
The best part is that they said they "shrank their balance sheet" when in fact they were sold to an "off balance sheet subsidiary" that they own part of. The bonds weren't sold, they were just "relocated". I sure wish I could do that when I make a mistake. And lets not forget that the Federal Reserve opened up the discount window to primary/dealers so that they could off-load a bunch of nuclear waste on to the Fed's balance sheet, which now looks like one big hedge fund in drag. And then the SEC temporarily changed short selling rules for 'the Group of 19' (the GSE's and Primary Dealers) for a few weeks, resulting in a short squeeze, but their shares still hobble along at recent lows.
On Friday, there was a rumor that the Korean Development Bank would buy Lehman, but again that turned out to be hogwash. And if they wanted to raise debt, like they say, "lotsa luck". Their bonds trade around +500 basis points to treasuries but my guess is that even if they could get deal done, they would have to come in the 10% range, again, uneconomic.
So now we have the recipe and an example for "a bankrupted institution":
Common stock too low to issue new shares.
Preferred stock yield too high to issue new shares economically.
Issuing debt is uneconomic.
More write-offs coming in days to come.
Business trends are awful.
Denial.
Now that we have identified the "poster child", let's find a few more... Or sadly, more than a few.
Zions Bancorp
Equity has traded down from $75 to $25.
Tried to issue a $200 million preferred stock offering at 9.5% but only was able to sell $47 million.
Their debt trades in the open market approximately 1,000 basis points above Treasuries, IF you can sell them, or 13 14%.
They are geographically in Utah, but spread out to Florida, Nevada and Arizona at the top of housing to take advantage of great opportunities.
They say they need $200-300 million capital. Good luck.
They maintained their common dividend.
KeyCorp
Common Stock has traded down from $40 to $11.
Preferred Stock trades at 13%.
Debt trades in the market at 10-11% dividend.
Cut dividend in half in July, still yields 6.5% even while they lose money.
Fifth Third Bank
Equity has traded down from $60 to $14.
There are no preferred issues outstanding.
Debt trades in 10-11% range if you can sell it.
Cut dividend by 75%.
Washington Mutual
Equity has traded from $40 to $3.
No preferred outstanding except convertible preferred.
Debt trades in the 20-25% range.
Cut the dividend to $0.01 per share in April.
Has admitted they will lose money for the next several years.
National City
Equity has traded from $40 to $5.
Preferred stock trades at 13-15%.
Sold a huge amount of shares at $5 per share in April.
Cut dividend to $0.01 per share in April.
Regions Financial
Equity down from $40 to $8.
Preferred Stock Trading at 10%.
Debt trades in the 10-11% range, if you can sell it.
Cut dividend by 75% in June.
Needs to raise $2 billion, according to Sanford Bernstein.
General Motor/GMAC
Equity has traded from $80 to $10.
Preferred stock trades in 18% area.
Short-term debt trades in 25-30% range.
Long-term debt trades in 17% range.
Eliminated common dividend in July.
Ford/Ford Motor Credit Co
Equity has traded from $60 to $4.
Preferred stock trades in 16-17% range.
Long term debt trades in the 18-20% range.
Eliminated common dividend in September.
Wachovia
Equity has traded from $60 to $14.
Issued a $3.5 billion "hybrid security" in February that now trades at 11%.
S&P has stated they cannot issue any more hybrids.
Sold 92,000,000 shars of a preferred stock in December at 8% that now trades $18 or 11%.
Cut common dividend twice since February to $.05 a share or 90%.
Debt trades at 9.5-10.5%.
CitiGroup
Equity has traded from 60 to 9.
Preferred Stock trades in 12% range.
Outstanding debt trades in 12-14% range.
Cut common dividend by 66%.
Sold 91,000,000 shares of common at $11 in April 2008.
Who are in the "Limping but Not Dead Man Walking Crowd"?
These companies would include those that may be 'too big to fail', have enough quality assets to sell, a franchise that is worth something to an acquirer or could just be broken up into pieces. They include:
Citi
Merrill Lynch
Morgan Stanley
Suntrust
Legg Mason
Capital One
AIG
MetLife
Prudential
Summary - This is NOT Shaping Up to be a Pretty Couple of Years
I am certain that I have missed a bunch of names on the "Bankruptcy List", but the pattern is rather easy to discern. As I stated early on, when we have one or two firms in trouble, we can deal with it. But when we add rising unemployment, explosive debt growth in recent years and non-performing assets to many hobbled financial institutions with trillions of dollars of exposure, it is hard not to be concerned.
For this reason, I remain cautious towards credit, expect a hard sell-off in stocks into 2010, consolidation in the financial services industry and some pain, like it or not. I am just not sure where the capital will come from to bail everyone out simultaneously. And even if the capital showed up, it would likely come at a cost that is uneconomic and would likely be dilutive for many years to come.

Deep Recession Ahead

2008-08-25T01:24:00.000-07:00

The world economy is slowing down. The global financial system is falling apart.
The whole situation is a mess...a disaster for investors...a catastrophe for homeowners...a Waterloo for the financial industry. But it is God’s gift to us.

First...there is Ben Bernanke on the cover of an american magazine, looking rather serious, as he appeared before the U.S. Congress.The poor man was expected to explain what was going on. What could he say, but that the economy was beset by “numerous difficulties?” He had to play the politician, in other words – the cunning dumbbell...avoiding at all costs saying anything useful or true. Of course, it is true enough to say that the economy faces troubles, but that description of it hides so many absurdities...and so many errors...and so many vanities and hallucinations.
Why didn’t he just come right out and explain that Americans have been living beyond their means...and now they’re being forced to cut back? That’s what retail sales figures showed – that consumer weren’t spending so much. What’s surprising about that? Nothing at all...
But the news struck economists and financial reporters like a UFO sighting – they didn’t know what to make of it.
There’s also a photo of a long line in front of IndyMac’s door – waiting to get their money back. Mr. Bernanke might have also explained what was happening in the financial industry. Wall Street banks...Fannie Mae...Freddie Mac...IndyMac...Bear Stearns and the whole lot...made their money by peddling debt to people who already had too much. What did you think...that they could do that forever?
The headman at the Fed would have done us all a service, in my opinion, if he leveled with the nation.
“Look,” he might have said, “the prosperity we have enjoyed for the last few years has been largely an illusion; it was based on debt, leverage, and speculation. We all know you can’t get rich by spending more than you earn. And you can create real prosperity by borrowing money and spending it on consumer items. We’re now paying the price for those mistakes. Let’s just get it over with.”
Those words may or may not have been on call for him. He might have doodled something like that on the back of an envelope on the way to Capitol Hill. Maybe they came to him in a dream.
But when he got in front of the microphone, he realized that the truth is the last thing anyone wants to hear. He wisely avoided it, sticking with the stock phrases and standard wording of economic obfuscation.
Meanwhile, down the street, the U.S. president shifted from soporific twaddle to breathtaking imbecility.
“To the extent that we find weaknesses [in the financial system] we’ll move,” said the president of all the Americans, George W. Bush.
Mr. Bush has a weakness himself – for movement. He has presided over the most fidgety administration since Franklin Roosevelt. Not content to sit still, he spent more, borrowed more, and stirred up more dust than any previous administration. Now, he proposes a vast new expansion of the war against Free Enterprise.
Bailing out Bear Stearns, providing tax refund checks, and nationalizing Fannie and Freddie “signal a weakening of the administration’s ideological commitment to free-market principles,” says the Financial Times .
This administration has no commitment to any principles, as near as we can see. All it took was a terrorist attack in New York, and it threw over its entire conservative foreign policy in favor of reckless interventionism. And now we have a crisis in the financial industry. Of course, the big lenders, spenders and speculators are only getting what they deserve. Still, the Bush Administration is mounting an invasion.
I predict that it will have roughly the same results. Sweden, of all places, faced a major financial meltdown in 1991. The government hastened to intervene with a bailout. The cost – if translated to an American-scale economy – was more than $1 trillion. Mr. Bush’s intervention will cost that much or more.

When it looked as though inflation had the upper hand, the forces of deflation began a major counter-offensive. The artillery barrage began only a couple of weeks ago. Since then, the battle has shifted dramatically.
The balance of economic forces is contractionary, and inflation is not completely whipped. .
The banks are collapsing. The roof is caving in on housing.
So far, the black goo has confounded economists. The world economy is slowing down. People are cutting back on their use of energy. In the United States, families are taking vacations closer to home, for example.
Also, the Bernanke Fed was hinting strongly that it wouldn’t be lowering rates further – and might even be raising them. Under those conditions, the dollar was widely expected to go up...and the price of oil to go down.
Speculators are wagering that the United States will soften up the dollar still further...they’re betting on more trouble, that is... They’re dumping oil, because it will inevitably and eventually respond to the drop in economic activity. But they’re buying gold, because they also want safety – from the dollar...from defaults...from bankruptcies...and from the claptrap solutions of public officials.
If the ongoing deleveraging of the US economy weakened US consumption,the economy might go into a deep recession. US fiscal deficits would then soar and long-term US interest rates might jump. This could make the debt dynamics of the US government look very unpleasant. A flight from the dollar and dollar bonds might even ensue.

عصر الاحباط

2008-08-24T20:58:00.000-07:00

أيا ابن كلا وبياع الحكايا.....................ياصانع الشحاطة والحطاطة والأماني
بدشداشة الهشاشة وهلا هلا...................تعجز دونها الكلمات وصفا والمعاني
وشاروخ يشبه الصاروخ مسابقا..................السكارى والمترنحين طربا بهذيان
يامن لاتعرف من الدنيا الا..............................النميمة والغنيمة والكاني ماني
ويامن عشقت الانبطاح ساجدا.............................متعلقا بكل أفاق متبجح جبان
ويامن اتخذت من السكون منهجا...................مرتكيا ونافخا بين الزوايا والأركان
وقلبت بفرح الليل نهارا ........................وقاومت بهمة الصناديد تقلب الأزمان
أتراك قادرا على عاديات الزمان.........................أم تذوق الذل مفعما بالهوان
مستجديا العون من هنا وهناك............متأرجحا بين الصدقات والمكارم والاحسان
يامن يمر الدهر محلقا بك سريعا............وتعد الحضارات وأهلها الدقائق والثواني
أما آن الأوان أيها المرتكي ......................والمضطجع أن تهب واقفا كالانسان
وتنفض غبار السبات كالممات........................وتترك التغني بالخوالي والأشجان
وتترك الآهات والنغمات جانبا...................وتلولح الأفاعي بين الزمامير والأغاني
وترنح الحشاشةوأهل الكيف والبشاشة...............بصفة ألصقت بهشاشة العربان
تاركا ترنح البطاريق والسلاحف........................لاحقا بركب الحضارات كالغزلان
وكفانا بشريعة الغاب مطية.......................وكفا الله البلاد شر القراصنة والحيتان
وشر الشقاق والنفاق وأهله................................وأهل التعلل بالذرائع والألوان
وشر كل حاسد بزوال نعمة ...........................وكل حاقد مزمن وخائن بحسبان
وبشر الصابرين على الأذى بيوم........................يشرق فيه الحق على الأكوان
وتبيض وجوه بلقاء ربها..............................وتسود أخرى بعذاب علقم متفان
فسارعوا ياأهل الهمم والشيم ..................الى الجد طمعا بجنات النعيم والرضوان

تصبحوا على خير يا عرب..... الرجاء عدم التشخير

2008-08-21T21:35:00.000-07:00

يمتلك العرب ثروات هائلة , يخُزن كثيرا منها في البنوك و الاسواق المالية العالمية و يستعمل بعضها لبناء الفنادق الراقية و مصانع البسكوت و الجحوش الفائزة في سباقات الفروسية و تلبية الحاجات الشخصية لاقلية من الاشخاص ذوي النفوذ و السلطة. لكننا كأمة ثرية بلاموال و المصادر الطبيعية و البشرية ما زلنا نعيش في عصر الجاهلية و ما زلنا نائمون.
اجل نحن نائمون على فراش من حرير مع مومس ساحرة الهيكل و الجمال!!
نحن امة تحب النوم لاننا في النوم نجد راحة في عدم التفكير و لذة في الاحلام
و في حب النوم تقطن احلامنا رغم سريان الزمان...الزمان يسير بلا وقوف على مدار الساعة و الايام, و نحن بلى ما زلنا نائمون... نعم نحن العرب النائمون و في النوم غياب عن العمل و الإنجاز.
رغم المساحات الزراعية الساشعة في السودان التي إن زُرعت بتمويل خليجي قد تعمل على مكافحة البطالة و الجوع فما زال فقراء العرب ينامون جوعا, لان شيوخنا و اسيادنا في الفنادق الراقية ما زالوا مع المومس ساحرة الجمال نائمون.
رغم توفر المصادر الطبيعية في شتى انحاء العالم العربي كمواد البناء فما زال الكثير منا بلا سقوف و حيطان ينامون لان شيوخنا و اسيادنا في سباق الجحوش يفتخرون و إن صحوا من النوم هذا ما يشاهدون.
نحن من اكبر الاسواق الإستيرادية في العالم, نستورد الغذاء و العلاج و السيارات و كل ما تصنعه البشرية, الا اننا عاجزون على بناء مصانع كل الحاجات التي نستوردها, لان اسيادنا في نومهم على الحرير في الفنادق و القصور المنعزلة عن غالبية شعوب الامة ما زالوا في المومس ساحرة الجمال يحلمون.
اجل نحن العرب النائمون, نائمون عن الساحة السياسية العالمية, نائمون عن المشاركة في الحفلات الرياضية العالمية,في المعارك نائمون, في المزارع نائمون, في المصانع و المعامل نائمون, في مختبرات البحث و العلوم, نعم نحن العرب النائمون.
رغم إرتفاع سعر برميل البترول فما زلنا نائمون و حتى دفع و دحل برميل فارغ في العاب بكين ما زلنا على ذلك عاجزون..أين المكرمات الملكية و الاميرية السامية!! الا يوجد هناك شيخ او ملك او امير ثري غير نائم في هذه الامة قادر على توفير مبلغا من المال لمجموعة من الاطفال و الشباب كي يتدربوا و يتقنوا مهاراتهم الرياضية على الساحة العالمية!!ام اننا بحاجة الى اكبر فندق و اكبر كاسينو كي تمارسوا مهارتكم و دعاراتكم!!
الحاكم الذي يهرب صورته و صورة زوجتة على كلاسين الفريق الرياضي, اليس هذا الحاكم قادر على فتح مصنع للكلاسين المزيفة بصور العائلة الملكية في بلده بدل إستيرادها من إيطاليا او فرنسا!!
الحاكم الذي يمتلك كلسونا يستعمله لخزن الاصوات و العطور, اليس هذا الحاكم قادر على تجميع هذه الصوتيات و العطور في زجاجات تقليدية تباع للسواح لجلب العملة الصعبة و تشغيل اياد عاملة.
الحاكم الذي ما زال نائما مع مومس اجنبية في اشهر فنادق باريس, اليس هذا الحاكم قادر على شراء تذكرة سفر للمومس كي تزور بلاده و يستفيد خادما دولارا او اثنين من البغشيش!!! نعم قادر !! اسف , خلل فني!!
ها هي ايران تطلق الاقمار الصناعية و تصنع الصواريخ طويلة المدى رغم القيود و الحصار, و انتم ما زلتم نائمون.
ها هي الصين تصدر جميع الانواع و الاشكال و الالوان الى كافة انحاء المعمورة و انتم ما زلتم في النوم تستوردون.
ها هي البرازيل, ها هي اوروبا, و قريبا جدا ها هي افريقيا في اسواقكم ..... وانتم نائمون.
ايها الحكام العرب في كل مكان.. في المخامر و الملاهي الليلية, في الفنادق و على الشواطىء الساحلية, في برك السباحة على متن الطائرات الخاصة و على طاولات القمار في الكاسينوهات الفاخرة, على تلال الشلوج التزليجية و في اعراس المنح النفطية... حان الان ميعاد الرجوع الى النوم.
تصبحوا على خير يا عرب!!
حلما سعيدا و مومس جميلا في فندقا جديدا!!
الرجاء عدم التشخير

America's War Economy

2008-08-21T20:50:00.000-07:00

Yes, America's economy is a war economy. Not a "manufacturing" economy. Not an "agricultural" economy. Nor a "service" economy. Not even a "consumer" economy.Seriously, I looked into your eyes, America, saw deep into your soul. So let's get honest and officially call it "America's Outrageous War Economy." Admit it: Americans secretly love their war economy. And that's the answer to Jim Grant's thought-provoking question last month in the Wall Street Journal -- "Why No Outrage?"
There really is only one answer: Deep inside Americans love war. They want war. Need it. Relish it. Thrive on war. War is in our genes, deep in their DNA. War excites their economic brain. War drives their entrepreneurial spirit. War thrills the American soul. Oh just admit it, they have a love affair with war.They love "America's Outrageous War Economy."
Americans passively zone out playing video war games. They nod at 90-second news clips of Afghan war casualties and collateral damage in Georgia. They laugh at Jon Stewart's dark comedic news and Ben Stiller's new war spoof "Tropic Thunder" ... all the while silently, by default, they're cheering on their leaders as they aggressively expand "America's Outrageous War Economy," a relentless machine that needs a steady diet of war after war, feeding on itself, consuming our values, always on the edge of self-destruction.
Why else are Americans so eager and willing to surrender 54% of their tax dollars to a war machine, which consumes 47% of the world's total military budgets?
Why are there more civilian mercenaries working for no-bid private war contractors than the total number of enlisted military in Iraq (180,000 to 160,000), at an added cost to taxpayers in excess of $200 billion and climbing daily?
Why do they shake their collective heads "yes" when their commander-in-chief proudly tells them he is a "war president;" and his party's presidential candidate chants "bomb, bomb, bomb Iran," as if "war" is a celebrity hit song?
Why do their spineless Democrats let an incompetent, blundering executive branch hide hundreds of billions of war costs in sneaky "supplemental appropriations" that are more crooked than Enron's off-balance-sheet deals?
Why have Washington's 537 elected leaders turned the governance of the American economy over to 42,000 greedy self-interest lobbyists?
And why earlier this year did their "support-our-troops" "war president" resist a new GI Bill because, as he said, his military might quit and go to college rather than re-enlist in his war; now they continue paying the Pentagon's warriors huge $100,000-plus bonuses to re-up so they can keep expanding "America's Outrageous War Economy?" Why? Because Americans secretly love war!
They've lost our moral compass: The contrast between today's leaders and the 56 signers of the Declaration of Independence in 1776 shocks their conscience. Today war greed trumps morals. During the Revolutionary War their leaders risked their lives and fortunes; many lost both.
Today it's the opposite: Too often their leaders' main goal is not public service but a ticket to building a personal fortune in the new "America's Outrageous War Economy," often by simply becoming a high-priced lobbyist.
Ultimately, the price of their greed may be the fulfillment of Kevin Phillips' warning in "Wealth and Democracy:" "Most great nations, at the peak of their economic power, become arrogant and wage great world wars at great cost, wasting vast resources, taking on huge debt, and ultimately burning themselves out."
'National defense' a propaganda slogan selling a war economy?But wait,
you ask: Isn't our $1.4 trillion war budget essential for "national defense" and "homeland security?" Don't Americans have to protect ourselves?
Sorry folks, but their leaders have degraded those honored principles to advertising slogans. They're little more than flag-waving excuses used by neocon war hawks to disguise the buildup of private fortunes in "America's Outrageous War Economy."
America may be a ticking time bomb, but they are threatened more by enemies within than external terrorists, by ideological fanatics on the left and the right. Most of all, they are under attack by their elected leaders who are motivated more by pure greed than ideology. They terrorize them, brainwashing them into passively letting them steal their money to finance "America's Outrageous War Economy," the ultimate "black hole" of corruption and trickle-up economics.
You think I'm kidding? I'm maybe too harsh? Sorry but others are far more brutal. Listen to the ideologies and realities eating at America's soul.
1. Their toxic 'war within' is threatening America's soul
How powerful is the Pentagon's war machine? Trillions in dollars. But worse yet: Their mindset is now locked deep in their DNA, in their collective conscience, in America's soul. Their love of war is enshrined in the writings of neocon war hawks like Norman Podoretz, who warns the Iraq War was the launching of "World War IV: The Long Struggle Against Islamofascism," a reminder that they could be occupying Iraq for a hundred years. His WW IV also reminded us of the coming apocalyptic end-of-days "war of civilizations" predicted by religious leaders in both Christian and Islamic worlds two years ago.
In contrast, this ideology has been challenged in works like Craig Unger's "American Armageddon: How the Delusions of the Neoconservatives and the Christian Right Triggered the Descent of America -- and Still Imperil Americans' Future."
Unfortunately, neither threat can be dismissed as "all in their minds" nor as merely ideological rhetoric. Trillions of tax dollars are in fact being spent to keep the Pentagon war machine aggressively planning and expanding wars decades in advance, including spending billions on propaganda brainwashing naïve Americans into co-signing "America's Outrageous War Economy." Yes, they really love war, but that "love" is toxic for America's soul.

2. America's war economy financed on blank checks to greedy
Read Nobel Economist Joseph Stiglitz and Harvard professor Linda Bilmes' "$3 Trillion War." They show how their government's deceitful leaders are secretly hiding the real long-term costs of the Iraq War, which was originally sold to the American taxpayer with a $50 billion price tag and funded out of oil revenues.
But add in all the lifetime veterans' health benefits, equipment placement costs, increased homeland security and interest on new federal debt, and suddenly taxpayers got a $3 trillion war tab!
3. America's war economy has no idea where its money goes
Read Portfolio magazine's special report "The Pentagon's $1 Trillion Problem." The Pentagon's 2007 budget of $440 billion included $16 billion to operate and upgrade its financial system. Unfortunately "the defense department has spent billions to fix its antiquated financial systems [but] still has no idea where its money goes."
And it gets worse: Back "in 2000, Defense's inspector general told Congress that his auditors stopped counting after finding $2.3 trillion in unsupported entries." Yikes, our war machine has no records for $2.3 trillion! How can we trust anything they say?
4. America's war economy is totally 'unmanageable'
For decades Washington has been waving that "national defense" flag, to force the public into supporting "America's Outrageous War Economy." Read John Alic's "Trillions for Military Technology: How the Pentagon Innovates and Why It Costs So Much."
A former Congressional Office of Technology Assessment staffer, he explains why weapon systems cost the Pentagon so much, "why it takes decades to get them into production even as innovation in the civilian economy becomes ever more frenetic and why some of those weapons don't work very well despite expenditures of many billions of dollars," and how "the internal politics of the armed services make weapons acquisition almost unmanageable." Yes, the Pentagon wastes trillions planning its wars well in advance.

America Must Come Down To Earth

2008-08-20T00:56:00.000-07:00

The U.S. had taken advantage of temporary confusion in Russia, during the ten-year-long post-Soviet-collapse interval, and set up a client government in Georgia, complete with military advisors, sales of weapons, and even the promise of club membership in the Western alliance known as NATO. These blandishments were all in the service of the Baku-to-Ceyhan oil pipeline, which was designed specifically to drain the oil region around the Caspian Basin with an outlet on the Mediterranean, avoiding unfriendly nations all along the way.At the time this gambit was first set up, in the early 1990s, there was some notion (or wish, really) among the so-called western powers that the Caspian would provide an end-run around OPEC and the Arabs, as well as the Persians, and deliver all the oil that the US and Europe would ever need – a foolish wish and a dumb gambit, as things have turned out.For one thing, the latterly explorations of this very old oil region – first opened to drilling in the 19th century – proved somewhat disappointing. U.S. officials had been touting it as like unto “another Saudi Arabia” but the oil actually produced from the new drilling areas of Kazakhstan, Turkmenistan, and the other Stans turned out to be preponderantly heavy-and-sour crudes, in smaller quantities than previously dreamed-of, and harder to transport across the extremely challenging terrain to even get to the pipeline head in Baku.Meanwhile, Russia got its house in order under the non-senile, non-alcoholic Vladimir Putin, and woke up along about 2007 to find itself the leading oil and natural gas producer in the world. Among the various consequences of this was Russia’s reemergence as a new kind of world power – an energy resource power, with the energy destiny of Europe pretty much in its hands. Also, meanwhile, the USA had set up other client states in the ring of former Soviet republics along Russia’s southern underbelly, complete with U.S. military bases, while fighting active engagements in Iraq and Afghanistan. Now, if this wasn’t the dumbest, vainest move in modern geopolitical history!It’s one thing that U.S. foreign policy wonks imagined that Russia would remain in a coma forever, but the idea that we could encircle Russia strategically with defensible bases in landlocked mountainous countries halfway around the world...? You have to ask what were they smoking over at the Pentagon and the CIA and the NSC?So, this asinine policy has now come to grief. Not only does Russia stand to gain control over the Baku-to-Ceyhan pipeline, but we now have every indication that they will bring the states on its southern flank back into an active sphere of influence, and there is really not a damn thing that the U.S. can pretend to do about it.America could have spent the past ten years getting its own house in order – waking up to the obsolescence of our suburban life-style, scaling back on the Happy Motoring, reconnecting their cities with world-class passenger rail, creating wealth by producing things of value (instead of resorting to financial racketeering), protecting their borders, and taking the necessary measures to defend and update their own industries. Instead, they pissed their time and resources away. Nations do make tragic errors of the collective will. The cluelessness of George Bush is nothing less than a perfect metaphor for the failure of a whole generation. The Boomers will be identified as the generation that wrecked America.So, as the vacation season winds down, America greets a new reality. They miscalculated in Western and Central Asia. Russia still “owns” that part of the world. Are Americans going to extend their current land wars there into the even more distant and landlocked Stan-nations? At some point, as they face financial and military exhaustion, they have to ask themselves if they can even successfully evacuate their personnel from the far-flung bases in Uzbekistan and Kyrgyzstan.This must be an equally sobering moment for Europe, and an additional reason for the recent plunge in the relative value of the Euro, for Europe is now at the mercy of Russia in terms of staying warm in the winter, running their kitchen stoves, and keeping the lights on. Russia also exerts substantial financial leverage over the U.S. in all the dollars and securitized U.S. debt paper it holds. In effect, Russia can shake the U.S. banking system at will now by threatening to dump its dollar holdings.The American banking system may not need a shove from Russia to fall on its face. It’s effectively dead now, just lurching around zombie-like from one loan “window” to the next pretending to “borrow” capital – while handing over shreds of its moldy clothing as “collateral” to the Federal Reserve. The entire US, beyond the banks, is becoming a land of the walking dead. Business is dying, home-ownership has become a death dance, whole regions are turning into wastelands of “for sale” signs, empty parking lots, vacant buildings, and dashed hopes. And all this beats a path directly to a failure of collective national imagination. Americans really don’t know what’s going on.The fantasy that they can sustain their influence nine thousand miles away, when they can’t even get their act together in Ohio is just a dark joke. One might state categorically that it would be a salubrious thing for America to knock off all its vaunted “dreaming” and just wake up.

New Era of Credit Contraction

2008-08-12T20:34:00.001-07:00

There is no doubt in my mind that since the early 1970’s the global economic boom has been largely financed by an ever-expanding quantity of money and credit. Once gold was removed from the monetary system in 1971, central banks were free to create as much paper currencies as they wanted. This reckless monetary inflation and credit growth has caused the value of “money” to diminish significantly over the past three decades and created a gigantic boom in global asset prices. Each time an asset “bubble” has burst in the past 35 years, central banks have responded by reducing interest-rates, thereby encouraging even more credit growth, which has spawned further speculative manias down the road. This time around, in the aftermath of the Anglo-Saxon housing bust, Mr. Bernanke and his comrades are desperately trying to do the same and the trillion dollar question is whether they will succeed. In the current circumstances, I suspect it will be extremely difficult for the central banks to further expand credit growth, thereby inflating their way out of trouble. Below I present the reasons why I am doubtful about the continuation of the credit bubble:First and foremost, in the current credit crisis, the entire banking system is being brought to its knees. This is very different to the previous crises when perhaps a handful of financial institutions or hedge funds got into trouble. Unfortunately, the financial alchemy (creation of structured products, over the counter derivatives, collateralized debt obligations, credit default swaps etc.) over the past few years has been so severe that the entire banking system is now on the verge of a total collapse. So, even if the central banks tried to further inflate the credit bubble by keeping interest-rates low for an extended period of time, I doubt if the commercial banks are in any position to expand their balance sheets. With billions of dollars of write-downs in the past year and humungous “Level 3” liabilities still undisclosed, the commercial banks have no other option but to try and repair the damage to their balance sheets by tightening credit standards. So, I doubt very much if they (for the foreseeable future) will participate in the central banks’ sponsored credit and inflation agenda. Secondly, I also happen to think that as a result of so many ridiculous tax-payer sponsored bail-outs of Wall Street banks, the U.S. government and regulators will tighten their grip over the ministry of inflation (the banking industry). Therefore, tighter regulation in the months ahead will also prevent the commercial banks from inflating the credit bubble further. Another reason why I believe we have reached the inflection point in this credit cycle is the state of the U.S. dollar. With the U.S. dollar trading at record-lows against major world currencies and soaring energy and food costs, I doubt very much if the Federal Reserve is in a position to lower interest-rates further. In fact, I would argue that the situation is totally out of the Federal Reserve’s control and the entire global economy now depends on the mercy of the owners of U.S. Treasuries. I have to admit that so far, given the amount of bail-outs and the state of the U.S. dollar, holders of U.S. government bonds have been rather well behaved. However, it may only be a matter of time before foreign holders of U.S. Treasuries start liquidating their holdings. When that occurs, long-term interest-rates in the United States would rise rapidly and the Federal Reserve would have no other option but to raise its Fed Funds rate. Finally, given the level of indebtedness of the U.S. consumer and falling asset prices, I wonder how the average American household would be able to take on even more debt. Once the technology bubble burst at the turn of the millennium and the Federal Reserve lowered interest-rates, Americans were quick to borrow and speculate in real-estate. However, this time around in the aftermath of the housing bust, even though the cost of borrowing has been reduced, Americans are not going deeper into debt. U.S. bank credit peaked earlier this year and is now in a decline. So, if American households are really tightening their belts and repaying their outstanding debt, there is no way the credit bubble would continue to inflate. It is my observation that we have now entered a new era of credit contraction and deleveraging. The abrupt bursting of the credit bubble is likely to have a profound impact on asset prices in the West. If my view is correct, we are likely to see a period of poor economic growth and deflating asset prices in the developed world. The U.S. economy is clearly struggling, Europe faces its own problems and Japan cannot seem to turn things around. So, I would not advise you to invest your capital in stock markets or real-estate in the industrialized nations.There can be no disputing the fact that U.S. financial assets have provided disappointing returns since the beginning of this decade. It is worth noting that even though the Dow Jones index is flat in nominal terms since 2000, it has lost more than half of its value against gold over the same period. At the turn of the millennium, the level of the Dow Jones could buy over 40 ounces of gold. Eight years later, the level of the Dow Jones can only buy roughly 12 ounces of gold! Clearly, gold has been a much better investment than U.S. stocks over the past eight years. In the years ahead, I expect to see further underperformance of financial assets and maintain my position that hard, tangible assets will continue to provide superior returns.