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КОЈ Е ВИНОВНИКОТ ???
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basilius_2 Offline
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#21

Причината поради кој финансискиот пазар,експлодира е баш затоа што се јавија преголеми корисници,а неможеше да се покријат побарувањата.
Истовремено,и банките издаваа кредити да се купат куќи,некои купија повеќе од една.Бидејќи одеднаш се појавија полно газди,а многу малку муштерии кои би можеле тие куќи да живеат во нив,како станари и потстанари.
Што се однесува до Американската економија таа функционира на тој начин што одеднаш ќе има голем напредок и одеднаш ќе експлодира (боом/буст).
Имено Американската економија работи по принципот на побарувачка и снабдување.Проблемот со Марксистичката економија е во тоа што плановите кои се правеа беа нереални.СССР во времето на Сталин правеше планови каде,целата економија сите ресурси ги вложуваше на еден сектор,а другите сектори пропаднаа бидејќи немаа пари да доаѓаат кај нив.Најдобар пример е земјоделието во Македонија,а посебно со тутунарите.
Државата сите пари ги фрли на нижењето тутун,и за тоа даваше огромни субвенции,што натера полно луѓе да зависат од тутунот,а другите земјоделски и стопански гранки пропаднаа.
"He who controls the present, controls the past. He who controls the past, controls the future." -- George Orwell
"Тој што ја контролира сегашноста,тој го контролира минатото.Тој што го контролира минатото ја контролира иднината." Џорџ Орвел
_____________________________________________________________

http://www.cd-macedonia.com
09-02-2011, 03:11 PM
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toni_a Offline
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#22

затоа е важно да се внимава на кого (и колку) се даваат пари (капитал) на заем !!! Icon_lol
тоа важи за нас, а и за банките.

таквите „пукнати балони„ ги има на секој чекор.

пс - на пр. во ДЕ рачунаат некаде со 6,5х од годишните нето приходи, како сума која без проблем би можел да ја вратиш.
(This post was last modified: 10-02-2011, 10:40 PM by toni_a.)
10-02-2011, 10:35 PM
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МрачниотКоњаник Offline
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#23

(09-02-2011, 03:11 PM)basilius_2 Wrote: Причината поради кој финансискиот пазар,експлодира е баш затоа што се јавија преголеми корисници,а неможеше да се покријат побарувањата.
Истовремено,и банките издаваа кредити да се купат куќи,некои купија повеќе од една.Бидејќи одеднаш се појавија полно газди,а многу малку муштерии кои би можеле тие куќи да живеат во нив,како станари и потстанари.
Што се однесува до Американската економија таа функционира на тој начин што одеднаш ќе има голем напредок и одеднаш ќе експлодира (боом/буст).
Имено Американската економија работи по принципот на побарувачка и снабдување.Проблемот со Марксистичката економија е во тоа што плановите кои се правеа беа нереални.СССР во времето на Сталин правеше планови каде,целата економија сите ресурси ги вложуваше на еден сектор,а другите сектори пропаднаа бидејќи немаа пари да доаѓаат кај нив.Најдобар пример е земјоделието во Македонија,а посебно со тутунарите.
Државата сите пари ги фрли на нижењето тутун,и за тоа даваше огромни субвенции,што натера полно луѓе да зависат од тутунот,а другите земјоделски и стопански гранки пропаднаа.
Ги читам овие (на базилиус и на тони_а) одговорите и се прашувам: можно ли е до толку да се загризе на јадица? Можеби и е, ако на пример Кармен Електра објаснува како настанала финансиската криза...
Па да беше само до неуките банкари што се расфрлале со пари лево-десно, зошто сеуште иде народ на економски факултет или воопшто на школо?
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11-02-2011, 06:06 AM
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toni_a Offline
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#24

(11-02-2011, 06:06 AM)МрачниотКоњаник Wrote: Ги читам овие (на базилиус и на тони_а) одговорите и се прашувам: можно ли е до толку да се загризе на јадица? Можеби и е, ако на пример Кармен Електра објаснува како настанала финансиската криза...
Па да беше само до неуките банкари што се расфрлале со пари лево-десно, зошто сеуште иде народ на економски факултет или воопшто на школо?
можно е! бтв, а зошто да не?

малиот банкар не носи вина. тој си работи „по пропис„, те. онака како ќе му кажат. има критерии кои муштеријата треба да ги исполни и според нив добива или не - кредит.
ок, мал простор околу кондициите секогаш постојат, но тие се мали. толку!

главното прашање е за „големите ѕверки„, односно за оние од врвот на хиерархијата. тие ставаат лимити и одредуваат начин на работење...но ова е повеќе од јасно...

како основен фундамент на проблемот (кој се случи) се јавува монетарниот систем во кој нашиов модерен свет агира и реагира.
под притисок се пазарите и потребата од континуиран раст (зголемување те. ширење) на маркетот...
доколку тоа не се случува „природно„, се јавуваат „фактори„ кои вештачки го пумпаат или задвижуваат.

главното прашање всушност е: дали намерно или ненамерно е испровоцирана финансиската криза?
дали ваквите циклични појави намерно или ненамерно (природна законодавност) се случуваат?
24-02-2011, 09:10 PM
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montehristo Offline
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#25

(24-02-2011, 09:10 PM)toni_a Wrote:
(11-02-2011, 06:06 AM)МрачниотКоњаник Wrote: Ги читам овие (на базилиус и на тони_а) одговорите и се прашувам: можно ли е до толку да се загризе на јадица? Можеби и е, ако на пример Кармен Електра објаснува како настанала финансиската криза...
Па да беше само до неуките банкари што се расфрлале со пари лево-десно, зошто сеуште иде народ на економски факултет или воопшто на школо?
можно е! бтв, а зошто да не?

малиот банкар не носи вина. тој си работи „по пропис„, те. онака како ќе му кажат. има критерии кои муштеријата треба да ги исполни и според нив добива или не - кредит.
ок, мал простор околу кондициите секогаш постојат, но тие се мали. толку!

главното прашање е за „големите ѕверки„, односно за оние од врвот на хиерархијата. тие ставаат лимити и одредуваат начин на работење...но ова е повеќе од јасно...

како основен фундамент на проблемот (кој се случи) се јавува монетарниот систем во кој нашиов модерен свет агира и реагира.
под притисок се пазарите и потребата од континуиран раст (зголемување те. ширење) на маркетот...
доколку тоа не се случува „природно„, се јавуваат „фактори„ кои вештачки го пумпаат или задвижуваат.

главното прашање всушност е: дали намерно или ненамерно е испровоцирана финансиската криза?
дали ваквите циклични појави намерно или ненамерно (природна законодавност) се случуваат?

1929 година Џ.П. Морган предизвикува “спонтана“ хистерија лиферувајќи шпекулации дека неговите конкуренти божем ќе пропаднат, тој бил добар ученик на Волтер Липман.
1934 Година поради мерките кои ги превзема Американскиот Претседател во врска со Новиот договор крупните индустријалци сакаат да заведат државен удар.
Сведочењето на Маринскиот Генерал Смедли Батлер во Американскиот Конгрес во разоткривање на тој заговор е сеуште класифициран како таен.
Да тврдам сега дека е тоа намерно некој ќе ме нарече конспиративец, но секогаш треба да се има здрава доза на сомневање.
‘What has been will be again, what has been done will be done again; there is nothing new under the sun‘ ( Eccl. 1:9).
03-03-2011, 06:57 AM
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gravsoslanina Offline
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#26

Нов член сум тука на форумот....па да ја искористам можноста.....во врска со “светската економска криза“...можно ли е да во прашање
ИГРА НА БРОЈКИ...?што би значело дека воопшто нема економска криза.......
08-03-2011, 09:27 PM
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Администратор Offline
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#27

(08-03-2011, 09:27 PM)gravsoslanina Wrote: Нов член сум тука на форумот...



Gravsoslanina ти пожелам добредојде на форумот од екипата на КОТЛЕ.
09-03-2011, 04:34 AM
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gravsoslanina Offline
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#28

(09-03-2011, 04:34 AM)Администратор Wrote:
(08-03-2011, 09:27 PM)gravsoslanina Wrote: Нов член сум тука на форумот...



Gravsoslanina ти пожелам добредојде на форумот од екипата на КОТЛЕ.

благодарам...повремено ќе пуштам свој коментар...
09-03-2011, 04:13 PM
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МрачниотКоњаник Offline
stop the brainfcuk
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#29

(08-03-2011, 09:27 PM)gravsoslanina Wrote: Нов член сум тука на форумот....па да ја искористам можноста.....во врска со “светската економска криза“...можно ли е да во прашање
ИГРА НА БРОЈКИ...?што би значело дека воопшто нема економска криза.......
Сакајќи или не, мај френд, ти само што удри врз едно суштинско прашање кое многумина раскажувачи на вести од кабловска просто одбиваат да си го постават:
колкава е намештаљкава?
Bravo
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10-03-2011, 07:25 AM
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МрачниотКоњаник Offline
stop the brainfcuk
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#30

(24-02-2011, 09:10 PM)toni_a Wrote:
(11-02-2011, 06:06 AM)МрачниотКоњаник Wrote: Ги читам овие (на базилиус и на тони_а) одговорите и се прашувам: можно ли е до толку да се загризе на јадица? Можеби и е, ако на пример Кармен Електра објаснува како настанала финансиската криза...
Па да беше само до неуките банкари што се расфрлале со пари лево-десно, зошто сеуште иде народ на економски факултет или воопшто на школо?
можно е! бтв, а зошто да не?

малиот банкар не носи вина. тој си работи „по пропис„, те. онака како ќе му кажат. има критерии кои муштеријата треба да ги исполни и според нив добива или не - кредит.
ок, мал простор околу кондициите секогаш постојат, но тие се мали. толку!

главното прашање е за „големите ѕверки„, односно за оние од врвот на хиерархијата. тие ставаат лимити и одредуваат начин на работење...но ова е повеќе од јасно...

како основен фундамент на проблемот (кој се случи) се јавува монетарниот систем во кој нашиов модерен свет агира и реагира.
под притисок се пазарите и потребата од континуиран раст (зголемување те. ширење) на маркетот...
доколку тоа не се случува „природно„, се јавуваат „фактори„ кои вештачки го пумпаат или задвижуваат.

главното прашање всушност е: дали намерно или ненамерно е испровоцирана финансиската криза?
дали ваквите циклични појави намерно или ненамерно (природна законодавност) се случуваат?
Тончи, сам си одговори на сопственото прашање!
Quote:како основен фундамент на проблемот (кој се случи) се јавува монетарниот систем во кој нашиов модерен свет агира и реагира.
под притисок се пазарите и потребата од континуиран раст (зголемување те. ширење) на маркетот
Па потоа:
Quote:се јавуваат „фактори„ кои вештачки го пумпаат или задвижуваат.
И на крај:
Quote:дали ваквите циклични појави намерно или ненамерно (природна законодавност) се случуваат?
Хахаха, па после онолкава интервенција од поединци очекуваш реакција од “природата“ на пазарот?
П.С. Ма и зборот пазар би го ставил под наводници...

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(This post was last modified: 10-03-2011, 07:32 AM by МрачниотКоњаник.)
10-03-2011, 07:30 AM
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basilius_2 Offline
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#31

Проблемот лежи во тоа што државата се заплеткува во Економијата. Наместо да го одржува пазарот и фер плејот во бизнисот, Државата за жал стана менаџер на економијата.
Со тоа полно бизниси во Америка станаа зависни од помош на државата, а некои од нив станаа помоќни и од самата држава.
Проблемот на големите корпорации во Америка, е тоа што имаат полно вработени, и цените на материјалите кои им се потребни цело време поскапуваат наместо да поевтинуваат.
"He who controls the present, controls the past. He who controls the past, controls the future." -- George Orwell
"Тој што ја контролира сегашноста,тој го контролира минатото.Тој што го контролира минатото ја контролира иднината." Џорџ Орвел
_____________________________________________________________

http://www.cd-macedonia.com
16-03-2011, 03:26 PM
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montehristo Offline
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#32

Quote:Secretive Plan For a Global Currency
Excerpt from "The Global Economic Crisis: The Great Depression of the XXI Century"



by Ellen Brown


Global Research, March 17, 2011



[Image: 23762.jpg]


The following is an excerpt of a chapter by Ellen Brown from the new book by Global Research Publishers, "The Global Economic Crisis: The Great Depression of the XXI Century."

The Global
Economic Crisis

Michel Chossudovsky
Andrew Gavin Marshall (editors)





--------------------------------------------------------------------------------

By acting together to fulfill these pledges we will bring the world economy out of recession and prevent a crisis like this from recurring in the future. We are committed to take all necessary actions to restore the normal flow of credit through the financial system and ensure the soundness of systemically important institutions, implementing our policies in line with the agreed G20 framework for restoring lending and repairing the financial sector. We have agreed to support a general SDR allocation which will inject $250bn into the world economy and increase global liquidity.– G20 Communiqué, London, April 2, 2009


Towards a New Global Currency?


Is the Group of Twenty Countries (G20) envisaging the creation of a Global Central bank? Who or what would serve as this global central bank, cloaked with the power to issue the global currency and police monetary policy for all humanity? When the world’s central bankers met in Washington in September 2008 at the height of the financial meltdown, they discussed what body might be in a position to serve in that awesome and fearful role. A former governor of the Bank of England stated:



The answer might already be staring us in the face, in the form of the Bank for International Settlements (BIS)... The IMF tends to couch its warnings about economic problems in very diplomatic language, but the BIS is more independent and much better placed to deal with this if it is given the power to do so.[1]



And if the vision of a global currency outside government control was not enough to set off conspiracy theorists, putting the BIS in charge of it surely would be. The BIS has been scandal-ridden ever since it was branded with pro-Nazi leanings in the 1930s. Founded in Basel, Switzerland, in 1930, the BIS has been called “the most exclusive, secretive, and powerful supranational club in the world.” Charles Higham wrote in his book Trading with the Enemy that by the late 1930s, the BIS had assumed an openly pro-Nazi bias, a theme that was expanded on in a BBC Timewatch film titled “Banking with Hitler” broadcast in 1998.[2] In 1944, the American government backed a resolution at the Bretton Woods Conference calling for the liquidation of the BIS, following Czech accusations that it was laundering gold stolen by the Nazis from occupied Europe; but the central bankers succeeded in quietly snuffing out the American resolution.[3]



In Tragedy and Hope: A History of the World in Our Time (1966), Dr. Carroll Quigley revealed the key role played in global finance by the BIS behind the scenes. Dr. Quigley was Professor of History at Georgetown University, where he was President Bill Clinton’s mentor. He was also an insider, groomed by the powerful clique he called “the international bankers.” His credibility is heightened by the fact that he actually espoused their goals. Quigley wrote:



I know of the operations of this network because I have studied it for twenty years and was permitted for two years, in the early 1960’s, to examine its papers and secret records. I have no aversion to it or to most of its aims and have, for much of my life, been close to it and to many of its instruments... In general my chief difference of opinion is that it wishes to remain unknown, and I believe its role in history is significant enough to be known...



The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.[4]



The key to their success, said Quigley, was that the international bankers would control and manipulate the money system of a nation while letting it appear to be controlled by the government.



The statement echoed one made in the 18th century by the patriarch of what became the most powerful banking dynasty in the world. Mayer Amschel Bauer Rothschild is quoted as saying in 1791: “Allow me to issue and control a nation’s currency, and I care not who makes its laws.” Mayer’s five sons were sent to the major capitals of Europe – London, Paris, Vienna, Berlin and Naples – with the mission of establishing a banking system that would be outside government control. The economic and political systems of nations would be controlled not by citizens but by bankers, for the benefit of bankers.



Eventually, a privately-owned “central bank” was established in nearly every country. This central banking system has now gained control over the economies of the world. Central banks have the authority to print money in their respective countries, and it is from these banks that governments must borrow money to pay their debts and fund their operations. The result is a global economy in which not only industry but government itself runs on “credit” (or debt) created by a banking monopoly headed by a network of private central banks. At the top of this network is the BIS, the “central bank of central banks” in Basel.



Behind the Curtain


For many years the BIS kept a very low profile, operating behind the scenes in an abandoned hotel. It was here that decisions were reached to devalue or defend currencies, fix the price of gold, regulate offshore banking, and raise or lower short-term interest rates. In 1977, however, the BIS gave up its anonymity in exchange for more efficient headquarters. The new building has been described as “an eighteen story-high circular skyscraper that rises above the medieval city like some misplaced nuclear reactor.” It quickly became known as the “Tower of Basel.” Today the BIS has governmental immunity, pays no taxes, and has its own private police force.[5] It is, as Mayer Rothschild envisioned, above the law.



The BIS is now composed of 55 member nations, but the club that meets regularly in Basel is a much smaller group; and even within it, there is a hierarchy. In a 1983 article in Harper’s Magazine called “Ruling the World of Money,” Edward Jay Epstein wrote that where the real business gets done is in “a sort of inner club made up of the half dozen or so powerful central bankers who find themselves more or less in the same monetary boat” – those from Germany, the United States, Switzerland, Italy, Japan and England. Epstein said:



The prime value, which also seems to demarcate the inner club from the rest of the BIS members, is the firm belief that central banks should act independently of their home governments... A second and closely related belief of the inner club is that politicians should not be trusted to decide the fate of the international monetary system.[6]



In 1974, the Basel Committee on Banking Supervision was created by the central bank Governors of the Group of 10 nations (now expanded to twenty). The BIS provides the twelve-member Secretariat for the Committee. The Committee, in turn, sets the rules for banking globally, including capital requirements and reserve controls. In a 2003 article titled “The Bank for International Settlements Calls for Global Currency,” Joan Veon wrote:



The BIS is where all of the world’s central banks meet to analyze the global economy and determine what course of action they will take next to put more money in their pockets, since they control the amount of money in circulation and how much interest they are going to charge governments and banks for borrowing from them...



When you understand that the BIS pulls the strings of the world’s monetary system, you then understand that they have the ability to create a financial boom or bust in a country. If that country is not doing what the money lenders want, then all they have to do is sell its currency.[7]






The Controversial Basel Accords


The power of the BIS to make or break economies was demonstrated in 1988, when it issued a Basel Accord raising bank capital requirements from six percent to eight percent. By then, Japan had emerged as the world’s largest creditor; but Japan’s banks were less well capitalized than other major international banks. Raising the capital requirement forced them to cut back on lending, creating a recession in Japan like that suffered in the U.S. today. Property prices fell and loans went into default as the security for them shriveled up. A downward spiral followed, ending with the total bankruptcy of the banks. The banks had to be nationalized, although that word was not used in order to avoid criticism.[8]



Among other “collateral damage” produced by the Basel Accords was a spate of suicides among Indian farmers unable to get loans. The BIS capital adequacy standards required loans to private borrowers to be “risk-weighted,” with the degree of risk determined by private rating agencies; farmers and small business owners could not afford the agencies’ fees. Banks therefore assigned one hundred percent risk to the loans, and then resisted extending credit to these “high-risk” borrowers because more capital was required to cover the loans. When the conscience of the nation was aroused by the Indian suicides, the government, lamenting the neglect of farmers by commercial banks, established a policy of ending the “financial exclusion” of the weak; but this step had little real effect on lending practices, due largely to the strictures imposed by the BIS from abroad.[9]



Economist Henry C K Liu has analyzed how the Basel Accords have forced national banking systems “to march to the same tune, designed to serve the needs of highly sophisticated global financial markets, regardless of the developmental needs of their national economies.” He wrote:



National banking systems are suddenly thrown into the rigid arms of the Basel Capital Accord sponsored by the Bank of International Settlement (BIS), or to face the penalty of usurious risk premium in securing international interbank loans... National policies suddenly are subjected to profit incentives of private financial institutions, all members of a hierarchical system controlled and directed from the money center banks in New York. The result is to force national banking systems to privatize...



BIS regulations serve only the single purpose of strengthening the international private banking system, even at the peril of national economies... The IMF and the international banks regulated by the BIS are a team: the international banks lend recklessly to borrowers in emerging economies to create a foreign currency debt crisis, the IMF arrives as a carrier of monetary virus in the name of sound monetary policy, then the international banks come as vulture investors in the name of financial rescue to acquire national banks deemed capital inadequate and insolvent by the BIS.



Ironically, noted Liu, developing countries with their own natural resources did not actually need the foreign investment that trapped them in debt to outsiders: "Applying the State Theory of Money [which assumes that a sovereign nation has the power to issue its own money], any government can fund with its own currency all its domestic developmental needs to maintain full employment without inflation."[10]



When governments fall into the trap of accepting loans in foreign currencies, however, they become “debtor nations” subject to IMF and BIS regulation. They are forced to divert their production to exports, just to earn the foreign currency necessary to pay the interest on their loans. National banks deemed “capital inadequate” have to deal with strictures comparable to the “conditionalities” imposed by the IMF on debtor nations: “escalating capital requirement, loan write-offs and liquidation, and restructuring through selloffs, layoffs, downsizing, cost-cutting and freeze on capital spending.” Liu wrote:



Reversing the logic that a sound banking system should lead to full employment and developmental growth, BIS regulations demand high unemployment and developmental degradation in national economies as the fair price for a sound global private banking system.[11]



The Last Domino to Fall


While banks in developing nations were being penalized for falling short of the BIS capital requirements, large international banks managed to skirt the rules, although they actually carried enormous risk because of their derivative exposure. The mega-banks took advantage of a loophole that allowed for lower charges against capital for “off-balance sheet activities.” The banks got loans off their balance sheets by bundling them into securities and selling them off to investors, after separating the risk of default out from the loans and selling it off to yet other investors, using a form of derivative known as “credit default swaps.”



It was evidently not in the game plan, however, that U.S. banks should escape the regulatory net indefinitely. Complaints about the loopholes in Basel I prompted a new set of rules called Basel II, which based capital requirements for market risk on a “Value-at-Risk” accounting standard. The new rules were established in 2004, but they were not levied on U.S. banks until November 2007, the month after the Dow passed 14 000 to reach its all-time high. On November 1, 2007, the Office of the Controller of the Currency “approved a final rule implementing advanced approaches of the Basel II Capital Accord.”[12] On November 15, 2007, the Financial Accounting Standards Board or FASB, a private organization that sets U.S. accounting rules for the private sector, adopted FAS 157, the rule called “mark-to-market accounting.”[13] The effect on U.S. banks was similar to that of Basel I on Japanese banks: they have been struggling to survive ever since.[14]



The mark-to-market rule requires banks to adjust the value of their marketable securities to the “market price” of the security.[15] The rule has theoretical merit, but the problem is timing: it was imposed ex post facto, after the banks already had the hard-to-market assets on their books. Lenders that had been considered sufficiently well capitalized to make new loans suddenly found they were insolvent; at least, they would have been if they had tried to sell their assets, an assumption required by the new rule. Financial analyst John Berlau complained in October 2008:



Despite the credit crunch being described as the spread of the ‘American flu,’ the mark-to-market rules that are spreading it were hatched [as] part of the Basel II international rules for financial institutions. It’s just that the U.S. jumped into the really icy water last November when our Securities and Exchange Commission and bank regulators implemented FASB’s Financial Accounting Standard 157, which makes healthy banks and financial firms take a ‘loss’ in the capital they can lend even if a loan on their books is still performing, even when the ‘market price’ [of] an illiquid asset is that of the last fire sale by a highly leveraged bank. Late last month, similar rules went into effect in the European Union, playing a similar role in accelerating financial failures...



The crisis is often called a ‘market failure,’ and the term ‘mark-to-market’ seems to reinforce that. But the mark-to-market rules are profoundly anti-market and hinder the free-market function of price discovery... In this case, the accounting rules fail to allow the market players to hold on to an asset if they don’t like what the market is currently fetching, an important market action that affects price discovery in areas from agriculture to antiques.[16]



Imposing the mark-to-market rule on U.S. banks caused an instant credit freeze, which proceeded to take down the economies not only of the U.S. but of countries worldwide. In early April 2009, the mark-to-market rule was finally softened by the FASB; but critics said the modification did not go far enough, and it was done in response to pressure from politicians and bankers, not out of any fundamental change of heart or policies by the BIS or the FASB. Indeed, the BIS was warned as early as 2001 that its Basel II proposal was “procyclical,” meaning that in a downturn it would only serve to make matters worse. In a formal response to a Request for Comments by the Basel Committee for Banking Supervision, a group of economists stated:



Value-at-Risk can destabilize an economy and induce crashes when they would not otherwise occur... Perhaps our most serious concern is that these proposals, taken altogether, will enhance both the procyclicality of regulation and the susceptibility of the financial system to systemic crises, thus negating the central purpose of the whole exercise. Reconsider before it is too late.[17]



The BIS did not reconsider, however, even after seeing the devastation its regulations had caused; and that is where the conspiracy theorists came in. Why did the BIS sit idly by, they asked, as the global economy came crashing down? Was the goal to create so much economic havoc that the world would rush with relief into the waiting arms of a global economic policeman with its privately-created global currency?



Notes



[1] Andrew Gavin Marshall, “The Financial New World Order: Towards a Global Currency and World Government”, Global Research, http://www.globalresearch.ca/index.php?c...&aid=13070, 6 April 2009. See also Chapter 17.

[2] Alfred Mendez, “The Network”, The World Central Bank: The Bank for International

Settlements, http://copy_bilderberg.tripod.com/bis.htm.

[3] HubPages, “BIS – Bank of International Settlement: The Mother of All Central Banks”, hubpages.com, 2009.

[4] Carroll Quigley, Tragedy and Hope: A History of the World in Our Time, 1966.

[5] HubPages, “BIS – Bank of International Settlement: The Mother of All Central Banks”, hubpages.com, 2009.

[6] Edward Jay Epstein, “Ruling the World of Money”, Harper’s Magazine, November 1983.

[7] Joan Veon, “The Bank for International Settlements Calls for Global Currency”, News with Views, 26 August 2003.

[8] Peter Myers, “The 1988 Basle Accord – Destroyer of Japan’s Finance System”, http://www.mailstar.net/basle.html, 9 September 2008.

[9] Nirmal Chandra, “Is Inclusive Growth Feasible in Neoliberal India?”, networkideas.org, September 2008.

[10] Henry C. K. Liu, “The BIS vs National Banks”, Asia Times, http://www.atimes.com/global-econ/DE14Dj01.html, 14 May 2002.

[11] Ibid.

[12] Comptroller of the Currency, “OCC Approves Basel II Capital Rule”, Comptroller of the Currency Release, 1 November 2007.

[13] Vinny Catalano, “FAS 157: Timing Is Everything”, vinnycatalano.blogspot.com, 18 March 2008.

[14] Bruce Wiseman, “The Financial Crisis: A look Behind the Wizard’s Curtain”, Canada Free Press, 19 March 2009.

[15] Ellen Brown, “Credit Where Credit Is Due”, webofdebt.com/articles/creditcrunch.php, 11 January 2009.

[16] John Berlau, “The International Mark-to-Market Contagion”, OpenMarket.org, 10 October 2008.

[17] Jon Danielsson, et al., “An Academic Response to Basel II”, LSE Financial Markets Group Special Paper Series, May 2001.




Ellen Brown is a frequent contributor to Global Research. Global Research Articles by Ellen Brown
‘What has been will be again, what has been done will be done again; there is nothing new under the sun‘ ( Eccl. 1:9).
(This post was last modified: 19-03-2011, 10:12 PM by montehristo.)
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Шпанците веќе бараат кривец кого да осудат
Quote:Економски злочини против човечности
Ел Паис
понедељак, 04. април 2011.

[Image: ekonomija_W.jpg]

(Аутори: Лурдес Бенериа, Професор економије на Коренел Универзитету и Кармен Сарасуа, Професор Економске историје на Аутономном универзитету у Барселони)

Према Међународном кривичном суду, злочин против човечности је „било који чин који изазива тешке патње или наноси штету менталном или физичком здрављу онима који су тај чин претрпели, а који је почињен као део општег или систематског напада на цивилно становништво“. Од II Светског рата зближили смо се са овим концептом, и са идејом да је, без обзира колико је био велик сам тај чин, могуће и обавезно истражити те злочине и учити да кривци плате за то.

Ситуације као ове које је створила светска економска криза, учиниле су да је почело да се говори о економским злочинима према човечности. Концепт није нов. Већ 1950. економиста неокласичар и добитник Нобелове награде, Гари Бекер, увео је своју „теорију злочина“ на нивоу микроекономије. Вероватноћа да нека особа почини злочин, према Бекеру зависи од ризика који прихвати, могућег плена и могуће казне. На макреоекономском нивоу, концепт је био коришћен у расправама о политици структуралног усклађивања коју су покренули Међународни монетарни фонд и Светска банка у току 80-тих и 90-тих година прошлог века, а која је изазвала веома високе социјалне трошкове становништву Африке, Латинске Америке, Азије (у току азијске кризе из 1997/98), и Источне Европе. Многи аналитичари су указали да су за то одговорне те институције, политике које су заговарале и економисти који су их направили, посебно ММФ, чији је углед био јако нарушен после азијске кризе.

Данас Западне земље плаћају социјалне трошкове финансијске кризе и незапослености, као и планова за штедњу који се наводно боре против тога. Губитак фундаманталних права као она на рад и стан, и патње милиона породица које живе на опасној ивици преживљавања, примери су ужасне цене ове кризе. Број домова који живе у сиромаштву расте назаустављиво. Али, ко је одговоран за то? Тржиште, читамо и слушамо свакога дана.

У једном чланку објављеном у Businessweek 20. марта 2009. под насловом “Wall Street's economic crimes against humanity”, Шошана Зубов, некадашња професорка са Харвардске пословне школе, држала је да то што одговорни за кризу негирају последице својих акција показује „банализацију зла“ и „институционализовани нарцизам“ у нашим друштвима. То је доказ недостатка одговорности и „емоиционалне дистанце“ са којом су накупили милионске суме они који сада негирају било какву везу са нанетом штетом. Није прихвативо кривити само систем, доказује Зубова, као што није прихвативо ни кривити за нацистичке злочине само идеје, а не оне који су злочине починили.

Кривити тржиште значи остати на површини проблема. Постоје одговорни, и то су конкретне личности и институције; то су они који су бранили неконтролисану либерализацију финансијског тржишта, директори и фирме који су остварили добит од прекорачења тржишта у току финансијског бума, они који су дозволили овакву праксу, и који сада дозвољавају да ови из свега изађу неоштећени и чак робуснији, са још више државних пара у замену за ништа. Фирме као што су Lehman Brothers или Goldman Sachs, банке које су дозволиле ширење ђубре кредита, инспектори који су наводно гарантовали здравље рачуна фирми, људи као Ален Гринспан, шеф америчких Федералних резерви у току владе Буша и Клинтона, жестоки противник регурализације финансијског тржишта.

Комисија америчког Конгреса која је испитивала изворе кризе, у овом смислу је све разјаснила. Створена од Обаме 2009. како би испитала илегалне или криминалне акције финансијског сектора, испитала је више од 700 стручњака. Њен извештај је објављен прошлог јануара, и закључује да је ова криза могла да се избегне. Указује на грешке Владе и фирми у систему регуларизације и финансијске контроле, у рачуноводственој и инспекцијској пракси, и у тренспарентности послова. Комисија је испитивала директну улогу неких од гиганата Вол Стрита у фиансијској катастрофи, као на пример тржиште subrpimes, и агенција задужених за ranking обавезница. Важно је схватити различите степене одговорности сваког од актера у овој драми, али није прихватив утисак некажњивости оних који су наводно без “одговорности”.

Што се тиче жртава економских злочина, у Шпанији 20% незапослених већ више од две године, значи огроман економски и људски трошак. Хиљаде породица трпи последице зато што су веровеле да ће платити хипотекарне кредите са платом од 1000 евра; зато је дошло до 90 000 хипотекарног одузимања станова у 2009. и 180 000 у 2010. години. У САД, стопа незапослености је упола мања него у Шпанији, али представља неких 26 милиона незапослених, што подрезумева страшан пораст сиромаштва у једној од најбогатијих земаља света. Према Комисији за Економску кризу, више од четири милиона продица је изгубило свој дом, а 4,5 милиона их је у процесу исељавања. Једанаест милијарди долара „породичног богатства” је „нестало” јер је опала вредност њихове имовине, укључујући ту стан, пензије и уштеђевину. Друга од последица кризе је њен утицај на цене хране и других основних сировина, секторима према којима шпекуланти усмеравају свој капитал. Резултат је инфалција њихових цена, и још већи пораст сиромаштва.

У неким познатим случајевима преваре као то је онај Мадофа, њен извршилац је у затвору и судски процес против њега се наставља јер његове жртве имају економску моћ. Али уопште, они који су изазвали кризу не само да су остварили невероватну добит, већ се не боје било какве казне. Нико не истражује њихову одговорност због одлука које су доносили. Владе их штите, а судски апарат их не прогони.

Да смо имали јасан појам о томе шта је то економски злочин, и да је постојао механизам да се они истражују у прогоне, избегли би се многи од данашњих проблема. Није то утопија. Исланд ту нуди веома интересантан пример. Уместо да спашава банкаре који су уништили земљу 2008. године, истражни судија је отворио истрагу против одговорних за то. Цела влада је 2009. морала да поднесе оставку, па је плаћање дуга банака било блокирано. Исланд није социјализовао губитке као што то раде многе земље, укључујући ту и Шпанју, већ је прихватио да одговорни буду кажњени и да њихове банке пропадну.

На исти начин како су формиране институције и поступци за прогон политичких злочина против човечности, време је да се исто учини и са економским. Ово је добар тренутак за то, јер је тешко одбити њихово постојање. Хитно је потребно да се појам “економски злочин” угради у мисао грађана, и да се схвати његов значај за изгадњу економске и политичке демократије. Најмање би то учинило да видимо потребу да се регулише тржиште, како би, како каже Полањи, служило друштву, а не обратно.

(Превео: Бранислав Ђорђевић)

NSPM
‘What has been will be again, what has been done will be done again; there is nothing new under the sun‘ ( Eccl. 1:9).
11-04-2011, 04:25 AM
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#35

‘What has been will be again, what has been done will be done again; there is nothing new under the sun‘ ( Eccl. 1:9).
13-04-2011, 09:55 AM
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#36

Quote:[b]The Wall Street Leviathan/b]
April 28, 2011
Jeff Madrick

The Financial Crisis Inquiry Report: Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States

PublicAffairs, 545 pp., $14.99 (paper)

Inside Job
a film directed by Charles Ferguson


Regulating Wall Street: The Dodd-Frank Act and the New Architecture of Global Finance
edited by Viral V. Acharya, Thomas F. Cooley, Matthew P. Richardson, and Ingo Walter
Wiley, 573 pp., $49.95

Reforming US Financial Markets: Reflections Before and Beyond Dodd-Frank
by Randall S. Kroszner and Robert J. Shiller, edited and with an introduction by Benjamin M. Friedman
MIT Press, 152 pp., $19.95

[Image: madrick_1-042811_jpg_230x310_q85.jpg]
Representational Pictures/Sony Pictures Classics

Former Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke, and Treasury Secretary Timothy Geithner; from Charles Ferguson’s documentary film Inside Job



With its revealing accounts of the Wall Street practices that led to the recession of 2008 and 2009, the recent report of the Financial Crisis Inquiry Commission (FCIC) is the most comprehensive indictment of the American financial failure that has yet been made. During two years of investigations, the commission accumulated evidence of many hundreds of irresponsible, self-serving, and unethical practices by Wall Street bankers and systematic tolerance of them by regulators.

Written by the six members appointed by congressional Democrats, the FCIC report concludes, “The crisis was the result of human action and inaction, not of Mother Nature or computer models gone haywire.” Many readers would think the conclusion obvious. But Wall Street professionals repeatedly claimed that similar crises occurred frequently in the history of modern capitalism, that they are merely the price paid for a dynamic and innovative economic system, and that individuals were not to blame. They thus minimized their own responsibility for the events and cast doubt on the need for significantly more intense regulation of their activities. The FCIC majority dismisses such arguments.

Can we then infer that future crises may be avoided by intelligent and unbiased financial regulators and a chastened Wall Street? A 2,300-page set of regulations—known as the Dodd-Frank Act after its congressional sponsors, Senator Chris Dodd and Representative Barney Frank—was passed last year to accomplish just that. In a television interview with Charlie Rose this March, Frank said he “got better than 90 percent” of what he wanted. The act has some bite. It proposes ways to deal with many of the practices that contributed to the crisis, including inadequate capital requirements, excessive Wall Street compensation, and damaging conflicts of interest in credit ratings agencies that readily assigned their highest ratings to risky debt. It tries to regulate trading of speculative securities like derivatives, which enabled bankers to wage huge bets with little capital on the movement of securities prices.



Under Dodd-Frank, a new oversight board, composed of members of regulatory agencies led by the Federal Reserve, will now be charged with assessing the level of so-called systemic risk of major financial institutions and imposing stricter capital rules or even shutting institutions down if they are deemed to put the financial system at risk—that is, if their failure might bring down many other institutions with them and endanger the American economy. Now there will be regulation not only of traditional commercial banks, which always fell under the purview of the Federal Reserve, but also investment banks, money market funds, and perhaps even hedge funds, which had been hardly regulated at all.

The Consumer Financial Protection Bureau has also been established inside the Federal Reserve to write new requirements for mortgages, consumer loans, and the other consumer credit products that were so badly abused. Of particular concern, people with poor credit and low incomes were sold so-called subprime mortgages that were deceptively cheap at the outset, sometimes requiring no down payments, but whose annual interest charges skyrocketed in later years. The availability of mortgage finance drove housing prices ever higher, and when they collapsed, beginning in roughly 2006, the growing amount of bad debt that resulted caused a collapse of Wall Street and then the global economy.

But the Dodd-Frank Act has largely pushed responsibility for writing and implementing the new rules onto existing regulators, including the Federal Reserve, the Securities and Exchange Commission, the Commodities Futures Trading Commission, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency. This will likely prove a damaging flaw. These regulators are by and large the same agencies that tolerated the excessively risky behavior in the first place. Even if they write effective rules they will face pressure from Wall Street lobbyists and mostly Republican legislators to soften restrictions and eliminate some of the critical ones. If the restrictions remain intact, which is likely in view of the Democratic majority in the Senate, the question remains whether the regulators will enforce them vigorously once the economy recovers and the crisis fades in memory. Several agencies have already missed the deadlines to write new rules. Some are worried that the Consumer Financial Protection Bureau will be neutralized by Congress. Wall Street spent $2.7 billion on lobbying between 1999 and 2008 and is lobbying vigorously again.

The Dodd-Frank Act could have been much more effective. It could, from the outset, have set high capital requirements—the amount of money that banks and other financial institutions have to put aside for possible losses. It could have broken up today’s enormous banks, which have grown rapidly in size since the crisis. Measured by their profits, the six largest financial institutions in the US now account for 55 percent of all banking assets. It could have divided the banks by function in order to reduce the overlapping of investment activities, which increases the chances of damage to the entire financial system. For example, those banks that accept federally insured deposits from savers could have been restricted to making loans to consumers and businesses. Other institutions that raise money independently of government guarantees could have been allowed to sell more risky stocks or corporate bonds to investors or speculate in securities with their shareholder capital.

The only action proposed by Dodd-Frank along these lines is known as the Volcker Rule, named after former Federal Reserve chairman Paul Volcker. It would prohibit proprietary trading by banks that typically accept the public’s deposits—that is, it would limit speculative investments with the institution’s own capital. But even the Volcker Rule has not been clearly formulated and applied. The question still not answered is why regulators would perform better in the future than in the past two decades.

The FCIC report will probably not provoke tougher regulation in Washington. Its strength is its accumulation of fact and example. By contrast, Charles Ferguson’s popular, Oscar-winning documentary Inside Job tells the story of the crisis with directness and clarity, partly because he is willing to make pointed accusations against specific federal regulators and Wall Street bankers. In interviewing some of those he thinks of as culprits, including several prominent economists, he finds that they have hardly anything to say in their defense. Those he did not interview are often shown in revealing congressional testimony. We see Alan Greenspan, the former Federal Reserve chairman, assuring Congress that derivatives, including those guaranteeing subprime mortgage securities, required no federal regulation at all. In fact, unregulated derivatives were a principal source of the risk-taking that brought down the financial system.

Ferguson never adequately explains derivatives but he makes it clear that Wall Street firms borrowed far too much in order to invest in mortgage debt securities that were far too risky, and no one stopped them. The result was soaring housing prices, which led to more risky mortgages. Then the banks and others sold the risky debt to investors around the world as if it had almost no risk at all. Did Wall Street bankers know they had built a house of cards? Ferguson thinks many did, selling bad products without proper warning to their clients; they didn’t care, he believes, because they were making too much money. But it takes the FCIC report to prove his point by means of carefully accumulated evidence.

When Ferguson accepted his Oscar in late February, he remarked that no one had yet gone to jail for the worst American financial crisis since the Great Depression. This was a telling observation about the weakness of corporate fraud law as well as the lack of vigor of the US Justice Department. Criminal action against Angelo Mozilo, whose firm Countrywide Financial wrote more subprime mortgages than any other, was dropped this winter. The FCIC report provides many examples of the failure of management to warn shareholders of the risks it was taking—apparent violations of disclosure laws that were never even investigated.

Still, jail sentences may have little effect. By the late 1990s, countless accounting frauds culminated in outrageous behavior by Enron, WorldCom, and others, abetted by such giants as Citigroup and the Arthur Andersen accounting firm. Some Enron executives went to prison and Andersen closed down, but this did not discourage deceptive practices in mortgage securities in the mid-2000s. Wall Street is now creating outsize values for social media companies like Facebook and Twitter, well before these companies have generated serious profits. While federal regulators are debating among themselves and with financial lobbyists about new rules, another bubble is likely forming before our very eyes.

Little had been expected of the FCIC because its subpoena power was weak. It was appointed by Congress in the spring of 2009 with the Democrat Philip Angelides as chairman and with a Republican-appointed vice-chairman. Both had to agree if a subpoena were to be served. The nineteen days of public hearings produced angry questions from commissioners and evasive responses from Wall Street CEOs but did not truly expose any major figure. Yet with some six hundred closed-door interviews and reviews of thousands of private documents, the majority report is the definitive history of this period. For the most part, Wall Street made money not by virtue of brilliance but by taking on higher levels of risk—usually by cleverly circumventing existing restrictions on how much it could borrow. Few on Wall Street had to give any money back when losses inevitably escalated.

The report’s conclusions were attacked by the commission’s Republican- appointed minority in a dissent whose length, it said, was limited by the majority. Even so, it did not challenge any of the majority’s facts, and even agreed with many of its conclusions. (A separate, more extreme dissent was issued by Peter Wallison, a codirector of financial policy studies at the American Enterprise Institute who, without responding cogently to any of its charges, acidly claimed that the majority had proved none of its points.) The minority pointed out that other factors, including low interest rates engineered by the Federal Reserve and large-scale Chinese purchases of bonds, stimulated excessive speculation in mortgage securities and the housing bubble. Thus, Wall Street manipulators were not entirely to blame.

Fannie Mae and Freddie Mac, federal agencies with implicit government backing, certainly had a large part in the financing of bad mortgages. The FCIC report finds that the business model of these for-profit giants, with implicit federal guarantees of their debt, was deeply flawed, and it observes that the federal bailout of them has incurred enormous costs. But private bankers financed a large majority of subprime mortgage debt. Moreover, the hundreds of examples of damaging and questionable Wall Street practices as well as regulatory negligence outlined by the majority of the commission are simply too large to be taken as secondary causes of the crisis. As for low interest rates and plentiful Chinese capital, just because money was easy to find doesn’t mean excessive risk-taking was inevitable.*

[Image: madrick_2-042811_jpg_230x366_q85.jpg]

Representational Pictures/Sony Pictures Classics

Representative Barney Frank; from Inside Job
One of the major conclusions to be drawn from the FCIC report is that almost all major financial institutions were in serious danger of collapse in the fall of 2008. This is why systemic risk is the paramount concern of regulators today. The report’s findings make clear that such risk is not just a consequence of the size of a firm. Firms are interconnected by buying securities from and selling them to one another, as well as by borrowing from and lending to one another.

In mid-September of that year, Ben Bernanke, the Federal Reserve chairman since early 2006, Treasury Secretary Henry Paulson, and New York Federal Reserve Bank President Timothy Geithner decided to let Lehman Brothers, which had invested heavily in mortgage securities and other real estate, go bankrupt. Financial markets froze and the businesses, money market funds, and banks that regularly lent money to Wall Street stopped doing so, fearing that they would not be repaid. The values of all debt securities except Treasury debt started to fall precipitously. On balance, Wall Street had no assets to sell to pay its debts. Bernanke told the FCIC:

As a scholar of the Great Depression, I honestly believe that September and October 2008 was the worst financial crisis in global history, including the Great Depression…. Out of maybe the 13, 13 of the most important financial institutions in the United States, 12 were at risk of failure within a period of a week or two.
Even the survival of Goldman Sachs, supposedly the strongest of the five major investment banks, was now in doubt. Goldman’s CEO, Lloyd Blankfein, later admitted in an interview with the FCIC that “there were systemic [my italics] events going on, and we were very nervous.” “We thought there was a real chance that [Goldman] would go under,” said Bernanke.

A prime example of the systemic dangers was the sale by insurance giant AIG of tens of billions of dollars of credit default swaps, a derivative that served as insurance for mortgage-backed securities. Because derivatives were unregulated and essentially traded in secret, triple-A-rated AIG was not required to hold capital or collateral against such liabilities. Because the swaps were traded secretly, there were also no open prices on their values. Goldman Sachs in particular bought a lot of derivative insurance from AIG.

But when mortgage-backed securities collapsed in value, AIG couldn’t pay off its commitments. Since so many firms were owed money by AIG—indeed, buying insurance encouraged these firms to take more risk—the Treasury and Fed decided to bail AIG out for a total of $180 billion, essentially nationalizing it, and covered all its liabilities, in the process bailing out Goldman and others as well. The inspector-general later appointed to analyze the federal bailout program, called the Troubled Asset Relief Program (TARP), severely criticized the Treasury for making whole the companies hurt by deals with AIG. Goldman, for example, got back the $14 billion it had at risk with AIG. The FCIC report says the claim made by Goldman that it had hedged its insurance purchases from AIG with other firms was shown to be dubious. The inspector-general argued forcefully that Goldman should have shared in the losses, and that taxpayers should not have accepted the full burden of Goldman’s errors.

Dodd-Frank’s answer to such systemic risk is the newly created oversight council led by the Fed, which is charged with anticipating such problems and reducing risks taken by the financial firms ahead of time. Will this prove to be more than a fantasy? When we consider how poorly the Fed and Treasury negotiated the AIG bailout, failing to stand up to Goldman Sachs and the other powers on Wall Street, there is little reason to have confidence that the new oversight institution will force the hands of the big banks and investment companies in the future, especially when times are good.

True, it would have taken some courage to have simply broken up today’s enormous banks or set high capital requirements by law. But there are other possibilities. Regulating Wall Street, a valuable, thoroughly researched book of essays on the crisis, proposes a direct tax on major financial institutions based on how much systemic risk they are creating, as measured by low-quality loans and inadequate services. Such a tax would encourage them to reduce such risk-taking. In an essay published in a short book edited by the economist Benjamin Friedman, Reforming US Financial Markets, the Yale economist Robert Shiller, who had long warned about the bubble in housing prices, criticizes Dodd-Frank for not establishing direct ways to mitigate future speculative bubbles. One reasonable suggestion he endorses would be to raise and lower capital requirements as financial conditions change.

For all the attention paid to Goldman Sachs, Citigroup provides the classic example of the efforts of Wall Street firms to circumvent existing capital requirements while regulators failed to oversee and supervise their activities, even with the tools they had. The story of Citigroup illustrates how difficult future regulations will be if they are simply left to the oversight council.

Citigroup was the banking behemoth run by Sandy Weill after a merger in 1998 between, on the one hand, Weill’s Travelers Group, which included the Travelers insurance company and Salomon Smith Barney, and, on the other, Citicorp, the giant international bank. The merger required lifting completely the restrictions of the 1933 Glass- Steagall Act, which forbade banks to act as investment houses; it had been signed by President Clinton.

Citigroup had been fined more than any other bank—some $400 million—because of its financial chicanery during the late 1990s and early 2000s. Even after Weill retired as CEO in 2003, it set out to take more risk, encouraged by former Treasury secretary Robert Rubin, the chair of Citigroup’s executive committee. It partly did so by skirting the regulations on how much it could borrow against capital, enabling it to become one of the two largest Wall Street participants in the mortgage market almost overnight. Among other things it did was lodge the assets it bought with the debt, often mortgage securities, in partnerships that did not appear on the Citigroup balance sheets. Citigroup also guaranteed $25 billion in loans to those who purchased the mortgage securities it underwrote, leaving it with a huge loss when these securities fell sharply in value.

The single most stunning finding of the FCIC report is that if all Citigroup’s assets had been accounted for accurately, its ratio of assets to capital would have been forty-eight to one in 2007, not the twenty-two to one it had been reporting that year. The ratio of forty-eight to one was irresponsible—higher than the capital ratios at the most aggressive investment banks, such as Bear Stearns, and far higher than the capital ratios of other banks. The Fed apparently had no idea of this.

But the main source of irresponsible risk—which some observers and academic economists view as the major cause of the crisis—was investment in triple-A-rated packages, or tranches, based on mortgage-backed securities of collateralized debt obligations (CDOs) that never deserved their triple-A ratings at all. Companies such as Goldman, Morgan, Merrill, Citigroup, and even Countrywide, which had its own huge capital markets operation, convinced Moody’s, Standard & Poor’s, and Fitch to rate three quarters of these packages of bonds triple-A, even when they were entirely composed of subprime mortgages. When a bank’s assets are rated triple-A, regulators require less capital in order to safeguard against downturns in value.

When divided into tranches, the highest-rated bonds were paid off first; thus, it was claimed that a high default rate would be needed to endanger these bonds. But this simply wasn’t so, as many bankers realized. Even small increases in defaults damaged the high-rated bonds of CDOs that were, quite irresponsibly, made up entirely of sub-primes. Eventually as much as 60 percent of the securities originally rated triple-A were reduced to junk bonds by the credit ratings agencies. These agencies bear heavy responsibility for playing the banks’ game.

Citigroup and others didn’t sell off all these triple-A securities to their unwary investors; but they sold enough for many of them, including pension funds, to take big losses when housing collapsed. Citigroup kept many CDOs on their own books or in the off- balance-sheet entities I have mentioned so it could earn the handsome interest they paid, suspiciously higher than the interest on other triple-A-rated securities. Citigroup also often had to buy some of them because it couldn’t sell all the CDOs it underwrote to customers.

The Republican minority on the commission, along with other observers, contend that repealing the Glass- Steagall Act was not a factor in the crisis even though the institutions grew unprecedentedly large. But Citigroup used the size of its balance sheet—more than $2 trillion in 2007—to guarantee its ever-growing purchases of mortgage-backed securities and to support other lines of business, including both conventional lending and trading securities. As the Fed put it in 2008, Citigroup’s “senior management allowed business lines largely unchallenged access to the balance sheet to pursue revenue growth.”

Citigroup along with Merrill Lynch had written more CDOs than anyone else by 2006. Citigroup lost $40 billion in the fourth quarter of 2007, and overall its losses and writedowns came to $130 billion, the largest among commercial banks. Merrill’s total losses came to nearly $56 billion, more than any other investment bank. Their CEOs claimed (as did Robert Rubin) that they had no idea the triple-A-rated CDOs were risky. Citigroup received $45 billion in funds from the government’s Troubled Asset Relief Program, more than any other bank, and was given guarantees on some assets, but no one was removed from management.

Where was the Fed? The legislation repealing Glass-Steagall, the Gramm-Leach-Bliley Act of 1999, had one other subtle but highly significant consequence, as the FCIC report explains. It diluted the government’s regulatory authority over the new financial conglomerates such as Citigroup. Under the legislation, the Fed, the strongest of the regulators when it did its job properly, now oversaw only bank holding companies, the umbrella organizations under which the bank subsidiaries operated. The 1999 act mandated that the Fed rely on the SEC to oversee bank subsidiaries that dealt in securities, and that the Office of the Comptroller of the Currency oversee commercial banks. The practical result was that much of importance thus fell through the cracks of the 1999 bill. The FCIC report refers to this stripped-down authority as “Fed-Lite.” The Fed failed to do its job in any case. It made no adequate analysis of the risky CDOs. As far back as 2005, a peer review by other Federal Reserve banks criticized the New York Fed, then under Tim Geithner, for inadequate oversight.

Greenspan, as head of the Fed, comes off worse than anyone else in the FCIC report. In 1999, when the Commodities Futures Trading Commission wanted to regulate derivatives, Greenspan led the attack against it. He wholeheartedly endorsed eliminating the Glass-Steagall restrictions that prevented major banks from engaging in all financial transactions, claiming that competition was the real regulator. As late as 2005, he stated that a housing bubble was unlikely. Most glaring was his refusal to regulate the suspicious mortgages being issued by Countrywide and others, even though the Fed had the authority to do so, and was warned time and again, even by the FBI, that mortgage brokers were writing deceptive and fraudulent mortgages to unsuspecting homeowners. As the report also notes, some 10,500 mortgage salesmen in Florida had criminal records.

The Dodd-Frank Act would now place all financial firms, not just commercial banks that take deposits, under firmer capital restrictions. It calls for useful changes in credit ratings agencies, which had profound conflicts of interest because they supplied ratings to the issuers that paid them. The FCIC report clearly describes the battle for market share by Moody’s, one of the largest of them, and its willingness to provide artificially high ratings. But the new proposals still await implementation. Dodd-Frank would also require what has been the secret unregulated trading of derivatives—a source of so much risk-taking—to be done openly by clearinghouses that can also set capital requirements for any trades—that is, margin requirements. But this, too, is a long way from being implemented.

In fairness, some of the regulatory agencies have been undertaking firmer regulation. The SEC is making a broad investigation of insider trading by hedge funds, and the Justice Department is prosecuting several flagrant cases. The FDIC is targeting bank executives for possibly fraudulent behavior in several hundred institutions that have failed. The Dodd-Frank legislation requires that executive compensation, including bonuses, be more openly revealed and shareholders be given a voice in how much executives of financial firms earn. Other agencies are also setting rules to limit compensation. The Obama administration may try to impose fines on particularly irresponsible mortgage servicers like Wells Fargo and Bank of America in order to finance reductions in the principal many homeowners now owe on their mortgages.

But all these reforms may be undermined by pressures from Wall Street and the belligerent Republican majority in the House. The SEC recently proposed banning some bonuses paid by financial firms if they encourage inappropriate risk-taking. The measure was passed only by a three-to-two vote with the three Democratic appointees to the SEC for it and the two Republican appointees against. A new president could easily shift the balance. Republican lawmakers are trying hard to cut back the budgets of the SEC and the Commodity Futures Trading Commission.

One refreshing sign of hope for constructive change is that economists, some of whose theories had much to do with a light regulatory approach toward derivatives and the housing bubble, are increasingly producing research calling for stricter guidelines than Dodd-Frank or the Obama administration. Regulating Wall Street presents a wide range of new research supporting stronger regulations than Dodd-Frank recommends, such as the tax proposals I mentioned earlier. In Reforming US Financial Markets, Robert Shiller also describes new economic theories that take into account more realistic appraisals of how Wall Street works and demonstrates why more effective regulation is necessary. The old theory of rational markets, which laid the groundwork for light regulation, “is one of the most remarkable errors in the history of thought,” Shiller writes. He believes that regulators can and should decide to raise capital requirements during periods of excessive speculation.

In the prologue of Regulating Wall Street, the editors, hardly known as progressives, remind financiers how useful strong regulations were in the past:

Many players on Wall Street and in corporate America in the 1930s hated the new regulatory regime imposed on them…. But in the long run…the new regulatory regime was one of the best things that ever happened for Wall Street and corporate America. Why? Because it created confidence among investors—then and in the decades to follow—that Wall Street finally had become a level playing field.
We would be far better off if the powers on Wall Street would remember this lesson.


*
Peter Wallison believes that government-subsidized housing, including the efforts of Fannie Mae and Freddie Mac, was the major cause of the collapse. His fuller dissent can be found at http://www.aei.org/docLib/Wallison dissent.pdf . For a more thorough but somewhat more balanced account of these agencies' part in the crisis, see Viral V. Acharya, Matthew Richardson, Stijn Van Nieuwerburgh, and Lawrence J. White, Guaranteed to Fail : Fannie Mae, Freddie Mac, and the Debacle of Mortgage Finance (Princeton University Press, 2011) . For a strong criticism of the data used by Wallison and the authors of this book, see David Min, Faulty Conclusions Based on Shoddy Foundations , Center for American Progress, available at http://www.americanprogress.org/issues/2...ecsumm.pdf . An interesting account of how the government entities accrued power politically appears in Gretchen Morgenson and Joshua Rosner, Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon (Times Books, 2011).
New York Review of Books
06-05-2011, 08:25 PM
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montehristo Offline
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#37

Откако Ален Гринспан овозможи укинување на дел од Глас-Штигалов закон со премиса дека пазарот сам ќе се регулирал сега Фед(кој не одговара пред конгресот ни пред законот туку само пред својот борд(банките кои се во тој борд)) наместо Трезорот(Treasury Department) ќе биде раководител во надзор на финансиите.
Кој криминал, и тоа покриен со закон, па,па,па.
06-05-2011, 08:37 PM
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montehristo Offline
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#38

Quote:The Empire of Debt
The rich require an abundant supply of the poor.
Dee Hon , 24 Sep 2007

debt economy . .

[Image: adbusters_74_money]

Money for nothing. Own a home for no money down. Do not pay for your appliances until 2012. This is the new American Dream, and for the last few years, millions have been giddily living it. Dead is the old version, the one historian James Truslow Adams introduced to the world as "that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement."

Such Puritan ideals – to work hard, to save for a better life – didn't die from the natural causes of age and obsolescence. We killed them, willfully and purposefully, to create a new gilded age. As a society, we told ourselves we could all get rich, put our feet up on the decks of our new vacation homes, and let our money work for us. Earning is for the unenlightened. Equity is the new golden calf. Sadly, this is a hollow dream. Yes, luxury homes have been hitting new gargantuan heights. Ferrari sales have never been better. But much of the ever-expanding wealth is an illusory façade masking a teetering tower of debt – the greatest the world has seen. It will collapse, in a disaster of our own making.

Distress is already rumbling through Wall Street. Subprime mortgages leapt into the public consciousness this summer, becoming the catchphrase for the season. Hedge fund masterminds who command salaries in the tens of millions for their supposed financial prescience, but have little oversight or governance, bet their investors' multi-multi-billions on the ability that subprime borrowers – who by very definition have lower incomes and/or rotten credit histories – would miraculously find means to pay back loans far exceeding what they earn. They didn't, and surging loan defaults are sending shockwaves through the markets. Yet despite the turmoil this collapse is wreaking, it's just the first ripple to hit the shore. America's debt crisis runs deep.

How did it come to this? How did America, collectively and as individuals, become a nation addicted to debt, pushed to and over the edge of bankruptcy? The savings rate hangs below zero. Personal bankruptcies are reaching record heights. America's total debt averages more than $160,000 for every man, woman, and child. On a broader scale, China holds nearly $1 trillion in US debt. Japan and other countries are also owed big.

The story begins with labor. The decades following World War II were boom years. Economic growth was strong and powerful industrial unions made the middle-class dream attainable for working-class citizens. Workers bought homes and cars in such volume they gave rise to the modern suburb. But prosperity for wage earners reached its zenith in the early 1970s. By then, corporate America had begun shredding the implicit social contract it had with its workers for fear of increased foreign competition. Companies cut costs by finding cheap labor overseas, creating a drag on wages.

In 1972, wages reached their peak. According to the US department of Labor Statistics, workers earned $331 a week, in inflation-adjusted 1982 dollars. Since then, it's been a downward slide. Today, real wages are nearly one-fifth lower – this, despite real GDP per capita doubling over the same period.

Even as wages fell, consumerism was encouraged to continue soaring to unprecedented heights. Buying stuff became a patriotic duty that distinguished citizens from their communist Cold War enemies. In the eighties, consumers' growing fearlessness towards debt and their hunger for goods were met with Ronald Reagan's deregulation the lending industry. Credit not only became more easily attainable, it became heavily marketed. Credit card debt, at $880 billion, is now triple what it was in 1988, after adjusting for inflation. Barbecues and TV screens are now the size of small cars. So much the better to fill the average new home, which in 2005 was more than 50 percent larger than the average home in 1973.

This is all great news for the corporate sector, which both earns money from loans to consumers, and profits from their spending. Better still, lower wages means lower costs and higher profits. These factors helped the stock market begin a record boom in the early '80s that has continued almost unabated until today.

These conditions created vast riches for one class of individuals in particular: those who control what is known as economic rent, which can be the income "earned" from the ownership of an asset. Some forms of economic rent include dividends from stocks, or capital gains from the sale of stocks or property. The alchemy of this rent is that it requires no effort to produce money.

Governments, for their part, encourage the investors, or rentier class. Economic rent, in the form of capital gains, is taxed at a lower rate than earned income in almost every industrialized country. In the US in particular, capital gains are being taxed at ever-decreasing rates. A person whose job pays $100,000 can owe 35 percent of that in taxes compared to the 15 percent tax rate for someone whose stock portfolio brings home the same amount.

Given a choice between working for diminishing returns and joining the leisurely riches of the rentier, people pursue the latter. If the rentier class is fabulously rich, why can't everyone become a member? People of all professions sought to have their money work for them, pouring money into investments. This spurred the explosion of the finance industry, people who manage money for others. The now-$10 trillion mutual fund industry is 700 times the size it was in the 1970s. Hedge funds, the money managers for the super-rich, numbered 500 companies in 1990, managing $38 billion in assets. Now there are more than 6,000 hedge firms handling more than $1 trillion dollars in assets.

In recent years, the further enticement of low interest rates has spawned a boom for two kinds of rentiers at the crux of the current debt crisis: home buyers and private equity firms. But it should also be noted that low interest rates are themselves the product of outsourced labor.

America gets goods from China. China gets dollars from the US. In order to keep the value of their currency low so that exports stay cheap, China doesn't spend those dollars in China, but buys US assets like bonds. China now holds some $900 billion in such US IOUs. This massive borrowing of money from China (and to a lesser extent, from Japan) sent US interest rates to record lows.

Now the hamster wheel really gets spinning. Cheap borrowing costs encouraged millions of Americans to borrow more, buying homes and sending housing prices to record highs. Soaring house prices encouraged banks to loan freely, which sent even more buyers into the market – many who believed the hype that the real estate investment offered a never-ending escalator to riches and borrowed heavily to finance their dreams of getting ahead. People began borrowing against the skyrocketing value of their homes, to buy furniture, appliances, and TVs. These home equity loans added $200 billion to the US economy in 2004 alone.

It was all so utopian. The boom would feed on itself. Nobody would ever have to work again or produce anything of value. All that needed to be done was to keep buying and selling each other's houses with money borrowed from the Chinese.

On Wall Street, private equity firms played a similar game: buying companies with borrowed billions, sacking employees to cut costs, and then selling the companies to someone else who did the same. These leveraged buyouts inflated share values, minting billionaires all around. The virtues that produce profit – innovation, entrepreneurialism and good management – stopped mattering so long as there were bountiful capital gains.

But the party is coming to a halt. An endless housing boom requires an endless supply of ever-greater suckers to pay more for the same homes. The rich, as Voltaire said, require an abundant supply of poor. Mortgage lenders have mined even deeper into the ranks of the poor to find takers for their loans. Among the practices included teaser loans that promised low interest rates that jumped up after the first few years. Sub-prime borrowers were told the future pain would never come, as they could keep re-financing against the ever-growing value of their homes. Lenders repackaged the shaky loans as bonds to sell to cash-hungry investors like hedge funds.

Of course, the supply of suckers inevitably ran out. Housing prices leveled off, beginning what promises to be a long, downward slide. Just as the housing boom fed upon itself, so too, will its collapse. The first wave of sub-prime borrowers have defaulted. A flood of foreclosures sent housing prices falling further. Lenders somehow got blindsided by news that poor people with bad credit couldn't pay them back. Frightened, they staunched the flow of easy credit, further depleting the supply of homebuyers and squeezing debt-fueled private equity. Hedge funds that merrily bought sub-prime loans collapsed.

More borrowers will soon be unable to make payments on their homes and credit cards as the supply of rent dries up. Consumer spending, and thus corporate profits, will fall. The shrinking economy will further depress workers' wages. For most people, the dream of easy money will never come true, because only the truly rich can live it. Everyone else will have to keep working for less, shackled to a mountain of debt.

Dee Hon is a Vancouver-based writer has contributed to The Tyee and Vancouver magazine. Read more economics articles at kickitover.org .
‘What has been will be again, what has been done will be done again; there is nothing new under the sun‘ ( Eccl. 1:9).
13-08-2011, 08:54 PM
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