Bailout-2

Bailout Page 2 added 10/10/08

The banking industry had another trick up their sleeve. After Phil Gramm and John Mc(banal)Cain guided their
bank deregulation legislation through Congress in 1999 the banks began “securitizing” mortgages --- putting them
together as “packages” of mortgages to spread the risk and then selling them on the market as “securities” like
stocks or other assets. This meant that speculators, investors, banks, insurance companies, pension funds, and
others could buy the “securities” and make the profit off the mortgages as they were paid off or retired. Of course
if the borrowers defaulted then the securities holders were left holding the bag and that is what happened when:
borrowers became unable to repay the loans, defaulted, and the properties have been foreclosed.

Now, the banks and finance world is overloaded with these over priced inventories of houses that they can’t sell
AND THIS MEANS THAT THEIR CAPITAL/MONEY IS TIED UP IN THIS OWNERSHIP OF REPOSSESSED,
FORECLOSED, HOUSING REALESTATE ON WHICH THEY RECEIVE NO PAYMENTS YET HAVE TO PAY TO
KEEP THE PLACES BOARDED UP, TAXES UP TO DATE, ETC. The financial industry [banking, insurance,
commercial credit, and the Fed are getting their just dues for the mess they created and are losing money, and this
is as it should be --- in the market economy that is championed by the conservatives the market determines who
survives and who perishes --- but now the wealthy want taxpayers to bail them out to protect the wealth of the
upper crust.

Of course the President and all his men are trying to portray this bailout as helping the American people by freeing
up the money of the rich so that they can begin making loans again. This needs to happen, according to the spin,
because the lack of consumer and business loans is hurting the economy and the people of the nation. Horse-
puck, the rich and powerful are worried that they will lose their dominance of government and society and that the
people of the nation will demand that the government work by and for the citizenry, not the oligarchy. The upper
crust exemplified by John [7 expensive homes] Mc(banal)Cain and his slut wife Cindy, [who he offered to have
pose nude for motorcycle clubs a couple of months ago.] like their lives of privilege and do all in their power to
maintain their privilege including bellying up to bankers and financiers. Remember it was John Mc(banal)Cain who
helped Keating, Lincoln Savings and Loan, fleece the public in the 80s and then “rescued” the Savings and Loan
industry with the institution of the taxpayer financed bailout. DUH.

9/22/08: Unite the Many Defeat the Few

Monday afternoon, 1pm, Pacific Daylight Time: It is a topsy-turvy world with large swings in the stock markets [up
on Thursday and Friday, down big time today, DOW --- 372.75, NASDAQ --- 94.92, and S&P --- 47.99 ] in response to
the efforts of President Bushleague, Federal Reserve Chair Bernanke, and US Treasurer Paulson to bring stability
through offering an unheard of “non-partisan”, yeah right, bailout of the rich under an unelected neo-fascist
dictatorship led by Paulson. (At least Hitler and Mussolini had the decency to stand for election before they
grabbed power for fascism.) Basically, for those who have not been able to make sense of what is going on,
Paulson would be given the power, the authority, and the money $1.8Trillion, $1,800,000,000,000 to buy huge
mortgage inventories held by banks, INCLUDING FOREIGN BANKS, that are in foreclosure due to the swindles
that have been perpetrated on the American public. Paulson’s actions would not be subject to oversight by either
the Congress or the Courts and he, and by expansion his subordinates, would be immune from prosecution if
laws were broken and we are reminded to remember that “power corrupts and absolute power corrupts
absolutely.” These mortgages have been financed for home buyers and home refinances by banks to make
exorbitant profits through the collection of “fees”, interest, and related “costs”. Many of these mortgages are and
were “variable interest” loans that began with extremely low interests rates for the first year and then began to
escalate in response to the “financial Market” rates. In other words a borrower could make the loan with an
interest rate of 3% but after a year it might rise to 4%, then 5 or 6% as the lender saw fit. If the borrower couldn’t
handle the new payment and defaulted, missed payments, then the mortgage would be foreclosed, the
house/property seized and the family evicted, and the bank would take possession of the property and sell it at
auction. Of course this moved hundreds of thousands of properties on to the market in short order and
consequently the value of the properties dropped because with rising unemployment, ballooning consumer credit
debt creating a lack of buyers, chopping the asking price for the homes became the only possible way to get rid of
them.

9/18/08: Unite the Many Defeat the Few

watched with some intensity the flailing of the stock markets as the powers that be in the government and the
private “Federal Reserve Bank” have attempted to settle things down and reassure investors and the world that
the US economy is “fundamentally strong” as McBush and McBainal would have us believe. McBainal
desperately needs a settled market if he is to have any chance at all of taking the White House with his new
partner Sarah Palin. Cynic that UtMDtF is I began this piece several times with the thesis that the government of
the ruling capitalist classes and their lobbyists would bail out the rich and let the rest of us sink or frantically tread
water while waiting for a life saver to be tossed our way. I hesitated in writing, too, because I thought to myself,
‘maybe I am just being too hard on the system. Maybe our democracy really works for all of us equally.’ But as
the week wore on I in fact took salacious pleasure in watching the stock market gyrations. When Lehman
Brothers Barnburnm and Bailout was allowed to go bankrupt, I thought, well maybe this vindicates the system and
it’s good that I didn’t write a negative screed about the machinations of the ruling upper crust. Maybe they will let
some of the rich take it in the shorts.

Then today, 9/18/08, after letting the economy fester for several days with giant declines in the stock markets on
Tuesday and Wednesday to set the stage so that their actions would be excusable and viewed as an act of mercy
the Fed and the government moved. The Fed along with other “Central” banks announced that they were
pumping about $180B into the world money supply to stimulate the liquidity of the money markets and take the
pressure off banks [who had become afraid to loan money to each other less they not be able to collect their due]
so they would begin to make loans again. Yesterday, AIG had been allowed to make money moves with
government help to save a “corporation that is too big to be allowed to fail” and the government bought AIG for
big bucks that are taxpayer bucks, our money.

So, with these moves the government came through and confirmed that it will act to save the upper crust, the
wealthy, the money grubbers, the lenders in the temple who exploit you and I. The same government, our
government, that will do nothing to assist you and I as we face difficulties: foreclosures, plummeting housing
values, high energy costs, no national health care system, decaying schools staffed by underpaid teachers and
classified employees, cash starved state governments, etc. WE THE PEOPLE are supposed to tough it out and quit
whining about hard times according to the neo-fascist GOP. And yet, this government of ours continues to spend
at least $3Billion dollars per week to prosecute the war in Iraq, $3Billion dollars to kill and or maim children,
women, old folks, and the men of that nation. We spend these war bucks that could be used here at home to
rebuild the infrastructure of our economy while the Iraqis take care of their own affairs as they have for several
thousands of years.

Yesterday, 9/17/08, this author demonstrated at the Los Angeles Federal Building with other activists demanding a
moratorium on Foreclosures. This demonstration was the first of many that are going to be held with that focus
and it felt good to be out there. The demonstration was sponsored principally by SEIU 741 and the
Labor/Community Coalition to Stop Foreclosures and Evictions. The speakers tied the state of the economy to
the war and to the social net that has been destroyed by the last 30 years of neo-liberalist economics, the so-
called Washington Consensus [Reagan, Maggie Thatcher, the Chicago School, etc --- the modern fascist
economics movement].

IT IS TIME THAT WE QUIT LIVING IN FEAR OF THE FUTURE. 9/11 WAS AN ABERRATION, NOT A RECURRING
TRAGEDY. WE MUST “GET A GRIP” AND THROW THOSE WHO ENCOURAGE US TO LIVE IN FEAR INTO THE
FIRES OF THEIR OWN HELL.

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