The Great Depression of 2009

by chris rice http://www.opednews.com

A crashing housing market appeared to be something that could be weathered by other growing sectors of the US/Western economies. Then, the inevitable credit dominoes started to fall, after the mortgage delinquencies fell. Next we entered a scary August and September world credit crisis, as huge forms of liquidity, formerly seeming in endless supply, rapidly dropped to nothing. That would be the securitized credit markets.

Rapidly, the emerging losses in securitized credit, from CDOs, MBS and such (packages of loans such as mortgages sold off as securities and derivatives) caused a cascade of falling confidence in our banking sectors. All of a sudden, the credit crisis spread from the mortgage derivatives markets to the commercial paper markets in an almost instantaneous fashion. BNP Paribas, France's largest bank, had to freeze redemptions on two hedge funds that had losses in mortgage derivatives. In about a week from that announcement, the entire European commercial paper market froze, as banks were afraid to roll over each other's commercial paper, not knowing who else had $billions worth of exposure to the huge mortgage derivatives market. This was in August of 2007.

The credit market damage is so severe that the largest banks in the US are at risk of losing much of their capital. Citibank alone said it needs to raise $30 billion in capital. If the 5 largest banks in the US are already in crisis mode, and other major banks in the EU too, and don't forget Canada, England and so on, things look incredibly negative. And the losses have only just begun to pile up. There are many more to come. Federal Reserve Chairman Ben Bernanke stated that 450,000 mortgages reset each quarter in the US in the coming year. But this is not all about just mortgage resets and the housing market. This is about the spreading damage to other key sectors of the credit markets.

Since July, the West's commercial paper markets (CP) have contracted by hundreds of $billions worth, as banks and investors refused to roll over CP of 270 days or less maturity. The ECB (European Central Bank), and US Fed, and other western central banks had to step in and offer short term money to cover the shortfalls, or else a massive world banking liquidity crisis would have emerged.

As it is, interbank lending is quite bad, and Central banks have not been able to stop either the continued shrinking of the CP markets, nor the ever increasing losses stemming from a collapse of the securitized debt markets. Central banks have had to step in as lenders of last resort to keep the banking and financial system from imploding, and there is little progress on this front to date. The $75 billion SIV bailouts arranged by the US Treasury department is on and off again. The key banks involved may not be able or wish to complete it. Citi, for example has to raise $30 billion in capital to cover the mess that has emerged since July.

Next big credit domino

Now, other huge credit markets are about to fall in turn. The next one is the credit insurance market. Credit insurance is an essential part of any credit market. Lenders can buy credit insurance to help cover the risk of loss when they lend. Credit insurance is a key component rating agencies use to asses credit risk of bonds and such, and assume that if any of the bonds that have credit insurance default, the credit insurers will pay off.

But, the amount of securitized credit loss is so huge at this time, losses on CDOs, MBS, and other securitized credit vehicles, that the viability of credit insurers is now in question. Credit insurers will have to start paying off in the next several months. They will be reporting big losses. That will affect the credit ratings of every security they insure.

This means that all the securities these credit insurers insure will be downgraded by rating agencies – if the credit insurer becomes insolvent.

This crisis has spread to Money Market funds for various reasons. First, many money market funds have a large part of their capital invested in short term commercial paper that provides a slight yield bonus. Since much CP is not rolling over, MMFs are having trouble rolling forward those maturities. Also, MMFs have invested heavily in the securitized debt (mortgage derivatives like MBS and SIVs and CDOs) all of which are in deep trouble.

I have had readers email me stories of being put off from redemptions from many money market funds since August. These are from major name institutions. I have been told of games like telling people to fill out forms and not executing what people wanted to do in their fund. Those stories still come in as I write this. It is very important that you read the disclosures about your MMFs, and know that these are generally not FDIC insured. The same goes for other nations MMFs and their deposit insurance.

How this crisis develops

First, US mortgages default, Jan to June 07. Then, the credit securities back of them collapse in value July 07 to present. Then the banks and others holding these have to take huge losses/writedowns. Then those institutions have to raise capital. Then credit insurers have to pay off (coming in the next several months). Then as they go bankrupt, all the rated securities they insure will be downgraded, as the supposed insurance that was purchased is now worthless, as the insurer is insolvent. Then a new cycle of losses as the newly downgraded credit securities have to be marked down.

Then - here is the rub – banks and such have to stop lending, and you get a system wide freeze of new credit. We are right in the middle of this part. HSBC, for example, has stated they are going to pull back lending in the US, as they have been badly hit in the mortgage markets. Consider this, and see credit contraction in the US increasing across lenders. As I said, Citi stated they need to raise $30 billion of capital.

Main source of credit now totally dead

What's more, the source of most of the credit in the last 5 years, securitized credit, is literally disappearing. As that entire sector becomes discredited, the source of most of the money coming into the world's bubble economies, securitized debt, is drying up.

As banks are forced to raise capital and stop lending, consumers find new credit hard to get or not available at all. The same goes for businesses. You then get system wide credit collapse, and the resultant collapse in economic growth. And if no recovery is made quickly, you get a depression. Not a recession, a depression, due to collapsing economic demand.

New Chinese Foreign investment restrictions

Just consider that many Chinese economic sectors have huge overinvestment, and that China just instituted economic restrictions on new foreign investment in many sectors they consider over invested. That being the case, they would not do well if a large part of their export markets contracted, should the west (EU, US, etc.) have a severe economic contraction.

The Facts Are Undeniable

Congress & the President scrambled to sign in a multi-billion dollar stimilus package. But where does the money come from? The government will borrow the money from China & Saudi Arabia to pay for the rebate, which is projected to cost $117 billion over the next two years, adding to the federal deficit.

The Federal government owes $53.3 trillion in future obligations that it has no ability to pay. The Government Accountability Office has sounded the alarm, but neither the politicians nor the American people are listening.

What Have We Been Told To Do With Our Tax Rebates

Save the new world order.

How Else Might We Use This Information?

SHUT 'EM DOWN!

No school, no work, no shopping, no life as usual....Not for today. Not this week. Not until we've won!

Get On Board

There is no reason to wait 'till Sept. to strike & every reason to strike now!When Bush says to shop, WE MUST STOP!

Congress has borrowed trillions of dollars on top of our outrageous debt to hand out tax rebates to folks that don't even pay taxes. Why? To save the New World Order. This is our time to STRIKE BACK!

I've been told that people won't take a day off during an economic downturn BUT that is when you strike. When the BEAST is weak. Now is the time, the only time that a few days of empty Wal Marts & theatres will send the economy reeling & give this strike the bite that it needs to succeed.

Bring them to their knees. STRIKE today, strike everyday. Buy nothing you don't absolutely need.

In order to get involved, here are the five best steps to take now:

1) Sign up with your email address HERE in order to get updates,e-alerts@votestrike.com

2) Don't buy anything that you don't absolutely need.

3) Send this URL to all your friends, post it to forums, put it on your personal pages, http://www.votestrike.com

4) Be a volunteer activist, ask us how.

5) Take the lead and help organize a protest on 9/11.

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

I created a website www.votestrike.com for you the voters because whichever party you belong to they have failed you. The website has ambitious goals of how to end the two party system & the third party myth. Modeled after the fall of the Berlin wall, the Polish overthrow of the communist government & the Phillipines removal of Marcos. All accomplished without firing a shot. But we do not rely on the failed tactics of the past instead we use the election system & the very votes & voters this system relies upon. And the site also offers campaign funding sources- who's bought off your candidate? As well as your solutions to education, lobbyist, healthcare, illegal immigration, the war on terror, the war in Iraq, crime, drugs, pedophiles, taxes. And a link page with 1000 links to more on these topics. I'm here to ask you to check it out, it's free. And you can submit content. Thanks for your time, my name is chris.

Source

Non-Alcoholic Surprise for Republicans?

The Editorial Staff may not realize this, but the venue they are touting is...alcohol-free. Unless they have inside information that this will change before the convention. They do advertise in the StarTrib on a daily basis, therefore communication between them is ongoing. A recent beverage change to Pepsi came suddenly, so this rumor may be true.

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Editorial: Last call for alcohol! Prior Lake for GOP?

"This is not Las Vegas. This is the city of St. Paul.''

City Council Member Lee Helgen is absolutely right: No one has ever confused St. Paul with Vegas. No one sober, anyway, which is the crux of the raging debate over extending bar hours in St. Paul and Minneapolis during the Republican Convention in September.

Eleven days, from 2 a.m. to 4 a.m. A mere 22 hours of added bar time designed to show the world that this is a big-time metropolis that can throw a memorable nominating bash. Seems reasonable enough. But a few killjoys are worried about police costs and neighborhood disruption. Imagine the mayhem 3,000 tipsy Republicans could cause in Highland Park at 4 a.m.

All of this bar talk got us wondering about Denver, where the Democrats will hold their superdelegate festival. The mile high bar time is 2 a.m., and we're told there's been no discussion of extending the fun in Colorado.

Frankly, that's surprising. There's a far greater chance the Democrats will find something to squabble about -- maybe even the selection of a nominee -- past the 10 p.m. news. It's much more likely they'll actually need extra bar hours. Is this more conservative approach to bar time an attempt to appeal to family-values voters? Or are there plans for late-night keggers at the hotels?

Back in St. Paul, the liquor marketplace is preparing to serve the GOP in the style to which it has become accustomed, with or without later bar times. Our favorite innovation comes from the historic St. Paul Hotel, which is stocking $525-a-shot scotch for the convention. Take that, Vegas.

To clarify, it'll actually cost $525 for a pony shot, which is 1 ounce. The typical shot of Jack Daniels you might sell a Democrat, with the requisite beer chaser, is 1.5 ounces. But when you're talking 55-year-old single-malt scotch from the Scottish Highlands, only a rube would expect more than an ounce for five bills.

This is all going to be so much fun, why not keep the bars open 24/7 and serve breakfast? Or move the GOP convention to Prior Lake and the spacious Mystic Lake hotel and casino. Comedian Larry the Cable Guy, who's known for the line "Git'r done,'' is already booked for August, but he'd probably sign on for another run during the convention. Not sure how he votes, but he sure seems like a red state guy.

You want Vegas, Republicans, head to Prior Lake. It's a lot more fun than St. Paul or Minneapolis, and with enough notice they'll probably upgrade the scotch. You'll never want to go home.

© 2008 Star Tribune. All rights reserved.

Actually, I didn't do it

By DAVID KARNES

On March 6, as one investigator later put it, I was the "unluckiest person in the world." That morning, someone bombed the military recruiting station in New York's Times Square, and 3,000 miles away, the fallout landed on me.

A 64-page pamphlet and a 20-page memo I wrote to Capitol Hill Democrats had reached lawmakers the very day the bomb went off. Knowing the odds against anyone actually reading what I sent, I had included a photograph to grab their attention. It shows me in a victory pose in front of that Times Square recruiting station's neon flag, with the caption "We Did It!" To the authorities, it was a smoking gun. My explanation is found only at the end of the memo: "I have enclosed the Holiday card I sent out to family and friends after the 2006 election. I hope and fully expect to have reason to send out an equally jubilant card after this November's results."

Arriving home that evening, I was met by FBI agents, dogs and a bomb squad. I consented to thorough questioning and a search of my home, and was greatly relieved to learn the next morning that the FBI had publicly cleared me of any connection to the bombing.

As it turned out, my relief was a little premature. I began surfing the Internet and realized just how stridently fingers had pointed in my direction. The tabloid headlines left little room for doubt: "Letters Claim Responsibility for Times Square Blast" (the New York Post); "'We Did It' Taunts Sicko's Manifesto" (the New York Daily News).

Also striking was how the media, without firsthand information, had adopted stock descriptions of both me and my writings: an "antiwar activist" (Fox News and USA Today); an "anarchist manifesto" (cityroom.blogs.nytimes.com), and an "anti-Iraq war screed" (michellemalkin.com).

In fact, my "activism" rarely leaves my keyboard, and I have never opposed any U.S. military action before 2003. As for Iraq, it is only one of many topics addressed in my congressional mailings, and my message was that "there is no easy way out" and that instead of debating "withdrawal," Democrats should offer "compelling and alternative" positions on "unilateralist foreign policy, preemptive war, effective counter-terrorism (and) genuine 'pro-Israel' policies."

The only ones to get it right were the law-enforcement personnel who read what I actually wrote. One investigator told me (correctly) that many of my views sounded "conservative," and New York Police Commissioner Raymond Kelly fairly characterized the mailings as "innocuous."

I hoped my clearance by the FBI would keep me out of the spotlight, but the focus simply shifted to what one official described as an "incredibly unbelievable coincidence."

Given the odds, much of the right-wing blogosphere insisted that there must be a cover-up: "I do not believe in 'incredibly unbelievable coincidence(s)' " (freerepublic.com); "... Waterboard him!" (weeklystandard.com).

Then my name surfaced, and I became, as one friend told me, "the talk of the town," as well as a media stereotype: a 50-year-old, single, gay entertainment lawyer coming home from the gym to the Hollywood Hills.

Reporters next located my 82-year-old mother. She lives alone, and with the television news blaring and the phone ringing, anxiety got the best of her. She tried to defend me as "the most gifted, creative person. ... He's been writing letters since he was 13 years old." She then called me and burst out crying: "I hope I did the right thing."

Speaking out on political matters entails risks, but nobody should have to take the risk that the media will inflict personal damage without regard for innocence or content. My pamphlet -- titled "Common Ground" (with a nod to Thomas Paine) -- was modeled on classic American patriotic tracts. A lot of thought, time and money went into my writings, which were never quoted and reportedly were confiscated by Capitol police. And while I can now rest easy that my FBI file is clean, no such luck with Google.

Friends advised me to retain an attorney and even a publicist. But I decided to rest my case on "the best evidence rule" and let my writings speak for themselves. As for publicists, I don't see how anybody could say it any better than FBI spokeswoman Laura Eimiller already has: "This was a citizen exercising his right to make a political comment to his representatives."

David Karnes, an entertainment attorney in Los Angeles, wrote this article for the Los Angeles Times.

source: http://www.startribune.com/opinion/commentary/16796746.html

Documentary Featuring Hakeem Wins Student Emmy Award

Farheen Hakeem, candidate for State Representative District 61b, is no
stranger to electoral politics or standing in the media spotlight. During
Hakeem's run for County Commissioner in 2006, two University of Florida
graduate students followed her as the subject of their Master's Thesis
film at the Documentary Institute.

What resulted was the film Bismillah: In the Name of Allah, directed by
Jolene Pinder and Sarah Zaman. The film is a finalist for an Academy of
Television Arts and Science College Television Award (Student Emmy). The
film is one of three winners, and its placement (1st, 2nd, or 3rd) will be
announced at an awards ceremony in Los Angeles on March 15th.

Bismallah: In the Name of Allah, is a film that follows the beginnings of
Farheen Hakeem's decision to put herself under public scrutiny by taking
part in the consummate American patriotic act - running for office.
Director Jolene Pinder comments, "We're so happy that the film is getting
out into the world and that Farheen's story is being heard!"

Hakeem states, "I am ecstatic for the film makers. They have worked so
hard and they deserve this recognition." Hakeem is currently running for
State Representative District 61b. This seat is currently being held by
Representative Neva Walker, who is not seeking re-election. Farheen
Hakeem will be attending the award ceremony on Saturday March 15th.

For more information about the film, please refer to the University of
Florida's Documentary Institute at
http://www.jou.ufl.edu/documentary/index.php?id=154.

For more information about the Student Emmy awards, please refer to
http://www.emmys.tv/foundation/collegetvawards.php

For more information about Farheen Hakeem, please refer to
www.farheenhakeem.org

For more information contact Ayesha at 612-636-1557 or at
press@farheenhakeem.org

EXCLUSIVE Interview with FOX & CNN

While these two are usually quite reticent, I was able to sit down and have a chat about the 2008 Presidential Election coverage. I am pleased to present my interview with CNN and FOX:

















How do you feel the Presidential election is going?

CNN: Very well, vigorous debates including YouTube and HRC. Very issue oriented

FOX: As long as Democrats nominate Hillary, we have a good season of stories to cover.

Do you think you started covering the primary too early?

FOX: We believe that election coverage is indefinite. Our attacks on Hillary began the moment we began airing.

CNN: We wanted a head start on the election cycle, starting with proposed candidates. We assumed many of the current key players prior to their announcement.

Why the strict emphasis on fund-raising?

FOX: Money is equivalent to speech. We support the first amendment and the people's rights. Unless of course you are PETA, Amnesty International, etc.

CNN: We concur. But we must also cover viable candidates who can raise money.

A study has shown that within five months of the primary race, you whittled down coverage from seventeen candidates to five. Why do that?

CNN: We do cover all candidates at CNN.com and have video coverage of the debates. This should be sufficient as only front runners garner coverage.

FOX: Any Republican candidate can beat Hillary, so why focus equal attention to all of them?

Even a year before the actual election and months before the primaries, you portray the coming election as Clinton versus Giuliani as inevitable. Is that supportive of democracy and open debate?

[ long pause ]

FOX: We don't see it that way. They are the front runners with significant leads in the polls.

CNN: Giuliani is also more liberal than most Republicans.

FOX: ( snicker ) So you think....

Do you foresee any independent or third party candidates running?

CNN: None that are electable.

FOX: They always run. But why would anyone NOT support American democracy?

Would you allow any other candidates in a debate?

CNN: Only if they meet a certain level of support from the American public.

FOX: No.

With the rise of the internet, independent media forms have allowed unknown candidates to gain more notoriety. If the American public want further options [ for President], could the election be swayed by an independent or third party?

FOX: We do not fear the fring media or their candidates.

CNN: We would cover any grassroots movement, but ensure it is seen as it truly is. Probably an outlier that could be minimized at every opportunity

Do you have an agenda beyond news reporting?

[ simultaneously ]: NO!

FOX: Preposterous to suggest!

CNN: We are professional journalists!

Any final comments on the election coverage?

CNN: America will elect the next president in 2008. CNN will be covering the election like no one else to inform the voters of important issues.

FOX: Hillary is Satan incarnate.

Thank you so much for your valuable time.