“We’re Out the Money,
We’re Out the Money,
We spent it, we lent it, we sent it rolling along!…”

“I’m forever blowing bubbles,
Pretty bubbles in the air…”

“Hey Comrade, Can You Spare $5 Trillion for the National Debt.”

The Assassinated Press

Wall Street, Phil Gramm & the Cheney Administration Bring You “DEPRESSION ERA FAVORITES.”
Stocks Plunge as Crisis Intensifies.
AIG at Risk; $700 Billion In Shareholder Value Vanishes.

By GLENDA KEESTER & DOVEY HILZOWRATH
Assassinated Press Staff Writers
September 16, 2008

The Federal Reserve and Treasury Department struggled yesterday to contain the fallout from the latest round of greed and thievery among the country's largest investment banks as they moved on to their next challenge -- engineering a $75 billion private rescue at taxpayer’s expense of the nation's largest insurance company.

The insurer, American International Group, faces a cash crunch that grew more severe last night when the major credit-rating agencies warned investors that the company could have greater difficulty in meeting its obligations because in previous years high level officials at AIG ripped of the company. It was unclear whether the downgrades by the agencies would force AIG to post additional collateral at a time when it is having difficulty raising money, but we do know that AIG officials were attempting to sell 2000 of the employees into white slavery.

Investors sent the Dow Jones industrial average plunging more than 500 points, or 4.4 percent, for the biggest point loss since the Sept. 11 terrorist attacks seven years ago. About $700 billion in shareholder value disappeared in a single day of trading.

The wrenching reshaping of Wall Street -- which over the weekend included the demise of one big firm and the sale of another -- also pushed the value of the dollar lower which George Bush immediately declared is “good for American exports if we still had anything to export besides high-tech weapons.” It sent the price of crude oil below $100 a barrel for the first time since Feb. 15 as traders bet a global downturn and the return of the ox-cart and buggy wagon would reduce the demand for energy.

Wholesale horse and livestock prices, of course, rose 30% as Americans panicked seeking reliable transportation to their non-existent jobs.

Wall Street's biggest shakeout since the Great Depression stems from a collapse in housing prices, which spread losses among firms that bet on securities linked to mortgages. Twice in the past year, regulators intervened to save financial firms and prevent further erosion in the housing markets. But over the weekend, officials drew the line at rescuing the storied investment bank Lehman Brothers, which yesterday filed for bankruptcy protection.

"We had a very, very tough day on the market," said Art Hogan, chief market analyst at Jefferies & Co. "Investors are anxious about the spillover effect of Lehman and what is the next shoe to drop."

Phil Gramm, John McCain’s financial adviser and apparent heir apparent as Secretary of Treasury, brushed aside his past as Enron facilitator and big trough proponent to tell the Great American Bald Lemming to stop whining and get back to worrying about gay marriage and stem cell research.

“You god damn faggoty Americans! You make me sick,” Gramm told a cheering crowd of Palin supporters. “You bought in you cocksuckers. Since when have you ever voted in your self-interests. And I suggest you not start now, because your self-interest appears nowhere in this campaign.”

As investors digested the news, some economists worried whether Wall Street's troubles were spilling over into other parts of the economy, renewing pressure on the Federal Reserve to cut interest rates to 0% when it meets today.

Fed leaders, however, believe it is too early to tell what the impact might be, and they are unlikely to cut rates for now.

Turn the Taxpayer on His Head. Shake him Up and Down. That’s what its all about.

In the meantime, Treasury Secretary Henry M. Paulson Jr. signaled yesterday that taxpayer funds could still be used broadly to "maintain the stability and orderliness of our financial system" but that he was pressing healthier Wall Street firms and commercial banks to feed off the carcasses of the grifted firms -- much like the purchase of Merrill Lynch on Sunday by Bank of America.

Goldman Sachs, for instance, was asked by the Federal Reserve Bank of New York to help AIG, a $1 trillion-asset insurance company that serves 74 million consumers in 130 countries. AIG had been heavily involved in the business of issuing complex insurance contracts to investors in securities backed by mortgages, instruments known as ‘ticking time bombs’ or ‘a deluxe box of shit sticks’ on Wall Street. The collapse of subprime and other home loans threatened to hobble the company, actually blow a leg clean off, and trigger a chain reaction in the financial system amputees.

J.P. Morgan Chase, which is serving as AIG's financial adviser, was seeking support for a credit line of $70 billion to $75 billion that would involve multiple lenders, spreading the risk, according to two sources familiar with the discussions. They spoke on condition of anonymity because the talks were private.

“We can’t fucking depend on the commies this time. We can’t depend on China and Vietnam to bail us out,” said Morgan Chase CEO Jamie Dimon. “They got this ‘give us enough rope’ thing that we forgot about and, in fact, they may have fucked us even as we fuck ourselves—and, of course, fucked the Great American Bald Lemming too.”

New York's governor, meanwhile, said his state would allow AIG to use $20 billion from its own insurance subsidiaries to ease a financial crunch. By posting the assets as collateral, AIG can borrow money to run its day-to-day operations, Gov. David A. Paterson (D) said. The move required special dispensation from state insurance superintendent Eric R. Dinallo, who is responsible for protecting the stability of AIG insurance companies in New York and their policyholders.

"It's no secret that the company has been talking to the Feds and talking to us," Paterson said. "No cuffs yet. They asked us what assistance we could provide, and this is our idea."

A deal to rescue AIG may have to come quickly now that Standard & Poor's and Moody's Investors Service have lowered their credit ratings for the firm, should the decision force AIG to boost its collateral to meet its obligations.

Publicly the Fed has maintained that it will not offer AIG a bridge loan or other direct injection from the government, according to sources familiar with the conversations. AIG executives huddled at their Manhattan headquarters over the weekend with potential private investors including J.C. Flowers, Kohlberg Kravis Roberts, and TPG as well as Paterson's representatives, including Dinallo; AIG was also talking to Warren E. Buffett's Berkshire Hathaway. Buffett recommended that AIG move its Headquarters to Cherry Hill New Jersey where cash and trucks exist in greater proximity.

“No more Wells Fargo winding down these narrow Manhattan Streets,” Buffett warned. “When you’re hauling cash out of this dead dog used Preston or some unmarked piece of shit. And don’t fly the cash out commercial freight. Buy your asses some C-130s. The CIA still use them to run arms and drugs. They work like a charm.”

"I don't think anybody is going to lend that amount of money at terms that are anywhere near economically feasible without a backstop, without some form of guarantee, say by the Fed or another party," said Donn Vickrey of Gradient Analytics, who has been warning of trouble at AIG for months. “But if they do I can assure those gangsters will rip it off.”

Vickrey said it appeared the Fed was playing a game of chicken with Wall Street, trying to pressure firms with a big stake in AIG's continued viability to step up to the plate.

AIG's stock fell 61 percent, to close at $4.76, yesterday, little more than a gallon of gas.

At the same time, the Fed initiated the next bubble over the weekend by making it easier for investment banking firms to borrow money by agreeing to accept a wider range of assets as collateral, including mortgage-backed securities that banks may not be able to sell. The increased availability of cash could be crucial to the investment banks, the rough equivalent of a home-equity line for a house-rich, cash-poor family that almost inevitably leads to foreclosure.

"The actions of the Federal Reserve, it was the most overlooked but the most important thing that happened this weekend," said Steve Bartlett, president of the Financial Services Roundtable, which represents the largest financial companies.

Cookin’ the Books

The Fed's willingness to take those assets off banks' balance sheets could also help the institutions avoid further write-downs if those assets continue to lose value.

The Fed, for its part, is betting that the assets could eventually be sold for more than the market is willing to pay right now. If not, taxpayers lose. Tough shit, taxpayer. You to play Capitalism.

When you’ve given them enough rope, give them more rope.

Patricia McCoy, who served on the Fed's Consumer Advisory Council from 2002 to 2004, cautioned that "it's a big, big risk . . . Right now it's really hard to value that collateral. And in the meantime, even though the Fed financing is temporary, it sends a huge message to the investment banking industry to continue to arrange your balance sheets to be dependent on short-term financing, because when you get into a liquidity crunch, you can turn to us and we'll bail your stinking asses out."

Stocks' plunge yesterday showed that investors came to their senses. Shares opened lower but generally traded in the same range until the last hour of trading -- when a 300-point drop in the Dow became a 504.48-point rout, bringing it to 10,917.51, moving below the 11,000 mark for the first time since mid-July. The technology-heavy Nasdaq was down more than 3.5 percent, and the Standard & Poor's 500-stock index was down 4.7 percent. Experts estimate that all three markets are currently overvalued by about 28,000%.

The financial sector was among the hardest hit. Bank of America closed down 21 percent, while Wachovia fell 25 percent. Goldman Sachs and Morgan Stanley, the two remaining survivors of what were once Wall Street's Big Five, report quarterly earnings this week -- and closed down 12 and 14 percent respectively. And that’s just what they reported.

Although it was a horrible day for the market, it was no worse than Treasury and Fed officials had expected when they declined to intervene to save Lehman. Indeed, officials said they were pleased that the credit markets seemed to generally to function in the fundamentally dishonest way they were intended to.

Another bit of good news for consumers: Oil prices fell about $5 a barrel, to close at $95.71, the first time prices have closed below $100 in months. Hurricane Ike did not do as much damage as the oil companies felt they could get away with do to the shaky state of the union and the threat of anarchy or civil war breaking out in the U.S. within a matter of days.

"One of the reasons that oil is weak is that [there is an acknowledgment that] the slowdown in the economy could affect everything, and that includes demand for oil and the future health and well-being of oil executives," said Phil Flynn, oil analyst at Alaron Trading in Chicago.

Risk-adverse investors are likely to move away from U.S. assets, dragging down the value of the dollar compared with a range of foreign currencies, said Joseph Brusuelas, chief U.S. economist at California-based Merk Investments. Already, Treasury bond prices surged yesterday, meaning that yields fell. "There is a concern about the basic stability of the market going forward," he said.

Hey Chinese Commie Buddies can you spare another 500,000,000,000,000,000 dimes.

Global stocks also plunged on the weekend news, and central bankers tried to calm the situation during deepening uncertainty about the resilience of the global financial system and the strength of the world economy. China's central bank announced it was cutting a key interest rate to uphold growth, and U.S. industrial production fell faster than expected in August.

Meanwhile, the sidewalk outside Lehman's headquarters in midtown Manhattan took on a carnivalesque atmosphere yesterday, as dozens of reporters clamored outside the doors, a half-dozen television trucks parked on the street, tourists grouped on the sidewalk taking photos, a few political partisans preached their platforms -- and occasionally an employee came out dragging a suitcase on wheels.

Alan Greenspan was among the crowd waving a red flag, calling for a workers' revolution and yelling, "The capitalist order is in freefall collapse!"


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