Expectation - The Dawn Ritual

It was a solicitor who knocked on our door yesterday that got me to thinking. She wanted a donation for a charity to clean up a huge area of the ocean where currents have brought together tons of trash stretching for miles, floating on the surface. Plastic bags and bottles, fishing lines and hooks and fishing nets for as far as the eyes can see. As far as I'm concerned, cleaning up the mess should not depend on charity. It should depend on taxes and nations should be responsible and pay the bill and to come together and send fleets of ships to clean it up. I have reason to say that...

There was always a day at sea that occurred occasionally that I considered perfect. And, had I thought about it, I might have been able to keep a record to figure out if those days came at scheduled intervals, just in time to sooth the soul. Maybe they did. But, I didn't notice. I did, however, notice that those were special days.

On those days I awoke early, like I always did, around four-thirty, showered and dressed by four-forty-five, and made my way to the galley for coffee. On those days I could walk down the passageway without bracing for the side-to-side rolling motion. I could hardly feel the ship moving at all. It felt like walking on solid, unmoving ground. There was a slight vibration from the ship's engines. Sometimes I could feel the power of the propeller pushing against the water without the slightest hesitation or interruption or shudder, unlike other days. Just a solid, continuous, harmonious push. On those days I felt a small serge of anticipation about what I would see from the main deck. I anticipated a perfect day.

Sometimes by the time I started my walk to the mess hall, I could hear others rising for the day. They, like I, knew from an inner feeling and the absence of swaying motion that the day was special. Someone would yell out, "rise and shine!" or "What are you doing? Sleeping your life away?" The few early risers gave no quarter to those night-owls who stayed up late and wanted to sleep in for just one more hour. The reply was usually, "shut the fuck up!" I heard the curse word and would think, "not today. That word is inappropriate today."

I would arrive at the galley as the coffee was in its last few perks, the color in the sight-glass perfectly dark brown to suggest better-than-usual cup coffee. It was always good coffee, but on those days it was great coffee. The cooks were already up and preparing for breakfast. The mess hall floor was littered with empty cardboard boxes just unpacked for the morning meal. Chute would be placing food on the serving counter or stirring the shit-on-the-shingle, a creamy gravy with either chipped beef or sausage, one of my favorites, or stacking the cartons of eggs beside the grill. The grill was getting hot. Someone stacked the bread next to the toaster. I picked up a few slices as I passed by. Someone else was gathering up the cardboard boxes, folding and bundling them up for trash storage for disposal at the next port. We didn't toss them overboard.

As soon as I entered the galley I'd hear Chute yell out to another cook or some guy on mess duty, "Check the milk dispenser. Set it to thirty-six degrees. I don't want to hear Clark bitch about warm milk!" He said that every morning after we became friends, and we may have became friends because of warm milk. I can't drink warm milk. In fact, I won't drink milk unless it nearly freezes my throat as it goes down and there was a time when I told Chute every chance I got that he didn't know shit about keeping milk cold. I'm sure he got tired of hearing it. "We keep it at forty degrees," he'd say. "Shit," I'd say, "that's warm." He finally turned the thermostat down and the entire crew started drinking more milk.

Those days were the reason I used a small thermos instead of using an even smaller galley cup. I didn't want to run out of coffee. I didn't want to miss the morning by having to return to refill my cup every fifteen minutes. I filled the thermos and made my way to the main deck and to a spot about one-quarter of the way down the rail from the bow, port or starboard, whichever was facing East, if at all possible. Robby, a Gunner's Mate friend, may already be there or he may be a few minutes behind me. He knew the spot too. It could have been that I learned the spot from him or perhaps he learned it from me, but we both knew where to stand. It was quieter at that spot than anyplace else. It was a point we studied and thought about. We leaned against the rail and waited, drinking our coffee and saying nothing.

Usually it was totally dark when we got there. There was just a slight shimmer, a bright thin line, on the perfect eastern horizon that told us that the Sun was coming. There was not a single sign of phosphorous light from an ocean wave, except sometimes something shot out of the water alongside the ship and quickly dove back in, causing a phosphorescent splash. Dolphins, we knew, were tracking beside us, out-pacing the ship, playing a game with us, but we couldn't see them yet. They were perfectly camouflaged in the dark, black water. Our engines were cruising nearly noiselessly. We could hear the splash of the Dolphins. We could, on some days, hear a flutter of wings, a different kind of wings than those of feather, and we saw the white phosphorous spot where something else popped out of the water. We couldn't see where it dove back into the water. These were flying fish, we knew, that rose out of the water and flew a hundred yards ahead of us, but we couldn't see them either. At least not yet. Even our ship cutting through the water caused so little disturbance in the water as to make a sound, nor could we see any sign of phosphorescent disturbance at the waterline. In spite riding on a machine that should have been making a noise, it was eerily quiet. We almost heard the Sun rising and the ocean waiting. Usually, as we drank our coffee and waited, we wondered at the power of nature that could muffle all sound as it waited for the day.

Finally the Sun would make its appearance, the dawn began to make things visible. We could see the Dolphins playing, rising to the surface, jumping and diving, and seemingly pausing to look at us standing against the rail. The flying fish breached the surface and flew farther than they did on other days. Sometimes we saw pods of killer whales farther away jumping and diving like the Dolphins. Perhaps they were following the Dolphins. Perhaps the Dolphins were close to us because the killer whales would not come closer. We sometimes saw whales breach the water and they too seemed to look at us. Once we saw a water spout and Robby and I were surprised at that sight. "How could that happen?" one of us asked, I don't recall which, on a day when there were no clouds in the sky and no apparent wind blowing and not the slightest wave on the ocean? As far as I know, it takes the same weather disturbance to create a water spout as it does a tornado, yet they appeared on the calmest day at sea. Perhaps sometimes for reasons that are beyond my understanding water can behave like dust in a dust-devil and rise and swirl around in gusts of invisible and isolated pockets of wind. Some people prefer sunrises that reflect on clouds in radiant reds, but there is no denying the beauty of a blazing sunrise in a cloudless sky over the calmest sea. In fact, the sense of power one gets from the ocean on its quietest day is greater than when it is most turbulent.

On those days the ocean was so smooth that we couldn't see even a hint of a swell. The questions in our minds was always the same, "How can the ocean be so large and this smooth? This glassy? Not a single ripple on the surface?" The Sun's reflection off the water was just as bright and blazing as the Sun itself and we couldn't look directly at either the Sun or the reflection. We watched the Dolphins or flying fish instead. Soon, a few gulls would come to fly a few feet away, intentionally picking the spot where we stood, nearly flying in formation and keeping post with us. We broke off pieces of the bread we brought from the galley and tossed them into the air and they, with perfect precision, like a jet fighter peeling off for a dive, dove and caught the pieces in mid-air. One of us usually ask, "What are these seagulls doing way out here?" or "Where do you think they sleep?" We were frequently several thousand miles from land, yet those gulls would be there. The simpleness of our questions masked a deeper feeling of awe.

Chute, on a break, would join us at around five, also carrying a cup of coffee and a few slices of bread for the gulls. He said the same thing every time on those days, "what a nice day! This is what I wait for." It was better than nice. It was perfect. Then, the three of us would toss bread to the gulls and watch the Dolphins in silence for thirty more minutes before going below to the galley for breakfast. For unexplainable reasons, we were hungrier and the eggs tasted better and the bacon crisper and Chute was a better cook than usual on those days. Robby wondered out loud if he could find some reason, an excuse, to work outside. Maybe a gun needed painting or lubricating or perhaps brass needed shining; things that Robby didn't usually do at his rank. Chute and I, who worked below decks, would find more excuses to go outside today. In fact, I noticed that on those days, there seemed to be more of the crew outside than on other days and, if you were observant, you could catch them gazing out over the ocean in a kind of daze or dream.

Robby, Chute and I were not always on the same ship together, but I believe we always attended the dawn ritual together. They, like me, wouldn't have missed those for the world. They were enchanting and addictive.

If I thought that I could see a sunrise like that, an ocean that calm and toss bread to gulls and watch dolphins play on a day during a five-day cruise to Mexico, I would book the cruise today. Earth can put on unimaginable displays of power, beauty and mystery and sometimes we should simply stand in silent reverence. Maybe the rest of the time we should do what it expects of us - take care of it.

Dave

The Prescription - I should have asked

I don't know why this stuff only happens to me. Why me, Lord? I've asked that question at one time or another my entire life. But, there you go, it happened again, this time by means of an unsightly growth, a nice word for a wart, in a most inconvenient place. If it had been in any other out-of-sight place, I wouldn't have bothered with it at all. But, it wasn't and that is my lot in life. I'm different. Things happen to me that are just barely slightly different than the same thing happening to other people. If another person had acquired an unsightly growth similar to mine, it would have been in a place just slightly off of center, perhaps only an eighth of an inch, so as not to be an irritant or noticeable at all.

Take splinters, for example. Other people get splinters just like I do, but I firmly believe that their splinters are different than mine. Mine always happen in the most inconvenient places. If I get a splinter in my thumb, I get it at the very exact spot that I continue to irritate until I take the time to dig it out, and even when I gather up the tools, the tweezers and magnifying glass to dig it out, I need help holding the glass, the tweezers and my thumb, all at the same time, at the right angle to perform the operation. And you would be surprised at how those people who happen to be available to help suddenly become so uncoordinated that they can't hold a magnifying glass at the angle needed! These things don't happen to other people. I'm convinced of that.

I went to the doctor several years ago to have the unsightly growth, okay - wart, removed. I was referred to a dermatologist who said, "Oh no! We can't remove that! That will bleed!" First off, I have to ask who in hell "we" are? Maybe he had a mouse in his pocket. It was only him and I in the room. In hindsight, I now believe that he was an overly excitable kind of person who couldn't stand the sight of blood, but I didn't insist on it being removed at the time. Also in hindsight, I have to ask myself why a person who can't stand the sight of blood became a dermatologist? But, you see? That's my lot. Out of all of the dermatologist in the world, I get the only one who faints at the sight of blood! That's what I'm talking about. If any other person had been there, they would have walked out of the hospital that day minus one unsightly growth! Whatever. So, after several years of sitting on it, I finally irritated the spot enough to inflame the area to the point of slight bleeding, and to bother the hell out of me, that I once again made an appointment to have it removed. This time, I was going to insist that I be treated just like all other patients. I was not going to be discriminated against!

I went to the appointment in somewhat of a grumpy mood, already prepared in my mind to be obstinate. My doctor said, "oh yeah. That's inflamed. Let me call a dermatologist." Five minutes later a very good looking dermatologist entered the room with her very good looking medical assistant. What? I thought. This too can only happen to me. Not only do I have to remove my drawers for a doctor, I have to remove them for a crowd! Two of which are good looking women! "Bend over," my doctor said, "they've seen behinds before."

"Oh yeah," the good looking dermatologist said, "I'll biopsy that." Notice that she didn't say "remove" it? That's just one more example of discrimination as far as I'm concerned, using a language or terminology that is vague or not understood by normal people. Just what did she mean by "biopsy?" So, I dressed and made my way to her clinic and then to an exam room where I once again removed my pants. According to her assistant, who came in to prepare me, a biopsy would remove "just a small slice" of the growth. "No," I told her, "I want the whole thing removed." "Well," she said, "we'll have to wait to see what the doctor says." Well, that statement, and all of my past discriminatory experience, sort of welled up inside of me to the point that I decided that I was going to be downright rude about the whole thing if I needed to be. At that point, I didn't give a damn what the doctor would say and I was going to say so.

But, I needn't have worried. The doctor said, after I asked her specifically what she meant, that the whole thing, the entire growth, was the biopsy. She was slicing it off at the skin level. And she did. I guess I was mollified by that fact that things, something, was finally going my way, the way I imagined that other people experienced; a happy ending. I really didn't notice or question the prescription she wrote out. "It's for a rash," she said, "around the area of the wound." "Okay," I said, a docile sheep following instructions from the most trusted profession in the world. Who do we trust the most? A doctor, of course.

It really didn't dawn on me what I felt about rashes. Frankly, I don't give them much thought. If I do anything at all, I'll get some over-the-counter cream or ointment and try to take care of it myself, such as Hydrocortisone 0.05% for dry skin. I've used that stuff frequently in the winter. So, I'll take care of it much like I take care of other ailments; if it gets to the point where it seems serious, I'll go to the doctor. Otherwise, I'll handle it. But, I trust doctors, so I accepted the prescription for Desonide Ointment 0.05% without question. I should have been alerted to a problem when this particular ointment required me to get advice from a pharmacist. How many ointments require a pharmacist's advice? "Don't put it on your eyelids," she said, "or your mouth or nose. It's intended to be used on other areas of your face." "Well," I said, "this is intended for the opposite end," in a smart-ass, joking sort of way. I should have noticed the shocked look on her face, but I didn't. Her look should have been a clue that I didn't need this particular ointment. My self-medicating history with minor ailments such as rashes should have come to mind, but it didn't. "Oh," she said, and she didn't say anything else, seemingly cutting her normal advice short.

So, I paid my share, $15 as I recall, and walked away with the tube of ointment. I put it on the counter when I got home and it's lain there since, unopened and unused. What really got me, though, was that I noticed on the receipt that I had only $232 balance left, after this prescription, on my Medicare Part D plan. What!? That lead me to ask myself just how much did this stuff cost, anyway? Well, if I paid 20%, then the whole thing cost $75. That's outrageous! That shock lead me to researching it further. The next thing I noticed was where it was made. We in the U. S. make a big deal, in fact it is illegal thanks to the Republican Congress and the Bush Administration, about getting cheap drugs from Canadian pharmacies. So, where is it made? Brampton, Ontario, Canada! And, it is distributed by the same company from Hawthorne, NY. I found a Canadian pharmacy that charges $8.79 for it! Well, sensing a conspiracy of some magnitude, and further evidence of the outright discrimination directed entirely at me, I set out to find what it is used for, and an even a bigger shock! It's used for DANDRUFF! DRY SKIN! The exact same thing that I use Hydrocortisone 0.05% at one-twentieth the cost. For crying out loud! By that time I had figured out that I had been scammed. I needed this stuff like I needed another hole in the head! Nevertheless, I had accepted it in total faith. I immediately went into a depression of that "I never learn" kind.

You know? I already use a dandruff shampoo, and it works pretty good. I don't have a single flake of dandruff on my shoulders. In fact, my barber, who I'm beginning to think knows more than my doctor, has told me that my shampoo is pretty strong and that I shouldn't use it more than once every two days. That statement meant to me that something that strong should be as good as Desonide Ointment 0.05%. And, so two weeks have passed and I've concluded that, had I been a touch more quick witted, I would have deduced relatively quickly that all you need to treat an inconvenient area of dandruff rash after a growth is removed is Selsun Blue shampoo. And, applying shampoo is a hell of a lot easier than the contortions needed to apply an ointment in that particular location, especially when trying to judge left from right through a mirror from a bent-over position that makes everything upside down. In fact, my contortionist days are long past. I can no longer turn myself into a pretzel. I'm taking the ointment back. I have other more important prescriptions to charge against my Medicare Part D plan.

Dave

This Book Explains It

In my quest for the answer to my primary question, "Why?", David Brooks' book, "The Social Animal: The Hidden Sources of Love, Character and Achievement" says a lot. In fact, it explains the "why" to a lot of questions. Why do people believe what they believe? Why do people make the choices they make? Why do people follow an obviously faulty ideology? Why do people repeat failure? Why do they choose against their own best interests? Why are people easily led by blatant propaganda? Why isn't it obvious to everyone without exception? Brooks provides an answer, and it makes sense.

When I opened the book to the first page, I immediately formed a big question in my mind: How did Brooks get on this wagon? How did he come to write "this" book? The subject of the book is about as far from his central endeavor as you can get! He is a commentator and writer about politics and policy, not a writer about psychology, neurology and physiology or how the brain works. He's a conservative writer and commentator, but with his book, he is saying that he is not blindly following conservative ideology. He's saying that he's more than willing to find a middle ground that works for all. He's interested in the same question I have: Why? That's an important distinction.

The book is about how the brain works, how we learn, how we love, why we choose what we choose and what makes us who we are. It's about the unconscious and conscious minds and what each do. And, it makes perfect sense. Contrary to what we've been taught for at least my lifetime, the unconscious mind is not a repository of repressed sexual desires where we live Freudian dreams and hate our mother. It is instead a center of innovation, of knowledge and miraculous invention and automatic learned reaction to the outside world. Contrary to what we've been taught, the conscious mind is not in control or the center of our knowledge as we all like to think. In fact, if we rely on conscious thought, we are more likely to not know what we do and why we do it. Wow! I repeat, it makes perfect sense.

One evening about fifteen or twenty years ago we were invited to dinner at Monica's and George's, two good friends, with two other "cousins" of the family. George, Russ and I were sort of extended family, attending only through our relations to the four women cousins. One of the cousins was a teacher, and the subject came up of the so-called "new" thought at the time on teaching kids. The idea being passed around by educators was to reinvent education, and thereby improve or enhance our children's ability to enter the world of adulthood, by somehow teaching them "how to think for themselves." It was all very vague to me, but the teacher cousin seemed to understand the teaching method being sold. But, one thing bothered me, and it started an argument at the dinner table.

"Learning by rote is out," she said. "Oh no!" I said, and the argument was on. At the time I was around forty-five and it had been my experience that how good I was at all of the jobs I had had up to that point solely depended on how well I learned those jobs by rote, by constantly repeating aspects of the job. As a career Navy person, I don't recall a single duty that I did well except through repeated drills and practice until my own performance was automatic. Repeated drills and practice was our gospel. And, there was nothing more satisfying than being on a well organized and functioning battle ship fine tuned through repeated drills. When we hit our targets at ninety-five percent or better, we were happy. When we steamed into hostile situations knowing we would win, we were happy. When we earned that Battle "E" for Battle Efficiency, we were happy and proud, and we sailed into harbors with that Battle "E" painted on our stack and we lined the deck in our dress uniforms! We looked good! We WERE good! And we knew it! We knew we could take on any situation and win. We worked hard and we played hard and we won. There was nothing better. The same was true of jobs I held after the Navy. I don't care where you work, you won't learn your job through theory. You learn it by doing it over and over again. So, she was wrong, and I knew it, but I didn't know why she was wrong and why I was right. Nevertheless, the new method was the one propagated and schools began to use it to teach their students.

Looking around now days, I don't see much improvement in our education system. In fact, the new method appears to have been a disaster and if any of those students who learned under the new methods achieved anything at all, it does not appear to because of the education system. We are on our way, again, of thinking up something new to teach children; this time with charter schools that are no different, in essence, than our public schools. We're off on another tangent, and should I mention the Republican gospel, "privatization?" Yep, charter schools is simply another way of privatizing public schools - the same old mantra.

Brooks presents a different idea and brings back an old idea. He cites studies and tests performed by neurologists, psychologists and physiologists over the past forty or fifty years. Usually, a book that cites scientific studies bores me to death, but Brooks weaves those findings into a story about a family and their children as they grow and go through life. He makes it interesting, very interesting. And, on page 86, about 20% of the way into the book, sort of hidden and obscure, not highlighted in bold print, he makes a profound statement about the brain: "The human brain is built to take conscious knowledge and turn it into unconscious knowledge." Wow! That ought to be in big bold letters! He goes on, "The first time you drive a car," he says, "you have to think about every move. But after a few months or years, driving is done almost automatically. Learning consists of taking things that are strange and unnatural, such as reading and algebra, and absorbing them so steadily that they become automatic. That frees up the conscious mind to work on new things. Alfred North Whitehead saw this learning process as a principle of progress: 'Civilization advances by extending the number of operations which we can perform without thinking about them.'" Well, he's right. He's talking about "repetitive" learning, learning things by rote. He's talking about learning until it becomes automatic so we can move on to new things.

I know why Brooks took the path that eventually became this book. He was curious. He wanted to know why the political divide in this country and why so many people have been convinced to follow people like Sarah Palin, who he calls a "cancer" and a "joke" in the Republican Party, or Glenn Beck, who is absolutely bonkers. The book was an accident, and he says as much in the first few pages of the book. He didn't start out to write the book.

The book explains a lot. Why do people get so infatuated with Fox News and Bill O'Rielly or Glenn Beck or Rush Limbaugh to the point that they close their minds to any other idea or source of information that prove them wrong? Even to the point of denying facts that prove O'Rielly, Beck and Limbaugh to be outrageous liars and rumor mongers in many cases? Why are they so convinced that Obama was not born in the United States, even in the face of a legitimate birth certificate? Why do they call him a socialist when the facts and his own behavior show that he's an ardent capitalist? Why do they get on the band wagon of hating a Muslim Mosque, an absolute anti-Constitutional stance, when there is absolutely no evidence supporting their hatred? In fact, the hatred stemmed from the rumor-mongering-spreading, mostly over Fox Cable, of a loony conspiracy theory. How does that happen? And, by the way, why don't people know what is REALLY in the Constitution? People who repeatedly misquote and misinterpret it? Where in hell did Michele Bachmann go to school? Or, did she? She's crazy and ignorant in nearly 100% of what she says!

And then there is another question. How or why did we come to believe that capitalism is the God send to our salvation? That laissez-faire is our end-all, best for all of us, the greatest thing since apple pie for our society? The answer to all of these questions is "repetitive" learning. Propaganda, repeated over and over, through the media until we are unable to see better solutions or even the truth for ourselves. We begin to believe in myth. The fact is that capitalism is a very vicious and ruthless endeavor when it is left to its own development and unregulated. Companies do not have a conscience. In fact, psychoanalysts have analyzed company behavior to be very similar to psychotic sociopath behavior. They have no pity, empathy or sympathy. They don't care if their presence destroys a community, town or city. There is only one thing that's important to a company: profit. And, to make the profit, a company will buy and close another company, costing millions of jobs. It will exploit land and externalize costs for taxpayers to pay, such as environmental cleanup costs. They will seek out cheap labor overseas, and destroy the community they are located in. In San Francisco, Twitter blackmailed the city to accept a condition for it staying in the city only if it didn't have to pay city taxes. The San Francisco Council caved in, so Twitter is staying, working, growing, making money without having to support the community it is in by paying taxes. What a bunch of nonsense! Someone else has to pay for the streets and sidewalks, public parking, traffic control, water system, sewage system and all of the rest of the infrastructure that Twitter uses to make its executives filthy rich.

The fact is that capitalism, just like any other economic system, needs to be controlled or it will destroy the social fabric we live in. But, we learn by repetition, and we've been convinced, over and over again, and despite historical fact, that there is no other way. So, we vote for it, just like we vote for the demise of Planned Parenthood, which is nothing like the lies about it that are repeated again and again until we believe it. We vote for budget cuts, but not for Defense cuts, because we are repeatedly told to fear for our security. We vote for privatizing Medicare with vouchers, which will be paid for by the government, when in fact privatizing it will make it more costly and in the end be nothing more than handing over Medicare to a private company. We vote for tax cuts for the rich because we are repeatedly told they "make the jobs," which is not true. We vote for corporate tax cuts while the corporations send jobs out of country, because, we're told repeatedly, that "we," the "United States," must "compete with the world," when the facts show that our standard of living is going down BECAUSE we continue to believe what we are repeatedly told. In fact, taxes that support maintaining and growing our country's infrastructure insures our competitiveness in the world, not our corporate tax rates. Like anything else, including investments by companies themselves; when we invest in ourselves, we grow and prosper.

We need to relearn a few things. It's time we rebelled against the bill of goods we're being fed. Brooks is brilliant in this book and it is so well written, at least for the first 86 pages, that anyone can read and understand it. I'll even go one better. If my family and friends sign up for a free Amazon Kindle account, and download and install the free Kindle Reader on their PC or Mac, I'll loan the book to them for free! I think there is a thirty-day limit for book loans, though, so they'll have to read it fast. And I don't know if I can lend it to more than one person at a time. But, that's my offer, limited as it is, and I can do that all the way from California! What a deal!

Every parent raising a child should read this book. Every teacher should read it. Every grandparent babysitting their grandchildren should read it. Every adult contemplating a family should read it. Read it!

One more thing. Repetitive learning IS brainwashing. So, the choice is which brainwashing do we want, the good kind that teaches us facts, truths, how to make intelligent decisions and how to live well? Or, do we want nonsense? And, I have another question, now. Why didn't I already know this? Well, dammit, I was brainwashed! Isn't it obvious?

Dave

The Financial Metldown

Reference: Permanent Subcommittee for Investigations Report: “Wall Street And The Financial Crisis: Anatomy of a Financial Collapse”

The Financial Crisis Timeline:

December 2006: Ownit Mortgage Solutions bankruptcy

February 27, 2007: Freddie Mac announces it will no longer buy the most risky subprime mortgages

March 7, 2007: FDIC issues cease & desist order against Fremont for unsafe and unsound banking

April 2, 2007: New Century bankruptcy

June 17, 2007: Two Bear Stearns subprime hedge funds collapse

July 10 and 12, 2007: Credit rating agencies issue first mass downgrades of hundreds of RMBS and CDO securities

August 6, 2007: American Home Mortgage bankruptcy

August 17, 2007: Federal Reserve: “[M]arket conditions have deteriorated…. downside risks to growth have increased appreciably.”

August 31, 2007: Ameriquest Mortgage ceases operations

December 12, 2007: Federal Reserve establishes Term Auction Facility to provide bank funding secured by collateral

January 2008: ABX Index stops issuing new subprime indices

January 11, 2008: Countrywide announces sale to Bank of America

January 30, 2008: S&P downgrades or places on credit watch over 8,000 RMBS/CDO securities

March 24, 2008: Federal Reserve Bank of New York forms Maiden Lane I to help JPMorgan Chase acquire Bear Stearns

May 29, 2008: Bear Stearns shareholders approve sale

July 11, 2008: IndyMac Bank fails and is seized by FDIC

July 15, 2008: SEC restricts naked short selling of some financial stocks

September 7, 2008: U.S. takes control of Fannie Mae & Freddie Mac

September 15, 2008: Lehman Brothers bankruptcy

September 15, 2008: Merrill Lynch announces sale to Bank of America

September 16, 2008: Federal Reserve offers $85 billion credit line to AIG; Reserve Primary Money Fund NAV falls below $1

September 21, 2008: Goldman Sachs and Morgan Stanley convert to bank holding companies

September 25, 2008: WaMu fails, seized by FDIC, sold to JPMorgan Chase

October 3, 2008: Congress and President Bush establish TARP

October 12, 2008: Wachovia sold to Wells Fargo

October 28, 2008: U.S. uses TARP to buy $125 billion in preferred stock at 9 banks

November 25, 2008: Federal Reserve buys Fannie and Freddie assets

Dave

The Washington Mutual Case Study: How one bank nearly destroyed the FDIC

Just in case you wonder whether your bank savings and checking accounts are safe, please read the following. The following is an excerpt from the Permanent Subcommittee on Investigations report entitled: “Wall Street And The Financial Crisis: Anatomy of a Financial Collapse.” It is very well written, so you don't have to worry about a lot of legalese or complicated language. It's easily understood. This quote from the report is from the Executive Summary about the subcommittee's case study of Washington Mutual Bank. Just this one bank nearly destroyed the Federal Depositary Insurance Corporation's guarantee of your $100,000 or less savings account. If you STILL think these banks should not be regulated and that regulators can be EASY on them, then you're crazy.

“ The first chapter focuses on how high risk mortgage lending contributed to the financial crisis, using as a case study Washington Mutual Bank (WaMu). At the time of its failure, WaMu was the nation’s largest thrift and sixth largest bank, with $300 billion in assets, $188 billion in deposits, 2,300 branches in 15 states, and over 43,000 employees. Beginning in 2004, it embarked upon a lending strategy to pursue higher profits by emphasizing high risk loans. By 2006, WaMu’s high risk loans began incurring high rates of delinquency and default, and in 2007, its mortgage backed securities began incurring ratings downgrades and losses. Also in 2007, the bank itself began incurring losses due to a portfolio that contained poor quality and fraudulent loans and securities. Its stock price dropped as shareholders lost confidence, and depositors began withdrawing funds, eventually causing a liquidity crisis at the bank. On September 25, 2008, WaMu was seized by its regulator, the Office of Thrift Supervision, placed in receivership with the Federal Deposit Insurance Corporation (FDIC), and sold to JPMorgan Chase for $1.9 billion. Had the sale not gone through, WaMu’s failure might have exhausted the entire $45 billion Deposit Insurance Fund. This case study focuses on how one bank’s search for increased growth and profit led to the origination and securitization of hundreds of billions of dollars in high risk, poor quality mortgages that ultimately plummeted in value, hurting investors, the bank, and the U.S. Financial system. WaMu had held itself out as a prudent lender, but in reality, the bank turned increasingly to higher risk loans. Over a four-year period, those higher risk loans grew from 19% of WaMu’s loan originations in 2003, to 55% in 2006, while its lower risk, fixed rate loans fell from 64% to 25% of its originations. At the same time, WaMu increased its securitization of subprime loans sixfold, primarily through its subprime lender, Long Beach Mortgage Corporation, increasing such loans from nearly $4.5 billion in 2003, to $29 billion in 2006.

From 2000 to 2007, WaMu and Long Beach together securitized at least $77 billion in subprime loans. WaMu also originated an increasing number of its flagship product, Option Adjustable Rate Mortgages (Option ARMs), which created high risk, negatively amortizing mortgages and, from 2003 to 2007, represented as much as half of all of WaMu’s loan originations. In 2006 alone, Washington Mutual originated more than $42.6 billion in Option ARM loans and sold or securitized at least $115 billion to investors, including sales to the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac). In addition, WaMu greatly increased its origination and securitization of high risk home equity loan products. By 2007, home equity loans made up $63.5 billion or 27% of its home loan portfolio, a 130% increase from 2003.

At the same time that WaMu was implementing its high risk lending strategy, WaMu and Long Beach engaged in a host of shoddy lending practices that produced billions of dollars in high risk, poor quality mortgages and mortgage-backed securities. Those practices included qualifying high risk borrowers for larger loans than they could afford; steering borrowers from conventional mortgages to higher risk loan products; accepting loan applications without verifying the borrower’s income; using loans with low, short term “teaser” rates that could lead to payment shock when higher interest rates took effect later on; promoting negatively amortizing loans in which many borrowers increased rather than paid down their debt; and authorizing loans with multiple layers of risk. In addition, WaMu and Long Beach failed to enforce compliance with their own lending standards; allowed excessive loan error and exception rates; exercised weak oversight over the third party mortgage brokers who supplied half or more of their loans; and tolerated the issuance of loans with fraudulent or erroneous borrower information. They also designed compensation incentives that rewarded loan personnel for issuing a large volume of higher risk loans, valuing speed and volume over loan quality.

As a result, WaMu, and particularly its Long Beach subsidiary, became known by industry insiders for its failed mortgages and poorly performing RMBS securities. Among sophisticated investors, its securitizations were understood to be some of the worst performing in the marketplace. Inside the bank, WaMu’s President Steve Rotella described Long Beach as “terrible” and “a mess,” with default rates that were “ugly.” WaMu’s high risk lending operation was also problem-plagued. WaMu management was provided with compelling evidence of deficient lending practices in internal emails, audit reports, and reviews. Internal reviews of two high volume WaMu loan centers, for example, described “extensive fraud” by employees who “willfully” circumvented bank policies. A WaMu review of internal controls to stop fraudulent loans from being sold to investors described them as “ineffective.” On at least one occasion, senior managers knowingly sold delinquency-prone loans to investors. Aside from Long Beach, WaMu’s President described WaMu’s prime home loan business as the “worst managed business” he had seen in his career.

Documents obtained by the Subcommittee reveal that WaMu launched its high risk lending strategy primarily because higher risk loans and mortgage backed securities could be sold for higher prices on Wall Street. They garnered higher prices, because higher risk meant the securities paid a higher coupon rate than other comparably rated securities, and investors paid a higher price to buy them. Selling or securitizing the loans also removed them from WaMu’s books and appeared to insulate the bank from risk.

The Subcommittee investigation indicates that unacceptable lending and securitization practices were not restricted to Washington Mutual, but were present at a host of financial institutions that originated, sold, and securitized billions of dollars in high risk, poor quality home loans that inundated U.S. financial markets. Many of the resulting securities ultimately plummeted in value, leaving banks and investors with huge losses that helped send the economy into a downward spiral. These lenders were not the victims of the financial crisis; the high risk loans they issued were the fuel that ignited the financial crisis.”

Dave

Meltdowns

References:

(1) "Inside Job," documentary.

(2) "All the Devils are Here," book.

It was the conservative idea of laissez-faire capitalism that ultimately caused the financial meltdown that has ruined many American lives; current and future lives. The dictionary defines laissez-faire as “a policy or attitude of letting things take their own course, without interfering,” especially in economical matters. Alan Greenspan was the the most important person and chief advocate of economic laissez-faire in the government from 1987 to 2007 as the Chairman of the Federal Reserve, the Central Bank of the United States. He told Congress every chance he got to “deregulate.” He said banks could “regulate themselves. They didn't need government to regulate them.” And, if Congress didn't deregulate, he did it from his seat at The Fed and through his influence at the U. S. Treasury. Deregulation is a big deal for libertarians like Greenspan, and Republicans, not only in finance, but in all of industry.

Deregulation began in earnest in the early 1980s. Wall Street finally had a sympathetic president, Ronald Reagan, in the White House. Donald Regan, a Merrill Lynch chairman and CEO, became Secretary of Treasury in 1981. Regan said, “Wall Street is in full agreement with this President.” On Wall Street, new financial tools were invented; the derivative, based on mathematical equations concocted by physicists. A new job title was invented; the Financial Engineer. Regulators turned their backs on bank mergers that conflicted with the Glass-Steagall Act and God said, “it is good.” The people became convinced. Alan Greenspan, who worked for Charles Keating at the time, became a White House regular adviser. Deregulation first effected Savings & Loan pseudo-banks, and greed took over. Charles Keating went to jail for Savings & Loan fraud. The “Keating Five,” Senators Alan Cranston (D-CA), Dennis DeConcini (D-AZ), John McCain (R-AZ), John Glenn (D-OH) and Donald Riegle (D-MI), were charged with ethic violations and investigated. Only John McCain managed to keep his job. Neil Bush, son of the Vice-President G. H. W. Bush, was on the board of the Silverado Savings & Loan and it cost U.S. Taxpayers $1.3 Billion to save its customers. Neil Bush wiggled out of the fraud charges against him and was only slapped on the wrist by the Office of Thrift Supervision for “breaches of...fiduciary duties involving multiple conflicts of interest.” Then, people forgot, history was changed, and everyone said “this too, will pass.” And, it did. Alan Greenspan was appointed Chairman, Federal Reserve. He became God.

In the early 1990s, as derivatives such as the Collateral Debt Obligation (CDO) and Credit Default Swaps began to be used more and more, and banks began to merge into global "too big to fail" banks with overseas locations, Greenspan turned his eyes away from the risky loans banks began making as much as he could. His Fed position really required him, by law, to oversee banks to a certain degree and to make sure that the banks had enough cash (capital) on hand for the loans they were making. He was certainly supposed to intervene if banks began lending too much to borrowers who had poor credit ratings, the sub-prime market. But, he turned his back on the problem so that banks didn't have to worry about violating the Glass-Steagall Act that strictly forbid commercial banks from risky “investment” gambling in markets. When banks absolutely couldn't avoid the Glass-Steagall Act, they got around the law by having their overseas branches and subsidiaries handle all derivative transactions. This not only hid the bank's Wall Street activity, it also helped the bank avoid paying corporate taxes.

While deregulation was gradually taking place, either by law or “getting around the law,” another laissez-faire idea was becoming the norm around the world: Privatization . This idea was to privatize government programs under private corporations. A number of countries followed suit by doing both, deregulating and privatizing, including Ireland, Greece, Mexico, New Zealand and Iceland, some with the help of huge loans from big U.S. investment banks such as Goldman Sachs, J. P. Morgan and Merrill Lynch. These banks securitized the loans to countries into bonds and Fitch, Moody's and Standard & Poor's all rated the bonds as AAA, the highest credit rating. And then the investment banks bought Credit Default Swaps, as insurance, to make sure they would get their money back in case any country defaulted on its loan.

Mexico, it turned out, was a bad risk in the 1990s. It wasn't quite the AAA rating everyone thought it was and it nearly defaulted on its sovereign debt. It was the high credit rating that was the primary reason that everyone agreed to the loans in the first place, and the big banks and credit rating companies received huge fees for giving it a high rating. The reason that Mexico went bust, however, was that privatization and deregulation didn't pan out like they thought it would. The Mexican Government had to pay for a program whether it was done by the government or by a corporation. While everyone says that corporations are efficient and governments are not, the truth is that corporations are hugely more expensive than government workers are. And, too, Mexican banks began risky derivative gambling as well. So, in order to save Mexico, the U.S. Government bailed out Mexico with a U.S. Guaranteed loan of $20 Billion in 1994, most of which was funneled back to the investment banks as loan payments. So, Goldman Sachs still got its money.

New Zealand appears to be a different case. It didn't need investment bank loans since it had a surplus and had no outstanding loans when it privatized. It also began deregulating much quicker than the United States did, and New Zealand's newly unregulated banks began taking on the same risky loans that American banks were taking on. Subsequently, New Zealand went into a six-year recession from 1991 through 1998 due to its liberalization of corporate regulations and privatization, and with the following 2008 global recession, it has one of the weakest economies in the world. Its businesses are still unregulated and it is becoming a poorer country as each year passes.

Other countries began to fail in the 1990s too, primarily because they adopted the American Capitalistic model; the laissez-faire privatization and deregulation. Mexico first, then came Russia, Asia, Latin America, Egypt, South Africa, the Ukraine, and others all in a short span of time. In all of those cases, three men led the battle to keep deregulation and privatization going; Alan Greenspan, Robert Rubin and Larry Summers. Rubin was the Secretary of Treasury under President Clinton at the time and Larry Summers was his deputy. These three men were called “ The Committee to Save the World.” The same committee had to save the United States' economy from a super-large hedge fund collapse in 1998 when the high-flying Long-Term Capital Management hedge fund collapsed. It was heavily invested in derivatives.

Only one person in the Clinton Administration dared to challenge the three saviors, Brooksley Born. Clinton appointed her as the Commodity Futures Trading Commission Chairman from 1996 to 1999. Until then, Republican Senator Phil Gramm of Texas had prevented any regulation of derivatives by getting a law passed. But, Born saw that the law was limited only to certain derivatives, not to the stuff the banks were creating, so she attempted to regulate them, which would have put a damper on sub-prime lending and securitization of mortgages which, in turn, would have prevented the 2008 recession. But, the big banks and The Committee to Save the World went ballistic. They wouldn't hear of it and they attacked her with anger and ridicule and everything else they could think of. She lost the battle and the war in front of Congress when Republicans led by Senator Phil Gramm joined the three attacking her. Gramm eventually got the Glass-Steagall Act repealed in 1999; the final straw in deregulating the banks. After the meltdown, Brooksley Born testified to the Financial Crisis Inquiry Commission on April 7, 2010, on Alan Greenspan's policies. She gave him “ What for,” calling him a “failure.” But, it was much too late and even then Greenspan wouldn't admit his failures. He said he only failed “30% of the time.” It was a huge thirty percent!

To Greenspan, laissez-faire is a religion and he adheres to his cult-like belief to the end. For Rubin and Summers it appears to be a matter of pride of association; they saw themselves as smarter than everyone else simply because they hung around with people like Greenspan and they were connected to some of the most powerful bankers in the world. They had also held very high positions in the banking industry. It was all an old boys club, and they all considered themselves smarter than everyone else. As for the big bankers, they laughed all the way to the bank at Greenspan. While he preached ideology, they took the money.

In 2001 sub-prime mortgages caused a smaller meltdown, named “sub-prime one,” that got the attention of a number of states and cities and their state and city attorneys. By that time, Washington D. C. couldn't do anything about the banks since the Bush Administration had taken over. The only people who cared in Washington were Senator Paul Sarbanes and Sheila Bair, a Treasury under-secretary, and neither of them had enough power to do anything. Cleveland, Ohio attempted to stop predatory lending by outlawing adjustable-rate and balloon payment loans and mandating counseling for borrowers. But, Countrywide, Ameriquest, Citibank, J. P. Morgan and other banks lobbied the Ohio legislature to overrule Cleveland's city council with a weak state law.

A number of other states and cities were also trying to control and stop predatory lending and all passed consumer protection laws. Eliot Spitzer, New York's Attorney General, tried to take on Wall Street directly, but he was spurned at every turn and banks refused to respond to his subpoenas for data, and the government backed the banks, saying that the banks didn't have to answer Spitzer's subpoenas. It was Georgia's consumer protection laws that finally got the Federal Government involved again. But the Government, led by Greenspan, Rubin and Summers protected the banks, not the consumers. Under the Bush Administration, the Office of the Controller of the Currency (OCC) and the Office of the Thrift Commission (OTS) were the primary Bush bank regulators who took up the issue. They came out with regulations that said no state or city had jurisdiction over nationally registered banks, which caused all companies giving mortgages to sub-prime lenders to register as nationally registered banks. This was called the “Preemption” regulation and it allowed banks to do anything they wanted to and states and cities couldn't interfere. They preempted state and local laws to make their money, the laissez-faire banking attack.

Then, maybe one of the screwiest things happened. OCC and OTS began competing for banks to regulate. Banks were actually given a “choice” on which agency they wanted to regulate them. They “advertized for banks.” So, in effect, the OCC and OTS relaxed regulations even more too attract more banks, they became “buddies” with the banks, told Congress about their increased workloads and Congress gave them more money and people to regulate their list of banks. In effect, it doubled the size of the two agencies regulating banks and each were doing the same tasks. Instead of smaller government, the Republicans doubled it.

In 2000, Iceland had one of the highest standard of living in the world. It had one of the most pristine environments and beautiful landscapes. It got 100% of its power from renewable natural geothermal sources. It did not use coal, oil or nuclear power. Its environment was clean and pure. It had zero poverty. In 2001, Iceland began the purest experiment in American Capitalism. It privatized its three banks and deregulated all in one sweep of its banking laws. The banks began loaning money. Construction companies began ripping up the landscape for power oil and coal power plants. Polluting belching factories moved in. And so, by 2008 when the recession hit, the three banks owed over $100 Billion, over 7.5 times Iceland's Gross Domestic Product of $13 Billion and 11 times its government revenue from taxes. There was no way for Iceland to save its people from poverty. Iceland's populace were furious. They refused to bail out its banks and, instead, forced all of those who got it into debt to pay off the debt. By December 2010, Iceland's recession was finally said to be over. It was pulling itself out of the recession. Iceland is going back to its more socialist ways, and like Denmark and Sweden, its standard of living is coming back again. Iceland's banks were not "too big to fail," and I wonder whether that "too big to fail" idea wasn't just one more laissez-faire scam sold to us.

It seems to me that deregulation always seems to result in “meltdowns.” Today we have another type of meltdown; a nuclear power plant in Japan. And, while the power plant is melting down, our Republican House of Representatives are busy passing deregulating laws; such as the one that prevents the Environmental Protection Agency to control “green-house gases.” In fact, the House has passed a number of bills in the past week to prevent the EPA from doing a number of things that protect the environment, including regulating nuclear power plants.

Japan probably has the strictest nuclear power plant regulations on Earth, since it has more experience with the effects of nuclear radiation of any country on Earth. Yet, there is panic all around from the power plant meltdown. It is ironic that the Republican Party's voice, Fox News, and specifically Glenn Beck, are causing more panic than they are soothing people's nerves about the plant meltdown. But, that may be a Republican strategy too; to keep the population in a panic and therefore ignorant of the truth, and their eyes misdirected away from what's going on in Congress. It's just another diversion.

Someone should go to jail for meltdowns.

Dave

No Honor at the Top

I've just watched "Inside Job," the Oscar winning documentary on who and what caused the global recession that we're in, and will be in for some time. I'm going to watch it again. It has a powerful message. If I were King for a Day, I would royally decree that everyone above the age of eighteen watch it - and test them on what they learned. Then I would lead a million people, or as many who can cram around Wall Street, Broadway, Nassau St., New St., Exchange Pl. and other New York City streets in that area and shout to high heaven for all of the criminals to come out of their buildings, something along the lines of what Micheal Moore did in his documentary, "Capitalism: A Love Story."  Mr. Moore's documentary also had a powerful message and right along with "Inside Job," it's another one that I'd force everyone to watch. And, if nobody came out of those buildings, as King I would order a swat team to drag them out. That's the problem with being a tyrant, as one with total power is inclined to become, I would likely condemn the innocent right along with the guilty. I'd like to think that there is at least one person in those buildings who is innocent or who "had a feeling" that what they were doing "wasn't right," or perhaps, and this is a stretch, refused to destroy their own company AND the global economy for the sake of their own wealth. I know. I know. The odds are against it.

Here's how much I think everyone should watch those documentaries: If I had the money, I would buy the rights to them and put them on YouTube for everyone to watch free of charge. I know. I know. The odds are against anyone watching the movies.

Here's why they should. Everyone I know... well, maybe not everyone. I know one person who doesn't have a pot, let alone a bank account, but as far as I know everyone else I know has at least a bank account. Most couldn't last a month if they lost their jobs, their paycheck, on the amount of money in their bank account. Some have a savings account. Some have a retirement account, and a few have investment accounts. All of them NEED to watch these movies. They NEED TO KNOW how close they are to losing those accounts. If they knew, maybe they can prevent it. And, the one who doesn't have a pot should watch it because they COULD HAVE a pot - after first extracting the head from the arse. Our cash in "their" bank gives them the capital to make loans.

A good, responsible bank keeps enough cash (capital) on hand (our cash) so it won't go bust if too many people don't pay off their loans. It's called a debt-to-capital ratio. When a good bank makes loans to people with good credit, it is very rare for 5% of the loans default. A bad, irresponsible bank goes broke when the debt-to-capital ratio is way out of whack, when it makes too many loans and it's taking way too much risk, such as Lehman Brothers had when it crashed. It had a 33 to 1 ratio, so if over a measly 3% of loans defaulted, and it did, the bank would run out of cash (our cash) to support itself. Actually, it was much worse than that for Lehman Brothers. It had as much as 20% loan default because it bought loans (Collateralized Debt Obligations) that banks had loaned to people who could not pay them off, subprime mortgages.

So, your (our) cash is used to make loans. When the loans are so bad and risky, all your/our cash can be lost. And, it was. When the banks are simply out of control, even the government may not be able to save your/our cash. In that case, the only people who wind up with the money (our money) are the big bankers. That's why you need to watch these movies. I know. I know. Odds are against it.

Out of all of the young people I know, only two have a chance of having a little bit more than the average person. If I count their mates, confirmed and apparent (assuming that current apparent fiancees makes the grade - I hope they do), that makes four people that I know who will "make it," or said better, who will get a bigger "piece of the pie."  One is a prime candidate for one of those Wall Street, high-flying jobs, but the lifestyle there is dangerous (more later about that). All of the other young people I know are "comfortable" and at the whims of Wall Street; with perhaps some cash in the bank but they have no idea how risky it is there. It could, if they keep sleeping, come falling down on their heads again and again, and like the past few years, they will bitch and moan about the money they lost, and perhaps keep listening to Limbaugh, but have no idea what hit them nor ever learn what happened. At least they won't hear the truth from Limbaugh. And then, while they're "liking" this and that on Facebook, they'll go do the worst thing they could do - they'll vote. Crap!

I know. I know. The odds of everyone wising up, or even waking up, are extremely high. So, what was the message of both documentaries? The unadulterated greed. It was so thick you could taste it. And, it is difficult to believe that a person would destroy their own company, their own country, the United States, and the global economy for their own sake, to get more money than anyone else and to destroy billions of jobs worldwide without the slightest twinge of conscience, but that's what they did. This is not normal behavior. It is psychopathic behavior. Not only that. When the U.S. Government had to bail them out - not to save them, but to save trillions of dollars in ordinary people retirement and savings accounts - they took another trillion dollars from taxpayers without blinking an eye. The average American has no clue how much damage Wall Street did worldwide. And, the guys who did it picked up their suitcases of cash and walked away with it. Not a single one went to jail or had to give any of it back. And the ones who replaced the criminals are doing the same thing again. The derivatives, the investment instruments that Warren Buffet called "weapons of mass destruction," are still being bought and sold without the slightest regulation. Commodities, such as oil, corn, soybeans, pork bellies that set food prices worldwide are still being bought and sold without the slightest regulation. Enormous wealth is still being transferred from the poor to the rich. The gap between haves and have-nots is still getting wider. Sooner or later, there will be a revolt. Someone's going to die just like they are in Libya, except it will happen in the good ole U. S. of A. And, the primary reason that there is not one iota of regulation throttling Wall Street greed is the Republican Party. The GOP doesn't like regulations.

The Republican Party's philosophy, laissez faire, letting things take their own course in regards to markets and business, has become "normal" in our culture. Even economic professors teach it, especially since the 1970s. It's what all of us have been led to believe. Bootstrap living. Can't make it? Pull yourself up, or die, you lazy ass! The fact is that when greed rules, when it dominates the culture over the airwaves and in colleges and universities, someone is going to be left behind whether they're lazy or not and however hard they try to pull themselves up from their bootstraps. The fact is that if greed isn't controlled, governments fail, societies fail and everyone suffers. I have to agree with Studs Terkel. He said, "competition is the wrong idea. Cooperation in society is what we need for all to live a good life," or words to that effect. Laissez faire is the wrong idea. Allen Greenspan was wrong. Ben Bernanke is wrong. Larry Summers is wrong. Tim Geithner is wrong. And, since President Obama is surrounded by the same criminals who caused the meltdown, he is wrong by accepting their advice. The truth is more likely that he faced an ultimatum, follow them or be a one-term president. Washington D. C., including the Presidency, is owned, lock, stock and barrel, by Wall Street regardless of who is president. Still, any Democrat is a thousand times better than the worst Republican. At least a Democrat typically has the working people and general society in mind, even if they can't do anything about it.

Frankly, there is nothing right about laissez faire. The idea that businesses and corporations can do any thing they want and that a buyer, i. e., me, must beware of what we buy because it could be junk, a scam, illegal, a dupe, a fake or otherwise doesn't live up to its claimed use is preposterous. If I put my money in your bank, Mr. Banker, I expect you to use it wisely and to not risk it foolishly and pay me a good interest rate for the use of my money. And, if you are foolish and lose it, then I expect you, not the government, to pay it back, even if that means selling off all of your assets, including the shirt on your back. It's the same with anything else I spend money on. If I buy a $100,000 car, it damn well better give me an erotic massage every day. I had better feel GOOD about it. Otherwise, you don't deserve to be in business. There will always be a need for a consumer to be aware and educated of personal financial risk when buying goods, and to be thrifty with their money and to save always.  But, there should never be a time when corporations and businesses can run roughshod over consumers just because they can.

I guess if you watch the movies, at least you may learn enough to ask your bank a few questions, such as how secure your money is. Perhaps you can find a clue about how your bank does its business and whether your money is at risk more than at other banks. Credit Unions seem to be safer. They are regulated better and are less risky. If you invest, you should at least think about how greedy the executives are who run the companies of the stocks you buy. Perhaps that will give you a clue on what stock to buy, when to buy it and when to sell it.

Here are some questions to ask your bank.
1. What is your debt-to-capital ratio?
2. Do you, your corporate headquarters or a subsidiary you own buy and/or sell Collateralized Debt Obligations (CDOs) or any other derivative?
3. Do you, your corporate headquarters or a subsidiary you own buy Credit Default Swaps?

Here are good answers:  If 2 and/or 3 are "Yes," get the hell out of that bank.

1. The correct answer is: Less than 10 to 1 debt-to-capital ratio. This means that your bank has $1.00 cash on hand for every $10 or less that it loans out, so it is 10% capitalized. It means that your bank can sustain its business (and your money) even if 10 percent or less of its loans default. Over 10% default rate is rare when all borrowers have good credit.

2. The correct answer is: NO. If it does, then more than a 10 percent default is possible and it's likely that the bank's borrowers don't have good credit, and the bank should have an even lower debt-to-capital ratio, say 5 to 1. Otherwise, you're money could be lost if not for the government guarantee, up to $200,000 (may have changed to $100,000).

2. The correct answer is: NO. If it is Yes, then your bank is gambling with no risk loans and likely loans to people who have bad to zilch credit ratings and can't pay the loan off. In fact, your bank may be counting on the person not paying off the loan; it's making more money from the Credit Default Swaps than if the person paid off the loan.

I guess you could ask one more question: Is your bank connected, in any way, with Wall Street trading, whether stocks, options, commodities or derivatives? If it is, then consider moving your money to another bank or credit union, preferably a locally owned one.

All exchanges, including the hidden derivative exchange, fluctuate based on recommendations of Wall Street analysts of one kind or another; stock analysts, commodities, options, credit ratings, derivatives, mortgages, corporate loans, and on and on.  If there's something that can be traded, there is an analyst for it.  Usually, investors buy and sell investments based on analysts' recommendations.  Companies plan their sales, production and services on "meeting" analysts predictions. Derivatives are packaged based on analysts' best ratings. The price of oil, corn, soybeans and pig bellies are determined by how much caffeine an analyst has with his morning dose of cocaine, or how much the guy snorted the night before, or how tired he was after he paid for a $1,000 prostitute. They make a lot of money, live fast, drive the most expensive cars and use cocaine and any handy beautiful woman. They rub elbows with traders and bankers to make deals, sometimes fraudulent deals, and money. They're not interested in investors, customers, their company or the United States or its citizens.

I heard the most honest assessment of Wall Street analysts this morning that I've ever heard. In the midst of the Middle-East oil instability, a wishy-washy jobs report, increased unemployed claims, a Euro evaluation problem, and China's first time ever trade deficit, the news broadcaster said, "Wall Street analysts have no idea how markets will be affected." Well, they have never had any idea how markets will be affected.

See the documentaries, and if you want to know more, read "All the Devils are Here."


I know. I know. Odds are against anyone watching the movies.

Dave