Grasping at Straws

On Friday morning, Senator Christopher Dodd, the head of the Senate Banking Committee, was interviewed on ABC’s Good Morning America. Dodd revealed that just hours earlier at an emergency meeting convened by Secretary of the Treasury Henry Paulson and Federal Reserve chairman Ben Bernanke, lawmakers were told that, “We’re literally maybe days away from a complete meltdown of our financial system.” Dodd added somberly, that in his three decades of serving in public office, he had “never heard language like this.”

The system is at the breaking point, and despite Wall Street’s elation from the proposed $1 trillion dollar bailout to remove toxic mortgage-backed debt from banks balance sheets, the market is still correcting in what has become a vicious downward cycle. This cycle will persist until the bad debts are accounted for and written off for or until the exhausted dollar-system collapses altogether. Either way, the volatility and violent dislocations will continue for the foreseeable future.

Most people don’t understand what happened on Thursday, but the build-up of bad news on the Lehman default and the $85 billion government takeover of AIG, triggered a run on the money markets and a freeze in interbank lending. The overnight LIBOR rate (London Interbank Offered Rate) more than doubled to 6.44%! Bank of America reported overnight borrowing rates in excess of 6%. Longer-term LIBOR rates also rose sharply. On Wednesday, jittery investors removed their money from money markets and flooded short-term US Treasuries for the assurance of a government guarantee on their savings even though interest rates had turned negative which means that their balance would actually shrink at the date of maturity. This is unprecedented, but it does help to illustrate how raw fear can drive the market.

The TED spread (the TED Spread measures market stress by revealing the reluctance of banks to lend to each other) widened and the credit markets froze in place. Borrowing three-month dollars on the interbank market and the U.S. Treasury’s three-month borrowing costs widened five full percentage points. That’s huge. The banking system shut down.

What does it mean? It means the Federal Reserve has lost control of the system. The market is driving interest rates now, and the market is terrified. End of story.

When the Fed announced its emergency program to dump $180 billion into the global banking system, short term Libor retreated slightly but long-term rates have remained stubbornly high. The noose continues to tighten. These rates are pinned to 6 million US mortgages which will be resetting in the next few years. That’s more bad news for the housing industry.

The entire system is deleveraging with the ferocity of a Force-5 gale touching down in the Gulf, and yet Henry Paulson has decided that the prudent thing to do is build levies around the system with paper dollars. Naturally, many people who understand the power of market-corrections are skeptical. It won’t work. Libor is pushing rates upwards — that’s the “true” cost of money. The Fed Funds rate (2 percent) is supported by infusions of paper dollars into the banking system to keep interest rates artificially low. Now the extreme pace of deleveraging has the Fed on the ropes. Trillions of dollars of credit is being sucked into a black hole which is raising the price of money. It’s out of Bernanke’s control. He needs to step out of the way and let prices fall or the dollar system will vanish in a deflationary vacuum.

The problems cannot be resolved by shifting the debts of the banks onto the taxpayer. That’s an illusion. By adding another $1 or $2 trillion dollars to the National Debt, Paulson is just ensuring that interest rates will go up, real estate will crash, unemployment will soar, and foreign central banks will abandon the dollar. In truth, there is no fix for a deleveraging market anymore than there is a fix for gravity. The belief that massive debts and insolvency can be erased by increasing liquidity just shows a fundamental misunderstanding of economics. That’s why Henry Paulson is the worst possible person to be orchestrating the so called rescue project. Paulson comes from a business culture which rewards deception, personal acquisitiveness, and extreme risk-taking. Paulson is to finance capitalism what Rumsfeld is to military strategy. His leadership, and the congress’ pathetic abdication of responsibility, assures disaster. Besides, why should the taxpayers be happy that the stocks of Morgan Stanley, Washington Mutual and Goldman Sachs surged on the news that there would be a government bailout yesterday? These banks are essentially bankrupt and their business models are broken. Keeping insolvent banks on life support is not a rescue plan; it’s insanity.

No one has any idea of the magnitude of the deleveraging ahead or the size of the debts that will have to be written down. That’s because 30 years of deregulation has allowed a parallel financial system to arise in which over $500 trillion dollars in derivatives are traded without any government supervision or accounting. These counterparty transactions are interwoven throughout the entire “regulated” system in a way that poses a clear and present danger to the broader economy. It’s a mess. For example, there are an estimated $62 trillion of Credit Default Swaps (CDS) alone, which are basically insurance policies for defaulting bonds. AIG was as heavily involved in CDS as they were in regulated insurance products. So why would AIG sell CDS rather than conventional insurance?

Because, just like the banks, AIG could maximize its profits by minimizing its capital cushion. In other words, it didn’t really have the capital to pay off claims when its CDS contracts began to blow up. If it had been properly regulated, then government regulators would have made sure that it was sufficiently capitalized with adequate reserves to pay off claims in a down-market. Now taxpayers will pay for the lawless system which men like “industry rep” Henry Paulson put in place. That’s deregulation in a nutshell; a system that allows Wall Street banksters to create credit out of thin air and then run weeping to Congress when their swindles backfire.

Inflating the currency, printing more money, and increasing the deficits won’t help. The bad debts have to be accounted for and liquidated. The Paulson strategy is to create another ocean of red ink while refusing to face the underlying problem head-on. This just further exacerbates the consumer-led recession which economists know is already setting in everywhere across the country. Demand is down and consumer spending is off due to falling home equity, job losses, and tighter lending standards at the banks. The broader economy does not need the added downward pressure from higher taxes, bigger deficits, or inflation. Paulson’s plan is a band-aid approach to a sucking chest wound. The debts are enormous and the pain will be substantial, but the problem cannot be resolved by crushing the middle class or destroying the currency.

The malfunctioning of the markets and the freeze-over in the banking system are the outcome of a massive credit unwind instigated by trillions of dollars of low interest credit from the Federal Reserve which was magnified many times over via complex derivatives contracts and extreme leveraging by speculative investment bankers. This has generated the biggest equity bubble in history. That bubble is now set for a “hard-landing,” which is the predictable result of an unsupervised marketplace where individual players are allowed to create as much credit as they choose.

If Paulson is not removed and his rescue plan scrapped altogether; the dollar will lose its position as the world’s reserve currency and the US government will face a historic funding crisis as foreign sources of capital dry up. That will thrust the country into a hyper-inflationary depression.

Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com. Read other articles by Mike.

29 comments on this article so far ...

Comments RSS feed

  1. Steve Sewall said on September 22nd, 2008 at 11:47am #

    WHAT? Dump the great Hank Paulson, Fortune Magazine’s “steely-eyed treasury chief”? No one is making this call but you just may be right, Mike. Maybe Paulson SHOULD be yanked from the quarterdeck as a Force-5 gale hits the US ship of state.

    But who you gonna call to replace him? And what will this guy’s first order of business be? (I like Steve Waldman’s ARISE proposal at http://interfluidity.com/. ) Your ideas?

    Can’t help mentioning a timely read: “The Maelstrom”, Edgar Allen Poe’s short story about risk and wealth. In it, two Norwegian fishermen shun safe waters for dangerous ones yielding the biggest catch of fish. One day, a maelstrom sucks their ship down. Down down down. But where one sailor straps himself to the ship and is lost, the other spots a barrel floating upward, grabs it, and survives.

    Now catch this. Marshall McLuhan’s biographer Terrence Gordon says that McLuhan identified “throughout his adult life” with the sailor who did not despair, kept his eyes open and who saw a COUNTER-INTUITIVE strategy for survival.

    The survival strategy that McLuhan gave the world is, of course, the one we are using now. It’s Bloomberg and CNBC. It’s the interactive electronic media that have created the global village McLuhan foresaw in the 1960′s.

    Yet why is it counter-intuitive? Because throughout history, ruling elites have used media more to perpetuate ignorance than to share information. But today, circunstances are forcing these elites to do what they previously perceived as a threat: share more information, be more transparent.

    McLuhan, a lifelong Catholic, spoke of this counter-uintuitiveness in this way: “There seems to be a deeply willed ignorance in man. “Sin” might also be defined as a lack of “awareness,” “resistance to learning,” and mankind being “threatened by understanding.” Does understanding kill us or save us? Now it looks like we have no choice!

    In this view, sin is a matter of hoarding information. Hope not all readers think I’m off-topic here. The first step in correcting today’s mess we’re is media-generated transparency. If this happens, other survival steps have at least a fighting chance of falling in place. If not, as Curtis Mayfield put it, if there’s a hell below, we all gonna go.

  2. Michael Kenny said on September 22nd, 2008 at 12:23pm #

    If Mr Whitney is right in his last paragraph, then I’m sure the entire planet is hoping that Paulson will not be removed nor his plan scrapped! The dollar’s role as the world’s reserve currency is the cause of the problem and, indeed, of most of the world’s other problems as well! The first step to rebuilding the financial system is thus the end of the dollar’s world role and I don’t think, after the mess that has been made, that the world will accept anything less.

  3. Gliscameria said on September 22nd, 2008 at 12:38pm #

    Why is it the middle class’s job to shoulder this? We certianly didn’t profit from it. Go after the top 10% for once! I would vote for ANYONE that came out and said they are going to hold Wall Street accountable and make them suffer the consequences of their actions. I want state/federal raids of their properties. Hopefully one of the candidates will realize they can fix this by going after 5% or 95% of the population. If this isn’t resolved people are going to start getting violent.

  4. nwkec said on September 22nd, 2008 at 1:12pm #

    Not to worry about violence and rioting. A brigade of the 3rd Infantry Division is training for domestic duties under US Army Northcom. They will be available for disastor duties as well as riot control. A spokesman for the unit states that he hopes the unit will not have shoot Americans. (From Army Times last week).

  5. Calm said on September 22nd, 2008 at 3:27pm #

    America has lost all it’s credibility within the world and universe.

    Everyone is laughin’ at them.

    The world is laughin’ when any American takes the stage to brag about Freedom and Democracy after having witnessed Guantanamo and the torture tapes.

    When some American financial wizard walks upon a stage to begin a lecture on capitalism, the audience will chuckle aloud. (The People’s Republic Of Wall Street) As America was runnin’ around the world talking the benefits of Free Trade and foreign ownership, they chose to nationalize their own companies rather than to allow foreigners (China) to purchase them.

    When some American walks upon a stage to bad-mouth Venezuela and it’s route to nationalization, the audience will chuckle aloud.

    In past years when America used to bail out a poor country, they always insisted that these countries not use the money to bail out their banking sector …. and now the American’s have done it themselves.

    I belive that the reason they bailed out the financial sector now is because they know the worst is yet to come and that another 2 trillion dollars is gonna arrive on the American doorstep as people begin to default on credit cards. Credit card companies extended credit in the same way that the mortgage companies did. Thousands of banks are going to fail and that is why Morgan Stanley and Golman Sacs became banks instead of investment houses, because they will need to take over the failing banks. (The FDIC does not have enough employees to handle so many bank failures, and needed to contract the work out.) America will need to Line-up the fire trucks as people choose to torch and burn their cars and houses rather then accept bankruptcy and foreclosure.

    Canada needs to nationalize their oil production in the same way that America recently nationalized it’s financial sector and be just as proud about doing it as the American’s are about their system.

    I think it is time that Canada chose to get in on the “Joke” too.

    Calm

  6. Calm said on September 22nd, 2008 at 3:41pm #

    This Has Got To Be The First Time In HistoryThat Poor Folks Are Being Held Responsible For Bankrupting Rich Folks

    Listen to all the commentators in TV Land telling everybody that it was Poor People who made Poor Choices and took on too much credit which bankrupted the Rich People.

    America is bankrupt.

    The average Joe Citizen needs to realize this and quit believing their own propaganda.

    American’s need to quickly realize that they are not “God’s Chosen Few” and are susceptible to financial collapse as any other empire throughout history.

    We can’t admire the American “Success” while at the same time suggest that the American’s did not plan for this “Success” and that very smart and intelligent furturists within the American government see at least 15 or 25 years into the future.

    We can’t praise the American “Genius” while at the same time suggest that this economic crisis is the result of stupidity.

    The American government saw the collapse of the American empire as far back as 1972 and when Nixon visited China for the first time.

    It was also in 1972 when Richard Nixon enacted a purely fiat dollar which repudiated the gold standard.

    This was done by imperial decree.

    Without a gold standard, Pax Americana was financed with the American printing presses running 24-7.

    The gold standard was replaced by an American system of conceit, delusion, debt and deceit.

    I quite well remember watching an interview with Dick Armey (R-Tx) about 5 years ago. He chuckled aloud mockingly when detailing how the world was giving America goods and services in trade for a simple piece of paper.

    Well, nobody wants this worthless paper anymore!

    Make no mistake …. the futurists working inside the bowels of government saw this collapse on the horizon at least 25 years ago.

    All you had to know or study was history and to recognize the collapse of other empires in an historical context.

    Britain knew they were collapsing as a world power beginning around 1870 and the collapse did not occur until after World War I.

    America is doing the same things that Britian did in order to stall-out the inevitable. America is doing now, exactly what the British did from 1883 to 1913, and when Britain increased its dependence on imported goods following the introduction of free trade.

    About 1870 the German Reich emerged as a new economic player on the map of Continental Europe in the same way that China is doing so at this moment in time. In August 1914, Britain declared war against Germany in an attempt to stop the development of Germany’s economy which was a threat to British hegemony.

    Immediately following the end of World War I, Britain collapsed as an “Economic Power” and America became the dominant world power. The Balfour agreement (1917) initiated by the British and giving the Jewish Folks a home in Palestine was in return for Jewish Banking assistance during World War I. Britain’s World War II costs were financed by American banks and Britain did not complete repayment of these American loans until December 2006.

    This housing crisis …. this credit crunch is not a mistake!

    But rather a well planned event and is being deliberately engineered.

    Make no mistake of that.

    Calm

  7. Donald Hawkins said on September 22nd, 2008 at 3:48pm #

    Calm that just might be true.

  8. Calm said on September 22nd, 2008 at 4:03pm #

    Now we know why all the anti-terrorism laws have been introduced and why there are a million or more activists names on the No-Fly list. The Ruling Class (The Economic Terrorists) are terrified about being strung-up on lamp posts out behind some gas station or in some sinister dark alley.

  9. Calm said on September 22nd, 2008 at 4:22pm #

    America polluted the world with worthless paper and did so purposely.

    Each Free Trade Agreement which was signed was actually a method or means for the Economic Terrorists to enter the banking systems of every country in the universe. It had nothing to do with manufactured goods …. the main play was the ability to move money and financal ownership unfettered.

    In doing so, the American’s purchased everything on the globe and the collateral used was 6 cents on the dollar. American banks were allowed to finance 40 dollars for each dollar they had on deposit.

    This was a deliberate scheme to take possession of every asset on the globe prior the economic collapse of the empire. The collapse of the American home ownership is only the “collateral damage” in the big picture.

    The big picture is ….

    That after the collapse of the American empire, the Economic Terrorists will still own all the world assets. And that was the real intention and the lasting truth.

    Calm

  10. Lijandra said on September 22nd, 2008 at 4:51pm #

    Very interesting article, thank you.

  11. HR said on September 22nd, 2008 at 6:07pm #

    If the U.S. was a real country, the tar, feather, and rail businesses would be swamped with orders …

  12. John said on September 22nd, 2008 at 9:15pm #

    The whole economic system is in crisis, by such measures like injecting money the problem will deepens, Great depression. This link can be helpful:
    http://democracyandsocialism.com/Articles/WhyRecession.html

  13. Donald Hawkins said on September 23rd, 2008 at 11:12am #

    I have been watching the hearing’s today with Ben, Henry, Cox and how does that go older and wiser. They got the older part down it’s the wiser I don’t see. Mumbo jumbo more mumbo jumbo. Still a Nation of mumbo jumbo. The last time I checked the Earth is moving forward and faster by rules that started billions of years ago and mumbo jumbo is not one of those rules.

  14. Donald Hawkins said on September 23rd, 2008 at 11:48am #

    The Big Bang
    10-43 seconds
    The universe begins with a cataclysm that generates space and time, as well as all the matter and energy the universe will ever hold. For an incomprehensibly small fraction of a second, the universe is an infinitely dense, hot fireball. The prevailing theory describes a peculiar form of energy that can suddenly push out the fabric of space. At 10-35 to 10-33 seconds a runaway process called “Inflation” causes a vast expansion of space filled with this energy. The inflationary period is stopped only when this energy is transformed into matter and energy as we know it.
    The Universe Takes Shape

    10-6 seconds
    After inflation, one millionth of a second after the Big Bang, the universe continues to expand but not nearly so quickly. As it expands, it becomes less dense and cools. The most basic forces in nature become distinct: first gravity, then the strong force, which holds nuclei of atoms together, followed by the weak and electromagnetic forces. By the first second, the universe is made up of fundamental particles and energy: quarks, electrons, photons, neutrinos and less familiar types. These particles smash together to form protons and neutrons.
    Formation of Basic Elements

    3 seconds
    Protons and neutrons come together to form the nuclei of simple elements: hydrogen, helium and lithium. It will take another 300,000 years for electrons to be captured into orbits around these nuclei to form stable atoms.
    The Radiation Era

    10,000 years
    The first major era in the history of the universe is one in which most of the energy is in the form of radiation — different wavelengths of light, X rays, radio waves and ultraviolet rays. This energy is the remnant of the primordial fireball, and as the universe expands, the waves of radiation are stretched and diluted until today, they make up the faint glow of microwaves which bathe the entire universe.
    Beginning the Era of Matter Domination

    300,000 years
    At this moment, the energy in matter and the energy in radiation are equal. But as the relentless expansion continues, the waves of light are stretched to lower and lower energy, while the matter travels onward largely unaffected. At about this time, neutral atoms are formed as electrons link up with hydrogen and helium nuclei. The microwave background radiation hails from this moment, and thus gives us a direct picture of how matter was distributed at this early time.
    Birth of Stars and Galaxies

    300 million years
    Gravity amplifies slight irregularities in the density of the primordial gas. Even as the universe continues to expand rapidly, pockets of gas become more and more dense. Stars ignite within these pockets, and groups of stars become the earliest galaxies. This point is still perhaps 12 to 15 billion years before the present.

    ===============================================================

    Birth of the Sun
    5 Billion Years Before the Present (BP)
    The sun forms within a cloud of gas in a spiral arm of the Milky Way Galaxy. A vast disk of gas and debris that swirls around this new star gives birth to planets, moons, and asteroids . Earth is the third planet out.
    Earliest Life

    3.8 Billion Years BP
    The Earth has cooled and an atmosphere develops. Microscopic living cells, neither plants nor animals, begin to evolve and flourish in earth’s many volcanic environments.
    Primitive Animals Appear

    700 Million Years BP
    These are mostly flatworms, jelly fish and algae. By 570 million years before the present, large numbers of creatures with hard shells suddenly appear.
    The First Mammals Appear

    200 Million Years BP
    The first mammals evolved from a class of reptiles that evolved mammalian traits, such as a segmented jaw and a series of bones that make up the inner ear.
    Dinosaurs Become Extinct

    65 Million Years BP
    An asteroid or comet slams into the northern part of the Yucatan Peninsula in Mexico. This world-wide cataclysm brings to an end the long age of the dinosaurs, and allows mammals to diversify and expand their ranges.
    Homo Sapiens Evolve

    600,000 Years BP
    Our earliest ancestors evolve in Africa from a line of creatures that descended from apes.
    Supernova 1987A Explodes

    170,000 Years BP
    A star explodes in a dwarf galaxy known as the Large Magellanic Cloud that lies just beyond the Milky Way. The star, known in modern times as Sanduleak 69-202, is a blue supergiant 25 times more massive than the Sun. Such explosions distribute all the common elements such as Oxygen, Carbon, Nitrogen, Calcium and Iron into interstellar space where they enrich clouds of Hydrogen and Helium that are about to form new stars. They also create the heavier elements (such as gold, silver, lead, and uranium) and distribute these as well. Their remnants generate the cosmic rays which lead to mutation and evolution in living cells. These supernovae, then, are key to the evolution of the Universe and to life itself.

    ===============================================================

    Crab Supernova Appears
    1054 A.D.
    A new star in the constellation Taurus outshines Venus. Chinese, Japanese, and Native American observers record the appearance of a supernova. It is not, however, recorded in Europe, most likely as a consequence of lack of study of nature during the Dark Ages. The remnants of this explosion are visible today as the Crab Nebula. Within the nebula, astronomers have found a pulsar, the ultra-dense remains of a star that blew up.
    Galileo Builds the First Telescope

    1609 A.D.
    Five years after the appearance of the great supernova of 1604, Galileo builds his first telescope. He sees the moons of Jupiter, Saturn’s rings, the phases of Venus, and the stars in the Milky Way. He publishes the news the following year in “The Starry Messinger.”
    Isaac Newton Describes Gravity

    1665 A.D.
    At the age of 23, young Isaac Newton realizes that gravitational force accounts for falling bodies on earth as well as the motion of the moon and the planets in orbit. This is a revolutionary step in the history of thought, as it extends the influence of earthly behavior to the realm of the heavens. One set of laws, discovered and tested on our planet, will be seen to govern the entire universe.
    Albert Einstein Publishes Theory of Relativity

    1905 A.D.
    The first of his many seminal contributions to twentieth century science, relativity recognizes the speed of light as the absolute speed limit in the universe and, as such, unites the previously separate concepts of space and time into a unified spacetime. Eleven years later, his General Theory of Relativity replaces Newton’s model of gravity with one in which the gravitational force is interpreted as the response of bodies to distortions in spacetime which matter itself creates. Predictions of black holes and an expanding Universe are immediate consequences of this revolutionary theory which remains unchallenged today as our description of the cosmos.
    Edwin Hubble Discovers that the Universe is Expanding

    1929 A.D.
    Edwin Hubble discovers that the universe is expanding. The astronomer Edwin Hubble uses the new 100-inch telescope on Mt. Wilson in Southern California to discover that the farther away a galaxy is, the more its light is shifted to the red. And the redder a galaxy’s light, the faster it is moving away from us. By describing this “Doppler shift,” Hubble proves that the universe is not static, but is expanding in all directions. He also discovers that galaxies are much further away than anyone had thought.
    Discovery of Quasars

    1960 A.D.
    Allan Sandage and Thomas Matthews find sources of intense radio energy, calling them Quasi Stellar Radio Sources. Four years later, Maarten Schmidt would discover that these sources lie at the edge of the visible universe. In recent years, astronomers have realized that they are gigantic black holes at the centers of young galaxies into which matter is heated to high temperatures and glows brightly as it rushes in.
    Discovery of Microwave Background Radiation

    1964 A.D.
    Scientists at the Bell Telephone Laboratories discovered microwave radiation that bathes the earth from all directions in space. This radiation is the afterglow of the Big Bang.
    Discovery of Pulsars

    1967 A.D.
    A graduate student, Jocelyn Bell, and her professor, Anthony Hewish, discover intense pulsating sources of radio energy, known as pulsars. Pulsars were the first known examples of neutron stars, extremely dense objects that form in the wake of some supernovae. The crab pulsar is the remnant of the bright supernova recorded by Native Americans and cultures around the world in the year 1054 A.D.
    Light from Supernova 1987A Reaches Earth

    1987 A.D.
    The light from this supernova reaches earth, 170,000 years after is parent star exploded. Underground sensors in the United States and Japan first detect a wave of subatomic particles known as neutrinos from the explosion. Astronomers rush to telescopes in the southern hemisphere to study the progress of the explosion and perfect models describing the violent deaths of large stars.
    Hubble Space Telescope Launched

    1990 A.D.
    The twelve-ton telescope, equipped with a 94-inch mirror, is sent into orbit by astronauts aboard the space shuttle Discovery. Within two months, a flaw in its mirror is discovered, placing in jeopardy the largest investment ever in astronomy.
    Big Bang Confirmed

    1990 A.D.
    Astronomers use the new Cosmic Background Explorer satellite (COBE) to take a detailed spectrum of the microwave background radiation. These studies showed that the radiation is in nearly perfect agreement with the Big Bang theory. Two years later, scientists used the same instrument to discover minute variations in the background radiation: the earliest known evidence of structure in the universe.
    Hubble Space Telescope Repaired

    1993 A.D.
    Astronauts aboard the space shuttle Endeavor succeed in correcting Hubble’s flawed optics, ushering in a spectacular new age of astronomy from space. Hubble’s greatest legacy so far: detailed images of galaxies near the limits of the visible universe.

    And let me add
    2008 A.D.
    James Hansen warns the World of climate change.

    2008 A.D.
    700 billion dollars at first is printed to stop the economic crisis.

    2016 A.D.
    Go ahead somebody write a little on this year come on give it a try.

  15. cg said on September 23rd, 2008 at 12:11pm #

    Don, all that from the same guys who didn’t even realize the intricacies of the rings around Saturn? Saturn, right here in our own backyard. Spitting distance.
    And they want to tell us how the universe began?
    What a crock.
    The big bang?
    I think MahaVishnu let a fart.

    http://bhagavata.org/images/bimages/garbod.vishnu.GIF

  16. Teresa said on September 23rd, 2008 at 12:19pm #

    Thank you for the most memorable quote I’ve read anywhere so far:

    Paulson is to finance capitalism what Rumsfeld is to military strategy.

  17. Donald Hawkins said on September 23rd, 2008 at 12:34pm #

    The Big Bang pretty much a done deal think of it as known. There is a Big unknown and that is how did it start. The unknown for many people is not one of there favorite subjects. It sure seems like most people like known things. Turn on the faucet and water comes out. Go to the store that is where the food is. Gas makes your car go. McCain or Obama. Bad debt print more money. Climate change a hoax because Exxon tells me so. The Earth is 5 thousand years old. I could keep witting for hours.

  18. Jonathan said on September 23rd, 2008 at 2:05pm #

    The big bang a done deal?? A known known, an unknown known, a known unknown or an unknown unknown?
    (The “big unknown” about the origin of the big bang is not so big really. According to Stephen Hawking a strong gravitational field can create all the necessary raw material)

  19. Donald Hawkins said on September 23rd, 2008 at 2:18pm #

    Raw material now your talking my language. Right now today how much raw material do we human’s use that the Earth can not replace. In percent. Water a raw material percent of rivers in China so polluted the water should not be put on the fields. Mexico is not far behind. California how many years before water a raw material a problem. Yes it can be solved but first you have to start. Have we started yet for real, no.

  20. Jonathan said on September 23rd, 2008 at 2:30pm #

    I agree but have become a bit disillusioned by the ‘we’. What does ‘we’ actually mean? Bemoaning our collective efforts (or lack thereof) in my observation does tend to absolve one of taking responsibility and creating a viable alternative.

  21. Donald Hawkins said on September 23rd, 2008 at 2:46pm #

    Now the big one for the ages all the ages where human’s are concerned.

    Typical imbalance between tectonic sources and sinks of atmospheric CO2 is about one ten-thousandths of a ppm of atmospheric CO2 per year. In one million years this would be a CO2 change of 100 ppm, which
    would cause large climate change. This natural rate of change should be compared with the
    present human-made increase of atmospheric CO2, which is about 2 ppm per year or ten thousand times larger than the natural rate.

    In 2016 if we continue to burn fossil fuels {that came from dinosaurs} at the present rate what then will not be an unknown?

    On the we thing if only we could get the truth out that would help. I know what is the truth sorry we are out of time 2+ 2=4 works for me.

  22. Jonathan said on September 23rd, 2008 at 3:04pm #

    I saw these figures on another post of yours and you are right – getting the truth out does help. Though I have noticed that accepting the truth does not always lead to the right action (or any at all) and we are good at deceiving ourselves (like you said in your previous post).
    Cheers

  23. Deadbeat said on September 23rd, 2008 at 3:44pm #

    The American people need to become like me and be a proud Deadbeat.

  24. Poilu said on September 23rd, 2008 at 5:49pm #

    Haven’t read all the comments yet, but…

    After nearly EIGHT YEARS of this Bush Reich’s bullshit, is anyone actually failing to discern the now too familiar ploy underlying this concerted effort to stampede the nation into yet another burst of folly?

    Once again, the Mayberry Machiavellis are deviously playing the FEAR card. Just a week or so ago, all was “well”, according to those SAME Bush Regime fabricators; now, suddenly, it’s a “dire emergency” requiring IMMEDIATE action, but only if that disproportionately (and inauditably) benefits the already obscenely wealthy who created this mess, with NO strings atached!

    See:
    “Paulson warns: No limits on CEO pay”
    http://www.wsws.org/articles/2008/sep2008/ceo-s23_prn.shtml

    Can we say “Shock Doctrine”?? I’ll bet we can. The Reich is attempting its final Putsch, to the detriment of ALL but themselves and their corporate accomplices. It’s a declaration of “martial law” for the economy, as one wise observer put it, with Paulson designated “FinanzFuehrer”.

    I say, “HELL, NO!”

  25. HR said on September 23rd, 2008 at 7:26pm #

    Fossil fuels come from decayed and compressed plant materials. There were never enough dinosaurs in existence to make anywhere near the fuel that has been consumed.

  26. Deadbeat said on September 23rd, 2008 at 9:10pm #

    HR,

    Thanks for the information. It is yet also another reason why I doubt the “Peak Oil” explanations.

  27. KK said on September 23rd, 2008 at 11:43pm #

    Solution?

    1] Let the Banks fail. We don’t need so many banks.

    2] Use the proposed $700 Billion to make sure that FDIC has enough money to pay the depositors of failed banks, invest in domestic projects for energy independence, create jobs etc..

    3] Fire Paulson and Bernanke. Impeach Bush.

  28. Donald Hawkins said on September 24th, 2008 at 6:14am #

    Oil was made over millions of years from tiny plants and animals. … The plankton that lived in the Jurassic period made our crude oil. Very good HR and that is the direction we are now headed back to the Jurassic with a few stops along the way. I think about 5 years ago I sent an e-mail to one of the financial channels and told them this little fact as I could tell they thought oil came from Dinosaurs. We may not make it but I’ll be damned if I am not going out without a fight and living a lie because some think that is the best way to go not for me.

  29. Poilu said on September 24th, 2008 at 5:48pm #

    KK:

    Hear, hear! That’s one of the most sensible solutions I’ve heard yet. If “free market” capitalism is so all-fired wonderful, it certainly ought to be able to correct itself in a FREE market. (Or have all those inflated claims for the “benefits” of de-regulation over the years merely been so much horsefeathers?)

    Come on, “Captains of Industry”! Just lash yourselves to the corporate mast and go down with the ship like men! Then at least we could perhaps revere your memory, rather than revile your innate greed and cowardice exhibited by comfortably surviving as the vilest of “Welfare Queens”.