You Ain’t Seen Nothing Yet

The problems we face today cannot be solved by the minds that created them.

– Albert Einstein

Obama hasn’t even been sworn in yet, and already the Wall Street cheerleaders are celebrating his first great triumph. According the pundits, the stock market staged a surprise 494 point rally on Friday because — get this — it was announced that Timothy Geithner would be appointed Obama’s Treasury Secretary.

Timothy who?

What nonsense. The sudden turnaround in stocks had a lot more to do with short-covering than anything else, but don’t let that get in the way of a good story. Even so, the last minute surge on the NYSE couldn’t stop another week-long bloodbath that ended with the Dow and S&P 500 tumbling another five percent. That’s not to say that Geithner is not bright and talented guy. He is, and so is his White House counterpart, Lawrence Summers. But the media hype is way overdone. Geithner doesn’t drive the markets and he isn’t “change you can believe in.” In fact, he’s a protege of Henry Kissinger, a member of the Council on Foreign Relations, and has the same political pedigree as his predecessor, Henry Paulson. They’re both part of the ruling fraternity and their views of the world are nearly identical. There’s no doubt that Geithner will be more competent and effective than Paulson but, then again, who wouldn’t be? Paulson may be the biggest flop at Treasury since Andrew Mellon steered the country onto the reef during the Great Depression. The recent flap over the Troubled Assets Relief Program (TARP) just proves the point. After convincing Congress to pass a $700 billion bailout plan — by invoking the specter of economic Armageddon and martial law — the former G-Sax chairman proceeded to set up a program for buying back mortgage-backed securities (MBS) and other junk paper from his banking buddies. Paulson argued that removing the crappy loans would help the banks get back on their feet and start lending again. Of course, no one could really figure out how the process was going to be executed, but maybe that’s just nit-picking. Fortunately, Paulson never got a chance carry out his plan. He was torpedoed by the stock market which plunged seven days in a row losing nearly 20 percent of its value until Paulson threw in the towel and did what 200 economists had suggested from the very beginning — buy preferred shares in the banks so they could rev-up their credit engines again.

Will Geithner be that stubborn? Not likely. And Paulson is a hard-nosed class warrior, too. Notice how every dime of the bailout has gone to banksters while all the efforts to provide relief to autoworkers, consumers or struggling homeowners have been blocked. Anyone who isn’t in the upper 1 percent income bracket can forget about getting a helping hand.

Paulson shoveled $25 billion to Citigroup without even sending in the regulators to see if they were solvent or not. How smart was that? Citi’s stock has dropped 93% from its all-time high in May 2007 and ended Friday at a measly $3.77 per share. It’s market cap has gone from $280 billion to a skinny $20 billion in less than a year. Without a lifeline from the government, they won’t make it through December; the short-sellers will carve them up like a smoked ham. Will Paulson come to Citi’s rescue with more public cash? Absolutely. So why won’t he support a similar bailout for the Big Three auto-makers who employ nearly a million people?

There was a clue in Sunday’s paper as to why Paulson is stiffing the car companies. According to UPI :

GMAC Financial Services said Thursday it had applied to the U.S. Federal Reserve for bank holding company status, a step toward securing federal aid. The auto and home financing company said it had also submitted an application to the U.S. Treasury to participate in the Capital Purchase Program set up in the $700 billion financial firm bailout program known as the Emergency Economic Stabilization Act.

As a bank holding company, GMAC would obtain increased flexibility and stability,” the company said in a statement.

So why would GMAC want to become a bank holding company if General Motors is headed for the chopping block? Could it be that the government is working out a secret deal with management to put the company through Chapter 11 (reorganization) just so it can crush the union and eliminate their pension and health care benefits in one fell swoop?

You bet. Car workers will be reduced to slave wages just like they are in sunny Alabama where sharecropping has moved indoors. And — no surprise — the Democrats are right on board with this labor-busting charade. The auto industry isn’t going to be shut down. That’s just more fear-mongering like the blather about martial law and WMD. Detroit is going to be transformed into a workers gulag; Siberia on Lake Michigan, which is why Paulson is withholding the $25 billion. It’s plain old class warfare.

Paulson has tried to spread the myth that his bailout eased the credit crunch, but it’s not true. The stress in the credit markets was caused by very precise factors (Libor, the TED Spread, OIS-Libor) which were intentionally allowed to rise to perilous levels so Paulson could coerce Congress into giving him his bailout loot. It wasn’t until Congress caved in that the FED addressed those market indicators by (setting up a new facility and) providing an explicit government guarantee on commercial paper and money markets. That’s what made Libor go down, not Paulson’s misguided TARP program which did absolutely nothing.

So, yes, the banks do need to be recapitalized. But, no, TARP did not address the specific conditions in the credit markets which were causing the problems. And, Yes, Congress is too blind to see that they were duped by a top-hat Wall Street land-shark who pulled the wool over their eyes and made off with $350 billion.

Geithner will never engage in the same cynical antics as Paulson. It was Paulson who set up the Super SIV (Structured Investment Vehicle) after two Bear Stearns hedge funds blew up so he could help Citigroup and other financial institutions pawn-off their off-balance sheets garbage to investors by placing the US treasury’s seal of approval on the rotten paper; another shameless rip-off shrink-wrapped in the Stars and Stripes.

Paulson’s “Hope Now” (1-888-995-HOPE) was another scam that was supposed to help banks and homeowners work out the details for a rate freeze on mortgage resets. Paulson assured the public that 500,000 homeowners would take advantage of the program, which would dramatically reduce rate of foreclosures. As it stands, Hope Now hotline has provided counseling to just 36,000 borrowers. “Representatives have suggested loan workouts for fewer than 10,000 of them, a small fraction of borrowers in need.” (“Earlier Subprime Rescue Falters,” Wall Street Journal)

Only 10,000 homeowners, and Paulson promised 500,000?

Another slight miscalculation. The real purpose of Hope Now was to derail Sheila Bair’s FDIC from enacting a program that has a real chance of helping people stay in their homes. Paulson doesn’t like that idea; after all, there’s still plenty of freeway overpasses for people to sleep under.

Paulson also initiated “Project Lifeline,” which targeted homeowners who were delinquent 90 days or more on their mortgages. Here’s the run-down of how it works:

“Project Lifeline involves servicers sending letters to borrowers — prime, Alt-A, or subprime, we’re past pretense on that part — who are very seriously delinquent (90 days or three payments down or more). The letter says that if the borrower contacts the servicer within ten days, agrees to homeowner counseling, and provides sufficient financial documentation that the servicer can consider a case-by-case, deep-analysis style modification of the mortgage terms, the servicer will agree to put the foreclosure process on hold for 30 days while the workout is considered. If the borrower fails to respond to the letter, foreclosure proceeds.”

Ever heard of Project Lifeline? No one else has either. That’s because it was just another one of Paulson’s PR chimeras that passed into oblivion as soon as it served its purpose of making it look like the administration really gives a damn. That’s a laugh.

Enter Geithner

Geithner is nothing like Paulson. He’s discreet, practical, non ideological and diplomatic. His job is to find a way to plug the holes in a banking system that is under-capitalized by a whopping $2 trillion dollars while trying to keep the broader economy from crashing to earth. He’s already concocted a stimulus plan (with Summers help) that should be big enough to get the country through the first quarter of ’09 ($700 billion), but it will take sustained government spending via infrastructure and green technologies programs to make up for the staggering losses to consumer spending. Expect the red ink to flow knee-deep from the purple mountains majesty all across the fruited plains, and pray that China and Japan keep buying US Treasuries or the country will face historic hyper-inflation.

Geithner knows that his mandate far exceeds his job description. Consumer confidence is at record lows because the public has lost faith in their institutions. The fear-mongering and the deception of the last 8 years have taken their toll; the pessimism is palpable. But market-based systems require confidence to function properly, otherwise people withdraw their savings and hoard their money. And that is exactly what is happening. We have entered a period of extreme risk aversion where there’s been a steady run on the financial system; investors have pulled their money out of commercial paper, structured investments, money markets, corporate bonds, and securities. The markets are in a state of panic. Investors are moving into safe havens like Treasuries while consumers are cutting back on spending. The whole system is contracting. The same thing happened during the Great Depression. The similarities are stunning. In his “1931 and 2008: Will Market history Repeat Itself,” Jason Zweig says:

Over the two weeks ended Nov. 20, 2008, the Dow Jones Industrial Average fell 16%. Over the two weeks ended Nov. 20, 1931, the Dow fell 16%.

If you think that is scary, consider this: In the final five weeks of 1931, the Dow fell 20% further. Then it went on to lose yet another 47% before it finally hit rock-bottom on July 8, 1932

It is vital to realize that markets are never under some obligation to stop falling merely because they have already fallen by an ungodly amount. It also is vital to explore how bad the worst-case scenario can get and to think about how you would respond if it comes to pass.

When it comes to worst-case scenarios, 1931-1932 is it. When the Dow finally stopped going down, in July 1932, it had lost 88% in 36 months. At that point, only five of the roughly 800 companies that still survived on the New York Stock Exchange had lost less than two-thirds of their value from their peak in 1929. (Wall Street Journal)

Geithner’s job is to restore confidence through transparency and consistency. No more lying. No more fudging the numbers to keep the public in the dark. Investors are already voting with their feet. It will take trust to get them to come back. Geithner has a clean slate to work with, but if he chooses Paulson’s route — the path of deception — he’ll fail, too. He’s got one chance to make good; otherwise….To his credit, he has made statements confirming his determination to reform the system. This is what he said to Congress in recent hearings:

The United States will have to have to undertake substantial reforms to our financial system. There was a strong case for reform before this crisis, our system was designed in a different era for a different set of challenges. But the case for reform is stronger today. Reform is important because a strong and resilient financial system is integral to the performance of any economy. . . . I think the severity and complexity of this crisis makes a very compelling case for a broad and comprehensive reassessment of how we use regulation to achieve an appropriate balance between efficiency and civility. This is extremely complicated both in terms of the tradeoffs involved but also in terms of building the necessary consensus involved both here in the United States and around the world. It is going to require significant changes in the way we regulate and supervise financial securities; changes that in my view, need to go well-beyond modest adjustments to some of the specific capital charges in the existing capital regime as it applies to banks.

Good. Investors want rules, guidelines, supervision, regulations and most of all accountability. Justice should be the organizing principle in the financial system just as it is in the legal system. That means securities fraud has to be investigated and prosecuted. No free passes for banking mandarins and toffee-nose fund managers. Break the law and go to jail, just like Jeffrey Skilling. This is the biggest financial meltdown in US history and not one CEO or CFO has even been indicted. Instead, the SEC wastes its time harassing Dallas Maverick’s owner Mark Cuban in a politically-motivated witch hunt. What a fiasco. Why not clean up the cesspool on Wall Street first. That’s where the problem is and that’s how one reestablishes credibility.

Then there’s the heavy lifting of rebuilding financial markets while hedge fund redemptions are approaching 50 percent, corporate bonds have dropped by nearly half, commercial property is tanking, consumer spending is in the dumps, and the housing market continues to crumble. That’s not an easy task. And, at the same time, banking behemoth Citigroup needs an immediate injection of capital just to maintain operations. Once again, the Treasury will assume a gigantic liability to avoid wider damage to the system. According to the Wall Street Journal:

The federal government agreed Sunday to take unprecedented steps to stabilize Citigroup Inc. by moving to guarantee close to $300 billion in troubled assets weighing on the bank’s books, according to people familiar with details of the plan.

Treasury has agreed to inject an additional $20 billion in capital into Citigroup under terms of the deal hashed out between the bank, the Treasury Department, the Federal Reserve, and the Federal Deposit Insurance Corp….

In addition to the capital, Citigroup will have an extremely unusual arrangement in which the government agrees to backstop a roughly $300 billion pool of its assets, containing mortgage-backed securities among other things. Citigroup must absorb the first $37 billion to $40 billion in losses from these assets. If losses extend beyond that level, Treasury will absorb the next $5 billion in losses, followed by the FDIC taking on the next $10 billion in losses. Any losses on these assets beyond that level would be taken by the Fed.

What a nightmare. In a conference call held last Friday, Citi’s chief executive Vikram Pandit boasted that Citi “had a fantastic business model” and that “we are one of the best counter-parties in the world based on our capital, and based on our liquidity.” Indeed, Pandit can count on virtually limitless liquidity from this point on.

Also, keep in mind, that when 2 Bear Stearns hedge funds went belly up in July 2007, the experts all agreed that there were probably only $200 to $300 mortgage backed securities (MBS) in the whole system. Now we find out that there are $300 billion on Citi’s balance sheet alone! More lies. In truth, there were more than $5 trillion in MBS created between 2000 and 2006. A large portion of those are held by banks. That means more trouble ahead.

You Ain’t Seen Nothing Yet

So how will Geithner and Summers deal with the problems they’ll be facing just two months from now?

They’ll do whatever they need to do to stabilize the financial system and to get consumers spending again. That means at least another $2 trillion added to the ballooning national debt and some extremely dodgy ways of getting liquidity into the system.(With the Fed Funds rate already at 1 percent, monetary policy is limited)

Larry Summers, who will serve as Obama’s chief economics advisor, summed up his plan like this to Bloomberg News:

“At first I believed that any stimulus package should be timely, targeted, and temporary. But the situation has deteriorated so significantly from that point that I would now go for speedy, substantial, and sustained over a several year interval.”

But how will Summers get money into the system if monetary policy has been ineffective and the banks are not providing sufficient credit?

Economist Nouriel Roubini answers that question in his latest blog entry on Global EconoMonitor web-site:

The Fed (will) directly purchase long term government bonds as a way of pushing downward their yield and thus reduce the yield curve spread. But even such action may not be very successful in world where such long rates depend as much as anything else on the global supply of savings relative to investment. Thus, even radical action such as outright Fed purchases of 10 or 30 year US Treasury bonds may not work as much as desired. (MW: In other words, the Fed will buy its own debt to control long-term rates)

Next, the Fed could make “outright purchases of corporate bonds (high yield and high grade); outright purchases of mortgages and private and agency MBS as well as agency debt; forcing Fannie and Freddie to vastly expand their portfolios by buying and/or guaranteeing more mortgages and bundles of mortgages; one could decide to directly subsidize mortgages with fiscal resources; the Fed (or Treasury) could even go as far as directly intervening in the stock market via direct purchases of equities as a way to boost falling equity prices. Some of such policy actions seem extreme but they were in the playbook that Governor Bernanke described in his 2002 speech on how to avoid deflation. They all imply serious risks for the Fed and concerns about market manipulation.

Finally, the Fed could try to follow aggressive policies to attempt to prevent deflation from setting in: massive quantitative easing; such as letting the dollar weaken sharply, flooding markets with unlimited unsterilized liquidity; talking down the value of the dollar; direct and massive intervention in the forex to weaken the dollar. (MW: Intentionally weakening the dollar to spur consumer spending and exports)

The bottom line is that Geithner and Summers will have to recapitalize the banks and deal with the massive corporate defaults at the same time they initiate their strategy for pumping liquidity into the system to keep the economy limping along. It’s a tall order and there’s no guarantee of success.

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

14 comments on this article so far ...

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  1. Don Hawkins said on November 26th, 2008 at 3:46pm #

    The market’s I have to admit are complex sort of. The biggest part of that complexity is complex to seem complex. At any given time only a few people of the 6 plus billion can understand only parts of it. Now the Earth works not in complex terms but basic terms. The hardest part the last ten years was to see back in time history and people we are in big trouble not only from what we see in the past but what we now see in the present. Can you see into the past I mean see the past happen of course Key West as the sun goes down guess what the sun you are looking at is 8 minutes in the past. Then look at the night sky those stars are millions and billions of years in the past. They know that there are galaxies out there far far away that we can’t see because the Universe is expanding and those galaxies are moving away from us faster than the speed of light. There is still time to slow climate change maybe but we need to move faster than the speed of light. For us human’s there is one way imagination it could just work. Worth a try, yes. Have a good one.

  2. bozh said on November 26th, 2008 at 5:14pm #

    do gangs which r devoid of pangs (when it comes to oppression/violence) care ab understandings?
    don’t gangs care only ab own wellbeing? ie, have jewelry, secured palaces, big cars, shares, power?
    since gangs or the biggest one in the world, the one in US, knows well there is no knowledge ab economy/markets, they hire ‘experts’ who appear on media and these expert then ‘tell’ us what’s going on.
    as some people say, one can only describe what is going on; then form conclusions, and later recommend what ought to be done.
    but descriptions (facts), people tell me, r also theoretical. thus whatever one says cld be in error since factual statements (descriptions) can be evaluated as mere theory and not as knowledge.
    the ‘experts’, generals, politicos oft first form a conclusion and defend it by more conclusions.
    if facts enter the picture, only those facts r admitted which support one’s theories, conclusions.
    i’m sure that 80 of people anywhere, and not just canada, wld have no clue what i’m talking about.
    another method of obnubilation is to relabel what one had said and then use his/her label as proof that the other person is wrong.
    eg, iraq invasion was undertaken almost solely based on conclusions; it’s been defended mostly by other conclusions, interspersed w. peripheral facts.
    one conclusion, the most important one, was studiously left out: US is in iraq largely or solely in order to remain in iraq for decades and from there to attack or threaten othe lands.
    saddam was labeled as epitome of evil and had to go. and natch, if one is labeld evil, that person must be killed.
    this means that US can merely label anyone it doesn’t like “evil” and from this conclusion form another that we have to invade his country in order to eliminate the evil.
    this reasoning is unsane. but i cld be wrong. perhaps most people know all this? thnx

  3. Don Hawkins said on November 26th, 2008 at 5:35pm #

    markets, they hire ‘experts’ who appear on media and these expert then ‘tell’ us what’s going on. They almost always tell people what they want them to think is going on. Let’s just say the truth is not high on there list. I know what is the truth well 1+1= 2 works for me but these so called experts you see on TV who talk about the economy seem to have there own math kind of like a parallel universe and as we all see now badly flawed math. But have friends in high places who also use this funny math and not everybody knows this yet.

  4. Don Hawkins said on November 26th, 2008 at 6:21pm #

    Let’s say it again it never hurts and that is these people on Wall Street or China street or you name the country street 1% of 6 billion plus have 90% of the wealth and they do it with that funny math. The people who use the 1+1=2 math and have unlocked the secrets of the Universe would look at this math and probably say are you nut’s and probably have. Many would also say how could this possibly work out well and as we see it doesn’t. We need a new way of thinking and at light speed could just work. Think Frank!!

  5. Don Hawkins said on November 26th, 2008 at 7:08pm #

    Embers of election night elation will glow longer than any prior election. Glowing even
    in other nations, and for good reason. We are all tied together, more than ever, like it or not.
    Barack Obama’s measured words on election night, including eloquent recognition of
    historic progress, from the viewpoint of a 106-year-old lady, still stoke the embers. But he
    was already focusing on tasks ahead, without celebratory excess.
    Well he should. The challenge he faces is unprecedented. I refer not to the inherited
    economic morass, as threatening as it is. The human toll due to past failures and excesses
    may prove to be great, yet economic recessions, even depressions, come and go.
    Now our planet itself is in peril. Not simply the Earth, but the fate of all its species,
    including humanity. The situation calls not for hand-wringing, but rather informed action.
    Optimism is fueled by expectation that decisions will be guided by reason and evidence,
    not ideology. The danger is that special interests will dilute and torque government policies,
    causing the climate to pass tipping points, with grave consequences for all life on the planet.
    The President-elect himself needs to be well-informed about the climate problem and its
    relation to energy needs and economic policies. He cannot rely on political systems to bring
    him solutions – the political systems provide too many opportunities for special interests.

    Tax and 100% dividend. A “carbon tax with 100 percent dividend” is required for
    reversing the growth of atmospheric CO2. The tax, applied to oil, gas and coal at the mine or
    port of entry, is the fairest and most effective way to reduce emissions and transition to the
    post fossil fuel era. It would assure that unconventional fossil fuels, such as tar shale and tar
    sands, stay in the ground, unless an economic method of capturing the CO2 is developed.
    The entire tax should be returned to the public, equal shares on a per capita basis (half
    shares for children up to a maximum of two child-shares per family), deposited monthly in
    bank accounts. No bureaucracy is needed. James Hansen

    FRANK communication with the public is essential. At present, all around the world,
    governments are guilty of greenwash, an implausible approach of goals and half-measures
    that will barely slow the growth of CO2. The world, not just the United States, needs an open
    honest discussion of what is needed. It is a tremendous burden to place on the Presidentelect,
    who seems to be the only potential candidate. The only chance seems to be if he
    understands the truth – the whole truth.
    Young people realize that they, their children, and the unborn will bear the consequences
    of our actions or inactions. They do not blame their parents, who legitimately ‘did not know’
    what they were starting. Young people have recently worked hard to influence the
    democratic process. Now they expect the system to take appropriate actions. If that does not
    happen, surely they will begin to raise their voices louder. James Hansen

    “You must unlearn what you have learned.” “Once you start down the dark path, forever will it dominate your destiny, consume you it will…”

    Adventure. Heh! Excitement. Heh! A Jedi craves not these things.

    “You will know (the good from the bad) when you are calm, at peace. Passive. A Jedi uses the Force for knowledge and defense, never for attack. ” Yoda

    Just lines from a movie a little more than that. The entire tax should be returned to the public.

  6. Don Hawkins said on November 27th, 2008 at 8:15am #

    “From Middle to Shaky Ground” shows some worrying trends in America’s households, including:
    * The median financial assets held by middle-class families declined by 22 percent. This means that for every dollar in median assets that middle-class families held in 2000, they held just 78 cents in 2006. These figures do not include home equity and therefore do not reflect additional losses families may have experienced due a decline in their home values.
    * Monthly housing expenses for the middle class rose by 9 percent. As a result, the percentage of middle-class families who match the Department of Housing and Urban Development’s definition of “housing burdened” rose from 31 percent in 2000 to 37 percent in 2006.
    * The number of middle-class families in which at least one member lacks health insurance grew from 18 percent in 2000 to 25 percent in 2006.
    “Declines such as these in any one area are alarming,” said Tom Shapiro, Professor of Law and Director of the Institute on Assets and Social Policy at Brandeis. “Bad news across a range of areas supporting financial stability means the middle class is confronting its greatest challenge since the Great Depression.” Brandeis University

    Well heck where is the money going. I did the math and something is very very wrong.

    And today this thanksgiving 2008 the insanity we see out of India on the News. Fox of course has it’s fair and balanced approach and CNN seems to have the answers from some. Deepak Chopra was on Larry King last night and what he said was good stuff. I don’t remember the exact words but something like it doesn’t matter if you drop a bomb from 10 thousand feet or what we see in India or Iraq a life is a life. We need to get away from this terrorism thinking that it is against the United States it is a Worldwide problem and this is after they were asking how many Americans died in the attack and in between the pictures on the news they go to commercial and you hear someone tell you to buy this new stuff a cement that you can pull a 500 ton train with or it shows a drinking glass with a hole in it and they put this cement on the outside of the glass to fix the hole, fascinating then back to the news still wondering why the World seems a little mixed up. Well got to go the parade is on and they are singing America the Beautiful and oh look people along the parade route holding signs that say will work for food wait the camera just went back to the parade I think that sign said that.

    “You will know (the good from the bad) when you are calm, at peace. Passive. Use the Force for knowledge and defense, never for attack. ” Think Frank

  7. mary said on November 27th, 2008 at 11:35am #

    Don I think you will find that Deepak Chopra was saying this:

    Chopra: Attack prompts tough questions
    [..]
    King: Is it because the war on terrorism really can never be won because the terrorists (inaudible)?
    Chopra: Because it’s an oxymoron. It’s an oxymoron, Larry, a war on war, a war on terrorism.
    You know, terrorists call mechanized death from 35,000 feet above sea level with a press of a button also terror. We don’t call it that, because our soldiers are wearing uniforms. They don’t see what is happening, and innocent people are being killed. So, you know, terror is a term that you apply to the other.

    King: Thanks, Deepak Chopra, as always, extraordinarily enlightening.

    In other words, we, the US and UK, are reaping the whirlwind from the wars in Iraq and Afghanistan. Pilotless drones (the devilishly named Predators) are now bombing innocent Afghani family parties including children. A recruiting sergeant for terrorism if ever there was one and perhaps Obama’s choice of Clinton and Gates and his promising that the war in Afghanistan will be stepped up is raising the anger levels.

    This is the link to the CNN programme.
    http://edition.cnn.com/2008/WORLD/asiapcf/11/26/king.chopra.mumbai/index.html?eref=rss_topstories

  8. Don Hawkins said on November 27th, 2008 at 2:04pm #

    Mary I read that link thanks and Chopra said,” And it’s not enough for us to worry about Westerners being killed and Americans being killed. Every life is precious over there. We have got to get rid of this idea that this is an American problem or a Western problem. It’s a global problem, and we need a global solution, and we need the help of all the Muslims, 25 percent of the world’s population, to help us uproot this problem”.

    Is he right, I don’t know. Use the Force for knowledge and defense, never for attack.

  9. bozh said on November 27th, 2008 at 3:15pm #

    a person who says there is god is welcome now to look for him. one caveat: do it after u die;for ye shall have an eternity of idle time to look for him.

  10. Don Hawkins said on November 27th, 2008 at 4:31pm #

    I read that link to CNN again then again. Then on CNN one man from India said that this is India’s 911 and they thought this could not happen but it did. Then he said he thinks the government needs to get tuff. Another report today Pakistan asked India not to jump to conclusions, oops. Will reason overcome the instincts on all sides and cooler heads prevail let’s hope so as we wouldn’t have to worry about climate change for a few years if India exercised it’s mind and jumped to conclusions (cut to commercial).

    Have you tried the new way of thinking yet? It comes in two CD’s and here’s the best part no money up front we will bill you later if you like our product. Just try it for a month and if you like it we pay the shipping. We sent you the first CD in our new way of thinking called unlearning what you have learned and it comes in all languages known to man. If you like our first CD the second is even better and we pay the shipping. The second is called reason to overcome your instincts and again comes in all languages known to man. All we are asking is try it. What have you got to lose?

  11. Petronius said on November 28th, 2008 at 4:28am #

    western thought hinges on a host of cliches, terrorism, al quaida, middle class for proletarians which we are all now except for the sweethearts at the head of general motors, goldman sachs etc.
    please start thinking clearly, we are oppressed while oppressing
    others in this world, we must stop this dog eat dog !

  12. Marton Zsenei said on November 28th, 2008 at 3:42pm #

    The full truth: the capitalism is in his final crisis. The capitalism cannot exist without growth but there are limits to growth. This need of capitalism created the consumer society which now can destroy the Earth.
    This solutios can onlybe a non-capitalist, but this solution hardly comes from Obama.

  13. Don Hawkins said on November 28th, 2008 at 3:55pm #

    Marton very clear simple words and true.

  14. giorgio said on December 5th, 2008 at 12:29pm #

    The trouble too is that real wealth is concentrated in the hands of about 1% of people. If this wealth was distributed in a standard statistical bell shaped curve over all mankind the failure of a few fat cats would not even cause a ripple….