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milpo (44.09)

Dear Mr. President:



February 23, 2009 – Comments (4)


Please stop wasting money.  Don't believe your advisors. There is simply not enough money in the treasury to bailout J.P. Morgan Chase, Citigroup, Bank of America, and HSBC.  Just look at the last quarterly report from your own Comptroller of Currency, who is the administrator of these banks. You have to let them fail.  The whole world would be much better off if these banks simply disappeared.



And please consider the following by Andrew Hughes:

Bailout This!The Stabilization of the Financial Sector: The Holy Grail of Economic Salvation
by Andrew Hughes
Global Research, January 27, 2009
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Idiocy is usually described as "endlessly repeating the same process, hoping for a different result". Lawrence Summers, Timothy Geithner, Nancy Pelosi, Joe Biden et al are straining at the leash to get the Bailout Ball rolling once again. The stabilization of the financial sector, as elusive as it has been so far, has become the Holy Grail of Economic salvation. That makes $8.5 Trillion worth of trying and $0 of result. The Knights of the Oval Table are gathered to plan their mission as their beleaguered subjects are trying to batter down the castle gates.  It's no small wonder that Geithner wants to get the money out the door as soon as the end of this week.

The most recent report from the Comptroller of the Currency seems to have gone unnoticed in Washington and the press. If banks are not lending because of increased capital requirements in the face of Credit Default Swaps, other derivatives and loan defaults then the report goes a long way in describing exactly why.

Credit Exposure to Capital ratio. Amounts in $Millions




Credit Exposure to Capital Ratio

J.P. Morgan Chase








Bank Of America








The assets comprise largely of Real estate, residential mortgage, student, car and credit card loans. With the rise in defaulting mortgages, delinquent credit card and other debt the problem can only get worse. To recapitalize the banks to the point where exposure is low enough to encourage lending would take trillions and that's before any more fallout from the collapsing economy. Lending also requires creditworthy borrowers, the number of which is in a nosedive. The $165 Trillion in notional derivatives and the associated credit risk related to $15 Trillion in Credit Default Swaps illustrated below is the poison apple that the taxpayer has been forced to bite into.


Total Credit Derivatives

J.P. Morgan Chase




Bank Of America




When the "credit crunch" began and Washington began the rush to solve the problem with taxpayer cash, no accounting of this derivative nightmare was ever brought to bear. In all the deliberations and press releases there was not a single mention of the fact that the primary cause of the bank collapse was due to these "instruments of mass destruction". It was widely discussed in the blogosphere but, like the real reasons for invading Iraq, never made it in to the mainstream media. As with Iraq, one would have to assume that the reason was to obfuscate the facts and cajole a shocked public in to accepting as a remedy whatever was proposed by Paulson, Bernanke and Bush. The latter had to be completely aware of the OCC data at the time and to assume that they did not is simply not credible. It would have been completely obvious that $700 Billion would do absolutely nothing to alleviate the crisis. As witnessed in the ensuing months since the TARP bill, how the money was used has been obfuscated and concealed.This was always a scam.

Even as the economic indicators broke one record after another, the recipients of the TARP funds were selling Credit Default Swaps to each other, betting on each other's downfall. They knew the game was up and wanted to profit on the way down as much as they had on the way up. All the major Banks on Wall St. are seeing mounting losses and the failure of one will increase the losses of the other. They are joined at the hip and will fall like a house of cards.

The question begs to be asked, and this is where the cynic in me dominates, what's the plan? When they do fall will the Government nationalize the last one standing for the good of the country and socialize even more of the losses? This would be the coup of the millennium and give birth to a new Governmental paradigm. To have this complete before the economy and society have completely broken down would be a good reason to declare a real National Emergency and declare Martial Law, the legislation, executive orders and infrastructure of which are already in place. How can one not be a cynic when we reflect on what has happened so far?

The numbers are in and the scam stands exposed to those who will look. Which way the story unfolds from here is anyone's guess. But I am ready to bet that Congress will not include the OCC data in the upcoming debate on the next round of cash for the Banks.

Andrew Hughes is a frequent contributor to Global Research.  Global Research Articles

4 Comments – Post Your Own

#1) On February 23, 2009 at 9:27 PM, milpo (44.09) wrote:

Correction in OCC link. Sorry.  Worth looking at. 

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#2) On February 23, 2009 at 9:29 PM, Varchild2008 (84.49) wrote:

Doesn't matter what us Americans think or say.  All we can do is grab a bag of Marshmellows and a stick and have ourselves a hot, juicy, snack while America burns to the ground.

This is history repeating itself.  We are in YEAR 1 of Jimmy Carter's 1st term in office.

President Obama is already pumping up the GLOOM and DOOM language in exactly the same tone of voice and style as Jimmy Carter's "We have lost all hope" speech. 

It is so obvious what is happening that it amazes me.
Jim Cramer is right though.  Our Stocks are TOAST unless we have Supermarkets like Walmart....nothing else will survive.

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#3) On February 23, 2009 at 11:01 PM, gryfonclaw (25.77) wrote:

I guess our leaders dictate to us what we're feeling, eh?

I suppose it's true that the more one repeats a lie, the more truthful it seems...

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#4) On February 24, 2009 at 7:07 AM, jstegma (28.53) wrote:

I agree that Obama and friends don't know what they're doing.  However, I don't really think Bush and friends knew either.  The problem that is unraveling is that there was a lot of optimism about Obama coming in and bringing change or hope or whatever, and that it would make things different somehow.  Go back and read some of the articles written just before and just after his inauguration.  That optimism is fading fast and the markets are crashing because of that change in sentiment.

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