My $.02 -: No, I didn't mistype the headline, I spelled it like it now is; the United Socialist States of America (USSA). As you read below, the jackals & vultures are looking to make a killing from the gov't bailout. The victims are you & I, taxpayer or not, every American citizen. Washington is poised to open our Treasury coffers, and every greedy, self-serving financial jackal & vulture are looking to tear out as much flesh as they can carry. They haven't learned a thing...
I implore you, beg you to raise your voice against this bailout action. Contact your Senators & Representatives NOW. If this bailout becomes law, we will have sealed America's
doom as a viable democratic Republic.
Let me explain what the future holds if our gov't continues this course: The bailout will fail. Our nation will be so deep in debt to foreign entities (China, North Korea, Saudi Arabia, Iran, Europe, Russia, et al; National Investment funds, banks) that we cannot make repayments, and they will own our government and our entire financial & economic structures.
The dollar will be worthless, more so that it is already. We will default & collapse, and Europe will be our "savior", so to speak. America will become a vassal state of the European
Union. Socialism will be the rule, even under a semi-democratic guise. Our lives will be directly dictated to, & controlled by, foreign leaders. Sure, we'll have representation, but in
no position of influence. We'll just nod our heads yes to whatever they demand. Your home, your job, even your actions will no longer be yours, only your thoughts.
America has never been so vulnerable, we have exposed our weaknesses; our God-lessness, our greed, our material lust, our lack of principle, character, honesty & integrity. I warned
that this was coming; not by my might, nor by my power, but by His Spirit. The Lord God said, "Go, set a watchman, Let him declare what he sees."Isaiah 21:6. I've been declaring, but who is listening & heeding?
Whether or not you take me seriously, or chuckle at my lunacy, the "handwriting is on the wall". Think, the recent hurricane Ike victims in Galveston now wished they had listened & taken to higher ground. Never mind the 400+ people unaccounted for, most likely carried out to sea...
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PARIS — The financial crisis that began in the United States spread to many corners of the globe. Now, the American bailout looks as if it is going global, too, a move that could raise its cost and intensify scrutiny by Congress and critics.
Foreign banks, which were initially excluded from the plan, lobbied successfully over the weekend to be able to sell the toxic American mortgage debt owned by their American units to the Treasury, getting the same treatment as United States banks.
On Sunday, the Treasury secretary, Henry M. Paulson Jr., indicated in a series of appearances on morning talk shows that an original proposal introduced on Saturday had been widened. “It’s a distinction without a difference whether it’s a foreign or a U.S. one,” he said in an interview with Fox News.
The prospect of being locked out of the bailout set off alarm bells among chief executives of overseas banks whose American affiliates also hold distressed mortgage-related assets, like Barclays and UBS. The original text provided access to the $700 billion bailout for any financial institution based in the United States.
As the day wore on, some raised their concerns with the Treasury Department, arguing that foreign institutions were both big employers and major players in the American capital markets. By Saturday evening, the language had been changed to allow any financial institution “having significant operations” in the United States.
While Mr. Paulson has agreed with that argument, the Bush administration is also leaning on foreign governments to pitch in with bailout programs of their own as needed. “We have a global financial system and we are talking very aggressively with other countries around the world, and encouraging them to do similar things, and I believe a number of them will,” Mr. Paulson said on Sunday.
The request is expected to be discussed during a conference call among Group of 7 finance ministries scheduled for Sunday evening, a European official said.
Allowing foreign banks to participate in the federal rescue package has not yet drawn widespread scrutiny in Congress, where a number of lawmakers, including Senator Christopher J. Dodd, Democrat of Connecticut, have acknowledged that millions of American citizens do business with UBS, the Royal Bank of Scotland, and many other foreign-based banks in the United States.
But a number of lawmakers are wary that such an extension may worsen what could ultimately turn out to be a trillion-dollar bailout for Wall Street.
“I’m skeptical of the bailout, the whole bill is only a couple of pages long,” said Representative Scott Garrett, Republican of New Jersey, who is a member of the House Financial Services Committee. As for the participation of foreign banks, Mr. Garrett said: “I have a concern with it, they probably should be treated differently, but Congress is really not getting any say.”
Christopher Whalen, a managing partner at Institutional Risk Analytics, said that Mr. Paulson needed to justify why a wider bailout was in the national interest.
“Can you imagine the Congress floating a bailout for Deutsche Bank or UBS? It is the responsibility of the German or Swiss government,” he said. “We shouldn’t be bailing them out.”
While politicians in the United States may emphasize the benefits for banks based overseas, the definition of what is a European or American bank has blurred in recent years with the growth of global giants like HSBC, Barclays and Deutsche Bank.
Deutsche Bank, for example, became a major player in the United States with its acquisition of Bankers Trust in 2001. It has written down more than $11 billion in investments linked to the subprime crisis.
Barclays, meanwhile, is on course to buy a significant portion of the North American operations of Lehman Brothers, the 158-year-old firm that filed for bankruptcy protection last week, helping to set off the global financial panic that forced Washington to act.
Gaining access to the relief was a top priority for European foreign financial institutions with banking operations in the United States, according to officials in industry and government.
They argued that the reputation of Wall Street and the United States government would suffer immensely if properly licensed foreign banks in the United States were shut out of the system.
“Who would open a bank again in the United States?” asked one executive of a major European bank who has been following the discussions.
At the same time, it was unclear how much European governments would bow to the Treasury Department’s encouragement to set up national programs to deal with their own vast mortgage problems. Real estate markets in Britain, Spain and Ireland have been particularly hard-hit as their own housing market bubbles — which grew in tandem with America’s — have collapsed.
Other governments have struggled to get budget deficits under control in the last few years. The German government, for example, has discouraged talk of a stimulus package, and British officials said Sunday that they were not working on a plan like that of the United States.
Robert Kelly, chief executive of the Bank of New York Mellon, said the central bankers around the world would probably be scrutinizing the American bailout proposal. “I would expect every finance minister is looking closely at what is happening in the United States, trying to hypothesize what the impact will be, and is thinking about the tools the Fed and Treasury have used,” he said. “I would not be surprised, and probably expect, some of those tools to be used in Europe as well.”
If the plan is approved in Congress and is signed into law, the benefits would be large for European banks with licensed operations in the United States, which incurred major losses from mortgage-linked securities.
UBS, the Swiss giant, has been among the hardest-hit institutions in the world; both its chairman and chief executive left amid more than $40 billion in write-downs. Even so, it still retains roughly $20 billion more in potential exposure to the troubled American housing market.
If a battle does develop in Congress over foreign participation, UBS, among others, is poised to make just these arguments. Officials at the Zurich-based giant point out the bank employs more than 30,000 Americans, is listed on the New York Stock Exchange, and owns two broker-dealers registered under United States laws, UBS Securities and UBS Financial Services, better known to Americans as the former Paine Webber unit.
“These are Americans who work in New York,” said one executive who requested anonymity because the American plan was still in development. “And they are working for a bank that was incorporated in the United States.” One senior Wall Street executive said he believed that the proposal would apply to other institutions with regulated American entities. Credit Suisse, for example, includes the old First Boston Corporation, though that name was dropped years ago. He said the biggest issue being debated was what securities would be included in the proposal, and how the actual mechanism to buy them would work.
In Asia, the plan to purchase distressed assets drew little reaction over the weekend. Asian banks generally have not invested significant assets in American mortgage-backed securities.
The bigger question in Asia, bankers said, lies in how the American legislation will affect HSBC, the large British-based bank with significant operations in Asia. The bank’s American subsidiary was a large buyer of mortgages over the last decade, and kept many of these mortgages on its books instead of trying to repackage and resell them as mortgage-backed securities.
Richard Lindsay, a spokesman for HSBC, said that senior management was still evaluating the situation and said it was a “positive step forward but it won’t solve the problems of an overleveraged industry.”
Eric Dash contributed reporting from New York, Keith Bradsher from Hong Kong and Julia Werdigier from London.
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Big Financiers Start Lobbying for Wider Aid
This article was reported by Jenny Anderson, Vikas Bajaj and Leslie Wayne, and written by Mr. Bajaj.
Even as policy makers worked on details of a $700 billion bailout of the financial industry, Wall Street began looking for ways to profit from it.
Financial firms were lobbying to have all manner of troubled investments covered, not just those related to mortgages.
At the same time, investment firms were jockeying to oversee all the assets that Treasury plans to take off the books of financial institutions, a role that could earn them hundreds of millions of dollars a year in fees.
Nobody wants to be left out of Treasury’s proposal to buy up bad assets of financial institutions.
“The definition of Financial Institution should be as broad as possible,” the Financial Services Roundtable, which represents big financial services companies, wrote in an e-mail message to members on Sunday.
The group said a wide variety of institutions as varied as mortgage lenders and insurance companies should be able to take advantage of the bailout, and that these companies should be able to sell off any investments linked to mortgages.
The scope of the bailout grew over the weekend. As recently as Saturday morning, the Bush administration’s proposal called for Treasury to buy residential or commercial mortgages and related securities. By that evening, the proposal was broadened to give Treasury discretion to buy “any other financial instrument.”
The lobbying became particularly intense because Congress plans to approve a package within just two weeks, without the traditional hearings and committee process.
“Of course there will be fierce lobbying,” said Bert Ely, a financial services industry consultant in Alexandria, Va. “The real question is, Who wouldn’t want to be included in the package?”
Mr. Ely said the open-ended nature of the Treasury’s plan could be interpreted to mean that the government was open to acquiring “any asset, anywhere in the world.”
“The question that I am raising — is there any limit?” Mr. Ely said.
Each part of the financial industry is pursuing its own interests.
Small banks, for example, are pushing the government to buy loans they made to home builders and commercial developers. Wall Street banks are lobbying to temporarily suspend certain accounting rules to avoid taking big losses on the assets they sell to Treasury, which would weaken them further.
Over the weekend, the Securities Industry and Financial Markets Association, Wall Street’s main trade and lobbying group, held conference calls to discuss “your firms’ views and priorities related to Treasury’s proposal,” according to an e-mail message sent to members.
One of the calls addressed the fact that municipal securities were not included in the proposals released at the end of last week. Some bankers are pushing for government support of those securities as part of a broader effort to restore investor confidence in money market funds.
The group also discussed which securities would be eligible to be sold to Treasury. Under the latest proposal, the government would buy securities issued on or before Sept. 17.
But some bankers debated whether the cutoff date should be December 2007, when the market was clearly seizing up, to avoid bailing out those who bought securities recently. Other firms hope to be hired to manage the assets that Treasury acquires, a job that could earn them $1 billion a year, even if they charged fees that were modest by industry standards. Among them are the asset management companies Pimco and BlackRock. Morgan Stanley, the investment bank, is also vying for the work.
Some private equity firms, including the Blackstone Group, may be interested in pursuing an asset-management assignment from the government, people briefed on the matter said. Such firms have already expressed interest in buying up distressed debts after having bet against them early last year.
That raises complications because those firms hold assets similar to the ones the Treasury plans to buy. Democrats suggested on Sunday that a provision be added to avoid any conflicts of interest, with a firm making money from handling assets like its own.
William H. Gross, chief investment officer of Pimco, which manages about $830 billion in assets, would like to be an asset manager for the government but said he had not been in touch with Henry M. Paulson Jr., the Treasury secretary, over the weekend. Mr. Gross is among the financial executives Mr. Paulson, who previously headed Goldman Sachs, has regularly consulted with since the financial crisis began.
Another contender is Morgan Stanley, which advised Treasury on an unpaid public service basis on its takeover of Fannie Mae and Freddie Mac and on the American International Group, the insurer that the Federal Reserve agreed to lend $85 billion to last week in consultation with the Treasury Department.
Similarly, Bank of New York Mellon and JPMorgan Chase, which bought Bear Stearns in a deal brokered by the Federal Reserve and the Treasury Department, were also campaigning for a spot.
BlackRock, a big New York asset management firm, was also involved in negotiations with the government, people briefed on the matter said. The firm is already managing $30 billion of Bear Stearns mortgage assets for the Fed, and it has done work for Fannie Mae, Freddie Mac and A.I.G. A BlackRock spokeswoman declined to comment.
There were signs of the industry’s fingerprints on drafts of the legislation released over the weekend. While an earlier draft said that only firms with headquarters in the United States could sell assets to the government under the program, a later version said sellers could include any financial institution. Securities firms were initially excluded but were included in a version released Sunday afternoon.
Congressional Democrats and advocates of low-income homeowners were also pushing for the direct acquisition of loans, because that would give the government more say over how collection agents modify the terms of onerous mortgages.
“In addition to buying the assets we have to have a workout plan,” said Douglas Dachille, chief executive of First Principles Capital Management, an investment firm in New York. “And we have to have more control, much more control and oversight of how the servicing is done.”
Perhaps the biggest question about the Treasury’s acquisition plan is how the government will decide how much it is willing to pay for the loans and securities it acquires. Will the government drive a hard bargain and acquire assets for the lowest possible price to protect taxpayers against losses? Or will the Treasury Department, in the interest of jumpstarting the credit market, try to bolster large financial institutions like Citigroup and Washington Mutual by paying a slight premium to the markets’ valuation of these troubled assets? Over the weekend, Treasury said it might use “reverse” auctions in which financial institutions rather than the Treasury — as buyer — would submit bids.
“The trick for the Treasury and American people is to make sure that the price exacts enough of a toll on the originators and holders of these securities, but not enough to destroy lending,” said Mr. Gross of Pimco, who has argued in recent weeks that the government must buy distressed debt to deal with a “financial tsunami.”
Analysts and investors say they expect financial firms to hold onto their troubled securities until the government begins acquiring assets through reverse auctions and negotiations. Eventually, the Treasury will return to the market to sell the assets back to private investors, but that could be a few years away.
“There will be that period where the Treasury takes the place of the private market,” Mr. Gross said. “Hopefully they will get out of that market but we will have to see how quickly that takes place.”
Reporting was contributed by Eric Dash, David M. Herszenhorn, Michael J. de la Merced and Andrew Ross Sorkin.
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The Coming 1-world Currency; it is happening
Some set 2010 as date for monetary union
WorldNetDaily
Editor's Note: The following report is excerpted from Jerome Corsi's Red Alert, the premium online newsletter published by the current No. 1 best-selling author, WND staff writer and columnist.
On Wednesday, finance chiefs of five of the six-member, oil-rich Gulf Cooperation Council approved a proposal to create a monetary union as a move toward adopting a single currency, according to the AFP.
The six Islamic states constituting the Gulf Cooperation Council are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. Oman pulled out of the agreement last year.
Five states in the compact have agreed to set 2010 as the target date for the creation of a monetary union and the adoption of common currency.
The emergence of an Islamic single currency among these oil-rich Middle Eastern countries marks a significant step in the emerging worldwide movement to abandon national currencies in favor of regional currencies, along the model where the EU states have abandoned their national currencies in favor of the European Central Bank and the euro.
In 2002, the finance ministers of the Gulf Cooperation Council states sought out the assistance of the European Central Bank, as the model for their single currency, according to BBC reports.
The council was created in 1981 to promote the development of the member countries.
The monetary union will entail the creation of a central bank to issue the single currency.
At the Wednesday meeting in the Saudi Red Sea city of Jeddah, the finance and economy ministers reviewed the European Union's response to the council's view on eliminating obstacles that have blocked a long-stalled free trade agreement with the EU.
Progress was also made on key convergence factors required to underpin the common currency, including setting the ratio of budget deficit and public debt to the gross domestic product, target interest rates and reserve requirements. Progress yet remains in reaching a consensus on inflation, the last remaining stumbling block to creating the common currency.
International Monetary Fund Chief Dominique Strauss-Kahn, who met with the Gulf Cooperation Council finance ministers in Jeddah, hailed the move by the Gulf states toward economic integration, though he continued to express doubts the single currency would be adopted within two years.
"Achieving monetary union by 2010 will be a major challenge, as much remains to be done to enable the creation of a single currency within two years," Straus-Kahn. "Overcoming the current inflationary pressures, developing a clear vision of the powers of the future common central bank, choosing an exchange regime of the common currency, and harmonizing financial regulations and structures will be critical in this process."
One factor easing the transition toward a single currency is that the six Gulf Cooperation Council member states all currently peg their currencies to the U.S. dollar.
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