Party’s Over As Financial Terrorism Takes Over Wall Street

The Crash of 2008, which is now wiping out trillions of dollars of our people’s wealth, is, like the Crash of 1929, likely to mark the end of one era and the onset of another.

The new era will see a more sober and much diminished America. The “Omnipower” and “Indispensable Nation” we heard about in all the hubris and braggadocio following our Cold War victory is history. Seizing on the crisis, the left says we are witnessing the failure of market economics, a failure of conservatism.

This is nonsense. What we are witnessing is the collapse of Gordon Gecko (”Greed Is Good!”) capitalism. What we are witnessing is what happens to a prodigal nation that ignores history, and forgets and abandons the philosophy and principles that made it great. A true conservative cherishes prudence and believes in fiscal responsibility, balanced budgets and a self-reliant republic. He believes in saving for retirement and a rainy day, in deferred gratification, in not buying on credit what you cannot afford, in living within your means.

Is that really what got Wall Street and us into this mess — that we followed too religiously the gospel of Robert Taft and Russell Kirk?

“Government must save us!” cries the left, as ever. Yet, who got us into this mess if not the government — the Fed with its easy money, Bush with his profligate spending, and Congress and the SEC by liberating Wall Street and failing to step in and stop the drunken orgy?

For years, we Americans have spent more than we earned. We save nothing. Credit card debt, consumer debt, auto debt, mortgage debt, corporate debt — all are at record levels. And with pensions and savings being wiped out, much of that debt will never be repaid. Our standard of living is inevitably going to fall. For foreigners will not forever buy our bonds or lend us more money if they rightly fear that they will be paid back, if at all, in cheaper dollars.

We are going to have to learn to live again without our means.

The party’s over

Up through World War II, we followed the Hamiltonian idea that America must remain economically independent of the world in order to remain politically independent.

But this generation decided that was yesterday’s bromide and we must march bravely forward into a Global Economy, where we all depend on one another. American companies morphed into “global companies” and moved plants and factories to Mexico, Asia, China and India, and we began buying more cheaply from abroad what we used to make at home: shoes, clothes, bikes, cars, radios, TVs, planes, computers. As the trade deficits began inexorably to rise to 6 percent of GDP, we began vast borrowing from abroad to continue buying from abroad. Read more of this post

Asian Markets Tumble, Global Investors Panic-Stricken, Flee To Gold

“If the largest insurance company [in the world] can fail, [America International Group Inc] than no one is safe.”

Photo credit –

Asian stocks tumbled Thursday, tracking declines on Wall Street as investors feared more companies could succumb to the global financial crisis that forced the US to bail out troubled insurer American International Group Inc.

Every regional benchmark fell deeply in the red. Hong Kong’s Hang Seng Index led the region’s losses, tanking 1,272.86 points, or 7.22 percent, to 16,364.33 – its lowest level in over two years.

In Japan, the Nikkei 225 stock index was down 445.67 points, or 3.79 percent, at 11,304.12. Australia’s S&P/ASX200 index fell more than 3.5 percent, South Korea’s Kospi lost 3.6 percent and Shanghai’s index fell 5.8 percent. As equities markets staggered, investors fled to gold, seen as a safe haven in times of trouble.

Investors were unsettled by the Federal Reserve’s $85 billion loan to AIG, the huge US insurer that lost billions in the risky business of insuring against bond defaults. It was the latest financial giant to fall in a historic financial crisis on Wall Street that’s already claimed investment banks Lehman Brothers and Merrill Lynch.

“It’s a complete collapse of confidence,” said Francis Lun, general manager of Fulbright Securities Ltd in Hong Kong. “The financial crisis in the US is hitting everyone, everyone is running for cover. If the largest insurance company can fail, than no one is safe.

Financial stocks across Asian went into a tailspin.

Japan’s three megabanks fell hard: Mizuho Financial Group, Inc. sank 7.2 percent, Mitsubishi UFJ Financial Group, Inc. shed 4.6 percent, and Sumitomo Mitsui Financial Group retreated 7.4 percent.

Leading China lender Industrial & Commercial Bank of China Ltd, or ICBC, fell over 5 percent in Hong Kong.

Macquarie Group Ltd., Australia’s biggest investment bank and securities firm, took an 18 percent nosedive.

Richard herring, the director of trading at Burrell Stockbroking, said Australian investors were nervous about AIG bailout.

“It has actually opened up a whole lot of other questions for investors to answer and that is: AIG is on the rack, what else is potentially out there that could go under?” Herring said.

Source – Jerusalem Post

Federal Reserve New Role – Sugar Daddy

Andrew Horowitz over at  writes an interesting article on the new role of the Federal Government.  

Calling them a sugar daddy, he isn’t to keen on the Fed’s bailing out large failing corporations at the expense of taxpayers because of bad financial decisions and risking investments. For a money manager I am surprised Mr Horowitz lumps the Federal Reserve as the US government when the former is a distinct separate entity from the US government controlling the monetary system. No wonder taxpayers monies are used to bail out these companies. Americans are tax heavily enough! There’s enough dough coming in!


Wall Street In Turmoil, World Markets In Crisis, All Is Still Fine & Dandy[Bush]

Asian stock markets plunged Friday in the wake of a sell-off on Wall Street

amid mounting concerns about a slumping U.S. economy and its impact on global growth

Photo credit – Canada Dot Com

Global stock markets tumbled Tuesday amid growing fears of a global financial crisis as investors reacted to the demise of two of Wall Street’s biggest names, Lehman Brothers and Merrill Lynch.

The storied New York investment bank [Lehman Brothers], crippled by $60 billion in soured real-estate holdings, was unable to find an investment partner to throw it a lifeline despite a flurry of last-minute negotiations over the weekend.

Investors were further shaken by the equally stunning news that Merrill Lynch, one of the world’s most famous brokerages, sought to avoid a similar fate with a $50 billion transaction to become part of Bank of America Corp.

The crisis appeared to be far from over. American Insurance Group, the world’s largest insurer, was fighting for its survival after downgrades from major credit rating firms, adding pressure to AIG as it seeks billions of dollars to strengthen its balance sheet.

Seichi Miura, strategist at Mitsubishi UFJ Securities in Tokyo, said already weak investor sentiment has been badly shaken by Lehman. He predicted extremely volatile markets ahead.

“The market just hasn’t been able to shake off an overall downward trend,” he said.


%d bloggers like this: