The Mullahs' Revenge

The "Hindenburg Omen", a term owed to the 1929 crash that brought on the Great Depression is said to be in the offing whenever there are a large number of both new 52 week highs and 52 week lows on the NYSE.

The stars were thus aligned in the fall of 2005. Unfortunately the Federal Reserve then decided it could outflank history. Greenspan resigned as Fed chairman the following January after agreeing to add $38 billion in govt. reserves. At the very same time Ben Bernanke, Bush's budget adviser, was appointed to replace him while the Fed quietly reported that the following quarter it would hide M-3, the broadest measure used to estimate the supply of money within an economy. Why the secrecy?

The Iranian Bourse

Despite a complete absence of coverage from the U.S. media conglomerates, a financial nightmare was unfolding. By invading Iraq and toppling Saddam Hussein Bush had empowered the country most able and determined to undermine U.S. influence. If successful an Iranian bourse that allows international buyers to buy oil in euros would mean the demand for U.S. dollars would collapse, staunching credit and liquidity.

So when Arianna Huffington asks who are these mysterious, unconfirmed counterparties to AIG's serial recklessness we must recognize that the CIA also functions through "legitmate companies". AIG had long been exposed for its lawbreaking. Its executives had confessed to criminal charges but Spitzer's investigations may have only scratched the surface. A paper trail stretching back a decade reveals that AIG regularly used offshore shell companies to skirt the law.

One current scam worked like this: Marsh, an insurance broker, was supposed to find the best insurance policies for its clients from a wide range of companies. Instead it steered the policies to companies such as AIG that agreed to pay kickbacks. It solicited phony competitive bids for insurance contracts to deceive customers into thinking there was real competition for their business. Marsh made $800 million on kickbacks in 2003 alone – over half its $1.5 billion profit. With a 40-percent share of the global insurance brokerage market, its fraud drove up prices for everyone. But as Business Insurance bemoaned, AIG received "little more than a tap on the wrist. The message delivered here is that a company of AIG's power have things pretty much its own way."

So where did all those billions of taxpayer dollars go? My guess is to pay off China, and perhaps Russia and Saudi Arabia.

From the London Telegraph: "Fannie and Freddie - the world's two biggest financial institutions - make up almost half the $12 trillion US mortgage industry. But that understates their vital importance at this juncture. They are now serving as lender of last resort to the housing market, providing 80pc of all new home loans.

Roughly $1.5 trillion of Fannie and Freddie AAA-rated debt - as well as other US "government-sponsored enterprises" - is now in foreign hands. The lion's share of US mortgage debt is held by the central banks of China, Russia and petro-powers. These countries could all too easily precipitate a run on the dollar in the current climate and bring the United States to its knees, should they decide that it is in their strategic interest to do so.

George W. Bush should be hailed as hero ... in Teheran.

Wipeout

The Iraq Invasion and Occupation was supposed to make it all better. The Iraqis would welcome the U.S. as liberators and in their undying gratitude give us their oil at rock bottom prices. The remarkable thing is-- it might actually have worked were it not for the fact that George W Bush has the diplomatic acumen of a 5th century Vandal and Dick Cheney loves money more than his own mother or even Donald Rumsfeld.

But thanks to cronyism, hubris and greed, along with some treasonous subterfuge,the war has been a debacle featuring incompetence, corruption, and brutality, all of mind-bending proportions and tragic consequences. When histories are written a hundred years hence on the remarkable decline of the American Empire, the war for Iraq will likely be judged as the greatest act of self-destruction the world has ever seen.

So here we are, five years after "Mission Accomplished", with an economy in the toilet, unemployment hovering at 13%, a government debt of nearly 10 trillion dollars and an annual deficit running @ $700 billion. The path to our swift disintegration we can trace to the great Ronald Reagan who convinced us and his clueless supplicant George W Bush., that by putting the poor in debt while pampering the rich we could eat cake every day and always have a good-paying job in the offing. His future vice-president George Bush Sr. described it aptly as "Voodoo Economics". Judging from his son, that may have been the last honest thing the man ever said.

So how has sailing a country of 300 million souls in a sea of red ink worked out? Well Fanny and Freddie, our two mortgage giants, are about to be shored up by more tax-payer credit, meanwhile Merrill Lynch and the Lehmann Brothers have just fallen on their knees, praying that our brave leverage king, Bank of America, will survive the bloodbath and be their savior. However, as much as I'd like to lay all the blame at the feet of Sir Ronald, credit for the most serious financial crisis since the Great Depression belongs to the moronic Phil Gramm, he of the infamous Enron Loophole, and the peerless Alan Greenspan who can't resist blowing bubbles and apparently has never met with a white-shoe banker without experiencing the urge to genuflect.

All of which means that the fiscal discipline responsible Democrats tend to practice in public and in private-- you know the idea that it's better to invest in the public as well as in private to insure the country's future-- has just gone up in smoke-- blown with the wind just like the neo-con dream that we would conquer all of Arabia, drill oil from now until eternity and live happily ever after, singing praises to dear Dick and Donny.