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The Bailout Is a Fraud That Could Bring Down Obama

By Ruth Conniff, The Progressive. Posted April 23, 2009.


The Obama administration must change their approach to the financial crisis, or Obama -- and the rest of us -- will pay a serious price.

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Goldman Sachs reports better-than-expected profits this quarter. Wells Fargo cleared record profits last week. The President, understandably, points to signs of hope and encourages Americans to be optimistic about the economy. But when do we move from healthy confidence to a confidence game? The banks are reporting profits thanks to massive infusions of taxpayer bailout funds. It's simply silly to be lulled by cheery-sounding reports when the institutions are actually insolvent. At some point we have to take a clear-eyed look at the massive failure of our financial system. Ignoring it won't make it go away.

That's more or less what Elizabeth Warren, the distinguished chair of the Congressional Oversight Panel, says in her panel's six-month report on the bank bailout. Warren, the government's watchdog, concedes that there are differences of opinion on her panel, which probably accounts for her very carefully couched discussion of the crisis. Although she told The Observer  that it is "preposterous" that the government hasn't fired the bank managers who are responsible for the derivatives disaster, her panel's report is cautious, with a scholarly explanation of the crisis in her video introduction. Nonetheless, the underlying criticism is obvious.

In a financial crisis like the current one, Warren explains, the government has three choices: 1. Liquidate failed banks. (That's what happened in the S&L crisis. The government took over institutions, fired the managers, wiped out investors, but protected depositors. A lot of savings and loans simply went out of business.) 2. Put them in receivership. (That's what Sweden did in the 1990s: failed managers were fired and replaced, depositors were protected, and the banks were returned to private hands under new management with healthier balance sheets.) or 3. Subsidize the banks. This last option is what led Japan to its "lost decade" -- the real value of bank assets are obscured, as the government funnels tax money into insolvent banks, propping them up indefinitely. This last is the approach the United States is now taking.

If you want to hear someone absolutely destroy that approach to the current crisis, check out a round of recent interviews with William Black, the professor of economics and law at the University of Missouri who was deputy director of the Federal Savings and Loan Insurance Corp. during the S&L crisis in the 1980s. Black, who liquidated a few banks in his time and earned the eternal enmity of Charles Keating, minces no words in describing the massive fraud by bankers and the regulators, including Treasury Secretary Tim Geithner, whom he describes as abetting them.

"This whole bank scandal makes Teapot Dome look like some kind of kids' doll set," Black told the investors' journal Barron's in an interview published in the print edition on April 13. (The interview appeared online on April 9, but you need a paid subscription to access the site). He covers the same points in a highly watchable interview on Bill Moyer's Journal..


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The Looting Continues ...
Posted by: mmckinl on Apr 23, 2009 12:11 AM   
Current rating: 3    [1 = poor; 5 = excellent]
Geithner is the brain child behind TARP, PPIP and all the other schemes designed to buy time while banks off-load their losses into every government agency and plan they can find ...

Fannie, Freddie, The Fed and the list goes on and on of the dumping of toxic assets on to the tax payers balance sheet ... Cost? $Trillions!

Yes the Fed. They are already planning to dump the Fed's crap into the treasury when nobody is watching ...

As head of the NY Fed Geithner was supposed to regulate Wall Street Banks, instead he just made innocuous speeches, while he winked and nodded to the Banksters.

Get real ... Geithner is the bag man for Wall Street and everybody knows it ... Well ... everybody except Obama !

[« Reply to this comment] [Post a new comment »] [Rate this comment: 1 - 2 - 3 - 4 - 5]

» RE: Seriously, now.. Posted by: oregoncharles
» RE: Seriously, now.. Posted by: mmckinl
» Obama knows it, too … Posted by: DJC11
» RE: Remember 1836 Posted by: edgar_michel
Quid pro Quo
Posted by: DrBrian on Apr 23, 2009 12:58 AM   
Current rating: 4    [1 = poor; 5 = excellent]
Although probably not rising to the level of proof needed for a criminal conviction, the quid of large campaign contributions to Obama and the quo of hundreds of billions of dollars in subventions to corrupt, avaricious, devious Wall Street executives, coupled with the refusal to support meaningful regulatory reform and lax efforts to prosecute will be enough to convict Obama in the court of public opinion and doom him and reward us with his defeat in the Democratic primaries in 2012.

[« Reply to this comment] [Post a new comment »] [Rate this comment: 1 - 2 - 3 - 4 - 5]

» RE: Quid pro Quo Posted by: atheistcable
» a gay president Posted by: pothead
» RE: Quid pro Quo Posted by: yesman
It sure would be nice...
Posted by: adp3d on Apr 23, 2009 1:39 AM   
Current rating: 5    [1 = poor; 5 = excellent]
...if the so-called (Liberal)mainstream media would reports these stories like they should...

[« Reply to this comment] [Post a new comment »] [Rate this comment: 1 - 2 - 3 - 4 - 5]

Obama for the MOB
Posted by: Mister_PsyOps on Apr 23, 2009 1:54 AM   
Current rating: 3    [1 = poor; 5 = excellent]
Let's get real.

Obama is a hired tinsel actor, not a "leader". He reads his lines and hits his marks. Obama was called out of Fascist Central Casting to do his 4 year routine and take a cheap dive for some temp fame plus a very cushy retirement. So it's just one extended runway corporate MSM photo op from now to 2012.

Barack Obama's handlers are well known Wall Street operators for the Rockefeller-Kissinger-Rothschild front: George Soros, Robert Rubin, Larry summers, Tim Geithner, Zbigniew Brzezinski, etc, etc. All of them tied to the ruling class power structure behind the private Ponzi snake oil "Federal Reserve" Corp (not in the least federal and without a penny of reserves). This is the sordid force that has groomed and paid Obama's way from the beginning.

A telling indicator of said reality is a regular visitor to the old regime. Guess who came to the White House virtually each and every week of the GW Bush/Cheney regime as a so-called "advisor"? (translation: policy manager and political fixer for the ruling class mob) That would be non other than David Rockefeller protégé - Henry Kissinger.

"Wall Street Bailout" on the public nickel has got to be the biggest rip off cum protection and extortion racket in history. That includes 9/11 "war on terror" although like bogus "war on terror" there is no end in sight for a derivatives toxic debt bubble that is well over $1,000 TRILLION dollars (Bank of International Settlements figure) deliberately kick-started and maintained by the "Federal Reserve" Corp.

The sad truth is, America deserves the American Idol brand of criminal 9/11 coverup "leadership" they have settled for. If you think that assessment is cynical, I've got a derivative to sell you. Reasonably priced.

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» RE: Obama for the MOB Posted by: villager1
» RE: Obama for the MOB Posted by: pothead
» Omoba? Posted by: realtruther
The US is one big lie.
Posted by: joebanana on Apr 23, 2009 2:53 AM   
Current rating: 3    [1 = poor; 5 = excellent]
The new America, lie, lie, lie. Lie to cover your lies, then lie about that. Honesty is unpatriotic, if you want to show your support for the prisonation, lie. Lie on your tax's, lie in court,lie just to lie. My kids were confused at first, now they understand this great country was built on lies, and lies are what will get us through these tough times. Truth has no room in this country, only losers tell the truth. Lies are where the true strength is (thought I was gonna say "lies", huh?).

[« Reply to this comment] [Post a new comment »] [Rate this comment: 1 - 2 - 3 - 4 - 5]

» RE: The US is one big lie. Posted by: richholland
» RE: The US is one big lie. Posted by: weathered
» RE: The US is one big lie. Posted by: techcafe
» RE: The US is one big lie. Posted by: bobtr900
deanx
Posted by: deanx on Apr 23, 2009 2:57 AM   
Current rating: 5    [1 = poor; 5 = excellent]
It is important to note that more than half of the reported profits came from accounting rule changes. For instance $2.2B of BoA reported profit came from claiming 'short selling' unsold bonds in its inventory. The bonds never changed hands and yet BoA booked estimated losses on the debt, as a profit.

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Obama = Elitist
Posted by: LeaderofMen on Apr 23, 2009 4:51 AM   
Current rating: 3    [1 = poor; 5 = excellent]
If anyone really thinks that Obama, who was schooled on the streets of Chicago (as well as Harvard), and a BLACK man, has somehow managed to infiltrate a secret society of old white guys, then think again.

Obama is not the luminary (artificial light) you think he is. He inherited George W. Bush's 100% mismanagement of the US that went on for 8 years.

All of you naysayers expect him to fix everything with a snap of his fingers. Well, here was your choice:

Obama
or McCain/Palin

If, for one instant, you think McCain/Palin should be at the helm, then you all are far stupider than you sound on this forum.

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» No choice Posted by: NYmediator
» Already am Posted by: inanaturallight
» what world do you live in? Posted by: realtruther
» RE: Obama = Elitist Posted by: grkjr
But maybe ignoring it WILL make it go away...
Posted by: Tweck9 on Apr 23, 2009 5:40 AM   
Current rating: 4    [1 = poor; 5 = excellent]
...it's what we should have done in the first place. Just ignore it. No bailout. They can pretend like they still have money. It's not like money is real anyway, we just conjure it out of thin air, it's an illusory mental construct. What's stopping us from just pretending these institutions are NOT insolvent, and that there never was a problem in the first place?

Maybe it was all just a dream.

Or a manufactured reality created by the bankers and politicians specifically for the purpose of looting the treasury.

In any case, it's not real.

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Sadly
Posted by: JSquercia on Apr 23, 2009 5:40 AM   
Current rating: 4    [1 = poor; 5 = excellent]
Sadly I musr admit that I am very disappointed in Obama .There are far to many of the same crew that created this mess on his economic team . Let's not forget it was Rubin & Summers who fought AGAINST regulating derivatives winning out over Brooksley Born . She of course was RIGHT and they were WRONG and yet she is on the outside looking in . The Fed had the power to stop much of what went on but studiuosly avoided using it as Greenspan felt the markets would correctly assess risk .Geithner was in bed with the whole Wall Street crowd.
It seems as if the Treasury Secretary is merely another Goldman Sachs employee . You have to wonder why Henry Paulson let Lehman fail . Could it be to eliminate a rival to Goldman . It sure looks like it to me .
We have people who would make Great Regulators and Advisors as the article points out . This Black certainly has the experience to replace Geithner . In fact in his Moyers interview he claims that they should be forced by existing law to take over the banks as they did during the S&L scandle ( another robbery by the monied and connected )
Surely we should be writting new regulations for the Financial Services Industry . There is NO reason they can't do this even as they are dealing with correcting the mess . It is disappointing to see that there was virtually no coverage of Warren's report on any of the media .
We must unwind these too big to fail institutions and NEVER allow them to occur again . Too big to fail is by definition too big to exist .At one time we had people who enforced Anti Trust regulations and we need them again .
I personally would declare all derivitives and Credit Default swaps null and void . Saying they were not investemnts but gambling .

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Where is the Culture of Greed Taught?
Posted by: Purple Girl on Apr 23, 2009 6:20 AM   
Current rating: 4    [1 = poor; 5 = excellent]
The Re-education and indoctrination going on in Our colleges of Business and Economics. Look in the mirror Oh Ivory Tower Dwellers.
I have a neice who was raised by a single mother- on welfare. She saw and lived the struggles and hardship of those 'at risk'. Yet once she recieved her PhD in Economics- she has become a hardcore 'Survival of the Fittest'. She states she 'Apathetic' to those who fail to achieve. she is a strict follower of the Glories and priviledge of afford by and to the Trickle Downers. This is not the child I knew for the first 20 yrs of her life- always compassionate, generous and kind. Now she's a cold hearted bitch- to be frank.she has never worked on Wall Street- But in Pharmacuticals, so this 'Me first' Ideology is not just limited to the financial sector and the MBA programs.
So when we bitch about the culture of Greed on Wall Street, we should be aware this is not an exclusive doctrine. it is pervasive in our upper management throught various industries- from Automotive, to healthcare, to insurance, to political Science.
If you want to get to the root of the Culture of Greed- get to who is teaching it....mass producing it. Want to change the way Business is done- go to the universities. Not to forget their parents too. Socio- Economic Darwinism is a learned concept.

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I dunno. Obama got away with supporting the 700b bailout last year.
Posted by: LaughingModerateIndependent on Apr 23, 2009 6:33 AM   
Current rating: 3    [1 = poor; 5 = excellent]
Ladies & Gentlemen,

This is far more outrageous than anything King George III ever did, to trigger the American Revolution. Simply put, the US government (led by the smooth-talking 2-faced Democratic Shyster-in-Chief) is moving to steal all our money in broad daylight, and hand it over to the financial gangsters.

If the plan had been dictated in the boardroom at Goldman Sachs, it wouldn't be a bit different than what Obama-Geithner-Summers et al are proceeding with. {In fact, for all intents and purposes, the plan basically WAS dictated in the boardroom at GS.}

If we don't rise up & get rid of these guys -- meaning the whores of both the Wall St parties -- almost all of us are going to wind up as financial slaves. Our kids & their kids are going to be paying taxes & interest in perpetuity, to atone for the banksters' sins. They will not have health care, or Social Security, or anything else -- because the money won't be there. It will all be in the yachts, mansions, & Swiss bank accounts of the financial gangsters. And all of this will have been brought to you by the two-party system, with the final blow -- financial servitude -- being administered by the Democrats.

This is torches & pitchforks time. A population that permits this to happen deserves to be enslaved. And with an electorate mentally addicted to picking between red or blue, what's to stop Obama from giving in to more bailout frauds? Sure, FDR was nowhere as dumb and Obama is no FDR but even on this site, the Obama loyalists will be happy to deny reality and like the Bush loyalists, they'll raise a hell for not supporting Democrats.

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Wow
Posted by: JTMixer5 on Apr 23, 2009 7:08 AM   
Current rating: 2    [1 = poor; 5 = excellent]
Not to worry, Obama bin Lyin will do what he does best and throw a speech at it! LOL

RT
Online Privacy when it Counts

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» JTMixer5 is a spammer - more info Posted by: Defenestrator
Yes, The Bailouts Are A Fraud Because...
Posted by: JohnTruth2001 on Apr 23, 2009 7:59 AM   
Current rating: 2    [1 = poor; 5 = excellent]
The implosion of the world's economy is being orchestrated by our private Federal Reserve & the other private central banks!!! It's a scheme of the Illuminati/NWO/globalists to destroy U.S. sovereignty & usher in a one-world dictatorship!

[« Reply to this comment] [Post a new comment »] [Rate this comment: 1 - 2 - 3 - 4 - 5]

» You forgot to include... Posted by: EncinoM
I’ll take door number 3
Posted by: solrev on Apr 23, 2009 8:48 AM   
Current rating: 5    [1 = poor; 5 = excellent]
I keep reading all the experts talk about what is behind each door, but you do not have to be an economic professor to use a little common sense. The man on the street philosophy is cut your loses and get on with life, however the Obama government does not seem smart enough to understand this. I think Obama is smart enough, so why are we going down this path? I do not believe that the root cause of our problem was the subprime mortgages, or the funny money making money financial institutions. I believe that the root cause of our problem was that whooshing sound the Texas gnome warned us about. What if we can not convince the world that we can become the master consumers again? The merchants of the world will weep and morn for who will buy their goods. Hello US bankruptcy, which is the best thing that could happen to us. It may well happen because we the people are going to hold our money close to our vest for a generation. Greed killed the golden consumers that laid the golden eggs.

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About those Goldman-Sachs profits...
Posted by: Defenestrator on Apr 23, 2009 8:57 AM   
Current rating: 5    [1 = poor; 5 = excellent]
It's just more book-cooking. And the new "the banks are doing great" talking points are also pretty illusory.

Is is why banks should be temporarily nationalized so they can be thoroughly audited and broken up. There's no trust in the banking system because it does not deserve to be trusted. We the people are not going to get an honest report until we can look at the numbers ourselves.

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Three card monty
Posted by: willymack on Apr 23, 2009 9:30 AM   
Current rating: 3    [1 = poor; 5 = excellent]
While we're preoccupied with our extinct economy, and paying through the nose to keep up the pretense of its viability:
1. Calls for a REAL investigation of 911 are being ignored.
2. We're STILL pouring ten billion dollars a month into two illegal, unwinable, and immoral "wars".
3. Jobs keep right on disappearing, and former employees are being tossed from their houses, and into the streets.
4. President Obama is playing pattycake with our demands for prosecution of the bushie crooks.
This situation is so hopelessly muddled, there's no way it could've gotten that way by accident, so what's REALLY happening?

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Of course it will...
Posted by: ShrubtheWarcriminal on Apr 23, 2009 12:03 PM   
Current rating: 2    [1 = poor; 5 = excellent]
...it is essentially Shrubs plan with a pretty boy touch and words...only he speaks better and still says has done nothing of substance.

I hope those of your who swallowed the Obama Kool-Aide platitudes are now realizing that this man is a corporate whore, bought and paid for by corporate pimps.

He has done little to be proud of on the progressive front and worse yet, he does not know what he stands for...say what you want about the Shrub and company...at least you knew what they stood for and what they were going to do to this country...basically destroy anything good that was left of it (no pun intended).

Obama, on the other hand often acts like a wimp and tries to play nice, instead of hiring the BEST people available to solve our problems, and as a result, he is letting the neoconazis eat his lunch, while he is losing his base.

Until people realize that this is a war for the heart and soul for this country and should be fought as such, the neoconazis will win, hands down. THEY do know how to fight.

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» RE: Of course it will... Posted by: STUDIP
» RE: There in lies the problem... Posted by: ShrubtheWarcriminal
Man of the Year Going Down
Posted by: johnwinthrop on Apr 23, 2009 12:24 PM   
Current rating: 2    [1 = poor; 5 = excellent]
Obama on Time cover again. It's 100 days in office. Lib media lionizes the smoothie and ignores the harsh truth outlined above.

Historians will hold Bush accountable. But right now, Obama is leading a team of burglers. The money for health care, energy and environment won't be there regardless of what the budget says. Inflation will kick in. More trillions for the Macs will be needed. Housing isn't going to recover and stocks will be forty percent below what many paid for them for a long time. Obama will go down. And of course the black media and progressive types will scream racism, except for a few like Coburn, Samuelson and Greider.

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» RE: Man of the Year Going Down Posted by: ReallyBearish
» the *neo*liberal media maybe Posted by: realtruther
Who's at fault?
Posted by: Democritus on Apr 23, 2009 2:36 PM   
Current rating: 4    [1 = poor; 5 = excellent]
A Wall Street apologist on CNBC said today that the regulators were at fault in not catching the massive fraud perpetrated by the banking industry.

Is he kidding? That's like saying that the police are at fault for not catching a serial killer before he shot up the neighborhood.

The bankers are at fault, and they should be fired, starting with Ken Lewis at Bank of America, and going right down the line.

Should Tim Geithner go, too? I haven't made up my mind. He's young. Maybe he has room to grow and change. If not, then Obama had better get someone else to clean up the mess.

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BigEasy
Posted by: Robert Wales, Ph.D. on Apr 23, 2009 2:39 PM   
Current rating: 2    [1 = poor; 5 = excellent]
It's all well and good to fritter over this stuff. But, I say, let 'em pour every dime they have into this blackhole of corruption. Wages are not keeping pace with production nor inflation over time. So, let Obama bankrupt the guv'mint and allow us the freedoms the Constitution originally intended. Law is bogus and selective. Peace and justice are an illusion. Obama is more concerned with his tenure than with appropriate prosecutions essential to democracy. Tend your garden ala Jefferson, avoid the despots ala Franklin. Oh, and no money left for high-tech mass killings overseas too. Maybe a bk in guv'mint ain't so bad; I say allow it to happen. Wire a hundred trillion to Wall Street and let's get it over with little dove. The money won't be worth anything anyhow. All you'll have is what you know and the wall street crowd don't know nothin' other than stealing from you & me.

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We're basically collectively lacking the intellect...
Posted by: Naty on Apr 23, 2009 3:55 PM   
Current rating: 3    [1 = poor; 5 = excellent]
...to see through this because our morality is rotten. Wisdom is rarer than gold these days as witnessed by the presence of more than one "side" to many scientific facts. What has happened to the true philosophers? We must be living in a dark age.

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Bottom Line
Posted by: Revolutionary (Direct) Democracy on Apr 23, 2009 4:36 PM   
Current rating: 2    [1 = poor; 5 = excellent]
The saddest part of the whole bank fiasco is that until 2012 there is nothing,

N-O-T-H-I-N-G

We can do about it.


VOCA, NOW!

FREE AMERICA

REVOLUTIONARY (DIRECT) DEMOCRACY

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Sorry but...
Posted by: reg373 on Apr 23, 2009 5:16 PM   
Current rating: 1    [1 = poor; 5 = excellent]
The banks have millions of customers and billions in revenue from performing loans.

Yes, housing is in the sewer. There is also a real asset behind all the toxicity - a house - that does not have a zero value. It will bottom and come back.

All the doom talk surrounding the bank bailouts, infers that their losses are a bottomless pit that never ends, and they have little earnings power. That's false.

-- found a cool site; Balkingpoints ; incredible satellite view of earth

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» RE: Sorry but... Posted by: JSquercia
» RE: Sorry but... Posted by: STUDIP
$1.14 Quadrillion USD worth of derivatives out there
Posted by: Alex Hidell on Apr 23, 2009 8:33 PM   
Current rating: 5    [1 = poor; 5 = excellent]
A large part of the problem is no one has a handle on the extent of the "toxic assets" and that is partly President Obama's fault and partly Sec. Geithner's fault and partly the MEDIA'S fault. A little noticed article, Steve Pizzo's Follow The Numbers shows us that speculative derivatives numbers are overwhelming the world's banking system

""Here's the breakdown, according to the International Bank of Settlements, which acts as banker for the world's central banks:

1) Listed credit derivatives stood at USD 548 trillion;
2. The Over-The-Counter (OTC) derivatives stood in notional or face value at USD 596 trillion"

World derivative debt is $1.14 Quadrillion USD. For the US banks share of that see Table 1, page 22 of 33 at

http://www.occ.treas.gov/ftp/release/2008-152a.pdf

The jig is up folks. The US banks are essentially bankrupt, with $10.5 trillion in assets vs. $176 trillion in derivative debts.

At the April 2nd G20 meeting world leaders should WRITE OFF this toxic speculative derivative 'debt'.

Put in further perspective, the entire world's GDP, according to the CIA's world book, is $71 trillion USD annually. Compare that with that $1.14 quadillion and you now understand that a huge transfer of wealth is taking place, crowding out legitimate recovery efforts.

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Obama is as big a "Fraud" as the Bailout & BushCo
Posted by: Man_vs_Kleptocracy on Apr 23, 2009 11:56 PM   
Current rating: 4    [1 = poor; 5 = excellent]
It is stunning how many continue to gulp down the official Kool-Aid dished out by the media and Washington madhouse on the most critical issues of our time. We are led by slick psychopath mobsters on all sides and still Americans would rather trust in these snakes than do what is right and challenge the crime system that is literally raping the country blind.

What's left of America will go out with a whimper of cowardice. With the record the U.S. has overseas, nobody will care.

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yanaar
Posted by: context on Apr 24, 2009 10:09 AM   
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How are these financial institutions suddenly showing "profits?" So-called "signs of hope." Or... maybe they received secret private "donations."

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» RE: yanaar Posted by: bonapartist
"Profits"?
Posted by: yesman on Apr 24, 2009 4:49 PM   
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If these institutions are reporting "profits," doesn't that simply mean that they've been given more taxpayer money than they need to keep going (even given their maintenance of grotesquely inflated salaries for the crooks responsible for the current crisis)? Why should we be happy or hopeful about that?

These "profits" simply mean that they didn't need the taxpayer bailout to begin with. Apparently they're capable of restarting their scams without further taxpayer input. So, since we don't need the executives' "expertise" to run the institutional scams anymore, then there's no further reason not to arrest and try them for their past malfeasance, right?

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» RE: "Profits"? Posted by: STUDIP
They're COUNTING on it...
Posted by: Pirate1 on Apr 24, 2009 5:55 PM   
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As the Bush regime was nearing its end, the forces of the status quo sought to bring about a crisis so dire, anyone running on the Democratic ticket would be expected to "fix" everything back to the wasteful ways everyone is so comfortable with. Obama has been listening to jerks aligned with the status quo who want him to fail and they are advising him in that direction every week. The sad thing is he's LISTENING to them and not to us. He'll be running against Gingrich/Palin next time and it won't be pretty.

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