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The Crash of 1929: Are We on the Verge of a Repeat?

By Scott Thill, AlterNet. Posted July 26, 2007.


Hedge funds have helped create a counterfeit economy that some experts say could lead to another full-blown economic depression.
07262007story

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[A senior adviser to President Bush] said that guys like me were ''in what we call the reality-based community,'' which he defined as people who ''believe that solutions emerge from your judicious study of discernible reality.'' I nodded and murmured something about enlightenment principles and empiricism. He cut me off. ''That's not the way the world really works anymore,'' he continued. ''We're an empire now, and when we act, we create our own reality. And while you're studying that reality -- judiciously, as you will -- we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors ... and you, all of you, will be left to just study what we do.'' -- Ron Suskind, "Without a Doubt," New York Times

The hypermarket beckons

News flash: The American economy is a hyperreality engineered by Ph.D.s working hand-in-hand with colluding media multinationals, political officials and some of the biggest names in business -- and the banks that invest in them. In other news, greed is still good.

Of course, the idea that Wall Street is corrupt is as old as Wall Street itself. After all, the immortal "Greed is good" aphorism was muttered by a white-collar criminal in the 1987 movie named after Wall Street, which was directed by a guy, Oliver Stone, who made his name in postmodern cinema and political agitation. In fact, a film of the same name came out in 1929, the year of the stock market crash. And so the narrative replicates.

Speaking of replicants, Oliver Stone is a man who tackled not only labyrinthine presidential conspiracies in the 1991 film JFK but also the numb pathos of 9/11 in last year's World Trade Center. Indeed, Wall Street indirectly tackled the junk bond and insider trading economic screw-jobs that riddled the '80s like so many overpriced, overly puffy hairdos. Stone envisioned the film as Crime and Punishment on Wall Street, which was only partially fitting for the time because there was a ton of crime and very little punishment.

And the more things have changed, the more they have stayed the same. Indeed, only the nomenclature has been altered. Instead of junk bonds and insider trading, we have hedge funds and private equity takeovers. And instead of Gordon Gekko and Wall Street, we have Fox News mogul Rupert Murdoch and, soon, the Wall Street Journal.

In the 1980s, guys like Michael Milken and Ivan Boesky -- who anticipated the "Greed is good" phrase with a 1986 commencement speech at Berkeley in which he stated, "Greed is all right. ... I think greed is healthy" -- were riding high on schemes that failed. Both served as inspirations for Stone's Wall Street scumbag Gordon Gekko, but both got off with a few years in prison and a few hundred million dollars lost. Milken shaved a 10-year sentence down to two, and in 2007, still had a net worth of about $2 billion. Roll the happy ending.

But the hyperreality does not end there, and by hyperreality I mean simply a reality that exists outside the one you live in, whoever you are. It can come in many forms. Film is one such simulation, network and cable news is another, and our two-party political machine, as Ron Suskind explains in the quote at the top of this article, is a finer-tuned one still. But they all collide and collude in the social space of Wall Street and its various markets, on the internet and on the trading floors of the New York Stock Exchange and onward.

Take Milken's favored high-yield junk bonds, for example, which are basically bonds that are rated below investment grade by ratings organizations like Standard and Poor's or Moody's and therefore subject to not only a much higher risk of default or other cash-sucking crashes but also higher paydays if you can make them work. To do that, you need a little help from your friends and unsuspecting investors, which is why Boesky and Milken went to jail for suckering friends and strangers into dense schemes that went nowhere.

And if that whole scam sounds familiar, that is because, as is always the case with hyperreality, it is happening again. Yet this time, it is happening in an information age in which 97 percent of stock transactions are conducted electronically. And this time it is not because of junk bonds, but because of hedge funds, mortgage-backed securities, subprime loans and a bizarro virtual scheme known as naked shorting, which has been around as long as -- and played a role in -- the 1929 crash, and according to some, could trigger the next one any day now.

"We've divorced the system from paper," explained Overstock.com CEO and hedge fund activist Patrick Byrne to me by phone, "and since then it's become easier to divorce it from reality. But the problem is that so much has been drained out of the system using these tools that the money is not there. If this gets exposed, the money is not there. It's been turned into Ferraris and mansions in the Hamptons. It can't be paid back. The system is going to vapor lock."

Nailing subprime's number

The recent implosion of the subprime housing market -- in which people with little or no significant savings of their own are offered huge loans for little or no money down for houses often but not always located in fast-track developments -- shares similarities with the junk bond burnout of the 1980s.


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Scott Thill runs the online mag Morphizm.com. His writing has appeared on Salon, XLR8R, All Music Guide, Wired and others.

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View:
The Casino Economy and the Financialization of Global Capitalism.
Posted by: yellow on Jul 26, 2007 1:02 AM   
Current rating: 4    [1 = poor; 5 = excellent]
One big indicator of the precarious nature of global capitalism is the fact that at the end of June 2006, the absolute nominal value of all over the counter financial derivative deals was $283 trillion, more than six times the value of all goods and services produced globally. Speculation is heart of global capitalism. There is close to $2 trillion daily in foreign currency speculation alone. The growth of speculation seems to go together with growing debt. The total US debt public and private is over $45 trillion. That is more than the global GDP. This cannot last. Consumer debt alone in the US is over $12 trillion and is what is propping up the stagnant US economy.

This is risky and seems to threaten a new depression. The growing social inequality is worse today than in 1929. The parallels are quite ominous. There could be another crash.

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

» RE: We go, they follow Posted by: NumberSix
» That's not necessarily true Posted by: cellorelio
» Alternet censored my post... Posted by: Whitecliff
» Guy you're to sensitive. Posted by: yellow
» Derivatives Posted by: Leman
Hate to say this...
Posted by: Temporary on Jul 26, 2007 1:32 AM   
Current rating: 2    [1 = poor; 5 = excellent]
but it's ALREADY HERE!

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

» please elaborate Posted by: thistleblower
Theres not much things im surden anymore...
Posted by: Temporary on Jul 26, 2007 1:35 AM   
Current rating: 2    [1 = poor; 5 = excellent]
but i know who will be the one to pick up the pieces

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

» Well to be honest... Posted by: Temporary
» RE: Well to be honest... Posted by: fearn
Imposed upaid labor, imposed debt is class despotism-corrupted democracy
Posted by: Perfectclue on Jul 26, 2007 3:58 AM   
Current rating: 5    [1 = poor; 5 = excellent]
Like all upaid labor, social wealth, stripped from its whole to an oligarchy, enabled by the class elites, corrupted middle layers, debt is another form of slavery, which these middle layers, corrupt class thugs impose on the collective whole.
This class despotism is called democracy. NOT!!!!

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

Feeling Bullish?
Posted by: Whitecliff on Jul 26, 2007 4:23 AM   
Current rating: 5    [1 = poor; 5 = excellent]
The sooner that the collapse comes the better; the day that The Systemâ„¢ comes crashing down will be a very glorious one indeed.

HEY! Maybe Jesus will come back and chase the money changers out of the Temple (America's temple: the NYSE trading floor) again?

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

Financial Advisor
Posted by: zazupuppy on Jul 26, 2007 5:02 AM   
Current rating: 5    [1 = poor; 5 = excellent]
I work for a Wall Street Firm as a Financial Advisor. I couldn't agree more. Very well written article. I have been screaming about "invented shares" for 15 years. Thanks for the read.

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

» No you don't Posted by: saml
What Experts?
Posted by: pharmawatcher on Jul 26, 2007 5:26 AM   
Current rating: 2    [1 = poor; 5 = excellent]
I want to complain about false advertising in the headlines and subheads for this article. You quote three sources, one of whom is actually quite temperate in his remarks and the other two are actually either investors or representatives of investors who are invest in companies squeezed by hedge-fund short-sellers. It's a serious question whether naked-short selling by hedge funds represents a systemic risk to capital markets, and I would have like to learn what oversight authorities at the Federal Reserve Bank and the Securities and Exchange Commission think about the situation, not to mention progressive economists who follow capital markets closely (I could provide your reporters with a list if they wish to contact me). I'm not asking for Alternet to eschew a progressive point of view. But I think your reporters ought to learn how to diversify their sources, learn to confront official sources with the questions raised by their stories, and learn to disclose the obvious conflicts of interest of any source they use, especially someone whose own website -- "investigatethesec.com" -- proclaims that they represent investors who've been hurt by short sales.

Mainstream jourmalism is collapsing because advertising dollars are migrating rapidly to the Internet. Look at today's profit reports on the Tribune Co. and the New York Times Co. It looks like the people the blogosphere loves to hate won't be with us much longer, and more and more people will be getting news from sources like yours. My fear is that the journalistic values the MSM follows on its better days is going to go down the toilet with it.

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» RE: What Experts? Posted by: leafsong1
» RE: What Experts? Posted by: jbur816
» You want sources about market fraud? Posted by: ReallyBearish
» RE: What Experts? Posted by: Morphizm
The new economic order
Posted by: Temporary on Jul 26, 2007 5:49 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
America tied up...

real good:)

And China on the other hand is doing good!

REAL GOOD:)

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

» RE: The new economic order Posted by: richholland
VERY TIMELY
Posted by: gellero on Jul 26, 2007 6:17 AM   
Current rating: 4    [1 = poor; 5 = excellent]
Funny, but just last week a client of mine - a professional 'technical stock analyst' in his mid 50's ( his own and some private money 10 - 20 million ) said the market was headed for a major correction.......20 - 30 % down. Or more Drops of over 1000 points in a week or less to start. (that's just the DOW, individual stocks could lose 50 - 70 %) He's into gold equities. Euro stocks will have a sympthetic fall too. All within the next 3 months.
Move your 401K into cash now.....you have been warned!!

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

» Cash? Posted by: justaguy
The Great Depression didn't just "happen"--
Posted by: zooeyhall on Jul 26, 2007 6:25 AM   
Current rating: 5    [1 = poor; 5 = excellent]
Most of the time, the Great Depression is taught in schools and presented on the media as something that just "happened"--like a hurricane or earthquake. However there were fundamental flaws in the capitalist system that made the Great Depression inevitable. And those flaws still exist today.

In addition to the issues raised in this article, I would like to add another. Many historical economists agree that there were serious, hidden, and ignored problems in the economy in the twenties--well before the crash of '29. One of the most important--and one that is all to evident today--was the declining real purchasing power of the working class. Even though businesses and CEOs were making record amounts of money, little of the benefits went to labor. Ordinary people could not then buy the ever increasing glut of consumer goods. Wealth disparity in American society reached levels that weren't exceeded until the present day.

And of course there was the prevalent preaching that unrestrained capitalism would cure all. And if you weren't in a rising boat---well, you just were too lazy or incompetent to get in on the gravy!

Add to that a media filled with fluff reporting and a "bread and circuses" entertainment for the masses--well, the 1920's are looking alot like American in the first decade of the 21st century!

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» Right wing rubbish Posted by: ReallyBearish
» edith is a bushie- Posted by: WitchyNy
» Bearish about the truth? Posted by: edith
» No problem, Gullible. Posted by: edith
Like a tidal wave, over 30 years to build...
Posted by: djnoll on Jul 26, 2007 6:47 AM   
Current rating: 5    [1 = poor; 5 = excellent]
and it will crest in another 5-10 years and crash on us all, worldwide. When our government passed ERISA at the behest of corporations who wanted out from under the pension burden, the American way of life was put on a path of financial disaster. the average person is not financially educated at all, and thus does not have or understand the tools needed to manage large investment programs. IRAs and 401 (k)s are the toys of the investment industry and are served up by employers as the alternative to pension funds that the employer pays for as a way of protecting the retirement of loyal employees.

So now we have have had junk bonds and hedge funds that investment houses have used to support investments. We have people like Russ Whitney and Carlton Sheets who sell people programs that encourage them to invest in real estate and make people prey for subprime loans. Of course they make their money from selling you the programs because they have moved on to bigger and more involved investments, using other people's money to create money. Then, when the markets begin to fall, these people who have mastered the economic game bail out, and leave the rest of us to hold the pieces as they crash around our heads.

The government is not going to step in and regulate anything. They think that this "growing" economy of wealth is going to last forever if they just keep us at war. They are right to a certain extent, but when baby boomers begin cashing in those IRAs and 401(k)s around 2017, billions of dollars are going to be needed to meet the demand, and when those dollars are not real....guess what? DEPRESSION! and one that will make the 1929 Great Depression look like a Sunday School picnic. And the likes of Rupert Murdoch will be no where to be seen, right along with his wealthy pals the Bushes and the Cheneys of this world.

Not only should we be cashing in and putting our money into gold and other tangible investments, we should be getting 100% out of debt as quickly as possible and making sure that we can feed and support ourselves adequately. We should be creating communities that work together to care and support each other with food, supplies, emergency services. We should be preparing ourselves to help our neighboring communities as a way of protecting ourselves. When the next Depression happens, it will be coupled with a level of violence that will be difficult to suppress. In short, folks, it will be a catharsis that will either cleanse this country of its apathy and create a better nation, or it will be the end of this country in a bloody battle to the death. The choice is still ours, but only if we listen to people like this author of the article, and start to prepare now.

http://www.standanddeliveramerica.com

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» RE: or we can just fiddle Posted by: solrev
And don't forget--Our constitution is just a piece of shredded paper...
Posted by: wmGreybeard on Jul 26, 2007 7:17 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
"Like I said, same scam, different name."

When any thing gets a bad reputation they change the name.. Pool becomes hedge fund.. Philip Morris becomes Altria ( cute innocent sounding name) ect. ect.

Maybe another 1929 would be a good thing. Paper money would be worthless, property titles are only pieces of paper like our constitution. The rich can't eat gold.

It will be a horrible mess for most of us, but if the earth is not destroyed by nuclear war, there are some including the indigenous tribes who will survive and perhaps develop a better society than we have.

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» Let Them Eat Gold? Posted by: edith
» And who has the gold, Edith? Posted by: ReallyBearish
Major correction coming soon: get liquid and get out of debt!
Posted by: Bobsays on Jul 26, 2007 7:32 AM   
Current rating: 4    [1 = poor; 5 = excellent]
I have been following this closely. Just last week a gathering of fund managers in the UK was a jumpy affair. All smelt something was going wrong and all were making exit plans fast. The UK economy is even more debt-juiced and bogus than the US economy.

Right now, the UK economy is experiencing growing inflation for everything (except most peoples salaries of course): food, housing, transport - it is all going up at a higher rate than the 'official' inflation. That is what they call a 'crack-up boom' - the last surge of greed and panic before it all implodes. It always gets worse before the crash. As people freak out, they pile into houses in order to protect their wealth, driving up prices and massively increasing debt. But in the end a correction comes, because, let's be honest, the UK is mostly a toilet for most people. It is a less-than-inspiring place and its economy is now centered around funny money and welfare provision. Not a super-great way to do things.

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Remember the Soviet Union?
Posted by: Temporary on Jul 26, 2007 7:56 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
"Economy? What "economy" comrade?"

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The new world order
Posted by: Temporary on Jul 26, 2007 8:02 AM   
Current rating: 3    [1 = poor; 5 = excellent]
Does this mean we shoud invest in gold????
Posted by: andy on Jul 26, 2007 8:03 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
if this is in fact true, and im sure it will happen one day, should one invest in gold (real gold in hand). If the market crashes and the currency becomes hyper inflated and worthless, does this mean gold (keeping up with this hyperinflation) will become something like $20000 an ounce?

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» Invest in Canned Goods Posted by: monkopotamus
Can't eat gold..
Posted by: form516 on Jul 26, 2007 8:21 AM   
Current rating: 4    [1 = poor; 5 = excellent]
I think I'll invest in a farm instead.

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» RE: Can't eat gold.. Posted by: cellorelio
» RE: Can't eat gold.. Posted by: ReallyBearish
» RE: Can't eat gold.. Posted by: Ysiad
Contrasts between 1929 and 2007
Posted by: Trazom on Jul 26, 2007 8:28 AM   
Current rating: 5    [1 = poor; 5 = excellent]
While the author addresses some similarities between now and then, mostly the financial derivatives markets, I think we need to point out 2 huge disparities that may end up creating a crisis much worse that what was experienced in the past:

1) The United States is now a net energy importer, and has been ever since the fifties. We import 5x energy than what we export. I'm assuming this is mostly petroleum (can't find the statistics). Not only that, but we also are net consumers of energy, consuming 98 quadrillion BTU per year compared to producing 72 quad BTU. with the difference coming from imports. And the differences are only growing. In 2000 we consumed 38 quad BTU worth of petroleum compared with 1929 levels of only 6 quad BTU. What does this all mean? It means that we have another nail in the coffin, for if a depression ensued and got really really nasty, all things would go out the window except energy, which would be King. All of the things we take for granted, which need such enormous amounts, would be gone in a puff of smoke, leaving a hundred million automobiles with no gas to put in the tanks, and a large section of suburbia (which didn't really exist back then) virtually uninhabitable. Those who would be lucky enough to get their hands on some gasoline will be pay very steep prices, and those who cannot will simply suffer.

2) A much larger percentage of Americans have mortgages (2/3 of all households in the US). Not having statistics on this from 1929, I would venture a guess that it is somewhere near 1/3 or even less. And those who did buy houses back then often payed entirely in cash, completely unthinkable today for everyone but the rich. So in addition to a depression which wipes out millions of jobs almost overnight, there is now even less solace for these millions of additional homeowners who will now be crushed by the weight of their mortgage debt.

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Crappy article
Posted by: davcrock on Jul 26, 2007 8:31 AM   
Current rating: 2    [1 = poor; 5 = excellent]
I don't think the author knows jack about financial markets. Going long or short on stock doesn't hurt the middle class one iota. The problem with CDO's is the actual pricing is very difficult and requires very complicated models. Unfortunately, quite a few people got it wrong. People who invest in hedge funds know they are taking a massive risk. They take it for the chance at a massive payoff. Furthermore, hedge funds are only available to institutional investors and people with huge incomes. Naked short selling is a risk. But the returns can be huge.

If the author is so sure that we are on the way to financial collapse, build a financial model, show the assumptions, and publish the results. Otherwise, quite making spurious comparisons to a very different time and financial environment and quit fear mongering over something that you don't understand.

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» SO, you want proof... Posted by: Bobsays
» More proof Posted by: ReallyBearish
» RE: Crappy article Posted by: VZEQICVA
» RE: Crappy article Posted by: VZEQICVA
» RE: Crappy article Posted by: VZEQICVA
The BIG QUESTION is...
Posted by: greenman on Jul 26, 2007 9:01 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
...what do you ask yoiur broker about the stocks which are in your account? Mr. Byrne says:

"Now you never know about this unless you know the right question to ask your broker, but it's possible that all you really have in your account is an IOU from your brokerage account from a different broker working with a hedge fund."

So, what's the magic question?

Greenman

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» RE: The BIG QUESTION is... Posted by: VZEQICVA
A LOAF OF BREAD VS. A TWINKIE
Posted by: VZEQICVA on Jul 26, 2007 9:25 AM   
Current rating: 4    [1 = poor; 5 = excellent]
1929 was bread, now we have a Twinkie market. We know how bread is made but twinkies remain a mystery. I had 20 yrs. in the financial biz and I've known some brilliant people. Much of daily market activity is over most heads. Currency, options, short selling, derivatives, margin, interest rates, etc.
Most of us should be saving, not so called investing. If you follow 1 share of stock in a single company you'll see a lot more than a share of stock. It's complicated. Thanks, ANNA

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A LOAF OF BREAD VS. A TWINKIE
Posted by: VZEQICVA on Jul 26, 2007 9:25 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
1929 was bread, now we have a Twinkie market. We know how bread is made but twinkies remain a mystery. I had 20 yrs. in the financial biz and I've known some brilliant people. Much of daily market activity is over most heads. Currency, options, short selling, derivatives, margin, interest rates, etc.
Most of us should be saving, not so called investing. If you follow 1 share of stock in a single company you'll see a lot more than a share of stock. It's complicated. Thanks, ANNA

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the system never did work
Posted by: Realist 2 on Jul 26, 2007 9:29 AM   
Current rating: 4    [1 = poor; 5 = excellent]
I marched with Dr. King. I was drummed out of the broadcast business because I spoke out against the war in Korea. I led demonstrations against the war in Vietnam and did the same against the war in Iraq. As a world war two vet I organized groups to help get better funding for VA Hospitals. All during that time I knew that no real change will come about unless we create a real Government by for and of the people. It almost happened after the last crash, but the system was saved. This time it will happen. Read REBIRTH OF A REALIST
www.erols.com/suttonbear

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I have a feeling..
Posted by: Temporary on Jul 26, 2007 9:33 AM   
Current rating: 5    [1 = poor; 5 = excellent]
Uncle Sam will be deployed in the middle-east for a long, LOONG TIME!

Just enough time for China to play a "Reagan" on Bushes America;)

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» One things for sure! Posted by: Temporary
Charts for Edith and the Right Wing Bozos
Posted by: ReallyBearish on Jul 26, 2007 9:47 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
http://www.321gold.com/editorials/willie/willie072607.html

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» scary stuff Posted by: mcooley
» Answer Posted by: ReallyBearish
WATCH: ZEIGEIST The Movie
Posted by: mcooley on Jul 26, 2007 9:55 AM   
Current rating: 5    [1 = poor; 5 = excellent]
If you haven't seen this video - don't be the last one to see where this next financial meltdown sucker punch is going to come from soon. The market's highs, the price of gold - this is all the final act before the closing bell:

Zeitgeist: Part 3 of this video lays it all out:
http://video.google.com/videoplay?docid=497251819335380093

You might then be intrigued to spend the time to watch the whole thing here:
http://video.google.com/videoplay?docid=5547481422995115331

Based on view counts, this video is currently rated #8, but it doesn't appear on google's "Top 100" list?
I wonder why?
Maybe for the same reason google took down the video
"America: Freedom to Fascism" after it hit over 3 million views and then relisted it with a new count starting at zero:
http://video.google.com/videoplay?docid=-1656880303867390173

Google - with their Orwellian corporate motto of "Do No Evil" seems to not want you to know what other people are actually watching. If you look at their "Top 100" list - it is basically all "tits-n-ass" videos - most of which have less hits than Zeitgeist.

Why is google lying to you?

Please watch these two videos while you still can.

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» RE: WATCH: ZEIGEIST The Movie Posted by: pjlewis_451
» RE: WATCH: ZEIGEIST The Movie Posted by: A rope leash
American economy...
Posted by: Temporary on Jul 26, 2007 9:59 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
flowing steadily to keep the military industrial complex going.

Going...

still going...

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Depression II
Posted by: leemiller38 on Jul 26, 2007 10:06 AM   
Current rating: 5    [1 = poor; 5 = excellent]
Before WWII the first global conflagration was known as the Great War. So far the Great Depression has withstood the times because we have been lucky and the oil is still holding out, but eventually we know that infinite growth in population or the economy on a finite planet is impossible to sustain. Our "Growth and Progress" paradigm is badly flawed.
I much prefer a doomsday depression to a nuclear war and I am betting that the powers what be do too, though they seem to be a bunch of morons. It will wring out the excess in population in a hurry, but some of nature will survive and the planet will recover in a few million years though it will never be the beautiful place it was before we evolved.
However, we should be getting nuclear weapons dismantled just in case one of our political morons goes berserk. The dismantling will cost money and energy and can be added to our World Gross Product to show we are still growing the economy!

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American economy
Posted by: Temporary on Jul 26, 2007 10:17 AM   
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Running out of...

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» RE: American economy Posted by: Temporary
More wars ahead!
Posted by: Temporary on Jul 26, 2007 10:34 AM   
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Paper Wealth
Posted by: bob t on Jul 26, 2007 10:41 AM   
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The Bush Republican is nothing but short term paper wealth. That coupled with the lask of purchasing power of the middle class and America is headed for a financial crash.
But then Bush said he would do that and he has.

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Parasites
Posted by: american on Jul 26, 2007 10:47 AM   
Current rating: 5    [1 = poor; 5 = excellent]
The hedge fund parasites are taking energy away from the rest of us and the environment by scamming and scheming, slowly, carelessly killing...

If what you do doesn't actually add value, you are a parasite.

To think, this set actually thinks they are the "beautiful people."

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Other signs of a looming depression.
Posted by: HughScott on Jul 26, 2007 11:23 AM   
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Where I live, in Southern California, 18% of people making $200,000 a year live from paycheck to paycheck. Lose their jobs and they lose their homes. Meanwhile, foreclosures in Los Angeles County are up a whopping 800 percent this year.

Americans had better pray that Red China keeps buying U.S. bonds. But then, President Bush says not to worry. And why should we? He's been right about everything else.

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Wishful thinking
Posted by: persian on Jul 26, 2007 12:14 PM   
Current rating: 1    [1 = poor; 5 = excellent]
There will be no crash of any sort. As always there will be strong corrections after a period of speculative and highly leveragd market i.e. intenet bubble of 2000 . The article fails to point out that the total impact of hedge funds on global equity market is fractional. People who borrow or buy houses beyond their means or get too greedy will get burned just like 2000. The excess borrowing of american consumers and government is where the danger lies. At some point the chinese and holders of petro -dollars will demand higher premium for their loan which will increase interest rate for all of us and take a bigger bite off of US budget and that will take away precious dollars away from health and education .The idea that you can go to war and give a tax breaks to the wealthy at the same time can only be done by borrowing. And that is to say the least misguided and irresponsible.

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» RE: Wishful thinking Posted by: Morphizm
» RE: Wishful thinking Posted by: mommy64
Let's recall that the term Casino Economy was coined by JM Keynes during the Great Depression.
Posted by: yellow on Jul 26, 2007 12:40 PM   
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The conditions that this great and precient economist saw during the 1930s was exactly the prevailing conditions we see today. There is rising social inequality, massive financial speculation, monopoly and economic concentration, and rapidly growing debt. The kind of instability brought about by these conditions can reappear. We are asking for real trouble.

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The IMF has been issuing warnings since 2002...
Posted by: babs on Jul 26, 2007 1:33 PM   
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... about out-of-control spending of the bush administration, the U.S. trade deficit, and mounting U.S. war debt (now in the tens of trillions). It warned that this unprecedented fiscal irresponsibility could possibly bring on a new world wide depression.

These dire warnings were publicized in the U.K., Canada, and other media markets, but I guess not in America. Maybe Bush vetoed that story too...

but hey, the Bushes will never miss a meal so what the hell do they care! Scotch and cigars in Dubai and "so long suckers, thanks for the ride".

it has been the crime of the century indeed and it continues to amaze and stupify the world.

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