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Web Letters | The Nation

Web Letter

Only six months ago we were falsely assured our financial institutions were in perfect shape.

Then our government told us it would explicitly accept responsibility for Fannie Mae's and Freddie Mac's mortgage-based securities just as a token sign of support, not expecting to incur any cost ever.

A couple of days ago our Federal Reserve Bank announced that it would print $1 trillion to buy those incriminated mortgage-based securities from the banks to help us, the customers, with better credit lines.

The question is why our government is obsessed with helping the citizens. We are willing to accept the measures that would help only the banks. If the government used that $1 trillion to give the tax cuts to us, we would be able to pay our mortgages back, thus helping the banks directly.

This way Mr. Bernanke and his counterparts in the White House put their sticky fingers directly into our pockets and stole $1 trillion by printing the money. The printing of fresh money doesn’t create any new value, it just dilutes the worth of the money we have in our wallets.

Unfortunately, our mainstream journalists are so busy discussing Obama’s appearance on the late night show, his basketball predictions and inflaming the public outrage over $160 million in bonuses to the AIG executives while ignoring a crucial fact, that a sum of money 6250 times larger has been stolen in front of our eyes.

We should keep the Guantánamo Base open with a different kind of criminal inside till we find out every tiny detail of the immense conspiracy directed at undermining the financial stability of our country.

Kenan Porobic

Charlotte, NC

Mar 20 2009 - 8:04am

Web Letter

Excellent article by Robert Scheer. Much of the media still enables these thieves by treating these so-called masters of finance with kid gloves. Their tone suggests that this will all blow over and then everything will settle back into the old patterns as soon as the public moves on to the next distraction.

jerry thomas

San Mateo, CA

Mar 18 2009 - 6:10pm

Web Letter

Scheer nails it! Let them all do the perp walk: AIG, Citigroup, Paulson,Geithner, Summers, Greenspan, Rubin...

Obama's pose/posture is inexcusable in all of this. His economy gurus insisted that the auto union workers' contracts be shredded but the AIG contracts are sacrosanct?

Handwriting was on the wall on this one: Obama taught at the University of Chicago law school (Home of Tory, free-marketer economist Milton Friedman), hired UChicago economist Austan Goolsbee as his advisor on things economic and globalizing. (Remember the Canada free-trade flap?) Further, hired members from Robert Rubin's unregulated free-traders found at Citibank/Citigroup/Harvard/Central Bank--like Summers, Geithner, etc.

They all drank the Wild West gambling casino economic Kool-Aid and then their world went into meltdown and still, incredibly, they are running (ruining) the show.

As for AIG, sure, resign, suicide or jail. AIGers committed at least two crimes: 1-they took in subprime junk mortgages and relabeled them as AAA or AA securities (selling junk as gold is fraud).

2- Its credit default operation in London was really a gambling casino. Bets (sometimes called insurance) were placed on anything--for example, would so-and-so's dog die in a fire on April 3, 2013? Hundreds of people could place this bet. And, here's the crime, they never put in the money to support these bets in case someone won the bet. Instead, they relied on the government bailing them out. If they made money on the gambling casino it was theirs, if they lost they taxpayers would bail them out.

As I said, AIGers resign, commit suicide or go to jail. (Don't pass Go and don't collect $200).

Moreover, as bad as Madoff's ponzi scheme was, he's small potatoes compared to the Wall Street banking giants.

The biggest scam ever was the subprime mortgage business. Credit was so easy that anyone with a pulse was given a junk mortgage; these, in turn, were shoveled through the doors of the banks and insurers like AIG. Next, our best and brightest bankers prevailed upon the rating agencies to label the junk as AAA securities. These "troubled assets" were then sliced and diced, collaterized, leveraged 30x and sold around the world as if they were gold. The business was such a money machine that it was impossible to say no to it. When the housing bubble burst, people lost their life savings, and countries went down. It seems to me that knowingly selling junk as if it were gold is fraud. Trillions of dollars were scammed and yet no one is busted?

Howard Kaplan

Belmont, MA

Mar 18 2009 - 5:08pm

Web Letter

I have a question... Really. I keep hearing little quiet rumors that the Federal Reserve also poured money into AIG independent of the TARP. Is this true? How much? Is it as much as a trillion, gulp?

James L Pinette

Caribou, ME

Mar 18 2009 - 9:53am

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