Real Estate 4 Ran$om: And The Role of Speculation & Recurrence of Fraud in Financial Collapse

–  Jesse’s Café Américain

Classical/Neo-Classical Economics: Skill/Privilege & Wages/Rents – “We have been distracted from the economic principles that effect our lives!” – video

This is an Australian produced film, but the principles carry. – I would not focus on land to the exclusion of financial assets like stocks, and other vehicles for producing income and capital gains, that allow speculators to game the system. (which is subsidized by the wage earner. – IP)

Real Estate 4 RansomClick for video

The US internet bubble for example. had nothing to do with land per se. And the Florida land boom in the US preceded by several years the stock market boom that led to the Crash of 1929.

And it was financialization, the application of fraudulent valuation and securitization leverage, that gave the US credit bubble its kick.

Financialization permits the transmission of the speculation to a broader audience, in the most recent collapse a global audience, and widens the scope and duration of the Ponzi scheme through its interlocking web of counter party risks.

The most common thread in destructive bubbles is official complicity, often seen in regulatory capture, and the almost willful suspension of disbelief achieved through influence in the media and the steady application of messaging, often so intense that it borders on overt propaganda.

Certainly it does involve the silencing of whistleblowers and critics through access denial, ridicule, and other forms of soft censorship. And if it is followed by the obstruction of justice so that the perpetrators may go forward unimpeded, they will work their cons and carny magic on something else again.

If this simple explanation of speculation does not have a sufficient pedigree, perhaps this more refined and weighty pronouncement from the Bank of England may serve to persuade.

“Under one equilibrium, patience wins the day. When long-term investors start in the ascendancy, prices tend to correct towards fundamentals. The performance of untested investors pursuing momentum strategies falters, while those pursuing longterm strategies flourish. The fraction of long-term investors rises. The self-correcting tendencies of market prices are thus reinforced, further supporting long-term investors. The patience gene thrives, the impatience gene dies. Natural selection results in a self-improving cycle, as with dieting, happiness and exercise.

But there is a second equilibrium where this cycle operates in reverse gear. With a large fraction of momentum traders, prices deviate persistently from fundamentals. Among untested investors, momentum strategies now flourish while long-term fundamentalists fail. The speculative balance of investors rises, increasing the degree of misalignment in prices. The patience gene falls into terminal decline. Natural selection results in a self-destructive cycle, as with drug, alcohol and food addiction.”

Andrew G. Haldane, Patience and Finance

And it is the government and the regulators, the Federal Reserve and the Bank of England, the FSA, SEC and CFTC for example, whose sworn duty it is to protect the financial markets from the ravages of rampant speculation and fraud.

And such a destructive condition cannot occur over a period of time unless they do not honor their oaths, for whatever reasons and rationales they may wish to provide.

The reliability of self-regulation is a fairy tale for dreamers and fools. Self-regulation requires an extraordinary moral nature, to hold itself virtuous against the temptation of concentrated power without impartial oversight. Quis custodiet ipsos custodes? It has NEVER worked, and is the guise assumed by wolves as they mingle with sheep. Trust us.

When speculation is allowed to flourish unchecked, whether through laxity or complicity or both, there is the inevitable and corrosive mispricing of risk that leads to disparity of fortune between the perpetrators and their marks, and the inevitable economic collapse as rude reality intrudes once again.

Didn’t quite catch their trick that last two times? Watch as they do it again.

And for whatever it may contribute, speculation in land and other means of production is but a child’s toy, as compared to the powerful engine of destruction, the destroyer of wealth, that is engaged by the systematic abuse and debasement of a nation’s currency, much less the premier currency of the world.

While greed and gullibility act in partnership, the allure of easy money never gets old, and recurs again and again throughout history.

“The commercial world is very frequently put into confusion by the bankruptcy of merchants, that assumed the splendor of wealth only to obtain the privilege of trading with the stock of other men, and of contracting debts which nothing but lucky casualties could enable them to pay; till after having supported their appearance a while by tumultuary magnificence of boundless traffic, they sink at once, and drag down into poverty those whom their equipages had induced to trust them.”

Samuel Johnson, The Rambler, January 7, 1752

“No free government, or the blessings of liberty, can be preserved to any people, but by a firm adherence to justice, moderation, temperance, frugality and virtue, and by frequent recurrence to fundamental principles.” – George Mason, The Virginia Declaration of Rights

~{END}~

Implications & Progression: Catherine Austin Fitts on corruption of the 80’s, 90’s and 00’s

Quis custodiet ipsos custodes?

In the early 1990’s Cathrine Austin Fitts company; Hamilton Securities developed software programs that consolidated the bidding process on HUD auctions. This made the process more transparent, doubled annual closing percentages and saved taxpayers $2.2 Billion. Some of the companies start up businesses, when combined with computer training, moved people off public assistance into productive jobs. Problem; this ruffled the feathers of corporate insiders and financial institutions who were making easy money from their rigged bidding monopoly and profits gained from public assistance programs. Thus began a decade long nightmare where HUD, The Harvard Trust (one of the nations largest slumlords) and the Department of Justice embroiled Ms Fitts and her company in baseless lawsuits and both physically and psychologically harassed, threatened and intimidated her, eventually driving Hamilton into bankruptcy. Some of those jobs her company created, in the inner city, are now handled by JP Morgan Chase, in India. Excerpts below are from: “Dillon Reed and Company: And the Aristocracy of Stock Profits” – IP

“John Birkelund, Chairman of Dillan Reed and Company (purchased by Swiss Bank Corporation which was acquired by UBS) and I would not discuss all of this because we would both understand that enforcement has nothing to do with law as described in civic classes. Enforcement is a game, a deadly game meant to maximize insiders organized crime profits and operations worldwide, and to organize and implement class privilege and ensure that the insiders win in the game of winner-takes-all economic warfare. If I did bring it up, John would most likely get frustrated with me… Because John does not have the power to change the rules of the game, just to play within them. John knows how hard it is to make money even when you do your very best to go with the flow. That is why the safe thing to do is to rig cash flow through government laws, regulations and contracts and to arrange for government to get rid of your enemies. This is one of the reasons why the blur of people cycling between high-level Wall Street and Washington positions at some point helps us to understand the extent to which there is no longer any sovereign government.

If I were to sit down with Al Gore, Elaine Kamarck, Jamie Gorelick and Chris Edley, I would expect their explanations would involve more obfuscating policy discussions but it would ultimately come down to a similar notion of going with the flow. As would the hundreds of thousands of highly credentialed, well-paid Americans who have actively lead the day-to-day implementation of policies that, when we pierce the veil, are really dictated by powerful private interests outside of the law as we believe it to be. Add all these policies and actions up and they add up to genocide, of our families and communities and of all living things, both throughout America and around the world.

Toward the end of the Clinton Administration, I sat down with a piece of paper and made a list of all the people who I believed had died as a result of actions by the U.S. banks, corporations, government and our allies, including economic warfare in Russia and Latin America, narcotics trafficking and the War on Drugs both in the U.S. and abroad as well as limited military engagements. I estimated that in a decade, we were intentionally responsible for the death of many millions of people throughout the world. For example, note this interview from May 1996 about the death of children in Iraq:

Lesley Stahl, 60 MINUTES: We have heard that a half million children have died [because of sanctions against Iraq]. I mean, that’s more children than died in Hiroshima and you know, is the price worth it? U.S. Secretary of State Madeleine Albright: I think this is a very hard choice, but the price? we think the price is worth it.

I have not repeated this exercise for the current Bush Administration. I expect, if I did, that it would show that the killing machine is steadily growing hungrier as it has for every Administration for a long time. And with $4 trillion missing from the U.S. government and more missing from a pump and dump of U.S. stock and other markets, I suspect that the private offshore deposits have continued to rise with the falling of the Popsicle Index (The Popsicle Index is the % of people who believe a child can leave their home, go to the nearest place to buy a Popsicle or snack, and come home alone safely)…..

The power of the killing machine rests in part in the broad based popular support it receives through the investment system and the markets. How are we to plead ignorance if the profits and growth in our 401K plans and investment portfolios have been enriched from prison stocks and the securities of the banks, homebuilders, property managers, mortgage bankers and other groups who managed this process of ethnic and economic cleansing and the gentrification it made possible?….

Our financial profiteering and complicity is not limited to elites. Our financial dependency on non-sustainable economics is broad, ingrained and deep. Are minorities, women and children being impacted disproportionately? Yes, but that is merely because those with little or no power are easiest to steal from or kill first. After the U.S. Governments intentional decision to provide no relief in New Orleans in the early days after Katrina, a faster way to set the stage for urban gentrification then the War on Drugs and private prisons, the first Afro-American Secretary of State, Condoleezza Rice, went shopping for $200 shoes while men and women of all ages and backgrounds; black, brown and white lost businesses, homes, families and lives together in the floods. This is the true face of the New World Order.

When Hamilton’s offices were seized, I found myself before a battery of new attorneys brought in by our insurance company. At one point, one of them suggested that we shift the responsibility for an action to a corporate subcontractor in a manner that would abrogate our verbal contract with them. When I made clear I would not do that, they said I had no choice. If I did not do what they said, the insurance carrier would pull their representation and with no attorneys like the young people being rounded up by Operation Safe Home I would go to jail. And so I decided it was time to lay down a few ground rules that would help newcomers understand what was involved with working with me. I said:

Gentlemen, I am obedient to the laws of God and there is nothing that you can say or do that will cause me to violate them. If that means that I am going to jail, then I am going to jail, if only to organize the last group of entrepreneurs I need to run the country when the government collapses. Because if people like me are going to prison, then it is only a matter of time until this government fails…

Interestingly enough, the lawyer who threatened me, told me many months later that this was the moment in which he realized that we were going to win.

Here is my prediction for the New World Order. I don’t know when. I don’t know where.  I don’t know how many patents on fundamental life process that Monsanto will claim sufficient to not let me cough without paying them a fee. I don’t know how many people the New World Order will reduce to poverty, assassinate and torture before they fail. I just know that they will fail. Because ultimately large complex systems cannot be held together by greed, technology and fear alone. Suspicion, lawlessness and smallness of mind ultimately cause implosion from within…

There was a time in my life when I believed that I was part of a culture of people; call us the English speaking people, who were excellent. The way of grief was the path through which I learned that I was mistaken. Long ago, I made a promise that I would never act against the best interests or the excellence of my own people; that I would do my best to ensure that we were worthy of the stewardship of our world and that we did our best to leave a better world for generations yet to come. To make and keep such a promise is to understand that money and position are tools, not goals, and that death is not the worst thing that can happen. John Birkelund would probably accuse me of fighting the tape and not being good at the game. I would tell John that now is not the time in the history of our people for a failure of imagination.” – Cathrine Austin Fitts

IP did a post featuring a fascinating interview on corruption with Ms, Fits. If you’re interested in the depth of the Rabbit Hole and the psychopaths within check it out and, see the “Dillon Reed and Company: And the Aristocracy of Stock Profits” link at the bottom of: The Looting of America: Happy Labor Day

Inflection Point

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