We believe the demise of Bear Stearns was planned months if not years ago. The tip-off was Randal Quarles’ statements. He was formerly Under Secretary of the Treasury and it was he who led the Treasury Department’s effort in the coordination of the President’s “Working Group on Financial Markets” and is currently Managing Director of the Carlyle Group. As we explained many times before these Illuminists float from one position to another in and out of the government.
He spoke at the National Economists Club in Washington and told those assembled that he chose his topic in January to explain the proposal to restructure the financial regulatory agencies, something Treasury Secretary Paulson presented just a week ago. That tells us that, that latest proposal was a long time in the making. Quarles is a top insider Illuminist so you had best listen. This means the Bear Stearns failure and the new proposals to make the Fed king of everything were planned long ago.
Quarles explained that the losses in terms of capital in the financial industry were massive, over one trillion dollars. He explained that more financial institutions would go under in the coming months. He said public markets do not have the capital to keep the system going, but he said firms like Carlyle had the ability to supply those funds.
He said regulatory changes were needed, specifically the size of positions that non-banks can take in banks. This means that specific banks and investment banks will be allowed to survive and the remainder will go under. Quarles knows, as do other insiders, which will survive and who to invest in. As you can see all things are not always as they seem to be.
There are more than 8,500 banks in the US and more than 90% of them are regional. Many are well capitalized and have no trouble borrowing in financial markets or attracting deposits, but some will get into trouble in the months ahead. Some will need to raise tens of billions of dollars to cover bad loans, and must choose among three unappetizing options: selling stock or bonds, selling assets or selling themselves, which is going to bring about more concentration in the banking sector. Many are heavily exposed to consumer mortgages and commercial real estate developers who cannot pay back interest and principal payments or both.
The placement at Lehman Bros. of $4 billion and at UBS and Deutsche Bank were to instill confidence in the system. They have temporarily, but that will be transitory because eventually more than $2 trillion will be necessary to keep banking institutions solvent. These big banks have already raised more than $100 billion to shore up their balance sheets.
Regional banks will find it more difficult to raise funds and will be absorbed by other banks.
Banks in the West, Midwest and Southeast will be hardest hit by the housing downturn and we do not see Sovereign Wealth Funds beating down their doors to buy equity.
Some banks have cut dividends to conserve cash, but that makes shares appear to be worth less.
Some are forming subsidiaries to hold bad loans, but eventually that accomplishes little in the long run. The toxic investments still have to be written off. It will be a tough road for small and middle-sized banks over the next several years.
As we pointed out in the last issue, the SEC has told corporations to value assets at the highest possible level and we will look the other way. This is what they did in the early 1980s and over several years the banks re-built their asset bases. This may be fine for the insiders but we do not get that opportunity. This time the financial system is far weaker than it was in the early 1980s. Yes, banks can carry assets at prices that have nothing to do with reality and they can buy time, but in the end their attempts at revival will prove fruitless. Thus, all the forced sale of assets at very low prices can be ignored and banks, Wall Street and corporate America can list assets at face value – what a charade. As we pointed out earlier the inside Illuminists will have access to unlimited amounts of cash and credit to buy into banks and whatever else they wish to consolidate their power and to accumulate ever more wealth. Those who are not in the elitist circle will be allowed to fail. Only those loyal to the Illuminati will financially survive.
Due to the new absence of rules and reporting, the true state of business affairs cannot be truly known. There will be no transparency and we will not know who is solvent and who isn’t. This is an unbelievable state of affairs in what is supposed to be a democracy. A coup has taken place by the money masters. They now tell us, that value is what we say it is and if you disagree you will be destroyed. There is no more law or regulation; they are what the Illuminists say they are. The Fed and our Treasury are going to do what they want to do and have to do to keep their system going. They will not easily relinquish their power. They will destroy the American people and subject them, if necessary, to continue in power.
They totally control all aspects of government and all regulatory agencies. That is why there is no movement in Washington to stop what they are doing. The agencies are there to protect the conspiracy. Don’t look for help from Congress, they are bought and paid for or compromised. The SEC and the CFTC do as they are told. You will get no help from them.
When we see journalists telling us Mr. Paulson’s proposals are basically good ideas we want to puke. It’s a consolidation of power. It is an implosion of the entire world credit market and anyone who thinks the exit from these problems will be easy is mistaken. The best we can hope for is depression and the worst is revolution.
You do not solve these kind of problems by cooking the books. There are over $2 trillion in write offs in progress and they cannot be avoided. The elitists want to extend them so their system of looting and corruption can continue and they can gather more power.
The collapses in the real estate industry and the credit crisis have their roots in the destruction of the Glass-Streagall Act of 1933. The quest for the end of this legislation by the banks began in the 1980s and we wrote about what would happen if the legislation were passed. It passed and it has turned out just the way we thought it would. Not only badly for Americans but it has been responsible for the problems we have today. It was important for banks to kill Glass-Steagall not only for the benefits but banks were breaking the law. The Act deliberately separated commercial banking from investment banking because Congress felt that the combination was in part responsible for the “Great Depression.” The bankers bought Congress and the Gramm-Leach-Bliley Act was passed in 1999. The result was the ability to make horrible loans, have a phony rating attached, form them into securities and sell them worldwide. All prudence was abandoned and as a result we have trillions of dollars in losses and our financial system stands at the edge of disaster. Even the delinquency figure for the fourth quarter of 5.2% isn’t reflective of how bad the situation really is because lenders are leaving non-payers in their homes. Banks and others are holding billions in mortgage-related instruments that are worthless because there is no market for them. As you can see banks and investment banks have flagrantly broken the law prior to and after the G-L-B Act was passed. You do that and you will go to jail. As you know Illuminists do not got to jail.
As a result borrowing from the discount window averaged $7 billion in the week of 4/2/08, and borrowing from the new emergency fund averaged $38.1 billion. The discount window borrowing was the highest since data began in 1961.
On a lighter note: When asked about the financial situation in the US, a Chinese official replied, “The subprime market is very complicated. Chinese banks are not nearly sophisticated enough to make those sorts of mistakes.”
Whether you were aware of it or not the Chinese stock market has fallen 50% from its peak last fall. They obviously do not have a “Plunge Protection Team.” Chinese investors know our market is manipulated and they want their market manipulated as well, irrespective of moral hazard.
Queen Hillary’s top strategist, Mr. Penn, had meetings with Colombian officials in behalf of his employer Burson-Marsteller, which was paid $300,000 to help educate members of Congress and other audiences about the US Colombian trade deal. Hillary is against the deal, but she had to have known of his position on the issue. Be as it may Penn has apologized. Our government wastes $5 billion a year in Colombia in an anti-narcotics program that enriches the CIA and Colombian elitists. Both Clinton and Obama believe the US needs a new trade policy before it has any new trade deals. As Jim Hoffa, Teamsters President said, “How can we trust that a President Hillary Clinton would stand strong against this trade deal when her top adviser is being paid by Colombia to promote it?”
Being Illuminists is profitable. Bill and Hillary made $20 million, a staggering 5,600% increase since the pervert left the White House. Most of the new found wealth comes from books and speeches. Bill earned $51.8 million in speeches around the globe as his payoff for following the Illuminati’s instructions. He made $29.5 on books and Hillary $10.9 million. Bill made $15 million with Ron Burkle. Bill is a partner of Yucaipa Global Partnership Fund, which is in Dubai ports. He also made $2.9 million from Info USA run by Vinod Gupta that sells data lists to a third party that have been used by fraudulent telemarketers.