Saving Humanity?

The changes required to save the financial fortunes of Western Civilization will be addressed by the Congress of the United States starting on Monday, September 22nd, 2008.  As we watched Fed Bank Chairman; Ben Bernanke,  Secretary of Treasury Hank Paulson and Securities and Exchange Commission Chairman Chris Cox join President Bush in the Rose Garden at the abbreviated Press Conference on Friday…..a laundry list was presented measured to prevent the fall of Western Civilization.  Evidently, propping up the Global Investment Banks of the United States to the tune of almost $3 Trillion dollars will be a critical move.  Whether this action actually winds up costing $9 or $10 Trillion seems irrelevant at this time.

In the aftermath of Republican Candidate John McCain calling for the firing of Securities and Exchange Commission Chair Chris Cox….it seems rather fitting and proper that President Bush would have the former Congressman join him and the other luminaries to make this historic announcement.  Markets around the world seemed staged for implosion if something was not to be done.  We had a choice:  Immediate Corrective Action of some kind…or let all the dominos fall.  The interconnected nature of the Global Economy seemed to have reached out and touched each and every one of us.

The major action taken to open the US Treasury wallet to all who have made too much money too soon…may or may not be a therapy that will suffice to save the system.  Certainly, the immediate reaction was to soothe the stock market mayhem for the time being.  But as they say in the trade:  “Will it be enough?”  The rush out of bogus Hedge Funds and Derivatives quickly pushed a large influx of cash into crude oil…which immediately ramped the price up $6 dollars a barrel and will immediately impact the price of gasoline….”for consumers”! 

The problem seems to be “the fundamentals” of our current financial system and the systemic progression of bad debt and unsustainable over valuation, starting with inflated commercial and residential Real Estate, moving quickly through the “available investment bloat” or “cash float”….that then was with panicked abandoned…thrown into Domestic or Foreign Hedge Funds..which invested your Money Market and Pension cash into such things as how many days of sunshine would New Delhi, India have in the next fiscal year!  We wish we were joking here!  When the billionaire brokers that create these funds and dissolve them just as quickly once the profits have entered their pockets.

So, what do the actions of Friday portend in the days and weeks to come?  The concept is for the Congress to quickly find legislation and regulations that can in some way….stop the financial implosion!  We doubt that any quick fix band-aid legislation can repair the “body transplant” that is needed.  If it was just a “brain transplant” that we needed…maybe our dear “Frankenstein Monster” could have been saved.  Sadly, it goes a lot deeper than that.

What we need is a series of edicts, regulations and legislation that over a period of five to ten years will return economic stability to our nation and the world.  In the meantime, the likes of Goldman-Sachs and Morgan Stanley need to go the way of the “buggy whip”!  All these remnants of what we once called “Investment Banks” need to be acquired by the major banking institutions that can afford to acquire the real property and rid themselves of unpure and unsustainable investment models.  Secondly, all Sub-Prime and APR loans need to go away.  How this can be accomplished by lenders and the buyers involved…will be part of what Government can in fact do.  The use of Freddie and Fannie…in this process might be a valuable tool….in directing part of the Trillions that will be required to prop up our dark and downtrodden  Real Estate Market.  We should let the individuals involved do the evaluations…this should be an agreement between the two parties.  We need to end all “Interest Resets”, “Transfer Fees”, and “Prime plus one” funny monkey business tools.  We need to get our house in order.

Next, purging our major Pension Funds, Public Benefit Corporations and other Institutions of risking investments….including Hedge Funds and Derivatives and Commodities…will be the first step to setting the table for a resurgence of American Business.  Government must be responsible for our basic staples in the life: The Military, Police and Fire Protection, Water, Electricity, Natural Gas, Grains for Food and Fuel to run our vehicles.  These items must be regulated enough to insure a constant supply to a growing economy.  If we merely allow “so-called market forces” to move Trillions in and out of say Corn…..this will quickly distort the market for Cattle Feed, Ethanol and even the price of butter…along with all other Diary products.

One issue which is being implemented is in a positive sense by President Bush is the recent work of the Securities and Exchange Commission to stop abuses concerning “naked short selling”.  What this allowed was pumping up the market one day and turning around and selling short the next day….and thus gaming the system – by pouring billions into a market to raise the price of the stock or commodity and then quickly selling out to make the difference on the next day.  There have been too many examples of this behavior that can be easily occluded by using off shore surrogates!  It will take a lot of investigation to uncover each of these egregious misuses and once caught…these people need to go to the slam for a long, long time if they truly want to make these regulations work.

One issue we have yet to address will be the tremendous number of International lawsuits which companies like Lehman Bros., Bear Sterns and all of the Investment Bankers will face…once the truth comes out.  The Congress will have to indemnify the companies that have bought or assumed these companies debts.  The CEO’s and Administrators however, will need to be held accountable!

The days and weeks ahead could be tragic..if the Congress doesn’t make the right decisions.  It will be important not to sell out to consultants and special interest lobbyists.  We will need to carefully watch what gets done on the IRS side of this equation.  These slimey characters have a way of getting out of most stuff with their fat wallets in tact.  We will see!

About Ron & Anna Winship

Independent News Producers/Writers and Directors for Parker-Longbow Productions. Independent Programming which includes a broad variety of Political, Entertainment and Professional Personalities. Cutting Edge - a talk the flagship of over 30 URL websites developed or under development. The Winships have been blogging for the Orange Juice since back when nickels had buffalos on them, and men wore onions attached to their belts, because it was the fashion back then.