CITIGROUP SETS MODEL FOR OTHER BANKS
Adn way down at the bottom it says that Morgan Stanley is vulnerable and likely to ask for the same thing.
http://www.usatoday.com/money/industries/banking/2008-11-24-citigroup-rescue-stocks_N.htmAFTER CITIGROUP -- A LOOK AHEAD
Now that I have your attention... After Citigroup collapsed and was bailed out in a stupid and futile effort, the end has become visible. I watched and read the pundits all day. They were beyond headscratching. They were stupefied. They couldn't find words except "socialism"... (or perhaps national socialism), and "incomprehensible"or "ridiculous". They had seen the writing on the wall in capital letters with Citigroup's "bailout". More of you might be paying attention now because I called Citi's demise quite a while ago. And for that reason I have delayed in writing about what I saw coming next. I needed for you to see this.
I, and all of us who contribute to this work, do so because we know --and we have seen -- that the more who listen, the more who learn, the more are helped. The more who can read the "map"... the more will survive. We aren't charging for this and I ask is that you buy my old book and soon, my new one... frequently.
"U.S. Pledges Top $7.7 Trillion to Ease Frozen Credit" -- Bloomberg
http://www.bloomberg.com/apps/news?pid=20601109&sid=arEE1iClqDrk&refer=homeThe United State government has already committed a total that surpasses TARP by a factor of ten. Citigroup got $326 billion in commitments today but their exposure is many, many times that. How can the government do that? Here it is... in one simple sentence: "Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis." This from the Bloomberg story Jenna just found.
It's over. Money has no meaning without energy. The economy is finished. The money supply has been tripled or quadrupled or more...out of thin air since last summer. That's what bubbles do as they burst. It all must collapse now and everyone who understands a $700 trillion derivatives bubble understands that what happened today was that the elites, being the scorpions that they are, could do nothing else. (Someone else please tell the story of the scorpion and the turtle.) They have committed to ride the collapse all the way down. The United States government has committed to bailouts of financial institutions until everything shuts down or there is no more money to"create". That's what happens when paradigms end. Dinosaurs didn't know they were going extinct. They ruled the earth. They could not comprehend "climate change". They could not adapt, nor could they act like anything except dinosaurs. A few had skills or special "deviant" traits and they "evolved" and survived. But as the dinosaur paradigm ended, openings -- vacuums -- were created in a completely new ecosystem. And nature abhors a vacuum.
What are we in now except an economic "climate change"? We, those on this blog and in the Peak/Sustainability movement, are the deviants!
I cannot see everything. But here's how I see the end of the U.S.economy. What is trickling from Wall Street to Main Street will arrive in full force by March or April. And around that time, perhaps next summer, the thing that started the collapse will return to deliver the coup de grace: oil prices. By that time a return to $100 or higher oil will bring back $3.00 gasoline and no one will be able to afford it. This was always, all about Peak Oil. The dinosaurs of our age know it and they assumed they could manage it. That's what our map has always said, the one that has enabled us to make so many accurate predictions for so many years. J. P. Morgan is the next domino in line and it is one of the deepest players in government intrigue and especially PROMIS software and P-Tech. (Sorry newcomers. I don't have time to slow down right now. Pls read the book or go to FTW.) Morgan is also one of the biggest gold manipulators. As it weakens, its ability to suppress the price of gold along with its allies will weaken. Bravo GATA!
I wrote in September that gold might reach $2,000 within six months. People laughed as prices fell into the low $700s. Six months from September takes us to next March. In the Citigroup bailout the smart money saw the same chosen end game that I see and gold shot back to $850 rising more than $50 just today. Now add a $300 street premium over $850 an ounce and we're at $1,150... The real breakout hasn't even happened yet because this collapse is only just beginning. And that's something else I saw over and over on CNBC and CNN today. " The worst is yet to come". "Darker days ahead". That's what the slugs at the bottom of the screen said. -- All of this BECAUSE of and AFTER the Citigroup "bailout".
I would say that by the end of next summer, as the corn comes in, this nation will be sensing that it is in the grips of something ten times worse than the Great Depression... Shock and Awe. By then you can forget about ethanol. People will be screaming for food. Perhaps Monsanto and Archer Daniels Midland will start to receive some long overdue karmic payback.
Ignorant people have been tossing the word revolution around like a used Hustler Magazine on this blog. (Sorry Larry Flynt. You were good to me and you saved the First Amendment. I was your "Hustler" interview of the month twice.) Revolutions start when the people rise up. Revolutions start when people are hungry. They start when a tipping point is reached and it seems they are all being reached at once, doesn't it? Energy, money, climate, food, fresh water; take your pick. Seven years ago I and Catherine Austin Fitts were screaming our lungs out about $2.1 trillion that went "missing" from the Pentagon in one year. No one listened. No one cared. People are starting to listen now because they have become the pig end of a ham and eggs breakfast. But the prep work isn't done yet. The people aren't ready. Quite frankly, however, Messrs Bush, Cheney and Paulson are doing a very good job of firing folks up...
Always remember that revolutions can take many different forms and that only the worst are bloody.
The dinosaurs are going to leave bigger and bigger openings in the months ahead. The shape of the next paradigm will be determined by the organisms that fill those spaces in the new ecosystem. I am working to see that it is us "deviants"; that we have a seat at the new table. We will be able to at least partially solve the problems of Power Down and sustainability that they cannot, the problems they cannot even fully comprehend. That was the recent great pain of Robert Hirsch. This is now a race to save as much and the best of human civilization as possible. Thank you M. King Hubbert. Thank you Colin Campbell. Thank you Matt Simmons. Thank you Jay Hanson. Thank you Al Bartlett. Thank you Richard Duncan. Thank you Richard Heinberg and Julian Darley. Thank you Matt Savinar and Mark Robinowitz. Thank you Barry Silverthorn. Thank you Robert Hirsch. Thank you all.
The question is, with so many openings, who will exploit them? What philosophies will fill the vacuums in the new economic ecosystem? The terms capitalism, socialism, communism etc are archaic now. They describe nothing that is emerging, or will exist, in our world and the sooner we dump the terms, the freer we will be to create something that actually works. I'm totally with Jefferson here. Throw it all out, get a blank piece of paper and start over... with the needs and informed will of the people leading the way. (I know, there's a lot of things that need to be worked on in that last sentence).
The question is not Cui bono? anymore. Cui bono assumes a stable and continuous operating paradigm. It takes no account of chaos and our oh-so-obvious human weaknesses. Cui bono has become a fear-based question that doesn't have the ability to explain much. Cui bono needs for someone to be in charge and in control because Cui bono's greatest fear is that no one is really in control at all.
We... what we write on this blog, and on many other good blogs and websites, are the new Federalist Papers.
And if I didn't know better I would think that someone was deliberately engineering a fast crash... and that Hank Paulson was the point man for it. In this case, understanding why is the booby prize. Just take it because that's what we must have to allow our children to reach and survive the next two or three decades. That is our mission.
I am really tired. I may take a few days off. You guys run with this for a while. You've been doing great. When I come back I'll learn from you as I always do.
Hug
MCR
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The scorpion needed to cross the river so he asked the turtle for a ride.
"What do you think I am, crazy?" the turtle said. "You're a scorpion. You'll kill me."
"What do you think I am, crazy?" the scorpion answered. "I'm not going to kill my only means of transportation across the river."
The turtle saw the wisdom of that and with the scorpion on his back, started swimming.
Half way across, the scorpion stung him.
"What are you, crazy?" said the turtle.
"Couldn't help it," said the scorpion. "I'm a scorpion. It is my nature."
I saw that $7.7 trillion article last night, noted the "1900 times previous weekly average" tidbit, shot it off to Mike and other trench buddies and waited for the "Holy Shit!"s to echo back from the opposite coast.
Of course, so far no one but Bloomberg acknowledges the existence of this behind-the-scenes aspect of the 'economic crisis' for which the President elect is going to have to find a 'solution.' But then, it is only Bloomberg that is suing to disclose the terms of the federal bank loans.
Remember when, in a moment of honesty, Bush said he spoke to the American people as though they were ten years old? (He was unusually well cast for the role, too.)
It worked for far too long. For in fact, most of us are. Certainly with respect to economics. The environment, too. All those hard subjects. Leave it to the Experts, the suits.
For all our vaunted 'independence' and rugged self-reliance - those qualities which supposedly made this country what it is (what tense shall I use? "will have been?") - we have become some of the most spoiled, helpless, insecure people in the world. We rely on the literal armor of our army as well as of our corporations to cling to the superiority to which we feel entitled.
The only thing you can say on our behalf is that this infantilism is a condition to which the rest of the world aspires.
One of the most gratifying jobs I have these days is teaching foreign students. They come from every conceivable country including North Vietnam, all the "stans" and countries in Africa from which I'd never met anyone.
The other day I asked a woman from Moldova what the population of her country was.
"Four million," she said. "But half of them are here."
They want the seat at the table which they think we still have. What a surprise when I tell them that the grandmothers they left behind, with their knowledge of berry cultivation, may in fact be the new gurus.
But the pundits are still talking the old talk. Job creation. Economic stimulus.
It will take a while longer to wean the American people off their expectations. Time is measured by change. As long as the status quo is tolerable, there will be no incentive towards a paradigm shift in thinking. When TSHTF, evolution will speed up markedly.
The layabout will wake up to the realization which had been lingering in his semi-consciousness his whole life: "The party's over."
For haven't we always known this day would come? Isn't it encoded in our DNA? Long before you ever heard of Peak Oil, didn't you every so often think, "Gee, I'm glad I'm alive here, now, with penicillin, plumbing, food from everywhere in the world?"
Beneath that observation lurks the question: "What am I without all that?"
I, for one, do not look forward to learning the answer. On the other hand, there's solace in facing reality.
JO
