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Totalitarianism, Stalinism, Facism...Take Your Pick


From the NY Times:

The chief executives of the nine largest banks in the United States trooped into a gilded conference room at the Treasury Department at 3 p.m. Monday. To their astonishment, they were each handed a one-page document that said they agreed to sell shares to the government, then Treasury Secretary Henry M. Paulson Jr. said they must sign it before they left.

http://www.nytimes.com/2008/10/15/business/economy/15bailout.html

Acquiescence to government mandates at the proverbial barrel of a gun.  Be afraid, my friends.

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I saw this on a Peak Oil doomer site. They've had a lot to play with these last few weeks.

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Nothing to say about this, Josh and the rest at TPM? God knows we need to spend even more time on important things like Joe the Plumber.

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There seems to be a line beyond which is relegated to doomers, conspiracy theorists, gold dealers and the like. For example, Matt Savinar, of Life After the Oil Crash, condenses his belief system thusly:

#1) narcotics are the world's third biggest industry behind only energy and weapons;

#2) Money from narcotics is more "potent" force multiplier in the global financial system than money from energy and weapons industries as profits from the narcotics trade:

(A) usually manage to evade taxes - which creates a massive compounding effect over time for whoever controls/invests the profits

and

(B) are more liquid which means they can move faster. In financial warfare, as in martial warfare or sports, speed kills. So whichever faction has the fastest moving capital can then outmaneuver the other factions in the battle for global financial supremacy.

#3) about 85% of the capital from the international narcotics trade ends up in Western banks. The overwhelming majority of the time, it's the big brand name national chain banks whose names we're all familiar with where the money ends up. After all, you don't think global drug lords are depositing their money at the small, family-owned credit union down the street from you, do you? Nope, they're putting their money in the exact same places where all the other Fortune 500 operations are putting their money which is the big national chain banks, big name investment houses, and international wealth funds.

#4) the most profitable narcotics are (by far) heroin and cocaine;

#5) Afghanistan produces 90% of the world's opium;

#6) Opium production in Afghanistan has smashed all previous records since the U.S. invaded just in time for planting season in 2001;

#7) the profits are typically deposited in off-shore banks and then laundered into the western banking system via low-interest loans for massive construction projects such as the massive condo-tower developments that sprung up in parts of the Middle East and the massive exurban home developments in the American Sunbelt from 2002-2007,

It's also worth noting, since this is a peak oil site after all, that many of the big energy infrastructure projects are almost certainly being financed with laundered drug money from off-shore money laundering banks as these banks offer very competitive interest rates (in hopes of quickly laundering the dirty money into clean capital.) If you're a big energy company are you going to finance your pipeline, off-shore well or utility sized solar installation with a 20 year loan at 7% from a clean bank or with one at 5% from a dirty bank?

You might be tempted to say "Well maybe the other guys will do that but I'm going to be ethical and go with the loan financed with clean money because I want to 'be the change I want to see'." At least that's what you'll say until you sit down with the company's accounting department to actually run the numbers: A $100 million oil pipeline or solar installation financed at 5% equates out to monthly payments of $66,000. If the project is financed at 7%, the monthly payments will be $77,500. Over the course of a year, that's a savings of $138,000. If your company's stock is trading at a price-to-earnings ratio of 30/1 then the difference between the dirty loan at 5% and the clean loan at 7% is $4,140,000 per year to your shareholders.

Bottom line is if you want to satisfy your shareholders, and/or keep your job, you're going to go with the loan at 5%, even if the bank is a suspected money laundering outfit. The way the laws are currently set up, if you're a publicly traded company you're not going to get in trouble for taking the lower cost loan financed with the dirty money even if the truth becomes known.

#8) As a result of numbers 1-7, capital influx from the narcotics trade is now as important to the global financial system as oil imports are to the transportation and agriculture systems.

http://www.lifeaftertheoilcrash.net/BreakingNews.html

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RobbyLove

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