Total $3.6T Projected Loans and Securities Losses, $1.8T Of Which At U.S. Banks/Brokers: The Specter of Technical Insolvency
Nouriel Roubini and Elisa Parisi-Capone of RGE Monitor release new estimates for expected loan losses and writedowns on U.S. originated securitizations:
- Loan losses on a total of $12.37 trillion unsecuritized loans are expected to reach $1.6 trillion. Of these, U.S. banks and brokers are expected to incur $1.1 trillion.
- Mark-to-market writedowns based on derivatives prices and cash bond indices on a further $10.84 trillion in securities reached about $2 trillion ($1.92 trillion.) About 40% of these securities (and losses) are held abroad according to flow-of-funds data. U.S. banks and broker dealers are assumed to incur a share of 30-35%, or $600-700 billion in securities writedowns.
- Total loan losses and securities writedowns on U.S. originated assets are expected to reach about $3.6 trillion. The U.S. banking sector is exposed to half of this figure, or $1.8 trillion (i.e. $1.1 trillion loan losses + $700bn writedowns.)
- FDIC-insured banks’ capitalization is $1.3 trillion as of Q3 2008; investment banks had $110bn in equity capital as of Q3 2008. Past recapitalization via TARP 1 funds of $230bn and private capital of $200bn still leaves the U.S. banking system borderline insolvent if our loss estimates materialize.
- In order to restore safe lending, additional private and/or public capital in the order of $1 – 1.4 trillion is needed. This magnitude calls for a comprehensive solution along the lines of a ‘bad bank’ as proposed by policy makers or an outright restructuring through a new RTC.
- Back in September, Nouriel Roubini proposed a solution for the banking crisis that also addresses the root causes of the financial turmoil in the housing and the household sectors. The HOME (Home Owners’ Mortgage Enterprise) program combines a RTC to deal with toxic assets, a HOLC to reduce homeowers’ debt, and a RFC to recapitalize viable banks.
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95 Responses to “Total $3.6T Projected Loans and Securities Losses, $1.8T Of Which At U.S. Banks/Brokers: The Specter of Technical Insolvency”
The banks do not need more capital. The holders of bank debt need a haircut. Zero out the existing equity, convert the outstanding debt to new equity, and lets get back to work.
Wow! You must be a debt holder. The debt holders don’t have any fault in all this mess, right? They bought loans and bonds of these precious banks with very little equity in the first place and now they are gonna be rewarded by equity. Good job. Let me tell you what is going to happen, like it or not. These banks will not make with all these TARPs. All their debt and equity holders will be “zeroed out” and they will be in government hands till some private investors out of the blue come out and buy them. It is gonna be a long long time when this happens. Anyway hold on to your bank bond and see what happens.
Apple beat, up 10% in after hours. The bottom is here.
OK, lets roll this idea. Flame away!The Real Estate Readjustment RebateMany economists and politicians are calling for mortgage modification programs of various kinds. The reasoning behind these programs is that home mortgage writedowns and debt overhang will continue to be a drag on the banking sector and the economy until house prices bottom. Therefore they are in effect attempts to stop the housing bubble correction or accelerate it. All of these programs share traits. They all:-Propose that US Government funds be used to reduce mortgage principal amounts, either temporarily or permanently-Propose that banks write down the value of mortgages, with the government also sharing some of the costs-Seek to keep people in their homesThe plans differ in their ideas of who takes the cost, and how much the homeowner might owe when the home is sold, as well as on other details. But all of the plans basically ask the government to benefit two groups – insolvent homeowners and insolvent banks. There are many problems with this approach. It ushers in moral hazard. It provides stimulus to those who are barely making it, which is not likely to spill over into the real economy as much as it could.The Real Estate Readjustment Rebate proposed here is an attempt to target the home value problem from a different perspective. The reasoning is that if Federal Stimulus is being proposed to correct these problems, it should be targeted at both the good borrowers as well as the bad, it should be targeted at the worst hit areas, and it should be targeted at correcting imbalances. The basic points of this plan are:-Each locale in the US will establish a percentage decline, peak to trough, that it’s residential real estate market is projected to endure. This decline should be tied to the long term pre-bubble home price trendline.- For each household, a stimulus will be applied, in the form of a government check or tax rebate, in the amount of a percentage of the current valuation of the residence or commercial dwelling they live in (be it a home or an apartment) equivalent to this peak to trough adjustment. For a $250,000 home in Phoenix where the market has dropped 30% will receive a $75,000 stimulus. It does not matter what the home was sold for, or what kind of mortgage is on the home, the stimulus is entirely based on valuation.- If the home has one or more mortgages, the stimulus must be applied to the mortgages as part of an adjustment, and the mortgage lenders expected to share some portion of the cost of the adjustment. A modified mortgage will be created for the adjusted value.- If the home has no mortgage or the stimulus amount pays the mortgage off, the excess stimulus money belongs to the household to do with what they please.- If the resident is a renter, the stimulus amount is shared between renter and landlord, reflecting the renters’ contribution to the landlord’s ownership of the property.- If there is a landlord or property owner and no renter, the percentage of the stimulus after the bank’s share accrues to the bank, allowing the home to be sold for less. Or, optionally, these situations could be targeted toward first time homeowners.This plan has several advantages. It targets solvent and insolvent homeowners and renters alike. The solvent are likely to wisely use or invest their stimulus, reflecting their already frugal lifestyle. This should help constrain a mass return to rampant consumerism. The insolvent get a chance to adjust to the new lower valuations with some chance of establishing a better financial future. The plan is also designed to target the worst hit communities with the most stimulus, where the local governments are likely to be facing the most fiscal stress. The plan also attempts to set home prices to their pre-bubble trendline, thereby attempting to establish the ‘right’ price for the home. The plan is also easy to apply on a uniform basis, and can use existing property tax valuations as its basis.This is not meant to advocate government dollars as the answer to the home valuation problem. It is unclear whether more government stimulus is really doable with the current deficit and the current Treasury market situation. The main reason I propose this is because I believe, if we hell bent on stimulus, it should not just be targeted at the insolvent, but instead should target the economy at large. This plan I believe does a better job of that than any I have heard up to now, because it targets the home debt overhang problem but ties a more powerful general stimulus to the solution.Thoughts? As I said, flame away!
I posted this on the NEW THREAD
Never mind its confused.
Not the best use of money. Money paid to homeowners will be used to pay down debt or hoarded.I am afraid the government needs to step in as employer of last resort and actually hire workers. I would suggest that the public works programs not be efficient, but be designed for maximum employment. 13% unemployment/ underemployment is a crisis and needs to be dealt with first.BTW, you’re in Phoenix? I’m here in a hotel room at a business valuation seminar. Just walked up Camelback Mountain to watch the sunset. Outstanding. Lots of vacant storefronts around the hotel.
Read some Schumpter and Darwin dude, you can only count on the public to act in thier own self interest which is never what benefits the whole. Rome has gotta burn at some point, why defer the problem and make it worse? A debt financed consumption based economy with unsustainable social and defnese costs has never worked in history especailly when it is finaced by fractional reserve lending with fiat money controlled by thieving Politicos.
Are you kidding me? Renters now will have rights to part of the equity in homes?Ayn Rand, where are you? We need you!
How can anyone be bullish? The housing market is in decline, and will most likely drop another 20% in 2009 alone— further slaughtering MEW (mortgage equity withdraw, and thus consumer spending, since no one makes money, they just withdraw their house appreciation). Banks (and the entire financial sector) are failing miserably, and this will get worse, before it gets better. Economic data will continue to get worse. The E of PE will continue to deterioriate, and PEs thus will rise, that is, until the P come on down again, so basically the stock markets are still overvalued. Especially, when you consider that PE ratios (really fractions) are nearly at historic norms, of 11 to 14, currently, and since we’re going into what I describe as the greater depression, then the PEs should not be near historic norms, nope, they should be lower, near historic lows!! So once again, the markets are elevated, dignified, and too high, and will depreciate some more. Secondly, the business cycle is still weakening, and faster than a lot of people thought. Things will continue to get worse, and faster than expected, and EPS estimates are still too high, and disappointments will be perceived as bad. Fixed income is best, try TIPS (ticker TIP)— principal adjusted to the CPI-U and a real yield applied to the adjusted principal, for growing principal of the TIPS and bigger coupons (assuming inflation over the long run). Also, unemployment will rise to maybe 11 to 13 percent, labor force participation rates will decline with people getting discouraged, and output will decrease, as layoffs ensue. There maybe be a 5 to 7 percent drop if US GDP! Then wages will decline, and corporate profits too. There is no catalyst what so ever for the stock market to rise anytime soon. Nope! The only thing we can hope for is a change in the perception of risk. Maybe Obama will bring about some PE expansion, as confidence comes back, after the opposite happened for literally 8 years— when there was PE contraction during the entire Bush Administration as confidence fell off a cliff, along with the US dollar. Is the US Dollar a dead cat bounce?? I worry about that. Come next spring when things do not get much better, if at all, the summertime selloff will be horrendous— and maybe a total default will happen in teh USA? Maybe that’s too sarcastic? Maybe we’ll just get a big selloff in spring and summer, and some foreign sovereign defaults, and then things might begin to stop getting worse at that point. Come the end of this summer, maybe things will begin to hold their own, and maybe asset classess across the board will actually rise?Beware of Obama’s solution, of borrowing more and more money (which reminds me of Bush— then again who would dramatically decrease governemnt spending too fast?!), trillions at a time, for bailouts, TARP, capital injections, capital infusions, and for saving capitalism itself, in the government’s eyes. Nope, they are in my opinion acting like socialists, and maybe even communists. They should try some Laissez-Faire attitudes themselves. They caused the entire problem (the prior administration and the entire congress), they should stop borrowing too much money too fast, as it crowds out investment and borrowing, and does great harm to the capital markets, and society at large. I fear for our future.
Oh, and with bank (and the entire financial sector’s failure and looming bankruptcies) people will have to use FDIC & SIPC which will infuriate people with the entire banking sector— I see a total loss of confidence looming in American, and abroad. People will be wondering if capitalism is dead or something. Clearly, the Government scoudrels need to limit their borrowing and reckless spending of borrowed (printed, and tax revenue) funds. I see great risk of intense regulatory changes, additions, and risk itself. This regulatory risk is enough to make my stomahce hurt. Maybe the Congress should try to regulate itself, and limit its own reckless stupid spending. Nationalization of the entire financial sector is also not a good idea. Laissez-Faire, no government intervention please!~ Andrew G. Bernhardt, St. Louis, MO.http://www.google.com/search?hl=en&safe=off&q=+site:www.rgemonitor.com+Andrew+Bernhardt,+RGE
I agree, we are seeing another sucker rally, maybe call it the Obama Bounce, but Citigroup and BoA will go to zero if left to their own devices and will likely be nationalized, which will drag everything down with them. The treasury bubble may also be deflating soon, and who knows what consequences a loss in confidence treasuries will have for the economy at large. There is allot of cash on the sides, and it might start to flow back into the system, so why not catch some of it, but be ready to jump out of the pool.
Does anyone else notice how similar Nouriel and Triumph the Insult Dog sound when they speak? I’d like to hear the good professor do one posting Triumph-style, to give us all some much-needed comic relief.”In order to restore safe lending, $1-$1.4 trillion is needed … for me to poop on!”
Speaking of sick humour:The PM of Australia has called for a freeze of political wages and,then,it has been discovered that he has increased his own advisory staffs remuneration packages… in the same instant…SOoo:”The reason I think it’s crazy is … because one of our biggest problems is recruiting good people into politics,” Dr Washer said. Without proper pay, there was a risk only “clowns”, “losers”, “screwballs” and “halfwits” would want to enter politics. “We need highly professional, highly skilled people to run the economy,” he said. “If you’re going to squeeze their pay you can’t get them.”http://www.theaustralian.news.com.au/story/0,,24945742-5013404,00.htmlNow, talking about:”We need highly professional, highly skilled people to run the economy,”Yes, we do…But, we have at present only the:”only “clowns”, “losers”, “screwballs” and “halfwits” would want to enter politics.”He forgot: opportunists, car salesmen, real estate agents and a further and deeper cross-section of the cockroach industries… Indeed, they are the ones that are already there…So it seems as we go merrily along the MP will just keep on increasing their benefits while they continue to call on the workers to make sacrifices and stop asking for more raises and entitlements,while:the next stimulus packages will be another round of loans for the banks and big business… because the foreigners (They are all “insolvent” er, broke) will not fund them and the Oz Banks are not lending to anyone. What’s new Horatio?In the meantime if you read the small articles you will find that already many people have lost their jobs proving that newspapers are a lagging indicator of vital socio-economic data.95% of the population demand entertainment.SOLHo hum
pjb,i too remain optimistic. tragedy , perhaps, has a way of stripping away layers of ignorance quickly, leaving one naked. sometimes this is just the thing to set the record straight. that level playing field people sometimes refer too.put another way that 95% can quickly be converted from satiated to hungry, both in body and in mind.the door is opening and we will see.
We are going to spend our way out of dept by using more dept to do it!!?? As also the rest of the planet. So all the dept on the planet will be put on the backs of the working people!!?? So if a huge percentage of people are no longer working, then what!!?? What good would even gold be!!?? It seems like this mess can last for decades!!??
Good explanation of global imbalances over at FT by Martin Wolf (via NC): A Sick World Economy
funny, the anglo-American authors never mind writing about how the WORLD economy is sick or the WORLD economy is in recession or how Euro-zone is making stupid decisions…
Was President Obama speaking to those other Americans:The US authorities want the names of UBS’s 17,000 wealthy American clients. If it hands them over, the Swiss bank will set a highly significant precedent not only for its rivals in Switzerland but for banks in tax havens around the world which operate in the US.
It’s the third step. The first step was the moneychangers putting more and more restrictions and pressures on handling your money so that they could make more off of just handling it. But that wasn’t enough.So they moved to the second step that was to market your name, i.e., sell your name and financial information to other customers so that they could make money off of that. And when there was some complaining, they pretended they would only share it with their corporate sisters, which turned out to be about 500 corporate sisters each around the world. But that wasn’t enough.Their third step is a need not only to share this information with their government and their spy agencies, but with and from foreign governments for their own political purposes, targeting those customers for the above and for such nefarious purposes as blackmail for the Simon Wiesenthals who want to find some money for reparations (don’t tell me they don’t sell it to him), and whatever else their dark methods for money grubbing and spying.Banks were supposed to provide a service and the service was supposed to be holding your money — not your life.
makes me wonder anyway why the swiss currency is so highly valued, as uber-regulated as that country is.
I’m reposting this by ConcernedinSanteFe today on the old thread at 16:49:45, okay? It deserves a fair hearing:Employment loss in the U.S. is at a watershed moment; small businesses, which employ about 45 percent of the workforce, are nearing crisis and insolvency, but have so far remained an unacknowledged gorilla in the room. Large corporations have sizable assets and portfolios from which to borrow for funding to remain in business long after they’ve hit a negative income cycle. Small businesses have no such options available to them. They also have not enjoyed the extraordinary publicity and government focus of large employers because individually each business is a small fish.We talk about losses from such companies as G.M. or Ford, with some 5-8millions of consumers hinging upon their failure; someone needs to start thinking about bottom-up restructuring of economics; the pyramid won’t stand without its broad base of individual consumers, 40 percent of whom are employed in organizations small enough to remain under the radar.As problematic as having Wall Street shut down large sectors of its business interests, any remaining interests on Wall Street will fail no matter what is done to shore them up without a healthy consumer base. Recovery will prove to be mostly impossible lacking this most critical segment of economy
important point, but I doubt whether those in power actually care. They would likely let out a long yaaaaawn. On the other hand you will probably get comments about that the ‘people’ should do ‘something’ – the problem is that ‘people’ cannot really do that much…
the people have brought down every plutocratic empire when the inequality grew large enough. the people have always been the greatest power – just as soon as they stopped kidding themselves that those in power can ever be expected to start caring about anything but their own interests – which are diametrically opposed to the interests of the working people.
Nice Anti-China rant here. It will be interesting to see if this kind of protectionist thinking starts to gain traction: Financial Week: Peter Morici Column – Depression Already HereThe author’s points are that fixing the banks, addressing energy efficiency, and redressing trade and wage deficits through a tough approach to China are the only way out.
China? I thought the real economical problem was the stupid uncooperative ECB?
I wasn’t actually agreeing, just pointing out what may be coming in the public’s thinking soon if my crystal ball is any guide. Protectionist attitudes are going to be on the rise. There is another link at the RGE home page on Chinese banks lending behavior. The upshot is they are throwing out their standards now in an effort to lend as much as they can to try to adjust to the global trade collapse. Speaking of which, did you note the Japanese export numbers today? Another huge drop.
ex,I call it survival attitude: not a bad thing to have — if you want to survive.
The US and China are two scorpions in a bottle. (Not mine, don’t know where I got it, but I love it.)A tough approach to China involves two stingers, not one.
To those who were waiting for Mother of God to explain details or answer questions, please see the thread before this one. Thanks.
you mean the “Bloomberg: Roubini Predicts U.S. Losses May Reach $3.6 Trillion” thread? I was looking there…
yes. longish posts, especially the one toward the end, should be easy to find, though i stopped using “my name”. unless you have questions, i’m outta here now. people are either going to pick up on the answer the world is searching for, or they’re not. adults are either going to determine to stop robbing everyone, or they’re not. the key has been given. i can’t make you pick it up.
mog,just so you know i agree with you. you can see but sometimes what one sees is not visible to others. that seems to be due to many factors. it’s natural and unavoidable as we live in a culturally induced illusion that has imposed limits on attention, subject matter, prioritization, value etc..your point is heresy to the culture of ignorance that has taken root. i know your teacher never said it would be easy. ?thanks for your posts. you have given so much and i love it. every sentence. great appreciation.peace and love and i’m gonna stay up a liitle bit longer. ok?
thanks, blindman. and you can stay up as late as you like…but that wasn’t me the other day, speaking to you. someone was just being funny, pretending to be your mom.peace and love to you, too, Sugar. pass my posts along. maybe we’ll get out of this nightmare alive, if we teach the survival necessity of getting fairpay instead of overpayunderpay.never forget that the root of all evil is the love of getting other-earned money.namaste
I take it is the one starting with “Can everybody be rich?”(correct me if I am wrong)
Yes, anon. If a post uses the terms ‘overpayunderpay’ and/or ‘pay justice’, ‘self-earned versus other-earned money’, ‘unlimited personal fortunes capitalism versus pay justice capitalism’, ‘only work creates wealth’ or if it’s just focused like a laser on equal pay for equal sacrifice – then it’s me.As much as these terms need to be on the tip of everyone’s tongues and need to be heard ringing through the world, at this point I still seem to be the only one using them (here at RGE).Once everyone starts making these long-missing distinctions and using these terms, we’ll be using forums like this one to exchange recipes and happy photos of our kids – or to discuss why it took us so long to see the simple sense of murdering the very bad idea to allow wealthpower giants.
mog,wow!! i have another mom? shi … .zle.
I think the banks should be nationalized and then privatized. This socialization of the losses has to stop, if socialism has to be embraced the it needs to be done in the correct way. Shareholders shouldn’t benefit thru taxpayers money.
So, Goldman Sachs owns the US govt now? I had suspected this all long and Geithner’s appointment will confirm that.
That’s what it is! a Goldman Sach’s coup d’etat confirmation hearing!
Yes. It’s correct. GS probably got Obama elected.
If I have learned one thing from this economic disaster, it is the realization that GS RUNS this country. it is very disturbing to see how much power they wield.
To all who are proposing solutions to the foreclosure and banking crises:Some problems have no solutions.
lets rephrase that..”Some problems have no solutions.”the thing is, the problem is US (us = people, as a whole)the human class structurea)the so called Kings/Leaders. PM’sb)the nobles/bussinesmen”s”.. supporting the leaders(usually for personal gain/agenda)c)the happy go lucky serfs, amazed by heroic feats of gladiators and loafs of free bread,content just to be in existencePeterJB stated this is a Leadership problem and he is right, change A and everything else changes, but the problem is,in our current environment you have to change B first, because B is the puppetmaster.. if we want to change A, then the guy should have the calibre of Frederick the Great..etc..etc, where he is feared and respected, in this age and time i cant see anyone who is up to the task
Certainly not Obama, who doesn’t even have enough backbone to keep guys like Geithner off his team.He has done permanent damage to his credibility right at the beginning of his administration. I cannot think of a worse start.
I absolutely agree with you.
We must change the non-functioning one-party election system whereby all the candidates have been pre-selected to retain the tyranny of a plutocracy of billionaires. Obama, they win, we lose: McCain, they win, we lose. Bush, they won, we lost.When grassroots’ choice is restored by Party division from the bottom up again, then we will have free government, including, as Earl Warren once said, “political activity by minority, dissident groups, who innumerable times have been in the vanguard of democratic thought and whose programs were ultimately accepted.”We need dissent — and passion.
Leadership will change when the erroneous ideas in people’s heads change – not before.
Fatalism is self-fulfilling prophesy, and the man who says it can’t be done should get out of the way of the (wo)man who is doing it.Grow a set and stop whining.
There is a solution. Default leading to foreclosure and devaluing the assets. Eventually the price of houses falls far enough that even the minimum wage earners can afford to have their own home.What people don’t seem to have is patience… None of this is fast.
Jan. 21 (Bloomberg) — President Barack Obama was sworn in today for a second time by Chief Justice John Roberts, after the two failed at yesterday’s inauguration to follow the oath in the U.S. Constitution word for word.A treasury secretary who cheats on his taxes. A Supreme Court justice who can’t swear in a president. What is this country coming to!!
It may seem trivial, but it is either the Supreme Law of the land, or it isn’t. He didn’t say the oath or affirmation as required, and it specifically says, “Before he enter on the Execution of his Office, he shall take the following Oath or Affirmation: – “…”There isn’t much left in doubt. It says he will, and he didn’t. He corrected the problem. It’s a start. Let’s see about holding Congress to it’s enumerated powers and Congress holding the Executive within its bounds. Then we’ll be working towards liberty for all.
Ha, he’s a puppet. All that stuff was just to get elected.If that isn’t obvious with the Geithner nomination being rammed through, including a coverup and despite the coverup being blown, nothing will convince you.
RETURN OF THE GOLD STANDARDNow we watch the U.K. enter the preliminary phase of default/devaluation after starting to take all the bank liabilities onto its balance sheet. The U.S. is following the same course as the administration plans to move our financial system’s liabilities on to the Treasury’s balance sheet. The U.S. will follow U.K. with its own default/devaluation. Those who say there is no good currency in the world which is an alternative to the dollar ignore the fact that gold is money. All currencies will end up back on the gold standard as this worldwide experiment with globalization of fiat currencies comes to an end. It is inevitable.
Thanks for the post, Gloomy. Interestingly enough, the most succinct description of the value of gold and sound money, I believe, comes from Rep. Ron Paul.“Sound money based on gold rather than paper “keeps government spending in check, keeps trade fair and honest,” says Paul. “Sound money also limits the ability to wage wars of aggression” by using fiat currency, such as when the Fed auctions off treasury bills to finance wars in Iraq and Afghanistan, resulting in devaluation of the dollar.Sound money gives FINANCIAL SECURITY: “There is something very comforting in knowing that what you earn today will retain its purchasing power in the years to come. Indeed…an ounce of gold has always been about evenly exchangeable for a finely tailored men’s suit, which these days is roughly $800.”But, says Paul, since the creation of the Federal Reserve the fiat dollar has lost 94% of its purchasing power, particularly since its complete decoupling from gold in 1971.“This sort of fluctuation in the medium of exchange creates a lot of uncertainty in the marketplace and necessitates that you either take extraordinary defensive maneuvers, or face financial ruin.”A recent study by the Consumer Bankruptcy Project, says Paul, “shows that bankruptcies among those 75 and older has more than quadrupled since 1991. This represents wealth and savings that have been eroded by inflation, and trust in entitlement promises that were more fantasy than reality.”But, says Paul, “The government’s thirst for power will not be easily, or cheaply, quenched. Fiat currency is one tool governments have to extract wealth quietly from the working class…”
I am a Ron Paul fan as well, but Ron has not come to grips with the need for government regulation of credit creation. It was the unregulated shadow banking system’s creation of credit through CDOs and CDSs that I believe is the root cause of our problems.Ron says the market can work itself out, but it is the constant meddling of the Fed with interest rate adjustments and playing with the money supply that has prevented the market from functioning properly. He would go on to say that if interest rates were allowed to rise so that they reflect real risk, then CDOs and CDS would have never gotten a foothold in the financial markets.I do not believe in such a pure market when there is so much money to be made churning baby boomer 401k accounts without adult supervision.
The US dollar is not a fiat currency. It is backed by the US military control of oil supplies: oil in the ground and the oil delivery infrastructure. This is why the oil-bearing nations accept the dollar: they have to.
BrainTrust:It’s time to make the transition from “the sky is falling” to “the sky fell, and now we get to build a new sky”.Rather than viewing this economic collapse as some fearsome calamity that’s befallen us, some of you see these events as a great opportunity, as I do. Maybe you’re wondering where all the smart people are that surely must be busily planning and building this emergent economy. Where are they?I couldn’t find the place where such people congregated, so it seemed that the only recourse was to build such a facility.Several RGE regulars are already helping to design and build this new collaborative toolset. It’s an internet-based collaboration system that will help us, and others like us, to design and build tomorrow’s economy.To some, that may sound like hyperbole. But the concept isn’t just words any longer, it’s actually in operation. And it needs your strong back to help it become a viable, robust mechanism that almost anyone can use.I would like to invite each of you to join the effort to take internet collaboration to the next level. If you’d like to attend our next conference call, send me an e-mail at outerbeltway at yahoo dot com.It’s now possible to turn talk into action. I hope to receive e-mails from people like JasonB, PeterJB, GSM, WolfintheWilds, PTM, PhilT and the rest of the thoughtful and courageous writers that grace the pages of RGE. If I’ve not called your name, don’t take offense, and don’t be shy. If you like to think, if you’ve got a bias toward action, then you should be part of the team that we’re building.All personal identities and e-mail addresses will be kept in the strictest confidence.I look forward to your e-mail.
OB (Wan), You get it. We are already in sky build mode. The screaming buys are already out there.P1AQL
I don’t get why the price of a premium subscription is such a secret. When I buy something from Amazon, I don’t have to jump through hoops to find out the price of a book.
You know the old saying – if you have to ask, you can’t afford it
That saying was probably coined by a salesman looking to screw somebody.
Capitalism’s Self-Inflicted Apocalypseby Michael ParentiAfter the overthrow of communist governments in Eastern Europe, capitalism was paraded as the indomitable system that brings prosperity and democracy, the system that would prevail unto the end of history.The present economic crisis, however, has convinced even some prominent free-marketeers that something is gravely amiss. Truth be told, capitalism has yet to come to terms with several historical forces that cause it endless trouble: democracy, prosperity, and capitalism itself, the very entities that capitalist rulers claim to be fostering.Plutocracy vs. DemocracyLet us consider democracy first. In the United States we hear that capitalism is wedded to democracy, hence the phrase, “capitalist democracies.” In fact, throughout our history there has been a largely antagonistic relationship between democracy and capital concentration. Some eighty years ago Supreme Court Justice Louis Brandeis commented, “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.” Moneyed interests have been opponents not proponents of democracy.The Constitution itself was fashioned by affluent gentlemen who gathered in Philadelphia in 1787 to repeatedly warn of the baneful and dangerous leveling effects of democracy. The document they cobbled together was far from democratic, being shackled with checks, vetoes, and requirements for artificial super majorities, a system designed to blunt the impact of popular demands.In the early days of the Republic the rich and well-born imposed property qualifications for voting and officeholding. They opposed the direct election of candidates (note, their Electoral College is still with us). And for decades they resisted extending the franchise to less favored groups such as propertyless working men, immigrants, racial minorities, and women.Today conservative forces continue to reject more equitable electoral features such as proportional representation, instant runoff, and publicly funded campaigns. They continue to create barriers to voting, be it through overly severe registration requirements, voter roll purges, inadequate polling accommodations, and electronic voting machines that consistently “malfunction” to the benefit of the more conservative candidates.At times ruling interests have suppressed radical publications and public protests, resorting to police raids, arrests, and jailings-applied most recently with full force against demonstrators in St. Paul, Minnesota, during the 2008 Republican National Convention.The conservative plutocracy also seeks to rollback democracy’s social gains, such as public education, affordable housing, health care, collective bargaining, a living wage, safe work conditions, a non-toxic sustainable environment; the right to privacy, the separation of church and state, freedom from compulsory pregnancy, and the right to marry any consenting adult of one’s own choosing.About a century ago, US labor leader Eugene Victor Debs was thrown into jail during a strike. Sitting in his cell he could not escape the conclusion that in disputes between two private interests, capital and labor, the state was not a neutral arbiter. The force of the state–with its police, militia, courts, and laws-was unequivocally on the side of the company bosses. From this, Debs concluded that capitalism was not just an economic system but an entire social order, one that rigged the rules of democracy to favor the moneybags.Capitalist rulers continue to pose as the progenitors of democracy even as they subvert it, not only at home but throughout Latin America, Africa, Asia, and the Middle East. Any nation that is not “investor friendly,” that attempts to use its land, labor, capital, natural resources, and markets in a self-developing manner, outside the dominion of transnational corporate hegemony, runs the risk of being demonized and targeted as “a threat to U.S. national security.”Democracy becomes a problem for corporate America not when it fails to work but when it works too well, helping the populace move toward a more equitable and livable social order, narrowing the gap, however modestly, between the superrich and the rest of us. So democracy must be diluted and subverted, smothered with disinformation, media puffery, and mountains of campaign costs; with rigged electoral contests and partially disfranchised publics, bringing faux victories to more or less politically safe major-party candidates.Capitalism vs. ProsperityThe corporate capitalists no more encourage prosperity than do they propagate democracy. Most of the world is capitalist, and most of the world is neither prosperous nor particularly democratic. One need only think of capitalist Nigeria, capitalist Indonesia, capitalist Thailand, capitalist Haiti, capitalist Colombia, capitalist Pakistan, capitalist South Africa, capitalist Latvia, and various other members of the Free World–more accurately, the Free Market World.A prosperous, politically literate populace with high expectations about its standard of living and a keen sense of entitlement, pushing for continually better social conditions, is not the plutocracy’s notion of an ideal workforce and a properly pliant polity. Corporate investors prefer poor populations. The poorer you are, the harder you will work-for less. The poorer you are, the less equipped you are to defend yourself against the abuses of wealth.In the corporate world of “free-trade,” the number of billionaires is increasing faster than ever while the number of people living in poverty is growing at a faster rate than the world’s population. Poverty spreads as wealth accumulates.Consider the United States. In the last eight years alone, while vast fortunes accrued at record rates, an additional six million Americans sank below the poverty level; median family income declined by over $2,000; consumer debt more than doubled; over seven million Americans lost their health insurance, and more than four million lost their pensions; meanwhile homelessness increased and housing foreclosures reached pandemic levels.It is only in countries where capitalism has been reined in to some degree by social democracy that the populace has been able to secure a measure of prosperity; northern European nations such as Sweden, Norway, Finland, and Denmark come to mind. But even in these social democracies popular gains are always at risk of being rolled back.It is ironic to credit capitalism with the genius of economic prosperity when most attempts at material betterment have been vehemently and sometimes violently resisted by the capitalist class. The history of labor struggle provides endless illustration of this.To the extent that life is bearable under the present U.S. economic order, it is because millions of people have waged bitter class struggles to advance their living standards and their rights as citizens, bringing some measure of humanity to an otherwise heartless politico-economic order.A Self-devouring BeastThe capitalist state has two roles long recognized by political thinkers. First, like any state it must provide services that cannot be reliably developed through private means, such as public safety and orderly traffic. Second, the capitalist state protects the haves from the have-nots, securing the process of capital accumulation to benefit the moneyed interests, while heavily circumscribing the demands of the working populace, as Debs observed from his jail cell.There is a third function of the capitalist state seldom mentioned. It consists of preventing the capitalist system from devouring itself. Consider the core contradiction Karl Marx pointed to: the tendency toward overproduction and market crisis. An economy dedicated to speedups and wage cuts, to making workers produce more and more for less and less, is always in danger of a crash. To maximize profits, wages must be kept down. But someone has to buy the goods and services being produced. For that, wages must be kept up. There is a chronic tendency-as we are seeing today-toward overproduction of private sector goods and services and underconsumption of necessities by the working populace.In addition, there is the frequently overlooked self-destruction created by the moneyed players themselves. If left completely unsupervised, the more active command component of the financial system begins to devour less organized sources of wealth.Instead of trying to make money by the arduous task of producing and marketing goods and services, the marauders tap directly into the money streams of the economy itself. During the 1990s we witnessed the collapse of an entire economy in Argentina when unchecked free marketeers stripped enterprises, pocketed vast sums, and left the country’s productive capacity in shambles. The Argentine state, gorged on a heavy diet of free-market ideology, faltered in its function of saving capitalism from the capitalists.Some years later, in the United States, came the multi-billion-dollar plunder perpetrated by corporate conspirators at Enron, WorldCom, Harkin, Adelphia, and a dozen other major companies. Inside players like Ken Lay turned successful corporate enterprises into sheer wreckage, wiping out the jobs and life savings of thousands of employees in order to pocket billions.These thieves were caught and convicted. Does that not show capitalism’s self-correcting capacity? Not really. The prosecution of such malfeasance- in any case coming too late-was a product of democracy’s accountability and transparency, not capitalism’s. Of itself the free market is an amoral system, with no strictures save “caveat emptor.”In the meltdown of 2008-09 the mounting financial surplus created a problem for the moneyed class: there were not enough opportunities to invest. With more money than they knew what to do with, big investors poured immense sums into nonexistent housing markets and other dodgy ventures, a legerdemain of hedge funds, derivatives, high leveraging, credit default swaps, predatory lending, and whatever else.Among the victims were other capitalists, small investors, and the many workers who lost billions of dollars in savings and pensions. Perhaps the premiere brigand was Bernard Madoff. Described as “a longstanding leader in the financial services industry,” Madoff ran a fraudulent fund that raked in $50 billion from wealthy investors, paying them back “with money that wasn’t there,” as he himself put it. The plutocracy devours its own children.In the midst of the meltdown, at an October 2008 congressional hearing, former chair of the Federal Reserve and orthodox free-market devotee Alan Greenspan confessed that he had been mistaken to expect moneyed interests–groaning under an immense accumulation of capital that needs to be invested somewhere–to suddenly exercise self-restraint.The classic laissez-faire theory is even more preposterous than Greenspan made it. In fact, the theory claims that everyone should pursue their own selfish interests without restraint. This unbridled competition supposedly will produce maximum benefits for all because the free market is governed by a miraculously benign “invisible hand” that optimizes collective outputs. (“Greed is good.”)Is the crisis of 2008-09 caused by a chronic tendency toward overproduction and hyper-financial accumulation, as Marx would have it? Or is it the outcome of the personal avarice of people like Bernard Madoff? In other words, is the problem systemic or individual? In fact, the two are not mutually exclusive. Capitalism breeds the venal perpetrators, and rewards the most unscrupulous among them. The crimes and crises are not irrational departures from a rational system, but the converse: they are the rational outcomes of a basically irrational and amoral system.Worse still, the ensuing multi-billion dollar government bailouts are themselves being turned into an opportunity for pillage. Not only does the state fail to regulate, it becomes itself a source of plunder, pulling vast sums from the federal money machine, leaving the taxpayers to bleed.Those who scold us for “running to the government for a handout” are themselves running to the government for a handout. Corporate America has always enjoyed grants-in-aid, loan guarantees, and other state and federal subventions. But the 2008-09 “rescue operation” offered a record feed at the public trough. More than $350 billion was dished out by a right-wing lame-duck Secretary of the Treasury to the biggest banks and financial houses without oversight–not to mention the more than $4 trillion that has come from the Federal Reserve. Most of the banks, including JPMorgan Chase and Bank of New York Mellon, stated that they had no intention of letting anyone know where the money was going.The big bankers used some of the bailout, we do know, to buy up smaller banks and prop up banks overseas. CEOs and other top banking executives are spending bailout funds on fabulous bonuses and lavish corporate spa retreats. Meanwhile, big bailout beneficiaries like Citigroup and Bank of America laid off tens of thousands of employees, inviting the question: why were they given all that money in the first place?While hundreds of billions were being doled out to the very people who had caused the catastrophe, the housing market continued to wilt, credit remained paralyzed, unemployment worsened, and consumer spending sank to record lows.In sum, free-market corporate capitalism is by its nature a disaster waiting to happen. Its essence is the transformation of living nature into mountains of commodities and commodities into heaps of dead capital. When left entirely to its own devices, capitalism foists its diseconomies and toxicity upon the general public and upon the natural environment–and eventually begins to devour itself.The immense inequality in economic power that exists in our capitalist society translates into a formidable inequality of political power, which makes it all the more difficult to impose democratic regulations.If the paladins of Corporate America want to know what really threatens “our way of life,” it is their way of life, their boundless way of pilfering their own system, destroying the very foundation on which they stand, the very community on which they so lavishly feed.Michael Parenti’s recent books include: Contrary Notions: The Michael Parenti Reader (City Lights); Democracy for the Few , 8th ed. (Wadsworth); The Assassination of Julius Caesar (New Press), Superpatriotism (City Lights), The Culture Struggle (Seven Stories Press), and God and His Demons (forthcoming). For further information, visit his website: http://www.michaelparenti.org .URL to article: http://www.commondreams.org/view/2009/01/20-9
g,he sums it up. great post.
They have been killing the beautiful geese that have been laying all those golden eggs.Yes! and they do this stealthy thru their use of taxes, laws, policing, rhetoric and inflated monetary system (debt)…And it is nice to know that others know but what is it we are going to do? … Nothing.. because they hold all the powerful cards and we hold none.This is changing due to their own greed and arrogance but there is no controlling this process. Their systems are failing them and us. Chaos rules when failure becomes pandemic or epidemic.Some of us are hoping to see this in one part of our conscience and deadly afraid at the same time because chaos is so uncontrollable with no certain outcome. Few wanted this but consequences of past actions have overtaken them and us. Change is upon us and none know the outcome.
Yes, that about sums it all up.
Yes, Parenti sees it as Lenin saw it: “Outside of Socialism there is no salvation of mankind from war, hunger, and the further destruction of millions and millions of human beings.” Parenti supports the centuries of struggle between capitalism and the worker.”Capitalism is despotism the more hateful for its meaness,” said Karl Marx in “Capital,” published in 1887. “It drags the laborer’s “wife and children beneath the wheels of the Juggernaut of capital.”Says Wikipedia, “From the late 60s well into the 80s, Parenti was one of many radicals and socialists who questioned the validity and value of what they called ‘bourgeois democracy.’ Why credit the corporate class with giving people a ‘bourgeois democracy,’ he asks, when in fact the ruling plutocrats furiously opposed most democratic advances in U.S. history, be it the extension of the franchise or the struggle for ethnic and gender equality, more direct forms of representation, more room for dissent and free speech, greater accountability of elected officialsand more equitable socio-economic domestic programs…“Many on the left continue to deliver impassioned and blanket condemnations of deceased communist countries, Parenti states. ‘Those of us who refused to join in the Soviet bashing were branded by left anti-communists as “Soviet apologists” and “Stalinists,” even if we disliked Stalin and his autocratic system of rule and believed there were things seriously wrong with existing Soviet society…”Parenti lauds the positives of life under Soviet Union socialism over the deprivations of capitalism in America.“Parenti argues that ‘despite the well-publicized deficiencies, crimes, and injustices, there were positive features about existing communist systems that were worth preserving, such as the free medical care and human services; affordable food, fuel, transportation, and housing; universal literacy; gains in women’s rights; free education to the highest level of one’s ability; a guaranteed right to a job; free cultural and sporting events, and the like.” He supported Gorbachev’s campaign of perestroika and glasnost until 1990 when it became evident to him that the Gorbachev reforms were leading to the implantation of free-market capitalism and were, as he saw it, bringing hardships to the common people.“Parenti maintains that the structural problems of free-market transnational capitalism will only worsen the living standards of people in the United States and abroad, while deepening the environmental crises.”http://en.wikipedia.org/wiki/Michael_Parenti
Well said – unfettered capitalism is as bad as communism and expresses itself with the same ultra-patriotism and jingoism. The ‘coronation’ of Obama is an example; which other of the western democracies show such adulation of their elected leaders? Somewhat like Stalin’s cult of personality directed at the position rather than the man, which amounts to the same thing if the man is hand-picked by a moneyed elite. The press and and the educational system have let the people, and democracy down badly .. who would have thought the government could repeal haebus corpus and implement Star Chamber courts with so little dissent? The destruction of the economy is a trifle compared to the damage that has been done to American ideals.
michael parenti zindabaad. zindabaad means adolation in Hindi language.
So, China’s 4Q08 GDP comes out today at 6.8%. Interestingly, this was exactly the median number forecast by economists interviewed by Bloomberg.Does anyone else share my enormous amount of cynicism towards that Chinese GDP figure? Over the last 3 months, all the other major export-oriented Asian economies such as Japan, South Korea, Singapore, Thailand and Taiwan have consistently reported economic activity numbers that are WAY below economists’ forecasts. These economists presumably use the same economic models to forecast Chinese activity as they do for Japan, South Korea, Singapore etc., so how can the economists consistently overestimate economic activity in these countries, but be perfectly correct when it comes to China?I have absolutely no faith in that Chinese 4Q08 GDP number. It has clearly been doctored to meet market expectations.
They doctor and fudge everything else, why not this? I would not be the least bit surprised to find out later down the road that there are many “Madoff” situations in China that were covered up.
I know. If they only were like the U.S. government in whose unemployment and other statistics reflect deep unbiased honesty.(and other western governments may not be that much better)
Good point. At least we are pretty sure our Olympic athletes are the correct age though, that has to count for something.
Maybe doctored to meet internal expectations as well. Regardless, if it’s even positive in a year that their export markets are collapsing historically, that is quite an achievement and a show of immense strength by China.
At the end of the day, it is not what is published that counts. It is real impact of the crisis on the Chinese economy. We all know Chinese economic numbers are worth nothing more that a pile of ****. That said, even the so called developed world numbers are suspect. The real impact of the crisis is far more important and can only be observed anecdotally. Some numbers cannot be fudged and the idea is to use those numbers to determine what the real impact of the crisis is: power consumption, raw and intermediate material imports, factory closures etc. And thos numbers are not looking good.
What Shall I Say?Each night when my children get ready for bedThey see me reading the news and shaking my headThey ask me if I’m feeling ok and if there is anything they can doI turn to them, forcing a smile, thinking “if you only knew”This economic crisis seems so unbelievable that I don’t know what to saySo most of the time I put my hands together and simply prayI also ask myself if this is the America I have worked my whole life forOr…is there supposed to be something moreAs much as I try, I just can’t seem to understand why our leaders have failed usIs it because we don’t spend every minute keeping them justI think most Americans go to work and do the best job they canMaking an honest living, paying their taxes to Uncle SamSo now do we keep believing in our sytem and give it our trustOr do we take action before we go bustI keep telling myself tomorrow will be a better dayBut when my children ask for food or shoes, what shall I say?
I love poetry that comes straight from the heart.
I have a question: Does the censorship on this blog now extend to the racial identities of government and financial officials and their potential biases concerning foreign governments, in that the discussion of this subject has just been removed?
It is debatable as to whether or not it was merely ‘race’ that was being discussed. Personally, though, I felt that the ‘racial’ reference was unnecessary, out of place, and served little purpose aside from being potentially inflammatory. And I don’t think it was much of a discussion, either. A discussion implies a give and take of ideas, and I don’t believe the poster was interested in listening to anyone or anything else. The posts, in my opinion, detracted from the rest of the comments, rather than enhancing or adding value.Regardless of either of our opinions on the subject, the fact remains that it is up to the owner and/or moderator of the blog to decide what he or she is willing to allow. I am a guest here, and I respect their right to ‘censor’ the comments as they see fit.
I’m against censorship of any kind. I’m not sure to what you are referring, but what possible connection could you have possibly made between race and a persons job? A bit like Phrenology perhaps?
“AIN’T WE GOT FUN?” by John LiechtyJanuary 21, 2009 — “History 48 Hours Away” CNN proposes today, counting down to the incoming Messiah (to borrow a Rush Limbaughism). I thought history was curtains since a few Neocons decided that American “preeminence” signaled its “end,” but I guess history is back. It’s hard to keep up.Not only is history 48 hours off – today’s paper declares that the new U.S. President has just four years to save the world. We’ve had 60 now to settle a conflict over a small patch of the world called Palestine and haven’t hit square one as yet, but never mind, these are hopeful times. If we can’t manage a few acres in 60 years, why not save the whole planet in four? Once he’s bailed out America’s Bushed reputation and Bushed economy, no doubt President Obama will see to the cosmos. Perhaps he’ll even find an occasion to achieve something substantial in Palestine. By then lunch will be free, pigs will fly, and the Cubs will prevail…I’m not particularly optimistic about Homo sapiens’ staggering-on capacity but have a hunch the planet, older and wiser than Homo sapiens, will carry on whether Obama saves it or not.Hyperbole seems to be a handy way to get attention in this inattentive… Hyperbole, nonetheless, is a time-tested rhetorical device, as George Bush’s speechwriters are well aware. Consider the following from the Anti-Messiah’s “farewell address” to the nation:1. Iraq has gone from a brutal dictatorship and a sworn enemy of America to an Arab democracy at the heart of the Middle East and a friend of the United States.That is what the President said. Run through a dehyperbolizer, what emerges is: Iraq has gone from a brutal dictatorship and sworn enemy of America to a brutal “democracy” and “friend” of the United States. Tens of thousands of people are dead. Hundreds of thousands are displaced. Millions have suffered terribly. Billions of tax dollars are wasted. It is now believed, and with reason, that Iraq under Saddam was in many respects better off than Iraq after Bush.2. Around the world, America is promoting human liberty, human rights and human dignity. We’re standing with dissidents and young democracies…Around the world, the American government is promoting what it perceives as its own interests. Liberty, rights, and dignity play second fiddle at home or abroad. We stand on dissidents as commonly as we stand with them.3. While our country is safer than it was seven years ago, the greatest threat to our people remains another terrorist attack. Our enemies are patient, and determined to strike again. America did nothing to seek or deserve this conflict……The greatest threat to our people remains inept leadership, greed, corruption, malaise, ignorance, environmental degradation… fortunately the prospect of another terrorist attack helps us ignore the herd of elephants in the room…4. I’ve often spoken to you about good and evil, and this has made some uncomfortable. But good and evil are present in this world, and between the two of them there can be no compromise.There’s white hats and black. We wear the white ones. They wear the black ones. We’ll let you know who “they” are in the unlikely event of ambiguity.5. Murdering the innocent to advance an ideology is wrong every time, everywhere.Murdering the innocent to advance an ideology is wrong every time, everywhere… Unless you’re conducting a War on Terror, and the innocent are members of wedding parties, children, civilians, prisoners… that’s collateral damage. Or unless your ideology happens to fall under our umbrella, in which case you have the right to “defend yourself” by systematically starving and killing a people mistreated and marginalized for 60 years, and vandalizing what little of their property you haven’t already confiscated.These are just five statements from Bush’s farewell open to dehyperbolization… In his last press conference the President allowed that he’s made tough decisions and that things haven’t always gone as planned, but concluded that all in all it’s been “fun.” Possibly. One suspects that many people, now that Israel has momentarily suspended the blood-letting it calls Operation Cast Lead, are in a mood to cast leather. It might be fun to see a mountain of shoes, say five or six billion of them, cover a certain ranch in Texas – but perhaps I hyperbolize.John Liechty currently teaches in Muscat, Oman
Madoff Clients May Recoup More Losses Through Taxes Than Suitseh eh eh eh,The tax payer will always pay the bill.Why?Because he has to, he can’t escape.He’s the ultimate victim of those who decide over other people’s money.Thake that.
US growth will be stopped by the planet, because economy can not be bigger than the planet, although economists do not recognize that. This will happen sooner than later.
If Professor Roubini is correct and I fear he is, why don’t any of the accounting firms listen to him? What about starting with the accounting firms and perhaps, one of the worst offenders KPMG. Why does anyone even care what KPMG has to say? Why does anyone want to work at KPMG? KPMG audits a disproportionate percentage of financials yet totally missed the banking collapse. Exactly what is KPMG expert at and why would anyone listen to them after all their failed audits of failed institutions? Many as early as 2005 predicted the financial meltdown and the unsustainable lending pattern of the financials including Dr. Roubini of the Stern School of economics, why didn’t KPMG listen. If I were a partner or employee at KPMG I would be extremely concerned about all the pending lawsuits and potential criminal liability of KPMG. You know for a fact that Tim Flynn the CEO and Joe Loonan the head lawyer will not stand behind the partners as evidenced by the tax partners KPMG threw under the bus when the DOJ came a calling. In fact, Flynn, completely reneged on the former O’Kelley’s promise to support the tax partners (after he got brain cancer) and lied to the tax partners by pulling the carpet out from under the them by hiring Bennett and Holmes to not only lie about the tax partners to the DOJ but deny them legal fees for defense at the DOJ’s request. Loonan, Holmes and Flynn, totally screwed the tax partners and an email exists wherein Loonan specifically states that in the KPMG tax settlement with the DOJ he has no idea if any of the facts are correct but KPMG better sign or the DOJ will put them out of business and ends the email by saying: “freedom is just another word for nothing left to lose”. The point of course is those that run KPMG have no honor, are lying scum and if you are employed by KPMG and something bad happens, KPMG will do everything it can to ensure it survives at your expense. Of course something bad has happened, the banking collapse was a no brainer, predicted by many and most of the KPMG audits of the financials are riddled with fraud. The lawsuits and criminal investigations are coming, no doubt. All KPMG partners and employees should be very concerned as KPMG has no problem throwing them under the bus for a life of ass raping if it will save KPMG a nickel. Why any clients would accept advice or rely on KPMG for anything shows a total lack of due diligence and perhaps, negligence by those clients choosing to use KPMG. Of course, the last sentence does not apply to those clients that are actually consensually engaging in fraud with KPMG. The firm of KPMG has no honor or expertise in any matter just self interested thieves like Flynn, Holmes and Loonan attempting to make as much money as possible for themselves before the firm implodes. Many emails exist concerning KPMG’s malevolence and will be disseminated over time. Thoreau has a great quote, “no one can associate themselves with the U.S. Government without disgrace”, the same applies to KPMG, no one can associate themselves with KPMG without disgrace.