Allen L Roland

The Dow is at 10,000, the Federal deficit is breaking records, unemployment is skyrocketing and money is cheap ~ so let's inflate the same debt bubble, continue Wall Street's derivative Ponzi scheme and let Main Street take the risk while Wall Street takes the profit:

As Henry Kissinger once said ~ " It's not a matter of what is true that counts but a matter of what is perceived to be true " and, believe me, the recent rally of the Dow Jones to 10,000 is a manipulated Wall Street Ponzi scheme to draw Main Street into the market to reinflate the same credit bubble that just burst ~ while bailing out the financial elite, who are mainly sellers, in the process.

When Robert Reich says " Watch Your Wallet even with the Dow at 10,000 " ~ you had better listen because the real truth of our present financial disaster is just beginning to emerge from the darkness.

Reich goes on to explain why the Dow Jones broke 10,000 while the rest of the economy is barely breathing ~ " Corporate earnings are up ~ mainly because companies have been cutting costs. Payrolls comprise 70 percent of most companies' costs, which means companies have been slashing jobs ...... Unsophisticated Investors of all stripes want to get in early and ride the wave. Pension funds, mutual funds, and other institutional investors figure the bull market has more oomph in it because, well, other investors will jump in. Think Ponzi scheme. Nice for now, but watch out if you're one of the last in....In other words, this is all temporary fluff, folks.... Anyone who hasn't learned by now that there's almost no relationship between the Dow and the real economy deserves to lose his or her shirt in the Wall Street casino." http://www.salon.com/opinion/feature/2009/10/15/dow/index.html?source=newsletter


Of course, at the center of all of these financial shenanigans is Goldman Sachs whose surging profits will probably enable it to dispense $23 billion in bonuses this year. Matt Taibbi, Rolling Stone, rightfully described Goldman as a “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”

And the Obama Administration is top heavy with Goldman people who are not about to kill the Goldman hen that is laying golden eggs. Witness last week, where the S.E.C hired a former Goldman executive, Adam Storch, as the chief operating officer of its enforcement unit.

Far more ominous is the 600 trillion dollar derivative market in the shadows which has purposely been kept from public scrutiny by both the Clinton and Bush administrations but is now about to makes its belated appearance during the Obama administration ~ thanks to PBS's FRONTLINE / THE WARNING.

The must see story that veteran producer / director Michael Kirk (Inside the Meltdown, Breaking the Bank) reports in this Tuesday night's FRONTLINE is both riveting, illuminating and the perfect follow through for Michael Moore's Capitalism / A Love Story ~ for Michael never really gets his questions answered about Derivatives.

Sifting the ashes of the financial meltdown, Kirk finds a lawyer named Brooksley Born, who, from her perch at the little-known Commodities Futures Trading Commission, tried to convince the country's key economic power players to do something which may have helped avert the financial crisis: regulate the increasingly high-risk financial instruments called "derivatives."

"They were totally opposed to it," Born says of the fierce resistance to regulation she met from Alan Greenspan, Robert Rubin, and the other members of President Clinton's "working group" ~ a highly influential and secretive body that determined the country's economic policy. In her first television interview, Born tells FRONTLINE that she was "puzzled" by the opposition she faced in Washington. "What was it that was in this market that had to be hidden?"

Excerpt: The Warning / On air and online October 20, 2009 at 9:00pm
www.pbs.org/frontline/warning

"Born's battle behind closed doors was epic," Kirk finds. The members of the President's Working Group vehemently opposed regulation ~ especially when proposed by a Washington outsider like Born.

"I walk into Brooksley's office one day; the blood has drained from her face," says Michael Greenberger, a former top official at the CFTC who worked closely with Born. "She's hanging up the telephone; she says to me: 'That was [former Assistant Treasury Secretary] Larry Summers. He says, "You're going to cause the worst financial crisis since the end of World War II."... [He says he has] 13 bankers in his office who informed him of this. Stop, right away. No more.'"

Greenspan, Rubin and Summers ultimately prevailed on Congress to stop Born and limit future regulation of derivatives. "Born faced a formidable struggle pushing for regulation at a time when the stock market was booming," Kirk says. "Alan Greenspan was the maestro, and both parties in Washington were united in a belief that the markets would take care of themselves." Now, with many of the same men who shut down Born in key positions in the Obama administration, The Warning reveals the complicated politics that led to this crisis and what it may say about current attempts to prevent the next one. " http://www.pbs.org/wgbh/pages/frontline/warning/?utm_campaign=Various&;utm_medium=Bulletin&utm_source=Main

The ticking time bomb, that still exists in the Obama administration, is the continuing concerted Wall Street effort not to regulate the highly-complex and lucrative derivative multi-trillion dollar crap shoot which still continues to rake in millions for the financial elite while Main Street stagnates. See my UNSPOKEN CAUSE OF MARKET COLLAPSE IS DERIVATIVE TRADING written on October 13, 2008 http://blogs.salon.com/0002255/2008/10/13.html

Until Wall Street is effectively regulated ~ the great Derivative Ponzi scheme will continue unabated ~ however, the day of reckoning is drawing near and it will not be painless.

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Allen L Roland http://blogs.salon.com/0002255/2009/10/16.html

Freelance Online columnist Allen L Roland is available for comments, interviews and speaking engagements (allen@allenroland.com)
Allen L Roland is a practicing psychotherapist, author and lecturer who also shares a daily political and social commentary on his weblog and website allenroland.com He also guest hosts a monthly national radio show TRUTHTALK on www.conscioustalk.net

Cartoon courtesy of Pat Oliphant / Washington Post

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Allen Roland’s weblog: http://blogs.salon.com/0002255/
Website: www.allenroland.com
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