Mike Morgan's Quick Notes

- Behind Enemy Lines -

A Depression is Unavoidable

King Henry Will Run the United States of America as Dictator - If you think you're hearing the truth in the media, think again.  The fact is, King Henry is demanding complete control and he can never be questioned or prosecuted for anything he does.  Here is a section direct from his proposal . . .

Sec. 8. Review. Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Paulson's Plan - In a nutshell he is bailing out Wall Street.  There is NO plan for regulation of the problems that got us here.  There is NO plan to prosecute any of the / his negligence and fraud as CEO of Goldman Sachs, or any of his friends.  This is not a bail out.  This is a cop-out and dump-out on Main Street.  If you let Paulson get away with it, the hardship on the average man will be far worse than if we let most of the chips fall on the boys and girls of Wall Street.  Instead of a 2-3 year crisis, Paulson is turning it into a 10-20 year crisis. 

 Unavoidable Depression - There is no doubt we go into a Depression.  I have been writing about a "Decession" for two years, and this past January, I started calling it what it is . . . The Greater Depression.  The issue at hand is who pays for it?  Do we pay for it alone, as taxpayers.  Or do we make sure there is some accountability, so guys like Paulson pay for their share . . . and go to jail for fraud. 

Paulson's Was There - Paulson IS Part of the Problem - If you read nothing else today, read the section below about Paulson and how he profited from the crisis he is now overseeing.  This is truly like asking the bank robber to lead the investigation of the bank heist.

If you do nothing, we not only pay for the Depression alone, but we reward those who created it . . . and we give them all the money they want to buy us up for pennies as we struggle to find food.  If you do nothing, the crooks keep the booty, and they get to laugh at us from their beach houses. 

Paulson's plan is criminal.  He is the grandest financial criminal of all history.  Please don't sit back and watch this train wreck.  Use the links below to contact your Senators, Congressmen and Nancy Pelosi.  It only takes a few minutes.  If you can fax your concerns in, that is even better.  Use the links to access their email and fax.

1 - Paulson was the CEO of Goldman Sachs while much of the toxic waste was created.  He made more than a half a billion dollars personally from the development of this crisis.  If there is to be a bail out of $500 billion, let's have 100 guys like Paulson return $500 million each and 1000 of his buddies return $50 million each.  That's a start, but even that will not solve the $5 trillion problem that Paulson wants you to believe is $500-700 billion.

2 - Paulson is asking for complete control with no oversight or review.  He demands the dictatorship.  Even Castro is laughing at us right now.

3 - Paulson is proposing paying his "buddies" 10 to 20 times what their assets are worth.  The toxic paper he is talking about buying is trading at  5 -20 cents on the dollar, if it trades at all.  The whisper number from Paulson is he will use our money to buy it for 60 cents on the dollar.

4 - Once Paulson and his thugs on Wall Street finish shaking us up for everything we have, it is still Game Over.  So why not take the medicine now, when Wall Street will be taking it with us?  Why reward Wall Street with yachts, vacation homes and piles of money in the bank, when they are the reason for the coming Depression.

5 - His Baby.  Think about when Paulson decided he was "shocked" with what was going on.  Not when Bear Stearns failed.  Not when Lehman failed.  Not when Merrill and the others were teetering.  No, not until his baby, Goldman Sachs dropped 40% in one day.  That's when he decided enough was enough.  Not until it affected his pocket book and his legacy as the World's Greatest Thief.

Paulson Was There - Below is an article from Bloomberg that appeared almost a year ago. It's sad. Very sad. Very sad that nobody stopped this man. It is sad that we gave a man responsible for much of the mess we are in, the power to wave his wand and exonerate himself and his friends . . . then to reward his friends and trash the taxpayers. It is even sadder that just a handful of politicians in Washington are speaking out. It seems like our politicians are prepared to hand the keys to the United States to a man that probably deserves to be in jail at this point. If he has not committed fraud, he has demonstrated the most extreme form of grossly negligent conduct I have ever seen. And he's a liar.

 By Mark Pittman
 
``He should admit to having been involved in creating the problem that we have now,'' said Representative Brad Miller, a North Carolina Democrat, who introduced a bill Oct. 22 to make firms packaging subprime mortgages liable for bad loans in some circumstances.

The subprime crisis developed earlier this year when falling home prices triggered defaults by homeowners who wouldn't have normally qualified for a mortgage. Many were unable or unwilling to make adjustable-rate payments that were due to rise. Home foreclosures doubled in the third quarter from a year earlier to 635,159, RealtyTrac reported Nov. 1.

Largely Contained

Starting in March, Paulson said the damage was ``largely contained'' and was no risk to the larger economy. When other credit markets began to be affected, he and others began pushing for solutions.

``I can't help but notice that when middle-class homeowners were losing their homes to foreclosure, he was pretty nonchalant about it,'' Miller said of Paulson. ``But when Wall Street CEOs start seeing trouble in their absurdly complicated financial instruments built on the mortgages of middle-class homeowners, he feels their pain.''

Paulson declined to comment through spokeswoman Michele Davis, who said, ``he can't talk about Goldman business.'' Spokesman Michael DuVally of New York-based Goldman declined to say how much subprime mortgages contributed to the investment bank's profits, or Paulson's compensation, during his tenure from May 1999 through June 2006.

Goldman paid Paulson $38.5 million for 2005, and he received an $18.7 million bonus for the first half of last year.

 
 House Bill

The data on subprime bonds, compiled by Bloomberg from reports by debt servicing companies, don't include all of the mortgage bond offerings managed by any of the firms. That's because all of them handle offerings by bond issuers outside of Wall Street, including Irvine, California-based New Century Financial Corp., a subprime lender now in bankruptcy.

The House bill Miller introduced is backed by Representative Barney Frank, the Massachusetts Democrat who is chairman of the Financial Services Committee. One provision would make firms that package and sell subprime mortgages liable for damages if loans violate certain minimum standards, including ensuring a borrower's reasonable ability to repay.

Paulson criticized the liability idea in an Oct. 16 speech at Georgetown University in Washington.
``We need to ensure yesterday's excesses are not repeated tomorrow,'' Paulson said. Penalizing Wall Street for packaging mortgage loans ``is not the answer to the problem,'' he said.

Potential Paralysis

The House measure would ``potentially paralyze securitization,'' which, Paulson said, has been ``extremely valuable in extending the availability of credit to millions of homeowners nationwide and lowering the cost of financing.''

In New Delhi on Oct. 30, Paulson repeated his pledge to find what went wrong in the financial system. ``We need to shed light on it and make the policy adjustments so this doesn't happen again,'' he said.
 
 
To contact the reporter on this story: Mark Pittman in New York at mpittman@bloomberg.net. 

You had better start emailing and calling your Senators and Congressman.  He already has enough votes to get this passed.  If you don't act, King Henry rules.  

Senators - http://www.senate.gov/general/contact_information/senators_cfm.cfm       
Congressman - https://forms.house.gov/wyr/welcome.shtml

Nancy Pelosi - http://www.house.gov/pelosi/contact/contact.html

Senator Bunning -
http://bunning.senate.gov/public/index.cfm?FuseAction=Contact.ContactForm

Senator Bunning is the only Senator that I have heard speak up against the plan. Others have spoken, but they are doing so cautiosly, so as not to piss of the King Henry just in case he pulls off the overthrow of the United States government.