Bail-Outs and Buy-Ins vs A Sustainable Economy

Guest Editorial by George LoBuono 

You may wonder where will all that taxpayer bail-out / buy-in money go in the end?  Major interests in two of the three big banks that benefit most by the Paulson plan to give nearly a trillion to failing banks have a history of strange moves against popular government. JPMorgan-Chase is what’s left of the old J.P. Morgan monopoly (Morgan’s only son had no direct heirs), and Citicorp was until recently the repository of many billions in Du Pont family cash accounts.

Ironically, JP Morgan’s Guaranty National Bank and DuPont family interests were two of the most visible supporters of an avowedly “fascist” 1934 plan to overthrow newly-elected President Franklin D. Roosevelt in a coup by impoverished veterans of World War I. War hero Gen. Smedley Butler was asked to lead the coup but exposed it, instead. The plan was to have 1 million angry veterans descend on Washington DC and occupy it, then force Roosevelt to install a “Secretary of General Affairs” who would really run the White House. Morgan supplied money and the DuPont’s Remington Arms company was to supply the weapons. The plan was modeled on the fascist veterans organizations in Europe, at the time. A Congressional investigation chaired by later-Speaker of the House John McCormack largely substantiated Butler’s charges.

Also ironic is that fact that both Morgan-Chase and Citicorp have a long history of involvement in both the origin and the ownership of the Federal Reserve Bank. A Chase-owning Rockefeller pushed the legislation that created the Fed back in 1913. And who actually owns the Fed? Not the US government.

Two internet articles, WHO OWNS THE FEDERAL RESERVE and THE FED NOW OWNS THE WORLD’S , argue that only US banks own the Fed, yet as the first article indicates we see Deutsche Bank’s NY subsidiary listed as one of the Fed’s owners. So, those Rothschild-Warburg interests often, if not erroneously decried as prime Fed owners can simply use their financial ins at Lehman, Morgan-Rockefeller and Goldman Sachs, etc. to manipulate the Federal Reserve Bank. Paul Warburg was the Fed’s first chairman.

Some on the internet argue that the Rothschild interests that President Andrew Jackson ousted by ending the Second Bank of the United States in 1836 were allowed back into power in 1913 when a Rockefeller and Rothschild-associate Paul Warburg pushed for the Jekyll Island conference that created the Fed. Was it, as some allege, a scheme to hijack the US economy at its source: the currency printing press? The question revolves around the fact that when the US government needs money, the US Treasury sends bonds to a relatively small group of private dealers who auction them to investors. As Congressman Wright Patman said, “When the Federal Reserve writes a check for any government bond it does exactly what any bank does, it creates money, it created money simply by writing a check.” In her book Web of Debt, Ellen Brown notes that “The bonds then become the “reserves” that the banking establishment uses to back its loans. In addition to (a) guaranteed 6% (paid by the Fed to its member banks), the banks will now be getting interest from the taxpayers on their “reserves.”

So for those banks, it’s like getting money for nothing and it’s all funneled into the hands of a relatively small group of private bankers. By effectively ceding them the power to create and distribute new money, is the US government really working toward a sustainable kind of economy? Recent events suggest otherwise, of course. Are there any alternatives on the horizon?

The 21st century will require a safer, more reliable approach, and that will require some thinking. So, here are some ideas for a system that might work better.

First, phase out the Federal Reserve bank (and the dollar). Replace it with a fractionally-integrated “eco.” How would it be fractionally-integrated? In the “eco” plan, the prime determining number is the sustainable resource of your planet–it’s the whole number 1 and all of your economy is based on fractions of that most important whole. The economy of the future will probably be mostly about electronic values (computerized accounts), but if you want to supplement that with some currency in order have the privacy to buy things without an electronic Big Brother watching your every move, then issue currency (i.e. the eco) that’s based on fractions or decimals of that sustainable whole quantity. That way, you won’t ruin your ecology or deplete its resources and have to seek them elsewhere (other planets?) at horrendous energy expense. This new kind of fractionally-integrated economy may be the only way to protect our planet’s ecology.

In order to both accommodate and adequately reflect the nature of 21st century energy technologies like so-called “scalar electromagnetism” and other energy drawn from the vacuum of empty space, the eco must have alternate-cycle numerical values written into all of it’s (fractions-of-the-whole) calculations. And just what are those “alternate cycle” numerical values?

They’re numbers that have two characteristics at the same time: they’re always mirrored by positive decimals (fractions of that ecologically sustainable whole), and they’re mirrored by the large whole number value (the energy universe) within which they are merely a fraction. As such, they resonate, precisely and predictably. When the new, non-polluting technologies that various official whistle-blowers say now exist in black budget programs are mainstreamed due to need and the rising costs of petroleum, the new economy must reflect the ecologically sustainable limits of the energy we draw from the vacuum. This may sound futuristic to some readers, yet according to numerous current and former official whistleblowers, such technologies are already a reality.

In order to correlate our energy use to the safe limits of the vacuum of “empty” space, the new eco economy would use extra-dimensional values. Here’s how that looks in real life: There’s a limited amount of energy that can be safely pulled out of the vacuum of empty space, and if we exceed that, as Nikola Tesla reportedly once did in New York City, we could cause earthquakes or even solar flares that can damage our atmosphere and our electronics. Such dangers are due to what Tom Bearden calls “delta t,” the marginal change of time involved in all “scalar” energy usage. “Scalar” energy draws from energy on a larger “scale,” across a larger range (or scale) of energy values extending both more deeply down into the atom and farther out into space, at the same time. Scalar electromagnetism, a technology already used in black budget industrial projects, is also called “zero point energy,” or electro-gravity, or negative energy technology–they’re all the same thing.

So, to be safe-especially during the first half of the 21st century, under the new “eco” we won’t burn so much fossil fuel because fossil fuels are used up in a mere flash of historical time. Instead, our energy increasingly becomes either simple conventional wind, hydroelectric (wireless distribution), or solar—plus some “scalar” energy.

Because the mistakes of a single, sitting government could endanger the lives of all of humankind for centuries, we must finally devise an ecologically realistic economy. So, the eco would be based on energy credits and sustainable resources. You can see the logic in that: equality and sustainability–all of it is rated per the planet’s resources. With the eco and the new 21st century technologies, we must use innovative math that always computes more than one numerical value or equation at a given time. Rather than use the simple linear math of old, we should use a non-linear math that has converging, or co-existing multiple fractional values (fractions of the sustainable whole). So whenever we use a whole number, it must be counter-balanced by the larger, determining fractions or decimals that rate it to larger cosmic/ecological quantities. We don’t just dream up whatever cosmic quantity we choose. Cosmic values are pre-determined and are explicit in the all the quanta and the energy fluctuations in the vacuum all around us. *This is a binding constraint in using the new “scalar” energy.

Technically speaking, our electronic calculation of a new “eco” economy has negative exponential numbers and decimals fluctuating with every use of energy. Such numbers must correlate to a clearly defined, “negative cycle” that manifests both in the gravity and the scalar energy around us, and also in the resonant ecology of nature around us. **A “negative cycle” is negative because it pulls and cycles inwardly like atomic gravity and the strong force, while normal energy like light and heat curves and bends outward.

In other words, given the new technological reality now upon us, we must begin to rate our energy and resource use directly to a negative cycle (or better yet a mutiply-shelled counterbalance of alternate cycles) because scalar energy, which is an “open secret” now shared by numerous industrial nations, is directly premised on such a cycle. Way back in the 1950’s Nikita Kruschev openly proclaimed his nation’s involvement in such technologies. More recently, Bill Clinton’s Secretary of Defense William Cohen publicly stated that there are already international agreements about the use of such technologies. Two noted researchers, ret. Navy Col. Tom Bearden and physicist Mark Comings have reported that for decades there has been a system both here in the United States (and likely elsewhere) than can instantly detect and triangulate the location of anyone who uses the new “scalar” energies. So, a kind of safety network is already in place, according to informed researchers.

To be most effective, the new eco economy must use new, alternative values in order to work correctly. Its math must put extra-dimensional values in very equation. Instead of a whole number sitting alone, you may see a floating value–like an exponent that we use but the eco economy will use an extra exponent sitting to the left of the number (a subscript), for example, to represent the scalar, negative cycle relationship of that number to the larger energy ecology. It’s a very real, binding kind of equation. That new negative-cycle value doesn’t sit still but is smeared out into space-time and is nearly always in more than one place at a given time. So it’s extra-dimensional. It is spread out on a greater scale.

I would argue that once we take the first necessary steps, the rest of world will soon recognize the logic of the “eco,” which intrinsically pays its benefits forward.

Along with the eco, we must end the Federal Reserve Bank. We can replace it with an international currency commission and the new, globally integrated electronic values. At the same time, in the US and in other participating countries, we can allow for adjusted internal market values-rated at their technology and planned resource futures. No outside dictatorship of internal values would arise, only basic global ratings per the eco–to assure a sustainable ecology (isn’t the lack of that why the current crisis is now occurring?)

The new “eco” economy would feel like a mildly humbling pinch in the short-term but should create a vigorous boost of activity within 3-5 years. It is real money-it’s faster and is fractionally integrated, as is the energy/resource reality; it’s not a fiction. The eco would require a public education campaign regarding the humbler, better reality that will begin to replace those “disaster capitalism” pyramid schemes.

If we choose to do so, we could phase in the new scalar energy sciences with the new plan, which would phase out fossil fuel dictatorships. The strength of the new system would be within it, hence the example would challenge other nations to be equally sustainable. It would always work within the nations that first adopt it because it is resonant ecology in motion. It immediately binds us to a survivable ecology. During early phases, we would confer with big lender nations about the value owed them by participating eco plan states. So we would reward green incentives in all states, with no exclusion. High tech can be exported to reverse China’s environmental disaster, infra-structural commitments can be made to Russia and India, Brazil, etc. Rainforests won’t be cut down in desperation.

Ideally, because of its popularity the eco should plan for a universal value of labor, so we should keep that in our overall goals.

In short, a sustainable system like that of the eco is very real and must either be considered or we will suffer systemic failures like the current one, over and over again. In the short-term, we would do well to adopt universal healthcare, essentially de-monetarize the medical care but not the med-tech industry just yet (it’s global).

And why not couple the eco with a global food plan, thus phasing out starvation due to monetary insularity. How do you do that? Export reproducable, self-sustaining agriculture systems to needy nations, i.e. simple irrigation projects are prioritized over Monsanto-like disaster predations.

Innovative new tech freedoms must be encouraged in an eco system. Green alternatives would inherently be prioritized per the eco plan. Educational credit programs for participating populations would be less elitist, more widespread among those populations and could be mixed with work offered to students, also. That much is easy.

Priority would be given to conventional “green” energy systems. Meanwhile, to be safe during early phases, scalar energy technology should be limited to micro-scale research (physics, genetics) and globally-networked outer space or medical projects, and such. The eco would offer exchange education programs for nations where religions seem reluctant to admit the new technological reality of the “new physics” universe.

And, finally, we would allow for innovation and adaptations required by participating societies. Using the eco, we wouldn’t tread on peoples’ freedoms. Instead, we would increase them because the eco is premised on a greater 21st century kind of realism and efficiency that would make work days shorter. As a result, hence there would be more free-time and time for study. 

–George LoBuono is a writer and investigative researcher living in Davis, CA

No Hope for Homeowners – Foreclosure Prevention Program Falters

Hope for Homeowners Program Update 11-19-08:

No Hope for Homeowners – Foreclosure Prevention Program Falters

Since the Hope for Homeowners program has been a failure so far in helping any homeowners avoid foreclosure, U.S. Housing and Urban Development Secretary Steve Preston announced today that standards for the program are being relaxed in the hopes that some actual borrowers might be helped by the program. The three most significant changes to the program are 1) allowing a loan to value of 96.5 percent for some H4H loans, 2) simplifying the process for removing subordinate liens by allowing upfront payments to lien holders and 3) Allowing lenders to stretch the terms on the mortgage to 40 years which theoretically could help with debt ratio problems.

Here are the full details:  http://fhaloanadvice.com/hope-for-homeowners-requirements-relaxed/

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Stunning feedback from readers of this article…

“I have been trying to get countrywide to adhere to this new program with zero results. I have made call after call on the HOPE FOR HOMEOWNERS program and keep getting the “run around” from them. They keep saying that they “have not heard about this program from upper management” so they cannot “process the paperwork on it yet”…meanwhile, each day that goes by, we wait and hope that we will not be thrown out on the streets. I know for a fact that they simply just don’t want to write down the differences….they are the worst culprits in this mess, I know….I used to underwrite mortgage loans for them until the “laid me off”, leaving us with no way to pay them the mortgage. I am since reemployed and have the capability to pay our mortgage after a 12 month mess. I firmly believe they will never use this program… they are too damn greedy.”  – Matt  (10-27-08)

“I thought it was just me. I have been trying for weeks to get someone at Countrwide to talk to me about the program. All I get is we have our own program coming out in December, and your account has not been flagged so you will not be eligible. On top of that I have to cancel my short sale in order to find out what they would do for me in a loan modification. My story is Matt’s story 20 years as an underwriter, Countrywide forced the lender I work for out of business, and I was unemployed for almost a year. Now I have a new job and want to modify my loan…..I just can’t get Countrywide to talk to me. Why should I have to give up a short sale contract to talk to the loan modification department? Why didn’t the government put some teeth into the new program and require that the lenders participate? After all they made all the money all those years on these loans and created this mess. God help us all because we are not going to get any compassion or leadership anywhere else.” – Kitty  (10-27-08) 

 

 “I spent hours on the phone today with Countrywide, called the Hope dept (which is the Home Retention department aka loss mitigation). Again I was told that they know nothing about the H4H program (Hope for Homeowners) I was actually told that I am lucky they have not foreclosed yet. When asking about a loan mod, I was told again that I would have to cancel the short sale process but today I was told that it is unlikely even with my income that they would consider me for a modification of any kind since the taxes on my home are due next month and that puts me over some threshold for what they can modify. So If I can come up with 25k I guess I can keep the house on a loan mod. Or I can continue the short sale process which has Countrywide loosing 78k based on the HUD my realtor submitted which is supported by the new appraised value of my home. Or do nothing and wait for the Sheriff to kick me out. I have no where to go, my wonderful realtor actually gave me the phone number for a shelter. I should take my 74 year old mother in law and my husband with congestive heart failure to a shelter. Countrywide should be working with me, I have the income to make the monthly payments. This is a travesty. God help us all.”  – Kitty  (10-28-08) 

 

As banks continue to line up for the taxpayer funded handouts designed to ease their withdrawals from years of dependence on high yields derived from ridiculously reckless lending practices, homeowners continue to seek avenues to prevent the looming possibility of foreclosure – typically cited as the root cause of the economic ‘crisis’ that currently grips world financial markets.

 

It’s reassuring to know that our dedicated civil servants are willing to put in the long hours required, on nights and weekends, to make sure their banking buddies and colleagues don’t have to suffer the same fate as many banking executives of late, having to retire with hundreds of millions of dollars that were fraudulently paid out as options and bonuses as reward for investing long and naked, and exposing their companies to tremendous risks.

By the way – none of those profits from the ‘boom’ are being appropriated in order to reimburse those now failing companies, and none of that money is going to be recovered in order to soften the blow to taxpayers.

That money is considered to be lawful compensation for a job poorly done. What is on the table is just exactly how much more bonuses they should get before their companies are declared illiquid then subsequently sold off to the lone bidder for pennies on the dollar, and how much of the bailout money they will use to buy up competitors instead of lending it out as promised.

And for the lowly taxpayer on whose backs both the illicit corporate profits as well as the cost of the bailout are borne? What has this unprecedented dash to action by the bureaucrats, political appointees, and elected representatives of the people wrought in the way of sanctuary from the economic tempest that has engulfed their citizenry?

How about the dandy “Hope for Homeowners” program, designed to help more than 400,000 homeowners avoid foreclosure by making as much as $300 billion dollars available for the effort.  What a fantastic idea, it would seem at first glance. Of course, the Devil really is in the details.

As of today, October 27, 2008 – nearly four weeks since the program was unveiled – a remarkable 79 people have applied for the program (Fox News 10-27-08).

Yes, 79 homeowners have been accepted (Fox News 10-27-08).

There are at least 77 banks participating in the program. I am not going to try to do that math in my head, but my best guess is that each of those banks has only helped about one homeowner avoid foreclosure on average in that 27 day period.

With all of the poorly underwritten loans Countrywide booked – and the tens of billions of dollars in profits they made in the process – one would think they might be on the list of participating lenders.  Not surprisingly, they are not.  Although a unit of Bank of America now, there has been no indication they will assume the responsibility for modification of existing Countrywide loans.

My first impression was that this had to be due to a simple lack of awareness by the public that such a program was available to them. Not the case at all I have found. The program has generated a great deal of interest from distressed homeowners since it was unveiled.

Lenders have been deluged with inquiries from interested borrowers, and the Congressional Budget Office has estimated that this program could help as many as 400,000 homeowners through September 2011, when the program ends.

“Our phones have been going crazy,” said Anthony Logan, president of Group Capital Mortgage in Cerritos, Calif, a participating lender.

What’s the hold up?  Why, it’s the program itself, which was designed almost certainly to fail. First of all, the program is completely voluntary for both the lenders and the participating banks. It also requires the lenders to forgive a portion of the original loan balance in an effort to bring the mortgage in line with the market and affordability for the borrower to enter a long term fixed mortgage.

It allows certain borrowers at risk of foreclosure to refinance into a 30- year fixed-rate loan insured by the Federal Housing Administration (FHA) if the current lender agrees to write down the existing loan to 90% of the home’s market value today. In plummeting areas such as California, if a lender holds a $500,000 mortgage and the home’s current appraisal comes in at $400,000, the lender would forgive $140,000 in all. Even before the program launched, lenders expressed concerns about the potentially enormous write downs they would face.

Incredibly, in the face of receiving the largest publicly funded bailout of private industry in history, supposedly caused by nonperforming securities backed by rapidly foreclosing mortgages, the banks themselves are refusing to use a portion of that bailout money to help alleviate the very circumstances that had predicated the public bailout in the first place.

“Refinancing into the new government-backed program requires your current lender’s approval. If the home’s value is less than the mortgage — which real estate data provider Zillow.com estimates applies to nearly one-third of American borrowers who bought in the last five years — the note’s owner must also agree to reduce the amount owed on the house to 90 percent of its current appraised value. If you owe $190,000 on a house that’s only worth that much, the bank would have to agree to reduce the loan to $171,000, giving up $19,000 in principal, plus interest.”

Meanwhile, two million families are expected to lose their homes to foreclosure in the next two years.

There is a serious leadership vacuum in this country, especially at the upper echelons of both government and business. Their priorities and policies are bankrupting our nation, and the close relationship between these private industries and our government regulatory agencies should be rigorously examined.

Henry Paulson, former CEO of Goldman Sachs, was one of the major architects and proponents of the “self-regulating” banking model developed in the 1990’s.

Heavy deregulation and the elimination of the safety barriers that had existed between the retail banks and investment banks, as well as the experimental distribution of risk to world-wide markets through untested financial vehicles, led to the erosion of the credit markets.

This system, partially conceived and enthusiastically advocated by Paulson, directly led to the current financial crisis that threatens the first worldwide depression since the 1930’s.

Now, for better or worse, we have handed the job of fixing this mess to the very people most instrumental in it’s cause, namely Paulson.

Is it any wonder that the phones are ringing off the hooks as desperate homeowners look for help and scramble to avert financial ruin by refinancing out of predatory loans, and yet only 79 loans being made to save them nationwide?

If it is not for lack of a program, and if it is not for a lack of interest on the borrowers part, that only leaves the failure of the program to the usual culprits – the banks.

“We know the interest from the public is there, and the next question that can’t be answered yet is are the lenders going to do this?” says Bill Glavin, special assistant to the FHA commissioner, who notes that it generally takes at least 45 to 60 days to complete the process for a regular FHA loan.”

Well Bill, here is your answer from them banks:  “No.”