The Financial Times: "The panic in the world credit markets reached historic intensity [on Wednesday] prompting a flight to safety of the type not seen since the 2nd World War."
Why aren't any of the agents of capitalism attempting to justify their noxious belief in "free markets" now?
There is no such concept in Reality as a free market, there never has been and there never will be.
The allegedly free market is, in fact, a state-based economic system whether one chooses to look at the US, Britain, Japan, Germany, Russia or China, or, indeed, anywhere else.
And any supposed freedom in the marketplace is limited to the market makers, other insiders and those who speculate in a booming market.
Woe betide those who speculate in a bear market!
This week has been one of the most momentous weeks in international finance in the last century - the cyclical trail of disaster and misguided rescue plan has been repeated throughout the week, set against markets experiencing the utmost volatility.
Over the weekend, when most Morecambe and Wise Show decisions are made nowadays so that market reaction may be delayed, Bernanke/Paulson announced that Lehman Brothers was being allowed to go under.
This sent shockwaves through the markets as investors suddenly realised that the public purse is not deep enough to support all the wrecks of capitalism's plight.
Additionally, it was announced on Sunday that Merrill Lynch, another distraught investment bank, was being taken over by Bank of America.
The markets were unimpressed and slalomed downhill.
But, as usual, Paulson ##############################################
For he announced on Tuesday (##########################################) the biggest bailout in US financial history - fully $85 billion to rescue AIG.
The selection of AIG over Lehman Brothers was key.
Firstly and most importantly, ##################################################
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Thirdly, it was indicative of the systemic risk, already great, that would be markedly magnified if the insurance sector was to follow the banking sector into deep crisis. The tentacles of impact would then be undermining the entire capitalist edifice.
Despite this input, the markets continued to fall.
At 5000, the FTSE reached a key threshold. #####################################
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On Wednesday, Gold saw its biggest ever one day gain (in $ terms) as major investors sought a safe haven for their ill-begotten assets in a turbulent marketplace.
Also on Wednesday, the Russian bourse halted trading for the second successive day. The Russians haven't learned that it is not seen as good form to simply halt trading because the market is not behaving as one might wish it to.
The London Stock Exchange (LSE) has a more integrated strategy.
When financial shenanigans were afoot after Morecambe and Wise's bailout of Fannie Mae and Freddie Mac, the LSE simply collapsed, allegedly for technical reasons, missing seven hours of trading on one of the most important trading days of recent times. Several other European bourses were affected in a domino fashion.
Also, on Wednesday, lending between banks effectively completely seized up, stopped, terminated...
This is serious.
If banks cannot raise money from each other, and if there is no more money in the public coffers so that the social may support the capital, and if mergers and acquisitions (M&A) continue to be rare (apart from those made in desperation) in the recession, then banks are dependent EITHER on proprietary trading in a market cornered by Goldman Sachs OR on attracting new customers at the retail end of the operation.
Consequently, a very simple rule of thumb is worthy of note.
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Interestingly, this is the exact opposite of the idiotic advice given by The Guardian financial journalist, Phillip Inman.
Idiot Inman is an Insider.
The Guardian must specialise in disinformation in finance as well as football, it would seem...
Idiot tells readers to "######################################" before going on to tell us that "it is hard to see how the government could let any bank go bust and allow savers to lose out. It saved Northern Rock, after all."
And, the US government saved Freddie Mac and Fannie Mae but had still allowed one of the most venerable (if such a word is appropriate in finance) names in investment banking to go to that great credit-default-swap in the sky.
This had occured three days earlier.
Idiot.
Thursday morning brought news that Lloyds was buying out HBOS in the biggest British banking deal ever.
But there were shenanigans here too.
Normally the monopolies people would be all over the Lloyds/HBOS deal like a rash.
But, it has been waved through with scarcely a glance, by an increasingly desperate government, that has called off the competition authorities so long as Lloyds promise to maintain first-time buyer lending - free markets again!
Late on Thursday came a further form of straight market manipulation. All rational people objected when Morecambe and Wise prevented the selling of stocks in a score of financial institutions in July. This was a blatant rigging of the market.
The Financial Services Authority (FSA) mimicked the comedians in America last night when they announced a ban on the short selling of bank stocks until January 16th 2009 and even this date isn't necessarily a threshold for a return to a less corrupted market structure, #######################################################
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Can't wait...
This is straight market manipulation.
Within minutes of the announcement, British banking stocks had soared 10% on Wall St with Barclays gaining over 20% in 4 minutes!!!
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Why is it that when speculators are undertaking speculative behaviour that is causing a market to boom, all is fine and dandy.
But when speculators are undertaking speculative behaviour that is causing a market to fall, they are banned from doing so.
Why are deep-state insiders allowed to rig the markets in this fashion without any public scrutiny?
And there are rumours pre-opening of the LSE this morning that Morecambe and Wise are going to announce a major banking package later today, presumably just in time for the opening of Wall St.
So, with the rampant use of taxpayers money, the banning of short-selling, the rigging of the markets, the arbitrary application of regulation, governments acting as guarantors of the last degree, a selective policy of intervention and the media support of heads of government, the FTSE has recovered to within 250 points of last Friday's close.
As I said, Morecambe and Wise...
This second banning of short selling in financial stock will make #########
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The short-termism in the banning of short-selling is telling.
Although the share prices of financial institutions will be falsely inflated in the immediate term, the downsides to this rigging are two-fold.
Firstly, the intervention will reduce the likelihood of inter-bank lending restarting anytime soon and, secondly, these short-term crutches for a falling market are only enhancing the eventual impact of this Depression.
They are deferring, but magnifying the future misery.
Many commentators and analysts have compared this week to 1929, having failed to find a single instance of such magnitude in the 79 years in between.
There are many losers from this capitalist cock-up - we're talking Third World here rather than unemployed commodities traders - and there are going to be a whole load more before this crunch has finished crunching.
And, as ever, we always have to add the systemic proviso that the negative impacts on any adaptation to climate change is left out of our gloomy assessment.
When you include climate change, the prognosis is terminal.
But one particular fact has impressed us most over Paulson's reign, the speed of US government financial intervention in crises of capital and property.
If only such behaviour had been replicated in New Orleans in their crisis of the social.
And still the city waits for the release of various US government grants and funding to continue with the pitiful attempts at rebuilding the city.
And every so often, up pops the strange idiot child from Texas, to inform us that he has total faith in the financial markets, with that preppy sneer-grin that has been perfected through all those weird weekends of pseudo-klan behaviour dressed up as frivolous, fraternal fun.
"The markets are safe, trust me..."
This is likely to reassure who exactly?
The strange idiot child, who does war crimes when in tantrum mode and hides underground when scared, the man who gave Goldman Sachs control of the global economy and the global recession, and he wants our trust.
Fuck Bush.
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