by Joe Shea
American Reporter Correspondent
October 3, 2008
WHAT YOU REALLY LOST TODAY
BRADENTON, Fla., Oct. 3, 2008 (3:55PM EDT) -- Like a bad joke, the Dow swung up close to 300 points today as lawmakers voted at 1 PM on the bill to bail out Wall Street banks and brokers, and then fell 450 from that point as traders began the clamor for more at the close.
It's like I told you here on Sept. 25: "I hate to tell you this, but as soon as the bailout bill is passed, after a day or perhaps two of market euphoria and 500-point gains, the market will start to fall again and market leaders will resume their chant, "More! More! We need more!"
I thought they would wait a day or two; so sue me.
Wall Street can never get enough money; enough money doesn't exist to make them feel fat, happy and satisfied with their $5 million bonuses anymore. They need real money now. Call the tarding desk and sell it all down; the government will pick it up, anyway.
Government by market price prevails. Government by the people, for the people, and of the people has lost.
There is no going back. Congress has empowered three or four banks to inexorably eat all the rest before they turn on one another and only on or two remain standing. That is so because when three or four banks - Citigroup, Bankamerica, JP Morgan and Wells Fargo - have hundreds of billions on deposit and the rest have tens of millions, the competitive advantage - in setting loan rates, offering freebies, buying advertising, offering jobs and directorships, making charitable gifts to governments local, county and state, branding stadii, guaranteeing security - becomes too great; the little fish have to get eaten by the big fish.
But even that is not the problem. The problem reallty is that there can be no political resistance to these large banks any longer. What local, county, state or federal legislator is going to say no to someone who call in his car loan, his home loan, his credit cards, his kids' student loans, anytime they want? And failing that, can make the stock market fall 100, 300, 500, 700 points?
And what if Congress tries to say they can't do that? What congressman can stand up to trillions of dollars of economic power consolidated in three or four banks? Most can't resist even a smaller bank's blandishments today.
Don't be lulled into believing these banks are weak, on the edge, or anything else; they are just fewer and bigger than ever, and now they've got a $700 billion credit line, using our money, in exchange for selling us - the taxpayers - a boatload of mortgages foreclosed upon before last March 31, and credit card debt that borrowers defaulted on last year.
If there is an underlying home, some day someone is going to buy it from a bank that buys it back from the Treasury two or three years from now.
The Fed will buy your $250,000 home for $50,000 now, sell it back as part of a big bundle of homes to a bank for $55,000 two years from now, and the bank will let you have it for $250,000 a year or so after that - at a healthy interest rate, of course. And there's no chance the bank's going to risk lending money to you the suckers without a whole lot of money down.
And when is someone going to want to buy any of that credit card debt from the United States Treasury? Not ever.
You only lose what you paid down on your house, plus all your payments, plus whatever the bank gains on the resale a few years from today.
So, also, you lose your freedom. Your financial independence is utterly undermined by a lack of competition; the power you surrendered now belongs to Wall Street.
As the FDA said today, drink your melamine and like it. A little bit won't hurt.