Posted on the Guardian Unlimited, economist Dean Bakers analysis of the Federal Reserves bailout of wall street at the U.S. Taxpayers expense is frightening.

Fed up with Wall Street

Dean Baker

March 18, 2008 8:00 PM

http://commentisfree.guardian.co.uk/dean_baker/2008/03/fed_up_with_wall_street.html

The collapse of the housing bubble in the US continues to wreak havoc on the financial geniuses who fostered its growth. All over Wall Street, the mantra “Who could have known?” is being heard with every more frequency and greater expressions of pain.

Things got really serious last week, when Bear Stearns was placed on life support, and was then disposed of in a fire sale last weekend. One of the longstanding giants of Wall Street investment banking now has less value than a street corner lemonade stand, if not for the generosity of the Fed. The Fed lent money to Bear Stearns and its purchaser, JP Morgan Chase, under terms that no private lender would have agreed to. The risk that the Fed will end up with a substantial loss on its advances to Bear Stearns is quite large, with no prospect for any real return on its investment.

This raises the obvious question: why did the Fed, an agency of the US government, use our tax dollars to keep Bear Stearns and its rich managers and shareholders above water? After all, the government supposedly doesn’t have enough money to provide kids with healthcare and child care, to guarantee families decent housing or to meet a long list of other needs. Why do we have the money to lend tens of billions of dollars to prop up Bear Stearns at discounted interest rates?

There are two points about this bailout that should be clear. First, this is a bailout - we are handing money to Wall Street. Second, we don’t have to hand tens of billions of dollars to the country’s richest people to save the financial system. (more…)

I guess that Rupert Murdoch hasn’t totally ruined the reputation of the Wall Street Journal, yet.

Like Greg Palast, Alan Dershowitz seems to be thinking that the whole “investigation” into former governor of New York seems suspect at best, and probably entrapment by the justice department.

Another thing that Dershowitz points out is how the Bushtard government is abusing their illegal domestic spying programs. We have been told that the Bushtard administration needed to spy on us American sheeple to protect us from the Islam O’ Fascists and would never be used for political gain or other fascist like activities. Well I guess that George W. Bushtard has “Fooled Us Again”, Doh!

If you ask me, what really sparked the justice departments interest in Eliot Spitzer wasn’t his Vitter like appreciation of call girls, but his column in the Washington Post from last Wednesday. Which do you think is a larger threat the the Bush administration? Spitzer bedding prostitutes or the govener writing an opinion piece called “Predatory Lenders’ Partner in Crime - How the Bush Administration Stopped the States From Stepping In to Help Consumers“.

The Entrapment of Eliot

The federal criminal investigation that has led to Eliot Spitzer’s resignation as governor of New York illustrates the great dangers all Americans face from vague and open-ended sex and money-transaction statutes.

Federal law, if read broadly, criminalizes virtually all sexual encounters for which something of value has been given. Federal money-laundering statutes criminalize many entirely legitimate and conventional banking transactions. Congress enacted these laws to give federal prosecutors wide discretion in deciding which “bad guys” to go after.

Generally, wise and intelligent prosecutors use their discretion properly — to target organized crime, terrorism, financial predation, exploitation of children and the like. But the very existence of these selectively enforced statutes poses grave dangers of abuse. They lie around like loaded guns waiting to be used against the enemies of politically motivated investigators, prosecutors and politicians.

There is no hard evidence that Eliot Spitzer was targeted for investigation, but the story of how he was caught does not ring entirely true to many experienced former prosecutors and current criminal lawyers. The New York Times reported that the revelations began with a routine tax inquiry by revenue agents “conducting a routine examination of suspicious financial transactions reported to them by banks.” This investigation allegedly found “several unusual movements of cash involving the Governor of New York.” But the movement of the amounts of cash required to pay prostitutes, even high-priced prostitutes over a long period of time, does not commonly generate a full-scale investigation.

We are talking about thousands, not millions, of dollars. We are also talking about a man who is a multimillionaire with numerous investments and purchases. The idea that federal investigators would focus on a few transactions to corporations — that were not themselves under investigation — raises as many questions as answers.

Even if Mr. Spitzer’s derelictions were serendipitously discovered as a result of routine, computerized examination of bank transactions, the dangers inherent in selective use of overbroad criminal statutes remain. Money laundering, structuring and related financial crimes are designed to ferret out organized crime, drug dealing, terrorism and large-scale financial manipulation. They were not enacted to give the federal government the power to inquire into the sexual or financial activities of men who move money in order to hide payments to prostitutes.

Once federal authorities concluded that the “suspicious financial transactions” attributed to Mr. Spitzer did not fit into any of the paradigms for which the statutes were enacted, they should have closed the investigation. It’s simply none of the federal government’s business that a man may have been moving his own money around in order to keep his wife in the dark about his private sexual peccadilloes.

But the authorities didn’t close the investigation. They expanded it, because they had caught a big fish in the wide net they had cast.

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The $200 billion bail-out for predator banks and Spitzer charges are intimately linked

By Greg Palast
Reporting for Air America Radio’s Clout

March 14th, 2008

While New York Governor Eliot Spitzer was paying an ‘escort’ $4,300 in a hotel room in Washington, just down the road, George Bush’s new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst with mortgage bank industry speculators.

Both acts were wanton, wicked and lewd. But there’s a BIG difference. The Governor was using his own checkbook. Bush’s man Bernanke was using ours.

This week, Bernanke’s Fed, for the first time in its history, loaned a selected coterie of banks one-fifth of a trillion dollars to guarantee these banks’ mortgage-backed junk bonds. The deluge of public loot was an eye-popping windfall to the very banking predators who have brought two million families to the brink of foreclosure.

Up until Wednesday, there was one single, lonely politician who stood in the way of this creepy little assignation at the bankers’ bordello: Eliot Spitzer.

Who are they kidding? Spitzer’s lynching and the bankers’ enriching are intimately tied.

How? Follow the money.

The press has swallowed Wall Street’s line that millions of US families are about to lose their homes because they bought homes they couldn’t afford or took loans too big for their wallets. Ba-LON-ey. That’s blaming the victim.

Here’s what happened. Since the Bush regime came to power, a new species of loan became the norm, the ‘sub-prime’ mortgage and its variants including loans with teeny “introductory” interest rates. From out of nowhere, a company called ‘Countrywide’ became America’s top mortgage lender, accounting for one in five home loans, a large chunk of these ‘sub-prime.’

Here’s how it worked: The Grinning Family, with US average household income, gets a $200,000 mortgage at 4% for two years. Their $955 monthly payment is 25% of their income. No problem. Their banker promises them a new mortgage, again at the cheap rate, in two years. But in two years, the promise ain’t worth a can of spam and the Grinnings are told to scram - because their house is now worth less than the mortgage. Now, the mortgage hits 9% or $1,609 plus fees to recover the “discount” they had for two years. Suddenly, payments equal 42% to 50% of pre-tax income. The Grinnings move into their Toyota.

Now, what kind of American is ‘sub-prime.’ Guess. No peeking. Here’s a hint: 73% of HIGH INCOME Black and Hispanic borrowers were given sub-prime loans versus 17% of similar-income Whites. Dark-skinned borrowers aren’t stupid – they had no choice. They were ‘steered’ as it’s (more…)

Ever wondered what life would be like if the Bushtastic Conservatards got everything they ever wanted? Well you don’t really have to stretch your imagination on this one. All you have to do is look at New Orleans for a prelude or Iraq for the complete picture.

Viva La Conservatardism!

5 years after Iraq’s ‘liberation,’ there are worms in the water

Hannah Allam | McClatchy Newspapers

last updated: March 16, 2008 06:37:35 PM

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Brave New Films tracks how Fox noise starts the distorted talking points about Barack Obama and then the rest of the main stream media picks up on the Fox talking points.

When you have are bunch of spineless sycophants whoring in American media today, I guess its no surprise when all the other monkeys starts imitating the craziest members of tribe.

This one is even better than the previously one. Fox has one Representative Steve King of Iowa saying that if Barack Obama wins, radical Islamics would be dancing in the streets.

My guess that January 21st, 2009 unless a Rethuglican is occupying the White House, the entire world will be dancing in the streets.