Just finished the drive. And in good timing to because while practically nobody on the thread had any useful information except guydreaux. Somebody I may actually learn some things from.

Your assessment of Merrill was spot on.

A couple of things.
1) I’m aware that super senior didn’t attract large capital requirements. That wasn’t my point and if that is what you inferred my apologies. And agree that the fact that it didn’t require much was a problem. What I was trying to get across was that super senior was hard to get rid of, didn’t earn the firms much(especially after you considered the cost of leverage), and that banks were accumulating an absolute ton of it. My understanding was that since they were accumulating so much of it and there were still some capital requirements for those tranches that if you insured the tranches you would even lower the capital requirements more. Correct me if I’m wrong about that.

2. My apologies for just throwing up an extremely rough example up there. I used 10 to 1 to demonstrate that it didn’t take much leverage to produce serious losses. I shouldn’t have said “blow up”. I was just trying to demonstrate the idea, not to be historically accurate. The use of a low leverage ratio, a high concentration, and a small change in underlying was intended to make the idea obvious to people not to actually prove anything mathematically.

So that said. Since I never miss an opportunity. I hope you wouldn’t mind sharing some insights.

First, what kind of work do you do?

1. What did you think of the new basel accords?
2. What conditions do you think will start ocurring before bank lending will start picking up again? What areas do you see it going to?
3. How soon do you think the fed will raise the federal funds rate?
4. Do you actually think the fed will use the reserve interest rate as an anti inflation tool if and when that day comes? Also what are your thoughts on that?
5. Do you see them as potentially raising the reserve requirement if it the situation got bad?
6. Are you agreeing with the crowd predicting a large crash in China and a fiscal crisis in Japan in the near future? If so, how long do you think we have?
7. Do you think the current commentators are overstating or understating the amount of municipal bankruptcies this year? How bad do you think tha crisis will be when the fed starts raising interest rates?

Lori 1:41 pm-Of all the comments posted here, yours was the only one 100% correct! It would be a moot point had we (the taxpayers) not bailed out these crooks. Turns my stomach to know (according to this article) some of these guys are still working…looking for the next rip-off bubble to line their pockets. In the process putting the average hardworking (full tax paying) Joe in more jeopardy. May GOD help us!

@jon and @guyderaeux I hope both of u work for public advocacy organizations or at least financial analysis investigative reporting and neither of u are just another couple of money runners. Both of u seem to understand what has happened and is happening in great detail - information that is crucial in keeping the general public involved in the greater discussion. The real root of the problem as far as I can tell is not really the bailouts per se or the silly schemes wall st geeks have come up with to swindle billions or the obvious deep corruption And ties between the banks, the administration, the fed, the rating agencies and the regulators…. But a far more insidious culprit that all of us must challenge if we are too ever see true democracy and justice. The horrible culture of greed and our cultural fixation with a fiat currency and fabricated value systems. Truly this is at the core level what is driving all this chaos and systemic collapse. People can try as they may to ride the exponetially increasing frequency of spike and crash cycles until the roller coaster itself derails and we all are flung into catastrophe. The economy as it has been built up beyond the industrial revolution is running on “borrowed” time in every sense of the word. There is absolutely nothing sustainable in a system which is literally “driven” by a finite fuel source towards the infinite growth necessary to make any of the current models pencil out.  Something to ponder… When man was first learning to fly he would get a running start, begin to turn his props or flap his wings, then leap into the air and off the cliff edge. Ecstatic he would smile and shout ” i am flying, i am flying…!!!”. And then BOOM! He would smack into the ground. His flight cut short because his Plane didnt really work. But it sure felt great when it was working.

I haven’t seen one comment that directs attention to the real fraud committed by the banks on the investor and the real estate market. It wasn’t until the Hunt brothers that anyone believed that evil doers could collapse an entire financial system When the Hunt’s manipulated the silver market, it collapsed like a house of cards. The Hunt’s were considered to be upstanding citizens due to all their philanthropic niceties. Lo and behold, they were no better than common criminals. The silver market has to this day never recovered.

  The real estate market may never recover. There is still more than ten years of shadow inventory even if there was not one more foreclosure. Lets go back to the real fraud and forget about all these spv’s and cdo’s and cds’s. Even Alan Greenspan was completely fooled by this slight of hand. As others have posted, they weren’t creating these instruments for their own purposes. They were the perfect vehicles to keep your eyes away from the other hand that was stealing you blind.
  Only a few were at the top of this scheme to start but like any other plan gone bad the cockroaches all scatter with the light turned on. All you have to do is catch a couple of them, and they sing like little piggies. These securitized trusts were established and funded before the security was even in place. The Investment banks were so excited that they had to get as many mortgages as possible to fund the security investments made by their institutional clients. Once this train got started, all the other players on the street wanted in on the ride to the promise land. The world capital markets were not even paying attention to the federal reserve as Greenspan admits. Nothing he could do could fend off the Gold Rush to get into these triple a investments with no risk! This scam is as old as the hills. Presell as much elixer and go buy it from whoever has any. Make a ton on the trade. Then you got a real party going. All of the leaders of these companies knew what was going on but the over riding factor was everyone was doing it, so it must be OK!!! How many accountantants were going to try and get in front of this train. This sucker was moving fast and hard.

I will diagram the flow chart next if there is any interest. Good Luck. Thanks Matt Weidner.

You cannot effectively “punish” guilty companies…you can only punish guilty managers, and then only by a “life altering” fine and/or imprisonment. Fining a company is no skin of the nose of the management…even if they lose their jobs, they simply move elsewhere. Punishment of the guilty needs to be VERY personal. No wonder there is no accountability on Wall Street…there is no real personal risk.

Inside traitors.

@Jon

I like the new Basel rules.  The way to prevent another crisis is to reduce leverage and increase capital.  Too bad this only applies to banks.

However, the financial markets are like a tube of toothpaste- squeeze one end hard and you get a real mess somewhere else.

Think of the last crisis- banks had fairly tough capital requirements.  FNMA and the investment banks did not, so leverage (and for awhile) returns rose at those firms.  Banks tried to compete by creating SIVs and increasing securitisation.  Basel 2 artificially subsidised “AAA” securities so the market created more of them.

The new Basel rules and Dodd Frank make banking less profitable.  Hence, banks will not be able to pay competitive rates on deposits (once interest rates rise),meaning new deposit products and investment fund products will be invented that bypass the banks and pay higher rates (just like SIV commercial paper used to).  These rules also mean
that banks will not be able to lend at attractive rates, meaning that (currently) taxpayers will fill that gap (90%+ of new US mortgages are GSE or FHA) and eventually, securitisation or closed end funds will.

I certainly hope the Fed will raise rates when they have to, and I think this will happen by late 2011.  If it is accompanied by fiscal tightening it should be quite bullish for the Dollar and bearish for gold.

I think China has misinvested it’s savings and will face a structural slowdown from too many subsidies creating too much irrational and uneconomic behaviour.  When the cadres realise they can’t secure their power through a “guarantee” of 8% growth they may need to find another opiate of the masses to prevent the peasants from lynching the privileged CCP members-  war?  Who knows.

Japan is heavily indebted to themselves. If Japanese seniors find their savings have disappeared (because JGBs are worthless)  there is always an honourable way out. 

Don’t know much about the muni situation in the US- except that this problem, like the Federal budget deficit, is easily solvable.  Just don’t see much evidence Americans want to pay the bill yet for decades of free lunch.

Other than that, thanks Jon for your comments.  I did not mean any offence.

And if investigators want to probe under the table givebacks I suggest they look at what is happening at the FHA now rather than what happened at Merrill a few years back.  The FHA scam is much, much bigger:  about 50% of all new mortgages are FHA backed.  Here’s how it works.

Most people know that the taxpayers are lending to FHA borrowers who put only 3% down, and this in a market expecting another 10% fall in home prices.  Do the taxpayers know that the real effective downpayment on FHA loans is near zero?  Here’s how it works:

an FHA borrower puts a bid down on a $200k house with 3% down ($6k).  But when the contract is written up the buyer tells the FHA they are going to pay $210k for the house (with 3%, or $6.3k down), and then asks the seller for the extra $10k back in cash at closing.  Rather than putting 3% down, the buyer actually gets cash back from the taxpayer.

Instead of lending on the house, part of the FHA/taxpayer loan is actually going toward cash in the buyers pocket.  Essentially the taxpayer is subsidising a “bonus” for the buyer paying slightly above market for the house.  Very similar to the Merrill example, except we’re talking hundreds of billions or trillions rather than a few 10 billion in principal.  FHA rules need to be written to outlaw this immediately.  The taxpayer bears the risk while the borrower get cash in their pocket and a free option on house price appreciation.

@guyderaux
I am not following your FHA scheme…who is processing these deals ane who is claiming these bonus paybacks? Are there really thousands of homebuyers out there making these deals and actually pocketing the difference on the loan and sales price? Even if there were 100,000 of these 10,000 deals that would only be $1B. The 10$B u speak of from the ML scheme still exceeds this figure. Plus there is no way this ML thing was isolated incident. Forgetting all that even, just the 10$B alone is still a lot of money to the average taxpayer/citizen when taken out of context of the greater macro economics that are really part of a differnt reality. 10$B is enough to give 100k families $100K! Thats a small city. And thats 2-3 yrs pay for the avg american. More likely there were 10 or more similar schemes working in similar fashion in different institutions. I mean c’mon we had whole teams at GS and others creating investment vehicles with returns based solely on catastrophic mortgage portfolio losses while the rest of the bank was betting on housing prices to climb to infinity.

@Robert

You are comparing apples and oranges and confusing the size of the “bonus” (in the case of the FHA scheme) with the total notional amount of the underlying loans.  That is not meaningful.

The size of the Merrill “bonus” was not specified, nor is it clear whether the bonuses accrued were ever paid.  The figures mentioned are the notional amount of the securitites involved.

The notional size of new FHA loans granted each year is massive (currently around 50% of all new mortgage loans).

If you want to find out how prevalent the FHA scam is in your area, ask your local real estate broker what percentage of FHA buyers attempt to get cash back at closing.

Two things, first Jon seems to have a professional grip on the details.  Only problem with the senior slice as I have read is that ALL of the slices were rotten.  Mortgages too bad to be sold were repackaged and rated AAA.  When this crisis broke, personally I was most angry at the rating agencies.  They are supposed to be the stop gap to control the banks and brokers.  When it became apparent that they were not preforming this function, I realized that “the gloves were off” as far as the banks and brokerage houses go and their disregard for the rule of law. 

Second, there are not enough poor people on the planet to make up the volume of bad loans necessary to bring down global finance, it was not Fannie and Freddie.  To generate enough bankers had to recruit everyone.  I remember the sales pitch on houses and condos from 06 to 07, all the now down, no doc, 80/20s, pick a payment loans.  I was personally perplexed and scared.  Too scared to buy, I thought something was about to happen, I had no clue what.  Sold my house and decided to wait it out. Best decision of my life.  If it is too good to be true, it means someone is going to get screwed.  Same scams, different generation.

I just finished reading Crash of the Titans.  I recommend this book to anyone reading this blog.  It is a detailed account of what happened inside Merrill and Bank of America.  Read the book then move your money out of the big banks and financial service companies and into a credit union.

Crash of the titans .. Great recommendation

Also check out “The Big Short” by michael Lewis to get a real insiders look into the entire subprime crash
Also “the great stick up” by robert scheer - incredible investigative reporting into the real story and lead up to the crash and all complicit parties.

Excellent advice!  Move all your money out of big banks!
They are truly criminal! Supory ur local economy! Support working people and small business through credit unions!

Check out http://www.truthandwhale.wordpress.com

Has this story been reported on any of the cable’s business networks?  It didn’t see it yet on the PBS money show maybe this evening.  More names need to be mentioned especially the hedge funds’ principles.  This should be copied and sent to each and every Congressman by concerned constituents.  This reports actions as bad as someone walking into a market with a gun but at least that person is honest with his intent.

1.  BoA received a subsidized capital infusion and continues to benefit from being too big to fail.  Glass-Steagall was a necessary instrument and the world pays dearly form not reinstating it globally.

2.  how did Dale Lattanzio’s partner, Doug Mallach, avoid mention?  he co-ran fixed income with Dale and was Kenny Margolis’s boss…

I’ve read hundreds more scathing reports in 2007 and 2008.  This story just adds more detail to the narrative of too little reserves, no regard to risk, and privatizing the gains while socializing the losses.  The number of synthetic financial instruments is infinite, the concept of two sides to every transaction has been taken to the extreme, and all lawful barriers avoiding conflict of interest are cast down.  The result is a perpetually gamed system whose champions believe that by looking out for themselves, meaning bonuses and profit, their actions always ultimately benefit society by allocating capital where it can do the most good.  They are wrong, but will never come to understand that they are wrong.

Until I see hundreds in orange jumpsuits, I have little faith in American national financial institutions, although the regionals I like better.  Precious little reform has occurred, and the same problems all remain.  The banksters have no remorse, and rationalize all their actions and methods.

The only reform they will understand requires greater action from the public, such as our soil has not seen in years.

Can someone interpret this.
In June 2009, the Financial Accounting Standards Board (“FASB”) updated the accounting standards related to the consolidation of VIEs. The standard amends the guidance on the determination of the primary beneficiary of a VIE from a quantitative model to a qualitative model and requires additional disclosures about an enterprise’s involvement in VIEs. Under the new qualitative model, the primary beneficiary must have both the power to direct the activities of the VIE and the obligation to absorb losses or the right to receive gains that could be potentially significant to the VIE. In February 2010, the FASB amended this guidance to defer application of the consolidation requirements for certain investment funds. The standards are effective for interim and annual reporting periods beginning after November 15, 2009. The Company adopted the standards effective January 1, 2010 and consolidated certain collateralized debt obligations (“CDOs”). As a result of the adoption, the Company recorded a $5.5 billion increase to assets and a $5.1 billion increase to liabilities. The difference between the fair value of the assets and liabilities of the CDOs was recorded as a cumulative effect increase of $473 million to appropriated retained earnings of consolidated investment entities. Such amounts are recorded as appropriated retained earnings as the CDO note holders, not Ameriprise Financial, ultimately will receive the benefits or absorb the losses associated with the assets and liabilities of the CDOs. Subsequent to the adoption, the net change in fair value of the assets and liabilities of the CDOs will be recorded as net income (loss) attributable to noncontrolling interests and as an adjustment to appropriated retained earnings of consolidated investment entities. See Note 3 for additional information related to the application of the amended VIE consolidation model and the required disclosures.

According to Janet Tavakoli, super senior tranches were unrated. The ratings agencies did not acknowledge their existence. People just ‘assumed’ they were ‘better than AAA’ because of their top place in the payment-waterfall. It gets to the invention of the ‘Synthetic CDO’ (which evolved from JP Morgan’s BISTRO, which came out of the Exxon Valdez.. and a drunken pool party… but that’s another story that Gillian Tett has told in Fool’s Gold). Cash CDO’s don’t have Super Senior.

I almost forgot to say… massive kudos to pro-publica, they make it look so easy but they have, here, uncovered an incredibly devastating story and God knows how they got anyone to talk to them about it. Brilliant work.

Guydreaux:

Your description is of Cash CDOs, but what of Synthetic CDOs?

If 1/3 of your assets are Synthetic CDOs, that means 1/3 of your assets are, essentially, bundles of credit default swaps. Naked CDS are best described by a good many wall-streeters as, essentially, gambling.

Now, if you have 100 bets placed that an event will never happen, and it happens, then you lose all 100 bets. Not just one. That event ? Housing prices going down.

This is brief. We have safeguards. The guardians aren’t doing their jobs. The biggest corporation, that no one seems to mention is the US Gov’t. The senators and congressmen along w/ the President, who was bought and paid for, by Wall St., were the biggest contributors to this fiasco. The Fed. Res. along w/ banking institutions around the world participated,
Regulations serve a purpose when they are enforced. Also the kind of regs have to be sensible. My concern right now is who is watching the watchers?

If we genuinely want to stop communism, then we need to stand up strongly against oligarchy. It’s no wonder the U.S. is in the shape it is seeing as how these traders are the sort of people who have Congress & the White House (every president) on speed dial.

What I find hardest to understand is how these gentlemen have avoided prosecution for embezzlement—by transferring funds from one division to another and then claiming a bonus for having made a “sale,” their bonuses were skimming off company profits which should have gone to shareholders. The criminality of this seems clear. That no one is prosecuting these thieves or seizing their ill-gotten gains shocks the conscience and does more to produce “moral hazard” than the original crimes.

Merrill Lynch didn’t even respect it’s client’s enough to inform them that their Financial Advisor had been replaced by someone else. My loss happened fast but I had faith in my former Financial Advisor. I expected his call if my assets were in trouble. Finally I realised there had to be something terribly wrong and I called Merrill Lynch and found out my former Financial Advisor was no longer with Merrill Lynch. I met with the new advisor and believed his lingo which was my financial downfall. Nobody commented on us individuals who lost thousands of dollars by investing with Merrill Lynch.

Everybody reading watch this for the Macro economic story
http://www.kpfa.org/archive/id/66383

A major problem with this article is that it’s commentary is like editing out all the players in a football game and making an anlaysis on the whole game by looking only at errors by 2 players…. Left out of this article are other players that made errors: (a) Freddie/Fannie, (b) CRA, (c) failed Congressional oversight of Freddie/Fannie (can you say Barney Frank), (d) Credit Default Swaps, (e) mortgage brokers… and a biggie (F) the ratings agencies! 

On a positive note, I agree with the tangled incentive arrangements… that is a problem.

It’s fraud.  The SEC just handled BOA with kid gloves because they are “too big to fail” and too big to break up.  BOA stock is now at $13.00 per share up from the $10.00 per share it dropped to in 2008 and down from over $50 per share.  The stockholders of Merrill and BOA should be screaming to their congressmen but apparently they are not.- maybe because so many shares are held by pensions and open end funds.  If pension and fund managers scream too loud then they would lose their jobs for getting caught with their pants down.
SEC Staff Accounting Bulletin #99 “Materiality” states that in determining materiality (or a material mis-statement), companies must consider qualitative factors as well as quantitative thresholds. These qualitative factors include: recording (or failing to record) transactions in order to meet analysts’ consensus; increase management compensation; preserve positive earnings, etc. Under SEC jurisdiction, such self-dealing is prosecutable ..... . if provable

All our futures have been made dimmer by the failure of the Obama Administration to do anything about these problems.  “Change” my @#$%^.  An example of what could be done: Require all compensation above, say $1 million p.a. to be made in restricted stock.  Could not be sold for 5 years.  Or half for five years and half could not be sold for ten years.  Then the interests of the executives would actually align with the shareholders (& indirectly with the rest of us, who would not be required to pick up the tab for their disastrous, horrific behavior).  Instead Treasury & regulators are continuing to be part of the problem.  Makes me think of the event in Louisiana, where three State Insurance Commissioners is a row, each elected on a reform platform, went to jail.

The biggest financial scam in history pulled off with subprime mortgages and everybody pleading stupid while booking billions in fees.

Republican dominated industries (Wall Street, banks, mortgage and real estate brokers) made fortunes with an adminstration hell bent to create a bubble to prove that tax cuts were driving the economy.

Since the Great Depression various entitiies established underwriting guidelines for home loans based on analysis of million of loans to established a reasonable level of defaults.  Starting in 2000 all of that went down the toilet.  If you could fog a mirror you qualified for a subprime, no questions asked. 

The huge number of unqualified buyers drove up the housing prices (economics 101) creating an upward spiral of higher values and larger loans.

The con artisits, supported by the politicians, made a fortune creating the bubble, made another fortune selling short when the bubble started to collapse and then a final fortune buying up the wreckage at deep discounts.

And the final con job was blaming the whole mess on a gay Senator and a hand full of blacks borrowers.

And they did it all with no risk because they were gambling with OPM - other people’s money.

Over the last 70 years since the Great Depression we established underwriting criteria for home mortgages to verify the ability of borrowers to repay loans. We did this by analyzing millions of loans to establish rules and regulations that kept loan defaults at a reasonable level. That all went down the toilet with subprimes.

The Cheney/Bush administration was determined to deregulate Wall Street as (1) a reward to a Republican dominated financial industry (Wall Street, banks, mortgage and real estate brokers) that made hundreds of billions in fees off the biggest financial scam in history and (2) to bolster their claim that the bubble they created proved that tax cuts would drive the economy.

With financial deregulation the greediest moved in and took over the markets forcing out the ethical and starting an economic train wreck in motion. CEOs were threatened with losing their jobs if they didn’t get a piece of the orgy.

The insiders made a fortune as the markets went up, another fortune selling short as the markets went down and a final fortune buying up the wreckage at deep discounts.

With the Republican dream of an economic train wreck at hand, they are now hell bent to destroy the unions, destabilize the labor markets with continued high unemployment and drive working class wages down to the level of the Mexicans and Chinese to further increase profits for the wealthiest.

This financial disaster was like bread from heaven for Republicans who, after intimidating the regulators into silence, scored one more by blaming it all on the Democrats.

Are not federal and state attorneys general guilty of “Actus reus” -omission of a crime- by not prosecuting the largest and most damaging theft in US history?

Let me spin you a scenario.  Props to “Guydreaux” for the reminder of something I’d rather forget.

I"ll be honest, I don’t know how factual this is so feel free to do your own research and correct me.

Note: If true, many aspects of this are fraud, however it is surprisingly unlikely you will be caught for years if you do your paperwork correctly.

How Banks Create Money

1. Live in California.  In parts of California, you do not need to pay for a business license if the business is named your own legal name:

“The Frank Smith Company”

2. Make your business a bank or investment firm.

3. Sell your house.  Invest the money you earn from the house in “your” bank “The Frank Smith Company”.

4.  U.S. Federal Reserve Rules stipulate that a Bank must have reserve cash on hand to handle transactions but may give out loans of up to 10x that reserve amount.  Have the “Frank Smith” company give you a loan for -ten times- the amount you sold your house for at an interest rate of one tenth of one percent. 

5.  Deposit the entire loan in the “Frank Smith Company”

6.  Repeat

7. As long as you make minimal cash transactions, never get caught, and never take out more than ten times the value of your house at one time you are potentially infinitely wealthy.  One look at your Leger by the Fed and you’re screwed.

8.  You can only be held criminally responsible if you are the CEO of the “Frank Smith Company”.  Frank Smith has done nothing illegal and this will not affect his personal credit rating.

9.  At any time the “Frank Smith Company” can go out of business or be sold to another company.  Frank Smith may also quit and walk away at any time.

I read a lot of these comments and found nothing to be said for the federal reserve bank that is not ran by the gov’t but, by the super rich.bring back regulated banking and watch some of our problems go away.

Reaver   Great
OK, lets now get serious . I call it the ” The Mustard Seed Project”
It starts with you!
and then me, and so forth.
1. All the depositors in our Community bank are shareholders in it.
2. Utilizing the greatest power on earth, the power to create credit..i.e. x 10 (fractionalization)
3. Trust documents that lay out the rules.( This is tricky. How do you find 10 honest men?)
4. The POWER is used for Health, Education, Employment, Shelter
5. 0-minimal interest rates for life/community essentials
6 high interest rates for toys.2nd. house etc.
.............................
say:
1/3 for individual needs
1/3 for community needs . schools, hospitals etc
1/3 state & federal
............................
Corporations can not be shareholders.
Companies can not be shareholders.
...........................
This has the potential to create a true democracy, by giving the POWER TO CREATE CREDIT TO THE PEOPLE.
............................
Imagine the government having to come to the people for War loans, or Bail Out money for the financial system.
You vote with your money…VETO means , sorry no cash for you!!
..........................
The POWER to create credit ultimately rests with the people, but the people are ignorant of this POWER and in addition have been brainwashed to the extent that any such suggestion is termed and believed to be SOCIALIST.
...................
The GATES, BUFFETS, TURNERS AND MANY MORE SUPER WEALTH could very easily turn America around by supporting such a project, but it will never happen. They are not powerful enough. Our political system has been utterly corrupted and the media is a propaganda tool for the central bankers.
..................................
As far as I am concerned the whole WFC was manipulated. A nice little consolidation, everybody nicely in debt. Nothing could be sweeter in the world. SUCKERS!
..............
The perfect storm of Deposits from China and the high oil prices = tax on every living soul on the planet - clean laundered cash into the Banking system x ten = created cash out the door so fast we need a WAR , PERSONNEL DEBT(credit cards), MORTGAGES and every which way.

IMAGINE - if the people, Congress understood the system and directed all that credit to alternative energy , education, infrastructure development etc, how many jobs would have been created and how strong America would have been.

Never to late Reaver

One Mustard Seed is all it needs.

How much does the West owe the Chinese Communist Party for bringing 1.3 billion people stability, education, health and food.
To open up their labor to produce affordable goods and reduce inflation for the West.
To allow the Corporations of the West to profit from this cheap labor and pass on the dividends that pay the 401k’s for our retirement.
To re-deposit their surpluses back into the American economy.

What do they think about us taking this surplus and instead of creating a further 10 million jobs, we in fact squander their trust and loss 10 million jobs.
The 10 million jobs that should have been created would have returned them dividends in the creation of 10 million more consumers of their goods.

How we have failed…...
and now the propaganda machine has started to beat the war drums about the threat of China.
Why should China ever trust America ever again.
A mistake can be accepted, but after the WFC no lessons have been learnt or action taken by the US.

In 10-15 years the world currency will no longer be the USD, it will be the Yuan, backed by GOLD!
as long as the war mongers haven’t engineered the destruction of China