Next-Generation Crazy: The Fed Plans For The Coming Recession

Insanity, like criminality, usually starts small and expands with time. In the Fed’s case, the process began in the 1990s with a series of (in retrospect) relatively minor problems running from Mexico’s currency crisis thorough Russia’s bond default, the Asian Contagion financial crisis, the Long Term Capital Management collapse and finally the Y2K computer bug.
With the exception of Y2K – which turned out to be a total non-event – these mini-crises were threats primarily to the big banks that had unwisely lent money to entities that then flushed it away. But instead of recognizing that this kind of non-fatal failure is crucial to the proper functioning of a market economy, providing as it does a set of object lessons for everyone else on what not to do, the Fed chose to protect the big banks from the consequences of their mistakes. It cut interest rates dramatically and/or acquiesced in federal bailouts that converted well-deserved big-bank losses into major profits.
The banks concluded from this that any level of risk is okay because they’ll keep the proceeds without having to worry about the associated risks.
At this point – let’s say late 1999 – the Fed is corrupt rather than crazy. But the world created by its corruption was about to push it into full-on delusion.
The amount of credit flowing into the system in the late 1990s converted the tech stock bull market of 1996 into the dot-com bubble of 1999, which burst spectacularly in 2000, causing a deep, chaotic recession.

This post was published at DollarCollapse on NOVEMBER 17, 2017.

‘Probably Not a Coincidence that the Prime Minister and I Were in Seattle meeting with Warren Buffett’

Canadian Finance Minister boasts about Crony Capitalist Bailout of collapsed mortgage lender. But his assumptions might be wrong.
‘Just like I said, a back door bailout in Exchange for something down the line. Very very dirty,’ tweeted Bay Area short-seller Marc Cohodes in response to Canadian Finance Minister Bill Morneau’s gloating about the government’s role in the bailout of Home Capital Group.
Home Capital Group is Canada’s largest alternative mortgage lender. It focuses on new immigrants and subprime borrowers that have been turned down by the banks. It had been melting down ever since revelations of liar loans surfaced in 2015. Liar loans don’t exist in Canada’s clean housing market. They’re a US thing. By April this year, Home Capital was collapsing as a run on its deposits crushed its funding sources. A very onerous and controversial funding package was arranged in all haste to keep it afloat, as the industry – and as we now know, the Canadian government – worried about contagion.
The Canadian housing bubble is sitting on needles, and everyone knows it.
On June 22, when Warren Buffett’s rescue of Home Capital Group became known, its shares, after having already soared over the prior days, soared another 27% to C$19, having tripled from their crisis low in late April. But since that propitious day, its shares have fallen nearly 30%.

This post was published at Wolf Street on Jul 24, 2017.

Why Wall Street Should Be Viewed as a Major National Threat

The day before the 4th of July, when most Americans were hustling about preparing for family barbecues, the New York Times finally decided to publish an editorial warning about Wall Street’s potential threat to the nation. Unfortunately, it did so with the kind of timidity we see regularly from cowed or compromised Wall Street banking regulators. The editorial writers noted that: ‘It’s entirely possible that the system is more fragile than the Fed’s stress tests indicate,’ and they called for ‘heightened vigilance of derivatives in particular’ without providing any detailed data.
A more accurate assessment of the situation would have been this: There is only one industry in the United States that has twice in a period of less than 100 years brought about a devastating economic crisis in the country. Wild speculation coupled with poor regulation of mega Wall Street banks brought about the Great Depression in the 1930s, leading to massive job losses, bank failures, poverty and economic misery for tens of millions of innocent Americans. The precise same combination of wild speculation and crony regulators created the Wall Street crash of 2008, throwing millions of Americans into unemployment and foreclosure while creating obscene bailouts and bonuses for bankers, and leaving the U. S. with such a low economic growth rate to this day that many Americans feel they are still living in the Great Recession.

This post was published at Wall Street On Parade on July 5, 2017.

The Greek “Bank Jog” Is Back: Bank Deposits Tumble To Lowest Since 2001

It didn’t take much for the Greek bank run jog to return: with Greece once again stuck between an IMF rock and a Schauble hard case, and whispers that another bailout may be on the horizon, the local population took advantage of whatever capital controls loopholes they could find, and withdrew money from the local banking sector, which to this day remains on ECB life support, almost two years after the 3rd Greek bailout in the summer of 2015.
According to Greece central bank data, Greek private sector bank deposits declined in January for the second month in a row, driven by renewed concerns over the country’s neverending bailout. Business and household deposits fell by 1.63 billion, or 1.34% month-on-month to 119.75 billion ($126.8 billion), the lowest level since November 2001. The January outflow follows a “jog” of 3.4 billion in December, making the two-month drop the worst since the latest Greek bailout panic in July of 2015.

This post was published at Zero Hedge on Feb 28, 2017.

Mike Pence Thinks the “Free Market” Is Making You Poor

Vice President-elect Mike Pence has no idea what the term ‘free market’ means, or at least, that is what his most recent statement would suggest. Defending President-elect Trump’s $7 million deal with Carrier, Pence recently stated, ‘the free market has been sorting it out and America’s been losing.’
RELATED: “Countless Ordinary Americans Benefit When Companies Move to Mexico“
While there have been some libertarian arguments made in defense of this new deal with Carrier, which will keep 1,000 jobs in the United States instead of moving them to Mexico, blaming the free market for a loss of American jobs is far-fetched, to say the least.
RELATED: “In Defense of Trumps’ Deal with Carrier“
However, there is something even more disturbing about Pence’s belief that the free market has failed the American people: it shows a complete lack of understanding for what a free market really is. Surely, if Pence had a clear idea of what a free market economy actually entails, he would know that America, doesn’t actually have one.
While still faring better than many other nations, America has become somewhat of a beacon of crony capitalism. From corporate bailouts to giant subsidies given to American companies which do not actually need these handouts, the United States does not have a great track record when it comes to keeping the government, and taxpayer dollars, out of big business.

This post was published at Ludwig von Mises Institute on Dec 10, 2016.

The Fallacies of Bernie Sanders

Where Bernie Went Wrong: And Why His Remedies Will Just Make Crony Capitalism Worse. By Hunter Lewis. Axios Press, 2016. 284 pages.
Hunter Lewis has rendered a great service with his new book. Writing from an Austrian perspective, he has given us the definitive analysis of the Bernie Sanders phenomenon. Though Sanders did not win the Democratic nomination, he accomplished something remarkable. ‘If Bernie’s campaign was primarily an exercise in moving public opinion, it was wildly successful. He carried young people by wide margins. He shifted the Democratic Party and eventually its platform in his direction.’ (p.1)
How did he do this? ‘Bernie often says out loud what others are privately thinking.’ (p.13) The middle class and the poor are not doing well, he says; and the fault lies in a ‘rigged’ system. ‘The economy becomes rigged because the rich, primarily represented by ‘greedy’ billionaires and corporations, use their wealth to subvert the political process and take command of government.’ (p.24)
Lewis finds much truth in Sanders’s accusation. In a manifestly corrupt way, for example, failed banks and businesses were ‘bailed out’ after the financial crash of 2008. ‘[Hank] Paulson, former CEO of Goldman Sachs, was one of the architects of the Wall Street bailout of 2008 which not only rescued Wall Street, but also rescued his own firm, along with all the shares he still retained in that firm.’ (p.132)

This post was published at Ludwig von Mises Institute on Nov 25, 2016.

The ‘Real’ Reasons People Will Vote For Trump

Someone close to me, who is voting for Hillary, sent me this article recently, thinking it did a great job of characterizing Trump voters as real people. And I was so mortified and incensed reading it, that I felt it necessary to respond with my own thoughts on this election, and who I will be voting for.
The article is a perfect example of virtue signaling as it relates to this election. Nowhere in the article does John Biggs, the author, indicate that he has actually spoken with any Trump voter who actually has anything positive to say about Trump himself or his proposed policies. Instead, the quotes are merely meant to symbolize angry conservatives who are voting against Hillary moreso than they are voting for Trump. It seems this Ohio native turned Brooklyn hipster has taken but one glance at the odds and surmised that since he believes Hillary is going to win, and since he has such a large following, it is his duty to begin reaching out to Trump voters to bridge the partisan divide. It seems as if he wants to unite everyone under a nation of corruption and crime for the leaders, but not for the general population. Seeing as how I regularly communicate with Trump voters, I felt it my duty to respond, and will preserve the anonymity of my contributors by speaking through my own voice.
However, it is important to give some background on myself, my voting record, and who I will be voting for. Since I have been eligible to vote, I have voted for the Libertarian candidate for President. I am firmly convinced that the differences between the two parties are merely superficial, as they are both committed to deficit spending, endless wars, welfare handouts, and corporate bailouts/kickbacks, which are the real issues plaguing the country today. Most recently, in 2012, I voted for Gary Johnson, as I was very impressed with his campaign and platform. At the time, Charlie at Single Dude Travel did an excellent job of characterizing what it means to vote for a third party, and not be a part of the two-party scam:

This post was published at Zero Hedge on Oct 25, 2016.

Five Things You Should Know About the Deutsche Bank Train Wreck

Too big to fail is about to get tested once again.
Deutsche Bank – Germany’s largest, and in many ways the embodiment of the global financial system – as you may have heard, is in a spot of bother.
The U. S. government is considering imposing a fine of around $14 billion on the bank for selling faulty mortgage-backed securities in the run up to the financial crisis. That’s on top of the fact that Deutsche and other European banks have been struggling with negative interest rates, which are squeezing profits. In all, Deutsche Bank’s DB 6.79% market cap has now shrunk to nearly its proposed fine, provoking fears that the bank might have to be helped out the German government, or be wiped out. So far, Germany’s Chancellor Angela Merkel has said that there will be no bailouts for Deutsche Bank.
But while Germany says it won’t stop a Deutsche bank failure, how worried should the U. S., and investors, be about it? Ultimately, the new regulations put in place since 2008 to contain Too-Big-To-Fail banks should mean that there will be no direct impact on the average American. But here are a few reasons why you should still keep an eye on it.
Too Big to Fail was always a bit of a misnomer. What really makes a bank a risk to the financial system as a whole is the degree to which it is interconnected with other institutions, i.e., its ability to spark chain reactions of non-payment if it should ever default. By this measure, Deutsche is frighteningly indispensable. It’s a counterparty to virtually every major bank in the world, in virtually all asset classes. This illustration from an IMF report in June gives you some idea. This is why I argued yesterday that the German government, which together with the European Central Bank is responsible for supervising Deutsche, would be highly unlikely to let it fail in a disorderly manner la Lehman Brothers.

This post was published at David Stockmans Contra Corner on September 30, 2016.

Good Job, Mario! NIRP Slams Commerzbank And 9,000 Jobs

On August 31, 2008, Germany’s Commerzbank announced that it was purchasing ailing rival Dresdner Bank from Allianz SE. As usual, however, the deal wasn’t described in those terms as nothing ever is so honest in public. Then-Allianz CEO Michael Diekmann said at the time of the announcement:
As a strong bank, the new company can safeguard jobs in the long term. With a stake of nearly 30 percent Allianz will be the largest shareholder of the new bank and will gain access to a powerful distribution network for its insurance products. The move will also secure the further success of its bancassurance strategy.
Just four months later, Commerzbank was becoming partially nationalized due to the ‘strong bank.’ By taking in 10 billion from SOFFIN, Germany’s bank bailout vehicle, at the outset of 2009 the merger could proceed. Without the ‘capital’, Commerzbank would have walked and left Dresdner (and Allianz) likely to be wholly nationalized (because failure is not an option anymore). As one ‘insider’ was quoted as saying, ‘the government just couldn’t afford to let this deal fail.’
For its part, Commerzbank spent years recovering from not just Dresdner but its own wholesale realities. The total rescue would total about 18 billion before it was all over, and that was a heavy burden on the bank. Thus, it wasn’t until November last year that the bank could finally pay a dividend again, a significant milestone on the firm’s road to recovery. The huge positive step by paying out the announced dividend earlier this year was not just a favorable impression on the bank’s fortunes but also those of Germany and its long road from ‘necessary’ nationalizations.

This post was published at David Stockmans Contra Corner by Jeffrey P. Snider ‘ September 27, 2016.

It’s Not Really About Deutsche Bank

It is never a good thing when official sources either named or unnamed are quoted in the media as denying bailout discussions. For any bank such rumors and denials are harmful because, obviously, they are a reflection of common perception. Furthermore, most people know all-too-well the true nature of any denials, thus reinforcing only that much more the troubling perceptions in the first place.
For Deutsche Bank to be the institution in question is altogether different. When Germany’s Commerzbank, for example, was forced to request a capital injection from the state’s bailout fund SOFFIN in November 2008 that was a sign of the times. It was just another bad sign in an ocean of them. Should Deutsche Bank even get connected to something like that is perhaps a sign of renewal of those times.
Deutsche Bank is not Commerzbank; in many ways Deutsche is the last remaining remnant of what is left of the reigning wholesale, eurodollar system. Where other banks long ago saw this depression for what it was (all risk, no reward), DB was siding with central bankers and deploying ‘capital’into EM’s and junk bonds. The bank was reticent to reject its derivatives book, once a source of nearly all its power and strength. And it was dreams of reclaiming lost grandeur that drove the bank into its currently perilous state. When the firm first announced estimates for its coming loss in October last year, I wrote:

This post was published at David Stockmans Contra Corner by Jeffrey P. Snider ‘ September 26, 2016.

The Road To Trumps Rise – – Big Bank Abuse Of Flyover America

Eight years ago Wednesday, Lehman Brothers collapsed into bankruptcy. To stem the panic, the feds launched the biggest bailout the world has ever seen. In rewarding failure, America allowed a broken, corrupt financial system to flourish – and, yes, has invited populists like Donald Trump to take the stage.
The latest example of how greed is not good, especially when it’s backstopped by government guarantees: Last week, federal regulators revealed that Wells Fargo, the country’s third-largest bank, had opened 1.5 million bank accounts and 565,000 credit-card accounts without customers’ permission over the past five years.
How could that happen? At least 5,300 workers engaged in what the government calls ‘abusive’ acts: using a customer’s personal information from one legitimate account to open another one, and then taking money from the real account to put it into the fake one. Workers went so far as to create fake e-mail addresses and PIN numbers.
And why would this happen? Wells Fargo wanted to grow – and so it rewarded workers who opened new accounts. Employees were ‘spurred by sales targets and compensation incentives,’ the government notes.

This post was published at David Stockmans Contra Corner on September 12, 2016.

Bailed Out Citigroup Is Going Full Throttle into Derivatives that Blew Up AIG

Having closely observed how Citigroup collapsed under the weight of its own corruption and risk-taking hubris in 2008 and spread its contagion across Wall Street, a headline we never dreamed we would see in our lifetime is shown above from Risk Magazine’s web site. The article under the heart-stopping headline is dated January 27, 2016 and informs readers that Citigroup is now viewed by clients as one of the top-three market makers in single name Credit Default Swaps in both North America and Europe.
Credit Default Swaps are the instruments that blew up the giant insurance company, AIG, in 2008, requiring the U. S. government to bail out the company to the tune of $185 billion. The bailout money went in the front door of AIG and was then funneled out the backdoor to the big Wall Street banks that had used AIG as their counterparty to guarantee their bets on Credit Default Swaps. The AIG bailout was effectively a backdoor bailout of the biggest banks on Wall Street.
Credit Default Swaps also played a role in Citigroup’s implosion in 2008, which necessitated the following government bailout: $45 billion in equity infusions; over $300 billion in asset guarantees; and more than $2 trillion in cumulative, below-market-rate loans from the Federal Reserve. Citigroup, then and now, holds insured savings deposits while at the same time engaging in high risk trading at both its investment bank and commercial bank.

This post was published at Wall Street On Parade on August 4, 2016.

The Never Trump Crowd Prefers Smiling Statism From Nurse Hillary

While I never have, and certainly never will, get on board the ‘Trump Train,’ I am perhaps more annoyed by the certain type of Republican and evangelical ‘conservative’ who opposes Trump specifically for reasons such as his vulgarity, his alleged racism, his rudeness and crudeness, his un-Christlikeness, his narcissism, and so on. The Donald is notoriously – and purposefully (he’s a reality TV sensation after all) – provocative in the way he treats his political opponents and those by whom he feels threatened. Obviously, all these things are worthy of criticism.
However, what is completely shocking to me, though perhaps it shouldn’t be, is that these same ‘Never Trump’ hashtag users literally would have been just dandy with Mitt Romney, John McCain, Marco Rubio, Chris Christie, Newt Gingrich, and so on. In other words, what matters to them is not the fact that the GOP’s leaders and champions are Big Government, pro-welfare state, pro-warfare state, pro Federal economic regulation/intervention, pro- Taxes, pro spending, pro-nationalization of commerce and industry; no, what matters most to them is that the politician is ‘nice.’
I have heard countless ballyhooing about the fact that Trump is the next Hitler due to his vocal denouncement of free trade, his immigration preferences, his appeal to the ‘nativists’ in America, and so on. Hogwash! Trump is a demagogue to the very same extent, though not necessarily to the same constituency, as all other politicians! Every single politician, by nature of his dirty rotten job, is a demagogue, one who appeals to emotion and sentiment. We live in a time when the Democratic and Republican parties have pushed for deficit after deficit, every debt ceiling addition, every war, every welfare program, the annual and constant funding of hundreds of Federal departments and agencies, law upon law, regulation upon regulation, bailout for the rich, bailout for the poor, bailout for some foreign government, bailout for some radical group who opposes some foreign government – and yet Donald is the bad guy, because he is profane and insensitive.

This post was published at David Stockmans Contra Corner on July 28, 2016.

Ireland Hits Brexit Alarm – Fears Biggest Crisis in 50 Years

The prime minister is under pressure, economists are slashing growth forecasts and companies are warning of Brexit’s dire consequences. London? No, Dublin.
The intertwining of trade and finance means no other country is feeling the fallout from the U. K.’s vote to leave the European Union more than Ireland. In the year the Irish marked the centenary of their uprising against British rule, the country remains at the mercy of the unfolding drama in its closest neighbor.
‘It’s the most serious, difficult issue facing the country for 50 years,’ said John Bruton, 69, who was Irish prime minister between 1994 and 1997 and later served as the EU’s ambassador to the U. S.
Exporters have warned the plummeting pound will erode earnings and economic growth, just as a recovery had taken hold after the 2010 international bailout that followed the banking meltdown. Irish shares have declined, not least because the U. K. is the top destination for the country’s exports after the U. S. and the biggest for its services. Meantime, Prime Minister Enda Kenny is fending off demands by Northern Irish nationalists for a reunification poll as he comes to terms with the loss of a key EU ally and plotters from his own party try to topple him. Then there’s the future of the U. K.’s only land border with the EU.
‘The consequences are mind-boggling,’ said Eoin Fahy, chief economist at Kleinwort Benson Investors in the Irish capital.

This post was published at David Stockmans Contra Corner on July 18, 2016.

Mike Pence – -A True Anti-Bailout Champion Of Free Markets

The possible selection of Indiana Gov. Mike Pence as Donald Trump’s running mate could clarify the presumptive Republican nominee’s banking policy views, adding a policymaker to the ticket who has been outspoken about the Dodd-Frank Act and other financial topics.
To date, Trump has said very little about banking matters beyond a general pledge to repeal the 2010 financial reform law. But Pence – who served in the House between 2001 and 2012, is well-known to bankers, having served as a fierce opponent to both Dodd-Frank and the Bush administration’s 2008 bank bailout. He is also closely aligned with House Financial Services Committee Chairman Jeb Hensarling and other conservative GOP lawmakers, giving them a key ally in any future Trump administration.
‘Mike inspires people, and his boundless optimism in America is infectious at a time when so many have lost hope,’ Hensarling said in a statement Thursday. ‘If selected, he will be a great addition to the ticket and he will make a great Vice President. Personally, I am proud to call him my friend.’
Former banker Rep. French Hill R-Ark., who also serves on the House Financial Services Committee, said in a emailed statement that ‘I would be pleased to see Mr. Trump select Governor Pence as his running mate for the fall presidential campaign.’
‘Pence is a principled conservative with executive and legislative experience,’ he added.
To be sure, Pence’s selection has not yet been announced by the Trump campaign. But several media outlets, including the Indianapolis Star, said Trump will soon formally pick the Indiana governor as his running mate. Trump was initially supposed to do so during an appearance on Friday, but he announced on Twitter that he would delay the announcement, citing a terrorist attack in France.

This post was published at David Stockmans Contra Corner on July 15, 2016.

Hillary Pulled A Mayor Daley: Tried To Help Son-In-Law’s Hedge Fund Bets On Greek Bailouts

Hedge fund manager Marc Mezvinsky had friends in high places when he bet big on a Greek economic recovery, but even the keen interest of his mother-in-law, then-Secretary of State Hillary Clinton, wasn’t enough to spare him and his investors from financial tragedy.
In 2012, Mezvinski, the husband of Chelsea Clinton, created a $325 million basket of offshore funds under the Eaglevale Partners banner through a special arrangement with investment bank Goldman Sachs. The funds have lost tens of millions of dollars predicting that bailouts of the Greek banking system would pump up the value of the country’s distressed bonds. One fund, exclusively dedicated to Greek debt, suffered near-total losses.
Clinton stepped down as secretary of state in 2013 to run for president. But newly released emails from 2012 show that she and Clinton Foundation consultant, Sidney Blumenthal, shared classified information about how German leadership viewed the prospects for a Greek bailout. Clinton also shared ‘protected’ State Department information about Greek bonds with her husband at the same time that her son-in-law aimed his hedge fund at Greece.
That America’s top diplomat kept a sharp eye on intelligence assessing the chances of a bailout of the Greek central bank is not a problem. However, sharing such sensitive information with friends and family would have been highly improper. Federal regulations prohibit the use of nonpublic information to further private interests or the interests of others. The mere perception of a conflict of interest is unacceptable.
Through its press representative, Eaglevale declined to comment for this story. Clinton’s campaign press office did not respond to a request for comment.

This post was published at David Stockmans Contra Corner on July 5, 2016.

Germany Just Blew Up Italy’s Bank Bailout Plan

“You never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before.” Rahm Emanuel prophetic words were quickly put to use by Italy on Monday morning, which barely waited one full day before using Brexit as the scapegoat excuse to warn that a 40 billion bailout of Italian banks is coming.
As a reminder, on Monday morning the local media reported that Renzi’s
government was pursuing a six-month waiver of EU state-aid rules,
allowing it to shore up banks without forcing investors to share losses. Two days ago, when we first reported of Italy’s proposed bank rescue plan, we said that the chairman of Lower House’s Finance Commission, Maurizio Bernardo, confirmed that the government is studying options to support the banking sector, including a capital injection, and said a law decree ‘with measures going in that direction’ could be approved by the end of this week.
We pointed out that how such an intervention would be implemented was unclear; it was is also unclear how such a direct state recapitalization of Italian banks using public funds would be permitted by current EU and ECB regulations, which prohibit state bailouts of insolvent banks, although Europe has a long and illustrious history of finding massive loopholes to that particular prohibition. “Last but not least it is unclear how existing stakeholders, shareholders, bondholders and uninsured depositors, would be impaired under such a bailout.”

This post was published at Zero Hedge on Jun 29, 2016.

The End Game Of Bubble Finance – – Political Revolt

During Friday’s bloodbath I heard a CNBC anchor lady assuring her (scant) remaining audience that Brexit wasn’t a big sweat. That’s because it is purportedly a political crisis, not a financial one.
Presumably in the rarified canyons of Wall Street, politics doesn’t matter much. After all, when things get desperate enough, Washington caves and does ‘whatever it takes’ to get the stock averages moving upward again.
Here’s a news flash. That’s all about to change.
The era of Bubble Finance was enabled by a political abdication nearly 50 years ago. But as Donald Trump rightly observed in the wake of Brexit, the voters are about to take back their governments, meaning that the financial elites of the world are in for a rude awakening.
To be sure, the apparent lesson of the first TARP vote when the bailout was rejected by the House in September 2008 was that politics didn’t matter so much.
Wall Street’s 800 point hissy fit was all it took to prostrate the politicians. Indeed, the presumptive free market party then domiciled in the White House quickly shed its Adam Smith neckties and forced the congressional rubes from the red states to walk the plank a second time in order to reverse the decision.

This post was published at David Stockmans Contra Corner by David Stockman ‘ June 27, 2016.

Surprise! Most Corrupt Bankster in U.S. Endorses Hillary Clinton

It’s hard to imagine a better endorsement of Donald Trump’s economic policies – whatever they may be, whenever he finds the time to explain them – than the recent endorsement of Hillary Clinton by former Goldman Sachs CEO and U. S. Treasury Secretary Hank Paulson. As the man in charge of the biggest explosion of corporate welfare in world history – the ‘TARP’ bailouts, he defined himself as a sworn enemy of capitalism and a socialist when it comes to the capital markets. Socializing billions of dollars in investment bank, insurance company, and automobile industry losses with taxpayer dollars qualifies Paulson as deserving of the S-word label. As such, Hillary Clinton may well have found a new political and financial soulmate.
Paulson began his career and cut his political teeth with some of the sleaziest and most disastrous political hacks in American history – first as a Pentagon assistant to the secretary of defense from 1970-1972, then as a Nixon administration assistant to John Ehrlichman, the convicted Watergate felon. Such sterling credentials earned him a position at Goldman Sachs, where he presumably mastered the political dirty trick skills that he must have learned from Ehrlichman and the rest to eventually claw his way up to the CEO position.
Paulson and Hillary Clinton might as well be cloned twins when it comes to using their positions of political power to line the pockets of the wealthiest people in America in return for kickbacks and political support. As the chief corporate welfare czar during the Bush administration, a first order of business was the $180 billion bailout of the insurance company AIG, ninety percent of which was totally solvent, as documented by David Stockman in his book, The Great Deformation(p. 6). Rather than allowing a healthy free-market purge of AIG’s bad assets, Paulson showered the company with taxpayer dollars in a totally unnecessary bailout.

This post was published at Lew Rockwell on June 27, 2016.