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Here is an email that I sent out to some investing friends on September 30, 2008. We must put an end to this notion that banks are too big to fail, and that we must rescue the elite rich from their stupidity! All the banks did with the TARP money George "dumbya" Bush gave them with no strings attached, was buy other banks at pennies on the dollar, pay out huge bonuses to the idiots that got us into this mess, stick the rest on their balance sheet to make them appear healthy, and say screw the taxpayer, we aren't lending anything to them as they are a risky investment. Now that they have the money on their balance sheets and can afford to wait for assets to decline in price, which by sitting on the money that we the taxpayers gave them they are assured will happen, and then when they decide they cannot milk any more from the taxpayers, when the rest of us as a nation are broke, they will declare a bottom and buy up the assets...our foreclosed homes and businesses for pennies on the dollar, offering us a job, and a place to rent from them.

People WAKE UP! This is the biggest transfer of wealth...theft of taxpayer money the world has ever seen!

From:

Sent: Tuesday, September 30, 2008 4:00 AM

To:

Subject: Just An Ole Fashion Run On The Banks...We've Been Here Before

Paulson and the gang keep saying that it is a liquidity problem and once you get $700 billion of this bad paper off the banks books the banks will go back to lending and all will be fine. I truly believe that is bullchit.

We are in a phase where the government is trying to prop up the larger banks by sacrificing the smaller less capitalized banks by selling the larger banks with a better chance of survival the deposits and assets of the weaker, smaller less capitalized banks at fire sale prices. Getting these instant deposits on the books without the burden of the debt that the acquired assets had attached to them will keep these bigger banks liquid a little longer...and keep the US of A taxpayer in debt longer as the US of A taxpayer is now burdened with that debt! Can anyone tell me where all the debt, the low grade chit paper that the government has already taken in at the fed window to keep these institutions capitalized, has gone for the institutions that have gone bankrupt? Did it magically disappear? How much bad paper did LEH dump onto the Fed before they went BK?

National City Bank (NCC) is the walking dead, as is Fifth Third (FITB) and Key Corp (Key). Buying $700 billion of junk from the banks and putting it into the taxpayers account is not going to fix this problem IMHO! Nature needs to be allowed to take its course first and puke all this toxic chit out before the system will get better.

Let me share a little from a book written by one of America's greatest thinkers, the man who, among other great achievements, invented the Geodesic Dome, R. Buckminster Fuller, Pages 87, 88, 89 of his book "Critical Path"...We have been here before!

Here is an excerpt from the book:

...Next the US government would make enormous subsidies to bailout large corporations such as Lockheed and Chrysler, which as basic military suppliers the US government could not allow to go bankrupt. Eventually the US taxpayers will be asked to make "free-of-risk" bail-outs of "private" enterprises, corporations with initial physical assets worth over a billion dollars classified as risk enterprises.

"we now return to the 1926-'27, '28, '29 sequence of events developing from selling the farmers' machinery on the bankers' drop dead terms (mortgage means "on death terms"). In 1927 and 1928 the bigger Western City banks began to foreclose on their local banks that had financed the farm machinery sales and had been borrowing from the bigger city banks to cover their unprecedentedly expanded loaning. First the little, then the successively bigger banks found that they had foreclosed on farmhouses that had no indoor toilets, many with roofs falling in, barns in poor condition, with the replevined farm machinery rusting out in the open - and no customers.

Word of the bad news gradually went around, small bank "runs" began and in 1929 came the Great Crash in the stock market. All business went from worse to worser. Unemployment multiplied. Prices steadily dropped. Nobody had money with which to buy. Bigger and bigger banks had to foreclose on smaller banks, until finally in early 1933 there came one day in which 5000 banks closed their doors to stop "the run" on their funds.

People were dismayed and both individually and collectively helpless to do anything to combat the economic collapse. The economy had gone to pieces. People did not parade and protest. They became so low in spirit and listless that they just sat around silently in their homes or in public places. The New York subway stations were filled with people sleeping on the concrete platform and stairways. No religious organizations were willing to let people sleep in their churches.

There came a "peeking order" point when the central Chicago banks foreclosed on all the other big Western city banks - followed by the big New York City central banks foreclosing on Chicago's central banks. Finally came the denouncement, when the big New York banks found themselves about to close because they were already behind-the-scenes insolvent. This occasioned the US Congress voting to accelerate by four months the presidential inauguration of Franklin Delano Roosevelt who, minutes after taking his oath of office, signed the Bank Moratorium, which momentarily suspended the acknowledgement of the death of the wealthy landowners' banking system that had lost all or much of its depositors' money. About a month later Congress voted to the President of the USA, the ability control all money. Months later again the US Supreme Court upheld the legislation. The USA citizens themselves and their government had become the wealth resource "of last recourse." The underwriting wealth belongs to all the people and not to the few. That happened also to be the description of socialism.

The 150-year-long "infinite wealth" poker hand and its uncalled bluffing was over. The called hands were suddenly down. It turned out that the "wealthys" wealth was nonexistent. Their marble-walled, steel-barred, visibly vaulted banks had been a psychologically attractive to the depositors, who preferred to have their earnings and savings deposited along with the wealth of the powerfully rich. What the banks had been doing was to loan the peoples deposits to other people. The banks had no money themselves....

...With the bluff of wealth over in March 1933, almost all business in America stopped. On the inauguration of Franklin Delano Roosevelt the emergency was so absolute that congress voted unanimously for whatever corrective measures the New Deal administration prescribed.

Roosevelt and his advisors said, "One thing is clear. Despite the emergency America abhors socialism. Americans don't like the assumption that everybody is equal. Americans are so independent, they don't feel at all equal. They don't like socialism, but," said the New Deal leaders, "the fact is that we, the American people, are going to have to guarantee our own bank accounts. People don't like to keep their money under their mattresses and prefer to put it into a bank, so we will have to do what we can to rehabilitate the banks. We the people acting unanimously through our government are going to have to guarantee the safety of each deposit in the banks to a convincingly substantial amount - $5000. We will leave the bank in ownership of the management of the stockholders of those banks that, by virtue of the presidential moratorium, are as yet theoretically alive, and hope that, with our guaranteeing, regulation, and supervising, many of them will reopen and will be able to progressively accredit their depositors with some percentage of their original deposits.

"But let us not deceive ourselves. With the government of the people guaranteeing the bank accounts, it becomes, in operating fact, socialism. On the other hand people themselves know so little about banking, credit concepts, and the history of power structures that they will not know that they have adopted socialism, since the government has not taken "possession" of the banks. Society will think well of 'we the people' as the government guaranteeing the new deposits in the banks up to $5000"....

Wow...that pretty much sounds like what we are going through in 2008! Has anything changed since the Great Depression? Should we continue to bailout the bankers at the cost of taxpayer money? Why don't we then just admit that the US of A is not a free market economy and is really a socialist economy and quit trying to hide what the rest of the world already knows, and by our trying to deny it, causes us to lose credibility. If we quit denying it maybe then we as taxpayers can also enjoy the profits as well as the losses.