by Tina Grazier
I was suspicious last year when the economy, which had been humming along nicely, was suddenly in “crisis”. The housing debacle came along and soon people were talking the economy down. It wasnt long until whispers of recession turned into full blown accusations of a 1929 fall. Gasoline prices started to rise and banking, lending and investment companies were said to be in free fall. All of this going on when the country is still experiencing growth. What the heck is going on?
A Bloomberg article by David Scheer, SEC to Probe Manipulation Through False Information, caught my attention simply because of my suspicions:
The U.S. Securities and Exchange Commission’s inspections unit, the Financial Industry Regulatory Authority, which monitors brokerages, and the New York Stock Exchange’s regulatory arm are checking whether firms have controls in place to prevent the intentional spread of misinformation, the SEC said in a statement today. They will also look at whether employees have been adequately trained. ** U.S. regulators are already hunting for traders who may have sought to illegally profit from the credit crisis by falsely stoking panics about the stability of companies including Bear Stearns Cos., which collapsed in March amid speculation that clients were pulling business. ** Cox told the Senate Banking Committee April 3 the agency takes such manipulation “very seriously” and that lawmakers’ hopes for a crackdown would be “met or exceeded.” In March, the Washington-based agency opened probes into whether hedge funds and other traders spread lies about Bear Stearns and Lehman after those stocks plunged, people familiar with the matter said at the time. ** Bear Stearns was forced to sell itself to JPMorgan Chase & Co. March 16 at a fraction of its previous market value.
Then there was another item of interest posted by, CNBC:
How Chuck Schumer Caused the Second Largest Bank Failure in US History, posted by Jerry Bowyer
Federal officials arent supposed to cause bank runs. In fact, much of the New Deal bank regulatory apparatus was set up for the purpose of eliminating such panics. When FDR was hit with a massive set of bank runs shortly after taking office, he gave an address in order to calm terrified depositors, assuring them that the banks would reopen shortly, and that everything would be fine. But Chuck Schumer is no FDR. He doesnt stop bank runs; he starts them. Or, at least, has started one. The collapse of Indymac bank, the second largest bank failure in American history, began with a letter from the office of Senator Charles Schumer on June 27. He questioned the viability of the bank. When a senior senator who is in a number of influential posts regarding oversight of bank regulators directly attacks the confidence of a depository institution, it matters. Not surprisingly, the director of the Office of Thrift Supervision concluded that the collapse of the bank immediately following the Senators comments has not a coincidence. Director Reich concluded that Senator Schumer had given the bank a heart attack. ** Why? Why would a federal official with enormous power, destroy an institution on which tens of thousands of depositors (not all of whom are insured) and employees depend? Why would a New York Senator attack a Pasadena bank, acting as some sort of amateur, self-appointed, long-distance bank examiner? ** Perhaps this might help answer the question: Indymac has been under attack from the hard left. The Center for Responsible Lending issued an attack on Indymac within a few days of Schumers letter. CRL is part of a small army of left of center research groups, community organizers, and public interest law firms who make their living accusing home lenders of racial redlining and predatory lending. On June 20th the Center accused Indymac of unfair practices regarding minority borrowers. ** A suspicious person might think that a network of lefty attack groups proficient in bank bashing and frequently funded by trial lawyers and short-sellers, coordinated their activities with a law firm on the hunt and a Senator who works closely with the network. ** On the other hand, maybe it is a coincidence that CRL and Sen. Schumer attacked the same bank in the same week. Maybe he didnt know about the CRL report, nor CRL about his letter. Maybe the community group didnt know about the trial-lawyer class action lawsuit which was launched against Indy a couple of weeks before all of this started.
Im not in a position to accuse anyone of anything. But I am one citizen who realizes that:
1. Its an election year
2. The economy always figures big in elections. (“It’s the economy ,stupid.”)
3. Blaming the president (and his party) when the economy goes bad is common practice regardless of cause.
4. A number of very wealthy people have vowed to make sure the democrat gets elected in November. One in particular has been known to manipulate markets and has personally funded activist organizations.
5. Democrats in Congress have openly admitted they are content to have oil prices high because that will force people out of their cars and into support of green industry alternatives.
6. Two common Democrat tactics involve class envy and villification of big business. All of our current economic woes have these in common.
Obviously we are experiencing very real economic problemss that affect us all. My point isnt that these dont existthey do. But did they have to be this devistating or have they been given a big shove? If you saw a busload of people traveling along a narrow cliff road would you drive a semi at top speed on the inside track to force it over the edge? You might if you lacked integrity and your motive was control of an election outcome.
This bad economy thing just seems to have a strong unpleasant odor about it. Call me paranoid, I wont mind. Oh, and if Barack Obama is elected in November we should all be watching for news reports of a sudden miraculous recovery, whether or not there’s been one.