Nobody Saw The Financial Crisis Or An Australian Recession Coming?

Bullshit

By Darryl Mason

There seems to be more and more people popping up in the media claiming "nobody saw it coming", the IT being an Australian recession, plunging house prices, a global financial crisis.

But it's not true. You just probably didn't see it coming if you were only reading the business sections of supposedly reputable Australian newspapers, or believing the guff that flowed from so many now discredited financial experts on the evening news, always promising that everything was okay, that stocks were the safest place to park your money, and it still wasn't too late to take out yet another loan on your heavily mortgaged home to buy another $20,000 worth.

If I could see it all coming back in 2006, why didn't the financial experts? That the world was heading for a major, if not unprecedented, financial crisis wasn't exactly a big secret, and you didn't have to search too long or hard to find the stories that told the blindingly obvious truth about what was coming. You just didn't find many of them in the mainstream media, particularly not in that media's business sections.

I published the following story near right on three years ago at the Your New Reality blog :

US Faces "Impending Financial Disaster"

"Tremors Through The Global Financial System"

May 16, 2006

By Darryl Mason

Those kinds of headlines are exactly the words you want to see in a news story about the US Dollar and US stock markets and the growing loss of global market faith in both.

The US, like Australia, has been borrowing more from central bankers than the value of the goods and services it produces.

The US and Australia has been living on vast credit, and now the international lenders look like they're going to start calling in some of the debts, as stock markets in the US and Australia go through an "adjustment", or "downturn".

Is the US on the brink of a recession? Yes. It hasn't tipped over into recession yet, but it's on the brink.

The rush to turn US dollars into gold, and even copper, is the simplest and most obvious sign that the US Dollar is fading rapidly. Gold is regarded as a faithful standard during years of economic turmoil, and some predict it may even reach an incredible $1000 per ounce with the next six to twelve months.

Mind-blowing. A few years back, the first websites I saw that pitched the positives of turning dollars and savings into gold were the alternative news ones.

That was less than two years ago when gold was still at $325 an ounce. Buy gold, buy gold, 'radical' economists chanted, while Bloomberg, Forbes and the Wall Street Journal sniffed at and quickly dismissed the likelihood of gold rising dramatically anytime soon.

So much for the experts.

One of these so-called radical, or alternate, new rhythm economists is Paul Craig Roberts. He's an older, wiser gentlemen of vast experience with the US economy, having served as the Assistant Secretary of the US Treasury during Ronald Reagan's administration.

Here's what he's thinking today :

The US current account deficit as a percent of Gross Domestic Product is unprecedented.

As more jobs and manufacturing are moved offshore, Americans become more dependent on foreign made goods.

This year the deficit could reach $1 trillion.The US pays its current account deficit by giving up ownership of its existing assets or wealth. Foreigners don't simply hold the $800 billion in cash. They use it to acquire US equities, real estate, bonds, and entire companies.American consumers are heavily indebted.

The growth of consumer debt is what has been fueling the economy.....is this the economic picture of a superpower that can dictate to the world, or is it the picture of a second-rate country dependent on foreigners to finance its consumption and the operation of its government?

You could say virtually the exact same thing about Australia today (not including the word 'superpower').

We, too, depend heavily on foreign lenders to help fuel our recent economic booms. Australians were allowed to borrow vast sums of money to buy houses, cars that depreciated spectacularly and consumer goods that took years longer to pay off than their warranties lasted.

Unlike the US, however, we've had a massive wave of mineral markets boom-time, which sadly is now drawing to a close.

The Howard government collected more than $100 billion in "extra" taxes, over the past four years, on the back of the minerals boom, and blew most of it on the War On Terror, the War On Iraq, meeting superannuation commitments for former politicians and government workers and tax cuts for the richest of all Australians.

The Howard government used virtually none of it for major infrastructure projects or new technical training schemes. The state governments were just as wasteful.

So now we don't have a human stockpile of skilled workers, or the manufacturing facilities for them to work in, we don't yet have a national broadband system (the one alleged to be coming is still years away), and our roads and train lines couldn't cope with all the plugged-in, high-tech workers even if they existed.

What is unique about the Howard government is that they were so brilliantly able to bamboozle the media and the public at large that Australia was one of the leaders of the global economy and, at the same time, convince most Australians (with a spectacular program of propaganda and double-speak) that interest rates were not going to rise.

Of course, Howard actually asked "Who do you trust to keep interest rates low?" But his minions made sure the public understood that to mean "Who do you trust to stop interest rates from rising?"


If you walk out of the casino with $10,000 in cash, but you owe the casino $100,000, you are not a winner, and they will catch up with you. Sooner, rather than later.

For the average credit-card using, mortgage paying, $50,000 per year earning Australian family, the worst is well and truly yet to come.

Hundreds of thousands of Australian families got suckered into the home ownership scam of the past four years, when house prices were over-valued by tens of thousands of dollars, from Brisbane all the way down to Melbourne (with the exception of most rural and country towns).

And, at the same time, they were tossed credit cards to buy white goods to fill those huge homes and to purchase mega-wide screen TVs as fast as China could churn them out.

More than 100 houses a week are now being repossessed by the banks and average credit card debts are spiraling well above $5000. Average household debts, outside of the mortgage, are racketing up to between $10,000 and $15,000.

For a few thousand Australian families, a further half a percent rise in interest rates will mean ruin. For tens of thousands of Australian families, a two or three per cent rise in interest rates will be absolutely devastating. Even if both parents manage to hold onto their jobs. In a recession, their wages will be cut, of course, and with the recent IR reforms there will be little they can do to stop that from happening to them. And if they protest too much about working a 60 hour week, they can now be fired without recourse.

In a recession, you are not rich if you are you paying off a house that has lost 20-30% of its value in the past two years, or if you are struggling to the meet the interest payments alone on credit card debts. And families will be using them, of course, to pay the phone bill and to buy groceries.

And you are certainly not rich, even if it may feel like it, if you own a $10,000 mega-wide screen TV and surround sound system that isn't worth a tenth of that at a hock shop less than year after you purchased it on low interest credit. It might take you five to ten years to pay off that TV, but there will be 3D holographic TV soon enough.

In a recession era economy, you are as good as rich if you are debt-free, regardless of the accumulation of possessions in your rented home.

Debt-free and freedom become virtually one and the same when the economy stumbles and falls and the true value of the dollars you earn drops, as your wages drop and interest rates rise.

Australians are being told that we must "be more competitive" with international rates of pay and productivity levels.

The problem for Australian workers is that the powerhouse of productivity today is China, where 70 and 80 hour work weeks are not unusual and the average hourly rate of pay there is a mere 57 cents.

Actually, forget what I said about the mega-wide screen TVs. For the average Australian worker, with a crippling mortgage to pay off, kids to put through school and a mountain of credit card debt to deal with, a mega-wide screen TV with surround sound might be just the thing to take the edge off after a 14 hour workday. That is, if you can afford to buy the fuel you need to drive those traffic-clogged roads to work because there are not enough engineers to keep the buses, trains and ferries running on time.

But that's another story altogether.

Brrr. A Cold Wind.

Fuck The People, It's Time To Cash In

The Daily Telegraph's associate editor Tim Blair explains why spectacular greed escalated the global financial crisis :

...Rudd’s characterisation of the global financial collapse as being driven by “unfettered free markets” is false itself. Where, for a start, did these unregulated, free-for-all, no oversight financial structures ever operate? Wall St?

Give me a break. The mortgage broking scams that were at the core of last year’s US market collapse evolved from a regulatory realm that effectively insulated them (for a time) from free-market forces.

Remember, the whole sub-prime mortgage debacle began with housing loans to people who weren’t well equipped to pay them off. The free market sees credit risks and mostly turns away; these clearly weren’t free-market decisions.

Investors sought involvement with the largest US mortgage brokers not because they were regulation-free but because they were government sponsored and therefore seen as less risky. It was a little like betting on a fixed (or even “fettered") race.

Admittedly, that’s when crazy fire-eyed capitalists cashed in. But, in such circumstances, who wouldn’t have? We’re talking about free money here.

Who wouldn't have cashed in and helped destroy the home values, savings and pension schemes of hundreds of millions of people around the world? Who wouldn't have cashed in and helped unleashed a firestorm of financial destruction that has deleted around $20,000 from the superannuation of millions of Australian families, and will force hundreds of thousands into unemployment?

Who wouldn't have "cashed in"?

People with morals? People who aren't crazed with raw greed perhaps? People who think there are more important things than money and turning a fast, unearned profit off the misery of those who never understood they were part of an enormous con job?

Broke? Nearly Homeless? Unemployed? Cheer Up, At Least You'll Have More Time To Spend With The Kids

By Darryl Mason

How intense is the rage being felt by the hundreds of thousands of Australians who devoted much of their lives to work, and commuting, for the past decade now only to find themselves no better off, and in many cases far poorer, than they were before they started living to work?

The best cure for years of intense, life-dominating, work is not a two week holiday, it's being unemployed. A good few months off always reminds you just how much more life has to offer than 60 hours a week behind a desk, or a steering wheel. Of course, the money's absolutely shit.

And far too many in Australia will learn this is all so very true as the global re-ordering of economies, wealth, trade and financial systems continues to wreak its seemingly endless destruction.

The new poverty, the first blast of long-term unemployment millions of young Australians have ever experienced, will have to be marketed to us as something positive, an overdue fresh look at the 'Work/Life Balance :

With falls in consumer demand starting to affect jobs, the customary "how's work?" is now followed by "has anyone been sacked?" and detailed analyses of how unfair/random/scary it all is. However, to avoid retrenchments many companies are implementing four-day weeks, extending leave, and cutting hours. In a country crying out for work-life balance, those experiencing such alternatives may not want a return to unsustainable patterns of paid work.

Levels of work-life stress have reached epidemic levels, with 55 per cent of employees feeling constantly rushed, and 46 per cent perceiving inflexible working times (Skinner and Pocock 2008, Work, Life and Workplace Culture). Such mismatches between actual and desired work patterns illustrate how organisational cultures are simply outmoded.

Though Australians on average work long hours, professional services firms classically illustrate how workers are reduced to timesheets. Each billable hour increases revenue, and costs firms nothing if employees are salaried. Their logic, therefore, is to equate long hours with greater production, call this "productivity".

Physical and mental health problems become increasingly widespread, carers are denied 'real jobs' because they can't put in 50-hour weeks, while working parents increasingly miss out on the lives of their children.

We could continue this trend towards one-dimensional existence, or we could take a stand.

We know that money doesn't buy happiness, and that our "standard of living" transcends mere consumption. Amongst talk of reducing monetary excess, we have a rare chance to influence that most precious of resources - time.

If we choose to, we could jump off the treadmill of consumption and work. If we choose to, we could redefine our workplaces, homes and communities. If we choose to, we could stop running, and start living.

Living non-expensive lives, that is. Which is not hard when you find yourself unemployed. The less you have, the less you spend. The choice in what is happening to Australian workers now, however, is being made by someone else. It's not quite the same as saying, "Fuck this, I've had enough, I need to get rid of all this work if I'm ever going to learn what living is all about."

Forcing people to reassess their work/life balance by taking away their jobs is more like shock therapy.

Maybe that will be the new way to tell someone they've got the flick : "We've decided you need some time to reassess your work/life balance."

Those who have to sell us the upsides of losing homes and discovering long-term unemployment, to fight the rise in suicides, depression and domestic violence, need to come up with something better, something that sounds a lot more fun than "The Frugal Years" to describe the many dozen months of The New Recession We Simply Had No Choice To Have.

They need to make unexpected poverty and unemployment sound like some kind of fun.

Perhaps that's how the Rudd government can brand market all the unemployment - "It's Not A Bad Thing, It's A Good Thing!"

They could run nightly ads reminding you just how great it is that you now have so much more time to spend with the family, or complete those long overdue home repair and renovation projects, or to reassure you that you can go to the (discounted) afternoon cinema sessions, on a weekday, without feeling guilty.

You Are Poor, Blame Cate Blanchett

By Darryl Mason

The Professional Idiot plays another game of "Don't Look Up, Look Over There". As expected, in a time of crisis. As appears to be his duty.

So who do you blame for the world financial crisis? Ultra-rich bankers you say? No, don't blame modern day robber barons using the stock market ("Come on in, everyone's a winner!") to suck away even minor wealth and replace it with debt slavery, The Professional Idiot wants you to blame....err, Hollywood stars! Like Cate Blanchett! And Cate Blanchett!

Don't look at how much cream was being scooped away by the people who are supposed to guard your investments, deposits and minimal wealth, leaving you with watery-milky soup, look at what Hollywood stars earn for entertaining people, or at least attempting to.

In such a crisis as we have now, someone must be blamed, particularly for making the poor even poorer. This is when you need what Mark Latham called "the dancing bears" - a conga-line of opinionists, throughout the dominant Murdoch media, all pumping the same turgid dogma, all trying to sell the exact same creed. So far, it's mostly been : Blame The Poor, The Stupid Poor, Why Won't You Just Blame The Poor?

But that can't last, and won't. Not even the stupid poor believe that rank bullshit.

The Professional Idiot is testing the waters with "Blame Hollywood Stars! Look How Much They Earn!", but only the most porridge-minded of his readers are soaking up that bait. The Professional Idiot's own newspaper is crowded daily with stories about wealthy Hollywood stars and seven-figure sports celebrities. Rich celebrity fodder pays The Professional Idiot's wages for fuck's sake. His boss built a media empire on the piddle and crap of rich celebrity lives.

Blame the poor, blame Hollywood stars, but whatever you do, don't blame those who were paid handsomely with the most minor expectation that they would not lose everything.

Don't Look Up, Look Over There.


Most Australians can't, won't blame the poor, here or in the US, for what is now happening, because they too are finding out just how poor they actually are, or soon will be.

People know, or at least have an idea, of who fucked them over. And it wasn't The Poor, or Cate Blanchett.


Kevin Rudd's talk of "extreme capitalism" and "extremists" terrified the shit out of Australia's smallest financial minority. Terrorists who shout their God's name as they sprint into schoolyards are "extremists", not money-drenched CEOs, or coke-addled traders.

There must have been many outraged cries of "What The Fuck? The little shit is talking about US all over the fucking NEWS!"

John Howard would never have betrayed his patrons in such a reckless, feckless way.

* * * * * * * * * * * * * *

There is a clear and growing anger in Australian society about where in fuck all their money has gone.

And it's obvious, even from reading the financial crisis-related comments threads that now only occasionally appear on Rupert Murdoch's online media, that this anger has to be focused somewhere. Else. Or else.

But the soon to be majority poor are not blaming Hollywood stars for the strip-mining of their investments and the value of their homes.

They know who is to blame. They know it's not Hollywood stars, or the American Poor, who believed President Bush's repetitive, hypnotic seven year long sales pitch of why they all had to become home owners. John Howard pitched the same mantras to potential debt slaves as well, but with an Australian flavour satchel sprinkled over the top.

"BuyAHomeBuyItNowAndFillItWithStuff" created entire industries, dozens of TV shows, racks of magazines, a slew of mind-melting media, including glossy liftouts in The Professional Idiot's own newspaper, generating billions over the Relaxed & Comfortable Years in advertising revenue, which flowed into "We're All So Fucking Rich! Let's Buy Heaps Of Shit On Credit!" advertorial content, everywhere, marketed as news and current affairs.

Of course it worked.

Of course hundreds of thousands of people rushed out to buy a home and fill it with stuff, even when they knew they couldn't afford it. Everywhere they looked was the same omnipresent advertising, the message simple, always the same : "Credit Is Easy, Buy Now, You Can Only Get More Richerer!"

Once in every generation the scam works, or works well enough to create a new population of debt slaves, who will keep working, until death, and pass on debts to their children.

Poor people can find anger easy, usually after the despair has passed. They must now be encouraged, by people like The Professional Idiot, to focus that anger on their neighbours, the people who ride the same buses and trains as they do, but who may not hold the same political or religious beliefs. Or even better, find a way to blame those who live somewhere else, another suburb, another town, city or country. But still mostly poor people. And blame Cate Blanchett, of course.

Don't look up, look over there.


So if the poor and/or Cate Blanchett are not to blame, who then to blame?

Can Muslims be blamed? That whole anti-usury thing at the core of their belief system probably rules most of them out. A shame that.

But what about Al Qaeda? Are they short-selling enthusiasts? Do they shift around a trillion or two a day trading derivatives? Were they purposely mass-hyping property values in Sydney, Melbourne and Perth from their laptops in the high mountains between Afghanistan and Pakistan?

What about the all-purpose Immigrants? They've always been good, hell for two hundred years, as an emotional scratching post for Australian community discontent.

But the problem now is, of course, that there's so many of them here, at backyard barbecues, in offices, in cinema foyers, in the pub, that that kind of loose talk just won't stand. Because the Immigrants will tell you, hey bro, we got fucking ripped off as well.

So it's time to for Rupert's dancing bears to circle the wagons, protect The Ultra-Rich, and find someone, anyone else to blame.

Anyone but those who are most responsible.

Just A Minute

Australian dads don't get much time alone with their kids, not during the week anyway.

"Right, son, the ads are on. You've got sixty seconds...."
"Oh, well, um, I was riding my bike and Jamie tried to..."
"Who's Jamie?"
"Jamie's my best friend. I told you about him on Monday, during our minute..."
"Yep, yep, Jamie. Keep going, you've got 50 seconds."
"I was on my bike and I was riding really fast past the new 7/11 and Jamie was on his bike and he..."
"What new 7/11?"
"It's near the train station...um dad, I think you need to turn off the..."
"Tell me the rest, you've got 35 seconds."
"...........It's okay, it's not important."
"No, keep going, son. This is our time together. I want to hear what's been going on. You've got 27 seconds."
"...It doesn't matter...."
"Of course it matters. I'm sure it's very important...to you. So you're on your bike, riding past the 7/11, the new one, and Jamie is on his bike and then what?"
"Nothing. I was just going to tell you..."
"Ten seconds left."
"Forget it."
"Nothing you want to tell me in seven seconds?"
"No."
"I know our time together is short, son, but I have to work really, really hard to pay for this new house, which is only going to increase in value, everybody on TV says so, so it's not time wasted. And I've been doing all those extra hours so I could buy up shares, like the prime minister said I should. The stock market will only keep booming, so it's not like the $50,000 I borrowed against the rising value of this house is going to suddenly disappear. In two years or so, in 2008, all this hard work is really going to pay off and we can spend lots more time together."
"Okay, dad."

It's Still Terrorism, But Without The Shocking Video

By Darryl Mason

Australia is under attack, PM Kevin Rudd, tells us, by the forces "of extremist capitalism." After Thursday's stock market blood-drainer, these forces seem to be winning. Or at least, what they set into motion is still wreaking incredible damage to the Australian economy.

How much has the stock market lost in the past year? A few hundred billion? Al Qaeda nuking Adelaide would have cost the economy less. So who is the greater threat? Al Qaeda kills people in the vicinity of the bombs they explode. Financial terrorists shred shrapnel into everybody.

We supposedly know who Al Qaeda are, or at least some of them, the few who can bother to front up in front of a webcam every few months, and the various leaders who we keep killing, over and over again.

But what about these "extremist capitalists"? Who are these financial terrorists?

Can we have some names, please? Are there ten of them? Or a few hundred? What do we know about their sleeper cells? What is their ideology of hatred? Why do they hate our values of a fair go and rewards for hard work so very, very much? Will they be held to account for what they've set into motion? Why aren't any of these financial terrorists being arrested? Why aren't we seeing them being hauled in and out of police stations in shackles? Will they be waterboarded to get at the truth? And why will so many of them get to keep their jobs, even if on greatly reduced pay?

The financial terrorists who are gutting the savings, investments and retirements of millions of Australians seem, today at least, to be even more illusory than Al Qaeda. One enemy lives in caves and poverty-smashed villages in the middle of fuck-all nowhere. The other extremist enemies live amongst us, they fly over our traffic choked streets in helicopters for their daily commute, and they live in most of their same pre-The Great Fucktober Crash Of 08 splendour. Well, that's not completely true. Some of these nation-shattering extremists have already headed off for calmer waters in the 80 foot floating palaces they built from the fleecing of thousands of work-haggered 65 year olds, who are now contemplating another decade of unexpected labour, or battling with a rising tide of unemployed youth for fewer and fewer jobs.

It's all but too late now, but where was that Financial Terrorism Hotline, so those that knew could have anonymously dobbed all those fuckers in?

In a stunning week of actual non-boring financial news, it was also remarkable to see just how much money an Australian government can make available in a time of "national emergency". More than $10 billion to the people, before Christmas. With a commitment to prop up banks and institutions that could soar into the hundreds of billions.

Ten billion dollars, thwomp, slammed down on the table, to save the Christmas spending season from expected disaster.

But do you know any pensioners or families planning to rush out and blow their government mini-bailout on Christmas presents?

There is definitely a mood of "thanks, but that'll go to pay off some debts" instead. Shopping malls around Australia are emptying of customers, and soon, staff, as people quickly begin to realise just what they can actually live without.

Paying off debts before guilt-induced holiday consuming is never a bad decision, but if the point of throwing around ten billion in cash is to get the people back into line at the checkouts, it doesn't seem likely it will pay off. Even if most people take their fresh cash to their local megacentre, it will only delay the inevitable mass layoffs of Generation Y staff for a month or two more.

Most elderly pensioners won't be splurging but will probably be remembering the once easily dismissed warnings from Depression-era grandparents and will be stockpiling long life food, or ripping out the ornamentals and laying in vegetables for next year. Just in case.

You might want to take up veggie and herb growing as a hobby, very soon. You know, just in case. My local supermarket in Sydney put up a big stand of vegetable and herb seeds a couple of weeks ago, after months of requests from locals. They couldn't re-stock that display fast enough. They've now sold out of just about everything, with a few days delay in getting more seeds, or maybe a week.

I found the seeds I wanted in the next suburb. But still, it was a strange experience to go to a local shop to buy more seeds, and find they've run out. Another sign of these unnerving times.

And here's an excellent, edible, street beautifying project we should see all over our towns and cities. It sure beats lining up in a petrol station carpark for four hours, waiting for the government food trucks to maybe arrive :

The English have their allotments; in Sydney we use the streets. In a variation on guerilla gardening, Sydneysiders are moving veggie plots from the backyard to the street verge, and converting formerly fallow public land into mini-market gardens.

"Environmentally, ethically and, from a community perspective, it's a great thing to do," says Eva Johnstone, a landscape architect, who with her husband, Bill, has been growing vegetables on their Marrickville street verge for the past two years.

"We always wanted to grow our own food, but our backyard is quite small, so the logical step was to grow it on the street, which was not being used for anything," Ms Johnstone said.

The Johnstones now have an established vegetable garden, with spinach, artichoke, rhubarb, peas, potatoes, beans, broccoli and beetroot. A nearby tree bears a passionfruit vine and a sign telling passersby to help themselves.

Street verges are council property but Mrs Johnstone says the council has been "happy to turn a blind eye.

Global warming, the drought and rising food prices have other Sydneysiders looking at local solutions to food production, says Michael Mobbs, a sustainability expert. A year ago, he and fellow residents of Myrtle Street, Chippendale, planted their nature strips and footpaths with a range of edible plants, including tomatoes, herbs, strawberries and fruit trees. Raspberries, rocket, native mint and passionfruit vines climb the telephone poles.

"We want to show people that they can grow food where they live and return to simpler, lower-impact lifestyle," says Mr Mobbs,....

Other councils are following suit.

The mayor of North Sydney : "We would certainly be very supportive if communities wanted to grow veggies in their street, as long as it's a community initiative."

Eat The Poor

The Professional Idiot explains why financial hell is raining down all around us, and thank Rupert he's there to do this, to spell it all for us, otherwise we might go around thinking that it was somebody else but The Poor! who are responsible.

The “greed” that initially created this crisis was of poor people in the US who took out home mortgages they had little hope of repaying. Banks were encouraged to lend them the money by federal laws demanding more lending to minorities, or else, and by the expectation that the US Government would underwrite such lending. It was magnified by many other (greedy) investors, many of the middle classes, who borrowed money to play the stock exchange or to bank on rising property values.

Hallucinatorally stupid, and simple. This is the Fox News explanation that even its most die-hard viewers no longer believe, no matter how much they want to.

Is it more disturbing that The Professional Idiot actually believes this is what has happened, that The Poor helped destroy world economies by simply desiring more than poverty and for believing the soaring rhetoric of their own president who spent a good chunk of his eight years in the White House stumping at lower income communities across the US telling them they had to all become homeowners to be worthwhile Americans?

Or is it more disturbing that The Professional Idiot feels absolutely no shame in distributing this incredible propaganda, these fish-brained simple myths, so as to delay his readers from actually starting to think too hard about how monumentally they all just got fucked, and really start to wonder who did this?

So blame The Poor. Why not? Fuckit. What are they gonna do about it? Nothing. They just had the phone cut off.

So soak it up Povos, the hatred and blame directed at you by the gatekeepers for the privileged and rich is just beginning.

Rudd Takes A Bet Worth Hundreds Of Billions Of Dollars

The odds are good that PM Rudd's monumental bet, in stumping up future taxpayer revenue to guarantee bank and credit union deposits for all Australians, for at least three years, will pay off. Some predict profits. But it's still an extraordinary gamble, a stake in the hundreds of billions of dollars. The biggest bet ever laid in the history of Australia.

Though none of the major banks appear to be shot full of holes from the shrapnel of America's extended 'Economic 9/11', unless they're hiding something monumental (fatal derivatives exposure, perhaps?), its still a remarkable event in the history of the country. Perhaps it would have more resonance if there were visuals to go with it other than numbers on boards, and a fantasmagoria of graphs. It's been porn for actuaries.

The October 12 emergency meeting also showed that behind the theatre and media-filling antics of our politicians, they usually all fall into line when they sense a true and total threat to the nation, and their own futures.

And so for today, a new week for millions of Australians obsessively checking stock market figures begins. There will be misery, hope, ruin, horror, terror, joy, despair, probably all within the first twenty minutes of trading.

It seems very likely that if markets in Australia, the US, Britain and Europe drop more than 20% further by Tuesday, we will follow the example of Russia and Indonesia, amongst the many, and suspend all trading. Shut down the markets for a week or two, sort out the mess. Perhaps such a closure would be a good thing, for reasons other than financial.

Being able to have constant market updates coming through your phone, your TV, your radio, every news site you visit, is one step away from having a permanent ticker flowing through your mind's eye.

People are going to need a solid time out from this full-core media flow soon. It can't be good for the mind, or the soul. We already know its not good for the nerves.

"Hi George, It's Kevin, And I'm Here To Help"

Australian prime minister Kevin Rudd has spoken on the phone with US president George W. Bush about the Economic 9/11 that is wreaking more destruction upon America than anything suicidal terrorists could ever be capable of cooking up.

Do you think Kev told George it was time to "get with the new program"?

You don't get a transcript of that no doubt interesting conversation, unless you are signed up with the iKev ultranet, which, fortunately, we are :

Kev : "Hello, George, it's Kevin from Australia, and I'm here to help. Now, I want you to know that we are very concerned about the global financial meltdown..."

George : "........................I'm a puppet on a string..............."

Kev : "I...okay, George. Now, I know you're feeling enormous pressure as this..."

George : ".....they said they'd do it, and they did it. They did it, John. They actually did it...."

Kev : "It's Kevin here, George. The Australian prime minister. You remember, Rupert's friend? We've met at....anyway, I want you to know that Australia will stand side by side the United States all the way through this crisis. We have faith, that's faith, George, that you can...hold it together. Your country needs you, Mr President. The world needs you to..."

George : "Rummy warned me what they could do. They fucked us all. Like the goddamned Skull & Bones extra special initiation. They ripped down our pants, bent us over the altar and rammed their..."

Kev : "I can't talk too long, George. I'd imagine your very busy. But I want you to know that Australia will not abandon your country, even if everybody else except for Mexico and Georgia does. We will be ready with emergency food aid, and energy aid, and none of your forces in Australia will have to worry about going hungry if funding is...cut off."

George : "My presidency began with 9/11, and now there's another one to finish it off. But I know for sure this one was a controlled demolition, John. A once in a lifetime crash. That's how historians will write me up now, as the president that sent his country into the Greater Depression. I'm going down in history as the absolute dumbest fuck ever to walk into the White House. They'll mock me worse than Carter. They'll..."

Kev : (off - "Are you fucking crazy? Don't put him on hold! I'll get rid of this call...") "Yeah, that's great, George. Listen, it's always great to talk to you, even when times are tough. We're all in this together, remember that George...some more than others. But I'm sure you'll pull through with...anyway, I've got China on the other line, so I've got to go."

George : "Okay, John, okay. But before you go, I'd like to invite you and Janette to come over when I open my presidential library in..."

Kev : "That's great, George. Bye."

"America, Can You Hold? We Have China On The Other Line"

"So what's the good news?"
"You keep digging it up, we'll keep buying it."
"Are you sure? Can I announce that?"
"Of course. Just don't try to put up your prices any time soon. That would not please us."
"That's great news. Thank you. Thank you so much. Thank you..."
"Please do not grovel. We find it very unattractive."


The United States stumbles out of the casino, pockets empty, pants around the ankles, cleaned out, gutted, dropping near worthless IOUs nobody inside wants to cash anymore. China still sits at the high stakes tables, hanging onto most of its mountain of chips. A few big bets go down, there are substantial losses, but the chip mountain remains formidable, and the game is not over for them yet. Waiting, waiting, waiting...

You can almost hear Kevin Rudd humming that old Hunters & Collectors song, 'don't rock the boat, keep your head down...'

Kevin Rudd has sought and received a personal assurance from the Chinese Premier, Wen Jiabao, that China's demand for exports would remain strong enough to prop up the Australian economy in the face of the global slowdown.

With the rapidly slowing global economy now a reality, Mr Rudd said he rang Mr Wen at 9pm on Monday to quiz him about his growth projections for China. Mr Rudd said he was told growth would slip from "something like 11 and 12 per cent down to 9 and 10 per cent", still strong enough to sustain a healthy demand for Australian commodity exports.

Mr Rudd believes China is the greatest militating factor against the global crisis and said the Communist nation was "now critical for Australia's continued economic performance".

"Part of the long-term strategy of this Government, and the strategy for the period immediately ahead, is how to more deeply and broadly engage with the Chinese economy," he said.

Asia will set the rules for the New Economic World Order, now that the UK, the EU and the US are busted out, choking on debt, shocked and staggered by the collapse (or demolition) of their banks and once AAA-rated financial institutions.

So the Communists didn't really lose, in the end, did they?

Just another confirmed lie, to heap onto the festering pile of lies we've been fed for decades, about free markets, globalisation, investing vs saving, and the bitter freedom of bountiful credit.

Will Australia Cop A Worse Hammering In The 'Economic Tsunami' Than The US?

Capitalism and the free market are great and wonderful things....until it all goes very, very wrong. And who pays for the 'mistakes' of the world's central bankers and the fetid greed of speculators?

Well, not the bank directors and CEOs. They get bonuses....well, they got their bonuses before it all went tits up, didn't they? They always do. The working poor will pay instead, as they always do. And the central bankers will all look you right in the eye and swear they didn't see any of this coming :

The world's financial storm has swept through Australia and New Zealand this week amid mounting signs of contagion across the Pacific region.

Gabriel Stein, from Lombard Street Research, said Australia could prove vulnerable once the global commodity cycle turns down. It has racked up a current account deficit of 6.2pc of GDP despite enjoying a coal, wheat, and metals boom, effectively spending its resources bonanza in advance. Household debt has reached 177pc of GDP, almost a world record.

"It is amazing that in the midst of the biggest commodity boom ever seen they have still been unable to get a current account surplus. They have been living beyond their means for 10 years. What worries me is that productivity growth has been very low: they have coasting after their reforms in the 1990s," he said.

What happened to us all being Relaxed & Comfortable? How could Peter Costello, 'Australia's Greatest Living Treasurer', not have prepared and insulated the nation from this chaos and misery? And how will the Rudd government stop the destruction spreading further?

Australia's Reserve Bank has had to grapple with vast inflows of Asian capital, especially Japanese money fleeing near zero rates at home. Short of imposing currency controls, it would have been almost impossible to stop the inflows.

"The easy money went straight into real estate," said Hans Redeker, currency chief at BNP Paribas.

"Australia will now have to generate 4pc of GDP to meet payments to foreign holders of its assets," he said. This is twice as high as the burden faced by the US.

Both the Australian and New Zealand dollars have fallen hard in recent days and now appear to be breaking down through key technical support against major currencies, including the US dollar. "The Aussie (dollar) is going down, big time," said Mr Redeker.

UPDATE : Writer Mike Whitney - who managed to predict the economic apocalypse now destroying American families and sending double-shift working men and women to the food banks, all back when the Wall Street Journal was still trumpeting 'We're All Rich! Say Yes To Everything! Max Out Another Credit Card!' - explains why the National Australia Bank's massive billion-plus write-downs this week are set to cause further panic on Wall Street :

We are now way beyond sub-prime. NAB says that it is suffering a 55 per cent loss on American housing loans – an event that has never happened in the history of a developed country in recent memory. This is an unprecedented event and means that the cost of bailing out the US financial system is now far beyond the highest estimates. A US recession is now locked in, but more alarmingly, 55 per cent loan losses point to the possibility of a depression.

It means the cost of bailing out housing exposures to the two mortgage insurers will be so great that it will leave no room to bail out anything else and there are several US banks that are now in big trouble. NAB says that the dislocation in the residential market is separate from the corporate market, but the flow on is inevitable." (The Business Spectator,"NAB will shock Wall Street")

The conduits are off-balance sheets operations run by the banks which contain hundreds of billions of dollars of bonds which are now essentially worthless.

So far, many of the banks have not accurately reported the losses from these operations hoping that the housing market will stabilize and the value of the bonds will rebound.

The action taken by the National Australia Bank is a "game-changer"; it's like the Grim Reaper swooping down on Wall Street and lopping-off the top of every big investment bank in downtown Manhattan.

Bizarrely, if the Great Central Bankers Swindle continues, and interest rates do not begin to fall soon, those without mortgage and credit card debt will be regarded as wealthy in comparison to millions of fucked over debt slaves, who really believed the lie that always seems to work at least once in every generation : You Can Have It All, And You Can Have It All Now.

In the words of Johnny Rotten : "Do You Ever Get The Feeling You've Been Cheated?"

It's never too soon to start growing some of your own food, in whatever space you have available. You know, just in case.

Australians Fear Terrorism Less Now They're Not Being Bombarded With Ads Telling Them To Fear Terrorism

The former Howard government's generous publicity campaign for Al Qaeda and terrorism fell off our TV screens and out of the newspaper ads some weeks before John Howard became the former prime minister of Australia.

The Howard government spent years and tens of millions of dollars trying to position terrorism as the National Fear. It kind of worked for a while, particularly with the in-the-neighbourhood attacks in Bali helping to make the threat seem more real to the people of Broome and Wollongong, but Terror Fear never really took hold, not like it has in countries where state and non-state terrorism is a local, brutal reality.

The survey quoted below claims that Australians are now more worried about meeting their financial obligations - mortgage, credit cards, fuel, food - than they are about the esoteric threat posed by terrorists deciding to attack a concrete bridge they may occasionally drive over :

Australians are more worried about their hip-pocket than being involved in a terrorist attack, according to a new survey.

One in three people are very concerned about meeting essential payments such as mortgages, while fears about national, personal and internet security have all fallen since December.

December, 2007, was about two months after the ads telling you that you must be awesomely suspicious of bags of garden fertiliser, rolls of wire left in carparks, bearded men with cameras and an intense interest in architecture and not really curious holes in fences stopped airing across the country.

The findings graphically illustrate the impact on average families of rapidly rising grocery and petrol prices, and high housing costs.

Fears about meeting financial obligations rose by three percentage points to 33 per cent of people being very or extremely concerned.

"There's no doubt more people are fearful of protecting the family's hip pocket than of being bombed by the Taliban..."

Those promoting Al Qaeda through exaggerating its potential threat must now find a way to blame Islamic bomb fetishists for $1.50 litre petrol, soul crushing drops in the value of millions of Australian homes, interest rate rises that shred hope and break up families, and food prices that leave much more space in the fridge and not so full plates.

All of those financial head and heart kicks are terrorism, too. If what worries you makes you fight with those you love, makes you sleep less, and less deeply, and makes you feel paranoid and fearful, uncomfortable and hopeless, then you are being terrorised. But this is legal, financial terrorism.

You won't, however, see ads telling you that three credit cards with limits all far beyond what average wage earners are every likely to be able to pay off - while bleeding cash on the mortgage, fuel and food bills - will do more damage to the lives, health and minds of Australians than tribal warriors in lands where electricity and water does not flow will ever inflict.

Bin Laden could only have dreamed of unleashing the kind of terror that savage debt now carves across the country.