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REQUIEM

Below are the two final essays to be posted on Allegiance and Duty Betrayed. The first one is written by a friend -- screen name 'Euro-American Scum' -- who, over the past four years, has been the most faithful essayist here. He has written about everything from his pilgrimage to Normandy in 2004 to take part in the 60th–year commemoration of the invasion, to his memories of his tour in Vietnam. His dedication to America’s founding principles ... and those who have sacrificed to preserve them over the past 200+ years ... is unequaled. Thank you, E-A-S. It has been a privilege to include your writing here, and it is a privilege to call you my friend.

The second essay is my own farewell. And with it I thank all of the many regular visitors, and those who may have only dropped in occasionally, for coming here. I hope you learned something. I hope a seed or two was planted. But, even if not, I thank you for stopping by ... 25 March, 2010

9/24/2008

The Eye of a Gnat

gnat.jpg

A few personal ramblings …

Because of what we have viewed as a fragile economy, and a weakening dollar, my husband and I have moved much of our stock portfolio into cash over the past few months – placing that cash in a money market fund at our brokerage firm.

Throughout the playing out of the sub prime debacle, the crumbling of corporations that were once financial giants, and the ludicrous bailout proposals, we have maintained that stance, continuing to hold precious metals/miners and commodities long-term, but keeping the remainder in cash, which sweeps into the money market account.

A few days ago we received a letter from our online brokerage firm, telling us that the NAV in our money market fund has fallen below $1, due, in part, to the decrease in value of debt securities issued by Lehman Brothers and held by the fund.

Long story short … as a result, until our funds are redeemed by our brokerage, we will not have access to them for withdrawal or transactions. We were informed that this action is being taken in our best interest ‘in order to limit potential losses’.

We (and millions of other American investors) have been attempting to step back from market speculation during what we determined to be an uncertain economic period (to put it mildly) by putting a significant portion of our savings into what most would consider to be a safe, conservative investment vehicle, and even that decision has been affected by the turmoil.

Which got me to thinking … those who are responsible for the current disaster-in-the-making … just how are they being affected by the results of their corrupt machinations?

The special interest groups that pressured their friends in congress to relax the underwriting standards in order to allow home ownership for people who did not have the financial wherewithal to own a home … are they suffering as much as the ‘average American’ (and the generation to follow) will in bearing the ultimate burden for this travesty?

The members of congress who pressured the mortgage and banking industry to relax the borrowing requirements … are they suffering as much as the ‘average American’ (and the generation to follow) will in bearing the ultimate burden for this travesty?

The financial gurus who got lost in their own importance, and their own power to call the shots while lining their own pockets … are they suffering as much as the ‘average American’ (and the generation to follow) will in bearing the ultimate burden for this tragedy?

My husband and I are only two of tens of millions of Americans whose lives have already been negatively affected. And this recent ‘negative effect’ will prove to be only the tip of a monstrous iceberg.

Today we do not have access to money that we spent a lifetime earning -- money that we placed in what we considered to be a ‘safe’ and liquid location.

Tomorrow, and possibly for the remainder of our lives, we, and tens of millions of our fellow Americans, will be forced to use a large portion of the fruits of our labors in order to pay the debt that was created by an elite group of lobbyists, legislators, and financiers – without our knowledge, and without our approval.

A friend wrote to me today, 'I find myself sitting in a high-stakes Texas hold-em game with a lot of chips in the pot that I cannot remember betting.'

And this is just the beginning. Private enterprise is fast becoming nationalized. Enormous financial and political power is being accorded to people in Washington who are unelected by, and unaccountable to, the people.

It is that last paragraph that terrifies me most. The fact that the present and future personal finances of every American are being plundered by an elite ruling class is egregious. But the fact that the United States Constitution is being declared all but irrelevant by the simultaneous swipes of countless bureaucratic pens is a tragedy beyond comprehension.

The days of our existence as a representative republic are numbered, thanks to the ever-increasing power of the governmental, financial, media and academic elite who have no comprehension of the preciousness and fragility of individual liberty, and whose collective sense of allegiance, duty, and integrity could fit into the eye of a gnat.

~ joanie

21 comments:

daveburkett said...

..the ever-increasing power of the governmental, financial, media and academic elite who have no comprehension of the preciousness and fragility of individual liberty, and whose collective sense of allegiance, duty, and integrity could fit into the eye of a gnat....

Damn them all!

Minuteman23 said...

I've said it before. I'll say it again. You should run for national office.

Steve Bannister said...

I read this on another forum today:

Tears well up in my eyes to think that anyone could be churlish enough not to give until it hurts to save the needy housed in that single room occupancy rat hole at 85 Broad Street in New York City.

How can anyone do any less than rescue these impecunious denizens in the bowels of lower Manhattan?

Please don't have the audacity to point out that Goldman Sachs 2006 year-end bonuses were $16.5 Billion or that it's 2007 year-end bonuses were $18 Billion or about $600,000 per employee. What is in the past must be forgotten.

Remember, people always feel more sorry for a poor person who was once rich than they do for the slob that was always poor. Bail out Goldman so they can give bonuses yet again and so that you can enjoy, with a clear conscience, this Holiday, the crappy ham or turkey your employer grudgingly provides for your bonus.

charles norton said...

From IBD today:

It's Time To Act

Credit Crisis: Everyone's chiming in on the financial mess, but we have yet to hear a better idea than that set out by our Treasury secretary and Fed chief. Congress should act on it without further showboating or delay.

Watching the same politicians who created this mess grill Mssrs. Paulson and Bernanke yesterday about what they intend to do about it was almost surreal.

Where, for example, does Chris Dodd, chairman of the Senate Banking Committee and the leading recipient of Fannie Mae campaign cash, get off acting so self-righteously when he and his panel were asked to move quickly on the administration's $700 billion rescue plan?

"I understand speed is important," Dodd huffed, "but I'm far more interested in whether we get this right."

Get this right? Who is he kidding?
By now, everyone in the U.S. and beyond should know that if Connecticut's senior senator and his Democratic colleagues had "gotten it right" from the start, and if they'd fixed the problem when they had the chance, there wouldn't be a need for the crisis hearings he's now conducting.

Hubris and hypocrisy aside, it's important to recognize the legislation for what it is - a rescue, not a bailout, of the financial system. Taxpayers will not be left "holding the bag." The government will buy these mortgage securities at 20 or 30 cents on the dollar and eventually sell them at higher prices.

How much higher, and how far into the future, no one knows. But even if the government doesn't make a profit in the end, the loss will be nothing like the trillion dollars that fear mongers and doomsayers throw around.

In fact, the plan is very close to the one set up in the savings-and-loan crisis of the 1990s to dispose of failed thrift assets.
As Paulson put it so plainly, Job One in this situation is to restore confidence in the financial system by unclogging a credit market that has come close to freezing up. If this can be achieved with minimal government intervention, and without investing too much power in the Treasury and Fed, so much the better.

Leave it up to Congress, however, to take a narrowly focused plan that's been kept simple (three-and-a-half pages) and adorn it with every gewgaw - from more help for homeowners to limits on bank executives' pay - on Congress' wish list.

Really, that's enough.

Like many others, we wish we had the luxury to let "the market" take care of this problem in its own way. But sadly, we're well beyond that point. Letting the system crash and burn and the world economy melt down is a political nonstarter for any president or Congress.

The plan before Congress is clear, transparent and minimalist. It's been drawn up by competent and highly experienced officials who have truly risen to the occasion.
The market is waiting. The time to act is now.

Angelo Miozza said...

Joan,
I could not agree with you more. The ‘good old boys club’ on Wall Street got us into a real mess this time. (I do not mean anything against women by using the term ‘boys club.’ In reality most on Wall Street are men and besides if women were in charge they would never have allowed this type of gambling mess to have occurred in the first place!).

I too have purchased more physical gold this past weekend and will buy more. When it was $500 per ounce I said we will look back and say gold was cheap. I now say it again at $900. I believe once it starts to trade above $1,000 it will then go much higher. I am afraid we will look back and say gold was cheap at $900.

I am not wishing for this but that’s where things seem to be going. Buying physical gold and silver, gold/silver stocks, and cash are very prudent right now. If one is not sure what stocks to buy, I suggest gold and silver ETF’s or click the link below. It takes you to US Global Investors who do a good job. Check out their fund performances and sign up for Frank Homes commentary. (Note: I have no conflict affiliation with them.)

http://www.usfunds.com/main_intro.asp

As a side note to the Obama post. This guy Antoin "Tony" Rezko is due to be sentenced one week before the election (see link below). This is not good news for Obama. If you are not sure who Rezko is just go to google.com type in; Obama’s friend Rezko.

http://www.chicagotribune.com/news/local/chi-tony-rezko-sentence-delay-webaug21,0,7342747.story

john galt said...

Good comments, Joanie and Angelo.

I wish I had some dry powder to buy some physical gold. Maybe soon....

marcus aurelius said...

I didn't start buying bullion until just last year. I saw the writing on the wall later than some. So my average price per ounce is in the $800-$900 range. But like you Angelo, and Joanie, I think that is going to look mighty cheap years from now.

As for Rezko being sentenced right before the election, it ain't gonna happen. There will be a delay of sentencing until after November 4th. You can count on it.

PatriciaEnglert said...

Well done Joanie- as always!

fascismisyourwosrtenemy said...

If we had been told a couple years ago that Fannie Mae and Freddie Mac would be taken over by the government, that Bear Stearns, Lehman Bros, and Merrill Lynch would be toast, and that the testimony that is going on before Congress today would be happening, none of us would have believed it.

As Joanie says, this is just the tip of the ice berg, and everything that is being proposed is just a temporary solution. The only permanent solution is to get rid of CORRUPTION in Washington and that isn't about to happen.

Batten down the hatches. There's more, and worse, to come.

LouBarakos said...

Letter from Ron Paul: Time is running out

Dear Friends,

Whenever a Great Bipartisan Consensus is announced, and a compliant media assures everyone that the wondrous actions of our wise leaders are being taken for our own good, you can know with absolute certainty that disaster is about to strike.

The events of the past week are no exception.

The bailout package that is about to be rammed down Congress’ throat is not just economically foolish. It is downright sinister. It makes a mockery of our Constitution, which our leaders should never again bother pretending is still in effect. It promises the American people a never-ending nightmare of ever-greater debt liabilities they will have to shoulder. Two weeks ago, financial analyst Jim Rogers said the bailout of Fannie Mae and Freddie Mac made America more communist than China! “This is welfare for the rich,” he said. “This is socialism for the rich. It’s bailing out the financiers, the banks, the Wall Streeters.”

That describes the current bailout package to a T. And we’re being told it’s unavoidable.

The claim that the market caused all this is so staggeringly foolish that only politicians and the media could pretend to believe it. But that has become the conventional wisdom, with the desired result that those responsible for the credit bubble and its predictable consequences - predictable, that is, to those who understand sound, Austrian economics - are being let off the hook. The Federal Reserve System is actually positioning itself as the savior, rather than the culprit, in this mess!

• The Treasury Secretary is authorized to purchase up to $700 billion in mortgage-related assets at any one time. That means $700 billion is only the very beginning of what will hit us.

• Financial institutions are “designated as financial agents of the Government.” This is the New Deal to end all New Deals.

• Then there’s this: “ Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency. “ Translation: the Secretary can buy up whatever junk debt he wants to, burden the American people with it, and be subject to no one in the process.

There goes your country.

Even some so-called free-market economists are calling all this “sadly necessary.” Sad, yes. Necessary? Don’t make me laugh.

Our one-party system is complicit in yet another crime against the American people. The two major party candidates for president themselves initially indicated their strong support for bailouts of this kind - another example of the big choice we’re supposedly presented with this November: yes or yes. Now, with a backlash brewing, they’re not quite sure what their views are. A sad display, really.

Although the present bailout package is almost certainly not the end of the political atrocities we’ll witness in connection with the crisis, time is short. Congress may vote as soon as tomorrow. With a Rasmussen poll finding support for the bailout at an anemic seven percent, some members of Congress are afraid to vote for it. Call them! Let them hear from you! Tell them you will never vote for anyone who supports this atrocity.

The issue boils down to this: do we care about freedom? Do we care about responsibility and accountability? Do we care that our government and media have been bought and paid for? Do we care that average Americans are about to be looted in order to subsidize the fattest of cats on Wall Street and in government? Do we care?

When the chips are down, will we stand up and fight, even if it means standing up against every stripe of fashionable opinion in politics and the media?

Times like these have a way of telling us what kind of a people we are, and what kind of country we shall be.

In liberty,

Ron Paul

danthemangottschall said...

I have never invested in precious metals or commodities much, but they are starting to look pretty good now.

Angelo Miozza, thanks for the very informative post.

Joanie, thanks as always for the excellent commentary.

johnsteever said...

McCain and Obama are talking about postponing the debate. My guess is that Obama will show up anyway, and vote "present."

John Cooper said...

Joanie--

I'm so sorry that you and your hubbie have become involuntarily caught up in all this. Some words from Ayn Rand, circa 1959 seem appropriate:
~~~~~
"Then you will see the rise of the men of the double standard - the men who live by force, yet count on those who live by
trade to create the value of their looted money - the men who are
the hitchhikers of virtue. In a moral society, these are the
criminals, and the statutes are written to protect you against
them. But when a society establishes criminals-by-right and
looters-by-law - men who use force to seize the wealth of disarmed victims - then money becomes its creators' avenger.

Such looters believe it safe to rob defenseless men, once they've
passed a law to disarm them. But their loot becomes the magnet
for other looters, who get it from them as they got it. Then the
race goes, not to the ablest at production, but to those most
ruthless at brutality. When force is the standard, the murderer
wins over the pickpocket. And then that society vanishes, in a
spread of ruins and slaughter.

"Do you wish to know whether that day is coming? Watch
money. Money is the barometer of a society's virtue. When you see that trading is done, not by consent, but by compulsion -
when you see that in order to produce, you need to obtain permission from men who produce nothing - when you see that money is flowing to those who deal, not in goods, but in favors - when you
see that men get richer by graft and by pull than by work, and
your laws don't protect you against them, but protect them
against you - when you see corruption being rewarded and honesty becoming a self-sacrifice - you may know that your society is doomed. Money is so noble a medium that it does not compete with
guns and it does not make terms with brutality. It will not
permit a country to survive as half-property, half-loot.

"Whenever destroyers appear among men, they start by destroying money, for money is man's protection and the base of a
moral existence. Destroyers seize gold and leave to its owners a
counterfeit pile of paper. This kills all objective standards
and delivers men into the arbitrary power of an arbitrary setter
of values. Gold was an objective value, and equivalent of wealth
produced. Paper is a mortgage on wealth that does not exist,
backed by a gun aimed at those who are expected to produce it.
Paper is a check drawn by legal looters upon an account which is
not theirs: upon the virtue of the victims. Watch for the day
when it bounces, marked: 'Account overdrawn.'

Anonymous said...

The days of our existence as a representative republic are numbered, thanks to the ever-increasing power of the governmental, financial, media and academic elite who have no comprehension of the preciousness and fragility of individual liberty, and whose collective sense of allegiance, duty, and integrity could fit into the eye of a gnat.

Sadly true and pretty much irreversible at this point.

no_way_a_liberal said...

I'm not a conspiracy nut. However, this looks too much like a plan to take over the US economy by the government. Lenin was right. Give us enough rope and we will hang ourselves. The gallows is built and we are walking up the thirteen steps to the noose.

cw-patriot said...

Steve Bannister:

Your post takes sarcasm to new heights. :)

Thanks for sharing it.

~ joanie

cw-patriot said...

Charles Norton:

Great IBD article. I'd add to this paragraph, though:

By now, everyone in the U.S. and beyond should know that if Connecticut's senior senator and his Democratic colleagues had "gotten it right" from the start, and if they'd fixed the problem when they had the chance, there wouldn't be a need for the crisis hearings he's now conducting.

It would be even more effective if IBD pointed out that Dodd received far and away the most political contributions from Fannie Mae and Freddie Mac of anyone on the Hill for the past sixteen years.

Thanks for the article.

~ joanie

cw-patriot said...

Angelo,

Thanks for the excellent financial insights. I agree with them all.

I was talking with my sister this afternoon. She is not very politically involved (despite my efforts to 'educate' her over the years) :). She was asking my opinion regarding where she and her husband should put their money during these uncertain times.

When I suggested using part of it to purchase physical gold (of which she has none), she said, 'But it's so expensive now.'

I reminded her that I had offered her the same advice five years ago, and that that had been her response then as well (when it was selling for $400/oz). :)

Glad to see you participating here. Your insights on both politics and finances will be greatly appreciated!

~ joanie

cw-patriot said...

Lou Barakos,

Thank you for the Paul letter.

I don't always agree with him on foreign policy issues, but on just about everything else his opinions are spot on.

This letter is absolutely brilliant! Thanks for bringing it to our attention.

~ joanie

cw-patriot said...

John:

Ayn Rand's words often send a shiver up my spine. Her 'crystal ball' is virtually without flaw.

The entire excerpt you copied is brilliant, but every American should read and study this, especially:

Watch money. Money is the barometer of a society's virtue. When you see that trading is done, not by consent, but by compulsion -- when you see that in order to produce, you need to obtain permission from men who produce nothing - when you see that money is flowing to those who deal, not in goods, but in favors - when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you - when you see corruption being rewarded and honesty becoming a self-sacrifice - you may know that your society is doomed.

Thanks, John.

~ joanie

cw-patriot said...

An update regarding the money market situation referenced in this essay, for anyone who may be interested.

In the essay I was lamenting the fact that we savings-oriented Americans, many of whom have opted to make conservative investments because of what we saw as a fragile economy, are even bearing the brunt of the economic turmoil, in places we never expected.

Pertinent excerpt from the essay:

Throughout the playing out of the sub prime debacle, the crumbling of corporations that were once financial giants, and the ludicrous bailout proposals, we have maintained that stance, continuing to hold precious metals/miners and commodities long-term, but keeping the remainder in cash, which sweeps into the money market account.

A few days ago we received a letter from our online brokerage firm, telling us that the NAV in our money market fund has fallen below $1, due, in part, to the decrease in value of debt securities issued by Lehman Brothers and held by the fund.

Long story short … as a result, until our funds are redeemed by our brokerage, we will not have access to them for withdrawal or transactions. We were informed that this action is being taken in our best interest ‘in order to limit potential losses’.


This afternoon I received a phone call from a TD Ameritrade representative, asking whether I had any questions about the above, and telling me that TD Ameritrade has been successful in redeeming its clients’ money market accounts. The NAV in this particular money market has fallen to 97 cents, and TD Ameritrade will be assuming the responsibility to make up the 3-cent difference. (He told me how many millions it will be costing them, but I don’t recall the figure.)

It’s refreshing to receive a bit of good news, and experience a positive reaction to an announcement by a financial institution, considering the way in which economic events are unfurling of late.

TD Ameritrade has my personal kudos, which will result in loyalty to them to the degree that I will not consider moving our account from there for any reason other than a diminishing of their current high corporate standards.

~ joanie