from www.MediaChannel.org

Fear and Panic As Market Drops Again: How Bad Is It? How Bad Can It Get?

THIS MORNING, A GLOBAL RESPONSE-CNN REPORTS

Federal Reserve, joining central banks worldwide, cuts key interest rate by half percentage point to 1.5 percent.

RIOT IN HONG KONG: AFP-- Furious investors clashed with police outside Bank of China's Hong Kong headquarters Wednesday and demanded the repayment of investments linked to failed US bank Lehman Brothers

Scuffles erupted outside the Bank of China building, as protesters tried to push through the police's barricade, an AFP photographer at the scene said.

Hundreds of protestors also swarmed other major banks and the city's legislature, grabbing lawmakers and demanding help to recoup their money.

The protestors, who complain that the banks which sold them the so-called "mini-bonds" had not fully explained the risks involved, held placards and shouted slogans to demand a full refund of their investments
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HORSEMAN OF THE APOCALYPSE: Ambrose Evans Pritchard of the Telegraph in London:

During the past week, we have tipped over the edge, into the middle of the abyss. Systemic collapse is in full train. The Netherlands has just rushed through a second, more sweeping nationalisation of Fortis. Ireland and Greece have had to rescue all their banks. Iceland is facing an Argentine denouement.

The US commercial paper market is closed… The interbank lending market has seized up….. Healthy companies cannot roll over debt….

As the unflappable Warren Buffett puts it, the credit freeze is "sucking blood" out of the economy. "In my adult lifetime, I don't think I've ever seen people as fearful," he said.

We are fast approaching the point of no return. The only way out of this calamitous descent is "shock and awe" on a global scale, and even that may not be enough….

THE POINT OF NO RETURN?
FED TO PUMP MORE MONEY INTO MARKETS, MAY CUT INTEREST RATES AGAIN
MANY AMERICANS FEAR A DEPRESSION

THE DEBATE: YIKES, IF THATS WHAT IT WAS

David Swanson liveblogged for those who may have mercifully missed it: http://www.afterdowningstreet.org/node/36706

McCain v. Obama II: The Empire Strikes Back

The first debate after the great foreign policty debate, which focused
almmost exclusively on war, shifted to a discussion devoted in large
part to foreign policy and specifically war. But it began with some
other topics.

8:55 p.m. This can't be good. PBS aired a program on the evolution of
dinosaurs just prior to the debate, showing no consideration for the
widespread belief that, yes, John McCain is a dinosaur and that his
running mate believes he walked the earth together with humans.

9:01 Pundits get the first and last word and begin by saying almost
nothing. Obama has to not be "too professorial."

9:02 Brokaw says Gallup chose 80 uncommitted voters from Nashville. Are
people who don't know who to vote for and live in Nashville
representative of the whole country? Is Gallup? Is General Electric's
Brokaw? We shall see.

Click on the link above for more.

STEVEN PEARLSTEIN IN THE WASHINGTON POST: NOTHING NEW BY EITHER CANDIDATE ON THE CRISIS

Against a backdrop of an unfolding meltdown in global financial markets and the near-certainty of a U.S. recession, the two candidates for president used the occasion of a much-anticipated town hall meeting last night to repeat all the talking points they were making long before the recent bank failures, the free fall of stock prices and the federal government's expensive rescue efforts.

SURGE OR SPLURGE?

J HARI (ICH)McCain Is Deluding Himself (and the Public) Over The 'Surge': http://www.informationclearinghouse.info/article20958.htm

John McCain is desperate to talk about the surge rather than the splurge. His Iraq war is set to cost one trillion dollars, and his deregulation-mania has cost hundreds of billions.

BASHING OBAMA: THE BLOOD SPORT OF REPUGS

I would like to do more on the bashing of Obama, he reversion to form by the Repugs (http://www.thenation.com/blogs/campaignmatters/368923)who can't really explain or defend the policies that led to the financial crisis and seem to prefer modern forms of Red baiting -(oldest tactic) to tarnish Obama with guilt by association with Bill Ayres et. al.

I am fascinated by the fact that Mayor Daley of Chicago defends Ayers who, by the way I know, and know as someone who has worked to promote innovation in a failing Chicago public schools system. Of reporting on the GOP gotcha smear tactics-which seems all they have left-CNN showed a pamphlet for a Peace School in Chicago. What a crime! It was pathetic reporting, Anderson, pathetic, driven by a National Review operative.

And what hypocrisy! Bill Ayres may have had a hand in blowing up bathrooms but McCain was blowing up people in an illegal and immoral war which CNN didn't have the guts to mention. (He also backed the Contras in Nicaragua!) At least they reported that Ayers and his wife Berardine had the charges dropped against them. Since there was no war crimes tribunal after the war, McCain couldn't be brought up on charges of his crimes against humanity. Yes. Folks, that's what they were. He was shot down while bombing civilians in Hanoi. Yup, You betcha. Wink, Wink.

FED IS SADDLING UP

Now, on to the decline and fall of our economic system. Last night a CNN poll showed 6 out of ten people said they expect a depreression, thats with a D.

The Fed says it is is coming to the rescue, injecting more billions and planning another rate cut. Bear in mind that the SEVEN previous cuts and the earlier injection of billions up on billions DID not solve the problem. Ben has a limited number of tools in his arsenal.

WASHINGTON - Federal Reserve Chairman Ben Bernanke warned Tuesday that the financial crisis has not only darkened the country's current economic performance but also could prolong the pain.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aAyx4qPsKSZk&refer=h...

The Fed chief's more gloomy assessment appeared to open the door wider to an interest rate cut on or before Oct. 28-29, the central bank's next meeting, to brace the wobbly economy.

Bernanke said the Fed will "need to consider" whether its current stance of holding rates steady "remains appropriate" given the fallout from the worst financial crisis in decades.

MARKET REACTS: NYT: The Dow skidded after the Federal Reserve chairman said that the outlook for economic growth had worsened.

AP: - Wall Street has had yet another dismal day, extending its heavy losses as investors' worries about the financial sector wiped out early enthusiasm over the Federal Reserve's efforts to inject confidence into the credit markets. Trading remained fractious and grew more turbulent in the last hour, with the Dow Jones industrial average losing more than 500 points and all the major indexes falling more than 5 percent.

RETIREMENT FUNDS HAVE LOST 2 TRILLION DOLLARS, EXPERTS SAY

Fed to Purchase U.S. Commercial Paper to Ease Crunch (Update1) By Craig Torres

Oct. 7 (Bloomberg) - The Federal Reserve will create a special fund to purchase U.S. commercial paper after the credit crunch threatened to cut off a key source of funding for corporations.

The Treasury will make a deposit with the Fed's New York district bank to help set up the special purpose vehicle. The central bank will also lend to the program at policy makers' target rate for overnight loans between banks. The Fed Board invoked emergency powers to set up the unit, the central bank said in a statement released in Washington.

Today's action follows a slide in the commercial-paper market to a three-year low of $1.6 trillion last week as investors fled even companies with few links to the subprime mortgage crisis. Companies from newspaper firm Gannett Co. to electricity producer Southern Co. have been forced to tap credit lines or forego raising debt because of the market's disruption.

House gives nod to boost for SEC enforcement authority The House last month passed a bill that would expand the Securities and Exchange Commission's enforcement authority.

BANKS NOW INSOLVENT, EXPERT CLAIMS

Willem Buiter has a penchant for ruffling feathers with his blunt pronouncements. He caused a firestorm at the Fed's recent Jackson Hole conference by, in his presentation, telling the central bank that it was a victim of "cognitive regulatory capture" and was excessively sensitive to the needs and special pleading of the financial services industry. Even though the hosts took umbrage, they should not have been surprised, since Buiter had been saying that sort of thing for months.

Buiter lobbed another bombshell today, but because it was presented on his blog and (needless to say) the market meltdow was attention-grabbing, it appears to have gotten little note:

It's reasonable to assume that the banking system in the North Atlantic region is insolvent and would be bankrupt but for the reality of recent government bailouts and the expectation of future government bailouts. Certainly, for the system as a whole, the marked-to-market value of its assets is way below that of its liabilities. I strongly suspect that even the hold-to-maturity value of its assets is well below that of its liabilities. Although the system as a whole is broke, there are no doubt individual banks that are solvent. We may not, however be certain as to which banks are solvent and which banks are not. (FROM NAKED CAPITALISM) http://www.informationclearinghouse.info/article20954.htm

French Premier Francois Fillon: We're on "The Edge of The Abyss" By Mike Whitney

People are scared and removing their money from the banks and money markets which is intensifying the freeze in the credit markets and driving stocks into the ground like a tent stake. Meanwhile, our leaders are "caught in the headlights", still believing they can "finesse" their way through the biggest economic cataclysm since the Great Depression. It's madness.

MICHAEL J KOZARES (SEEKING ALPHA)

You get a sense that America's chickens have come home to roost. Instead of learning from our past mistakes though, as the idiom above is meant to suggest, the nation appears intent on compounding them. The Great American Bailout of 2008 is simply more of the same - more debt, more easy money, more moral hazard, more taxpayer responsibility, and more government intervention. Quite literally, the government has once again applied a band aid, papered the problem over and delayed once more what will certainly be an even worse day of reckoning. Yes, the chickens have come home to roost, but for all the roosting all we have gotten is more chickens.

REUTERS: CHINA FEELING IT TOO

Many of China's richest people grew a bit poorer this year as stock and property markets tumbled, but the country's wealthy are riding out the downturn better than many of their foreign counterparts, a survey showed on Tuesday.

Real estate heiress Yang Huiyan, 27, saw her estimated fortune shrink to $4.9 billion from $17.5 billion as the market value of her stake in property developer Country Garden Holdings Co plunged, according to the latest annual Hurun Report, which ranked the country's 1,000 richest people.

That pushed Yang, who ranked as China's richest person last year, down to number three, said the report, compiled by researcher Rupert Hoogewerf.

WHATS NEXT? SPECIFIC TALKS ABOUT SPECIFIC PLANS FOR MARTIAL LAW AND A POLICE STATE
http://www.countercurrents.org/clifford061008.htm

STUNNING EMAIL FROM CATHERINE AUSTIN FITTS TO MEMBER OF GOLDMAN SACHS RESEARCH TEAM-THIS SAYS IT ALL!! http://solari.com/blog/?p=1660#more-1660

FEELING A LITTLE CHALLENGED BECAUSE OF YOUR UNDERSTANDING OF ECONOMICS? WANT TO HAVE SOMEONE EXPLAIN THE CURRENT FINANCIAL CRISIS IN REALLY SIMPLE TERMS? THEN YOU MUST LISTEN TO THIS INTERVIEW WITH CHRIS MARTENSON

Meanwhile back on Wall Street, I joined a union rally last week protesting the bailout and talked about the need for a JAILOUT, not just abailout. (This is an issue I explained in more detail earlier Tuesday on NPR's ON POINT program with Tom Ashbrook. You can hear the podcast no on line: www.onpointradio.org/

We did a video of just another day on Wall Street. Check it out: http://www.youtube.com/watch?v=uJFm22G464Q

PEOPLE IN THE STREET

We sent our producer, the filmmaker (and taxpayer) Ray Nowosielski over to Times Square Friday to get some reaction to the bailout passing. He also paid a little visit to Morgan Stanley, whose building was across the street from the old Globalvision office. Here's his video report: http://www.youtube.com/watch?v=EJ15oh56bG0

Miami Herald: Homeowners Get Some Relief

Oct. 7-Countrywide Financial will provide Florida homeowners up to $1 billion in mortgage relief under a settlement reached with the state's attorney general over alleged abusive lending practices. ||Countrywide, once the largest home loan company in the country, was acquired in July by Bank of… Read more

NJ May Bill Mortgage Lenders $2,000 Per Foreclosure by AFU

TRENTON, New Jersey, Oct 6 (Reuters) - A panel of New Jersey legislators on Monday approved a measure to make mortgage lenders pay $2,000 before taking a homeowner into foreclosure. It joins a growing list of local and national efforts to stem a tide of home foreclosures.

Comment on this post: http://www.newsdissector.com/blog/2008/10/07/fear-and-panic-as-market-dr...

Chalmers Johnson: THE GREAT GLOBAL CRASH OF '08

From TomDispatch.com's Tom Engelhart:

Here we are, with ringside seats - far too close for comfort - at the Great Global Crash of '08. Nobody's quite calling it that yet, but what else could it be? All over the world yesterday stocks plummeted; the Russian and Brazilian stock indexes went down so precipitously - 19% and 13% - that exchanges in both countries were closed for parts of the day; the Indonesian index tumbled an unprecedented 10%; the Paris bourse, 9%; the London FTSE 100, a historic 8%; and the main German index 7%; while, at the New York Stock Exchange, the Dow Jones dipped under 10,000 on its wild ride toward the depths.

In moments like this, if you're an American, you look for ironies. And here's one appropriate to Chalmers Johnson's dispatch below. In the last year, the Bush administration's top officials have sunk much of their increasingly lame-duck energy into pacifying Iraq, and so getting it out of the news and the spotlight at least long enough for election '08 to happen (and undoubtedly long enough as well for them to get out of town in January). And then what happens? The administration is ambushed, not by Sunni militants or Shiite radicals but by its own people: investment bankers, lenders, hedge-fund managers, financial management types - the very people for whom they organized the world and who had long been playing fast and loose (and profitably) with our economic system. The ambush, of course, took the form of a financial meltdown of massive proportions for which, as in Iraq in 2003, the administration had clearly done no significant preplanning or war-gaming. And, as with the insurgency then, so now they operated by the increasingly worn seats of their pants. Their attempted $700 billion "surge," as stock exchanges around the world indicated yesterday, wasn't likely to pacify a global financial system near cardiac arrest.

And I'm getting to that irony, if you'll just hang on. But first recall the administration's dreams only five years ago. Then, they were convinced that they would create a Pax Americana globally and a Pax Republicana domestically that would last generations. Now, "Bush's brain" Karl Rove is talking about an Obama November victory, while what Iraq started, the economic meltdown looks to be ending.

Here's a sure thing: George W. Bush and Dick Cheney won't make it out of town in time, their wars will remain disasters, their imperial dreams so much smoke, and domestically, they may have created the conditions for a turning-point election that could bring to Washington not only a resurgent Democratic Party, but the first black president of the United States. Quite a record for one "commander-in-chief" presidency. Chalmers Johnson, whose latest book, Nemesis: The Last Days of the American Republic, warned of the possibility of a profligate, militarized U.S. going bankrupt, considers whether, in the ruins of Bush's financial Katrina, an Obama victory and a reconfiguring election are possible, or whether deep-seated racism and embedded regional party loyalties will prove too much even for this catastrophic moment.

NOT MENTIONED IN THE DEBATE:

Isambard Wilkinson, The Telegraph UK: "Pakistan's foreign exchange reserves are so low that the country can only afford one month of imports and faces possible bankruptcy."

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Letters, Videos, And Comic Books Calling For Change

My name is Enza Sebastiani. I am an independent filmmaker/reporter with a dream: restoring democracy in America.

Here's my independent reporting on what happened last Saturday, October 5, 2008, in Burlingame, CA, during a fundraiser brunch organized by the Republican party to raise funds.

Gov. Sarah Palin raised over $2 million dollars during a pricey brunch ($1000 to $2500 per person) attended by over 1500 people.

Outside was a different story: $0.99 donuts, crappy coffee, CIA and security guards pushing us around…

However, an overwhelming support by OBAMA/BIDEN protesters not only out numbered the McCain/Palin supporters, proudly holding their stunningly creative and funny handmade signs and banners, in sharp contrast with the rubber stamped manufactured signs held by the few, and very angry McCain/Palin supporters….

In any case, this is PART ONE of my documentary on that day, in which I witnessed, first hand, and once again, the shuttering of our First Amendment. http://www.youtube.com/watch?v=h32j2azsGKk

AN ORDER FROM GREG PALAST

Bobby Kennedy Jr. and I have had it UP TO HERE. They stole 2000. They stole 2004. Now, they're snatching it again. So Bobby and I are doing the most important thing we can do in a crisis of democracy: write an investigative comic book.

Here it is: Steal Back Your Vote is out today. Download it right now at StealBackYourVote.ORG

Its 24 full-color pages cut open the Rove-arian cancer on our ballot box: the Six Ways They're Stealing Your Vote - plus a two-page pull-out guide - 7 Ways to Steal it Back.

Print it out. Pass it out. Right now.

UK: Government will spy on every call and e-mail

[Spying by St Stev via Flickr] Ministers are considering spending up to GBP 12bn (EUR 15.5bn) on a database to monitor and store the internet browsing habits, e-mail and telephone records of everyone in Britain. GCHQ, the government's eavesdropping centre, has already been given up to GBP 1bn to finance the first stage of the project. Hundreds of clandestine probes will be installed to monitor customers live on two of the country's biggest internet and mobile phone providers - thought to be BT and Vodafone. BT has nearly 5m internet customers. Ministers are braced for a backlash similar to the one caused by their ID cards programme. Dominic Grieve, the shadow home secretary, said: 'Any suggestion of the government using existing powers to intercept communications data without public discussion is going to sound extremely sinister.' MI5 currently conducts limited e-mail and website intercepts which are approved under specific warrants by the home secretary. Further details of the new plan will be unveiled next month in the Queen's speech. The Home Office stressed no formal decision had been taken but sources said officials had made clear that ministers had agreed 'in principle' to the programme. Officials claim live monitoring is necessary to fight terrorism and crime. However, critics question whether such a vast system can be kept secure. A total of 57 billion text messages were sent in the UK last year - 1,800 every second. (Times Online)

LETTERS

NEIL CAPPELLINO WRITES:

I heard you on Tom Ashbrook's show today and was interested in what you had to say. Thank you for your professional insights and the willingness to share those findings.

As an economics lay person, I would like to hear someone talk about the hidden role the Federal Reserve plays in such calamities. It is my understanding that since 1913 when our government turned over control of the nations money supply to the Federal Reserve, they effectively relegated themselves to borrowing from the privately held entity in order to finance deficit spending. Likewise, we as taxpayers are charged federal income tax, which in large part funds the interest due on that debt. Wouldn't that be a relatively salient fact to share with the public at this time?

I believe if people understood the more obscure and dubious machinations of the Federal Reserve, the nature of 'fiat' money, it's effect on the value of our currency and the fact that our never-ratified federal income tax dollars are being collected to service interest payments to the Federal Reserve, the public may well perceive that as the most historic ongoing plunder of all time. I certainly do!

So far in anything that resembles the mainstream media I've only heard Ron Paul touch on this subject. As a studied and respected author and career professional in media and truth telling, what is your truth here and do you see this information as something worth broadcasting?

I discuss the origins of the Fed in my book.

Jim Whelan writes:

I think the junk traders on Wall Street are crazy.

These junkies have driven down the value of your 401k's, the college funds for your children and your everday savings.

I say put them all in jail and throw away the key for good! Just like we did with OJ.

As far as I am concerned the numbskills can work for twenty five cents an hour and pay us all back the rest of their lives. We have paid enough for their mistakes.

Tony D'Andrea heard me on NPR earlier today:

(…we met on Mt Auburn St the morning after the 4/15/70 Harvard Square Riots-you were there when Det. Dominic Scalese of the Cambridge PD "busted me to buck private"]

I was very pleased to hear you were still in the mix, shaking things up and getting people to see that "elephant in the kitchen". Your presentation on WBUR took things to a new level, that of complicity and intent on the part of those controlling the big money interests in this manufactured crisis.

I'd like to suggest some new lines of investigation for you on this matter, as well as offering some good sources.

It is always hard to find the source of events like this when you begin peeling down the onion from the outside. When JFK was shot, it took years before there was even enough suspicion to be able to raise questions in the public eye without being dismissed as a crackpot. And today, with the passage of time and a lot of research, we've pretty much got it all, except for the names of the shooters and those who paid them off.

Here too-in the current financial crisis-there are not only a lot of layers of complicity under the surface, but tie-ins with a number of other issues. And it is not until you piece them together that you can see how serious the matter really is.

Go back…perhaps a hundred to a hundred and fifty years..to the reconstruction era. The country was rebuilding after the Civil War, corporate power was beginning to emerge. Abuses in the fledgling industrial world were rampant and we saw the embryonic beginnings of the union movement, women's suffrage, child labor laws, the civil rights movement. The first antitrust laws were passed, and the lines of demarcation were drawn.

Corporate interests had begun serious efforts by the time preceding the first world war to control their governments. Europe reigned supreme, and cooperation between European and American interests led to that first major war. Even then, the "Old Money Elite" in Europe saw American interests as competitors in the battle for global dominance, and they decided even at that early time that America's growth had to be slowed.

Nothing slows a country's growth down, or spurs growth in selected industries, like war. WW1 made a lot of rich people a lot richer. And at the end of that war, the Elite tried to set up the framework for a global government thru the League of Nations. It failed.

During the 20's, Labor unions were becoming a problem. So they paved the way for Adolph Hitler to come into power in Germany as an experiment in controlling those unions. Americans like Prescott Bush, David Rockefeller, JP Morgan and Henry Ford were complicit in Hitler's rise. And Prescott Bush sold Hitler Oil, Steel and war materiel before and DURING the second world war. For that, he should have been tried for Treason.

JAYNE LYN STAHL SENDS ALONG THIS SONG

This was sent to me by a complete stranger, Ian Rhett, who evidently reads my blogs. It brought tears to my eyes, and the music is terrific. Give a listen…

I just released a new music video (my 3rd) called "What Kind of Amazing Grace" and would love to share it with you

WHAT NEWSPAPERS MUST TO TO SURVIVE

Critical will be holding onto local retail advertisers

Nearly every ad category has fallen on hard times this year, with the poor economy and growing credit crisis, but newspapers may end up absorbing the biggest hit. The Newspaper Association of America predicted last week that total ad revenue for the newspaper industry will fall 11.5 percent this year, the biggest single-year decline since NAA began tracking such things nearly 60
years ago, to $40.1 billion. Further, online ad spending will slow to just 1.8 percent after double-digit growth last year. Whether this downturn is cyclical, related mostly to the poor economy, or part of a larger multi-year trend, remains to be seen, and it will rest in part on whether newspaper

The Tribune Company's chief executive calls allegations against him and the company frivolous and unfounded.

CEO Sam Zell said Wednesday that he was outraged by a lawsuit filed this week that alleged his management of the business that owns the Chicago Cubs, the Los Angeles Times, KTLA-TV Channel 5 and other media properties is destroying the value of the company. (L.A. Times)

FACT CHECK FROM SARAH MEYER

the UK gov. spent £1.3 b. p.a.on cigarette related illnesses in the UK.

The UK govn. made £7.b p.a. through taxes on cigarettes.

What about alcohol related diseases and the UK profit on alcohol tax?

HONORING GIL ROSSELINI: Read Rory O' Connor's touching tribute to our mutual friend and colleague.

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