statism watch

Well, yeah – bankers have come right out and said they’re going to use the bailout funds to execute bank mergers. The big picture should be coming together for most people out there by now.

Terence Corcoran, Financial Post
November 12, 2008

The economy is drowning in too much stimulus

Henry Paulson’s about-face yesterday on Washington’s US$700-billion financial market bailout should be the last straw. It is now past time for governments, from the G20 through to Washington and Ottawa, to call a moratorium on bailout plans and stimulus efforts, liquidity injections and capital supports, rescue packages and mortgage guarantees, deposit insurance expansions and credit subsidies.

To put the matter bluntly: These measures — from Mr. Paulson’s surprise policy turnaround to China’s fake stimulus program to the looming spectre of the G20 meeting this weekend — are all undermining global financial market recovery. Complicating matters, the world today faces the prospect of an Obama administration hell-bent on more initiatives, including auto-industry bailouts and even bigger blasts of “stimulus” to rescue an economy that’s drowning in too much stimulus. There’s a simple reason this endless succession of interventions, the most radical and massive in global financial history, is not working and is instead making a bad situation worse. They are designed to subvert market realities and by doing so, they make it impossible for the rest of us to make rational market decisions — about our money, our jobs, our investments, our spending.

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CBC News
November 12, 2008

The U.S. government is making a big move away from its original plan to use a $700-billion US bailout fund to buy up illiquid assets at financial institutions.

Treasury Secretary Henry Paulson said Wednesday that the government is now looking at ways to use the money to encourage private investment in the lending market for credit in areas such as credit cards, car loans and students loans. He said about 40 per cent of all U.S. consumer credit comes through that market.

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While Tarpley does not quote his sources in the article below, it seems to be in line with recent pronouncements from Gordon Brown and others that what’s needed is an accrual of power to the International Monetary Fund, as well as the longterm goals of the IMF itself. We’ll find out soon enough – the summit is in three days. A quick survey of other beneficiaries of the IMF’s largesse reveals that they have a less than stellar record when it comes to assisting distressed nation-states.

Webster Tarpley, Prisonplanet.com
November 12, 2008

This is a confidential strategy paper for the November 15 G-20 summit in Washington DC. This is not a new Bretton Woods in any sense, but rather a British-steered attempt to impose the dictatorship of the International Monetary Fund (IMF) on the entire planet, wiping out all hope of economic recovery, the modernization of the developing countries, and national sovereignty at the same time.

Under this plan, the IMF would dictate the economic policies of all states. The IMF orthodoxy is austerity, sacrifice, deregulation, privatization, union busting, wage reductions, free trade, the race to the bottom, and prohibitions on advanced technologies. These policies would strangle humanity.

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More monetization of debt. That usually ends badly.

The Canadian Press
November 12, 2008

Ottawa offers $50B more to ease credit crunch

The federal government will purchase another $50 billion in residential mortgages to ease the credit crunch facing Canadian banks.

Finance Minister Jim Flaherty’s announcement today follows a similar move last month to purchase up to $25 billion in mortgages.

Flaherty again stressed that the federal government is buying mortgages already insured through the Canada Mortgage and Housing Corp.

He said this action “at a time of considerable uncertainty” will provide banks access to stable funding during a period of stress in credit markets.

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Heather Scoffield, Globe and Mail
November 12, 2008

The Bank of Canada announced Wednesday another batch of measures to get credit markets working more smoothly.

In a press release, the central bank said it will put an additional $8-billion into one-month money markets, spread out in four auctions over the next few weeks, through a newly created Canadian-dollar term loan facility.

The Bank of Canada has hinted heavily in recent weeks that it had further measures in store, to make sure financial institutions are able have cash on hand to finance their transactions.

Financial institutions can post almost any kind of loan on their books as collateral, in order to take part in the auctions, the bank said.

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