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Chinese Police Units Begin Entering US To Protect Assets
By: Sorcha Faal, and as reported to her Western Subscribers
Reports circulating in the Kremlin today are stating that the first
deployment of China’s elite People's Armed Police (PAP) under an
agreement signed between the United States and China, and as we had
previously reported on in our September 20th report “US Homeowners Soon
To Be Evicted By Chinese Police Under New Law”, have arrived in America
and begun to deploy to protect Chinese assets in this now insolvent
First-World country.
Unbeknownst to the American people, however, is that since September
20th, the $700 billion bailout bill signed into law by their President
yesterday was expanded from its original 3 pages to a 451 page virtual
novel of new laws virtually enslaving them to the foreign holders of
their debt.
Even more disturbing, these reports continue, are that these new laws
not only give Chinese and European banks control over the mortgage debt
of the American people, they now include their credit card balances, and
which virtually the entire US populace have indebtedness to.
To how utterly chilling this new US law for the American people, titled
the “Emergency Economic Stabilization Act of 2008”, Russian legal
experts point out in these reports that:
“Section 101 (a)(1) establishes what is termed the Troubled Asset Relief
Program (TARP) to which substantial portions of what the American people
currently owe to their banks and financial institutions is to be turned
over the US Government for redistribution to foreign banks.
Section 101(c)(3) Designates for the first time in American history
these foreign banks as financial agents of Federal Government with full
law enforcement authority over the citizens in the US.
Section 3 (b) allows the US Secretary of the Treasury to put any kind of
debt, including credit card, home loans, personal loans, automobile
loans, etc., into the TARP programme.
Section 112 allows the US Secretary of the Treasury to astoundingly
extend financing to foreign banks to purchase the debt of the American
people.
Section 112 (1)(a) allows the US Government to hold stocks in companies
for the first time in their history and which completely destroys the
capitalist economy of their Nation.
Section 119 (2)(a) gives the US Secretary of the Treasury dictatorial
powers not reviewable by courts making this position the most powerful
one in America.
Section 122 increases the US public debt to the incredible amount of
$11,315,000,000,000 (Trillion)
Section 204 puts the United States under emergency economic rule and
states, "all provisions of this Act are designated as an emergency
requirement and necessary to meet emergency needs”.
But, these reports warn, the two most chilling measures put into this
new law are titled “Section 511 "Paul Wellstone and Pete Domenici Mental
Health Parity and Addiction Equity Act of 2008” and “TITLE II-SPECIAL
PROJECTS ON FEDERAL LAND Section 201”.
The new mental health provisions contained in these new laws allows the
United States to label dissident citizens as being ‘mentally ill’, and
the ‘Special Projects’ section allows for the reimbursement to US cities
and counties for the building of concentration camps for these mentally
ill dissidents.
The fear of the United States Government against their dissidents is
becoming more evident as many of them are beginning to sound the alarm
of events to come, and as we can see evidenced by one such report from
the SteveQuale.Com website:
“THERE IS STRONG INDICATION THAT A "BANK HOLIDAY" UNDER A DECLARATION
OF AN ECONOMIC EMERGENCY MAY BE DECLARED IN THE U.S. SOMETIME WITHIN
THE NEXT 2 WEEKS AND POSSIBLY AS EARLY AS SATURDAY 10/4/2008.
THE INFORMATION INDICATES THAT IT MAY BE ANNOUNCED TO LAST A WEEK OR TWO
AND THAT ALL BANKS AND FINANCIAL INSTITUTIONS WILL CLOSE DURING THAT
PERIOD. NO ACCESS TO YOUR DEPOSITS WILL BE POSSIBLE, ATMS WILL NOT WORK,
CREDIT CARDS WILL NOT WORK, AND BROKERAGE ACCOUNTS WILL NOT BE
ACCESSIBLE EITHER.
THIS WOULD BE DONE UNDER A STATE OF MARTIAL LAW THOUGH TROOPS MAY NOT
APPEAR ON ALL STREETS IMMEDIATELY UNDER THE FAINT HOPE THAT THE POPULACE
WILL SIMPLY ACCEPT THESE MATTERS, BUT THE BANKS AND FINANCIAL
INSTITUTIONS WILL BE HEAVILY GUARDED WHETHER OVERTLY VISIBLE OR NOT.
IF RIOTS OR CIVIL UPHEAVAL BREAK OUT, WHICH OF COURSE WOULD BE EXPECTED
IN MANY LOCALES, THEN YOU WILL SEE TROOPS, LAW ENFORCEMENT OFFICERS,
SWAT TEAMS, PRIVATE SECURITY CONTRACTORS, AND EVEN FEDERALLY AUTHORIZED
U.S. GOVERNMENT, STATE GOVERNMENT, AND LOCAL GOVERNMENT WORKERS
OPERATING UNDER THE REGIONAL MILITARY GOVERNORS OR FEMA CONTINUTITY OF
GOVERNMENT CONTROLLERS TO ATTEMPT TO PUT DOWN THE RIOTS AND UPHEVAL WITH
SANCTIONED ANY FORCE NECESSARY.
FULL IMPLEMENTATION OF ALL 500 + EXECUTIVE ORDERS AND PRESIDENTIAL
DECISION DIRECTIVES ALREADY EXTANT AFTER THE 911 ATTACKS PROMPTED THEIR
INVOCATION BY THE PRESIDENT, PLUS ANY STANDING ORDERS UNDER FEMA COG
PLANS OR MILITARY PLANS UNDER THE CURRENT VERSIONS OF "REX 84"
......"GARDEN PLOT".....OR "CABLE SPLICER" WILL BE CARRIED OUT.
EXPECT CURFEWS , CHECK POINTS, RESTRICTIONS ON TRAVEL, CONFISCATION OF
FOOD, WATER, TRANSPORTATION, WEAPONS, COMMUNCATIONS, HOMES FOR
BILLETTING TROOPS, ALL MONEY, AND SHOOT TO KILL ORDERS IF THE REGIONAL
MILITARY GOVERNOR DEEMS IT NECESSARY. ORGANIZATION OF CIVILLIAN WORK
GANGS AND EVEN TRANSPORT TO CONCENTRATION CAMPS WILL BE SEEN IF EVENTS
GO AS THE MILITARY AND FEMA PLANNERS HAVE EXPECTED.”
Not just to US dissident websites either are these warnings being
issued, and as we can read:
“The next day, the Los Angeles Times, in an article on the Senate
passage of the bailout measure, noted in passing a statement by
Democratic Rep. Brad Sherman from the San Fernando Valley in Southern
California which underscores the authoritarian atmosphere surrounding
the proceedings in Congress.
Sherman, who voted against the bailout bill on Monday, said, “The one
thing that’s been proven is the absolute fear-mongering that’s being
used to drive us is false.” He continued, “I’ve seen members turn to
each other and say if we don’t pass this bill, we’re going to have
martial law in the United States.”
Though it is not in our knowing to the know the full outcome of these
events we can state what is plainly evident, the Untied States
To ιδιο λεει και το FORBES στην Αμερικη...
Next: The Mother Of All Bank Runs?
Nouriel Roubini 10.02.08, 12:01 AM ET
Nouriel Roubini
It's plain that the current financial crisis is worsening in spite of--or perhaps because of--the Treasury rescue plan.
The strains in financial markets are becoming more, rather than less, severe in spite of the nuclear option of a $700 billion package: Interbank spreads are widening and are at a level never seen before; credit spreads are widening to new peaks; short-term Treasury yields are going back to near-zero levels as there is flight to safety; credit default swap (CDS) spreads for financial institutions are rising to extreme levels as the ban on shorting of financial stock has moved the pressures on financial firms to the CDS market; and stock markets around the world have reacted very negatively to this rescue package.
Financial institutions in the U.S. and in advanced economies are going bust. In the U.S., the latest victims were Washington Mutual (nyse: WM - news - people ) (the largest U.S. savings and loan) and Wachovia (nyse: WB - news - people ) (the sixth largest U.S. bank). In the U.K., after Northern Rock (other-otc: NHRKF.PK - news - people ) and the acquisition of HBOS by Lloyds TSB (nyse: LYG - news - people ), you now have the bust and rescue of Bradford & Bingley; in Belgium you had Fortis (other-otc: FORSY.PK - news - people ) going bust and being rescued over the weekend; in Germany, Hypo Real Estate, a major financial institution near bust, has also needed rescue.
So, this is not just a U.S. financial crisis. It is a global crisis hitting institutions in the U.K., the Euro-zone and other advanced economies (Iceland, Australia, New Zealand, Canada etc.).
The strains in financial markets--especially short-term interbank markets--are becoming more severe in spite of the Fed and other central banks having injected $300 billion of liquidity in the financial system last week alone, including massive liquidity lending to Morgan Stanley (nyse: MS - news - people ) and Goldman Sachs (nyse: GS - news - people ).
In a solvency and credit crisis that goes well beyond illiquidity, no one is lending to counter-parties as no one trusts any counter-party (even the safest ones), and everyone is hoarding the liquidity that is injected by central banks. And since this liquidity goes only to banks and major broker-dealers, the rest of the shadow banking system has no access to this liquidity as the credit transmission mechanisms are blocked.
After the bust of Bear and Lehman, and the merger of Merrill with Bank of America (nyse: BAC - news - people ), I suggested that Morgan Stanley and Goldman Sachs should also merge with a large financial institution that has a large base of insured deposits so as to avoid a run on their overnight liabilities. Instead, Morgan and Goldman took a cosmetic approach, converting themselves into bank holding companies as a way to get further liquidity support--and regulation as banks--from the Fed and as a way to acquire safe deposits.
But neither institution can create, in a short time, a franchise of branches, and neither one has the time and resources to acquire smaller banks. And the injection of $8 billion of Japanese capital into Morgan and $5 billion of capital from Warren Buffett into Goldman is a drop in the ocean, as both institutions need much more capital.
Thus, the gambit of converting into banks while not being banks yet hasn't worked, and the run against them has accelerated in the last week: Morgan's CDS spread went through the roof on Friday to over 1200, and the firm has already lost over a third of its hedge-fund clients together with the highly profitable prime brokering business (this is really a kiss of death for Morgan). And the coming roll-off of the interbank lines to Morgan would seal its collapse. Even Goldman Sachs is under severe stress: Most of its lines of business (including trading) are now losing money.
Both institutions should stop playing for time, as delay will be destructive: They should merge now with a large foreign financial institution, as no U.S. institution is sound enough and large enough to be a solid merger partner. If John Mack and Lloyd Blankfein don't want to end up like Richard Fuld, they should do a John Thain today and merge as fast as they can with other large commercial banks. Maybe Mitsubishi (other-otc: MSBHY.PK - news - people ) and a bunch of Japanese life insurers can take over Morgan.
The only institution sound enough to swallow Goldman may be HSBC (nyse: HBC - news - people ). Or maybe Nomura in Japan should make a bid for Goldman. Either way, Mack and Blankfein should sell at a major discount before they end up like Bear and are offered, in a few weeks, only a couple of bucks a share for their faltering operation. And the Fed and Treasury should tell them to hurry up, as they are both much bigger than Bear or Lehman, and their collapse would have severe systemic effects.
When investors don't trust even venerable institutions like Morgan Stanley and Goldman Sachs, you know that the financial crisis is as severe as ever. When a nuclear option of a monster $700 billion rescue plan is not even able to rally stock markets, you know this is a global crisis of confidence in the financial system.
The next step of this panic could be the mother of all bank runs, i.e. a run on the trillion dollar-plus of the cross-border short-term interbank liabilities of the U.S. banking and financial system, as foreign banks start to worry about the safety of their liquid exposures to U.S. financial institutions. A silent cross-border bank run has already started, as foreign banks are worried about the solvency of U.S. banks and are starting to reduce their exposure. And if this run accelerates--as it may now--a total meltdown of the U.S. financial system could occur.
The U.S. and foreign policy authorities seem to be clueless about what needs to be done next. Maybe they should today start with a coordinated 100 basis points reduction in policy rates in all the major economies in the world to show that they are starting to seriously recognize and address this rapidly worsening financial crisis.
Nouriel Roubini, a professor at the Stern Business School at NYU and chairman of Roubini Global Economics, is a weekly columnist for Forbes.com.
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