by Gary North
by Gary North
Your assignment, if you accept it. . .
Help me compile statements by every so-called expert on how the financial markets were safe, the stock market was going to rise, and "people should not panic and sell stocks."
For months, high-level government officials assured us that America's financial markets were safe. They continued to assure us right up until Treasury Secretary Henry Paulson on September 18 said a $700 billion bailout is required to save the economy from a collapse comparable to the Great Depression.
Our leaders, including Paulson, did not have a clue as to what was going on.
The World Wide Web has preserved their assurances. It is now time to collect them in one place. I propose to call this place The Gallery of the Clueless.
The assurances began in August 2007. They accelerated right through September 18.
It did not matter that Fannie Mae and Freddie Mac were nationalized without vote by Congress on a Sunday afternoon, September 7. The experts remained optimistic.
It did not matter that a week later, also on a Sunday, Merrill Lynch sold itself without a vote by its Board of Directors to Bank of America, which also did not ask for a vote by its Board of Directors. It did not matter that on Monday, September 15, Lehman Brothers Holdings declared bankruptcy — the largest bankruptcy by far in American history, dwarfing Enron and WorldCom combined. We were assured on September 15 that everything was under control.
It was not just Paulson, Bernanke, and the President who assured us. It was also almost every talking head from the financial world who appeared on television. The main exception was Prof. Nouriel Roubini, whose grim forecasts have come true, one by one.
On Sunday, September 14, he said that no investment bank would survive. He said the model was fundamentally flawed. Two went bust within 24 hours: Merrill Lynch and Lehman. The other two were bailed out by a change in their legal structure on Friday, September 19. Both Goldman Sachs and Morgan Stanley surrendered their status as investment banks, switched to holding companies, thereby coming under Federal regulation, and immediately becoming eligible for bailout money.
We have seen a stream of ex-geniuses depart as multi-millionaires: Angelo Mozilo (Countywide Financial), Charles Prince (Citigroup), Stan O'Neal (Merrill Lunch), and Dick Fuld (Lehman). They join the legendary Franklin Raines (Fannie Mae), who had departed years earlier, and who today is an Obama advisor. Then there were the recent heads of Fannie and Freddie. The head of AIG will be replaced soon.
In 1931, Viking books published a slim volume titled "Oh, Yeah?" It was a collection of quotations from the nation's former experts of why the stock market was a great place for your money in 1928 and 1929. These quotations were identified as to who said what, when, and where.
I own a copy of this compilation. It ended with a 1931 quote from Calvin Coolidge, who was in retirement: "The country is not in good condition."
I intend to assemble a digital equivalent of "Oh, Yeah?" I will post it free of charge on the Web. I want to make it easy for journalists and historians to see just how blind the nation's leaders were.
This collection will serve as a warning to future investors: "Don't trust the assurances of self-interested people whose careers and reputations are at stake."
The new Administration will return to Congress for more rounds of bailouts. Each will be presented as "the final request." Each will be sold to Congress as last shoe to drop.
The result so far has been a gigantic increase in the nation's debt. We have gone beyond the point of no return.
Voters know now that the national debt will never be paid off, at least not with dollars worth what they are worth today. But they think they are helpless. They will let Congress get away with this.
WHAT I NEED FROM YOU
Do a Google search for such topics as these for 2007 and 2008:
"money is safe"
panic AND not
"should not sell"
confidence AND banks
confidence AND FDIC
Paulson AND assurance
Bernanke AND assurance
Dodd AND assurance
Maybe you can think of others.
Look for links after page 1 on Google. Go as far as page 5. Look for juicy ones.
Then extract the quotation using cut & paste (Ctrl-c, Ctrl-v).
Paste it into an email letter (Ctrl-v).
Then paste in the link to the Web source.
Repeat the process using YouTube in the search box. If you find some choice videos, send them along with the links. But you must provide a summary of what the video shows.
Put "clueless" in the subject box.
Send it to [email protected].
September 24, 2008
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