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The United States Federal Reserve Bank (the Fed) is bailing out the billionaires again. This time the Fed is making certain that losses suffered by hedge funds are reversed. Hedge funds are not banks. They are private billionaire investment clubs which manage investments for clients and which cannot have more than 99 clients. This is why many hedge funds will not take on clients who are unwilling or unable to invest $10 million or more with them.

On March 16, 2020 the Wall Street Journal reported Hedge Funds Hit by Losses in “‘Basis Trade.’ A wide swath of hedge funds was hit by the recent unwinding of the so-called basis trade last week. The basis trade is a long-running investment that seeks to exploit pricing gaps between Treasury securities and futures.” This is a useless activity in which nothing is made, no services and no goods are produced.

The Journal went on, “The Federal Reserve rushed to repair disorderly trading conditions in the Treasury market last Thursday.” Translated, that means the Fed rushed in to make certain these billionaire investor Hedge Funds did not lose money. Not until 2008 did the Fed rush in to save billionaires from their stupid investment losses through banks and other forms of business, like hedge funds.

The Journal went on, “The Fed’s intervention Thursday and over the weekend ended up aiding Citadel and many (hedge) funds deploying the basis trade, said people familiar with the matter.” That means whatever the Fed did made certain rich folks did not lose money. Citadel manages about $30 billion for 99 or less clients.

Guess who works for Citadel. None other than Ben Bernanke, the former Chairman of the Fed, and the person who turned the Fed into a money laundering organization for billionaires back in 2008-09. The New York Times reported back in 2015, “For eight years, Ben S. Bernanke, the former Federal Reserve chairman, was steward of the world’s largest economy. Now he has signed on to advise one of Wall Street’s biggest hedge funds. Mr. Bernanke will become a senior adviser to Citadel, the $25 billion hedge fund founded by the billionaire Kenneth C. Griffin. He will offer his analysis of global economic and financial issues to Citadel’s investment committees. He will also meet with Citadel’s investors around the globe. It is the latest and most prominent move by a Washington insider through the revolving door into the financial industry.”

“In an interview, Mr. Bernanke said he was sensitive to the public’s anxieties about the “revolving door” between Wall Street and Washington and chose to go to Citadel, in part, because it “is not regulated by the Federal Reserve and I won’t be doing lobbying of any sort.”

It is odd that this billionaire investor club and other hedge funds are getting bailed out by the Fed since the Fed does not regulate them. The Fed is simply printing up money by the billions and rescuing them and their clients from their losses. Why is the Federal Reserve ensuring that billionaire investor clubs do not lose money, and how does Bernanke’s employment depend on the Fed’s actions?

Hedge funds, like Citadel, do not make produce anything that you use, such as machines, food and water. They simply gamble with other people’s billions.

Why is it that when rich people make incredibly stupid investment decisions the government and or the Fed is always there to bail them out? The answer is we do not have a democracy. We have plutocracy in which the rich rule via both of their major political parties.

The billionaires reap the benefits of the financial markets when the markets are going up but do not have to share in the losses with the 99 percent when the markets are heading down.

Historically, the Fed was supposed to serve as a central bank by providing short term loans to banks when necessary and only if the needy banks had “good collateral.” Its job is also to keep inflation and unemployment low using interest rates, and buy U.S. debt when nobody else wants to buy them. That changed in 2008 when the bank under the direction of Ben Bernanke gave $26 trillion to twelve banks, four of them foreign. That is when the Fed became a money laundering criminal enterprise for the wealthy. For that report click The CoronaVirus Stimulus Bill: The Rich Get 5 Trillion, We Get Crumbs

 

 

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The rich receive most of their income, from 2/3rds to 100 percent, via corporations, either through capital gains by the selling of shares or with dividends distributed to shareholders. So it should come as no surprise that the billionaires who control the Republican Party got what they wanted in the Federal stimulus bill while the billionaires who control the Democratic Party got theirs, as well. They got more than the bill itself.

The rich will receive $4.95 trillion from the $2.2 trillion stimulus bill. You read that right. The $2.2 trillion includes more than $450 billion for large corporations, allegedly in loans. The bill includes a proviso that the Federal Reserve can print up to ten times that amount and lend that $4.5 trillion with a nod and a wink to large corporations.

The combined profits of all US corporations in 2018 and 2019 were slightly over $4 trillion before taxes. The rich and their corporations, in other words, are getting more than two years’ worth of profits from the stimulus bill. This money will mainly go to the largest corporations, which means the money will go to a small number of corporations, pretty much the 100 to 150 largest. This means a massive stock market bubble is on the horizon fueled by the Fed, lies, political corruption, smoke and mirrors.

In effect, both the Democratic and the Republican members of the US congress decided to save their rich owners by giving them trillions of dollars, most of which will go to the top 1 percent. Then they throw crumbs to the rest of us and their corporate media dutifully failed to report this. Huffington Post and The American Prospect and a few others did report it.

Now, yes, some of you will say, but these are loans. The corporations need to pay the loans back. Wrong! In the future, Fed officials will tell you the loans have been repaid, or the loans were never made, but those will be lies, just like when Fed officials told us the $26 trillions it loaned out to twelve banks during the Great Recession was all paid back by 2011.

That $26 trillion bailout was top secret. Nobody was going to be told about it except the recipients, banks such as Goldman Sachs and JP Morgan/Chase. Then United States House members Ron Paul and Alan Grayson pushed through a bill authorizing the first and only audit of the Fed. The non-partisan General Accounting Office uncovered the $26 trillion bailout. Otherwise, we were never going to be told of it.

The entire U.S. banking industry in the four years from 2008 through 2011 earned $158 billion pre-tax dollars. The $158 billion represents less than 7/10ths of 1 percent of $26 trillion. Obviously, the banks could not have returned the money. It was mathematically impossible. Then Fed Chairman Ben Bernanke after the audit proceeded to lie when he claimed the money had been paid back, and this was mostly ignored by the corporate media.

So you know what’s going to happen. Major corporations will receive close to $5 trillion that they will never need to return, and will never pay taxes on since Fed officials will lie and either say, “They paid it back,” or “They never borrowed the money.” Don’t expect another audit for 100 years. (There has only been one audit of the Fed in its 100+ years of existence, and that is how the $26 trillion bailout was discovered. Click this link for that story.)

0.01 percent of the U.S. population will receive nearly $5 trillion. That money will be used for dividends, CEO compensation, share buybacks in the future (since they are limited with this bill),  and just about anything the billionaires want. That’s why they pay the big bucks in the form of campaign contributions to politicians and spend billions of dollars on lobbyists.

In the meantime, a large portion of us 314,685,000 citizens will share $1.75 trillion (about $5500 each on average) to help keep the economy afloat while the roughly 300,000 richest of parasites share $5 trillion, which comes out to a little over $16.6 million each.

That should tell you how corrupt our democracy and both major political parties have become. You should also be aware that with the $26 trillion bank bailout the Fed went from being a central bank to a money-laundering machine for the banks and their rich shareholders. With the new bailout, the Fed has been given permission by the Federal government via both major political parties to be a money launderer for the rich and the rest of their money-making corporations. In other words, the Fed has been a criminal enterprise for the rich by violating U.S. money-laundering laws since 2008.

For more on this from the American Prospect, click the following link.

For more on this from the Huffington Post, click Democrats Are Handing Donald Trump The Keys To The Country: The Senate coronavirus bill is shocking.

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Corrupt Republican U.S. Senator Richard Burr of North Carolina sits on the U.S. intelligence committee. After receiving a briefing in February on the likely devastating economic impacts of the coronavirus, he told members of a rich folks club called the Tar Heel Circle about what was coming and how devastating the coronavirus was going to be. It costs $500 to $10,000 to gain membership into the Tar Heel Circle. Members represent major corporations based in North Carolina and major campaign donors.

They now had inside knowledge during the meeting of what was going to happen and, if they had any brains, they got out of the market, like Burr did.

Corrupt U.S. Senator Diane Feinstein also sits on the intelligence committee and she received the same information as Burr. Allegedly through her husband, she sold hundreds of thousands of dollars of stock and escaped just before the financial and economic hurricane hit the United States. She is as guilty as Burr of insider trading and both should be charged with insider trading.

Republican Senator Kelly Loeffler sold over three million dollars of shares after a private briefing in the U.S. Senate about the likely negative economic impacts of the coronavirus. Loeffler claims she has a third party manage her shares and she had nothing to do with the sale of her assets. Of course, just like Feinstein, she could have passed on information to the third party. Her rationale sounds flimsy.

Nowadays the 1 percent steal about 38 percent of all income produced in the United States compared to 8 percent in 1980. Three men own more wealth than the bottom 50 percent of the population. Control of the political process and the corruption of both major political parties, as well as the conservative/corporate wing of the United States Supreme Court, has made this possible. Receiving insider information on the coronavirus and its likely financial impact on the United States is just one small reason why income and wealth inequality in the United States and throughout the world over the last forty years has grown.

None of these corrupt senators bothered to tell the public of what was coming. Corruption reigns throughout the congress. Do not expect a serious congressional investigation.

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You can see the effects of the Coronavirus in the nearly empty restaurants, coffee shops, health clubs, etc…. throughout the United States. The U.S. should have gone into recession sometime in 2016 to 2018 after corporate profits peaked during the third quarter of 2014 and annually during that year. The U.S. always follows a decline in total corporate profits with a recession unless corporate earnings pick up. However, something kept this business expansion going far beyond what it historically should have since corporate earnings have been down for almost six years.

The Fed’s $26 trillion bailout of billionaires and multi-millionaires during the last economic crisis, as well as record corporate debt, helped to prolong the record economic expansion and the stock market bubble far beyond what economic fundamentals would normally have allowed. Record corporate share buybacks have helped the bubble and expansion along, although share buybacks had long been considered market manipulation.

Apple, for example, purchased $320 billion of its own shares over the last seven years pushing its stock price after a seven-way split in 2014 from $92 a share to over $320 until January 2020. The shares have lost $50 so far and are likely to lose a lot more. $320 billion are heading down the drain.

President Donald Trump’s tax cuts which largely went to the rich and their corporations should be given plenty of credit for extending this expansion and stock market bubble. Most corporations used the tax savings for share buybacks. All that did was inflate perhaps the largest US stock market bubble in history. As the number of people filing for unemployment insurance rises, the bubble will have further to fall, and it is likely the business contraction will be worse because of it, and the president should be given plenty of credit for that too.

Income and wealth inequality has continued to grow over the last forty years to historic proportions. Consumer debt is at record levels, as is corporate debt. Gross domestic product growth has been much lower over the last decade than under President’s Carter, Reagan, Bush 41, and Clinton. The same is true with job growth. Wages have been stagnant for forty years. Home prices have fallen 8 percent since and including the fourth quarter of 2017. Rich investors are pouring out of the mortgage bond markets.

All of this suggests a recession of historic magnitude, among the worst ever. I am not the only one who thinks this way. The Fed over the last ten days has lowered interest rates, and will likely lower them even further this week. Normally that does not happen until after a recession has officially begun. In addition, the president has declared a national emergency and the Democrats and Republicans have a relief package all set for the Senate to vote on this coming week.

None of the share buybacks, federal stimulus packages, and interest rate decreases will likely defeat the impact of the Coronavirus unless they come with a vaccine. Many months from now expect the folks at the National Bureau of Economic Research to get together and determine the recession began in March 2020, maybe April.

President Trump will not be at fault, though his tax cuts for the rich and their corporations will have played a negative role in the coming debacle.

There is a reason why income and wealth inequality has gotten so bad in the United States that three men own more wealth than the bottom 50 percent of the population.

You can blame the Democrats and the Republicans and the billionaires who pull their strings. For tax cuts for the rich blame Republicans; for exporting millions of jobs and redistributing trillions of dollars of income from the 99 to the 1 percent blame the Democrats, especially the Clinton’s and Joe Biden. For deregulation of Wall Street blame Ronald Reagan and Bill Clinton and Joe Biden. The list goes on but the leaders of the two parties work together behind closed doors to ensure all this stuff occurs.  This is precisely why the two parties have acted so quickly together to fight the Coronavirus and the ensuing economic debacle they have created.

**An hour after I wrote and posted this story the United States Federal Reserve Bank dropped interest rates a full percent down to virtually zero and announced it would purchase $700 billion of U.S. Treasury Notes and Mortgage-Backed Bonds. The recession has not even begun and everybody in power is acting as if the next Great Depression began a year ago. The folks in power know a disaster coming when they see it. Hell, they created it by redistributing trillions of dollars from the 99 to the 1 percent during the last forty+ years. Now the chickens may be coming home to roost.

 

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The red arrow below shows the Exact Moment When President Donald Trump Saved the United States Economy from Democratic President Barack Obama

Donald Trump claims his economy has no relationship to the economy President Obama saved from the incompetent RepubliCON President George W. Bush. That, of course, is a lie. Both presidents reigned during the longest business expansion in United States history. So who had the better economic statistics between the two presidents? Obama did.

During Trump’s first 36 months in office, the US economy has gained 6.6 million jobs. But during a comparable 36-month period at the end of Obama’s tenure, employers added 8.1 million jobs or 23% more than what has been added since Trump took office. The average monthly gain so far under Trump is 182,000 jobs. During the last 36 months under Obama, employers were adding an average of 224,000 jobs a month.

I should also like to point out that at this point in his first and only term, President Jimmy Carter had enjoyed a gain of 10.1 million jobs. Employers added 8.5 million jobs during the first 36 months of Bill Clinton’s term and 7.8 million jobs during the first 36 months of Lyndon Johnson’s tenure, even though the labor force at that time was less than half the size of what it is today.

Total yearly corporate profits were also higher under Obama. Corporate profits peaked during the third quarter of 2014. That year also witnessed the greatest amount of total corporate profits in U.S. history. Corporate profits were higher in every year of Obama’s second term than in any year since Donald Trump became president.

In the three years under President Trump, Gross Domestic Product (GNP) has grown an average of 2.54 percent per year, while under the last three years of President Obama GNP rose 2.8 percent per year. Obviously, the economy grew faster under Obama.

President Trump pushed for and succeeded in getting tax cuts passed through congress almost exclusively for the rich and their corporations. The bill was signed into law by President Trump on December 22, 2017. Most of the changes introduced by the bill went into effect on January 1, 2018.

Since the tax cuts went into effect, GNP has grown 2.4 percent per year, which is lower than during Trump’s first year, and lower than the last three years of Obama’s presidency.  As predicted in this blog, the tax cuts have had a negative impact on the growth of GNP, but they have pushed the United States economy into a far more serious stock market bubble that will have dire repercussions and likely send the United States into the deepest recession since the Great Depression. The official stats show that when Trump says the economy is better because of the tax cuts, he is lying, the numbers do not lie. He will deserve some significant blame for the severity of the coming recession due to his tax cuts.

Under Trump, stocks were up 14 percent per year as of February 14, 2020. That is to be expected given his ruinous tax cuts for the rich, which have pushed the market up higher than it otherwise would have gone. Meanwhile, under Obama, stocks flew higher by 13.8 percent on a yearly basis, and he managed this without the tax cut pushed by Trump.

Overall, it appears with Obama we had an economy on the rise, while with Trump we have an economy on the decline. That is not necessarily the fault of Trump. The business cycle must end, and it just might be on his watch.

Average median home prices have declined since the last quarter of 2017, the yield curve has inverted, U.S. vehicle sales declined last year, the number of individuals and households applying for food stamps has risen since last May, sales of vehicles in China plummeted by 8 percent last year suggesting China may be in recession already and before the coronavirus, total business sales in the United States have declined over the last year, U.S. manufacturing has been tanking since last year, durable goods employment is down, corporate debt is at an all-time high as is corporate share buybacks, and all are signs of a possible looming world recession.

Naturally, whoever is president next January will get the blame. If it is Trump, he will simply be in the wrong place at the wrong time, just like Trump’s economy is riding the tailwinds of Obama’s economic miracle and saw him in the right place at the right time.

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One of the big lies about Bernie Sanders is that he cannot win against President Trump in the general election and that the Democrats need to choose a so-called moderate candidate in order to defeat the president in the general election. The DNC and the billionaire controlled corporate news media know this is a lie. Anybody can look at the polls and discover this claim is false.

By moderate candidate, the DNC and the corporate news media mean a Wall Street/billionaire controlled Democratic Party candidate. Quite naturally, a self-made capitalist millionaire like Bernie is labeled by the corporate press as a hardline Stalinist Communist who wants to burn all churches, put every citizen on farm communes, and burn all billionaires at the stake, rather than as the person who wants to restore and reinvigorate the middle class with such policies as Medicare for all, which every advanced capitalist nation has except for the USA.

So how do the preferred Wall Street candidates stack up against Trump in the latest poll?

In the latest Quinnipiac poll, released last week, Joe Biden defeats Trump by 7 percent, Pete Buttigieg wins by 4, Amy Klobuchar is up by 6, and the heavily advertised former Republicon mayor of New York City, Michael Bloomberg, beats the president by 9 percent.

Bernie defeats the president by 8 percent. Sanders beats Trump by a greater margin than all the rest except for Bloomberg. In other words, a billionaire/Wall Street controlled candidate is less likely to defeat the president than Bernie. By the way, the candidate who has positioned herself as being between Bernie and the Wall Street Democrats on public policy, Elizabeth Warren, beats Trump by 4 percent.

I can read the polls as easily as anybody else. Don’t let the DNC and the billionaire controlled corporate propaganda machine (so-called news media) tell you what to think. You can check out most of the latest polls at realclearpolitics.com. Just click on the polls link in the upper left-hand corner.

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“What CNN did to Bernie Sanders in the Iowa Democratic presidential debate — stabbing him with the gender card on behalf of a weakened Elizabeth Warren — was cheap and unfair. And it was shameful,” John Kass of the Chicago Tribune wrote the day after last week’s little-watched Democratic Party debate.

Did Bernie really tell Elizabeth Warren in 2018 that a woman could not be president of the United States? I suspect it is highly unlikely.

As you can hear in the video above, it’s Sanders saying he thinks a woman can be president, and that was thirty years ago. Likewise, in the video below, Michael Moore says it is highly unlikely Bernie said that. And considering that Hillary Clinton received nearly five million more votes for president in 2016 than the electoral college elected Donald Trump, and you can begin to call in doubt that Bernie ever said anything like what Warren said about women not being able to be president of the United States.

I am not suggesting Warren lied, although it could be the case, but it could also be that she misunderstood something Bernie said. Or perhaps the corporate, that is to say, Wall Streeters who control the Democratic Party, were prepared to do anything to stop the surging in the polls Sanders, and Warren decided to give them a helping hand.

Kass noted, “Just before the debate, CNN ran a story portraying Sanders as a misogynist who thinks a woman couldn’t be elected president. That’s ridiculous. He doesn’t believe that.

And at the CNN debate, moderator Abby Phillip took Warren’s gender card, fashioned it into a knife and stabbed Sanders just weeks before the Iowa caucuses.

“Sen. Sanders, CNN reported yesterday, and Sen. Warren confirmed in a statement, that in 2018 you told her that you did not believe that a woman could win the election. Why did you say that?” Phillip asked of Sanders.

“Well,” Sanders said, “as a matter of fact, I didn’t say it.

“I don’t want to waste a whole lot of time on this, because this is what Donald Trump and maybe some of the media want,” Sanders added. “Anybody knows me knows that it’s incomprehensible that I would think that a woman cannot be president of the United States.

“Go to YouTube today,” Sanders said. “’There’s a video of me 30 years ago talking about how a woman could become president of the United States.’”

That video is at the top of this story. You can see the obvious. Why would Warren engage in a plot with Wall Street Democrats to derail Bernie Sanders? That too is incomprehensible, but it appears to be so.

It is also, Kass notes, probably not a coincidence that the Democrats are impeaching Donald Trump at this very moment. This pulls Bernie off the campaign trail into the halls of the Senate just when he is surging. Is not that an amazing coincidence?

“And now,” Kass wrote, “after weeks of stalling, House Speaker Nancy Pelosi has finally brought the impeachment of President Donald Trump to the Senate.

This means Democratic presidential candidates who are also senators, Amy Klobuchar of Minnesota, Warren of Massachusetts and Sanders of Vermont, are stuck in Washington as jurors.

And Joe (Biden)? With Bernie on Trump jury duty in Washington, Biden is left to wander around Iowa with (former) Mayor Pete — who also was not challenged by CNN — and that radical billionaire environmentalist who made his gold in fossil fuels.

No wonder Sanders’ supporters are upset. They’ve seen this before. They watched the same game play out three years ago, when the Democratic nomination was almost his, and establishment media handmaidens of the Democratic National Committee protected Hillary Clinton, who lost to Trump.”

Column: CNN’s shameful treatment of Bernie Sanders–Chicago Tribune

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