President Obama says he wants to "rebalance" the economic relationship between China and the U.S. as part of his plan to restart the American jobs machine. "We cannot go back," he said in September, "to an era where the Chinese . . . just are selling everything to us, we're taking out a bunch of credit-card debt or home equity loans, but we're not selling anything to them." He hopes that hundreds of millions of Chinese consumers will make up for the inability of American consumers to return to debt-binge spending. This is wishful thinking. True, the Chinese market is huge and growing fast. By 2009, China was second only to the U.S. in computer sales, with a larger proportion of first-time buyers. It already had more cell-phone users. And excluding SUVs, last year Chinese consumers bought as many cars as Americans (as recently as 2006, Americans bought twice as many). Even as the U.S. government was bailing out General Motors and Chrysler, the two firms' sales in China were soaring; GM's sales there are almost 50% higher this year than last. Proctor & Gamble is so well-established in China that many Chinese think its products (such as green-tea-flavored Crest toothpaste) are Chinese brands.

Wall Street bankers are really mad these days -- in both senses of that word! You'd think these whizzes of speculative finance would be ecstatically happy and filled with gratitude, not anger. After all, having crashed our economy, they were allowed to keep their cushy jobs, get bailed out with trillions of our tax dollars, and permitted to go right back to playing the same old casino games that had previously enriched them at our expense. Once again, such powerhouse outfits as Goldman Sachs and JPMorgan Chase are raking-in tons of money -- and, as in the gilded days before Wall Street plunged Main Street into deep recession, bankers have promptly reverted to the selfish ethic of lavishing multimillion-dollar bonuses on themselves. Goldman, for example, has already set aside more than $16 billion to dole out as end-of-year bonuses for its bankers. That's a pace of self-enrichment that will siphon off nearly half of all the money that Goldman takes in this year! So, why are they mad? Because you and I are not showing them any love. Believe it or not, Wall Streeters actually expected that their return to grandiose banker bonuses would be greeted with huzzahs and "you the man" cheers from an admiring public, rather than another coast-to-coast explosion of anger.

The number of foreclosure filings hit a record high in the 3rd quarter: "Despite signs of broader economic recovery, number of foreclosure filings hit a record high in the third quarter - a sign the plague is still spreading." And banks are keeping losses off the books as they ignore the people that are not paying their mortgages. Here we are neck deep in debt to pay off the gambling debts of the bankers and now they are completely ignoring their very real losses that are piling up at a record rate simply so they can keep the bonus money flowing into their own pockets. And what are these bankers with their Enron style accounting doing to help the homeowners that are on the verge of losing their homes? You can be certain that they are still out there offering ARMs to unsuspecting victims of their financial rape of the world. And as for you? You get nothing but shafted and some of you even get to be HOMELESS!

Suppose someone came up with the following design for the core institutions of our financial system: they would be mainly financed by deposits, redeemable on demand; they would invest in a wide range of often illiquid and opaque assets; they would engage in complex trading activities; but they would have a wafer-thin equity cushion. Surely, people would conclude, this is fraudulent. They would be right...In practice, however, we have gone much further than this. We have also explicitly guaranteed many deposits and implicitly guaranteed many more liabilities. Indeed, in the crisis, policymakers guaranteed all the liabilities of institutions deemed systemically significant. Today, the core financial institutions are, beyond doubt, a part of the state.

The overextended federal government is now starting to bail itself out.

Let's be clear: The Street today is up to the same tricks it was playing before its near-death experience. Derivatives, derivatives of derivatives, fancy-dance trading schemes, high-risk bets. “Our model really never changed, we’ve said very consistently that our business model remained the same,” says Goldman Sach's chief financial officer. The only difference now is that the Street's biggest banks know for sure they'll be bailed out by the federal government if their bets turn sour -- which means even bigger bets and bigger bucks. Meanwhile, the banks' gigantic pile of non-performing loans is also growing bigger, as more and more jobless Americans can't pay their mortgages, credit card bills, and car loans. So forget any new lending to Main Street. Small businesses still can't get loans. Even credit-worthy borrowers are having a hard time getting new mortgages.

"One year after the global banking system collapsed the Institute for Policy Studies (IPS) 16th Annual Executive Excess report -- "America's Bailout Barons" -- shows that the perverse system of executive compensation which contributed to the financial meltdown is still thriving for top bailout recipients. [snip] But the fact is we haven't learned -- or haven't acted on -- the lessons we must heed if we're going to build a more just, sustainable economy that works for the real economy rather than the Wall Street."

Instead of finally doing more to help ordinary people, Congress seems poised to jump to the aid of another group of millionaires and billionaires--and throw federal dollars at exactly the people who don't really need it.

The bailout of big banks and 'financial houses' is a deliberate fraud! So too, 'trickle down/supply side' economics. Even if 'tax windfalls', like those found in 'supply-side' economics, persuade manufacturers to produce more, where is the market for the overproduction? Lately, however, Fat Cats have figured out how to game the system: transfer the booty offshore! As a result, declines in GDP have become a defining characteristic of every GOP regime since those of Calvin Coolidge, Herbert Hoover, Ronald Reagan and the two Bushes.

This guy gets a $100 million bonus - from taxpayer money - because he helped run up the price of oil last year!

"These malefactors of great wealth (thank you, Teddy) developed hideously destructive credit policies and took insane risks that hurt millions of American families and nearly wrecked the economy. Then they were bailed out with hundreds of billions of taxpayer dollars, money that came from the very people victimized by the industry’s outlandish practices. Now the industry is fighting against creation of an agency that would protect taxpayers and ordinary consumers from a similarly devastating onslaught in the future. And at the same time they are scrambling to raise credit card interest rates and all manner of exploitive fees to build a brand new superstructure of questionable profits on the backs of the taxpayers who came to their rescue."

For much of the past 30 years, politics and policy [in Britain] and in America have moved in tandem. We had Reagan; they had Thatcher. Both nations had an explosion of household debt and saw their financial systems become increasingly unsound. In both countries, the conservatives who pushed through deregulation lost power in the 1990s. In each case, however, the new leaders were as infatuated with “innovative” finance as their predecessors were. At the beginning of this decade, in Britain, the Labor Party continued to rule right through the bubble years. Mr. Brown eventually became prime minister. And so the Bush bust in America is the Brown bust here. Mr. Brown bought fully into the dogma that the market knows best, that less regulation is more. Mr. Brown’s response to the crisis — a burst of activism to make up for his past passivity — makes sense. Leading indicators suggest that Britain will begin an economic recovery well before the rest of Europe.

"In April, she called the bank. The representative said the bank was not doing modifications for people like her, she recalled. He shifted the conversation: if she handed over $18,000, he could lower her payment to $967 from $1,046. Her interest rate would actually increase slightly, with the drop largely because she was putting down more money. “I just laughed,” Ms. Ulery said. “It was a really good deal for them.” To which she poses her own question: What sort of deal is it for the American taxpayer?"

What the U.S. economy may need is a dose of good old-fashioned inflation. So say economists including Gregory Mankiw, former White House adviser, and Kenneth Rogoff, who was chief economist at the International Monetary Fund. They argue that a looser rein on inflation would make it easier for the debt-strapped (from bailouts for the rich) US government to meet its obligations. It will also further decimate the retirement savings of working people. The ultimate plan is to repay the debt (resulting from the current orgiastic burst of looting the public purse to give free money to the rich) with cheaper dollars. There's precedent, England did the same thing for most of the 20th century (interestingly, that was during the dissolution of their empire, hmmmmm).

"The government says it sees "green shoots" sprouting among the thorny economic indicators. We fear that this is a willful triumph of hope over reality--a way to avoid hard decisions and wait to see what happens next. The happy talk may yield bright headlines for a few days, but it could be dangerous for the Obama presidency. The US economy, not to mention the world's, is nowhere near what ordinary mortals would recognize as recovery."

"First-term Vermont Senator Bernie Sanders, who spent 16 years in the U.S. House of Representatives, is taking advantage of rising populist anger at the government’s bailouts of financial companies to push legislation that would reveal the identity of all Federal Reserve borrowers and restrict recipients of emergency Fed loans from hiring foreign workers."

"Less than a week earlier, on April 29, the same workers had gathered at the same hall to cast 89 percent of their votes for a package of pay and benefits cuts that they were promised would "keep manufacturing jobs here in the United States." Within hours of the vote, Chrysler was forced into bankruptcy proceedings that were portrayed by Obama as a painful but necessary step to give the company "a new lease on life." Then, in bankruptcy documents describing "the new Chrysler," came the news: the company, which had already accepted more than $4 billion in federal loans and which was maneuvering to collect $6 billion more, is preparing to use this largesse to jettison the Kenosha plant and seven others while ramping up production in Mexico."

"As hundreds of our hard-earned billions are being poured into corrupt, greed-driven, lethally inefficient banks, the Administration, Congress and corporate media have studiously avoided the one sector of the banking industry that actually works---the credit unions. Throughout the United States there are hundreds of these people-powered banks that have succeeded and prospered while all around them the traditional banking has collapsed into ruin, taking our general economy with them."

Niels C. Jensen, a partner with Absolute Return Partners LLP, has written an interesting essay on the need of governments around the world to issue bonds to pay for their respective bailouts. I need to put the $33 trillion into perspective, because it is so big that it is almost incomprehensible. According to Wikipedia..., total private wealth across the world today is about $37 trillion less the losses incurred in 2007-09, so the real number is probably closer to $30 trillion now. Total global savings (loosely adjusted for the big losses in 2008) are probably somewhere in the region of $100 trillion. In other words, financing this crisis could absorb one-third of total global savings...

So, we are able to go to the horn of Africa, bring back 16-year old children and put them on trial as adults for piracy, but we succumb to the demands of the Wall Street pirates within our midst? "Sure, the pirates are like a small-time, entrepreneurial version of the big-time crooks on Wall Street. The financiers and investment bankers hijack the economy for their own quick profit, and then when they're caught, they hold the economy's future hostage while they demand humongous amounts of money. The only differences are that the Somalis may actually need the money, and they pulled guns while the bankers didn't even have to." Now ain't that a kick in the head? The following short animation should help put things into the appropriate perspective.