ÿþ<html> <head> <meta http-equiv="content-type" content="text/html;charset=iso-8859-1"> <title>OnlineColumnist&reg;.com: Putin Punishes Georgia</title> <meta name="generator" content="Adobe GoLive 4"> <style type="text/css"> .style2 { font-size: large; font-weight: bold; font-family: Arial; } .style3 { height: 58px; } .style4 { font-size: x-large; font-weight: bold; } </style> </head> <body bgcolor="white" vlink="black"> <center> <table cool width="624" height="2719" border="0" cellpadding="0" cellspacing="0" gridx="16" showgridx gridy="16" showgridy> <tr height="79"> <td width="133" height="118" rowspan="2" valign="top" align="left" xpos="0"><a href="aboutdiscobolos.html"><img height="110" width="62" src="images/discobolos.logo.transp.gif" border="0"></a></td> <td width="7" height="118" rowspan="2"></td> <td width="482" height="79" colspan="2" valign="top" align="left" xpos="140"><img height="75" width="450" src="images/banner.GIF"></td> <td width="1" height="118" rowspan="2"></td> <td width="1" height="79"><spacer type="block" width="1" height="79"></td> </tr> <tr height="39"> <td width="182" height="39"></td> <td width="300" height="39" valign="top" align="left" xpos="322"><a href="aboutdiscobolos.html"><img height="14" width="267" src="images/divisionofNEW.GIF" border="0"></a></td> <td width="1" height="39"><spacer type="block" width="1" height="39"></td> </tr> <tr> <td width="624" colspan="6" valign="top" align="left" xpos="0" class="style3"> <table border="0" width="100%" bgcolor="black" cellspacing="0"> <tr> <td> <table border="0" width="100%" bgcolor="#99ffcc" cellspacing="0" cellpadding="4"> <tr> <td align="center"> <div align="left"> <a href="index.html"><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong>HOME</strong></font></a><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> &#149; <a href="articlesindex.html">ARTICLES</a> &#149; <a href="books.html">BOOKS</a> &#149; <a href="teflon.html">THE </a><a href="teflon.html">TEFLON</a><a href="teflon.html"> REPORT</a> &#149; <a href="mailto:letters@onlinecolumnist.com">REACTIONS</a> &#149; <a href="aboutdiscobolos.html">ABOUT DISCOBOLOS</a></strong></font></div> </td> </tr> </table> </td> </tr> </table> </td> </tr> <tr height="2"> <td width="133" height="2">&nbsp;</td> <td width="489" height="2576" colspan="3" rowspan="2" align="left" xpos="133" content valign="top" csheight="2573"> <p class="style2">Wall Street&#39;s Meltdown</p> <p><b><font face="Arial,Geneva,Helvetica">by John M. Curtis</font></b><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"><b><a href="books.html"><br> </a></b></font><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"><b>(310) 204-8700</b></font></p> <p><font size="2" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"><i>Copyright September 16, 2008<br>All Rights Reserved. </i></font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p> <p class="MsoNormal"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <span class="style4">W</span>all Street s roller coaster continued to spook investors, as the Dow Jones Industrial Average climbed back 147 points from its 504-point plunge Sept. 15.<span style="mso-spacerun: yes">&nbsp; </span>Lehman Bros. bankruptcy sent the market into a long-awaited correction, shaving off 4.4% or $700 billion in overall value.<span style="mso-spacerun: yes">&nbsp; </span>Adding $70 billion to banking reserves, Federal Reserve Board Chairma Ben S. Bernanke sought to reassure troubled financial markets that the Fed wouldn t stand idly by while the nation s leading institutions tightened the money supply.<span style="mso-spacerun: yes">&nbsp; </span>When economic upheaval hits Wall Street, financial institutions jack-up rates to cover risks.<span style="mso-spacerun: yes">&nbsp; </span>Adding banking reserves helps offset the tendency of financial institutions to hike interest rates.<span style="mso-spacerun: yes">&nbsp; </span>Nothing hurts the business cycle more than inflated interest rates.<span style="mso-spacerun: yes">&nbsp; </span>Recently bailing out Fannie Mae and Freddie Mac, the Fed couldn t rescue cash-strapped Lehman Bros.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Wild swings in the stock market signal defensiveness on the part of fund-traders, whose portfolios go through extreme gyrations.<span style="mso-spacerun: yes">&nbsp; </span>For months, Wall Street has traded in a narrow range, moving sideways making little upward progress.<span style="mso-spacerun: yes">&nbsp; </span>Watching American Insurance Group teeter on bankruptcy also didn t reassure markets, whose defensive positions have helped drop share prices with the year from $70 to its Sept. 16 close of $3.75.<span style="mso-spacerun: yes">&nbsp; </span>Shareholders at Lehman Bros. have already been wiped out, with AIG following close behind.<span style="mso-spacerun: yes">&nbsp; </span>Venerable investment house Merrill Lynch has all but gone under, agreeing to a hostile takeover by Bank of America.<span style="mso-spacerun: yes">&nbsp; </span>B-of-A, who took over defunked Countrywide Jan. 11, is having second-thoughts about the $29 a share offer, now worth around $15 after Monday s meltdown.<span style="mso-spacerun: yes">&nbsp; </span>If B-of-A. withdraws its offer, Merrill Lynch would go belly up.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Former Fed Chairman Alan Greenspan, blamed by some for the current financial mess, called today s misery  a once in a half-century or century event, admitting it was the worst of his career.<span style="mso-spacerun: yes">&nbsp; </span>Greenspan s critics blame him for deregulating financial markets, artificially driving down interest rates and arbitrarily bailing out his personal friends.<span style="mso-spacerun: yes">&nbsp; </span>Today s mess continues the same kind of irresponsible corporate behavior once seen in the 2001-02 dot.com bubble, erasing $7 trillion of wealth in U.S. stock markets.<span style="mso-spacerun: yes">&nbsp; </span>Corporate CEOs continued to hide liabilities and plunder company resources, leading to the kind of insolvency witnessed by Bear Stearns, Lehman Bros., AIG and WaMu.<span style="mso-spacerun: yes">&nbsp; </span>White House Treasury Secretary Hank Paulson, former CEO of Goldman Sachs, stressed the importance of overhauling Wall Street s antiquated regulatory system, leaving too much room for abuse.</p> <p class="MsoNormal"> <span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Despite Wall Street s volatility, oil prices continued its plunge to $92, from its July 27 peak of $147, injecting some disguised optimism into today s gloom. High oil and gas prices helped together with the exorbitant price of the Iraq War to tank the economy.<span style="mso-spacerun: yes">&nbsp; </span>No industry other than big oil has profited over the last two years at the expense of the economy.<span style="mso-spacerun: yes">&nbsp; </span>Big oil got more than it bargained for, driving the country into recession, causing lower demand for petroleum products.<span style="mso-spacerun: yes">&nbsp; </span>Oil traders have been shorting the market, driving prices back to reality.<span style="mso-spacerun: yes">&nbsp; </span>Unless there s something done with the margin requirements, speculators could once again drive prices back to unrealistic levels.<span style="mso-spacerun: yes">&nbsp; </span>Most energy producers, like Saudi Arabia, Iran, Iraq, Kuwait, Venezuela and Russia admitted that supply-and-demand had nothing to do with relentless price increases that eventually broke the economy.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>There s plenty of blame to go around contributing to nation s current economic mess.<span style="mso-spacerun: yes">&nbsp; </span>Pointing fingers at Wall Street or the financial sector doesn t address runaway government spending, especially to subsidize wars in Afghanistan and Iraq.<span style="mso-spacerun: yes">&nbsp; </span>Spending $12-16 billion a month has depleted the U.S. treasury, robbing the country of necessary infrastructure projects to stimulate the economy.<span style="mso-spacerun: yes">&nbsp; </span> Too much out-sourcing has neutralized the stimulus effect from war-spending.<span style="mso-spacerun: yes">&nbsp; </span>Today s war economy puts U.S. tax dollars into defense corporations, which, in turn, out-source manufacturing overseas.<span style="mso-spacerun: yes">&nbsp; </span>Defense spending, including corporate welfare to the nation s largest contractors, isn t considered socialism.<span style="mso-spacerun: yes">&nbsp; </span>Yet any non-defense spending directed toward infrastructure, education or social engineering is considered out-of-control  liberal spending by those advocating perpetual warfare.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Today s economic meltdown has more to do with runaway defense spending, especially on Iraq.<span style="mso-spacerun: yes">&nbsp; </span>While there s a need for more oversight and regulation, there s a bigger need to rein-in runaway defense spending.<span style="mso-spacerun: yes">&nbsp; </span>No economy including the mighty U.S. can afford to rebuild foreign economies.<span style="mso-spacerun: yes">&nbsp; </span>Asking Iraq to pay for its own security would go a long way in containing the ongoing hemorrhage to the U.S. treasury.<span style="mso-spacerun: yes">&nbsp; </span>No one has all the answers but Big Oil should not be allowed to fleece business and consumers at the expense of the overall economy.<span style="mso-spacerun: yes">&nbsp; </span>When the economy recovers, Congress must fix Wall Street s wild speculation that has driven oil prices to record levels.<span style="mso-spacerun: yes">&nbsp; </span>More regulation should help rein-in corporate greed that has given Big Oil a license to tank the economy.<span style="mso-spacerun: yes">&nbsp; </span>Before the cycle repeats itself, the White House must do its part to contain Big Oil before it s too late.<span style="mso-spacerun: yes">&nbsp; </span> </p> <p><b><u>About the Author</u></b><br> </p> <p><b>John M. Curtis </b>writes politically neutral commentary analyzing spin in national and global news. He&#x2019;s editor of OnlineColumnist.com and author of <a href="books.html">Dodging The Bullet</a> and <a href="books.html">Operation Charisma</a>.<br> </p> <p></p> </td> <td width="1" height="2576" rowspan="2"></td> <td width="1" height="2"><spacer type="block" width="1" height="2"></td> </tr> <tr height="2574"> <td width="133" height="2574" valign="top" align="left" xpos="0"><img height="172" width="111" src="images/johninframe3.jpg"></td> <td width="1" height="2574"><spacer type="block" width="1" height="2574"></td> </tr> <tr height="1" cntrlrow> <td width="133" height="1"><spacer type="block" width="133" height="1"></td> <td width="7" height="1"><spacer type="block" width="7" height="1"></td> <td width="182" height="1"><spacer type="block" width="182" height="1"></td> <td width="300" height="1"><spacer type="block" width="300" height="1"></td> <td width="1" height="1"><spacer type="block" width="1" height="1"></td> <td width="1" height="1"></td> </tr> </table> <table border="0" cellpadding="0" cellspacing="2" width="597"> <tr> <td><font size="1" face="Arial,Geneva,Helvetica"> <hr noshade size="1"> </font><a href="index.html"><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong>Home</strong></font></a><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> || <a href="articlesindex.html">Articles</a> || <a href="books.html">Books</a> || <a href="teflon.html">The Teflon Report</a> || <a href="mailto:letters@onlinecolumnist.com">Reactions</a> || <a href="aboutdiscobolos.html">About Discobolos</a></strong></font> <div align="left"> <p><font size="1" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular">This site designed, developed and hosted by the experts at</font><font size="2" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"> <a href="http://www.cmeonline.net" target="_blank"><img height="30" width="138" src="images/cmelogoANIM.gif" border="0" align="absmiddle"></a></font></p> </div> <p><font size="2" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular">&copy;1999-2005 <a href="aboutdiscobolos.html">Discobolos Consulting Services, Inc.</a><br> (310) 204-8300<br> All Rights Reserved. </font></td> </tr> </table> </center> </body> </html>