Saturday, November 5, 2011

Matt Taibbi's Latest Essay


Matt Taibbi is an incredibly articulate journalist whose ability to capture in words the essence of the fraud and corruption at the heart of the financial crisis is unsurpassed.

Here is a brief excerpt from his lastest essay:

Mike Bloomberg's Marie Antoinette Moment By Matt Taibbi, Rolling Stone Magazine 04 November 11

"The typical money-machine cycle of subprime lending took place without any real government involvement. Bank A (let's say it's Goldman, Sachs) lends criminal enterprise B (let's say it's Countrywide) a billion dollars. Countrywide then goes out and creates a billion dollars of shoddy home loans, committing any and all kinds of fraud along the way in an effort to produce as many loans as quickly as possible, very often putting people who shouldn't have gotten homes into homes, faking their income levels, their credit scores, etc.

"Goldman then buys back those loans from Countrywide, places them in an offshore trust, and chops them up into securities. Here they use fancy math to turn a billion dollars of subprime junk into different types of securities, some of them AAA-rated, some of them junk-rated, etc. They then go out on the open market and sell those securities to various big customers – pension funds, foreign trade unions, hedge funds, and so on.

"The whole game was based on one new innovation: the derivative instruments like CDOs that allowed them to take junk-rated home loans and turn them into AAA-rated instruments...."

READ THE ENTIRE ESSAY HERE:
http://www.readersupportednews.org/opinion2/275-42/8241-focus-mike-bloombergs-marie-antoinette-moment

1 comment:

  1. I wrote this is response to a new blogger who questioned why all the bad news, cant we have some good news to show how things are getting better.

    It is clear that things won't be "better" until we can extract this vampire squid called the nuclear industry from continuously injecting us with radiation. Until we can shutdown all the nuclear plants.

    My specialties are Thermal Fluids and Materials Science, with a Masters Degree from University of Michigan, and I have spent over 25 years working on mechanical and electrical systems, especially power generation systems. Also, since I have family in Japan, I have spent several hundred hours refreshing and increasing knowledge on nuclear and radiation. I have a grasp of the situation.

    At first when nuclear was starting to be promoted as "green" I thought that was cool, because nuclear is "cool", it is the farthest reaches of our science, it is playing god, turning matter directly into energy. It is a Harley with a Turbocharger, that cool.

    And only in old Russia would a problem get real severe, right?

    Then I discovered just how poorly these plants were being run and how poorly they were designed from the get-go. And then I discovered how one of the basic premises of risk control, separation of risks, was completely ignored. That being that the used fuel rods were the most dangerous part of the plant, but for "convenience" the most dangerous things were stored right next too or even RIGHT ON TOP OF the reactors themselves.

    This is done to conserve cost, if they were to ship off the rods to somewhere else, it would cost them money, however, they can just store them at their "approved nuclear facility" and thus just kick th ecan down the road -- increasing current profits while increasing the potential diasater 100's of times over.
    THEN on top of that complete irresponsible behavior, the nuke operators also decided to not just stack the rods together with the original design spacing, but they decided to increase storage capacity by packing in the rods even tighter. What happens is that the closer they are, the more the nuetrons from one rod affect and “excite” the neutrons from adjacent rods, and that is the whole process of nuclear fission is that neutron excitement, the whole process of control of nuclear processes is control of the neutrons and the material spacing.
    Well, so our nuclear scientists decided to stack the used rods even closer, and they ran some calculations that showed that if the spacing was smaller, and they used chemical laced water as a cooling fluid, along with a heat removal heat exchanger and an electrically operated pump to ensure continous movement of the cooling water THEN all would be fine….they could run like that for decades until the used fuel “aged” became easier to deal with. IF all that occurred, and if it didn’t the used fuel pool would overheat, the water would boil off, and an uncontrolled nuclear reaction would occur, spewing forth even more deadly radiation than from the original nuclear fission process used to BOIL WATER.
    When I found that out, I knew immediately that this whole industry has become corrupt and intellectually dishonest to the core so to speak. At Fukushima, they put the fuel tanks for the back up generators right on the ocean, probably for ease of refueling from a boat, but who cares the real reason, the bottom line is that very stupid decisions were made, and no one was effectively over seeing it.
    Nuclear is too strong for humans, humans cannot be trusted with this toy. Over time, greed, economic downturns, periods of bad government, periods of industry regulator ‘capture’, natural disasters, aging facilities, and ignorance and denial, all lead to an OBVIOUS CONCLUSION. Nuclear will wipe out and mutate our species unless we just say NO.

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