Lynching as in Merrill Lynch

Books by Wilson Jeremiah Moses

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If this be Lynching . . . (As in Merrill-Lynch)
Mad Dog Moses Froths Again

The United States is funding the war in Iraq with borrowed money. And where is the United States borrowing the money to finance its war in Iraq?    From China, of course. The dirty little secret about the war in Iraq is that "Communist" China is footing the bill. The war is funded by selling American debt and China is buying that debt. Fed Chairman Bernanke maintains a what-me-worry attitude and consoles us with the assurance that China holds only 4% of American debt. True, I suppose, but it is convenient for George Bush to have China as his banker, while he seeks to build an Alexandrine empire from the Bosporus to the Hindu Kush.

Did you know that a black man, Stan O'Neal was the CEO of Merrill Lynch, and that he lost his job for contributing to the subprime mortgage debacle, and bringing about the biggest loss that Merrill has ever experienced? I can already anticipate the cries of African American outrage at this "Lynching," but is he being lynched?   Read on. First of all, nobody was duped by Brother Stan, while he was pumping his Ponzi scheme. Stan was really behaving no differently than Alan Greenspan, or Ben Bernanke, or the House and Senate banking committees.   Everybody was pumping the same bubble, including Bear Stearns, Merrill-Lynch, the Federal Reserve Banks, the Treasury Department, and the MIT and Harvard departments of economics.   The Wall Street Journal didn't see this coming; neither did Alan Greenspan, Larry Kudlow, Jim Cramer or public Television's Nightly Business Report. They all claim they didn't realize the exposure of the various economic sectors to mortgage debt, and they claim they didn't know how risky these investments were.

Sure, tell me about the tooth fairy!

In 1976 I bought a house in Dallas, with a 9% mortgage and I sold it in 1980 for almost twice as much. In those days banks almost never issued mortgage loans at or below the prime interest rate. They derived their profits from the interest that borrowers paid.   Alas those times have become a fairytale that survives only in high school economics text books.   Today, banks "bundle" and "securitize" these mortgages and sell them to speculators, who expect to trade them on the secondary market.   Profits come from trading in (or speculating on) mortgage futures. Mortgages are bought and sold on the assumption that their monetary values will rise for two reasons: 1. Increase in the amounts that borrowers will pay as their interest rates rise. (a very tenuous assumption) 2. Confidence that the future value of the securitized mortgages will perpetually increase as they are traded in the secondary market.

The brutal hypocrisy is that while everyone talks about how wonderful it is for the economy to enjoy low interest rates, lower-middle-class whites are the principal victims of adjustable rate mortgages.   Lower-middle-class whites, with median household incomes of $45,000 cannot afford to keep up with the rising interest rates, any more than they can afford their gas-guzzling SUVs. Oil prices are mounting towards $100 per barrel as a result of dollar devaluation, but whether or not these costs will be passed on to consumers is a political matter. I am tempted to suggest that the oil companies are involved in conspiracies, but that is a theory so unthinkable that, I blush to admit that it even crosses my mind.

Things are bad enough for the lower-middle class, but the poor people in the trailer parks and housing projects haven't a clue. They are not aware of the workings of the Federal Reserve System; indeed, they don't even know it exists. The Fed is a private sector entity, that controls the lives and economic welfare of everyone, but like the Supreme Court, it is a non-elected body, hence undemocratic.   But unlike the Supreme Court, the Fed is a conclave of private sector banking institutions; its board members are functionally judges in their own cases, regulating the values of stocks and bonds, Treasury Bills, hedge funds, and derivatives. And what does the median-income American know about hedge funds and derivatives?

When your pension fund invests in the real estate market, you are not speculating in land, but in derivatives, which have no value other than the confidence of speculators that their price will inexorably continue to inflate. Bernanke is doing his best to meet this expectation, but his lowering of interest rates will not help those who are already losing their homes to foreclosure. Be certain that these areas of the economy are neither regulated nor closely scrutinized by either Democrats or Republicans. In the past the Republicans with their constant drum beat against regulation bore a greater share of the guilt. But the Clinton Democrats, with their rhetoric of abolishing "big government," are equally culpable.

Mia Farrow is currently protesting against the evils of China's economic culpability for the humanitarian crisis in Darfur. What about China's economic culpability for the American war in Iraq? Which war has cost the greater number of lives or displaced the greater number of people?

My poor benighted and enfeebled Negro brothers and sisters continue to rock in their churches, to recirculate Garveyite rhetoric, and plan conventions and demonstrations. Meanwhile Stan O'Neal, one of the smart Negroes negotiates a $100 million severance package from Merrill Lynch, beyond the wildest dreams of Shelby Steele or Cornell West.

If this be Lynching, Stan the Man is certainly making the most of it.

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Please do not remove my name from your list of ignorant, backward, confused, and benighted Negroes. Yesterday, I naively stated that Stan, "the Mack Man" O'Neal would receive "severance pay" of $100,000,000. This was ignorant. In fact, one of the elements of his negotiated departure was that he be allowed to "retire." He has not been fired, and furthermore it is difficult to calculate exactly how much he will be receiving, but a Reuters article printed on Monday, estimated $200,000,000.

http://www.reuters.com/article/ousiv/idUSN2948102720071029

Remember Dick Grasso, who "retired" from the New York Stock Exchange? All Grasso got was a mere $139.5 million "retirement and severance" package.

Why would any smart Negro want to waste his time with so-called "black business?"

Mack on, Mister Stan!

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UPDATE: Merrill's CEO Exit: When A Severance Package Isn't Severance
Dow Jones
October 30, 2007: 06:35 PM EST
http://money.cnn.com/news/newsfeeds/articles/djhighlights/200710301835DOWJONESDJONLINE000812.htm

SAN FRANCISCO (Dow Jones) --When is a severance package not a severance package? When Merrill Lynch & Co. says so, some executive compensation experts said on Tuesday.

Merrill (MER) announced the retirement of Chief Executive Stanley O'Neal earlier on Tuesday, just days after the investment bank reported an unexpected third-quarter loss on the back of an $8 billion subprime mortgage-inspired write-down.

O'Neal is getting roughly $160 million in stock options and retirement benefits as he steps down. The company is not paying him any severance, a spokeswomen for the bank said. She declined to comment further.

Mack on, Mister Stan!

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posted 31 October 2007