By Judge Andrew P.Napolitano FOX News Senior Judicial Analyst
The Secretary of the Treasury and the Chair of the Federal Reserve have taken an oath to uphold the Constitution and the federal laws. Among those laws is the obligation of management of publicly traded corporations to inform shareholders in a meaningful way of the risks attendant upon all extraordinary corporate activity, including major acquisitions.
The acquisition of Merrill Lynch by the Bank of America was surely a major acquisition and an extraordinary corporate act. The president of B of A now tells us that the Secretary and the Chair told him not to inform his shareholders that Merrill Lynch was truly a risky investment. As it turns out, when Ken Lewis learned that Merrill Lynch was worth about $17 billion less than the $50 billion agreed upon amount, he attempted to invoke the material adverse change (MAC) clause in the contract of acquisition, which would have given him the option of getting Merrill Lynch for $33 billion or walking away from the deal.
“Ken Lewis, Henry Paulson, John Thain, Ben Bernanke, and Jeffrey Lacker, the President of the Federal Reserve Bank of Richmond, should all be prosecuted for extortion, conspiracy to extort, criminal fraud, and theft of honest services; and they should be imprisoned if convicted.”
President Obama stood before a captive audience at Georgetown University earlier this week and delivered yet another dishonest and misleading speech on the cause of our economic downturn.
He makes a feeble attempt at blaming all our ills on “predatory” lenders and “greedy” people at the GSEs Fannie/Freddie as well as AIG and others. He makes no mention of the actions taken that set the stage for conditions that make such things possible: government intervention. No mention of who caused the bubbles: government. And of course, like any good puppet, he follows the script nicely by making sure there’s no mention of the Federal Reserve, the main culprit in all this mess.
After completing Trace Mayer’s excellent ebook, “The Great Credit Contraction“, I stopped reading and said aloud, “Wow”. I started reading it with the intention of reading a few pages. Much to the detriment of sleep I ended up reading half the book in the first sitting.
The dollar truly is an illusion and gold is real money. Mayer’s book hammers this home in a profound way. One of the great things about the book is that it covers the fundamentals and history of money as we know it. If you ever wondered how the idea of fractional reserve banking came about then you should read this book. If you want an answer to the question, “What is money?”, then this book is for you.
Mayer utilizes several quotes from economists past and present to reinforce his points. He invokes the likes of Ron Paul, Lew Rockwell, Ludwig Von Mises, Alan Greenspan, and many others.
Judge Napolitano’s liberty-full Freedom Watch show tomorrow will have the following guests and topics, as reported at FreedomWatchOnFox.com:
2:00-2:10 Glenn Beck and Shepard Smith start the show.
2:10 – 2:30 Peter Schiff (in studio) with Lew Rockwell (phone) including a special 10 minute segment from Schiff entitled “Protecting Your Assets, what you need to know about your money and investments.”
2:30 – 3:00 Ron Paul (from DC), Peter Schiff, and David Boaz (live from CATO)
Possibly other last minute guests as well.
The topics for the week will be: U.S. power to seize firms, possible 15 year depression, discussion of Austrian School of Economics, preview of Campaign for Liberty, St. Louis conference and much, much more.
The debauchery on Capitol Hill continues unabated, with an amazing ninety-three new bills introduced yesterday in Congress, many of which attempt to do the same thing. How many of these bills do you think are Constitutional? (Answer: very few). Here are some of the worst:
HR1652 – To require institutions receiving certain assistance from the Troubled Asset Relief Program or the Federal Reserve to have employee bonus payment plans approved in advance of the payments being made. [Each member of Congress must operate in a bubble, and/or they're all hoping for the "credit" if their bill is passed. This is at least the fifth bill on this subject in the past three days!]
HR1650 – To enhance the oversight authority of the Comptroller General of the United States with respect to expenditures under the Troubled Asset Relief Program. [Yet another TARP regulation bill. The full text of the bill is not currently available, so I couldn't tell if it specifically mentions employee bonuses so I could add it to the list above. Why don't these people just come out and admit that this TARP garbage is immoral an unconstitutional in the first place?]
S-651 – A bill to amend the Internal Revenue Code of 1986 to impose an excise tax on excessive bonuses paid by, and received from, companies receiving Federal emergency economic assistance, to limit the amount of nonqualified deferred compensation that employees of such companies may defer from taxation, and for other purposes. [Number 7, by Sen. Max Baucus [D-MT]…]
HR1649 – To authorize the Secretary of Education to make grants to reduce the size of core curriculum classes in public elementary and secondary schools, and for other purposes.
HR1645 (also S-638) – To provide grants to promote financial and economic literacy. [While I think it's critical that people become more financially and economically literate, government should certainly not be the teacher, or else we'll end up with more Keynesian nitwits that have destroyed our economy to date. Rather, people can take Chris Martenson's Crash Course for free, and read books like Hazlitt's Economics in One Lesson and Tom Woods' Meltdown.]
HR1643 (also S-648) – To amend title XVIII of the Social Security Act to establish a prospective payment system instead of the reasonable cost-based reimbursement method for Medicare-covered services provided by Federally qualified health centers and to expand the scope of such covered services to account for expansions in the scope of services provided by Federally qualified health centers since the inclusion of such services for coverage under the Medicare Program.
HR1642 – To provide loans and grants for fire sprinkler retrofitting in nursing facilities.
HR1641 – To amend the National Trails System Act to provide for a study of the Cascadia Marine Trail.
HR1640 – To amend the Truth in Lending Act to protect consumers from usury, and for other purposes. [Caveat emptor. The process of buying a home would be much quicker and hassle-free if not for the myriad of regulations and bureaucratic red-tape imposed by the federal, state, and local governments.]
Your Senators and Representatives have continued to be busy little bees, always grinding the sausage. Forty-four new bills introduced yesterday:
HR230 – Recognizing the historical significance of the Mexican holiday of Cinco de Mayo. [You've got to be kidding me. If this weren't displayed on official government sites, I would swear this was a joke.]
HR1388 – Generations Invigorating Volunteerism and Education Act: To reauthorize and reform the national service laws.
HR1415 – To provide for a demonstration project regarding Medicaid reimbursements for stabilization of emergency medical conditions by non-publicly owned or operated institutions for mental diseases.
HR1413 – To amend the Internal Revenue Code of 1986 to allow certain public employees a deduction for distributions from governmental plans for health and long-term care insurance, and for other purposes.
HR1412 – To increase public confidence in the justice system and address any unwarranted racial and ethnic disparities in the criminal process. [Looking at the full text of this bill, it's clear that the authors have the idea that justice is being served out "unfairly" with respect to race and ethnicity, and are under the mistaken impression that "unconscious bias" can be legislated away.]
The past couple days have been quite interesting due to a live improvised and impassioned rant by CNBC’s Rick Santelli the other day. His rant represents the near-rage many Americans feel about the Obama administration’s latest plan for wealth redistribution and creating further moral hazard.
The story begins with Rick Santelli’s rant:
Amen Rick. Amen. He may be a loud talker, but he speaks the truth, which these days needs to be shouted for anyone to hear it. After the stir he caused with his rant online CNBC posted a poll asking if you would show up for a Chicago Tea Party in July as he mentions in the rant. Apparently, before the poll was removed 94% said they’d be there with about 250,000 votes.
This morning I heard Rick’s rant played and discussed on Glenn Beck’s radio show, Opie and Anthony’s radio show of all places, and several other main stream media outlets.
Judge Andrew Napolitano has a brand new (online only for now) show called Freedom Watch on FOX News. The first show was this afternoon. It was a liberty power hour. It brought together the likes of Ron Paul, Peter Schiff, Cody Willard, and The Judge for an hour of discussion. Also on the show were Stephen Moore from the WSJ and Alan Colmes from FOX.
I was unable to capture the video of the show, but I did record the entire show’s audio. I enjoyed the pre-show banter where Cody Willard asks Peter Schiff about running for office in 2010 so I kept that part in the audio available below. Also they discuss how the “blogs have been going crazy” about the show.
One of the best quotes comes from Willard when he calls Treasury Secretary Geithner “a 35 year old punk”. Cody Willard is the host of the FOX Business show called “Happy Hour” and is a friend to free markets and individual liberty. Read his blog “The Cody Word”.
It sounds like The Judge will have Ron Paul back and some of his other guests in the coming weeks. It’s a great listen and if/when FOX posts the video I’ll post it below.
For now listen to the 60 minutes of audio below. Note that the show doesn’t start until about 2 1/2 minutes in. If you want to miss the banter and opening music then just jump to that point.
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The LBMA Silver Mid Rate goes negative AGAIN!!!! Read on to see why I used 4 exclamation points.
by Jake, the Champion of the Constitution Originally published Friday, January 30, 2009 at http://www.nolanchart.com/article5916.html
[In case you do not yet understand futures markets, "backwardation" means that silver to be delivered today is now being priced higher than metal to be delivered later in the London Bullion Market Association's futures market in London, England. For more details on backwardation, please refer to my five-part December series which starts here "The End for the Dollar and all Fiat Currencies (1/5)". Contango is the opposite of backwardation and exists when futures price is higher than the spot price as I explained for those new to futures terminology here "The Money Matrix - What the Heck Are Derivatives? (PART 10/15)". [As you read, please also note that I am NOT a commodities trader, I am just an engineer by trade, so feel free to help me out with my analysis or mistakes.] ( Photo) (2)
As we learned in “The Significance of Gold Backwardation Explained (4/5)“, backwardation is a sign of a very tight market, and a market that will be tight for sometime into the future either 1) current supply is very tight, 2) future supply is projected to be very tight, or 3) there is a severe distrust in counterparties that the short positions can deliver the goods on time per the contract, or vice versa that the long positions will not have the cash.]
John Stossel’s commentary on Townhall.com details why the recent Madoff scam brouhaha wonderfully illustrates why government regulation rarely, if ever, works, and in fact often makes things worse.
The $50-billion investment scam allegedly pulled off by Wall Street insider Bernard Madoff has ignited predictable calls for more regulation.
The “massive fraud … was made possible in part because the regulators who were assigned to oversee Wall Street dropped the ball,” said President-elect Obama.
“This scandal underscores the need for a 21st century regulatory approach,” writes Arthur Levitt Jr., former chairman of the Securities and Exchange Commission (SEC), in The Wall Street Journal.
Notice the disconnect. Regulation failed, so we need more regulation. I see it differently. Regulation failed, so let’s try free markets. That would be a change.
Regulation did indeed fail. “An executive in the securities industry, Harry Markopolos, contacted the SEC’s Boston office in May 1999, urging regulators to investigate Mr. Madoff. Mr. Markopolos continued to pursue his accusations over the past nine years,” The Wall Street Journal reported.
Liberty Maven
[In case you do not yet understand futures markets, "backwardation" means that silver to be delivered today is now being priced higher than metal to be delivered later in the London Bullion Market Association's futures market in London, England. For more details on backwardation, please refer to my five-part December series which starts here "
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