Scott Oliver - September 2008

WeLoveCostaRica.com is all about Costa Rica however, having been a professional, Wall Street trained/tainted investment advisor for over 20 years and the father of two American teenagers, you will have to please forgive me if I comment today on the current financial situation/meltdown in the USA.

With the proposed bailout, we have every right to be angry about what's going on and rest assured that you are alone feeling that way. Although the 'popular' media has not shown any, there have been protests against the bailout.

Some people will tell you - that the war on terror is a fraud, a hoax, that all of this including this present financial storm is just another step towards an all powerful, one world government, a 'New World Order' and a micro-chipped, totally controlled population and, you may want to ask yourself if they're maybe - just maybe - they are right.

In January 2008 Secretary Henry M. Paulson, Jr. stated before the U.S. Chamber of Commerce that: "The U.S. economy is resilient. The unemployment rate remains low and job creation continues, albeit at a modest pace. The structure of our economy is sound and our long-term economic fundamentals are healthy." He also said that: "The U.S. economy is resilient and diverse. It has been remarkably robust in recent years, and will be so again."

On March 31, 2008, Secretary Henry M. Paulson, Jr. spoke on the Blueprint for Regulatory Reform (Ha!) saying: "I have the greatest confidence in the resiliency, flexibility and strength of our economy and our capital markets. We are focused on maintaining stable, orderly and liquid financial markets and ensuring that our banks continue to support the economy by making credit available to consumers and businesses."

So here's Henry 'Hank' Paulson, an 'expert' who clearly did not see what was happening only six months ago - even though our VIP Members who have been reading our articles like 'Protect Your Assets - The 'Perfect Storm' may be about to wipe them out...' saw this coming and Hank wants you to give him free reign over $700 billion of taxpayer's money.

Of course, Henry Paulson is personally worth about US$700,000,000 and he probably already has most of that invested in non US$ investments so this meltdown will not affect him too much... And don't feel too sorry for him with his new low paying government job because in accepting this government job, Hank saved himself over US$100,000,000 in capital gains taxes

And by the way, do you know the complex calculations they went through to arrive at that US$700 billion number?

"It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."

Hello? Are you serious?

And please note the following sentence that was included in the first draft of the bailout package proposed by the Bush administration: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

What this means folks is that your US$700 billion in taxpayer dollars will purchase the distressed assets of several failed financial institutions, and all of this will be done in such a way so that it's unchallengeable by courts and ungovernable by the People's duly sworn representatives. Sweet deal huh? Sweet for who?

Most people, like the experts themselves fail to see the big picture here, although $700 billion is a monumental sum of money, it's actually the tip of the iceberg... The Paulson Plan will probably start with $700 billion, and probably end up being $7 trillion (plus) as they extend the bailout to include not only real estate derivatives but credit default swaps and interest rate swaps as well.

Someone should inform Congress that there are approximately $1.4 quadrillion (notional) of derivatives floating around this planet of ours. If only 1% is bad, that's $14 trillion. If we are fortunate - and I don't think we are - and only 1/10 of one percent is bad, that would be $1.4 trillion. The derivative numbers (BIS) are as of the end of Q2 2008.

"Swiss investor Marc Faber, known for a long track record of good calls (he was a commodities bull until late this spring, for instance, when he reversed his view) and a fine grasp of financial markets history, confirms the estimate earlier in the week by Ken Ohmae that the US needs a salvage operation much bigger than the one envisaged by the Treasury plan, and the damage may come to $5 trillion. "The $700 billion is really nothing,' Faber said in a television interview. "The treasury is just giving out this figure when the end figure may be $5 trillion."

According to Bill Gross, who manages the world's biggest bond fund, the cost of the government rescue package to taxpayers "will run into the trillions," Gross added. "I'm forecasting three years from now we'll see our first trillion-dollar budget."

Nouriel Roubini is a brilliant economist who has been far more correct about the market than our Henry Paulson says that: "Thus the claim by the Fed and Treasury that spending $700 billion of public money is the best way to recapitalize banks has absolutely no factual basis or justification. This way of recapitalizing financial institutions is a total rip-off that will mostly benefit -- at a huge expense for the US taxpayer - the common and preferred shareholders and even unsecured creditors of the banks."

Nouriel Roubini has no hidden agenda, he is telling the economic story as he sees it. While Henry Paulson is a public servant (Yeah! Right...) trying to suck US$700 billion out of your collective pockets ... Who do you think is more likely telling us the truth?

In the months before the March 2003 Iraq invasion, the Bush administration estimated the Iraq war would cost no more than $50 billion. As of the end of September 2008, the wars in Iraq and Afghanistan have already cost more than twelve times as much - $604 billion, the Congressional Budget Office says.

One of the country's leading economists Nobel laureate and former chief World Bank economist, Joseph Stiglitz has just published a book 'The Three Trillion Dollar War: The True Cost of the Iraq Conflict' (Paperback) that puts an estimated price tag on the war in Iraq at $3 trillion.

The Financial Market Wizards - Some of the people we should be asking for money:

• Richard S. Fuld, Jr. has been chairman of the Board of Directors of Lehman Brothers Holdings Inc. and Lehman Brothers Inc. since 1994 and chief executive officer of the Company since 1993. He is chairman of Lehman Brothers' Executive Committee. Over the past eight years he has earned around $480 million.
• According to the Merrill Lynch website John A. Thain, "heads one of the world's most sophisticated wealth management, capital markets and advisory companies, with offices in 40 countries and territories and total client assets of almost $2 trillion." And even after this melt down, the Guardian newspaper mentions that: "Merrill Lynch's newly recruited chief executive, John Thain, stands to share a $200m payout with two senior lieutenants for less than a year's work which culminated this week in the bank surrendering its 94-year-old independence."
• Alan D. Schwartz. President and Chief Executive Officer of The Bear Stearns Companies Inc. In 2007, he earned cash compensation of $35,734,422, which included a $16,237,150 bonus.
• Dick Syron, former CEO of Freddie Mac "collected $38 Million> for "running the ship into the ground", and in the process lost more than $50 Billion of the shareholders' value."
• Fannie Mae CEO Franklin Raines and former Fannie Mae CFO J. Timothy Howard were forced out of their jobs by the Board of Directors but don't feel too sorry for them because: "Mr. Raines will receive monthly payments of $114,393 from the corporation's pension plan for the rest of his and his surviving spouse's life and, if he is allowed to make his retirement effective in June, 2005 as he has requested rather than immediately, that pension amount would rise to $116,300. Mr. Howard will receive estimated monthly payments of $36,071 from the plan. In addition, both men will receive lifetime medical and dental coverage for themselves, their wives, and any dependents under age 21 and corporation paid premiums on substantial life insurance policies."

  "Raines' total compensation from 1998 through 2004 was $91.1 million"

Combine the sums above from the two Dicks(?) above, John, Alan, Franklin, Tim and Hank's US$700 million fortune and we have just found well over a billion dollars that could go towards this bailout and yes! You know where I'm going with this, right?

Your income in Costa Rica? Less than $1,000 per month Between $1,000 - $1,500 per month $1,501 - $2,000 per month $2,001 - $3,000 per month $3,001 - $4,000 per month $4,001 - $5,000 per month $5,001 - $7,500 per month $7,501 - $8,500 per month $8,501 - $10,000 per month More than $10,001 per month

The New "Declaration of Independence" of the New Jersey Branch of the Oliver Family.

"After Wall Street, their executives and the politicians (who allowed them to create these "financial weapons of mass destruction") have paid back the hundreds of billions of dollars that they have earned in outrageous salaries and bonuses over the past 20 years, then, and only then can you come begging to the taxpayer."

"When it comes to our military and the funding for unnecessary wars, (and like the 737 military bases the US has abroad, most of them are definitely unnecessary), you can fund it with your own money and, you also get to send your own beloved sons and daughters to die or be maimed for life, not mine."

Written by Scott Oliver, author of How To Buy Costa Rica Real Estate Without Losing Your Camisa and Costa Rica's Guide To Making Money Offshore.

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