Eliot’s Mess
The $200 billion bail-out for predator banks
and Spitzer charges are intimately linked
By Greg Palast
Reporting for Air America Radio’s Clout
March 14th, 2008



While New York Governor Eliot Spitzer was paying an ‘escort’ $4,300 in a hotel room in Washington, just down the road, George Bush’s new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst with mortgage bank industry speculators.

Both acts were wanton, wicked and lewd. But there’s a BIG difference. The Governor was using his own checkbook. Bush’s man Bernanke was using ours.

This week, Bernanke’s Fed, for the first time in its history, loaned a selected coterie of banks one-fifth of a trillion dollars to guarantee these banks’ mortgage-backed junk bonds. The deluge of public loot was an eye-popping windfall to the very banking predators who have brought two million families to the brink of foreclosure.

Up until Wednesday, there was one single, lonely politician who stood in the way of this creepy little assignation at the bankers’ bordello: Eliot Spitzer.

Who are they kidding? Spitzer’s lynching and the bankers’ enriching are intimately tied.

How? Follow the money.

The press has swallowed Wall Street’s line that millions of US families are about to lose their homes because they bought homes they couldn’t afford or took loans too big for their wallets. Ba-LON-ey. That’s blaming the victim.

Here’s what happened. Since the Bush regime came to power, a new species of loan became the norm, the ‘sub-prime’ mortgage and its variants including loans with teeny “introductory” interest rates. From out of nowhere, a company called ‘Countrywide’ became America’s top mortgage lender, accounting for one in five home loans, a large chunk of these ‘sub-prime.’
...

‘Steering,’ sub-prime loans with usurious kickers, fake inducements to over-borrow, called ‘fraudulent conveyance’ or ‘predatory lending’ under US law, were almost completely forbidden in the olden days (Clinton Administration and earlier) by federal regulators and state laws as nothing more than fancy loan-sharking.

But when the Bush regime took over, Countrywide and its banking brethren were told to party hearty – it was OK now to steer’m, fake’m, charge’m and take’m.

But there was this annoying party-pooper. The Attorney General of New York, Eliot Spitzer, who sued these guys to a fare-thee-well. Or tried to.

Fischer defends dollar purchase

Israeli intervention in the foreign exchange market last week was not indicative of any monetary policy change, but rather was an act meant to maintain price stability in keeping with government objectives, Bank of Israel Governor Stanley Fischer said on Sunday.

Prof. Elise Brezis says an economic slowdown is inevitable

"We are going through a tough period of instability and uncertainty in the global market," Fischer said during a press conference. "Recently, the value of the shekel against the dollar, and against other foreign currencies, has started to become less stable."

"By December 2007, we were able to say that the phenomenon that was taking place was less a strengthening of the shekel, and more a weakening of the dollar," Fischer noted.

Last Thursday, the Bank of Israel intervened in the foreign exchange market for the first time since 1997, buying an undisclosed amount of foreign currency as the shekel-dollar exchange rate fell below the psychological barrier of NIS 3.40.

According to Fischer, the fact that the Bank of Israel was not involved in the foreign exchange may have worked to the shekel's advantage.

. . . .
The move by the Bank of Israel came as a surprise, since over the past couple of months Governor of the Bank of Israel Stanley Fischer reiterated the bank's stance in favor of a free market for the shekel, rejecting urgent calls by exporters to intervene to ease the sharp plunge of the shekel-dollar exchange rate hurting their profits.

"What's going on now is that the dollar has moved against us. Indeed, it's moved against everybody in terms of exports," Fischer said in an interview with The Jerusalem Post to be published next week. "Against the euro we haven't strengthened so much, so the European market looks better, and there is growth in Asia. So the exporters have to start reorienting [themselves], without being so extremist as to forget that there will continue to be a huge market in the US, in a year from now when the recovery starts."

Fischer added that the exporters have well understood what they have to do and that data showed that they were "reorienting" to the new dollar rate.
. . . .

Specifically, what does the bolded part mean? Psychological barrier?