Despite Barack Obama's claim that his campaign represents a mass "movement" of "average folks," the initial core of his support was largely comprised of rich denizens of Wall Street.

Why would the super wealthy want a perceived "black populist" to become the nation's chief executive officer?

The "Obama bubble" was nurtured by Wall Street in order to have a friend in the White House when the captains of capital are made to face the legal consequences for deliberately creating current and past economic "bubbles."

Wall Street desperately needs a president who will sweep all the corruption and losses, would-be indictments, perp walks and prosecutions under the rug and get on with an unprecedented taxpayer bailout of Wall Street.

Who better to sell this agenda to the millions of duped mortgage holders and foreclosed homeowners in minority communities across America than our first, beloved, black president of hope and change?

The Making of the Obama Bubble

The 2008 Obama presidential run may be the most slickly orchestrated marketing machine in memory. That's not a good thing.

Marketing is not even distantly related to democracy or civic empowerment.

Marketing is about creating emotional, even irrational bonds between your product and your target audience.

And slick it is. According to the Obama campaign's financial filings with the Federal Election Commission (FEC) and aggregated at the Center for Responsive Politics, the Obama campaign has spent over $52 million on media, strategy consultants, image building, marketing research and telemarketing.

Is it any wonder America's brains are scrambled?

Obama Mania

The Obama phenomenon has been likened to that of cults, celebrity groupies and Messiah worshipers. But what we're actually witnessing is Obama mania (as in tulip mania), the third and final bubble orchestrated and financed by the wonderful Wall Street folks who brought us the first two: the Nasdaq/tech bubble and a subprime-mortgage-in-every-pot bubble.

To understand why Wall Street desperately needs this final bubble, we need to first review how the first two bubbles were orchestrated and why.

In March of 2000, the Nasdaq stock market, hyped with spurious claims for startup tech and dot.com companies, reached a peak of over 5,000. Eight years later, it's trading in the 2,300 range and most of those companies no longer exist.

From peak to trough, Nasdaq transferred over $4 trillion from the pockets of small mania-gripped investors to the wealthy and elite market manipulators.

The highest monetary authority during those bubble days, Alan Greenspan, chairman of the Federal Reserve, consistently told us that the market was efficient and stock prices were being set by the judgment of millions of "highly knowledgeable" investors.

Mr. Greenspan was the wind beneath the wings of a carefully orchestrated wealth transfer system known as "pump and dump" on Wall Street.

As hundreds of court cases, internal emails, and insider testimony now confirm, this bubble was no naturally occurring phenomenon any more than the Obama bubble is.

"Nasdaq transferred over $4 trillion from the pockets of small

mania-gripped investors to the wealthy and elite market manipulators."

First, Wall Street firms issued knowingly false research reports to trumpet the growth prospects for the company and stock price.

Second, they lined up big institutional clients who were instructed how and when to buy at escalating prices to make the stock price skyrocket (laddering).

Third, the firms instructed the hundreds of thousands of stockbrokers serving the mom-and-pop market to advise their clients to sit still as the stock price flew to the moon or else the broker would have his commissions taken away (penalty bid).

While the little folks' money served as a prop under prices, the wealthy elite on Wall Street and corporate insiders were allowed to sell at the top of the market (pump-and-dump wealth transfer).

Why did people buy into this mania for brand new, untested companies when there is a basic caveat that most people in this country know, i.e., the majority of all new businesses fail?

Common sense failed and mania prevailed because of massive hype pumped by big media, big public relations, and shielded from regulation by big law firms, all eager to collect their share of Wall Street's rigged cash cow.

The Housing Bubble

The current housing bubble bust is just a freshly minted version of Wall Street's real estate limited partnership frauds of the '80s, but on a grander scale.

In the 1980s version, the firms packaged real estate into limited partnerships and peddled it as secure investments to moms and pops.

The major underpinning of this wealth transfer mechanism was that regulators turned a blind eye to the fact that the investments were listed at the original face amount on the clients' brokerage statements long after they had lost most of their value.

Today's real estate related securities (CDOs and SIVs) that are blowing up around the globe are simply the above scheme with more billable hours for corporate law firms.

"The major underpinning of this wealth transfer mechanism was that regulators turned a blind eye."

Wall Street created an artificial demand for housing (a bubble) by soliciting high interest rate mortgages (subprime) because they could be bundled and quickly resold for big fees to yield-hungry hedge funds and institutions.

A major underpinning of this scheme was that Wall Street secured an artificial rating of AAA from rating agencies that were paid by Wall Street to provide the rating.

When demand from institutions was saturated, Wall Street kept the scheme going by hiding the debt off its balance sheets and stuffed this long-term product into mom-and-pop money markets, notwithstanding that money markets are required by law to hold only short-term investments.

To further perpetuate the bubble as long as possible, Wall Street prevented pricing transparency by keeping the trading off regulated exchanges and used unregulated over-the-counter contracts instead. (All of this required lots of lobbyist hours in Washington.)

But how could there be a genuine national housing price boom propelled by massive consumer demand at the same time there was the largest income and wealth disparity in the nation's history? Rational thought is no match for manias.

That brings us to today's bubble.

We are being asked to accept at face value the notion that after more than two centuries of entrenched racism in this country, which saw only five black members of the U.S. Senate, it's all being eradicated with some rousing stump speeches.

We are asked to believe that those white executives at all the biggest Wall Street firms, which rank in the top 20 donors to the Obama presidential campaign, after failing to achieve more than 3.5 per cent black stockbrokers over 30 years, now want a black populist president because they crave a level playing field for the American people.

The Wall Street plan for the Obama-bubble presidency is that of the cleanup crew for the housing bubble: sweep all the corruption and losses, would-be indictments, perp walks and prosecutions under the rug and get on with an unprecedented taxpayer bailout of Wall Street. The corporate law firms have piled on to funding the plan because most were up to their eyeballs in writing prospectuses or providing legal opinions for what has turned out to be bogus AAA securities.

Who better to sell the Wall Street Whitewash to the millions of duped mortgage holders and foreclosed homeowners in minority communities across America than our first, beloved, black president of hope and change?

Why do Wall Street and the corporate law firms think they will find a President Obama to be accommodating?

As the Black Agenda Report notes, "Evidently, the giant insurance companies, the airlines, oil companies, Wall Street, military contractors and others had closely examined and vetted Barack Obama and found him pleasing."

That vetting included his remarkable "yes" vote on the Class Action Fairness Act of 2005, a five-year effort by 475 lobbyists, despite appeals from the NAACP and every other major civil rights group.

Thanks to the passage of that legislation, when defrauded homeowners of the housing bubble and defrauded investors of the bundled mortgages try to fight back through the class-action vehicle, they will find a new layer of corporate-friendly hurdles.

I quite admire Senator Obama. I want to believe he is not a party to the scheme. But corporate interests have had plenty of time to do their vetting.

tags: obama  wall street  capitalism  bubble  

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