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Winston Churchill once said, “An appeaser is one who feeds a crocodile hoping it will eat him last.” On September 11, Christopher Stevens, a career diplomat, became one of the first Americans in Libya to feed the crocodile of Ansar Al-Sharia and learned too late that while appeasers may hope to be eaten last, they are often eaten first. Christopher Stevens was a Middle Eastern diplomat who typified the new breed going from the University of Berkeley and the Peace Corps to desks in Saudi Arabia, Egypt and Syria. He taught English to Moroccan children in the Peace Corps and...

CARACAS, Venezuela (AP) -- President Hugo Chavez announced Thursday that Venezuelan security forces have arrested a U.S. citizen and suspect he is a mercenary who could be involved in an alleged plot to destabilize the country if the opposition's candidate loses the upcoming presidential election. Chavez said the Hispanic man was detained Aug. 4 while crossing into Venezuela from Colombia. The president said the man was carrying a U.S. passport with entrance and exit stamps from countries including Iraq, Afghanistan and Libya as well as a notebook containing geographical coordinates. The man's identity was not released. Chavez did not say...

NEW YORK (Reuters) - Renowned investor George Soros said on Friday the world financial system has effectively disintegrated, adding that there is yet no prospect of a near-term resolution to the crisis. Soros said the turbulence is actually more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union. He said the bankruptcy of Lehman Brothers in September marked a turning point in the functioning of the market system. "We witnessed the collapse of the financial system," Soros said at a Columbia University dinner. "It was placed on life support, and it's still...

Late Last night when I originally posted this story it did not include the following...

RIGHT BEFORE THE ELECTION OF PRESIDENT HUSSEIN: "A $550 BILLION ELECTRONIC RUN ON THE BANKS" This is un-frickin-believable. The financial crisis was deliberate, planned, staged. Who made the run? "Someone threw us in the middle of the Atlantic ocean without a life raft. We are trying to determine which is the closest shore and whether there is any chance in the world to swim that far. We don't know." Electronic Run On Banks - $550 Billion Withdrawn In 1 Hour, Federal Reserve Halts Withdrawals - US Economy Would Have Collapsed Capitalism Gone Wild hat tip Cathy Rep. Paul Kanjorski of...

In the past, whenever the financial system came close to a breakdown, the authorities rode to the rescue and prevented it from going over the brink. That is what I expected in 2008 but that is not what happened. On Monday September 15, Lehman Brothers, the US investment bank, was allowed to go into bankruptcy without proper preparation. It was a game-changing event with catastrophic consequences. For a start, the price of credit default swaps, a form of insurance against companies defaulting on debt, went through the roof as investors took cover. AIG, the insurance giant, was carrying a large...

Soros: 'Bad Bank' for Troubled Assets Is Bad Idea Billionaire financier George Soros told CNBC he disagrees with plans to create a new government entity to buy up troubled bank loans and believes former Treasury Secretary Henry Paulson mis-managed the first rescue attempt of financial institutions. "That (the "bad bank" proposal) will help relieve the situation, but it will not be sufficient to turn it around," Soros said during a live interview at the Davos economic conference in Switzerland. Instead, Soros said he would create a "good bank" and re-capitalize the good assets. He admitted his alternative plan is not...

Barack Obama's White House chief of staff, Rahm Emanuel, told business leaders assembled by the Wall Street Journal in November that the economic crisis facing the country is "an opportunity to do things you could not do before." That has to be one of the most chilling statements I have ever heard uttered by an American political official in my lifetime. It ranks right up there with the transparent arrogance of Clinton administration hotshot Paul Begala's July 1998 explanation of the use of executive orders by the president to go over the heads of Congress: "Stroke of the pen. Law...

As much as $75 billion of Lehman Brothers Holdings Inc. value was destroyed by the unplanned and chaotic form of the firm's bankruptcy filing in September, according to an internal analysis by the company's restructuring advisers. A less-hurried Chapter 11 bankruptcy filing likely would have preserved tens of billions of dollars of value, according to a three-month study by the advisory firm, Alvarez & Marsal. An orderly filing would have enabled Lehman to sell some assets outside of federal bankruptcy-court protection, and would have given it time to try to unwind its derivatives portfolio in a way that might have...

RUSH: I want to expand my thought process on this whole Madoff thing and take it into the realm of the current economic crisis, because, quite naturally, all this fascinates me. It's about money. Well, it's all of our money here, folks, that's literally being tinkled away, and I've been asking myself, "How in the world did we get to this point when it all seemed to happen so overnight?" Now, I understand that there were foundational problems that we were being told of as far back as last summer and in spring, but if you search your memory bank...

Fleckenstein to Shutter Short-Selling Hedge Fund December 8, 2008, 7:25 am Topics Hedge FundsIndustries Financial Services One of the most public defenders of short-selling is closing down his fund. Bill Fleckenstein, the hedge fund manager, wrote in his Daily Rap column that he was closing down his Fleckenstein Capital fund. Mr. Fleckenstein’s column was reprinted on the Calculated Risk blog. In it, the fund manager writes that he always intended to return to the long side of investing, as opposed to the short-seller’s strategy of betting against stocks. He became a short seller in part because of what he described...

Two days after Lehman Brothers Holdings Inc. sought bankruptcy protection, an explosive rumor spread that another big Wall Street firm, Morgan Stanley, was on the brink of failure. The chatter on trading desks that Sept. 17 was that Deutsche Bank AG had yanked a $25 billion credit line to the firm That wasn't true, but it helped trigger a cascade of bearish bets against Morgan Stanley. Chief Executive Officer John Mack complained bitterly that profit-hungry traders were sowing panic. Yet he lacked a critical piece of information: Who exactly was behind those damaging trades? Trading records reviewed by The Wall...

Reforms are defusing the danger in the credit-default swap market. AS THE GLOBAL CREDIT CRISIS GRINDS ON WITHOUT seeming relief, worries grow that a mishap in the once obscure credit-default swap market could trigger an even more lethal financial meltdown. ..... It's easy to understand why credit-default swaps, which have been called financial weapons of mass destruction, can engender hysteria. These quasi-insurance policies allow buyers to insure all manner of debt instruments, including corporate and sovereign-nation bonds, various bond indexes and securitizations, against any credit losses from defaults. Demand for them grew explosively during the past decade's credit boom. According...

Abstract: Five of the world's richest hedge fund managers, including George Soros, the man who the broke the Bank of England, have been called to account by US politicians for their role in the collapse of the global financial system. The quintet – including John Paulson, who made $3.7bn (£2.49bn) last year betting against the US mortgage market – were grilled over their roles in buying unregulated derivatives products, which some politicians believe contributed to the financial markets' meltdown. The men, who each earned more than $1bn each last year, were called to account by Democratic Congressman Henry Waxman, who...