the joke

The Game That Goes On and On
A Swiss Bank, a President, and the Permanent Government

by Russ Baker



Last August, the presidential press corps followed Barack Obama and his family to Martha’s Vineyard for their brief vacation. The coverage focused on summery fare – a visit to an ice cream parlor, the books the president had brought along. Nearly everyone mentioned his few rounds of golf, including his swing, and the enthusiasm of onlookers. What caught my eye, though, was the makeup of his foursome. The president was joined by an old friend from Chicago; a young aide; and Robert Wolf, Chairman and CEO, UBS Group Americas. In a decidedly incurious piece, a New York Times reporter made light of Wolf’s presence:

“The president has told friends that to truly relax he prefers golfing with young aides…But he departed from that pattern Monday when he invited a top campaign contributor, Robert Wolf, president of UBS Investment Bank, to join him for 18 holes. Call it donor maintenance.”

Wolf, however, is hardly – as the Times suggested – just another donor. For one thing, he is a leading figure in an industry that almost brought down the entire financial system – and then was the recipient of astonishing government largesse. UBS, along with other banks, benefited directly from the backdoor bailout of the insurance giant AIG.

But UBS stands alone in one rather formidable respect – it was the defendant in the largest offshore tax evasion case in U.S. history, accused of helping wealthy Americans hide their income in secret offshore accounts. To settle a massive investigation, UBS forked over $780 million to the US treasury. This settlement came shortly before Wolf rounded out Obama’s golfing party. Given this rather problematical situation, why then would the President choose UBS’s Wolf of all people for this honor?

Wolf declined a request for an interview about his relationship with the President, so it was not possible to pose that question to him. This hardly matters, though, for the story goes far beyond Wolf and UBS. It involves Republicans as well as Democrats, the Bush Administration as well as Obama’s. More importantly, behind the trivialized golf outing on Martha’s Vineyard, lie the interests that increasingly set the course for every administration. And that now game the system so well that the rest of us – wherever we live in the world – are kept fighting for the scraps.


When most people criticize those aspects of government that seem most impervious to the democratic process, they cite the permanency and perceived self-interest of the mandarins of the Washington bureaucracy. But when it comes to real power, an ability to come out ahead no matter which party is in power, it’s hard to top certain financial institutions.

UBS is very much a part of that permanent government. Though not a household name in the United States, UBS is a major player in the Beltway game. During the 2008 campaign, while Robert Wolf was courting Democratic hopeful Obama, his UBS cohort, former Senator Phil Gramm, was working the other side of the street. As chairman of the Senate Banking Committee in the 1990s, Gramm, a corporate-friendly Texas Republican, played a key role in the deregulation of the banking industry, an act so central to the nation’s financial collapse. Since 2002, Gramm has been UBS Americas’ vice chairman. In 2008, he was the leading economics adviser for Obama’s opponent, John McCain – and even touted as a possible treasury secretary in a McCain administration.

The bottom line: UBS hedged its bets, and so had an inside track no matter which party took the White House. Thus, when Obama won, it was Wolf who ascended. The new president named the banker-donor to his White House Economic Advisory Board.

The important machinations behind this accrual of influence rarely get attention in the frenzied hustle of the news cycle. One reason is that they do not seem like news at all, since they are essentially woven deeply into the fabric of politics and government, thus hidden in plain sight. Another is that they are dauntingly complex.

Some things are simple, though. Like the fact that a UBS executive is a dubious candidate to serve as an economic advisor to the president. For one thing, the company’s track record at the time of the election was distinctly underwhelming. UBS suffered major losses on subprime lending, and had to raise money from the Singapore government and other entities. As Slate’s money columnist Daniel Gross quipped back in 2008, “UBS used to stand for Union Bank of Switzerland. But perhaps it should stand for Untold Billions Squandered. Or Underwater Bi-Lingual Schleppers.” Furthermore, UBS’ stock lost nearly 70 percent of its value even before the recession really kicked in – making it the worst performing foreign bank operating here.

Given this damning set of facts, Wolf made both an odd choice as a presidential adviser and a peculiar pick for that intimate round of golf.

obama can shut down internet

Obama Can Shut Down Internet For 4 Months Under New Emergency Powers

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Paul Joseph Watson
Friday, June 25, 2010

Obama Can Shut Down Internet For 4 Months Under New Emergency Powers 250610top2

President Obama will be handed the power to shut down the Internet for at least four months without Congressional oversight if the Senate votes for the infamous Internet ‘kill switch’ bill, which was approved by a key Senate committee yesterday and now moves to the floor.

The Protecting Cyberspace as a National Asset Act, which is being pushed hard by Senator Joe Lieberman, would hand absolute power to the federal government to close down networks, and block incoming Internet traffic from certain countries under a declared national emergency.

Despite the Center for Democracy and Technology and 23 other privacy and technology organizations sending letters to Lieberman and other backers of the bill expressing concerns that the legislation could be used to stifle free speech, the Senate Homeland Security and Governmental Affairs Committee passed in the bill in advance of a vote on the Senate floor.

In response to widespread criticism of the bill, language was added that would force the government to seek congressional approval to extend emergency measures beyond 120 days. Still, this would hand Obama the authority to shut down the Internet on a whim without Congressional oversight or approval for a period of no less than four months.

The Senators pushing the bill rejected the claim that the bill was a ‘kill switch’ for the Internet, not by denying that Obama would be given the authority to shut down the Internet as part of this legislation, but by arguing that he already had the power to do so.

    They argued “That the President already had authority under the Communications Act to “cause the closing of any facility or station for wire communication” when there is a “state or threat of war”, reports Sydney Morning Herald.

    Fears that the legislation is aimed at bringing the Internet under the regulatory power of the U.S. government in an offensive against free speech were heightened further on Sunday, when Lieberman revealed that the plan was to mimic China’s policies of policing the web with censorship and coercion.

    “Right now China, the government, can disconnect parts of its Internet in case of war and we need to have that here too,” Lieberman told CNN’s Candy Crowley.

    While media and public attention is overwhelmingly focused on the BP oil spill, the establishment is quietly preparing the framework that will allow Obama, or indeed any President who follows him, to bring down a technological iron curtain that will give the government a foot in the door on seizing complete control over the Internet.

    As we have illustrated, fears surrounding cybersecurity have been hyped to mask the real agenda behind the bill, which is to strangle the runaway growth of alternative and independent media outlets which are exposing government atrocities, cover-ups and cronyism like never before.

    Indeed, China uses similar rhetoric about the need to maintain “security” and combating cyber warfare by regulating the web, when in reality their entire program is focused around silencing anyone who criticizes the state.

    The real agenda behind government control of the Internet has always been to strangle and suffocate independent media outlets who are now competing with and even displacing establishment press organs, with websites like the Drudge Report now attracting more traffic than many large newspapers combined. As part of this war against independent media, the FTC recently proposing a “Drudge Tax” that would force independent media organizations to pay fees that would be used to fund mainstream newspapers.

    real news about bp

    The Real Truth About BP and What is Happening in the Gulf

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    Kurt Nimmo
    June 25, 2010

    BP is engaged in criminal negligence. It only pretends to clean-up its mess when government officials arrive for photo-ops. BP and its employees have given more than $3.5 million to federal candidates over the past 20 years, with the largest chunk of their money going to Obama.

    BP Chairman Carl-Henric Svanberg told reporters earlier this month: “I hear comments sometimes that large oil companies are greedy companies or don’t care, but that is not the case with BP. We care about the small people.”

    Small people. Expendable people. The woman in this video tell us what is really happening in Louisiana. BP, Obama, and Congress — all beholden to large corporations and bankers — are sacrificing thousand of people and keeping it hidden.

    The corporate media talks about Florida’s beaches and lost tourism money. They talk about the marine animals covered in oil but not the children who are coming down with respiratory problems from toxic gases blowing in from the Gulf.

      Idiots on Fox and CNN trade barbs back and forth about Obama’s lack of leadership. It’s the Democrats say the Republicans. It’s the Republicans say the Democrats. Fingers get pointed while oil washes up in the salt marshes and deadly chemicals rain down on crops in Mississippi. People are beginning to talk about a new disease… Gulf of Mexico Syndrome.

      “The petro-chemical-military-industrial complex is gassing Gulf Coast residents with poisonous Benzene and Corexit dispersant at dangerously high levels in the largest U.S. domestic military operation to date,” writes Deborah Dupré. “Human suffering in the Gulf is increasing from the world’s latest and largest toxic oil kill as BP lies and government remains silent about human health risks and associated military interventions. Most immediately damaging of the operation’s withheld information pertains to toxins breathed since the explosion.”

      Near the end of the above video Kindra Arnesen talks about what toxins are doing to her children. Her story is likely not an isolated incident. Lots of children and old people with respiratory ailments are having problems with the air in Louisiana (and soon other Gulf states and Florida). The media is just not telling us about it. The media is owned by large corporations. The corporate media’s job is to distract with mindless fluff and cover up the crimes of the corporatists.

      If this continues much longer the military will be called in — not to evacuate people but to contain angry people who will ultimately organize and take things into their own hands. Violence and revenge cannot be ruled out.

      Can you blame them? Wouldn’t you do the same thing if BP destroyed your livelihood and poisoned your children?

      // Social bookmarks

      economic commentary from europac

      June 25, 2010

      Suiting Up for a Post-Dollar World
      By John Browne

      The global financial crisis is playing out like a slow-moving, highly predicable stage play. In the current scene, Western governments are caught between the demands of entitled welfare beneficiaries and the anxiety of bondholders who fear they will be stuck with the bill. As the crisis reaches an apex, prime ministers and presidents are forced into a Sophie’s choice between social unrest and bankruptcy. But with the “Club Med” economies set to fall like dominoes, the US Treasury market is not yet acting the role we would have anticipated.

      Our argument has always been that the US benefits from its reserve-currency status, allowing it to accumulate unsustainable debts for an unusually long period without the immediate repercussions of inflation or higher borrowing costs. But this false sense of security may be setting us up for a truly monumental crash.

      There is fresh evidence that time is running out for the dollar-centric global monetary order. In fact, central banks outside the US are already making swift and discrete preparation for a post-dollar era.
      To begin, the People’s Bank of China has just this week decided to permit a wider trading range between the yuan and the dollar. This is the first step toward ending the infernal yuan-dollar peg. While the impetus behind this abrupt change remains a mystery, I have a sneaking suspicion that, as my colleague Neeraj Chaudhary explained in his commentary last week, the nationwide labor strikes were a prime motivator.

      In response to the 2008 credit crunch, the Fed printed so many dollars that the People’s Bank of China was forced to drive Chinese inflation into double digits to maintain the peg. The pain has fallen on China’s workers, who have seen their wages stagnate while prices for everything from milk to apartments have skyrocketed. This week’s move indicates that, regardless of its own policy motives, the Communist Party can no longer afford to keep pace with the dollar’s devaluation. The result will be a shift in wealth from America to China, which may trigger a long-anticipated run on the dollar, while creating investment opportunities in China.

      Just days before China’s announcement, Russian President Dmitry Medvedev rattled his monetary sabre by telling the press of his intention to lead the world toward a new monetary order based on a broad basket of currencies. Giving strength to his claim, the Central Bank of Russia announced that it would be adding Canadian and Australian dollars to its reserves for the first time. Analysts suggest that the IMF may follow suit. While Russia floats in the limbo between hopeless kleptocracy and emerging economy, it does possess vast natural resources and a toe-hold in both Europe and Asia. In other words, it will be a strategically important partner for China as it tries to cast off dollar hegemony.

      Speaking of Europe, the major powers there are moving toward a post-dollar world by rejecting President Obama’s calls to jump on America’s debt grenade. The prescriptions coming from Washington translate loosely to: our airship is on fire, so why don’t you light a candle under yours so that we may crash and burn together. Given that dollar strength is largely seen as a function of euro weakness (as Andrew Schiff discussed in our most recent newsletter, debt troubles in the eurozone’s fringe economies have created a distorted confidence in the greenback. However, as you might imagine, Europe has higher priorities than being America’s fall guy. Led by an ever-bolder Germany, the European states are wisely choosing not to throw themselves on our funeral pyre, but to wisely clean house in anticipation of China’s rise.

      In another ominous sign for the dollar, the Financial Times reported Wednesday that after two decades as net sellers of gold, foreign central banks have now become net buyers. What’s more, more than half of central bank officials surveyed by UBS didn’t think the dollar would be the world’s reserve in 2035. Among the predicted replacements were Asian currencies and the euro, but – by far – the favorite was gold. This is supported by Monday’s revelation by the Saudi central bank that it had covertly doubled its gold reserves, just about a year after China made a similar admission. There is no reason to assume these are isolated incidents, or that the covert trade of dollars for gold doesn’t continue. To the contrary, this is compelling evidence that foreign governments are outwardly supporting the status quo while quietly preparing for the dollar’s almost-inevitable devaluation. What people like Paul Krugman believe to be a return to medieval economics may, in fact, be the wave of the future.

      In peacetime, hardened troops will likely tolerate a blowhard general for an extended period; but when the artillery opens up with live ordnance, an ineffectual leader risks rapid demotion. The newspapers are now riddled with hints that foreign governments have lost faith in Washington and the dollar reserve system. It seems to me only natural that after a century of war, inflation, and socialism, the next hundred years would belong to those people who hold the timeless values of hard money and fiscal prudence. Unfortunately, our policymakers are not those people.

      Please note: Opinions expressed are those of the writer.

      g. edward griffin news

      US: Democrats say they are going to force Republicans to support their Cap-and-Trade tax by attaching it to a bill to regulate offshore drilling, believing that no one would dare oppose such a bill in the wake of the recent Gulf oil spill. [Similar ploys have been used many times in the past by both Democrats and Republicans.] NY Times 2010 Jun 25 (Cached)

      California welfare recipients, using debit cards given by the state, withdraw $1.8 million at casino ATMs over 8 months. This does not include money withdrawn from ATMs at bars and liquor stores.
      [California receives federal money to prop up its welfare system, which is one reason there is little interest in controlling or eliminating it.] LA Times 2010 Jun 25 (Cached)

      US: BP Whistleblower lashes out against her employer and exposes its deceptions, gross negligence, and indifference to the effects of the Gulf oil spill. Brasscheck Posted 2010 Jun 25

      Japan: Government recommends that citizens go to bed and arise an hour earlier to reduce electrical consumption for lights and TV sets, thus reducing carbon emissions. [Here is another example of how the global warming myth is leveraged to control human behavior. What is now just a recommendation eventually could become law.] Telegraph 2010 Jun 24 (Cached)

      Gulf oil spill is a re-run of an almost identical spill in the Gulf in 1979.  The same solutions that didn’t work 31 years ago have been applied to this spill, with the same failures. In 1979 the leak was eventually stopped by drilling 2 relief wells.
      Posted Jun 24

      New research discovers how anti-oxidants in red wine and green tea kill prostate cancer cells.
      Natural News 2010 Jun 24 (Cached)

      UN’s World Health Organization is pushing for a global internet tax to pay pharmaceutical companies to deliver drugs to third-world nations – to improve health, of course. [Not hard to figure out what lobbyist group is behind this one.] Natural News 2010 Jun 24 (Cached)

      Previously healthy 16 year-old girl is blinded following a second HPV vaccination.
      Natural News
      2010 Jun 24

      US: Home sales fall to a record low, as tax credits expire. Downward trend expected to continue. [Once again, we see government intervention doing more harm than good. Intervention caused the sub-prime crash and could not possible be a cure for what it caused. Better to let markets correct themselves with supply and demand setting prices, sales, and interest rates.]
      Fox News
      2010 June 23 (Cached)

      Scientists now claim that brain scans can predict your future behavior MORE effectively than YOU can. [Although the focus of this article is on how people make choices regarding their health, it is a small step to applying the same technology to behavior that the government may consider to be unacceptable. Your own testimony regarding your intentions could be disregarded in favor of a mandatory brain scan interpreted by technicians on the government payroll following orders to convict you of a crime you did not commit on the claim that your would have done so if not imprisoned. This is not as far-fetched as it may seem.]
      Fox News
      2010 Jun 23 (Cached)

      Supreme Court rules in favor of Monsanto
      (7-1) and lifts nationwide ban on GMO alfalfa. The Court also ruled that before GMO alfalfa can be planted, the USDA must submit an Environmental Impact Study (EIS) indicating that it is safe to plant and won’t contaminate other fields through cross pollination.  Several states are now seeking bans.
      [The USDA holds GMO patents, so its EIS may not be objective.]
      LA Times 2010 Jun 22 (Cached)

      US; Attorneys in Georgia submit a brief to a federal court declaring that the outcome will determine “whether the people control the government, or whether the government controls the people.” The case involves the right of individuals to choose to consume raw milk or any other natural food even if the government thinks they should not. Video clips are included in the article.
      2010 Jun 22 (Cached)

      A small California city lays off all employees and dismantles the police department. all public services to be contracted with neighboring cities.
      LA Times
      2010 Jun 22 (Cached)

      US: Senator Lieberman defends his bill to authorize the President to disconnect the Internet from international communication in the event of “cyberattack” – and says that we should follow the example of China in this regard. [If we didn’t know he is a globalist, dedicated to world government based on collectivism, he would almost sound convincing, but we know that his definition cyberattack or national security is much different that that of the average citizen. Besides, serious cyberattack could come from within the US as well as outside.] Liberty Maven 2010 22 (Cached)

      Mexican drug cartels now control 3 counties in Arizona, and local law enforcement doesn’t have the resources to fight it. US Wildlife and Fisheries has abandoned land along the border because of heavily armed drug and human traffickers.

      2010 Jun 21 (Cached)

      There is an interesting news report from Tennessee about a mysterious destruction of crops and just about everything else that grows. So far, the cause has not been determined, but we doubt if authorities are checking the plants to see if there is a residue of aluminum or barium that might be fallout from stratospheric spraying. We are hoping that someone in that area will be able to contact farmers or others who have reported this phenomenon and see if samples can be taken to a professional lab for analysis. This is happening in Tennessee along a large swath of land near the Shelby and Tipton county border along Herring Hill Road and elsewhere near the Mississippi River bottoms. Here’s the news report. Anyone interested? If so, please contact me at

      US Senator Kyl (R-AZ) says he was told by Obama that the federal government is not interested in securing the Arizona border because that would reduce support for the pending immigration bill, which primarily is an amnesty bill. [Obama denies having said this, but the lack of federal action verifies its truth.] WSJ 2010 Jun 21 (Cached)

      FDA proposes a ‘rule change’ to give one FDA bureaucrat the power to allow drug companies to add new ingredients to vaccines and drugs or alter the composition of old ones. This will allow Big Pharma to fast track new concoctions with minimal scientific evidence of effectiveness or safety.
      [It should be obvious by now that the drug cartel now uses the FDA as a disguised marketing branch of their operations.] NVIC 2010 Jun 21 (Cached)

      Apple Computer now collects the “precise” and “real-time geographic location” of its users’ iPhones, iPads, and computers when they download apps or media from the iTunes store. Users are prevented from downloading until they agree to this. LA Times 2010 Jun 21 (Cached)

      Gulf area residents are angry because as the oil spill continues BP Oil boss Tony Hayward was seen enjoying a yacht race while Obama was golfing. [They are angry for the wrong reason. It’s not that these men are taking time to relax, but that, although they talk a good line, they are doing little to actually contain the spill even when they are on the job. The real story is that they want the spill to continue to serve as an excuse to curtail future oil production. Also, the destruction of marine life caused by toxic dispersant chemicals will become an excuse for UN laws supposedly to protect the undersea habitat. It’s all about money and power, and that is where the anger should be directed.]
      Daily Mail
      2010 Jun 20 (Cached)

      The EU has adopted a regulation to prevent the construction of ordinary family homes starting in 2020. Other countries are expected to follow. New homes will have to be “near zero energy” buildings, which are unattractive compact cubes. [The global elite will not be affected. See the picture of a Al Gore’s California villa at the end of the article. Does it look “energy zero” to you?)

      Motl’s Blog
      2010 June 20  (Cached)

      Hawaii former elections official confirms that Obama was born outside of Hawaii. However, he
      still claims that Obama could be a born American citzen and says, if people disagree over his eligibility, they should not blame Obama but the process by which he was vetted for office.
      In further discussion, he is clueless about the degree to which federal politicians no longer serve the American people.
      WND 2010 Jun 20 (Cached)

      US: Pentagon resumes building data base of names, including Americans, who object to federal government policies – to protect against terrorism, of course. Raw Story 2010 Jun 19 (Cached)

      Israel says that the flotilla incident was a result of armed activists violating a required check point because the ship was suspected of containing weapons. See video of the actual boarding here. YouTube Posted 2010 June 19
      Israeli Ambassador says that Israel did not fire the first shot during the flotilla incident. The video appears to confirm that.
      YouTube Posted 2010 Jun 19
      [For our position on this incident, please see our comments in the Forum section by following this link.]


      Reports and commentaries that look beyond the news to identify historical facts and trends that must be understood to place the news into perspective. This is our “think-tank” section that makes it possible to anticipate future events.

      US Environmental group petitions the Department of Interior to declare wild bees as ‘endangered’. This article shows how the effect of the Endangered Species Act is to steal American land and impose heavy restrictions on landowners.
      2010 Jun 25 (Cached)

      This article explains the recent Supreme Court ruling in favor of Monsanto and shows how we are being fooled by advocacy and environmental groups into accepting corporate and political control over food. Solutions to protect against food scarcity are offered. 2010 Jun 23 (Cached)

      Is salted popcorn soon to become a federal offense? It will if influential collectivists have their way because, they say, most people are too dumb to make their own choices
      . Crosstalk 2010 Jun 23 (Cached)

      James Corbett delivers a stunningly concise and accurate explanation of the so-called ‘austerity’ programs demanded by the IMF. He is talking about the dismantling of nations and their conversion into puppets of large corporations and international bankers. But he also has a solution well worth considering. YouTube 2010 Jun 22

      BP Oil and the Political Agenda, an excellent summary of the issues and facts NOT covered by mainstream media. Of particular interest are several short videos, including one on a cheap, fast, non-toxic, and proven method of cleaning up the oil but which is ignored by BP and the federal government. [It is clear from these facts that those in charge do not want to solve the problem but seek an agenda that benefits from the catastrophe itself.]
      2010 Jun 18 (Cached)

      how to buy a used car

      How to Negotiate for a Used Car

      by Brett on June 16, 2010 · 51 comments

      in Manly Skills

      A couple of months ago, I wrote about how to buy a used car. I went through all the steps except for negotiating because it’s a topic deserving of its very own post. A post which I’ll tackle today.

      Now to begin, here’s my honest confession: I suck at negotiating.

      And it becomes really apparent whenever I negotiate for big purchase items like cars. When Kate and I had to buy a “new” car last year, I stunk it up. It wasn’t for a lack of trying. I was actually excited about the chance to improve my negotiating chops. I felt ready to walk into the dealership and make a deal.

      But I punted. When the dealer started putting out numbers, I hemmed and hawed.

      Thankfully, Kate is a kickass negotiator. I think it’s her Italian heritage that makes her so good. Maybe the Polish. I don’t know. She’s just good at it. She saw that I was flubbing it up and took over the reins and got us a good deal.

      As we drove away in our new car, I’ll admit that my manly ego was bruised. And I could tell Kate was disappointed that I hadn’t been able to take the lead.

      I thought, “I’m the man damnit! I should know how to negotiate and not have to let my wife do it.”

      Perhaps that’s not too mature. I’m definitely lucky to have a wife who knows how to haggle like an Arabian bazaar merchant. But I’d like to be able to hold my own in this arena as well.

      So I used the experience to double down on my efforts to improve my bargaining skills. In an effort to prepare myself for the next time we have to buy a car, I did some research, asked guys I know for their negotiating tips, and went along with a friend who was buying a car. Here’s what I learned along the way.

      Knowledge Is Power

      In the negotiation game, knowledge is truly power. And in the car buying business, the car salesman usually has the most information. Think about it. When the average buyer walks into the dealer, he’ll immediately divulge to the salesman which car he wants, how much he can pay per month, and which vehicle he’s trading in.

      Meanwhile, the salesman gives away no information that would help the buyer. Information like how much the car really cost the dealership, how low they’ll really sell it for, or what’s the real value on the buyer’s trade-in.

      Who do you think’s going to get the better deal in this scenario? The dealer, of course. He’s the one with all the information!

      Thus, to minimize the amount you pay for a car, you need to do two things: 1) hold your cards close by not telling the dealer exactly what you’re looking for or how much you’re willing to pay and 2) find out as much information about the car you want to buy before you walk into the dealership.

      Know How Dealers Make Their Money

      When you’re talking with a dealer, it’s important to know that dealers make money three different ways with each customer.

      1. They can make money on the front end of the purchase by selling the car for more than what they paid to buy it.
      2. They can make money on the back end, selling you things like financing, extended warranties, and dealer add-ons like rustproofing.
      3. If the dealer includes trade-in value, they can make money on the difference between what they pay for your car and what they get when they sell it.

      Most buyers just focus on #1. However, car dealers might actually make more money on numbers #2 and #3. Thus, when you start negotiating for a used car, take into account things like financing and the trade-in value of your current car when calculating the final price.

      How to Negotiate for a Used Car

      Buy cars that are at least two years old. Why two years old? Well, they’re new enough that they still look nice and probably don’t have a lot of problems. But more importantly, a new car’s wholesale value drops between 45 and 55 percent of its original sticker price after two years. What a bargain!

      Read Consumer Reports annual auto issue. Consumer Reports annual auto issue comes out every April and has a used car section that gives you info like lists of most reliable and least reliable used cars and frequency-of-repair records for recent model years. This information can help you create a list of used cars you want to check out.

      Get the big picture value. Once you have a list of possible used cars, get an idea of how much they generally go for by checking the Kelley Blue Book’s Guide to Used Cars and the National Automobile Dealer’s Official Used Car Guide. Don’t just rely on the website versions of these value guides.  The websites won’t give you a car’s wholesale price, just the retail value. The wholesale price is what dealers use to determine how much they should pay for a car. After paying the wholesale price, dealers jack the price up for retail. You want to buy the used car for as close to the wholesale price as possible.

      However, don’t take these values too literally.  The values in the Blue Book or Official Used Car Guide don’t reflect the specific situation in your specific market. For example, your town might have a glut of Astro Minivans (Why are you buying an Astro Minivan?), so the price on those will be less than the blue book value. So you’ll need to…

      Fine tune your estimate. Find out what the going price is for the cars you want in your area. Check out for prices in your area.

      Check the dealerships to see if they have the car. Look on, call around to the dealerships or check their websites to see if they have the used car you want and what they’re asking for it. If they have the car you’re looking for, swing by the car lot and write down the car’s Vehicle Identification Number. You’ll need it later.

      CarFax. Get one. CarFax gives a comprehensive report of a vehicle’s history. The report will tell you how many owners the car has had or if it’s had any accidents. That sort of info can help get you a lower price (or steer you away from the car altogether). For example, if the car belonged to a rental fleet, it probably had a bunch of different drivers who had varying degrees of driving skills. Some may have gunned the engine at stoplights and others might have kept their foot on the brake. Bottom line, an old rental car has a lot more wear and tear than a similar car that had only one owner (especially of the old lady variety). Consequently, the old rental car should have a considerably lower price than the one owner car.

      To get a CarFax report, just visit CarFax and enter the Vehicle Identification Number. They cost $34.99, so try having the dealer get it for you. “Show me the Carfax” seems to work on tv.

      Research financing rates before you walk into the dealer. Ideally, you should pay in cash when buying a used car, but sometimes you just don’t have ten grand lying around to blow in one fell swoop. That’s when auto financing will come in handy and car dealers would love to help you finance your new used car. Remember that dealers make money on the back end by getting you signed up with dealership financing.  A bank actually funds the loan, but the dealer acts as a middleman who gets a commission for signing you up. Consequently, the salesman will pressure you to finance with the dealer.

      But here’s the deal. You don’t have to finance your car with the dealer. You can use any bank that you want. To avoid the pressure of inking a car loan at the dealership, shop around for different auto loan rates. Check your bank. When the dealer starts pushing you to the little finance office, you can tell them you’ve already been approved for a car loan and what the interest rate is on that loan.

      Of course, the dealership still wants to get that commission from their bank, so they’ll start negotiating auto loan rates with you. You might even get a better deal going with the dealer. Who knows! Just have your financing ready before you step foot on the car lot. You’ll save yourself some money.

      Take care of the trade-in. If you’re going to trade-in a car to buy your new used car, do some research on your current car. You want to get as much money as you can on the trade-in. Dealerships will low ball you on the price so they can turn around and sell it for a hefty profit. Ask for the wholesale price or as near to wholesale price as you can. Again, to find the wholesale price on your car, check out Kelly Blue Book or the Official Used Car Guide.

      If you don’t want to deal with the dealer, you can always sell the car yourself at retail price. It’s a bigger hassle, but you might get more money that way.

      Time to start dealing. Alright. You know the wholesale/retail price and the going price for the car in your area. You also have a few auto loans with competitive rates lined up. It’s time to do business.

      Step into the dealership with a set “walking price” fixed in your head. If the dealer refuses to meet this price, you know you’re walking away.

      If you’re shopping as a couple, make sure you’re both on the same page and get your “routine” down. When one person gets up to walk, the other gets up too. You don’t want one person hard balling while the other jumps in with, We’ll take it!”

      Make an offer. Most dealers build about 20% gross margin into the used car’s asking price. That means they ask for 20% more than what they paid for it. So offer 15% below the asking price. Tell the salesman you know that there’s about a 20% gross margin in the price and that you want him to make a profit, but you’re not going to let him take you to the cleaners.

      Then zip your lip. Just stare at the salesman and wait for him to speak. Don’t hem or haw like I did. That just lets the salesman know you’re not confident with your offer.

      He’ll probably say stuff like, “But our asking price is lower than the retail price! You’re getting a great deal!”

      Tell him, “I don’t care about the retail price. I care about the wholesale price and what you paid for it. The closer we can get to that wholesale price, the more likely I’ll drive out of this lot with this car.”

      He may act insulted. He may go to the back to confer with his manager. Remember, he’s going to make you feel like you’re bleeding him dry and he’s doing everything he can to bring the price down. Don’t let guilt or obligation get to you. This is business. You want to buy a car; he wants to sell one. If he doesn’t like your offer, he won’t take it. No harm done.

      Point out things that might make the car hard to sell. Dealers want to move the cars off the lot, the faster, the better. Point out how unpopular a standard transmission is or that the car doesn’t even have a CD player or how there’s a big tear in the seat. Say, “That’s going to make the car hard to sell, but I’m willing to drive it off the lot right now for x price.”

      If he counters with a higher number, ask for 10% below the asking price. If he counters again, tell him you have an appointment to see the exact same car with another dealer and walk out the door. Before you leave, give him your phone number and tell him to call you if he changes his mind. He’ll probably call. A profit is a profit, no matter how slim it is.

      Turn down dealer add-ons. If you’re buying a used car from a dealer, they’re going to try to sell you a bunch of add-ons like rustproofing or detailing. Just say no. If you live in a place that requires a rustproofing, you can probably do it cheaper somewhere else.

      Be ready to walk away. In any negotiation, be ready to walk away. Be flexible in your choice and don’t get too attached to one car. Remember, there are plenty more automotive fish in the sea.

      Have any more used car negotiation tips? Share them with us in the comments.