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Senate yanks 102-year-old freebie from banks

© yourpfpro.com
Banks given the "highway."
Banking lobbyists are furiously fighting a proposed and unexpected cut in revenues that the industry has received for more than a century. Included in Senate legislation to fund highways is a provision to greatly reduce the dividend that the Federal Reserve pays to banks that participate in the Fed system.


Comment: A review of previous policy proposals suggests that the idea may have first been thought up by House liberals. The 2014 budget proposal from the Congressional Progressive Caucus put forward the idea to raise revenue, and a CPC aide said he believed it was the first time someone in Congress proposed the idea. But the Senate highway bill apparently marks the first time members have actually placed it in actual legislation.


The payout, which is 6%, has been around since Congress authorized the Federal reserve Act of 1913. More than 2,900 banks have purchased stock (equal to 6% of each bank's total capital and surplus) in the central bank that allows them to participate in the system. For the banks, it's a win-win investment because it is subsidized by the government in the form of the annually-paid 6% dividend. It originally came about as a marketing ploy to bring banks on board, making up for the fact that the stock can't increase in value, nor can be traded or sold.

In 2012, the Fed handed $1.637 billion in dividends to banks, most of it tax-free, according to The New Republic. It's "a risk-free entitlement program," wrote the magazine's David Dayen. "It's one of the many unknown ways the Fed extends special benefits to Wall Street."

But senators are always looking for ways to boost government revenues to help pay for their legislation. They have now turned to the banks' 6% dividend for a healthy source of funding. Without any advance notice to the banking industry, they included a provision in the highway bill—which lawmakers are hoping to pass before funding evaporates at month's end—that would reduce the dividend to 1.5% for banks that hold more than $1 billion in assets. The reduction would reap about $17 billion for the government.

Comment: As far as this provision being attached to the highway bill...this is done all the time, so now that it affects the banks we are being picky?

Donald Kohn, the former vice chair of the Fed, told House lawmakers Wednesday that the proposal would be one directly felt by banks. "Let's recognize that by lowering it to, say, 1.5 percent on the proposal, in effect you are placing a tax on banks," he told the House Financial Services Committee. Whoa there, buckaroo! Since when does the (not total) rescind of a freebie constitute a tax on the banks? And, who/what has dibs on citizen money in the next derivatives fiasco "bail-in" situation? The banks. Who will be left holding the empty bag? Certainly not the banks.


Георгиевская ленточка

Swiss media interview with Putin: FIFA 2018 and American imperialism

© Presidential Press and Information Office
Vladimir Putin gave an interview to Swiss media. The interview was recorded on July 25 in St Petersburg, during the President’s visit to the preliminary round draw for the 2018 Football World Cup.
Question: Good evening, Mr President. Thank you very much for making the time for this interview.
Vladimir Putin (In French): Bon Soir.
Question: We are currently in the city of St Petersburg, where the draw ceremony is underwayfor the 2018 Football World Cup, which will be held in the Russian Federation, and to which you are devoting so much energy.
Vladimir Putin: Yes, this is true. Congratulations to all of us.

I can honestly tell you, and there is nothing new: we do not have any special ambitions in this upcoming championship, although we certainly expect a good performance from our team.

Our goal in holding this competition fell in line with FIFA's goals - namely, broadening football's geography. I won't even mention that Russia is a very large nation - the biggest in the world in terms of territory, and the largest in Europe in terms of population.

In addition to everything else, we have a visa-free regime - free movement - with most of the former Soviet republics, which are now independent states. And naturally, this event will be important not only for Russia but our closest neighbours as well.

Comment: After reading this interview, can anyone conclude that Putin is mad? Hardly. That's why he's so demonized in the Western press: because he is saner than any Western leader, and he tells the truth plainly. And that is a dangerous thing for 'Western democracies'! See: 80% of French citizens want a good relationship with Russia

And if you're one of those people Putin has thanked in his final paragraph, you can show your support by signing: Dear Putin!


Eye 1

Turkey calls NATO council meeting to step up the bombing campaign in Syria

© AP Photo
With the NATO council meeting to discuss the recent outbreak of violence in Turkey, the US and Ankara have reportedly spoken about establishing an ISIL-free buffer zone in northern Syria. However, there are fears that such a campaign would target other groups and trigger more violence in the region.

The issue of an anti-buffer zone is thought to have been high on the agenda of today's NATO council meeting in Brussels, after Turkey experienced its greatest outbreak of violence in recent times following clashes with ISIL militants and Kurdish groups.

Turkish Prime Minister Ahmet Davutoglu said he was pushing for permission to initiate a bombing campaign to rid northern Syria of ISIL fighters and other terrorist groups, while also offering support to western-backed 'moderate' rebel groups in the country.

Comment: Once again Terrorism Inc. gives NATO an excuse to ramp up its war on the world. Also see:


Bad Guys

Ukrainian 'leadership' demands more bailout money for themselves, and more shock therapy for the people

© Sputnik / Andrei Stenin
While a crisis of faith, of sorts, has resounded in western discourse on the economic effectiveness of austerity, this scepticism, rather ironically, dissipates when you cross over into the remnants of the Iron Curtain.

Neoliberalism's flagellants reside east of the Elbe. There, ideological purity remains, if not redoubled. Former patients of shock therapy are now its most devoted converts. This was not only demonstrated by Estonian, Latvian, Lithuanian, Slovak, and Polish officials' unyielding support for 'tough reforms' in Greece, but the general lack of sympathy among their populations for the Greek people. Past shock therapies have left them numb, docile, and inured to the calamities of neoliberal logics.

The neoliberal faith is expanding further eastward as well. The Ukrainian leadership have shown their unbridled readiness to exchange one master, Russia, for another: western finance and corporate capital. Even in light of the Troika's 'fiscal waterboarding' of Greece and the utter failure of austerity as economic policy, the Ukrainian government is willing, even enthusiastic, to implement reforms prescribed by the IMF not only with the blind faith that they will stimulate economic recovery, but also in the name of 'European values', which are now subject to much scrutiny.

Comment: Of course these greedy officials are willing to make the Ukrainian people suffer under austerity while they themselves use bailout money in their backroom deals. They are simply shameless.


Arrow Down

Chinese stocks crash overnight: Is another "glitch" in the New York Stock Exchange coming?

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Despite unprecedented efforts by the Chinese government to stem the rout in the Chinese stock market that had shaved as much as $4 trillion from share prices before the government's interventions this month and last, the Shanghai Composite closed down 8.48 percent today at 3,725.558.

The overnight rout has raised speculation in some quarters as to whether we are going to see another "glitch" on the New York Stock Exchange today similar to that of July 8 in the midst of another Chinese stock market tumble. As we reported at the time:

Comment: See also:

Trading on New York Stock Exchange shut down due to 'computer glitch'; Airline grounds flights due to 'technical issues'

Chinese stock plunge leaves state media speechless


Bomb

Global derivatives are the $1.5 Quadrillion time bomb that might yet 'destroy Western civilization'

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When investing becomes gambling, bad endings follow. The next credit crunch could make 2008-09 look mild by comparison. Bank of International Settlements(BIS) data show around $700 trillion in global derivatives.


Along with credit default swaps and other exotic instruments, the total notional derivatives value is about $1.5 quadrillion - about 20% more than in 2008, beyond what anyone can conceive, let alone control if unexpected turmoil strikes.

The late Bob Chapman predicted it. So does Paul Craig Roberts. It could "destroy Western civilization," he believes. Financial deregulation turned Wall Street into a casino with no rules except unrestrained making money. Catastrophic failure awaits. It's just a matter of time.

Ellen Brown calls the "derivatives casino...a last-ditch attempt to prop up a private pyramid scheme" - slowly crumbling under its own weight.

For years, Warren Buffett called derivatives "financial time bombs" - for economies and ordinary people.

Comment: It's a big house of cards that could come down at any moment. When it does life in the West will change dramatically. Check out:


Star of David

Israel conducting large scale emergency-readiness war drills

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© Baz Ratner / Reuters
Large-scale military drills have been launched in Israel with the aim of testing the IDF's readiness to go into emergency mode. Hundreds of thousands of reserve soldiers are involved in testing the system.

They will all be receiving a telephone call to confirm everything is in working order, according to the General Staff's plan for the drills, set to last for three days.

Thousands of others will be summoned to bases on short notice, according to the Jerusalem Post. An IDF source told the newspaper that this is "one of the largest telephone call-ups we've had in an exercise."

"We want to ensure that the system is well-oiled and working."

Comment: There seems to be a marked increase in military drills and war games across the globe. Is this for preparations that something big is about to happen?


Bad Guys

Islamic State leader approves beheading of woman as wedding present

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© Muzaffar Salman / Reuters
Islamic State leader Abu Bakr al-Baghdadi approved a beheading of a woman as a wedding gift for a female religious judge, a defector from the terrorist group told Daily Mail in an exclusive interview, also describing other atrocities committed by the militants.

A female Sharia judge, who lost her husband in a fighting and had to marry again under Islamic State (IS, formerly ISIS/ISIL) law, demanded to kill an "infidel" - an unbeliever - as a present for her wedding, the interview reveals.

The Group's leader al-Baghdadi allegedly satisfied her request, although, insisting she could claim only the life of another woman as affairs between men and women are strictly segregated in the Islamic State.

Comment: The Islamic State is a deadly trap luring people with romantic ideals and then adding them to the brutal killing machine.


Handcuffs

Native American civil rights activist found dead in Mississippi jail cell

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© Brendan McDermid / Reuters
The Mississippi Bureau of Investigation is probing the mysterious death of Rexdale W. Henry, who was found dead in the Neshoba County Jail on July 14. A private autopsy funded by prominent activists is underway.

Henry, a member of the Choctaw tribe and a longtime community activist, was found dead of unspecified causes in a jail cell on July 14 about 30 minutes after he was last seen alive. He was first detained on July 9 after failing to pay a traffic fine, according to the Jackson Free Press. He was the second person this year to die in the Neshoba County Jail.

The Mississippi state crime lab has conducted an autopsy, while the Mississippi Bureau of Investigation continues its look into how Henry, 53, lost his life in a jail of the same county known for the Mississippi Burning murders more than 50 years ago.

Comment: With all of these deaths of minorities by police and in jails lately really makes one wonder if these are provocations to stir societal unrest.


Network

Predators in power: Porn websites visited 250,000 times on UK Parliament computers

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© Stefan Wermuth / Reuters
Over 247,000 attempts were made to visit X-rated websites from the UK Parliament's computer network last year, with the numbers spiking during parliamentary recess in April, a Freedom of Information (FOI) request has revealed.

Attempts to access more than 42,000 sites classed as pornographic were made during April alone last year, totaling more than 1,300 each day.

The Freedom of Information request by the Daily Express found the second most active month was October 2014, where there were more than 30,000 attempts to access porn sites.

The figures don't show which sites were accessed or how long was spent on the pages.

The findings add to the previous total of 350,000 in 2013.

Comment: Whatever it takes to keep the children safe?

You can start by resigning and locking up the entire shower of predators-in-power.

Which won't happen of course.

Why is it that people accept monsters for leaders?