Grand Theft Economics
Ashley Smith
SocialistWorker.org
Mon, 08 Feb 2010 00:00 EST
Ashley Smith reports that the U.S. is reviving what Haitians call "the plan of death."
© Unknown
Hillary Clinton celebrates job creation in Haiti inside a clothing factory
ONE MONTH after the devastating earthquake, Haiti continues to suffer under apocalyptic conditions.
The quake killed more than 200,000 people, injured 250,000 and has left over 3 million dependent on assistance for food, water and housing. Contrary to the puff pieces in the media, the relief operation has been a miserable failure. The United Nations admitted at the end of January that had only been able to feed 1 million people, leaving many more without access to food. Whole sections of Port-au-Prince and surrounding towns never even saw relief convoys.
Amid this catastrophe, imperial powers and corporate vultures are circling, eyeing the profits to be made from reconstruction.
Rita Nazareth
Bloomberg
Mon, 08 Feb 2010 21:02 EST
U.S. stocks slid and the Dow Jones Industrial Average closed below 10,000 for the first time since November amid concern that deteriorating European government finances will derail the economic recovery.
Bank of America Corp. and American Express Co. lost at least 2.8 percent for the biggest declines in the Dow. Nasdaq OMX Group Inc. fell 4 percent to lead the Standard & Poor's 500 Index lower after its forecast for operating expenses topped some analysts' estimates. Home Depot Inc. rose 2.2 percent and Google Inc. climbed 0.4 percent on analyst upgrades.
The S&P 500 decreased 0.9 percent to 1,056.74 at 4:07 p.m. in New York, its biggest Monday drop since October. The Dow slipped 103.84 points, or 1 percent, to 9,908.39. Almost four stocks retreated for each that rose on the New York Stock Exchange. All 10 major groups in the S&P 500 fell today.
The Sydney Morning Herald
Mon, 08 Feb 2010 18:34 EST
The federal government decision to prematurely withdraw its deposit and wholesale guarantee scheme for banks will ignite competition in financial services and intensify the need for banks to diversify their revenue base.
The guarantee has been vital to the stability of Australia's financial system as others were collapsing, but a nasty side effect was diminishing competition in Australian banking as the big four grabbed bigger slices of home loans, small-business loans, credit cards and deposits.
Recent figures show that the big four banks now hold more than three-quarters of outstanding mortgages; two years ago the figure was 56.8 per cent. With deposits the story is similar, particularly as the banks slug it out for them.
Ellen Brown
The Huffington Post
Sat, 06 Feb 2010 18:19 EST
Rumor has it that Timothy Geithner is on his way out as Treasury Secretary, due to his involvement in the AIG scandal that is now unraveling in hearings before the House Oversight and Reform Committee.
Bob Chapman writes in The International Forecaster:
Each day brings more revelations of efforts of the NY Fed and Goldman Sachs to hide the details of the criminal conspiracy of the AIG bailout ... This is a real crisis on the scale of Watergate. Corruption at its finest.
But unlike the perpetrators of the Watergate scandal, who wound up facing jail time, Geithner evidently has a golden parachute waiting at Goldman Sachs, not coincidentally the largest recipient of the AIG bailout. At least that is the rumor sparked by an article by
Caroline Baum on Bloomberg News, titled "Goldman Parachute Awaits Geithner to Ease Fall." Hank Paulson, Geithner's predecessor, was CEO of Goldman Sachs before coming to the Treasury. Geithner, who has come up through the ranks of government, could be walking through the revolving door in the other direction.
Mike Whitney
Smirking Chimp
Tue, 02 Feb 2010 19:54 EST
The reappointment of Fed chairman Ben Bernanke means that the opportunity for change has passed and the reform movement is dead. It means that and that derivatives trading, off-balance sheet operations, securitization, dark pools and high frequency trading will go on much as they have before. It means that the public will continue to be gouged so that a handful of Wall Street sharpies can rake in obscene profits using complex "financial innovations" and over-leveraged debt instruments. It means that the entire system will continue to be put at risk to protect the interests of investment banks and hedge funds. It means that the subsidies, the preferential treatment, and the bailouts will continue to fuel populist rage and exacerbate deepening divisions in society. It means that the status quo has been preserved and that it's "business as usual".
No reform movement will succeed as long as Bernanke is at the Fed. He's an agent of the big banks and a Wall Street loyalist. He's also the author of Too Big To Fail, the controversial theory which provides unlimited state support for financial institutions that are deemed too large or interconnected to fail. TBTF means that capitalism's vital market clearing function can avoided if one is rich or powerful enough. Bernanke repealed capitalism to save his friends.
Gretchen Morgenson and Louise Story
New York Times
Sat, 06 Feb 2010 18:31 EST
Billions of dollars were at stake when 21 executives of Goldman Sachs and the American International Group convened a conference call on Jan. 28, 2008, to try to resolve a rancorous dispute that had been escalating for months.
A.I.G. had long insured complex mortgage securities owned by Goldman and other firms against possible defaults. With the housing crisis deepening, A.I.G., once the world's biggest insurer, had already paid Goldman $2 billion to cover losses the bank said it might suffer.
A.I.G. executives wanted some of its money back, insisting that Goldman - like a homeowner overestimating the damages in a storm to get a bigger insurance payment - had inflated the potential losses. Goldman countered that it was owed even more, while also resisting consulting with third parties to help estimate a value for the securities.
After more than an hour of debate, the two sides on the call signed off with nothing settled, according to internal A.I.G. documents and an audio recording reviewed by The New York Times.
Ethan A. Huff
NaturalNews
Sat, 06 Feb 2010 06:00 EST
In response to an environmental lawsuit filed against the oil giant, Chevron has fortified its defenses with at least twelve different public relations firms whose purpose is to debunk the claims made against the company by indigenous people living in the Amazon forests of Ecuador.
According to them, Chevron dumped billions of gallons of toxic waste in the Amazon between 1964 and 1990, causing damages assessed at more than $27 billion.
The company is being criticized by people and organizations from across the social and political spectrum for its unethical behavior in regards to the case. Originally filed in U.S. federal district court back in 1993, the lawsuit was eventually moved to courts in Ecuador at Chevron's behest. Having initially lauded Ecuador's legal system in an effort to have the case moved there, Chevron later changed its mind and began attacking the system when that system found the company liable for damages.
Gretchen Morgenson
New York Times
Sun, 07 Feb 2010 08:21 EST
You know we're in trouble when we're told that the economic problems in Greece, Portugal and Spain, the most indebted countries in the euro zone, are likely to remain safely contained in those nations.
After all, we heard the same nonsense in 2007 from United States financial leaders talking about the subprime mortgage mess. Both Ben S. Bernanke, the chairman of the Federal Reserve Board, and Henry M. Paulson Jr., then the Treasury secretary, rolled out to reassure concerned investors that troubles in mortgage land wouldn't permeate the rest of the economy.
As we all now know, mortgage woes were contained - to planet Earth. And so it may be with overleveraged nations in Europe.
Alexis Xydias, Rita Nazareth and Lynn Thomasson
Bloomberg News
Sun, 07 Feb 2010 06:09 EST
The securities unit of London-based Barclays Plc told analysts yesterday not to use the acronym for Portugal, Italy, Ireland, Greece and Spain in notes to clients, according to a memo obtained by Bloomberg News. The mandate from Valerie Monchi was sent to research staff.
The Piigs nickname has grown increasingly popular in the last month as investors dumped assets in the euro zone's smaller economies on concern the countries will struggle to control budget deficits. Stocks in Spain, Portugal and Greece plunged today, with the Athens Stock Exchange Index falling to the lowest level since April. Yields on Greece's 10-year bonds and Portugal's 2-year securities have jumped to the highest levels against German bunds since the late 1990s.
Barry Grey
World Socialist Web Site
Sun, 07 Feb 2010 03:16 EST
Stock markets in Europe and Asia fell sharply Friday in the second day of a near-panic selloff fueled by fears that the debt crisis facing weaker European economies will throw the world economy into a "double-dip" recession.
Commodity prices - oil and gold, in particular - also fell sharply.
In the US, triple-digit losses on the Dow Jones Industrial Average were recouped in the final hour, resulting in small gains for the Dow and the other major indexes in volatile trading, following a sharp selloff on Thursday.
The Dow ended the day with a 10-point gain, following a 268-point plunge on Thursday. The index, which was below the 10,000 mark for most of the day, has lost 6.5 percent over the past two weeks.
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