http://www.sott.net Signs of the Times, featuring news and commentary on world events. Never wavering in our unending search for the light of truth in a pathocracy driven world! en-us Original content Copyright 2009 by Signs of the Times. For other content, see our Fair Use Policy at www.sott.net Sat, 07 Nov 2009 00:39:40 -0500 http://www.sott.net/images/sottlogo_rss.jpg SOTT.net http://www.sott.net http://www.sott.net/articles/show/196330-Mission-Accomplished-Let-the-Looting-Begin-ExxonMobil-led-consortium-nets-supergiant-Iraq-oil-field Group wins bid to develop west Qurna as Baghdad signs up slew of big contracts Baghdad - An ExxonMobil-led consortium has beaten rival Russian, French and Chinese groups to bag initial rights to develop Iraq's West Qurna field, the Oil Ministry said, adding momentum to Iraq's bid to unlock its oil riches. With reserves of 8.7 billion barrels, West Qurna is among the prized Iraqi fields eyed by Western oil majors as they face flat or lower output at home and stiff competition from Chinese and Indian oil companies in bidding for oilfields elsewhere. "The consortium led by ExxonMobil, which includes Shell, won the contract to develop West Qurna Phase One oilfield," Oil Ministry spokesman Asim Jihad said. The initial deal was signed in Baghdad on Thursday but needs Cabinet approval before it can be finalized. The 20-year contract is part of a raft of deals Iraq is close to formalizing in a bid to catapult itself to the world's third largest oil producer after decades of war and economic decline. http://www.sott.net/articles/show/196330-Mission-Accomplished-Let-the-Looting-Begin-ExxonMobil-led-consortium-nets-supergiant-Iraq-oil-field Fri, 06 Nov 2009 19:05:07 -0500 http://www.sott.net/articles/show/196319-AIG-posts-profit-of-455-million New York - Bailed out insurance giant AIG on Friday announced a profit of 455 million dollars in the third quarter, a massive turnaround from a 24.4 billion dollar loss in the same period last year. The earnings from group, the largest recipient of US government aid during the financial crisis, were better than expectations. Excluding special items, the profit was 2.85 dollars per share, compared with a market forecast of 1.98 dollars per share. It was the second consecutive quarterly profit for American International Group after the prior quarter's earnings of 1.8 billion dollars. http://www.sott.net/articles/show/196319-AIG-posts-profit-of-455-million Fri, 06 Nov 2009 17:21:08 -0500 http://www.sott.net/articles/show/196317-California-power-company-seeks-higher-rates-for-energy-efficient-customers Think it's keen to be green? Not if you're California's Pacific Gas & Electric, according to a recent report. Utility provider PG&E, in documents filed with the state, is seeking a five percent rate increase for its most energy-efficient customers. The increase is reportedly so the company can give it's highest-volume customers a price break. "[The] company, with profits up 4.6 percent in the third quarter of this year, said they're just trying to be fair," California blog Mission Local noted. "It's necessary to avoid the continued shifting of costs associated with utility services to a limited set of residential customers," PG&E spokesperson told blogger Heather Duthie. That "limited set of residential customers" the company refers to are those who use between 131 and 300 percent of average customers, Mission Local added. Under the proposal, they can expect future savings between 2.5 and 5.7 percent on their electric rates. http://www.sott.net/articles/show/196317-California-power-company-seeks-higher-rates-for-energy-efficient-customers Fri, 06 Nov 2009 16:37:00 -0500 http://www.sott.net/articles/show/196304-British-Airways-to-Cut-More-Jobs-After-a-Heavy-Loss British Airways (BA) said on Friday that it plans to cut a further 1,200 jobs after reporting a heavy loss in the first-half of its financial year. The further job cut means that the airline will have shed a total of 4,900 positions by March 2010. The company suffered a loss before tax of 292 million pounds (about 485 million dollars) for the six months to the end of September, compared with profits of 52 million pounds a year earlier. It is also the first loss in first half of its financial year. The first half of BA's financial year is usually stronger because it covers the summer holiday season. BA said revenue over the six-month period was down by 13.7 percent to 4.1 billion pounds, compared with 4.75 billion pounds in the same period of 2008. http://www.sott.net/articles/show/196304-British-Airways-to-Cut-More-Jobs-After-a-Heavy-Loss Fri, 06 Nov 2009 14:28:37 -0500 http://www.sott.net/articles/show/196294-Unemployment-Rate-Jumps-to-10-2-Percent-Highest-Since-1983 More than one in 10 members of the American workforce were unable to get a job in October, the Labor Department said Friday, the first time in nearly three decades that the unemployment rate has soared into double digits. The unemployment rate rose to 10.2 percent, department said, up from 9.8 percent in September, the highest level since 1983. Employers also continued slashing jobs, though at a slower rate than September, showing that even though the economy is expanding, the job market remains dismal. The crossing of that symbolic 10 percent barrier is likely to weigh on both the psychology of American consumers and the urgency of efforts in Washington to prop up the job market. http://www.sott.net/articles/show/196294-Unemployment-Rate-Jumps-to-10-2-Percent-Highest-Since-1983 Fri, 06 Nov 2009 10:47:08 -0500 http://www.sott.net/articles/show/196288-Unemployed-and-Desperate-Wisconsin-Man-Tries-to-Sell-the-Rights-to-His-Name Unemployed and desperate, a 19-year-old Sheboygan man is trying to sell one of the only things he owns - his name. Calvin Gosz has put the rights to give him a new name on eBay. He said if people can have a name like Mercedes for free, "why wouldn't McDonald's pay for me to have Ronald McDonald as a name?" Gosz said he moved to Wisconsin from Florida in September. He's filled out more than a dozen job applications, but so far no luck. Of his decision to go on eBay, he said, "I guess it just kind of goes to show the desperation of some people to try and get some money if they can't find work." http://www.sott.net/articles/show/196288-Unemployed-and-Desperate-Wisconsin-Man-Tries-to-Sell-the-Rights-to-His-Name Fri, 06 Nov 2009 08:27:49 -0500 http://www.sott.net/articles/show/196249-Fannie-Mae-Posts-18-9-billion-Q3-Loss-Taps-Treasury New York - Fannie Mae, the largest provider of funding for U.S. home loans, said on Thursday bad mortgages and a federal foreclosure prevention program left it with a $18.9 billion loss, forcing it to tap the Treasury again to plug a hole in its net worth. Fannie Mae (FNM.P) (FNM.N) , seized by the government last year, said the quarterly loss stemmed from $22 billion in credit-related expenses. These included charges on mortgages it bought out of securities as it modified loans under President Barack Obama's foreclosure prevention plan. The company also boosted its provision for credit losses in future quarters, and said it expects those impairments to increase this quarter and through 2010. The assessment is dire for the housing market that has appeared to post a fragile recovery over the past several months with a rebound in home sales and prices in some regions. http://www.sott.net/articles/show/196249-Fannie-Mae-Posts-18-9-billion-Q3-Loss-Taps-Treasury Thu, 05 Nov 2009 19:54:25 -0500 http://www.sott.net/articles/show/196247-Insider-Trading-Probe-Ensnares-14-More New York - Fourteen people were charged with fraud and conspiracy in a dramatic widening of an insider trading scandal that has ensnared hedge fund managers, top Silicon Valley executives and a bevy of white-shoe advisers. In complaints that read like scripts for the TV series The Sopranos, investigators alleged suspects dropped off bags full of cash, used prepaid cellphones to dodge wiretaps, and used nicknames such as "the Greek" and "the Octopussy." "Some of the defendants -- taking a page from the drug dealer's playbook -- deliberately used anonymous, hard-to-trace, prepaid cellphones in order to avoid detection," U.S. Attorney Preet Bharara told a news conference on Thursday. "When sophisticated business people begin to adopt the methods of common criminals, we have no choice but to treat them as such," he added. http://www.sott.net/articles/show/196247-Insider-Trading-Probe-Ensnares-14-More Thu, 05 Nov 2009 19:51:35 -0500 http://www.sott.net/articles/show/196238-Fannie-Mae-to-Rent-Foreclosed-Homes-Back-to-Borrowers Fannie Mae plans to allow homeowners facing foreclosure to stay in their homes and rent them for up to one year as part of the latest effort to help troubled borrowers while keeping a glut of foreclosed properties from hitting the housing market. The Deed for Lease Program, which Fannie plans to roll out on Thursday, will offer borrowers who fail to complete or don't qualify for a loan modification or other workout to deed their property to the lender in exchange for a lease. Borrowers-turned-tenants will be able to sign leases of up to 12 months and will pay market rents, which in most cases are lower than the cost of mortgage payments. http://www.sott.net/articles/show/196238-Fannie-Mae-to-Rent-Foreclosed-Homes-Back-to-Borrowers Thu, 05 Nov 2009 16:46:30 -0500 http://www.sott.net/articles/show/196220-Russian-Economy-Still-Faces-Uncertainty The Russian economy, which had been developing at high speed prior to the global financial turmoil and economic downturn, has suffered severe losses in the crisis. Nonetheless its prospect remains uncertain at present. President Dmitry Medvedev estimated that Russia's 2009 Gross Domestic Product (GDP) may decline 7.5 percent compared with that of 2008. Statistics showed that Russia's GDP contracted 10 percent in the first nine months this year. Though monthly GDP has continued to grow starting from June, none of the growth rates was higher than 0.5 percent. Meanwhile Russia's industrial production declined 13.5 percent from January to September, with the process industry plunging 19.1percent. One good news may be the high inflation that once bothered Russia has somewhat relieved. Prime Minister Vladimir Putin estimated that the inflation rate might be lowered to less than 9 percent this year. However, lowering inflation rate turned out to have been followed by shrinking consumption. http://www.sott.net/articles/show/196220-Russian-Economy-Still-Faces-Uncertainty Thu, 05 Nov 2009 14:05:49 -0500 http://www.sott.net/articles/show/196212-Profit-Not-Satanic-Barclays-Says-After-Goldman-Invokes-Jesus Barclays Plc Chief Executive Officer John Varley stood at the wooden lectern in St. Martin-in-the- Fields on London's Trafalgar Square last night and told the packed pews of the church that "profit is not satanic." The 53-year-old head of Britain's second-biggest bank said banks are the "backbone" of the economy. Rewarding high- performing bankers with more pay doesn't conflict with Christian values, he said. Varley was paid 1.08 million pounds ($1.77 million) and no bonus in 2008. "Talent is highly mobile," Varley, a Catholic, said. "If we fail to pay or are constrained from paying competitive rates then that talent will move to another employer." http://www.sott.net/articles/show/196212-Profit-Not-Satanic-Barclays-Says-After-Goldman-Invokes-Jesus Thu, 05 Nov 2009 12:21:33 -0500 http://www.sott.net/articles/show/196198-Goldman-left-foreign-investors-holding-the-subprime-bag New York - Inside the thick Goldman Sachs investment circular were the details of a secret, $2 billion deal channeled through a Caribbean tax haven. The Sept. 26, 2006, document offered sophisticated U.S. and European investors an opportunity to buy into a pool of supposedly high-grade bonds backed by residential, commercial and student loans. The transaction was registered through a shell company in the Cayman Islands. Few of the potential investors knew it, but the ratings of many of the mortgage securities hid their true risks and, in some cases, Goldman's descriptions exaggerated their quality. http://www.sott.net/articles/show/196198-Goldman-left-foreign-investors-holding-the-subprime-bag Wed, 04 Nov 2009 21:55:06 -0500 http://www.sott.net/articles/show/196185-JPMorgan-Ends-SEC-Alabama-Swap-Probe-for-722-Million JPMorgan Chase & Co. agreed to a $722 million settlement with the U.S. Securities and Exchange Commission to end a probe into sales of derivatives that helped push Alabama's most populous county to the brink of bankruptcy. JPMorgan will give Jefferson County, Alabama, $50 million, pay a $25 million penalty and cancel $647 million in fees the county faced to unwind the transactions, according to an SEC news release. In addition, the agency charged two former JPMorgan employees for their roles in an "unlawful payment scheme" that allowed them to win bond and interest-rate swap business with the county. The settlement comes a week after Larry Langford, the former president of the Jefferson County Commission and Birmingham mayor, was convicted for accepting $235,000 in designer clothes, Rolex watches and cash from an Alabama banker who JPMorgan paid almost $3 million to help arrange the swaps associated with a refinancing of the county's sewer debt. "It's a good day for us," said Jefferson County Commission President Bettye Fine Collins. "Finally, we're seeing some movement. We have been victimized by our creditors." http://www.sott.net/articles/show/196185-JPMorgan-Ends-SEC-Alabama-Swap-Probe-for-722-Million Wed, 04 Nov 2009 20:05:29 -0500 http://www.sott.net/articles/show/196180-Johnson-Johnson-Plans-Staff-Cut-Of-Up-to-8-200-Jobs Johnson & Johnson (JNJ) unveiled plans to generate up to $1.7 billion in pretax cost savings through job cuts and other means when planned moves are fully implemented in 2011. Up to 7% of the company's nearly 120,000-person work force will be eliminated through the streamlining. The health-products giant said job cuts will be only one aspect of the move. A fourth-quarter restructuring charge of up to $1.3 billion will be recorded as the company reiterated its 2009 earnings target excluding items such as that charge. This year has shaped up to be one of J&J's most difficult, with all three of its main business units showing signs of weakness. Heightened competition from generics has hurt its prescription-drug arm, while unfavorable currency-exchange rates have pulled down sales growth for consumer health care and medical devices. http://www.sott.net/articles/show/196180-Johnson-Johnson-Plans-Staff-Cut-Of-Up-to-8-200-Jobs Wed, 04 Nov 2009 19:23:21 -0500 http://www.sott.net/articles/show/196177-Al-Gore-could-become-world-s-first-carbon-billionaire Last year Mr Gore's venture capital firm loaned a small California firm $75m to develop energy-saving technology. The company, Silver Spring Networks, produces hardware and software to make the electricity grid more efficient. The deal appeared to pay off in a big way last week, when the Energy Department announced $3.4 billion in smart grid grants, the New York Times reports. Of the total, more than $560 million went to utilities with h which Silver Spring has contracts. http://www.sott.net/articles/show/196177-Al-Gore-could-become-world-s-first-carbon-billionaire Wed, 04 Nov 2009 17:06:06 -0500 http://www.sott.net/articles/show/196173-Sarkozy-s-shower-costs-taxpayers-250-000 The French president had a £250,000 shower built for him using European taxpayers' money - only for it to be torn down, unused, days after being completed, it was revealed yesterday. The luxury unit - which had air conditioning and radio 'surround sound' - was built to the exact specifications of 1.6m (5ft 5in) Nicolas Sarkozy for a three-day summit in Paris. But, instead, he decided to wash in the Élysée Palace ten minutes away. http://www.sott.net/articles/show/196173-Sarkozy-s-shower-costs-taxpayers-250-000 Wed, 04 Nov 2009 16:14:03 -0500 http://www.sott.net/articles/show/196148-Gold-Climbs-to-Record-as-India-s-Central-Bank-Buys-IMF-Bullion Gold jumped to a record after India's central bank bought 200 metric tons of the metal from the International Monetary Fund, heightening speculation that there may be more official purchases. Gold futures for December delivery rose to a record $1,088.50 an ounce at about 2:22 p.m. in after-hours trading on the New York Mercantile Exchange's Comex unit. Earlier, the most-active contract settled at $1,084.90, up $30.90, or 2.9 percent. It was the biggest gain since March 19. "This will encourage other countries and other investors, especially Indians, who are big buyers anyway, to jump into the market," said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois. http://www.sott.net/articles/show/196148-Gold-Climbs-to-Record-as-India-s-Central-Bank-Buys-IMF-Bullion Tue, 03 Nov 2009 23:19:23 -0500 http://www.sott.net/articles/show/196130-UK-RBS-Lloyds-Get-51-Billion-in-Second-Bank-Bailout Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc will receive 31.3 billion pounds ($51 billion) in a second bailout from the U.K. taxpayer as the two banks agreed to cap bonuses. The Treasury will inject 25.5 billion pounds of capital into RBS, for a total of 45.5 billion pounds, making it the costliest bailout of any bank worldwide. The government will fund about a quarter of Lloyds's 21 billion-pound fundraising. Both banks said they won't pay cash bonuses to workers earning more than 39,000 pounds this year. http://www.sott.net/articles/show/196130-UK-RBS-Lloyds-Get-51-Billion-in-Second-Bank-Bailout Tue, 03 Nov 2009 17:52:55 -0500 http://www.sott.net/articles/show/196113-Lufthansa-pulls-bmi-sale-after-price-fails-to-attract-bidders Lufthansa, the German flag carrier, has withdrawn bmi from sale and will concentrate on trying to turn around the loss-making airline itself. After it became clear that an acceptable price could not be achieved, the company confirmed that it was no longer in talks with buyers. Wolfgang Prock-Schauer, the former head of Jet Airways in India, will become chief executive of bmi today. He has been set the task of restructuring the airline. If Lufthansa is able to stem the losses and the aviation market recovers, the company will consider putting bmi back on the market. http://www.sott.net/articles/show/196113-Lufthansa-pulls-bmi-sale-after-price-fails-to-attract-bidders Tue, 03 Nov 2009 12:33:43 -0500 http://www.sott.net/articles/show/196097-Economic-Crisis-Hits-States-and-Municipalities Crises expose the system's irrationalities and wasteful resource allocations. For example, Madoff and his many, smaller imitators reveal the tips of corruption icebergs. More important, the crisis-induced fiscal emergencies looming in most of the 50 states demonstrate several absurdities in our economic system. The Center on Budget and Policy Priorities (CBPP) in Washington, DC monitors and calculates the gap between the fifty states' tax revenues and expenditures. The above recent CBPP chart compares the total state budget shortfalls in both the last recession and the current one. Today's record shortfalls measure how many billions states will need to raise in additional taxes or cut their expenditures (or combinations of both) in this and coming years. http://www.sott.net/articles/show/196097-Economic-Crisis-Hits-States-and-Municipalities Tue, 03 Nov 2009 11:05:43 -0500 http://www.sott.net/articles/show/196096-CIT-failure-to-leave-small-businesses-floundering * CIT's $42 bln factoring business in doubt * Small businesses still facing credit crunch New York - CIT Group Inc's CIT.N bankruptcy filing, while long expected, could still trigger a financing crunch for many of the hundreds of thousands of small businesses it finances. CIT filed for bankruptcy protection on Sunday, and said its creditors have already approved the century-old commercial lender's reorganization plan.[ID:nN01408863] The bankruptcy followed a failed struggle to refinance its debt amid the credit crunch and recession, and paves the way for it to restructure. Under the plan announced on Sunday, the lender expects to reduce total debt by about $10 billion. But the company's long-term prospects are uncertain and the bankruptcy could leave more than one million small and medium-sized businesses looking for another source of funding, lawyers said. http://www.sott.net/articles/show/196096-CIT-failure-to-leave-small-businesses-floundering Tue, 03 Nov 2009 10:48:16 -0500 http://www.sott.net/articles/show/196094-States-Are-Pondering-Fraud-Suits-Against-Banks Phoenix - Newly empowered by the Supreme Court, the attorneys general of several states hit hard by the housing collapse are exploring consumer fraud suits against major mortgage lenders. Frustrated by the banks' inability or unwillingness to stop an avalanche of foreclosures, the states are considering lawsuits over the creation and marketing of millions of bad loans as well as the dismal pace of mortgage modifications. Such cases would have been impossible until recently, because federal regulators had exclusive oversight of national banks. But a 5-to-4 Supreme Court decision in June allowed the states to exercise their own supervision, giving them significant leverage. "We tried to use the tool to be persuasive with the banks," Arizona's attorney general, Terry Goddard, said in an interview. "But their waterfall of excuses, the abysmal numbers of modifications, tells us persuasion is not working." As a result, he said, "we're moving much closer to litigation." http://www.sott.net/articles/show/196094-States-Are-Pondering-Fraud-Suits-Against-Banks Tue, 03 Nov 2009 10:39:20 -0500 http://www.sott.net/articles/show/196093-It-is-Japan-we-should-be-worrying-about-not-America Japan is drifting helplessly towards a dramatic fiscal crisis. For 20 years the world's second-largest economy has been able to borrow cheaply from a captive bond market, feeding its addiction to Keynesian deficit spending - and allowing it to push public debt beyond the point of no return. The rocketing cost of insuring against the bankruptcy of the Japanese state is telling us that the model has smashed into the buffers. Credit default swaps (CDS) on five-year Japanese debt have risen from 35 to 63 basis points since early September. Japan has suddenly decoupled from Germany (21), France (22), the US (22), and even Britain (47). Regime-change in Tokyo and the arrival of Yukio Hatoyama's neophyte Democrats - raising $550bn (£333bn) to help fund their blitz on welfare and the "new social policy" - have concentrated the minds of investors at long last. "Markets are worried that Japan is going to hit a brick wall: the sums are gargantuan," said Albert Edwards, a Japan-veteran at Société Générale. Simon Johnson, former chief economist of the International Monetary Fund (IMF), told the US Congress last week that the debt path was out of control and raised "a real risk that Japan could end up in a major default". http://www.sott.net/articles/show/196093-It-is-Japan-we-should-be-worrying-about-not-America Tue, 03 Nov 2009 10:29:34 -0500 http://www.sott.net/articles/show/196035-California-to-withhold-a-bigger-chunk-of-paychecks The amount goes up 10% on Sunday as Sacramento borrows from taxpayers. Technically, it's not an income tax increase: You'll get the money back eventually. Reporting from Los Angeles and Sacramento - Starting Sunday, cash-strapped California will dig deeper into the pocketbooks of wage earners -- holding back 10% more than it already does in state income taxes just as the biggest shopping season of the year kicks into gear. Technically, it's not a tax increase, even though it may feel like one when your next paycheck arrives. As part of a bundle of budget patches adopted in the summer, the state is taking more money now in withholding, even though workers' annual tax bills won't change. Think of it as a forced, interest-free loan: You'll be repaid any extra withholding in April. Those who would receive a refund anyway will receive a larger one, and those who owe taxes will owe less. http://www.sott.net/articles/show/196035-California-to-withhold-a-bigger-chunk-of-paychecks Mon, 02 Nov 2009 12:35:00 -0500 http://www.sott.net/articles/show/195995-Cut-Wall-Street-Out-How-States-Can-Finance-Their-Own-Economic-Recovery Pouring money into the private banking system has only fixed the economy for bankers and the wealthy; it has not done much to address either the fundamental problem of unemployment or the debt trap so many Americans find themselves in. President Obama's $787 billion stimulus plan has so far failed to halt the growth of unemployment: 2.7 million jobs have been lost since the stimulus plan began. California has lost 336,400 jobs. Arizona has lost 77,300. Michigan has lost 137,300. A total of 49 states and the District of Columbia have all reported net job losses. http://www.sott.net/articles/show/195995-Cut-Wall-Street-Out-How-States-Can-Finance-Their-Own-Economic-Recovery Mon, 02 Nov 2009 03:02:04 -0500 http://www.sott.net/articles/show/195985-CIT-Group-files-for-US-bankruptcy The US lender, CIT Group, has filed for bankruptcy protection, after a debt-exchange offer to bondholders failed. However, the majority of bondholders have agreed a reorganisation plan that will reduce CIT's debt by $10bn (£6bn) while allowing it to go on operating. The group's operating subsidiaries, including CIT Bank, were not included in the bankruptcy filing in New York. CIT Group suffered as the credit crisis left it unable to fund itself, and the recession exposed it to many bad loans. Under the reorganisation plan which has been approved by bondholders, creditors will end up owning the company. http://www.sott.net/articles/show/195985-CIT-Group-files-for-US-bankruptcy Sun, 01 Nov 2009 23:01:08 -0500 http://www.sott.net/articles/show/195984-How-Goldman-secretly-bet-on-the-U-S-housing-crash Washington - In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting. Goldman's sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled the nation's premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies. Only later did investors discover that what Goldman had promoted as triple-A rated investments were closer to junk. http://www.sott.net/articles/show/195984-How-Goldman-secretly-bet-on-the-U-S-housing-crash Sun, 01 Nov 2009 22:42:40 -0500 http://www.sott.net/articles/show/195959-Run-on-Iceland-McDonald-s-as-chain-flips-last-burgers Noisy crowds, long queues, and traffic jams plunged McDonald's restaurants in Iceland into a state of siege Saturday, as the chain served its final burgers on the island. Icelanders flooded the three branches of the US fast-food restaurant in Reykjavik several hours before the outlets shut for the last time, forced to close after the island's economic collapse caused running costs to soar. Extra staff were deployed to reinforce the outlets, whose disappearance after 16 years means Iceland will be one of the few Western countries without a presence of the ubiquitous eatery. Customers in one branch faced a 20-minute wait to be served and snaking lines of cars caused traffic jams at the drive-in. http://www.sott.net/articles/show/195959-Run-on-Iceland-McDonald-s-as-chain-flips-last-burgers Sun, 01 Nov 2009 18:13:37 -0500 http://www.sott.net/articles/show/195936-Be-Prepared-for-the-Worst Any number of pundits claim that we have now passed the worst of the recession. Green shoots of recovery are supposedly popping up all around the country, and the economy is expected to resume growing soon at an annual rate of 3% to 4%. Many of these are the same people who insisted that the economy would continue growing last year, even while it was clear that we were already in the beginning stages of a recession. A false recovery is under way. I am reminded of the outlook in 1930, when the experts were certain that the worst of the Depression was over and that recovery was just around the corner. The economy and stock market seemed to be recovering, and there was optimism that the recession, like many of those before it, would be over in a year or less. Instead, the interventionist policies of Hoover and Roosevelt caused the Depression to worsen, and the Dow Jones industrial average did not recover to 1929 levels until 1954. I fear that our stimulus and bailout programs have already done too much to prevent the economy from recovering in a natural manner and will result in yet another asset bubble. http://www.sott.net/articles/show/195936-Be-Prepared-for-the-Worst Sun, 01 Nov 2009 14:14:48 -0500 http://www.sott.net/articles/show/195934-Meltdown-101-What-to-know-if-your-bank-fails Dozens of banks have failed this year. What do you need to know if yours is next? The number of bank failures has reached 115 since January - more than four times the total for 2008 and the most since the savings and loan crisis in 1992. And most experts expect problems caused by unpaid loans to force many more closures in the coming years, mostly among small, community-based banks. Banks are typically shut down late Friday afternoon. That gives the Federal Deposit Insurance Corp. time over the weekend to handle the shutdown, which most often involves transferring deposits to another bank that is taking over the failed institution. The first sign of failure consumers see may be a closure notice on the bank's door. The impact of the bank failures on consumers has been minimal, but rumors about what can happen are rampant. The FDIC has also warned of dozens of scams that try to take advantage of consumers who don't understand the process. http://www.sott.net/articles/show/195934-Meltdown-101-What-to-know-if-your-bank-fails Sun, 01 Nov 2009 13:51:03 -0500 http://www.sott.net/articles/show/195932-Forgotten-Anniversary-One-Hundred-Years-of-Legal-Tender One unintended effect was that all efforts to avert the war and the concomitant great bloodshed and destruction of property through better diplomacy were short-circuited. The war parties in both countries had won a great victory. The cause of peace suffered a decisive defeat. Please note that I have said "so-called legal tender legislation" because 'legal tender' in this context was a vicious distortion of the meaning of the phrase. There was nothing coercive about legal tender before 1909. Bank notes circulated as money, but their acceptance was entirely voluntary. People had an unconditional right to exchange them for the coin of the realm, that is, for gold coins. If the bank did not comply, then it was in technical default and had to face the consequences. http://www.sott.net/articles/show/195932-Forgotten-Anniversary-One-Hundred-Years-of-Legal-Tender Sun, 01 Nov 2009 13:35:23 -0500 http://www.sott.net/articles/show/195929-Delaware-beats-Switzerland-as-most-secretive-financial-center Washington -- Move over Switzerland. The tiny state of Delaware beats the Alpine country in a contest for the most secretive financial jurisdiction, a tax justice rights group said on Saturday. The United States, led by the eastern seaboard state, took in $2.6 trillion in deposits from non-resident corporations and individuals in 2007, according to a survey of financial jurisdictions analyzed by the Tax Justice Network. The survey of laws, practices and size of inflows in 60 jurisdictions found Delaware coming in first, followed by Luxembourg and then Switzerland. The Cayman Islands and the United Kingdom round out the top five. http://www.sott.net/articles/show/195929-Delaware-beats-Switzerland-as-most-secretive-financial-center Sun, 01 Nov 2009 12:10:20 -0500 http://www.sott.net/articles/show/195902-Stiglitz-Says-U-S-Recession-Nowhere-Near-End-After-GDP-Jump Nobel Prize-winning economist Joseph E. Stiglitz said the U.S. recession is "nowhere near" an end and the economy's third-quarter growth rate of 3.5 percent, the first expansion in more than a year, won't carry into 2010. While this week's figures on gross domestic product are "very good," the numbers would be "miserable" without stimulus measures enacted by the Obama administration, Stiglitz said today at a forum in Shanghai. He urged the U.S. and other countries not to pull back on efforts to shore up economies. "When we look at if workers can get jobs, if they can work full time, if businesses are able to sell goods they produce, in those terms, we are nowhere near the end of recession" in the U.S., said Stiglitz, 66, the former chief economist at the World Bank. The U.S. job market is still "in very bad shape." http://www.sott.net/articles/show/195902-Stiglitz-Says-U-S-Recession-Nowhere-Near-End-After-GDP-Jump Sat, 31 Oct 2009 20:30:05 -0400 http://www.sott.net/articles/show/195889-Nine-U-S-banks-seized-in-largest-one-day-haul Los Angeles - U.S. authorities seized nine failed banks on Friday, the most in a single day since the financial crisis began and the latest stark sign that substantial parts of the nation's banking industry are being crippled by bad loans. The move brought the total number of failed banks in 2009 to 115 -- their highest annual level since 1992 -- with analysts expecting more to come. Among the lenders seized Friday was Los Angeles-based California National Bank, in what was the fourth-largest U.S. bank failure this year. The largest institution to fail in the current financial crisis was Washington Mutual, which boasted $307 billion in assets when it was shuttered in September 2008. U.S. Bancorp on Friday acquired the nine banks that had been held by FBOP Corp, picking up $18.4 billion in assets and $15.4 billion of deposits. http://www.sott.net/articles/show/195889-Nine-U-S-banks-seized-in-largest-one-day-haul Sat, 31 Oct 2009 08:15:28 -0400 http://www.sott.net/articles/show/195888-Wilbur-Ross-Sees-Huge-Commercial-Real-Estate-Crash Billionaire investor Wilbur L. Ross Jr., said today the U.S. is in the beginning of a "huge crash in commercial real estate." "All of the components of real estate value are going in the wrong direction simultaneously," said Ross, one of nine money managers participating in a government program to remove toxic assets from bank balance sheets. "Occupancy rates are going down. Rent rates are going down and the capitalization rate -- the return that investors are demanding to buy a property -- are going up." U.S. commercial property sales are forecast to fall to the lowest in almost two decades as the industry endures its worst slump since the savings and loan crisis of the early 1990s, according to property research firm Real Capital Analytics Inc. The Moody's/REAL Commercial Property Price Indices already have fallen almost 41 percent since October 2007, Moody's Investors Service said Oct. 19. http://www.sott.net/articles/show/195888-Wilbur-Ross-Sees-Huge-Commercial-Real-Estate-Crash Sat, 31 Oct 2009 08:06:22 -0400 http://www.sott.net/articles/show/195864-US-533-000-for-each-job-created-by-the-Stimulus-Plan- On Thursday, the government released a flood of data about the stimulus, showing how 9,000 federal contractors spent their stimulus dollars - including the value of the contract, each project's status, and how much each of the contractor's five highest-paid officers were paid. But when it came to presenting that data, Recovery.gov, the government's official site for stimulus information, highlighted one number in particular, posting it on the site's main page in large font: "JOBS CREATED/SAVED AS REPORTED BY FEDERAL CONTRACT RECIPIENTS: 30,383." To make extra certain of getting viewers' attention, the number itself appears in bright green. http://www.sott.net/articles/show/195864-US-533-000-for-each-job-created-by-the-Stimulus-Plan- Fri, 30 Oct 2009 18:36:43 -0400 http://www.sott.net/articles/show/195859-U-S-Secret-Bailouts-for-Giant-Failing-Banks-of-the-Future Boston - Big banks will not be forced to downsize and the public will be the last to know when they fail, a controversial bill unveiled by U.S. Treasury Secretary Timothy Geithner and Congressman Barney Frank proposes. The long-awaited "too big to fail" legislation was roundly criticised during a congressional hearing Thursday as a nod to the biggest financial firms in the U.S. "This is TARP on steroids," said Rep. Brad Sherman, a Democrat, referring to the U.S. Treasury programme that gave trillions to financial companies. The legislation was called for by Congress and President Barack Obama in the wake of the trillions recently spent by the U.S. government to rescue behemoth financial institutions like AIG and Bank of America, out of fear that their failure would bring down the whole financial system. http://www.sott.net/articles/show/195859-U-S-Secret-Bailouts-for-Giant-Failing-Banks-of-the-Future Fri, 30 Oct 2009 17:04:20 -0400 http://www.sott.net/articles/show/195857-Turkey-to-Use-National-Currencies-in-Trade-with-Iran-China Ankara - Turkey is switching to national currencies in trade with Iran and China, ending dependence on the U.S. dollar and the euro for about 20% of its commodity turnover, local media reported on Wednesday. Turkey has already switched to settlements in national currencies with Russia amid weakening confidence in the greenback as the world's major reserve currency. The move was initiated by Turkish President Abdullah Gul during his visit to Moscow in February. Turkey's decision to make settlements with Iran and China in national currencies was announced during a visit to Iran by Turkish Prime Minister Recep Tayyip Erdogan. The Turkish premier told a Turkish-Iranian business forum on Tuesday that the countries had prepared a legal framework for transition to settlements in national currencies. "We have adopted a necessary legislative act and are prepared for the transition," the Turkish newspaper Milliyet quoted Erdogan as saying. http://www.sott.net/articles/show/195857-Turkey-to-Use-National-Currencies-in-Trade-with-Iran-China Fri, 30 Oct 2009 16:17:24 -0400 http://www.sott.net/articles/show/195849-India-May-Import-Rice-Fueling-Panic-IRRI-Says India, the world's second-largest rice grower, may become a net importer for the first time in 21 years in 2010, potentially sparking the kind of "panic" that sent prices to records in 2008, an agricultural economist said. India may import as much as 3 million metric tons next year after the wet season harvest plunged, Samarendu Mohanty, a senior economist at the International Rice Research Institute, said in an interview. Those would be the imports since 2006, according to U.S. Department of Agriculture data. Food price protests swept the globe from Bangladesh to Haiti last year after fears of shortages prompted producers including India to cut rice exports and importers increased purchases to secure supplies, sending prices to a record. http://www.sott.net/articles/show/195849-India-May-Import-Rice-Fueling-Panic-IRRI-Says Fri, 30 Oct 2009 15:07:26 -0400 http://www.sott.net/articles/show/195846-Massachusetts-Snafu-Stiffs-Unemployed Checks sent by mistake - and now money must be repaid Thousands of desperate jobless Bay Staters - at the end of their ropes and unemployment benefits - thought the state had tossed them a lifeline when new checks arrived in the mail, only to learn it was all a big mistake and now they have to give the money back. The state Division of Unemployment Assistance mistakenly sent checks totaling $3.4 million to 4,159 out-of-work residents who'd exhausted their benefits, thanks to a glitch in the office's archaic computer system, the Herald has learned. Officials have yet to notify the hardluck recipients of the gaffe. http://www.sott.net/articles/show/195846-Massachusetts-Snafu-Stiffs-Unemployed Fri, 30 Oct 2009 13:42:55 -0400 http://www.sott.net/articles/show/195833-Spending-drop-raises-concerns-about-growth Washington - U.S. consumer spending fell in September after four months of gains as a government program to boost auto purchases ended, adding to fears that economic growth could stumble without government support. The Commerce Department said on Friday consumer spending fell 0.5 percent, the largest decline since December, after a 1.4 percent increase in August. The decline was in line with market expectations. A separate report from the Labor Department showed employment costs in the United States rose 0.4 percent in the third quarter, matching the previous period's increase and indicating marginal gains in income. U.S. stock index futures trimmed losses after the economic data, while U.S. government debt prices rose. http://www.sott.net/articles/show/195833-Spending-drop-raises-concerns-about-growth Fri, 30 Oct 2009 09:56:52 -0400 http://www.sott.net/articles/show/195832-No-Justice-We-ve-Bailed-Out-the-Banks-When-Do-We-Go-After-the-Crooks-Behind-Our-Financial-Collapse- Where did our wealth go? How do we claw it back? And when are we going to punish the culprits? When Barack Obama donned the crusader's mantle during the 2008 presidential campaign, his Web-savvy campaign team created KeatingEconomics.com and pushed it on millions of voters. The main video showed the Ichabod Crane-like Charles Keating - the wealthy, politically connected poster child of the '80s savings-and-loan scandal - in handcuffs. The Obama video portrayed John McCain as Keating's stooge and likened the S&L crash to the 2008 Wall Street meltdown, except that the current crisis is global and its bad guys are bigger and badder. Today's corporate villains were flashed on the screen, among them AIG, Bear Stearns, Lehman Brothers, Fannie Mae and Freddie Mac. The opening narrator was Bill Black, a Ph.D. criminologist and former lead lawyer at the Office of Thrift Supervision who helped steer the brilliant federal effort that cleaned up the S&L industry and won more than 1,000 felony convictions of senior insiders while recovering millions of their ill-gotten dollars. Those watching the compelling attack ad (still online) had every reason to believe that Obama's approach would be just as hard-edged and that felon-busting G-men would rout the crooks and recover our money. This was not to be. http://www.sott.net/articles/show/195832-No-Justice-We-ve-Bailed-Out-the-Banks-When-Do-We-Go-After-the-Crooks-Behind-Our-Financial-Collapse- Fri, 30 Oct 2009 09:46:28 -0400 http://www.sott.net/articles/show/195822-Japan-Consumer-Prices-Fall-2-3-as-Deflation-Continues Japan's consumer prices fell at a near-record pace in September, a sign that deflation is likely to remain a drag on the economic recovery. Prices excluding fresh food slid 2.3 percent from a year earlier after dropping an unprecedented 2.4 percent in August, the statistics bureau said today in Tokyo. The median estimate of 28 economists surveyed was for a 2.4 percent decline. Companies are cutting prices to attract customers whose wages are tumbling. The Bank of Japan will probably forecast today that consumer prices will keep falling through fiscal 2011, signaling there will be little chance to raise interest rates for a year at least, economists said. http://www.sott.net/articles/show/195822-Japan-Consumer-Prices-Fall-2-3-as-Deflation-Continues Thu, 29 Oct 2009 21:36:59 -0400 http://www.sott.net/articles/show/195821-Ukrainian-economy-suffers-sharp-fall-in-2009 Five years after the "Orange Revolution," which brought Ukrainian politician Viktor Yushchenko to power in January 2005, the Ukrainian economy is in the deepest crisis since the post-Soviet economic and social implosion of the 1990s. Yushchenko's bid for office, and his subsequent campaign to overturn the declared electoral victory of the more pro-Russian candidate Viktor Yanukovich, were financed and politically supported by the United States. Washington saw Yushchenko as a means of weakening Russian influence in the country and opening up its markets to transnational companies and global finance capital. Yushchenko had earned his support from Washington during his tenure as the head of the central bank of Ukraine, where he oversaw the privatisation of Ukrainian state assets in the 1990s. While prime minister under President Leonid Kuchma from 1999 to 2001, he also campaigned in favour of economic "liberalisation." http://www.sott.net/articles/show/195821-Ukrainian-economy-suffers-sharp-fall-in-2009 Thu, 29 Oct 2009 21:30:58 -0400 http://www.sott.net/articles/show/195806-The-U-S-recession-ends-but-not-for-you Experts say U.S. economic growth has returned, signaling the end of the longest and deepest recession since the Great Depression. But the good news for Wall Street - where shares have been running up - is showing no signs of trickling down to Main Street, where unemployment is flirting with 10 percent, foreclosures continue to rise and record numbers of families now depend on government-issued food stamps to make ends meet. "For every person out of work, for every family facing foreclosure, for every small business facing a credit crunch, the recession remains alive and acute," U.S. Treasury Secretary Timothy Geithner said in testimony to a congressional committee. http://www.sott.net/articles/show/195806-The-U-S-recession-ends-but-not-for-you Thu, 29 Oct 2009 16:41:10 -0400 http://www.sott.net/articles/show/195804-Clunkers-Taxpayers-paid-24-000-per-car Auto sales analysts at Edmunds.com say the pricey program resulted in relatively few additional car sales. A total of 690,000 new vehicles were sold under the Cash for Clunkers program last summer, but only 125,000 of those were vehicles that would not have been sold anyway, according to an analysis released Wednesday by the automotive Web site Edmunds.com. Still, auto sales contributed heavily to the economy's expansion in the third quarter, adding 1.7 percentage points to the nation's gross domestic product growth. http://www.sott.net/articles/show/195804-Clunkers-Taxpayers-paid-24-000-per-car Thu, 29 Oct 2009 16:20:37 -0400 http://www.sott.net/articles/show/195798-US-fake-economy-is-growing-once-again The US economy grew at an annual pace of 3.5% between July and September, its first expansion in more than a year. The growth was helped by a substantial government spending plan, including a scrappage scheme to boost car sales. The official figures indicate recession has ended, but some economists think there could be further setbacks. President Obama said while "welcome news", the US was still a "long way" from recovering from the "deepest downturn since the Great Depression". "This is affirmation that this recession is abating and the steps we've taken have made a difference, but I also know that we've got a long way to go to fully restore our economy." http://www.sott.net/articles/show/195798-US-fake-economy-is-growing-once-again Thu, 29 Oct 2009 15:52:28 -0400 http://www.sott.net/articles/show/195795-Shell-to-cut-5-000-jobs-by-the-end-of-the-year-after-profits-less-record-dividends-slump Royal Dutch Shell has announced that it will cut 5,000 jobs by the end of the year, many of them in the UK, as part of its major cost-cutting drive to help offset a slump in profits and weak prospects next year. The Anglo-Dutch oil company, reporting a 72% slide in third-quarter profits this morning, said that staff in its upstream division would have to reapply for 15,000 new positions being advertised internally as part of its restructuring programme, "Transition 2009". Of the division's 50,000 workforce - which is half the company's total - 5,000 people would lose their jobs as a result of the process, said finance director Simon Henry. This would involve more than a fifth of its most senior managers being made redundant. Over half the job losses will take place in corporate offices in the UK, US and the Netherlands, but Henry did not give a breakdown. http://www.sott.net/articles/show/195795-Shell-to-cut-5-000-jobs-by-the-end-of-the-year-after-profits-less-record-dividends-slump Thu, 29 Oct 2009 15:46:41 -0400 http://www.sott.net/articles/show/195788-Is-capitalism-on-the-ropes-Interview-with-Michael-D-Yates-and-Fred-Magdoff 1. Mike Whitney---In your new book, The ABCs of the Economic Crisis: What Working Need to Know you allude to right wing think tanks, like the Heritage Foundation and the American Enterprise Institute, which promote a "free market" ideology. How successful have these organizations been in shaping public attitudes about capitalism? Do you think that attitudes are beginning to change now that people understand the role that Wall Street and the big banks played in creating the crisis? (The ABCs of the Economic Crisis: What Working People Need to Know By Fred Magdoff and Michael Yates, Monthly Review Press) Michael Yates: Corporate America began to wage what turned out to be a one-sided war against working people in the mid-to late-1970s, when it became apparent that the post-World War Two "Golden Age" of U.S. capitalism was over. As profit rates fell, businesses began to develop a strategy for restoring them. This strategy had many prongs, and one of them was ideological, that is, a struggle for "hearts and minds," to use a military term now being applied to Afghanistan. The presumed failure of Keynesian economics, marked by the simultaneous existence of escalating inflation and unemployment, gave the ideological struggle its foundation. Maybe there had been too many restrictions placed on the market, and these restrictions (minimum wages, health and safety regulations, laws facilitating union organizing in labor markets; public assistance in the form of money grants, housing subsidies, and the like; restrictions on the flow of money internationally) had led to results opposite those that liberal Keynesians had thought most likely. If these complex arguments could be tied to simple cliches, like "get the government off our backs," "the unions have gotten too powerful" (with always a hint that they are too radical thrown into the argument), and "welfare queens" (with that always popular whiff of racism), they could provide ideological cover for what was really a matter of corporate economics, namely the making of money. This ideological attack bore fruit quickly. President Carter appointed Paul Volcker to chair the Federal Reserve Board of Governors, and Volcker, under the guise of fighting inflation, immediately began to snuff the life out of working class communities by forcing interest rates up to nearly 20 percent. Today, Volcker is treated like a hero by Democrats and above reproach (though ignored by President Obama's more right-wing economic advisors), which shows just how far to the right economic discourse has moved. What Carter began, Reagan completed, firing the Air Traffic Controllers and putting the nail in labor's coffin. Behind the scenes in all of this and growing in strength for the next twenty years (funded by wealthy business leaders) or so were the right-wing think tanks you mention. Just as retired generals go to work for military contractors and defeated politicians become lobbyists, government economic advisors get jobs at Heritage or the American Enterprise Institute or the Cato Institute. The staffs of these ideological centers churn out endless position papers and studies, which find their way into our newspapers and the offices of our congresspersons. A gigantic network of professors, journalists, politicians, lobbyists, and, today, a television network (Fox) bombard us with right-wing propaganda. That all of this has been successful is seen by the fact that the shibboleths of neoliberalism - such as the needs for privatization of public entities, the free reign of markets, the obviousness of the success of welfare reform, the evils of raising the minimum wage - are all commonplaces today. While the public now knows that something is rotten, I am not sure that neoliberal ideas are so under attack that they will lose their sway. I think that the tenacity of these ideas owes something to the lack of an ideological alternative, which, in turn, is due to the abject failure of organized labor to provide one. For example, we need universal health care. Labor, however, has not consistently argued in favor of this or supported it at all. Now Congress is poised to enact healthcare legislation that might well be worse than the profit-driven system we have all come to hate. Labor should refuse to support this legislation, but I doubt it will. Then, when the new healthcare plans fail to deliver the goods, the right-wing will be lying in wait, ready to pounce and say, "See, we told you so. The government always makes things worse." In other words, until there is a radical ideology to replace right-wing thinking, the latter is unlikely to lose its drawing power. http://www.sott.net/articles/show/195788-Is-capitalism-on-the-ropes-Interview-with-Michael-D-Yates-and-Fred-Magdoff Thu, 29 Oct 2009 14:10:23 -0400 http://www.sott.net/articles/show/195786-Why-the-Goldman-Sachs-AIG-Story-Won-t-Go-Away How did so much taxpayer money end up in the coffers of American International Group Inc.'s too- big-to-fail customers? The more we find out, the more it becomes obvious we still don't know the half of it. It's the story that won't go away: Was last year's federal rescue of AIG a back-door bailout for the likes of Goldman Sachs Group Inc., Societe Generale SA, Deutsche Bank AG, Merrill Lynch & Co. and other large banks? And who exactly were the regulators trying to protect when they seized control of the insurance giant in September 2008? The banks? Or the rest of us? To believe AIG's disclosures, you'd have thought its executives decided on their own last year to pay 100 cents on the dollar to the various banks that had bought $62 billion of credit-default swaps from the company. Now, thanks to an Oct. 27 story by Bloomberg News reporters Richard Teitelbaum and Hugh Son, we know otherwise. It turns out the decision to make the banks whole wasn't AIG's. It was made by the Federal Reserve Bank of New York, back when its president was the current U.S. Treasury secretary, Timothy Geithner, and its chairman was Goldman Sachs director Stephen Friedman. (Friedman resigned from the New York Fed in May, after the Wall Street Journal reported he had bought more than 50,000 shares of Goldman stock following AIG's takeover.) http://www.sott.net/articles/show/195786-Why-the-Goldman-Sachs-AIG-Story-Won-t-Go-Away Thu, 29 Oct 2009 13:27:54 -0400