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 2010 by Signs of the Times. For other content, see our Fair Use Policy at www.sott.net Tue, 09 Feb 2010 05:32:25 -0500 http://www.sott.net/images/sottlogo_rss.jpg SOTT.net http://www.sott.net http://www.sott.net/articles/show/202697-The-shock-doctrine-for-Haiti Ashley Smith reports that the U.S. is reviving what Haitians call "the plan of death." 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. http://www.sott.net/articles/show/202697-The-shock-doctrine-for-Haiti Tue, 09 Feb 2010 05:32:24 -0500 http://www.sott.net/articles/show/202692-U-S-Stocks-Retreat-on-Concern-Europe-Finances-to-Hurt-Recovery 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. http://www.sott.net/articles/show/202692-U-S-Stocks-Retreat-on-Concern-Europe-Finances-to-Hurt-Recovery Mon, 08 Feb 2010 21:08:19 -0500 http://www.sott.net/articles/show/202685-Australian-government-decides-to-call-time-on-bank-guarantee-and-now-the-game-is-on 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. http://www.sott.net/articles/show/202685-Australian-government-decides-to-call-time-on-bank-guarantee-and-now-the-game-is-on Mon, 08 Feb 2010 18:40:01 -0500 http://www.sott.net/articles/show/202683-AIG-Gate-The-World-s-Greatest-Insurance-Heist 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. http://www.sott.net/articles/show/202683-AIG-Gate-The-World-s-Greatest-Insurance-Heist Mon, 08 Feb 2010 18:27:56 -0500 http://www.sott.net/articles/show/202635-Bernanke-s-Bankster-s-Skimming-Operation-Exposed 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. http://www.sott.net/articles/show/202635-Bernanke-s-Bankster-s-Skimming-Operation-Exposed Sun, 07 Feb 2010 20:03:12 -0500 http://www.sott.net/articles/show/202625-Testy-Conflict-With-Goldman-Helped-Push-A-I-G-to-Edge 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. http://www.sott.net/articles/show/202625-Testy-Conflict-With-Goldman-Helped-Push-A-I-G-to-Edge Sun, 07 Feb 2010 18:46:37 -0500 http://www.sott.net/articles/show/202593-Chevron-Hires-Twelve-Public-Relations-Firms-to-Discredit-Indigenous-Indians-in-Ecuador 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. http://www.sott.net/articles/show/202593-Chevron-Hires-Twelve-Public-Relations-Firms-to-Discredit-Indigenous-Indians-in-Ecuador Sun, 07 Feb 2010 10:06:30 -0500 http://www.sott.net/articles/show/202587-This-Crisis-Won-t-Stop-Moving 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. http://www.sott.net/articles/show/202587-This-Crisis-Won-t-Stop-Moving Sun, 07 Feb 2010 08:28:54 -0500 http://www.sott.net/articles/show/202586-Pigs-Won-t-Fly-Swine-Acronym-Ordered-Out-of-Barclays-Capital-Reports 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. http://www.sott.net/articles/show/202586-Pigs-Won-t-Fly-Swine-Acronym-Ordered-Out-of-Barclays-Capital-Reports Sun, 07 Feb 2010 06:14:28 -0500 http://www.sott.net/articles/show/202584-Sovereign-debt-fears-signal-new-stage-of-global-crisis 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. http://www.sott.net/articles/show/202584-Sovereign-debt-fears-signal-new-stage-of-global-crisis Sun, 07 Feb 2010 03:19:44 -0500 http://www.sott.net/articles/show/202563-De-facto-North-American-Union-Buy-America-clause-waived-for-Canada Canada has been exempted from the 'Buy American' clause in President Barack Obama's multi-billion package announced last year to stimulate the economy. Under the American Recovery and Reinvestment Act passed by the US Congress last year, the Obama administration is to spend $787 billion on public works projects, infrastructure, education, health care and homeland security to create jobs. But the US Congress introduced the 'Buy America' clause in the Act to shield the country's crucial sectors from competition. Canada, the European Union and Australia called the 'Buy America' clause a protectionist measure and sought its deletion. http://www.sott.net/articles/show/202563-De-facto-North-American-Union-Buy-America-clause-waived-for-Canada Sat, 06 Feb 2010 15:57:28 -0500 http://www.sott.net/articles/show/202531-Secret-summit-of-top-bankers The world's top central bankers began arriving in Australia yesterday as renewed fears about the strength of the global economic recovery gripped world share markets. Representatives from 24 central banks and monetary authorities including the US Federal Reserve and European Central Bank landed in Sydney to meet tomorrow at a secret location, the Herald Sun reports. Organised by the Bank for International Settlements last year, the two-day talks are shrouded in secrecy with high-level security believed to have been invoked by law enforcement agencies. http://www.sott.net/articles/show/202531-Secret-summit-of-top-bankers Sat, 06 Feb 2010 08:10:52 -0500 http://www.sott.net/articles/show/202522-Monsanto-The-World-s-Poster-Child-for-Corporate-Manipulation-and-Deceit When Forbes magazine declared Monsanto as the Company of the Year for 2009, millions of surprised people were forced to reevaluate their opinions about a major corporation. Now they no longer trust Forbes. Monsanto is one of the most despised corporations on earth. This is the first in a series of articles that expose their not-so-hidden dark side and how, if unrestrained, Monsanto could unleash a cataclysm. Indeed, it has already started... http://www.sott.net/articles/show/202522-Monsanto-The-World-s-Poster-Child-for-Corporate-Manipulation-and-Deceit Fri, 05 Feb 2010 19:39:00 -0500 http://www.sott.net/articles/show/202517-2010-US-bank-failure-tally-now-16-as-1st-American-State-Bank-of-Minnesota-fails Regulators shuttered a Minnesota bank on Friday night, for the 16th failure of 2010. The bank, 1st American State Bank of Minnesota, in Hancock, was closed by the state's Department of Commerce. The department named the Federal Deposit Insurance Corp. the receiver. Customers of the failed bank are protected, however. The FDIC covers accounts up to $250,000. The FDIC entered into a purchase and assumption agreement, in which it transfers control of the failed bank to a healthy institution, with Community Development Bank, FSB. The 1st American's two branches will reopen Monday under their new ownership. http://www.sott.net/articles/show/202517-2010-US-bank-failure-tally-now-16-as-1st-American-State-Bank-of-Minnesota-fails Fri, 05 Feb 2010 19:14:44 -0500 http://www.sott.net/articles/show/202502-Warning-of-Greek-crisis-spreading-across-EU The Greek debt crisis has spread to Spain and Portugal in a dangerous escalation as global markets test whether Europe is willing to shore up monetary union with muscle rather than mere words. Julian Callow from Barclays Capital said the European Union might need to invoke emergency treaty powers to halt the contagion by issuing an EU guarantee for Greek debt. "If not contained, this could result in a 'Lehman-style' tsunami spreading across much of the EU," he said. Credit default swaps measuring bankruptcy risk on Portuguese debt surged 28 basis points on Thursday to a record 222 on reports that Jose Socrates was about to resign as prime minister after failing to secure enough votes in parliament to carry out austerity measures. http://www.sott.net/articles/show/202502-Warning-of-Greek-crisis-spreading-across-EU Fri, 05 Feb 2010 15:39:43 -0500 http://www.sott.net/articles/show/202480-Endgame I've mentioned more than once in these essays the foreshortening effect that textbook history can have on our understanding of the historical events going on around us. The stark chronologies most of us get fed in school can make it hard to remember that even the most drastic social changes happen over time, amid the fabric of everyday life and a flurry of events that can seem more important at the time. This becomes especially problematic in times like the present, when apocalyptic prophecy is a central trope in the popular culture that frames a people's hopes and fears for the future. When the collective imagination becomes obsessed with the dream of a sudden cataclysm that sweeps away the old world overnight and ushers in the new, even relatively rapid social changes can pass by unnoticed. The twilight years of Rome offer a good object lesson; so many people were convinced that the Second Coming might occur at any moment that the collapse of classical civilization went almost unnoticed; only a tiny handful of writers from those years show any recognition that something out of the ordinary was happening at all. Reflections of this sort have been much on my mind lately, and there's a reason for that. Scattered among the statistical noise that makes up most of today's news are data points that suggest to me that business as usual is quietly coming to an end around us, launching us into a new world for which very few of us have made any preparations at all. http://www.sott.net/articles/show/202480-Endgame Fri, 05 Feb 2010 02:00:31 -0500 http://www.sott.net/articles/show/202477-Stocks-Slump-Euro-Drops-Bond-Risk-Soars-on-Jobs-Debt-Concern Asian stocks plunged the most in 10 weeks, extending a global rout, the euro fell and bond default risk jumped after an unexpected increase in U.S. jobless claims and on growing concern over European sovereign debt. The MSCI Asia Pacific Index lost 2.5 percent to 114.73 at 12:33 p.m. in Tokyo, the lowest level in two months, and the euro fell as much as 0.4 percent against the dollar to the lowest level since May. The cost of protecting Australian corporate debt jumped the most in almost six months and emerging market equity funds had their biggest outflow in 24 weeks. Investors are fleeing risk as initial applications for unemployment insurance unexpectedly increased to 480,000 last week and companies from MasterCard Inc. to Monster Worldwide Inc. reported earnings that trailed analyst estimates. Portugal and Greece led a surge in the cost of insuring against losses on sovereign debt to a record on concern that emerging market countries will struggle to curb budget deficits. http://www.sott.net/articles/show/202477-Stocks-Slump-Euro-Drops-Bond-Risk-Soars-on-Jobs-Debt-Concern Fri, 05 Feb 2010 00:39:45 -0500 http://www.sott.net/articles/show/202468-Next-in-line-for-a-bailout-Social-Security Don't look now. But even as the bank bailout is winding down, another huge bailout is starting, this time for the Social Security system. A report from the Congressional Budget Office shows that for the first time in 25 years, Social Security is taking in less in taxes than it is spending on benefits. Don't look now. But even as the bank bailout is winding down, another huge bailout is starting, this time for the Social Security system. A report from the Congressional Budget Office shows that for the first time in 25 years, Social Security is taking in less in taxes than it is spending on benefits. Instead of helping to finance the rest of the government, as it has done for decades, our nation's biggest social program needs help from the Treasury to keep benefit checks from bouncing - in other words, a taxpayer bailout. http://www.sott.net/articles/show/202468-Next-in-line-for-a-bailout-Social-Security Thu, 04 Feb 2010 22:13:27 -0500 http://www.sott.net/articles/show/202421-U-S-Banks-Abetting-Corrupt-Regimes-Probe-Finds New York - The global bank HSBC may be running offshore accounts for central banks. According to a U.S. Senate investigation, an HSBC subsidiary in London called HSBC Equator Bank had a sister bank in the Bahamas. According to an internal e-mail, the bank told HSBC USA it had been providing offshore accounts to central banks for 20 years, because the banks wanted to avoid "Mareva" injunctions, legally enforceable orders to freeze funds. This was revealed by a report to be released Thursday by the Senate Subcommittee on Investigations. A subcommittee staff member who worked on the investigation said, "You have a central bank saying to their banker, I don't want to have to comply with a legally enforceable order so put me offshore. So they did." HSBC declined to confirm or deny the charge. HSBC told IPS, "HSBC takes compliance matters very seriously. HSBC's record demonstrates a commitment to vigorous enforcement and continuous enhancement of anti-money laundering policies and practices." It would not comment further. http://www.sott.net/articles/show/202421-U-S-Banks-Abetting-Corrupt-Regimes-Probe-Finds Thu, 04 Feb 2010 09:35:03 -0500 http://www.sott.net/articles/show/202420-The-Crisis-Is-Not-Over Readers ask if the financial crisis is over, if the recovery is for real and, if not, what are Americans' prospects. The short answer is that the financial crisis is not over, the recovery is not real, and the U.S. faces a far worse crisis than the financial one. Here is the situation as I understand it: The global crisis is understood as a banking crisis brought on by the mindless deregulation of the U.S. financial arena. Investment banks leveraged assets to highly irresponsible levels, issued questionable financial instruments with fraudulent investment grade ratings, and issued the instruments through direct sales to customers rather than through markets. The crisis was initiated when the U.S. allowed Lehman Brothers to fail, thus threatening money market funds everywhere. The crisis was used by the investment banks, which controlled U.S. economic policy, to secure massive subsidies to their profits from a taxpayer bailout and from the Federal Reserve. How much of the crisis was real and how much was hype is not known at this time. http://www.sott.net/articles/show/202420-The-Crisis-Is-Not-Over Thu, 04 Feb 2010 09:06:47 -0500 http://www.sott.net/articles/show/202417-Prius-Adds-to-Toyota-s-Woes-as-Stock-Drops-in-Tokyo The hybrid-electric Prius has long been Toyota's "green car," the symbol of the automaker's engineering prowess and its big bet on the kind of car consumers will want to buy for decades to come. But on Wednesday, the Prius was drawn into the mounting crisis for Toyota, as Japanese officials ordered the company to investigate problems with the brakes on the 2010 model. American safety officials also said they had received dozens of similar complaints. The problems seemed to weigh on the company's stock as markets opened in Asia Thursday morning, with Toyota down nearly 5 percent in early trading in Tokyo. The new questions surrounding the Prius raise doubts about a different problem in a model that was not part of the recent global recalls of more than nine million vehicles. http://www.sott.net/articles/show/202417-Prius-Adds-to-Toyota-s-Woes-as-Stock-Drops-in-Tokyo Thu, 04 Feb 2010 00:27:30 -0500 http://www.sott.net/articles/show/202415-Obama-budget-Bad-Things-coming- The big names in econo-blogging have been weighing in on Obama's 2010 and 2011 budget proposals, and it is not pretty. I cannot find one of the real econo-bloggers (those with a record of being right with their predictions based on the numbers) who think this budget is anything other than an utter disaster. Some highlights they've mentioned about the disaster: 1. The budgets continue the disastrous Bush tax cuts that gutted the Federal Government's ability to fund its operations out of cash flow, therefore guaranteeing long-term deficits ultimately funded by printing money (because in the end that's what is going to happen) for as many years as the eye can see. Short-term we have no problem -- total U.S. government debt is only half of GDP, or roughly 1/8th of what Japan's government debt is. Long term, we cannot basically exempt over 50% of Americans from paying taxes and have a solvent government. No nation can function when half the nation is a bunch of deadbeat freeloaders. That way lies Somalia territory. Indeed, the primary cause of the deficit is the Bush tax cuts combined with the wars in Iraq and Afghanistan -- without those, the deficit would be eliminated by economic growth within five years. Yet Obama wants to continue both the Bush tax cuts AND the wars. Inexplicable. http://www.sott.net/articles/show/202415-Obama-budget-Bad-Things-coming- Thu, 04 Feb 2010 00:07:41 -0500 http://www.sott.net/articles/show/202405-No-Help-in-Sight-More-Homeowners-Walk-Away About 5.1 million will own a home valued below 75 percent of what is owed In 2006, Benjamin Koellmann bought a condominium in Miami Beach. By his calculation, it will be about the year 2025 before he can sell his modest home for what he paid. Or maybe 2040. "People like me are beginning to feel like suckers," Mr. Koellmann said. "Why not let it go in default and rent a better place for less?" After three years of plunging real estate values, after the bailouts of the bankers and the revival of their million-dollar bonuses, after the Obama administration's loan modification plan raised the expectations of many but satisfied only a few, a large group of distressed homeowners is wondering the same thing. New research suggests that when a home's value falls below 75 percent of the amount owed on the mortgage, the owner starts to think hard about walking away, even if he or she has the money to keep paying. http://www.sott.net/articles/show/202405-No-Help-in-Sight-More-Homeowners-Walk-Away Wed, 03 Feb 2010 20:26:36 -0500 http://www.sott.net/articles/show/202342-Greece-rattled-by-hidden-debt-controversy Greek debt markets have come under fresh assault from hot money funds after a commission of experts in Athens told the country's parliament that it had uncovered €40bn (£35bn) of "hidden debts" during an investigation into past manipulation by the financial authorities. Premier George Papandreou said the spike in Greek borrowing costs was "completely unjustified" and lashed out at the rating agencies, which precipitated this crisis by downgrading Greek bonds. "Greece is at the centre of an unprecedented speculative attack: we cannot be at the mercy of creditors. Despite our tragic mistakes, our fate is today defined by rating agencies that bear responsibility for the 'bubble' that led to the global crisis in the first place," he said. Yields on 10-year Greek bonds jumped 14 basis points to 6.74pc, widening the spread over German Bunds to 355 points. Portuguese bonds suffered after the central bank said the government had not done enough to tackle its ballooning deficit. http://www.sott.net/articles/show/202342-Greece-rattled-by-hidden-debt-controversy Tue, 02 Feb 2010 19:14:03 -0500 http://www.sott.net/articles/show/202304-Biting-recession-leaves-ever-more-Americans-hungry Chicago - The number of Americans receiving emergency food from the largest U.S. hunger-relief charity and its partners rose 46 percent from 2005 to 2009, according to a report released on Tuesday. "Feeding America" said 37 million people, including 14 million children, needed emergency food aid each year, more than 10 percent of the U.S. population of 300 million. It based the figure on 61,000 interviews and 37,000 surveys of local charitable agencies. That compares to 25.3 million people in 2005, when the group released its last quadrennial study. http://www.sott.net/articles/show/202304-Biting-recession-leaves-ever-more-Americans-hungry Tue, 02 Feb 2010 11:29:34 -0500 http://www.sott.net/articles/show/202279-World-War-III-U-S-vs-China- It took the onset of World War II to lift the world out of the Great Depression that began in 1929. Ignore the historical hyperbole that claim Roosevelt's "New Deal" had anything to do with it. It was war, plain and simple, that galvanized the U.S. manufacturing complex into debt-driven growth, and ended the period of stagnation following the economic contraction from 1929 to 34. Bernanke's theory is that the depression would have been averted had the Federal Reserve acted decisively and boosted liquidity - a theory he is now testing. At that time, the Fed was limited to how much liquidity it could inject by the fact that the available money supply had to be connected (at least partially) to the available gold on hand in U.S. reserves. http://www.sott.net/articles/show/202279-World-War-III-U-S-vs-China- Mon, 01 Feb 2010 22:07:14 -0500 http://www.sott.net/articles/show/202274-Cramer-The-Bavarian-Illuminati-the-Trilateral-Commission-Goldman-Sachs-and-the-Queen-of-England-are-not-all-bad http://www.sott.net/articles/show/202274-Cramer-The-Bavarian-Illuminati-the-Trilateral-Commission-Goldman-Sachs-and-the-Queen-of-England-are-not-all-bad Mon, 01 Feb 2010 21:01:42 -0500 http://www.sott.net/articles/show/202272-CIA-Officers-Working-for-Private-Corporations In the midst of two wars and the fight against Al Qaeda, the CIA is offering operatives a chance to peddle their expertise to private companies on the side - a policy that gives financial firms and hedge funds access to the nation's top-level intelligence talent, Politico has learned. In one case, these active-duty officers moonlighted at a hedge-fund consulting firm that wanted to tap their expertise in "deception detection," the highly specialized art of telling when executives may be lying based on clues in a conversation. The never-before-revealed policy comes to light as the CIA and other intelligence agencies are once again under fire for failing to "connect the dots," this time in the Christmas Day bombing plot on Northwest Flight 253. http://www.sott.net/articles/show/202272-CIA-Officers-Working-for-Private-Corporations Mon, 01 Feb 2010 20:51:15 -0500 http://www.sott.net/articles/show/202271-The-Grasping-Hand The modern democratic state pillages its productive citizens. To assess the unprecedented scale that the modern democratic state has attained in Europe, it is useful to recall the historical kinship between two movements that emerged at its birth: classical liberalism and anarchism. Both were motivated by the mistaken hypothesis that the world was heading toward an era of the weakening of the state. While liberalism wanted a minimal state that would guide citizens almost imperceptibly, leaving them to go about their business in peace, anarchism called for the total death of the state. Behind these two movements was a hope typical of the European nineteenth century: that man's plunder of man would soon come to an end. In the first case, this would result from the elimination of exploitation by unproductive classes, that is, the nobility and the clergy. In the second case, the key was to reorganize traditional social classes into little groups that would consume what they produced. But the political history of the twentieth century, and not just in its totalitarian extremes, proved unkind to both classical liberalism and anarchism. The modern democratic state gradually transformed into the debtor state, within the space of a century metastasizing into a colossal monster - one that breathes and spits out money. http://www.sott.net/articles/show/202271-The-Grasping-Hand Mon, 01 Feb 2010 20:40:48 -0500 http://www.sott.net/articles/show/202262-Backdoor-taxes-to-hit-middle-class New York --The Obama administration's plan to cut more than $1 trillion from the deficit over the next decade relies heavily on so-called backdoor tax increases that will result in a bigger tax bill for middle-class families. In the 2010 budget tabled by President Barack Obama on Monday, the White House wants to let billions of dollars in tax breaks expire by the end of the year -- effectively a tax hike by stealth. While the administration is focusing its proposal on eliminating tax breaks for individuals who earn $250,000 a year or more, middle-class families will face a slew of these backdoor increases. http://www.sott.net/articles/show/202262-Backdoor-taxes-to-hit-middle-class Mon, 01 Feb 2010 19:22:51 -0500 http://www.sott.net/articles/show/202261-Politicians-Can-t-Wait-for-Bankers-Urging-Caution-on-Regulation Politicians under pressure from angry voters to show progress on financial reform are losing patience with bankers waiting to reach global harmony on new rules. High unemployment and slow economic growth coupled with banks reporting multibillion-dollar bonus pools have heightened tension since leaders of the Group of 20 nations agreed in September to await global rules on capital, liquidity and compensation. That tension spilled over into hallways and meeting rooms at the World Economic Forum's annual conference in Davos, Switzerland, last week. "We have to show short-term results," French Finance Minister Christine Lagarde said in an interview at the conference shortly after chairing a private meeting between bankers, politicians and regulators. http://www.sott.net/articles/show/202261-Politicians-Can-t-Wait-for-Bankers-Urging-Caution-on-Regulation Mon, 01 Feb 2010 19:01:02 -0500 http://www.sott.net/articles/show/202260-Volcker-rule-unlikely-to-move-forward-in-Senate-lawmakers-say A proposal by former Federal Reserve Chairman Paul Volcker to limit bank's proprietary trading will be either be dropped or significantly modified in the Senate, lawmakers and staffers told dealReporter. Senate Banking Committee ranking member Richard Shelby (R-AL) said he opposes the so-called Volcker rule and the Obama administration's call to levy a USD 90bn tax on banks. His comments come as House Financial Services Committee Chairman Barney Frank (D-MA) predicted the proposals outlined by President Obama could be law within six months. Speaking to this news service on Thursday, Shelby said if Democrats push forward with the proposals they risk unravelling much of the bipartisan support already reached regarding the passage of financial regulatory reform in the Senate. Shelby said that the Obama administration risks losing Republican support for the bill if they begin to "politicise" the issue. http://www.sott.net/articles/show/202260-Volcker-rule-unlikely-to-move-forward-in-Senate-lawmakers-say Mon, 01 Feb 2010 18:54:22 -0500 http://www.sott.net/articles/show/202256-UK-singer-refuses-to-pay-tax-in-bonus-protest English singer says he is going to stop paying tax to the British government unless it halts the payment of big bonuses to staff at the Royal Bank of Scotland. Folk singer Billy Bragg reiterated Sunday his call to halt the financial bonuses at the Royal Bank of Scotland (RBS) as he prepared to withhold his taxes in protest. "Millions of workers are already facing stark choices: are they willing to work longer hours for less money, or would they rather be unemployed? I don't see why the bankers at RBS shouldn't be asked the same question," the performer told crowds at Speaker's Corner in London's Hyde Park. Bragg added that he objected to RBS plans to pay £1.5 billion in bonuses to bank staffers despite having been bailed out by taxpayers' money and suffering the "worst losses in British commercial history" in 2009. http://www.sott.net/articles/show/202256-UK-singer-refuses-to-pay-tax-in-bonus-protest Mon, 01 Feb 2010 13:26:33 -0500 http://www.sott.net/articles/show/202188-New-Haiti-Same-Corporate-Interests In the wake of the earthquake that has killed more than 100,000 people in Haiti, the foreign ministers of several countries calling themselves the "Friends of Haiti" met on Monday in Montreal to discuss plans for "building a new Haiti." Participants in the Ministerial Preparatory Conference on Haiti, who included Secretary of State Hillary Clinton; representatives of international financial institutions including the World Bank and the International Monetary Fund; and Haitian Prime Minister Jean-Max Bellerive came to what Canadian Foreign Affairs Minister Lawrence Cannon, the conference chair, referred to as a "road map towards Haiti's reconstruction and development." However, the Latin American countries of ALBA--the Bolivarian Alliance for the Americas--who held a counter-conference, and several grassroots Haiti solidarity organizations, who organized protests outside the conference, expressed skepticism that the "Friends of Haiti" and the international financial institutions would work to further the interests of ordinary Haitians. http://www.sott.net/articles/show/202188-New-Haiti-Same-Corporate-Interests Sun, 31 Jan 2010 08:59:46 -0500 http://www.sott.net/articles/show/202172-False-Hope-in-Financial-Free-Lunch Last week's winner of the Mogambo Most Stupid Quote Of The Week (MMSQOTW) goes to that arch-idiot, Barack Obama - after the contest judge (me) was found (my wife tracked me down) in a local tavern (low-rent girlie bar), and was hurriedly sobered up (to no avail) with some hot coffee (too weak) and a lot of screaming from my wife (loud), mostly centered about what a lowlife bastard I am (with examples). After being driven home with her "loud snotty harangue" as musical accompaniment, I ran across this startling AP news item entry, which was so shocking that it sobered me up pretty quick! The most recent staggering stupidity (our contest winner!) is from the White House, where "President Barack Obama said Thursday he wants to tax banks to recoup the public bailout of foundering firms at the height of the financial crisis."! Hahaha! http://www.sott.net/articles/show/202172-False-Hope-in-Financial-Free-Lunch Sat, 30 Jan 2010 20:18:47 -0500 http://www.sott.net/articles/show/202137-Roubini-Calls-U-S-Growth-Dismal-and-Poor-Predicts-Slowing New York University Professor Nouriel Roubini, who anticipated the financial crisis, called the fourth quarter surge in U.S. economic growth "very dismal and poor" because it relied on temporary factors. Roubini said more than half of the 5.7 percent expansion reported yesterday by the government was related to a replenishing of inventories and that consumption depended on monetary and fiscal stimulus. As these forces ebb, growth will slow to just 1.5 percent in the second half of 2010, he said. "The headline number will look large and big, but actually when you dissect it, it's very dismal and poor," Roubini told Bloomberg Television in an interview at the World Economic Forum's annual meeting in Davos, Switzerland. "I think we are in trouble." http://www.sott.net/articles/show/202137-Roubini-Calls-U-S-Growth-Dismal-and-Poor-Predicts-Slowing Sat, 30 Jan 2010 08:43:14 -0500 http://www.sott.net/articles/show/202134-Books-a-Must-Have-Even-in-Sluggish-Economy-Poll During tough economic times when U.S. consumers are trying to cut back the indulgence they can't seem to live without is books. Three-quarters of adults questioned in an online poll said they would sacrifice holidays, dining out, going to the movies and even shopping sprees but they could not resist buying books. Dining out came in a far second with only 11 percent of Americans naming it their top indulgence, followed by shopping at 7 percent, vacations at four and movies, which was chosen by only 3 percent of Americans. "The recession highlighted the downside of greed, indulgence and giving in to temptation, but we noticed a shift back to life's simplest pleasures," said Michelle Renaud, a senior manager at Harlequin Enterprises Limited, which conducted the poll. http://www.sott.net/articles/show/202134-Books-a-Must-Have-Even-in-Sluggish-Economy-Poll Sat, 30 Jan 2010 08:31:51 -0500 http://www.sott.net/articles/show/202125-Blame-the-central-bankers-more-than-the-private-bankers No doubt the flak directed at all those private bankers who "don't get it" about bank bonuses is well deserved. Yet I cannot help thinking that the central bankers are escaping very lightly in the post-crisis dust-up. For while incentive structures in banking exacerbated the credit bubble, they were a much less potent cause of trouble than central bank behaviour across the world. In spite of the bizarre recent assertion by Ben Bernanke, chairman of the Federal Reserve, that the Fed was largely innocent in the matter of bubble creation, central banks clearly bear much responsibility for past excessive credit expansion. The Fed's gradualist and transparent approach to raising rates in mid-decade also ensured that bankers were never shocked into a recognition that unprecedented shrinkage of bank equity was phenomenally dangerous. In spite of the popular perception that financial innovation caused so much of the damage in the crisis, the rise in bank leverage was a far more important factor. The academics who dominate modern central banking were ideologically committed to the notion of efficient markets and to exclusive reliance on inflation targeting regardless of imbalances arising from easy credit and soaring asset prices - a spectacular case of one-club golfing. This mindset led to the silly belief that bubbles could not be identified at the time and that it was better to clean up after the bust than to lean pre-emptively against the wind in the boom. Monetary policy was thus asymmetric. Interest rates were reduced when asset prices fell, but were not raised in response to wildly overbeating markets. http://www.sott.net/articles/show/202125-Blame-the-central-bankers-more-than-the-private-bankers Fri, 29 Jan 2010 23:01:49 -0500 http://www.sott.net/articles/show/202124-Scandal-Albert-Edwards-Alleges-Central-Banks-Were-Complicit-In-Robbing-The-Middle-Classes We apologize in advance for the New York Magazine-style headline, but this is a report that has to be read by all Senators who are preparing to reconfirm Bernanke for a second term. When voting for the Chairman, be aware that all of America will now look at you as the perpetrators who are encouraging the greatest inter and intra-generational theft to continue, and as prescribed by Newton 3rd law, sooner or later, an appropriate reaction will come from the very same middle class that you are seeking to doom into a state of perpetual penury and a declining standard of living. America spoke in Massachusetts, and will speak again very soon if you do not send the appropriate signal that you have heard its anger - Do Not Reconfirm Bernanke. You have been warned. We present Albert Edwards' latest in its complete form as it must be read by all unabridged and without commentary. These are not the deranged ramblings of a fringe blogger - this is a chief strategist for a major international bank. http://www.sott.net/articles/show/202124-Scandal-Albert-Edwards-Alleges-Central-Banks-Were-Complicit-In-Robbing-The-Middle-Classes Fri, 29 Jan 2010 22:57:14 -0500 http://www.sott.net/articles/show/202121-Keiser-Report-12-Markets-Finance-Scandal- Every week Max Keiser looks at all the scandal behind the financial news headlines. This time Max Keiser and co-host Stacy Herbert look at the scandal behind the headlines about the Volcker plan, the Supreme Court ruling and about Central Banks robbing the middle classes. Keiser also speaks to Fred Harrison, the Renegade Economist, about property bubbles and privatizing wages. http://www.sott.net/articles/show/202121-Keiser-Report-12-Markets-Finance-Scandal- Fri, 29 Jan 2010 22:19:11 -0500 http://www.sott.net/articles/show/202097-China-Shouldn-t-Rescue-Greece-by-Buying-Debt-Yu-Says China shouldn't buy a "large chunk" of Greek government debt to help rescue the nation because the securities are more risky than U.S. Treasuries, said Yu Yongding, a former adviser to the Chinese central bank. Greece has a lower debt rating than the U.S. and its statistics have been "sharply" criticized by the European Commission, said Yu, currently a member of the Chinese Academy of Social Sciences, a government-backed research body. The Greek Finance Ministry yesterday "categorically" denied a report in the Financial Times that it is wooing China to buy as much as 25 billion euros ($35 billion) of its bonds. "It is unreasonable for an economist to support a diversification away from an unsafe asset class to a much more unsafe asset class," Yu said in an e-mailed response to questions. "Let European governments and the European Central Bank rescue Greece." http://www.sott.net/articles/show/202097-China-Shouldn-t-Rescue-Greece-by-Buying-Debt-Yu-Says Fri, 29 Jan 2010 16:44:20 -0500 http://www.sott.net/articles/show/202095-Lenders-Pursue-Mortgage-Payoffs-Long-After-Homeowners-Default When John King stopped making payments on his home in Coral Gables, Florida, two years ago, he assumed the foreclosure ended his mortgage contract, he said. Last month, a Miami-Dade County court gave collectors permission to pursue him for $44,000 stemming from the default. King is among a rising number of borrowers who are learning that they can be on the hook for years after losing their homes. Amid a crisis that stripped $6.4 trillion, or 28 percent, from the value of U.S. residential real estate since the 2006 peak, lenders are exercising their rights to pursue unpaid mortgage balances. To get their money, they can seize wages, tap bank accounts and put liens on other assets held by debtors. "The big dogs get a bailout, and the little man gets no mercy," said King, 39, referring to the U.S. government's rescue of banks and other financial institutions. http://www.sott.net/articles/show/202095-Lenders-Pursue-Mortgage-Payoffs-Long-After-Homeowners-Default Fri, 29 Jan 2010 16:34:27 -0500 http://www.sott.net/articles/show/202066-Secret-Banking-Cabal-Emerges-From-AIG-Shadows The idea of secret banking cabals that control the country and global economy are a given among conspiracy theorists who stockpile ammo, bottled water and peanut butter. After this week's congressional hearing into the bailout of American International Group Inc., you have to wonder if those folks are crazy after all. Wednesday's hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials. We're talking about the Federal Reserve Bank of New York, whose role as the most influential part of the federal-reserve system -- apart from the matter of AIG's bailout -- deserves further congressional scrutiny. The New York Fed is in the hot seat for its decision in November 2008 to buy out, for about $30 billion, insurance contracts AIG sold on toxic debt securities to banks, including Goldman Sachs Group Inc., Merrill Lynch & Co., Societe Generale and Deutsche Bank AG, among others. That decision, critics say, amounted to a back-door bailout for the banks, which received 100 cents on the dollar for contracts that would have been worth far less had AIG been allowed to fail. http://www.sott.net/articles/show/202066-Secret-Banking-Cabal-Emerges-From-AIG-Shadows Fri, 29 Jan 2010 06:16:12 -0500 http://www.sott.net/articles/show/202057-Funds-flee-Greece-as-Germany-warns-of-fatal-eurozone-crisis Germany has triggered a near-panic flight from southern European debt markets by warning that there will be no EU bail-outs, even though it fears the region's economic crisis has turned dangerous and could prove "fatal" for the entire eurozone. The yield on 10-year Greek bonds blasted upwards by over 40 basis points to 7.15pc in a day of wild trading. Spreads over German Bunds reached almost four percentage points, by far the highest since Greece joined the euro, and close to levels that risk a self-feeding spiral. Contagion hit Portuguese, Spanish, Irish, and Italian bonds. George Papandreou, the Greek premier, said in Davos that his country had been singled out as the weak link in a "attack on the eurozone" by speculators and political foes. "We are being targeted, particularly by those with an ulterior motive." http://www.sott.net/articles/show/202057-Funds-flee-Greece-as-Germany-warns-of-fatal-eurozone-crisis Thu, 28 Jan 2010 21:10:58 -0500 http://www.sott.net/articles/show/201992-Rule-By-The-Rich The election of Republican Scott Brown to the U.S. Senate by Democratic voters in Massachusetts sends President Obama a message. Voters perceive that Obama's administration has morphed into a Bush-Cheney government. Obama has reneged on every promise he made, from ending wars, to closing Gitmo, to providing health care for Americans, to curtailing the domestic police state, to putting the interests of dispossessed Americans ahead of the interests of the rich banksters who robbed Americans of their homes and pensions. But what can Obama do other then spout more rhetoric? The Democrats were destroyed as an independent party by jobs offshoring and so-called free trade agreements such as NAFTA. The effect of "globalism" has been to destroy the industrial and manufacturing unions, thus leaving the Democrats without a power base and source of funding. Obama and the Democrats cannot be an opposition party, because Democrats are as dependent as Republicans on corporate interest groups for campaign funding. http://www.sott.net/articles/show/201992-Rule-By-The-Rich Thu, 28 Jan 2010 07:02:00 -0500 http://www.sott.net/articles/show/201989-Record-Number-of-Young-Americans-Jobless The U.S. economic recession has taken a particularly heavy toll on young Americans, with a record one out of five black men aged 20 to 24 neither working nor in school, according to research released on Tuesday. Teenagers have found it significantly harder to get a job since the recession began in late 2007, with black youths and young people from low-income families faring the worst, wrote Andrew Sum of Northeastern University in Boston, an employment researcher commissioned by the Chicago Urban League and the Alternative Schools Network. "Low-income and minority youth, who depended on part-time jobs as a significant stepping stone to future employment, have been forced out of the job market and economically marginalized," Herman Brewer of the Chicago Urban League said in a statement. Overall, 26 percent of American teenagers aged 16 to 19 had jobs in late 2009, said the report, which was based on U.S. Census Bureau data. That figure is a record low since statistics began to be kept in 1948, the researchers said. http://www.sott.net/articles/show/201989-Record-Number-of-Young-Americans-Jobless Thu, 28 Jan 2010 00:42:36 -0500 http://www.sott.net/articles/show/201980-Is-Bernanke-Hiding-A-Smoking-Gun- A Republican senator said Tuesday that documents showing Federal Reserve Board Chairman Ben Bernake covered up the fact that his staff recommended he not bailout AIG are being kept from the public. And a House Republican charged that a whistleblower had alerted Congress to specific documents provide "troubling details" of Bernanke's role in the AIG bailout. Sen. Jim Bunning (R-Ky.), a Bernanke critic, said on CNBC that he has seen documents showing that Bernanke overruled such a recommendation. If that's the case, it raises questions about whether bailing out AIG was actually necessary, and what Bernanke's motives were. http://www.sott.net/articles/show/201980-Is-Bernanke-Hiding-A-Smoking-Gun- Wed, 27 Jan 2010 20:58:04 -0500 http://www.sott.net/articles/show/201973-No-money-for-Americans-means-more-money-for-the-War-Machine-Barack-Obama-seeks-three-year-spending-freeze President Barack Obama is to seek a three-year freeze on domestic spending in his 2011 budget that would save $250 billion by 2020, administration officials said. Mr Obama will outline the freeze in his State of the Union address on Wednesday and will spell it out in detail on Feb 1, when he unveils his second budget. He is under fire for a record deficit and has called for a bipartisan congressional commission to consider spending cuts and tax increases to improve the country's fiscal outlook. Democrats are jittery after the Massachusetts election of a Republican for the Senate seat long held by the late Edward Kennedy, worried that it may be a warning sign for congressional elections in November. http://www.sott.net/articles/show/201973-No-money-for-Americans-means-more-money-for-the-War-Machine-Barack-Obama-seeks-three-year-spending-freeze Wed, 27 Jan 2010 20:31:30 -0500 http://www.sott.net/articles/show/201971-Obama-to-impose-freeze-on-social-spending President Obama will use his State of the Union Address Wednesday night to call for a three-year freeze on discretionary social spending, sources inside the administration have told the press. The proposed austerity measures, which will be detailed February 1 in the administration's 2011 budget proposal, signal the Obama administration's determination to stabilize the national debt at the expense of the working class. The proposed spending freeze targets non-military discretionary spending on programs that benefit the general population, but which comprise just one sixth of the budget. The freeze will keep this share of the budget at its current level of about $477 billion through 2013. Factoring in inflation, the freeze will translate into a reduction in real terms. Within the overall pie of discretionary spending - funding that must be approved by Congress each year - some programs will face cuts and some will be eliminated altogether, administration officials say. After 2013, Obama's plan would hold non-military discretionary spending at or below the level of inflation. http://www.sott.net/articles/show/201971-Obama-to-impose-freeze-on-social-spending Wed, 27 Jan 2010 20:20:43 -0500 http://www.sott.net/articles/show/201949-Better-Off-Deadbeat-Craig-Cunningham-Has-a-Simple-Solution-for-Getting-Bill-Collectors-Off-His-Back-He-Sues-Them- Unlike his neighbors' homes, Craig Cunningham's house in Northeast Dallas looks abandoned. The grass is dried out. The concrete slab under the front door is lopsided and cracked. The green exterior has faded to a toxic-looking shade. Yellow Pages pile up near the front door, and the black mailbox is stuffed full. Maybe the home has been foreclosed on. That wouldn't be a surprise in this economy. But no, that's not the case. Inside, the 29-year-old Cunningham hunkers his 6-foot-2-inch frame on a dumpy couch. His heavy arms extend from his sides, palms up, so two Chihuahuas, Angel and Chuay, can curl under them. Although it's 10 a.m. on a weekday, he's wearing slippers. He leans forward to lift some paperwork out of a plastic tub on the coffee table. The phone rings, and he answers with a soft voice. It's just a friend, and soon he hangs up. He's waiting for a particular type of phone call - one from a representative of a debt collection agency or a credit card company, whom he'll try to ensnare like a Venus fly trap. It's not unlikely that Cunningham's next call will be from a bill collector, since he's between jobs - except for being in the Army Reserve - and owes $100,000 in debts. While most Americans with unpaid bills dread the collector's call, Cunningham sees them as lucrative opportunities. Many collection and credit card companies, intentionally or not, violate little-known consumer rights laws, and Cunningham's favorite pastime is catching them doing so and then suing them. In fact, it's a profitable side job. http://www.sott.net/articles/show/201949-Better-Off-Deadbeat-Craig-Cunningham-Has-a-Simple-Solution-for-Getting-Bill-Collectors-Off-His-Back-He-Sues-Them- Wed, 27 Jan 2010 17:18:42 -0500