This story from Bloomberg just hit the wires this morning. Bank of America is shifting derivatives in its Merrill investment banking unit to its depository arm, which has access to the Fed discount window and is protected by the FDIC.

This means that the investment bank's European derivatives exposure is now backstopped by U.S. taxpayers. Bank of America didn't get regulatory approval to do this, they just did it at the request of frightened counterparties. Now the Fed and the FDIC are fighting as to whether this was sound. The Fed wants to "give relief" to the bank holding company, which is under heavy pressure.

This is a direct transfer of risk to the taxpayer done by the bank without approval by regulators and without public input. You will also read below that JP Morgan is apparently doing the same thing with $79 trillion of notional derivatives guaranteed by the FDIC and Federal Reserve.

What this means for you is that when Europe finally implodes and banks fail, U.S. taxpayers will hold the bag for trillions in CDS insurance contracts sold by Bank of America and JP Morgan. Even worse, the total exposure is unknown because Wall Street successfully lobbied during Dodd-Frank passage so that no central exchange would exist keeping track of net derivative exposure.

This is a recipe for Armageddon. Bernanke is absolutely insane. No wonder Geithner has been hopping all over Europe begging and cajoling leaders to put together a massive bailout of troubled banks. His worst nightmare is Eurozone bank defaults leading to the collapse of the large U.S. banks who have been happily selling default insurance on European banks since the crisis began.

Citigroup has agreed to pay $285 million to settle civil fraud charges that it misled buyers of complex mortgage investments just as the housing market was starting to collapse.

The Securities and Exchange Commission said Wednesday that the big Wall Street bank bet against the deal in 2007 and made $160 million in fees and profits. Investors lost millions.

Citigroup neither admitted nor denied the SEC's allegations in the settlement.

"We are pleased to put this matter behind us and are focused on contributing to the economic recovery, serving our clients and growing responsibly," Citigroup said in a statement.

The penalty is the biggest involving a Wall Street firm accused of misleading investors before the financial crisis since Goldman Sachs & Co. paid $550 million to settle similar charges last year. JPMorgan Chase & Co. resolved similar charges in June and paid $153.6 million.

A decade on from a landmark genetic-sequencing study, promised progress on typhoid fever has not materialized, says Stephen Baker.

Genome sequences come thick and fast in modern science. Nature has just published an analysis of the genome of the naked mole rat, and a historic sequence of the plague bacterium Yersinia pestis, reconstructed from medieval victims of the Black Death.

What is the value of such research? In my field, infectious disease, the genomics revolution has been substantially less beneficial than was anticipated. To those of us who work in poor countries in which infectious diseases that have been all but eliminated in the West are still common, it is clear that the wide-eyed optimism and persuasive advocacy for genomics that were expressed at the turn of the century were at best naive, and at worst potentially damaging, diverting resources from more worthy causes. Certainly, the outcomes have not matched those promised as justification for funding the research.

I have personal experience of the hype and the reality. Ten years ago, I was an author on the paper that announced the genome sequence of Salmonella enterica Typhi, the microorganism that causes typhoid fever. The research was promoted with great fanfare, which declared that scientists were at a turning point in the fight against the disease. A decade on, we are no closer to a global solution.

The S. enterica Typhi sequence did help us to understand the biology of the organism and to address enigmas such as why it causes disease only in humans, how it develops resistance to antimicrobial agents and how it modulates the human immune response. And although not even the most optimistic genomics or public-health expert would have predicted eradication of the disease within a decade, the sequencing did at least make elimination a realistic target.

But the promised concrete benefits - bespoke treatments, next-generation vaccines and low-cost diagnostics - have failed to materialize.

WASHINGTON - Officials of the Barack Obama administration have aggressively leaked information supposedly based on classified intelligence in recent days to bolster its allegation that two higher-ranking officials from Iran's Islamic Revolutionary Guards Corps (IRGC) were involved in a plot to assassinate Saudi ambassador Adel al-Jubeir in Washington.

The media stories generated by the leaks helped divert press attention from the fact that there is no verifiable evidence of any official Iranian involvement in the alleged assassination plan, contrary to the broad claim being made by the administration.

But the information about the two Iranian officials leaked to NBC

News, the Washington Post and Reuters was unambiguously false and misleading, as confirmed by official documents in one case and a former senior intelligence and counter-terrorism official in the other.

The main target of the official leaks was Abdul Reza Shahlai, who was identified publicly by the Obama administration as a "deputy commander in the Qods force" of the IRGC. Shahlai had long been regarded by US officials as a key figure in the Qods force's relationship to Shi'ite cleric Muqtada al-Sadr's Mahdi Army in Iraq.

The accusation "cult" is almost literally a "kiss of death" in our world, most particularly since September 11, 2001 when - allegedly - 19 fanatical Islamic terrorists - brought the most powerful nation on earth to its knees (or seemingly.) There were years of preparation for this event, including numerous very public "cult" events - Jonestown, Waco, Heaven's Gate, Solar Temple, Satanic Ritual Abuse cases, etc - that set the stage in the minds of the masses. By the time 9-11 rolled around, all you had to do was whisper "cult" and the nation was ready to march on the castle with firebrands and pitchforks.

So, it is not a good idea to use the word "cult" lightly in view of this hystericized societal state. (Never mind the fact that the word itself has drastically changed in meaning.)

As I mentioned in my article yesterday, on first reading about Eric Pepin accused of being a cult leader, having been falsely, slanderously, and libelously accused of same myself, my first instinct was to think "hang on a minute!" But, as I noted, reading further, there were too many troubling signs of a lot more below the surface of this glitch in the life of Eric Pepin when he was caught, literally, with his pants down.

We have been collecting data about Eric from the net (and elsewhere) so as to be better equipped to deal with someone who has egregiously attacked our right to investigate our world and warn our readers of potential dangers. This information is continually being added to the forum thread about Eric Pepin that is the object of his lawsuit as reported yesterday. Curiously, Rick Ross's pages about Eric Pepin have disappeared except for google cache...

And so, in view of the current situation of Eric Pepin and the Higher Balance Institute vis a vis sott.net, we thought it would be helpful to our readers to reprise an older article that lays out a lot of informational background to the psy-op games being played in our world and on the internet in terms of social and ideological vectoring. Remember, different ideologies can mask the same pathological behavior...

Verizon Wireless will now collect phone users' information, including their GPS location and Web browsing history, and sell the data to third parties unless customers opt out of the tracking service.

Verizon Wireless' (VZW) updated privacy policy permits the mobile giant to also track customers' app usage, device type, calling features and amount of phone use, as well as any search terms they type when browsing the Web on a VZW mobile device, and demographic information provided by other companies, such as gender and age.

Revenge strike against cuffing of Occupy Wall St protesters

Hacktivists have published a dossier of personal information on the head of Citigroup in retaliation for the cuffing of protesters at an Occupy Wall Street demo.

Members of a group called CabinCr3w, a hacking gang affiliated with Anonymous, revealed phone numbers, an address, email address and financial information on Vikram Pandit, Citigroup's chief executive officer.

The exposé follows the arrest of a group of anti-capitalist protesters who allegedly sparked a ruckus inside a Citibank branch while withdrawing funds and closing their accounts. About 24 people were detained and charged with criminal trespass on Saturday afternoon, The Wall Street Journal reports.

In The New York Times "Sunday Review" of Sept. 25, 2011, Michael Kazin, a co-editor of Dissent magazine, published an article entitled "Whatever Happened to the American Left?" It is drawn from a new book of his entitled American Dreamers: How the Left Changed a Nation. In the article (full disclosure: I have not read the book, only the review that appeared in The Times Sunday Book Review on Sept. 18) Mr. Kazin attributed the aforementioned decline to a number of factors. They included: unlike the (relatively) powerful left of the 1930s, the modern left, unlike the modern Right, has not been germinating for very long; in the 1970s they started leaving traditional "left" issues such as "class justice" for such things as rights for minorities and women; the failed promises of the Democratic Party, post pre-Viet Nam Lyndon Johnson; dependence on "politicians;" and "not reconnecting with ordinary Americans." So, you see, the "decline of the US left" is all the left's fault.

Well, historical developments like the decline, indeed the virtual disappearance of any real, socialistically-oriented left as real as its cousin, the "liberal/progressive" left, don't happen in an historical vacuum. Indeed in this case it would appear that what the Right-wing, Corporate Power has done to the US left since the height of its power during the New Deal is the primary cause of its decline. Further it would appear that the failure of self-styled US leftists to recognize and come to grips with the amazingly powerful legal, legislative, and propagandistic forces that the US Corporate Power mobilized against the left, and then organize to oppose it with strength, is also a major cause of the US left's decline.

Organized left-wings began developing in European constitutional democracies and monarchies in the late 19th century. In some, like Prussia, the left-wing party(s) appeared before the labor union movement did. In others, like the United Kingdom, the trade union movement came first, followed by left parliamentary parties. However, whichever came first, eventually any further successes that the left might have in their parliaments, in forcing concessions on labor relations, on health services, on the structure of work and leisure time, on any other broad-based national social legislation, was built on a base of strong trade union movement. This is the case in Western Europe down to this very day.

There is no danger that the protesters who have occupied squares, parks and plazas across the nation in defiance of the corporate state will be co-opted by the Democratic Party or groups like MoveOn. The faux liberal reformers, whose abject failure to stand up for the rights of the poor and the working class, have signed on to this movement because they fear becoming irrelevant. Union leaders, who pull down salaries five times that of the rank and file as they bargain away rights and benefits, know the foundations are shaking. So do Democratic politicians from Barack Obama to Nancy Pelosi. So do the array of "liberal" groups and institutions, including the press, that have worked to funnel discontented voters back into the swamp of electoral politics and mocked those who called for profound structural reform.

Resistance, real resistance, to the corporate state was displayed when a couple of thousand protesters, clutching mops and brooms, early Friday morning forced the owners of Zuccotti Park and the New York City police to back down from a proposed attempt to expel them in order to "clean" the premises. These protesters in that one glorious moment did what the traditional "liberal" establishment has steadily refused to do - fight back. And it was deeply moving to watch the corporate rats scamper back to their holes on Wall Street. It lent a whole new meaning to the phrase "too big to fail."

President Obama, who has been traveling the country urging Congress to pass his jobs bill so Americans can be put to work on infrastructure projects, need only look out a window in the West Wing to see one such project. Under way on his front lawn for the last 17 months, it is highly visible and yet mysterious.

For the first time in recent memory, the ground and pipes beneath the Oval Office are exposed, and each day, workers lower massive concrete blocks several stories underground. Cranes, trucks and construction workers file in and out of the hole, usually through a passageway between the White House and the Old Executive Office Building.

The cavernous hole has inspired much speculation. Is it an Olympic-size swimming pool for the fitness-conscious first couple? A more spacious bunker? A place, perhaps, to hide the deficit?

The General Services Administration says it is an elaborate renovation of the building's aging air-conditioning and electrical systems. These upgrades take place periodically, a G.S.A. spokeswoman, Sara Merriam, said, adding that Washington's Big Dig would soon continue on the other side of the White House grounds.