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July 16th, 2014

7/16/2014

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THE NEXT FEW DAYS I WANT TO TALK ABOUT THE COMING ECONOMIC COLLAPSE IN 2015.  I WILL START BY REMINDING PEOPLE WANT CAUSED THE 2008 CRASH AND SHOW HOW THE TWO ARE TIED TO TRANSFERRING ALL WEALTH TO THE TOP AND USING THE EXCUSE OF GOVERNMENT DEBT TO DISMANTLE OUR DEMOCRATIC STRUCTURES.  NEO-LIBERALS AND NEO-CONS WILL TAKE IT ALL!


I want to encourage people to pay attention to a subject that bores everyone but is the source of the looting of US government coffers and individual's pockets.  The Federal Reserve and Wall Street frauds. We need to know all of this CAN be reversed.  The economy is closer to collapse yet again by the same people playing the same games and all of it illegal.  So, let's review what caused the crash of 2008 to see how it relates to what will bring the economy down in 2015.
Remember, these economic policies started when Reagan/Clinton took the Republican and Democratic Parties to neo-liberalism.  The goal back then was to dismantle all of the public structures built for strong 1st world country to create the wealth inequity that goes with empire-building. The same was happening in Europe and the UK.  This is why Maryland has no public justice or oversight and accountability today----all of this boom and bust is no accident----it is all about wealth redistribution to the top.

Clinton deregulated and broke the Glass Steagall to set the stage for this explosive growth of US corporations with no overight and Bush simply allowed for an 'anything goes' environment.  Reagan/Clinton/Bush working with Alan Greenspan and Wall Street.
  Greenspan/Geithner allowed open fraud and corruption in the financial markets and Bush made sure the US Justice Department and financial agencies aided and abetted these crime.  The goal was transferring real estate from citizens to the banks through foreclosure so to control development especially in urban centers like Baltimore as well as sending trillions of dollars in government funding for these subprime loans to the banks.  

 
'We didn't see that coming' said Greenspan. Meanwhile, neo-liberals at the state and local levels were allowing the subprime mortgage fraud go wild. This same thing happened in Europe as subprime mortgage loans filled their economy as well.  It was Obama's job to make sure the money stayed with those committing the fraud.


The constant portrayal of this Visigoth looting as creating homeownership for low-income people -----knowing a collapse would send people into foreclosure-----shows the social pathology driving Wall Street and neo-liberals and neo-cons.

IT IS NOT LEGAL FOR ANYONE TO ALLOW OPEN FRAUD AND CORRUPTION AND GREENSPAN WAS ALLOWED TO JUST FADE AWAY FOR ONE OF THE GREATEST CRIMES IN HISTORY.

This was no maestro---he simply used people's faith in government and Rule of Law and sold people in investing in a system he knew would blow up making most people losers.  Think what is happening today---media is telling you the market is strong, politicians are throwing pensions into it and we all know it is getting ready to crash....and in 2015 we will hear O'Malley and Rawlings Blake who are loading the state with debt just as they oversaw the subprime mortgage fraud----'I didn't see that coming'!
WELL, WE SEE IT COMING AND IT IS INFUSED WITH PUBLIC MALFEASANCE AND FRAUD.

Alan Greenspan: Public Enemy Number One


By Stephen Lendman Global Research, October 27, 2008

With so many good choices, it’s hard just picking one. But given the gravity of today’s financial crisis, one name stands out above others. The “maestro,” as Bob Woodward called him in his book by that title. The  “Temple of Boom” chairman, according to a New York Times book review. Standing “bestride the Fed like a colossus.” Now defrocked as the “maestro” of misery. Alan Greenspan. From August 11, 1987 to January 31, 2006, as head of the private banking cartel euphemistically called the Federal Reserve. That Ron Paul explains isn’t Federal and has no reserves.

It represents bankers who own it. Big and powerful ones. Not the state or public interest. It prints money. Controls its supply and price. Loans it out for profit and charges the government interest it wouldn’t have to pay if Treasury instead of Federal Reserve notes were issued. People, as a result, pay more in taxes for debt service. The nation is more crisis-prone. Over time they increase in severity. The current one the most serious since the Great Depression. Potentially the greatest ever. The result of Greenspan’s 18 year irresponsible legacy.

He championed deregulation and presided over an earlier version of today’s crisis. The Reagan-era savings and loan fraud. It bankrupted 2200 banks. Cost taxpayers around $200 billion and for many people their savings in S & Ls they thought safe.

In the 1990s, he engineered the largest ever stock market bubble and bust in history through incompetence, subservience to Wall Street, and dereliction of duty. In January 2000, weeks short of the market peak, he claimed that “the American economy was experiencing a once-in-a-century acceleration of innovation, which propelled forward productivity, output, corporate profits, and stock prices at a pace not seen in generations, if ever….Lofty stock prices have reduced the cost of capital. The result has been a veritable explosion of spending on high-tech equipment….And I see nothing to suggest that these opportunities will peter out anytime soon….Indeed many argue that the pace of innovation will continue to quicken….to exploit the still largely untapped potential for e-commerce, especially the business-to-business arena.”

A week later, the Nasdaq peaked at 5048. Lost 78% of its value by October 2002. The S&P 500 49% from its March 2000 high to its October 2002 bottom. Individual investors were left high and dry as a result. For Mr. Greenspan, it was back to engineering multiple bubbles with 1% interest rates and a tsunami of easy money.

He advocated less regulation, not more. Voluntary oversight. The idea that markets work best so let them. Government intervention as the problem, not the solution. In the mid-1990s, he told a congressional committee:

“Risks in financial markets, including derivative markets, are being regulated by private parties. There is nothing involved in federal regulation per se which makes it superior to market regulation.”

On October 23 before the House Government Oversight and Reform committee, he refused to accept blame for the current crisis, but softened his tone and admitted a “flaw” in his ideology. Confessed his faith in deregulation was shaken. Said he was in a “state of shocked disbelief.” Unclear on what went wrong. Not sure “how significant or permanent it is,” and added:

– “We are in the midst of a once-in-a century credit tsunami (requiring) unprecedented measures;”

– “This crisis has turned out to be much broader than anything I could have imagined;”

– “fears of insolvency are now paramount;”

– significant layoffs and unemployment are ahead;

– a “marked retrenchment of consumer spending” as well;

– containing the crisis is conditional on stabilizing home prices;

– at best, it’s “still many months in the future;”

What went wrong with policies that “worked so effectively for nearly four decades,” he asked? Securitizing home mortgages. “Excess demand” for them, and failure to properly price them he answered. Unmentioned was unbridled greed. The greatest ever fraud. No oversight, and a predictable crisis only surprising in its magnitude and how it grew to unmanageable severity.

Greenspan is now softening on regulation but barely enough to matter. Too little, too late by any standard, and only to restore stability after which chastened investors “will be exceptionally cautious.” In the end, in his view, “This crisis will pass, and America will reemerge with a far sounder financial system.” Until another Fed chairman repeats his mistakes. Creates a crisis too big to contain. Destroys unfettered capitalism as we know it. Changes the world irrevocably as a consequence. Unless this time is the big one and does it sooner.

In March 1999, Greenspan was optimistic at the end of a robust decade (that James Petras calls “the golden age of pillage”) with no worries about new millennium meltdowns. He addressed the Futures Industry Association and said it would be “a major mistake” to increase rules on how banks assess risks when they use derivatives. He added: “By far the most significant event in finance during the past decade has been the extraordinary development and expansion of financial derivatives.” By a compounded 20% rate throughout the decade. Around 30% alone by banks in 1998. And, according to Greenspan, “The reason that (derivatives) growth has continued despite adversity, or perhaps because of it, is that these new financial instruments are an increasingly important vehicle for unbundling risk….the value added of derivatives themselves derives from their ability to enhance the process of wealth creation (and) one counterparty’s market loss is the (other’s) gain.”

Overall, they’ve increased the standard of living of people globally, he claimed. In fact, they contributed to global crises in the 1990s. Hot money in, and meltdowns when it exited. The problem is derivatives work well in bull markets, but are disastrous when they’re down. Going up they do nothing for ordinary people, but during downturns receding tides sink all boats and all in them and aren’t the zero sum game Greenspan suggested.

Worst of all are so-called credit default swaps (CDSs). The most widely traded credit derivative. In the tens of trillions of dollars. A $43 trillion market, according to PIMCO’s Bill Gross. The International Swaps and Derivatives Association (ISDA) estimates it at $54.6 trillion. Down from $62 trillion at yearend 2007. Others place it higher, but key is what they are and how they’re used. They resemble insurance (on risky mortgages), but, in fact, are for little more than casino-type gambling. Unregulated with no transparency in the shadow banking system that dwarfs the traditional one in size and risk.

Gross describes it this way. It “craftily dodges the reserve requirements of traditional institutions and promotes a chain letter, pyramid scheme of leverage, based in many cases on no reserve cushion whatsoever.” CDSs are at the center of shadow banking, and Gross and others warn about possible financial Armageddon if things begin collapsing.

A “Cheerleader for Imprudence”

That, according to James Grant, editor of Grant’s Interest Rate Observer. Greenspan’s “biggest mistake was inciting people to do imprudent things.” He called him “marble-mouthed” for his “Greenspeak” and not simply admitting he “was as blind as those (he) pretended to lead. This sense of security that people invested in the idea of perfect control by an all-knowing brain at the top, that idea’s been shattered.”

In July, Grant was outspoken in a Wall Street Journal op-ed titled “Why No Outrage?” He quoted Mary Elizabeth Lease from the Populist era haranguing farmers to “raise less corn and more hell.” He asked why today’s financial victims aren’t protesting Fed policy “of showering dollars on the (monied) people who would seem to (least) need them.” Where are the “uncounted improvident?” Have they “not suffered (enough) at the hands of what used to be called The Interests? Have the stewards of other people’s money not made a hash of high finance? Where is the people’s wrath?” In the wake of the “greatest (ever) failure of ratings and risk management.”

Greenspan’s Fed cut interest rates to 1%. “House prices levitated as mortgage underwriting standards collapsed.” He claimed earlier that property appreciation was a sign of prosperity and a strong economy and “while home prices do on occasion decline, large declines are rare.” Most homeowners experience “a modest but persistent rise in home values that is perceived to be largely permanent.”

Especially, according to Grant, at a time that “credit markets went into speculative orbit, and an idea took hold. Risk….was yesterday’s problem.” It led to “one of the wildest chapters in the history of lending and borrowing.” As a consequence, an $8 trillion home valuation wealth bubble and an unprecedented oversupply of unsold properties. Now in even more  oversupply as owners default. Are foreclosed on or simply walk away from unaffordable underwater assets. They sit empty with no one to buy them except for those able in distressed sales.

The whole episode criminal and avoidable had the Fed used its authority under the 1994 Home Ownership and Equity Protection Act. It authorized the central bank to monitor abuses and intervene, if necessary, to prevent abusive lender practices. It failed to do it.

The result was predictable. People and the economy in crisis. Greenspan orchestrated it. His successor Bernanke did nothing to curb it. Wall Street was on a roll until it crashed. Huey Long once compared JD Rockefeller to “the fat guy who ruins a good barbecue by taking too much.” Wall Street thrives on it. Fed largesse enables it. The problem is their indigestion affects everyone. A stomachache spreading round the world. How bad it’ll get and where it stops nobody knows. Blame it on Greenspan. Our “former clairvoyant,” according to Grant.
___________________________________________


Below you hear the same talk as we did in 2006-2007 as the subprime mortgage market began to implode and again it was the FED policy and the Obama Administration/Congress that fueled this crash just as it was Greenspan and Bush with the subprime mortgage loans.

Where last fraud centered on redistributing real estate to the few----this fraud centers on using credit bond and municipal debt to create the excuse to privatize all that is public and end public sector pensions and benefits.  The 2015 crash will be so deep with no help from the Federal government still holding $17 trillion in debt from the last massive corporate fraud that the US economy will look like Greece and Spain.  It will place the US in the same double-disaster as Europe---subprime loan fraud/sovereign debt fraud.

As the article below states-----hold on to your hats as the market sees a mass exodus from the bond market!!!


Where this article makes it sound that Yellen is being a 'dove'....she has no options....the FED under Bernanke did what the FED under Greenspan did......fed the bond market bubble until there was no return.  Remember, Wall Street wants people back in the stock market and blowing up the once safest place to invest, the bond market, will do that.  Soon, everyone will be fleeing the bond market as it collapses right back to the stock market.  They are making trapped rats of our pension system and giving us no opportunity for a stable economy.


THAT'S A NEO-LIBERAL/NEO-CON FOR YOU!!!!!  GET RID OF THEM!!!


Fed Officials Trying to Warn Bond Markets
July 15th, 2014
in contributors

by EconMatters, EconMatters.com

The Purpose of Complacency Talk

The Fed officials have been coming out in speeches the last couple of weeks with rhetoric about 'complacency' and other such code words for chasing risk ahead of what the Federal Reserve knows is going to be an abrupt change in monetary policy over the next six months.


Follow up:

The Fed is concerned because they know they want an orderly transition in markets and not causing major dislocations in markets by massive selloffs. However, the getting is so good with interest free money that participants are going to push this edge they have in markets right up until the last possible exit minute.

So despite the fact that QE ends in October with no more bond buying by the Fed, the 10-Year is still sitting at 2.50% with participants making money hand over fist with the borrow at 15-25 basis points and investing in yield instruments with massive leverage trades that has been so popular and irresistible by investors looking for 'free money arbitrage' opportunities.



An Orderly Unwind

The problem that the Fed has rightly identified is that they are not going to get an orderly exit at this pace, the unwind is going to be massive, jarring, and definitely not 'orderly'! The Bond markets, take the 10-year yield could literally have a 25 or 35 basis point move over a 24 hour period that would wreak a lot of havoc on fund flows, asset classes and financial markets.

This turmoil in the bond market could really be disastrous because the Fed participants realize the bond market isn't being priced currently where the Fed is moving to in terms of monetary policy. The Fed should be alarmed because the unwind is setting up for a possible 100 basis point move in two months' time frame type of fund dislocation and reallocation of capital, and that is going to be problematic for markets!



But the Fed only has themselves to blame for this predicament as in this case you cannot have your cake and eat it too! Janet Yellen cannot be so dovish at Fed news conferences given her reputation as a dove among doves, and get any respect from market participants; the trade is going to be all-in and one-sided without the slightest regard for the risks associated with being so aggressive.

In short, Janet Yellen has encouraged the one thing that Fed governors should always avoid being so 'transparent' that market participants go full boar on a trade, one-sided, highly levered, unhedged, and nothing could possibly happen with this dovish a Fed Chairperson at the helm trade! In a nutshell they have become too 'complacent' or they have taken her dovishness for granted.

Pigs at the Bond Trough

The pattern has been quite clear in Bond Markets wait until after the 200k plus Employment Report blows the 10-Year up to 2.70%, and come in and buy bonds like there is not tomorrow with huge leverage, until they have to get out of the way of the next CPI, GDP or Employment Report - as this process has repeated itself over the last four months of financial markets. The Levered Yield Trade has been the trade of the year so far in 2014 - the strategy of investing in anything with yield from over-valued utilities, pricey bonds and even stodgy low growth Big Caps with some semblance of a dividend yield!

Janet Yellen cannot have her Dovish Cake, and eat it too in the form of an "Orderly Unwind"!

So the Fed has to realize that sending out the mignons of the Fed isn't going to counteract Janet Yellen's dovishness. If they want markets to start unwinding trades ahead of policy adjustments that are coming and not wait until the last possible minute, then Janet Yellen herself is going to have to send a shot across the monetary bow so to speak!

She is going to have to come out with a hawkish tone to garner some healthy respect for normalization of fed policy by markets. She is dovish we get that, but the Fed is about to change monetary policy, and much sooner than is currently priced into many asset classes, and it is going to take some considerable time if participants started repositioning today to unwind many of these massive positions in markets, any sense or orderliness necessitates a little at a time versus all at once!

Janet Yellen has got to start talking hawkish to get this process started otherwise her worst fear is going to materialize in spades as market participants are all going to wait until the last minute trying to make that last dollar on the yield trade, and cause huge market turbulence when they all try to get out at once!



The Data Indicate 1st QTR 2015 Rate Hike at the Latest!

The Employment numbers, the inflation numbers, and the risky valuations in financial markets all point to the Fed needing to start raising rates sometime in the first quarter of next year. This is much sooner than Janet Yellen's Dovish talk has markets pricing in with their forecast for late in 2015 for the first rate hike.

Market participants are far too levered up, all on the same side, and well behind the monetary normalization curve of when the first rate hike is actually going to occur. This is a recipe for disaster, and that seminal light bulb moment in financial markets when everybody realizes, that moment in Margin Call where the analyst drops the ear-buds out saying internally holy shit, that they need to liquidate everything right now. In other words, the entire market all hits the sell button at the same time!


_______________
Wall Street and the FED thinks the steps towards stabilizing the economy have been a success and they are ready for the coming crash.  What's not to like---the American people lose all their wealth as the richest wealth soars.

Below you see an article that shows the progression of the plan.  Goldman Sachs was key to the financial frauds in the US but were key in bringing down the European social society.  They targeted especially Greece and Spain with fraudulent financial instruments loading these nations with huge sovereign debt having the goal of imploding the economies forcing the dismantling of social society.  Why this is important to Americans today? It is these same tactics are now coming to the US.  We experienced the subprime mortgage fraud in the US as they did in Europe but Europe was brought down harder because a second fraud----sovereign/municipal debt fraud ----completely emptied their government coffers.  This is why Europe is in deeper distress than the US.  Well, the time is now for the sovereign debt fraud in the US and it looks like levered municipal bond debt, mortgaged tax debt, and state and local money tied to development that cannot be afforded. 

THIS MASSIVE DEBT BUILDUP ON THE BACKS OF OUR GOVERNMENT IS WHAT CREATED IN EUROPE THE DEEPEST OF RECESSIONS.

This happened in Europe between 2001 and 2007 and now it is being done here in the US between 2008 and 2015.  The subprime mortgage fraud was about taking the American people's wealth-----this coming municipal bond leverage fraud is about taking the government wealth as happened in Europe.

Goldman Sachs and DeutscheBank both created fraudulent financial instruments that allowed government officials to hide their national debt so more debt could be taken.  None of this is legal and Goldman Sachs knew it was breaking the law.  So Greece and Spain were made to look like the government budgets were balanced when they were ever deeper in debt.  Making these governments look like they were AAA mirrored making subprime mortgage loans look AAA.  These government officials in Greece and Spain took more and more credit and distributed money to friends and off-shored it until these economies imploded from debt.  Europe's TROIKA then came in to make the Greek and Spanish people pay for the fraud just as is happening in the US with the subprime mortgage and other financial frauds.
  You see Europe's Draghi and his connection to Goldman Sachs overseeing the crisis just as Tim Geithner did in the US.

THE KEY WORDS HERE ARE HIDING SOVEREIGN DEBT TO LOAD MORE DEBT TO MAKE THE IMPLOSION SO DEEP AS TO FORCE THE DISMANTLING OF GOVERNMENT ASSETS.

That is what happened in Europe.  Subprime mortgage fraud and sovereign debt fraud.  Today, the US economy is ready to implode from sovereign/municipal bond debt.
  Maryland is ground zero for this.  O'Malley and Maryland Assembly and Baltimore City Hall has loaded the state and city with so much leverage in credit bonds and tax deals that when the crash comes in 2015 the public will be stuck with debt so large----just as Greece and Spain---that the recession will be deep and the debt too large, forcing the privatization of all that is public. 

THIS IS A PLAN---NOT SIMPLY GREED OR BAD POLICY.
  'MARYLAND HAS A 'AAA' RATING FROM MOODY'S YOU SAY'-----you mean the same Moody's that gave subprime mortgage loans the same AAA? 

Maryland's economy is one great big shell game.
  This is not a Democrat vs Republican issue because Republicans are doing the same in their states.  It is a complete breakdown of Rule of Law and a rush to take what you can.  The article below is long but please glance through to see how Goldman Sachs worked to implode Greece's economy and think about what is happening in Maryland!
Another long article but please glance through.

EU Ignores Falsification of Greek Public Finance Data
Posted on 18 December 2011 by
admin by Guest Author ECB Watch

This is a companion to another article to be published Draghi Nomination Based on Deception.  Here, we address the broader issue of the falsification of Greece’s public finance data.   We will look into Eurostat audits (Walter Radermacher), the ECB’s willful hindrance against the release of records (Jean Claude Trichet), Goldman Sachs’ communication (Gerald Corrigan), and the actions of the European parliament (Sharon Bowles), the Commission (Olli Rehn) and the European Securities and Markets Authority (Verena Ross). Click on cartoon for larger image.


Summary

Eurostat ran a series of audits of Greece’s public finances from 2009 to 2010, including for the swap transactions contracted with Goldman Sachs in 2001. These were used to misrepresent, by a few % relative to GDP, the extent of debt and deficits. Eurostat says it only became aware of it in early 2010: this calls for an explanation because news of the contentious transactions broke in 2003. According to the final audit, in 2010, the window dressing scheme initiated in 2001 was significantly restructured in August 2005. Soon after, Goldman Sachs sold its position for cash to the National Bank of Greece. This 2005 modification of the 2001 contract resulted in a 81% increase in the amount of concealed debt, in the accounts of 2006, relative to the initial amount. According to the same audit, Greece willfully misled Eurostat in 2008, when the contracts were still in effect (in fact, they will be until 2037). The national accounts of Greece were regularized by Eurostat in November 2010.

Spokesman for the bank Gerald Corrigan testified before the British parliament in February 2010. He personally vouched that the letter of the law was obeyed in the 2001 deal, suggesting that it was EU’s fault for allowing a loophole in its regulations. To minimize the perception of wrongdoing he reminded the audience that similar practices were age-old and common in the industry. Yet he stonewalled the questions of whether specific countries, Portugal and the UK, respectively, were clients that fell under this category. His leaving out the 2005 restructuring in his testimonial is an odd oversight.

He [Gerald Corrigan] personally vouched that the letter of the law was obeyed in the 2001 deal, suggesting that it was EU’s fault for allowing a loophole in its regulations. In April 2010, former prime minister of Belgium Guy Verhofstadt spearheaded a hearing, Greece : the moment of truth. It was held by the Economic and Monetary Affairs Committee of the EU Parliament under Sharon Bowles’ chairmanship. There appears to be a disconnect between the objective and what Sharon Bowles delivered, as we argue further down in relation to ESMA, but another indication of it is that the deposition of the spokesman for Goldman Sachs, Gerald Corrigan, bears no relation to the stated topic (the word Greece is not to be found).  This is perhaps an indication of a disconnect between the objective and what Sharon Bowles delivered. We will argue it further below in relation to ESMA. In November 2010, Jean Claude Trichet obstructed the release, requested by Bloomberg, of ECB documents detailing the swap transactions. In May 2011, he went as far as vetoing a legal claim, made by Bloomberg, to reopen these archives. Was his justification, preventing acute market risks, satisfactory?

In August 2011, the Commissioner for Economic and Monetary Affairs, Olli Rehn, to appease the concern of an MEP about the possible connection of Mario Draghi to the falsification of Greek public finance data, misrepresented the evidence contained in a November 2010 Eurostat audit report as to this connection. Recall that Mario Draghi’s hearing in June, just before a vote by the European parliament on his nomination, was, and remains to this day, controversial due to discrepancies between his defense on this issue and verified facts.

The legislative branch, in the U.S., has gone to great length to learn from the mistakes of the financial crisis.  In addition it came with evidence based recommendations to pursue criminal investigations that were or have been carried out by federal agencies and the department of justice.  In fairness, this process has been stymied by powerful interest groups.  Even so, Europe’s response, in comparison, for the case studied here, which is a significant chapter of the Greek debt crisis, looks unfavorable. The hearing Greece : the hour of truth may well have been a pretense, as hinted at. We now argue it further. The Commission and the European parliament would have had the authority to commission ESMA to investigate the matter.  Neither Olli Rehn nor Sharon Bowles, it seems, has taken this step.  Had it been the case, ESMA would have had the authority, if the conclusion of the investigation called for it, to bring a legal case against any alleged perpetrator of fraud, or delegate that task to national authorities.  Instead, ESMA’s stated priorities, under the leadership of its new Executive Director, Verena Ross, are the single rule book, production and analysis of data, and supervising credit rating agencies…

Note : we now use the EU institutions’ convention that ECON stands for Economic and Monetary Affairs.

Eurostat audits

Eurostat is the statistical office the EU Commission, whose current Director General is Walter Radermacher. In Eurostat parlance, a methodological visit is an audit that is undertaken in cases where the Eurostat identifies substantial risks or potential problems with the quality of the data.   There were a series of methodological visits to Greece. They began in 2009 and continued through 2010. Three major reports were produced, one on 29 October 2009, the second on 8 January 2010 and the third in November 2010.  According to the last one, a series of failings in the institutional arrangements and practical compilation of Greek public finance data. We skimmed through the January report and read the November 2010 report.  Only the latter addresses the contentious Greek swaps transaction.  It concluded as follows: Taking into account the work carried out [i.e. corrections to misreported data], as described in this report, the latest debt and deficit data for Greece now gives, in Eurostat’s view, an essentially reliable picture, [including for] fiscal data for the years 2006-2009. It is, therefore, an important report as it represents Eurostat’s final opinion on the issue of the Greek swaps contracted with Goldman Sachs.

Greece patently misled it in 2008, claiming that it neither engaged in FOREX swaps, nor in off market swaps. Eurostat’s summary of its dealings with Greece as pertaining to these swaps would be hard to reconcile, prima facie, with the blithely reported claim that the transactions were legal.  First, Eurostat says that At the beginning of the year 2010, it became known that Greece had entered in 2001 into currency off-market swap agreements with Goldman Sachs, using an exchange rate different from the spot prevailing one. This is strange, however, because the scheme was reported in 2003 by Risk.net.  Perhaps not coincidentally, notes the article, Greece’s credit rating by one of the three major credit rating agencies was raised, that year, from A to A+.  Second, Eurostat says that Greece patently misled it in 2008, claiming that it neither engaged in FOREX swaps, nor in off market swaps. These are exactly the type of transactions agreed between Greece and Goldman Sachs in 2001 and, as we see next, were actively managed thereafter. Eurostat’s audit says that in August 2005 a significant restructuring of the swap contract took place. The maturity of the swap was extended from 2019 to 2037.   This, together with other modifications, resulted in an increase in the amount of undisclosed Greek debt data, for the portion that is imputable to the deal, from 2.830 bn euros in 2001 [1] to 5.125 bn euros in 2006. It’s a 81% increase. Eurostat adds that [a]lmost at the same time, GS sold its rights and obligations to the National Bank of Greece (NBG, a bank completely privatised in November 2004). As a side note, Mario Draghi was appointed head of Bank Italy in 2006, ending his employment at Goldman Sachs. The latter had begun in 2002, when Goldman Sachs was reportedly the lead manager of Greece’s debt underwriting. His denial of any connection to the deal in a hearing before the ECON Committee in June 2001 remains controversial to this day.

There is no question that the 81% increase in the debt hiding scheme, in 2006, is imputable to the August 2005 modification: the restructuring operations implemented in 2005 and 2008 were in fact the explicit recognition of an increase of the liability (principal amount of the loan) to be recorded as debt of Greece. To complete our coverage of the swap transactions, let us quote Eurostat: [t]he swap was marginally restructured again in late 2008 [and was] securitised in February 2009 via a Special Purpose Vehicle (Titlos) that paid EUR 5.5 billion to the NBG. There is no question that the 81% increase in the debt hiding scheme, in 2006, is imputable to the August 2005 modification : the restructuring operations implemented in 2005 and 2008 were in fact the explicit recognition of an increase of the liability (principal amount of the loan) to be recorded as debt of Greece. The corresponding amount, 5.125 bn euros, persisted until 2007. The 2008 modification pushed it to 5.4 bn euros, and 2009 saw a decrease to 5.281 bn euros. We think the decrease is the result of an amortization scheme kicking in after a grace period of two years mentioned in the report. In 2010, Eurostat assigned these amounts as additions to government debt for the years 2006—2009. Goldman Sachs’ communication

Goldman Sachs Managing Director Gerald Corrigan testified before the House of Commons on February 22, 2010. This came to our attention in an article by Finfacts Ireland, and the transcript is contained in the document Too important too fail, too important to ignore (March 2010).  In question 295, for short Q295, he is asked [H]ave banks like Goldman’s not accentuated sovereign risk in countries like Greece by arranging loans for securitisation against future revenue streams that do not appear on the books or currency swaps that have not been calculated at normal exchange rates? To which, Corrigan personally vouches that the transactions were legal : [It] is very clear to me, based on the investigation that I have done over the past few days, that those transactions were very much consistent and comparable with the standards of behaviour and measurement used by the European Community.  There was nothing inappropriate. They were in conformity with existing rules and procedures when they were entered into. To back it up, he cites a consultation with Eurostat: When those transactions were entered into personnel from Goldman Sachs consulted with the appropriate authorities at Eurostat, as did, as I understand it, the Government of Greece and, again, there was no indication whatsoever that those transactions were not in line with existing practices, policies and guidelines.

Goldman Sachs identified a flaw in EU rules, in 2001, and exploited it—opportunity.  He [Corrigan] has not explicitly answered the question i.e. whether it increased sovereign risk —harm— but, absent his denial, it was implicitly conceded. Finally, he shifts blame on the EU not having stringent enough rules:  I should also say that those guidelines and standards were modified in 2007 which suggests that perhaps they were more liberal than they should have been back in 2001. In other words, Goldman Sachs identified a flaw in EU rules, in 2001, and exploited it—opportunity.  He has not explicitly answered the question i.e. whether it increased sovereign risk —harm— but, absent his denial, it was implicitly conceded.  The rest of his answer is laced with the mitigating factors that these practices have been around for decades, if not centuries and not limited to Goldman Sachs and Greece—rationalization.   However, when asked to confirm whether a similar deal was contracted with Portugal (Q296) and Great Britain (Q297), he dodged and could not confirm, respectively, reiterating the above rationalization in each case. The white elephant in the room, in this hearing, is the August 2005 significant restructuring of the swap contract.”  That’s keeping in mind that Greece is alleged by Eurostat to have misled it in 2008 about the existence of such transactions.  Although Goldman Sachs was no longer the counter party in 2008, it suggests that this modification has gone under the radar from August 2005 until Eurostat looked into the matter in 2010.

Let’s review some traits in Corrigan’s answers. He hinted at what we labeled an opportunity and had recourse to the same rationalization multiple times. These are two of the three factors that fall under the definition of the Fraud Triangle.   This is merely superficial but, unfortunately, there is a significant legal precedent attesting of unethical business practices at this company:   Goldman Sachs paid half a billion dollars to settle SEC charges that it misled investors in a subprime mortgage product (ABACUS) just as the U.S. housing market was starting to collapse.  The third factor is a motive.  The transaction generated hundreds of millions of dollars for the firm according to a press release by Bloomberg, EU seeks Greek swaps disclosure after ministry probe.  The ratio of the upper estimate of the fees (200 millions euros) to the amount of Greek debt masked under the 2001 deal (2.830 bn euros) is 7.1%. The key deal maker, Antigone Loudiadis, made a substantial fortune from the deal in just one year, reported the Wall Street Journal in 2010, and enjoyed a career boost thereafter.  Incidentally, she made controversial headlines again, reported Bloomberg in May 2011, as CEO of Rothesay Life, as regards to death derivatives.

He [Corrigan] hinted at what we labeled an opportunity and had recourse to the same rationalization multiple times.  These are two of the three factors that fall under the definition of the Fraud Triangle. Zero Hedge reported that, on the same day as Corrigan’s testimonial, the bank issued a communique. It essentially summarizes his arguments, with a few more figures but, again, makes no mention of the 2005 restructuring. Finally, Gerald Corrigan’s written statement does not address any of the above. Obstruction by Jean Claude Trichet

First, Bloomberg filed a request with the ECB in November 2010 to have access to ECB internal documents detailing the contentious transactions.  It was denied.   Second, Bloomberg contested the decision at the EU’s General Court in Luxembourg in December 2010.   Third, the ECB asked the General Court to dismiss the lawsuit, in May 2011, just one month before Mario Draghi’s nomination, apparently using a veto prerogative.  That’s one month before the nomination of the next ECB President whose possible role in the falsification of Greek debt as Goldman Sachs VP from 2002 to 2005 was raised by Simon Johnson as early as February 2010. Fourth, Bloomberg reacted in June 2011 with these words : The European Central Bank allowed itself to be deceived by a default in the making and now refuses to share with the taxpaying citizens it represents the details of the deception.  Secret and opaque financing got Europe into a mess that can only be resolved by the transparency of full disclosure.


The European parliament

As a member of the UK’s Liberal Democratic Party, Sharon Bowles is also affiliated with the Alliance of Liberals and Democrats of Europe, in short ALDE.   In March 2010, the former prime minister of Belgium and group leader of ALDE, Guy Verhofstadt, made a proposal to to promptly convene a public hearing of all those implicated in the falsification of Greek public accounts. He followed up with a declaration on 14 April 2010, reported in a press release known as Greece: the moment of truth, for Sharon Bowles to ask Director General of Eurostat to explain how accounts could have been legally modified and what measures were taken in the aftermath to prevent such actions. This was supposed to be discussed in a hearing, the same day, titled The fiscal crisis in the European Union – lessons from Greece.  According to the ECON Committee’s final draft programme, its participants were Sharon Bowles (moderator), Olli Rehn, Walter Radermacher, Gerald Corrigan, and a representative from a financial derivatives organization (ISDA), Richard Metcalfe.  We did not find the transcript of the hearing at EU Parliament’s portal, which is unfortunate, but we did find the deposition of Gerald Corrigan.  It contains insights on two subjects and nothing more.  The first is perspective on government debt management, such as the benefits of issuing debt through primary dealers.  The second is facilitating derivatives market surveillance, which recounts the initiatives of the financial industry policy group chaired by Corrigan, the Counterparty Risk Managment Policy Group (CRMPG).  This hardly addresses Guy Verhofstadt’s injunction, quoted in the press release Greece: the moment of truth : The chairman of Goldman Sachs in the US in particular should justify his bank’s speculation against Greek sovereign debt and the motivation of the investment bank which did not seem to be entirely based on economic considerations.

“widespread misreporting of deficit and debt data by the Greek authorities during in November 2004, [...] and on five occasions between 2005 and 2009.“  Eurostat audit January 2010 The topic reemerged in a parliamentary debate about Quality of statistical data in the Union and enhanced auditing powers by the Commission, on 15 June 2010. To frame it, we suppose, Sharon Bowles posted on 4 June 2010 the question of “whether any [Member States] have submitted falsifications or false data or statistics either intentionally or by neglect?”  The January 2010 audit had already answered that question for Greece: widespread misreporting of deficit and debt data by the Greek authorities during in November 2004, [...] and on five occasions between 2005 and 2009.” “In short, there is circumstantial evidence that the chair of the ECON Committee, Sharon Bowles, around 2010, was lagging behind Eurostat’s methodological visits to Greece. To conclude this section, former PM of Belgium Guy Verhofstadt’s high hopes, Greece : the moment of truth, in April 2010, may have fallen flat; that is, the EU parliament failed to deliver an account of who did what?


The Commission

In ECON Commissioner Olli Rehn‘s words spoken during the aforementioned 15 June 2010 debate, the closest match to Sharon Bowles’ question was As is well known, the Commission has undertaken in-depth work on Greek statistics over several years. The amended regulation should, in future, better mitigate the risk of fraud or manipulation of statistics, or of any other kind of irregularity.  Yesterday, there was a new development concerning Greece.  You will know that Moody’s decided to downgrade Greek bonds yesterday. On 21 July 2011, a parliamentary question was addressed to him, on the subject of Appointment of Mario Draghi as President of the European Central Bank.  This question was : Does the Commission have information on Mario Draghi’s involvement, whilst he was Goldman Sachs’ European vice-chair, in the dealings between the bank and the Greek Government over the concealment of accountancy fiddles? Olli Rehn’s answer, on 22 August 2011, was that transactions in derivatives between the Greek debt agency and Goldman Sachs dated back to 2001, implying that the President of the ECB had no connection to them. This is one of the two arguments presented by Mario Draghi before the ECON Committee in June, just before the vote on his nomination, that were found to be unsatisfactory.  Olli Rehn backs up his claim by citing the November 2010 Eurostat audit.  This is perplexing because the audit reveals that the terms of the contract between Goldman Sachs and the Greek Ministry of Finance were modified in August 2005.   This modification resulted in an 81% increase in the amount of debt concealed through this type of scheme.  Presumably, Mario Draghi still worked at Goldman Sachs at the time, since his term of office at the Central Bank of Italy started in January 2006.

In short, in August 2011, the Commissioner for ECON either misled the MEP (Willy Meyer) having some concern about Mario Draghi’s past at Goldman Sachs, or had superficial knowledge of the Eurostat audit he cited as evidence in defense of Mario Draghi’s reputation.

Has justice run its normal course?

Let’s try to understand by looking at a comparable case, the United States, where the financial lobby is nonetheless powerful. The above mentioned settlement with the SEC in July 2011 marked the end of a civil lawsuit that had begun in April 2010.  On 30 April 2011, Reuters reported that federal prosecutors in New York had begun a criminal investigation into other transactions, upon referral by the SEC.  In parallel, the Senate Permanent Subcommittee on Investigations, for short PSI, was investigating the financial crisis. It’s outcome, a bipartisan report, known as the Levin-Coburn report, was released in April 2011.  According to the Wall Street Journal, it asked for bank regulators to examine mortgage-related securities to identify any possible legal violations and use Goldman Sachs as a case study in implementing conflict prohibitions. October 2011, the aforementioned federal investigation, in New York, reportedly materialized with $1bn lawsuit against the bank, using evidence of investment bank abuses from the Levin-Coburn Report: Timberwolf was cited in a scathing U.S. Senate panel report in April that faulted Goldman, Deutsche Bank AG and others for hawking debt they expected to perform poorly..

Is the system of government fundamentally different in Europe, in this respect?  Of course not.  The equivalent of the SEC, in the EU, is the European Securities Markets Authority, for short ESMA, formerly the CESR.   It has only recently been granted enforcement authority known as level 4 of its governing procedure. Yet, it can issue a recommendation to a national authority[to carry out legal action].  To do so, ESMA must first carry out an investigation.  According to the same provision (level 4), the European parliament (Sharon Bowles), or the Commission (Olli Rehn) can request ESMA to get it under way.

The falsification of Greek debt, based on what was said thus far, and the fact that Goldman Sachs did not disclose it (See February 2010 Bloomberg article),  presumably constitutes a fairly obvious breach of their fiduciary duty as a primary dealer—a privileged position in the market.  Is anyone aware of Sharon Bowles or Olli Rehn launching an investigation into this scheme?  Let’s try to find out.

But in view of what precedes, there is reason to suspect that authorities have turned a blind eye to the problem. [referring to the falsification of Greek debt] In October 2011, a new Executive Director of ESMA, Verena Ross, was nominated, with the ECON Committee’s approval.  She gave a keynote speech to that effect in October 2011, in which she laid out her vision of the future focus of the work [of ESMA]. A lot has to do with harmonizing rules and processes across member states [2].  None of it addresses the glaring priority of bringing to justice the suspected perpetrators of financial crime.  If Verena Ross’ speech is to be taken at its word, the future focus of ESMA has a negative connotation:  turn the page and pretend that financial crime never happened.  In fairness, there were reports of a possible probe into this bank’s activities by the UK’s FSA and Bafin in Germany in the first half of 2010, but nothing specific about the falsification of Greek debt that we are aware of.  There was, however, a specific reference to that effect, in the US, by Fed Chairman Bernanke in the same period.   We can’t be certain that these investigations have stalled, or were put to rest.  But in view of what precedes, there is reason to suspect that authorities have turned a blind eye to the problem. Some financial experts allege a broader cynical scheme undertaken by the bank, that is reminiscent of its practices in the subprime crisis.  Essentially, these are hedging and speculative bets using insider knowledge of Greek public finances.   Let’s briefly review the literature.  In February 2010, two authors, Marshal Auerback and L. Randall Wray alleged that From 2001 through November 2009 [...] not only did Goldman and other financial firms help and encourage Greece to take on more debt, they also brokered credit default swaps on Greece’s debt—making income on bets that Greece would default.  No doubt they also took positions as the financial conditions deteriorated—betting on default and driving up CDS spreads. Corroborating evidence and analysis can be found in the following articles, listed in in chronological order : What about Greece and Goldman Sachs (Diplomatic World, Spring 2010), Clearing the air: Goldman Sachs and Greece (Hellenesonline, January 2011) and Goldman bet against entire European nations —who were clients— the same way it bet against its subprime mortgage clients (Washington’s blog, July 2011).



Notes

[1] The masking scheme is the combination of two sets of swaps. In the first set, a currency swap neutralizes Greece’s currency risk resulting from preexisting foreign denominated debt:  In 2001 a series of off-market cross-currency swaps were effectively linked to underlying debt instruments issued on foreign markets. This would have been standard practice, except for this clause:  the contracts were not based on the prevailing spot market rates of exchange [such that] the Greek government debt was de facto [immediately] reduced by EUR 2.4 billion by the conversion process. The second contains off-market interest swaps that are equivalent to a promise by Greece to make a stream of payments to Goldman Sachs.  This second set was designed to offset the gain for Greece resulting from the first set, such that its impact on debt and deficit, we must assume, would be gradual and slow.

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February 10th, 2014

2/10/2014

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WHEN NEO-LIBERALS SAY 'SUSTAINABILITY' THEY MEAN....NOW THAT WE HAVE ALL THE MONEY.....EVERYTHING PUBLIC HAS TO GO!!!



As we know, big investors are dumping the bonds and heading to gold investments as the bond market is ready to implode.  So what do we see below as a result?

PENSIONS ARE BEING THROWN INTO THE BOND MARKET TO KEEP IT AFLOAT JUST A LITTLE LONGER BEFORE THE COMING ECONOMIC CRASH.

Remember, in 2007 pensions were taken from the then safe bond market and placed into the stock market as it was ready to collapse causing pensions to lose 1/2 their value.  Mind you....these pension-fund managers, whether public or private, know these are bad investments as does the public officials involved in allowing it.  This coming crash will take all the value again from pensioners as big private investors run and insure against losses with Credit Default Swaps.
  The entire bubble was manufactured with the intent to blow up the bond market with sovereign and municipal bond debt -----THE PUBLIC SECTOR------taking the hit.

Bonds are low because the market is ready to crash and that is not the same as a simple low in a normal stock cycle.

Pensions Sell Stocks to Buy Bonds

By Roben Farzad January 24, 2014


Coming off a year when the broad U.S. stock market enjoyed a 30 percent gain, investors and financial advisers are struggling to determine the most appropriate portfolio asset allocation consistent with their tolerance for risk, says Andrew Clinton, president of Clinton Investment Management, in Stamford, Conn. Pension funds, in particular, are striving to lock in the outsize gains they have enjoyed over the past few years in the booming debt and equity markets. To do so, they are going against the broader fund-flow trend by selling equities and shifting money to fixed income. Deutsche Bank (DB) forecasts that pensions will liquidate about $150 billion in equities this year alone to buy bonds with maturities of 10 years or longer.

“It’s only logical,” says Clinton. “Pensions struggling with underfunded status need to lock in the lift of the past couple of years. From a risk-adjusted perspective, equities, for all their recent outperformance, are nearly four times as volatile as municipal bonds. Pension managers are in a different dialogue than everything you hear now about people rotating out of stocks, etc.”

Clinton believes this asset reallocation is likely to last for years. As for domestic equities, which are near their all-time high: They are their costliest compared with government debt in three years. The Standard & Poor 500-stock index’s profits as a percentage of the index’s price is just under 3 percentage points higher than the yield for 10-year government notes, the smallest premium since March 2011.

Video: Stocks vs. Bonds vs. Commodities: Where to Invest? In the third quarter, U.S. pension funds, which have assets of $16 trillion, swapped out of equities and into bonds at the fastest clip in five years, data compiled by the Federal Reserve show. According to Matt Robinson of Bloomberg News, they bought $117 billion of debt on an annualized basis and offloaded $135 billion of stocks. The 100 biggest corporate pension plans thinned their deficits by a net $319 billion, according to consultancy Milliman; they are now 95 percent funded, compared with a low of 77 percent two years ago.

“It makes sense,” says Michael Gayed of Pension Partners in Manhattan. “Rebalancing to target weights is a time-tested approach to enhancing longer-term returns--forcing you to buy low and sell high.” He says the “Great Rotation” is presently, at the margin, from stocks back to bonds.


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This is the reason the Spanish citizens are marching in the street.  Their pensions are being eliminated because TROIKA payments are being made by Spanish leaders by the citizen's public assets.  It is incredible as Spain is one of the hardest hit with fraud and corruption.  They had all that debt created by leaders tied with Wall Street and DeutschBank with development that was not deeded.....money simply spent to move it to the top.  This is what is happening with US pensions as well as they are moved to the bond market ready to implode!

'Retiring' The Debt: Spain Drains Pension Fund To Prop Up Bonds

Jan. 14, 2013 9:33 AM ET  |  Includes: EWP Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)

Last week, Spain's Treasury raised $5.82 billion euros at auction in the country's first debt sale of the year; this was well above even the upper end of the target range. The auction, which the Wall Street Journal described as 'robust,' was enough to drive yields on Spanish 10-year notes below 5% for the first time in 10 months.

The Treasury in Madrid sold three bonds, one maturing in 2015, one maturing in 2018, and a 2026 note. Yields were down across the maturities compared with the last time the notes were sold and, in the case of the 2026 note, compared with where it traded in the secondary market. The consensus, which of course is somewhat justifiable, is that the successful auction indicates demand for Spanish debt isn't going to dry up anytime in the very near future. Here's Annalisa Piazza, a fixed income strategist quoted by the Wall Street Journal:

Today's Spanish auction suggests that market appetite for euro-zone periphery's debt remains solid despite uncertainties regarding the request for a bailout and eventual activation of the European Central Bank's Outright Monetary Transactions.

The problem for Spain in 2013, however, is that two major sources of demand for the country's debt are likely to be largely unavailable in the coming year. In a rather disconcerting piece published on January 3, the Wall Street Journal disclosed that Spain has now spent over 90% of its Social Security Reserve Fund buying its own debt. Just to reiterate: Spain has spent pretty much the entirety of its pension fund on its own bonds.

There are three obvious problems here. First, this means that the fate of pensions in Spain is now hopelessly intertwined with the fate of Spanish government bonds, a fact that doesn't inspire much confidence, given the market for periphery sovereign debt in 2012. Indeed, the Wall Street Journal notes that the decision to invest the Social Security Reserve Fund's cash in Spanish government bonds violates a Spanish government decree which states that the fund can only purchase securities "of high credit quality and a significant degree of liquidity." This is terribly ironic given that if anyone should know that Spanish government bonds are not of the highest quality and are certainly not highly liquid, it's the Spanish government.

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Keep in mind that the California pension fund was found to be the worst for fraud and corruption in investments the last economic crash.  Tons of lawsuits for bad investments bringing little back as 'settlements' were just as bad in pension claims as Wall Street financial fraud and the US Justice Department. 

Here we see California pensions back in the action of losing money.  Keep in mind that corporate stocks have soared through this BULL market....mergers and acquisitions from free money by the FED made corporations rich.....yet pensions are again dying on the vine because they are invested in markets that are ready to implode.


Keep in mind that if the US Justice Department had brought back all of the fraud lost to pensions in 2008 and all that had been invested in the BULL market these few years....pensions would be flush.  Rather, neo-liberals deliberately placed pensions into investments they knew would fail and now pretend these pensions are unsustainable.

As this article shows.....this was a national plan by neo-liberals to dismantle public sector pensions and just as Rawlings-Blake is ready to throw Baltimore's pensions into the market as 401Ks and O'Malley sends teacher's union pensions to localities knowing localities cannot pay....this pension dismantling was planned and it is all illegal!

California teachers’ pensions sink further into debt
By Kevin Martinez
27 November 2013

A new report released by the California Public Policy Center on November 12 reported that the California State Teachers’ Retirement System (CalSTRS) added $4 billion to its unfunded pension obligations for the 2012 fiscal year.

CalSTRS, the largest teachers’ pension fund in the United States, collected $5.8 billion from employees and employers last year. Of this, $4.7 billion was considered a “normal contribution,” while $1.1 billion was used to pay unfunded liabilities, which by 2012 were estimated to be $71 billion in debt. As a result, plans to dismantle the pension fund in the name of fiscal solvency are being aggressively developed.

The study shows that the so-called “catch up” payment should have been 7 times higher based on unfunded liability payback terms recommended by Moody’s Investor Services in April. The study also shows that if the rate of return projection drops to 6.2 percent, the unfunded liabilities recalculate to $107.8 billion and the catch-up payment increases to $9.6 billion, assuming a rate of return of 6.2 percent. Because of overly optimistic forecasts, the study estimates that CalSTRS actually increased its debt in 2012 by $4 billion.

Should CalSTRS lower its rate of return projections, its funded ratio of 67 percent will fall dramatically.
The dependency on stock market profits thus sets the stage for volatility, even more indebtedness and, ultimately, privatization. While in Detroit, with President Obama’s backing, banks are using the bankruptcy courts to tear up pensions and privatize city services, California’s Democratic Governor Jerry Brown has pursued similar results by signing a pension “reform” last year which demands workers pay more toward their own pensions and work many more years before they collect it.

The corporate media is supporting the argument that there will be no money to fund pensions in another 30 years. This is the same strategy used to argue for the dismantling of Social Security and other basic entitlements. The claim is being made that pension enhancements from 1999 are responsible for the unsustainable obligations, when in actuality calculations were based on optimistic Wall Street investment projections. Now, in the aftermath of the 2008 economic crash, these same financial forces are trying to justify a “take back” of benefits.

In San Jose, Democratic Mayor Chuck Reed is being touted for his work on pension “reform.” After a referendum was passed last year, the city will now force current employees to contribute up to 16 percent toward their pensions or switch over to an even more expensive private plan, and new workers will have a pension that pays even less, while they are required to contribute half toward their pensions.


Plans for the dismantling of these funds are clearly well advanced. In addition to Governor Brown’s “reform” and various municipal initiatives, powerful lobbyists are pursuing similar plans which would ensure workers’ loss of hard-fought, essential survival benefits.

One such initiative is the so-called Pension Reform Act of 2014, proposed by the Coalition for Fair and Sustainable Pensions, made up of a group of mayors from cities with similar problems (San Jose, Vallejo, San Bernardino). Based on San Jose Mayor Reed’s brutal attack on municipal workers’ retirement, the plan, according to its web site, “would amend the California Constitution to give government agencies clear authority to negotiate changes to existing employees’ pension or retiree healthcare benefits on a strictly going-forward basis.” In essence, it’s open season for the demolition of pension benefits.


The premise that these funds, including CalSTRS, are going bankrupt, is a lie. First of all, workers have paid their whole lives into these funds, making it their money and no else’s. Secondly, while the banks and major corporations were bailed out during the crash and continue to be supported to the tune of $85 billion a month, no one in the political establishment is arguing for pensions to be rescued, although these funds have also invested billions in the same “free market.”

Lastly, there is plenty of money to be found. California is home to more billionaires than anywhere else in the world. One out of nine of the world’s billionaires reside there. The total combined wealth of California’s billionaires amounts to $1 trillion, nearly the total GDP of countries like South Korea or Mexico.

While in the post-war era the US economy was based on industrial production and pension fund operations were regulated in order to ensure a degree of stability, now the economy has been financialized and pension fund portfolios rise and fall with the gyrations of the stock market. Not only are they exposed to financial crises in the US, but to international fluctuations as well, such as the European debt crisis or derivatives markets. According to CalSTRS’s website, the portfolio invests over 56 percent of its assets into global equity, 12 percent into real estate, and another 12 percent into private equity funds.

The situation for workers is now so desperate that many have to work until they are elderly to get a decent pension. According to a recent poll by Harris Interactive, 48 percent of middle-class Americans don’t think they have enough money saved for a comfortable retirement and a full one-third think they will work “until at least 80.”

The poll also found that more than half of the people said that paying monthly bills comes before saving for retirement. More than 4 out of 10 Americans say that saving for retirement and paying their bills at the same time is not possible.

For their part, the California Teachers Association (CTA) has been instrumental in the implementation of the pension “reform.” It has been complicit with the Democrats in supporting these initiatives to dismantle pension funds. All it asks for is a seat at the table.

On the CTA website, under the headline, “Where we stand on Teachers’ Retirement,” they write on the estimated $56 billion shortfall that “this does not have to be paid overnight. Like a mortgage, this is an amount that will need to be closed over a 30-year period.” The CTA does not bother to explain how, because, in essence, it agrees that teachers will have to pay for the shortfall by increasing their contributions to the pension fund.

Moreover, the CTA supported Prop. 30, which promised to restore funding to education at the expense of thousands of teachers being laid off and no budget cuts rescinded. The CTA also supports Common Core, which tailors school curriculum to the demands of big business.

In related developments, the California Public Employees’ Retirement System (CalPERS) is also reporting $340 billion in liabilities with only $260 billion in assets as of September 2013. A 2011 study by Joe Nation, a former Democratic state legislator and professor at Stanford Institute for Economic Policy Research, estimated that the real number is closer to $170 billion in unfunded pension obligations, not $80 billion as previously assumed.

According to Nation, CalPERS uses an overly optimistic formula to calculate returns on investments averaging 7.5 percent annual growth. A more realistic figure would be 5 to 6 percent. Even with this model, both CalSTRS and CalPERS are expected to run out of funds by 2043.

CalPERS, like its CalSTRS counterpart, is intimately involved in Wall Street investments. As of April, the $263 billion fund was 65 percent invested into “growth investment” (i.e. stocks), with 52 percent in public equity, 12 percent in private equity, and 8 percent in real estate. For every dollar paid to CalPERS, 66 cents comes from “investment earnings,” 21 cents from CalPERS employers, and 13 cents from CalPERS members. This last figure is likely to increase if the ruling class continues its policies unabated.

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Below you see a LOL comment from the last economic benefactor of massive corporate fraud.  As people reading my blog know I have these four years shouted that inflation was already high and that the FED was simply pretending/hiding it in order to justify all that FREE MONEY FROM THE FED.   They all knew they were creating huge inflation and that when the bond market imploded the inflation would create what will be a Great Depression.  This is not hyperbole ......it is coming and deliberate.

Remember, the investment firms for the rich have protected their wealth from this coming catastrophe....investment in real estate and gold with little in the bond or stock market.  See why they need to move pensions into these markets as they pull out....just as they did in 2008!

IT IS ALL PLANNED AND ILLEGAL!


Either way, I think we're all best served to heed the words of John Paulson, the preeminent hedge fund manager who oversees $14 billion in assets: "By the time inflation becomes evident, gold will probably have moved, which implies that now is the time to build a position."

What Inflation Could Look Like in 2014
By Jeff Clark, Senior Precious Metals Analyst

Most economists, especially those from the mainstream, will tell you that inflation is widely expected to remain benign for the foreseeable future. And for those who think it could climb higher, it's usually because they think it should be higher. History has a message for them: be careful what you wish for.

There are plenty of examples in history showing that once inflation takes hold, it can quickly spiral out of control. That's the danger we face now. Here's what I mean…

A recent article about sudden inflation by Amity Shlaes, a senior fellow of economic history at the Council on Foreign Relations and a best-selling author, provides some examples from the past century of US inflation that was at first subdued but then abruptly rocketed to alarming levels. I put them into a chart so you could see how quickly inflation rose within just two years from "benign" levels. I then made some projections for us today based on these historical examples.

According to Shlaes, US inflation was 1% in 1915 (based on an earlier version of the CPI-U). Over just two years, it hit 17%. As she states, it happened because the Treasury "spent like crazy on the war, creating money to pay for it…"

Given the fact that our spending and money-printing is now out of control, I projected what our inflation rate would be if we matched the inflation rates of these time periods. The first striped bar to the right represents what the CPI would register if we matched the 1915-1917 rise. Inflation would hit 19% by 2014. (Yes, the CPI has been tinkered with many times, but this is at least what "unofficial" or "authentic" inflation would register.)

In 1945, the official inflation rate was 2%. It accelerated to 14% in 24 months. If we matched this percent rise, we'd hit 15% by 2014 (middle striped bar)..

And the example that kicked off the greatest bull market in gold and silver, the early 1970s. The CPI stood at 3.2% in 1972, a level close to ours today. It soared to 11% just two years later. Mimicking this rise, the third striped bar shows we'd also be at 11% in 2014. (Shadow Stats says we're already at 10% based on 1980 methodology, so from this level we'd hit 17% in 24 months.)


Could we really have inflation that high within two years? Consider the following:

  • Fox Business reported on March 7 that "wages grew much more quickly at the end of last year than originally estimated…" This is an important data point because most economists believe you can't have higher inflation without rising wages.
  • Commercial and industrial loans have risen 14% year over year, and business and consumer spending are in an uptrend.
  • Home-building permits are at their highest point since October 2008. Existing home sales fell 0.9% last month, but that's after January sales were up 4.6%.
     
  • Jobless claims are coming down, retail sales gained the most in five months, and auto sales were up 16% last month. One report I read stated that we've had 24 consecutive weeks of stronger US data.
If the economy continues to improve and more money is sloshing through the system, it's easy to see how inflation could grab hold. Yet, if you understand Austrian economics, you'll look beyond how the mainstream views inflation and to its root cause: monetary debasement.

  • The US monetary base stands at $2.72 trillion, a 168% increase since October 2008.
  • The national debt in the US has risen by a whopping $4.9 trillion just since Obama took office. It now stands at $15.5 trillion.
  • The US budget deficit this year is projected to be over $1.3 trillion, an obscene amount that exceeds the entire annual budget of just 20 years ago.
  • According to ISI Group, there have been an incredible 122 "stimulative policy initiatives" from central banks around the world over the past seven months.
Remember, in these historical examples, inflation was initially low and therefore off everyone's radar. But government tinkering with the monetary system lit the spark that led to a sudden and rapid rise in inflation. It caught many off guard, just like I suspect it would now. Don't think there are no consequences to our unwise fiscal and monetary course; a potentially ugly tipping point is more likely than not at some point.

Given the abuse most fiat currencies are undergoing around the world today, coupled with obscene amounts of deficit spending, I think gold should be viewed not just as a potential moneymaker but as protection against the rabid inflation that will invariably damage our economy and dilute our pocketbooks.
If you think deflation is next, I'll accept that argument – for a time – if you accept mine, that the Fed would almost certainly panic at another deflationary event and print to the max. This is why we're convinced that inflation, à la currency dilution, is inevitable. (Harry Dent, best-selling author of The Great Crash Ahead, is convinced deflation poses our biggest economic threat, while Currency Wars author James Rickards believes inflation is the real danger. You can hear them debate the issue – and participate as a member of the audience – during the Inflation-Deflation Face-Off program at the upcoming Casey Research Recovery Reality Check Summit.)

To those of you who say gold hasn't always kept up with inflation, don't kid yourself about what it would do in a highly inflationary environment: it would surely climb like it did in the 1970s. And those "productive assets" Warren Buffett prefers over gold? They would have a difficult time raising the prices of their products quickly enough to keep up with a rapidly escalating CPI. Gold may not perfectly track inflation when it's low, but it is precisely a high-inflation environment where it serves one of its core purposes.

You may think high inflation is further away than 2014, but don't dismiss the fact that it can happen suddenly. And keep in mind the possibility that a sudden shift in inflation – especially inflation expectations – could be the spark for a mania in precious metals. I can easily see this being the catalyst that finally pushes the greater public into our sector, causing a paradigm shift that eventually sends it into a bubble.


Either way, I think we're all best served to heed the words of John Paulson, the preeminent hedge fund manager who oversees $14 billion in assets: "By the time inflation becomes evident, gold will probably have moved, which implies that now is the time to build a position."

We agree. As we stated in the February BIG GOLD, if 10% of your total investable assets (i.e., excluding equity in your primary residence) aren't held in various forms of gold and silver, we think your portfolio is at risk. And as Doug Casey reminded us last week, "Anyone who thinks they have any measure of financial security without owning any gold – especially in the post-2008 world – is either ignorant, naïve, foolish, or all three."

This is the time to accumulate, while gold and silver prices are below their peaks. Buy a little every month and store it in a safe place. And for even better bargains, look to the undervalued stocks, which I would argue offer better protection against inflation than most other equity investments since their cash flow will climb commensurate with gold and silver prices. We identified the two best stocks for new money right now in the current issue of BIG GOLD, and you can get the brand-new pick from International Speculator – an African company that has built its first gold mine and is already working on its second.


If we match the inflation rates seen several times in the recent past, what will your savings be worth in a few years? We'll have lots to worry about in a high-inflation climate, but our purchasing power can be protected by owning gold.

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Mainstream media pretended that the economy was on its way to recovery each year even as they knew it was being positioned to implode.  That is why you and I did not know anything and it is why I am a blogger today....so I will know what is happening and share it with you!  It is true we cannot stop this....but all we need to do is

REINSTATE RULE OF LAW AND REBUILD WHITE COLLAR CRIMINAL AGENCIES TO RECOVER ALL THIS CORPORATE FRAUD.....EASY PEASY.  WHEN GOVERNMENT SUSPENDS RULE OF LAW, THEY SUSPEND STATUTES OF LIMITATION!



THE 1% ARE READY FOR THIS NEXT CRASH THAT WILL TAKE ALL PENSIONS AND PUBLIC SECTOR ASSETS WITH IT.  HEAVILY LEVERAGED CREDIT BOND DEBT IN MARYLAND AT A TIME OF ECONOMIC COLLAPSE?  THERE IS A REASON FOR THAT!

Zero Coupon Inflation Swap

  Definition of 'Zero Coupon Inflation Swap'


An exchange of cash flows that allows investors to reduce or increase their exposure to the risk of a decline in the purchasing power of money. In a zero coupon inflation swap, which is a basic type of inflation derivative, an income stream that is tied to the rate of inflation is exchanged for an income stream with a fixed interest rate. However, instead of actually exchanging payments periodically, both income streams are paid as one lump-sum payment when the swap reaches maturity and the inflation level is known. Investopedia explains 'Zero Coupon Inflation Swap'
The currency of the swap determines the price index that is used to calculate the rate of inflation. For example, a swap denominated in U.S. dollars would be based on the Consumer Price Index of the United States, while a swap denominated in British pounds would typically be based on Great Britain's Retail Price Index. Other financial instruments that can be used to hedge against inflation risk are real yield inflation swaps, price index inflation swaps, Treasury Inflation Protected Securities (TIPS), municipal and corporate inflation-linked securities, inflation-linked certificates of deposit and inflation-linked savings bonds.



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January 17th, 2014

1/17/2014

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SO FAR IT HAS BEEN BERNIE SANDERS AND RUSS FEINGOLD THAT HAVE SHOUTED FOR STRONG BANK REFORM AND JUSTICE IN THESE MASSIVE FRAUDS....SO LET'S GET THEM TO RUN FOR PRESIDENT/VICE-PRESIDENT IN 2016!!!



Did you hear the corporate NPR introduction of Obama's next Wall Street appointment to an agency supposedly protecting the public from economic instability and work for high employment?  What a stellar appointment of a good all-round guy!!!  We all love him!  Now, if you look at the US Federal Reserve as the center of global corporate tribunal rule acting to place massive corporate fraud on steroids and installing policy that keeps the public caught in boom and bust crony and criminal markets losing all their wealth and causing ever-growing levels of unemployment.....ALL MAXIMIZING WEALTH FOR THE FEW---- you see from where this promotion comes. Indeed, Fischer is in fact THAT good ole' boy.  In the days of TPP there is no public sector or US citizens to consider for goodness sake!

For those who know better you'll see below how the Fischer/Bernake/Draghi fit goes with the TROIKA mess that has hold of the US and Europe.  You can follow the money to see his place in the pecking order of moving massive wealth.  Again, we want to thank Anonymous and those hackers that are doing civil disobedience and not stealing people's pin numbers.....hacking to download banking information that is allowing International Journalists to follow the money to off-shore accounts to the tune so far of $35 trillion dollars.  We are getting a great picture of who has the money and where it is so when Rule of Law is reinstated the people of Europe and US will be able to recover the loot and reverse wealth inequity.  THIS IS WHERE FISCHER COMES INTO THE PICTURE.

We all remember when Obama placed Greenspan's deputy and Geithner to head Financial agencies needed by the public to hold banks accountable.  These two where of course in the forefront of allowing the massive frauds to go forward while everyone was shouting MASSIVE AND SYSTEMIC MORTGAGE AND FINANCIAL FRAUD throughout the 2000s.  This is now round two of 'IT'S ABOUT THE GLOBAL TRIBUNAL AS WORLD RULER' politics.
  Yellen has stated she supports all of what Bernanke did so she will be status quo for the US economy and wealth inequity.


For those liking to follow the financial fraud this is the next connection of dots in the revolving door of cronyism.  It is important because as more people see how corrupt this system is, the more people will move to revolution.  Fischer is MIT material tied to Summers and Italy's Draghi.  Draghi is now head of the European ECB.  We all know Summers as Clinton's global market king and MIT is of course farm team for Wall Street.  Fischer's connection with the BAnk of Israel coincides with the exact time Wall Street was moving massive amounts of money off-shore and guess where the top off-shore location was according to International Investigative Journalists using WIKILEAKS hacking download of Wall Street banks showing the movement of $35 trillion dollars?????  ISRAEL WAS ONE TO THE TOP LOCATIONS.  Know why Pope Benedict retired suddenly...Draghi's Italy used the Vatican Bank to move money from NYC through the Vatican.  See the crony?  It is all illegal and it is all documented by International Justice groups!!!!



Obama to nominate Stanley Fischer, 2 others to Federal Reserve seats

By Jim Puzzanghera January 10, 2014, 8:35 a.m. Los Angeles Times



WASHINGTON -- President Obama will nominate Stanley Fischer, the former head of the Bank of Israel, to be vice chair of the Federal Reserve, and also tapped two other people for seats on the central bank's Board of Governors, the White House said Friday.

Lael Brainard, who recently stepped down as Treasury undersecretary for international affairs, was chosen to fill one of the vacant seats on the seven-member Fed board.

And Jerome H. Powell, a former Treasury official and investment banker who has served on the Fed board since 2012, will be renominated. Powell was confirmed to an unexpired term that expires on Jan. 31.

PHOTOS: Federal Reserve chairs through the years

"These three distinguished individuals have the proven experience, judgment and deep knowledge of the financial system to serve at the Federal Reserve during this important time for our economy," Obama said.

The nominations, which had been expected, add to the major changes coming at the Fed as it tries to pull back on its aggressive stimulus efforts without damaging the economic recovery.

Current Vice Chair Janet L. Yellen was confirmed this week to replace Ben S. Bernanke, whose second four-year term as central bank chair expires on Jan. 31. She will lead a different, and potentially more fractious Fed policy-making team.

This month, four new regional Federal Reserve Bank presidents will rotate into the 12 voting positions on the Federal Open Market Committee, or FOMC, which sets monetary policy. All seven Fed governors are voting members.

Friday's disappointing government report showing the economy created just 74,000 net new jobs in December highlighted the difficulties for Fed policymakers. They must decide if the economy is strong enough to continue the reduction started last month in the Fed's bond-buying stimulus program, when most data pointed to an improving labor market.

Fischer, who was governor of the Bank of Israel from 2005-13, is a legendary economist who brings a wealth of experience to the Fed board.

He has worked at the World Bank, the International Monetary Fund and was vice chairman of Citigroup Inc. from 2002-05.

Fischer was the PhD advisor for outgoing Fed Chair Ben S. Bernanke at the Massachusetts Institute of Technology. Fischer also taught European Central Bank President Mario Draghi and former Treasury Secretary Lawrence H. Summers.

If confirmed by the Senate, Fischer would replace Yellen as the Fed's No. 2 official.

"He is widely acknowledged as one of the world’s leading and most experienced economic policy minds and I’m grateful he has agreed to take on this new role and I am confident that he and Janet Yellen will make a great team," Obama said.

Brainard also brings international experience to the Fed. And she helps close a pending gender gap on the central bank's board. Elizabeth Duke stepped down last year and Sarah Bloom Raskin is awaiting confirmation as deputy Treasury secretary.

If Raskin departs as expected, Yellen would be the only woman remaining on the board.

Obama said Brainard's "knowledge of international monetary and economic issues will be an important addition to the Fed."

Powell served as an assistant secretary and under secretary at the Treasury Department under President George H.W. Bush.

Fed governors have 14-year terms but rarely serve all of it. Powell is nominated to a full 14-year term. Fischer would fill a term expiring in 2020 and Brainard one expiring in 2026.


_______________________________________________________________________
Below you see nothing has been done with the Financial Reform Bill.  Volcker demanded long ago that his name be taken off of what neo-liberals are pretending are rules that will safeguard the banking system.  NO ONE BELIEVES THAT.  I'v spoken as to the importance of bank capitalization and the fact that most financial experts wanted this to be at least 20%...below you see the TROIKA as will the FED move away from any accountability.  Remember, QE and 0% recapitalized the banks by taking all the most toxic subprime mortgages off the banks accounting and move them to the FED in the trillions of dollars.  THIS IS WHAT CORPORATE NPR CALLS 'THE BANKS/CORPORATIONS ARE HEALTHY NOW'.

Somehow we are getting bank warnings that requiring capital will hurt lending that has yet to happen as they roll in profit and will not happen as the goal is to consolidate all small and regional businesses into these global corporations.


The two issues in financial reform were banks having enough capital to cover leverage and the Glass Steagall separation of bank's money from its consumers....the Volcker Rule was advanced for this. So, capitalization many thought needed to be 20% as it had historically been 70%. When the financial reform debate was hot we were told we would get 8-10% which was a start, but now we see below they are back where it was before the crash....3%. NOT ONE CHANGE HAS BEEN MADE....NOT ONE BIT OF ACCOUNTABILITY.....AND THIS IS BECAUSE WE HAVE A NEO-LIBERAL PRESIDENT AND CONGRESS.

KEEP IN MIND THAT IT IS THE FEDERAL RESERVE WRITING MANY  OF THESE LAWS AND CHOOSES TO ENFORCE REGULATIONS OR NOT.  SINCE NEO-LIBERALS CONSIDER TPP A DONE DEAL.....ALL THE POLICY IS ABOUT WHAT MAXIMIZES PROFIT....MORE NAKED CAPITALISM.

What the American people want is a President that appoints people that want the opposite.....more capitalization, more regulation, and more downsizing by recovering tens of trillions of dollars in fraud still owed. 


SO FAR IT HAS BEEN BERNIE SANDERS AND RUSS FEINGOLD THAT HAVE SHOUTED FOR STRONG BANK REFORM AND JUSTICE IN THESE MASSIVE FRAUDS....SO LET'S GET THEM TO RUN FOR PRESIDENT/VICE-PRESIDENT IN 2016!!!

Debt Rule Faces Dilution as Regulators Heed Bank Warnings

By Jim Brunsden Jan 10, 2014 8:05 AM ET

Lenders are poised to win concessions from central bank chiefs and global regulators over a debt limit they criticized as a blunt instrument that would penalize low-risk activities and curtail lending.

A revised leverage-ratio plan is set to be laxer than a draft published last year by the Basel Committee on Banking Supervision, said a person familiar with the scope of a Jan. 12 meeting of the group’s oversight body at which the measure will be discussed.

Leverage ratios are designed to curb banks’ reliance on debt by setting a minimum standard for how much capital they must hold as a percentage of all assets on their books. A quarter of large global lenders would have failed to meet the draft version of the leverage limit had it been in force at the end of 2012, according to data published by the committee in September.

“I expect considerable change in the rule to defer to applicable national accounting systems,” Karen Shaw Petrou, managing partner of Washington-based research firm Federal Financial Analytics Inc., said in an e-mail. “If the rule in fact doesn’t do this, it will wreak tremendous havoc in securities financing, repo, and other capital-market activities and send them over to the shadows.”

Photographer: Chris Ratcliffe/Bloomberg Bank of England Governor Mark Carney said, “My personal view, is that a leverage ratio... Read More

Some supervisors have called for greater use of leverage ratios instead of standard Basel capital requirements, which are measured as a ratio of banks’ equity against risk-weighted assets, because banks are inconsistent in the way they calculate these standards.

Asset Size The draft leverage rule published last year would have required banks to hold capital equivalent to at least 3 percent of their assets, without any possibility to take into account the riskiness of their investments. Stefan Ingves, the Basel committee’s chairman, has said that discussions in the group have focused on calibrating how banks should calculate the size of their assets, as opposed to reopening talks on the 3 percent figure.

“In our view, the final leverage rule will be significantly moderated to avoid it becoming a binding constraint on bank lending activity,” research firm Capital Alpha Partners LLC wrote in a note to clients yesterday.

The “most likely adjustments will be to allow for greater netting for derivatives and securities financing transactions,” according to the note. There is also “a good chance” that regulators will scale back rules on how banks must calculate the size of some off balance sheet commitments, it said.

Stated Intentions The Basel committee declined to comment on the leverage ratio talks.

“Overall and in contrast to publicly stated intentions, a binding leverage ratio may actually encourage increased risk-taking by European banks while at the same time forcing them to cut back on low-risk exposures” such as derivatives used to hedge risk, Jan Schildbach, senior economist at Deutsche Bank Research, said in an e-mail. This would potentially hurt “their clients and the European economy as a whole.”

Global regulators have met for almost 40 years in Basel, Switzerland, to negotiate common standards for supervising the banking system.

The Jan. 12 meeting will be of the Group of Governors and Heads of Supervision, or GHOS, which oversees the committee’s work and is comprised of central bank and regulatory chiefs. The GHOS is led by Mario Draghi, the president of the European Central Bank.

Bank Strength Relying on leverage ratios to assess a bank’s strength wouldn’t be sensible as the measure can easily be influenced and is hard to compare between lenders under different reporting standards, Rabobank Groep Chief Financial Officer Bert Bruggink said in an interview this week.

“For banks reporting under European accounting rules, a leverage ratio of 3 percent or 4 percent is very well defendable,” Bruggink said. “Requiring higher numbers, especially if that’s done with reference to U.S. banks, would be wrong and harmful to the economy.”

Main Item The leverage measure is the main item on the agenda for the GHOS talks, according to two other people familiar with the talks. All three asked not to be identified because the discussions are private.

Under the published Basel timetable, banks will be expected to publicly disclose how well they measure up to the standard from 2015, with the rule to become a binding minimum standard in 2018.

Banks such as BNP Paribas SA (BNP), Bank of America Corp. and Citigroup Inc. (C) have called for a rewrite of the draft leverage rule published in June, saying it would adversely affect economic growth and job creation, make it more expensive for governments to sell their debt and give banks incentives to invest in riskier assets.

“The leverage ratio instrument sets the wrong incentives by discriminating against low-risk business, which also accounts for a larger share of European banks’ operations than for U.S. institutions,” Schildbach said. “In addition, in the U.S., a compulsory leverage ratio has been in place for many years already, whereas the Europeans are used to align their business models to a system of risk-weighted capital ratios.”

More Scope Banks have called on the committee to alter the rule by giving lenders more scope to carry out netting, which would allow them to reduce the size of the pool of assets used to calculate the leverage ratio.

Netting is an accounting term describing the process of banks offsetting the value of different assets and liabilities they have taken on with a single counterparty.

Lenders have argued that they should be allowed to net the collateral received on derivatives trades because otherwise the protection they gain wouldn’t be taken into account by the leverage ratio. They have also called for more scope to use netting on securities financing transactions such as repurchase agreements, or repos.

Other requests from banks have included that assets perceived to bear little risk of loss, such as high quality mortgage debt, should be exempted or partially exempted from the leverage ratio calculation.

Playing Field Knowing how the international leverage ratio is defined “is important domestically for a level playing field,” Bank of England Governor Mark Carney told U.K. lawmakers in November, according to a public record of the proceedings.

“My personal view, is that a leverage ratio is an integral part of the capital framework of banks, so it is absolutely necessary,” Carney said.

There is no chance that all high quality assets will be removed from the calculations, Simon Hills, executive director at the British Bankers’ Association, said in a telephone interview.

“The most we can probably hope for on scope is a little movement,” he said. “Our priority is that cash held with central banks should be excluded from the leverage ratio calculations, as well as gilt purchases made as part of central bank monetary policy operations. We think that merits another look.”



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As corporate NPR and local WYPR pretend they do not know the economy is ready to implode with the same conditions as last time only instead of subprime mortgage fraud in the trillions it will be sovereign and muncipal bond debt that took Europe last crash.  We are over the $600 trillion leverage mark now!

This is why Fischer and Yellen are so important for the global tribunal because they both will use the same system of bailout and coverup that Bernanke and Geithner did in 2007-2008.



Derivatives: The $600 Trillion Time Bomb That's Set to Explode
  • By Keith Fitz-Gerald, Chief Investment Strategist, Money Map Report  ·   October 12, 2011  ·   Print  |   Email
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Keith Fitz-Gerald Do you want to know the real reason banks aren't lending and the PIIGS have control of the barnyard in Europe?

It's because risk in the $600 trillion derivatives market isn't evening out. To the contrary, it's growing increasingly concentrated among a select few banks, especially here in the United States.

In 2009, five banks held 80% of derivatives in America. Now, just four banks hold a staggering 95.9% of U.S. derivatives, according to a recent report from the Office of the Currency Comptroller.

The four banks in question: JPMorgan Chase & Co. (NYSE: JPM), Citigroup Inc. (NYSE: C), Bank of America Corp. (NYSE: BAC) and Goldman Sachs Group Inc. (NYSE: GS).

Derivatives played a crucial role in bringing down the global economy, so you would think that the world's top policymakers would have reined these things in by now - but they haven't.

Instead of attacking the problem, regulators have let it spiral out of control, and the result is a $600 trillion time bomb called the derivatives market.

Think I'm exaggerating?

The notional value of the world's derivatives actually is estimated at more than $600 trillion. Notional value, of course, is the total value of a leveraged position's assets. This distinction is necessary because when you're talking about leveraged assets like options and derivatives, a little bit of money can control a disproportionately large position that may be as much as 5, 10, 30, or, in extreme cases, 100 times greater than investments that could be funded only in cash instruments.

The world's gross domestic product (GDP) is only about $65 trillion, or roughly 10.83% of the worldwide value of the global derivatives market, according to The Economist. So there is literally not enough money on the planet to backstop the banks trading these things if they run into trouble.

Compounding the problem is the fact that nobody even knows if the $600 trillion figure is accurate, because specialized derivatives vehicles like the credit default swaps that are now roiling Europe remain largely unregulated and unaccounted for.

Tick...Tick...Tick To be fair, the Bank for International Settlements (BIS) estimated the net notional value of uncollateralized derivatives risks is between $2 trillion and $8 trillion, which is still a staggering amount of money and well beyond the billions being talked about in Europe.

Imagine the fallout from a $600 trillion explosion if several banks went down at once. It would eclipse the collapse of Lehman Brothers in no uncertain terms.

A governmental default would panic already anxious investors, causing a run on several major European banks in an effort to recover their deposits. That would, in turn, cause several banks to literally run out of money and declare bankruptcy.

Short-term borrowing costs would skyrocket and liquidity would evaporate. That would cause a ricochet across the Atlantic as the institutions themselves then panic and try to recover their own capital by withdrawing liquidity by any means possible.

And that's why banks are hoarding cash instead of lending it.

The major banks know there is no way they can collateralize the potential daisy chain failure that Greece represents. So they're doing everything they can to stockpile cash and keep their trading under wraps and away from public scrutiny.

What really scares me, though, is that the banks

think this is an acceptable risk because the odds of a default are allegedly smaller than one in 10,000.

But haven't we heard that before?

Although American banks have limited their exposure to Greece, they have loaned hundreds of billions of dollars to European banks and European governments that may not be capable of paying them back.

According to the Bank of International Settlements, U.S. banks have loaned only $60.5 billion to banks in Greece, Ireland, Portugal, Spain and Italy - the countries most at risk of default. But they've lent $275.8 billion to French and German banks.

And undoubtedly bet trillions on the same debt.

There are three key takeaways here:

  • There is not enough capital on hand to cover the possible losses associated with the default of a single counterparty - JPMorgan Chase & Co. (NYSE: JPM), BNP Paribas SA (PINK: BNPQY) or the National Bank of Greece (NYSE ADR: NBG) for example - let alone multiple failures.
  • That means banks with large derivatives exposure have to risk even more money to generate the incremental returns needed to cover the bets they've already made.
  • And the fact that Wall Street believes it has the risks under control practically guarantees that it doesn't.
Seems to me that the world's central bankers and politicians should be less concerned about stimulating "demand" and more concerned about fixing derivatives before this $600 trillion time bomb goes off.


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Corporate NPR/APM likes to tell us that the world's economy is getting better now that looted money has made it to offshore accounts and austerity in Europe and US has the public filling the $17 trillion whole in the national deficit caused by the massive frauds.  The free money and QE has moved most of the US real estate into the hands of these huge investment firms now controlling development and soaking people with rents and slum-landlording.  YES, THIS IS INDEED THE NEW ECONOMY!!!

So, as Americans pray the TPP nations that signed the treaty can bring down their governments to end the TPP......and as we pray that the Atlantic Trade deal will fall because of loss of trust created by the NSA exposure and Europe's farm/environment issues that will not bend to US naked capitalism.....this we know:

Europeans are not all rosy and cheerily agreeing to austerity and TROIKA rule and the dismantling of their social programs and labor unions contracts.  In fact the move for dismantling the Euro is far stronger and Wall Street knows that the shock from this default will be traumatic to the world and US economy.  What is happening in Spain, Wall Street's favorite nation following TROIKA orders as you see below is a return of Fascism to Spain.  Global corporate tribunals will be totalitarianism and while Americans have not known this personally and this is why we are slow to fight.....

EUROPEANS HAVE ALL OF THIS AUTOCRACY IN RECENT MEMORY AND THEY WILL NOT ALLOW IT TO CREEP!  That's why the NSA scandal was so important, it is why attempts to pass laws limiting protest and political speech happening in the US will not fly in Europe.  Remember, it was Germany/DeutscheBank and Wall Street/Goldman Sachs that started this full fledged attack on social governments over the decade and it started with fraudulent financial instruments hiding sovereign debt and then loading these countries with tremendous municipal debt.  Europeans know this dynamic and will not join a European union with Germany leading the TROIKA and the UK fat on massive financial fraud on top!  As we see the PIIGS nations have been made IMF developing world wards with this massive fraud and attack on their sovereignty!

What does that mean to you and me?  It means that all the US pensions and municipal bonds that are now propping up these European nations under attack by the TROIKA will default and just as with these same US pensions./municipal bonds sent into the stock market to prop up the Wall Street banks in 2007 losing 1/2 their value to fraud.....it is about to happen big time sometime soon and your politician, your pension fund manager knows this!  With the amount of debt Wall Street has....$600 trillion in leveraged debt, the FED has several trillion in leveraged debt, the US Federal debt of $17 trillion, and local credit bond and municipal debt soaking local budgets-----


THIS WILL BE A DEPRESSION-MAKER JUST AS WE HEAD INTO 2014 ELECTION YEAR.  REMEMBER OBAMA ELECTED JUST AS THE LAST CRASH HIT?  WE WILL HEAR ALL POLICY AGAIN SURROUNDING BAILING OUT THE ECONOMY.

This is where Obama's Federal Reserve appointments come into play as the same system of bailouts and protection from fraud happen all over!!

The EU is a new form of colonialism – it’s time to break free

Posted by revoltingeurope ⋅ January 14, 2014 ⋅ 


Spain has a future but it means breaking with the Eurozone and EU institutions, argue Hector Illueca and Adoración Guamán

The economic crisis affecting our country and the austerity policies imposed by the troika (European Commission, European Central Bank and International Monetary Fund) are leading to an increasingly evident social fracture. Astonished citizens observe the degradation of everyday life and the tolerance of abuses of power by the most privileged in the country. The deterioration of the material conditions of an increasingly wide social majority comes accompanied by grave corruption scandals that have infected the political and economic elites, shining a light on a society in which injustice and inequality are ever more entrenched.

In this context, the dream of European integration has become a nightmare of a brutal present and a bleak future. Citizens have been quite deliberately served up a false, ideological and idyllic image of the European Union, with the media projecting a mythical vision quite removed from reality: the truth is that the European Union completely alien to the principles of cohesion and solidarity collaborative solidarity and has become a sort of German hunting ground where strong economies exploit their economic and commercial advantages to crush the weak economies. This is a European Union governed by the law of the jungle .


However, the severity of the economic situation and declining well-being has cast aside the veil and the inhabitants of the periphery are starting to understand that they are victims of a new settlement. It is increasingly difficult to hide that the introduction of the euro has led to a centre-periphery relationship within the European Union, where the North dominates the South. It is no longer possible to deny that the single currency has benefited Germany and the other rich countries of Europe, strengthening their position in the European scheme as net exporters of capital goods and consumption, and net importers of overall demand.

To put it plainly and simply: economic and monetary union has allowed the core countries, especially Germany, to accumulate growing trade surpluses in Europe, blocking any possibility of competitive devaluation and fuelling a radical redistribution of work to the detriment of the less powerful economies of the Mediterranean basin. Strong core countries such as Germany, the Netherlands and Finland, increase their competitiveness, retain their national sovereignty and finance their welfare states due to loss of competitiveness and the destruction of sovereignty and welfare in the European periphery.

The new European division of labour

Spanish workers, along with workers in other peripheral economies, have become a reservoir of low cost labour. As noted by others, the process of European integration has created a new international division of labour, fuelling colonialist dynamics characterized by German hegemony and the subordination of peripheral [1 ] economies. This is what explains why state control over the market and the protection of social rights are being dismantled according to the dictates of economic and monetary union.

When this process clashes with state provisions in social policy, peripheral states adapt their welfare systems, always, to be clear, reducing the protection of labour and social rights. Social dumping has not only not been challenged, but it has been fostered, placing labour regulation as a competitive factor and triggering a fierce regulatory Darwinism to reduce labour standards and social protection.

SOUND FAMILIAR?????  SAME THING HAPPENING IN THE US!!!

The new European division of labour explains and promotes the progressive destruction of state -sponsored social models desired by the Troika and which is immediately apparent in two key areas: the flexibility of labour markets (in particular, lowering the protection for stabile employment and cutting the cost of labour) and the reduction of welfare, in particular social security systems (reducing pensions, health care reforms, etc. . ) .

Its influence is also evident in the education reform in Spain pursued by Minister Wert, reforms which are also sponsored by European institutions, which guide the educational system towards the formation of cheap labour and providing the knowledge needed to deal appropriately with the garbage that characterizes the labour market in underdeveloped countries. The dependent and peripheral position of our economy in the European scheme is radically incompatible with the existence of public pensions, education and public health and a fair and decent job market.

By accepting the dictates of the Troika, the ruling classes of the peripheral countries show their inability to take an independent path for their respective countries and seal a relationship of subordination and dependence similar to that which occurs in the process of classic colonization, characterized by the systematic dispossession of peripheral economies and the exploitation of its workers. We must not forget that they are the ruling classes of the Member States which have built and paid for this European Union model, under whose untouchable legitimacy the most unpopular and tough reforms have sheltered. The undermining of the bargaining position of the unions is the price of the treacherous collusion of the elites of the deficit countries in forging a strong and stable alliance with the German bourgeoisie to impose a new political and social order throughout Europe.

More Europe?

In this context, it is surprising that certain sectors of the Spanish and European left insist on reforming the eurozone as a solution to the current social and economic emergency. With something of a Panglossian air, they invoke the need for “more Europe” , denounce the fragmentation of fiscal policy and the criticise the ECB for providing ample liquidity to banks while abandoning indebted member states to face speculative attacks.

They propose the abolition of the Stability Pact, the creation of a fiscal authority and amendments to the statutes of the ECB to enable loans to governments experiencing difficulties. In a burst of ingenuity, they even speak of a “good euro” in which one could establish a European minimum wage to reduce the competitiveness differentials between countries.

This is an illusion that for decades has paralyzed much of the left and the labour movement and blocked the construction of an alternative at the service of the masses of our country. The euro area lacks a single European state and there is no expectation that one will be created in the near future. The unification of fiscal policy would mean a complete restructuring of sovereignty throughout the European Union, constructed from a strict hierarchy of states and a careful calculation of national interests, and would require a consensus that will not occur.

Any possible reform would follow the existing hierarchy of power, characterized by the dominance of the countries of the centre and especially Germany. To be exact, the euro has been the means to build the hegemony of German capital, which has inexorably imposed itself on the European stage and prevents the possibility of implementing a programme that meets the needs of the social majority.

Time for a break

In our opinion, any political agenda that seeks to actually break with neoliberalism, even in a reformist direction, should seriously consider euro exit. As noted by Costas Lapavitsas [2 ] , the only progressive answer for our people is to leave the euro zone and regain control of sovereignty in the context of a radical shift in economic and social power to labour.


This strategy must start with the default on sovereign debt and extends to a euro exit to allow our country to escape the cataclysm of internal devaluation imposed by the European Union. Our country has a future, but a decent future will necessarily mean breaking with this Europe and the European institutions.
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September 12th, 2013

9/12/2013

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As you listen to all of the revisionism of the financial collapse in 2008 at the same time we are memorializing 9-11, take time to see how the two are tied to each other.  Jihadists attacked Wall Street because they see US markets as evil and dangerous.  Several years later we have the economic crash and see that Wall Street is evil and dangerous!

PLEASE DO NOT ALLOW THESE NEO-LIBERALS TO REVISE WHAT HAPPENED AS THEY TRY TO SKIRT THE TRUTH AS TO HOW CRIMINAL THE US FINANCIAL SYSTEM IS AND HOW TENS OF TRILLIONS OF DOLLARS IN FRAUD NEED TO COME BACK TO GOVERNMENT COFFERS AND INDIVIDUALS!



Regarding a revisionist look at the 2008 financial collapse:

I think anyone left listening to NPR/Marketplace on WYPR knows what was presented was propaganda and not journalism so I will just give snippets that show most of what was presented was untrue. We do want to thank public media journalists before the 2010 corporate takeover of public media for their professional and accurate journalism. We know they did so knowing their jobs may be in peril. Professionalism requires commitment to integrity and honesty and those journalists pre-2010 had just that!

In a Peabody Award winning program, NPR correspondents argued that a "Giant Pool of Money" (represented by $70 trillion in worldwide fixed income investments) sought higher yields than those offered by U.S. Treasury bonds early in the decade. This pool of money had roughly doubled in size from 2000 to 2007, yet the supply of relatively safe, income generating investments had not grown as fast. Investment banks on Wall Street answered this demand with products such as the mortgage-backed security and the collateralized debt obligation that were assigned safe ratings by the credit rating agencies.[59]

As we all know, this mortgage fraud was conceived at the same time Clinton and his Administrative team, Larry Summers and Robert Rubin were breaking the Glass Steagall wall and this fraud had as its goal the movement of massive amounts of wealth to the top earners through fraud. A goal was to clear the poor and working class from urban centers where Master Plans across the country set affluent development and blowing up the FHA with debt as Wall Street wanted control of all mortgage business.

For anyone not believing when this collapse happened that the entire massive fraud was not planned, there is no doubt today. As the current report on NPR pointed out.....every single bank had credit default swaps (insurance) for all of these mortgage investments with AIG. It is ironic that the 9-11 memory falls at the same time as the anniversary of the 2008 collapse. The jihadist attacked Wall Street for the very reasons that brought the economic collapse just years later!

Five years from the collapse we have the same conditions as existed then....no financial reform, 600 trillion dollars in derivative leverage......little capitalization and an economy ready to collapse this time with bond debt. Again, this collapse will be fueled by fraud as all of the municipal bond/sovereign debt that has happened these several years happened through public malfeasance in collusion with Wall Street just as with the pensions thrown into the stock market in 2007 as the market crashed. Loading municipalities with debt so the next economic collapse created by the bond bubble would move more public assets to the top earners. This is a second phase of wealth redistribution to the top. As everyone in Maryland knows, O'Malley and Rawlings-Blake have leveraged the state and city with so much bond debt that when this crash happens next year.....and it will be much bigger than the 2008 crash....there will be no Federal rescue. Don't worry for the banks.....they already have their credit default swaps for bond investments!

THE AMERICAN PEOPLE HAVE YET TO RECOVER TENS OF TRILLIONS OF DOLLARS IN FINANCIAL FRAUD FROM THE PAST DECADE. REMEMBER, WHEN RULE OF LAW IS SUSPENDED....SO IS STATUTES OF LIMITATION.

Why do you think Maryland is still listed as the state still having mortgage foreclosures? We were ground zero for the mortgage fraud with MERS operating from the Washington beltway. Gansler gave what was the parking ticket settlement of $1 billion to the state fund so O'Malley could claim he balanced the budget (O'Malley used huge cuts in Medicaid to do the same----what a guy...he did that for families!) The money that should have gone to communities and people effected by the fraud went to developers to pad the cost of building new and affluent homes. Baltimore now has such high homelessness, crime, and poverty because in part  politicians have refused to demand justice for the citizens of Baltimore and Maryland. Almost nothing has been done to mitigate the damages of job loss and personal savings lost from the massive mortgage fraud in Maryland. We will bring the corporate fraud back as we rebuild the public justice system state by state!

Below you see some articles that completely negate the report just given by NPR/Marketplace. There have been no real stress tests....there is no real bank capitalization.....none of the financial reform has been enacted and most has been watered away.....the banks are as leveraged and bigger than before.....AND THEY ARE STILL COMMITTING FRAUD EVERY DAY WITH NO JUSTICE!



Class Dunce Passes Fed’s Stress Test Without a Sweat.

Bank Stress Tests Viewed As Fed Deception By Critics

Posted on March 19, 2012 in Bank Lending, Banking News

Every banker knows that public confidence in the banking industry is essential.

With the banking industry approaching a near meltdown last year, the Federal Reserve decided to conduct a series of “stress tests” on the country’s largest banks in order to restore confidence in the banking system. After reviewing the results of the stress tests, many critics now say that the tests were a deception by the Federal Reserve designed to deceive the public into believing that the banking system is sound when, in fact, it is not.

Gary Shilling, who remains bearish on housing and the economy, argues that the fundamentals for the banking industry remain weak in
Bank Stress Tests Don’t End The Pain.

The business climate for major banks around the world has changed remarkably in just four years. Decades ago, they set off on a huge leveraging spree. Then, starting in 2007, many institutions holding bad private and sovereign assets had to be bailed out by central banks and governments to prevent a collapse of the global financial system.

Even with help from the release of reserves for bad loans, U.S. banks’ return on equity was 6.8 percent in the fourth quarter, compared with 15 percent in the pre-crisis salad days. Return on assets, which skips leverage, is 0.76 percent, down from 1.4 percent.

Banks will also be faced with low returns on their basic business as slow economic growth, falling house prices, small returns on stocks, low interest rates and a flat yield curve persist in the remaining five to seven years of global deleveraging that I foresee. Consumer loans will be repaid on balance, and record nonfinancial corporate liquidity and slow economic growth will continue to curb borrowing and mergers-and- acquisitions activity. Then there are the huge counterparty risks on derivatives and potential large further write downs of troubled assets.


Do current prices reflect the continuing deleveraging of banks, persistent slow loan growth, further write-offs of bad real estate and other assets, compressed interest-rate margins, increased capital requirements and increasingly stringent regulation? I’m not convinced they do.  NO!

Jonathan Weil argues in a Bloomberg article that Fed testing of regulatory capital has no connection to reality when it comes to big banks surviving another financial crisis since banks that failed or needed huge bailouts during the crash of 2008 were classified at the time as “well capitalized” by regulators.  Weil goes on to describe the Fed stress tests as a “joke” when they tested Regions Financial Corp which still hasn’t paid back TARP money and has a negative tangible common equity of $525 million


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1000x Systemic Leverage: $600 Trillion In Gross Derivatives "Backed" By $600 Billion In Collateral

Submitted by Tyler Durden on 12/24/2012 10:07 -0400

There is much debate whether when it comes to the total notional size of outstanding derivatives, it is the gross notional that matters (roughly $600 trillion), or the amount which takes out biletaral netting and other offsetting positions (much lower). We explained previously how gross is irrelevant... until it is, i.e. until there is a breach in the counterparty chain and suddenly all net becomes gross (as in the case of the Lehman bankruptcy), such as during a financial crisis, i.e., the only time when gross derivative exposure becomes material (er, by definition). But a bigger question is what is the actual collateral backing this gargantuan market which is about 10 times greater than the world's combined GDP, because as the "derivative" name implies all this exposure is backed on some dedicated, real assets, somewhere. Luckily, the IMF recently released a discussion note titled "Shadow Banking: Economics and Policy" where quietly hidden in one of the appendices it answers precisely this critical question.
The bottom line: $600 trillion in gross notional derivatives backed by a tiny $600 billion in real assets: a whopping 0.1% margin requirement! Surely nothing can possibly go wrong with this amount of unprecedented 1000x systemic leverage.
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Keep in mind that US bank capital was as high as 70% before the Reagan/Clinton bank deregulation started and most financial experts wanted financial reform to have it restored to around 40%.  Neo-liberals moved it from what was 2% at the time of the 2008 crash to what you see below. I think these numbers are high. Needless to say.....this does nothing for bank health.

Bank capitalization means how much physical assets does a bank have to back loans and credit.  As we saw with the article above on the amount of leverage now....your neo-liberal and Obama found it hard to just raise the requirement to 9-10%.   This is what causes the need to bailout these banks....they  bet $600 trillion with just a few hundred billion of capital.

US Bank Capitalization

                                 2008       09         10         11          12
United States          9.3      10.9       11.1       11.2       11.3


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Giant Banks Now 30% Bigger than When Dodd-Frank Financial “Reform” Law Was Passed
Posted on April 17, 2012 by WashingtonsBlog

Size of Banks Killing Economy … But Giant Banks Have Only Gotten Bigger Since Financial “Reform” Enacted


For years, many high-level economists and financial experts have said that – unless we break up the giant banks – our economy will never recover, real reform will be blocked, and democracy and the rule of law will be corrupted.

So how did the government respond to the financial crisis which started in 2007?

Let the giant banks get even bigger.

As Bloomberg notes, the five banks that held assets equal to 43% of the US economy in 2007 before the financial crisis and the bank bailout now control assets that equal 56% of the US economy:

Two years after President Barack Obama vowed to eliminate the danger of financial institutions becoming “too big to fail,” the nation’s largest banks are bigger than they were before the credit crisis.



Five banks – JPMorgan Chase & Co. (JPM), Bank of America Corp., Citigroup Inc., Wells Fargo & Co., and Goldman Sachs Group Inc. — held $8.5 trillion in assets at the end of 2011, equal to 56 percent of the U.S. economy, according to the Federal Reserve.

Five years earlier, before the financial crisis, the largest banks’ assets amounted to 43 percent of U.S. output. The Big Five today are about twice as large as they were a decade ago relative to the economy, sparking concern that trouble at a major bank would rock the financial system and force the government to step in as it did during the 2008 crunch.

“Market participants believe that nothing has changed, that too-big-to-fail is fully intact,” said Gary Stern, former president of the Federal Reserve Bank of Minneapolis.

That specter is eroding faith in Obama’s pledge that taxpayer-funded bailouts are a thing of the past. It is also exposing him to criticism from Federal Reserve officials, Republicans and Occupy Wall Street supporters, who see the concentration of bank power as a threat to economic stability.

***

The industry’s evolution defies the president’s January 2010 call to “prevent the further consolidation of our financial system.” Embracing new limits on banks’ trading operations, Obama said then that taxpayers wouldn’t be well “served by a financial system that comprises just a few massive firms.”

Simon Johnson, a former chief economist of the International Monetary Fund, blames a “lack of leadership at Treasury and the White House” for the failure to fulfill that promise. “It’d be safer to break them up,” he said.

***

Regulatory burden could promote further industry consolidation, according to Wilbur Ross, chairman of WL Ross & Co., a private-equity firm.

“We think the little tiny banks, the 90-odd percent of banks that are under $1.5 billion in deposits, are pretty much an obsolete phenomenon,” he told Bloomberg Television on March 14. “We think they’ll all have to merge with each other, be acquired by bigger banks or something.”

***

In 2011, funding costs for banks with more than $10 billion in assets were about one-third less than for the smallest banks, according to the FDIC.

Some presidents of regional Federal Reserve banks have lambasted too big to fail. As Bloomberg notes:

In recent weeks, at least four current Fed presidents — Esther George of Kansas City, Charles Plosser of Philadelphia, Jeffrey Lacker of Richmond and Richard Fisher of Dallas — have voiced similar worries about the risk of a renewed crisis.

But the most powerful Fed bank – the New York Fed – and Bernanke’s Federal Open Market Committee, as well as Tim Geithner’s Treasury Department, have done everything possible to ensure that the the giant banks become too bigger to fail.



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As those getting their news other than WYPR/NPR/Marketplace know.....the Fed policy and a bond bill written by Obama and neo-liberals in Congress is blowing up the bond market. THIS IS DELIBERATE....REMEMEBER, THE EUROPEAN DEBT IS SO BAD BECAUSE GOLDMAN SACHS AND DEUTSCHE BANK COLLUDED WITH FINANCIAL MINISTERS TO HIDE SOVEREIGN DEBT SO MORE AND MORE DEBT COULD BE TAKEN ON, JUST AS IS HAPPENING IN THE US TODAY!

Dennis Slothower – the financial analyst responsible for 2011's "Letter of the Year" according to MarketWatch.com - now warns...

Why Stocks Could Collapse...
Beginning as Soon as September 30th!

The Fed has propped up the equity markets for months...
but that could soon come to a disastrous end!

According to Marketwatch.com, Dennis Slothower is the guru behind “The investment letter that evaded the 2008 crash...(and) is now the top performer." -- Marketwatch.com, October 6, 2011

Right now, Dennis is issuing another dire warning.

His technical indicators suggest that the market manipulation we’ve seen over the last several months is about to come to an end.

And with very real threats to this artificially inflated market coming from a potential U.S. debt downgrade...for the possibility of a European collapse...and a sluggish U.S. economy - the bottom could fall out of the U.S. stock market at any time.

This correction could begin as soon as September 30th – so it’s important that you take action now to prepare yourself.

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Whiteout Press Independent News for independent thinkers and independent voters!

November 30, 2011  Special thanks to Bloomberg Marketplace for their detailed reporting.

$700 Billion Bank Bailout was Secretly $7 Trillion November 30, 2011. Washington.

In 2008, President Bush, Secretary Paulson and Chairman Bernanke crafted a bank bailout program they termed TARP or the Toxic Asset Relief Program. It was created in the middle of the night, over a weekend, because if they didn’t act by Monday they said, there wouldn’t be an America anymore. With confusion and fear in his eyes, President Bush handed the reins of power to the former CEO of Goldman Sachs. And instead of limiting himself to the $700 billion Congress grudgingly approved, Hank Paulson printed $7 trillion dollars, funneled it through the Federal Reserve and handed it over to the world’s biggest banks with no strings attached and in total secrecy.

Hank Paulson, former Goldman Sachs CEO and architect of the bank bailouts

While watching Whiteout Press’ favorite morning business show, 'In Business with Margaret Brennan' on Bloomberg TV, the show was interrupted by a startling announcement. Bloomberg investigators had uncovered details that the most powerful men in Washington and New York were desperate to keep secret. In fact, Bloomberg had to sue the Federal government for access to the events of 2009 and 2010 regarding the US bank bailout. The Federal Reserve however, insisted all details of the largest bank bailout in the history of the world had to be kept completely secret from the American people.

The government fought releasing the secret details all the way the US Supreme Court. Earlier this year, Bloomberg won their lawsuit. Treasury and the FED weren’t going to surrender to the American people that easy however. The FED turned over 29,000 documents and details of 21,000 transactions made during the time period covered by TARP and the nation’s bank bailout. Attempting to handcuff Bloomberg investigators with an avalanche of documentation, imagine their surprise when Margaret Brennan’s show was interrupted yesterday with the unbelievable news that the bank bailout American’s were led to believe was only $700 billion, was actually $7.77 trillion. According to the NY Fed, the total amount of US currency in circulation in the entire world at the time was only $829 billion.

While the events are difficult to follow for anyone who’s not familiar with the strange way America’s banking and economic system works, not to mention all the government and Wall Street secrecy, here’s a novice’s view of what happened during the panicked early days of America’s economic collapse. When the $700 billion bank bailout authorized by Congress wasn’t going to be anywhere near enough to save banks like Goldman Sachs, JP Morgan, Citigroup and Bank of America, Ben Bernanke and the FED opened up the nation’s discount borrowing window – to the tune of $7.77 trillion dollars.


Republican Presidential candidate Ron Paul (R-TX) could do a much better job of explaining the almost criminal nature of the FED than this Whiteout Press author ever could. With his pledge to abolish the FED, Rep Paul might explain – imagine you Joe Citizen walk into your city hall and ask for a $10 billion dollar loan at zero percent interest. They give you, and only you, that loan because you’re ‘special’. You then loan that $10 billion out to others at 5, 10 or 20 percent yearly interest for things like homes, which are guaranteed by the taxpayers, so there’s no risk of nonpayment. When that $15 or $20 billion is paid back to you, you pay back the FED the original $10 billion and keep the rest.

Instead of loaning that $7.77 trillion to the American people as the American government intended, banks throughout the world took advantage of the US taxpayer and used that money to secretly cover massive losses the banks were suffering from their stupidly investing in their own worthless financial instruments – instruments the banks knew were worthless and doomed to fail. Like a modern day shell game, trillions of dollars floated from one banking institution to another, appearing to fill all balance sheet holes everywhere. Not all the banks used the money to fill holes however. Some used it to make massive profits.

The Bloomberg reporting revealed banks like Barclays, Banco Santander and BNP Parabas made a fortune on the US taxpayer program. Barclays turned their money into a $26.7 billion profit. Banco Santander profited $29.2 billion and BNP Parabas made $17.1 billion.

They weren’t alone. According to Bloomberg’s data, 97 different financial institutions around the globe turned their ‘discount window’ into profits during the two years of the financial crisis. The most suspicious part – the US government insisted on keeping every single transaction a secret. In one day alone at the end of 2008, the Federal Reserve gave out $1.2 trillion dollars to banks – the most on any day before or since.

For those who remember, Bank of America was accused of using its funds not to bailout underwater homeowners, but instead to purchase a bank in China. Bank of America made a profit of $14.2 billion using their ‘special’ discount borrowing privilege. Bank of America wasn’t the only player in the middle of the US financial collapse that made massive profits off the US taxpayer. Wells Fargo made $12.1 billion. JP Morgan made $13.8 billion, Goldman Sachs made $12.7 billion, American Express made $1.4 billion, Discover made $1.4 billion, US Bancorp profited $7.2 billion, HSBC made $11.6 billion, PNC Financial $1.4 billion, Lloyds made $9.6 billion and the list goes on and on.

Not all the banks that made massive profits off the US taxpayers during the peak of the financial crisis were well-known American brands. Foreign banks also made billions in profits, including the National Australia Bank, Bank of Toronto, Mitsubishi, Skandinavista, Chang Hwa, the Israel Discount Bank and dozens more.



Not all banks used the US taxpayers to make billions in extra profits. Some banks tried, and lost.

Among the banks that lost money on the secret loan program were Citigroup, losing $29.3 billion, Royal Bank of Scotland lost $45.3 billion, Credit Suisse lost $4.1 billion, Deutsche Bank lost $433 million, Fifth Third lost $1 billion, Wachovia lost $31.6 billion, Merrill Lynch lost $35.9 billion, Arab Banking lost $77 million, Allied Irish Banks lost $3.4 billion, Morgan Stanley lost $3 billion, Industrial Bank of Korea lost $559 million and the list goes on and on.

Readers can take their pick regarding which aspect of this story to be most angry about. Some will be outraged that for-profit banks are taking advantage of the US taxpayer and making billions in free money. Others will be angry that based on the above list, it appears the US taxpayer is also guaranteeing the profits of foreign banks all over the world. And some will be outraged by the fact that the entire story was kept secret from not only the American people, but also their representative in Congress and even officials at the FED.

Bloomberg asked one longtime critic of giant banks, Rep. Sherrod Brown (D-OH), to comment. “When you see the dollars the banks got, it’s hard to make the case these were successful institutions,” she says, “This is an issue that can unite the Tea Party and Occupy Wall Street. There are lawmakers in both parties who would change their votes now.”

Bloomberg also quotes other individuals who should have been aware of what was going on, but weren’t. Gary H. Stern, Minneapolis FED Chairman at the time, insists he, “wasn’t aware of the magnitude.” Rep. Brad Miller (D-NC), member of the House Financial Services Committee, says, “TARP at least had some strings attached. With the Fed programs, there was nothing.”

Misleading Shareholders

With hindsight being 20/20, Bloomberg looked at some of the biggest emergency borrowers and compared their financial situation with the outlook and forecasts made by the bank’s CEO’s to their shareholders. One such example is Ken Lewis, CEO of Bank of America. On November 26, 2008 he informed shareholders that BofA was, “one of the strongest and most stable major banks in the world.” We’ll let you the reader decide - Bank of America owed the US government a staggering $86 billion on that day.


Another example is JP Morgan Chase’s CEO Jamie Dimon. On March 26, 2010, he reassured his shareholders that JP Morgan didn’t need a bailout and only participated in the program in the beginning, “at the request of the Federal Reserve to help motivate others to use the system.” In reality, JP Morgan was still taking advantage of the emergency program and owed the US government $48 billion dollars more than a year after the program began.

As far as the American people go, the two Representatives of theirs in Congress that should have been made aware of what was going on, weren’t. Both the Republican and Democratic overseers of the massive bank bailout, Rep. Judd Gregg (R-NH) and Rep. Barney Frank (D-MA), both confirmed to Bloomberg they were kept in the dark.

“We were aware emergency efforts were going on” Frank said, “We didn’t know the specifics.” Congressman Frank announced his retirement earlier this week. Rep. Judd Gregg simply responded, “We didn’t know the specifics.” Former Congressman Judd Gregg is now employed by Goldman Sachs.

What’s Changed

Most Americans couldn’t explain how banks function or how the bank bailout worked if their lives depended on it. But most assume the US taxpayer loaned billions to banks to save the industry and avoid economic collapse, rampant unemployment and a housing crash. But if one were to take a step back and look at the new landscape, a new picture emerges of what the bank bailout was really about. In the five years from before the crisis in 2006 to after the crisis in 2011, the six largest US banks increased their assets, or money and property they own, from $6.8 trillion dollars to $9.5 trillion.

Dallas Federal Reserve President Richard Fisher summed up the thoughts of many when he called that fact, “un-American”.




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July 22nd, 2013

7/22/2013

0 Comments

 
We have heard that the Nobel Prize committee has received a nomination for Nobel Prize for Manning and Snowden.  Meanwhile the US has sited each as an enemy of the country and traitors.  A poll below shows the world see the US on par with China in nations the world's people trust.  Below you see an article that has the US chastising Russia for silencing an accountant that revealed government corruption.

If you live in the US you will have heard little of the views of the world about the US in our media.  In the world's media it is a leading headline. I am listening to NPR's report on the crime and corruption of third world Nigeria and as an American I see no difference as to what is happening in the US.....it is the same.  Yet, not a mention in the press.  This is STATE MEDIA NOT FREE PRESS.  Free press holds power accountable and state media is the power spreading propaganda through media.

In Baltimore, our public radio WYPR will interview longterm neo-liberal Ben Cardin.  This pol voted the Glass Steagall wall down, deregulated banks, and is active in the TPP as he was with the original trade agreements that gave us these global corporations that now lie, cheat, and steal everything in sight. These are the questions I sent to Dan Rodricks who never asks any of these questions:

Cardin:

You stated your commitment to compromise with the republicans over national debt reduction that has raising taxes and cutting spending as the way to pay off the debt.  The debt was caused by massive corporate fraud in the tens of trillions, recovery of which would pay off the national, state, and local government debt.  Yet, you do not mention that.  International journalists using Assange's download of bank records have already found $13 trillion in bank tax fraud from money in offshore accounts and government watchdogs know that tens of trillions of dollars have been lost in bank fraud alone.  Watchdogs have identified trillions in health care fraud that hits Entitlement Trusts the hardest and yet you voted to gut funding for these programs because they represented to much of the budget with all that fraud.  Trillions of dollars in defense industry fraud, for-profit education fraud, insurance industry fraud, and energy industry fraud just to name a few.  NOT ONE MENTION OF CORPORATE FRAUD AND ITS RECOVERY FROM BEN CARDIN!  One mention about Ben Cardin.....he is suspected of Insider Trading to enrich himself and was part of voting to rescind a law that would have made this illegal.....like we have to have a law that makes it illegal.

Cardin:

The TPP seeks to deny the citizens of America the right to legislate by entering treaties abroad that would set law across all public sectors into place with no ability to reverse those laws by national vote.  This essentially ends sovereign rights and voids the US Constitution.  Everyone would call this illegal, traitorous, and a COUP by the President and the Congress if they dare vote on it....which we are sure they will because they have spent these few decades writing it for corporations.  The US has suspended Rule of Law for public justice in white collar crimes, in privacy and civil rights, the judicial and court system has been dismantled to plea deals and arbitration.  You have overseen an attack on the three branches of government that serve as checks and balance on power in the Executive office.....the system that keeps in check authoritarian and autocratic systems.  How do you see yourself different than the two whistleblowers Snowden and Manning who appear to be trying to hold you and Congress responsible for crimes you are doing to the country?

There are philosophical/ethical/moral debates all across the country as to whether politicians who take away health care from the citizens of the US are guilty of manslaughter given that we all know that 1/2 of all spending in Medicare and Medicaid has been stolen over decades and that the payroll taxes paid by citizens since Reagan's Administration has been sent to the Treasury rather than the Trusts where tens of trillions of dollars in corporate fraud spent it.  Yet not a sound from neo-liberals like Cardin.  So, if a politician is aiding and abetting fraud and then legislating the loss of access to health care that causes people to die or die prematurely.....they must be guilty of manslaughter.  It seems pretty clear!  This all seems to make you a very bad person.

The TPP not only opens the US to foreign corporations and their products, it erases all of the twentieth century public protects for labor, the environment, public works, taxation, and social subsidy.  In other words it brings the US down to second and third world values.....even as it is almost there now.  So, you are working to hand US public transportation to French companies and US ports to Chinese companies so US companies can expand into those companies.  We see each time the US workers losing union rights, wages, benefits, OSHA protections, FDA food safety.....all because of your actions.  How proud does that make you or is it strictly how much money is placed in an offshore account in your name?


These two articles are just the tip of the iceberg in how Ben Cardin and his neo-liberals took a first world country with a strong middle-class and economy down to third world status in every measure.  It also shows how the media went with Ben to this third world status as most of these articles are written by journalists out of the mainstream media

Chase, Once Considered "The Good Bank," Is About to Pay Another Massive Settlement


By Matt Taibbi POSTED: July 18, 12:20 PM ET
Rolling Stone




Why Did the Fed Refuse to Heed Warnings About Fraudulent Mortgage Lenders?


Appraisers, prosecutors, and industry tried to tell the Fed about a massive fraud crisis, but no one was listening. Photo Credit: Shutterstock.com

July 15, 2013  |           Real regulators are vital to a nation. They can stop crises in their tracks — or they can let a them explode on an unsuspecting public. The Federal Reserve was warned by many different people, including appraisers, prosecutors, and industry players that the mortgage industry was rife with fraud. Why didn't they listen?

The Appraisers’ Warning of the Lenders’ Fraud Epidemic


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Here we have the US hating that the Russians have violated Rule of Law for an accountant trying to out government misconduct as it adversely affected business interests.  The US is all for enforcement of law protecting corporate interests.

Chairman Menendez Statement of Verdict against Sergei Magnitsky for Tax Evasion Thursday, July 11, 2013

adam_sharon@foreign.senate.gov

WASHINGTON, DC – Chairman Robert Menendez released this statement following a posthumous guilty verdict today in a Moscow court against Sergei Magnitsky for tax evasion.

"Sergei Magnitsky’s death and the circumstances around his imprisonment are shameful,” said Menendez.  “Today's conviction of Sergei Magnitsky – three years after his death – is nothing short of a message to Russia’s activist community of the repercussions of opposing the state. The trend toward authoritarianism in Russia and the accompanying escalation in violations of human and civil rights is reason for grave concern.”

Sergei Magnitsky was a Russian accountant who was arrested while investigating allegations of extensive theft by Russian officials and subsequently died of medical neglect in prison in November 2009.  Since his death, Magnitsky has become a symbol, for many inside and outside Russia, of the corruption of Russian state institutions and the consequences these abuses of power create.  A 2012 law named for Magnitsky enables the U.S. government to place sanctions on Russians guilty of human rights violations.
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We see in the US media as we do here an attempt to make the youth feel that it is the Baby Boomers that are stealing all of the wealth.  The Baby Boomers are indeed made up of the 1% that went rogue in stealing the money, but it is not the New Deal and War on Poverty programs that did that.  Pensions and retirements work and need to be paid for by recovering corporate fraud and not by making the youth pay more in taxation.  We see the same propaganda used on the middle-class against the poor, saying it is the outlandish social safety nets that are taking the middle-class down.  WE ALL KNOW IT IS MASSIVE CORPORATE FRAUD TAKING BOTH THE MIDDLE/LOWER CLASS DOWN!



Europe’s rich 'could face uprising similar to Peasants' Revolt' Europe’s rich Baby Boomers are behaving like the nobility in the Peasants’ Revolt, and could face an uprising by the younger generation if the situation doesn’t change, HSBC’s chief economist has warned.

Stephen King said the Occupy movement was the beginnings of what could develop into more widespread protests by youths, who feel they have been shortchanged Photo: AP By Katherine Rushton, US Business Editor

7:01PM BST 09 Jul 2013  The Telegraph


Stephen King warned that the widening wealth gap and sense of “entitlement” between older generations and cash-strapped youths had echoes of the conditions which led to the 1381 uprising of British peasants against the aristocrats who ruled them.

Then, the country had just been savaged by the plague, which robbed farmers of their workforces as well as their loved ones by killing an estimated 1.5m people. However, the wealthy ruling classes refused to modify their behaviour, leaving the poorer farm workers to bear the brunt of the economic downturn.

“In those days, public spending was about warfare … resources had been severely curtailed as a consequence of the Black Death,” said Mr King. “The nobility wanted to continue as they had done previously. They did not change their ways even though there had been this terrible disease come through … there was an attempt to try and clamp down on tax evasion which led to the Plantagenet equivalent of men with baseball bats coming along to raise funds.

“Those entitlements the Boomer generation are stuck to are imposing a significant cost to the younger generation … which over the long term is very disruptive to the performance of economies.”

He said the Occupy movement and the London riots two years ago were the beginnings of what could develop into more widespread protests by youths, who feel they have been short-changed.

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As people's anger grows at the injustice at all levels and the COUP against the US Constitution, Congress is placing more and more restrictions on domestic liberties as they anticipate a full out revolution against this!

Chris Hedges Responds to NDAA Defeat, Says It’s a ‘Black Day’ for Liberty


Posted on Jul 17, 2013 AP/

Jacquelyn Martin Holding a single flower each, two protesters wearing black hoods and orange jumpsuits take part in a demonstration in front of the White House.

The U.S. Court of Appeals for the 2nd Circuit has dealt a terrible blow to Chris Hedges, Daniel Ellsberg, Noam Chomsky and the other activists and journalists suing to prevent the indefinite military detention of American citizens.

The plaintiffs have had successes and setbacks in court.

Here is what Hedges wrote after Wednesday’s decision:

This is quite distressing. It means there is no recourse now either within the Executive, Legislative or Judicial branches of government to halt the steady assault on our civil liberties and most basic Constitutional rights. It means that the state can use the military, overturning over two centuries of domestic law, to use troops on the streets to seize U.S. citizens, strip them of due process and hold them indefinitely in military detention centers. States that accrue to themselves this kind of power, history has shown, will use it. We will appeal, but the Supreme Court is not required to hear our appeal. It is a black day for those who care about liberty.

You can read the court’s decision here.






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The stats below don't add up but it is clear that the US is not that far ahead of China.....63% to 50%.  The US has adopted almost all of China's political and social structure.

I would suggest that the US has a higher ranking because it is a first world coming down to third world while China is third world coming up to second world.

America’s Global Image Remains More Positive than China’s

But Many See China Becoming World’s Leading Power Overview Publics around the world believe the global balance of power is shifting. China’s economic power is on the rise, and many think it will eventually supplant the United States as the world’s dominant superpower.

However, China’s increasing power has not led to more positive ratings for the People’s Republic. Overall, the U.S. enjoys a stronger global image than China. Across the nations surveyed, a median of 63% express a favorable opinion of the U.S., compared with 50% for China.



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Meanwhile, a US citizen who whistleblows on violations of International Law and human rights violations by the US government is now a traitor.

Bradley Manning Nobel Peace Prize Nomination


2013 By Global Research News Global Research, March 04, 2013

Birgitta Jónsdóttir official blog and news-beacon-ireland.info Theme: Law and Justice  7532  4729  217    20.8K by Birgitta Jónsdóttir

February 1st 2013 the entire parliamentary group of The Movement in the Icelandic Parliament, the Pirates of the EU; representatives from the Swedish Pirate Party, the former Secretary of State in Tunisia for Sport & Youth nominated Private Bradley Manning for the Nobel Peace Prize.

Following is the reasoning we sent to the committee explaining why we felt compelled to nominate Private Bradley Manning for this important recognition of an individual effort to have an impact for peace in our world. The lengthy personal statement to the pre-trial hearing February 28th by Bradley Manning in his own words validate that his motives were for the greater good of humankind.

Read his full statement 

Our letter to the Nobel Peace Prize Committee Reykjavík, Iceland 1st of February 2013

Dear Norwegian Nobel Committee,

We have the great honour of nominating Private First Class Bradley Manning for the 2013 Nobel Peace Prize.

Manning is a soldier in the United States army who stands accused of releasing hundreds of thousands of documents to the whistleblower website WikiLeaks. The leaked documents pointed to a long history of corruption, war crimes, and a lack of respect for the sovereignty of other democratic nations by the United States government in international dealings.

These revelations have fueled democratic uprisings around the world, including a democratic revolution in Tunisia. According to journalists, his alleged actions helped motivate the democratic Arab Spring movements, shed light on secret corporate influence on the foreign and domestic policies of European nations, and most recently contributed to the Obama Administration agreeing to withdraw all U.S.troops from the occupation in Iraq.

 Bradley Manning has been incarcerated for more then 1000 days by the U.S. Government. He spent over ten months of that time period in solitary confinement, conditions which expert worldwide have criticized as torturous. Juan Mendez, the United Nations’ Special Rapporteur on Torture and Cruel, Inhuman and Degrading Treatment or Punishment, has repeatedly requested and been denied a private meeting with Manning to assess his conditions.

The documents made public by WikiLeaks should never have been kept from public scrutiny. The revelations – including video documentation of an incident in which American soldiers gunned down Reuters journalists in Iraq – have helped to fuel a worldwide discussion about the overseas engagements of the United States, civilian casualties of war and rules of engagement. Citizens worldwide owe a great debt to the WikiLeaks whistleblower for shedding light on these issues, and so we urge the Committee to award this prestigious prize to accused whistleblower Bradley Manning.

We can already be reasonably certain that Bradley Manning will not have a fair trial as the head of State, the USA President Mr. Barack Obama, stated over a year ago on record that Manning is guilty.

Sincerely,

Birgitta Jónsdóttir, Member of Parliament for the Movement, Iceland

Christian Engström, Member of the European Parliament for the Pirate Party, Sweden

Amelia Andersdottir, Member of the European Parliament for the Pirate Party, Sweden

Margrét Tryggvadóttir, Member of Parliament for the Movement, Iceland

Þór Saari, Member of Parliament for the Movement, Iceland

Slim Amamou, former Secretary of State for Sport & Youth (2011), Tunisia

Birgitta Jónsdóttir is a member of the Icelandic parliament for The Movement. She can be contacted  via her blogsite


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The entire world sees Manning and Snowden as heroes and whistleblowers and we fully expect Nobel Peace Prizes given for their actions.  International journalism has this story as center headline from Africa to Asia, to Europe to Latin America.  US is now tied with China in international trust.


Bradley Manning Nobel Peace Prize Petition Gains 65,000 Signatures

(VIDEO) The Huffington Post  |  By Ryan Buxton Posted: 06/08/2013 12:39 pm EDT  |  Updated: 06/08/2013 12:39 pm EDT

 The soldier facing trial for giving classified material to WikiLeaks deserves the Nobel Peace Prize, writer Norman Solomon argued during a HuffPost Live interview Friday.

Solomon, author of the book War Made Easy is among the nearly 65,000 people who support a petition to award Bradley Manning the Nobel Prize for the way the information he passed to WikiLeaks contributed to withdrawing troops from Iraq, he told host Mike Sacks.

The information Manning leaked -- and the "cavalier and callous atrocities" included in it -- led the Iraqi government to seek the authority to prosecute American soliders, Solomon said, which the United States didn't want to allow.

"Washington officials maintained their position that we can't tolerate the Iraqi government prosecuting our boys and girls in Iraq, and so that hastened the withdrawal of all U.S. troops," Solomon said. "On that basis alone, Bradley Manning is certainly entitled to and should get the Nobel Peace Prize."

Watch the video above to hear Solomon's argument for why Manning deserves recognition, and how a book by journalist Bob Woodward contained more sensitive government information than what Manning leaked.


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Swedish professor nominates Edward Snowden for the Nobel Peace Prize

  • Stefan Svallfors, sociology professor at Umeå University, nominated Edward Snowden for the Nobel Peace Prize
  • Snowden will not be eligible for this year's prize, which will be awarded in December 2013 - but could be considered for 2014
  • The NSA whistleblower would have a hard time accepting the award, as he has already unsuccessfully applied for asylum in Norway
By Ashley Collman

PUBLISHED: 13:06 EST, 14 July 2013 | UPDATED: 13:17 EST, 14 July 2013


A sociology professor in Sweden has recommended NSA whistleblower Edward Snowden for the Nobel Peace Prize.


In a letter addressed to the Norwegian Nobel Committee and published in Swedish newspaper Västerbottens-Kuriren, Professor Stefan Svallfors nominated Snowden for his 'heroic effort at great personal cost' shedding light on the expansive cyber-spying conducted by the U.S. National Security Agency.


Because of his bravery, Snowden 'helped to make the world a little bit better and safer,' Svallfors wrote.


Scroll down for full letter

Swedish supporter: Stefan Svallfors, professor of sociology at  Umea University, sent a letter to the Norwegian Nobel Committee nominating Edward Snowden for the Nobel Peace Prize

A nomination for Snowden would be symbolic because it shows 'that individuals can stand up for fundamental rights and freedoms.'


History: The Nobel Peace Prize has been awarded to 124 times since 1901

Svallfors compares Snowden's act to the rulings in the Nuremberg trials of 1945 because 'I was just following orders' was not held as a viable excuse for the Nazis who carried out human rights atrocities.


Svallfors also believes this will help the Peace Prize regain some of respect it lost after prematurely awarding Barack Obama the award in 2009. 

'It would show its willingness to stand up in defense of civil liberties and human rights, even when such a defense [could] be viewed with disfavor by the world's dominant military power.'


But it may be too late for Snowden to receive the award this year.


Nominations for laureates must be postmarked no later than February 1 for consideration in the following December's prizes.  


Between the months of March and August the advisers review the short list of candidates.


However, Svallfors' nomination should be taken seriously by the committee for next year's prize.
As a sociology professor at Umeå University, he counts as one of the 'qualified' people who can send their nominations to the committee.



These qualified people include: members of national assemblies and governments of states; members of international courts; university rectors; professors of social sciences, history, philosophy, law and theology; directors of peace research institutes and foreign policy institutes; recipients of the prize; board members of organizations that have been awarded the prize; active members of the Norwegian Nobel Committee; former advisers of the Norwegian Nobel Committee.


The Nobel Peace Prize was started in 1901 and has been awarded to 100 individuals and 24 organizations.


Qualified: As a professor of sociology at Umeå University in Sweden, Svallfors is one of the few that are allowed to make recommendations to the committee

The process: Candidates are nominated before February 1 and then go through a nearly year-long review up until the December award ceremony

Too soon: Many criticized the premature awarding of the peace prize to President Barack Obama in 2009


It was the last prize described in Alfred Nobel's will, which left most of his fortune to the creation of the prizes. Other Nobel Prizes are awarded in the areas of physics, chemistry, medicine and literature.


The peace prize is awarded each year to 'the person who shall have done the most or the best work for fraternity between nations, for the abolition or reduction of standing armies and for the holding and promotion of peace congresses.'

Though Snowden is eligible for nomination for the December 2014 prize, it's unlikely he'd be able to travel to Oslo for the award ceremony.


Snowden applied for asylum in Norway on July 2, but the country then planned to reject it according to their national law.

'According to Norwegian law, one can't seek asylum abroad and the normal procedures stipulate that the asylum application from Edward Snowden will be rejected,' Paal Loenseth, Northwegian state secretary told news agency NTB.


If Snowden is awarded the prize in 2014, he would be the youngest Nobel Peace Laureate in the history of the prize. 

PROFESSOR SVALLFORS' MESSAGE TO THE NOBEL PEACE PRIZE COMMITTEE
Best committee members!

I suggest that the 2013 Peace Prize awarded to the American citizen Edward Snowden.

Edward Snowden has - in a heroic effort at great personal cost - revealed the existence and extent of the surveillance, the U.S. government devotes electronic communications worldwide. By putting light on this monitoring program - conducted in contravention of national laws and international agreements - Edward Snowden has helped to make the world a little bit better and safer.

Through his personal efforts, he has also shown that individuals can stand up for fundamental rights and freedoms. This example is important because since the Nuremberg trials in 1945 has been clear that the slogan "I was just following orders" is never claimed as an excuse for acts contrary to human rights and freedoms. Despite this, it is very rare that individual citizens having the insight of their personal responsibility and courage Edward Snowden shown in his revelation of the American surveillance program. For this reason, he is a highly affordable candidate.

The decision to award the 2013 prize to Edward Snowden would - in addition to being well justified in itself - also help to save the Nobel Peace Prize from the disrepute that incurred by the hasty and ill-conceived decision to award U.S. President Barack Obama 2009 award. It would show its willingness to stand up in defense of civil liberties and human rights, even when such a defense be viewed with disfavour by the world's dominant military power.

Sincerely,

Stefan Svallfors
Professor of Sociology at Umeå University





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Post Title.

4/22/2012

0 Comments

 
Derivatives are one leg of the three legged stool Obama outlined as critical in his financial reform bill...this was a driver to the collapse and oversight is a must.  We saw Obama and Geithner cris-crossing Europe last summer fighting against oversight of foreign derivatives by Europe (American) and now we see the US oversight coming out of rules committee completely gutted.  Did you hear your politician shouting against the gutting of financial reform?    THIRD WAY BUILT THESE WALL STREET BANKS AND THEY AREN'T GOING TO SLOW THEM DOWN...THEY ARE WORKING TO MAKE THEM BIGGER...THAT IS WHY THE PEOPLE CAN'T GET JUSTICE!

If anyone watched an interview with 60 Minutes/CBS news anchor Pelley and IMF head Christine Lagarde last week you will see a very chilling example of the complete silencing of the mainstream media regarding the cause of the financial crisis and the massive fraud and failure to prosecute.  In this soft-ball interview, Pelley stands quietly as Lagarde assigns the new 'spin' on the crisis------she says ' this is a credit crisis'.  this insinuates that it is irresponsible debtors not the crash and burn of the economy by financial institutions.  Now, all mainstream journalism uses those same terms.  Now, because the governements and Justice Departments didn't bring back trillions in fraudulent profits that have left the 1% obscenely rich, the taxpayer's money will be used for the short-term for every financial consequence of this fraud crisis.  We know that this scheme was developed not only to move money to the top, but to break all social elements of democracy through these government starvation tactics.  THESE POLITICIANS ARE WORKING HARD TO BREAK DOWN OUR PUBLIC INSTITUTIONS.......EUROPE ESPECIALLY AS A SOCIAL DEMOCRACY.  The good news is that citizens of Europe are fighting back.  France is looking to elect a Socialists...Greece jooks to be turning its current politicians out, and Spain is seeing grea social turmoil.  All these political parties have been infiltrated by corporate candidates so we can only shout loudly and strongly and throw them out when they don't work for people over profits!

This constant effort to portray Warren Buffet as the 'good' billionaire is an old school social psychology ploy meant to ease people into the idea of a patronage society rather than a democracy with all citizens held to the same standards.  We have him fighting to keep the rich safe from progressive taxation with the "Buffett Rule'; we have him  fighting for fairness as he uses his wealth to buoy all the failing, corrupt banks after the collapse.  Calling for banks to accept financial reform while hitting regulators hard on rules written that will do just that.  THIS IS A DELIBERATE ATTEMPT TO GIVE THE IMPRESSION OF PATRONAGE IS 'OK'.  WE SAY, 'PAY A PROGRESSIVE TAX RATE AND FIGHT FOR CORPORATIONS TO DO THE SAME' SO GOVERNMENT CAN DO ITS OWN JOB.  WE SAY,' WORK FOR STRONG LABOR LAWS AND WAGES'  
SO PEOPLE CAN FINANCE THEIR OWN COMMUNITY WELL-BEING. 

We do not want patronage - we want corporate civic responsibility and a strong middle-class!

April 19, 2012 7:02 PM Warren Buffett's son tackles hunger in rural America
 By Seth Doane
Play CBS News Video (CBS News) DECATUR, Ill. - Billionaire Warren Buffett is well known for his charity work and so is his son Howard. On Thursday, Howard Buffett announced a new partnership to feed the needy with the food processing giant Archer Daniels Midland and Feeding America, a national hunger charity.
Howard Buffett owns a 3,000-acre farm in Decatur, Illinois. Atop his tractor, he can see America's "bounty." But not far from here, he sees folks with almost nothing.
"You're from one of the wealthiest families in America," Doane said to Buffett. "Do you really see [and] understand hunger?"
"No. I wouldn't understand hunger," responded Buffett, "because my kids have never been hungry. I've never put them to bed hungry. I've never been hungry. What I can understand is the humiliation, the frustration, even the embarrassment of some people who have to walk into a food bank for the first time and ask for help."
Buffett is well known for his anti-hunger efforts overseas. We met him this winter in Africa.
Now he thinks he and his fellow farmers should pay attention to the need here at home.
"I went and visited food banks," he said. "I started to see a picture that I don't think a lot of Americans see: Millions of our neighbors that don't have enough food to eat on a regular basis.
The "Invest an Acre" program that Buffett announced Thursday will allow the 80,000 farmers who use processing plants run by Archer Daniels Midland to donate the profits from at least an acre of their land.
The profits from this acre of corn might be only around $100 or $200, but $100 is enough to help provide 800 food bank meals. So multiply that acre after acre after acre -- and that could make a real difference in these communities.
The money will go to thousands of Feeding America food pantries primarily in the Midwest. Buffett's foundation will cover up to $3 million in administrative costs.
The goal is to help people including Richard Roof, an out-of-work plumber. He picked up a box from a Decatur pantry. It's one day he doesn't have to ask his grown kids for food.
"What would you do without a program like this here?" Doane asked Roof.
"Starve."
"It's that simple?"
"Plain and simple."
Howard Buffet said: "I don't think the level of hunger in this country is acceptable. Not for the kind of society that we are. It is absolutely not acceptable."
What is acceptable, said Buffett, is planting seeds for a solution -- one acre at a time
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Amid Europe's Debt Crisis, A Sharp Rise In Suicides
 by Sylvia Poggioli April 21, 2012  National Public Radio   Mourners gather at the spot in front of the Greek parliament in Athens where 77-year-old retired pharmacist Dimitris Christoulas shot and killed himself on April 4. Christoulas left a note saying he did not want to end up scrounging for food in garbage bins.   Mourners gather at the spot in front of the Greek parliament in Athens where 77-year-old retired pharmacist Dimitris Christoulas shot and killed himself on April 4. Christoulas left a note saying he did not want to end up scrounging for food in garbage bins. text size A A A April 21, 2012 The eurozone crisis has been under way for three years and has led to sharp welfare cutbacks and a credit crunch throughout the continent. But one of the most serious effects of the financial crisis has been an alarming spike in suicides in debt-burdened Greece, Ireland and Italy. Last Wednesday, about a 1,000 people gathered in central Rome for a candle-lit vigil to honor Italy's economic victims. Statics show that from 2009 and 2010, some 400 small-business owners took their lives. There have already been 23 crisis-related suicides since January. Many victims left notes saying they could no longer cope with frozen bank loans, late client payments and soaring taxes. The Italian state alone owes more than $90 billion to entrepreneurs. Some have been waiting to be paid for up to two years. The head of an Italian small-business association, Giuseppe Bortolussi, says the tight austerity measures imposed by the European Union have created a hostile climate for entrepreneurs. Many see suicide as an act of rebellion against a deaf and insensitive system that fails to grasp the seriousness of the situation. - Giuseppe Bortolussi, head of a small-business association in Italy "Many see suicide as an act of rebellion," he says, "against a deaf and insensitive system that fails to grasp the seriousness of the situation." For example, Francesco Todesco, 26, locked himself in his car and died from exhaust fumes. He had been forced to close his business as a shop-window designer for Harrods and Gucci, and took up tree-cutting in his native Tuscan town. But he was undone by the credit crunch. Small Businesses Collapse In 2011, an average of 31 companies shut down each day. Most of them were small and medium-sized companies that represent 95 percent of the Italian economy. Regional business associations report the trend is growing rapidly. Two young women whose fathers took their lives last fall have set up a counseling hotline to help desperate entrepreneurs and assure them they are not alone. In Ireland, which is still reeling from its real-estate market bust, the suicide rate has also risen with the crisis. Government statistics show that the majority of victims were men, average age 36. Nearly half were unemployed and suffering from financial hardships and loneliness. Greece once had one of Europe's lowest suicide rates. But as it enters its third year of recession and stringent austerity, 30 percent of the population lives under the poverty line and its suicide rate has soared. The most dramatic case was that of 77-year-old retired pharmacist Dimitris Christoulas, who earlier this month shot himself in front of parliament in Athens. He left a note saying he did not want to end up scrounging for food in garbage bins. His suicide unleashed days of street protests as Greek public opinion identified with this family man who had always lived by the book. Christoulas' powerful gesture soon made him a symbol of a hard-working and rule-abiding middle class that is being made to pay the highest price of the eurozone crisis
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Regulators to Ease a Rule on Derivatives Dealers
Published: Wednesday, 18 Apr 2012 | 9:35 AM ET Text Size By: Ben Protess
The New York Times
 
As federal regulators put the finishing touches on an overhaul of the $700 trillion derivatives market, a major provision has been tempered in the face of industry pressure.

Source: Wikipedia On Wednesday, the Securities and Exchange Commission and the Commodity Futures Trading Commission are expected to approve a rule that would exempt broad swaths of energy companies, hedge funds
and banks from oversight. Firms would not face scrutiny if they annually arrange less than $8 billion worth of swaps, the derivative contracts tied to interest rates and commodities like oil and gas.

The threshold is a not-insignificant sum. By one limited set of regulatory data, 85 percent of companies would not be subject to oversight. After five years, the threshold would reset to $3 billion; it is the same amount suggested by a group of energy companies in a February 2011 letter, according to regulatory records.

When regulators first proposed the rules in late 2010, they set the exemption at $100 million. At that level, only 30 percent of the players would have been excused from the oversight, which was mandated by the Dodd-Frank financial overhaul law.

It is unclear whether that data tells the full story. Other numbers produced by the
S.E.C. suggest that the initial $100 million plan would have ensnared some companies that the law did not intend to affect.

The agencies that wrote the rule covering so-called swap dealers note that their policy would oversee the largest derivatives players that pose a systemic risk to the broader economy. And despite exempting many companies from oversight, the rule still would capture the vast majority of swaps contracts because it applies to several big banks like Goldman Sachs [GS  112.44    -1.16  (-1.02%)   ] that arrange most of the deals. Under the rule, the agencies also must study whether the $8 billion figure is appropriate. The agencies could change the figure if it proved too high or low.

Some watchdog groups, however, fear that regulators are carving out a significant loophole that will open the door to problems. The exemption, the culmination of wrangling among the regulators and a yearlong lobbying blitz, would excuse firms from having to post additional capital and file reports.



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“That’s bad for the markets, customers and the system as a whole,” said Dennis Kelleher, president and chief executive of Better Markets, a nonprofit advocacy group.

The new rule comes as financial regulation takes center stage in Washington. President Obama called on Tuesday for more “cops on the beat” to monitor speculative commodities trading, which some experts blame for rising gas prices. In a speech in the White House Rose Garden, Mr. Obama invoked the Enron scandal, in which the energy firm amassed a major derivatives trading operation and skirted the law amid lax rules.

In the new rule set to be completed on Wednesday, the controversy lies in the so-called de minimis exemption, a sort of regulatory hall pass for firms that have insignificant derivatives holdings. At $8 billion, Mr. Kelleher said it amounts to a de maximum exemption.

The initial $100 million limit met harsh criticism from most derivatives players, who argued that a single swaps trade can carry a notional value of billions of dollars. The notional amount reflects the value of the underlying assets rather than the amount of money that changes hands. So, on the face of it, even the $8 billion level would be a blip for a market that is valued at $700 trillion.

But the regulatory fine print could allow many firms to whittle down the size of their activity to under $8 billion.  

Under the rule, companies can exclude the swaps they use to hedge their business against risk like, say, interest rate fluctuations. And the rule would apply only to a company’s swaps transactions, so firms would not need to count their other varieties of derivatives, like forwards and options. The Commodity Futures Trading Commission also scrapped a strict provision that would have prevented companies that are exempt from the rules from arranging more than 20 swap contracts in one year, regardless of the dollar amount.

As a result, some large banks and other players are expected to avoid regulatory scrutiny in swaps, based on data from the Office of the Comptroller of the Currency. Both Northern Trust and BOK Financial, the parent company of Bank of Oklahoma, which are listed among the top 25 banks in the derivatives business, could be exempt. Major energy firms like Constellation Energy are also expected to get a pass.

Such companies pushed regulators to relax the rules. A coalition of energy firms, including BP, Constellation Energy [BGLEH  98.7075  ---  UNCH  (0)   ] and Shell, sent regulators a letter that pitched a $3.5 billion threshold and even suggested specific wording changes to the rule. Another group, known as the Coalition of Physical Energy Companies, proposed a $3 billion figure, the threshold that regulators are set to adopt after five years.

The energy groups dominated the frenetic lobbying effort surrounding the rule and its exemption. Firms dispatched executives to testify before Congress, hired an army of lobbyists and lawyers to draft comment letters and held more than 100 meetings with regulators to discuss the rule, records show. The Coalition of Physical Energy Companies hired the law firm of the former New York City mayor, Rudolph W. Giuliani, to plead its case in Washington. The other group that included Shell and BP [BP  41.99    -0.51  (-1.2%)   ] had more than 10 meetings with regulators.

That coalition, led by law firm Hunton & Williams, also hired a consulting firm and a former prominent regulator, Sharon Brown-Hruska, to study the rule. Ms. Brown-Hruska, who was acting chairwoman of the C.F.T.C. under President George W. Bush, concluded that “the proposed expansive definition of ‘swap dealer’ is contrary to the public interest.” The study said the rule would reduce liquidity in markets and cause energy companies to cede their business to riskier too-big-to-fail banks.

That concern was echoed by a trade group representing midsize banks, which urged regulators in a letter “to closely examine and understand the low-risk nature of small dealers’ businesses in connection with establishing the criteria for the de minimis exemption.”

Inundated with pressure and complaints from industry groups, regulators debated the proper size of the exemption for months. The trading commission scheduled several meetings to vote on the rule, only to delay the vote each time as both agencies reviewed the final draft.

Ultimately, regulators found only imperfect numbers to support their oversight effort surrounding swaps. The data, which showed that an $8 billion figure would exclude about 85 percent of the companies, is limited to one type of derivatives contract known as a credit-default swap . But the data also encompassed a broader group than necessary, most likely including pension funds and municipalities that are not subject to the federal regulatory crackdown. The S.E.C. relied on separate information that showed the exemption would affect a significantly smaller percentage of companies.

Regulators said they tried to strike a balance using the limited data as a guide. At the least, they argued, the new rules add transparency to a market that went unpoliced during the financial crisis.

This story originally appeared in The New York Times
~
 
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