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Where the TAXI makes a stop, to ponder upon which road mayhap be true

Tag: financial breakdown

Goldman Sachs’ Global Coup D’etat

“Goldman made similar deals here in the United States, masking the true value of investments, then selling those worthless investments to customers while placing bets that those same investments would eventually fail.”

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Tuesday, 27 November 2012 16:07
By Thom Hartmann and Sam Sacks

When the people of Greece saw their democratically elected Prime Minister George Papandreou forced out of office in November of 2011 and replaced by an unelected Conservative technocrat, Lucas Papademos, most were unaware of the bigger picture of what was happening all around them.

Similarly, most of us in the United States were equally as ignorant when, in 2008, despite the switchboards at the US Capitol collapsing under the volume of phone calls from constituents urging a “no” vote, our elected representatives voted “yes” at the behest of Bush’s Treasury Secretary Henry Paulsen and jammed through the biggest bailout of Wall Street in our nation’s history.

But now, as the Bank of England, a key player in the ongoing Eurozone crisis, announces that former investment banker Mark Carney will be its new chief, we can’t afford to ignore what’s happening around the world.

Steadily – and stealthily – Goldman Sachs is carrying out a global coup d’etat.

Greek Prime Minister Lucas Papademos in his office at the Presidential Palace in Athens, Greece, January 16, 2012. (Photo: Eirini Vourloumis / The New York Times)

There’s one tie that binds Lucas Papademos in Greece, Henry Paulsen in the United States, and Mark Carney in the U.K., and that’s Goldman Sachs. All were former bankers and executives at the Wall Street giant, all assumed prominent positions of power, and all played a hand after the global financial meltdown of 2007-08, thus making sure Goldman Sachs weathered the storm and made significant profits in the process.

But that’s just scratching the surface.

As Europe descends into an austerity-induced economic crisis, Goldman Sachs’s people are managing the demise of the continent. As the British newspaper The Independent reported earlier this year, the Conservative technocrats currently steering or who have steered post-crash fiscal policy in Greece, Germany, Italy, Belgium, France, and now the UK, all hail from Goldman Sachs. In fact, the head of the European Central Bank itself, Mario Draghi, was the former managing director of Goldman Sachs International.

And here in the United States, after Treasury Secretary and former Goldman CEO Henry Paulsen did his job in 2008 securing Goldman’s multi-billion dollar bailout, he was replaced in the new Obama administration with Tim Geithner who worked very closely with Goldman Sachs as head of the New York Fed and made sure Goldman received more than $14 billion from the bailout of failed insurance giant AIG.

What’s happening here goes back more than a decade.

In 2001, Goldman Sachs secretly helped Greece hide billions of dollars through the use of complex financial instruments like credit default swaps. This allowed Greece to meet the baseline requirements to enter the Eurozone in the first place. But it also created a debt bubble that would later explode and bring about the current economic crisis that’s drowning the entire continent. But, always looking ahead, Goldman protected itself from this debt bubble by betting against Greek bonds, expecting that they would eventually fail.

Ironically, the man who headed up the Central Bank of Greece while this deal was being arranged with Goldman was – drumroll please – Lucas Papademos.

Goldman made similar deals here in the United States, masking the true value of investments, then selling those worthless investments to customers while placing bets that those same investments would eventually fail. The most notorious example was the “Timberwolf” deal, which brought down an Australian hedge fund, and which Goldman Sachs banksters emailed each other about, bragging, “Boy, that Timberwolf was one shitty deal.”

This sort of behavior by Goldman helped inflate, and then eventually pop, the housing bubble in the United States. The shockwave then ran across the Atlantic, hitting Europe and turning Goldman’s debt-masking deal with Greece years earlier sour, thus deepening the crisis.

All of these antics should have brought about the demise of Goldman as well, but with their alumni in key policy positions on both sides of the Atlantic, Goldman not only survived, it flourished.

As the DailyKos sums up, “The normal scenario usually involves helping a nation hide a problem and sell its debt until the problem blows up into a bubble that bursts in a spectacular way…Goldman Sachs then puts their ‘man’ into a position of power to direct the bailouts so that Goldman gets all its money back and more, while the nation’s economy gets gutted.”

For years, tinfoil hat crazies who’ve bookmarked Glenn Beck’s websites and often appear as “experts” on Fox so-called News have warned us about a one-world government (here, here, and here). The latest threat, according to them, is Agenda 21 and the creation of a Soviet-style world authority that will confiscate private party everywhere, redistribute wealth to developing nations, and force us all to live by new global laws that sacrifice our national sovereignty. It’s totalitarian governments and not transnational corporations that we should be afraid of, they warn.

But when the tinfoil hat is removed, you can see that a sort of one-world government has already been established in a far more subtle form, through the rise of Goldman Sachs and their colleagues in the Wall Street elite.

A million questions arise when looking at what’s happening around the world. But many of these questions can be answered, once it’s acknowledged that Goldman Sachs alumni have executed a global coup d’etat.

Why are the working people of Greece, Portugal, Spain, and Italy suffering under austerity and being asked to sacrifice their pensions, their wages, and their jobs when, after five years, it’s clear these policies are only making these nations’ debts even harder to pay off?

It’s because Goldman Sachs is sucking the last remaining wealth out of those nations to recoup whatever failed investments they made before the Crash.

Why have thousands of homeowners in the United States turned to suicide, domestic violence, and even mass murder when faced with home foreclosure, when a simple solution like re-writing mortgages, which FDR did successfully during the Great Depression, could put an end to the bloodshed and misery?

It’s because re-writing mortgages would force banks like Goldman Sachs to take a hit. And thanks to the game they’ve created, they actually make more money when a home they own is foreclosed on.

Why, despite mountains of evidence, have banksters at Goldman Sachs and other Wall Street institutions not been thrown in jail for defrauding customers, manipulating LIBOR interest rates, and throwing thousands of Americans out of their homes illegally in a massive robo-signing scandal?

It’s because we have a two-tiered justice system in which those in power, like Goldman Sachs executives, get a slap on the wrist when they steal $50 billion, but people like you and me go to jail for stealing a 7-11 Slurpee.

Now does it make sense why Wall Street was bailed out and Main Street was sold out?

In this post-crash world, where agents of Goldman Sachs have infiltrated key positions of power all around the world, we must all fundamentally re-understand how we view the global economy and just how much effect our democratic institutions have on this economy.

We no longer have an economy geared to benefit working people around the world; we have an economy that’s geared to exploit working people for Goldman Sachs’ profits. Trader Alessio Rastani told the BBC in September before Goldman’s Lucas Papademos was installed as Greece’s Prime Minister, “We don’t really care about having a fixed economy, having a fixed situation, our job is to make money from it…Personally, I’ve been dreaming of this moment for three years. I go to bed every night and I dream of another recession.” Rastani continued, “When the market crashes… if you know what to do, if you have the right plan set up, you can make a lot of money from this.”

And as we’ve seen over the last decade, Goldman Sachs knows exactly what to do. They’ve had the right plan set-up, and it’s nothing short of a global coup d’etat.

As Rastani bluntly told the BBC, “This is not a time right now for wishful thinking that governments are going to sort things out. The governments don’t rule the world, Goldman Sachs rules the world.”

 

SOURCE:
http://truth-out.org/opinion/item/12996-goldman-sachs-global-coup-de-tat.html#13547977288201&action=collapse_widget&id=3478441

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Doug Casey: The US Is Now the United (Police) State of America Doug Casey, Chairman

“”National security” essentially amounts to nothing more than government security, which amounts to cover for the individuals in the government. Nazi Germany and the USSR were national-security states. As I’ve tried to explain in the past, once a critical mass is reached, it’s impossible to reform a government. I believe we’ve reached that state in the US.”

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November 29, 2012 8:35pm GMT

Louis: Doug, after conversations like the one we had last week, we often get letters from angry readers who accuse you of hating America, disloyalty, and perhaps even treason. These people don’t know or understand what I do about you – that you love the idea that was America. It’s the United State it has become for which you have nothing but contempt. Perhaps we should try to explain this to them?

Doug: I doubt it would work; it’s a tough row to hoe, trying to explain things to people who are so set in their thinking that they truly and literally don’t want to hear anything that might threaten their notions. A person who feels threatened by ideas and who responds with emotion is acting irrationally. How can we have a discussion with someone whose emotion trumps their reason? How do we even begin to untangle the thinking of people who will gather this week to give thanks for the bounty produced by freedom and hard work – the famous puritan work ethic – by eating a turkey bought with food stamps?

But we can outline the ideas, for the record.

Louis: I’ll bring a copy if they ever do put you on trial for thoughtcrime – which is frighteningly close to being real these days and called treason to boot.

Doug: It’s not just close; it’s here. Just try telling an unapproved joke in a security line in an airport these days.

Louis: True enough. Where to begin?

Doug: At the beginning. America was founded as a confederation of independent countries – that’s what a state is. Or was, in our language. The original United States of America was a confederation of countries that banded together for protection against larger and more powerful countries they feared might be hostile. This is not a disputed interpretation of history, but as solid a fact as the study of history produces – and yet a largely neglected one.

Louis: We did cover this ground briefly in our conversations on the Civil War and the Constitution.

Doug: So we did… the short version being that the US Constitution was essentially a coup; the delegates to what we now call the Constitutional Convention were not empowered to replace the existing government – only to improve upon the Articles of Confederation between the then-independent states. The framers of the Constitution drafted it with the notion of a national government already in place, but calmed fears of loss of state sovereignty by calling the new government the “United States of America” – a verbal sleight of hand that worked for over half a century. Then the southern states decided to exercise what these words imply, their right to leave the union. While slavery was and is a wholesale criminal activity I object to in every way possible, the southern states did have the right to secede, both legally and ethically. But the question was settled by force, not reason, and the wrong side won.

Louis: Another coup?

Doug: More like an exposure of the first one for the whole world to see. But by then it was way too late. Despite this, the relative freedom of the US – because it was for many years far freer than other countries – made it possible for artists, engineers, inventors, and businesspeople to flourish and create a society more wealthy and powerful than any the world had ever seen. This is what I call the idea of America – the America That Was.

But the seeds of destruction were already sown at the very beginning – with the Alien and Sedition Acts being perhaps the first highly visible step in the wrong direction. Then came the forceful assertion of one national government, with states reduced to administrative regions via the War of Southern Secession, from 1861-’65. I’m no fan of state governments, incidentally, but at least they’re smaller and closer to their subjects than the federal government. Another major step in the wrong direction occurred with the Spanish-American War of 1898, where the US acquired an overseas empire by force. The next major step downhill was the creation of the Federal Reserve and the income tax, both in 1913, just in time for World War I. It took time for these things to make the system crash, because it was still a fairly free economy.

Louis: But crash it did in 1929…

Doug: Yes. And it led to the Great Depression of 1929-’46, which lasted so long entirely because of the unmitigated disaster of the New Deal (which we discussed recently). The New Deal injected socialist-fascist ideas into mainstream American thought like a poisonous acid, corrupting the heart of the idea of America that once made the place great. The process was completed with Lyndon Johnson’s Great Society, which really established the basis of the welfare-warfare state. It truly set the stage for the total ethical, economic, social, political, and even military disaster now unfolding before our eyes.

Still, the beating heart of the idea of America – which is to say both social and economic freedom – took time to corrupt. Like a strong man who doesn’t know he’s headed for a heart attack, American culture didn’t really peak until the 1950s. The bullet-finned 1959 Cadillac is a symbol of this peak, in my mind.

Louis: Then we had Johnson and his “guns and butter” policy – War in Vietnam and War on Poverty at the same time – followed by tricky Dick kicking the last leg out of under the stool by taking the dollar off an even theoretical gold standard.

Doug: Yes. Nixon was arguably even a worse president than Johnson, with the devaluation of the dollar in 1971 and his creation of the War on Drugs. Things have spiraled out of control since then. In The Casey Report, we’ve written reams about these last decades and how they led to and shaped what’s happening now. But I have to say, the focus has been largely financial.

Louis: Which is as it should be, in a publication designed to help investors navigate these turbulent times.

Doug: Yes, but the corruption goes way beyond that, beyond even the senseless wars and idiotic foreign policy we discussed last week. America, once the land of the brave and the home of the free, is well on its way to becoming a police state – worse than any we’ve seen in the past, including the Soviet Union and Nazi Germany.

Louis: How could it get worse than that?

Doug: Because Big Brother has better technology now, allowing possible manipulation and control of the population that Stalin and Hitler never dreamed of. And because the US used to be such a great place, a lot of people have been tricked into believing it’s the same as it was. But there’s no more resemblance between the America of old and the US of today than there was between the Rome of the Republic and the Rome of the later emperors. Furthermore, most Americans have conflated the government with society. They’re not only different things, but often antithetical.

Louis: I thought you said you’re an optimist!

Doug: I am. But that’s for the survivors who make it through the wringer the global economy – and every person on this planet – is about to go through. I keep telling you that the coming Greater Depression is going to be even worse than I think it is. You may think I’m joking, but I’m not. I do think that, primarily for reasons we discussed in our conversation on technology, what comes next will not only be even better than I imagine, it will be better than I can imagine… but first we have to go through the wringer. I see no way around it. I truly don’t.

Louis: Okay, I know you believe that. Can you substantiate the police-state claim?

Doug: Well, rather than give you anecdotal evidence – of which there are masses more each day – let me refer to a rather perceptive blog post by a George Washington law professor named Jonathan Turley, titled 10 Reasons Why the US Is No Longer the Land of the Free. I’m sure I don’t see everything the way the professor does, but the list struck me as quite accurate and very important for people to understand.

Louis: I’m sure I don’t want to hear this, but okay, shoot.

Doug: [Chuckles] Maybe you don’t, but I know you value the truth. These points underline something I’ve said for years: the Bill of Rights is a completely dead letter. It’s essentially meaningless and rarely even gets the benefit of lip service. Quoting it will result in derision, if not arrest as a dangerous radical.

Frankly, I didn’t think the civil liberties situation could get worse than it was under Cheney-Bush, but it has. Obama has repealed none of what they did – and added more. So, let’s go through the list. First:

Assassination of US citizens: “President Obama has claimed, as President George W. Bush did before him, the right to order the killing of any citizen considered a terrorist or an abettor of terrorism.”

Of course the very concept of terrorism is highly malleable, with over 100 definitions floating about – as we’ve discussed. But apart from that, it’s now accepted that the president and his minions have the right to kill almost anyone. This conceit will get completely out of control after the next real or imagined major terrorist incident.

Louis: This reminds me of the extraordinary powers given to government agents to battle the War On Some Drugs – like the RICO statutes – which have now been turned against ordinary citizens who have nothing to do with the drug trade.

Doug: Exactly. Once you give the state a power – for whatever good reason you imagine it needs it – it will use that power for whatever those in charge feel is in their interests. And those in charge are never saints.

Next:

Indefinite detention: “Under the law signed last month, terrorism suspects are to be held by the military; the president also has the authority to indefinitely detain citizens accused of terrorism.”

This was a precedent set by Guantánamo, where scores of the accused continue to rot without even a kangaroo-court trial.

Arbitrary justice: “The president now decides whether a person will receive a trial in the federal courts or in a military tribunal, a system that has been ridiculed around the world for lacking basic due process protections. Bush claimed this authority in 2001, and Obama has continued the practice.”

As the government becomes more powerful, it’s completely predictable that everything – including the justice system – will become ever more politicized. And government very rarely relinquishes a power it’s gained. I particularly like the Supreme Court ruling in April 2012 that allows anyone who’s arrested for anything – including littering or jaywalking – to be strip-searched.

Louis: Note to readers: you can’t hear Doug’s voice, but I assure you that his use of the word “like” is sarcastic.

Doug: Just so. Moving right along:

Warrantless searches: “The president may now order warrantless surveillance, including a new capability to force companies and organizations to turn over information on citizens’ finances, communications and associations. Bush acquired this sweeping power under the Patriot Act in 2001, and in 2011, Obama extended the power, including searches of everything from business documents to library records.”

Privacy is now a completely dead concept, from both a legal and a practical point of view. If you want to retain privacy, you now have no alternative to relocating outside the US.

Louis: Or any advanced Western country. I’ve read that there are more surveillance cameras per square mile in London than anywhere else.

Doug: I’ve heard that too. The opposite being true in rural Argentina is one of the things I like about it. Back to the list:

Secret evidence: “The government now routinely uses secret evidence to detain individuals and employs secret evidence in federal and military courts. It also forces the dismissal of cases against the United States by simply filing declarations that the cases would make the government reveal classified information that would harm national security…”

“National security” essentially amounts to nothing more than government security, which amounts to cover for the individuals in the government. Nazi Germany and the USSR were national-security states. As I’ve tried to explain in the past, once a critical mass is reached, it’s impossible to reform a government. I believe we’ve reached that state in the US.

War crimes: “The world clamored for prosecutions of those responsible for waterboarding terrorism suspects during the Bush administration, but the Obama administration said in 2009 that it would not allow CIA employees to be investigated or prosecuted for such actions. This gutted not just treaty obligations but the Nuremberg principles of international law.”

Torture by field operatives under the stress of combat is one thing; torture as official policy is something else again. But torture is now accepted in the US. Worse, there are far more serious war crimes than torture being committed in the name of the US that are going unpunished.

Louis: This is, after all, a far darker version of the same US government that deliberately infected black US citizens with syphilis just to see what would happen, and sent US citizens of Japanese descent to concentration camps during WWII.

Doug: Exactly. The next point is:

Secret court: “The government has increased its use of the secret Foreign Intelligence Surveillance Court, which has expanded its secret warrants to include individuals deemed to be aiding or abetting hostile foreign governments or organizations. In 2011, Obama renewed these powers, including allowing secret searches of individuals who are not part of an identifiable terrorist group.”

You no longer live in a free country when there’s zero privacy for citizens, but 100% secrecy for the government and those it employs.

Immunity from judicial review: “Like the Bush administration, the Obama administration has successfully pushed for immunity for companies that assist in warrantless surveillance of citizens, blocking the ability of citizens to challenge the violation of privacy.”

The government has outsourced some of its functions – not least the use of contractors in war zones. Increasingly, being associated with the government gives you a “get out of jail free” card. In the USSR they called this a “krisha” – a roof.

Continual monitoring of citizens: “The Obama administration has successfully defended its claim that it can use GPS devices to monitor every move of targeted citizens without securing any court order or review.”

Bad as this is, it’s just one example. There’s also the use of domestic drones, and hundreds of thousands of cameras that take pictures of everyone everywhere.

Extraordinary renditions: “The government now has the ability to transfer both citizens and noncitizens to another country under a system known as extraordinary rendition, which has been denounced as using other countries, such as Syria, Saudi Arabia, Egypt and Pakistan, to torture suspects.”

Yes, if someone is kidnapped, there’s plausible deniability if the torturing is done abroad by a third party. And they’re likely to have even fewer compunctions.

Louis: That’s a pretty depressing list, Doug.

Doug: And this is just the beginning. As I’ve said before, I don’t call the shots – just try to tell the truth as I see it. The point is that you couldn’t assemble a list like this even 15 years ago. But now it’s part of the firmament. Worse, it’s going to grow. As the economy turns down over the next few years, the people – acting like scared chimpanzees – will ask the government to “do something.” And it will. The trend is going hyperbolic.

Louis: I can’t argue… and I agree it is not likely to be stopped. So if this is a sure trend, are there investment implications?

Doug: This just goes to reinforce what I’ve been saying for some time. As great as a US citizen’s risk is in the marketplace these days, the greatest single risk to their wealth and health is the government. People simply must internationalize to diversify their political risk. I can’t stress that strongly enough.

Louis: Would you go so far as to say that being a taxpayer in the US now is like being a Jew in Germany in the mid-1930s?

Doug: That’s a good analogy. It’s costly and upsetting to uproot, but the risk if you don’t is unimaginably worse. And I would warn people in other countries to take the same precautions. All of these nation-states are dying dinosaurs that will cause a lot of damage as they thrash about in their death throes. No place is completely safe, but you improve your odds by not putting your eggs all in one basket.

Louis: Okay, I guess we’ve covered that plenty of times. Is there a “police-state play” – any investments one could make before the new Iron Curtain slams down? Handcuff manufacturers?

Doug: Nah – they have those plastic zip-binder things now; they’re so cheap that I doubt the manufacturer can even make big money in volume. But I do remember a speech I attended in the ’90s given by William Bennett, the ex-Drug Czar, who recommended investing in prisons. I excoriated him as a sociopath at that meeting – but he was right. However, that ship has sailed; it’s hard to believe the US can incarcerate more than the current 2.3 million people. Besides, I find it morally offensive to capitalize on what I consider to be criminal enterprises. No, for now the only absolutely crystal-clear imperative is as above: You’ve got to have a Plan B ready in case you need to get out of Dodge – and you need it pronto.

And to those who celebrate Thanksgiving, I urge you to remember that it was hard work and the freedom to profit from it that created the bounty the pilgrims celebrated. It was this enterprising spirit and the liberty to exercise it that was the heart of the idea of the America That Was – the idea that made America great. Those corrupt politicians who have been undermining these values for so long and the willfully ignorant ideologues who support them are responsible for turning this country into the United (Police) State of America. They should be criticized and opposed at every opportunity.

Louis: Okay, Doug. Thanks for another challenging but enlightening conversation.

Doug: My pleasure.

CME Declares Force Majeure at Manhattan Gold Depository

“Force majeure, a contract clause that frees parties from liability due to an event outside of their control, for the facility.”

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Published November 26, 2012

Dow Jones Newswires
CME Group Inc. (CME) on Monday said that Manfra, Tordella and Brookes Inc., one of the exchange’s gold depositories, will not be able to delivery metal as the lower Manhattan company deals with “operational limitations” almost a month after the arrival of Hurricane Sandy.

MTB, one of five depositories licensed to deliver gold against CME’s benchmark 100-troy ounce gold contract, held 29,276 troy ounces of gold and 33,000 troy ounces of palladium as of Nov. 23, according to data from CME subsidiary Comex.

In a notice to customers on Monday, CME declared force majeure, a contract clause that frees parties from liability due to an event outside of their control, for the facility.

CME said that individuals holding MTB warrants, or certificates for a specific lot of metal stored in the depository, may receive gold delivered from Brinks Co. (BCO) in New York. MTB is responsible for any additional costs incurred by customers receiving metal from Brinks, CME said.

“This shouldn’t have a material impact on the way market participants are doing business,” a CME spokesman said. “They’ll still contact MTB if they want to take delivery on contracts,” and MTB will arrange for delivery through Brinks.

In a notice posted to its website dated Nov. 12, MTB said the firm “sustained substantial damages” following Hurricane Sandy’s arrival in New York City on Oct. 29, and had curtailed its operations.

The force majeure will remain in effect until further notice from the exchange, the CME said. The delivery period for CME’s December-delivery precious metals futures begins on Friday.

Write to Matt Day at matt.day@dowjones.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

Copyright © 2012 Dow Jones Newswires

SOURCE [BEWARE]: Fox Business
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Hungry For The Holidays: 20 Facts About Hunger In America That Will Blow Your Mind

All over America there are millions of people that will be missing meals and going hungry this holiday season. Even as much of the country indulges in the yearly ritual of unbridled consumerism that we refer to as “the holiday season”, more families in the United States than ever before will be dealing with not having enough food to eat. Food stamp use is at an all-time high. Demand at food banks is at an all-time high. They keep telling us that we are in an “economic recovery” and yet the middle class continues to shrink and the number of Americans living in poverty just continues to grow. We are witnessing unprecedented hunger in America, and this especially seems tragic during the holidays. Much of the country is partying as if the good times will never stop, but families that are living from one meal to the next are facing a completely different reality. How do you tell your children that there isn’t going to be any food to eat for dinner? How do you explain to them that other families have plenty to eat but you don’t? Sadly, many food banks are overstretched at this point. All over the nation, food pantries have actually had to turn people away because of the overwhelming demand. And more Americans used food stamps to buy their Thanksgiving dinners this year than ever before. This is a problem that is not going away any time soon, and when the next major economic downturn strikes the problem of hunger in America is going to get even worse.

For many Americans, hunger has become a way of life. Families that don’t have enough money are often faced with some absolutely heartbreaking choices. Just check out what one Maine official that works with the Emergency Food Assistance Program recently had to say…

“One in six people in Maine don’t know where their next meal is coming from, or skip a meal so their kids can eat, or have to choose between paying for prescriptions and food, or fuel for your car and food,” Hall said. “What’s amazing is that food is always the first thing to go from your budget. It’s staggering, the choices people have to make.”

Food banks all over the country try their best to do what they can, especially during the holidays, but it is often not enough. In fact, some food banks ran out of turkeys well in advance of Thanksgiving this year…

Three days in advance of Thanksgiving, the Pear Street Cupboard and Café in Framingham, Massachusetts, is out of turkeys. According to organizers, “requests for help are up 400 percent over last year.”

But it isn’t just during the holidays that food banks are having problems keeping up with demand. The truth is that many food banks find themselves out of food and having to turn away hungry families all throughout the year. The following is from a recent Reuters article…

Overall, food pantries and soup kitchens reported a 5 percent spike in demand in 2012, according to the survey. More than half of providers said they were forced to turn away clients, reduce portion sizes, or limit their hours.

In Staten Island, all of the agencies that respond to hunger reported not having enough food to meet demand, while in the Bronx that was true for 80 percent of agencies. In Queens and Brooklyn, more than 60 percent of agencies did not have enough food to meet the needs of the populations they serve.

If you are able, please support your local food bank. The needs are great and they are only going to get greater.

The following are 20 facts about hunger in America that will blow your mind…

#1 According to one calculation, the number of Americans on food stamps now exceeds the combined populations of “Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.”

#2 In October 2008, 30.8 million Americans were on food stamps. By August 2012 that number had risen to 47.1 million Americans.

#3 Right now, one out of every seven Americans is on food stamps and one out of every four American children is on food stamps.

#4 It is projected that half of all American children will be on food stamps at least once before they turn 18 years of age.

#5 According to new numbers that were just released by the U.S. Census Bureau, the number of Americans living in poverty increased to a new all-time record high of 49.7 million last year.

#6 The number of Americans living in poverty has increased by about 6 million over the past four years.

#7 Today, about one out of every four workers in the United States brings home wages that are at or below the federal poverty level.

#8 According to the U.S. Census Bureau, the poverty rate for children living in the United States is about 22 percent.

#9 Overall, approximately 57 percent of all children in the United States are living in homes that are either considered to be either “low income” or impoverished.

#10 In the United States today, close to 100 million Americans are considered to be either “poor” or “near poor”.

#11 One university study estimates that child poverty costs the U.S. economy 500 billion dollars each year.

#12 Households that are led by a single mother have a 31.6 percent poverty rate.

#13 In 2010, 42 percent of all single mothers in the United States were on food stamps.

#14 According to the National Center for Children in Poverty, 36.4 percent of all children in Philadelphia are living in poverty, 40.1 percent of all children in Atlanta are living in poverty, 52.6 percent of all children in Cleveland are living in poverty and 53.6 percent of all children in Detroit are living in poverty.

#15 Since 2007, the number of children living in poverty in the state of California has increased by 30 percent.

#16 Family homelessness in the Washington D.C. region (one of the wealthiest regions in the entire country) has risen 23 percent since the last recession began.

#17 There are 314 counties in the United States where at least 30 percent of the children are facing food insecurity.

#18 More than 20 million U.S. children rely on school meal programs to keep from going hungry.

#19 Right now, more than 100 million Americans are enrolled in at least one welfare program run by the federal government. And that does not even count Social Security or Medicare.

#20 According to the Natural Resources Defense Council, approximately 40 percent of all food in America “is routinely thrown away by consumers at home, discarded or unserved at restaurants or left unharvested on farms.”

By Michael, on November 26th, 2012

Bread Lines of the Modern Era– The Great Recession
IF all EBT recipients shopped at only Walmart Super Centers for ALL their SNAP benefits, then this is how the Bread Line would look each month– 14,588 people.
There are 3051 Walmart Super Centers in USA and 44,510,598 participants in SNAP (2011), making the average SNAP line at each Walmart at 14,588 people.
The Modern Era’s Bread Lines are not visible because the business is handled discreetly through EBT Cards.
According to this Food Stamps report pg 16-17, Walmart receives half of all SNAP dollars in Oklahoma.
Walmart is the largest retailer in America.
Short Facts:
47% of Food Stamp participants are children.
78.6% of all SNAP participants are in metropolitan areas.
93.2% of all SNAP benefits go to US citizens.
Only 4% are self-employed.
(CLICK IMAGE FOR INFOGRAPHIC SOURCE)

SOURCE:
http://theeconomiccollapseblog.com/archives/hungry-for-the-holidays-20-facts-about-hunger-in-america-that-will-blow-your-mind

Is College Worth the Price and Debt? Private student loans make up $150 billion of the $1 trillion in outstanding student debt. Private student loans grow hand and hand with for-profit institution growth

“Student debt has surpassed the $1 trillion mark and continues to grow. What is also problematic is how much of this debt is tied to onerous private student loans”

-x-x-x-x-x-x-x-x-x-

Posted by mybudget360

Few will ever argue that getting an education is a worthy goal. College is seen as the gateway to a better life and mobility into the middle class. The middle class has been shrinking while the cost of attending college has skyrocketed. The cost to attend college has far outstripped any sensible economic measure and has climbed even faster than housing values during the peak days of the bubble. Is college worth the current cost? Many articles come out showing that college graduates earn more than non-college graduates. Yet this data rarely digs deep into the figures. What colleges did these graduates go to since the US now has over 4,000 institutions? How old are these graduates? These figures look at lifetime earnings so we are looking at a time when the US had a more vibrant economy and going to college was affordable. Let us examine if college is worth the current price.

Total Student Debt

Student debt is the fastest growing segment of debt in our economy. Student debt has surpassed the $1 trillion mark and continues to grow. What is also problematic is how much of this debt is tied to onerous private student loans:

$150 billion of the outstanding student debt is attached to the private market. This debt does not have the minimal protection of federal student loans. Keep in mind many find themselves in deep financial issues with federal loans. A recent report found incredible amounts of complaints regarding these loans:

“(NY Times) The report found that many loan servicers — the companies that collect the payments for the lenders — make it extremely difficult for student borrowers to manage their debts. Borrowers often have difficulty finding out how much they owe or getting information about their payment histories. Some struggling borrowers who need loan modification said that servicers forced them to pay more per month than they could possibly afford, without telling them the payments would not prevent default.”

That is one aspect of the problem. What the report does not focus on is how many of these loans are made to students going to for-profit institutions.

For-profits

For-profit institutions in the late 1990s made up about 3 percent of total college enrollment. Now they make up roughly 10 percent of all students:

These schools also eat up an inordinate amount of federal aid as the chart above highlights with very little results. Many are largely designed to suck in as much federal aid money while yielding a negligible educational benefit to students. They also push many into the private loan market.

Remember that figure of $150 billion in private student loans? A large portion of this growth can be attributed to the growth of the for-profit education industry:

At a public school, about 5 percent of graduating students take on private student loans. Compare this to 42 percent at for-profits. This would not be such an issue aside from the fact that many of these schools have horrific track records when it comes to placing students in the careers they studied for. They have an extremely powerful lobby and make it very difficult to gather these figures. In fact, until a year ago it was extremely difficult to get the figures on outstanding student debt. How can it be that an industry fully subsidized by the government does not know that banks and educational lenders have made out some $1 trillion in student loans? Of course they knew and it was in the government and banks interest to keep this figure hidden from view. Now the problem is out of hand and we are likely facing another bubble.

Young Wage Earners

The loss of the middle class has crushed the earnings of those only with a high school degree:

Earnings for male high school graduates has fallen nearly 25 percent from the 1970s. The same has occurred for female high school graduates. There are fewer blue collar jobs that can provide a living wage. The squeeze on working class Americans is intense and that is why we find nearly 47 million Americans now on food assistance. With these kinds of figures, it is understandable why some will go to any college for the chance of making it out of poverty.

At least going to college, whether paying $20,000 a year at a for-profit or $50,000 for a private institution, many feel they will get something in return. If they try a go at the market with no college degree the figures are already dismal. So it is important that people make wise choices. In fact, many will do a much better job by simply going to a local community college than a for-profit. Yet community colleges being crushed by local state budgets never had an effective advertising wing to get out to the public.

Many of the institutions that run marketing campaigns especially in the for-profit arena are largely places to be avoided. For-profits have horrific default rates and have very little tangible results in the real world.

Net Worth for Young

Are young Americans poorer than they were two decades ago? One strong measure of financial health is looking at net worth figures:

Americans under the age of 35 today are much poorer than their counterparts of the 1980s. Many are also in deeper debt. We have one of the most educated in terms of college educational attainment generations yet in terms of salary and net worth, they are performing poorly. Is college worth the cost? That totally depends on where you go and what you are paying. It is very clear that most of the for-profits are simply debt traps. There are many schools in the 4,000 and more that exist that largely provide a weak educational experience for the investment put in. Signaling is one of the reasons many go to schools with a reputation. But how much is that signal worth? In many cases it depends on what industry you go into. Nearly half of recent college graduates (those under 25) are working in industries that don’t require their college degree or are un/underemployed. Does that sound like a winning slogan for “college is worth it at any price?”

 

SOURCE:
http://www.mybudget360.com/is-college-worth-the-price-and-debt-for-profits-the-worth-of-college-education/

Swiss Study Shows 147 Technocratic “Super Entities” Rule the World

Swiss Study Shows 147 Technocratic “Super Entities” Rule the World
October 10, 2012

By Susanne Posel – Occupy Corporatism
(click images to see their sourcepages – ’tis disturbing)

The Swiss Federal Institute (SFI) in Zurich released a study entitled “The Network of Global Corporate Control” that proves a small consortiums of corporations – mainly banks – run the world. A mere 147 corporations which form a “super entity” have control 40% of the world’s wealth; which is the real economy. These mega-corporations are at the center of the global economy. The banks found to be most influential include:

• Barclays
• Goldman Sachs
• JPMorgan Chase & Co
• Vanguard Group
• UBS
• Deutsche Bank
• Bank of New York Melon Corp
• Morgan Stanley
• Bank of America Corp
• Société Générale

9 Biggest Banks’ Derivative Exposure – $228.72 Trillion
Note the little man standing in front of white house. The little worm next to lastfootball field is a truck with $2 billion dollars.
There is no government in the world that has this kind of money. This is roughly 3 times the entire world economy. The unregulated market presents a massive financial risk. The corruption and immorality of the banks makes the situation worse.
If you don’t want to bank with these banks, but want to have access to free ATM’s anywhere– most Credit Unions in USA are in the CO-OP ATM network, where all ATM’s are free to any COOP CU member and most support depositing checks. The Credit Unions are like banks, but invest all their profits to give members lower rates and better service. They don’t have shareholders to worry about or have derivatives to purchase and sell.
Keep an eye out in the news for “derivative crisis”, as the crisis is inevitable with current falling value of most real assets.
Derivative Data Source: ZeroHedge

However as the connections to the controlling groups are networked throughout the world, they become the catalyst for global financial collapse.

James Glattfelder, complex systems theorist at the SFI explains: “In effect, less than one per cent of the companies were able to control 40 per cent of the entire network.”

Using mathematic models normally applied to natural systems, the researchers analyzed the world’s economy. Their data was taken from Orbis 2007, a database which lists 37 million corporations and investors. The evidence showed that the world’s largest corporations are interconnected to all other companies and their professional decisions affect all markets across the globe.

George Sudihara, complex systems expert for SFI claims that this phenomenon is a common structure that could be found in nature. Comparing the manufactured reality of the financial markets to the ecosystems of the planet, Sudihara says that although the 147 corporations that rule the world through influence and interconnectedness are no more harmful than the natural cycles of our weather or animal kingdoms.

€828.6 Billion – Amount 2x large banks loaned to people of bankrupt countries
€828,600,000,000 – Intesa SanPaolo & Banco Santander lent a total of €828.6 billion to GIIPS in loans to institutions, corporations, retail business, mortgages, commercial real estate, etc, also called private debt. Intesa SanPaolo’s convoy is 3.8 kilometers long and Banco Santander’s is 3.5 kilometers long.
In technical terms this is called “Credit risk exposures (EAD – exposure at default)”.
The info is sourced from European Banking Authority’s website – 2011 Bank Stress Tests.

 

Yet because of the facts presented in the study, the financial crash of 2008 can be traced back to these tightly-knit networks. Future disasters can also be projected based on this analysis because of the “connectedness” of these influential entities which are only 147 corporations.

It is suggested the global capitalism could be a useful tool to make the markets more stable by simply acquiescing to control by the technocrats. The world’s transitional corporations (TNCs) guide the flow of all economies through influence and manipulation which created a structure of economic power. Most corporations are guided by the shareholders who use the companies to wield incredible power over the shift of economic consciousness. And the behavior of the system reflects the direction taken by those who fund the super entities.

Assumed by many that there was a complex architecture to the global economic power that caused financial systems to ebb and flow or crash and burn is not a scientific fact as evidenced in this study.

As the banking cartels force countries in the EuroZone into sovereign debt, there is a weakening of the many multi-national corporations around the world. Wells Fargo and JPMorgan Chase have financially gained while stocks are being unloaded in other markets.

This sovereign land-grab by the central banking cartels across Europe is mirrored in a recent Goldman Sachs report: “The more the Spanish administration indulges domestic political interests … the more explicit conditionality is likely to be demanded.” In other words the technocrats working for the Zionists are acquiring each country in the EuroZone.

The European Central Bankers agreed to give any nation in the Euro-Zone a bailout if they agreed to hand over the country to them under the guise of “new rules and conditions when applying for assistance.”

The Army of Debt
€360 Billion Euro Army of Debt heading towards Greece to infest itself on the government.
“Democracy is when the indigent, and not the men of property, are the rulers.” – Aristotle

As America drifts downstream toward economic implosion, the Federal Reserve headed by Ben Bernanke has chosen a different approach. They unveiled QE3 last week as a pump and dump scheme to prop up the US dollar by printing cash that is backed by nothing, while purchasing the mortgage-backed securities from the same banks that created the scandal and acquiring land in a massive land-grab; the likes of which have never been seen in the US.

Simultaneously, the BRICs nations (Brazil, Russia, India and China) are buying gold to back their fiat currencies to avoid being caught up in the destruction of the technocrats as they march toward one world currency. BRICs have become the anti-thesis to the banking cartels of the Zionist regime.

As these nations pair with Middle Eastern countries like Iran to trade gold for petrol instead of the US dollar as the global reserve currency, the Obama administration has begun a propaganda campaign against China involving a manufactured cyber-threat.

In Iran, the terrorist factions that do the bidding of the Zionists to topple governments by inciting fake revolutions have been deployed to Iran to stir-up trouble and blame the failing Ra-il which is being strategically destroyed by sanctions placed on the nation by the US. The American Israeli Public Affairs Committee (AIPAC) coerced the US Congress to pass HR 1905 which further tighten the economic noose around Iran for the benefit of the Zionist-controlled Israeli government.

In April of this year, the BRICs nations met to agree upon a strategy that would liberate the countries of the world from the grip of the technocrats. The BRICs countries are pushing for peace, but not through force and occupation of other countries to obtain this goal.

Vladimir Putin, President of Russia had this to say about the United Nations and their obvious attempts at global governance through usurpation of powers over countries. “One of the priorities of BRICs for the years to come should be the strengthening and key role of the UN’s Security Council in maintaining international peace and security. And also ensuring that the UN is not used as a cover for regime change and unilateral actions to resolve conflict situations.”

A joint BRICs bank was discussed with vigor. It would serve as an alternative to central banks that abuse their power at the expense of nations worldwide. They hope to replace the International Monetary Fund (IMF) and the World Bank. The IMF and World Bank are alarmed by this move and highly disapprove of it.

This is not shocking, considering that the central banks play a game of printing fiat that has no precious metals backing the paper.

Over 180 countries have signed onto the BRICs agreement as evidenced in their declaration. While the global Elite still hold power over the G5 countries, the rest of the world is standing up, severing their ties and making plans for a new world without them.

 

SOURCE: Blacklisted News
http://www.blacklistednews.com/Swiss_Study_Shows_147_Technocratic_“Super_Entities”_Rule_the_World_/21945/0/0/0/Y/M.html?morestories=obinsite

 

MORE SOURCES:

PDF: Swiss Study “The Network of Global Corporate Control”
http://arxiv.org/PS_cache/arxiv/pdf/1107/1107.5728v2.pdf

Huffington Post: ‘Super-Entity’ Of 147 Companies At center of World’s Economy, Study Claims
http://www.huffingtonpost.ca/2011/10/24/super-entity-147-global-economy-swiss-researchers_n_1028690.html

Reuters: Wall Street drops as investors wary of weak earnings
http://www.reuters.com/article/2012/10/08/us-markets-stocks-idUSBRE89708R20121008

Forbes: Wells Fargo And The Case Of The Falling Financials
http://www.forbes.com/sites/greatspeculations/2012/10/08/wells-fargo-and-the-case-of-the-falling-financials/

CNBC: Bank Bailout May Be Insufficient for Spain: Goldman Sachs
http://www.cnbc.com/id/48173416/Bank_Bailout_May_Be_Insufficient_for_Spain_Goldman_Sachs

WN: Euro crisis: Europe clears key obstacle; political risks remain in Greece, Spain, Italy (NOTE: the original source DELETED the original article. India’s sources do this more often than ye think)
http://article.wn.com/view/2012/09/12/Euro_crisis_Europe_clears_key_obstacle_political_risks_remai/

Occupy Corporatism: Bernanke’s Stimulus Simply Following Global Elite’s Directives to Implode the US Dollar
http://occupycorporatism.com/bernankes-stimulus-simply-following-global-elites-directives-to-implode-the-us-dollar/

Occupy Corporatism: The Fed’s US Land-Grab Hidden Within Purchase of Mortgage-Backed Securities
http://occupycorporatism.com/the-feds-us-land-grab-hidden-within-purchase-of-mortgage-backed-securities/

Occupy Corporatism: China buys gold before Bernanke implodes the US Dollar
http://occupycorporatism.com/china-buys-gold-before-bernanke-implodes-the-us-dollar/

Occupy Corporatism: The Connection Between White House Cyber Attacks and Global Reserve Currency
http://occupycorporatism.com/the-connection-between-white-house-cyber-attacks-and-global-reserve-currency/

Occupy Corporatism: Manufactured Arab Spring Implemented in Iran Amid Stricter US Sanctions
http://occupycorporatism.com/manufactured-arab-spring-implemented-in-iran-amid-stricter-us-sanctions/

Occupy Corporatism: HR 1905: AIPAC Pressures Congress for Stricter Sanctions Against Iran
http://occupycorporatism.com/hr-1905-aipac-pressures-congress-for-stricter-sanctions-against-iran/

BRICS: http://www.bricsindia.in/

VIDEO: Bye bye Dollar, it was fun – USA dollar NO LONGER world reserve currency

Now we know the truth. The financial meltdown wasn’t a mistake – it was a con

Hiding behind the complexities of our financial system, banks and other institutions are being accused of fraud and deception, with Goldman Sachs just the latest in the spotlight. This has become the most pressing election issue of all

Goldman Sachs was in the spotlight last November when demonstrators protested outside its Washington offices against executive bonuses. Photograph: Andrew Harrer/Bloomberg via Getty Images (click images for their sourcepages)

Will Hutton
The Observer, Sunday 18 April 2010

The global financial crisis, it is now clear, was caused not just by the bankers’ colossal mismanagement. No, it was due also to the new financial complexity offering up the opportunity for widespread, systemic fraud. Friday’s announcement that the world’s most famous investment bank, Goldman Sachs, is to face civil charges for fraud brought by the American regulator is but the latest of a series of investigations that have been launched, arrests made and charges made against financial institutions around the world. Big Finance in the 21st century turns out to have been Big Fraud. Yet Britain, centre of the world financial system, has not yet levelled charges against any bank; all that we’ve seen is the allegation of a high-level insider dealing ring which, embarrassingly, involves a banker advising the government. We have to live with the fiction that our banks and bankers are whiter than white, and any attempt to investigate them and their institutions will lead to a mass exodus to the mountains of Switzerland. The politicians of the Labour and Tory party alike are Bambis amid the wolves.

Just consider the roll call beyond Goldman Sachs. In Ireland Sean FitzPatrick, the ex-chair of the Anglo Irish bank was arrested last month and questioned over alleged fraud. In Iceland last week a dossier assembled by its parliament on the Icelandic banks – huge lenders in Britain – was handed to its public prosecution service. A court-appointed examiner found that collapsed investment bank Lehman knowingly manipulated its balance sheet to make it look stronger than it was – accounts originally audited by the British firm Ernst and Young and given the legal green light by the British firm Linklaters. In Switzerland UBS has been defending itself from the US’s Internal Revenue Service for allegedly running 17,000 offshore accounts to evade tax. Be sure there are more revelations to come – except in saintly Britain.

The shape of CDOs to come (Cayman Financial Review)

Beneath the complexity, the charges are all rooted in the same phenomenon – deception. Somebody, somewhere, was knowingly fooled by banks and bankers – sometimes governments over tax, sometimes regulators and investors over the probity of balance sheets and profits and sometimes, as the Securities and Exchange Commission (SEC) says in Goldman’s case, by creating a scheme to enrich one favoured investor at the expense of others – including, via RBS, the British taxpayer. Along the way there is a long list of so-called “entrepreneurs” and “innovators” who were offered loans that should never have been made. Lloyd Blankfein, Goldman’s CEO, remarked only semi-ironically that his bank was doing God’s work. He must wake up every day bitterly regretting the words ever emerged from his mouth.

For the Goldmans case is in some ways the most damaging. The Icelandic banks, Anglo Irish bank and Lehman were all involved in opaque deals and rank bad lending decisions – but Goldman allegedly went one step further, according to the SEC actively creating a financial instrument that transferred wealth to one favoured client from others less favoured. If the Securities and Exchange Commission’s case is proved – and it is aggressively rebutted by Goldman – the charge is that Goldman’s vice-president Fabrice Tourre created a dud financial instrument packed with valueless sub- prime mortgages at the instruction of hedge fund client Paulson, sold it to investors knowing it was valueless, and then allowed Paulson to profit from the dud financial instrument. Goldman says the buyers were “among the most sophisticated mortgage investors” in the world. But this is a used car salesman flogging a broken car he’s got from some wide-boy pal to some driver who can’t get access to the log-book. Except it was lionised as financial innovation.

Banks in talks to end bond probe (Wallstreet Journal)

The investors who bought the collateralised debt obligation (CDO) were not complete innocents. They had asked for the bond to be validated by an independent expert into residential mortgage-backed securities – a company called ACA management. ACA gave the bond the thumbs-up on the understanding from Fabrice Tourre that the hedge fund Paulson were investing in it. But the SEC says Tourre misled them, a pivotal claim that Goldman denies. The reality was that Paulson was frantically buying credit default swaps in the CDO that would go up in price the more valueless it became – a trade that would make more than $1 billion. Worse, Paulson had identified some of the dud sub-prime mortgages that he wanted Tourre to put into the CDO. If the SEC case is true, this was a scam – nothing more, nothing less.

Tourre could see what was coming. In one email in January 2007 he wrote: “More and more leverage in the system. The whole building is about to collapse anytime now… only potential survivor, the fabulous Fab[rice Tourre] .. standing in the middle of all these complex highly leveraged exotic trades he created without necessarily understanding all of the implications of those monstrosities”. Fabulous Fab, like his boss, will not be feeling very fab today.

Hedging their bets — about exactly WHO owns your Mortgage? (Daily KOS)

The cases not only have a lot in common – using financial complexity allegedly to deceive and then using so-called independent experts to validate the deception (lawyers, accountants, credit rating agencies, “portfolio selection agents,” etc etc ) – but they also show how interconnected the financial system is. In Iceland Citigroup and Deutsche Bank covered the margin calls of distressed Icelandic business borrowers, deepening the crisis. Lehman uses the lightly regulated London markets and two independent British experts to validate that their “Repo 105s” were “genuine” trades and not their own in-house liability. The American authorities pursued a Swiss bank over aiding and abetting US nationals to evade tax.

Hedging their bets — about exactly WHO owns your Mortgage? (Daily KOS)

Bankers will complain these cases all involve one or two misguided individuals, but that most banking is above board and was just the victim of irrational exuberance, misguided belief in free market economics and faulty risk management techniques. Obviously that is true – but, sadly, there is much more to the crisis. Andrew Haldane, executive director of the Bank of England, highlights the remarkable reduction in the risk weighting of bank assets between 1997 and 2007. Put simply, Europe’s and the US’s large banks exploited the weak international agreement on bank capital requirements in the so-called Basel agreement in 2004 to reclassify the risk of their loans and trading instruments. They did not just reduce the risk by 5 or 10%. Breathtakingly, they claimed their new risk management techniques were so wonderful that the riskiness of their assets was up to half of what it had been – despite property and share prices cresting to new all-time highs.

Brutally, the banks knowingly gamed the system to grow their balance sheets ever faster and with even less capital underpinning them in the full knowledge that everything rested on the bogus claim that their lending was now much less risky. That was not all they were doing. As Michael Lewis describes in The Big Short, credit default swaps had been deliberately created as an asset class by the big investment banks to allow hedge funds to speculate against collateralised debt obligations. The banks were gaming the regulators and investors alike – and they knew full well what they were doing. Simon Johnson’s 13 Bankers shows how the major American banks deployed vast political lobbying power and money to create the relaxed regulatory environment in which all this could take place. In Britain no money changed hands. Gordon Brown offered light-touch regulation for free – egged on by the Tories, who wanted to go further.

CDOs for Dummies (The Big Picture)

This was the context in which Goldman’s Fabulous Fab created the disputed CDOs, Sean FitzPatrick allegedly moved loans between banks and Lehman created its Repo 105s along with the entire “debt mule” structure revealed this weekend of inter-related companies to shuffle debt around its empire. London and New York had become the centre of an international financial system in which the purpose of banking became making money from money – and where the complexity of the “innovations” allowed extensive fraud and deception.

Now it has all collapsed, to be bailed out by western taxpayers. The banks are resisting reform – and want to cling on to the business practices and business model that has so appallingly failed. It is obvious why: it makes them very rich. The politicians tread carefully, only proposing what the bankers say is congruent with their definition of what banking should be. Labour and Tories alike are united in opposing improved EU regulation of hedge funds, buying the propaganda those operations had nothing to do with the crisis. Perhaps Paulson’s trades at Goldman, and the hedge funds’ appetite for speculating in credit default swaps, may disabuse them.

Goldman Sachs has a derivative exposure of $44.192 Trillion dollars.
The $1 Trillion pillars towers are double-stacked @ 930 feet (248 m).
The White House is standing next to the Statue of Liberty.
Goldman Sachs has advantage over other banks because it has awesome
connections in US Government. A lot of former Goldman employees hold high-level
US Government positions (chart).
Mitt Romney’s top donor is Goldman Sachs, and one of Obama’s best donors.
Ex-CEO of Goldman Sachs, Hank Paulson became the Secretary of Treasury under Bush and
during the 2008 financial crisis authored the TARP bill demanding $700 billion bail-out.
In UK, Goldman Sachs escaped £10 million bill on a failed tax avoidance scheme with help of good connections.
The bank is the largest player in the food commodities market, earned $955m from food speculation in 2009″ – That’s your $$$.
Goldman Sachs employees are arming themselves with guns in case there is a populist uprising against the bank.
Goldman Sachs calls their investors “muppets”. and use clients to make money for themselves, disregarding the clients.
The bank was fined $22 million for sharing valuable nonpublic information with top clients (Think insider trading with best clients).
Goldman Sachs was part-owner America’s leading website for prostitution ads until the ownership stake was exposed.
Goldman Sachs helped Greece conceal its debt with secret loans, while simultaneously taking advantage of Greece.
Goldman Sachs got a $814 billion SECRET bailout from the Federal Reserve during the 2008 crisis.
Goldman Sachs got $10 billion of the 2008 TARP bailout, and in the same year paid $10.9 billion in employee compensation and “benefits”, while paying a tax rate of 1%. That means an average of $327,000 to each Goldman Sach’s employee.

It is time to reframe the question. Banks and financial institutions should do what economy and society want them to do – support enterprise, direct credit to where it is needed and be part of the system that generates investment and innovation. Andrew Haldane – and the governor of the Bank of England – are right. We need to break up our banks, limit their capacity to speculate and bring them back to earth. Britain should also launch an official investigation into what went wrong – and hand the findings to the Serious Fraud Office. This needs to become this election campaign’s number one issue – not one which either a compromised Labour party or a temporising Conservative party will relish. The Lib Dems, the fiercest critics of the banks, have begun to get very lucky.

SOURCE: The Guardian
http://www.guardian.co.uk/business/2010/apr/18/goldman-sachs-regulators-civil-charges?fb=optOut

The Fed’s Nuclear Balance Sheet. Stand Back: This Baby’s Going to Explode

Mitch Feierstein
Author, ‘Planet Ponzi’

 

Over the coming weeks, we’re going to be hearing a lot about the ‘fiscal cliff’: the threat that some 5% of GDP is going to be ripped out of the economy in a combination of tax hikes and spending cuts. A fiscal slow-down on that scale will almost certainly trigger recession. The CBO thinks so, though their numbers look optimistic to me. (If you cut demand by 5%, more or less overnight, then you shouldn’t expect the economy to grow by more than 1% in the year following.)

Because the process of fiscal compromise acts itself out on the political stage – all big personalities and high drama – the media loves to report it. Loves to imply that vast questions are at stake, that political careers will stand or fall by the outcome.

But they’re not. Not really. This so-called ‘cliff’ is really just the first in a series of steps. The US budget is arguably the most distorted in the Western world. Greece and Japan may have higher debts, Italy and Portugal may have worse growth prospects – but for sheer budgetary insanity, the US is probably the world leader, combining huge current deficits with vast unfunded promises to retirees, and welfare entitlement program recipients. You don’t need to take my word for this. The IMF states, ‘under our baseline scenario, a full elimination of the fiscal and generational imbalances would require all taxes to go up and all transfers to be cut immediately and permanently by 35 percent. A delay in the adjustment makes it more costly.’

The political ructions of the next few weeks will simply constitute the first scenes in a drama that will run for the next ten or fifteen years. And what’s more, this is a play where we already know the ending. Taxes will have to go up. Spending will have to come down. No other outcome is available: just ask the Greeks.

And meantime, there is a monetary time-bomb charged and ticking. A bomb which is being constantly primed with further explosive, further destructive force. Remember that the economic catastrophe of 2008 was created by loose monetary policy, the indisciplined expansion of credit and a market where increasingly shoddy securities were sold as investment grade assets. You might think that a logical reaction would be the steady tightening of policy and encouraging a climate of credit discipline.

Alas, however, such logic has no place at the Fed. Interest rates are on the floor, and have been for four years now. Because four years of loose money isn’t enough for the ivory-tower academics in charge of monetary policy, the Fed has explicitly committed to keep rates low indefinitely.

Loose money in the past, loose money guaranteed into the future … but that’s still not enough. The Fed has enlarged its balance sheet by $2 trillion since the crisis began to unfold. But that doesn’t even say it. The unelected officials at the Fed handed out an extraordinary $16 trillion in secret loans to bail out banks and businesses in the 2008-10 period. Those loans were not known to, or authorized by, Congress and many of the recipients were firms owned and headquarter abroad. Sen. Bernie Sanders, who has much to call attention to these issues, comments, ‘No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president.’ Well, duh! It’s frankly extraordinary that there should be any question about this.

As Sanders also points out, the actual operation of the bailouts was largely outsourced in large part to investment banking firms on Wall Street who benefitted directly from the bailout. According to the Government Accountability Office, some two-thirds of such outsourcing contracts were awarded on a no-bid basis, an extraordinary failure. And meantime in a ‘money-laundering’ style operation, the Fed is acquiring $40 billion of low-quality mortgage backed securities – in many cases from the firms that created and missold them – thereby cleaning corrupt balance sheets at the risk of the US taxpayer.

The problems created by this unconstitutional misconduct go far beyond the mere trillions of dollars involved. The US Treasury market is being currently manipulated on a heroic scale. At times we’ve seen the Fed buying as much as 70% of US government bond issuance. Worse still, it’s effectively told the market that it intends to continue supporting the market as much as necessary for as long as necessary. In effect, we have a tiny group of unelected officials pursuing a set of radical and experimental policies – QE infinity, money-printing, unlimited bond buying, call it what you will.

And the theory behind this activity is simply crazy. When have price controls and state intervention ever worked? I don’t just mean for the US Treasuries market, but for any major market at any time? State intervention always fails. The Fed is simply setting up what looks set to be the largest Ponzi Scheme in history.

What’s more, because financial markets are interlinked, indiscipline in one market soon ripples through the system and unintended consequences impact many other markets. Wall Street traders, both currently and historically, price junk bonds off the US ten year treasury, which currently trades at an implausible 1.61%. But since the US Treasury market is flawed, every related market is too. As the Economist notes, a bubble is being inflated in government bonds, quality corporate bonds, junk bonds, and (I would add) global equities. As that newspaper comments, ‘When the market does turn everyone will want to head for the exit at once, as was the case with mortgage-related bonds in 2007. That might turn a retreat into a rout.’ I’d agree, except that the word might ought to be will.

And all this wouldn’t be so bad, except for one thing. What’s the exit strategy? Could it be hope-based by any chance? How do you climb down from these heights? Who will buy these bonds when the Fed stops? Who absorbs the losses? What exactly happens to the economy when interest rates normalize and bond prices collapse back to normal levels? Indeed, what happens to the banks when they can no longer sell their lousy assets to the Fed, can’t bump up their profits by selling no-bid services to the dumbest buyer in town? Too big to fail is still getting bigger.

The fiscal cliff is scary, because an abrupt one-off change in fiscal posture is a dumb way to do something that needs doing. But still, it needs doing. If a temporary economic slowdown is the price we pay for that, too bad. We’ll still be in better shape for taking the hit.

The monetary neutron bomb is worse. We’re still building it. No one’s talking about it. And the amounts are colossal.

The Fed’s Nuclear Balance Sheet. Stand Back: This Baby’s Going to Explode

“The political ructions of the next few weeks will simply constitute the first scenes in a drama that will run for the next ten or fifteen years. And what’s more, this is a play where we already know the ending. Taxes will have to go up. Spending will have to come down. No other outcome is available: just ask the Greeks.”

 

 

Mitch Feierstein
Author, ‘Planet Ponzi’
Posted: 11/16/2012 4:54 pm

Over the coming weeks, we’re going to be hearing a lot about the ‘fiscal cliff’: the threat that some 5% of GDP is going to be ripped out of the economy in a combination of tax hikes and spending cuts. A fiscal slow-down on that scale will almost certainly trigger recession. The CBO thinks so, though their numbers look optimistic to me. (If you cut demand by 5%, more or less overnight, then you shouldn’t expect the economy to grow by more than 1% in the year following.)

Because the process of fiscal compromise acts itself out on the political stage – all big personalities and high drama – the media loves to report it. Loves to imply that vast questions are at stake, that political careers will stand or fall by the outcome.

But they’re not. Not really. This so-called ‘cliff’ is really just the first in a series of steps. The US budget is arguably the most distorted in the Western world. Greece and Japan may have higher debts, Italy and Portugal may have worse growth prospects – but for sheer budgetary insanity, the US is probably the world leader, combining huge current deficits with vast unfunded promises to retirees, and welfare entitlement program recipients. You don’t need to take my word for this. The IMF states, ‘under our baseline scenario, a full elimination of the fiscal and generational imbalances would require all taxes to go up and all transfers to be cut immediately and permanently by 35 percent. A delay in the adjustment makes it more costly.’

The political ructions of the next few weeks will simply constitute the first scenes in a drama that will run for the next ten or fifteen years. And what’s more, this is a play where we already know the ending. Taxes will have to go up. Spending will have to come down. No other outcome is available: just ask the Greeks.

And meantime, there is a monetary time-bomb charged and ticking. A bomb which is being constantly primed with further explosive, further destructive force. Remember that the economic catastrophe of 2008 was created by loose monetary policy, the indisciplined expansion of credit and a market where increasingly shoddy securities were sold as investment grade assets. You might think that a logical reaction would be the steady tightening of policy and encouraging a climate of credit discipline.

Alas, however, such logic has no place at the Fed. Interest rates are on the floor, and have been for four years now. Because four years of loose money isn’t enough for the ivory-tower academics in charge of monetary policy, the Fed has explicitly committed to keep rates low indefinitely.

Loose money in the past, loose money guaranteed into the future … but that’s still not enough. The Fed has enlarged its balance sheet by $2 trillion since the crisis began to unfold. But that doesn’t even say it. The unelected officials at the Fed handed out an extraordinary $16 trillion in secret loans to bail out banks and businesses in the 2008-10 period. Those loans were not known to, or authorized by, Congress and many of the recipients were firms owned and headquarter abroad. Sen. Bernie Sanders, who has much to call attention to these issues, comments, ‘No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president.’ Well, duh! It’s frankly extraordinary that there should be any question about this.

As Sanders also points out, the actual operation of the bailouts was largely outsourced in large part to investment banking firms on Wall Street who benefitted directly from the bailout. According to the Government Accountability Office, some two-thirds of such outsourcing contracts were awarded on a no-bid basis, an extraordinary failure. And meantime in a ‘money-laundering’ style operation, the Fed is acquiring $40 billion of low-quality mortgage backed securities – in many cases from the firms that created and missold them – thereby cleaning corrupt balance sheets at the risk of the US taxpayer.

The problems created by this unconstitutional misconduct go far beyond the mere trillions of dollars involved. The US Treasury market is being currently manipulated on a heroic scale. At times we’ve seen the Fed buying as much as 70% of US government bond issuance. Worse still, it’s effectively told the market that it intends to continue supporting the market as much as necessary for as long as necessary. In effect, we have a tiny group of unelected officials pursuing a set of radical and experimental policies – QE infinity, money-printing, unlimited bond buying, call it what you will.

And the theory behind this activity is simply crazy. When have price controls and state intervention ever worked? I don’t just mean for the US Treasuries market, but for any major market at any time? State intervention always fails. The Fed is simply setting up what looks set to be the largest Ponzi Scheme in history.

What’s more, because financial markets are interlinked, indiscipline in one market soon ripples through the system and unintended consequences impact many other markets. Wall Street traders, both currently and historically, price junk bonds off the US ten year treasury, which currently trades at an implausible 1.61%. But since the US Treasury market is flawed, every related market is too. As the Economist notes, a bubble is being inflated in government bonds, quality corporate bonds, junk bonds, and (I would add) global equities. As that newspaper comments, ‘When the market does turn everyone will want to head for the exit at once, as was the case with mortgage-related bonds in 2007. That might turn a retreat into a rout.’ I’d agree, except that the word might ought to be will.

And all this wouldn’t be so bad, except for one thing. What’s the exit strategy? Could it be hope-based by any chance? How do you climb down from these heights? Who will buy these bonds when the Fed stops? Who absorbs the losses? What exactly happens to the economy when interest rates normalize and bond prices collapse back to normal levels? Indeed, what happens to the banks when they can no longer sell their lousy assets to the Fed, can’t bump up their profits by selling no-bid services to the dumbest buyer in town? Too big to fail is still getting bigger.

The fiscal cliff is scary, because an abrupt one-off change in fiscal posture is a dumb way to do something that needs doing. But still, it needs doing. If a temporary economic slowdown is the price we pay for that, too bad. We’ll still be in better shape for taking the hit.

The monetary neutron bomb is worse. We’re still building it. No one’s talking about it. And the amounts are colossal.