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Gary Edwards

How Government Failure Caused the Great Recession - The American, A Magazine of Ideas - 0 views

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    The banking crisis that began in August 2007 shocked markets and precipitated the Great Recession. To fully explain the banking crisis, one must account for its timing, severity, and global impact. One must also confront a startling historical contrast. If we define "banking crisis" to mean bank failures and system losses exceeding 1 percent of a country's gross domestic product (GDP), we find that in the period 1875-1913, a period of marked expansion in international trade and capital flows comparable to the last three decades, there were only four banking crises worldwide.1 By contrast, in the period 1978-2009, a period of much more extensive bank regulation, central bank intervention, government protection of depositors and other bank creditors, and government control of mortgage markets, about 140 banking crises occurred worldwide. Of these, 20 were more severe than any crisis from the earlier period of 1875-1913, in terms of total bank losses as a percent of GDP. Leading financial economists such as Charles Calomiris have argued that a necessary condition for a banking crisis is government policy that distorts the micro-incentives of banks. Likewise, University of Chicago scholar Richard Posner has argued the banks that got into trouble during the recent crisis were simply taking "risks that seemed appropriate in the environment in which they found themselves."2 In the period 1978-2009, about 140 banking crises occurred worldwide. But then why didn't a banking crisis erupt sooner-say, in the recession years of 1990-1991 or 2001-2002? What changed in recent years that led to business risk-taking capable of wrecking the U.S. housing market and the U.S. banking system and other banking systems throughout the world? Further, why were prudent credit practices reasonably maintained in credit card and commercial mortgage securitization in recent years, but wholly abandoned in residential mortgage securitization?
Paul Merrell

The Only Thing We Have to Fear Is -- The CIA | War Is A Crime .org - 0 views

  • Fifty years ago, exactly one month after John Kennedy was killed, the Washington Post published an op-ed titled “Limit CIA Role to Intelligence.” The first sentence of that op-ed on Dec. 22, 1963, read, “I think it has become necessary to take another look at the purpose and operations of our Central Intelligence Agency.” It sounded like the intro to a bleat from some liberal professor or journalist. Not so. The writer was former President Harry S. Truman, who spearheaded the establishment of the CIA 66 years ago, right after World War II, to better coordinate U.S. intelligence gathering. But the spy agency had lurched off in what Truman thought were troubling directions.
  • Is this why the President feels he cannot fire his clumsily devious Director of National Intelligence James Clapper, who had to apologize to Congress for giving “clearly erroneous” testimony in March? Is this why he allows National Security Agency Director Keith Alexander and counterparts in the FBI to continue to mislead the American people, even though the intermittent snow showers from Snowden show our senior national security officials to have lied — and to have been out of control? This may be small solace to President Obama, but there is no sign that the NSA documents that Snowden’s has released include the Senate Intelligence Committee’s 6,300-page report on CIA torture. Rather, that report, at least, seems sure to be under Obama’s and Senate Intelligence Committee chair Dianne Feinstein’s tight control.
  • But Kennedy stuck to his guns, so to speak. He fired Dulles and his co-conspirators a few months after the abortive invasion, and told a friend that he wanted to “splinter the CIA into a thousand pieces and scatter it into the winds.” The outrage was very obviously mutual.
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  • Truman concluded the op-ed with an admonition that was as clear as the syntax was clumsy: “I would like to see the CIA restored to its original assignment as the intelligence arm of the President, and that whatever else it can properly perform in that special field – and that its operational duties be terminated or properly used elsewhere.” The importance and prescient nature of that admonition are even clearer today, a half-century later.
  • After Kennedy was murdered in Dallas, the patrician, well-connected Dulles got himself appointed to the Warren Commission and took the lead in shaping the investigation of JFK’s assassination. Documents in the Truman Library show that Dulles also mounted a small domestic covert action of his own to neutralize any future airing of Truman’s and Souers’s warnings about covert action.
  • As the de facto head of the Warren Commission, Dulles was perfectly positioned to protect himself and his associates, were any commissioners or investigators — or journalists — tempted to question whether Dulles and the CIA played a role in killing Kennedy. And so, the question: Did Allen Dulles and other “cloak-and-dagger” CIA operatives have a hand in John Kennedy’s assassination and in then covering it up? In my view, the best dissection of the evidence pertaining to the murder appeared in James Douglass’s 2008 book, JFK and the Unspeakable. After updating and arraying the abundant evidence, and conducting still more interviews, Douglass concludes that the answer is Yes.
  • The mainstream media had an allergic reaction to Douglass’s book and gave it almost no reviews. It is, nevertheless, still selling well. And, more important, it seems a safe bet that President Barack Obama knows what it says and maybe has even read it. This may go some way toward explaining why Obama has been so deferential to the CIA, NSA, FBI and the Pentagon. Could this be at least part of the reason he felt he had to leave the Cheney/Bush-anointed torturers, kidnappers and black-prison wardens in place, instructing his first CIA chief Leon Panetta to become, in effect, the agency’s lawyer rather than leader.
  • Sadly, those concerns that Truman expressed in that op-ed — that he had inadvertently helped create a Frankenstein monster — are as valid today as they were 50 years ago, if not more so.
  • But the timorous President has a big problem. He is acutely aware that, if released, the Senate committee report would create a firestorm – almost certainly implicating Obama’s CIA Director John Brennan and many other heavy-hitters of whom he appears to be afraid. And so Obama has allowed Brennan to play bureaucratic games, delaying release of the report for more than a year, even though its conclusions are said to closely resemble earlier findings of the CIA’s own Inspector General and the Constitution Project (see below).
  • Hat tip to the New Yorker’s Jane Mayer, who took the trouble to read the play-by-play of testimony to the Senate Intelligence Committee by former CIA General Counsel (2009-2013) Stephen W. Preston, nominated (and now confirmed) to be general counsel at the Department of Defense. Under questioning by Sen. Mark Udall, D-Colorado, Preston admitted outright that, contrary to the CIA’s insistence that it did not actively impede congressional oversight of its detention and interrogation program, “briefings to the committee included inaccurate information related to aspects of the program of express interest to Members.”
  • That “inaccurate information” apparently is thoroughly documented in the Senate Intelligence Committee report which, largely because of the CIA’s imaginative foot-dragging, cost taxpayers $40 million. Udall has revealed that the report (which includes 35,000 footnotes) contains a very long section titled “C.I.A. Representations on the C.I.A. Interrogation Program and the Effectiveness of the C.I.A.’s Enhanced Interrogation Techniques to Congress.” Preston also acknowledged that the CIA inadequately informed the Justice Department on interrogation and detention. He said, “CIA’s efforts fell well short of our current practices when it comes to providing information relevant to [the Office of Legal Counsel]’s legal analysis.”
  • As Katherine Hawkins, the senior investigator for last April’s bipartisan, independent report by the Constitution Project’s Task Force on Detainee Treatment, noted in an Oct. 18, 2013 posting, the memos from acting OLC chief, Steven Bradbury, relied very heavily on now-discredited CIA claims that “enhanced interrogation” saved lives, and that the sessions were carefully monitored by medical and psychological personnel to ensure that detainees’ suffering would not rise to the level of torture. According to Hawkins, Udall complained – and Preston admitted – that, in providing the materials requested by the committee, “the CIA removed several thousand CIA documents that the agency thought could be subjected to executive privilege claims by the President, without any decision by Obama to invoke the privilege.”
  • Worse still for the CIA, the Senate Intelligence Committee report apparently destroys the agency’s argument justifying torture on the grounds that there was no other way to acquire the needed information save through brutalization. In his answers to Udall, Preston concedes that, contrary to what the agency has argued, it can and has been established that legal methods of interrogation would have yielded the same intelligence. Is anyone still wondering why our timid President is likely to sit on the Senate Intelligence Committee report for as long as he can? Or why he will let John Brennan redact it to a fare-thee-well, if he is eventually forced to release some of it by pressure from folks who care about things like torture?
  • It does appear that the newly taciturn CIA Director Brennan has inordinate influence over the President in such matters – not unlike the influence that both DNI Clapper and NSA Director Alexander seem able to exert. In this respect, Brennan joins the dubious company of the majority of his predecessor CIA directors, as they made abundantly clear when they went to inordinate lengths to prevent their torturer colleagues from being held accountable. (Also, see “CIA Torturers Running Scared,” Sept. 20, 2009; or “Are Presidents Afraid of the CIA?” Dec. 29, 2009)
Paul Merrell

BBC News - Farage: UKIP has 'momentum' and is targeting more victories - 0 views

  • The UK Independence Party is a truly national force and has "momentum" behind it, Nigel Farage has said after its victory in the European elections. Hailing a "breakthrough" in Scotland and a strong showing in Wales, he said UKIP would target its first Westminster seat in next week's Newark by-election. Lib Dem leader Nick Clegg has said he will not resign after his party lost all but one of its 12 MEPs. He said he was not going to "walk away" from the job despite the poor results. Mr Farage has been celebrating his party's triumph in the European polls, the first time a party other than the Conservatives or Labour has won a national election for 100 years.
  • The UK Independence Party is a truly national force and has "momentum" behind it, Nigel Farage has said after its victory in the European elections. Hailing a "breakthrough" in Scotland and a strong showing in Wales, he said UKIP would target its first Westminster seat in next week's Newark by-election. Lib Dem leader Nick Clegg has said he will not resign after his party lost all but one of its 12 MEPs.
  • The UK Independence Party is a truly national force and has "momentum" behind it, Nigel Farage has said after its victory in the European elections. Hailing a "breakthrough" in Scotland and a strong showing in Wales, he said UKIP would target its first Westminster seat in next week's Newark by-election. Lib Dem leader Nick Clegg has said he will not resign after his party lost all but one of its 12 MEPs. He said he was not going to "walk away" from the job despite the poor results.
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  • UKIP won 27.5% of the vote and had 24 MEPs elected. Labour, on 25.4%, has narrowly beaten the Tories into third place while the Lib Dems lost all but one of their seats and came sixth behind the Greens. With Northern Ireland yet to declare its results, the election highlights so far have been: Far-right, anti-EU parties, including the Front National in France, made gains across Europe, as did anti-austerity groups from the left Labour has 20 MEPs so far, an increase of seven on 2009, which was a record low point for the party It topped the poll in Wales by a narrow margin from UKIP. The SNP won two seats in Scotland, where UKIP also won its first MEP
  • The Conservatives have so far secured 24% of the vote nationally and lost seven seats The Lib Dems slumped to fifth place The Green Party came fourth and has got three MEPs - one more than it achieved in 2009. BNP leader Nick Griffin lost his seat as the party was wiped out, the English Democrats also saw their vote share fall
  • Mr Farage has said his party intends to build on what he has described as "the most extraordinary result" in British politics in the past century.
  • Speaking in London at an election rally, he said his party now appealed to all social classes and had made significant inroads in Wales and Scotland as well as winning the most votes in England.
  • He said the party was aiming to win the Newark by-election next week, to try and "turn the heat" up on David Cameron. They would target a dozen or more seats in next year's general election, he added. "Our game is to get this right, to find the right candidates, and focus our resources on getting a good number of seats in Westminster next year. "If UKIP do hold the balance of power, then indeed there will be a (EU) referendum."
  • Mr Farage said Labour would come under "enormous pressure" to offer the voters a referendum on Europe, and he said he did not believe Nick Clegg would still be Lib Dem leader at the general election. "The three party leaders are like goldfish that have been tipped out of their bowl onto the floor and are gasping for air," he said.
  • Mr Clegg is facing calls to stand down after Sunday night's results, with MP John Pugh saying the "abysmal" performance meant the Lib Dem leader should make way for Vince Cable. But Mr Clegg said he had no intention of stepping down despite the "gut-wrenching" loss of most of the party's representatives in Brussels. "Of course it's right to have searching questions after such a bad set of results," he said. "But the easiest thing in politics when the going gets really really tough is to wash your hands of it and walk away, but I'm not going to do that and neither is my party."
  • Lib Dem Business Secretary Vince Cable added: "These were exceptionally disappointing results for the party. Many hard-working Liberal Democrats, who gave this fight everything they had and then lost their seats, are feeling frustrated and disheartened and we all understand that." Mr Clegg "deserves tremendous credit" for having been bold enough to stand up to "the Eurosceptic wave which has engulfed much of continental Europe", he said. The party had taken a "kicking for being in government with the Conservatives", but must now "hold its nerve", he said.
  • Reacting to his third place, David Cameron said the public was "disillusioned" with the EU and their message had been "received and understood", but he rejected calls to bring forward his proposed in/out EU referendum to 2016.
  • After UKIP's success, the Tory leadership is facing renewed calls for an electoral pact with their rivals to avoid a split in the right of British politics at next year's general election. Daniel Hannan, who was returned as a Tory MEP in the South East region, said it would be "sad" if the two parties "were not able to find some way, at least in marginal seats, of reaching an accommodation so that anti-referendum candidates don't get in with a minority of votes". But Mr Cameron said it was a "myth" that the two parties had a shared agenda. Labour was looking at one stage as if it might be beaten into third place by the Tories - a potentially disastrous result for Ed Miliband as he seeks to show he can win next year's general election. But the party was rescued by another strong showing in London - and it took heart from local election results in battleground seats, which party spokesmen suggested were a better guide to general election performance.
  • Mr Miliband said the party was "making progress" but had "further to go" if it was to prevail in next year's general election. He said the outcome of the elections was about more than Europe and his party must respond to a "desire for change" over a wide range of issues. BNP leader Nick Griffin lost his seat and saw his party's vote collapse by 6% in the North West of England. Anti-EU parties from the left and right have gained significant numbers of MEPs across all 28 member states in the wake of the eurozone crisis and severe financial squeeze. However, pro-EU parties will still hold the majority in parliament. Turnout across the EU is up slightly at 43.1%, according to estimates. Turnout in the UK was 33.8%, down slightly on last time.
  • In the European elections five years ago, the Conservatives got 27.7% of the total vote, ahead of UKIP on 16.5%, Labour on 15.7%, the Lib Dems on 13.7%, the Green Party on 8.6% and the BNP on 6.2%.
  • Eurosceptic 'earthquake' rocks EU Under pressure Clegg: I won't quit Miliband: Labour 'making progress' Cameron: We can still win in 2015 BNP wiped out in Euro elections UKIP looks to Westminster after win Calls for Clegg to quit 'ridiculous' Immigration target
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    UKIP sets the wheels to rocking on apple carts in the UK and EU, winning 24 of UK's 73 seats in the European Parliament and hundreds of seats in UK community governments, all at the expense of the front-running three parties in the UK's 2009 election.   Wikipedia: The UK Independence Party (UKIP) is a [hard] Eurosceptic, right-wing populist political party in the United Kingdom, founded in 1993. The party describes itself in its constitution as a "democratic, libertarian party." Now if we could just begin to see a NATO-sceptic party emerging across Europe ...  
Paul Merrell

Things Barack Obama Doesn't Consider "Abuse" | emptywheel - 0 views

  • President Obama will shortly give a speech in which he’ll make cosmetic changes to the NSA dragnet, but will continue, in many ways, the accessing of personal data from Americans with no probable cause. As part of his cosmetic effort, he will also say there has been no evidence of abuse in these programs. That means he does not consider any of the following abuse: The NSA spied on the porn and phone sex habits of ideological opponents, including those with no significant ties to extremists, and including a US person.
  • According to the NSA in 2009, it had a program similar to Project Minaret — the tracking of anti-war opponents in the 1970s — in which it spied on people in the US in the guise of counterterrorism without approval. We still don’t have details of this abuse. When the NSA got FISC approval for the Internet (2004) and phone (2006) dragnets, NSA did not turn off features of Bush’s illegal program that did not comply with the FISC authorization. These abuses continued until 2009 (one of them, the collection of Internet metadata that qualified as content, continued even after 2004 identification of those abuses). Even after the FISC spent 9 months reining in some of this abuse, the NSA continued to ignore limits on disseminating US person data. Similarly, the NSA and FBI never complied with PATRIOT Act requirements to develop minimization procedures for the Section 215 program (in part, probably, because NSA’s role in the phone dragnet would violate any compliant minimization procedures).
  • The NSA has twice — in 2009 and 2011 — admitted to collecting US person content in the United States in bulk after having done so for years. It tried to claim (and still claims publicly in spite of legal rulings to the contrary) this US person content did not count as intentionally-collected US person content (FISC disagreed both times), and has succeeded in continuing some of it by refusing to count it, so it can claim it doesn’t know it is happening. As recently as spring 2012, 9% of the NSA’s violations involved analysts breaking standard operating procedures they know. NSA doesn’t report these as willful violations, however, because they’ve deemed any rule-breaking in pursuit of “the mission” not to be willful violations. In 2008, Congress passed a law allowing bulk collection of foreign-targeted content in the US, Section 702, to end the NSA’s practice of stealing Internet company data from telecom cables. Yet in spite of having a legal way to acquire such data, the NSA (through GCHQ) continues to steal data from some of the same companies, this time overseas, from their own cables. Arguably this is a violation of Section 702 of FISA.
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  • NSA may intentionally collect US person content (including Internet metadata that legally qualifies as content) overseas (it won’t count this data, so we don’t know how systematic it is). If it does, it may be a violation of Section 703 of FISA. Rather than discussing any of these violations, the NSA has waved around a few cases of LOVEINT (most, if not all, of which have not been prosecuted) as part of a successful ploy to distract from much more systemic abuses of its authority, affecting far more Americans. But there has been abuse, even beyond practices (like back door searches) that gut the Fourth Amendment or (like NSA’s approach to encryption) that hurt Americans’ security. President Obama will spend a lot of time saying there have been no abuses. He’s wrong.
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    One I had missed before, Marcy Wheeler's missive just before Obama delivered his speech on the NSA in January 2014, announcing his proposed "reforms."
Paul Merrell

Bail-In and the Financial Stability Board: The Global Bankers' Coup | nsnbc international - 0 views

  • Ellen H. Brown (WoD) : On December 11, 2014, the US House passed a bill repealing the Dodd-Frank requirement that risky derivatives be pushed into big-bank subsidiaries, leaving our deposits and pensions exposed to massive derivatives losses. The bill was vigorously challenged by Senator Elizabeth Warren; but the tide turned when Jamie Dimon, CEO of JPMorganChase, stepped into the ring. Perhaps what prompted his intervention was the unanticipated $40 drop in the price of oil. As financial blogger Michael Snyder points out, that drop could trigger a derivatives payout that could bankrupt the biggest banks. And if the G20’s new “bail-in” rules are formalized, depositors and pensioners could be on the hook. The new bail-in rules were discussed in my last last article entitled “New G20 Rules: Cyprus-style Bail-ins to Hit Depositors AND Pensioners.” They are edicts of the Financial Stability Board (FSB), an unelected body of central bankers and finance ministers headquartered in the Bank for International Settlements in Basel, Switzerland. Where did the FSB get these sweeping powers, and is its mandate legally enforceable?
  • Those questions were addressed in an article I wrote in June 2009, two months after the FSB was formed, titled “Big Brother in Basel: BIS Financial Stability Board Undermines National Sovereignty.” It linked the strange boot shape of the BIS to a line from Orwell’s 1984: “a boot stamping on a human face—forever.” The concerns raised there seem to be materializing, so I’m republishing the bulk of that article here. We need to be paying attention, lest the bail-in juggernaut steamroll over us unchallenged. The Shadowy Financial Stability Board Alarm bells went off in April 2009, when the Bank for International Settlements (BIS) was linked to the new Financial Stability Board (FSB) signed onto by the G20 leaders in London. The FSB was an expansion of the older Financial Stability Forum (FSF) set up in 1999 to serve in a merely advisory capacity by the G7 (a group of finance ministers formed from the seven major industrialized nations). The chair of the FSF was the General Manager of the BIS. The new FSB was expanded to include all G20 members (19 nations plus the EU).
  • Formally called the “Group of Twenty Finance Ministers and Central Bank Governors,” the G20 was, like the G7, originally set up as a forum merely for cooperation and consultation on matters pertaining to the international financial system. What set off alarms was that the new Financial Stability Board had real teeth, imposing “obligations” and “commitments” on its members; and this feat was pulled off without legislative formalities, skirting the usual exacting requirements for treaties. It was all done in hasty response to an “emergency.” Problem-reaction-solution was the slippery slope of coups. Buried on page 83 of an 89-page Report on Financial Regulatory Reform issued by the US Obama administration was a recommendation that the FSB strengthen and institutionalize its mandate to promote global financial stability. It sounded like a worthy goal, but there was a disturbing lack of detail. What was the FSB’s mandate, what were its expanded powers, and who was in charge? An article in The London Guardian addressed those issues in question and answer format:
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  • For three centuries, private international banking interests have brought governments in line by blocking them from issuing their own currencies and requiring them to borrow banker-issued “banknotes” instead. Political colonialism is now a thing of the past, but under the new FSB guidelines, nations could still be held in feudalistic subservience to foreign masters. Consider this scenario: the new FSB rules precipitate a massive global depression due to contraction of the money supply. XYZ country wakes up to the fact that all of this is unnecessary – that it could be creating its own money, freeing itself from the debt trap, rather than borrowing from bankers who create money on computer screens and charge interest for the privilege of borrowing it. But this realization comes too late: the boot descends and XYZ is crushed into line. National sovereignty has been abdicated to a private committee, with no say by the voters. Marilyn Barnewall, dubbed by Forbes Magazine the “dean of American private banking,” wrote in an April 2009 article titled “What Happened to American Sovereignty at G-20?”: It seems the world’s bankers have executed a bloodless coup and now represent all of the people in the world. . . . President Obama agreed at the G20 meeting in London to create an international board with authority to intervene in U.S. corporations by dictating executive compensation and approving or disapproving business management decisions.  Under the new Financial Stability Board, the United States has only one vote. In other words, the group will be largely controlled by European central bankers. My guess is, they will represent themselves, not you and not me and certainly not America.
  • Are these commitments legally binding? Adoption of the FSB was never voted on by the public, either individually or through their legislators. The G20 Summit has been called “a New Bretton Woods,” referring to agreements entered into in 1944 establishing new rules for international trade. But Bretton Woods was put in place by Congressional Executive Agreement, requiring a majority vote of the legislature; and it more properly should have been done by treaty, requiring a two-thirds vote of the Senate, since it was an international agreement binding on the nation. “Bail-in” is not the law yet, but the G20 governments will be called upon to adopt the FSB’s resolution measures when the proposal is finalized after taking comments in 2015. The authority of the G20 has been challenged, but mainly over whether important countries were left out of the mix. The omitted countries may prove to be the lucky ones, having avoided the FSB’s net.
Paul Merrell

The U.S. Government's Secret Plans to Spy for American Corporations - The Intercept - 0 views

  • Throughout the last year, the U.S. government has repeatedly insisted that it does not engage in economic and industrial espionage, in an effort to distinguish its own spying from China’s infiltrations of Google, Nortel, and other corporate targets. So critical is this denial to the U.S. government that last August, an NSA spokesperson emailed The Washington Post to say (emphasis in original): “The department does ***not*** engage in economic espionage in any domain, including cyber.” After that categorical statement to the Post, the NSA was caught spying on plainly financial targets such as the Brazilian oil giant Petrobras; economic summits; international credit card and banking systems; the EU antitrust commissioner investigating Google, Microsoft, and Intel; and the International Monetary Fund and World Bank. In response, the U.S. modified its denial to acknowledge that it does engage in economic spying, but unlike China, the spying is never done to benefit American corporations.
  • Director of National Intelligence James Clapper, for instance, responded to the Petrobras revelations by claiming: “It is not a secret that the Intelligence Community collects information about economic and financial matters…. What we do not do, as we have said many times, is use our foreign intelligence capabilities to steal the trade secrets of foreign companies on behalf of—or give intelligence we collect to—U.S. companies to enhance their international competitiveness or increase their bottom line.” But a secret 2009 report issued by Clapper’s own office explicitly contemplates doing exactly that. The document, the 2009 Quadrennial Intelligence Community Review—provided by NSA whistleblower Edward Snowden—is a fascinating window into the mindset of America’s spies as they identify future threats to the U.S. and lay out the actions the U.S. intelligence community should take in response. It anticipates a series of potential scenarios the U.S. may face in 2025, from a “China/Russia/India/Iran centered bloc [that] challenges U.S. supremacy” to a world in which “identity-based groups supplant nation-states,” and games out how the U.S. intelligence community should operate in those alternative futures—the idea being to assess “the most challenging issues [the U.S.] could face beyond the standard planning cycle.”
  • One of the principal threats raised in the report is a scenario “in which the United States’ technological and innovative edge slips”— in particular, “that the technological capacity of foreign multinational corporations could outstrip that of U.S. corporations.” Such a development, the report says “could put the United States at a growing—and potentially permanent—disadvantage in crucial areas such as energy, nanotechnology, medicine, and information technology.” How could U.S. intelligence agencies solve that problem? The report recommends “a multi-pronged, systematic effort to gather open source and proprietary information through overt means, clandestine penetration (through physical and cyber means), and counterintelligence” (emphasis added). In particular, the DNI’s report envisions “cyber operations” to penetrate “covert centers of innovation” such as R&D facilities.
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  • In a graphic describing an “illustrative example,” the report heralds “technology acquisition by all means.” Some of the planning relates to foreign superiority in surveillance technology, but other parts are explicitly concerned with using cyber-espionage to bolster the competitive advantage of U.S. corporations. The report thus envisions a scenario in which companies from India and Russia work together to develop technological innovation, and the U.S. intelligence community then “conducts cyber operations” against “research facilities” in those countries, acquires their proprietary data, and then “assesses whether and how its findings would be useful to U.S. industry” (click on image to enlarge):
  • he report describes itself as “an essential long-term piece, looking out between 10 and 20 years” designed to enable ”the IC [to] best posture itself to meet the range of challenges it may face.” Whatever else is true, one thing is unmistakable: the report blithely acknowledges that stealing secrets to help American corporations secure competitive advantage is an acceptable future role for U.S. intelligence agencies. In May, the U.S. Justice Department indicted five Chinese government employees on charges that they spied on U.S. companies. At the time, Attorney General Eric Holder said the spying took place “for no reason other than to advantage state-owned companies and other interests in China,” and “this is a tactic that the U.S. government categorically denounces.” But the following day, The New York Times detailed numerous episodes of American economic spying that seemed quite similar. Harvard Law School professor and former Bush Justice Department official Jack Goldsmith wrote that the accusations in the indictment sound “a lot like the kind of cyber-snooping on firms that the United States does.” But U.S. officials continued to insist that using surveillance capabilities to bestow economic advantage for the benefit of a country’s corporations is wrong, immoral, and illegal.
  • Yet this 2009 report advocates doing exactly that in the event that ”that the technological capacity of foreign multinational corporations outstrip[s] that of U.S. corporations.” Using covert cyber operations to pilfer “proprietary information” and then determining how it ”would be useful to U.S. industry” is precisely what the U.S. government has been vehemently insisting it does not do, even though for years it has officially prepared to do precisely that.
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    DNI James Clapper caught telling another whopper. 
Paul Merrell

"Crisis At The Border" Is Yet Another Example Of "Blowback." - 0 views

  • If you’re reading this, you probably follow the news. So you’ve probably heard of the latest iteration of the “crisis at the border”: tens of thousands of children, many of them unaccompanied by an adult, crossing the desert from Mexico into the United States, where they surrender to the Border Patrol in hope of being allowed to remain here permanently. Immigration and Customs Enforcement’s detention and hearing system has been overwhelmed by the surge of children and, in some cases, their parents. The Obama Administration has asked Congress to approve new funding to speed up processing and deportations of these illegal immigrants. Even if you’ve followed this story closely, you probably haven’t heard the depressing backstory — the reason so many Central Americans are sending their children on a dangerous thousand-mile journey up the spine of Mexico, where they ride atop freight trains, endure shakedowns by corrupt police and face rapists, bandits and other predators. (For a sense of what it’s like, check out the excellent 2009 film “Sin Nombre.”) NPR and other mainstream news outlets are parroting the White House, which blames unscrupulous “coyotes” (human smugglers) for “lying to parents, telling them that if they put their kids in the hands of traffickers and get to the United States that they will be able to stay.” True: the coyotes are saying that in order to gin up business. Also true: U.S. law has changed, and many of these kids have a strong legal case for asylum. Unfortunately, U.S. officials are ignoring the law.
  • The sad truth is that this “crisis at the border” is yet another example of “blowback.” Blowback is an unintended negative consequence of U.S. political, military and/or economic intervention overseas — when something we did in the past comes back to bite us in the ass. 9/11 is the classic example; arming and funding radical Islamists in the Middle East and South Asia who were less grateful for our help than angry at the U.S.’ simultaneous backing for oppressive governments (The House of Saud, Saddam, Assad, etc.) in the region. More recent cases include U.S. support for Islamist insurgents in Libya and Syria, which destabilized both countries and led to the murders of U.S. consular officials in Benghazi, and the rise of ISIS, the guerilla army that imperils the U.S.-backed Maliki regime in Baghdad, respectively. Confusing the issue for casual American news consumers is that the current border crisis doesn’t involve the usual Mexicans traveling north in search of work. Instead, we’re talking about people from Central American nations devastated by a century of American colonialism and imperialism, much of that intervention surprisingly recent. Central American refugees are merely transiting through Mexico.
  • “The unaccompanied children crossing the border into the United States are leaving behind mainly three Central American countries, Honduras, El Salvador and Guatemala. The first two are among the world’s most violent and all three have deep poverty, according to a Pew Research report based on Department of Homeland Security (DHS) information,” reports NBC News. “El Salvador ranked second in terms of homicides in Latin America in 2011, and it is still high on the list. Honduras, Guatemala and El Salvador are among the poorest nations in Latin America. Thirty percent of Hondurans, 17 percent of Salvadorans and 26 percent of Guatemalans live on less than $2 a day.” The fact that Honduras is the biggest source of the exodus jumped out at me. That’s because, in 2009, the United States government — under President Obama — tacitly supported a military coup that overthrew the democratically elected president of Honduras. “Washington has a very close relationship with the Honduran military, which goes back decades,” The Guardian noted at the time. “During the 1980s, the US used bases in Honduras to train and arm the Contras, Nicaraguan paramilitaries who became known for their atrocities in their war against the Sandinista government in neighbouring Nicaragua.”
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  • Honduras wasn’t paradise under President Manuel Zelaya. Since the coup, however, the country has entered a downward death spiral of drug-related bloodshed and political revenge killings that crashed the economy, brought an end to law, order and civil society, and now has some analysts calling it a “failed state” along the lines of Somalia and Afghanistan during the 1990s. “Zelaya’s overthrow created a vacuum in security in which military and police were now focused more on political protest, and also led to a freeze in international aid that markedly worsened socio-economic conditions,” Mark Ungar, professor of political science at Brooklyn College and the City University of New York, told The International Business Times. “The 2009 coup, asserts [Tulane] professor Aaron Schneider, gave the Honduran military more political and economic leverage, at the same time as the state and political elites lost their legitimacy, resources and the capacity to govern large parts of the country.” El Salvador and Guatemala, also narcostates devastated by decades of U.S. support for oppressive, corrupt right-wing dictatorships, are suffering similar conditions.
  • Talk about brass! The United States does it everything it can to screw up Central America — and then acts surprised when desperate people show up at its front gate trying to escape the (U.S.-caused) carnage. Letting the kids stay — along with their families — is less than the least we could do.
Paul Merrell

THE 9/11 READER. The September 11, 2001 Terror Attacks | Global Research - 0 views

  • GLOBAL RESEARCH ONLINE INTERACTIVE READER SERIES GR I-BOOK No.  7  THE 9/11 READER The September 11, 2001 Terror Attacks 9/11 Truth: Revealing the Lies,  Commemorating the 9/11 Tragedy
  • August 2012 The 911/ Reader is part of Global Research’s Online Interactive I-Book Reader, which brings together, in the form of chapters, a collection of Global Research feature articles, including debate and analysis, on a broad theme or subject matter.  To consult our Online Interactive I-Book Reader Series, click here.
  • Table of Contents of the 9/11 Reader In Part I, the 911 Reader provides a review of what happened on the morning of 9/11, at the White House, on Capitol Hill, the Pentagon, at Strategic Command Headquarters (USSTRATCOM), What was the response of the US Air Force in the immediate wake of the attacks?  Part II focusses on “What Happened on the Planes” as described in the 9/11 Commission Report. Part III sheds light on what caused the collapse of the World Trade Center buildings. It also challenges the official narrative with regard to the attack on the Pentagon. Part IV reviews and refutes the findings of the 9/11 Commission Report. Part V focusses on the issue of foreknowledge by Western intelligence agencies. Part VI examines the issue of how foreknowledge of the attacks was used as an instrument of insider trading on airline stocks in the days preceding September 11, 2001. The bonanza financial gains resulting from insurance claims to the leaseholders of the WTC buildings is also examined.
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  • Part VII focusses on the history and central role of Al Qaeda as a US intelligence asset. Since the Soviet-Afghan war, US intelligence has supported the formation of various jihadist organizations. An understanding of this history is crucial in refuting the official 9/11 narrative which claims that Al Qaeda, was behind the attacks. Part VIII centers on the life and death of 9/11 “Terror Mastermind” Osama bin Laden, who was recruited by the CIA in the heyday of the Soviet Afghan war. This section also includes an analysis of the mysterious death of Osama bin Laden, allegedly executed by US Navy Seals in a suburb of Islamabad in May 2011. Part  IX  focusses on “False Flags” and the Pentagon’s “Second 9/11″. Part X examines the issue of “Deep Events” with contributions by renowned scholars Peter Dale Scott and Daniele Ganser. Part XI  examines the structure of 9/11 propaganda which consists in “creating” as well “perpetuating” a  “9/11 Legend”. How is this achieved? Incessantly, on a daily basis, Al Qaeda, the alleged 9/11 Mastermind is referred to by the Western media, government officials, members of the US Congress, Wall Street analysts, etc. as an underlying cause of numerous World events. Part XII focusses on the practice of 9/11 Justice directed against the alleged culprits of the 9/11 attacks. The legitimacy of 9/11 propaganda requires fabricating “convincing evidence” and “proof” that those who are accused actually carried out the attacks. Sentencing of Muslims detained in Guantanamo is part of war propaganda. It depicts innocent men who are accused of the 9/11 attacks, based on confessions acquired through systematic torture throughout their detention. Part  XIII focusses on 9/11 Truth.  The objective of 9/11 Truth is to ultimately dismantle the propaganda apparatus which is manipulating the human mindset. The 9/11 Reader concludes with a retrospective view of 9/11 ten years later.
  • PART  I Timeline: What Happened on the Morning of September 11, 2001 Nothing Urgent: The Curious Lack of Military Action on the Morning of September. 11, 2001 - by George Szamuely – 2012-08-12 Political Deception: The Missing Link behind 9-11 - by Michel Chossudovsky – 2002-06-20 On the morning of September 11, Pakistan’s Chief Spy General Mahmoud Ahmad, the alleged “money-man” behind the 9-11 hijackers, was at a breakfast meeting on Capitol Hill hosted by Senator Bob Graham and Rep. Porter Goss, the chairmen of the Senate and House Intelligence committees. 9/11 Contradictions: Bush in the Classroom - by Dr. David Ray Griffin – 2008-04-04 9/11 Contradictions: When Did Cheney Enter the Underground Bunker? - by David Ray Griffin – 2008-04-24 VIDEO: Pilots For 9/11 Truth: Intercepted Don’t miss this important documentary, now on GRTV - 2012-05-16
  • PART II What Happened on the Planes “United 93″: What Happened on the Planes? - by Michel Chossudovsky – 2006-05-01   Phone Calls from the 9/11 Airliners Response to Questions Evoked by My Fifth Estate Interview - by Prof David Ray Griffin – 2010-01-12 Given the cell phone technology available in 2001, cell phone calls from airliners at altitudes of more than a few thousand feet, were virtually impossible Ted Olson’s Report of Phone Calls from Barbara Olson on 9/11: Three Official Denials - by David Ray Griffin – 2008-04-01 Ted Olson’s report was very important. It provided apparent “evidence” that American 77 had struck the Pentagon.
  • PART III What Caused the Collapse of The WTC Buildings and the Pentagon? The Destruction of the World Trade Center: Why the Official Account Cannot Be True - by Dr. David Ray Griffin – 2006-01-29 The official theory about the Twin Towers says that they collapsed because of the combined effect of the impact of the airplanes and the resulting fires Evidence Refutes the Official 9/11 Investigation: The Scientific Forensic Facts - by Richard Gage, Gregg Roberts – 2010-10-13 VIDEO: Controlled Demolitions Caused the Collapse of the World Trade Center (WTC) buildings on September 11, 2001 - by Richard Gage – 2009-09-20 VIDEO: 9/11: The Myth and The Reality Now on GRTV - by Prof. David Ray Griffin – 2011-08-30 Undisputed Facts Point to the Controlled Demolition of WTC 7 - by Richard Gage – 2008-03-28 VIDEO: 9/11 Explosive Evidence: Experts Speak Out See the trailer for this ground-breaking film on GRTV - 2011-08-03 9/11: “Honest Mistake” or BBC Foreknowledge of Collapse of WTC 7? Jane Standley Breaks Her Silence - by James Higham – 2011-08-18 The Collapse of WTC Building Seven. Interview. Comment by Elizabeth Woodworth - by David Ray Griffin – 2009-10-17   Building What? How SCADs Can Be Hidden in Plain Sight: The 9/11 “Official Story” and the Collapse of WTC Building Seven - by Prof David Ray Griffin – 2010-05-30 Besides omitting and otherwise falsifying evidence, NIST also committed the type of scientific fraud called fabrication, which means simply “making up results.” VIDEO; Firefighters’ Analysis of the 9/11 Attacks Refutes the Official Report - by Erik Lawyer – 2012-08-27 VIDEO: Pentagon Admits More 9/11 Remains Dumped in Landfill - by James Corbett – 2012-03-01 The Pentagon revealed that some of the unidentifiable remains from victims at the Pentagon and Shanksville sites on September 11, 2001 were disposed of in a landfill. 9/11: The Attack on the Pentagon on September 11, 2001 The Official Version Amounts to an Enormous Lie - by Thierry Meyssan – 2012-08-16
  • PART IV Lies and Fabrications: The 9/11 Commission Report A National Disgrace: A Review of the 9/11 Commission Report - by David Ray Griffin – 2005-03-24 The 9/11 Commission Report: A 571 Page Lie - by Dr. David Ray Griffin – 2005-09-08 September 11, 2001: 21 Reasons to Question the Official Story about 9/11 - by David Ray Griffin – 2008-09-11 911 “Conspiracy Theorists” Vindicated: Pentagon deliberately misled Public Opinion Military officials made false statements to Congress and to the 911 Commission - by Michel Chossudovsky – 2006-08-02 The 9/11 Commission’s Incredible Tales Flights 11, 175, 77, and 93 - by Prof. David Ray Griffin – 2005-12-13 9/11 and the War on Terror: Polls Show What People Think 10 Years Later - by Washington’s Blog – 2011-09-10
  • PART  V Foreknowledge of 9/11   VIDEO: The SECRET SERVICE ON 9/11: What did the Government Know? Learn more on this week’s GRTV Feature Interview - by Kevin Ryan, James Corbett – 2012-04-10 9/11 Foreknowledge and “Intelligence Failures”: “Revealing the Lies” on 9/11 Perpetuates the “Big Lie” - by Prof. Michel Chossudovsky – 2011-09-14 “Foreknowledge” and “Failure to act” upholds the notion that the terrorist attacks (“act of war”) “waged by Muslims against America” are real, when all the facts and findings point towards coverup and complicity at the highest levels of the US government. Foreknowledge of 9/11 by Western Intelligence Agencies - by Michael C. Ruppert – 2012-08-21
  • PART XII Post 9/11 “Justice” IRAN ACCUSED OF BEING BEHIND 9/11 ATTACKS. U.S. Court Judgment, December 2011 (Havlish v. Iran) - by Julie Lévesque – 2012-05-11 U.S. Court Judgment, December 2011 (Havlish v. Iran) “American Justice”: The Targeted Assassination of Osama Bin Laden Extrajudicial executions are unlawful - by Prof. Marjorie Cohn – 2011-05-10 ALLEGED “MASTERMIND” OF 9/11 ON TRIAL IN GUANTANAMO: Military Tribunals proceed Despite Evidence of Torture - by Tom Carter – 2012-05-30 U.S. Military Drugged Detainees to Obtain FALSE Confessions Self-confessed 9/11 “mastermind” falsely confessed to crimes he didn’t commit - by Washington’s Blog – 2012-07-15 911 MILITARY TRIAL: Pentagon Clears Way for Military Trial of Five charged in 9/11 Attacks - by Bill Van Auken – 2012-04-06 Khalid Sheikh Mohammed’s trial will convict us all - by Paul Craig Roberts – 2009-11-25
  • PART VII 9/11 and the “Global War on Terrorism” (GWOT) Political Deception: The Missing Link behind 9-11 - by Michel Chossudovsky – 2002-06-20 On the morning of September 11, Pakistan’s Chief Spy General Mahmoud Ahmad, the alleged “money-man” behind the 9-11 hijackers, was at a breakfast meeting on Capitol Hill hosted by Senator Bob Graham and Rep. Porter Goss, the chairmen of the Senate and House Intelligence committees. 9/11 ANALYSIS: From Ronald Reagan and the Soviet-Afghan War to George W Bush and September 11, 2001 - by Michel Chossudovsky – 2010-09-09 Osama bin Laden was recruited by the CIA in 1979. The US spent millions of dollars to supply Afghan schoolchildren with textbooks filled with violent images and militant Islamic teachings.     The Central Role of Al Qaeda in Bush’s National Security Doctrine “Revealing the Lies” on 9/11 Perpetuates the “Big Lie” - by Michel Chossudovsky – 2007-07-12 September 11, 2001: America and NATO Declare War on Afghanistan NATO’s Doctrine of Collective Security - by Michel Chossudovsky – 2009-12-21   America’s Holy Crusade against the Muslim World. - by Michel Chossudovsky – 2010-08-30 What is now unfolding is a generalized process of demonization of an entire population group
  • Osamagate - by Michel Chossudovsky – 2001-10-09 The main justification for waging this war has been totally fabricated. The American people have been deliberately and consciously misled by their government into supporting a major military adventure which affects our collective future. The “Demonization” of Muslims and the Battle for Oil - by Michel Chossudovsky – 2007-01-04 Muslim countries possess three quarters of the World’s oil reserves. In contrast, the United States of America has barely 2 percent of total oil reserves.   Was America Attacked by Muslims on 9/11? - by David Ray Griffin – 2008-09-10 Much of US foreign policy since 9/11 has been based on the assumption that America was attacked by Muslims on 9/11.   New Documents Detail America’s Strategic Response to 9/11 Rumsfeld’s War Aim: “Significantly Change the World’s Political Map” - by National Security Archive – 2011-09-12
  • PART VIII The Alleged 9/11 Mastermind: The Life and Death of  Osama bin Laden Who Is Osama Bin Laden? - by Michel Chossudovsky – 2001-09-12   VIDEO: The Last Word on Osama Bin Laden - by James Corbett – 2011-05-24 Osama bin Laden: A Creation of the CIA - by Michel Chossudovsky – 2011-05-03 Interview with Osama bin Laden. Denies his Involvement in 9/11 Full text of Pakistani paper’s Sept 01 “exclusive” interview - 2011-05-09 Where was Osama on September 11, 2001? - by Michel Chossudovsky – 2008-09-11 On September 10. 2001, Osama was in a Pakistan military hospital in Rawalpindi, courtesy of America’s indefectible ally Pakistan Osama bin Laden, among the FBI’s “Ten Most Wanted Fugitives”: Why was he never indicted for his alleged role in 9/11? - by Michel Chossudovsky – 2006-09-17 Osama bin Laden: Already Dead… Evidence that Bin Laden has been Dead for Several Years - by Prof. David Ray Griffin – 2011-05-02 The Mysterious Death of Osama bin Laden: Creating Evidence Where There Is None - by Dr. Paul Craig Roberts – 2011-08-04 The Assassination of Osama bin Laden: Glaring Anomalies in the Official Narrative Osama was Left Handed… - by Felicity Arbuthnot – 2011-05-11 The Assassination of Osama Bin Laden - by Fidel Castro Ruz – 2011-05-07 Dancing on the Grave of 9/11. Osama and “The Big Lie” - by Larry Chin – 2011-05-05
  • PART  IX  ”False Flags”: The Pentagon’s Second 9/11 The Pentagon’s “Second 911″ “Another [9/11] attack could create both a justification and an opportunity to retaliate against some known targets” - by Michel Chossudovsky – 2006-08-10 The presumption of this military document, is that a Second 911 attack “which is lacking today” would usefully create both a “justification and an opportunity” to wage war on “some known targets Crying Wolf: Terror Alerts based on Fabricated Intelligence - by Michel Chossudovsky – 2006-08-20 This is not the first time that brash and unsubstantiated statements have been made regarding an impending terror attack, which have proven to be based on “faulty intelligence”.
  • PART X “Deep Events” and State Violence The Doomsday Project and Deep Events: JFK, Watergate, Iran-Contra, and 9/11 - by Prof. Peter Dale Scott – 2011-11-22 The Doomsday Project is the Pentagon’s name for the emergency planning “to keep the White House and Pentagon running during and after a nuclear war or some other major crisis.” JFK and 9/11 Insights Gained from Studying Both - by Dr. Peter Dale Scott – 2006-12-20 In both 9/11 and the JFK assassination, the US government and the media immediately established a guilty party. Eventually, in both cases a commission was set up to validate the official narrative. Able Danger adds twist to 9/11 9/11 Ringleader connected to secret Pentagon operation - by Dr. Daniele Ganser – 2005-08-27 Atta was connected to a secret operation of the Pentagon’s Special Operations Command (SOCOM) in the US. A top secret Pentagon project code-named Able Danger identified Atta and 3 other 9/11 hijackers as members of an al-Qaida cell more than a year before the attacks. 9/11, Deep State Violence and the Hope of Internet Politics - by Prof. Peter Dale Scott – 2008-06-11 The unthinkable – that elements inside the state would conspire with criminals to kill innocent civilians – has become thinkable… Al Qaeda: The Database. - by Pierre-Henri Bunel – 2011-05-12
  • PART XI Propaganda: Creating and Perpetuating the 9/11 Legend September 11, 2001: The Propaganda Preparation for 9/11: Creating the Osama bin Laden “Legend” - by Chaim Kupferberg – 2011-09-11 THE 9/11 MYTH: State Propaganda, Historical Revisionism, and the Perpetuation of the 9/11 Myth - by Prof. James F. Tracy – 2012-05-06   Al Qaeda and Human Consciousness: Al Qaeda, Al Qaeda…. An Incessant and Repetitive Public Discourse - by Prof. Michel Chossudovsky – 2012-03-24 9/11 Truth, Inner Consciousness and the “Public Mind” - by James F. Tracy – 2012-03-18
  • PART VI Insider Trading and the 9/11 Financial Bonanza 9/11 Attacks: Criminal Foreknowledge and Insider Trading lead directly to the CIA’s Highest Ranks CIA Executive Director “Buzzy” Krongard managed Firm that handled “Put” Options on UAL - by Michael C. Ruppert – 2012-08-13 The 9/11 Attacks on the World Trade Center (WTC): Unspoken Financial Bonanza - by Prof Michel Chossudovsky – 2012-04-27 SEPTEMBER 11, 2001: Insider Trading 9/11 … the Facts Laid Bare - by Lars Schall – 2012-03-20 Osama Bin Laden and The 911 Illusion: The 9/11 Short-Selling Financial Scam - by Dean Henderson – 2011-05-09
  • PART XIII 9/11 Truth Revealing the Lies,  Commemorating the 9/11 Tragedy VIDEO: Commemorating the 10th Anniversary of 9/11 - by Prof. Michel Chossudovsky – 2011-09-01 VIDEO: AFTER 9/11: TEN YEARS OF WAR Special GRTV Feature Production - by James Corbett – 2011-09-08
  •  
    Wow!
Gary Edwards

Swimming with the Sharks: Goldman Sachs, School Districts, and Capital Appreciation Bon... - 0 views

  • In 2008, after collecting millions of dollars in fees to help California sell its bonds, Goldman urged its bigger clients to place investment bets against those bonds, in order to profit from a financial crisis that was sparked in the first place by irresponsible Wall Street speculation. Alarmed California officials warned that these short sales would jeopardize the state’s bond rating and drive up interest rates. But that result also served Goldman, which had sold credit default swaps on the bonds, since the price of the swaps rose along with the risk of default.
  • In 2009, the lenders’ lobbying group than proposed and promoted AB1388, a California bill eliminating the debt ceiling requirement on long-term debt for school districts. After it passed, bankers traveled all over the state pushing something called “capital appreciation bonds” (CABs) as a tool to vault over legal debt limits. (Think Greece again.) Also called payday loans for school districts, CABs have now been issued by more than 400 California districts, some with repayment obligations of up to 20 times the principal advanced (or 2000%).
  • The controversial bonds came under increased scrutiny in August 2012, following a report that San Diego County’s Poway Unified would have to pay $982 million for a $105 million CAB it issued. Goldman Sachs made $1.6 million on a single capital appreciation deal with the San Diego Unified School District.
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  • . . . AB1388, signed by then-Gov. Arnold Schwarzenegger in 2009, [gave] banks the green light to lure California school boards into issuing bonds to raise quick money to build schools. Unlike conventional bonds that have to be paid off on a regular basis, the bonds approved in AB1388 relaxed regulatory safeguards and allowed them to be paid back 25 to 40 years in the future. The problem is that from the time the bonds are issued until payment is due, interest accrues and compounds at exorbitant rates, requiring a balloon payment in the millions of dollars. . . . Wall Street exploited the school boards’ lack of business acumen and proposed the bonds as blank checks written against taxpayers’ pocketbooks. One school administrator described a Wall Street meeting to discuss the system as like “swimming with the big sharks.” Wall Street has preyed on these school boards because of the millions of dollars in commissions. Banks, financial advisers and credit rating firms have billed California public entities almost $400 million since 2007. [State Treasurer] Lockyer described this as “part of the ‘new’ Wall Street,” which “has done this kind of thing on the private investor side for years, then the housing market and now its public entities.”
  • The Federal Reserve could have made virtually-interest-free loans available to local governments, as it did for banks. But the Fed (whose twelve branches are 100% owned by private banks) declined. As noted by Cate Long on Reuters:
  • The Fed has said that it will not buy muni bonds or lend directly to states or municipal issuers. But be sure if yields rise high enough Merrill Lynch, Goldman Sachs and JP Morgan will be standing ready to “save” these issuers. There is no “lender of last resort” for muniland.
  • Among the hundreds of California school districts signing up for CABs were fifteen in Orange County. The Anaheim-based Savanna School District took on the costliest of these bonds, issuing $239,721 in CABs in 2009 for which it will have to repay $3.6 million by the final maturity date in 2034. That works out to $15 for every $1 borrowed. Santa Ana Unified issued $34.8 million in CABs in 2011. It will have to repay $305.5 million by the maturity date in 2047, or $9.76 for every dollar borrowed. Placentia-Yorba Linda Unified issued $22.1 million in capital appreciation bonds in 2011. It will have to repay $281 million by the maturity date in 2049, or $12.73 for every dollar borrowed.
  • In 2013, California finally passed a law limiting debt service on CABs to four times principal, and limiting their maturity to a maximum of 25 years. But the bill is not retroactive. In several decades, the 400 cities that have been drawn into these shark-infested waters could be facing municipal bankruptcy – for capital “improvements” that will by then be obsolete and need to be replaced.
  • Then-State Treasurer Bill Lockyer called the bonds “debt for the next generation.” But some economists argue that it is a transfer of wealth, not between generations, but between classes – from the poor to the rich. Capital investments were once funded with property taxes, particularly those paid by wealthy homeowners and corporations. But California’s property tax receipts were slashed by Proposition 13 and the housing crisis, forcing school costs to be borne by middle-class households and the students themselves.
  • According to Demos, per-student funding has been slashed since 2008 in every state but one – the indomitable North Dakota. What is so different about that state? Some commentators credit the oil boom, but other states with oil have not fared so well. And the boom did not actually hit in North Dakota until 2010. The budget of every state but North Dakota had already slipped into the red by the spring of 2009.
  • One thing that does single the state out is that North Dakota alone has its own depository bank.
  • The state-owned Bank of North Dakota (BND) was making 1% loans to school districts even in December 2014, when global oil prices had dropped by half. That month, the BND granted a $10 million construction loan to McKenzie County Public School No. 1, at an interest rate of 1% payable over 20 years. Over the life of the loan, that works out to $.20 in simple interest or $.22 in compound interest for every $1 borrowed. Compare that to the $15 owed for every dollar borrowed by Anaheim’s Savanna School District or the $10 owed for every dollar borrowed by Santa Ana Unified.
  • How can the BND afford to make these very low interest loans and still turn a profit? The answer is that its costs are very low. It has no exorbitantly-paid executives; pays no bonuses, fees, or commissions; pays no dividends to private shareholders; and has low borrowing costs. It does not need to advertise for depositors (it has a captive deposit base in the state itself) or for borrowers (it is a wholesale bank that partners with local banks, which find the borrowers). The BND also has no losses from derivative trades gone wrong. It engages in old-fashioned conservative banking and does not speculate in derivatives. Unlike the vampire squids of Wall Street, it is not motivated to maximize its bottom line in a predatory way. Its mandate is simply to serve the public interest.
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    " Remember when Goldman Sachs - dubbed by Matt Taibbi the Vampire Squid - sold derivatives to Greece so the government could conceal its debt, then bet against that debt, driving it up? It seems that the ubiquitous investment bank has also put the squeeze on California and its school districts. Not that Goldman was alone in this; but the unscrupulous practices of the bank once called the undisputed king of the municipal bond business epitomize the culture of greed that has ensnared students and future generations in unrepayable debt."
Paul Merrell

De-Dollarization: Dismantling America's Financial-Military Empire | Global Research - 0 views

  • 13 June 2009
  • The city of Yakaterinburg, Russia’s largest east of the Urals, may become known not only as the death place of the tsars but of American hegemony too – and not only where US U-2 pilot Gary Powers was shot down in 1960, but where the US-centered international financial order was brought to ground. Challenging America will be the prime focus of extended meetings in Yekaterinburg, Russia (formerly Sverdlovsk) today and tomorrow (June 15-16) for Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization (SCO). The alliance is comprised of Russia, China, Kazakhstan, Tajikistan, Kyrghyzstan and Uzbekistan, with observer status for Iran, India, Pakistan and Mongolia. It will be joined on Tuesday by Brazil for trade discussions among the BRIC nations (Brazil, Russia, India and China).      The attendees have assured American diplomats that dismantling the US financial and military empire is not their aim. They simply want to discuss mutual aid – but in a way that has no role for the United States, NATO or the US dollar as a vehicle for trade. US diplomats may well ask what this really means, if not a move to make US hegemony obsolete. That is what a multipolar world means, after all. For starters, in 2005 the SCO asked Washington to set a timeline to withdraw from its military bases in Central Asia. Two years later the SCO countries formally aligned themselves with the former CIS republics belonging to the Collective Security Treaty Organization (CSTO), established in 2002 as a counterweight to NATO. 
  • Challenging America will be the prime focus of extended meetings in Yekaterinburg, Russia (formerly Sverdlovsk) today and tomorrow (June 15-16) for Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization (SCO). The alliance is comprised of Russia, China, Kazakhstan, Tajikistan, Kyrghyzstan and Uzbekistan, with observer status for Iran, India, Pakistan and Mongolia. It will be joined on Tuesday by Brazil for trade discussions among the BRIC nations (Brazil, Russia, India and China).    
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  • Yet the meeting has elicited only a collective yawn from the US and even European press despite its agenda is to replace the global dollar standard with a new financial and military defense system. A Council on Foreign Relations spokesman has said he hardly can imagine that Russia and China can overcome their geopolitical rivalry,1 suggesting that America can use the divide-and-conquer that Britain used so deftly for many centuries in fragmenting foreign opposition to its own empire. But George W. Bush (“I’m a uniter, not a divider”) built on the Clinton administration’s legacy in driving Russia, China and their neighbors to find a common ground when it comes to finding an alternative to the dollar and hence to the US ability to run balance-of-payments deficits ad infinitum.            What may prove to be the last rites of American hegemony began already in April at the G-20 conference, and became even more explicit at the St. Petersburg International Economic Forum on June 5, when Mr. Medvedev called for China, Russia and India to “build an increasingly multipolar world order.” What this means in plain English is: We have reached our limit in subsidizing the United States’ military encirclement of Eurasia while also allowing the US to appropriate our exports, companies, stocks and real estate in exchange for paper money of questionable worth.
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    Revisiting history: It's amazing to see how far the de-dollarization strategy has progressed since 2009.
Paul Merrell

Netanyahu Has Never Actually Supported a Palestinian State, Despite What He Told Obama - 0 views

  • IN A MEETING with President Obama today, Benjamin Netanyahu went through the familiar motions of expressing rhetorical support for a two-state solution to the Israel-Palestine conflict. Stating, “I remain committed to a vision of peace of two states for two peoples,” Netanyahu said that he wanted “make it clear that we have not given up our hope,” for achieving a two-state solution to the conflict. Just a day before this statement, however, the Israeli government took steps to ensure such a vision could never become reality, moving to authorize the construction of an additional 2,200 housing units in the occupied territories in the face of Palestinian opposition. The reason behind this apparent discrepancy between word and deed is that Netanyahu does not, and has essentially never, supported the creation of an actual Palestinian state. Last year, during the Israeli election, Netanyahu briefly acknowledged this fact himself, explicitly stating to voters that there would not be a Palestinian state during his tenure as prime minister if he was reelected. Despite this, the convenient fiction that the Israeli prime minister supports a “two-state solution” continues to linger in the United States. Why?
  • In 2009, however, that began to change. In June of that year, newly elected President Barack Obama, who had made rebuilding ties with the Muslim world a part of his foreign policy platform, gave a landmark speech in Cairo in which he said the United States “does not accept the legitimacy of continued Israeli settlements,” going on to describe them as contrary to previous agreements and an impediment to peace in the region. Israeli media would report at the time that Obama’s words “resonated through Jerusalem’s corridors.” In seeming recognition of shifting American sentiments on this issue, 10 days later Netanyahu gave what was billed as a landmark speech at Bar-Ilan University near Tel-Aviv, dealing in part with the subject of Palestinian statehood. In his address, hailed by the White House as an “important step forward,” Netanyahu endorsed for the first time the creation of what he called “a demilitarized Palestinian state” in the occupied territories. But the same speech added stipulations that, in sum, turned this so-called state into a rebranded version of Netanyahu’s 2000 “Palestinian entity,” with only limited autonomy. In private, just three months before the speech, Netanyahu was even more blunt about the limits he required for a more independent Palestinian territory, stipulating he could only support one “without an army or control over air space and borders,” according to diplomatic cables later released by WikiLeaks.
  • In a speech two years later to Congress, Netanyahu would go into more detail about the ridiculous conception of Palestinian “statehood” he was imagining, one in which the West Bank would be essentially bifurcated by massive Israeli settlement blocs, the prospective Palestinian capital of East Jerusalem would be surrounded by settlements, and the Israeli Defense Forces would continue to have “a long-term military presence” inside the newly independent “state.” Needless to say, such a proposal was unlikely ever to be accepted by the Palestinians, nor did it bear much resemblance to the independent statehood they had actually been seeking. Netanyahu let the mask drop even further in July 2014, when he stated in a press conference that “there cannot be a situation, under any agreement, in which we relinquish security control of the territory west of the River Jordan,” essentially outlining a position of permanent military occupation of Palestinian territories. In the run-up to the 2015 election, when he publicly disowned the idea of Palestinian statehood, Netanyahu would specifically repudiate his 2009 Bar-Ilan speech, stating that “there will be no withdrawals and no concessions,” and that the speech was “not relevant.” As recently as last week, Netanyahu told the Knesset Foreign Affairs and Defense Committee that “we need to control all of the territory for the foreseeable future,” before adding darkly that Israel “will forever live by the sword.”
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  • In light of all this, it’s difficult to take seriously Netanyahu’s most recent claim that he supports the creation of a Palestinian state. At best, he has in the past expressed support for a Palestinian “entity” with some features of self-governance (an idea that has well-known historical precedents), but certainly not one that affords genuine independence, freedom or statehood to its inhabitants. At his most brazen, he has denied the possibility of even that limited form of self-determination, stating bluntly that Israel will control the entire West Bank and keep its inhabitants under indefinite military subjugation. Netanyahu has nonetheless been allowed to maintain a convenient fiction that he supports the negotiated goal of Palestinian self-determination. In reality, he has never really supported it. Thanks in large part to Netanyahu’s leadership, a Palestinian state will likely never emerge. Due to his own obstinance, as well as American indulgence, a binational state or a formalized Apartheid regime have now become the most probable remaining outcomes to this disastrous, decades-long conflict.
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    Negotiation of a "2-state solution" for Israel and Palestine has never been anything more than an excuse for continuing the status quo, with Israel dominating both territories in an apartheid state. The 2-state solution, moreover, denies all residents of the former British Mandate Territory of Palestine (including present day Israel) of their fundamental right to self-determination of their form of government established by the U.N. Charter. And the notion of a 2-state solution with territorial swaps ignores the right of Arab residents of the Mandate Territory to return to their homes at the close of hostilities, a right specifically forbidden from being negotiable by Israel and the Palestinian authority; it is an individual right that governments cannot lawfully barter away.   I'm glad to see The Intercept taking a no holds barred, speak-truth-to-power  approach to the Israel-Palestine question. 
Paul Merrell

New Poll Highlights Need for Reform in the Middle East « LobeLog - 0 views

  • A new public opinion survey undertaken in six Arab countries, Iran, and Turkey finds that people are more likely to blame “corrupt, repressive, and unrepresentative governments” and “religious figures and groups promoting extremist ideas and/or incorrect religious interpretations” for the rise of violent groups like al-Qaeda and the Islamic State than they are to blame “anger at the United States.” These findings are the result of a series of face-to-face polls conducted by Zogby Research Services on a commission from the Sir Bani Yas Forum in the United Arab Emirates (UAE) and released at a Middle East Institute-sponsored event on Wednesday. In September, ZRS interviewed a total of 7,400 adults across eight countries—Egypt, Iran, Iraq, Jordan, Lebanon, Saudi Arabia, Turkey, and the UAE—on a broad range of topics, including the ongoing conflicts in Iraq, Libya, Syria, and Yemen; the Israel-Palestine situation; the Iranian nuclear deal; and the threat of religious extremism. Respondents in Iran and Iraq were also asked a separate series of questions about internal affairs in those countries.
  • With respect to Israel-Palestine, the poll found that people in five of the six surveyed Arab nations are less likely to support a comprehensive Arab-Israeli peace deal now than they were back in 2009, when Zogby International’s “Six-Nation Arab Opinion Poll” asked a similar question of respondents in those five countries. In Egypt, which has seen the sharpest decline in support for a peace deal, almost two-thirds of respondents said that they would oppose a peace deal “even if the Israelis agree to return all of the territories and agree to resolve the refugee issue,” compared with only 8% who answered similarly in the 2009 survey. This represents a potential risk for Egyptian President Abdel Fattah el-Sisi, who has worked to improve Egyptian-Israeli relations despite the apparent feelings of most of the Egyptian public. Similar, albeit smaller, shifts were seen in Jordan (where 24% oppose a deal today, compared with 13% in 2009), Lebanon (30% vs. 18%), Saudi Arabia (36% vs. 18%), and the UAE (19% vs. 8%). Iraq was not part of the 2009 survey, but 59% of respondents in this survey said that they would also oppose a comprehensive peace deal with Israel.
  • Still, it was in the area of extremism and its causes where the poll generated its most interesting findings. When asked to rate eight factors on a 1-5 scale (where 1 means “very important factor”) in terms of their importance as a driver of religious extremism, respondents in all eight countries gave “anger at the U.S.” the fewest number of ones and twos, although that factor was still rated as important by a majority of respondents in Egypt, Saudi Arabia, the UAE, and Turkey. Zogby argued that this was a sign that Barack Obama’s attempt to leave a “softer U.S. footprint in the region pays off.” However, when asked whether the United States is playing a positive or negative role in combating extremist sectarian violence, large majorities in each country said that the U.S. was playing a negative role. Instead, the two most commonly cited factors in the development of religious extremism were “corrupt governments” and “extremist and/or incorrect religious ideas.” Other commonly cited factors, like “lack of education,” “poverty,” and “youth alienation” also speak to a consistent sense that extremism is an internal problem stemming from poor governance. Majorities in each of the eight countries except Iran agreed that “countering the messages and ideas promoted by recruiters for extremist groups” and “changing the political and social realities that cause young people to be attracted to extremist ideals” were “most important” in terms of defeating violent extremist groups like the Islamic State. Within Iraq, majorities from all three of the country’s major ethno-religious groups (Sunni Arabs, Shi?a Arabs, and Kurds) agreed that “forming a more inclusive, representative government” is the best way to resolve the conflict there, but even larger majorities from each group said that they were “not confident” that such a government will be formed within the next five years.
Paul Merrell

WikiLeaks Cables Portray Saudi Arabia As A Cash Machine For Terrorists - 0 views

  • Saudi Arabia is the world’s largest source of funds for Islamist militant groups such as the Afghan Taliban and Lashkar-e-Taiba – but the Saudi government is reluctant to stem the flow of money, according to Hillary Clinton. “More needs to be done since Saudi Arabia remains a critical financial support base for al-Qaida, the Taliban, LeT and other terrorist groups,” says a secret December 2009 paper signed by the US secretary of state. Her memo urged US diplomats to redouble their efforts to stop Gulf money reaching extremists in Pakistan and Afghanistan.
  • “Donors in Saudi Arabia constitute the most significant source of funding to Sunni terrorist groups worldwide,” she said. Three other Arab countries are listed as sources of militant money: Qatar, Kuwait and the United Arab Emirates. The cables highlight an often ignored factor in the Pakistani and Afghan conflicts: that the violence is partly bankrolled by rich, conservative donors across the Arabian Sea whose governments do little to stop them. The problem is particularly acute in Saudi Arabia, where militants soliciting funds slip into the country disguised as holy pilgrims, set up front companies to launder funds and receive money from government-sanctioned charities. One cable details how the Pakistani militant outfit Lashkar-e-Taiba, which carried out the 2008 Mumbai attacks, used a Saudi-based front company to fund its activities in 2005. Meanwhile officials with the LeT’s charity wing, Jamaat-ud-Dawa, travelled to Saudi Arabia seeking donations for new schools at vastly inflated costs – then siphoned off the excess money to fund militant operations. Militants seeking donations often come during the hajj pilgrimage – “a major security loophole since pilgrims often travel with large amounts of cash and the Saudis cannot refuse them entry into Saudi Arabia”. Even a small donation can go far: LeT operates on a budget of just $5.25m (£3.25m) a year, according to American estimates.
  • Saudi officials are often painted as reluctant partners. Clinton complained of the “ongoing challenge to persuade Saudi officials to treat terrorist funds emanating from Saudi Arabia as a strategic priority”. Washington is critical of the Saudi refusal to ban three charities classified as terrorist entities in the US. “Intelligence suggests that these groups continue to send money overseas and, at times, fund extremism overseas,” she said. There has been some progress. This year US officials reported that al-Qaida’s fundraising ability had “deteriorated substantially” since a government crackdown. As a result Bin Laden’s group was “in its weakest state since 9/11” in Saudi Arabia. Any criticisms are generally offered in private. The cables show that when it comes to powerful oil-rich allies US diplomats save their concerns for closed-door talks, in stark contrast to the often pointed criticism meted out to allies inPakistan and Afghanistan. Instead, officials at the Riyadh embassy worry about protecting Saudi oilfields from al-Qaida attacks. The other major headache for the US in the Gulf region is the United Arab Emirates. The Afghan Taliban and their militant partners the Haqqani network earn “significant funds” through UAE-based businesses, according to one report. The Taliban extort money from the large Pashtun community in the UAE, which is home to 1 million Pakistanis and 150,000 Afghans. They also fundraise by kidnapping Pashtun businessmen based in Dubai or their relatives.
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  • “Some Afghan businessmen in the UAE have resorted to purchasing tickets on the day of travel to limit the chance of being kidnapped themselves upon arrival in either Afghanistan or Pakistan,” the report says. Last January US intelligence sources said two senior Taliban fundraisers hadregularly travelled to the UAE, where the Taliban and Haqqani networkslaundered money through local front companies. One report singled out a Kabul-based “Haqqani facilitator”, Haji Khalil Zadran, as a key figure. But, Clinton complained, it was hard to be sure: the UAE’s weak financial regulation and porous borders left US investigators with “limited information” on the identity of Taliban and LeT facilitators. The lack of border controls was “exploited by Taliban couriers and Afghan drug lords camouflaged among traders, businessmen and migrant workers”, she said. In an effort to stem the flow of funds American and UAE officials are increasinglyco-operating to catch the “cash couriers” – smugglers who fly giant sums of money into Pakistan and Afghanistan.
  • In common with its neighbours Kuwait is described as a “source of funds and a key transit point” for al-Qaida and other militant groups. While the government has acted against attacks on its own soil, it is “less inclined to take action against Kuwait-based financiers and facilitators plotting attacks outside of Kuwait”. Kuwait has refused to ban the Revival of Islamic Heritage Society, a charity the US designated a terrorist entity in June 2008 for providing aid to al-Qaida and affiliated groups, including LeT. There is little information about militant fundraising in the fourth Gulf country singled out, Qatar, other than to say its “overall level of CT co-operation with the US is considered the worst in the region”. The funding quagmire extends to Pakistan itself, where the US cables detail sharp criticism of the government’s ambivalence towards funding of militant groups that enjoy covert military support. The cables show how before the Mumbai attacks in 2008, Pakistani and Chinese diplomats manoeuvred hard to block UN sanctions against Jamaat-ud-Dawa. But in August 2009, nine months after sanctions were finally imposed, US diplomats wrote: “We continue to see reporting indicating that JUD is still operating in multiple locations in Pakistan and that the group continues to openly raise funds”. JUD denies it is the charity wing of LeT.
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    Question for Hillary: Since you have known at least since December, 2009 that these Arab nations are funding al Qaida and its offshoot organizations, if elected will you impose strong sanctions on them to halt their funding of terrorism?
Paul Merrell

It Can Happen Here: The Confiscation Scheme Planned for US and UK Depositors - 0 views

  • Confiscating the customer deposits in Cyprus banks, it seems, was not a one-off, desperate idea of a few Eurozone “troika” officials scrambling to salvage their balance sheets. A joint paper by the US Federal Deposit Insurance Corporation and the Bank of England dated December 10, 2012, shows that these plans have been long in the making; that they originated with the G20 Financial Stability Board in Basel, Switzerland (discussed earlier here); and that the result will be to deliver clear title to the banks of depositor funds.  
  • Although few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into “bank equity.”  The bank will get the money and we will get stock in the bank. With any luck we may be able to sell the stock to someone else, but when and at what price? Most people keep a deposit account so they can have ready cash to pay the bills.
  • The 15-page FDIC-BOE document is called “Resolving Globally Active, Systemically Important, Financial Institutions.”  It begins by explaining that the 2008 banking crisis has made it clear that some other way besides taxpayer bailouts is needed to maintain “financial stability.” Evidently anticipating that the next financial collapse will be on a grander scale than either the taxpayers or Congress is willing to underwrite, the authors state: An efficient path for returning the sound operations of the G-SIFI to the private sector would be provided by exchanging or converting a sufficient amount of the unsecured debt from the original creditors of the failed company [meaning the depositors] into equity [or stock]. In the U.S., the new equity would become capital in one or more newly formed operating entities. In the U.K., the same approach could be used, or the equity could be used to recapitalize the failing financial company itself—thus, the highest layer of surviving bailed-in creditors would become the owners of the resolved firm. In either country, the new equity holders would take on the corresponding risk of being shareholders in a financial institution.
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  • No exception is indicated for “insured deposits” in the U.S., meaning those under $250,000, the deposits we thought were protected by FDIC insurance. This can hardly be an oversight, since it is the FDIC that is issuing the directive. The FDIC is an insurance company funded by premiums paid by private banks.
  • If our IOUs are converted to bank stock, they will no longer be subject to insurance protection but will be “at risk” and vulnerable to being wiped out, just as the Lehman Brothers shareholders were in 2008.  That this dire scenario could actually materialize was underscored by Yves Smith in a March 19th post titled When You Weren’t Looking, Democrat Bank Stooges Launch Bills to Permit Bailouts, Deregulate Derivatives.  She writes: In the US, depositors have actually been put in a worse position than Cyprus deposit-holders, at least if they are at the big banks that play in the derivatives casino. The regulators have turned a blind eye as banks use their depositaries to fund derivatives exposures. And as bad as that is, the depositors, unlike their Cypriot confreres, aren’t even senior creditors. Remember Lehman? When the investment bank failed, unsecured creditors (and remember, depositors are unsecured creditors) got eight cents on the dollar. One big reason was that derivatives counterparties require collateral for any exposures, meaning they are secured creditors. The 2005 bankruptcy reforms made derivatives counterparties senior to unsecured lenders.
  • One might wonder why the posting of collateral by a derivative counterparty, at some percentage of full exposure, makes the creditor “secured,” while the depositor who puts up 100 cents on the dollar is “unsecured.” But moving on – Smith writes: Lehman had only two itty bitty banking subsidiaries, and to my knowledge, was not gathering retail deposits. But as readers may recall, Bank of America moved most of its derivatives from its Merrill Lynch operation [to] its depositary in late 2011. Its “depositary” is the arm of the bank that takes deposits; and at B of A, that means lots and lots of deposits. The deposits are now subject to being wiped out by a major derivatives loss. How bad could that be? Smith quotes Bloomberg:
  • . . . Bank of America’s holding company . . . held almost $75 trillion of derivatives at the end of June . . . . That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives, the OCC data show. $75 trillion and $79 trillion in derivatives! These two mega-banks alone hold more in notional derivatives each than the entire global GDP (at $70 trillion).
  • Are you safe, then, if your money is in gold and silver? Apparently not – if it’s stored in a safety deposit box in the bank.  Homeland Security has reportedly told banks that it has authority to seize the contents of safety deposit boxes without a warrant when it’s a matter of “national security,” which a major bank crisis no doubt will be.
  • Another alternative was considered but rejected by President Obama in 2009: nationalize mega-banks that fail. In a February 2009 article titled “Are Uninsured Bank Depositors in Danger?“, Felix Salmon discussed a newsletter by Asia-based investment strategist Christopher Wood, in which Wood wrote: It is . . . amazing that Obama does not understand the political appeal of the nationalization option. . . . [D]espite this latest setback nationalization of the banks is coming sooner or later because the realities of the situation will demand it. The result will be shareholders wiped out and bondholders forced to take debt-for-equity swaps, if not hopefully depositors.
  • President Obama acknowledged that bank nationalization had worked in Sweden, and that the course pursued by the US Fed had not worked in Japan, which wound up instead in a “lost decade.”  But Obama opted for the Japanese approach because, according to Ed Harrison, “Americans will not tolerate nationalization.” But that was four years ago. When Americans realize that the alternative is to have their ready cash transformed into “bank stock” of questionable marketability, moving failed mega-banks into the public sector may start to have more appeal.
Paul Merrell

Ecuadorian Presidential Hopeful Could Be Assange's Undoing - 0 views

  • Guillermo Lasso, a former banker and Ecuador’s ex-Minister of Economics, is running for president in Ecuador and has promised to end the nation’s long-standing asylum of Wikileaks editor Julian Assange.
  • However, Ecuador’s upcoming runoff election, set to conclude April 2, could dramatically alter Assange’s situation, particularly if Guillermo Lasso – the conservative, opposition-party candidate – wins the contest. Lasso, who was recently named the most likely winner of the upcoming runoff, has stated that he would end Assange’s “costly” asylum in the embassy, adding that “the Ecuadorian people have been paying a cost that we should not have to bear.”
  • Lasso’s position on Assange’s asylum was likely intended to set him apart from the policies of long-time president Rafael Correa, whose leftist regime originally granted Assange asylum. However, Correa maintains that Lasso’s statements regarding the Wikileaks editor are more about U.S. “appeasement” than anything else. It is widely believed that Lasso – if victorious in April – would strengthen Ecuador’s ties with the U.S. compared to Correa, who famously shut down the U.S.’ Ecuadorian military base in 2009 and ejected the U.S. ambassador to the country in 2011.
Paul Merrell

We were subjected to 'meticulous, daily torture' - freed Gitmo detainee - RT News - 0 views

  • After years of being held at the US Naval Base in Cuba without trial, Ibrahim Idris, one of two Sudanese detainees released on Thursday, said US prison officials had "systematically tortured" him in the course of his 11-year imprisonment at Gitmo. Idris, who has been described by US officials as mentally ill, delivered his comments in a news conference in Khartoum, just hours after returning home courtesy of a US military plane. Appearing weak and speaking with apparent difficultly, Idris gave a brief account of his lengthy imprisonment at Gitmo. “We have been subjected to meticulous, daily torture," he said. "We were helpless…on an isolated island, surrounded by weapons." He praised the Sudanese government and human rights organizations for working to secure the release of prisoners at Gitmo, which has been called “the GULAG of our times” by Amnesty International. Closed-door military tribunals, for example, have been riddled with problems, including courtroom speakers that have a mysterious tendency for being blocked during key testimony.
  • Another released detainee, Noor Othman Muhammed, was unable to attend the conference because he was recovering in the hospital, Idris said. On Feb. 18, 2011, Muhammed pleaded guilty in a military tribunal to offenses under the Military Commissions Act of 2009, and was sentenced to 14 years confinement, according to a Defense Department news release. In exchange for his guilty plea and Muhammed's cooperation with prosecutors, the military court agreed through a pre-trial agreement to suspend all confinement in excess of 34 months. Idris, who had been designated for transfer since 2009, said some of the former prisoners had pled guilty in a bid to secure their freedom. As Barack Obama wins congressional approval to transfer some prisoners from Guantanamo Bay to their home countries, a released Sudanese inmate spoke of the torture he and others endured at the hands of their American jailers. Approval for a partial detainee release is contained in the National Defense Authorization Act, which passed the Senate by an 84-15 vote on Thursday night.
  • While the bill does not address all of the administration's concerns, its provisions ... will provide the administration additional flexibility to transfer detainees abroad consistent with our national security interests," White House spokesman Jay Carney said earlier Thursday. Of those still held in the prison, five individuals stand accused of participating in the Sept. 11, 2001 terrorist attacks. At the same time, some four dozen detainees are considered “too dangerous” to be released. About half of Gitmo's 158 detainees have been cleared to be released since 2009, yet congressional restrictions prevented that from happening.
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  • A new outbreak of hunger strikes happened in early 2013. By July, 106 of the 166 detainees were on hunger strike, with 45 of them being force-fed.
  • According to Idris, those inmates who participated in these protests were “doubly tortured.” In November, a 19-member task force concluded in a 269-page report, entitled 'Ethics Abandoned: Medical Professionalism and Detainee Abuse in the ‘War on Terror', that since September 11, 2001, the Department of Defense (DoD) and CIA ordered medical professionals to assist in intelligence gathering, as well as forced-feeding of hunger strikers, in a way that inflicted “severe harm.” Gitmo officials announced earlier this month that the US military will no longer disclose to the media and public whether prisoners at Guantanamo Bay are on hunger strike, explaining that "the release of this information serves no operational purpose."
Paul Merrell

Americans on Wrong Side of Income Gap Run Out of Means to Cope - 0 views

  • “We’ve exhausted our coping mechanisms,” said Alan Krueger, an economics professor at Princeton University in New Jersey and former chairman of President Barack Obama’s Council of Economic Advisers. “They weren’t sustainable.” The result has been a downsizing of expectations. By almost two to one — 64 percent to 33 percent — Americans say the U.S. no longer offers everyone an equal chance to get ahead, according to the latest Bloomberg National Poll. The lack of faith is especially pronounced among those making less than $50,000 a year, with close to three-quarters in the Dec. 6-9 survey saying the economy is unfair.
  • The diminished expectations have implications for the economy. Workers are clinging to their jobs as prospects fade for higher-paying employment. Households are socking away more money and charging less on credit cards. And young adults are living with their parents longer rather than venturing out on their own. In the meantime, record-high stock prices are enriching wealthier Americans, exacerbating polarization and bringing income inequality to the political forefront. Even independent government agencies like the Securities and Exchange Commission and the Federal Reserve have been dragged into the debate.
  • “The basic bargain at the heart of our economy has frayed,” Obama said in a Dec. 4 speech in Washington. “This is the defining challenge of our time: Making sure our economy works for every working American.” Democratic lawmakers also intend to press next year for a higher minimum wage to tackle the yawning gap between rich and poor, Durbin said. Republicans aren’t ceding the issue. “The American dream is certainly more in doubt than in decades,” House Speaker John Boehner of Ohio said in response to Obama’s speech. “But after more than five years in office, the president has no one to blame but himself.”
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  • Income inequality has been rising more or less steadily since the mid-1970s. The Gini coefficient, a broad-based measure of inequality, stood at a record high last year, according to Census Bureau data dating back 46 years.
  • Women who became unemployed during the recession and its aftermath have been slower to find new positions. Among women losing jobs they’d held for at least three years between January 2009 and the end of 2011, 50 percent were re-employed by the start of 2012, while the share for men was 61 percent, according to a Bureau of Labor Statistics report released in February. Households turned to stepped-up borrowing to help make ends meet, until that avenue was shut off by the collapse of house prices. About 10.8 million homeowners still owed more money on their mortgages than their properties were worth in the third quarter, according to Seattle-based Zillow Inc. The fallout has made many Americans less inclined to take risks. The quits rate — the proportion of Americans in the workforce who voluntarily left their jobs — stood at 1.7 percent in October. While that’s up from 1.5 percent a year earlier, it’s below the 2.2 percent average for 2006, the year house prices started falling, government data show.
  • “The middle has really collapsed,” said Lawrence Katz, an economics professor at Harvard University in Cambridge, Massachusetts, and a former chief economist at the Labor Department in Washington. Even those with college degrees are having trouble keeping up, he said. While they earn more than those with less schooling, they’ve seen no real wage growth in recent years. The median income of men 25 years of age and older with a bachelor’s degree was $56,656 last year, 10 percent less than in 2007 after taking account of inflation, according to Census data.
  • It’s the richest of the rich who are reaping the most benefit as an increasingly interconnected and technologically sophisticated world puts a premium on those perceived to have the highest skills — a phenomenon dubbed “winner take all” by Cornell University Professor Robert Frank. Government policies also play a role. The Treasury Department, for instance, taxes capital gains racked up by the wealthy on the sale of shares, bonds and other assets at about half the rate of ordinary income. The top 1 percent captured 95 percent of the gains in incomes in the first three years of the recovery, based on analysis of tax returns by Saez. Those less well-off, meanwhile, are running out of ways to cope. The percentage of working-age women who are in the labor force steadily climbed from a post-World War II low of 32 percent to a peak of 60.3 percent in April 2000, fueling a jump in dual-income households and helping Americans deal with slow wage growth for a while. Since the recession ended, the workforce participation rate for women has been in decline, echoing a longer-running trend among men. November data showed 57 percent of women in the labor force and 69.4 percent of men.
  • The disparity has widened since the recovery began in mid-2009. The richest 10 percent of Americans earned a larger share of income last year than at any time since 1917, according to Emmanuel Saez, an economist at the University of California at Berkeley. Those in the top one-tenth of income distribution made at least $146,000 in 2012, almost 12 times what those in the bottom tenth made, Census Bureau data show. Economists have posited a variety of explanations for the growing differences in incomes. Manufacturing companies moved once high-paying jobs abroad, to China and elsewhere. Technological advances led to the loss of clerical and office work, especially relating to routine tasks. The decline of unions — 11.3 percent of workers were represented in 2012 compared with 20.1 percent in 1983 — has advantaged bosses at the expense of their employees.
  • Millennials — adults aged 18 to 32 — are still slow to set out on their own more than four years after the recession ended, according to an Oct. 18 report by the Pew Research Center in Washington. Just over one in three head their own households, close to a 38-year low set in 2010. Obama has proposed a raft of policies to attack the widening wage gap — from simplifying the tax code and increasing exports to enhancing worker training and boosting pre-kindergarten education. Yet in a divided Washington he hasn’t made much progress pushing them through. The president’s renewed focus on income inequality has more to do with politics than policy, said Douglas Holtz-Eakin, president of the American Action Forum, a self-described center- right institute in Washington.
  • “It’s great politics to demagogue income distribution and complain about the rich getting ahead and the poor falling behind,” said Holtz-Eakin, a former Congressional Budget Office director. “The substance of what he’s actually done doesn’t match the enormity of the problem as he’s portrayed it.”
  • The wage-gap debate has reverberated to other parts of Washington, as the SEC published a rule Sept. 18 that would compel public companies to reveal pay ratios between chief executives and their employees. While businesses have decried the requirement as overreach, some investors welcome the data as a way to help assess a company’s health.
  • Across companies in the S&P 500, the average multiple of CEO compensation to that of rank-and-file workers is 204, up 20 percent since 2009, according to data compiled by Bloomberg in April. The Fed also has been caught up in the debate over growing income disparities. Lawmakers from both parties have questioned whether its bond-buying policy, called quantitative easing, has benefited the rich at the expense of those less well-off by boosting prices of stocks and other assets.
  • The S&P 500 stock index has risen 29 percent in 2013. The richest third of U.S. households account for 89 percent of all equities ownership, according to the Center for Retirement Research at Boston College.
  • Janet Yellen, nominated to take over as Fed chairman next year, defended the central bank’s actions at a Senate Banking Committee hearing on Nov. 14. “The policies we’ve undertaken have been meant to generate a robust recovery,” Yellen told the committee. The growing calls for action to reduce income inequality have translated into a national push for a higher minimum wage. Fast-food workers in 100 cities took to the streets Dec. 5 to demand a $15 hourly salary.
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    Monetary policy of, by, and for banksters continues in the U.S. One irony is that banksters press for transition to an all digital currency so that savers can be penalized, a blatant "trickle-up"economic policy, whilst also pressing for more bank bailouts, wielding the thoroughly-discredited "trickle down" economic theory. But "trickle down" theory, in the context of bank bailouts, has not successfully trickled down and the only beneficiaries have been the few Americans who can still invest in the stock market, paying the highest dividends to the wealthiest among us. Has their ever been a time when the stock market's behavior has been so divorced from the well-being of the middle and lower economic classes? I doubt there has been at least in the last 50 years. Where would we be if the bank bail-out trillions had instead been mailed as checks to the middle and lower economic classes? "Trickle up" works and that is what built the American economy to its peak in inflation-adjusted dollars -- an affluent middle class. But do not expect leadership from Washington, D.C. in correcting income inquequality; only political rhetoric and a fight over extension of unemployment benefits, now lapsed. "According to the World Bank, the GINI coefficient "measures the extent to which the distribution of income or consumption expenditure among individuals households within an economy deviates from a perfectly equal distribution." Therefore it is used as an indication of income inequality within countries. ... In the late 2000s, Chile had the highest GINI coefficient, after taxes and transfers, among OECD member countries. The United States, Turkey and Mexico came right before it. At the other end of the scale, Slovenia, Denmark and Norway led the ranking with the lowest levels of income inequality." http://www.gfmag.com/tools/global-database/economic-data/11944-wealth-distribution-income-inequality.html#ixzz2pGpv4xGZ Higher minimum wages? How about instead abolishing the Feder
Paul Merrell

The White House Has Been Covering Up the Presidency's Role in Torture for Years - The I... - 0 views

  • On May 10, 2013, John Brennan presented CIA’s response to the Senate Intelligence Committee Torture Report to the President. Official White House Photo by Pete Souza. The fight between the CIA and the Senate Intelligence Committee over the Committee’s Torture Report – which Dan Froomkin covered here – has now zeroed in on the White House. Did the White House order the CIA to withdraw 920 documents from a server made available to Committee staffers, as Senator Dianne Feinstein says the agency claimed in 2010? Were those documents – perhaps thousands of them – pulled in deference to a White House claim of executive privilege, as Senator Mark Udall and then CIA General Counsel Stephen Preston suggested last fall? And is the White House continuing to withhold 9,000 pages of documents without invoking privilege, as McClatchy reported yesterday? We can be sure about one thing: The Obama White House has covered up the Bush presidency’s role in the torture program for years. Specifically, from 2009 to 2012, the administration went to extraordinary lengths to keep a single short phrase, describing President Bush’s authorization of the torture program, secret.
  • As Steven Aftergood, director of the Federation of American Scientists Project on Government Secrecy, noted  in 2009 – shortly after Hayden revealed that torture started as a covert operation – this means there should be a paper trail implicating President Bush in the torture program. “[T]here should be a Presidential ‘finding’ authorizing the program,” he said, “and [] such a finding should have been provided to Congressional overseers.” The National Security Act dictates that every covert operation must be supported by a written declaration finding that the action is necessary and important to the national security. The Congressional Intelligence committees – or at least the Chair and Ranking Member – should receive notice of the finding. But there is evidence that those Congressional overseers were never told that the finding the president signed on September 17, 2001 authorized torture. For example, a letter from then ranking member of the House Intelligence Committee, Jane Harman, to the CIA’s General Counsel following her first briefing on torture asked: “Have enhanced techniques been authorized and approved by the President?” The CIA’s response at the time was simply that “policy as well as legal matters have been addressed within the Executive Branch.”
  • Nevertheless, the finding does exist. The CIA even disclosed its existence in response to the ACLU FOIA, describing it as “a 14-page memorandum dated 17 September 2001 from President Bush to the Director of the CIA pertaining to the CIA’s authorization to detain terrorists.” In an order in the ACLU suit, Judge Alvin K. Hellerstein confirmed that the declaration was “intertwined with” the administration’s effort to keep the language in the Tenet document hidden. When the administration succeeded in keeping that short phrase secret, all effort to release the declaration also ended.
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  • The White House’s fight to keep the short phrase describing Bush’s authorization of the torture program hidden speaks to its apparent ambivalence over the torture program. Even after President Obama released the DOJ memos authorizing torture – along with a damning CIA Inspector General Report and a wide range of documents revealing bureaucratic discussions within the CIA about torture – the White House still fought the release of the phrase that would have made it clear that the CIA conducted this torture at the order of the president. And it did so with a classified declaration from Jones that would have remained secret had Judge Hellerstein not insisted it be made public. As Aftergood noted, such White House intervention in a FOIA suit is rare. “The number of times that a national security advisor has filed a declaration in a FOIA lawsuit is vanishingly small,” he said. “It almost never happens.” But as ACLU Deputy Legal Director Jameel Jaffer noted of the finding, “It was the original authority for the CIA’s secret prisons and for the agency’s rendition and torture program, and apparently it was the authority for the targeted killing program as well.  It was the urtext.  It’s remarkable that after all this time it’s still secret.”
  • Enduring confusion about this particular finding surely exists because of its flexible nature. As Bob Woodward described in Bush at War, CIA Director Tenet asked President Bush to sign “a broad intelligence order permitting the CIA to conduct covert operations without having to come back for formal approval for each specific operation.” As Jane Mayer described in The Dark Side, such an order not only gave the CIA flexibility, it also protected the President. “To give the President deniability, and to keep him from getting his hands dirty, the finding called for the President to delegate blanket authority to Tenet to decide on a case-by-case basis whom to kill, whom to kidnap, whom to detain and interrogate, and how.” When George Tenet signed written guidelines for the CIA’s torture program in 2003, however, he appeared to have deliberately deprived the President of that deniability by including the source of CIA’s authorization – presumably naming the President – in a document interrogators would see. You can’t blame the CIA Director, after all; Tenet signed the Guidelines just as CIA’s Inspector General and DOJ started to review the legality of the torture tactics used against detainees like Abd al-Rahim al-Nashiri, who was threatened with a drill and a gun in violation of DOJ’s ban on mock executions.
  • President Obama’s willingness to go to such lengths to hide this short phrase may explain the White House’s curious treatment of potentially privileged documents with the Senate now – describing President Bush’s authorization of the torture program and its seemingly contradictory stance supporting publishing the Torture Report while thwarting its completion by withholding privileged documents. After all, the documents in question, like the reference to the presidential finding, may deprive the President of plausible deniability. Furthermore, those documents may undermine one of the conclusions of the Torture Report. According to Senator Ron Wyden, the Senate Torture Report found that “the CIA repeatedly provided inaccurate information about its interrogation program to the White House.” Perhaps the documents reportedly withheld by the White House undermine this conclusion, and instead show that the CIA operated with the full consent and knowledge of at least some people within the White House. Finally, the White House’s sensitivity about documents involved in the torture program may stem from the structure of the finding. As John Rizzo made clear, the finding authorizes not just torturing, but killing, senior al Qaeda figures. Bob Woodward even reported that that CIA would carry out that killing using Predator drones, a program CIA still conducts. And in fact, when the Second Circuit ultimately ruled to let the White House to keep the authorization phrase secret, it did so because the phrase also relates to “a highly classified, active intelligence activity” and “pertains to intelligence activities unrelated to the discontinued [torture] program.” Given what we know about the September 17, 2001 finding, that may well refer to President Obama’s still active drone program.
  • In any case, the White House’s seemingly contradictory statements about the Torture Report might best be understood by its past treatment of CIA documents. By releasing the DOJ memos and other materials, the White House provided what seemed to be unprecedented transparency about what the CIA had done. But all the while it was secretly hiding language describing what the White House has done.
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    See also U.N. Convention Against Torture, which the U.S. is a party to. http://www.un.org/documents/ga/res/39/a39r046.htm
Paul Merrell

Obama preserves renditions as counter-terrorism tool - Los Angeles Times - 0 views

  • The CIA's secret prisons are being shuttered. Harsh interrogation techniques are off-limits. And Guantanamo Bay will eventually go back to being a wind-swept naval base on the southeastern corner of Cuba.But even while dismantling these programs, President Obama left intact an equally controversial counter-terrorism tool.Under executive orders issued by Obama recently, the CIA still has authority to carry out what are known as renditions, secret abductions and transfers of prisoners to countries that cooperate with the United States.Current and former U.S. intelligence officials said that the rendition program might be poised to play an expanded role going forward because it was the main remaining mechanism -- aside from Predator missile strikes -- for taking suspected terrorists off the street.
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    From February 1, 2009, less than a month after Obama's inauguration.
Paul Merrell

The Liberal Apologies for Obama's Ugly Reign » CounterPunch: Tells the Facts,... - 0 views

  • My favorite story indicating the depth and degree of Obama’s loyalty to the wealthy Few comes from the spring of 2009. In his important book Confidence Men: Wall Street, Washington, and the Education of a President (2011), the Pulitzer Prize-winning author Ron Suskind tells a remarkable story from March of 2009. Three months into Barack Obama’s supposedly progressive, left-leaning presidency, popular anger at Wall Street was intense and the nation’s leading financial institutions were weak and on the defensive in the wake of the financial collapse and recession they had created. The new president called a meeting of the nation’s top 13 financial executives at the White House. The banking titans came into the meeting full of dread. As Suskind noted: “They were the CEOs of the thirteen largest banking institutions in the United States… And they were nervous in ways that these men are never nervous. Many would have had to reach back to their college days, or even grade school, to remember a moment when they felt this sort of lump-in-the-throat tension…As some of the most successful men in the country, they weren’t used to being pariahs… [and] they were indeed pariahs. The populist backlash against the financial sector—building steadily since September—was finally beginning to cause grave discomfort on Wall Street. As unemployment ballooned and credit tightened, the country began to look inward, toward the origins of the panic and its disastrous consequences.”
  • In the end, however, the anxious captains of high finance left the meeting pleased to learn that Obama was totally in their camp. For instead of standing up for those who had been harmed most by the crisis—workers, minorities, and the poor – Obama sided unequivocally with those who had caused the meltdown. “My administration is the only thing between you and the pitchforks,” Obama said. “You guys have an acute public relations problem that’s turning into a political problem. And I want to help…I’m not here to go after you. I’m protecting you…. I’m going to shield you from congressional and public anger.” For the banking elite who destroyed millions of jobs in their lust for profit, there was, as Suskind puts it, “Nothing to worry about. Whereas [President Franklin Delano] Roosevelt had [during the Great Depression] pushed for tough, viciously opposed reforms of Wall Street and famously said ‘I welcome their hate,’ Obama was saying ‘How can I help?’” As one leading banker told Suskind, “The sense of everyone after the meeting was relief. The president had us at a moment of real vulnerability. At that point, he could have ordered us to do just about anything and we would have rolled over. But he didn’t – he mostly wanted to help us out, to quell the mob.” When “the bankers arrived in the State Dining Room,” Suskind notes, “Obama had them scared and ready to do almost anything he said…. An hour later, they were upbeat, ready to fly home and commence business as usual” (Confidence Men).
  • This remarkable episode happened in the White House in a time when, to repeat, the Democrats held the majority in both houses of Congress along with an angry populace ready with good reason for Wall Street and 1% blood. And what did the populace get from this seemingly progressive alignment of the stars? The venerable left liberal journalist William Grieder put it very well in a March 2009 Washington Post Op-Ed: “a blunt lesson about power, who has it and who doesn’t.” Americans “watched Washington rush to rescue the very financial interests that caused the catastrophe. They learned that government has plenty of money to spend when the right people want it. ‘Where’s my bailout,’ became the rueful punch line at lunch counters and construction sites nationwide. Then to deepen the insult, people watched as establishment forces re-launched their campaign for ‘entitlement reform’ – a euphemism for whacking Social Security benefits, Medicare and Medicaid.”
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