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Paul Merrell

Moody's downgrades 4 US giant lenders - RT Business - 0 views

rt.com/...downgrades-four-us-lenders-766

financial-collapse too-big-to-fail bail-ins U.S. Cyprus

shared by Paul Merrell on 17 Nov 13 - No Cached
  • Moody’s is to cut the credit rating of US major banks, including Morgan Stanley, Goldman Sachs, JPMorgan and Bank of New York Mellon. The rating agency thinks the government is now less likely to support the lenders in times of new financial difficulties. The debt rating of the holding company of Goldman Sachs was cut from A3 to Baa1, JPMorgan - from A2 to A3, Morgan Stanley - from Baa1 to Baa2, and Bank of New York Mellon -  from Aa3 to A1.
  • "We believe that US bank regulators have made substantive progress in establishing a credible framework to resolve a large, failing bank," said Robert Young, the Moody’s Managing Director. "Rather than relying on public funds to bail-out one of these institutions, we expect that bank holding company's creditors will be bailed-in and thereby shoulder much of the burden to help recapitalize a failing bank." Lower credit rating can cost the lenders a higher loan price, increasing their financial burden. However the bank executives complained about unfairly assessed downgrades, and optimism overcompensation, the Financial Times reported. The review is similar to one by Standard & Poor's in June and comes from government’s unwillingness to repeat bailouts in a crisis.
  • The decision was made after the ratings of eight American banks, including Citigroup, Bank of America, Wells Fargo and State Street were placed on revision in August, when more details of government’s intention to abandon banks support were unveiled.
  • Paul Merrell on 17 Nov 13
     
    So Moody's thinks Cyprus like bail-ins for large failing U.S. banks are more likely than government bail-outs and names the large banks most likely to fail, with their projected likelihood to fail reflected in Moody's adjusted credit ratings. For those who don't understand what a "bail-in" is, it means that the bank gets your deposits and you get back a bit of ownership in a failing enterprise. Try to spend that. 
Paul Merrell

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

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banksters G20 Financial-Stability-Board must-read

shared by Paul Merrell on 13 Dec 14 - No Cached
  • 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.
Gary Edwards

EconoMonitor : Great Leap Forward » BERNANKE'S OBFUSCATION CONTINUES: The Fed... - 0 views

www.economonitor.com/...illion-bail-out-of-wall-street

Banksters Federal-Reserve-Bankster-Cartel Levy-Economics-Institute banksters

shared by Gary Edwards on 16 Dec 11 - No Cached
  • Gary Edwards on 16 Dec 11
     
    Excellent summary of how deep the hole the Federal Reserve has dug for Americans.  Walks us from the 2008 crisis to the Levy Economics Institute $29.616 Trillion Bankster Bailout.  Incredibly well written commentary. excerpt: Bernanke argues we should look only at the lending at a peak instant of time. Think about it this way. A half dozen drunken sailors are at the bar, and the bartender refills their shot glasses with whiskey each time a drink is taken. At any instant, the bar-keep has committed only six ounces of booze. That is a useful measure of whiskey outstanding. But it is not useful for telling us how much the drunks drank. Bernanke would like us to believe that if the Fed newly lent a trillion bucks every day for 3 years to all our drunken bankers that we should total that as only a trillion greenbacks committed. Yes, that provides some useful information but it does not really measure the necessary intervention by the Fed into financial markets to save Wall Street. And that leads to the final way to measure the Fed's commitments to propping up our drunks on Wall Street: add up every single damned loan, guarantee and asset purchase the Fed made to benefit banks, banksters, real Housewives on Wall Street, fraudsters, and their cousins, aunts and uncles. This gives us the cumulative Fed commitments. The final important consideration is to separate "normal" Fed actions from the "extraordinary" or "emergency" interventions undertaken because of the crisis. That is easier than it sounds. After the crisis began, the Fed created a large alphabet soup of special facilities designed to deal with the crisis. We can thus take each facility and calculate the three measures of the Fed's commitments for each, then sum up for all the special facilities. And that is precisely what Nicola Matthews and James Felkerson have done. They are PhD students at the University of Missouri-Kansas City, working on a Ford Foundation grant under my direction, titl
Paul Merrell

New G20 Rules: Cyprus-style Bail-ins to Hit Depositors AND Pensioners | nsnbc internati... - 0 views

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banksters G20-summit deposits Cyprus bail-ins

shared by Paul Merrell on 02 Dec 14 - No Cached
  • On the weekend of November 16th, the G20 leaders whisked into Brisbane, posed for their photo ops, approved some proposals, made a show of roundly disapproving of Russian President Vladimir Putin, and whisked out again.
  • It was all so fast, they may not have known what they were endorsing when they rubber-stamped the Financial Stability Board’s “Adequacy of Loss-Absorbing Capacity of Global Systemically Important Banks in Resolution,” which completely changes the rules of banking. Russell Napier, writing in ZeroHedge, called it “the day money died.” In any case, it may have been the day deposits died as money. Unlike coins and paper bills, which cannot be written down or given a “haircut,” says Napier, deposits are now “just part of commercial banks’ capital structure.” That means they can be “bailed in” or confiscated to save the megabanks from derivative bets gone wrong.
  • Rather than reining in the massive and risky derivatives casino, the new rules prioritize the payment of banks’ derivatives obligations to each other, ahead of everyone else. That includes not only depositors, public and private, but the pension funds that are the target market for the latest bail-in play, called “bail-inable” bonds. “Bail in” has been sold as avoiding future government bailouts and eliminating too big to fail (TBTF). But it actually institutionalizes TBTF, since the big banks are kept in business by expropriating the funds of their creditors. It is a neat solution for bankers and politicians, who don’t want to have to deal with another messy banking crisis and are happy to see it disposed of by statute. But a bail-in could have worse consequences than a bailout for the public. If your taxes go up, you will probably still be able to pay the bills. If your bank account or pension gets wiped out, you could wind up in the street or sharing food with your pets.
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  • In theory, US deposits under $250,000 are protected by federal deposit insurance; but deposit insurance funds in both the US and Europe are woefully underfunded, particularly when derivative claims are factored in. The problem is graphically illustrated in a chart from a March 2013 ZeroHedge post. OCC Chart (Image, upper left).
  • Paul Merrell on 02 Dec 14
     
    With commercial banks overloaded by investment bank derivative debt, a bank is the very last place one should park their money. See http://tinyurl.com/3oj7vbs and http://tinyurl.com/3ovf6ze FDIC insurance is now of value only to senior debtors, not to deposit account holders.
Gary Edwards

A Crisis Worse than ISIS? Bail-Ins Begin - nsnbc international | nsnbc international - 0 views

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Banksters

shared by Gary Edwards on 31 Dec 15 - No Cached
  • Propping Up the Derivatives Scheme Dodd-Frank states in its preamble that it will “protect the American taxpayer by ending bailouts.” But it does this under Title II by imposing the losses of insolvent financial companies on their common and preferred stockholders, debtholders, and other unsecured creditors. That includes depositors, the largest class of unsecured creditor of any bank.
  • Title II is aimed at “ensuring that payout to claimants is at least as much as the claimants would have received under bankruptcy liquidation.” But here’s the catch: under both the Dodd Frank Act and the 2005 Bankruptcy Act, derivative claims have super-priority over all other claims, secured and unsecured, insured and uninsured.
  • The over-the-counter (OTC) derivative market (the largest market for derivatives) is made up of banks and other highly sophisticated players such as hedge funds. OTC derivatives are the bets of these financial players against each other. Derivative claims are considered “secured” because collateral is posted by the parties. For some inexplicable reason, the hard-earned money you deposit in the bank is not considered “security” or “collateral.” It is just a loan to the bank, and you must stand in line along with the other creditors in hopes of getting it back. State and local governments must also stand in line, although their deposits are considered “secured,” since they remain junior to the derivative claims with “super-priority.”
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  • Under the old liquidation rules, an insolvent bank was actually “liquidated” – its assets were sold off to repay depositors and creditors. Under an “orderly resolution,” the accounts of depositors and creditors are emptied to keep the insolvent bank in business.
  • The point of an “orderly resolution” is not to make depositors and creditors whole but to prevent another system-wide “disorderly resolution” of the sort that followed the collapse of Lehman Brothers in 2008.
  • The concern is that pulling a few of the dominoes from the fragile edifice that is our derivatives-laden global banking system will collapse the entire scheme. The sufferings of depositors and investors are just the sacrifices to be borne to maintain this highly lucrative edifice.
  • At first glance, the “bail-in” resembles the normal capitalist process of liabilities restructuring that should occur when a bank becomes insolvent. . . . The difference with the “bail-in” is that the order of creditor seniority is changed. In the end, it amounts to the cronies (other banks and government) and non-cronies. The cronies get 100% or more; the non-cronies, including non-interest-bearing depositors who should be super-senior, get a kick in the guts instead. . . . In principle, depositors are the most senior creditors in a bank. However, that was changed in the 2005 bankruptcy law, which made derivatives liabilities most senior. Considering the extreme levels of derivatives liabilities that many large banks have, and the opportunity to stuff any bank with derivatives liabilities in the last moment, other creditors could easily find there is nothing left for them at all.
  • A study involving the cost to taxpayers of the Dodd-Frank rollback slipped by Citibank into the “cromnibus” spending bill last December found that the rule reversal allowed banks to keep $10 trillion in swaps trades on their books. This is money that taxpayers could be on the hook for in another bailout; and since Dodd-Frank replaces bailouts with bail-ins, it is money that creditors and depositors could now be on the hook for.
  • As of September 2014, US derivatives had a notional value of nearly $280 trillion
  •  Citibank is particularly vulnerable to swaps on the price of oil. Brent crude dropped from a high of $114 per barrel in June 2014 to a low of $36 in December 2015.
  • What about FDIC insurance? It covers deposits up to $250,000, but the FDIC fund had only $67.6 billion in it as of June 30, 2015, insuring about $6.35 trillion in deposits. The FDIC has a credit line with the Treasury, but even that only goes to $500 billion; and who would pay that massive loan back? The FDIC fund, too, must stand in line behind the bottomless black hole of derivatives liabilities
  • You can move your money into one of the credit unions with their own deposit insurance protection; but credit unions and their insurance plans are also under attack.
  • In short, the goal of the bail-in scheme is to place losses on private creditors. Alternatives that allow them to escape could soon be blocked.
  • The Dodd Frank Act and the Bankruptcy Reform Act both need a radical overhaul, and the Glass-Steagall Act (which put a fire wall between risky investments and bank deposits) needs to be reinstated.
  • Meanwhile, local legislators would do well to set up some publicly-owned banks on the model of the state-owned Bank of North Dakota – banks that do not gamble in derivatives and are safe places to store our public and private funds.
  • Gary Edwards on 31 Dec 15
     
    Excellent analysis of the coming banking crisis anw how our politicians have put the citizens on the hook for risky bank derivative gambling.  Thanks Marbux! Ellen H. Brown (nsnbc) : While the mainstream media focus on ISIS extremists, a threat that has gone virtually unreported is that your life savings could be wiped out in a massive derivatives collapse. Bank bail-ins have begun in Europe, and the infrastructure is in place in the US.  Poverty also kills.
Gary Edwards

Jim Kunstler's 2014 Forecast - Burning Down The House | Zero Hedge - 0 views

www.zerohedge.com/...14-forecast-burning-down-house

Banksters

shared by Gary Edwards on 08 Jan 14 - No Cached
  • Gary Edwards on 08 Jan 14
     
    Incredible must read analysis. Take away: the world is going to go "medevil". It's the only way out of this mess. Since the zero hedge layout is so bad, i'm going to post as much of the article as Diigo will allow: Jim Kunstler's 2014 Forecast - Burning Down The House Submitted by Tyler Durden on 01/06/2014 19:36 -0500 Submitted by James H. Kunstler of Kunstler.com , Many of us in the Long Emergency crowd and like-minded brother-and-sisterhoods remain perplexed by the amazing stasis in our national life, despite the gathering tsunami of forces arrayed to rock our economy, our culture, and our politics. Nothing has yielded to these forces already in motion, so far. Nothing changes, nothing gives, yet. It's like being buried alive in Jell-O. It's embarrassing to appear so out-of-tune with the consensus, but we persevere like good soldiers in a just war. Paper and digital markets levitate, central banks pull out all the stops of their magical reality-tweaking machine to manipulate everything, accounting fraud pervades public and private enterprise, everything is mis-priced, all official statistics are lies of one kind or another, the regulating authorities sit on their hands, lost in raptures of online pornography (or dreams of future employment at Goldman Sachs), the news media sprinkles wishful-thinking propaganda about a mythical "recovery" and the "shale gas miracle" on a credulous public desperate to believe, the routine swindles of medicine get more cruel and blatant each month, a tiny cohort of financial vampire squids suck in all the nominal wealth of society, and everybody else is left whirling down the drain of posterity in a vortex of diminishing returns and scuttled expectations. Life in the USA is like living in a broken-down, cob-jobbed, vermin-infested house that needs to be gutted, disinfected, and rebuilt - with the hope that it might come out of the restoration process retaining the better qualities of our heritage.
Gary Edwards

David Skeel: A Nation Adrift From the Rule of Law - WSJ.com - 1 views

online.wsj.com/...4184704577588822128122752.html

wsj rule-of-law David-Skeel

shared by Gary Edwards on 23 Aug 12 - No Cached
  • Gary Edwards on 23 Aug 12
     
    "No one doubts that the coming election will be the most important referendum on the size and nature of government in a generation. But another issue is nearly as important and has gotten far less attention: our crumbling commitment to the rule of law. The notion that we are governed by rules that are transparent and enacted through the legislative process-not by the whims of our leaders-is at the heart of that commitment. If legislators exceed their authority under the Constitution, or if otherwise legitimate laws are misused, courts must step in to prevent or remedy the potential harm. During the 2008 financial crisis, the government repeatedly violated these principles. When regulators bailed out Bear Stearns by engineering its sale to J.P. Morgan Chase, they flagrantly disregarded basic corporate law by "locking up" the transaction so that no other bidder could intervene. When the government bailed out AIG six months later, the Federal Reserve funded the bailout by invoking extraordinary loan powers for what was clearly an acquisition rather than a loan. (The government acquired nearly 80% of AIG's stock.) Two months later, the Treasury Department used money from the $700-billion Troubled Asset Relief Program fund to bail out the car companies. This was dubious. Under the statute, the funds were to be used for financial institutions. But the real violation came a few months later, when the government used a sham bankruptcy sale to transfer Chrysler to Fiat while almost certainly stiffing Chrysler's senior creditors. According to two leading legal scholars, Eric Posner and Adrian Vermeule, rule-of-law violations are inevitable during a crisis. The executive branch takes all necessary steps, even if that means violating the law, until the crisis has passed. The argument is powerful, and its advocates are correct that presidents and other executive-branch officials often push the envelope during a crisis. Yet pushing the envelope isn't the same thing as f
Paul Merrell

12 Banks Reveal 'Living Wills' That Hint Toward a Future Bail-in | nsnbc international - 0 views

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banksters major-U.S.-banks bail-ins living-wills too-big-to-fail

shared by Paul Merrell on 07 Jul 15 - No Cached
  • Twelve major banks have made their living wills open to the public in response to US regulators pushing for more “convincing plans” for self-dismantling should their operations fail.
  • The purpose of living wills is a way “to give bankers and regulators a clearer understanding of a bank’s operations and its assets and liabilities [and] map out the steps the banks would take to distribute large losses among stakeholders.” The Federal Reserve Bank (FRB) and the Federal Deposit Insurance Corp (FDIC) are overseeing the bank’s contingency plans, ensuring that no bank is “too big to fail”. This includes financial institutions with more than $50 billion in assets; as well as non-financial firms that are considered systemically important as understood by the US Department of Treasury (USDT) Financial Stability Oversight Council (FSOC). The banks participating in this exercise include:
  • • JPMorgan Chase & Co • Morgan Stanley • Bank of America • Credit Suisse Group AG • Goldman Sachs Group • Wells Fargo & Co • State Street Corp • Bank of New York Mellon Corp • UBS Group AG • Deutsche Bank AG • Barclays Plc Should another financial crisis rear its head again, these revelations provide investors and traders a better sense of the standing of banks.
  • ...4 more annotations...
  • Collectively, the banks divulged that they have “stockpiled long-term debt” within holding companies (or the parent company that owns the bank) to make their portfolios appear to be “less complex”. In other words, banks have placed their derivatives (or stockpiled long-term debt) within the main corporation that owns their subsidiaries. The only problem is that if the parent fails, so do its “children”. The bank’s assets could be placed into receivership with the intention of being split up and auctioned off; however some corporations abuse receivership and bankruptcy to make investors and creditors think they are dead in the water only to pull out at the last minute and enjoy large primary debt write-offs. This is a sort of corporate version of playing possum.
  • This classic con tactic would provide the unique advantage of not having to go to the Senate and demand a taxpayer bailout. The banks could simply file for bankruptcy and exert social pressure via public outcry, protests and demands of the people that Congress consider another bailout. In this scenario, the parent company gets saved and not the subsidiaries. This tactic is a reserve version of what happened after the crash in 2008. Regarding the bank’s contingency plans, JPMorgan’s “hypothetical death”would see the bank downsize by a 3rd and provide a resolve for the bank “without systemic disruption or taxpayer support”. Citigroup has proposed shrinking by selling off $300 billion in corporate assets and “cut US retail banking to about $200 billion”; as well as get rid of broker-dealers.
  • Mark Costigilo, spokesperson for Citigroup, explained that should Citigroup go into bankruptcy, their living will “demonstrates that we can do so without the use of taxpayer funds and without adverse systemic impact.” And Bank of America (BoA) stated that their rise out of bankruptcy would involve the unloading of $1.2 trillion in assets; as well as “shedding most of … non-bank operations”. Last year, the major banks were told to revise previously submitted living wills because their plans did not provide a “credible or clear path through bankruptcy that doesn’t require unrealistic assumptions and direct or indirect public support.” All of this adds up to a bail-in, as predicted by economic analyst Jim Sinclair who said: “Bail-ins are coming to North America without any doubt, and will be remembered as the ‘Great Leveling,’ of the ‘great Flushing’ (of Lehman Brothers). Not only can it happen here, but it will happen here. It stands on legal grounds by legal precedent both in the U.S., Canada and the U.K.”
  • Sinclair pointed out: “Bail-ins do not require a crisis to occur and can surface one bank at a time, spread out over years. The major situation is deposits above insurance levels in banks too big to fail. Those deposits are directly in harm’s way.”
Paul Merrell

ECB Head Mario Draghi Admits For First Time EU May Break-Up - TruePublica - 0 views

truepublica.org.uk/...for-first-time-eu-may-break-up

banksters euro EU-disintegration

shared by Paul Merrell on 01 Feb 17 - No Cached
  • Back in 2012, Mario Draghi, President of the European Central Bank, pledged to do “whatever it takes” to protect the eurozone from collapse, infamous words I’m sure he has come to regret. Draghi’s speech at an investment conference in London boosted markets at the time and forced down Spain and Italy’s borrowing costs after saying; “Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.” The markets responded because they were effectively being manipulated. Known as “Outright Monetary Transactions” the scheme was to have been deployed alongside a QE programme from March 2015, itself racking up ¢80billion a month. Several trillion euros later and the EU looks as precarious as ever with growth a distant memory. In Italy, yields on bonds dropped from 6.3 per cent to 1.2 per cent after that famous speech and all seemed good – on the face of it. But deep down, it was not as we had been led to believe. Italy’s government debt grew and is now equal to 133 per cent of GDP. When Ireland imploded and had to be fully bailed out by the ECB, it’s debt pile was 132.2% of GDP.
  • With all this intervention, the ECB’s balance sheet ballooned – set to overtake the U.S. Fed Reserve and has now reached over $3trillion according to Bank of America Merrill Lynch (not to be confused with national debt). Then, totally off the mainstream media radar came news that another Italian bank had disintegrated. And while attention was focused on the rescue of Banca Monte dei Paschi di Siena, which is still not fully finalised, news came that Banca Etruria, has quietly slipped into bankruptcy. “It was announced (Dec 21st) that the first part of an investigation concerning fraudulent bankruptcy charges (at Banca Etruria), in which 21 board members are implicated, had been closed. This strand of the investigation concerns €180 million of loans offered by the bank which were never paid back, leading to the regional lender’s bankruptcy and eventual bail-in/out last November that left bondholders holding virtually worthless bonds.” Next up and out of the blue comes UniCredit, the country’s largest bank. It is seeking to raise €13bn of desperately needed capital but large as though this is, the biggest problems, according to the FT is that the smaller banks, like Banca Etruria, are now in a perilous position and on the verge of falling over the cliff edge. Italy has banks on every street corner, with more branches per capita than any other OECD country. The lack of growth (occurred since it joined the Euro), has suppressed much needed profits on the one hand whilst seeing poor wage growth on the other, causing drastically increased non-performing loans that now add up to an eye-watering €360billion.
  • The FT reports that Italian banks “have long sold their own shares and debt to their retail customers as an attractive alternative to savings products, a disgraceful practice that should never have been allowed. It means that ordinary Italians, many in retirement, have already suffered as bank shares have fallen. They will suffer much more in a bail-in.” The FT is suggesting that a full bail-in is on the cards. It is. truepublica reported back in September that banks throughout the EU would simply steal depositors money if any of them failed now that new bail-in rules had been implemented. And that is exactly what is happening. The result of all this is that Mario Draghi, clearly feeling the strain, has finally admitted defeat and said that there is a strong possibility of the EU falling apart. This time the tactic to keep unity was to threaten every country in the EU by stating that leaving the Eurozone would cost dearly and would require any member country to settle its claims or debts with the bloc’s payments system before severing ties. There’s nothing to stop a desperate member country from leaving and simply defaulting.
Gary Edwards

This Is Where Goldman Can Stick Their Guns (PHOTO) - Home - The Daily Bail - 0 views

dailybail.com/...an-stick-their-guns-photo.html

financial-crisis financial-oligarchs obammunism banksters

shared by Gary Edwards on 01 Dec 09 - Cached
  • Gary Edwards on 01 Dec 09
     
    Goldman Sachs employees are buying up hand guns to protect themselves from the angry throngs of peasants (taxpayers) with pitchforks.  This is clipped from a Bloomberg article!  (Good videos) excerpt: Henry Paulson, U.S. Treasury secretary during the bailout and a former Goldman Sachs CEO, let it slip during testimony to Congress last summer when he explained why it was so critical to bail out Goldman Sachs, and -- oh yes -- the other banks. People "were unhappy with the big discrepancies in wealth, but they at least believed in the system and in some form of market-driven capitalism. But if we had a complete meltdown, it could lead to people questioning the basis of the system." Torn Curtain There you have it. The bailout was meant to keep the curtain drawn on the way the rich make money, not from the free market, but from the lack of one. Goldman Sachs blew its cover when the firm's revenue from trading reached a record $27 billion in the first nine months of this year, and a public that was writhing in financial agony caught on that the profits earned on taxpayer capital were going to pay employee bonuses. This slip-up let the other bailed-out banks happily hand off public blame to Goldman, which is unpopular among its peers because it always seems to win at everyone's expense.
Paul Merrell

Ireland To Prosecute Top Banker Who Destroyed Their Economy - Guess Where He Was Hiding - 0 views

www.mintpressnews.com/...214791

banksters criminal-prosecution Ireland Drumm fraud

shared by Paul Merrell on 17 Mar 16 - No Cached
  • A former head of a major Irish bank has been extradited from the U.S. and brought before Dublin District Court to face several charges stemming from the bank’s role in the 2008 financial crisis. David Drumm, former chief executive of Irish Anglo Bank from 2005 until 2008, had been arrested in Boston in October 2015, and originally attempted to fight extradition — but he recently withdrew the objection and was returned to Ireland early on Monday. Drumm faces 33 charges in Ireland, which echoes Iceland’s unprecedented move to hold its bankers criminally accountable for their role in that country’s economic meltdown. Though Drumm predictably denied wrongdoing, his charges include “fraud, forgery, misleading management reporting, unlawful lending, falsifying documents, and false accounting, linked to financial transactions prior to the collapse of Anglo,” according to the Irish Times.
  • Though prosecutors consider Drumm a flight risk — after all, he seemed to be seeking safe haven inside the United States — the court allowed the ex-banker to post bail under several conditions. Drumm’s passport is currently being held by the Gardaí (Garda Síochána, or Irish Police), and under the bail arrangement, he assured the court he would not apply for another and does not possess a U.S. passport. Seven of Drumm’s relatives offered to put their houses on the line as ‘security’ for his bail, though the judge only required four names. As RT reported, Drumm is alleged to have participated in transactions totaling around €7 billion between Anglo and a second lending institution, Irish Life and Permanent. Anglo “posted the worst corporate results in Irish history with losses of €17.5 billion for 2010.” Drumm came to the United States in 2009, and reportedly refused to cooperate with an investigation. Prosecutors fear his “capacity to marshal significant sums” of money adds to the possibility Drumm could easily disappear. However, his solicitor argued that in order to better prepare his defense — including sorting through the “millions of documents” and nearly 400 hours of phone conversations — Drumm needed to remain out of prison. As the Times noted, two “books” of evidence will need to be heard by the court — one of which entails bringing 120 witnesses to testify. The former banking executive has not yet entered a formal plea. He faces a maximum penalty of 10 years in prison if found guilty.
Gary Edwards

The Stunning Hypocrisy of the U.S. Government - BlackListedNews.com - 1 views

www.blacklistednews.com/...M.html

NSA-Patriot-Act-NDAA Edward-Snowden hypocrisy

shared by Gary Edwards on 24 Jun 13 - No Cached
  • Please read this rather good summary in this morning’s New York Times of the worldwide debate Snowden has enabled – how these disclosures have “set off a national debate over the proper limits of government surveillance” and “opened an unprecedented window on the details of surveillance by the NSA, including its compilation of logs of virtually all telephone calls in the United States and its collection of e-mails of foreigners from the major American Internet companies, including Google, Yahoo, Microsoft, Apple and Skype” – and ask yourself: has Snowden actually does anything to bring “injury to the United States”, or has he performed an immense public service?
  • The irony is obvious: the same people who are building a ubiquitous surveillance system to spy on everyone in the world, including their own citizens, are now accusing the person who exposed it of “espionage”.
  • It seems clear that the people who are actually bringing “injury to the United States” are those who are waging war on basic tenets of transparency and secretly constructing a mass and often illegal and unconstitutional surveillance apparatus aimed at American citizens – and those who are lying to the American people and its Congress about what they’re doing – rather than those who are devoted to informing the American people that this is being done.
  • ...13 more annotations...
  • The Obama administration leaks classified information continuously. They do it to glorify the President, or manipulate public opinion, or even to help produce a pre-election propaganda film about the Osama bin Laden raid.
  • The Obama administration does not hate unauthorized leaks of classified information. They are more responsible for such leaks than anyone.
  • What they hate are leaks that embarrass them or expose their wrongdoing.
  • The “enemy” they’re seeking to keep ignorant with selective and excessive leak prosecutions are not The Terrorists or The Chinese Communists.
  • It’s the American people.
  • The people who have learned things they didn’t already know are American citizens who have no connection to terrorism or foreign intelligence, as well as hundreds of millions of citizens around the world about whom the same is true.
  • What they have learned is that the vast bulk of this surveillance apparatus is directed not at the Chinese or Russian governments or the Terrorists, but at them.
  • And that is precisely why the US government is so furious and will bring its full weight to bear against these disclosures.
  • What has been “harmed” is not the national security of the US but the ability of its political leaders to work against their own citizens and citizens around the world in the dark, with zero transparency or real accountability.
  • If anything is a crime, it’s that secret, unaccountable and deceitful behavior: not the shining of light on it.
  • At a press conference to discuss the accusations, an N.S.A. spokesman surprised observers by announcing the spying charges against Mr. Snowden with a totally straight face. “These charges send a clear message,” the spokesman said. “In the United States, you can’t spy on people.”
  • “The American people have the right to assume that their private documents will remain private and won’t be collected by someone in the government for his own purposes.”
  • “Only by bringing Mr. Snowden to justice can we safeguard the most precious of American rights: privacy,” added the spokesman, apparently serious.
  • Gary Edwards on 24 Jun 13
     
    Extremely well linked story from "Washington's Blog" excerpt: "The Government's Hypocrisy Is the Core Problem Congress has exempted itself from the prohibition against trading on inside information … the law that got Martha Stewart and many other people thrown in jail. There are many other ways in which the hypocrisy of the politicians in D.C. are hurting our country. Washington politicians say we have to slash basic services, and yet waste hundreds of billions of dollars on counter-productive boondoggles.  If the politicos just stopped throwing money at corporate welfare queens, military and security boondoggles and pork, harmful quantitative easing, unnecessary nuclear subsidies,  the failed war on drugs, and other wasted and counter-productive expenses, we wouldn't need to impose austerity on the people. The D.C. politicians said that the giant failed banks couldn't be nationalized, because that would be socialism.  Instead of temporarily nationalizing them and then spinning them off to the private sector - or breaking them up - the politicians have bailed them out to the tune of many tens of billions of dollars each year, and created a system where all of the profits are privatized, and all of the losses socialized. Obama and Congress promised help for struggling homeowners, and passed numerous bills that they claimed would rescue the little guy.  But every single one of these bills actually bails out the banks … and doesn't really help the homeowner. The D.C. regulators pretend that they are being tough on the big banks, but are actually doing everything they can to help cover up their sins. Many have pointed out Obama's hypocrisy in slamming Bush's spying programs … and then expanding them  (millions more). And in slamming China's cyber-warfare … while doing the same thing. And - while the Obama administration is spying on everyone in the country - it is at the same time the most secretive administration ever (ba
Paul Merrell

The Stunning Hypocrisy of the U.S. Government | Washington's Blog - 0 views

www.washingtonsblog.com/...-hypocrisy-versus-honesty.html

surveillance state NSA hypocricy

shared by Paul Merrell on 25 Jun 13 - No Cached
  • Congress has exempted itself from the prohibition against trading on inside information … the law that got Martha Stewart and many other people thrown in jail. There are many other ways in which the hypocrisy of the politicians in D.C. is hurting our country. Washington politicians say we have to slash basic services, and yet waste hundreds of billions of dollars on counter-productive boondoggles. If the politicos just stopped throwing money at corporate welfare queens, military and security boondoggles and pork, harmful quantitative easing, unnecessary nuclear subsidies, the failed war on drugs, and other wasted and counter-productive expenses, we wouldn’t need to impose austerity on the people. The D.C. politicians said that the giant failed banks couldn’t be nationalized, because that would be socialism. Instead of temporarily nationalizing them and then spinning them off to the private sector – or breaking them up – the politicians have bailed them out to the tune of many tens of billions of dollars each year, and created a system where all of the profits are privatized, and all of the losses socialized. Obama and Congress promised help for struggling homeowners, and passed numerous bills that they claimed would rescue the little guy. But every single one of these bills actually bails out the banks … and doesn’t really help the homeowner.
  • The Federal Reserve promises to do everything possible to reduce unemployment. But its policies are actually destroying jobs. Many D.C. politicians pay lip service to helping the little guy … while pushing policies which have driven inequality to levels surpassing slave-owning societies. The D.C. regulators pretend that they are being tough on the big banks, but are actually doing everything they can to help cover up their sins. Many have pointed out Obama’s hypocrisy in slamming Bush’s spying programs … and then expanding them (millions more). And in slamming China’s cyber-warfare … while doing the same thing. And – while the Obama administration is spying on everyone in the country – it is at the same time the most secretive administration ever (background). That’s despite Obama saying he’s running the most transparent administration ever.
  • Glenn Greenwald – the Guardian reporter who broke the NSA spying revelations – has documented for many years the hypocritical use of leaks by the government to make itself look good … while throwing the book at anyone who leaks information embarrassing to the government. Greenwald notes today: Prior to Barack Obama’s inauguration, there were a grand total of three prosecutions of leakers under the Espionage Act (including the prosecution of Dan Ellsberg by the Nixon DOJ). That’s because the statute is so broad that even the US government has largely refrained from using it. But during the Obama presidency, there are now seven such prosecutions: more than double the number under all prior US presidents combined.
  • ...3 more annotations...
  • The irony is obvious: the same people who are building a ubiquitous surveillance system to spy on everyone in the world, including their own citizens, are now accusing the person who exposed it of “espionage”. It seems clear that the people who are actually bringing “injury to the United States” are those who are waging war on basic tenets of transparency and secretly constructing a mass and often illegal and unconstitutional surveillance apparatus aimed at American citizens – and those who are lying to the American people and its Congress about what they’re doing – rather than those who are devoted to informing the American people that this is being done.
  • Similarly, journalists who act as mere stenographers for the government who never criticize in more than a superficial fashion are protected and rewarded … but reporters who actually report on government misdeeds are prosecuted and harassed. Further, the biggest terrorism fearmongers themselves actually support terrorism. And see this. In the name of fighting terrorism, the U.S. has been directly supporting Al Qaeda and other terrorists and providing them arms, money and logistical support in Syria, Libya, Mali, Bosnia, Chechnya, Iran, and many other countries … both before and after 9/11. And see this. The American government has long labeled foreigners as terrorists for doing what America does. Moreover, government officials may brand Americans as potential terrorists if they peacefully protest, complain about the taste of their water, or do any number of other normal, all-American things.
  • This is especially hypocritical given that liberals like Noam Chomsky and conservatives like the director of the National Security Agency under Ronald Reagan (Lt. General William Odom) all say that the American government is the world’s largest purveyor of terrorism. As General Odom noted: Because the United States itself has a long record of supporting terrorists and using terrorist tactics, the slogans of today’s war on terrorism merely makes the United States look hypocritical to the rest of the world. These are just a couple of ways in which the D.C. politicians are hypocrites.
Gary Edwards

CHILDREN KILLED OF KEVIN KRIM, CHIEF EXECUTIVE OF CNBC DIGITAL, AFTER RELEASING INFORMA... - 0 views

www.fourwinds10.net/...news.php

Banksters Federal-Reserve-Bankster-Cartel assasination murder

shared by Gary Edwards on 02 Nov 12 - No Cached
  • Gary Edwards on 02 Nov 12
     
    Incredible article about the behind-the-scenes story of the nanny murder of two small children in NYC.   First, it's a staged murder meant to send a clear message to ALL media.  The children were the offspring of Kevin Krim, CEO of CNBC digital.  His website had published a story about the Spire Law Group suing an entire class of bigshot BANKSTERS for the theft of $43 TRILLION dollars of tax payer money.  Second, this involves the US Government.  The Spire allegation is that the Feds actively helped and assisted the Bankster theft. Third, the story describes the historical background of these Bankster hits, assassination and threats.  Although not covered in the article, Presidential assassinations in particular have an unmistakable link to Executive Orders that the Treasury print Silver Certificates that would compete against Bankster notes.  In one way or another, it's all about control of the money system.  This list of Presidents includes Jackson, Lincoln, Garfield, McKinley, Kennedy and Reagan. Original Press Release from the Spire Law Group:  ... http://goo.gl/ynV6O .... Wow! ................................... excerpt:: "On 10/25/2012 two corporate financial media bastions,  MarketWatch  (an affiliate of the Wall Street Journal) and CNBC, presented their readers with a bombshell.  In a too-good-to-be-true lawsuit, the top echelons of the USA's banking and civilian government had been sued for "racketeering and money laundering."  The suit requested "the return of $43 trillion to the United States Treasury."  Yes, you've read that right: 43 trillion-roughly 3 years worth of America's GDP or 3 times America's underestimate of its own national debt. The suit characterizes itself, according to these two corporate media tabloids, as the largest money laundering and racketeering lawsuit in United States History.  [It identifies] $43 trillion ($43,000,000,000,000.00) of laundered money by the 'Banksters' and their U.S. r
Gary Edwards

Next Leg Of The Ponzi Revealed - Foreign Central Banks To Begin Buying US Stocks Outrig... - 0 views

www.zerohedge.com/...stocks-outright-starting-today

Federal-Reserve-Bankster-Cartel

shared by Gary Edwards on 02 Mar 12 - No Cached
  • Gary Edwards on 02 Mar 12
     
    Another great chart detailing the Feds destruction of our currency.  Is this money laundering or a giant ponzi scheme? The good news is that the stock market is on a tear.  The bad news?  International banksters are gobbling up US corporate stocks with the Trillions of freshly printed dollars our Federal Reserve Cartel was kind enough to provide.   Recall that the July 2010 GAO audit of the Federal Reserve Banksters revealed an eye-popping $16.1 Trillion dollars had been distributed to domestic and international banksters between December 2007 and January 2010.   Where did the money go?  How do those dollars make their way back into the world economy?  And what will happen to the value of the dollar when these vast sums do show up in world financial markets? The banksters are not lending.  And companies are not borrowing.  The Trillions flooding the worlds banksters was originally thought to provide liquidity and keep the economy churning.  While there are many competing answers to the question of why this massive bailout and reboot didn't work, were now witnessing the wholesale purchase of corporate ownership with those dollars.   "Don't want to borrow those Trillions?  Good.  We'll buy you then." Sorry, but this looks like a gigantic money laundering scheme where hot dollars are dumped off in exchange for real assets. excerpt:  In other words, while the Fed's charter forbids it from buying US equities outright, it certainly can promise that it will bail out such bosom friends as the Bank of Israel, the Swiss National Bank, and soon everyone else, if and when their investment in Apple should sour. Luckily, this means that the exponential phase in risk is approaching as everyone will now scramble to frontrun central bank purchases no longer in bonds, but in stocks outright, leading to epic surges in everything risk related, then collapse and force the Fed to print tens of trillions to bail everyone out all over again, rinse repea
Gary Edwards

20 deeply disturbing economic facts | Western Free Press - 0 views

www.westernfreepress.com/...eply-disturbing-economic-facts

Banksters Federal-Reserve-Bankster-Cartel Obammunism

shared by Gary Edwards on 03 Mar 12 - No Cached
  • Gary Edwards on 03 Mar 12
     
    Christopher Cook sums it up nicely and points us to "The Economic Collapse", where there are 20 economic facts that are quite contrary to all the election year happy talk we're hearing from big media and big government.  These facts are beyond nasty.  We're looking at national bankruptcy.  The kind no election year happy talk can gloss over. excerpt: More than one analyst is warning that, contrary to rosy projections, the economy is not only weakening, but headed for collapse. While I am making no predictions about what will come to pass, this is an entirely reasonable position for a number of reasons. The sovereign debt crisis alone threatens to bring down the economies of the West. The United States is holding its own now, in part because Europe's trauma is making it so that the dollar is still the world's reserve currency. If that scenario changes and there is a flight away from dollars, however, then all bets are off. And there's no one who can bail us out, the way Germany et al are trying to bail out Greece. We're too big. Our debt is too big. One of the sites that has been keeping track of all this doom and gloom is The Economic Collapse Blog. They were one of the resources I cited when making Top Ten Disturbing Facts, Top 10 Disturbing facts: The Details, Five more disturbing facts and related posts; they are very helpful. Yesterday, they produced another helpful (yet deeply disturbing) list of facts, under the title 20 Economic Statistics To Use To Wake Sheeple Up From Their Entertainment-Induced Comas. You should read all 20, and the rest of the post, but here is a selection:
Paul Merrell

America's Going to Lose the Oil Price War - Bloomberg View - 0 views

www.bloombergview.com/...oing-to-lose-the-oil-price-war

war & peace economic-warfare pipelinestan oil-prices shale-oil

shared by Paul Merrell on 14 Jan 15 - No Cached
  • This could be a bloody, prolonged battle with an uncertain outcome. Oil supply and demand are rather inelastic to the price in the short term. The price's trajectory this year will, therefore, be largely dictated by the news and the market's reaction to it. A wave of bankruptcies in the U.S. shale industry will probably drive it up because it will be perceived as a negative factor for supply. How high it will go, however, is unpredictable. It may actually rise enough to enable consolidation in the U.S. shale industry, giving it second wind and driving OPEC countries, Russia, Mexico and Norway into greater difficulties -- or it might just even out at a level that would make the U.S. forget about its shale boom. That would have dire consequences for the U.S. economic recovery. It may be time for the U.S. government to consider whether it wants to up the stakes in this price war by entering it as a sovereign country. That might mean bailing out or temporarily subsidizing the shale producers. After all, they are competing with states now, not with businesses like themselves.
  • Paul Merrell on 14 Jan 15
     
    U.S. government subsidies for fracked shale oil producers? Well, we bail out banksters bad bets; why not the oil companies' too? But watch the sparks fly if they try to ram that through Congress.  Repubs and Dems are competing on which should get credit for a slight improvement in the economic stats for the last quarter. But with gasoline heading south of $2.00 per gallon, I'd bet that it's increased consumer spending that is flowing from reduced prices at the gas  pump and is not being repatriated to OPEC.  
Gary Edwards

The Real Reason We Keep Bailing Out AIG : John Crney of Clusterstock/business-insider - 0 views

www.businessinsider.com/at-makes-aig-so-special-2009-3

financial-crisis cds aig goldman-sachs banksters

shared by Gary Edwards on 03 Mar 09 - Cached
  • Gary Edwards on 03 Mar 09
     
    How could one company be worth bailing out for $180 billion? That's how much the US has contributed to AIG so far. So what is it about an insurance company that makes AIG so central to the financial system that they can't be allowed to fail at any cost? Great comments on this issue. Basically, AIG credit default swaps were being used as gambling chips. Originally intended as a means of providing banks with "regulation arbitrage", the CDS artificially lowered risk by insuring sub-prime securities, which were themselves thought to be tax-payer guaranteed, coutesy of Fannie and Freddie. The CDS however were also offered to those who did not hold bonds or securitized notes! Non holders could purchase CDS as a means of gambling on the rise or fall of real estate values in the USA. This leveraging lead to near $500 Trillion in insured CDS, many of which were held by China and European banks.
Gary Edwards

Campaign For Liberty - Jim Rogers Interview Transcript - 0 views

www.campaignforliberty.com/blog.php

obammunism financial-collapse hyperinflation

shared by Gary Edwards on 11 Aug 10 - Cached
  • Gary Edwards on 11 Aug 10
     
    Excellent interview. excerpt:  if you were the President of the United States today, do you think that there are any practical steps that you could take immediately to fix the economy, and what would they be? JR: Oh, sure. I would abolish the Federal Reserve. I would cut taxes. I would cut spending in a draconian manner. A very draconian manner. The idea that you can solve a problem of too much debt and too much consumption, with more debt and more consumption, defies comprehension. I can't believe that grown-ups would say words like that out-loud. But that's what they seem to think - I don't know if they really believe it's going to work, but they just don't know what else to do, and you know they're all doing... for the next elections, so they're making things worse. There are plenty of ways to solve the problem. You let the people who go bankrupt go bankrupt. You let Fannie Mae and Freddie Mac go bankrupt, go out of business. You let AIG go out of business. You stop bailing everybody out. The Japanese tried it our way in the early 90s; they refused to let anybody go bankrupt, and they still talk about the 1990s as "the lost decade." Now they're talking about this decade as the second lost decade. Japanese stock market today is 75% below where it was in 1990. That is not a typo. It is down 75% in 20 years. Can you imagine if the New York Stock Exchange, or if the DOW Jones to use a better example, were at 4000? I don't think people would be very happy. Well, that's the equivalent of the situation in Japan right now. It didn't work in Japan; it's not going to work in the US. It's going to lead to more problems. People say, "Oh, our poor grandchildren! Look at all this debt!" No, no, no, it's not our poor grandchildren; it's us! This is a current problem! This is a problem, even our parents, if they're still alive, forget our grandchildren; our parents are going to be suffering, and our grandparents if they're still alive! This is a current disaster for all of us
Paul Merrell

| The Archived Columns of Conn M. Hallinan - 0 views

dispatchesfromtheedgeblog.wordpress.com

economies EU Greece anti-austerity oligarchs banksters privatization

shared by Paul Merrell on 02 Feb 15 - No Cached
  • Almost before the votes were counted in the recent Greek elections, battle lines were being drawn all over Europe. While Alexis Tsipras, the newly elected Prime Minister from Greece’s victorious Syriza Party, was telling voters, “Greece is leaving behind catastrophic austerity, fear and autocratic government,” Jens Weidmann, president of the German Bundesbank, was warning the new government not to “make promises it cannot keep and the country cannot afford.”   On Feb. 12 those two points of view will collide when European Union (EU) heads of state gather in Brussels. Whether the storm blowing out of Southern Europe proves an irresistible force, or the European Council an immovable object, is not clear, but whatever the outcome, the continent is not likely to be the same after that meeting.   The Jan 25 victory of Greece’s leftwing Syriza Party was, on one hand, a beacon for indebted countries like Spain, Portugal, Italy and Ireland. On the other, it is a gauntlet for Germany, the Netherlands, Finland, and the “troika”—the European Central bank, the European Commission, and the International Monetary Fund (IMF)—the designers and enforcers of loans and austerity policies that have inflicted a catastrophic economic and social crisis on tens of millions of Europeans.
  • The troika’s policies were billed as “bailouts” for countries mired in debt—one largely caused by the 2008 financial speculation bubble over which indebted countries had little control—and as a way to restart economic growth. In return for the loans, the EU and the troika demanded massive cutbacks in social services, huge layoffs, privatization of pubic resources, and higher taxes.   However, the “bailouts” did not go toward stimulating economies, but rather to repay creditors, mostly large European banks. Out of the $266 billion loaned to Greece, 89 percent went to investors. After five years under the troika formula, Greece was the most indebted country in Europe. Gross national product dropped 26 percent, unemployment topped 27 percent (and over 50 percent for young people), and one-third of the population lost their health care coverage.   Given a chance to finally vote on the austerity strategy, Greeks overwhelmingly rejected the parties that went along with the troika and elected Syriza.
  • Gerry Adams of Sinn Fein—now the third largest party in the Irish Republic—hailed the vote as opening “up the real prospect of democratic change, not just for the people of Greece, but for citizens right across the EU.” Unemployment in Ireland is 10.7 percent, and tens of thousands of jobless young people have been forced to emigrate.   The German Social Democrats are generally supportive of the troika, but the Green Party hailed the Syriza victory and Die Linke Party members marched with signs reading, “We start with Greece. We change Europe.”   Italian Prime Minister Matteo Renzi—who has his own issues with the EU’s rigid approach to debt—hailed the Greek elections, and top aide Sandro Gozi said that Rome was ready to work with Syriza. The jobless rate in Italy is 13.4 percent, but 40 percent among youth.
  • ...6 more annotations...
  • In short, there are a number of currents in the EU and a growing recognition even among supporters of the troika that prevailing approach to debt is not sustainable.   One should have no illusions that Syriza will easily sweep the policies of austerity aside, but there is a palpable feeling on the continent that a tide is turning. It did not start with the Greek elections, but with last May’s European Parliament elections, where anti-austerity parties made solid gains. While some right-wing parties that opportunistically donned a populist mantle also increased their vote, they could not do so where they were challenged by left anti-austerity parties. For instance, the right did well in Denmark, France, and Britain, but largely because there were no anti-austerity voices on the left in those races. Elsewhere the left generally defeated their rightist opponents.   If Syriza is to survive, however, it must deliver, and that will be a tall order given the power of its opponents.
  • The French Communist Party hailed the Greek elections as “Good news for the French people,” and Jean-Luc Melenchon of the Parti de Gauche called for a left-wing alliance similar to Syriza. French President Francois Hollande made a careful statement about “growth and stability,” but the Socialist leader is trying to quell a revolt by the left flank of his own party over austerity, and Paris is closer to Rome than it is to Berlin on the debt issue.   While the conservative government of Portugal was largely silent, Left Bloc Member of Parliament Marisa Matias told a rally, “A victory for Syriza is a victory for all of Europe.”
  • As convoluted as Greek politics are, the main obstacle for Syriza will come from other EU members and the Troika.   Finnish Prime Minister Alex Stubb made it clear “that we would say a resounding ‘no’ to forgive loans.” Merkel’s chief of staff, Peter Altmaier, says, “We have pursued a policy which works in many European countries, and we will stick to in the future.” IMF head Christine Lagarde chimed in that “there are rules that must be met in the euro zone,” and that “we cannot make special exceptions for specific countries.”   But Tsipras will, to paraphrase the poet Swinburne, not go entirely naked into Brussels, but “trailing clouds of glory.” Besides the solid support in Greece, a number of other countries and movements will be in the Belgian capital as well.   Syriza is closely aligned in Spain with Podemos, now polling ahead of the ruling conservative People’s Party. “2015 will be the year of change in Spain and Europe,” tweeted Podemos leader Pablo Iglesias in the aftermath of the election, “let’s go Alexis, let’s go!” Unemployment in Spain is 24 percent, and over 50 percent for young people.
  • At home, the Party will have to take on Greece’s wealthy tax-dodging oligarchs if it hopes to extend democracy and start refilling the coffers drained by the troika’s policies. It will also need to get a short-term cash infusion to meet its immediate obligations, but without giving in to yet more austerity demands by the troika.   For all the talk about Syriza being “extreme”—it stands for Coalition of the Radical Left— its program, as Greek journalist Kia Mistilis points, is “classic ‘70s social democracy”: an enhanced safety net, debt moratorium, minimum wage raise, and economic stimulus.   Syriza is pushing for a European conference modeled on the 1953 London Debt Agreement that pulled Germany out of debt after World War II and launched the “wirtschaftswunder,”or economic miracle that created modern Germany. The Agreement waved more than 50 percent of Germany’s debt, stretched out payments over 50 years, and made repayment of loans dependent on the country running a trade surplus.
  • The centerpiece of Syriza’s Thessaloniki program is its “four pillars of national reconstruction,” which include “confronting the humanitarian crisis,” “restarting the economy and promoting tax justice,” “regaining employment,” and “transforming the political system to deepen democracy.”   Each of the “pillars” is spelled out in detail, including costs, income and savings, and, while it is certainly a major break with the EU’s current model, it is hardly the October Revolution.   The troika’s austerity model has been quite efficient at smashing trade unions, selling off public resources at fire sale prices, lowering wages and starving social services. As a statement by the International Union of Food Workers argues, “Austerity is not the produce of a deficient grasp of macroeconomics or a failure of ‘social dialogue,’ it is a conscious blueprint for expanding corporate power.”
  • Under an austerity regime, the elites do quite well, and they are not likely to yield without a fight.   But Syriza is poised to give them one, and “the little party that could” is hardly alone. Plus a number of important elections are looming in Estonia, Finland, and Spain that will give anti-austerity forces more opportunities to challenge the policies of Merkel and the troika.   The spectre haunting Europe may not be the one that Karl Marx envisioned, but it is putting a scare into the halls of the rich and powerful.
  • Paul Merrell on 02 Feb 15
     
    I'm struck again by the poltical brilliance of Russia's decision to drop the South Stream Pipeline in favor of a new pipeline through Turkey to the border with Greece. Russia has gained an ally in Greece in terms of fighting economic sanctions on Russia and reinstating trade between Russia and the EU. Greece has veto power in the EU on any new sanctions or renewal of existing sanctions, at least most of which have sunset provisions. Russia also made allies of two NATO members, Greece and Turkey. And Greece is positioned by its threat of refusal to repay debt to the troika banksters to break the absolute hold the banksters have on monetary policy in the Eurozone. Russia magnifies that threat by saying that it is open to a proposal to bail out the Greek government. Not yet known is whether a condition would be abandoning the Euro as Greece's own currency. Greece might conceivably reinstate the drachma with its value pegged to a basket of foreign currencies, including the ruble and yuan. In other words, Greece leaving the EU and NATO and joining BRICS is conceivable.
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