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Gary Edwards

Walking Away From Your Mortgage: Is it moral? Or is it a legitamate financial option b... - 0 views

www.businessinsider.com/away-from-your-mortgage-2009-3

financial-crisis obama-socialism banksters

shared by Gary Edwards on 05 Mar 09 - Cached
  • MM CA said: Mar. 04, 1:28 PM Borrower_underwater: and your point is? defending the banks and mortgage industry? who said his house was dump? he said it was his dream home... pay attention... either way the man and his fmaily were smart enough to save 300k for a down payment. i live in california and the appreciation of housing the past 10 years was irrational and unsustainbale. he boguht three years ago. there was no crisis then. Why woudlnt he buy. Renting now is smart but then? i think you need to inderstand the crisis better. i understand a little bit more than you think i do: see my list of issues/predcitons i developed 3 mtonhs ago... most are coming true...
  • So here lies the squeeze. Originator gets paid per loan made. People in an iron lung are getting approved for subprime. Bank hopes to package loan into CMO and sell to Helsinki or some such. Who is supposed to make sure that the house is really worth what the guy in the iron lung is willing to pay? The appraiser. Not the Originator. Not the bank (we're clearly not talking the good old commmunity bank days were your loan officer knew your neighborhood).
  • it is easy to see where the bank's first protection against a borrower default, correctly establishing a home's value at the time of purchase, falls to the side. That's where it starts to look like the "pay me to rate you" goons at the rating agencies. The populace and ultimate debt holders have counted on the ratings and home valuation process to be clean but simple economic incentives should tell us otherwise.
  • ...1 more annotation...
  • I agree that the argument that "it's priced into the rate" is insufficient, what is sufficient is the fact that the consequences of walking away are actually in the contract! If I stop paying, you take the house. That's why the bank gets to have a lien. It's all part of the deal we signed, remember?. I don't think walking away from the mortgage is even "breaking" the contract. We will simply be exercising a different clause of the contract: foreclosure in lieu of payment.
  • Gary Edwards on 05 Mar 09
     
    Mortgage lenders absolutely hate borrowers who walk away from underwater mortgages, especially those who could actually afford to keep paying off their mortgages but just decide it isn't worth it. They hate them so much that the term-of-art for these borrowers is "ruthless." But the ethics of mortgage lenders don't have much to recommend them. We need to decide for ourselves whether or not there's a moral obligation to keep paying off a mortgage. For some it's practically a patriotic duty. For others it's a matter of being a good neighbor, since foreclosures could hurt their home values also. Still others say it's just a matter of being a moral person who keeps promises. Great comments to this story. Check out the predictions from MM_CA. They have a diigo highlight. At the time of my reading of this story, the DOW was down 200 pts to 6678.95. The Supreme Leader is busy conducting a healthcare summit, claiming that "fixing" (read "nationalizing") the healthcare system will result in so many jobs that the economy will turn around. The comments are well worth the time!
Gary Edwards

A history of the Mortgage - Housing dilemma by Arnold Kling | EconLog | Library of Econ... - 0 views

econlog.econlib.org/...my_fantasy_test.html

financial-crisis financial-solutions socialism mortgage-history banksters

shared by Gary Edwards on 02 Mar 09 - Cached
  • Method A suffered a breakdown in the 1970's, because inflation was allowed to get out of control. The 6 percent mortgage interest rates that were commonly charged by savings and loans became untenable when inflation and interest rates soared to double-digit levels. The savings and loan industry went out of business. Whether Method B could survive a similar shock is unclear. The right lesson to learn from the 1970's was not that we should use Method B. The right lesson to learn is that we should not let inflation get out of hand.
    • Gary Edwards
      Gary Edwards on 02 Mar 09
       
      Government inflation (thank you Jimmy Carter) as the cause of the savings and loan collapse!
  • The secondary mortgage market began in 1968, when the United States formed the Government National Mortgage Association (GNMA). GNMA pooled loans originated under programs by the Federal Housing Administration (FHA) and the Veterans Administration (VA) and sold these pools to investors. The purpose of this, as with the quasi-privatization of the Federal National Mortgage Association (Fannie Mae) that took place that year, was to take Federally guaranteed mortgage loans off of the books. President Johnson, fighting an unpopular war in Vietnam, wanted to save himself the embarrassment of having to come to Congress to ask for larger and larger increases in the ceiling on the national debt. Thus, the first steps toward mortgage securitization were taken in order to disguise financial reality using accounting gimmicks. It has been the same ever since.
    • Gary Edwards
      Gary Edwards on 02 Mar 09
       
      There it is, in all it'snaked glory. The government created the secondary mortgage market, spinning up Fannie, Freddie and Ginnie for the purpose of taking federally subsidized and guaranteed mortgages off the the official government books. hence the quasi-gov orgs. It's an accounting gimmick!!!!
  • Gary Edwards on 02 Mar 09
     
    Excellent study of how we got into this problem that the socialist are now using to kill forever the American Dream: "..... Forty years ago, depository institutions handled mortgage credit risk very differently than they do today. Back then, the depository institution, which was typically a savings and loan association, held mortgages that were underwritten by its own employees, given to borrowers and backed by homes in its own community. These were almost always 30-year, fixed-rate loans, with borrowers having made a significant down payment, often 20 percent of the price of the home. Call this approach to mortgage lending "Method A." Today, mortgage loans held by depository institutions are often in the form of securities. These securities are backed by loans originated in distant communities by unknown borrowers, underwritten by mortgage brokers or other personnel not employed by the depository institution. The loans are often not 30-year fixed-rate loans, and the borrowers have typically made down payments of 5 percent or less, including loans with no down payment at all. Call this approach to mortgage lending "Method B." If you compare the two methods using common sense, then Method B does not pass a simple sanity check. In fact, the current financial crisis consists of banks that are up to their necks in Method B......"
Gary Edwards

Speculators, Politicians, and Financial Disasters : A history of Banking and Socialism - 0 views

www.commentarymagazine.com/...the-madness-of-crowds-13180

politics banking socialism fannie-freddie

shared by Gary Edwards on 29 Oct 08 - Cached
  • As the sorry tale of the S&L crisis suggests, the road to financial hell is sometimes paved with good intentions. There was nothing malign in attempting to keep these institutions solvent and profitable; they were of long standing, and it seemed a noble exercise to preserve them. Perhaps even more noble, and with consequences that have already proved much more threatening, was the philosophy that would eventually lead the United States into its latest financial crisis—a crisis that begins, and ends, with mortgages. A mortgage used to stay on the books of the issuing bank until it was paid off, often twenty or thirty years later. This greatly limited the number of mortgages a bank could initiate. In 1938, as part of the New Deal, the federal government established the Federal National Mortgage Association, nicknamed Fannie Mae, to help provide liquidity to the mortgage market.
  • it was, ironically, the New Deal that institutionalized discrimination against blacks seeking mortgages. In 1935 the Federal Housing Administration (FHA), established in 1934 to insure home mortgages, asked the Home Owner’s Loan Corporation—another New Deal agency, this one created to help prevent foreclosures—to draw up maps of residential areas according to the risk of lending in them. Affluent suburbs were outlined in blue, less desirable areas in yellow, and the least desirable in red. The FHA used the maps to decide whether or not to insure a mortgage, which in turn caused banks to avoid the redlined neighborhoods. These tended to be in the inner city and to comprise largely black populations. As most blacks at this time were unable to buy in white neighborhoods, the effect of redlining was largely to exclude even affluent blacks from the mortgage market.
  • In 1977, responding to political pressure to abolish the practice, Congress finally passed the Community Reinvestment Act, requiring banks to offer credit throughout their marketing areas and rating them on their compliance. This effectively outlawed redlining.
  • ...4 more annotations...
  • in 1995, regulations adopted by the Clinton administration took the Community Reinvestment Act to a new level. Instead of forbidding banks to discriminate against blacks and black neighborhoods, the new regulations positively forced banks to seek out such customers and areas. Without saying so, the revised law established quotas for loans to specific neighborhoods, specific income classes, and specific races. It also encouraged community groups to monitor compliance and allowed them to receive fees for marketing loans to target groups.
  • the Clinton changes in 1995. As part of them, Fannie and Freddie were now permitted to invest up to 40 times their capital in mortgages; banks, by contrast, were limited to only ten times their capital. Put briefly, in order to increase the number of mortgages Fannie and Freddie could underwrite, the federal government allowed them to become grossly undercapitalized—that is, grossly to reduce their one source of insurance against failure. The risk of a mammoth failure was then greatly augmented by the sheer number of mortgages given out in the country.
    • Gary Edwards
      Gary Edwards on 29 Oct 08
       
      wow, there's that "40 to 1" lending to asset ratio that took down the big five investment banks in October of 2008!
  • Since banks knew they could offload these sub-prime mortgages to Fannie and Freddie, they had no reason to be careful about issuing them. As for the firms that bought the mortgage-based securities issued by Fannie and Freddie, they thought they could rely on the government’s implicit guarantee. AIG, the world’s largest insurance firm, was happy to insure vast quantities of these securities against default; it must have seemed like insuring against the sun rising in the West.
  • remaining at the heart of the financial beast now abroad in the world are Fannie Mae and Freddie Mac and the mortgages they bought and turned into securities. Protected by their political patrons, they were allowed to pile up colossal debt on an inadequate capital base and to escape much of the regulatory oversight and rules to which other financial institutions are subject. Had they been treated as the potential risks to financial stability they were from the beginning, the housing bubble could not have grown so large and the pain that is now accompanying its end would not have hurt so much.
  • Gary Edwards on 29 Oct 08
     
    Fueled by easy credit, the real-estate market had been rising swiftly for some years. Members of Congress were determined to assure the continuation of that easy credit. Suddenly, the party came to a devastating halt. Defaults multiplied, banks began to fail. Soon the economic troubles spread beyond real estate. Depression stalked the land. The year was 1836.
Paul Merrell

The Trans-Pacific Partnership and the Death of the Republic | WEB OF DEBT BLOG - 0 views

ellenbrown.com/...-and-the-death-of-the-republic

trade agreements TPP fast-track Investor-State-DisputeSettlement ISDS legislation

shared by Paul Merrell on 26 Apr 15 - No Cached
  • On April 22, 2015, the Senate Finance Committee approved a bill to fast-track the Trans-Pacific Partnership (TPP), a massive trade agreement that would override our republican form of government and hand judicial and legislative authority to a foreign three-person panel of corporate lawyers. The secretive TPP is an agreement with Mexico, Canada, Japan, Singapore and seven other countries that affects 40% of global markets. Fast-track authority could now go to the full Senate for a vote as early as next week. Fast-track means Congress will be prohibited from amending the trade deal, which will be put to a simple up or down majority vote. Negotiating the TPP in secret and fast-tracking it through Congress is considered necessary to secure its passage, since if the public had time to review its onerous provisions, opposition would mount and defeat it.
  • The most controversial provision of the TPP is the Investor-State Dispute Settlement (ISDS) section, which strengthens existing ISDS  procedures. ISDS first appeared in a bilateral trade agreement in 1959. According to The Economist, ISDS gives foreign firms a special right to apply to a secretive tribunal of highly paid corporate lawyers for compensation whenever the government passes a law to do things that hurt corporate profits — such things as discouraging smoking, protecting the environment or preventing a nuclear catastrophe. Arbitrators are paid $600-700 an hour, giving them little incentive to dismiss cases; and the secretive nature of the arbitration process and the lack of any requirement to consider precedent gives wide scope for creative judgments. To date, the highest ISDS award has been for $2.3 billion to Occidental Oil Company against the government of Ecuador over its termination of an oil-concession contract, this although the termination was apparently legal. Still in arbitration is a demand by Vattenfall, a Swedish utility that operates two nuclear plants in Germany, for compensation of €3.7 billion ($4.7 billion) under the ISDS clause of a treaty on energy investments, after the German government decided to shut down its nuclear power industry following the Fukushima disaster in Japan in 2011.
  • Under the TPP, however, even larger judgments can be anticipated, since the sort of “investment” it protects includes not just “the commitment of capital or other resources” but “the expectation of gain or profit.” That means the rights of corporations in other countries extend not just to their factories and other “capital” but to the profits they expect to receive there.
  • ...6 more annotations...
  • Under the TPP, could the US government be sued and be held liable if it decided to stop issuing Treasury debt and financed deficit spending in some other way (perhaps by quantitative easing or by issuing trillion dollar coins)? Why not, since some private companies would lose profits as a result? Under the TPP or the TTIP (the Transatlantic Trade and Investment Partnership under negotiation with the European Union), would the Federal Reserve be sued if it failed to bail out banks that were too big to fail? Firestone notes that under the Netherlands-Czech trade agreement, the Czech Republic was sued in an investor-state dispute for failing to bail out an insolvent bank in which the complainant had an interest. The investor company was awarded $236 million in the dispute settlement. What might the damages be, asks Firestone, if the Fed decided to let the Bank of America fail, and a Saudi-based investment company decided to sue?
  • Just the threat of this sort of massive damage award could be enough to block prospective legislation. But the TPP goes further and takes on the legislative function directly, by forbidding specific forms of regulation. Public Citizen observes that the TPP would provide big banks with a backdoor means of watering down efforts to re-regulate Wall Street, after deregulation triggered the worst financial crisis since the Great Depression: The TPP would forbid countries from banning particularly risky financial products, such as the toxic derivatives that led to the $183 billion government bailout of AIG. It would prohibit policies to prevent banks from becoming “too big to fail,” and threaten the use of “firewalls” to prevent banks that keep our savings accounts from taking hedge-fund-style bets. The TPP would also restrict capital controls, an essential policy tool to counter destabilizing flows of speculative money. . . . And the deal would prohibit taxes on Wall Street speculation, such as the proposed Robin Hood Tax that would generate billions of dollars’ worth of revenue for social, health, or environmental causes.
  • Clauses on dispute settlement in earlier free trade agreements have been invoked to challenge efforts to regulate big business. The fossil fuel industry is seeking to overturn Quebec’s ban on the ecologically destructive practice of fracking. Veolia, the French behemoth known for building a tram network to serve Israeli settlements in occupied East Jerusalem, is contesting increases in Egypt’s minimum wage. The tobacco maker Philip Morris is suing against anti-smoking initiatives in Uruguay and Australia. The TPP would empower not just foreign manufacturers but foreign financial firms to attack financial policies in foreign tribunals, demanding taxpayer compensation for regulations that they claim frustrate their expectations and inhibit their profits.
  • What is the justification for this encroachment on the sovereign rights of government? Allegedly, ISDS is necessary in order to increase foreign investment. But as noted in The Economist, investors can protect themselves by purchasing political-risk insurance. Moreover, Brazil continues to receive sizable foreign investment despite its long-standing refusal to sign any treaty with an ISDS mechanism. Other countries are beginning to follow Brazil’s lead. In an April 22nd report from the Center for Economic and Policy Research, gains from multilateral trade liberalization were shown to be very small, equal to only about 0.014% of consumption, or about $.43 per person per month. And that assumes that any benefits are distributed uniformly across the economic spectrum. In fact, transnational corporations get the bulk of the benefits, at the expense of most of the world’s population.
  • Something else besides attracting investment money and encouraging foreign trade seems to be going on. The TPP would destroy our republican form of government under the rule of law, by elevating the rights of investors – also called the rights of “capital” – above the rights of the citizens. That means that TPP is blatantly unconstitutional. But as Joe Firestone observes, neo-liberalism and corporate contributions seem to have blinded the deal’s proponents so much that they cannot see they are selling out the sovereignty of the United States to foreign and multinational corporations.
  • For more information and to get involved, visit: Flush the TPP The Citizens Trade Campaign Public Citizen’s Global Trade Watch Eyes on Trade
Paul Merrell

Can Greece and EU Make Amends? | Consortiumnews - 0 views

consortiumnews.com/...can-greece-and-eu-make-amends

economy Greece EU Eurozone

shared by Paul Merrell on 07 Jul 15 - No Cached
  • As German Chancellor Angela Merkel has said, loans must be repaid. In principle, of course, she is right, but there are extenuating circumstances, including that the lenders baited the trap in which the Greeks have fallen. The lenders offered loans when they should have known that the borrowers had little chance of repaying them.Sometimes in Greece – as, for example, in Latin America – bank officers encouraged borrowing because they got bonuses for generating business, a common banking practice. Other loans were made for political purposes. Some also had “security” aspects.Collectively, the Greeks are “guilty” of accepting the loans. They should have known how hard it would be to repay them. Some, prudently, refused, but when the loans temporarily created a minor boom, almost everyone was swept up in the euphoria.
  • And the Greeks were not alone. Other heavy borrowers included the governments and peoples of Spain, Portugal, Italy and Ireland. This is what makes the current crisis more than just a Greek problem.Internationally, there are already signs that lenders are reacting to the Greek vote in panic. If one country that borrowed heavily is defaulting, they ask, which other heavily-borrowing country is likely to be next? Many have suggested it will be Spain. Apparently a number of lenders believe that popular Spanish movements resemble the coalition of groups supporting Greek Prime Minister Alexis Tsipras’s Syriza. The bankers may not particularly care about the politics or ideology, but they fear the turmoil.Bankers are usually noted for their prudence (especially when the risks of non-payment are readily apparent). And prudence argues for either making no new loans or even calling in those already made. This could dramatically harm the Spanish economy where already in this year nearly one in four workers could not find a job.So, it’s clear that the time of danger is here. What about the time for statesmanship? Ironically, the lenders do not seem to have yet understood that the “No” vote could save the Euro, save Greece – and potentially save Spain, Italy, Portugal and Ireland. Why is that so?
  • It is so because having secured his support at home, Prime Minister Tsipras can now afford to negotiate a sensible deal. And, having seen that Tsipras survived what amounted to a vote-of-no-confidence and would have meant his political removal if he had lost, Chancellor Merkel and French President Francois Hollande now realize that they must negotiate a sensible deal with Tsipras if they are to save the Euro and potentially the European Union.What would be the basis of a compromise? While there are details of considerable complexity, the heart of the matter is reasonably simple:First, Greece cannot repay the huge debt in the foreseeable future. That would have been true even if the Greeks had voted “yes.” Put starkly, the IMF, the European Central Bank and other creditors must forgive a large part of the Greek debt. They probably will choose to disguise “forgiveness” by calling it an extension into the remote future.
  • ...1 more annotation...
  • Second, if Greece is to survive in some acceptable manner – and possibly even avoid a civil war – the country will need additional emergency financing. Tsipras’s electoral victory will make it possible for him to bend slightly – but not much – on such issues as welfare payments.At the same time,  public desperation – as funds dry up and even food becomes scarce – will impel him to compromise as much as he can to stay in office. Meanwhile, the lenders will find strong incentives to help because a total collapse of the Greek economy raises the specter of collapse in other European Union economies and the ultimate danger of the splintering of the European Union and the collapse of the Euro.
Gary Edwards

How the Money Vanished - The Bear Stearns "House of Cards" story by William Cohan - 0 views

online.wsj.com/...SB123630340388147387.html

bear-stearns financial-crisis william-cohan banksters

shared by Gary Edwards on 06 Mar 09 - Cached
  • At 2:00 a.m. on Friday -- Mr. Cohan tells us -- Mr. Geithner called Donald Kohn, the vice chairman of the Federal Reserve, and told him that he "wasn't confident that the fallout from the bankruptcy of Bear Stearns could be contained." Taxpayers reading this fascinating tale may wonder whether the fallout from the government's intervention can be contained and, if so, at what cost.
  • Gary Edwards on 06 Mar 09
     
    Meeting the characters in "House of Cards," it's not easy to conceive of people less deserving of federal assistance. In 1997, Bear Stearns helped pioneer the subprime mortgage-backed security by serving as co-underwriter on a $385 million offering. By the mid-2000s, Bear was the leading issuer of such securities and a leader in collateralized debt obligations, which offered even less transparency to investors. Bear was a vertically integrated manufacturer of mortgage chaos, making individual loans to home buyers, servicing the loans, bundling them into pools for investors, marketing the securities and also borrowing huge sums to finance internal hedge funds that held onto these dodgy assets. House of Cards By William D. Cohan (Doubleday, 468 pages, $27.95) Mr. Cohan describes the succession of government policies that encouraged Bear and others to invest so heavily in mortgage finance, from the Fed's easy money to Clinton-era changes to the Community Reinvestment Act requiring more loans to low-income borrowers. But the firm itself deserves the lion's share of the blame for its own collapse. Suggestions to sell some of its risky mortgage assets, or to raise capital, or to consider merger partners were brushed aside in the years and months leading up to the debacle. Paul Friedman, chief operating officer of Bear's fixed-income division, tells Mr. Cohan that "we did this to ourselves. . . . It's our fault for allowing it to get this far, and for not taking any steps to do anything about it."
Gary Edwards

Obama's Bait and Switch: Karl Rove describes how Obama's Policies Break His Campaign P... - 0 views

online.wsj.com/...SB123621161271234665.html

financial-crisis karl-rove obama-socialism obamanomics banksters

shared by Gary Edwards on 06 Mar 09 - Cached
  • For example, Mr. Obama didn't run promising larger deficits -- but now is offering record-setting ones. He'll add $4.9 trillion before his term ends and $7.4 trillion if given a second, doubling the national debt in five years and tripling it in 10.
    • Gary Edwards
      Gary Edwards on 06 Mar 09
       
      Obama railed against the Bush deficits, accusing Bush of irresponsible stewardship. Obama promised fiscal responsibility.
  • Mr. Obama cannot dismiss critics by pointing to President George W. Bush's decision to run $2.9 trillion in deficits while fighting two wars and dealing with 9/11 and Katrina. Mr. Obama will surpass Mr. Bush's eight-year total in his first 20 months and 11 days in office, adding $3.2 trillion to the national debt. If America "cannot and will not sustain" deficits like Mr. Bush's, as Mr. Obama said during the campaign, how can Mr. Obama sustain the geometrically larger ones he's flogging?
  • Mr. Obama pledged "no tax hikes on any families earning less than a quarter million dollars." What he didn't draw attention to was $600 billion in higher energy taxes he wants to impose through a cap-and-trade system on carbon emissions. These taxes will hit everyone who drives, flips a light switch, or buys anything manufactured, grown or shipped.
  • Gary Edwards on 06 Mar 09
     
    Barack Obama won the presidency in large measure because he presented himself as a demarcation point. The old politics, he said, was based on "spin," misleading arguments, and an absence of candor. He'd "turn the page" on that style of politics. Last week's presentation of his budget shows that hope was a mirage.
Gary Edwards

Volcker: A "Little Inflation" Is A Terrible Idea - 0 views

www.businessinsider.com/tion-is-a-terrible-idea-2009-2

finacial-crisis peter-schiff volker hyperinflation

shared by Gary Edwards on 23 Feb 09 - Cached
  • Gary Edwards on 23 Feb 09
     
    Henry Blodgett picks up Paul Volkers comments on inflation ".....The government would quietly but desperately love to inflate our way out of this mess--destroying the dollar so the real burden of our mountain of debt shrivels to a molehill.  This remedy, of course, would punish everyone who has saved up a nest egg or lives on a fixed-income, but they're likely to be considered an expendable minority...." There is also a link on this page to the Aron Task interview with Peter Schiff, "The stimulous bill will lead to unmitigated disaster." http://www.businessinsider.com/2009/2/peter-schiff-stimulus-bill-will-lead-to-unmitigated-disaster Peter compares Bush to Hoover and Obama to Roosevelt, predicting an unmitigated disaster; a depression with hyperinflation. He argues that the great depression was tempered by the fact that government spending and intervention was limited by the godl standard. Today, the Federal Reserve has no such limitation!
Gary Edwards

The Dark Side of the Socialist Joker: "Don't Just Take Their Wealth, Destroy it!" - 0 views

www.amconmag.com/...00009

obama-socialism financial-crisis aig cds banksters

shared by Gary Edwards on 19 Mar 09 - Cached
  • Gary Edwards on 19 Mar 09
     
    Business Insiders John Carney describes what happened at evil doer, AIG. In describing the black hole that is swallowing up endless volumes of taxpayer wealth, Carney points out that AIG is a channel for redistributing American wealth to International Bankers. ".... In last summer's blockbuster "The Dark Knight," the Joker invites one of the top crime lords of Gotham City to the rundown warehouse where he has stashed his ill-gotten gains. The mobster stares in awe at the huge stack of money the arch-criminal has amassed. But a moment later, his awe turns to horror as the Joker sets the money aflame. "This town deserves a better class of criminal," he explains. The exchange reveals the deep evil of the Joker. Unlike a common criminal, he doesn't just want to steal money from others. He wants to destroy their wealth....... At the heart of AIG's problems is a financial product called a credit default swap, which is really just an insurance contract on debt. If a borrower failed to pay off a loan fully, an investor protected by a credit default swap would be able to collect the outstanding amount from the insurance company. The idea was that credit default swaps would reduce the risk to any investor who bought bonds. In the best of worlds, they would reduce risk throughout the financial system by spreading out the costs of defaults. But that's not how things worked out. Instead, credit default swaps came to be used by banks in a way that no one anticipated-to avoid banking regulations. And AIG decided to get into the business of enabling this scheme...... "
Gary Edwards

Goldman Sachs: Don't Blame Us - BusinessWeek - 1 views

www.businessweek.com/...b4173030234603.htm

financial-oligarchs financial-crisis goldman-sachs crony-capitalism Obammunism Banksters banksters

shared by Gary Edwards on 03 Apr 10 - Cached
  • Gary Edwards on 03 Apr 10
     
    Goldman Sachs reputation with its clients-who must have at least $10 million to open an account-has never been better. Among the general public, however, the perception is that Goldman is the toxic epicenter of everything wrong with Wall Street. The firm's 32,000 employees are seen as an army of Gordon Gekkos, greedy manipulators who pumped up the housing bubble, then bet opportunistically on its implosion as American International Group (AIG), its trading partner, buckled under massive debts. It is widely alleged-though unproven-that Goldman called on its close friends in government to arrange for an AIG bailout, effectively pocketing billions of taxpayer dollars. "Every game has a sucker," says William K. Black, a professor of law and economics at the University of Missouri at Kansas City who was deputy director of the Federal Savings & Loan Insurance Corp., "and in this case, the sucker was not so much AIG as it was the U.S. government and taxpayer." Heads Goldman wins, tails you lose, America.
Gary Edwards

The Right Way To Reform Wall Street: Let Stupid Firms Fail! - 0 views

www.businessinsider.com/errible-washington-idea-2009-9

financial-crisis financial-oligarchs banksters

shared by Gary Edwards on 18 Sep 09 - Cached
  • Gary Edwards on 18 Sep 09
     
    Let stupid firms fail. We need to get back to that. Yes, the fact that the "stupid firms" this time around included most of Wall Street shows that special rules of financial bankruptcy should apply so the whole system doesn't collapse.  But the firms need to be allowed to fail. What should the special rules of financial bankruptcy be? managements should be tossed compensation contracts and other liabilities should be torn up,  bonus pools should be zeroed until the firms return to annual profitability equity and preferred holders should be wiped out, and junior bondholders should get a major haircut through the immediate, forced conversion of debt to equity. All of this should happen not over years in the courts, but overnight--in the manner in which the FDIC seizes failing banks.  In such proceedings, all of Wall Street's idiocy enablers will lose their shirts: The folks who work the at the firms, the folks who lend money to the firms, the folks who invest in the firms and trust the firms' managements to be something other than morons. Losing your shirt generally has a sobering effect on decision-making.  As long as managers, lenders, and shareholders know they will lose their shirts, the next generation of Wall Street enablers will likely be far more careful and demanding than their predecessors, at least for a little while (and don't hallucinate that the Fed's new policy is anything other than temporary). 
Gary Edwards

GDP Is..... Better Than Expected? - Or Filled With Outright Lies? The Market Ticker - 0 views

market-ticker.denninger.net/.......-Better-Than-Expected.html

obam-socialism marxism financial-crisis banksters

shared by Gary Edwards on 29 Oct 09 - Cached
  • Gary Edwards on 29 Oct 09
     
    Whoa!  Incredible fact filled analysis of the pre election GDP numbers released by Obama. excerpt:  Disposable personal income decreased in nominal terms q/o/q by 5.9% while in real terms (inflation adjusted) it decreased q/o/q by 7.4%!  That is an enormous swing in purchasing power and not in the right direction! Personal outlays increased $148.2 billion (5.8 percent) in the third quarter, compared with an increase of $8.2 billion (0.3 percent) in the second. Personal saving -- disposable personal income less personal outlays -- was $364.6 billion in the third quarter, compared with $533.1 billion in the second. The personal saving rate -- saving as a percentage of disposable personal income -- was 3.3 percent in the third quarter, compared with 4.9 percent in the second. So into decreasing personal income and disposable personal income people tried to spend anyway.  Best guess: most of this was "cash for clunkers", which is the worst sort of "spending" - it is the taking on of more debt by replacing a paid-off car with one that now comes with a shiny (and nasty) payment book.  The Trade: Go long auto repo outfits (aside: as far as I know there are no publicly-traded repo companies.) Nothing in here I like; to the contrary, this report sucks and on a drill-down appears to be full of outright lies.
Paul Merrell

The new European 'arc of instability' - RT Op-Edge - 0 views

rt.com/...3-putin-russia-sovereign-swift

war & peace economic-warfare Russia U.S.-foreign-policy Eurasia

shared by Paul Merrell on 06 Jan 15 - No Cached
  • The European Council on Foreign Relations and Berlin think-tank Friedrich Ebert Stiftung have just reached more or less the same conclusion. If the dangerous stand-off between the EU and Russia over Ukraine is not solved, the EU could face, up to 2030, a military build-up in eastern Europe; a new arms race with NATO as a protagonist; and a semi-permanent “zone of instability” from the Baltic to the Balkans and the Black Sea. What these two think-tanks don’t – and won’t – ever acknowledge is that a new European “arc of instability” – from the Baltic to the Black Sea, as myself and other independent analysts have stressed – is exactly what the Empire of Chaos and its weaponized arm – NATO – are working on to prevent closer Eurasia integration. By the way, the Pentagon excels in fabricating “arcs of instability.” The previous one was – and remains – massive, stretching from the Maghreb to Xinjiang in western China across the Middle East and Central Asia.
  • Moscow has totally identified the plot; Foreign Minister Sergey Lavrov, once again, has made it crystal clear, in detail. And crucially, some influential sectors in Germany also did, as in members of the cultural elite destroying the notion of a new war in Europe: “Not in our name.” The same applies to those that always preach more transatlantic cooperation, extol the US’s “defining” role in Germany, and effusively praise Germany as the most American country in Europe; that’s the case of the Frankfurter Allgemeine newspaper – which stands for the core of the political and economic establishment in Germany. It’s still in an embryonic stage, and has not yet made Chancellor Angela Merkel see the light; but a reverse reengineering of Atlanticist relations is already in progress in Germany.
  • Meanwhile, the proverbial group of extremist US senators, plus the notorious poodles/vassals of Britain and Poland, haven’t stopped lobbying to shut Russia off from SWIFT – just as they did with Iran. This would be nothing but yet another declaration of (economic) war – or the economic counterpoint to NATO hysteria. In fairness, a great deal of the EU – especially Germany – knows this is madness. Germany’s top financial paper Handelsblatt recently published a key interview with head of VTB-Bank Andrei Kostin, which has still not been translated into any major English-language paper.
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  • Kostin went straight to the point: “Of course, there is a plan B [in the case of Russia being shut off from the SWIFT bank system], but in my personal opinion it would mean war – if this type of sanction will be introduced. America and Europe did that against Iran but with Iran at that time there were no diplomatic relations, only military containment...if Russian banks’ access to SWIFT will be prohibited, the US ambassador to Moscow should leave the same day. Diplomatic relations must be finished. Banking is the most vulnerable part of the Russian economy because the system is based so strongly on the dollar and the euro.” Next May, Russia’s Central Bank is planning to introduce an analogue to SWIFT – after key consultations with China. It’s always important to keep in mind that China set up a parallel SWIFT to do business with Iran under sanctions. But still there will be a window of four months for a lot of nasty things to happen after a Republican-controlled US Senate is empowered in January.
  • And then there’s the golden rule. Why is Russia buying so much gold? With the US dollar forced upward and gold downward, it makes total business sense to sell gas for inflated dollars and then buy cheap depressed gold; that’s what the Chinese call a “win-win.” And of course on both counts, the West loses. The Washington/Wall Street elites are fully aware that both Moscow and Beijing won’t accumulate US dollars anymore. As for the Masters of the Universe plutocrats who manipulate/control the value of the US dollar, a case can be made that one of their purposes is wrecking the US’s industrial base and the nation’s middle classes. Moscow, meanwhile, has adjusted to the new “instability.” The weak ruble has a positive effect – already stressed by President Putin – by forcing Russia to diversify its manufacturing and become more self-sufficient.
  • Of course, the problem remains for Russia to pay the foreign interest on its debt in US dollars. Moscow could always declare a moratorium in debt repayments. The ruble might go down even more. But as everyone from Lukoil to Rosneft converts more US dollars into rubles, that will drive the ruble back up. Not to mention that the ruble is shorted as it stands. The bottom line is that Moscow has learned yet another lesson for the immediate future: never become indebted to the West. What’s certain is that the Empire of Chaos won’t relent in its strategy of heating up the new arc of instability – inside Europe, across the economic/financial spectrum – and instrumentalizing its pre-fabricated New Iron Curtain from the Baltic to the Black Sea. The Kremlin seems to know exactly how high the stakes are. As The Saker told me in an email, “Putin is telling both the West and the Russian people that there is a long war in progress and that the Russian people have to morally be prepared to accept sacrifices for the survival of Russia. This is one more step in the 'coming-out' of what I call the ‘Eurasian Sovereignists’ in which the US [has] now openly declared as a Russophobic (Russia-hating and Russia-fearing) enemy, and the Europeans as a powerless colony. Military power is not directly a factor in this, the internal power balance between the pro-Western ‘Atlantic Integrationists’ and the ‘Eurasian Sovereignists’ is.” It’s all here – from the debacle of a regime (Bretton Woods) to the current, provoked crisis, all brilliantly explained by Mikhail Khazin. Russia is getting ready to rock. Is the West?
Paul Merrell

America's Monetary Crisis: Even the Council on Foreign Relations Is Saying It: Time to ... - 0 views

www.globalresearch.ca/...5398884

banksters economic-collapse trickle-down

shared by Paul Merrell on 09 Sep 14 - No Cached
  • The Fed, it seems, has finally run out of other ammo. It has to taper its quantitative easing program, which is eating up the Treasuries and mortgage-backed securities needed as collateral for the repo market that is the engine of the bankers’ shell game. The Fed’s Zero Interest Rate Policy (ZIRP) has also done serious collateral damage. The banks that get the money just put it in interest-bearing Federal Reserve accounts or buy foreign debt or speculate with it; and the profits go back to the 1%, who park it offshore to avoid taxes. Worse, any increase in the money supply from increased borrowing increases the overall debt burden and compounding finance costs, which are already a major constraint on economic growth. Meanwhile, the economy continues to teeter on the edge of deflation. The Fed needs to pump up the money supply and stimulate demand in some other way. All else having failed, it is reduced to trying what money reformers have been advocating for decades — get money into the pockets of the people who actually spend it on goods and services.
  • Blyth and Lonergan write: [L]ow inflation . . . occurs when people and businesses are too hesitant to spend their money, which keeps unemployment high and wage growth low. In the eurozone, inflation has recently dropped perilously close to zero. . . . At best, the current policies are not working; at worst, they will lead to further instability and prolonged stagnation. Governments must do better. Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly. In practice, this policy could take the form of giving central banks the ability to hand their countries’ tax-paying households a certain amount of money. The government could distribute cash equally to all households or, even better, aim for the bottom 80 percent of households in terms of income. Targeting those who earn the least would have two primary benefits. For one thing, lower-income households are more prone to consume, so they would provide a greater boost to spending. For another, the policy would offset rising income inequality. [Emphasis added.]
  • A money drop directly on consumers is not a new idea for the Fed. Ben Bernanke recommended it in his notorious 2002 helicopter speech to the Japanese who were caught in a similar deflation trap.
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  • Assume a $1 trillion dividend issued in the form of debit cards that could be used only for goods and services. A back-of-the-envelope estimate is that if $1 trillion were shared by all US adults making under $35,000 annually, they could each get about $600 per month.  If the total dividend were $2 trillion, they could get $1,200 per month. And in either case it could, at least in theory, all come back in taxes to the government without any net increase in the money supply.
  • Paul Merrell on 09 Sep 14
     
    Have the banksters finally accepted that trickle-down economics does not work, that only a money-drop on the lower classes can get the economy growing again? 
Paul Merrell

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

nsnbc.me/...-ins-hit-depositors-pensioners

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.
Paul Merrell

Killing Off Community Banks - Intended Consequence of Dodd-Frank? | WEB OF DEBT BLOG - 0 views

ellenbrown.com/...nded-consequence-of-dodd-frank

banksters consolidation Dodd-Frank community-banks too-big-to-fail too-big-to-jail too-big-to-regulate

shared by Paul Merrell on 25 Oct 15 - No Cached
  • The Dodd-Frank regulations are so lethal to community banks that some say the intent was to force them to sell out to the megabanks. Community banks are rapidly disappearing — except in North Dakota, where they are thriving.  At over 2,300 pages, the Dodd Frank Act is the longest and most complicated bill ever passed by the US legislature. It was supposed to end “too big to fail” and “bailouts,” and to “promote financial stability.” But Dodd-Frank’s “orderly liquidation authority” has replaced bailouts with bail-ins, meaning that in the event of insolvency, big banks are to recapitalize themselves with the savings of their creditors and depositors. The banks deemed too big are more than 30% bigger than before the Act was passed in 2010, and 80% bigger than before the banking crisis of 2008. The six largest US financial institutions now have assets of some $10 trillion, amounting to almost 60% of GDP; and they control nearly 50% of all bank deposits.
  • Meanwhile, their smaller competitors are struggling to survive. Community banks and credit unions are disappearing at the rate of one a day. Access to local banking services is disappearing along with them. Small and medium-size businesses – the ones that hire two-thirds of new employees – are having trouble getting loans; students are struggling with sky-high interest rates; homeowners have been replaced by hedge funds acting as absentee landlords; and bank fees are up, increasing the rolls of the unbanked and underbanked, and driving them into the predatory arms of payday lenders. Even some well-heeled clients are being rejected. In an October 19, 2015 article titled  “Big Banks to America’s Firms: We Don’t Want Your Cash,” the Wall Street Journal reported that some Wall Street banks are now telling big depositors to take their money elsewhere or be charged a deposit fee. Municipal governments are also being rejected as customers. Bank of America just announced that it no longer wants the business of some smaller cities, which have been given 90 days to find somewhere else to put their money. Hundreds of local BofA branches are also disappearing.
  • Hardest hit, however, are the community banks. Today there are 1,524 fewer banks with assets under $1 billion than there were in June 2010, before the Dodd-Frank regulations were signed into law. Collateral Damage or Intended Result?
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  • Obviously, making the big banks bigger also serves the interests of the megabanks, whose lobbyists are well known to have their fingerprints all over the legislation. How they have been able to manipulate the rules was seen last December, when legislation drafted by Citigroup and slipped into the Omnibus Spending Bill loosened the Dodd-Frank regulations on derivatives. As noted in a Mother Jones article before the legislation was passed: The Citi-drafted legislation will benefit five of the largest banks in the country—Citigroup, JPMorgan Chase, Goldman Sachs, Bank of America, and Wells Fargo. These financial institutions control more than 90 percent of the $700 trillion derivatives market. If this measure becomes law, these banks will be able to use FDIC-insured money to bet on nearly anything they want. And if there’s another economic downturn, they can count on a taxpayer bailout of their derivatives trading business.
  • Regulation is clearly inadequate to keep these banks honest and ensure that they serve the public interest. The world’s largest private banks have been caught in criminal acts that former bank fraud investigator Prof. William K. Black calls the greatest frauds in history. The litany of frauds involves more than a dozen felonies, including bid-rigging on municipal bond debt; colluding to rig interest rates on hundreds of trillions of dollars in mortgages, derivatives and other contracts; exposing investors to excessive risk; and engaging in multiple forms of mortgage fraud. According to US Attorney General Eric Holder, the guilty have gone unpunished because they are “too big to prosecute.” If they are too big to prosecute, they are too big to regulate.
Paul Merrell

Eurozone crosses Rubicon as Portugal's anti-euro Left banned from power - Telegraph - 0 views

www.telegraph.co.uk/...ro-Left-banned-from-power.html

banksters Portugal coup-government

shared by Paul Merrell on 25 Oct 15 - No Cached
  • Portugal has entered dangerous political waters. For the first time since the creation of Europe’s monetary union, a member state has taken the explicit step of forbidding eurosceptic parties from taking office on the grounds of national interest. Anibal Cavaco Silva, Portugal’s constitutional president, has refused to appoint a Left-wing coalition government even though it secured an absolute majority in the Portuguese parliament and won a mandate to smash the austerity regime bequeathed by the EU-IMF Troika.
  • He deemed it too risky to let the Left Bloc or the Communists come close to power, insisting that conservatives should soldier on as a minority in order to satisfy Brussels and appease foreign financial markets.
  • Democracy must take second place to the higher imperative of euro rules and membership. “In 40 years of democracy, no government in Portugal has ever depended on the support of anti-European forces, that is to say forces that campaigned to abrogate the Lisbon Treaty, the Fiscal Compact, the Growth and Stability Pact, as well as to dismantle monetary union and take Portugal out of the euro, in addition to wanting the dissolution of NATO,” said Mr Cavaco Silva.
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  • “This is the worst moment for a radical change to the foundations of our democracy. "After we carried out an onerous programme of financial assistance, entailing heavy sacrifices, it is my duty, within my constitutional powers, to do everything possible to prevent false signals being sent to financial institutions, investors and markets,” he said. Mr Cavaco Silva argued that the great majority of the Portuguese people did not vote for parties that want a return to the escudo or that advocate a traumatic showdown with Brussels. This is true, but he skipped over the other core message from the elections held three weeks ago: that they also voted for an end to wage cuts and Troika austerity. The combined parties of the Left won 50.7pc of the vote. Led by the Socialists, they control the Assembleia.
  • The conservative premier, Pedro Passos Coelho, came first and therefore gets first shot at forming a government, but his Right-wing coalition as a whole secured just 38.5pc of the vote. It lost 28 seats.
  • The Socialist leader, Antonio Costa, has reacted with fury, damning the president’s action as a “grave mistake” that threatens to engulf the country in a political firestorm. “It is unacceptable to usurp the exclusive powers of parliament. The Socialists will not take lessons from professor Cavaco Silva on the defence of our democracy,” he said. Mr Costa vowed to press ahead with his plans to form a triple-Left coalition, and warned that the Right-wing rump government will face an immediate vote of no confidence. There can be no fresh elections until the second half of next year under Portugal’s constitution, risking almost a year of paralysis that puts the country on a collision course with Brussels and ultimately threatens to reignite the country’s debt crisis. The bond market has reacted calmly to events in Lisbon but it is no longer a sensitive gauge now that the European Central Bank is mopping up Portuguese debt under quantitative easing.
  • Paul Merrell on 25 Oct 15
     
    The banksters just dropped the pretense of democracy in Portugal.  For additional analysis, see http://www.globalresearch.ca/the-pantomime-of-democracy-portugals-coup-against-anti-austerity/5484375
Paul Merrell

Leaked Audio Reveals Venezuelan Opposition in Secret Talks with IMF | venezuelanalysis.com - 0 views

venezuelanalysis.com/11581

war & peace U.S.-foreign-policy Venezuela IMF coup-attempts oligarchs

shared by Paul Merrell on 21 Oct 15 - No Cached
  • A leaked audio of a conversation between Venezuelan businessman, Lorenzo Mendoza, and former politician, Ricardo Hausman, has revealed Venezuela’s political and business opposition to be seeking collaboration with the IMF (International Monetary Fund) ahead of the country’s parliamentary elections on December 6th. In the phone conversation, leaked in Venezuela last Wednesday, both men speak about the possibility of IMF intervention in the Venezuelan economy and frequently refer to each other as “mate”.   Mendoza currently ranks as one the wealthiest businessmen in the world and controls key areas of the Venezuelan economy, such as the production of cornflour, beer and other household staples. Government supporters hold him responsible for the widespread shortage of key products, which they say is an attempt to destabilise the administration of current leftwing President Nicolas Maduro.   Hausman was formerly Planning Minister (1992-1993) to disgraced ex-Venezuelan President president, Carlos Andres Perez. He currently resides in the US where he is a lecturer at the Kennedy School of Government at Harvard University. 
  • In the audio, which is dominated by Hausman, the ex-minister reveals that he is a longterm friend of the IMF’s Vice-president for the Western Hemisphere, who has asked him to go to the organisation to “talk about Venezuela”. He explains that the fund is “worried” that it will have to “intervene” in the country.   “The condition is that we have a small committee meeting to speak, gloves off, about what the hell we can do to see… Or, if you were to receive a call from Obama or Holland, or whoever and they say… Hell, mate, for us it’s really important that they get involved in Venezuela,” says Hausman.  The economist also assures Mendoza that he is committed to the “war in Venezuela” despite his absence, stating that “there is no exit for Venezuela without substantial international help,” appearing to reference the opposition’s violent street campaign to unseat the government last year, entitled La Salida (the exit).  Specifically Hausman recommends a 40-50 billion dollar loan from the IMF, which he says will entail a significant restructure of the country’s “debt profile” and “what they euphemistically term, private sector involvement”. The two men also reference a group of Hausman’s students in the US, who appear to have been pinned by both men to carry out the economic restructuring in a post-Chavista government.  The conversation finishes with Hausman revealing that he has “projects” in Colombia, Mexico, Peru and Albania, and confirming that the time is right for “carrying out an adjustment plan in Venezuela”. 
  • The recording has caused shockwaves amongst Venezuela’s citizens, who have widely rejected any IMF involvement in the country’s economics. The fund is largely held responsible by citizens for the country’s debt crisis in the 1980s, the economic turmoil of the 1990s, as well as for the riots known as the Caracazo in 1989 which led to widespread police repression and thousands of killings.  The IMF’s poisonous legacy in the country has led the country’s political opposition to distance itself publicly from the organisation. Nonetheless, its spokespeople have been consistently linked to the ill reputed fund over the past fifteen years of leftist government.  Earlier in February 2015, the political opposition led by Leopoldo Lopez, Maria Corina Machado and Antonio Ledezma, released a “Call for a National Transition Agreement” just days before the national government reported that it had uncovered plans for an attempted coup amongst the airforce.  “The Call for a National Transition” contained a number of points orientating the politics of a transitional regime in Venezuela, including selling off national public enterprises and the input of “international financial organisations”. 
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  • After the government publicly released the recording between Hausman and Mendoza last week, Venezuelan President Nicolas Maduro accused the opposition of once again seeking financial support from the IMF in order to promote “insurrectionary violence” in the country.  “I have proof that the IMF has received a visit from a group of technocrats… who have requested 60 billion dollars in order to put their plan into action, and the fund has told them that they will give them [the money] if they unseat the government,” stated the president on his weekly television show, In Contact with Maduro.  Although Maduro has yet to reveal evidence, Mendoza at least seems to have corroborated the authenticity of the phone conversation, which he has slammed as an “illegal” recording of a “private talk” that he had with Hausman.  Maduro has called for Mendoza to be prosecuted.  “I hope the judicial bodies react,” he stated. 
Paul Merrell

Why the Pentagon really, really doesn't want to get involved in Syria | Killer Apps - 0 views

killerapps.foreignpolicy.com/..._want_to_get_involved_in_syria

war & peace Syrian war no-fly-zone feasibility

shared by Paul Merrell on 19 Jun 13 - No Cached
  • Top Pentagon brass have been ambivalent in the extreme about getting involved in the Syrian crisis since it began more than two years ago. And now, even as the Obama administration signals its intention to provide direct military aid to opponents of the Syrian regime, there remains deep skepticism across the military that it will work. With some notable exceptions, top brass believe arming Syrian rebels, creating a no-fly zone and intervening in other ways militarily, amounts to a risky approach with enormous costs that won't likely give the Syrian opposition the lift it needs.
  • While no one is talking about sending boots on the ground, top brass is extremely reluctant to commit assets. For example, senior military officers believe arming rebels, long one of the most popular initiatives among Syrian interventionists, will result in those arms getting into the wrong hands sooner or later. "There is no way to ensure their safeguarding and recovery procedures in the event the weapons are stolen or lost and end up in the wrong hands," one senior military officer said, speaking on an issue with which he is familiar but on which he isn't authorized to speak publicly. Creating a no-fly zone sounds good on paper, military officials say, and might help to give a morale boost to the opposition. But it represents little more than a symbolic strategy meant to show the Assad regime that the U.S. and its allies want to contain the conflict. But if one of President Bashar al-Assad's aircraft are shot down, then what, military officials ask.
  • A perception that there is a dearth of military assets needed for such action contributes to the collective military sentiment about Syrian intervention. There's also perhaps a deep, psychological underpinning: the Syrian rebels are nearly indistinguishable from some of the very foreign fighters the military has been fighting. "The defense establishment has been fighting jihadis for the last many years, and now, why are we helping them?"
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  • The Pentagon's enthusiasm for a no-fly zone is tempered by past experiences. The Air Force still quickly points to Operation Northern and Southern Watch over Iraq as an operationally exhausting and expensive endeavor that lasted many years. "The biggest reason the military is resistant is frankly that it recognizes as well it should, post-Iraq, that military action brings extreme and unintended consequences and that's totally valid," said Joe Holliday, a fellow at the Institute for the Study of War.
  • Still, the conventional wisdom across the senior level general and flag officers in the military is that military options generally aren't good ones. Gen. Philip Breedlove, commander of U.S. European Command and Supreme Allied Commander, Europe, had said he saw "no military value" in creating a no-fly zone inside northern Syria.
  • That lack of strategic enthusiasm for a military role in Syria has animated or perhaps justified the administration's own ambivalence since the uprising began in March 2011. As the Pentagon grapples with a financial crisis largely brought on by the debts created by fighting two protracted wars for more than the last decade, military leaders aren't keen to slip into another fight. Chairman of the Joint Chiefs of Staff, Gen. Marty Dempsey, has repeatedly repudiated the idea of getting more involved in Syria. Providing direct military aid or getting involved in some other way is one thing, but it's the endgame the brass worries about. "Before we take action, we have to be prepared for what comes next," Dempsey told the Senate Armed Services Committee April 18. And at a breakfast for reporters later that month, Dempsey again expressed doubt about intervention. "Whether the military effect would produce the kind of outcome I think that not only members of Congress but all of us would desire -- which is an end to the violence, some kind of political reconciliation among the parties, and a stable Syria -- that's the reason I've been cautious about the application of the military instrument of power.... It's not clear to me that it would produce that outcome," he said.
Paul Merrell

Looting the Pension Funds: How Wall Street Robs Public Workers | Politics News | Rollin... - 0 views

www.rollingstone.com/...ing-the-pension-funds-20130926

banksters pension-funds looting

shared by Paul Merrell on 27 Sep 13 - No Cached
  • Paul Merrell on 27 Sep 13
     
    The Rolling Stone's Matt Taibbi strikes again. 
  • Gary Edwards on 28 Sep 13
     
    Awesome article Paul. A must read for anyone trying to understand the 2008 financial collapse. The same Wall Street Banksters who collapsed the world economy are back at it. This time raiding the public workers pension funds, spending millions on politicians and press campaigns to blame cops, firefighters, and teachers for mounting municipal fiscal failures and the coming collapse. Blame anyone but these triple dipping Banksters and their political toadies. Excellent piece of writing too. Check out this opening excerpt introducing the five page story: "In the final months of 2011, almost two years before the city of Detroit would shock America by declaring bankruptcy in the face of what it claimed were insurmountable pension costs, the state of Rhode Island took bold action to avert what it called its own looming pension crisis. Led by its newly elected treasurer, Gina Raimondo - an ostentatiously ambitious 42-year-old Rhodes scholar and former venture capitalist - the state declared war on public pensions, ramming through an ingenious new law slashing benefits of state employees with a speed and ferocity seldom before seen by any local government. Detroit's Debt Crisis: Everything Must Go Called the Rhode Island Retirement Security Act of 2011, her plan would later be hailed as the most comprehensive pension reform ever implemented. The rap was so convincing at first that the overwhelmed local burghers of her little petri-dish state didn't even know how to react. "She's Yale, Harvard, Oxford - she worked on Wall Street," says Paul Doughty, the current president of the Providence firefighters union. "Nobody wanted to be the first to raise his hand and admit he didn't know what the fuck she was talking about." Soon she was being talked about as a probable candidate for Rhode Island's 2014 gubernatorial race. By 2013, Raimondo had raised more than $2 million, a staggering sum for a still-undeclared candidate in a thimble-size state. Donors from Wall Str
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