The way we live our daily lives says so much about us
here are two stories from two separate ways of life
One group is trying to tell the government what to do, and the other is being told what to do.
1
Widow spends 1 million to keep cars off the public road near her home
I wish I had a million to push lawyers around so that I could "be alone"
on my own public road.
2
Empty your own bins families told
This is a small, but smelly step in the destruction of the social contract in the UK.
The others are the constant cuts to Education and Healthcare, which are clearer,
and more dangerous examples of social decay. Of course, this can be solved by
building more prisons to house desperately poor and sick people.
Pay now, or pay later. Schools or prisons?
more later
Thursday 28 July 2011
Default, Now! Apocalypse, Later!
This is how every Empire ends.
But the US empire is bound to Strike Back
at somebody before this is all over.
But the US empire is bound to Strike Back
at somebody before this is all over.
be patient
the ceiling is rotten, but the real problem is buried in the basement
While American politicians are arguing about fixing the debt ceiling,
they should be more concerned about what's buried in the basement.
Like, the overall debt, the body politic- i.e. the voters (without jobs),
capitalism (because bankers get social safety net), and the future (cash hording by the rich leads to crashes).
more soon
checkitout:
michael-hudson.com
How a $13 Trillion Cover Story was Written
June 17, 2011
By Michael Hudson
Free money creation to bail out America’s elite financial speculators, but not for Social Security or Medicare
Only the “Crazies” Get the Bank Giveaway Right
Financial crashes were well understood for a hundred years after they became a normal financial phenomenon in the mid-19th century. Much like the buildup of plaque deposits in human veins and arteries, an accumulation of debt gained momentum exponentially until the economy crashed, wiping out bad debts – along with savings on the other side of the balance sheet.
Physical property remained intact, although much was transferred from debtors to creditors. But clearing away the debt overhead from the economy’s circulatory system freed it to resume its upswing. That was the positive role of crashes: They minimized the cost of debt service, bringing prices and income back in line with actual “real” costs of production. Debt claims were replaced by equity ownership. Housing prices were lower – and more affordable, being brought back in line with their actual rental value. Goods and services no longer had to incorporate the debt charges that the financial upswing had built into the system.[HALLELUJAH]
Financial crashes came suddenly. They often were triggered by a crop failure causing farmers to default, or “the autumnal drain” drew down bank liquidity when funds were needed to move the crops. Crashes often also revealed large financial fraud and “excesses.”
This was not really a “cycle.” It was a scallop-shaped ratchet pattern: an ascending curve, ending in a vertical plunge. But popular terminology called it a cycle because the pattern was similar again and again, every eleven years or so. When loans by banks and debt claims by other creditors could not be paid, they were wiped out in a convulsion of bankruptcy.
Gradually, as the financial system became more “elastic,” each business recovery started from a larger debt overhead relative to output. The United States emerged from World War II relatively debt free. Downturns occurred, crashes wiped out debts and savings, but each recovery since 1945 has taken place with a higher debt overhead. Bank loans and bonds have replaced stocks, as more stocks have been retired in leveraged buyouts (LBOs) and buyback plans than are being issued to raise new equity capital. Behind every LBO is the desire to keep stock prices high, lavishing rewards to managers via the stock options they give themselves.
But after the stock market’s dot.com crash of 2000 and the Federal Reserve flooding the U.S. economy with credit after 9/11, 2001, there was so much “free spending money” that many economists believed that the era of scientific money management had arrived and the financial cycle had ended. Growth could occur smoothly – with no over-optimism as to debt, no inability to pay, no proliferation of over-valuation or fraud. This was the era in which Alan Greenspan was applauded as Maestro for ostensibly creating a risk-free environment by removing government regulators from the financial oversight agencies.
What has made the post-2008 crash most remarkable is not merely the delusion that the way to get rich is by debt leverage (unless you are a banker, that is). Most unique is the crash’s aftermath. This time around the bad debts have not been wiped off the books. There have indeed been the usual bankruptcies – but the bad lenders and speculators are being saved from loss by the government intervening to issue Treasury bonds to pay them off out of future tax revenues or new money creation.
The Obama Administration’s Wall Street managers have kept the debt overhead in place – toxic mortgage debt, junk bonds, and most seriously, the novel web of collateralized debt obligations (CDO), credit default swaps (almost monopolized by A.I.G.) and kindred financial derivatives of a basically mathematical character that have developed in the 1990s and early 2000s.
These computerized casino cross-bets among the world’s leading financial institutions are the largest problem.
Instead of this network of reciprocal claims being let go, they have been taken onto the government’s own balance sheet. This has occurred not only in the United States but even more disastrously in Ireland, shifting the obligation to pay – on what were basically gambles rather than loans – from the financial institutions that had lost on these bets (fraudulently inflated loans) onto the government (“taxpayers”).
The government took over the mortgage lending guarantors Fannie Mae and Freddie Mac (privatizing the profits, “socializing” the losses) for $5.3 trillion – almost as much as the entire national debt. The Treasury lent $700 billion under the Troubled Asset Relief Plan (TARP) to Wall Street’s largest banks and brokerage houses. The latter re-incorporated themselves as “banks” to get Federal Reserve handouts and access to the Fed’s $2 trillion in “cash for trash” swaps crediting Wall Street with Fed deposits for otherwise “illiquid” loans and securities (the euphemism for toxic, fraudulent or otherwise insolvent and unmarketable debt instruments) – at “cost” based on full mark-to-model fictitious valuations.
Altogether, the post-2008 crash saw some $13 trillion in such obligations transferred onto the government’s balance sheet from high finance, euphemized as “the private sector” as if it were the core economy itself, rather than its calcifying shell.
Instead of losing on their bad bets, bad loans, toxic mortgages and outright fraudulent claims, the financial institutions cleaned up, at public expense. They collected enough to create a new century’s power elite to lord it over “taxpayers” in industry, agriculture and commerce who will be charged to pay off this debt.
If there was a silver lining to all this, it has been to demonstrate that if the Treasury and Federal Reserve can create $13 trillion of public obligations – money – electronically on computer keyboards, there really is no Social Security problem at all, no Medicare shortfall, no inability of the American government to rebuild the nation’s infrastructure.
The bailout of Wall Street showed how central banks can create money, as Modern Money Theory (MMT) explains. But rather than explaining how this phenomenon worked, the bailout was rammed through Congress under emergency conditions. Bankers threatened economic Armageddon if the government did not create the credit to save them from taking losses.
Even more remarkable is the attempt to convince the population that new money and debt creation to bail out Wall Street – and vest a new century of financial billionaires at public subsidy – cannot be mobilized just as readily to save labor and industry in the “real” economy. The Republicans and Obama administration appointees held over from the Bush and Clinton administration have joined to conjure up scare stories that Social Security and Medicare debts cannot be paid, although the government can quickly and with little debate take responsibility for paying trillions of dollars of bipartisan Finance-Care for the rich and their heirs.
The result is a financial schizophrenia extending across the political spectrum from the Tea Party to Tim Geithner at the Treasury and Ben Bernanke at the Fed. It seems bizarre that the most reasonable understanding of why the 2008 bank crisis did not require a vast public subsidy for Wall Street occurred at Monday’s Republican presidential debate on June 13, by none other than Congressional Tea Party leader Michele Bachmann – who had boasted in a Wall Street Journal interview two days earlier, on Saturday, that she voted against the Troubled Asset Relief Program (TARP) “both times.”
She complains that no one bothered to ask about the constitutionality of these extraordinary interventions into the financial markets.
“During a recent hearing I asked Secretary [Timothy] Geithner three times where the constitution authorized the Treasury’s actions [just [giving] the Treasury a $700 billion blank check], and his response was, ‘Well, Congress passed the law.’ …With TARP, the government blew through the Constitutional stop sign and decided ‘Whatever it takes, that’s what we’re going to do.’”
Clarifying her position regarding her willingness to see the banks fail, she explained:
I would have. People think when you have a, quote, ‘bank failure,’ that that is the end of the bank. And it isn’t necessarily. A normal way that the American free market system has worked is that we have a process of unwinding. It’s called bankruptcy. It doesn’t mean, necessarily, that the industry is eclipsed or that it’s gone. Often times, the phoenix rises out of the ashes.[1]
There were easily enough sound loans and assets in the banks to cover deposits insured by the FDIC – but not enough to pay their counterparties in the “casino capitalist” category of their transactions. This super-computerized financial horse racing is what the bailout was about, not bread-and-butter retail and business banking or insurance.
It all seems reminiscent of the 1968 presidential campaign. The economic discussion back then between Democrat Hubert Humphrey and Republican Richard Nixon was so tepid that it prompted journalist Eric Hoffer to ask why only a southern cracker, third-party candidate Alabama Governor George Wallace, was talking about the real issues. We seem to be in a similar state in preparation for the 2012 campaign, with junk economics on both sides.
Meanwhile, the economy is still suffering from the Obama administration’s failure to alleviate the debt overhead. He should be making banks write down junk mortgages to reflect actual market values and the capacity to pay. Foreclosures are still throwing homes onto the market, pushing real estate further into negative equity territory while wealth concentrates at the top of the economic pyramid. No wonder Republicans are able to shed crocodile tears for debtors and attack President Obama for representing Wall Street (as if this is not equally true of the Republicans). He is simply continuing the Bush Administration’s policies, not leading the change he had promised. So he has left the path open for Congresswoman Bachmann to highlight her opposition to the Bush-McCain-Obama-Paulson-Geithner giveaways.
The missed opportunity
When Lehman Brothers filed for bankruptcy on September 15, 2008, the presidential campaign between Barack Obama and John McCain was peaking toward Election Day on November 4. Voters told pollsters that the economy was their main issue – their debts, soaring housing costs (“wealth creation” to real estate speculators and the banks getting rich off mortgage lending), stagnant wage levels and worsening workplace conditions were what mattered. However, in the wake of Lehman, the main issue under popular debate was how much Wall Street’s crash would hurt the “real” economy. If large banks went under, would depositors still be safely insured? What about the course of normal business and employment?
Credit is seen as necessary; but what of credit derivatives, the financial sector’s arcane “small print”? How intrinsic are financial gambles on collateralized debt obligations? Remember CDOs were called “weapons of mass financial destruction” by no less than Warren Buffett. They have little to do with retail banking or even business banking and insurance, but are financial bets on the economy’s zigzagging measures.
Without casino capitalism, could industrial capitalism survive? Or had the superstructure become rotten and best left to “free markets” to wipe out in mutually offsetting bankruptcy claims?
Mr. Obama ran as the “candidate of change” from the Bush Administration’s war in Iraq and Afghanistan, its deregulatory excesses and giveaways to the pharmaceuticals industry and other monopolies and their Wall Street backers. Today it is clear that his promises for change were no more than campaign rhetoric. There even has been continuity of Bush Administration officials committed to promoting financial policies to keep the debts in place, enabling banks to “earn their way out of debt” at the expense of consumers and businesses. Read $13 trillion in government bailouts and subsidy.
History is being written to depict the policy of saving the bankers rather than the economy as having been necessary – as if there were no alternative, that the vast giveaways to Wall Street were simply “pragmatic.” Financial beneficiaries claim that matters would be even worse today without these giveaways. It is as if we not only need the banks, we need to save them (and their stockholders) from losses, enabling them to pay and retain their immensely rich talent at the top with even bigger salaries, bonuses and stock options.
It is all junk economics – well-subsidized illogic, quite popular among fundraisers.
The Obama Plan
From the outset in 2009, the Obama Plan has been to re-inflate the Bubble Economy by providing yet more credit (that is, debt) to bid housing and commercial real estate prices back up to pre-crash levels, not to bring debts down to the economy’s ability to pay. The result is debt deflation for the economy at large and rising unemployment – but enrichment of the wealthiest 1% of the population as economies have become even more financialized.
This smooth continuum from the Bush to the Obama Administration masks the fact that there was a choice, and even a clear disagreement at the time within Congress, if not between the two presidential candidates, who seemed to speak as Siamese Twins as far as their policies to save Wall Street (from losses, not from actually dying) were concerned.
Wall Street saw an opportunity to be grabbed, and its spokesmen panicked policy-makers into imagining that there was no alternative. And as President Obama’s chief of staff Emanuel Rahm noted, this crisis is too important an opportunity to let it go to waste. For Washington’s Wall Street constituency, the bold aim was to get the government to save them from having to take a loss on loans gone bad – loans that had made them rich already by collecting fees and interest, and by placing bets as to which way real estate prices, interest rates and exchange rates would move.
After September 2008 they were to get rich on a bailout – euphemized as “saving the economy,” if one believes that Wall Street is the economy’s core, not its wrapping or supposed facilitator, not to say a vampire squid. The largest and most urgent problem was not the inability of poor home buyers to cope with the interest-rate jumps called for in the small print of their adjustable rate mortgages. The immediate priorities sat at the top of the economic pyramid. Citibank, AIG and other “too big to fail” institutions were unable to pay the winners on the speculative gambles and guarantees they had been writing.
It was as if the economy had become risk-free, not overburdened with debt beyond its ability to pay.
Making the government absorb their losses – instead of recovering the enormous salaries and bonuses their managers had paid themselves for selling these bad bets – required a cover story to make it appear that the economy could not be saved without the Treasury and Federal Reserve underwriting these gambling losses. Like the sheriff in the movie Blazing Saddles threatening to shoot himself if he weren’t freed, the financial sector warned that its losses would destroy the retail banking and insurance systems, not just the upper reaches of computerized derivatives gambling.
How America’s Bailouts Endowed a Financial Elite to rule the 21st Century
The bailout of casino capitalists vested a new ruling class with $13 trillion of public IOUs (including the $5.3 trillion rescue of Fannie Mae and Freddie Mac) added to the national debt. The recipients have paid out much of this gift in salaries and bonuses, and to “make themselves whole” on their bad risks in default to pay off.
An alternative would have been to prosecute them and recover what they had paid themselves as commissions for loading the economy with debt.
Although there were two sides within Congress in September 2008, there was no disagreement between the two presidential candidates. John McCain ran back to Washington on the fateful Friday of their September 26 debate to insist that he was suspending his campaign in order to devote all his efforts to persuading Congress to approve the $700 billion bank bailout – and would not debate Mr. Obama until that was settled. But he capitulated and went to the debate. On September 29 the House of Representatives rejected the giveaway, headed by Republicans in opposition.
So Mr. McCain did not even get brownie points for being able to sway politicians on the side of his Wall Street campaign contributors. Until this time he had campaigned as a “maverick.” But his capitulation to high finance reminded voters of his notorious role in the Keating Five, standing up for bank crooks. His standing in the polls plummeted, and the Senate capitulated to a redrafted TARP bill on October 1. President Bush signed it into law two days later, on October 3, euphemized as the Emergency Economic Stabilization Act.
Fast-forward to today. What does it signify when a right-wing cracker makes a more realistic diagnosis of bad bank lending than Treasury Secretary Geithner, Fed Chairman Bernanke or other Bush-era financial experts retained by the Obama team?
Without the bailout, the gambling arm of Wall Street would have collapsed, but the “real” economy’s everyday banking and insurance operations could have continued. The bottom 99 percent of the U.S. economy would have recovered with only a speed bump to clean out the congestion at the top, and the government would have ended up in control of the biggest and most reckless banks and AIG – as it did in any case.
The government could have used its equity ownership and control of the banks to write down mortgages to reflect market conditions. It could have left families owning their homes at the same cost they would have had to pay in rent – the economic definition of equilibrium in property prices.
The government-owned “too big to fail” banks could have been told to refrain from gambling on derivatives, from lending for currency and commodity speculation, and from making takeover loans and other predatory financial practices. Public ownership would have run the banks like savings banks or post office banks rather than gambling schemes fueling the international carry trade (computer-driven interest rate and currency arbitrage) that has no linkage to the production-and-consumption economy.
The government could have used its equity ownership and control of the banks to provide credit and credit card services as the “public option.” Credit is a form of infrastructure, and such public investment is what enabled the United States to undersell foreign economies in the 19th and 20th centuries despite its high wage levels and social spending programs. As Simon Patten, the first economics professor at the nation’s first business school (the Wharton School) explained, public infrastructure investment is a “fourth factor of production.” It takes its return not in the form of profits, but in the degree to which it lowers the economy’s cost of doing business and living. Public investment does not need to generate profits or pay high salaries, bonuses and stock options, or operate via offshore banking centers.
But this is not the agenda that the Bush-Obama administrations chose. Only Wall Street had a plan in place to unwrap when the crisis opportunity erupted. The plan was predatory, not productive, not lowering the economy’s debt overhead or cost of living and doing business to make it more competitive. So the great opportunity to serve the public interest by taking over banks gone broke was missed. Stockholders were bailed out, counterparties were saved from loss, and managers today are paying themselves bonuses as usual. The “crisis” was turned into an opportunity to panic politicians into helping their Wall Street patrons.
One can only wonder what it means when the only common sense being heard about the separation of bank functions should come from a far-out extremist in the current debate. The social democratic tradition had been erased from the curriculum as it had in political memory.
Tom Fahey: Would you say the bailout program was a success? …
BACHMANN: John, I was in the middle of this debate. I was behind closed doors with Secretary Paulson when he came and made the extraordinary, never-before-made request to Congress: Give us a $700 billion blank check with no strings attached.
And I fought behind closed doors against my own party on TARP. It was a wrong vote then. It’s continued to be a wrong vote since then. Sometimes that’s what you have to do. You have to take principle over your party.[2]
Proclaiming herself a libertarian, Ms. Bachmann opposes raising the federal debt ceiling, Pres. Obama’s Medicare reform and other federal initiatives. So her opposition to the Wall Street bailout turns out to be from a lack of understanding about how governments and their central banks can create money with a stroke of the computer pen, so to speak. (If the printing presses can work for Wall St, surely they too can for the people’s health?) But at least she was clear that bank counterparty gambles made by high rollers at the financial race track could have been wiped out without destroying the banking system’s key economic functions.
The moral
Contrasting Ms. Bachmann’s remarks to the panicky claims by Mr. Geithner and Hank Paulson in September 2008 confirm a basic axiom of today’s junk economics: When an economic error becomes so widespread that it is adopted as official government policy, there is always a special interest at work to promote it.
In the case of bailing out Wall Street – and thereby the wealthiest 1% of Americans – while saying there is no money for Social Security, Medicare or long-term public social spending and infrastructure investment, the beneficiaries are obvious. So are the losers.
High finance means low wages, low employment, low industry and a shrinking economy under conditions where policy planning is centralized in the hands of Wall Street and its political nominees, rather than in the safekeeping of more objective administrators.
they should be more concerned about what's buried in the basement.
Like, the overall debt, the body politic- i.e. the voters (without jobs),
capitalism (because bankers get social safety net), and the future (cash hording by the rich leads to crashes).
more soon
checkitout:
michael-hudson.com
How a $13 Trillion Cover Story was Written
June 17, 2011
By Michael Hudson
Free money creation to bail out America’s elite financial speculators, but not for Social Security or Medicare
Only the “Crazies” Get the Bank Giveaway Right
Financial crashes were well understood for a hundred years after they became a normal financial phenomenon in the mid-19th century. Much like the buildup of plaque deposits in human veins and arteries, an accumulation of debt gained momentum exponentially until the economy crashed, wiping out bad debts – along with savings on the other side of the balance sheet.
Physical property remained intact, although much was transferred from debtors to creditors. But clearing away the debt overhead from the economy’s circulatory system freed it to resume its upswing. That was the positive role of crashes: They minimized the cost of debt service, bringing prices and income back in line with actual “real” costs of production. Debt claims were replaced by equity ownership. Housing prices were lower – and more affordable, being brought back in line with their actual rental value. Goods and services no longer had to incorporate the debt charges that the financial upswing had built into the system.[HALLELUJAH]
Financial crashes came suddenly. They often were triggered by a crop failure causing farmers to default, or “the autumnal drain” drew down bank liquidity when funds were needed to move the crops. Crashes often also revealed large financial fraud and “excesses.”
This was not really a “cycle.” It was a scallop-shaped ratchet pattern: an ascending curve, ending in a vertical plunge. But popular terminology called it a cycle because the pattern was similar again and again, every eleven years or so. When loans by banks and debt claims by other creditors could not be paid, they were wiped out in a convulsion of bankruptcy.
Gradually, as the financial system became more “elastic,” each business recovery started from a larger debt overhead relative to output. The United States emerged from World War II relatively debt free. Downturns occurred, crashes wiped out debts and savings, but each recovery since 1945 has taken place with a higher debt overhead. Bank loans and bonds have replaced stocks, as more stocks have been retired in leveraged buyouts (LBOs) and buyback plans than are being issued to raise new equity capital. Behind every LBO is the desire to keep stock prices high, lavishing rewards to managers via the stock options they give themselves.
But after the stock market’s dot.com crash of 2000 and the Federal Reserve flooding the U.S. economy with credit after 9/11, 2001, there was so much “free spending money” that many economists believed that the era of scientific money management had arrived and the financial cycle had ended. Growth could occur smoothly – with no over-optimism as to debt, no inability to pay, no proliferation of over-valuation or fraud. This was the era in which Alan Greenspan was applauded as Maestro for ostensibly creating a risk-free environment by removing government regulators from the financial oversight agencies.
What has made the post-2008 crash most remarkable is not merely the delusion that the way to get rich is by debt leverage (unless you are a banker, that is). Most unique is the crash’s aftermath. This time around the bad debts have not been wiped off the books. There have indeed been the usual bankruptcies – but the bad lenders and speculators are being saved from loss by the government intervening to issue Treasury bonds to pay them off out of future tax revenues or new money creation.
The Obama Administration’s Wall Street managers have kept the debt overhead in place – toxic mortgage debt, junk bonds, and most seriously, the novel web of collateralized debt obligations (CDO), credit default swaps (almost monopolized by A.I.G.) and kindred financial derivatives of a basically mathematical character that have developed in the 1990s and early 2000s.
These computerized casino cross-bets among the world’s leading financial institutions are the largest problem.
Instead of this network of reciprocal claims being let go, they have been taken onto the government’s own balance sheet. This has occurred not only in the United States but even more disastrously in Ireland, shifting the obligation to pay – on what were basically gambles rather than loans – from the financial institutions that had lost on these bets (fraudulently inflated loans) onto the government (“taxpayers”).
The government took over the mortgage lending guarantors Fannie Mae and Freddie Mac (privatizing the profits, “socializing” the losses) for $5.3 trillion – almost as much as the entire national debt. The Treasury lent $700 billion under the Troubled Asset Relief Plan (TARP) to Wall Street’s largest banks and brokerage houses. The latter re-incorporated themselves as “banks” to get Federal Reserve handouts and access to the Fed’s $2 trillion in “cash for trash” swaps crediting Wall Street with Fed deposits for otherwise “illiquid” loans and securities (the euphemism for toxic, fraudulent or otherwise insolvent and unmarketable debt instruments) – at “cost” based on full mark-to-model fictitious valuations.
Altogether, the post-2008 crash saw some $13 trillion in such obligations transferred onto the government’s balance sheet from high finance, euphemized as “the private sector” as if it were the core economy itself, rather than its calcifying shell.
Instead of losing on their bad bets, bad loans, toxic mortgages and outright fraudulent claims, the financial institutions cleaned up, at public expense. They collected enough to create a new century’s power elite to lord it over “taxpayers” in industry, agriculture and commerce who will be charged to pay off this debt.
If there was a silver lining to all this, it has been to demonstrate that if the Treasury and Federal Reserve can create $13 trillion of public obligations – money – electronically on computer keyboards, there really is no Social Security problem at all, no Medicare shortfall, no inability of the American government to rebuild the nation’s infrastructure.
The bailout of Wall Street showed how central banks can create money, as Modern Money Theory (MMT) explains. But rather than explaining how this phenomenon worked, the bailout was rammed through Congress under emergency conditions. Bankers threatened economic Armageddon if the government did not create the credit to save them from taking losses.
Even more remarkable is the attempt to convince the population that new money and debt creation to bail out Wall Street – and vest a new century of financial billionaires at public subsidy – cannot be mobilized just as readily to save labor and industry in the “real” economy. The Republicans and Obama administration appointees held over from the Bush and Clinton administration have joined to conjure up scare stories that Social Security and Medicare debts cannot be paid, although the government can quickly and with little debate take responsibility for paying trillions of dollars of bipartisan Finance-Care for the rich and their heirs.
The result is a financial schizophrenia extending across the political spectrum from the Tea Party to Tim Geithner at the Treasury and Ben Bernanke at the Fed. It seems bizarre that the most reasonable understanding of why the 2008 bank crisis did not require a vast public subsidy for Wall Street occurred at Monday’s Republican presidential debate on June 13, by none other than Congressional Tea Party leader Michele Bachmann – who had boasted in a Wall Street Journal interview two days earlier, on Saturday, that she voted against the Troubled Asset Relief Program (TARP) “both times.”
She complains that no one bothered to ask about the constitutionality of these extraordinary interventions into the financial markets.
“During a recent hearing I asked Secretary [Timothy] Geithner three times where the constitution authorized the Treasury’s actions [just [giving] the Treasury a $700 billion blank check], and his response was, ‘Well, Congress passed the law.’ …With TARP, the government blew through the Constitutional stop sign and decided ‘Whatever it takes, that’s what we’re going to do.’”
Clarifying her position regarding her willingness to see the banks fail, she explained:
I would have. People think when you have a, quote, ‘bank failure,’ that that is the end of the bank. And it isn’t necessarily. A normal way that the American free market system has worked is that we have a process of unwinding. It’s called bankruptcy. It doesn’t mean, necessarily, that the industry is eclipsed or that it’s gone. Often times, the phoenix rises out of the ashes.[1]
There were easily enough sound loans and assets in the banks to cover deposits insured by the FDIC – but not enough to pay their counterparties in the “casino capitalist” category of their transactions. This super-computerized financial horse racing is what the bailout was about, not bread-and-butter retail and business banking or insurance.
It all seems reminiscent of the 1968 presidential campaign. The economic discussion back then between Democrat Hubert Humphrey and Republican Richard Nixon was so tepid that it prompted journalist Eric Hoffer to ask why only a southern cracker, third-party candidate Alabama Governor George Wallace, was talking about the real issues. We seem to be in a similar state in preparation for the 2012 campaign, with junk economics on both sides.
Meanwhile, the economy is still suffering from the Obama administration’s failure to alleviate the debt overhead. He should be making banks write down junk mortgages to reflect actual market values and the capacity to pay. Foreclosures are still throwing homes onto the market, pushing real estate further into negative equity territory while wealth concentrates at the top of the economic pyramid. No wonder Republicans are able to shed crocodile tears for debtors and attack President Obama for representing Wall Street (as if this is not equally true of the Republicans). He is simply continuing the Bush Administration’s policies, not leading the change he had promised. So he has left the path open for Congresswoman Bachmann to highlight her opposition to the Bush-McCain-Obama-Paulson-Geithner giveaways.
The missed opportunity
When Lehman Brothers filed for bankruptcy on September 15, 2008, the presidential campaign between Barack Obama and John McCain was peaking toward Election Day on November 4. Voters told pollsters that the economy was their main issue – their debts, soaring housing costs (“wealth creation” to real estate speculators and the banks getting rich off mortgage lending), stagnant wage levels and worsening workplace conditions were what mattered. However, in the wake of Lehman, the main issue under popular debate was how much Wall Street’s crash would hurt the “real” economy. If large banks went under, would depositors still be safely insured? What about the course of normal business and employment?
Credit is seen as necessary; but what of credit derivatives, the financial sector’s arcane “small print”? How intrinsic are financial gambles on collateralized debt obligations? Remember CDOs were called “weapons of mass financial destruction” by no less than Warren Buffett. They have little to do with retail banking or even business banking and insurance, but are financial bets on the economy’s zigzagging measures.
Without casino capitalism, could industrial capitalism survive? Or had the superstructure become rotten and best left to “free markets” to wipe out in mutually offsetting bankruptcy claims?
Mr. Obama ran as the “candidate of change” from the Bush Administration’s war in Iraq and Afghanistan, its deregulatory excesses and giveaways to the pharmaceuticals industry and other monopolies and their Wall Street backers. Today it is clear that his promises for change were no more than campaign rhetoric. There even has been continuity of Bush Administration officials committed to promoting financial policies to keep the debts in place, enabling banks to “earn their way out of debt” at the expense of consumers and businesses. Read $13 trillion in government bailouts and subsidy.
History is being written to depict the policy of saving the bankers rather than the economy as having been necessary – as if there were no alternative, that the vast giveaways to Wall Street were simply “pragmatic.” Financial beneficiaries claim that matters would be even worse today without these giveaways. It is as if we not only need the banks, we need to save them (and their stockholders) from losses, enabling them to pay and retain their immensely rich talent at the top with even bigger salaries, bonuses and stock options.
It is all junk economics – well-subsidized illogic, quite popular among fundraisers.
The Obama Plan
From the outset in 2009, the Obama Plan has been to re-inflate the Bubble Economy by providing yet more credit (that is, debt) to bid housing and commercial real estate prices back up to pre-crash levels, not to bring debts down to the economy’s ability to pay. The result is debt deflation for the economy at large and rising unemployment – but enrichment of the wealthiest 1% of the population as economies have become even more financialized.
This smooth continuum from the Bush to the Obama Administration masks the fact that there was a choice, and even a clear disagreement at the time within Congress, if not between the two presidential candidates, who seemed to speak as Siamese Twins as far as their policies to save Wall Street (from losses, not from actually dying) were concerned.
Wall Street saw an opportunity to be grabbed, and its spokesmen panicked policy-makers into imagining that there was no alternative. And as President Obama’s chief of staff Emanuel Rahm noted, this crisis is too important an opportunity to let it go to waste. For Washington’s Wall Street constituency, the bold aim was to get the government to save them from having to take a loss on loans gone bad – loans that had made them rich already by collecting fees and interest, and by placing bets as to which way real estate prices, interest rates and exchange rates would move.
After September 2008 they were to get rich on a bailout – euphemized as “saving the economy,” if one believes that Wall Street is the economy’s core, not its wrapping or supposed facilitator, not to say a vampire squid. The largest and most urgent problem was not the inability of poor home buyers to cope with the interest-rate jumps called for in the small print of their adjustable rate mortgages. The immediate priorities sat at the top of the economic pyramid. Citibank, AIG and other “too big to fail” institutions were unable to pay the winners on the speculative gambles and guarantees they had been writing.
It was as if the economy had become risk-free, not overburdened with debt beyond its ability to pay.
Making the government absorb their losses – instead of recovering the enormous salaries and bonuses their managers had paid themselves for selling these bad bets – required a cover story to make it appear that the economy could not be saved without the Treasury and Federal Reserve underwriting these gambling losses. Like the sheriff in the movie Blazing Saddles threatening to shoot himself if he weren’t freed, the financial sector warned that its losses would destroy the retail banking and insurance systems, not just the upper reaches of computerized derivatives gambling.
How America’s Bailouts Endowed a Financial Elite to rule the 21st Century
The bailout of casino capitalists vested a new ruling class with $13 trillion of public IOUs (including the $5.3 trillion rescue of Fannie Mae and Freddie Mac) added to the national debt. The recipients have paid out much of this gift in salaries and bonuses, and to “make themselves whole” on their bad risks in default to pay off.
An alternative would have been to prosecute them and recover what they had paid themselves as commissions for loading the economy with debt.
Although there were two sides within Congress in September 2008, there was no disagreement between the two presidential candidates. John McCain ran back to Washington on the fateful Friday of their September 26 debate to insist that he was suspending his campaign in order to devote all his efforts to persuading Congress to approve the $700 billion bank bailout – and would not debate Mr. Obama until that was settled. But he capitulated and went to the debate. On September 29 the House of Representatives rejected the giveaway, headed by Republicans in opposition.
So Mr. McCain did not even get brownie points for being able to sway politicians on the side of his Wall Street campaign contributors. Until this time he had campaigned as a “maverick.” But his capitulation to high finance reminded voters of his notorious role in the Keating Five, standing up for bank crooks. His standing in the polls plummeted, and the Senate capitulated to a redrafted TARP bill on October 1. President Bush signed it into law two days later, on October 3, euphemized as the Emergency Economic Stabilization Act.
Fast-forward to today. What does it signify when a right-wing cracker makes a more realistic diagnosis of bad bank lending than Treasury Secretary Geithner, Fed Chairman Bernanke or other Bush-era financial experts retained by the Obama team?
Without the bailout, the gambling arm of Wall Street would have collapsed, but the “real” economy’s everyday banking and insurance operations could have continued. The bottom 99 percent of the U.S. economy would have recovered with only a speed bump to clean out the congestion at the top, and the government would have ended up in control of the biggest and most reckless banks and AIG – as it did in any case.
The government could have used its equity ownership and control of the banks to write down mortgages to reflect market conditions. It could have left families owning their homes at the same cost they would have had to pay in rent – the economic definition of equilibrium in property prices.
The government-owned “too big to fail” banks could have been told to refrain from gambling on derivatives, from lending for currency and commodity speculation, and from making takeover loans and other predatory financial practices. Public ownership would have run the banks like savings banks or post office banks rather than gambling schemes fueling the international carry trade (computer-driven interest rate and currency arbitrage) that has no linkage to the production-and-consumption economy.
The government could have used its equity ownership and control of the banks to provide credit and credit card services as the “public option.” Credit is a form of infrastructure, and such public investment is what enabled the United States to undersell foreign economies in the 19th and 20th centuries despite its high wage levels and social spending programs. As Simon Patten, the first economics professor at the nation’s first business school (the Wharton School) explained, public infrastructure investment is a “fourth factor of production.” It takes its return not in the form of profits, but in the degree to which it lowers the economy’s cost of doing business and living. Public investment does not need to generate profits or pay high salaries, bonuses and stock options, or operate via offshore banking centers.
But this is not the agenda that the Bush-Obama administrations chose. Only Wall Street had a plan in place to unwrap when the crisis opportunity erupted. The plan was predatory, not productive, not lowering the economy’s debt overhead or cost of living and doing business to make it more competitive. So the great opportunity to serve the public interest by taking over banks gone broke was missed. Stockholders were bailed out, counterparties were saved from loss, and managers today are paying themselves bonuses as usual. The “crisis” was turned into an opportunity to panic politicians into helping their Wall Street patrons.
One can only wonder what it means when the only common sense being heard about the separation of bank functions should come from a far-out extremist in the current debate. The social democratic tradition had been erased from the curriculum as it had in political memory.
Tom Fahey: Would you say the bailout program was a success? …
BACHMANN: John, I was in the middle of this debate. I was behind closed doors with Secretary Paulson when he came and made the extraordinary, never-before-made request to Congress: Give us a $700 billion blank check with no strings attached.
And I fought behind closed doors against my own party on TARP. It was a wrong vote then. It’s continued to be a wrong vote since then. Sometimes that’s what you have to do. You have to take principle over your party.[2]
Proclaiming herself a libertarian, Ms. Bachmann opposes raising the federal debt ceiling, Pres. Obama’s Medicare reform and other federal initiatives. So her opposition to the Wall Street bailout turns out to be from a lack of understanding about how governments and their central banks can create money with a stroke of the computer pen, so to speak. (If the printing presses can work for Wall St, surely they too can for the people’s health?) But at least she was clear that bank counterparty gambles made by high rollers at the financial race track could have been wiped out without destroying the banking system’s key economic functions.
The moral
Contrasting Ms. Bachmann’s remarks to the panicky claims by Mr. Geithner and Hank Paulson in September 2008 confirm a basic axiom of today’s junk economics: When an economic error becomes so widespread that it is adopted as official government policy, there is always a special interest at work to promote it.
In the case of bailing out Wall Street – and thereby the wealthiest 1% of Americans – while saying there is no money for Social Security, Medicare or long-term public social spending and infrastructure investment, the beneficiaries are obvious. So are the losers.
High finance means low wages, low employment, low industry and a shrinking economy under conditions where policy planning is centralized in the hands of Wall Street and its political nominees, rather than in the safekeeping of more objective administrators.
It's been a trill knowin' ya, US of A
16 trillion for banks, in secret, and nothing for the people in their
Bernanke Bungalows (the family car).
If you believe some people, the stupidity of the impasse in the US
is an intentional plan to undermine the US, so that a world government,
run by bankers can take over. If the US debt draws 10% interest a year
because it's at BBB, then the banks win, and the US public loses.
I don't know about stuff like that, but if it ends to more
peace breaking out for a while, then good.
I find it hard to believe that the US would risk all the oil
that it claims "belongs to itself", sitting under the "lazy
arses" of the non-white.
All I know is that if you cut Medicare and Social Security (self-funding
and healthy), there's gotta be a price to pay either directly,
through public disorder or indirectly through greater crime.
Either way, the place is going to be unliveable for most, and a risk
for the Mercedes of the rich, even. They still have to use public roads,
don't they. They're gonna have cars with bodyguards riding shotgun, like
some Mad Max scenes.
Bernanke Bungalows (the family car).
If you believe some people, the stupidity of the impasse in the US
is an intentional plan to undermine the US, so that a world government,
run by bankers can take over. If the US debt draws 10% interest a year
because it's at BBB, then the banks win, and the US public loses.
I don't know about stuff like that, but if it ends to more
peace breaking out for a while, then good.
I find it hard to believe that the US would risk all the oil
that it claims "belongs to itself", sitting under the "lazy
arses" of the non-white.
All I know is that if you cut Medicare and Social Security (self-funding
and healthy), there's gotta be a price to pay either directly,
through public disorder or indirectly through greater crime.
Either way, the place is going to be unliveable for most, and a risk
for the Mercedes of the rich, even. They still have to use public roads,
don't they. They're gonna have cars with bodyguards riding shotgun, like
some Mad Max scenes.
Wednesday 20 July 2011
when is a non-sale a sign of price discovery?
Nowhere else but on the US SLV market.
As I said, the oligarchs are not going to let silver rise above the price of JPM
stock, unless they have totally lost control.
I guess they haven't.
There's a Youtube explanation by a guy feeling like death warmed over:
[fight the good fight, buddy]
and a story by Zerohedge
Silver Surge #2 Imminent?
Submitted by Tyler Durden on 07/18/2011 14:46 -0400
Here it comes again, courtesy of Google Trends. We will shortly start taking bets how many hours will pass before the CME hikes silver margins by another 100%, despite not lowering them once in the spot price drop from $50 to $32 over the past two months.
As I said, the oligarchs are not going to let silver rise above the price of JPM
stock, unless they have totally lost control.
I guess they haven't.
There's a Youtube explanation by a guy feeling like death warmed over:
[fight the good fight, buddy]
and a story by Zerohedge
Silver Surge #2 Imminent?
Submitted by Tyler Durden on 07/18/2011 14:46 -0400
Here it comes again, courtesy of Google Trends. We will shortly start taking bets how many hours will pass before the CME hikes silver margins by another 100%, despite not lowering them once in the spot price drop from $50 to $32 over the past two months.
Sunday 17 July 2011
please be seated for the stress test
because it's theatre:
this from theautomaticearth.blogspot.com [they're pretty succinct]
Ilargi: The more the ratings agencies come under fire for downgrading, the more they do just that -or so it seems-: downgrade (or threaten to). While it may seem strange that they still have credibility left after being late on just about any call they've made in ages, don't let's forget that they are very much part of the political and banking system, and therefore fully engaged in extend and pretend policies. It's still funny that the EU cries foul over Fitch, a company that boasts 60% French ownership.
Perhaps it would be even better if the ratings agencies start rating European banks for real. The stress tests certainly don't do that. All you really need to know about those tests is in this one line from Harry Wilson and Philip Aldrick at the Telegraph:
European banks set for 'chaos Monday' after nine fail stress test
While Greek bonds are trading at about half their face value in the market, the EBA only required banks to assume a 15% loss on their holdings. [that's a joke test- Costick67]
...
Ilargi: Maybe they're thinking Greek debt will recover? Not very likely to happen, the yield on Greek 2-year bonds broke over 32% this week. Keep that up for a bit, and Greece is going going gone.
The reality is, we're just watching a bunch of Punch and Judy shows here, stress tests, downgrades, the US debt ceiling "controversy". Obama has now put his job on the line to get a deal done; he must be pretty sure he’ll get one in the end; a job and a deal.
Still, whether it comes to either that potential US downgrade Moody‘s and S&P are threatening, or to the debt ceiling charade, or the stress tests, all of the above are based on entirely the wrong numbers, and I wouldn't be one bit surprised if that is fully intentional: all are meant to hide what's really happening, and where the real hurt lies. [see the Hudson article below- Costick67]
this from theautomaticearth.blogspot.com [they're pretty succinct]
Ilargi: The more the ratings agencies come under fire for downgrading, the more they do just that -or so it seems-: downgrade (or threaten to). While it may seem strange that they still have credibility left after being late on just about any call they've made in ages, don't let's forget that they are very much part of the political and banking system, and therefore fully engaged in extend and pretend policies. It's still funny that the EU cries foul over Fitch, a company that boasts 60% French ownership.
Perhaps it would be even better if the ratings agencies start rating European banks for real. The stress tests certainly don't do that. All you really need to know about those tests is in this one line from Harry Wilson and Philip Aldrick at the Telegraph:
European banks set for 'chaos Monday' after nine fail stress test
While Greek bonds are trading at about half their face value in the market, the EBA only required banks to assume a 15% loss on their holdings. [that's a joke test- Costick67]
...
Ilargi: Maybe they're thinking Greek debt will recover? Not very likely to happen, the yield on Greek 2-year bonds broke over 32% this week. Keep that up for a bit, and Greece is going going gone.
The reality is, we're just watching a bunch of Punch and Judy shows here, stress tests, downgrades, the US debt ceiling "controversy". Obama has now put his job on the line to get a deal done; he must be pretty sure he’ll get one in the end; a job and a deal.
Still, whether it comes to either that potential US downgrade Moody‘s and S&P are threatening, or to the debt ceiling charade, or the stress tests, all of the above are based on entirely the wrong numbers, and I wouldn't be one bit surprised if that is fully intentional: all are meant to hide what's really happening, and where the real hurt lies. [see the Hudson article below- Costick67]
Self-inflicted injury. Bankers suffer paper cut from own printer
I mean - they created the f^^&king things. Serves them right.
I know. We'll be paying for it, eventually.
from theautomaticearth.blogspot
"CDS on U.S. Banks Stubbornly High
by Nicole Hong - Wall Street Journal
The cost of insuring major U.S. banks' debt against default is still nine times as high as it was before the credit crisis, with the cost of credit default swaps for some institutions' bonds at levels normally associated with credit ratings on the edge of "junk."
Analysts and money managers blame several factors for the stubbornly elevated CDS levels—regulatory uncertainty, declining loan volumes and concerns about how much U.S. banks are exposed to Europe's sovereign debt crisis. Some said they believed the CDS market is too bearish, others that robust earnings would bring protection costs down.
Median spreads for CDS on six major U.S. banks—Morgan Stanley, Bank of America Corp., Citigroup Inc., Goldman Sachs Group, J.P. Morgan Chase & Co. and Wells Fargo & Co.—averaged 1.41 percentage points Friday, according to Markit data. This means that it costs an average of $137,000 annually to insure $10 million of debt against default for five years.
Although these spreads have tightened since they peaked at an average of 3.95 percentage points in March 2009, they are still a far cry from their levels before the credit crisis. In January 2007, average CDS spreads at these six banks were only 0.15 percentage point.
Curiously, CDS no longer correlate to credit ratings the way they did before the crisis. Average CDS-implied ratings at U.S. banks were about one notch higher than their Moody's credit ratings before the crisis, but now are three to five notches lower. These six big banks all have solidly investment-grade credit ratings between Aa3 and A3, but four have CDS-implied ratings of Baa3, just one notch above junk bonds.
Analysts and investors are divided on how much to read into this anomaly. "It doesn't mean the companies will lose access to their deposits or to funding markets," said Tony Smith, senior director at Moody's Analytics. "This is just one metric that will capture investor sentiment at the moment."
"
I know. We'll be paying for it, eventually.
from theautomaticearth.blogspot
"CDS on U.S. Banks Stubbornly High
by Nicole Hong - Wall Street Journal
The cost of insuring major U.S. banks' debt against default is still nine times as high as it was before the credit crisis, with the cost of credit default swaps for some institutions' bonds at levels normally associated with credit ratings on the edge of "junk."
Analysts and money managers blame several factors for the stubbornly elevated CDS levels—regulatory uncertainty, declining loan volumes and concerns about how much U.S. banks are exposed to Europe's sovereign debt crisis. Some said they believed the CDS market is too bearish, others that robust earnings would bring protection costs down.
Median spreads for CDS on six major U.S. banks—Morgan Stanley, Bank of America Corp., Citigroup Inc., Goldman Sachs Group, J.P. Morgan Chase & Co. and Wells Fargo & Co.—averaged 1.41 percentage points Friday, according to Markit data. This means that it costs an average of $137,000 annually to insure $10 million of debt against default for five years.
Although these spreads have tightened since they peaked at an average of 3.95 percentage points in March 2009, they are still a far cry from their levels before the credit crisis. In January 2007, average CDS spreads at these six banks were only 0.15 percentage point.
Curiously, CDS no longer correlate to credit ratings the way they did before the crisis. Average CDS-implied ratings at U.S. banks were about one notch higher than their Moody's credit ratings before the crisis, but now are three to five notches lower. These six big banks all have solidly investment-grade credit ratings between Aa3 and A3, but four have CDS-implied ratings of Baa3, just one notch above junk bonds.
Analysts and investors are divided on how much to read into this anomaly. "It doesn't mean the companies will lose access to their deposits or to funding markets," said Tony Smith, senior director at Moody's Analytics. "This is just one metric that will capture investor sentiment at the moment."
"
a new Lees-on life is all we ask
If you read this story, you may decide that finance (banking) is the illness
that's going to wipe out or enslave most of the non-rich in the world,
and decide like I have to try desperately to keep your earnings away
from finance, and government, or you may decide to be brave and "do a Leeson."
You should look up the story of Nick Leeson.
He was a British guy of humble beginnings who ended up working for a
big British bank in the Far East, Barings.
His illegal/unwise (?) dealing went unchecked until the bank went bankrupt.
Now, I suppose he doesn't believe himself to part of the class war in the UK,
because there is one, but I place him right there.
I think he intended to give the system a kick, and he bided his time.
In fact, I'm thinking that his model of the sleeper spy (on behalf of the rest of us)
is about the only way (short of self-inflicted wounds of the oligarchs)
that we're going to get any change, however small,
in this banker oligarchy that we euphemistically call 'democracy'.
We're now watching the end-game roll out:
For proof, I've selected some of the most explosive comments
made by Dr Michael Hudson in a radio interview, transcribed on his website
try to fully understand the implications of the words that Hudson uses.
I can barely make a comment, so here are the clips, with headings:
DOUBLE WHAMMY
Finance and food dependency achieve today what military invasion was required to achieve in centuries past.
THE ROLE OF OLIGARCHS
Q: I’ve always been a little mystified as to why everyone joins the IMF and the World Bank, why they don’t go it alone.
A: The question you’re asking is, who are they? Who is Argentina? Who is Brazil? It’s not as if the whole country makes the decision. These countries are very largely their own oligarchies.
... So if you have a country that’s run like Saudi Arabia is run, or other dictatorships, a client dictatorship run by a client oligarchy is kept in place by essentially the U.S. diplomacy against the domestic democracy. That’s why America backed dictators in Latin America for 50 years after World War II....
So the interest of the rentier oligarchy that’s floating on top of the economy, as Werner Sombart said, ‘like globules of fat on the soup of the economy’. They benefit from this while the economy as a whole suffers. This is the problem with neoliberal reform. It’s created oligarchies throughout the former Soviet countries. We can see this from the Baltics to Central Asia and what’s happened there.
THE PLAN TO DESTROY the U.S.
[I knew there had to be a bigger game going on. The obvious destruction of the US could not be explained by simple greed of politicians. The crash of the US dollar will bring on the new world currency, run by the bankers. But that's not the whole game. see below- Costick67]
We need a depression in order just to lower the wages of America and to have an excuse – of course, a depression is going to make the budget deficit even larger and the solution to the depression has already been written up just like the invasion of Iraq was all written up before 9/11. The solution is going to be that the government is going to sell off its land, whatever is in the public domain.
The American government is going to look just like Greece and just like Ireland. They’re going to be told, ‘The states can’t pay, there’s no federal revenue to share with Minnesota or Wisconsin or the city of Chicago. They’re going to have to sell off their roads, sell off their streets, sell off their infrastructure, sell off their public utilities, sell off their business. The government will sell whatever it has, the Postal Service, to essentially buyers who will now borrow the money from the banks making a huge new market for banks and investment bankers, in privatizing and cutting up what used to be the public domain and turning it over to the wealthiest 10 percent of the economy. So people realize yes, the class war’s back in business. We’re going into a depression.
OBAMA, WAR & the NOBEL PRIZE
even before he took office he won the Nobel War Prize so he knew that he was going to escalate wherever he could. That’s what the war prize is given for. That’s why it was given to Kissinger and to other people that go to war. And he wouldn’t be able to extend the war into Libya....
NEW DARK AGE
When you privatize a basic infrastructure it’s privatized on credit and so the new owners build in their interest charges and financial charges into the cost of doing business, they pay themselves enormous salaries, much higher than the public sector would pay, and they begin to treat their monopoly position as if they can put a toll booth on the roads, a toll booth on the water and sewers, a toll booth anywhere.
...WHOLE economy into rent extraction.
U.S. FINANCIAL WAR on EUROPE
We’ve placed big bets that these governments are going to pay, there won’t be a debt write-down, so you have to keep Irish labor on the hook, you have to keep the Irish taxpayer on the hook, you have to make Ireland pay.’ Same thing in Greece. It’s said that Geithner again told the Europeans, ‘The American banks have made a big gamble on Greece, the Greek people will be defeated, that the oligarchy will win, that the oligarchy will succeed in pushing them into depression and you’ve got to save American banks from losing on this gamble by destroying yourselves. Destroy Greece, destroy yourselves because otherwise our banks would lose money and we’re not willing to lose a dollar. We’d rather you lose a trillion dollars than us lose one dollar because I represent the American banks, not you.’ So one can say, ‘Shame on Mr. Obama for putting a Treasury secretary that has such a dysfunctional, almost sociopathic, personality and psychology to be willing to do this.’ Europe’s response is to say, ‘Who put Mr. Geithner in power over the European government, impoverishing us? Who put the American Treasury in a position to demand that we go into depression?’[I don't see any Eurocrats standing up to defend the EU. Sorry: Backbone required- Costick67]
GET RID OF FINANCE- IT’ S AN ILLNESS
Q: You describe a class war of banks against all the rest of society which cuts across the notion of left or right in political terms. Could you elaborate on that a little bit?
A: This is probably the hardest issue to get across because finance really isn’t a class. Surprisingly enough, the first discussion of this came in the 1970s and ’80s in Russia. Stalin – actually, it was already in the ’60s. Stalin had asked a leading thereologists and ancient historians to look at the class conflict in antiquity..... And he said finance really isn’t a class because everybody’s a creditor. In America, employees save money, they have Social Security. Everybody is a creditor to somebody as well as being a debtor, and the financial classes are debtors. So it’s not really a class. He said it’s a legal estate. And if you look at all of the discussions in the 19th century about class warfare it was always, what was the class? The class was the owner of capital or the people that they hired. It was labor and industrial capital. Those were the two classes. There was also a land-owning class, the rentiers, but nobody ever thought of finance as being a class of people. Bankers were supposed to be intermediaries, they were supposed to provide credit for the wheels of commerce but most people thought of wealth as being land or stock ownership or securities. They didn’t think of finance as being a class. So I use the term very loosely, not in the classical meaning of the word class.
So there’s a financial dynamic of compound interest, a financial dynamic of banks and the financial sector getting the rest of society into debt that now can be created on a computer keyboard without limit, and then essentially getting rich by pushing the rest of society into debt up to the point where the entire economic surplus is being used not to raise living standards, not to invest in tangible industrial capital formation, not to pay taxes to government, but to pay interest and financial fees to the financial sector. So I guess instead of a class I should refer to what national income economists call the FIRE sector – finance, insurance and real estate. And it’s a symbiotic sector that’s emerged to become the characteristic central planners of the economic. [the only solution for the rest of us is, when in a FIRE, go for the EXIT door. Neither a lender nor a borrower be- Costick67]
A REASON FOR MONSANTO TO KEEP GOING
Q: So you’re saying that the United States uses the World Bank and the IMF to force other countries to import our agriculture.
A: That’s been the explicit aim and I’ve described that in my book, Super Imperialism, how the mainstay of the U.S. balance of payments for the last 50 years has been agriculture, not industry. And in addition to agriculture, of course, military exports to the oil exporting countries so that they’re permitted to charge as much as they want for their oil as long as they agree to spending it on buying American airplanes. Saudi Arabia’s now buying tanks to use against its population. The idea is to arm the countries to prevent their domestic populations from bringing about a democratic government. That’s what’s creating the Arab Spring and the reactions against the governments – wasting their economic surplus on buying American arms and agreeing not to promote agriculture but to buy American food to essentially finance dependency on the United States.
... And that’s how the Americans basically are impoverishing the Third World countries, by insisting – for instance through the World bank and IMF – that they will only give loans if other countries do not feed themselves and depend on American grain. Now that America’s using the grain to make alcohol and gasoline there’s no more grain available to feed these people so the result is African starvation as official American policy.
that's going to wipe out or enslave most of the non-rich in the world,
and decide like I have to try desperately to keep your earnings away
from finance, and government, or you may decide to be brave and "do a Leeson."
You should look up the story of Nick Leeson.
He was a British guy of humble beginnings who ended up working for a
big British bank in the Far East, Barings.
His illegal/unwise (?) dealing went unchecked until the bank went bankrupt.
Now, I suppose he doesn't believe himself to part of the class war in the UK,
because there is one, but I place him right there.
I think he intended to give the system a kick, and he bided his time.
In fact, I'm thinking that his model of the sleeper spy (on behalf of the rest of us)
is about the only way (short of self-inflicted wounds of the oligarchs)
that we're going to get any change, however small,
in this banker oligarchy that we euphemistically call 'democracy'.
We're now watching the end-game roll out:
default, selling of national assets, permanent debt
Greece, Ireland, Portugal, the Euro countries, the US
and some other insignificant countries
because most of the rest of the world is already there,
under the jackboots of either the US, Europe, the IMF/WB
and some other insignificant countries
because most of the rest of the world is already there,
under the jackboots of either the US, Europe, the IMF/WB
For proof, I've selected some of the most explosive comments
made by Dr Michael Hudson in a radio interview, transcribed on his website
michael-hudson.com
If you thought LSD or pot is a mind-blowing experience,try to fully understand the implications of the words that Hudson uses.
I can barely make a comment, so here are the clips, with headings:
DOUBLE WHAMMY
Finance and food dependency achieve today what military invasion was required to achieve in centuries past.
THE ROLE OF OLIGARCHS
Q: I’ve always been a little mystified as to why everyone joins the IMF and the World Bank, why they don’t go it alone.
A: The question you’re asking is, who are they? Who is Argentina? Who is Brazil? It’s not as if the whole country makes the decision. These countries are very largely their own oligarchies.
... So if you have a country that’s run like Saudi Arabia is run, or other dictatorships, a client dictatorship run by a client oligarchy is kept in place by essentially the U.S. diplomacy against the domestic democracy. That’s why America backed dictators in Latin America for 50 years after World War II....
So the interest of the rentier oligarchy that’s floating on top of the economy, as Werner Sombart said, ‘like globules of fat on the soup of the economy’. They benefit from this while the economy as a whole suffers. This is the problem with neoliberal reform. It’s created oligarchies throughout the former Soviet countries. We can see this from the Baltics to Central Asia and what’s happened there.
THE PLAN TO DESTROY the U.S.
[I knew there had to be a bigger game going on. The obvious destruction of the US could not be explained by simple greed of politicians. The crash of the US dollar will bring on the new world currency, run by the bankers. But that's not the whole game. see below- Costick67]
We need a depression in order just to lower the wages of America and to have an excuse – of course, a depression is going to make the budget deficit even larger and the solution to the depression has already been written up just like the invasion of Iraq was all written up before 9/11. The solution is going to be that the government is going to sell off its land, whatever is in the public domain.
The American government is going to look just like Greece and just like Ireland. They’re going to be told, ‘The states can’t pay, there’s no federal revenue to share with Minnesota or Wisconsin or the city of Chicago. They’re going to have to sell off their roads, sell off their streets, sell off their infrastructure, sell off their public utilities, sell off their business. The government will sell whatever it has, the Postal Service, to essentially buyers who will now borrow the money from the banks making a huge new market for banks and investment bankers, in privatizing and cutting up what used to be the public domain and turning it over to the wealthiest 10 percent of the economy. So people realize yes, the class war’s back in business. We’re going into a depression.
OBAMA, WAR & the NOBEL PRIZE
even before he took office he won the Nobel War Prize so he knew that he was going to escalate wherever he could. That’s what the war prize is given for. That’s why it was given to Kissinger and to other people that go to war. And he wouldn’t be able to extend the war into Libya....
NEW DARK AGE
When you privatize a basic infrastructure it’s privatized on credit and so the new owners build in their interest charges and financial charges into the cost of doing business, they pay themselves enormous salaries, much higher than the public sector would pay, and they begin to treat their monopoly position as if they can put a toll booth on the roads, a toll booth on the water and sewers, a toll booth anywhere.
...WHOLE economy into rent extraction.
U.S. FINANCIAL WAR on EUROPE
We’ve placed big bets that these governments are going to pay, there won’t be a debt write-down, so you have to keep Irish labor on the hook, you have to keep the Irish taxpayer on the hook, you have to make Ireland pay.’ Same thing in Greece. It’s said that Geithner again told the Europeans, ‘The American banks have made a big gamble on Greece, the Greek people will be defeated, that the oligarchy will win, that the oligarchy will succeed in pushing them into depression and you’ve got to save American banks from losing on this gamble by destroying yourselves. Destroy Greece, destroy yourselves because otherwise our banks would lose money and we’re not willing to lose a dollar. We’d rather you lose a trillion dollars than us lose one dollar because I represent the American banks, not you.’ So one can say, ‘Shame on Mr. Obama for putting a Treasury secretary that has such a dysfunctional, almost sociopathic, personality and psychology to be willing to do this.’ Europe’s response is to say, ‘Who put Mr. Geithner in power over the European government, impoverishing us? Who put the American Treasury in a position to demand that we go into depression?’[I don't see any Eurocrats standing up to defend the EU. Sorry: Backbone required- Costick67]
GET RID OF FINANCE- IT’ S AN ILLNESS
Q: You describe a class war of banks against all the rest of society which cuts across the notion of left or right in political terms. Could you elaborate on that a little bit?
A: This is probably the hardest issue to get across because finance really isn’t a class. Surprisingly enough, the first discussion of this came in the 1970s and ’80s in Russia. Stalin – actually, it was already in the ’60s. Stalin had asked a leading thereologists and ancient historians to look at the class conflict in antiquity..... And he said finance really isn’t a class because everybody’s a creditor. In America, employees save money, they have Social Security. Everybody is a creditor to somebody as well as being a debtor, and the financial classes are debtors. So it’s not really a class. He said it’s a legal estate. And if you look at all of the discussions in the 19th century about class warfare it was always, what was the class? The class was the owner of capital or the people that they hired. It was labor and industrial capital. Those were the two classes. There was also a land-owning class, the rentiers, but nobody ever thought of finance as being a class of people. Bankers were supposed to be intermediaries, they were supposed to provide credit for the wheels of commerce but most people thought of wealth as being land or stock ownership or securities. They didn’t think of finance as being a class. So I use the term very loosely, not in the classical meaning of the word class.
So there’s a financial dynamic of compound interest, a financial dynamic of banks and the financial sector getting the rest of society into debt that now can be created on a computer keyboard without limit, and then essentially getting rich by pushing the rest of society into debt up to the point where the entire economic surplus is being used not to raise living standards, not to invest in tangible industrial capital formation, not to pay taxes to government, but to pay interest and financial fees to the financial sector. So I guess instead of a class I should refer to what national income economists call the FIRE sector – finance, insurance and real estate. And it’s a symbiotic sector that’s emerged to become the characteristic central planners of the economic. [the only solution for the rest of us is, when in a FIRE, go for the EXIT door. Neither a lender nor a borrower be- Costick67]
A REASON FOR MONSANTO TO KEEP GOING
Q: So you’re saying that the United States uses the World Bank and the IMF to force other countries to import our agriculture.
A: That’s been the explicit aim and I’ve described that in my book, Super Imperialism, how the mainstay of the U.S. balance of payments for the last 50 years has been agriculture, not industry. And in addition to agriculture, of course, military exports to the oil exporting countries so that they’re permitted to charge as much as they want for their oil as long as they agree to spending it on buying American airplanes. Saudi Arabia’s now buying tanks to use against its population. The idea is to arm the countries to prevent their domestic populations from bringing about a democratic government. That’s what’s creating the Arab Spring and the reactions against the governments – wasting their economic surplus on buying American arms and agreeing not to promote agriculture but to buy American food to essentially finance dependency on the United States.
... And that’s how the Americans basically are impoverishing the Third World countries, by insisting – for instance through the World bank and IMF – that they will only give loans if other countries do not feed themselves and depend on American grain. Now that America’s using the grain to make alcohol and gasoline there’s no more grain available to feed these people so the result is African starvation as official American policy.
Saturday 16 July 2011
gold-plated double cross
So, we know how the oligarchs, i.e. government & bankers,
are manipulating the price of gold and silver so as to save
their fiat-money arses.
On the one hand, the Gold-bugs are freaking out when gold goes
up by 1 dollar, realising somehow that each dollar is a real fight.
I find myself laughing at them. Investors chatting up a one dollar move.
Well, if those same people are saying that gold will go to 5000 bucks,
how many days of gains would that take, without a loss?
a couple of decades.
And, I'm on their side.In their lust for riches, they're ignoring politics.
What they're ignoring is that this means the oligarchs are still largely
keeping control of things, for now.
My hope is placed in the political implications:
What I think is going on with the latest rises -
The banks are playing both sides of this, now,
and leaning towards the gold-bugs
because they know that
the government's near the end of its "game" and it's all
gonna go bust.That means the controls on gold prices will have to
be stopped because the big countries will not be able to keep the scam
going,
due to money needed for the next banking crisis.
The bankers, by supporting gold, will be forcing the next crash.
So, the banks are trying to make money on gold,
and then when their toxic stuff blows up again,
they're gonna get bailed out again.
That's the double-cross I see.
The bankers, by supporting gold, will be forcing the next crash.
So, the banks are trying to make money on gold,
and then when their toxic stuff blows up again,
they're gonna get bailed out again.
That's the double-cross I see.
The gold-bugs dream of 5000 bucks-an-ounce will come with a
full market crash.
So, the price rises are presaging the next big crash.
Will it be in a few months?
a year?
a year?
Thursday 14 July 2011
Griechenland uber junk bonds
[There. That should do it. Now that's leibensraum!]Sud-Deutschland ist, mit der schwimming! (tanks Max K)
or Austeria (tanks to WillBanzai7 of ZH)
Home, home on the sea, where the banksters and fraudsters can play!or Austeria (tanks to WillBanzai7 of ZH)
I dare say that with the sale of islands,
that they will officially become the property and wealth of the nation of the buyer.
So, hoist your flags. That's balkanization you can believe in.
that they will officially become the property and wealth of the nation of the buyer.
So, hoist your flags. That's balkanization you can believe in.
[now, they wear suits and carry pens]Gentleman's agreement: "who would like to be raped, bitte?"
more later
tsunami crime wave, coming to a burg near you
[In a later blog, I'll discuss what this means for Orlov's 5 stages of collapse.]
I was getting this sense that two huge forces were going to collide violently,
especially in the US.
You have:
1 cutting of public funding for stuff, including policing
2 increasingly desperate people
3 (for the US only) with lots of guns
This, I thought would lead to crime getting out of control.
We all know that the oligarchs always get away with crimes, but they still tie up the police,
in the back room, until they accept the bribe, that is.
Socrates- The Law is like a spider's web. The little people get stuck, but the big folks break right through.
While the non-rich don't care about Socrates, their public education has shown them:
1 If you're rich, you can break the law at will
2 Our leaders are horribly corrupt
3 Police officers are usually in an office pushing paper
4 Most of society has not realised that there's a class war going on,
and so they're vulnerable (especially businesses)
5 It's time to start stealing
Even without an education, 'monkey see- monkey do' will cause an explosion of crime.
If the media shows the police unable to keep up, then BOOM.
Unknown to me, I had started writing this story on the same day as the others below.
"burglars, gamblers, murderers, scramblers, pick-pockets, peddlers, even pan-handlers"
-That's the Message
Economists, having recognised that their bullsh*t has led directly to this
financial mess, literally (through encouraging loose banking legislation, worldwide),
have turned to saying, essentially, is that
"employee shoplifting is proof of employees' feeling high job security when they take the risk to steal, and keeps the product flowing, without raising company tax and health remittances."
Sorry, pal, but the employees are stealing because they're being screwed. Millions for the boss, pennies for them. They can't afford to live and have no future. That's why they're stealing. Either they'll do it from the inside, or from the outside, with a gun.
more later
checkitout: 3 things
1 [HOOKIN']
NBC BAY Hookers Know Way to San Jose: Cops
Elimination of Vice unit apparently opens flood gate for ladies of the night.
By Kurt Wagner
San Jose budget cuts aren’t hurting all businesses, and in fact, one group in particular seems to be cashing in on the city’s economic woes: prostitutes.
Prostitution has made a rapid comeback to San Jose street corners in the past few weeks, according to NBC Bay Area sources.
After police budgets were slashed July 1, San Jose PD’s Vice Unit was disbanded, said San Jose Police Department spokesman Jose Garcia. This meant that part of their job responsibility – cracking down on prostitution and brothels – was reassigned to the police department’s Covert Response Unit.
The CRU was originally responsible for narcotics busts in the area and despite the newly added responsibilities, the unit’s size increased by one officer. It now totals 14. Sources say the result has been an increase in illegal prostitution.
"We're fairly confident that they will be able to address those issues, however, it may not be as fast as we traditionally were able to do that," said Garcia.
... South Second Street seems to be a hotspot for this type of illegal activity. Community members say that once the sun goes down, the neighborhood turns into a gathering place crawling with those involved in the prostitution business. One local store owner described Second Street as “a zoo,” particularly on Thursday nights after San Jose’s "Music in the Park" concerts.
One site in particular, the corner of Second and William Streets, is only two blocks from the city’s Federal Courthouse and just one block from Notre Dame High School.
Felix Fanti, a resident on Second Street, says the police are nowhere to be found.
Every night, any time after six o'clock you see women walking up and down the streets. After 12 o'clock you see pimps posted up on these corners," he said. "But that's nothing new to me, I see it all the time."
2 [STEALING]
the economic collapse blog
The following are 15 examples that show many Americans have become so desperate that they will do just about anything for money....
#1 In Utah, one unemployed 28 year old man is offering to be "human prey" for hunters for the bargain price of $10,000. For an additional $2,000, he will let people hunt him down while he is running around naked.
#2 The Huffington Post is reporting that there has been an epidemic of air conditioning thefts all over the United States....
Across the country, in states like Illinois, Texas, Arizona, Georgia and Florida, there have been reports of thieves stealing unsecured air conditioning units weighing as much as 125 pounds.
#3 In Corpus Christi, Texas thieves have actually been breaking into funeral homes in order to steal the embalming fluid.
#4 Even police officers are committing desperate acts these days. Just check out what one police officer in Chicago is charged with doing....
A Chicago Police officer stole $50,000 from his ailing elderly father to pay off his bills and gambling debts and unsuccessfully attempted to swipe his dad’s retirement savings by impersonating him
#5 Nothing is off limits to thieves these days. Criminals recently broke into a southwest Atlanta beauty supply store and took off with $30,000 in hair extensions.
#6 In another area of Atlanta, thieves have been breaking down walls and busting bathroom fixtures with sledgehammers in order to get their hands on copper, brass and steel....
Kids in two Atlanta communities won’t have their neighborhood pools to help beat the summer heat, at least for now. Thieves used what is believed to be sledge hammers to bust walls and break fixtures in bathrooms at Adams and South Bend parks to steal copper, brass and steel.
#7 One grandmother in Florida has been accused of trying to sell her newborn grandson for $75,000.
#8 In Antioch, California a total of approximately 300 power poles were recently knocked down by thieves and stripped of their copper wiring.
#9 In Minnesota recently, a mob of teen girls brutally pummeled a mother and her two daughters until they were black and blue. Apparently the mob of teen girls was enraged over a pair of missing sunglasses.
#10 In Asheville, North Carolina thieves recently took off with 4 metal tables and 16 metal chairs that were sitting outside a pizzeria.
#11 In Florida, thieves have actually been stealing storm drain covers.
#12 In Oregon, thieves recently broke into a Salvation Army community center and stole 3 large air conditioning units. Now all the people that come to that facility for help and for community programs this summer will be absolutely sweltering.
#13 In the Cleveland area, two young boys that had set up a lemonade stand were robbed in broad daylight. The crooks got away with approximately 12 dollars.
#14 In Oklahoma, thieves recently broke into a church and stole "arts and crafts supplies meant to help teach bible stories to children".
#15 A 59 year old man from North Carolina named Richard James Verone was so desperate for money that he actually robbed a bank and got caught on purpose so that he could be put in prison and be given free health care.
3 [COVERIN' UP FOR YOUR GUILT]
[Economists will try to shine up this bag of sh*t, to save face- Costick67]
Shoplifting: Is It Good for the Economy?
Published: Tuesday, 12 Jul 2011 | 1:41 PM ET
By: Cindy Perman
CNBC.com Staff Writer
An increase in shoplifting is typically a bad sign for the economy; it means that things are so bad, people are forced to steal to make ends meet.
Because I'm good enough. I'm smart enough. And doggone it, I deserve this pocket packet of kleenex!
But the latest report from National Retail Federation showed that, while inventory loss due things like shoplifting increased by $3.6 billion, or nearly 11 percent, to $37 billion last year, much of that loss was due to employee theft.
Some economy watchers say that’s actually a good sign for the economy—that employees are feeling more secure in their jobs, and therefore more comfortable taking a few risks.
You know, when you start to feel safe and relaxed it’s natural to slip a minifridge in your lapel pocket, right?!
It’s true that employees are feeling more secure in their jobs right now. But many pros say what's causing the uptick in theft is that there have been so many layoffs that remaining employees feel overworked and underpaid feel like they’re justified in taking from the company.
“People are starting to get resentful about increasing workload,” said Marie McIntyre, a career coach and author of “Secrets to Winning at Office Politics.”
“You can only keep piling the work on the same staff for so long before the quality of work begins to suffer,” she said.
Or, before they say, while they’re working late one night, “Screw it. I’m taking the copier home. I’ve earned it!”
In fact, most retail theft is committed by employees—it’s just worse now because more people are reaching a point of desperation, said retail analyst Howard Davidowitz.
“We are in an economy of desperation. People are desperate,” Davidowitz said. “Some people haven’t gotten raises or bonuses in years. They feel cheated. They think, ‘This is a way I can get a little bit back.’ A lot of employee theft comes from that attitude: ‘I’m underpaid, I’m overworked, I’m supposed to get more.’”
It’s like the old “buy one, get one free” has turned into “”pay for one, steal one,” Rachel Shteir, author of "The Steal: A Cultural History of Shoplifting," told MyDaily.com. It gives you a sense of power, she said.
A couple of Splenda packets in grandma’s handbag may seem like a small deal but Davidowitz said this is bigger. Much bigger: It stems back to the deficit. Until Washington wrangles the debt, there won’t be confidence, companies won’t hire and the rest of us will be do disillusioned, we’ll be jamming packs of copier paper in our back pockets.
“The worst is yet to come,” Davidowitz said.
Employers should take this as a wake-up call: $3.6 billion is a lot of post-it notes and copier paper. You have to ask yourself, if we keep piling on to employees, and they keep getting more disgruntled, where will this end?
“If employees think shoplifting is OK in this economy, does it also mean that murder is OK in this economy because there are less people to compete against for jobs?” asked comedian Harrison Greenbaum.
I say let’s make a pact right here and now to end it at post-it notes and Splenda before we all do something we'll regret. Deal?
Pony Treats:
Most Commonly Stolen Items. Shoplifting may seem like an impulse but in fact, it can be pretty predictable. Here are the top 10 most stolen items.
It’s Got a Nice Beat. You Can Dance to It. Heartbreak is always a toe-tapper, but shoplifting, as it turns out, has also snuck it’s way into more than a few lyrics. Ah, the classics: “Let’s Loot the Supermarket Again” and “Do a Runner!”
I was getting this sense that two huge forces were going to collide violently,
especially in the US.
You have:
1 cutting of public funding for stuff, including policing
2 increasingly desperate people
3 (for the US only) with lots of guns
This, I thought would lead to crime getting out of control.
We all know that the oligarchs always get away with crimes, but they still tie up the police,
in the back room, until they accept the bribe, that is.
Socrates- The Law is like a spider's web. The little people get stuck, but the big folks break right through.
While the non-rich don't care about Socrates, their public education has shown them:
1 If you're rich, you can break the law at will
2 Our leaders are horribly corrupt
3 Police officers are usually in an office pushing paper
4 Most of society has not realised that there's a class war going on,
and so they're vulnerable (especially businesses)
5 It's time to start stealing
Even without an education, 'monkey see- monkey do' will cause an explosion of crime.
If the media shows the police unable to keep up, then BOOM.
We will have a democratic (of the people) response to politics of the day.
A democratic redistribution of wealth, to the thief.
a democratic vox pop "watch out".
a democratic vox pop "watch out".
a democratic marketplace (including hooking & drug dealing)
Unknown to me, I had started writing this story on the same day as the others below.
talk about your zeitgeist.
"burglars, gamblers, murderers, scramblers, pick-pockets, peddlers, even pan-handlers"
-That's the Message
Economists, having recognised that their bullsh*t has led directly to this
financial mess, literally (through encouraging loose banking legislation, worldwide),
have turned to saying, essentially, is that
"employee shoplifting is proof of employees' feeling high job security when they take the risk to steal, and keeps the product flowing, without raising company tax and health remittances."
Sorry, pal, but the employees are stealing because they're being screwed. Millions for the boss, pennies for them. They can't afford to live and have no future. That's why they're stealing. Either they'll do it from the inside, or from the outside, with a gun.
more later
checkitout: 3 things
1 [HOOKIN']
NBC BAY Hookers Know Way to San Jose: Cops
Elimination of Vice unit apparently opens flood gate for ladies of the night.
By Kurt Wagner
San Jose budget cuts aren’t hurting all businesses, and in fact, one group in particular seems to be cashing in on the city’s economic woes: prostitutes.
Prostitution has made a rapid comeback to San Jose street corners in the past few weeks, according to NBC Bay Area sources.
After police budgets were slashed July 1, San Jose PD’s Vice Unit was disbanded, said San Jose Police Department spokesman Jose Garcia. This meant that part of their job responsibility – cracking down on prostitution and brothels – was reassigned to the police department’s Covert Response Unit.
The CRU was originally responsible for narcotics busts in the area and despite the newly added responsibilities, the unit’s size increased by one officer. It now totals 14. Sources say the result has been an increase in illegal prostitution.
"We're fairly confident that they will be able to address those issues, however, it may not be as fast as we traditionally were able to do that," said Garcia.
... South Second Street seems to be a hotspot for this type of illegal activity. Community members say that once the sun goes down, the neighborhood turns into a gathering place crawling with those involved in the prostitution business. One local store owner described Second Street as “a zoo,” particularly on Thursday nights after San Jose’s "Music in the Park" concerts.
One site in particular, the corner of Second and William Streets, is only two blocks from the city’s Federal Courthouse and just one block from Notre Dame High School.
Felix Fanti, a resident on Second Street, says the police are nowhere to be found.
Every night, any time after six o'clock you see women walking up and down the streets. After 12 o'clock you see pimps posted up on these corners," he said. "But that's nothing new to me, I see it all the time."
2 [STEALING]
the economic collapse blog
The following are 15 examples that show many Americans have become so desperate that they will do just about anything for money....
#1 In Utah, one unemployed 28 year old man is offering to be "human prey" for hunters for the bargain price of $10,000. For an additional $2,000, he will let people hunt him down while he is running around naked.
#2 The Huffington Post is reporting that there has been an epidemic of air conditioning thefts all over the United States....
Across the country, in states like Illinois, Texas, Arizona, Georgia and Florida, there have been reports of thieves stealing unsecured air conditioning units weighing as much as 125 pounds.
#3 In Corpus Christi, Texas thieves have actually been breaking into funeral homes in order to steal the embalming fluid.
#4 Even police officers are committing desperate acts these days. Just check out what one police officer in Chicago is charged with doing....
A Chicago Police officer stole $50,000 from his ailing elderly father to pay off his bills and gambling debts and unsuccessfully attempted to swipe his dad’s retirement savings by impersonating him
#5 Nothing is off limits to thieves these days. Criminals recently broke into a southwest Atlanta beauty supply store and took off with $30,000 in hair extensions.
#6 In another area of Atlanta, thieves have been breaking down walls and busting bathroom fixtures with sledgehammers in order to get their hands on copper, brass and steel....
Kids in two Atlanta communities won’t have their neighborhood pools to help beat the summer heat, at least for now. Thieves used what is believed to be sledge hammers to bust walls and break fixtures in bathrooms at Adams and South Bend parks to steal copper, brass and steel.
#7 One grandmother in Florida has been accused of trying to sell her newborn grandson for $75,000.
#8 In Antioch, California a total of approximately 300 power poles were recently knocked down by thieves and stripped of their copper wiring.
#9 In Minnesota recently, a mob of teen girls brutally pummeled a mother and her two daughters until they were black and blue. Apparently the mob of teen girls was enraged over a pair of missing sunglasses.
#10 In Asheville, North Carolina thieves recently took off with 4 metal tables and 16 metal chairs that were sitting outside a pizzeria.
#11 In Florida, thieves have actually been stealing storm drain covers.
#12 In Oregon, thieves recently broke into a Salvation Army community center and stole 3 large air conditioning units. Now all the people that come to that facility for help and for community programs this summer will be absolutely sweltering.
#13 In the Cleveland area, two young boys that had set up a lemonade stand were robbed in broad daylight. The crooks got away with approximately 12 dollars.
#14 In Oklahoma, thieves recently broke into a church and stole "arts and crafts supplies meant to help teach bible stories to children".
#15 A 59 year old man from North Carolina named Richard James Verone was so desperate for money that he actually robbed a bank and got caught on purpose so that he could be put in prison and be given free health care.
3 [COVERIN' UP FOR YOUR GUILT]
[Economists will try to shine up this bag of sh*t, to save face- Costick67]
Shoplifting: Is It Good for the Economy?
Published: Tuesday, 12 Jul 2011 | 1:41 PM ET
By: Cindy Perman
CNBC.com Staff Writer
An increase in shoplifting is typically a bad sign for the economy; it means that things are so bad, people are forced to steal to make ends meet.
Because I'm good enough. I'm smart enough. And doggone it, I deserve this pocket packet of kleenex!
But the latest report from National Retail Federation showed that, while inventory loss due things like shoplifting increased by $3.6 billion, or nearly 11 percent, to $37 billion last year, much of that loss was due to employee theft.
Some economy watchers say that’s actually a good sign for the economy—that employees are feeling more secure in their jobs, and therefore more comfortable taking a few risks.
You know, when you start to feel safe and relaxed it’s natural to slip a minifridge in your lapel pocket, right?!
It’s true that employees are feeling more secure in their jobs right now. But many pros say what's causing the uptick in theft is that there have been so many layoffs that remaining employees feel overworked and underpaid feel like they’re justified in taking from the company.
“People are starting to get resentful about increasing workload,” said Marie McIntyre, a career coach and author of “Secrets to Winning at Office Politics.”
“You can only keep piling the work on the same staff for so long before the quality of work begins to suffer,” she said.
Or, before they say, while they’re working late one night, “Screw it. I’m taking the copier home. I’ve earned it!”
In fact, most retail theft is committed by employees—it’s just worse now because more people are reaching a point of desperation, said retail analyst Howard Davidowitz.
“We are in an economy of desperation. People are desperate,” Davidowitz said. “Some people haven’t gotten raises or bonuses in years. They feel cheated. They think, ‘This is a way I can get a little bit back.’ A lot of employee theft comes from that attitude: ‘I’m underpaid, I’m overworked, I’m supposed to get more.’”
It’s like the old “buy one, get one free” has turned into “”pay for one, steal one,” Rachel Shteir, author of "The Steal: A Cultural History of Shoplifting," told MyDaily.com. It gives you a sense of power, she said.
A couple of Splenda packets in grandma’s handbag may seem like a small deal but Davidowitz said this is bigger. Much bigger: It stems back to the deficit. Until Washington wrangles the debt, there won’t be confidence, companies won’t hire and the rest of us will be do disillusioned, we’ll be jamming packs of copier paper in our back pockets.
“The worst is yet to come,” Davidowitz said.
Employers should take this as a wake-up call: $3.6 billion is a lot of post-it notes and copier paper. You have to ask yourself, if we keep piling on to employees, and they keep getting more disgruntled, where will this end?
“If employees think shoplifting is OK in this economy, does it also mean that murder is OK in this economy because there are less people to compete against for jobs?” asked comedian Harrison Greenbaum.
I say let’s make a pact right here and now to end it at post-it notes and Splenda before we all do something we'll regret. Deal?
Pony Treats:
Most Commonly Stolen Items. Shoplifting may seem like an impulse but in fact, it can be pretty predictable. Here are the top 10 most stolen items.
It’s Got a Nice Beat. You Can Dance to It. Heartbreak is always a toe-tapper, but shoplifting, as it turns out, has also snuck it’s way into more than a few lyrics. Ah, the classics: “Let’s Loot the Supermarket Again” and “Do a Runner!”
Costick67 may be a prophet, part 12
A couple of stories back, I had Bernanke playing "Dust in the Wind".
As if by request, the Arizona dust storm kicked up a couple of days later.
What can I do for an encore? Beats the sh*t outta me.
We'll let nature have the last laugh, because Nature Bats Last.
checkitout:
guymcpherson.com
Environmental wisdom with practical plans and lots of proof
As if by request, the Arizona dust storm kicked up a couple of days later.
What can I do for an encore? Beats the sh*t outta me.
We'll let nature have the last laugh, because Nature Bats Last.
checkitout:
guymcpherson.com
Environmental wisdom with practical plans and lots of proof
Greece is just a flu, the cancer is elsewhere
You'll get one guess for that, and no prize.
Le Monde (non-) Diplomatique is one of the gang of media folks now, FINALLY
seeing that Greece is a sideshow (like Max Keiser).
The big issue is
"if you can't save a sh*tbox economy like Greece, there's something wrong"
So Le Monde said (I haven't found the story yet) that the world is worrying about a cold (GR)
when it's being attacked by a cancer.
I don't know if it names the cancer, but it's the banks. Du-uh
In this clip, the Prof says that Euro-aid is a back-door bank bailout.
Here's what they say (Telegraph or Tmes, I think):
"Allergies can fight cancer- allergic reactions caused by contact could ward off cancer by triggering immune system defences, a new study has found. The allergies , known as contact allergies which are triggered by substances such as chemicals, may prime the immune system to react against certain types of cancer. The findings from a study of almost 17000 danish adults confirm a theory that those with allergies have super responsive immune systems and are therefore less likely to develop cancer."
If the cancer is the monetary/financial system:
Well, I'm allergic to going into debt, and allergic to giving my money to big corporations
and government. I'd rather barter and trade.
More awesome medical metaphors, from george washington's blog [on zerohedge]:
Michael Hudson,
You can think of the financial sector as being wrapped around the real economy, almost like a parasite, and that's why it's been called parasitic for so long. The financial sector extracts interest from the economy, the property sector extracts economic rent, as do monopolies. Now the key thing about parasites, is that it's not simply that they extract nourishment from the host. The parasite takes over the
host's brain, to make it think it's part of the economy, to make it think
it's part of the host's own body, and, in fact, that's it almost like a child of the host, to be protected. And that's what the financial sector has done today.
You have Obama coming out and saying, "We have to save the banks in order to save the real economy". The fact is, you can't serve both the parasite and the host.
....On August 10th, Hudson went even further. Specifically, he said:
* The giant financial institutions have already killed their host - the real American economy
* Since they realize that the American economy is dead, they are trying to suck as much blood out of America as possible while the corpse is still warm
* Because the American economy is dead, their plan is to soon jump to another host. They will ship all of their money overseas
more later
Le Monde (non-) Diplomatique is one of the gang of media folks now, FINALLY
seeing that Greece is a sideshow (like Max Keiser).
The big issue is
"if you can't save a sh*tbox economy like Greece, there's something wrong"
So Le Monde said (I haven't found the story yet) that the world is worrying about a cold (GR)
when it's being attacked by a cancer.
I don't know if it names the cancer, but it's the banks. Du-uh
In this clip, the Prof says that Euro-aid is a back-door bank bailout.
So, the bailout is a suppository for the banksters.
xD AhhAhahHAhAHAAHHAhAhahahAh
xD AhhAhahHAhAHAAHHAhAhahahAh
Well, up yours', banksters.
Can I push up your stool?
In a related story:
Allergic reactions may save people from cancerCan I push up your stool?
In a related story:
Here's what they say (Telegraph or Tmes, I think):
"Allergies can fight cancer- allergic reactions caused by contact could ward off cancer by triggering immune system defences, a new study has found. The allergies , known as contact allergies which are triggered by substances such as chemicals, may prime the immune system to react against certain types of cancer. The findings from a study of almost 17000 danish adults confirm a theory that those with allergies have super responsive immune systems and are therefore less likely to develop cancer."
If the cancer is the monetary/financial system:
Well, I'm allergic to going into debt, and allergic to giving my money to big corporations
and government. I'd rather barter and trade.
Am I gonna be okay, doc?
More awesome medical metaphors, from george washington's blog [on zerohedge]:
Michael Hudson,
You can think of the financial sector as being wrapped around the real economy, almost like a parasite, and that's why it's been called parasitic for so long. The financial sector extracts interest from the economy, the property sector extracts economic rent, as do monopolies. Now the key thing about parasites, is that it's not simply that they extract nourishment from the host. The parasite takes over the
host's brain, to make it think it's part of the economy, to make it think
it's part of the host's own body, and, in fact, that's it almost like a child of the host, to be protected. And that's what the financial sector has done today.
You have Obama coming out and saying, "We have to save the banks in order to save the real economy". The fact is, you can't serve both the parasite and the host.
....On August 10th, Hudson went even further. Specifically, he said:
* The giant financial institutions have already killed their host - the real American economy
* Since they realize that the American economy is dead, they are trying to suck as much blood out of America as possible while the corpse is still warm
* Because the American economy is dead, their plan is to soon jump to another host. They will ship all of their money overseas
more later
you missa da payment, we breaka you legs
Luckily for PM Papandreou of Greece, the Germans can't read Sicilian-American.
Papandr-IOU went to talk to Germany's Financial Times Deutche rip-off
and started talking about selective non-payment,
when Germany owns the biggest chunk of his debt.
It's like going up to your bully and slapping him in the face.
[just watch out for the halibut at the end!]
Does Pap actually have gonads? I'm shocked.
more later.
Papandr-IOU went to talk to Germany's Financial Times Deutche rip-off
and started talking about selective non-payment,
when Germany owns the biggest chunk of his debt.
It's like going up to your bully and slapping him in the face.
[just watch out for the halibut at the end!]
Does Pap actually have gonads? I'm shocked.
more later.
Rupert, you silly brute!
[Guardian]
[trying to get out and they drag me right back in. David and News Int.'s UK boss]A Cammy imagining:
"Mr Murdoch, you cannot control our media.
Even though our laws say you can't control our media,you almost managed to do it, because you have us blackmailed.
and, by the way, thanks for getting me elected.
Now, go away you phone-hacking brute.
"don't worry about that jail thing. we don't have any posh units available, anyway.
We can do an Assange-type deal, if you'll give me Coulson or Brooks. OK?"
The UK is trying hard to be crowned banana republic of the month.
The application by News Int./Corp/Murdoch to by BSkyB should be about
free speech and media diversity. In a banana republic, it's about whether you're
in favour with the Public Kangaroo Court, led by
bitchy politicians,
corrupt media,
& misplaced morals.
Welcome to the UK.
corrupt media,
& misplaced morals.
Welcome to the UK.
the message Murdoch was getting was:
All is well, until
the public discovered he hacked the phone
of a murdered teenage girl's family. [check 'Milly Dowler']
All of a sudden, politicians found a moral backbone,
or borrowed one.
Until that point, they were resigned to being ruled
by King Rupert.
Lot's of throat clearing in mid-sentence.
"Our Dear leader is..(ahem)... a son of a bitch"
The only thing that would have upset the PKC more
would have been if Murdoch had kicked a dog,
or stopped printing a crossword puzzle in his papers.
[BTW a crossword writer is famous enough to be on Desert Island Discs]
xD AhaHhAHHAAhaAhahaahaAHAHAH
believe it
http://www.bbc.co.uk/radio4/features/desert-island-discs
The government:All is well, until
the public discovered he hacked the phone
of a murdered teenage girl's family. [check 'Milly Dowler']
All of a sudden, politicians found a moral backbone,
or borrowed one.
Until that point, they were resigned to being ruled
by King Rupert.
Lot's of throat clearing in mid-sentence.
"Our Dear leader is..(ahem)... a son of a bitch"
The only thing that would have upset the PKC more
would have been if Murdoch had kicked a dog,
or stopped printing a crossword puzzle in his papers.
[BTW a crossword writer is famous enough to be on Desert Island Discs]
xD AhaHhAHHAAhaAhahaahaAHAHAH
believe it
http://www.bbc.co.uk/radio4/features/desert-island-discs
It's unable to reign in one of the world-wide king-making oligarchs.
Its Politicians need his support to get elected.
Its politicians are complicite in corruption, found by Murdoch,
and corruption in trying to cover up the hacking probe.
The Police are largely on the take, and helping Murdoch's "journalists",
and being spied on.
and Nobody's going to jail.
So, it's just a farce-comedy in broad daylight.
Have I missed anything?
more hacking coughs latercheckitout: 2 entries from Sturdy blog:
As Leader of the Opposition he [Cameron] flew to a Greek island and met with Murdoch. Immediately afterwards he started announcing a variety of policies beneficial to the mogul's interests, including downsizing OfCom and abolishing the BBC Trust. News Corp then delayed launching their takeover bid until a change of government. The moment Cameron was in office, Murdoch was one of the first people he saw at number 10. As recently as this spring he wrote columns for the News of The World, condemning the evils of regulation. As recently as a month ago he made a private speech at Murdoch's Headquarters. As recently as Wednesday's PMQs he stood by his decision to hire the beleaguered Andy Coulson as his PR guru. He also refused to call for the resignation of his horse-riding partner and gracious dinner hostess, Rebekah Brooks (aka Wade).
STURDY 2
[sarc warning included- Costick67]
•It is unfair to tarnish David Cameron for doing the thoroughly decent thing and giving a man a second chance.
The image of Cameron desperately pushed by Tory politicians and right-wing commentators is that of a trusting, wide-eyed, Bambi-like figure who asked for assurances from Andy Coulson and then, believing the apparently reformed chap at his word, gave the old bean a second chance. Turns out the chap was a scamp! Oh no!
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