Tag Archive: Ben Bernanke


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Is your money safe at the bank? An economist says ‘no’ and withdraws his

BY Terry Burnham  January 30, 2014 at 12:45 PM EST

The Fed policies of Ben Bernanke and Janet Yellen, who begins her term Feb. 1, are making former Harvard economist Terry Burnham withdraw his money from Bank of America. Photo by Davis Turner/Getty Images.
The Fed policies of Ben Bernanke and Janet Yellen, who begins her term Feb. 1, are making former Harvard economist Terry Burnham withdraw his money from Bank of America. Photo by Davis Turner/Getty Images.

Terry Burnham, former Harvard economics professor, author of “Mean Genes” and “Mean Markets and Lizard Brains,” provocative poster on this page and long-time critic of the Federal Reserve, argues that the Fed’s efforts to strengthen America’s banks have perversely weakened them. (See our 2005 segment with Burnham below about how “lizard brains” influence our economic decisions.)

Last week I had over $1,000,000 in a checking account at Bank of America. Next week, I will have $10,000.

Why am I getting in line to take my money out of Bank of America? Because of Ben Bernanke and Janet Yellen, who officially begins her term as chairwoman on Feb. 1.

Before I explain, let me disclose that I have been a stopped clock of criticism of the Federal Reserve for half a decade. That’s because I believe that when the Fed intervenes in markets, it has two effects — both negative. First, it decreases overall wealth by distorting markets and causing bad investment decisions. Second, the members of the Fed become reverse Robin Hoods as they take from the poor (and unsophisticated) investors and give to the rich (and politically connected). These effects have been noticed; a Gallup poll taken in the last few days reports that only the richest Americans support the Fed. (See the table.)

Gallup poll

Why do I risk starting a run on Bank of America by withdrawing my money and presuming that many fellow depositors will read this and rush to withdraw too? Because they pay me zero interest. Thus, even an infinitesimal chance Bank of America will not repay me in full, whenever I ask, switches the cost-benefit conclusion from stay to flee.

Let me explain: Currently, I receive zero dollars in interest on my $1,000,000. The reason I had the money in Bank of America was to keep it safe. However, the potential cost to keeping my money in Bank of America is that the bank may be unwilling or unable to return my money.

They will not be able to return my money if:

Customers wait in line at the Indymac Bank branch headquarters in Pasadena, Calif., in July 2008. Joshua Lott/Bloomberg News

Customers wait in line at the IndyMac Bank branch headquarters in Pasadena, Calif., in July 2008. Joshua Lott/Bloomberg News

  • Many other depositors like you get in line before me. Banks today promise everyone that they can have their money back instantaneously, but the bank does not actually have enough money to pay everyone at once because they have lent most of it out to other people — 90 percent or more. Thus, banks are always at risk for runs where the depositors at the front of the line get their money back, but the depositors at the back of the line do not. Consider this image from a fully insured U.S. bank, IndyMac in California, just five years ago.
  • Some of the investments of Bank of America go bust. Because Bank of America has loaned out the vast majority of depositors’ money, if even a small percentage of its loans go bust, the firm is at risk for bankruptcy. Leverage, combined with some bad investments, caused the failure of Lehman Brothers in 2008 and would have caused the failure of Bank of America, AIG, Goldman Sachs, Morgan Stanley, Merrill Lynch, Bear Stearns, and many more institutions in 2008 had the government not bailed them out.

In recent days, the chances for trouble at Bank of America have become more salient because of woes in the emerging markets, particularly Argentina, Turkey, Russia and China. The emerging market fears caused the Dow Jones Industrial Average to lose more than 500 points over the last week.

Returning to my money now entrusted to Bank of America, market turmoil reminded me that this particular trustee is simply not safe. Or not safe enough, given the fact that safety is the reason I put the money there at all. The market turmoil could threaten “BofA” with bankruptcy today as it did in 2008, and as banks have experienced again and again over time.

If the chance that Bank of America will not return my money is, say, a mere 1 percent, then the expected cost to me is 1 percent of my million, or $10,000. That far exceeds the interest I receive, which, I hardly need remind depositors out there, is a cool $0. Even a 0.1 percent chance of loss has an expected cost to me of $1,000. Bank of America pays me the zero interest rate because the Federal Reserve has set interest rates to zero. Thus my incentive to leave at the first whiff of instability.

Read More Here

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Harvard Economist Expects Bank Runs, Withdraws $1 Million from BofA

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Published on Feb 4, 2014

In today’s video, Christopher Greene of AMTV reports on a Harvard economist who expects a Bank Run at Bank of America.
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Is your money safe at the bank? An economist says ‘no’ and withdraws his
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Fed’s Fisher: Too-big-to-fail banks are “crony” capitalists

Richard Fisher, president and CEO of the Federal Reserve Bank of Dallas, speaks during a conference before the Committee for the Republic Salon at the National Press Club in Washington January 16, 2013. REUTERS/Jose Luis Magana

Richard Fisher, president and CEO of the Federal Reserve Bank of Dallas, speaks during a conference before the Committee for the Republic Salon at the National Press Club in Washington January 16, 2013.

Credit: Reuters/Jose Luis Magana

By Pedro Nicolaci da Costa

NATIONAL HARBOR, Maryland | Sat Mar 16, 2013 1:52pm EDT

(Reuters) – The largest U.S. banks are “practitioners of crony capitalism,” need to be broken up to ensure they are no longer considered too big to fail, and continue to threaten financial stability, a top Federal Reserve official said on Saturday.

Richard Fisher, president of the Dallas Fed, has been a critic of Wall Street’s disproportionate influence since the financial crisis. But he was now taking his message to an unusual audience for a central banker: a high-profile Republican political action committee.

Fisher said the existence of banks that are seen as likely to receive government bailouts if they fail gives them an unfair advantage, hurting economic competitiveness.

“These institutions operate under a privileged status that exacts an unfair tax upon the American people,” he said on the last day of the annual Conservative Political Action Conference (CPAC).

“They represent not only a threat to financial stability but to fair and open competition … (and) are the practitioners of crony capitalism and not the agents of democratic capitalism that makes our country great,” said Fisher, who has also been a vocal opponent of the Fed’s unconventional monetary stimulus policies.

Fisher’s vision pits him directly against Fed Chairman Ben Bernanke, who recently argued during congressional testimony that regulators had made significant progress in addressing the problem of too big to fail. Bernanke asserted that market expectations that large financial institutions would be rescued is wrong.

But Fisher said mega banks still have a significant funding advantage over its competitors, as well as other advantages. To address this problem, he called for a rolling back of deposit insurance so that it would extend only to deposits of commercial banks, not the investment arms of bank holding companies.

“At the Dallas Fed, we believe that whatever the precise subsidy number is, it exists, it is significant, and it allows the biggest banking organizations, along with their many nonbank subsidiaries – investment firms, securities lenders, finance companies – to grow larger and riskier,” he said.

Fisher argued Dodd-Frank financial reforms were overly complex and therefore counterproductive.

“Regulators cannot enforce rules that are not easily understood,” he said.

(Reporting by Pedro Nicolaci da Costa; editing by Gunna Dickson)

 

“These institutions operate under a privileged status that exacts an unfair tax upon the American people,” he said on the last day of the annual Conservative Political Action Conference (CPAC).

“They represent not only a threat to financial stability but to fair and open competition … (and) are the practitioners of crony capitalism and not the agents of democratic capitalism that makes our country great,” said Fisher, who has also been a vocal opponent of the Fed’s unconventional monetary stimulus policies.

 

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Bernanke Tightens Hold on Fed Message Against Hawks

By Steve Matthews & Aki Ito – Mar 19, 2013 12:53 PM CT

Ben S. Bernanke is tightening his control of Federal Reserve communications to ensure investors hear his pro-stimulus message over the cacophony of more hawkish views from regional bank presidents.

The Fed chairman, starting tomorrow, will cut the time between the release of post-meeting statements by the Federal Open Market Committee and his news briefings, giving investors less opportunity to misperceive the Fed’s intent. In recent presentations, he has pledged to sustain easing, defending $85 billion in monthly bond purchases during congressional testimony last month and warning that “premature removal of accommodation” may weaken the expansion.

Ben S. Bernanke, chairman of the U.S. Federal Reserve. Bernanke’s push to continue record stimulus faltered with the Jan. 3 release of minutes from the FOMC’s December meeting, which said several officials favored slowing or stopping bond buying well before the end of 2013. Photographer: Andrew Harrer/Bloomberg

Bernanke Testimony on Fed Policy, Economy

42:22

Feb. 27 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke testifies about the central banks policies and economic growth. He speaks before the House Financial Services Committee in Washington. (This is the first part of the question and answer portion of Bernanke’s testimony. Source: Bloomberg)

Bernanke Testimony on Policy, Economy (Q&A Part 2)

1:51:21

Feb. 27 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke testifies about the central bank’s policies and the U.S. economy. He speaks before the House Financial Services Committee in Washington. (This is the second part of the question-and-answer portion of Bernanke’s testimony. Source: Bloomberg)

Fed's Fisher on Monetary Policy, Stimulus Risks

12:56

Aug. 8 (Bloomberg) — Federal Reserve Bank of Dallas President Richard Fisher talks about monetary policy and the potential risks of additional economic stimulus. He speaks with Tom Keene and Sara Eisen on Bloomberg Television’s “Surveillance. (Source: Bloomberg)

Hubbard on Global Economies, Central Banks Policy

6:07

March 19 (Bloomberg) — Glenn Hubbard, chairman of the Council of Economic Advisers under former Republican President George W. Bush from 2001 to 2003 and now dean of Columbia University’s business school in New York, talks about the outlook for Europe, U.S. and Asia’s economies and central banks’ monetary policies. Hubbard speaks from the Credit Suisse Asian Investment Conference in Hong Kong with Susan Li on Bloomberg Television’s “First Up.” (Source: Bloomberg)

“Bernanke rightly views it as imperative to get out in front of any movement to quickly pull away from stimulus, and to signal that to markets,” said Jonathan Wright, an economics professor at Johns Hopkins University in Baltimore who worked at the Fed’s division of monetary affairs from 2004 until 2008. Bernanke “felt he needed to take the wheel” of communications to dispel any misperception that the Fed will end bond purchases too soon.

Bernanke’s push to continue record stimulus faltered with the Jan. 3 release of minutes from the FOMC’s December meeting, which said several officials favored slowing or stopping bond buying well before the end of 2013. The yield on the 10-year Treasury note rose that day about 0.07 percentage point to 1.91 percent, the highest since May.

Promoting Purchases

In his congressional testimony Feb. 26 and 27 and a March 1 speech at the Federal Reserve Bank of San Francisco, Bernanke promoted the Fed’s bond purchases, saying stimulus shouldn’t be slowed by financial-stability concerns. Vice Chairman Janet Yellen echoed those views March 4.

The Fed chairman wants to avert an unintended rise in Treasury yields that would undermine his unprecedented efforts to reduce long-term interest rates and speed growth, including the rebound in vehicle sales and housing, said Nathan Sheets, the Fed’s top international economist from 2007 until 2011.

“If long rates rise because of a misunderstanding of the Fed policy path, that is something that is worrisome and that is something they want to clarify,” said Sheets, now global head of international economics at Citigroup Inc. in New York. “Lower rates are absolutely supporting the recovery and stimulating the housing market, autos and durable goods.”

Third Round

Several FOMC participants have strayed from Bernanke’s line during the past year. Richard Fisher, president of the Federal Reserve Bank of Dallas, said he saw no need for more stimulus on Aug. 8, about a month before the central bank started a third round of quantitative easing.

“We keep applying what I call monetary Ritalin to the system,” he said in an interview on “Bloomberg Surveillance” with Tom Keene and Sara Eisen. “We all know there’s a risk of over-prescribing.”

Philadelphia Fed President Charles Plosser said on Aug. 30 that the potential disadvantages of additional securities purchases outweighed the benefits.

“Increasing accommodation creates risks, and we need to balance those,” he said in an interview with CNBC at the Fed symposium in Jackson Hole, Wyoming.

Plosser, Fisher and Richmond Fed President Jeffrey Lacker are the most “hawkish” FOMC participants, calling for a comparatively aggressive approach to fighting inflation, and aren’t “signals” for future committee action, said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York.

Steer Policy

“The committee is increasingly a democracy, and if you have one-fourth of the votes, you’re not going to steer policy,” said Feroli, a former Fed researcher.

The 12 district bank presidents have five votes on the 12- member FOMC, with the New York Fed president holding a permanent position and the others annually rotating onto the panel. Lacker voted in 2012 and repeatedly dissented; neither he, Plosser nor Fisher vote this year.

Bernanke, in speeches and testimonies last year, pushed down yields on 10-year Treasuries by 0.06 percentage point on a cumulative basis, more than any of the other 18 FOMC participants, as he promoted accommodation more forcefully than investors anticipated, according to Macroeconomic Advisers LLC.

The research company gauged the impact from speeches and radio or TV interviews, starting from 15 minutes before the event until two hours afterward. It separately measured the effect from Bernanke’s press conferences and semi-annual testimonies to Congress.

Falling Short

The Fed chairman’s speeches last year, while temporarily reducing bond yields, weren’t enough to counteract speeches by his policy-making colleagues, who boosted 10-year yields by 0.11 percentage point when their enthusiasm for stimulus fell short of investor expectations, according to the St. Louis-based company.

 

Read Full Article Here

 

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Jail Time?

By: Fred Sheehan | Sat, Mar 16, 2013

“The Fed’s alphabet soup of cash-pumping….actions were so reckless that even the outrageous anecdotes to which they gave rise can scarcely capture the lunacy rampant in the Eccles Building. Thus, the nation’s central bank actually guaranteed upward of $200 million that had been borrowed by two New York housewives to start a new business [in November 2008 – FJS]. Amazingly, the purpose was to enable this intrepid duo to purchase large volumes of securitized auto loans about which they knew nothing.” – David A. Stockman, The Great Deformation: The Corruption of Capitalism in America, to be published in April 2013.

Recent attention devoted to banksters by U.S. senators is noteworthy. Not definitive by any means, but the media attention to what could have been ignored may foreshadow a comeuppance.

Members of the Senate Committee on Banking, Housing, and Urban Development did not let Federal Reserve Chairman Ben S. Bernanke escape “Too-Big-to-Jail” questions at a February 26, 2013 hearing. This is alluded to in “Crony Bureaucrat” and “Eating the Fed for Lunch.” Some might think the chairman’s elliptical answers an attempt to duck and cover but it is more probable his mind simply drifted off, his wafting countenance familiar to travelers in the Sahara beaten by a mind-numbing sun while draped on the back of an anemic camel famished upon the outskirts of Chenachene.

However, it was not only Simple Ben. The parade of government officials previously exempt from crony questioning continues. Attorney General Eric Holder was put on the spot before the Senate Judiciary Committee on March 6, 2013:

SENATOR CHARLES GRASSLEY (R-IA): “In the case of bank prosecution. I’m concerned we have a mentality of ‘too big to jail’ in the financial sector, spreading from fraud cases to terrorist financing to money laundering cases. I would cite HSBC. I think we are on a slippery slope and that’s background for this question. I don’t have recollection of DOJ prosecuting any high-profile financial criminal convictions in either companies or individuals….”

ATTORNEY GENERAL ERIC HOLDER: “….the concern that you have raised is one that I, frankly, share. I’m not talking about HSBC here, that would be inappropriate. But I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if we do prosecute – if we do bring a criminal charge – it will have a negative impact on the national economy, perhaps even the world economy. I think that is a function of the fact that some of these institutions have become too large. Again, I’m not talking about HSBC, this is more of a general comment. I think it has an inhibiting influence, impact on our ability to bring resolutions that I think would be more appropriate. I think that’s something that we – you all [Congress] – need to consider. The concern that you raised is actually one that I share.”

 

Read Full Article Here

 

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Jeff Gelles: Time to take on ‘too big to fail’?

Former Delaware Sen. Ted Kaufman (right), with former Treasury Secretary Tim Geithner, thinks the time has come to break up big banks.
Former Delaware Sen. Ted Kaufman (right), with former Treasury Secretary Tim Geithner, thinks the time has come to break up big banks. (Bloomberg News)
By Jeff Gelles, Inquirer Columnist

Posted: March 18, 2013

What was the biggest shortcoming of 2010’s massive Dodd-Frank financial reform – a flaw that still threatens the U.S. economy and all who rely on it?

One answer pops up with remarkable consistency from across the political spectrum: the belief that the law didn’t actually solve the problem that some financial institutions are so large that they’re “too big to fail.”

Tea party favorites such as Sen. Rand Paul (R., Ky.) have warned against it, as have conservative pundits such as George Will and Peggy Noonan – making unusual common cause with liberals like former Labor Secretary Robert Reich, Columbia University economist Joseph Stiglitz, and former Sen. Ted Kaufman (D., Del.).

They share a concern that some institutions – especially four megabanks that now each count more than $1 trillion in assets – are still protected by an implicit guarantee that the government will step in to stop their collapse.

That’s what happened in fall 2008, when the growing financial crisis pushed Lehman Brothers into bankruptcy while the administration of President George W. Bush stood by. To avoid further panic – and prevent what some feared would be another Great Depression – Bush switched course. His Treasury secretary, Hank Paulson, teamed with Congress and the Federal Reserve on emergency steps designed to prevent a repeat.

The legislation sponsored by Sen. Chris Dodd (D., Conn.) and Rep. Barney Frank (D., Mass), to be fair, sought to end “too big to fail” – not by addressing “too big” but by insisting that teetering banks face an orderly failure rather than a bailout. It established a process for regulators to resolve the affairs of even the largest, most complex institutions, much as the Federal Deposit Insurance Corp. takes over insolvent smaller banks.

 

Read Full Article Here

 

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Live-Blogging Senate Hearing Tomorrow, When J.P. Morgan Chase Will Be Torn a New One

POSTED: March 14, 5:00 PM ET

Carl Leven
Carl Leven
Bill Pugliano/Getty Image

Beginning at 9:30 a.m. tomorrow, I’m going to be live-blogging a hearing held by Senator Carl Levin’s Permanent Subcommittee on Investigations – the best crew of high-end detectives this side of The Wire, in my opinion – who will be grilling J.P. Morgan Chase executives and high-ranking federal regulators in a get-together entitled, “J.P. Morgan Chase “Whale” Trades: A Case History Of Derivatives Risks And Abuses.” This follows this afternoon’s release of a brutal 301-page report commissioned by Levin and Republican John McCain by the same name.

The Subcommittee investigators, largely the same crew who unraveled financial scandals surrounding infamous Goldman Sachs trades like Abacus and Timberwolf, and also took on HSBC’s trans-global money-laundering activities in an extraordinarily detailed report issued last summer, have now taken aim at the heart of the Too-Big-To-Fail issue through its examination of the much-publicized catastrophic derivative trades made by its amusingly-nicknamed “London Whale” trader, Bruno Iksil, last year.

Most ordinary people dimly remember the London Whale episode now, and even at the time struggled to understand even the vaguest contours of the story while mainstream reporters (including people like myself) were trying with all their might to make sense of it from afar. What most people got out of that story was that J.P. Morgan Chase somehow lost buttloads of money through some sort of impossibly complex derivative trade – billions, though nobody could ever settle on an exact number – and that this was somehow a very bad thing that required the attention of the federal government, although even that part of it was a bit of a mystery to most ordinary people.

Gangster Bankers: Too Big to Jail

Why should we care if a private bank, or more to the point a private banker like Chase CEO Jamie Dimon, loses a few billion here and there? What business is it of ours? And why did we have to have congressional hearings about it last year? The whole thing certainly seemed a big mystery to Dimon himself, who dragged himself to Washington and spent the entire time rolling his eyes and snorting at Senators’ questions, clearly put out that he even had to be there.

This new report by the Permanent Subcommittee answers the question of why the public needed to be involved in that episode. What the report describes is an epic breakdown in the supervision of so-called “Too Big to Fail” banks. The report confirms everyone’s worst fears about what goes on behind closed doors at such companies, in the various financial sausage-factories that comprise their profit-making operations.

If the information in the report is correct, Chase followed the behavioral model of every corrupt/failing hedge fund this side of Bernie Madoff and Sam Israel, only it did it on a much more enormous scale and did it with federally-insured deposits. The fund used (in part) federally-insured money to create, in essence, a kind of super high-risk hedge fund that gambled on credit derivatives, and just like Sam Israel did with his Bayou fund, when it got in trouble, it resorted to fudging its numbers in order to disguise the fact that it was losing money hand over fist.

Chase for years hid the very existence of this operation from banking regulators and lied about the purpose of the fund (saying it was purely a hedging operation when it stopped being a hedge and instead became a wild directional gamble), and it also changed the way it calculated the fund’s value once it started to lose hundreds of millions of dollars. Even worse, the bank’s own internal auditors signed off on the phoney-baloney accounting of this Synthetic Credit Portfolio (SCP), at one point allowing it to claim $719 million in losses when the real number was closer to $1.2 billion.

How did they do this? In the years leading up to January of 2012, Chase used a standard, plain-vanilla method to price the derivative instruments in its portfolio. The method was known as “mid-market pricing”: if on any given day you had a range of offers for a certain instrument – the “bid-ask” range – “mid-market pricing” just meant splitting the difference and calling the value the numerical middle in that range.

But in the beginning of 2012, Chase started to lose lots of money on the derivatives in its SCP, and just decided to change its valuations, that they weren’t in the business of doing “mids” anymore. One executive thought the “market was irrational.” As the Subcommittee concluded:

By the end of January, the CIO had stopped valuing two sets of credit index instruments on the SCPs books, the CDX IG9 7-year and the CDX IG9 10-year, near the midpoint price and had substituted instead noticeably more favorable prices.

 

Read Full Article Here

 

Politics, Legislation and Economy News

Economic News – Banking / Financial Corruption – Fiscal Irresponsibility – Rising Costs

The noble purpose of QE3 is to save the economy, right?

To put people back to work.  To put America on the road to recovery…

Hogwash.

It’s a scam right down to the bone.

Here’s the real story the financial news media won’t tell you.

Published on Sep 25, 2012 by

More videos at: http://www.brasschecktv.com

QE3 Explained Simply

Written by:
Written on:August 15, 2011

QE3 explained for the layman.QE3, or quantitative easing 3, lingers in the back of investors’ minds.

Few investors seem to know exactly what quantitative easing really means.

We’ll take the time to explain it now.

QE3 Explained

Quantitative easing is a simple concept: a central bank “prints” money to buy long- and short-dated government debt. The goal is to drive down interest rates, boost demand for investment capital, and increase economic output.

Supply and demand are equally powerful forces in the currency and debt markets as they are in the market for shoes, toothpaste, or jelly beans. Increasing supply means lower prices. For currency, the price is not only the current price, but also the future price—interest rates.

Many think that quantitative easing 3 will never come. The Fed has agreed to make the market for dollars liquid with a promise to keep interest rates at 0-.25% for the next two years. That action alone should keep the price of money inexpensive enough to end all talk of QE3.

Effects of QE3

We can’t predict with certainty what the Federal Reserve will do to boost output, stave off deflation, and promote general economic growth. However, we can explain how QE3 will affect the markets, pending that it does eventually come:

  1. Lower Treasury Yields – The Federal Reserve is authorized to buy US Treasuries with freshly printed dollars. When the Fed bids up the price of US Treasuries, the yield on US Treasuries moves down. This is true for any bond—price and yield are inversely-related.
  2. Lower dollar value – By nature of any quantitative easing program, the Fed must create more dollars to buy up US Treasuries. Naturally, this results in a lower dollar value against other currencies, as the price of the currency is dictated primarily by supply and demand.
  3. Inflation concerns – It happens every time the Fed acts to loosen monetary policy. Inflation remains low in the US, but a small group of investors worry that quantitative easing will lead to inflation. The reality is that the Fed would like to see inflation, since it has thus far failed to create any real measurable amount of it. Deflation remains a top concern.
  4. Rising asset prices – Assets are priced into the future, whether we’re talking about stock prices, or the price for a barrel of oil. When the time value of money falls, investors can pay for earnings further out into the future. Bernanke made it clear his goal was to boost the financial markets, and that means giving lift to asset prices.

Economic News

 

 

Banks/ Financial/Government  Corruption :  Rising Costs/ Jobs/Security

 

 

 

Published on Sep 3, 2012 by

Sept. 3 – As evidence of a global slowdown increases we ask three financial industry experts how they see this month playing out and the key elements of risk. Eurozone economy, investors, emerging  markets, S&P  cyclical  evidence in the US  QE.  Federal reserve

 

 

 

 

Is There Going To Be A Stock Market Crash In The Fall?

The Economic Collapse Blog
Danger

© The Economic Collapse Blog

Is the stock market going to crash by the end of this year? Are we on the verge of major financial chaos on a global scale? Well, this is the time of the year when investors start getting nervous.

We all remember what happened during the fall of 1929, the fall of 1987 and the fall of 2008. However, it is important to keep in mind that we do not see a stock market crash in the fall of every year.

Some years the stock market cruises through the months of September, October, November and December without any problems whatsoever. But this year conditions certainly seem to be right for a “perfect storm” to develop.

Technical indicators are screaming that a stock market decline is imminent and sources in the financial industry all over the world are warning that a massive crisis is on the way.

In fact, the Telegraph ran a story with the following shocking headline the other day: “Market crash ‘could hit within weeks’, warn bankers“.

What you are about to read should alarm you. But it is not a guarantee that anything will or will not happen. When Ben Bernanke gives his speech at the Jackson Hole summit on Friday he could announce to the rest of the world that the Federal Reserve has decided to launch QE3 and that the Fed will be printing up trillions of new dollars.

If that happened global financial markets would leap for joy. So it is always a dangerous thing when anyone out there tries to tell you that they can “guarantee” what is about to happen in the financial world. There are just so many moving parts. But if we do not see major intervention by the governments of the world or by global central banks a major financial crisis could rapidly develop this fall.

The conditions are certainly right for a stock market collapse, and we could easily see a repeat of what happened back in 2008.

The truth is that the second half of 2012 looks a little bit more like the second half of 2008 with each passing day.

For example, credit default swaps are soaring just like we saw back during the last financial crisis. The following is from a recent article in the Telegraph by Harry Wilson and Philip Aldrick….

Insurance on the debt of several major European banks has now hit historic levels, higher even than those recorded during financial crisis caused by the US financial group’s implosion nearly three years ago.

Credit default swaps on the bonds of Royal Bank of Scotland, BNP Paribas, Deutsche Bank and Intesa Sanpaolo, among others, flashed warning signals on Wednesday. Credit default swaps (CDS) on RBS were trading at 343.54 basis points, meaning the annual cost to insure £10m of the state-backed lender’s bonds against default is now £343,540.

The Telegraph also publishedsome ominous warnings from anonymous banking executives in their recent article….

“The problem is a shortage of liquidity – that is what is causing the problems with the banks. It feels exactly as it felt in 2008,” said one senior London-based bank executive.

One anonymous banker was even bold enough to predict a “market shock” for “September or October”….

“I think we are heading for a market shock in September or October that will match anything we have ever seen before,” said a senior credit banker at a major European bank.

Of course there are analysts on this side of the pond that are incredibly bearish right now as well. The warnings from Europe line up very well with what Bob Janjuah of Nomura Securities has been saying….

Based on the reasons set out earlier and also covered in my two prior notes, over the August to November period I am looking for the S&P500 to trade off down from around 1400 to 1100/1000 – in other words, I expect over the next four months to see global equity markets fall by 20% to 25% from current levels and to trade at or below the lows of 2011! US equity markets, along with parts of the EM spectrum, will I think underperform eurozone equity markets, where already very little hope resides.

Others are issuing similar warnings. Just check out what a couple of Bank of America analysts said in a report the other day….

Our strategists see an unusually high number of macro catalysts over the next 3-6 months that could take markets lower. We expect economic growth to disappoint in the second half of the year in anticipation of the fiscal cliff. This would exacerbate any slowdown from the deepening recession in Europe and decelerating growth in emerging markets. There is also the ongoing tension in the Middle East, the potential for a US credit downgrade and accelerating downward analyst estimate revisions. To top it off, September is seasonally the weakest month of the year for stock price returns.

There has been an unusual amount of chatter in the financial world about the September to December time frame.

That could mean something or it could mean nothing.

But is is very interesting to watch what some top financial insiders are doing with their stocks right now.

Dennis Gartman, the publisher of the Gartman Leter, has dumped all of his stocks at this point.

As I have written about previously, George Soros has dumped all of his stock in banking giants JP Morgan, Citigroup and Goldman Sachs.

Are they just being paranoid?

Or do they know something that we do not?

If you are looking for the next “Lehman Brothers moment” in the United States, you might want to watch Morgan Stanley. Morgan Stanley was heavily involved in the Facebook IPO disaster, earlier this year their credit rating was downgraded, and now there are persistent rumors that Morgan Stanley is in big trouble and that it will be allowed to fail. You can check out some of these rumors for yourself here, here and here.

But of course as I have said all along the center of the coming crisis is going to be in Europe, and many analysts agree with me. For example, the following is what the chairman of Casey Research, Doug Casey, had to say during a recent interview….

Europe is a full cycle ahead of the U.S. Its governments and its banks are both bankrupt. It’s a couple of drunks standing on the street corner holding each other up at this point. Europe is in much worse shape than the U.S. It’s highly regulated, highly taxed and much more socially unstable.

Europe is going to be the epicenter of the coming storm. Japan is waiting in the wings, as is China. This is going to be a worldwide phenomenon. Of course, the U.S. will be in it, too. We’re going to see this all over the world.

Much of southern Europe is already experiencing depression-like conditions. Unemployment in both Greece and Spain is well above 20 percent and both economies are steadily shrinking.

Money is flowing out of Spanish banks at an unprecedented rate right now. Just take a look at these charts. The only thing that is going to keep the Spanish banking system from totally collapsing is outside intervention.

But the truth is that all of Europe is in big trouble. Even German companies are slashing job right now. For example, check out what Siemens is up to….

German engineering conglomerate Siemens (SIEGn.DE) is in early internal talks to cut thousands of jobs in response to a weakening economy, particularly in Europe, a German newspaper reported.

Decisions could be made in October or November, according to daily Boersen-Zeitung, which did not specify its sources.

A Siemens spokesman declined to comment.

We are living in the greatest debt bubble in the history of the world, and at some point that bubble is going to burst in a very messy way.

It is vital that people understand that our system is not even close to sustainable.

Knowing exactly when it will collapse is not nearly as important as understanding that a collapse is absolutely inevitable.

I think what former World Bank economist Richard Duncan had to say recentlyis very helpful….

“The explosion in credit drove economic growth in the U.S. and around the world, and now that’s the only thing that’s keeping us from collapsing in a debt/deflation spiral,” he said. “[What] I think everybody needs to understand is that the kind of economy that we have now, it’s not capitalism. It has very little in common with capitalism. Capitalism was an economic system in which the government played very little role …. Under capitalism, gold was money and the government had nothing to do with it. Now the central bank creates the money and manipulates its value.”

And he is very right.

We aren’t seeing a failure of capitalism.

What we are witnessing is the failure of debt-based central banking.

And if you think that the global elite are not aware of what is happening then you have not been paying attention.

This summer the global elite have been preparing very hard. Either they are getting very paranoid or they know things that we do not.

If you want to catch up on what the global elite have been up to recently, check out these three articles that I have published previously….

-“Are The Government And The Big Banks Quietly Preparing For An Imminent Financial Collapse?

-“Startling Evidence That Central Banks And Wall Street Insiders Are Rapidly Preparing For Something BIG

-“Jacob Rothschild, John Paulson And George Soros Are All Betting That Financial Disaster Is Coming

If you are waiting for the nightly news to tell you what to do, then you have not learned anything.

Did anyone in the mainstream media warn you about what was about to happen back in 2008?

Of course not.

The “authorities” insisted that everything was going to be just fine and many average Americans were absolutely wiped out.

So don’t expect someone to come along and nicely inform you that your retirement savings are about to be absolutely devastated.

In this day and age it is absolutely critical for people to learn to think for themselves.

Barack Obama is not going to save you.

Mitt Romney is not going to save you.

The U.S. Congress is not going to save you. They are too busy living the high life at taxpayer expense.

The system is not looking out for you. Nobody is really going to care if your financial planning gets turned upside down. This is a cold, cruel world and you need to understand how the game is played. The financial insiders are looking out for themselves and most of them usually are able to avoid financial disaster.

Average folks like you and I are normally not so fortunate.

There are lots of warning signs that indicate that this fall could be a very turbulent time for global financial markets.

Ignore them at your own peril.

 

Politics, Legislation and Economy News

 

 

By Michael,

What a depressing choice the American people are being presented with this year.  We are at a point in our history where we desperately need a change of direction in the White House, and we are guaranteed that we are not going to get it.  The Democrats are running the worst president in American history, and the Republicans are running a guy who is almost a carbon copy of him.  The fact that about half the country is still supporting Barack Obama shows how incredibly stupid and corrupt the American people have become.  No American should have ever cast a single vote for Barack Obama for any political office under any circumstances.  He should never have even been the assistant superintendent in charge of janitorial supplies, much less the president of the United States.  The truth is that Barack Obama has done such a horrible job that he should immediately resign along with his entire cabinet.  But instead of giving us a clear choice, the Republicans nominated the Republican that was running that was most similar to Barack Obama.  In fact, I don’t think we have ever had two candidates for president that are so similar.  Yes, there are a few minor differences between them, but the truth is that we are heading into Obama’s second term no matter which one of them gets elected.  The mainstream media makes it sound like Obama and Romney are bitter ideological rivals but that is a giant lie.  Yeah, they are slinging lots of mud at each other, but they both play for the same team and the losers are going to be the American people.

Republicans are being told that they have “no choice” but to vote for Romney because otherwise they will get another four years of Obama.

This “lesser of two evils” theme comes out every four years.  We are told that we “must” vote for a horrible candidate because the other guy is even worse.

Well, millions of Americans are getting sick of this routine.  Perhaps that is why it is being projected that as many as 90 million Americans of voting age will not vote this year.

Yes, Barack Obama has been so horrible as president that it is hard to put it into words.

But Mitt Romney would be just like Barack Obama.

Those that are dreaming of a major change in direction if Romney is elected are going to be bitterly, bitterly disappointed.

The following are 40 ways that Barack Obama and Mitt Romney are essentially the same candidate….

1. Barack Obama and Mitt Romney both supported TARP.

2. Mitt Romney supported Barack Obama’s “economic stimulus” packages.

3. Mitt Romney says that Barack Obama’s bailout of the auto industry was actually his idea.

4. Neither candidate supports immediately balancing the federal budget.

5. They both believe in big government and they both have a track record of being big spenders while in office.

6. Barack Obama and Mitt Romney both fully support the Federal Reserve.

7. Barack Obama and Mitt Romney are both on record as saying that the president should not question the “independence” of the Federal Reserve.

8. Barack Obama and Mitt Romney have both said that Federal Reserve Chairman Ben Bernanke did a good job during the last financial crisis.

9. Barack Obama and Mitt Romney both felt that Federal Reserve Chairman Ben Bernanke deserved to be renominated to a second term.

10. Both candidates oppose a full audit of the Federal Reserve.

11. Both candidates are on record as saying that U.S. Treasury Secretary Timothy Geithner has done a good job.

12. Barack Obama and Mitt Romney have both been big promoters of universal health care.

13. Mitt Romney was the one who developed the plan that Obamacare was later based upon.

14. Wall Street absolutely showers both candidates with campaign contributions.

15. Neither candidate wants to eliminate the income tax or the IRS.

16. Both candidates want to keep personal income tax rates at the exact same levels for the vast majority of Americans.

17. Both candidates are “open” to the idea of imposing a Value Added Tax on the American people.

18. Barack Obama and Mitt Romney both believe that the TSA is doing a great job.

19. Barack Obama and Mitt Romney both supported the NDAA.

20. Barack Obama and Mitt Romney both supported the renewal of the Patriot Act.

21. Barack Obama and Mitt Romney both believe that the federal government should be able to indefinitely detain American citizens that are considered to be terrorists.

22. Both candidates believe that American citizens suspected of being terrorists can be killed by the president without a trial.

23. Barack Obama has not closed Guantanamo Bay like he promised to do, and Mitt Romney actually wants to double the number of prisoners held there.

24. Both candidates support the practice of “extraordinary rendition”.

25. They both support the job-killing “free trade” agenda of the global elite.

26. They both accuse each other of shipping jobs out of the country and both of them are right.

27. Both candidates are extremely soft on illegal immigration.

28. Neither candidate has any military experience.  This is the first time that this has happened in a U.S. election since 1944.

29. Both candidates earned a degree from Harvard University.

30. They both believe in the theory of man-made global warming.

31. Mitt Romney has said that he will support a “cap and trade” carbon tax scheme (like the one Barack Obama wants) as long as the entire globe goes along with it.

32. Both candidates have a very long record of supporting strict gun control measures.

33. Both candidates have been pro-abortion most of their careers.  Mitt Romney’s “conversion” to the pro-life cause has been questioned by many.  In fact, Mitt Romney has made millions on Bain Capital’s investment in a company called “Stericycle” that incinerates aborted babies collected from family planning clinics.

34. Barack Obama and Mitt Romney both believe that the Boy Scout ban on openly gay troop leaders is wrong.

35. They both believe that a “two state solution” will bring lasting peace between the Palestinians and Israel.

36. Both candidates have a history of nominating extremely liberal judges.

37. Like Barack Obama, Mitt Romney also plans to add “signing statements” to bills when he signs them into law.

38. They both have a horrible record when it comes to job creation.

39. Both candidates believe that the president has the power to take the country to war without getting the approval of the U.S. Congress.

40. Both candidates plan to continue running up more government debt even though the U.S. government is already 16 trillion dollars in debt.

Ben Bernanke Pummeled by C-Span Callers Who Say Ron Paul is Right

Ron Paul Assaults Ben Bernanke On Parallel Currencies

2012 RON PAUL vs. BEN BERNANKE – 3 Brutal Rounds

Politics and Legislation

Walker signs bill barring workers from collecting damages for employment discrimination

Wisconsin Gov. Scott Walker has signed a bill that prohibits workers from collecting damages in employment discrimination cases.

By: Associated Press report, Associated Press

MADISON — Wisconsin Gov. Scott Walker has signed a bill that prohibits workers from collecting damages in employment discrimination cases.

Under current state law, employees who prevail in discrimination lawsuits can collect between $50,000 and $300,000 in compensatory and punitive damages. The Republican bill blocks anyone from collecting such damages in employment discrimination suits…..

Read Full Article Here

Another health law faces court challenge

By Julian Pecquet

Two weeks after fighting for the survival of its signature healthcare reform law before the Supreme Court, the Obama administration will be back in court Tuesday to defend another part of the president’s agenda to make Americans healthier.

The D.C. Court of Appeals is scheduled to hear oral arguments in a case brought by five tobacco companies challenging regulations requiring graphic warning labels on cigarette packs and advertisements starting in September.

Once again, the administration is finding itself accused of overstepping its constitutional authority, this time on First Amendment grounds.

“The graphic images … were neither designed to protect the consumer from confusion or deception, nor to increase consumer awareness of smoking risks; rather, they were crafted to evoke a strong emotional response calculated to provoke the viewer to quit or never start smoking,” federal Judge Richard Leon, a George W. Bush appointee, ruled in February…..

Read Full Article Here

White House abandons push for federal contractors to disclose political giving

By Mike Lillis

The Obama administration has all but abandoned its push to require federal contractors to disclose their political donations.

A year ago, the White House composed a draft executive order that would have forced potential government contractors to reveal their political spending as a condition of submitting bids. But roughly 12 months later, no final order has been issued, and supporters and critics alike say they’ve seen no signs such a change is forthcoming.

“The executive order can potentially come back after the 2012 elections,” said Craig Holman, lobbyist for Public Citizen, a government watchdog group that has been urging the greater transparency. “But I don’t consider it still being contemplated [now].”

Holman said Obama sent clear signals the issue has been pushed to the back burner in January when the president declined to pitch it in his State of the Union address.

Read Full Article Here

Inside Russia: Putin’s Private National Guard

By Yulia Latynina

Nezavisimaya Gazeta reported that President-elect Vladimir Putin is poised to undertake the most significant reform Russia has seen in recent years by creating a National Guard from scratch. These special forces, numbering up to 400,000 men, would answer directly to the president and would be charged with protecting the country from internal threats.

As a result, Russia would resemble a classic South American or Middle Eastern dictatorship. Take, for example, Syria, where for decades men from the lower classes have had only two career options — a dead-end job with a state company or joining the troops that guard the president. Ironically, Putin is considering adopting such a system even after the entire world witnessed how the Libyan version of this model failed miserably, while the Syrian version of this model is headed toward a similar demise.

The creation of dedicated security units unconnected to the army or the police — like the infamous Tonton Macoutes under former Haitian President Francois “Papa Doc” Duvalier — does not protect citizens from criminals nor external enemies, but protects the leadership from the people. These units are telltale attributes of a dictatorship.

The Putin regime effectively issued a decree granting freedom to the siloviki, as Peter III had granted certain liberties to the nobility. In freeing the hands of the siloviki, they were allowed to extort, steal and even kill. Paradoxically, the government asked for nothing in return, except for the promise to uphold a sort of gentlemen’s agreement: “You are free to rape and pillage as long as you break up anti-government demonstrations.”….

Read Full Article Here

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Economy

Analysts: Gas prices may have peaked

By Andrew Restuccia

Gasoline prices, which have vexed President Obama politically in recent months, may have reached their peak, according to energy analysts.

Prices at the pump reached nearly $3.94 last Friday, the highest point this year, according to AAA. But prices have decreased slightly over the last five days, reversing increases that began in December of last year.

Analysts say prices could continue to decline.

“What this could potentially mean for motorists is that prices could take a bit of a breather or they might fall,” said Patrick DeHaan, senior petroleum analyst at gasbuddy.com.“Traditionally, every spring we see prices rise like this,” DeHaan added. “They tend to peak in late spring.”

Ben Brockwell, director of data and pricing at the Oil Price Information Service, said gasoline prices have decreased more in the last five days than any time during the past year…..

Read Full Article Here

Bernanke says financial stability a work in progress

By Pedro Nicolaci da Costa

STONE MOUNTAIN, Georgia (Reuters) – The U.S. economy has yet to fully recover from the effects of the financial crisis, and regulators must continue to find new ways to strengthen the banking system, Federal Reserve Chairman Ben Bernanke said on Monday.

“The heavy human and economic costs of the crisis underscore the importance of taking all necessary steps to avoid a repeat of the events of the past few years,” Bernanke told a group of economists and finance experts at a conference sponsored by the Federal Reserve Bank of Atlanta.

In a speech that did not touch directly on the outlook for economic growth or monetary policy, Bernanke focused on the lingering blind spots for financial authorities trying to prevent a repeat of the 2008-2009 meltdown…..

Read Full Article Here

IRS confident courts will uphold effort to license tax preparers

By Bernie Becker

The IRS is confident that its initiatives to increase regulation of tax preparers will be found legal, despite challenges from opponents.

With a libertarian group filing a lawsuit saying the agency is in the midst of a power-grab, Doug Shulman, the IRS commissioner, said last week that new requirements would help smoke out unscrupulous preparers and were being implemented with care.

“I’m very confident not only is everything we’re doing going to be seen as legal, but more importantly, everything we’re doing, I think, is going to benefit the American people,” Shulman said at the National Press Club on Thursday.

Under the IRS regulations, certain preparers have to pass a new competency test and complete 15 hours of education requirements a year.

According to the most recent figures, roughly 60 percent of taxpayers were using paid preparers.

But while it often takes a government license to cut hair, Shulman said that, before recent IRS efforts, there weren’t basic competency requirements for tax return preparers — even as government reports found some preparers making significant errors.

“I’m the IRS commissioner, so I’m biased that taxes are more important than how your hair looks,” Shulman said Thursday. “I know other people view that differently…..

Read Full Article Here

Want Jobs? Rescue Homeowners – and Spend, Baby, Spend

Richard (RJ) Eskow, Op-Ed:

Another way to get the economy moving is to get financial relief to people who have been financially struggling and have put off needed spending – on vehicles, home improvements, and the like – as well as reasonable amenities. Homeowners owe $800 billion in “negative equity” to banks for non-existent real estate value. That’s an “invisible bailout” funded by the struggling middle class, and delivered by borrowers who were frequently hoodwinked into taking out a mortgage at inflated prices.

Read Full Article Here

Ogaki Kyoritsu Bank To Introduce Japan’s 1st Card-Free ATMs

NIKKEI.com

TOKYO (Nikkei)–Ogaki Kyoritsu Bank (8361) said Wednesday it will in September introduce Japan’s first ATMs that will enable customers to conduct cash withdrawals and other transactions by simply placing their palms over a reader, obviating the need for a card or bank book.

Although ATMs equipped with biometric authentication sensors already exist, those machines still require customers to use cash cards or bank books to withdraw funds….

Read Full Article Here

On-call employment: Good for business, bad for workers

A department store employee wheels out a rack of clothing.

Matt York/The Associated Press

Retail turning to call-in shifts means smaller paychecks and less stability for workers

By Joe Eaton

Like generations of college students, Caprice Taylor needed a job to help pay her school and living expenses. For the 24-year-old student of fashion merchandise management at the Fashion Institute of Technology in New York City, sales work at a retail clothing shop seemed like a good option.

Taylor was hired last year at Club Monaco, a high-end clothing and apparel retailer owned by Polo Ralph Lauren. But her scheduled shifts at the Manhattan store were not guaranteed. Instead, she was given call-in shifts, which required her to call the store two hours before she was scheduled to arrive to see if she was needed.

Most often, she was not.

For months, Taylor said, she arranged her personal life around work days, waiting in her apartment, only to call in and learn the store wasn’t busy enough. On some weeks, Taylor logged as few as six hours, not earning enough to keep up with her living expenses.

“It puts your day on complete hold,” Taylor said. “It pressures you.”

After four months of unpredictable paychecks, Taylor quit. She later found work at a Polo Ralph Lauren store that does not have on-call shifts. She was lucky to find it. Retail watchers say big-box stores and shopping-mall stalwarts are increasingly hiring workers for on-call shifts, a trend that cuts labor costs for employers, but leaves workers like Taylor struggling to get by…..

Read Full Article Here

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Wars and Rumors of War

Bahrain: The Key to Saudi-Qatari Servitude

Neo-Con’s pet project in Bahrain serves as point of leverage for Saudi-Qatari capitulation.

Tony Cartalucci
BlacklistedNews.com

Like an axe poised above one’s neck at execution, the despotic hereditary regimes of Saudi Arabia and Qatar have the specter of their own US-fueled “Arab Springs” looming over them, ever ready to be triggered. A constant reminder of this is the destabilized Sunni royal family in Bahrain, in the epicenter of Saudi and Qatari power.

Bahrain: The Key to Saudi Qatari Servitude SunniDestabilization

Image: A map of eastern Saudi Arabia featuring the island nation of Bahrain situated between Qatar and the Saudi mainland. Bahrain, like Saudi Arabia and Qatar, is a despotic Sunni monarchy – selected by the West to be made an example of and to keep its neighbors in check and on board for the current “Arab Spring” blitzkrieg upturning the rest of the Arab World. (click image to enlarge)

….

The Bahrain protests, like those of Egypt, Libya, Syria, Myanmar, North Korea, Thailand, and beyond, were trained, equipped, and supported by the US State Department. Leading opposition organizations, such as the US-basedWitness Bahrain” and Bahrain Center for Human Rights, are partnered directly with US State Department-funded fronts like theInternational Federation for Human Rights (FIDH) while a high-profile self-proclaimed leader of the protests, Abdulhadi al-Khawaja, was regional coordinator of “Frontline Defenders,” a Ford Foundation, Freedom House, American Jewish World Service, Soros Open Society Institute-funded “human rights” advocacy group. Al-Khawaja is now carrying out a “hunger strike” while in prison…..

Read Full Article Here

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Articles of Interest

Special report: Rendition ordeal that raises new questions about secret trials

In 2004, Fatima Bouchar and her husband, Abdel Hakim Belhaj, were detained en route to the UK, and rendered to Libya. This is the story of their imprisonment, and the trail of evidence that reveals the involvement of the British government

Ian Cobain
guardian.co.uk

Just when Fatima Bouchar thought it couldn’t get any worse, the Americans forced her to lie on a stretcher and began wrapping tape around her feet. They moved upwards, she says, along her legs, winding the tape around and around, binding her to the stretcher. They taped her stomach, her arms and then her chest. She was bound tight, unable to move.

Bouchar says there were three Americans: two tall, thin men and an equally tall woman. Mostly they were silent. She never saw their faces: they dressed in black and always wore black balaclavas. Bouchar was terrified. They didn’t stop at her chest – she says they also wound the tape around her head, covering her eyes. Then they put a hood and earmuffs on her. She was unable to move, to hear or to see. “My left eye was closed when the tape was applied,” she says, speaking about her ordeal for the first time. “But my right eye was open, and it stayed open throughout the journey. It was agony.” The journey would last around 17 hours.

Bouchar, then aged 30, had become a victim of the process known as extraordinary rendition. She and her husband, Abdel Hakim Belhaj, a Libyan Islamist militant fighting Muammar Gaddafi, had been abducted in Bangkok and were being flown to one of Gaddafi’s prisons in Libya, a country where she had never before set foot. However, Bouchar’s case is different from the countless other renditions that the world has learned about over the past few years, and not just because she was one of the few female victims.

Documents discovered in Tripoli show that the operation was initiated by British intelligence officers, rather than the masked Americans or their superiors in the US. There is also some evidence that the operation may have been linked to a second British-initiated operation, which saw two men detained in Iraq and rendered to Afghanistan. Furthermore, the timing of the operation, and the questions that Bouchar’s husband and a second rendition victim say were subsequently put to them under torture, raise disturbing new questions about the secret court system that considers immigration appeals in terrorist cases in the UK – a system that the government has pledged to extend to civil trials in which the government itself is the defendant.

Read Full Article Here

Navy simulates jet crash in Va. Beach

Leanna Caplan

VIRGINIA BEACH, Va. (WAVY) – On Thursday, the Navy simulated a jet crash near Old Pungo Ferry Road in Virginia Beach.

The drill was organized to train Virginia Beach and Chesapeake first responders. The scenario: A navy jet is unable to make the return trip to Oceana and has crashed near Back Bay in Virginia Beach.

The goal was to develop and exercise coordination efforts between the two cities and the Navy’s first responders, according to a news release from NAS Oceana.

CAPT James Webb, the CO of NAS Oceana, said, “We’re totally relying on all the cooperation. The first responders have to come from the surrounding community.”

The drill included numerous emergency services personnel and vehicles responding to the Navy’s fire trainer, which was placed in the parking lot of the old Capt. George’s restaurant.

“There are specific responder issues in dealing with aircraft that they wouldn’t normally face,” NAS Oceana Dist. Fire Chief Kenneth Snyder said.

Like unexploded ordinance and extremely flammable composite materials.

NAS Oceana personnel practice at least annually for the potential of a military aircraft crash, and the drill often involves the city’s first responders, but this is the first time a drill will involve both Chesapeake and Virginia Beach.

http://www.fox43tv.com/video/videoplayer.swf?dppversion=18327

Navy simulates jet crash in Va. Beach: fox43tv.com

Navy held recent drill to prepare for ‘exact’ events of Va. crash

April 6, 2012 by legitgov

Holy coincidence, Batman! Navy held recent drill to prepare for ‘exact’ events of Va. crash 06 Apr 2012 The US Navy held a drill on 15 December to prepare for the ‘exact’ situation that took place Friday, regarding the F/A-18 Navy jet crash. (No link, Fox News, 7PM ET live broadcast)

Navy jet has ‘catastrophic mechanical malfunction,’ hits apartments in Virginia

From Michael Martinez and Barbara Starr, CNN

CNN affiliates WTKR, WAVY and WVEC have more on the story.

(CNN) — A Navy fighter jet experienced a “catastrophic mechanical malfunction” during takeoff Friday over the military community of Virginia Beach, Virginia, and rained a stench of jet fuel shortly before crashing into apartment buildings, according to residents and Navy officials.

The jet carried a student pilot in the front seat and an experienced instructor behind him, and the dumping of jet fuel was “one of the indications that there was a mechanical malfunction,” Navy Capt. Mark Weisgerber told reporters.

The malfunction is being investigated, he said.

The two pilots, a Virginia Beach police officer, an EMS volunteer and three other people were treated at Sentara Virginia Beach General Hospital. One of the pilots was admitted, while the other six patients were released, the hospital’s website said.

Both pilots, who live in Virginia Beach, are “doing well and they suffered minor injuries,” Weisgerber said.

As of Friday night, three people from one of five apartment buildings heavily damaged in the crash were unaccounted for, down from 30, Virginia Beach Fire Department Battalion Chief Tim Riley said.

No one has been reported missing to authorities, but rescue crews are using a checklist of all occupants in the five buildings in an effort to account for all residents, Riley said.
Witnesses describe horror of jet crash

Rescue crews did an initial search of the five buildings, and as of Friday night, completed 95% of a secondary search, Riley said.
Witness: Pilot apologized for jet crash

“If there is anybody there, chances of survivability would be low,” Riley told reporters, referring to any survivors in the five buildings.
Witness: I saw flames under the plane

No deaths were reported as of Friday night, Riley said…..

Read Full Article Here

Florida toll booths caught acting like TSA and DHS

Uploaded by on Mar 7, 2011

Pay with a big bill and you will get the third degree- how did you get this money? do you have a bank statement-are you a terrorist? What you have a job- arrest him quick!!!

North Korea suffers major blow as rocket crashes

By Ju-min Park

(Reuters) – North Korea’s much hyped long-range rocket apparently crashed into the sea a few minutes after launch on Friday, U.S. and South Korean officials said, dealing a blow to the prestige of the reclusive and impoverished state as well as to its new leader.

Pyongyang had defied international pressure from the United States, the United Nations and others to push ahead with the launch timed to celebrate the 100th birthday of Kim Il-sung, the deceased founder of the state.

Even close ally China had warned against the launch and South Korean intelligence officials have said North Korea may be ready to follow it up with a third nuclear test as it did after a rocket launch in 2009.

“South Korean and U.S. intelligence understand that North Korea’s missile launch failed,” a spokesman for the South’s defense ministry told reporters at a briefing.

North Korea said it wanted the Unha-3 rocket to put a weather satellite into orbit, although critics believed it was designed to enhance its capacity to design a ballistic missile to deliver a nuclear warhead capable of hitting the continental United States.

The rocket crashed in a sea that separates the Korean peninsula from China off the west coast of South Korea after flying 120 km (75 miles) from its launch site close to the Chinese border, officials in Seoul, Washington and Tokyo said…..

Read Full Article Here

Rep. Mica: GSA officials spent week in Hawaii for one-hour ribbon cutting

By Pete Kasperowic

Rep. John Mica (R-Fla.) said Wednesday that the ongoing probe into the wasteful spending habits of the General Services Administration (GSA) has uncovered that several GSA officials were flown to Hawaii for a week to attend a one-hour ribbon cutting ceremony.

The announcement from the House Transportation & Infrastructure Committee Chairma is the latest in a slow drip of news on GSA’s activities that will culminate in two explosive hearings next week. One of Mica’s subcommittees will hold a hearing Tuesday, and the House Oversight & Government Reform Committee will grill current and former GSA officials on Monday.

Most of the anger from lawmakers has focused on a 2010 junket to Las Vegas that cost more than $800,000, as well as bonuses and expensive gifts given to GSA employees. But Mica said the Hawaii trip is a new low….

Read Full Article Here

[In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit, for research and/or educational purposes. This constitutes ‘FAIR USE’ of any such copyrighted material.]

Politics and Legislation

World Bank Nominee Tied to Monsanto Shareholder Bill Gates, Soros

By Tim McCoy
BlacklistedNews.com

Obama has nominated Dartmouth University president Jim Yong Kim, M.D. to head the United Nations World Bank. Most people think that UN agencies benefit poor people, but this is far from the truth.

The UN World Bank claims to fight poverty in developing nations by financing infrastructure projects. But the UN World Bank is really a tool used to acquire Third World natural resources through conditions on loans that are extremely difficult to repay. The raw resources are then privatized by insider multi-national corporations. The World Bank actually creates more poverty.

The nomination of Jim Yong Kim indicates that the World Bank may shift away from focusing on infrastructure and will instead turn toward providing healthcare in Third World countries. Jim Yong Kim’s areas of interest include vaccines for tuberculosis as well as drugs for HIV and AIDS……

Read Full Article Here

http://www.blacklistednews.com/World_Bank_Nominee_Tied_to_Monsanto_Shareholder_Bill_Gates%2C_Soros_/18683/0/0/0/Y/M.html

Barack Obama: I Have A “Moral Obligation” To Neuter America

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     The Author’s title not mine.  Used here because aside from the title it has some valid points

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Barack Obama actually plans to do it. He actually plans to neuter America by unilaterally dismantling most of the U.S. strategic nuclear arsenal. In fact, Barack Obama says that the United States has a “moral obligation” to disarm as we lead the way to “a world without nuclear weapons”. Sadly, a “world without nuclear weapons” is a fantasy that will not be possible any time soon. Nuclear weapons technology is getting into more hands with each passing year, and geopolitical tensions are rising all over the globe. If the United States did not have nuclear weapons, anyone with just a handful of nukes would constitute a massive threat to our national security. An overwhelming strategic nuclear arsenal helps keep us safe because every other nation on the planet knows that it would be national suicide to attack us. If you take that overwhelming strategic nuclear arsenal away, the entire calculation changes.

Many out there claim that even if the U.S. only has a few hundred nuclear warheads that it will be more than enough to be an effective deterrent.

Sadly, that simply is not true.

If an enemy knows that we only have a few hundred warheads, and if they know exactly where those warheads are located for verification purposes, then a first strike which would take out the vast majority of our operational warheads becomes very plausible.

That is why what Obama wants to do is so incredibly dangerous. If he reduces our strategic nuclear arsenal down to almost nothing, the odds of a nuclear first strike against the United States someday go up dramatically.

The following is what Fox News reported that Obama said during a speech in South Korea the other day….

“American leadership has been essential to progress in a second area — taking concrete steps towards a world without nuclear weapons,” Obama said yesterday during a speech in Korea. “I believe the United States has a unique responsibility to act — indeed, we have a moral obligation.”……….

http://endoftheamericandream.com/archives/barack-obama-it-is-a-moral-obligation-to-neuter-america

House approves 90-day highway bill, dares Senate to reject it

By Pete Kasperowicz

The House on Thursday morning approved a 90-day extension of federal highway programs over the objections of angry Democrats, a move that dares Senate Democrats to reject the bill just days before federal authorization expires.

The House approved its bill, H.R. 4281, in a 266-158 vote that saw 37 Democrats join all but 10 Republicans in passing it — a fair amount of bipartisanship given the bitter partisan debate heard in the House throughout much of the week.

With the House vote, the Senate must now decide whether to accept the bill, insist on changes, or continue to push for House passage of the Senate-approved two-year extension. That last option, however, appears to be more difficult, as the House plans to go out of session at the end of Thursday.

http://thehill.com/blogs/floor-action/house/219025-house-approves-90-day-highway-bill-dares-senate-to-reject-it

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Economy

Bernanke Claims That The Fed Has Averted A Second Great Depression By Bailing Out The Too Big To Fail Banks

Federal Reserve Chairman Ben Bernanke claims that the Federal Reserve averted a second Great Depression by bailing out the big Wall Street banks during the last financial crisis, and he says that if a similar financial crisis comes along that the correct “policy response” will be to do the exact same thing again. This was the theme of the lecture that Bernanke delivered to students at George Washington University on Tuesday. In previous lectures Bernanke has defended the existence of the Fed and detailed the history of Fed activities, but on Tuesday he addressed things that have happened since he has been at the helm of the Fed. And according to Bernanke, he has been doing a great job. Bernanke told the students that the “threat of a second Great Depression was very real” and that the Federal Reserve did exactly what needed to be done to fix the financial system. Unfortunately, the truth is that all Bernanke did was kick the can a bit farther down the road. You can’t fix a debt problem with more debt, and the debt bubble we are living in today is far larger than it was in 2008. Will Bernanke still be trying to portray himself as a hero when this house of cards finally falls apart?……

http://theeconomiccollapseblog.com/archives/bernanke-claims-that-the-fed-has-averted-a-second-great-depression-by-bailing-out-the-too-big-to-fail-banks

Senate again blocks Dem bid to nix ‘Big Oil’ tax breaks

By Ben Geman and Andrew Restuccia

The Senate on Thursday thwarted Democratic plans to strip billions of dollars in tax breaks from the largest oil companies, a vote that represented the latest skirmish in the election-year war over gasoline prices.

Lawmakers voted 51-47 to block Sen. Robert Menendez’s (D-N.J.) bill. Sixty votes were needed to advance the measure.

The vote occurred shortly after President Obama – seeking to cast Republicans as allies of big oil companies – used a Rose Garden speech to urge lawmakers to back the plan.

http://thehill.com/blogs/e2-wire/e2-wire/219015-draft-draft-senate-again-blocks-dems-bid-to-nix-big-oil-tax-breaks

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Wars and Rumors of War

Arabic broadcaster Al-Jazeera backs down over showing disturbing footage filmed by Toulouse gunman after pleas from Sarkozy

Memory stick with video montage was sent to Arabic TV office the day before Mohammed Merah was shot dead
Le Parisien newspaper had also seen footage sent by man who murdered seven people in three separate attacks

By Peter Allen

Arabic TV network Al-Jazeera has said it will not air disturbing footage of the Toulouse shootings after the video was sent to its office in Paris.

It appeared to have been recorded during Mohammed Merah’s deadly attacks on soldiers and a Jewish school earlier this month.

The station’s decision not to broadcast the video, which was sent on a USB memory stick along with a letter, came after French president Nicolas Sarkozy and family of the victims had asked for it not to be shown.

The video has been edited into a ‘montage’ accompanied by an Islamic war songs, and was sent in a package post-dated March 21 – the day before 23-year-old Merah was killed by French special forces in his home city.

http://www.dailymail.co.uk/news/article-2120909/Disturbing-video-footage-filmed-Toulouse-gunman-killed-victims-emerges.html#ixzz1qY0bLTDY

Rand Paul blocks Iran sanctions bill

Invokes The Constitution In Iran Sanctions Debate

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Environmental

Well from hell: Gas rig abandoned in North Sea after massive leak

Huge clouds of natural gas have forced the evacuation of several oil rigs in the area amid fears of an explosion

A desperate battle to plug an enormous gas leak in the North Sea is being waged tonight.

Huge clouds of natural gas have forced the evacuation of several oil rigs in the area amid fears of an explosion.

And workers warned there was a “clear and present danger” of a major gas blast.

A two-mile exclusion zone for shipping and three miles for aircraft have already been set up around Total’s Elgin platform, which has been leaking since Sunday.

Specialist engineers from Texas who tackled the devastating BP oil spill in the Gulf of Mexico in 2010 have been flown in by the company to help stop the leak.

Safety boss David Hainsworth said: “We are mobilising experts from Houston and France to help us deal with this.”

But the Elgin platform – 150 miles off the coast of Aberdeen – has been dubbed “the well from hell” because of the particularly high pressure of the gas.

Wullie Wallace, of union Unite, said: “The incident cannot be underestimated in its seriousness. There is still a clear and present danger to our members.”……

http://www.mirror.co.uk/news/uk-news/gas-rig-abandoned-in-north-sea-774258

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Radiation

1 of Japan’s damaged reactors has high radiation, no water, renewing doubts about stability

By Associated Press,

TOKYO — One of Japan’s crippled nuclear reactors still has fatally high radiation levels and hardly any water to cool it, according to an internal examination Tuesday that renews doubts about the plant’s stability.

A tool equipped with a tiny video camera, a thermometer, a dosimeter and a water gauge was used to assess damage inside the No. 2 reactor’s containment chamber for the second time since the tsunami swept into the Fukushima Dai-ichi plant a year ago. The probe done in January failed to find the water surface and provided only images showing steam, unidentified parts and rusty metal surfaces scarred by exposure to radiation, heat and humidity.

http://www.washingtonpost.com/world/asia_pacific/new-probe-at-japans-crippled-nuke-plant-finds-fatally-high-radiation-little-water-in-reactor/2012/03/27/gIQA83d0dS_story.html

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Articles of Interest

John Pilger – The New rulers of The World

Suit: NYPD conducting illegal stops in private buildings

By Andrew Jones

The New York Civil Liberties Union (NYCLU) filed a lawsuit against the New York City Police Department (NYPD) Wednesday, alleging that in addition to stopping primarily black and Latino residents in public spaces as part of the NYPD’s stop-and-frisk program, officers are illegally searching people in private buildings.

According to a press release, the NYCLU filed the lawsuit on behalf of residents whose buildings are apart of “Operation Clean Halls,” an agreement by the NYPD and a landlord that grants officers permission to patrol inside a building at any time.

NYCLU Executive Director Donna Lieberman cited how minorities have been largely affected by the NYPD’s program…..

http://www.rawstory.com/rs/2012/03/28/suit-nypd-conducting-illegal-stops-in-private-buildings/