February 28, 2009

RFID, GPS Technology and Electronic Surveillance

Fight Against Terror Must Mean the End of Ordinary People’s Privacy, Says Ex-Security Chief

February 25, 2009

Mail Online - Personal data of innocent citizens must be made available to the Government to combat terrorism, according to an influential former security chief. Sir David Omand, Whitehall’s former and security and intelligence coordinator, called for unprecedented Big Brother powers to allow access to private details - including phone records, emails and travel information - to be given to the intelligence services.

Setting out a hugely controversial blueprint for the future of national security he said ‘moral rules’ about individual privacy would have to be broken. His 17-page report calls for the creation of a vast state database to gather information about terrorist groups which are increasingly recruiting and operating online. But he argued that a citizen’s right to privacy would have to be sacrificed to allow ‘intrusive’ intelligence techniques...

Speak Out Against National Animal Identification System (NAIS)

February 18, 2009

Mother Earth News - Animal owners, consumers and taxpayers: NAIS ALERT! Protect your right to farm and to eat local food. Speak out against the National Animal Identification System!

The USDA has proposed a rule to require all farms and ranches where animals are raised to be registered in a federal database under the National Animal Identification System (NAIS) for existing disease control programs. The draft rule covers programs for cattle, sheep, goats and swine. It also sets the stage for the entire NAIS program to be mandated for everyone, including anyone who owns even one livestock animal (for example, a single chicken or a horse). Learn more about the legislation in The Truth About the Animal ID Plan.

It’s critical that the USDA and Congress hear from the hundreds of thousands of people who will be adversely affected by the NAIS program. This includes not only animal owners, but also consumers who care about local and sustainable foods, taxpayers who object to wasteful government programs, and advocates for a safer food system...

Symposium Planned to Discuss Implementation of Nationwide Mileage-Based Taxing System

February 18, 2009

JustGetThere - Public officials from several states are gathering in Austin, Texas this April for a symposium to discuss the implementation of a nationwide, mileage-based taxing system to replace the gas tax... The technology that will be used is a RFID embedded sticker and GPS satellite boxes installed in all vehicles and gas stations...

BBC Shills for Cashless Society

February 16, 2009

BBC News - Consumers in the UK should expect a revolution in the way they pay for things in the near future, according to payments association Apacs. The cheque, which is 350 years old on 16 February, is said to be in irreversible decline as innovation points towards a cashless society. Banks will increasingly battle for a consumer to use one card exclusively.

But as consumers prepare to pay and access accounts using their mobiles, retailers are worried costs will rise. By 2015, the number of payments made by cash in the UK will be overtaken for the first time by other ways of paying, according to Apacs. At the end of this year, three million Barclays customers will be able to press their debit card to a sensor in more than 8,000 UK shops to register a payment.

Meanwhile, the UK could mirror technology already used in East Asia where the chip now found in a plastic card is placed in an everyday item such as a mobile phone or a watch. This is then pushed against a sensor in a shop to pay, and is known as “contactless” technology...

Banking Crisis: Money-Spinning Scam for the Financial Giants

G7 Finance Ministers Reject Protectionist Measures

February 14, 2009

AP – Rejecting protectionism, the Group of Seven finance ministers pledged Saturday to work together to support growth and employment and to strengthen the banking system so the world can overcome its worst financial crisis in 50 years. But the bad news continues. The final statement on their two-day meeting in Rome also predicts a gloomy forecast, with the severe economic downturn continuing through most of 2009.

"The stabilization of the global economy and financial markets remains our highest priority," the statement said, noting that the world's seven most industrialized countries have "collectively taken exceptional measures" to address the challenges.

The statement endorses the U.S. and British approach to fixing the banking system by recapitalizing banks. The ministers also said a way must be found to deal with the banks' toxic assets, however no prescription was laid out.

The meeting marked the international debut of new U.S Treasury Secretary Timothy Geithner, who conferred with Federal Reserve Chairman Ben Bernanke as the session began Saturday at the Italian Finance Ministry.

Geithner smiled at cameras, but declined to respond, when asked if any progress was being made...

Despite Federal Aid, Many Banks Fail to Revive Lending

February 3, 2009

Washington Post - The federal government has invested almost $200 billion in U.S. banks over the last three months to spark new lending to consumers and businesses. So far, it hasn't worked. Lending has declined, and banks that got government money on average have reduced lending more sharply than banks that didn't.

Consider the case of Bethesda's EagleBank, which received $38.2 million from the Treasury Department in early December. The company, which focuses on lending to local businesses, was delighted to get the money, executives said. Its nine-member board convened an impromptu conference call during the week of Thanksgiving to approve the deal. But EagleBank used roughly half the money to digest the acquisition of Fidelity & Trust Bank, a Bethesda rival with financial problems. And it has struggled to use the rest to increase lending...

Just a Band-Aid on the Foreclosure Problem?

February 3, 2009

Washington Post - Jeanine Wilson continues to struggle despite modifications to the mortgage on her Upper Marlboro home. Her first modification, in May, increased her payments by $200 a month after her lender attached late fees and the missed payments. The second modification came after she was laid off as a social worker for the District government. Her interest rate was reduced, but though she was holding two new jobs, she still continued to miss payments, she said.

"They just kept saying they were in the business of making money, not in the business of helping you save your home -- either you pay it or you don't pay it," Wilson said.

In a recent study, Alan M. White, an assistant law professor at Valparaiso University, found that even with housing prices dropping rapidly, lenders have been reluctant to lower the borrower's principal. Instead, the average modification adds $10,000 to the principal owed by the homeowner, he found...

Banks Still Lending at Many Times Earnings

January 30, 2009

Financial Times - UK banks have become more cautious in the way they make new mortgage loans, but not nearly as cautious as might be expected given the slump in house prices and the deepening recession, official data have revealed.

The Financial Services Authority, the bank’s regulator, recently published detailed statistics on mortgage lending for the quarter ending September 2008, showing that banks were still willing to make loans that were many times borrowers’ incomes.

The percentage of loans granted on high income multiples – defined as 3.5 times income for a single borrower or 2.75 times income for joint borrowers – was just less than 44 per cent in the third quarter, virtually unchanged from 18 months ago before the credit crunch.

The data also show that lenders made little headway in helping borrowers who have fallen behind on payments to avoid repossession, in spite of being urged to do so by the government...

Wall Street Paid $18 Billion in Employee Bonuses Last Year

January 29, 2009

AP - President Barack Obama issued a withering critique Thursday of Wall Street corporate behavior, calling it "the height of irresponsibility" for Wall Street employees to be paid more than $18 billion in bonuses last year while their financial sector was crumbling. "It is shameful," Obama said from the Oval Office. "And part of what we're going to need is for the folks on Wall Street who are asking for help to show some restraint, and show some discipline, and show some sense of responsibility."

The president's comments, made with new Treasury Secretary Timothy Geithner at his side, came in swift response to a report that employees of the New York financial world garnered an estimated $18.4 billion in bonuses last year. The figure, from the New York state comptroller, drew prominent news coverage...

Banks That have Said 'No Thanks' to U.S. Bailout

January 29, 2009

AP - The following banks have announced they no longer planned to participate in the government-sponsored bank bailout program:

• American River Bankshares, of Rancho Cordova, Calif., said it would not accept $6 million
• Chemical Financial Corp., of Midland, Mich., said it will not accept $84 million
• California United Bank, of Encino, Calif., said it will not accept $8.4 million
• Dime Community Bancshares Inc., of Brooklyn, N.Y., said it will not accept $77.3 million
• Dearborn Bancorp Inc., of Dearborn, Mich., withdrew its application for $29 million
• Eagle Financial Services, Inc., of Berryville, Va., said it will not accept $10 million
• First Capital Inc., of Corydon, Ind., said it would not accept bailout money
• Friendly Hills Bank, of Whittier, Calif., said it would not accept $1.6 million
• Glacier Bancorp Inc., of Kalispell, Mont., said it would not accept bailout money
• Legacy Bancorp Inc., of Pittsfield, Mass., said it would not accept $20 million
• Liberty Bancorp Inc., of Liberty, Mo., said it would not accept $8.5 million
• Mechanics Bank, of Richmond, Calif., said it withdrew its application for $60 million
• NBT Bancorp Inc., of Norwich, N.Y., said it would not accept bailout money
• New York Community Bancorp Inc., of Westbury, N.Y., said it would not accept $596 million
• OptimumBank Holdings Inc., of Fort Lauderdale, Fla., said it would not accept $4.6 million
• Pamrapo Bancorp Inc., of Bayonne, N.J., withdrew its application for $11 million
• Pacific Continental Corp., of Eugene, Ore., said it would not accept $30 million
• Smithtown Bancorp, of Hauppauge, N.Y., said it would not accept $37.8 million
• S.Y. Bancorp Inc., of Louisville, Ky., said it would not accept $43 million
• Tompkins Financial Corp., of Ithaca, N.Y., said it would not accept $15 million

Bank Bailout Could Cost $4 Trillion

January 27, 2009

Fortune - The cost of the bank bailout is likely to be much higher than $700 billion.

While the Obama administration hasn't asked Congress for more money yet, some experts warn that government spending on support for struggling financial services companies will ultimately reach into the trillions of dollars.

The first half of the controversial $700 billion program to help banks has already been spent - mostly on buying up preferred shares of troubled banks. Part of the remaining $350 billion may be used to purchase troubled assets from bank balance sheets and place them in what Federal Deposit Insurance Corp. chief Sheila Bair has dubbed an "aggregator bank."

And while taxpayers will surely recover some of that sum eventually, more money is likely to be needed in order for the bank rescue to work. "The amount of working capital you'd expect the government to take into this would be around $3 trillion to $4 trillion," said Simon Johnson, a senior fellow at the Peterson Institute for International Economics and author of its Baseline Scenario financial crisis blog...

Democrats Open to Additional Taxpayer Money for Banks

January 25, 2009

AP - The White House warned Sunday that the country could face a long and painful financial recovery, even with major government intervention to stimulate the economy and save financial institutions. "We're off and running, but it's going to get worse before it gets better," said Vice President Joe Biden, taking the lead on a theme echoed by other Democratic officials on the Sunday talk shows.

At the end of the Obama administration's first week, the party in power at both ends of Pennsylvania Avenue sought to lower expectations for a quick fix despite legislation expected to pass by next month that would pump billions of dollars into the economy. Democrats also opened the door for even more government aid to struggling banks beyond the $700 billion bailout already in the pipeline.

Congress has given President Barack Obama permission to spend the second $350 billion of a Wall Street bailout package even though lawmakers have criticized the Bush administration for the way it spent the first half. House Speaker Nancy Pelosi, D-Calif., said she is open to additional government rescue money for banks and financial institutions. But she said taxpayers must get an ownership stake in return...

Vehicle Mileage Tax

Obama Administration Considering Taxing Vehicles By Miles Traveled

February 21, 2009

ScienceBlogs.com - We should make gas taxes part of a car's purchase price. It would certainly beat Transportation Secretary LaHood's proposal of a vehicle mileage tax (and is there any stupid idea that Republicans won't embrace?):

Some surprising news out of the Department of Transportation today as Ray LaHood suggests that the Obama administration is considering taxing people based on how many miles they drive. A vehicle miles traveled tax, as the proposal is often called, has been under consideration in states like Rhode Island and Idaho and has, not surprisingly, proven pretty unpopular.

First, it's a tax. Second, it requires the installation of a GPS chip to record miles driven and beam the information to centralized computers. Sorry, did that sound Orwellian? I meant a small transponder that informs the government of your driving habits.

Crap. This is hard to sell.

In the interview with the Associated Press, LaHood set the vehicle-miles traveled (vmt) in opposition to a gasoline tax, which he "firmly opposes," at least during the current recession.

Ezra Klein thinks this might be better than the gasoline tax, however:

There's some logic to that. Gasoline is a very visible, and very unpredictable, cost. Every summer, particularly in recent years, the price of fuel becomes a tier one political issue, in large part because it rises so much from the winter. It's hard to imagine a gasoline tax being sustained. Vehicle miles traveled, by contrast, is both steadier and less visible.

Massachusetts Gov. Wants to Track Cars on State Roads with GPS Units in Each Car

February 17, 2009

boingboing.net - SamSam says: "Gov. Deval Patrick wants to charge drivers by how much they drive on state roads, and at what times. How is he planning on doing this? By adding GPS units to cars, giving at least some state employees the ability to track cars where ever they go."

"It's outrageous, it's kind of Orwellian, Big Brotherish," said Sen. Scott Brown, R-Wrentham, who drafted legislation last week to prohibit the practice. "You'd need a whole new department of cronies just to keep track of it."

Taxing the Miles You Drive - GPS to Track and Record All Vehicles?

February 2, 2009

Associated Content - Gas prices were too high and we weren't green enough. Fine, buy an electric car or gas saving car and all is fine. Right? Wrong. The Oregon Governor thinks gas taxes are going away. His answer? Tax the miles you drive with GPS technology. Think they are kidding? They're not.

The Oregon governor believes taxing every mile you drive is fair for all. Really? What if your job requires you to be on the road? What if you live in rural areas and have to travel to a job or to get groceries? You too will pay the tax for the miles you drive. GPS, remember when you thought it was a cool idea?

Not only will the miles you drive be taxed, but also the congestion time at which you drive. If you put your car on the road at congested times of traffic you will be taxed a bit more.

How will this GPS work to track you? How will anyone know when or how many miles you drive? The gas pump is going to tell them! When you fill up with gas, the gas pump will read your car's GPS. It will tell them how many miles you have driven since you last filled. It will also tell them where (what roads) you drove and at what time you drove on them.

Remember when smokers begged for people to be a little understanding? Remember when smokers warned that there would be a tax that ALL people would have to pay on something they held dear? Well, I think the GPS tax for tracking and taxing every mile you drive just may fit that bill.

This tax, like the cigarette smokers tax, will have devastating consequences on the poor and middle income people. With a tax on every mile we drive, not to mention tracking information on every mile we drive, are we seeing the "hope" and "change" that Obama and the democrats were talking about?

Car manufacturers plan to outfit every vehicle with a GPS unit. I assume they will make the rest of us install one like the TV boxes. Taxes, taxes, taxes. Start adding them up people. Your paychecks will not stretch that far.

A tax on every mile you drive. GPS tracking and recording every mile you drive. There ought to be a law.

February 27, 2009

The Final Push for World Government

Germany to Station Troops in France for First Time Since WWII

Spiegel Online
February 2, 2009

Germany will station troops in France as part their joint crisis reaction force, Angela Merkel and Nicholas Sarkozy have said. In a joint opinion piece published ahead of the Munich Security Conference on Friday, the two leaders call for greater European and world cooperation on security.

The leaders of Germany and France urged greater European and trans-Atlantic unity on global security on Wednesday and underscored their call by announcing that German troops will be stationed in France as part of the joint Franco-German Brigade, a rapid reaction force.
"Anyone who knows our common history will be aware of the historical significance of this new step in the Franco-German friendship," German Chancellor Angela Merkel and French President Nicholas Sarkozy said in a joint opinion piece published on Wednesday in Germany's Süddeutsche Zeitung and France's Le Monde.
SPIEGEL reported last month that a German army battalion of 500 troops would be stationed in the town of Colmar in France's Alsace region. French media have reported Strasbourg, Metz or Bitche as possible locations.

It will be the first stationing of German troops in France since World War II. The Franco-German brigade was set up in 1989 and has around 5,000 troops that, until now, have been stationed at seven locations in Germany. It has served in Afghanistan and in the Balkans.

Merkel and Sarkozy said international coordination on security policy was essential to tackle the Middle East conflict, the dispute over Iran's nuclear program, terrorist attacks in Afghanistan and Pakistan, as well as the international financial and economic crises.
"Security policy must be interpreted in a new and broader way," Merkel and Sarkozy said, adding that cooperation on military security needed to be complemented with a joint approach on the global financial architecture, energy supply and population migration.
They said it was essential that Europe and the US deepen their cooperation given the new risks they face in the 21st century.
"That means joint analysis, decision-taking and implementation. Unilateral steps would contradict the spirit of this partnership. But it also means that we Europeans must speak even more with one voice, which requires a strong measure of discipline from the member states," the leaders wrote.

"And we must further bundle and increase our capabilities, both civilian and military. The synergy between both is the trademark of European security policy," they added.
The statement is a show of unity between the French and German leaders who have had a rocky relationship over the last two years with disagreements on a range of issues including the financial crisis and French plans for a Mediterranean Union...

Merkel and Sarkozy said Iran was openly speculating that the international community would stand by and let it proceed with its nuclear program.
"We will not permit an Iranian nuclear bomb because that would constitute a threat to world peace," they said. "And we are ready, in line with the expected involvement of the new American government, to stop the Iranian threat with increased dialogue but also -- if necessary -- with very determined sanctions."

Gordon Brown Urges Global ‘Grand Bargain’

February 20, 2009

Aftermath News - After meeting with World Bank head Robert Zoellick and IMF chief Dominique Strauss-Khan to plan the G-20 summit, Brown said that the world needed to work together to improve global financial regulation to prevent a repeat of the current financial crisis. The meeting of the Group of 20 advanced and developing nations on April 9 is seen as critical in developing an international response to the current crisis...

South Korean Lawmakers Brawl Over U.S. Free Trade Pact

December 18, 2008

Associated Press – Brawling South Korean lawmakers tried to sledgehammer their way into a parliamentary meeting room barricaded by the ruling party as the National Assembly descended into chaos Thursday over a free trade agreement with the United States.

Opposition parties were incensed by the ruling Grand National Party's move to submit the agreement to a committee on trade, setting in motion the process for the accord to win approval in the legislature.

Security staff and aides from the ruling party stood guard outside the room to keep opposition lawmakers away after the committee's GNP-affiliated chairman invoked his right to use force to "keep order" in parliamentary proceedings.

Scuffles broke out as dozens of opposition members and their aides attempted to push their way into the office. TV footage showed people from both sides shoving, pushing and shouting in a crowded hall at the National Assembly building amid a barrage of flashing cameras. Opponents later used a sledgehammer and other construction tools to tear open the room's wooden doors, only to find barricades of furniture set up inside as a second line of defense. Cable news channel YTN reported that an electric saw was used to open the door. YTN footage showed security guards spraying fire extinguishers at those trying to force their way inside and one man with blood trickling down his face.

The opposition attempt failed, and 10 GNP legislators introduced the bill to the committee. "This is a clear violation of law," the main opposition Democratic Party said in a statement, accusing the GNP of illegally occupying the parliamentary chamber and unilaterally introducing the bill. "This is a declaration of war against the opposition and the people."

Clashes between lawmakers are not unusual in the National Assembly. Such violence has long been cited as one of the worst ills of South Korean politics.

South Korea and the United States signed the accord that calls for slashing tariffs and other barriers to trade in April last year after 10 months of tough negotiations, though neither side's legislature has yet ratified it — the key step needed for it to take effect.

The pact is the largest for the U.S. since the North American Free Trade Agreement with Canada and Mexico and the biggest ever for South Korea. NAFTA, signed in 1993, took effect the following year.

Proponents in both countries say it would not only expand trade but further cement ties between Washington and Seoul — key security allies who have cooperated on issues such as North Korea for decades. Opponents counter that it will cause pain to key sectors in both nations — agriculture in South Korea and automobiles in the United States.

GNP legislators had locked themselves in the committee room earlier in the day to head off any opposition attempts to occupy the chamber — the only place where the bill can be introduced. After a subcommittee review, the bill would be put to a vote at the committee before reaching the full parliamentary session for a final vote.

The GNP says it aims to pass the bill by year's end. The party has a majority in both the committee and in the entire parliament, with 172 seats in the 298-member unicameral National Assembly. But the process is expected to be tough going because opposition parties say they will do whatever possible to stop it.

The Democratic Party says the trade deal should not be approved until the government comes up with better measures to protect farmers and others expected to suffer from increased U.S. imports. The ruling GNP says the trade pact should be approved as early as possible because South Korea — a major exporting nation — stands to gain much from the deal.

Amid concern the administration of President-elect Barack Obama might ask to renegotiate the agreement, supporters of the pact believe early ratification by Seoul could also put pressure on the U.S. Congress to do the same.

Educators Seek Shift in U.S. Schooling to Stress 'Global' Values, See Nationalism as 'Obsolete'

December 15, 2008

In October of 2007, the annual Frontiers in Education Conference met in Milwaukee Wisconsin. Among the several papers presented at the conference was, Critical Theory, Globalization and Teacher Education In A Technocratic Era. The paper was written by three professors, Mark Malisa, Randall Koetting, and Kristin Radermacher. The authors opening statements read:

"Our perspective is that of educators who view the current world as one that is highly internationalized and intensely global, rendering nationalistic orientations obsolete. We also view education and educators as involved agents in the construction of a just social world, and contend that this implies infusing the curriculum and teacher education with cosmopolitan sensibilities, frequently, through critical theory and critical pedagogy."
The authors propose that because of globalization, education programs must be reordered. The report states that teacher education programs in the U.S. must adopt a "global perspective" and that "...the time of splendid isolation is over... purposes of education have changed."

"As globalization becomes the dominant term for describing and conceptualizing teacher education, colleges and schools of education will need to revisit their mission statements and rethink what it means to be part of the global community," the report states.

"As such, educators will have to evaluate the extent to which they function as part of a new system that creates and sustains a new dominant global culture..."
Educators in the "global world" will, "...need an unprecedented willingness to teach and be taught by the rest of the world. Part of this will involve rethinking the language and practice of nationalism... even in the classroom."

The report concludes that there will be resistance to these measures, but offers a solution,

"...a lot of work remains to be done in creating a critical consciousness that makes it possible to realize that global solidarity does not threaten nationalism."
Whether or not these professors realize it, their objectives are at the heart of an agenda that has been pursued at the highest levels of the U.S. educational system for decades. As the 1954 Reece Committee discovered, tax-exempt foundations, particularly the Rockefeller Foundations, Ford Foundation, Carnegie Foundation and others were instrumental in influencing U.S. education. Their goals, as the committee found, were international in scope.

The Committee cited a report from the President's Commission on Higher Education, published in 1947, which outlines the goals of educational programs: The realization on part of the people of the necessity of world government "...psychologically, socially and... politically". The cited report states:

"In speed of transportation and communication and in economic interdependence, the nations of the globe are already one world; the task is to secure recognition and acceptance of this oneness in the thinking of the people, as that the concept of one world may be realized psychologically, socially and in good time politically.

It is this task in particular that challenges our scholars and teachers to lead the way toward a new way of thinking. There is an urgent need for a program for world citizenship that can be made a part of every person's general education.
As the United States enters into uncharted economic waters, and possibly a new depression, globalist ideology is losing its flavor to many intelligent young people. However, the agenda will continue in an attempt to raise a generation to man the controls of a world-wide system of governance.

Bush Hands Over Reins of the U.S. Economy to the European Union

November 19, 2008

The results of the G-20 economic summit amount to nothing less than the seamless integration of the United States into the European economy.

In one month of legislation and one diplomatic meeting, the United States has unilaterally abdicated all the gains for the concept of free markets won by the Reagan administration and surrendered, in total, to the Western European model of socialism, stagnation, and excessive government regulation.

Sovereignty is out the window. Without a vote, we are suddenly members of the European Union. Given the dismal record of those nations at creating jobs and sustaining growth, merging with the Europeans is like a partnership with death.

At the G-20 meeting, Bush agreed to subject the Securities and Exchange Commission (SEC) and our other regulatory agencies to the supervision of a global entity that would critique its regulatory standards and demand changes if it felt they were necessary. Bush agreed to create a College of Supervisors. According to The Washington Post, it would "examine the books of major financial institutions that operate across national borders so regulators could begin to have a more complete picture of banks' operations." Their scrutiny would extend to hedge funds and to various "exotic" financial instruments. The International Monetary Fund (IMF), a European-dominated operation, would conduct "regular vigorous reviews" of American financial institutions and practices. The European-dominated College of Supervisors would also weigh in on issues like executive compensation and investment practices.

There is nothing wrong with the substance of this regulation. Experience is showing it is needed. But it is very wrong to delegate these powers to unelected, international institutions with no political accountability. We have a Securities and Exchange Commission appointed by the president and confirmed by the Senate, both of whom are elected by the American people. It is with the SEC, the Treasury, and the Federal Reserve that financial accountability must take place.

The European Union achieved this massive subrogation of American sovereignty the way it usually does, by negotiation, gradual bureaucratic encroachment, and without asking the voters if they approve.

What's more, Bush appears to have gone down without a fight, saving his debating time for arguing against the protectionism that France's Nicolas Sarkozy was pushing. By giving Bush a seeming victory on a moratorium against protectionism for one year, Sarkozy was able to slip over his massive scheme for taking over the supervision of the U.S. economy.

All kinds of political agendas are advancing under the cover of responding to the global financial crisis.

Where Franklin Roosevelt saved capitalism by regulating it, Bush, to say nothing of Obama, has given the government control over our major financial and insurance institutions. And it isn't even our government! The power has now been transferred to the international community, led by the socialists in the European Union.

Will Obama govern from the left? He doesn't have to. George W. Bush has done all the heavy lifting for him. It was under Bush that the government basically took over as the chief stockholder of our financial institutions and under Bush that we ceded our financial controls to the European Union. In doing so, he has done nothing to preserve what differentiates the vibrant American economy from those dying economies in Europe.

Why have 80 percent of the jobs that have been created since 1980 in the industrialized world been created in the United States? How has America managed to retain its leading 24 percent share of global manufacturing even in the face of the Chinese surge? How has the U.S. GDP risen so high that it essentially equals that of the European Union, whose population is 50 percent greater?

It has done so by an absence of stifling regulation, a liberation of capital to flow to innovative businesses, low taxes, and by a low level of unionization that has given business the flexibility to grow and prosper. Europe, stagnated by taxation and regulation, has grown by a pittance while we have roared ahead. But now Bush — not Obama — Bush has given that all up and caved in to European socialists.

The Bush legacy? European socialism. Who needs enemies with friends like Bush?

Statement From G-20 Summit

November 19, 2008

Catherine Austin Fitts “translation” of the official statement from the Summit on Financial Markets and the World Economy:

1. Now that the growth of debt and derivatives bubbles has stalled, we are committed to using governmental-central bank mechanisms to cover the positions of any of the large private financial institutions whose profits are at risk due to their management of these bubbles and who can use this opportunity to squeeze and acquire smaller rivals at low cost.

2. Our commitment to use derivatives and market interventions to shift investment from the real economy and commodities into a paper economy is firm. We will continue to use centralized governmental mechanisms to subsidize and manage this process.

3. All of the organizations and players who reaped a fortune engineering the debt and derivatives bubbles will be allowed to keep their winnings.

4. We will use this period of consolidation to further centralize the global financial system by enforcing greater centralization of the standards, practices and control of enforcement and regulatory bureaucracies. This increased governmental centralization will be presented as the “fix” for our “problems.”

5. We will continue the move toward one world government and one world currency.

6. We are prepared to use coordinated inflation of global money supplies and fiscal stimulus to protect our control and positions.

7. We are committed to the Slow Burn (see my blog post on this subject).

8. This process will continue to be managed to protect large insurance and risk positions.

9. The net result will be to continue to exercise growing control over the real economy by a handful of private families and institutions designed to protect and grow intergenerational wealth.

G-20 are silent on the military and covert action that will be required to make this stick. They are also silent on how they are going to manage this much inflation. For example, the most recent figures from the St. Louis Fed indicate that the aggregate monetary base is growing at an annualized rate of almost 800%.

Watch for a new focus on “green investing” as the trick in all of this will be how to create new productivity when the absence of real prices mean there is no market to provide the necessary signals and financial incentives.

China Gives No Sign of Bailout Help After Summit

November 16, 2008

China gets pledge of greater say in global finance but gives no sign of bailout help.

China got what it wanted in Washington's financial summit--a promise of a bigger role for developing countries in global finance--but gave no sign Sunday whether it will respond by using any of its $1.9 trillion in reserves in a bailout fund.

China has been pushing for developing countries generally--and itself specifically--to have more influence at the International Monetary Fund and other global bodies. Analysts say that might be Beijing's price to give in to foreign appeals to dip into its reserves and contribute money toward an IMF emergency loan fund for struggling countries.

The Washington summit was an "important and positive" step toward "the reform of the international financial structure," foreign ministry spokesman Qin Gang said in a statement. It made no mention of possible bailout contributions, and a man who answered the phone at the ministry press office said he had no information.

February 26, 2009

Civil Liberties, Health Care, Food Policies

Deadly Bacteria Defy Drugs, Alarming Doctors

February 20, 2009

LA Times - ...But the drugs once used to treat gram-negative bacteria are becoming ineffective, and finding effective new ones is especially challenging. “We’re literally running out of drugs to treat gram-negatives,” said Dr. Brad Spellberg, an infectious disease specialist at Harbor-UCLA Medical Center. “And there is nothing in the pipeline right now.”

Exact numbers are hard to come by, because infections by these three bacteria are not reportable by law. But using 2002 data voluntarily reported to the Centers for Disease Control and Prevention from about 300 large, mostly urban hospitals, the Infectious Diseases Society of America identified about 104,000 gram-negative infections that were resistant to at least some antibiotics, roughly the same as the 102,000 MRSA infections found that year...

British Scientists Condemn Using Children in GM Food Trials

February 19, 2009

Daily Mail - Children in China and America were fed GM rice in a controversial trial... Critics are furious that the GM rice was not put through animal feeding trials to ensure it was safe before being given to children. The decision to use the children has been condemned as ‘completely unacceptable’ by a group of 22 scientists - all GM critics - from Britain and around the world. They claim it is indicative of moves by the biotech lobby, led by the USA and biotech firms, to force GM food into the mouths of the world without proper assessment.

The scientists have written an open letter to the team behind the experiments, condemning the way they were conducted... The scientists argue there is a large body of evidence showing GM food production can trigger gene mutations which ‘can result in health damaging effects when GM food products are fed to animals’. The letter adds: ‘Our greatest concern is that this rice, which is engineered to overproduce beta carotene, has never been tested in animals’. It says there is evidence that certain chemicals derived from beta carotene ‘are both toxic and cause birth defects’...

Among the leading bodies behind the GM Golden rice project are the biotech company Syngenta, the Rockefeller Foundation, and the charitable foundation set up by Microsoft boss Bill Gates... The project was financed and run through the U.S. National Institutes of Health and involved children in China and America.

February 25, 2009

Collapse of the Global Economy

A “Monetary Stalingrad” is on Its Way to Europe

February 17, 2009

With journalists like Ambrose Evans-Pritchard and at least two other colleagues at The Telegraph this newspaper sports the most knowledgeable financial journalists in print of any UK newspaper. Little, if anything can be learned from those in other broadsheets and the tabloids offer mere escapism. Nor is financial education much better on the radio or TV. The BBC’S Robert Peston is laughably overrated and followed by the ignorant in the media as well by the public. He is always behind the economic curve. Only Max Keiser’s satirical programme “The Oracle” offers “a late night” realistic view of world economics on the BBC.

Europe’s loans to Eastern Europe’s states within and outside the EU is going to cause the next world economic storm - and that is still while the US and UKs’ banks are bankrupt and their debts are bankrupting their countries. Latvia’s economy along with most UK and US banks is “clinically dead” and the Bank Austria and its Italian owner is facing “a monetary Stalingrad”. Depending which figures one wants to accept Germany’s gross domestic product shrank between 8 to 9 per cent in the last quarter! Ireland and several other EU countries are effectively bankrupt! The storm could hit within days or weeks. Major political upheaval and change will ensue.

Europe’s Economic Slump Deeper Than Expected

February 15, 2009

The International Herald Tribune - Europe sank even deeper into recession than the United States in the closing months of last year, according to figures published Friday, as finance ministers of leading industrialized nations gathered in one of the worst-affected countries, Italy, for discussions on the crisis.

In the fourth quarter, the economy of the countries sharing the euro declined by 1.5 percent, according to the European Union’s statistics office. That is even worse than the 1 percent decline in the U.S. economy during that period, compared with the previous quarter.

“Today’s data wipes out any illusion that the euro zone is getting off lightly in this global downturn,” said Jörg Radeke, an economist at the Center for Economics and Business Research in London...

Japan Faces ‘Unimaginable’ Contraction

February 9, 2009

FT - Japan’s economy faces an “unimaginable” contraction, the chief economist of its central bank warned on Monday, as figures revealed surging bankruptcies and a big fall in machinery orders...

Violent Unrest Rocks China as Crisis Hits

February 1, 2009

PTI - The collapse of the export trade in China has left millions jobless and set off a wave of violent unrest in the country. Bankruptcies, unemployment and social unrest are spreading more widely in China than officially reported, according to an independent research that paints an ominous picture for the world economy, The Sunday Times reported on Sunday.

The research was conducted for the newspaper over the last two months in three provinces vital to Chinese trade - Guangdong, Zhejiang and Jiangsu. It was found that the global economic crisis has scythed through exports and set off dozens of protests that are never mentioned by the state media.

According to the report in the Southern province of Guangdong, three jobless men detonated a bomb in a business travellers' hotel in the commercial city of Foshan to extort money from the management. All along the coast, angry workers besieged labour offices and government buildings after dozens of factories closed their doors, without paying wages and their owners went back to Hong Kong, Taiwan or South Korea.

In Southern China, hundreds of workers blocked a highway to protest against pay cuts imposed by managers. At several factories, there were scenes of chaos as police were called to top creditors breaking in to seize equipment in lieu of debts. In Northern China, television journalists were punished after they prepared a story on the occupation of a textile mill by 6,000 workers. Furious local leaders in the city of Linfen said the news item would "destroy social stability" and banned it.

VIDEO: Violent Unrest Rocks China

Protectionism, Unemployment and Riots as the Global Slump Deepens

February 9, 2009

MoneyWeek - We are facing “a global jobs crisis”, said Juan Somavia, head of the International Labour Organisation (ILO). As the worst global downturn since the war tightens its grip, employers across the globe have been swinging the axe in earnest. Last Monday alone saw over 70,000 jobs cut by seven companies across Europe and the US. Spain lost almost 200,000 jobs in January, a record monthly jump. Jobless claims are now at around 3.3 million, a 47% rise from November.

Ireland’s unemployment rate has almost doubled to 9.2% in a year. China estimates that 20 million migrant workers, or one sixth of the total, have lost their jobs over the past few months. According to the ILO, worldwide unemployment could rise by 50 million to 230 million this year – a 27% rise from 2007 levels. The potential social and political fallout, said the ILO, is “daunting”...

IMF Says Advanced Economies Already in Depression

February 7, 2009

Bloomberg - Advanced economies are already in a "depression" and the financial crisis may deepen unless the banking system is fixed, IMF Managing Director Dominique Strauss-Kahn said...

Japan on the Edge of the Abyss

February 3, 2009

Naked Capitalism - The Japanese industrial production data and METI forecast was bad beyond all imagining. Industrial production might fall by 1/3 in the 12 months ending in January. It could fall in a mere four months between November and February by more than half the U.S. Great Depression decline which took almost four years...December industrial production came in down 9.6%, worse than the METI forecast. It is now down almost 21% year over year. METI forecasts a further 4.7% decline in February. The inventory to production ratio soared again. Maybe METI will be correct. If it is, Japan industrial production will have fallen 28% (non annualized) in four months. It will have fallen by a third in about a year. Nothing in the history of major nations compares. A 28% decline in four months would be more than half of the entire decline in U.S. industrial production over the 3 years and nine months of the U.S. Great Depression...

February 24, 2009

The Right to Keep and Bear Arms

Trade a Gun for a Rose in SC on Valentine’s Day

February 14, 2009

AP - Police in South Carolina gave away roses on Valentine’s Day. All you had to do to get one for your sweetie was turn in a gun... At a Columbia church, five cars lined up to give away guns before the exchange had even started. About an hour and a half later, police had collected 75 weapons. “We’ve got a great turnout so far,” Richland County sheriff’s spokesman Lt. Chris Cowan said.

A handgun was worth a $100 gift card, while a rifle or shotgun netted a $50 gift certificate. Cowan said one man turned in six handguns, worth $600 in gift cards...

Cowan said the idea was spawned in part by Columbia Police Chief T.P. Carter and Richland County Sheriff Leon Lott, who has made headlines recently for investigating Michael Phelps after a photo surfaced showing the Olympic swimming champion smoking a marijuana pipe. The program was modeled after a California one; similar exchanges have been done in New York and San Francisco.

HR 45 May be More Troubling Than the Average Anti-gun Bill

February 15, 2009

Gun Owners of America - The first anti-gun bill of the 111th Congress -– Chicago Congressman Bobby Rush’s H.R. 45 –- has caught the attention of many in the Second Amendment community as something we need to be worried about. This is because of the extremity of the bill:
  • It would require a federal license for all handguns and semiautomatics, including those you currently possess; and
  • It would require handgun and semi-auto owners to be thumbprinted at the police station and to sign a certificate that, effectively, the firearm will not be kept in a place where it would be available for the defense of the gun owner’s family.
Licensing is only a way-station to discouraging, arresting, or humiliating gun owners and outlawing guns. Under H.R. 45, for example, the applicant must also make available ALL of his psychiatric records, pass an exam, and pay a fee. So... are you a veteran who has ever consulted a psychologist or psychiatrist? Guess what? The FBI would soon be examining every confidential statement you have ever made during those consultations.

Private sales of handguns and semi-autos would be outlawed, and reports to the attorney general of all transactions would be required, even when -- as the bill allows -- the AG determines that a state licensing system is sufficiently draconian to substitute for the federal license.

But, you may be thinking, “I’m just a hunter with a deer rifle... surely, none of this is relevant to me”? Then you should know that, with virtually no exceptions, ALL firearms transactions (including person-to-person private sales of long guns, hunting rifles, shotguns, etc.) would be subject to the same paperwork hassles that are required when buying from a dealer. In addition, the bill would make it unlawful in virtually all cases to keep any loaded firearm for self-defense.

A variety of “crimes by omission” (such as failure to report certain things to the government) would be created. Criminal penalties of up to ten years and virtually unlimited regulatory and inspection authority would be established. Combined with the Ammunition Accountability effort to outlaw ammunition in numerous states, this two-pronged attack would soon make gun ownership a thing of the past...

“Pork” Bailout Bill Could Ban Guns for Millions of Americans

February 11, 2009

Gun Owners of America - But of even greater concern to gun owners is the fact that a government-coordinated database (which government can freely access) will now contain all records of government-provided and private psychiatric treatment -– including, in particular, the drugs which were prescribed.

Remember last year’s “NICS Improvement Act” otherwise known as the Veterans Disarmament Act? This law codified ATF’s attempts to make you a prohibited person on the basis of a government psychiatrist’s finding that you are a “danger” –- without a finding by any court. Well, roughly 150,000 battle-scarred veterans have already been unfairly stripped of their gun rights by the government....

Dem’s Use “Stimulus” as Cover for More Gun Control

February 13, 2009

Canada Free Press - The liberals are at it again. In a new bill introduced the first day of the present session of Congress, and with zero coverage from the MSM, H.R. 45 (Blair Holt’s Firearm Licensing and Record of Sale Act of 2009) targets all gun owners in the U.S.A. While the media the world and everyone else is focused on the “phony plan” to spend tax dollars legislation is sneeking through the House and Senate for more gun control.

This nefarious bill seeks to strip us all of our Constitutional Rights to possess and bear firearms of any distinction. It requires, within the first two years, that all new guns be registered. The bill goes retroactive after two years. Meaning that two years after the passage of the bill, ALL FIREARMS in a citizen’s possession must be registered, not just those purchased after the bill passes, and this apparently applies to antique firearms as well...

Gun Dealers Experiencing Shortage In Ammunition

February 10, 2009

After months of heavy buying, gun dealers across the state [Florida] are experiencing shortages. Some say it began with the election of President Barack Obama. Others say it's about the economic downturn or fear of crime. Whatever the reasons, ammunition has been selling like plywood and bottled water in the days before a hurricane...

Ammunition Accountability: Maybe We’d Better Take This Bill Seriously

December 4, 2008

Ever since the early 1970s, whenever downstate Assemblymen rattled sabers and proposed radical anti-gun or anti-hunting legislation, we could count on the conservative Senate Republican majority to block it.

That was then.

The scene changed dramatically on Nov. 4. Now the outrageous stuff coming out of the Assembly has some credence on the other side of the aisle. The Democrats — and that means the New York City mentality — have the majority in both houses. Except for four swing votes, they have pretty much carte blanche.

That's why the fact that the Assembly has bought into a national crusade known as the Ammunition Accountability Act is suddenly a legitimate threat. New York, Pennsylvania and 16 other states have already enacted legislation that would mandate the engraving of a unique serial number on the base of each handgun and “assault weapon” bullet, and an identical number on the cartridge's case. The act calls for dealers of this “encoded ammunition” to record the purchaser's name, birthdate, drivers license number, etc.

All non-encoded ammunition must be disposed of prior to Jan. 1, 2011. The database and other expenses involved would be paid for by a special tax of a half-cent per round of ammunition sold...

Would-be Appointees Quizzed on Guns

November 21, 2008

President-elect Barack Obama’s transition team is asking potential appointees detailed questions about gun ownership, and firearms advocates aren’t happy about it. The National Rifle Association has denounced the move, which has already led one Republican senator to consider legislation aimed at ensuring a president can’t use an applicant’s gun ownership status to deny employment.

It’s just one question on a lengthy personnel form — No. 59 on a 63-question list — but the furor over the query is a vivid reminder of the intensity of support for Second Amendment rights and signals the scrutiny Obama is likely to receive from the ever-vigilant gun lobby.

Obama’s transition team declined to go into detail on why they included the question, suggesting only that it was done to ensure potential appointees were in line with gun laws. “The intent of the gun question is to determine legal permitting,” said one transition aide.

But even some Democrats and transition experts are baffled by the inclusion of the question. Tucked in at the end of the questionnaire and listed under “Miscellaneous,” it reads: “Do you or any members of your immediate family own a gun? If so, provide complete ownership and registration information. Has the registration ever lapsed? Please also describe how and by whom it is used and whether it has been the cause of any personal injuries or property damage.”

Paul Light, professor of public service at New York University, said there was no such question for potential appointees when President George W. Bush took office in 2000. “It kind of sticks out there like a sore thumb,” Light said. He expressed uncertainty over why it was included but surmised it was out of an abundance of caution, a desire to avoid the spectacle of a Cabinet-level or other high-ranking appointee who is discovered to have an unregistered handgun at home. “It’s the kind of thing that, if dug out, could be an embarrassment to the president-elect,” Light said.

Clay Johnson, deputy director of management at the Office of Management and Budget and the head of Bush’s 2000 transition, also didn’t quite understand the purpose of the question. “It could be their way to say to prospects that they will have to answer all these questions sooner or later, so be prepared,” Johnson observed.

Matt Bennett, a veteran campaign operative who did a stint at Americans for Gun Safety and who now works for the moderate Democratic think tank Third Way, was equally befuddled. “It strikes me as overly lawyerly,” he said, noting that only a small percentage of guns owned by adults are ever used improperly.

Only half-joking, Rep. Tim Ryan (D-Ohio) alluded to the shooting accident involving Vice President Dick Cheney, suggesting the query could be a better-safe-than-sorry measure. “Given the behavior of the vice president under the last administration, you may want to know these things,” Ryan said. On a more serious note, Ryan suggested that the new president was being “very, very thorough” in his approach. An Obama ally and pro-gun Democrat from a blue-collar region of Ohio, Ryan dismissed the notion that the inclusion of such a question would do any political harm to the incoming president.

But other gun rights supporters want Obama to know the question has raised their antennae. “It’s very odd and very concerning to put out a question like that,” said Sen. Jim DeMint (R-S.C.), adding that it may also be “unprecedented.” The freshman senator, who is up for reelection in 2010, had his campaign organization send an e-mail to supporters this week, pledging to enact legislation to bar federal hiring discrimination on the basis of gun ownership. “Barack Obama promised change, and this is proof positive that we are going to see some of the most liberal change in our nation’s history,” wrote DeMint’s campaign in the e-mail. DeMint conceded it was unrealistic to try to get a bill on the matter through during the lame duck session this week. Still, it’s the sort of symbolic issue that may provide a political opening for Republican members of Congress from conservative-leaning states to contrast themselves with the new Democratic administration. “I want him to know that we’re looking for areas we can work with him but also looking for areas of concern that we want to let him know we’re going to fight on,” DeMint said.

The NRA, the gun-rights group that spent millions to defeat Obama, only to see him easily carry sportsmen-heavy states such as Michigan and Pennsylvania, is signaling that it intends to keep up the fight.

“Barack Obama and his administration are showing their true colors and true philosophy with regard to the Second Amendment,” said Chris Cox, the NRA’s top political official. “It shows what we’ve been saying all along — this guy doesn’t view the Second Amendment as a fundamental constitutional right.”

Cox said the group had put the word out to their members on the question. Bennett, though, argued that approach would have little resonance. “The real question is whether he’s doing harm to the broader image of Democrats on guns, and the answer is probably no,” he said. “It may gin up 350,000 hard-core NRA types, but it won’t really bother 65 million other gun owners.”

IBM, Microsoft, Google, Verizon

World-Renowned Scientists Team with Google and NASA to Launch Singularity University

February 2, 2009

TechCrunch - NASA, Google, and some of the foremost authorities in science and technology have teamed up to create a new school, dubbed Singularity University, that is looking to solve “humanity’s grand challenges”. The university is named after the idea of the singularity – an extremely rapid period of technological progress. And damn if it doesn’t sound like the coolest school ever.

The roster behind Singularity University is beyond impressive: it was founded by Dr. Ray Kurzweil (author, technologist, and futurist), Dr. Peter Diamandis (XPRIZE), Pete Worden (Director of NASA Ames), Dr. Robert Richards (co-founder of the International Space University), Dr. Robert Richards (ISU President), Dr. Michael Simpson, and a number of sponsors including Google. And to run the school, Singularity brought on board Salim Ismail, the founder of Yahoo’s innovative Brickhouse team.

Modeled after the International Space University, the school is meant to expose some of world’s the most promising graduate students and professionals to a broad range of cutting-edge technologies and research with subjects including bioinformatics, networking, genetics, law, heath, and entrepreneurship (you can see a full listing of topics covered here).

The first three weeks of each session are devoted to forming a basic understanding in all of the fields, following by three weeks spent seeing how each of these fields can possibly intermingle (for example, you might study how 3D printers traditionally used in prototyping could be used to build organs out of stem cells). The final three weeks of study are spent applying the newly-learned knowlege to solving real-world problems.

Sessions will be held at the NASA Ames Research Campus, near Mountain View, California. Unfortunately, space will be extremely limited – the initial class will consist of around 30 students, with around 100 for the school’s second year. It won’t be cheap either: fees run around $25,000 per student, though there will be scholarships available. There will also be brief sessions available for students who are already in the workforce.

February 23, 2009

The Collapse of the U.S. Economy and Government Finances

Obama’s Budget: Almost $1 Trillion in New Taxes

February 26, 2009

ABC News - President Obama’s budget proposes $989 billion in new taxes over the course of the next 10 years, starting fiscal year 2011, most of which are tax increases on individuals.

1) On people making more than $250,000: Total: $636 billion/10 years

2) On businesses: Total: $353 billion/10 years

Barack Obama Unveils Staggering $3.55 Trillion Dollar Budget

February 27, 2009

President Barack Obama has unveiled a staggering $3.55 trillion (£2.44 trillion) budget, costing each American taxpayer the equivalent of $25, 573...

Obama Seeks $634 Billion Over 10 Years for Health Care

February 25, 2009

AP- President Barack Obama's first budget will seek $634 billion over 10 years as a down payment on health care reform, a senior administration official said Wednesday. The official said Obama's proposal is meant to start a dialogue with Congress over how to provide coverage for an estimated 48 million uninsured while also slowing health care costs, which amount to $2.4 trillion a year and keep rising even as the economy is shrinking.

Obama's request comes on top of recent health care expansions approved by Congress and also described by his administration as down payments toward overhauling the health care system. Those include $32 billion to expand coverage for the children of low-income workers and $19 billion to speed the adoption of computerized health records.

Aside from health care, the budget will extend Obama's signature $400 tax cut for workers, originally enacted as part of the economic stimulus plan. The budget also calls for an increase in the top income tax rate, from 35 percent to 39.6 percent for couples with incomes above $250,000 a year, said another administration official.

The biggest tax adjustment, however, would come from updating the alternative minimum tax for inflation. That would add $150 billion to the deficit by 2013. The AMT was originally designed to make sure the wealthy paid at least some taxes, but it threatens to ensnare some 24 million middle- to upper-income taxpayers next year...

House OKs $410 Billion Bill to Boost Domestic Programs

February 25, 2009

AP - The Democratic-controlled House approved $410 billion legislation Wednesday that boosted domestic programs, bristled with earmarks and chipped away at policies left behind by the Bush administration. The vote was 245-178, largely along party lines.

Republicans assailed the measure as too costly — particularly on the heels of a $787 billion stimulus bill that President Barack Obama signed last week. But Democrats jabbed back.

"The same people who drove the economy into the ditch are now complaining about the size of the tow truck," said Rep. James McGovern, D-Mass., pointing out the large increase in deficits that President George W. Bush and GOP-controlled Congresses amassed...

Economic Crisis ‘Is As Bad As They Come’

February 23, 2009

San Francisco Chronicle - Americans can expect unemployment to reach 11 or 12 percent, housing prices nationally to drop 36 percent, stocks to lose more than half their value, and real output per capita to plunge 9.3 percent, according to economists Carmen Reinhart of the University of Maryland and Kenneth Rogoff of Harvard University, who have tracked financial crises back to 14th century England...

Get Ready for Mass Retail Closings

February 23, 2009

Yahoo Finance - About 220,000 stores may close this year in America, says our guest, retail consultant Howard Davidowitz of Davidowitz & Associates. As more Americans save and spend less, it’s clear there’s too much retail space. Just visit Web site deadmalls.com and track retail’s growing body count. And luxury retailers? They’re on "life support," Davidowitz says.

Among the brandname stores Davidowitz says are in trouble:

• Nordstrom
• Neiman Marcus
• Tiffany
• Jeweler Zale Corp.
• Saks
• J.C. Penney
• Sears

Kansas Suspends Income Tax Refunds, May Miss Payroll

February 16, 2009

AP Mobile News Network - Kansas has suspended income tax refunds and may not be able to pay employees on time, the state’s budget director said Monday.

The state doesn’t have enough money in its main budget account to pay its bills, prompting Democratic Gov. Kathleen Sebelius to suggest transferring $225 million from other accounts throughout state government. But the move required approval from legislative leaders, and Republican leaders refused Monday.

Budget Director Duane Goossen said that without the money, he’s not sure the state can meet its payroll. State employees are scheduled to be paid again Friday...

$65 Trillion - U.S. Financial Obligations Exceed The Entire World's GDP

February 17, 2009

The Final Hour - The total liabilities of the United States government, including future social security and medicare payments that the U.S. government is already committed to pay out, now exceed 65 TRILLION dollars, which is more than the entire GDP of the whole world.

According to the 2008 Financial Report of the United States Government, which is an official United States government report, the U.S. actually had a budget deficit of 5.1 trillion dollars in 2008.

So why did the Congressional Budget Office report that the federal budget deficit was only 455 billion dollars (which is certainly a total disaster) in 2008?

The difference lies in accounting. The CBO’s figures are based on cash accounting, while the 2008 Financial Report of the United States Government is based on GAAP accounting. GAAP accounting is what is used by all the major firms on Wall Street and it is regarded as a much more accurate reflection of financial reality...

How Banks Are Worsening the Foreclosure Crisis

February 13, 2009

AP - The bad mortgages that got the current financial crisis started have produced a terrifying wave of home foreclosures. Unless the foreclosure surge eases, even the most extravagant federal stimulus spending won’t spur an economic recovery.

The Obama Administration is expected within the next few weeks to announce an initiative of $50 billion or more to help strapped homeowners. But with 1 million residences having fallen into foreclosure since 2006, and an additional 5.9 million expected over the next four years, the Obama plan — whatever its details — can’t possibly do the job by itself. Lenders and investors will have to acknowledge huge losses and figure out how to keep recession-wracked borrowers making at least some monthly payments...

Obama to Outline Plan to Stem Home Foreclosures

February 13, 2009

AP - The White House said President Barack Obama on Wednesday will outline his much-anticipated plan to spend at least $50 billion to prevent foreclosures in a speech in Arizona, one of the states hardest hit by the foreclosure crisis.

"It's not intended to be measured by one day's market scorekeeping, but instead to ensure that the 10,000 Americans each day that have their homes foreclosed on, and the millions more that are barely getting by, are protected," White House press secretary Robert Gibbs said Friday without providing other details.

Treasury Secretary Timothy Geithner announced a revised effort to stabilize the financial system on Tuesday. It contained outlines of a foreclosure-relief effort, but few details.

Though lenders have beefed up their efforts to aid borrowers over the past year, their action hasn't kept up with the worst housing recession in decades. More than 2.3 million homeowners faced foreclosure proceedings last year, an 81 percent increase from 2007, and analysts say that number could soar as high as 10 million in the coming years, depending on the severity of the recession...

Revamped Bank Bailout Bill to Help Prevent Foreclosures

February 8, 2009

National Economic Council director Larry Summers said... "We need to stabilize and repair our financial system to maintain the flow of credit that families and businesses depend on to keep our economy strong. The plan that Secretary Geithner lays out on Tuesday will achieve that goal."

Summers declined to get into details of the new TARP relief, but said a large chunk of it would go to housing. "The president's made clear that he's very committed to (preventing) foreclosures. I expect that it will be 50 billion dollars or more that will be directed at providing support for the housing sector of our economy," he said.

The top White House adviser said also the refashioned program would assist banks dispose of bad assets while promoting new lines of credit in a climate of greater transparency. Summers said the first half of the TARP spending had "averted what could have been a profound collapse," but said the credit markets were still not functioning and accepted criticism of the spending's opacity...

$3 Trillion — Senate, Fed, Treasury Attack Crisis

February 10, 2009

AP - On a single day filled with staggering sums, the Obama administration, Federal Reserve and Senate attacked the deepening economic crisis Tuesday with actions that could throw as much as $3 trillion more in government and private funds into the fight against frozen credit markets and rising joblessness...

600,000 U.S. Layoffs in January

WSWS News - In the 12 months since January 2008, the American economy has hemorrhaged 3.5 million jobs, the most in one year since 1939, during the Great Depression. In a clear indication the economic crisis is rapidly heading into a severe global depression, US employers purged 598,000 jobs in January, the most layoffs in a single month since 1974. January’s firings raised the unemployment rate to 7.6 percent, the highest level since 1992...

15 Companies That Might Not Survive 2009

February 9, 2009
U.S. News and World Report

Rite Aid (Ticker symbol: RAD; about 100,000 employees; 1-year stock-price decline: 92%)
Claire's Stores (Privately owned; about 18,000 employees)
Chrysler (Privately owned; about 55,000 employees)
Dollar Thrifty Automotive Group (DTG; about 7,000 employees; stock down 95%)
Realogy Corp. (Privately owned; about 13,000 employees)
Station Casinos (Privately owned, about 14,000 employees
Loehmann's Capital Corp. (Privately owned; about 1,500 employees)
Sbarro (Privately owned; about 5,500 employees)
Six Flags (SIX; about 30,000 employees; stock down 84%)
Blockbuster (BBI; about 60,000 employees; stock down 57%)
Krispy Kreme (KKD; about 4,000 employees; stock down 50%)
Landry's Restaurants (LNY; about 17,000 employees; stock down 66%)
Sirius Satellite Radio (SIRI - parent company; about 1,000 employees; stock down 96%)
Trump Entertainment Resorts Holdings (TRMP; about 9,500 employees; stock down 94%)
BearingPoint (BGPT; about 16,000 employees; stock down 21%)

Retired GM Worker Speaks on Freezing Death of 93-year-old Michigan Man

February 5, 2009

World Socialist Web Site - Last week a funeral was held for Marvin Schur, the 93-year-old resident of Bay City, Michigan whose frozen body was found in his home on January 17. Schur died of hypothermia after the municipally owned utility company cut off electricity because of a $1,100 unpaid bill.

Bay City home where Schur's body was foundEven though nighttime temperatures had fallen to below zero in mid-January, the city placed a "limiter" on Schur's electric meter—a device designed to shut off power if a resident uses more than 10 amps of electricity. Nothing was done to instruct the old man, who suffered from dementia, on how to reset the device and restore limited service...

Obama to Water Down ‘Buy American’ Plan after EU Trade War Threat

February 4, 2009

The Times Online - The European Union warned the US yesterday against plunging the world into depression by adopting a planned “Buy American” policy, intensifying fears of a trade war. The EU threatened to retaliate if the US Congress went ahead with sweeping measures in its $800 billion (£554 billion) stimulus plan to restrict spending to American goods and services.

Gordon Brown was caught in the crossfire as John Bruton, the EU Ambassador to Washington, said that “history has shown us” where the closing of markets leads — a clear reference to the Depression of the 1930s, triggered by US protectionist laws...

“Buy American”—or Bye-Bye America

Personal Bankruptcies Soar 33%

February 2, 2009

MSN Money - Personal bankruptcies surged to more than 1 million filings in the United States in 2008 — the most since a rewrite of bankruptcy laws went into effect in 2005...

Folding Dealers Shock Car Buyers with Unpaid Liens

February 1, 2009

AP - The national wave of auto dealership closures has come crashing down on thousands of people who are on the hook for used-car loans that dealers were supposed to absolve.

When a car buyer still owes money on a vehicle he is trading in, the dealer promises to pay off the outstanding loan, then resells the vehicle. But as more dealers go out of business, some are sticking consumers with the bill. Lenders can then go after the previous owner who thought the debt was paid, or repossess the car from the new owner who assumed it came with clear title...

February 21, 2009

Taypayer Handouts and Ripoffs

Negotiators Agree on $790 Billion Price for Stimulus Bill

February 11, 2009

AP - Negotiators for Congress and the White House have tentatively settled on a $790 billion price tag on President Barack Obama's economic stimulus bill and have restored some the Senate cut from school repair and state aid.

After talks continued nonstop Wednesday, officials announced a formal meeting of negotiators for mid-afternoon in the Capitol as they try to get a bill to Obama's desk for signing by week's end...

Bailout, Take 2: Investors Want U.S. Taxpayers to Share Risk

February 9, 2009

AP - Investors want the Obama administration to sweeten the deal before they agree to buy risky debt from U.S. banks as part of the government's retooled program to rescue the ailing financial industry.

The administration is expected to announce Tuesday that the government's latest bailout strategy will be enticing big investors to buy more than $1 trillion in troubled assets from the banks. The hope is that, free from the drag of subprime mortgage debt and other bad investments, banks will be more likely to start lending money again and the economy will rebound.

Exactly how the administration plans to persuade hedge funds, insurance companies and private equity firms to buy into some of the world's riskiest investments remains unclear. But investors said Monday they were unlikely to buy into the idea unless the government puts up a lot of the money and promises to absorb a lot of the losses if things go badly.

"The first loss has got to be the government's," said Wall Street veteran Muriel Siebert, who runs the brokerage Muriel Siebert & Co. "Maybe the first 25 percent of losses. We don't know what's in some of those bonds."

Billionaire Wilbur Ross, who runs the private equity firm WL Ross & Co., said investors want to know how much risk the government will accept if the investments go sour, and how much money the government is willing to put up — likely in the way of low-interest loans...

Obama Calls Anew for Swift Action on Economy

February 8, 2009

AP - Making his case in the most dire terms, President Barack Obama said that if Congress does not quickly pass an economic stimulus package, the nation will slip into a crisis so deep that "we may be unable to reverse" it.

Sound familar?: President Bush Urges Congress to Pass Bailout Bill
September 25, 2008

CNN - U.S. President George W. Bush, saying "our entire economy is in danger," urged Congress to approve his administration's $700 billion bailout proposal. "We're in the midst of a serious financial crisis, and the federal government is responding with decisive actions," Bush said.

Bush pointed out that the collapse of several major lenders was rooted in the subprime mortgage market that thrived over the past decade. He said passage of the $700 billion bailout proposal was needed to restore confidence in the market. "I'm a strong believer in free enterprise, so my natural instinct is to oppose government intervention," he said. But "these are not normal circumstances. The market is not functioning properly. There has been a widespread loss of confidence.

"Without immediate action by Congress, America can slip into a major panic."

Summers Warns that Stimulus Battle Not Yet Over

February 8, 2009

AP - One of President Barack Obama's top economic advisers forecast Sunday a difficult struggle with Congress over Senate cuts of $40 billion for state and local governments from the administration's massive spending and tax cut package to stimulate the failing economy.

The $827 billion Senate version of the plan — designed to bring the economy out of the worst downward spiral since the Great Depression — was expected to pass the Senate on Tuesday. The House had already passed its $819 billion version of the measure... [Poster's Note: If there are $40 billion in cuts, why did it go from $819 billion to $827 billion?]

Obama Losing the Stimulus Message War

February 5, 2009

Politico - Despite Obama’s sky-high personal approval ratings, polls show support has declined for his stimulus bill since Republicans and their conservative talk-radio allies began railing against what they labeled as pork barrel spending within it.

The sheer size of it — hovering at about $900 billion — has prompted more protests that are now causing some moderate and conservative Democrats to flinch and, worse, hesitate.

The anxiety over lost momentum seemed almost palpable this week as the president in television interviews voiced frustration with his White House’s progress and the way his recovery program was being demonized as a Democratic spending frenzy...

VIDEO: Biden Pushes Hard for Stimulus

As Layoffs Rise Across U.S., One Employer is Hiring: Uncle Sam

February 1, 2009

AP - While the nation's 11 million unemployed and the millions more who fear losing their jobs may feel Washington should streamline too, economists say a strong federal work force is key to economic recovery. Were President Barack Obama to put any of the nearly 2 million federal civil servants out in the street in the middle of the worst economic downturn since the Great Depression, the consequences could be dire.

"Federal belt-tightening would worsen the problem right now," said Kevin Hassett, director of economic policy studies at the American Enterprise Institute, a conservative think tank. "Most economists agree that the federal government is a built-in stabilizer," said Hassett, a former adviser to GOP presidential campaigns.

Obama's proposed $800-plus billion economic aid plan, which includes heavy spending on public works, is expected to increase the ranks of government workers, although mostly at the state and local level...

February 20, 2009

Government Takeover of Banks and Businesses

U.S. Will Invest $250 Billion in Banks

October 14, 2008

Reuters - The United States will pump $250 billion into its banks, following similar measures in Europe, but data showed the threat of recession has not been banished even if a financial sector meltdown has. About half the total likely to go to the top nine US banks to get them lending to each other again, people familiar with the scheme said.

Federal Reserve Chairman Ben Bernanke said in an article in the Wall Street Journal that the measures constituted a broad attempt to end the crisis, which began with a US housing market collapse and now threatens industry and jobs worldwide. "These steps will allow us to restore more normal market functioning and encourage private capital to further support the reinvigoration of financial markets," he wrote.

The Treasury will buy stakes in Bank of America, Wells Fargo, Citigroup, JPMorgan Chase, Goldman Sachs, Morgan Stanley and Bank of New York Mellon Corp, said two sources speaking anonymously. Media reports said State Street Corp and Merrill Lynch would also receive a capital injection.

Similar moves in Europe helped restore some confidence among investors on Monday.
  • London, Berlin and Paris offered direct capital injections for banks and to underwrite lending between banks that has all but frozen, choking off funds that ultimately drive private business and industry.
  • Germany approved a rescue plan worth up to 500 billion euros ($US679 billion).
  • France put up a total of 360 billion euros.
  • Britain, which has led the way with a twin blueprint of bank equity stakes and money market support, had already pledged 250 billion pounds to guarantee lending between banks and stumped up 37 billion pounds to buy into its troubled financial giants.
  • Japan joined the global push, saying it could inject public funds into regional banks to make sure small firms can get cash while the Bank of Japan said it would hold an extraordinary meeting from 1130 GMT (2230 AEST) to consider ways of improving its operations to keep financial markets stable.
  • Even the Gulf with its oil revenues is acting. The United Arab Emirates will pump 70 billion dirhams ($US19 billion) of emergency funding into its banking sector.
The New York Times said Citi, JP Morgan Chase, Bank of America and Wells Fargo would receive investments of $25 billion each. Goldman Sachs and Morgan Stanley will get $10 billion each.

Nine Banks "Partially" Nationalized

October 14, 2008

Can you get "a little" pregnant? Then how can a bank be "partially" nationalized? The U.S. government is dramatically escalating its response to the financial crisis by planning to invest $250 billion in the country's banks, forcing nine of the largest to accept a Treasury stake in what amounts to a partial nationalization.

News that European governments also planned to take stakes in their banks, and anticipation of new U.S. measures, unleashed a tremendous surge in U.S. stock prices yesterday, with the Dow Jones industrial average soaring to the biggest percentage gain since the 1930s, up 11.1 percent. It ended 936.42 points higher, the largest point gain ever, just days after the Dow had its steepest weekly decline in history.

The Treasury Department's decision to take equity stakes in banks represents a significant reversal, coming just weeks after Treasury Secretary Henry M. Paulson Jr. had opposed the idea. "In a momentous meeting yesterday afternoon in Washington, Paulson, flanked by top financial regulators, told the executives of nine leading banks that they needed to participate in the program for the good of the national economy," two industry sources said on condition of anonymity because they were not authorized to speak publicly.

So this is how it comes, yes? Not with dramatic speeches and chest thumping but in the silence of a well appointed government office where American citizens are told to hand over the private property of investors to virtual government control.

I am speechless with rage. Not one peep from "conservative" economists? Where are the op-eds? Who is defending the free market system? Us? A couple of thousand internet bloggers and writers and a few radio talk show hosts?

What would Paulsen have done if the bank execs said "thanks, but no thanks?" That's a chasm I choose not to have open beneath my feet thank you. If Bush can do this, what would a Barack Obama do in the name of this emergency? One shudders to contemplate it.

This won't stop at banks. If things get much worse, other industries will be sitting in Paulsen's office and given the choice of "doing what's right for the national economy" or...what? Anything is possible with this crew.

If it were simply a case of throwing the rascals out, that would be easy. But the entire government of the United States, save a few scattered souls in Congress , are evidently in favor of this switch to socialism. It makes one feel helpless when you realize that decisions being made now will have consequences that will reverberate the rest of our lives.

Have they all lost their minds?

How Paulson Nationalized the Biggest Banks in the U.S.

October 14, 2008

It took the Bush Administration longer than many experts believe it should have taken to get there, but today's big news is that the administration has finally arrived at the point many economists weeks ago urged it to get to: direct injections of cash into the banking system and in turn taking ownership stakes in some of the nation's largest banks.

The administration had to twist some bankers' arms to arrive at this point, since there were top banking executives who didn't want the federal government taking ownership in their institutions.

But banks aren't exactly in the strongest negotiating position right now. Nine of the nation's largest banks were told they didn't have a choice.

The move follows a landmark agreement among European countries over the weekend to follow Britain in partially nationalizing ailing banks and providing deposit insurance and other guarantees on loans between banks. All told, Britain, Germany, France, Italy and other countries poured $2.3 trillion into their banking sector, according to news reports.

The New Banking Superpowers

September 28, 2008

Business Spectator - A snapshot of the world's 20 biggest banks by market capitalisation reveals a lot about how the world has changed since the sub-prime credit crisis began to unfold a year ago. It shows a shift in banking power away from the United States to Europe and Asia. That trend is likely to be maintained as institutions outside the US step up their participation in the consolidation of the banking sector funded by high savings rates in domestic markets.


Note that JP Morgan Chase (which acquired Washington Mutual on September 25, 2008), Wells Fargo (which acquired Wachovia on October 12, 2008), and Bank of America (which acquired an additional 8.4 percent state in China Construction Corp. on November 18, 2008), are amoung the nine banks that were partially "nationalized" in October 2008. Note also that ICBC is majority-owned by the Chinese Government.

Australia's big four banks did not make the big bank league (see table above), but Commonwealth Bank of Australia sits just outside the top 20 with a market cap of $US49 billion. CBA is in good company. It is among five banks clustered around the $US50 billion market cap level including Mizuho Financial Group, Sumitomo Mitsui Financial Group, Credit Suisse and Credit Agricole.

CBA is in good company. It is among five banks clustered around the $US50 billion market cap level including Mizuho Financial Group, Sumitomo Mitsui Financial Group, Credit Suisse and Credit Agricole.

Bankers have traditionally measured themselves against each other by the size of their balance sheets. But that rule of thumb no longer applies in the wake of the $520 billion in sub-prime write-offs and various financial institution bankruptcies over the past 12 months.

Another popular yardstick for ranking the world's banks has been shareholders' equity. This measure has lost its lustre because of investor concerns about the potential damage to equity from further loan write-offs.

These days market capitalisation is a far better guide to the relative strength of a financial institution. A higher stock market rating usually goes hand-in-hand with higher quality management, better provisioning and sound funding arrangements.

US banks that would have made it into the top 20 a year ago are either no longer around or are the subject of takeover speculation. Wachovia, which a year ago had a market cap of $US105 billion, is struggling to remain independent. Washington Mutual, which a year ago had a market cap of $US62 billion, disappeared in the past week. Its best assets are now part of JPMorgan Chase & Co, which is trading near its record high. Bank of America, Wells Fargo and US Bancorp have kept the stars and stripes flying in the top 20.

A fourth US bank to make the list is Citigroup. However, it is a shadow of its former self. It is a prime example of why banks should not be ranked by either total assets or shareholders' equity. Its market cap of $US109 billion is about 20 per cent less than its total shareholders' equity at June 30 of $US136 billion. Its total assets would probably make it number one in the world but having $US2,100 billion in assets is not a great measure of worth in today's environment.

Citigroup is about half the size of the number one ranked bank by market cap, the Industrial and Commercial Bank of China (ICBC). In stark contrast to its American counterpart, ICBC is valued at almost three times its total equity.

ICBC is one of three Chinese banks in the top 20. The others are China Construction Bank (fifth with a market cap of $US158 billion) and Bank of China (eighth with a market cap of $US102 billion). ICBC managed to keep its distance from the sub-prime mess with a total exposure to troubled US mortgages of about $US1.92 billion and provisions against that of about $US700 million. It has expanded into South Africa with the purchase of 20 per cent of Standard Bank.

It is arguable that the Asian success story includes the world's second biggest bank by market cap, HSBC Holdings. Although it is listed and headquartered in London, HSBC has successfully expanded from its original base in Hong Kong into many Asian countries, the UK, the US, South America and Australia.

In Europe, the quiet achiever is the Spanish bank Banco Santander. It is named in most merger talks for troubled banks. Europe, however, has not been immune from the broader impact of the credit crunch with several banks disappearing from the scene including HBOS, a bank that a year ago would have ranked in or near the top 20 with a market cap of $US96 billion. HBOS is about to become part of Lloyds TSB.

That brings us to the list we didn't do: the world's fastest shrinking banks. Apart from HBOS, the list would include Northern Rock, Bradford & Bingley and Washington Mutual. Those queuing up to join include Wachovia and Fortis.

American Insurance Group (AIG) Nationalized

September 17, 2008

[The Fed] said the US Government would receive 79.9 per cent of AIG’s equity and the right to veto dividend payments – the Government is trying to diminish the level of moral hazard created by the rescue by ensuring shareholders and preference shareholders are punished in the process. The US has just nationalised one of its biggest private sector institutions...

Federal Government Takes Over Fannie Mae and Freddie Mac

September 7, 2008

The belief of the top leadership in China that the Americans do not know how to handle their banking and economic crisis looks more and more accurate. A person with very close links to China’s leaders revealed that their most immediate concern was the deteriorating US banking situation. His comments were the first intimation to the West of the deep concerns at the top in China.

In the 48 hours since publication of these comments we have seen a volley of illustrations of the chaos pervading US economic management – exactly what the Chinese fear.

The latest problems started when the Dow Jones publication Barron's stated that US government officials may have no choice but to effectively nationalise the US housing finance titans Freddie Mac and Fannie Mae, which could wipe out existing holders of the companies' common stock.

But the US Treasury responded that it had no plans to use its new authority to backstop the mortgage finance giants in this way...

The Chinese have invested in large quantities of Fannie Mae and Freddie Mac paper and stand to win if that paper is given US government backing. That does not please many Americans.

Does Congress Secretly Plan to Nationalize American Banks?

June 30, 2008

What I believe we are seeing is the nationalization of our banking industry. Don't feel like the Lone Ranger… it appears the central banks in other non-communist nations are doing the same thing, just using a different methodology. Since nationalization of privately owned business is a primary identifier for a communist system of economics, it certainly gives one pause for thought, doesn't it? It looks to me like government wants to turn consumer lending and checking accounts over to GMAC, while they give control of other banking functions to stock brokers.

Is the nationalization of the oil industry far behind banks? Or, is the Congressional suggestion that oil companies be nationalized just a good way to keep our “nationalization” radar focused on an industry other than banking? Who knows in that dirty jungle called Washington?

I believe there will be grave problems ahead for America's commercial banking industry, just as there were problems for the Savings and Loan industry when Congress created that problem. The proposed legislation could give the non-regulated, non-audited, non-bank banking industry of brokerage and equity investment houses control of commercial banks without the protections that banks, and thus, consumers, have via the supposed regulation of the Comptroller of the Currency, the FDIC, state regulators, the Federal Reserve, and others.

Of course, none of these agencies is doing what bank regulations require them to do to protect America's banks from precisely what is happening to them.