Monday, May 17, 2010

Here We Go.............

Obama Administration Proposes Rolling Back Fifth and Sixth Amendments

May 16, 2010
SOC Editor’s note: Not even Obama’s predecessor suggested such draconian measures. Obama wants a modification that strikes at ideas established in the Magna Carta of 1215 and British common law — due process and a right to a speedy trial.
President Obama’s legal advisers are considering asking Congress to allow the government to detain terrorism suspects longer after their arrests before presenting them to a judge for an initial hearing, according to administration officials familiar with the discussions.
If approved, the idea to delay hearings would be attached to broader legislation to allow interrogators to withhold Miranda warnings from terrorism suspects for lengthy periods, as Attorney General Eric H. Holder Jr. proposed last week.
The goal of both measures would be to open a window of time after an arrest in which interrogators could question a terrorism suspect without an interruption that might cause the prisoner to stop talking. It is not clear how long of a delay the administration is considering seeking.
The officials, who spoke on the condition of anonymity because the proposal is still being developed, cautioned that it was not clear what the final proposal would include. Several aides to leading Democratic members of Congress said the administration had not approached their offices for detailed discussions of the matter, and the administration declined to comment on the internal deliberations.

You Mean The Markets Might NOT Be Manipulated?

'Serious manipulation'of gold, silver markets

Price of precious metals'forced down for profit'
Posted: May 16, 201010:18 pm Eastern

NEW YORK – A London-based commodities trader claims a major New York bank is conducting serious manipulation of the silver and gold futures markets.
The practice has continued even after federal regulators have been warned of the impropriety, Andrew Maguire, a metals trader at the London Bullion Market Association, told WND.
Last November, Maguire brought allegations before the U.S. Commodity Futures Trading Commission, or CFTC, in Washington that gold and silver traders at JPMorgan Chase have conspired to manipulate global precious metals markets. He charged the manipulation amounts to hundreds of millions of dollars, if not billions, in institutional trading profit for the bank and personal profit for the traders.
"It's like robbing a bank," Maguire told WND.
America's wealth is being intentionally killed off. Find out how to protect your own right now!
Maguire charged that JPMorgan Chase gold and silver traders have coordinated massive purchases of "short contracts" betting that the price of gold or silver will go down. The purchases, he said, are part of a strategy aimed at forcing the price of gold and silver to drop dramatically at the expense of holders of "long positions" owning gold or silver.
"This is a very small community that engages in metals trading – only a handful of traders at major institutions like JPMorgan Chase," Maguire said.
"The traders involved in market manipulation trigger their signals in advance so that local traders like me can jump on board to create a major market movement," he said.
(Story continues below)
WND has obtained a series of e-mails Maguire exchanged with Eliud Ramirez, the head of CFTC's enforcement unit. A copy was sent to CFTC Commissioner Bart Chilton. Maguire specified his allegations in the e-mail and predicted major market moves he believed would occur as a result of trader manipulations instigated at JPMorgan Chase.
In a Feb. 3 e-mail, Maguire predicted to the CFTC that traders were ready to initiate "a wave of short selling" designed to reduce dramatically the price of gold and of silver.
An examination of the price charts for gold and silver show both metals suffered price declines after Maquire's Feb. 3 e-mail, exactly as he predicted.
As the market manipulation was in progress, Maguire sent additional e-mails to Ramirez at the CFTC.
"It is undoubtedly the concentrated short who has 'walked silver down' since Wednesday, putting large blocks in the way of bids," Maguire e-mailed Ramirez Feb. 5. "This is clear manipulation as the long holders who have been liquidated are matched by new short selling as open interest is rising during the decline."
Then, again later that day, Maguire e-mailed Ramirez: "A final e-mail to confirm that the silver manipulation was a great success and played out EXACTLY to plan as predicted yesterday. How would this be possible if the silver market was not in full control of the parties we discussed in our phone interview?"
In the e-mail, Maguire rebuked the CFTC: "It is common knowledge here in London among the metals traders that it is JPM's (JPMorgan Chase's) intent to flush out and cover as many shorts as possible prior to any discussion in March about position limits. I feel sorry for all those not in this loop. A serious amount of money was made and lost today and in my opinion as a result of the CFTC's allowing by your own definition an illegal concentrated and manipulative position to occur."
Bill Murphy, chairman of the Gold Anti-Trust Action Committee, published Maguire's e-mails on his organization's website, charging, "It would not be possible to predict such a market move unless the market was manipulated."
WND asked JPMorgan Chase to reply to Maguire's charges.
"We have no knowledge of who Andrew Maguire is," Brian Marchiony, a spokesman for JPMorgan Chase told WND. "We have no comment on Maguire's charges."
A CFTC spokesman told WND, "We do not comment on investigations."
Signal to 'get on board'
How does Macguire allege the insider market manipulation in the metals futures markets can be recognized?
"When suddenly, in relatively thin trading on gold or silver, you see out of the blue several hundreds, if not 1,500 contracts suddenly pop up on the sell-side, then you know that is a very concentrated position holder, not an amalgamation of orders," he explained.

"It's a signal to everybody to get on board on the sell-side because this is not moving a cent further on the long-side," he said.
Maguire insisted the coordinated placement of a large number of sell-side orders could only be designed to move the price of gold or silver down. The traders coordinating the market movement would benefit from having shorted the metal at the expense of its owners, who held long positions or were purchasing futures contracts betting the price of the metal would go up.
"All the traders then had better jump on board because you'd be crazy to go against a major coordinated market move like this," he said. "It's like playing a fish as the traders manipulating the market push the price of gold or silver down and down and down."
Maguire said he explained to the CFTC that "the footprints of the coordinated trading were easy to read." He sent to the CFTC computer "screen shots" he believe proved JPMorgan was a concentrated market manipulator engaging in illegal activity designed to depress the price of gold or silver for profit.
If Maguire has shared the information with the CFTC, why did he decide to go public explaining his accusations to WND and to Murphy at GATA for publication?
"I want the CFTC to catch these guys in the act," Maguire answered, "and I called the CFTC to alert them to market manipulations as they were happening. But now I'm concerned that the CFTC is just sitting on the information and doing nothing to investigate my allegations or bring charges."
Maguire charged the profit made by metals market manipulators was "in the hundreds of millions, if not billions" and that the end result was the money was "being stolen from private investors who have no idea whatsoever what is going on behind the scenes."
On March 25, Murphy disclosed Maguire's charges in a public hearing before the CFTC, a clip of which can be viewed on YouTube.
Attempted murder?
Maguire and his wife were involved in a bizarre car accident in London, the New York Post reported March 29.
Maguire told WND he reluctantly has come to believe the car accident was an attempt on his life.
"We got hit in the side at full acceleration and tried to corral the cars in a gas station, including the guy who hit us with a commercial vehicle," Maguire explained.
The assailant then got in his car and accelerated, hitting a number of cars as he escaped from the gas station, making the event into a hit-and-run situation.
"The police told us the assailant was known to them and even that they arrested him," Maguire said. "But recently the police won't say anything, and I haven't been able to learn anything about the assailant."

What We've Suspected All Along

Cabal killing off U.S. wealth

Investigation documents American economy didn't fall, it was pushed
Posted: May 10, 20109:58 pm Eastern

A cabal that has been traced back almost half a century still is working – using a manipulative carbon credit scheme among other things – to kill off the wealth of the United States, according to a new investigation that has been documented in "Killing Wealth, Freeing Wealth: How to Save America's Economy … and Your Own."
The work, with an official launch date Tuesday, is by author and economist Floyd Brown and broadcaster and political adviser Lee Troxler. Brown created the Willie Horton ad, considered by many the most impactful campaign commercial ever, and Troxler wrote speeches for President Reagan.
The bottom line is a warning that the last economic collapse didn't just happen, it was forced, they report.
They explain the machination consumers have seen at the highest levels of finance isn't just some cyclical phase the nation is enduring, but a capital crime, and the murder victim is the nation's wealth – "Hundreds of billions, even trillions of dollars – destroyed in order to enrich and empower beyond imagination a ruling elite of 'Killionaires' whose membership will shock even seasoned political observers."
The authors combed the wreckage of the U.S. economy for their evidence of sabotage, and now are revealing a billionaire financial complex spanning several presidential administrations that set out in conscious conspiracy to kill individual initiative in their wealth grab.
They also are warning that the economic turmoil isn't finished. In their last book they accurately predicted the 2008 financial collapse – to within one month and 100 points on the Dow. Their new forecast includes a Washington-Wall Street conspiracy, an eco-terrorist link to the BP oil catastrophe, and Goldman Sachs.
(Story continues below)
"Killing Wealth, Freeing Wealth" reports that Americans need not depend on the government they support to protect them, either.
"(Obama) chose 'house upon stone' as his vision, and he told a nation that it wouldn't be easy rebuilding that house since we had 'lost trust and confidence' after years of Republican misrule," the book reports. "He's right. It won't be easy … On the very same day Timothy Geithner announced his anti-lobbyist rules he hired goldman Sachs lobbyist Mark Patterson as his chief of staff."
The authors have followed the money back to secret meetings in Silicon Valley in 2005 where these "Killionaires" conspired to create a colossal and entirely artificial market in carbon credits with the design of bilking investors of hundreds of billions of dollars when the right environmental catastrophe "could be engineered."
They went back even further, revealing from the 1960s the originas of today's political and economic problems.
And they offer suggestions, a "claw-back" strategy entrepreneurs and investors can use to face the coming years, which is expected to include more turbulence because of the continuing policy of – literally – creating money out of ink and paper.
Brown studied economics at the University of Washington under famed economist Paul Heyne, and forged his political experience working for President Reagan and Sen. Bob Dole. Now president of the Western Center for Journalism, he has authored "Obama Unmasked: Did Slick Hollywood Handlers Create the Perfect Candidate?" "Say the Right Thing," "Prince Albert: The Life and Lies of Al Gore," and "Slick Willie: Why America Cannot Trust Bill Clinton."
Troxler wrote not just speeches for Reagan but also books, "Obama Unmasked," "Hillary the Movie," "On Native Soil: The Documentary of the 9/11 Commission Report," "FahrenHYPE 9/11: Unraveling the Truth About Fahrenheit 9/11 and Michael Moore," and "Along Wit's Trail: The Humor & Wisdom of Ronald Reagan."


Wednesday, May 5, 2010

The Mexican Hypocrisy

Mexico's illegals laws tougher than Arizona's

Mexican President Felipe Calderon denounced as "racial discrimination" an Arizona law giving state and local police the authority to arrest suspected illegal immigrants and vowed to use all means at his disposal to defend Mexican nationals against a law he called a "violation of human rights."
But the legislation, signed April 23 by Arizona Gov. Jan Brewer, is similar to Reglamento de la Ley General de Poblacion — the General Law on Population enacted in Mexico in April 2000, which mandates that federal, local and municipal police cooperate with federal immigration authorities in that country in the arrests of illegal immigrants.
Under the Mexican law, illegal immigration is a felony, punishable by up to two years in prison. Immigrants who are deported and attempt to re-enter can be imprisoned for 10 years. Visa violators can be sentenced to six-year terms. Mexicans who help illegal immigrants are considered criminals.
The law also says Mexico can deport foreigners who are deemed detrimental to "economic or national interests," violate Mexican law, are not "physically or mentally healthy" or lack the "necessary funds for their sustenance" and for their dependents.
"This sounds like the kind of law that a rational nation would have to protect itself against illegal immigrants — that would stop and punish the very people who are violating the law," said Rep. Steve King of Iowa, ranking Republican on the House Judiciary subcommittee on immigration, citizenship, refugees, border security and international law.
"Why would Mr. Calderon have any objections to an Arizona law that is less draconian than his own, one he has pledged to enforce?" Mr. King said.
Sen. Jon Kyl of Arizona, the ranking Republican on the Senate Judiciary subcommittee on terrorism and homeland security, described Mr. Calderon's comments as "hypocritical to say the least."
"I would have expected more from Mr. Calderon," said Mr. Kyl, who serves as the Senate minority whip. "We are spending millions of dollars to help Mexico fight the drug cartels that pose a threat to his government, and he doesn't seem to recognize our concerns. He ought to be apologizing to us instead of condemning us."
Mr. Kyl, along with fellow Arizona Republican Sen. John McCain, has introduced a 10-point comprehensive border security plan to combat illegal immigration, drug and human smuggling, and violent crime along the southwestern border. It includes the deployment of National Guard troops, an increase in U.S. Border Patrol agents and 700 miles of fencing, along with other equipment and funding upgrades.
He said skyrocketing violence on the border, including the recent killing of an Arizona rancher by an illegal immigrant he had gone to assist, has not gone unnoticed by the public, adding that until the federal government provides the necessary funding and manpower to adequately secure the southwestern border, Arizona will not long remain the only state to pass legislation to do it on its own.
Rep. Ted Poe, Texas Republican and a member of the House Judiciary and Foreign Affairs committees, described Mr. Calderon's criticism as "arrogant and hypocritical." He said Mexico's immigrations laws are "even tougher than those in the United States" and it was inappropriate to denounce the Arizona law when "Mexico does the very same thing."
"Mexico wants people to come to the United States and to send their money home," he said. "They want to make their problems our problems — that's their foreign policy. President Calderon should spend more time focusing on problems in his own country instead of criticizing Arizona for doing what Mexican law requires its own to do."
Rep. John Culberson, a Texas Republican who has advocated for stricter border enforcement policies, said the Arizona law was enacted as a result of the nation's "failed immigration policies."
"We should focus our time and resources on enforcing policies that work, like zero tolerance, which has reduced crime and illegal immigration dramatically along our southern border," he said.
Ricardo Alday, a spokesman at the Mexican Embassy in Washington, did not return calls for comment.
But the embassy has said the Mexican government is "deeply concerned by the potential dire effects" that the Arizona law will have on the estimated 12 million illegal immigrants in the United States — about 450,000 of them in Arizona.
"As it has been raised by national Latino and immigration rights organizations, initiatives that exclusively criminalize immigration create opportunities for an undue enforcement of the law through racial profiling," Mr. Alday said in an April 15 statement.
The ambassador also warned of the "likelihood of negative effects that this measure … may have for the future development of friendship, commercial, tourist and cultural ties" between Mexico and Arizona.
The Arizona law, which is set to take effect in midsummer, authorizes state and local law enforcement officers — during lawful stops only — to determine the immigration status of people for whom there is "reasonable suspicion" that they are in the country illegally. Known as Senate Bill 1070, it was enacted in response to a dramatic rise in violence along the Arizona-Mexico border.
Reasonable suspicion is a legal standard requiring that before someone is arrested or detained there must be reasonable belief that the person has been, is or is about to be engaged in criminal activity.
A Rasmussen Reports poll has found that 70 percent of likely voters in Arizona approve of the legislation, while 23 percent oppose it.
Half of the nearly 1 million illegal border crossings into the United States each year occur in Arizona, according to a report by the Federation for American Immigration Reform (FAIR), which also said Arizona taxpayers spend more than $2 billion a year on education and health care for illegal immigrants and their children.
"The porous border is virtually a welcome mat for criminal organizations that run drugs and other contraband through the state," the immigration watchdog group said, adding that kidnappings in Phoenix are at a record high.
Rep. Luis V. Gutierrez, an Illinois Democrat who was arrested Saturday during a rally at the White House calling on Congress and the Obama administration to enact immigration reform, said more states "could adopt Arizona's draconian law" if Congress doesnt act now.
"We must have fair and balanced reform to ensure immigrants are full participants in our economic recovery," said Mr. Gutierrez, chairman of the Democratic Caucus Immigration Task Force, for which he is the party's leading strategist and spokesman on immigration issues. "Enforcement-only tactics break up families, disrupt businesses, distract local law enforcement and drain local budgets."
In signing the bill, Mrs. Brewer said she would "not tolerate racial discrimination or racial profiling" and emphasized an amendment to the bill that prevents law enforcement personnel from using a person's race as the only factor in implementing the law.
"This protects all of us — every Arizona citizen and everyone here lawfully," she said.
The key legal issue, according to attorneys on both sides, will be whether the state law interferes with the federal government's duty to handle immigration.
Criticism of the Arizona law has come from several sources, including President Obama, who described it as an example of "irresponsibility" by the state. Attorney General Eric H. Holder Jr. has said the Justice Department is considering a legal challenge to the law.
Homeland Security Secretary Janet Napolitano told the Senate Judiciary Committee last week that the Arizona law could distract the agency from using its resources to go after serious criminals. She said there were concerns that at some point "we'll be responsible to enforce or use our immigration resources against anyone that would get picked up in Arizona."
She said she vetoed similar measures when she served as Arizona governor from 2003 to 2009.
On Sunday, she called the Arizona law "really a cry of frustration," while noting that "more assets have been put into Arizona in the last 15 months than ever in history."
"But, you know what, there's still a frustration out there. It's a frustration ultimately that will only be solved with comprehensive immigration reform," she said on ABC's "This Week."
The American Civil Liberties Union (ACLU), the Mexican American Legal Defense and Educational Fund (MALDEF) and the National Immigration Law Center (NILC) also are preparing legal challenges.
During a Phoenix news conference last week, MALDEF President and General Counsel Thomas A. Saenz said "a vigorous and sophisticated legal challenge will be mounted" before the bill's implementation this summer "to prevent this unconstitutional and discriminatory law from ever taking effect."
Linton Joaquin, NILC's general counsel, added that the Arizona law "sends a strong message to all immigrants to have no contact with any law enforcement officer." He said the "inevitable result" would not only be to make immigrants more vulnerable to crime and exploitation, "but also to make the entire community less safe by aggressively discouraging witnesses and victims from reporting crimes."
The Rev. Eve Nunez of the Arizona Latino Commission and National Hispanic Christian Leadership Conference said the Arizona law will be divisive and demonstrates the need for Congress to pass an immigration reform bill.
"A lot of pastors are very fearful they will be fined for transporting members of their congregation in their church vans. Churches are already losing members," she said. "There is great fear in the Hispanic community. It is very sad that in a state that should be welcoming the stranger, we are allowing oppressive laws to pass."
Mr. King defended the bill, saying Arizona and other states are being forced to "step up and fill the void" left by the failure of the Obama administration and Homeland Security Department to secure the nation's borders.
"I commend Arizona for standing up for the rule of law," he said.
Mr. King also noted that critics of the law have distorted what it says. He said the law allows state authorities to inquire into the immigration status based only on a "reasonable suspicion" that the person is unlawfully present in the United States.
As a state senator in Iowa, he was the principal sponsor of a workplace drug and alcohol testing bill in 1998 that also relied on "reasonable suspicion." That bill allowed the taking of urine or other samples from employees for whom there was a reasonable suspicion that they were under the influence.
"That bill passed into law in 1998 and there has not been a constitutional challenge to it yet," Mr. King said.
Arizona state Sen. Russell Pearce, the bill's author, said a constitutional challenge would "determine whether our nation enforces its immigration laws and secures its borders or becomes victim to its enemies."

Congressional Hypocrites Were Betting Against Stocks As Country Collapsed

Some members of Congress made risky bets with their own money that U.S. stocks or bonds would fall during the financial crisis, a Wall Street Journal analysis of congressional disclosures shows.
Senators have criticized Goldman Sachs Group Inc. for profiting from the housing collapse. And Congress is considering legislation to curb Wall Street risk-taking, including the use of financial instruments known as derivatives and of leverage, or methods that amplify returns.

According to The Journal's analysis of congressional disclosures, investment accounts of 13 members of Congress or their spouses show bearish bets made in 2008 via exchange-traded funds—portfolios that trade like stocks and mirror an index. These funds were leveraged; they used derivatives and other techniques to magnify the daily moves of the index they track.
There's no evidence the legislators and their spouses used privileged information or failed to follow rules on disclosure. Congressional rules permit lawmakers and their families to invest in—or bet against—publicly held companies they oversee through committee assignments, as well as broader markets or indices. While some made money, others lost.
Some of these legislators have publicly criticized practices such as short-selling, or betting on a security to decline. In February, Sen. Johnny Isakson (R., Ga.) argued on the Senate floor that "we don't need those speculating in the marketplace to take unfair advantage of the values of equities that are owned by Americans all over this country for the sake of making a buck on a short sale."
On Oct. 8 and 9, 2008—as the Federal Reserve was bailing out American International Group Inc.—an account Sen. Isakson held invested more than $30,000 in ProShares UltraShort 7-10 Year Treasury and UltraShort 20+ Year Treasury, the records show. These are "leveraged short" funds, designed to gain $2 for each $1 drop in the daily value of U.S. Treasury bonds.
Sen. Isakson said his account is professionally managed by Morgan Stanley Smith Barney and he has no control over it. "They make those decisions and I report what they do," Mr. Isakson said. "I put money away in my career so I can hopefully retire one day."
Sen. Isakson said, "Short selling has a role to play in the market." He said he supports legislation to limit it but wouldn't prohibit it.
Such trading involving members of Congress or spouses "doesn't look real great when the economy is tanking and people are blaming the government," said former Rep. Joel Hefley (R., Colo.), once head of the House Ethics Committee. Still, he said, "You can't have people not using their best judgment on their investment portfolio."
According to The Journal's analysis of the disclosures, collected by the Center for Responsive Politics, few members of Congress made more than a dozen securities trades in 2008. Typical trades were for a few hundred or a few thousand dollars.
While some lawmakers trade for their own accounts, others delegate trading to a spouse, stockbroker or financial adviser. A few legislators keep their money in blind trusts and don't know how it's invested.
Jonathan Gillibrand, husband of New York Democratic Sen. Kirsten Gillibrand, made more than 250 transactions in options in his E*Trade account in 2008, when his wife was in the House, according to disclosures.
Almost all the trades were in put options, which convey the right to sell a stock or other instrument at a given price until a given date. At least 34 times, Mr. Gillibrand bought puts on stocks of home builders, including Beazer Homes USA Inc., Hovnanian Enterprises Inc., Meritage Homes Corp. and Ryland Group Inc. These were bets the builder stocks would fall; if they did, the puts' value would rise.
Mr. Gillibrand also bought call options on ProShares UltraShort Real Estate. Although call options are bullish bets, this trade, too, was a bet against the property market, because the ProShares fund is designed to rise $2 for each $1 fall in real-estate stocks. His profit or loss couldn't be determined.
Sen. Gillibrand, in an April 22 news release on White House financial-regulatory proposals, praised the effort to "rein in excessive risk and leverage in the pursuit of short-term profits."
"The senator was referring to activity by some institutions that were leveraging in excess of 20 to one, using taxpayer money on extremely risky short-term bets rather than long-term strategies that benefit the broader economy," said spokesman Matt Canter. Any comparison of those remarks with her husband's trading "is wrong," he said, adding that the senator "was not involved in his trading." Her office declined to make Mr. Gillibrand available for comment.
As previously reported by The Journal, in 2008 Rep. Spencer Bachus (R., Ala.) made roughly four dozen trades in shares of ProShares UltraShort QQQ and its options, according to disclosure records. This fund is designed to go up twice as much as the Nasdaq 100 stock index goes down.
AFP/Getty Images
Rep. Spencer Bachus
Rep. Bachus makes his own trades through a Fidelity account. He is the ranking Republican on the House Financial Services Committee, which has legislative oversight over the capital markets.
"I don't trade on margin"—money borrowed from a broker to raise potential returns—Rep. Bachus said in an email, "and don't consider my investments leveraged to any risky extent." He added: "Never have I traded on nonpublic information, nor do I trade in financial stocks."
Rep. Bachus made roughly $28,000 on his trades in options and leveraged ETFs in 2008, according to a Journal analysis, a figure he called "essentially correct."
On July 14, 2008, Rep. Bachus said in a letter to Financial Services Committee Chairman Barney Frank that it was "quite apparent" the challenges facing mortgage companies Fannie Mae and Freddie Mac were caused partly by "short-seller activities." A spokesman for Rep. Bachus didn't respond to requests for comment on the letter.
Rep. Shelley Berkley (D., Nev.), a member of the House Ways and Means Committee, has been a critic of Wall Street. In a statement on the House floor Feb. 23, she said: "Representing Las Vegas, let me assure you, no casino on the planet behaves as irresponsibly and recklessly as Wall Street does. Wall Street ought to be ashamed, and take a lesson from the casino industry."
An account held by her husband, Lawrence Lehrner, shows 57 trades in 2008 in ETFs designed to gain $2 for each $1 drop in the value of a market index, the disclosures show. Between July 25 and July 29, 2008—four months after Bear Stearns Cos. fell—records show four trades in and out of ProShares UltraShort Financial fund.
On Sept. 16, 2008, the day after Lehman Brothers filed for bankruptcy, the account added ProShares UltraShort S&P 500, a fund that thrives when blue-chip stocks tumble.
It was sold over the next two days at a 5% profit, according to disclosures. The account earned a modest net profit of a little over $700 on the trades in leveraged funds in 2008, based on The Journal's analysis of trading records.
"All trades were done by a licensed money manager without any input from my husband or me," Rep. Berkley said. "This is exactly the way many people handle whatever monies they may have in the stock market. I know in our case, he operated wholly within the existing regulations." Her office declined to make her husband's money manager available for comment.

Guess Who’s Paying For The Greece Bailout? That’s Right — YOU

May 4, 2010
The bailout outrages never stop.
Of the 110-billion Euro Greece bailout, 30-billion (approx $40 billion) will be paid for by the IMF.
The US supplies almost 20% of the IMF’s funding (per quotas). So that means US taxpayers are providing ~$8 billion of the $145 billion going to kick the Greek can down the road.
That’s the first outrage. (Why is this our problem?)
The second outrage is that, as in some of the US bailouts, our bailout money is JUNIOR to Greece’s existing debt. That means that, over the next couple of years, the idiot banks that loaned bankrupt Greece money will get their money back. And then, when Greece runs out of cash again, we’ll be left holding the bag (along with Germany and the rest of the folks who bailed Greece out).

In any normal financing, the lender of last resort would be SENIOR to all existing debt. It would get its money back first, before the other idiots got a penny.
In the Greece bailout, however, the new money we’re putting in will be going right out the door to pay off existing lenders who would have lost their shirts. And if the Greece austerity measures don’t work and there’s nothing left for us? Tough.
(Why don’t the existing creditors have to lose a penny? Same reason the AIG creditors didn’t lose a penny. Because it would apparently be too traumatic to ask them to do that. The idea that the existing creditors might have to lose money was apparently so unthinkable that it was never even on the table).
It’s nice of us to bail out Greece, isn’t it? Can’t we at least get the Parthenon as collateral or something?

We've Been Silent On The Polish Plane Crash....Til Now

Regime Change by Plane Crash
Tuesday, May 4, 2010
Nearly a month ago amateur footage was released ostensibly showing a Russian clean-up crew at the crash site killing off the few survivors of the Polish presidential plane crash. It seems unlikely that a crew would be waiting there on-site in that location as it’s an otherwise unremarkable wood that would not be frequented by the Russian authorities. Unless they were waiting for someone, that is.
This air crash had some telltale signs of being a pre-planned accident. On-site footage has sparked Polish demand for an international investigation better than the whitewashing collusion of Putin’s and Prime Minister Donald Tusk’s Polish underlings. Georgian President Mikhail Saakashvili said “there is something incredibly evil” in the death of Polish President Lech Kaczynski and his entourage. Compelling new evidence suggesting that the plane crash killing President Lech Kaczynski, nearly a hundred top military brass and civilians leaders was engineered is generating growing criticism of the Prime Minister, forcing him to deal with this reality. And this is not the first time a Polish head of state has died mysteriously in an air crash.

Recently, cleaned-up footage of the video has been spread in part through a collaborative Facebook effort to further showcase the events of that fateful day in April. This includes a better English transcription than originally posted due to more precise audio analysis. By no small coincidence the day of the crash was the seventieth anniversary of the first Katyn Massacre where Nazi Germany allowed Russians to kill 22,000 Polish officials, intellectuals, landowners and leading people of Polish communities.
The digitally enhanced video below shows people in confrontation in the aftermath of the plane crash, now the second Katyn massacre. Notice there is only smoke, not fog, in contrast to initial mainstream media reports.

Here is the translated English transcript of the audio in the video and its approximate timing:
0:13 Calm down!0:18 Look him in the eyes.0:22 Calm down!0:29 Oh my God!0:30 All of them!0:31 Kill them!0:38 (Airport siren sounds)0:45 Surround him! Go around! He‘s running away!0:47 Give me a gun.0:49 Come here, bastard!0:50 Kill him!0:51 Do not kill us.0:51 Do not kill us.0:55 My God, my God, what is that?0:55 Shoot.0:56 (Gun reloading noise)0:57 (Shot #1)1:01 You’ll never get away with it!1:07 (Shot #2)1:09 (Laughter)1:13 Change of plans – come back!1:14 Everyone come back – faster!1:14 (Shot #3)1:17 (Shot #4)1:20 Let’s get out of here.
We should remember to keep in mind that the nefarious globalists who orchestrated previous assassinations and terrorist attacks historically worldwide have a penchant for using special dates like 9/11 and 7/7. Their obsession with numerology and symbolism shows this “accident” to be no accident at all, indeed containing the textbook hallmarks of planned regime change as observed throughout history.
Much disinformation has been released in the media about what actually occurred on April 10th. To clear the air on a few issues:
Initial reports said that the plane attempted to land several times due to dense fog, but later it was revealed by a senior Russian aviation official that it only attempted to land once, and that it crashed on that attempt. There was no fog in the area as was suggested. The amateur video footage and weather reports contradict this media claim of fog obscuring the pilot’s view. Fog usually requires 100% humidity (unless created artificially), and as can be seen from the weather report below, it was only at 60%. In fact, there was no fog for the entire week in that area. This information is confirmed in weather reports.

The media also says the TU-154 has a questionable safety record, and that the presidential plane was more than two decades old. But sources reveal the plane had just been serviced:
“The Polish presidential plane was fully overhauled in December, its three engines repaired and updated with retrofitted electronic and navigation equipment.”
A thorough check is standard routine before a flight. Planes are statistically one of the safest means of travel in the world. Hardly any head of state has died in a plane crash in the past few decades. Now half the Polish government is dead! How likely is it that this was an accident?
Let’s look at another analysis:
“Commentator James Buchanan (link to article follows) makes some observations about fortuitous plane accidents, including one that killed the Polish prime minister (in exile) after he learned the real story of Katyn in 1943. It’s not that hard to arrange a plane accident, as at least three former members of the Kennedy family – including Joe Kennedy, Jr. and John Kennedy, Jr. – could testify!
“Buchanan points out that the Polish presidential plane had a complete overhaul in 2009 and the model of Tupelov that had been involved in accidents was sound and that the cited accidents took place in remote areas where maintenance was not so good.”
Contrary to some reports of mechanical failure, the plane was in perfect condition, recently inspected and refurbished with new navigational and electronic equipment. The plane was equipped with TAWS (Terrain Awareness System) in addition to standard radar, so there is hardly likely it would clip a tree on the way down as the navigational alarm would have sounded. No alarms were reported from the black boxes. Unless the upgraded electronic equipment had been modified or sabotaged, or even affected by a Russian electro-magnetic pulse weapon, as some suggest. In that case, manual override may have been necessary, or even impossible if the wiring had been severely affected.

If a manual landing was attempted, it may have been unsuccessful due to the fact that lamps were turned off on the runway, and additional beacons were misplaced to lure the pilot into the woods. Literally, false light bulbs were put in the lamps and were then later removed after the crash. According to the report above, when questioned, reporters were told to “go away.” So it appears that the pilot was given false information about the location of the runway. This could have been not only visual but also electronic, if the plane’s navigational system had been sabotaged to give incorrect data.
One of the bigger problems with the investigation is that much of it was done through the Russian authorities, and then information was handed off to the Polish people, instead of releasing the electronic devices themselves. Neither the black boxes nor audio recordings have been released to the Polish government, but only transcripts. If the Russian government had any involvement in this assassination, this would be something that they would want to do to hide their interference. Too much information from this investigation has been heavily controlled and concealed. Things are always actively hidden for a purpose. As it is said, “For everyone who does wicked things hates the light and does not come toward the light, so that his works might not be exposed.”
Regular investigative procedures clearly weren’t being followed, and it is clear that lies have been planted at every step along the way to obfuscate the truth. Certain news outlets suggested that the pilot was not able to speak Russian and there was confusion during the landing. Colleagues of the pilot say he was fluent in Russian, contrary to media reports.
Early speculative reports suggested that the president or another commanding officer who outranked the pilot told the pilot to act against his wishes. Transcripts from black box, however, show that no upper commander was interfering with the pilot.
Continuing on the topic of malfeasance, the base radar at the military airport which the presidential plane was to land in was disabled after Tusk met with Putin a week before the crash, at a more important meeting which the President and other Polish politicians were suspiciously not invited to.
Supposedly, the bodies were taken to Moscow and eventually all accounted for, but this goes in direct contradiction to pilot voice logs that states that only four people had been on board. Likely the stated passengers had been abducted and diverted to some other location, as suggested by Gerhard Wisnewski, where they would be disposed of against their will and/or knowledge. This procedure probably occurred on 9/11 as well, due to the fact that no bodies were ever retrieved – no dental records, nothing from any of the flights. For a plane crashing from perhaps less than 10 meters above the ground, according to flight analysis by pilots and aviation experts, casualties would be quite low, hence the likelihood of finding survivors and the need for them to be “disappeared” by those who seemingly wished to displace them.
If the plane was flying on low fuel and just meters above the ground as reported, how is it possible that the pieces of the plane were found two kilometers away? How could it have hit the tops of trees at 20 and 25 meters when it was still going without any collision at ten meters? Also, onlookers reported an explosion…but from what, if the fuel was nearly empty?
Conflicting information reports whether all the bodies from this crash were retrieved, and whether they were even identifiable. Polish and Russian officials said nobody survived the crash. But the amateur footage reveals otherwise, including footage of what appears to be the pilot in standard garb, climbing out of the wreckage and waving! All the bodies have been found, they allege – and yet at the same time, authorities say DNA tests will have to be carried out on the bones of many to identify them.
Whoa, wait a minute – shouldn’t that be done beforehand, if they were already supposedly “identified?” And that is just one example. What about the erased computers of crash victims three hours afterwards by the Polish secret service? How about the fact that the Prime Minister has complete say over any conclusion the investigation will ever come to? Both these questions and more have been posited by Kavkaz Center and remain unanswered. Clearly there is definite malfeasance going on here.
The question of motive has been previously addressed, but should be reviewed:
Poland was the only country in the EU that refused to strengthen its currency, as its Zloty being weak was a benefit to the Polish economy in exports, employment and tax revenues. The national bank governor had said he would not take loans from the IMF…they had even been so bold as to offer to loan the IMF money! But after the governor’s untimely death the IMF loans have started against his plans.
Poland is the only country that is not in recession in Europe, it’s actually grown 2.75% this year, and 1.7% last year, and growth projections are even higher for next year. Its debt is quite low compared to other countries at around 50% of its GDP. We can expect Poland to be absorbed into the Eurozone and increasing the size of its debts as its Central Bank governor was taken in the crash.
North Dakota is the only of the 50 US states to grow, and they have a state bank. As the state of North Dakota illustrates, economies can grow in spite of a general decline surrounding it, and Poland is another shining example of growth against the surrounding trends. Poland’s economy is indeed no joke.
After a licensed Novartis bird flu vaccine killed 21 homeless people in Poland in the summer of 2008, Poland refused the Swine flu vaccination, and was the only country in Europe to do so.
Poland and Italy were the only two countries in the EU to threaten to veto EU climate change plans.
Two weeks before the horrible plane crash involving the Polish Government and its finance head, the IMF visited Poland. They remarked that Poland was the only prosperous country in the EU, and also the last member signing into the European Union. They were wanting the Polish government to embrace the Euro as the sole unit of money, even though the polish Zloty has grown in value against the sinking Euro. And now a nation’s military heads and government have been deposed at one fell swoop.
Some good insight and questions that have been asked by investigative journalist Jane Burgermeister, from which I have referenced heavily from in this article, follow:
“How come President Kaczynski and half of Poland’s government flew to Katyn three days after the official anniversary?
Why did 100 figures who are vital for the day-to-day functioning of the Polish government go to a relatively insignificant ceremony, and not to the main one?
What reason could there be for the Polish central bank governor to fly to Katyn to attend the ceremony? Why did the 100 top Polish leaders all fly on the same plane?
How could security protocols that require that even a president and his deputy fly separately be so relaxed that so many key people needed to run the Polish government from day to day are allowed to fly on the same plane? And in a Russian Tupolev plane, and to the traditional arch-enemy of Poland, Russia?
Why were none of the journalists that accompany the president on the plane as usual?
According to Polish media, journalists were told that they had been assigned to another plane that had had technical problems and they would, therefore, need to switch to a third plane, delaying their arrival in Katyn. The delay of the journalists in arriving at the scene of the crash allowed a better manipulation of the media coverage. According to both Bild am Sonntag and the Berliner Zeitung newspapers, a hotel close to the crash site was sealed off, possibly to ensure that journalists who might have seen the crash could not send photos or reports. A man who took pictures of the crash site using his mobile phone had to erase the photos at a police check point on his way home.
What evidence is there that these people were on the plane to Smolensk at all apart from the passenger list issued by the authorities?
It is conceivable that the 100 top Polish leaders were rounded up in a purge and killed or kidnapped inside Poland and that the airplane accident in Russia was staged to explain their deaths. Weather reports indicated clouds but not fog.
According to the official version, however, the plane hit trees as it approached Smolensk airport in thick fog, and caught fire. The plane made four landing attempts because of the fog, according to the mainstream media.
But another witness reported hearing an explosion. The damage of the plane shown is consistent with an explosion. Debris was scattered around an area more than one kilometer.
Pilot error was a possible reason for the crash, according to the official story. But the pilots chosen to fly heads of state are highly qualified.
Why was the plane flying so low that it “hit a tree?” Weren’t the instruments measuring altitude on board working? What was the co-pilot doing? Where was the military escort? The security service detail?”
More analysis from this investigative journalist can be found here.
Not to mention that the bishop of Poland’s Protestant Church was killed in a car accident returning home from funeral ceremonies for President Lech Kaczynski. Whether this is an untimely coincidence or not is unknown, but the fact remains that a lot of people have died on route to commemorate the Polish dead. It’s definitely reminiscent of Princess Diana, to say the least.
Conspiracies do exist. Recently congress has admitted Lee Harvey Oswald didn’t act alone in the JFK assassination. All a conspiracy is is when two people or more act together to plan to commit criminal acts. We see that more and more every day in the financial sector, by our political leaders, through price-setting oligopolistic global corporations, and on even an international level. In this case, the EU, with the cooperation of Russia, is the implicated party. We know that Putin is buddy-buddy with the oligarchs running Eastern and Western Europe.
Why should we think the EU is infallible when Europe has had such a long history of criminal conspiracy, with kings and dukes being assassinated at every turn of the page?
From the Catiline conspiracies in first century BC, to the killing of Julius Caesar, from the Pazzi conspiracy, to the Babington Plot and the Throckmorton Plot, from the Gunpowder Plot of 1605, to the Dreyfus Affair, to Operation Himmler – these are all European conspiracies, not even divulging the modern-day ones. Who says conspiracies are only theory? It’s not just theory, it’s a fact of reality: corporations and individuals are being arraigned on conspiracy charges on a daily basis now, and people do hard time in prison for the crime of conspiring to commit crimes.
Cui Bono: Who Stands To Gain?
Prime Minister Tusk is an EU-friendly politician in contrast to the leaders who died in the plane crash, and appears to be talented at doublespeak – much like Obama, showing support for policies that the public supports, in contrast to what he actually stands for and represents. Before the crash, Polish politicians were becoming more nationalistic and preferred Polish self-determination over international government and corporate cooperation.
Tusk’s party is predicted to win the next presidential election. The only two other presidential candidates died in the crash, publicly accepted and popular but now cast aside due to tragedy. The date of the presidential election has been moved up from October to June, giving Tusk’s party the advantage. His party’s victory will cement the dominance of the European Union over Poland, and quite conveniently just in time for Goldman Sachs, Citigroup and Morgan Stanley to move in to dominate and corrupt their financial system.

The European Union stands to gain the most. Certainly, Russia doesn’t benefit from this affair, except perhaps in the form of military dominance. But those aggressions have long since past, and Poland is not a big threat to Russia. The EU wants Poland to step into line with their program, so that they can go on to the next stage of global governance. With the last piece of their puzzle being put into place, the EU is now being fully united in a corporate body.
What is the message that this oddly-timed regime change has brought to the people of the free world, countries and leaders who wish to resist the globalist empire? Oppose us and die! Greece, Italy, Ireland and other states within the EU have shown their desire to stand apart from complete EU governance and the domination of the Euro, and now Poland has been made an example of. Dare oppose the IMF, the Eurozone, EU-mandated vaccinations and the global powers-that-be, and you will be dealt with most severely.

Aides fear crisis threatening Obama's aura of competence along with environment

White House in P.R. 'panic' over spill

May 4, 2010 05:20 AM EDT
The ferocious oil leak in the Gulf of Mexico is threatening President Barack Obama’s reputation for competence, just as surely as it endangers the Gulf ecosystem. So White House aides are escalating their efforts to reassure Congress and the public in the face of a slow-motion catastrophe, even though it’s not clear they can bring it under control anytime soon. “There is no good answer to this,” one senior administration official said. “There is no readily apparent solution besides one that could take three months. ... If it doesn’t show the impotence of the government, it shows the limits of the government.” Hope and change was Obama’s headline message in 2008, but those atop his campaign have always said that it was Obama’s cool competence — exemplified by his level-headed handling of the financial meltdown during the campaign’s waning days — that sealed the deal with independents and skeptical Democrats. The promise of rational, responsive and efficient government is Obama’s brand, his justification for bigger and bolder federal interventions and, ultimately, his rationale for a second term. So there was a “little bit of panic,” according to one administration official, when White House aides sensed the oil spill narrative getting away from them last week. The White House was particularly alarmed by the rash of stories comparing the Obama administration’s initial response with President George W. Bush’s sluggish response in the wake of Hurricane Katrina in 2005. Katrina was one of the first issues Obama seized upon after his election to the Senate in 2004 — and he made a highly publicized visit to New Orleans during the campaign, using the Bush administration response as a metaphor for incompetent and uncaring government. In fact, conversations at the time of the spill on April 20 show that West Wing aides were worried about the rig tragedy from the moment it was reported. Even before the scope of the disaster was clear, these aides knew that it would undermine, if not reverse, Obama’s support for increased offshore oil drilling. But even supporters acknowledge the White House didn’t convey that sense of concern to the public. “They weren’t slow on the response; they were slow on talking about it,” an outside White House adviser said. “The communication and the visibility came several days later. In the beginning, because this was so unprecedented, they were optimistic they would be successful in shutting it down relatively soon. They thought they’d be able to cap it. “I don’t think any of the [worst case] predictions are crazy anymore,” the adviser continued. “That’s why you’ve seen that nobody is making predictions anymore. Nobody wants to be wrong anymore. They have to be demonstrating forceful leadership in throwing everything they have at the problem.” The administration’s public response intensified dramatically last Thursday when the magnitude of the spill became apparent, and then again Saturday, when Adm. Thad Allen, the U.S. Coast Guard commander, was named “national incident commander.” The administration announced a Deepwater Horizon Incident Joint Information Center, with its own Twitter feed and Facebook page to help keep threatened communities in the loop.
Allen told POLITICO in a telephone interview that he has no regrets about any of major decisions made by federal officials since the platform exploded – and that the response was much better than the Bush administration’s Katrina response. “Things started to change rapidly when the drilling unit sunk [on the second day after the explosion],” Allen said. “We are dealing in a battle space with no human access. In fact, I call it ‘inner space.’ It’s more like Apollo 13 than the Exxon Valdez because we’re seeing everything with remotely operated vehicles.” Dana Perino, the last White House press secretary under Bush, even sounded sympathetic to Obama’s plight. “I don’t think this is comparable to Katrina,” she said. “But ... they are learning just how hard it is to get situational awareness during a crisis. ... Things are going to overtake them. They are learning this right now.” A timeline of the White House response shows the difficulty federal officials initially had getting a clear picture of the disaster. The Departments of Homeland Security and Interior say they dispatched officials to the Gulf within hours of the April 20 spill. But the White House publicly downplayed its possible environmental and political impact during the Coast Guard’s search-and-rescue operation during the first 72 hours. Allen said, “Two hours after the MODU [Mobile Offshore Drilling Unit] went down, I was in the Oval.” He said he briefed Obama and other administration officials on the worst-case scenario of a catastrophic spill. “It took about 20 to 30 minutes,” Allen recalled. “He had a few questions. ... We also talked about the investigation that would be required.” Allen said it took the Coast Guard “between 36 and 48 hours” after the platform sank on April 22 to get a clear view of the disaster location 5,000 feet below the surface using robot subs. And it was not until late last Wednesday that officials discovered there were three leak locations. A remote camera showed oil gushing from a crimped pipe — leaks Allen suspects were caused by settlement after the rig sank. Just as striking has been the administration’s powerful public relations counterattack, including senior administration officials on the Sunday shows touting talking points pointing to the administration’s involvement from “Day One.” At the same time, they’ve identified a villain — BP — with Interior Secretary Ken Salazar saying he’d keep a “boot on the neck” of the company to ensure it would pay for and toil over a cleanup of historic proportions.
On April 23, White House press secretary Robert Gibbs took issue when a POLITICO reporter suggested the wellhead was still leaking. Gibbs said Obama, who was receiving regular reports, was principally concerned with the human toll of the explosion. Gibbs said the disaster wouldn’t prompt a review of Obama’s executive order opening up vast offshore areas to petroleum and natural gas exploration. “I don’t think it opens up a new series of questions” on the process, he said, predicting it “won’t be the last time” there’s a spill. Also on April 23 — the day the Coast Guard called off the search for 11 missing workers, now presumed dead — Homeland Security Secretary Janet Napolitano led the first formal meeting of a National Response Team in the White House Situation Room. The Situation Room meetings have become a twice-daily conference call at 10 a.m. and 6 p.m., with about a dozen agencies participating. Napolitano, who went to Louisiana last week, plans to return to other affected Gulf Coast states later this week. With members of Congress returning to Washington on Tuesday, top administration officials are heading to the Capitol Visitor Center auditorium to hold two briefings — one at 3 p.m. for House and Senate staff, and another at 4:30 p.m. for lawmakers. Salazar will moderate the session for members, which will include Adm. Allen, Commerce Secretary Gary Locke, EPA Administrator Lisa Jackson and White House energy adviser Carol Browner. An adviser familiar with the planning said the administration officials’ message will be: “Here are the efforts on the ground. What are you hearing, and what else do we need to do? If there are places you think we’re not putting enough resources, tell us where those are, and we will get them there.” “The administration is being very concrete,” the adviser said. “Nobody’s trying to spin anybody. They’re giving a straight story, and taking input as to where else they need to do more.” Allen defended himself against criticism that the Coast Guard waited too long to intervene with BP. “Everybody was acting at each point in accordance with our doctrine and our judgment,” said Allen, who is due to retire at the end of this month. “There’s no hard and fast criteria to some of this. ... We have not had an event involving a platform like this in my career, and that’s 39 years. “This is an asymmetrical, anomalous complex unprecedented event.” Allen, echoing Obama’s remarks, said he was confident that BP would foot the entire bill for the cleanup, which could run into the tens of billions, despite a $75 million cap on payment for ecological damages embedded in a 1990s law. “There is an unlimited liability. ... Under certain conditions, there is no limit to the liabilities,” he said, adding that the government would have to prove “negligence or things like that” to recoup the whole amount.

Greece Forcing Hand Of Eurodollar Printers

EU Creates Money Out of Thin Air to Float Greece
Wednesday, May 05, 2010
Trichet May Rewrite ECB Rule Book to Tame Greek Risk ... European Central Bank President Jean- Claude Trichet, who capitulated on a January pledge not to relax lending rules for the sake of one country, may have to sacrifice more principles to prevent Greece from bringing down the euro. Trichet yesterday diluted rules for the second time in a month to guarantee the ECB will keep taking Greek government bonds as collateral for loans. The central bank may have to extend that to other nations, renew a program of lending unlimited cash to banks for a year, and even start buying government debt if the 110 billion-euro ($146 billion) bailout plan for Greece fails to stem the euro's slide, economists said. "Rather you break the rule book than the euro area," said Jacques Cailloux, chief European economist at Royal Bank of Scotland Group Plc in London. "We're far from being out of the woods. There is now a real opportunity for the ECB to take the lead." – Bloomberg
Dominant Social Theme: Emergency measures are absolutely necessary.
Free-Market Analysis: It is often a bit hard to figure out what is going on in the domain of high finance because the reporting is nearly impermeable. But if people understood clearly, they would probably be enraged. This article from Bloomberg is a case in point. What it really is reporting is that the ECB will print as much money as necessary to fund the Greek government so long as the larger market is unwilling to lend to Greece. While it may work for a while, funding government deficits by printing money out of thin air simply increases inflation and eventually promises significant price inflation. And this will create other problems that the article hints at. Here's some more from the article, also excerpted above:
"Despite fundamental differences, it remains impossible to rule out a self-fulfilling crisis," UBS AG Chief European Economist Stephane Deo wrote in a research note to clients. "To the extent that markets become illiquid the ECB would have to respond." The next response to a broadening loss of confidence in euro-area finances would be for the ECB to channel cash through banks, either by lending them more for longer in its regular auctions or by weakening collateral rules further, Deo said. Another option would be to accept bank loans to governments as security, he said.
The bank's policy makers may move as soon as their May 6 meeting in Lisbon to reintroduce unlimited three-month loans, Citigroup Inc. economists led by Juergen Michels said today. The ECB may have to go even further and buy government bonds if it is to stabilize financial markets and avoid a return to recession as governments slash spending to appease investors, said David Owen, chief European economist at Jeffries Group Inc. in London. "There is a good chance the ECB will ultimately have to resort to quantitative easing," he said.
Harvinder Sian, a senior fixed-income strategist at Royal Bank of Scotland, wrote in a report today that "markets should be alert to the risk of ECB bond buying, as early as today." While the ECB is prohibited from buying assets directly from authorities, it can buy them on the secondary market. Trichet said on May 2 that "at this stage, we have absolutely no decision on the purchase of government bonds."
Such a strategy remains unlikely because it would be a "red line which the German government would not allow to be crossed," said Marco Annunziata, chief economist at UniCredit Group in London. "Purchases of government bonds would be a straight monetary financing of excessive fiscal deficits, which is anathema to the Bundesbank and German government." Still, the ECB said yesterday that it would accept all Greek government debt as security when lending to banks, reneging on Trichet's pledge in January that it would not loosen lending requirements "for the sake of any particular country."
The last paragraph is the really important one. It is telling us that if the ECB starts to print money to buy Greek bonds that no one else will buy, the Germans, collectively (having had too much experience with the terrors of price inflation in the past 100 years), will take some sort of definitive action (maybe seek to pull out of the EU?) Of course, it won't be socialist German leaders who will initiate the action. The electorate will drag them into it.
The kinds of draconian measures that the ECB is contemplating reminds us that the crisis is far from over. It all sounds so official, so complex and so ... necessary. But what is the reality? The reality is that what is being contemplated is printing money out of thin air to pay for Greek government profligacy. The Greeks have promised themselves many wonderful things that they now cannot pay for. And the EU is going to step in and buy Greek bonds with electronic money that has no intrinsic value.
A small group of men got together about 50 years ago to set up the European Common Market to ensure that nothing like World War II would ever happened again. Despite other hypotheses, we believe the group was driven by an Anglo-American axis that wanted to see Europe consolidated under a single currency and political system. In any event, the EU has been built up in the modern era using numerous lies that have disguised the true intentions of its leaders.
In order to maintain the EU and expand it, the EU elites created a common currency that could not outlast a serious economic downturn. They basically patched together a bunch of dysfunctional and debt ridden nation's currencies, all in the hope of creating a false illusion of strength. The ultimate idea was that a financial crisis would force the EU to become a political as well as an economic force. While that is taking place today, the Internet and the technology of advanced communications has made it very difficult for the elite to promote the necessary dominant social themes that would justify the kind of political action that is necessary. The patchwork currency-quilt is starting to unravel and the warm fuzzy feelings associated with being in bed with the EU along with it.
The EU, in our opinion, encouraged the socialist profligacy that has led to current account deficits. The leaders of the EU knew that the stability of the currency would inevitably create a temptation to leverage additional government spending, especially for Southern EU countries. This was supposed to create a crisis to lead to a more political union. But now the crisis has seemingly backfired. To combat it, the EU is willing to print as much money as it needs to float the Deficits of the Profligate.
What we see from this is that the crisis itself was manmade – intended to further consolidate wealth and control in the hands of those who stand in the shadows and run Europe nonetheless. Further, we see the powers-that-be are willing to print money out of nothing to ensure that the EU does not truly go bust. This is what the Bloomberg article is telling us in its impenetrable manner.
Conclusion: The media and the academic institutions that provide the justification for this sort of financial system are as much as fault as the EU itself. The entire program – along with the culture of the European professional upper classes – seems positively Swiftian. It piles absurdity upon absurdity and then through various devices and creative communication attempts to create complexities in the hopes that people won't see through to what is really going on. But such strategies seem to be working less well these days.

Quote of the Day/Century

"The champions of socialism call themselves progressives, but they recommend a system which is characterized by rigid observance of routine and by a resistance to every kind of improvement. They call themselves liberals, but they are intent upon abolishing liberty. They call themselves democrats, but they yearn for dictatorship. They call themselves revolutionaries, but they want to make the government omnipotent. They promise the blessings of the Garden of Eden, but they plan to transform the world into a gigantic post office. Every man but a subordinate clerk in a bureau. What an alluring utopia! What a noble cause to fight!Against all this frenzy of agitation there is but one weapon available: reason. Just common sense is needed to prevent man from falling prey to illusory fantasies and empty catchwords.

"From "Bureaucracy" by Ludwig von Mises (1944)


One Indicator's Unwelcome Return to Pre-Lehman Levels
Monday, May 3, 2010 at 12:49PM
For the last several months, we have highlighted how many market and economic indicators have returned to their pre-Lehman levels. Today, however, we saw one indicator's unwelcome return. Each month in the ISM Manufacturing Report on Business, respondents are asked which commodities are rising in price and which ones are declining. In this month's report, respondents saw increases in 20 commodities and decreases in one (natural gas), for a net of 19. On a three month average basis, the net number of commodities rising in price is now up to 17, which is the highest level since August 2008. While no one is complaining about improved economic demand, one unwelcome by-product of the improved economic picture is rising prices. Along those lines, this month's increase in the commodities survey to its highest level in over a year suggests that worries over inflation may begin to grow louder.

Eurozone Still Sinking.......

4 May 2010
There’s an old saying on Wall Street that stocks take the stairs up and the elevator down. Boy was that true today. You might even say that some people took an even faster way down – out the window. If you’re living in Greece, Spain or Portugal that probably sounds pretty good right about now. Today was a disastrous day on just about any level. Technically, the volume was very high and breadth was very negative at almost 6:1. It was also a 90% down day. Fundamentally, Europe could very well be broken.
On Sunday evening we wrote:
“Aside from the fact that this is almost certainly not a buying opportunity, let’s just hope that we don’t confront similar Euro problems down the road. I think that is 100% impossible as the problems here cannot be resolved with bailouts, but only by a restructuring of the European Monetary Union. Unfortunately, the Greek bailout now guarantees that it will take a much larger and far more damaging event to wake the EMU up to the true flaws that are at hand here….”
Nonetheless, investors piled into stocks on Monday as hopes of a Greek bailout looked promising. Unfortunately, the market has called the EMU’s buff and now the problems have potentially worsened. Greece is no longer the concern as the markets focus on Portugal and Spain. I find it hard to believe that the Germans can pass the Greek bailout now that they know the market could care less for it. It would be an effective waste of a huge amount of money. There truly is no happy ending to all of this. I think we are witnessing the beginning of the end of the EMU (how long that takes to unfold is beyond me). The currency is fatally flawed and has been exposed as such. Unfortunately, it is the people of Europe who will now suffer at the decisions of a few central bankers. I fear they will paper over the problems in a flawed attempt to maintain unity. The “Scott Norwood kick of the can” is quickly turning into a Pele like kick – extraordinarily hard….
Stocks closed lower by 2.4% today. I have maintained that the risks are extraordinarily high in this market and today does nothing but confirm such thinking.

Nicely Said................

"Courage is what it takes to stand up and speak; courage is also what it takes to sit down and listen."
-Winston Churchill

Tuesday, May 4, 2010

Real Math For Real Problems In The Entitlement Sector

The Welfare State Meets Mathematics

The simple matter is that many nations have been living beyond their means and investors are beginning to doubt governments are good credit risks. That’s saying something, when governments can simply confiscate from the public the money needed to pay bond holders. But debt-to-GDP levels are now so high across the Western world that bond investors (and ratings agencies) are having serious doubts.The credits ratings analysts at Standard and Poor’s have been busy. A day after downgrading Greek and Portuguese debt, the analysts downgraded Spanish debt too. And now words like “viral” and “contagion” are…uh…spreading like…a disease.

The contagion from a Greek default could also spread to much larger economies where the public finances are also fragile, including the U.K. and, perhaps the biggest risk of all, Japan,”said Julian Jessop, chief international economist at Capital Economics. Jessop somehow left out the U.S, which is astonishing given that the U.S. Treasury Department will auction US$129 billion in new debt this week. Yields on 2-year, 10-year and 30-year U.S. debt all rose (and prices fell).But now the metaphors get complicated. You’re going to start hearing a lot of commentators say that this is a crisis of confidence. But when is the last time you stopped a cold with a strong sense of self belief?To say the sovereign debt crisis is just a crisis of confidence is to ignore Europe’s (and Japan’s, and the U.K.’s, and America’s) failing fiscal welfare state model. This model is not surviving its first contact with the inevitable math of demography, where you have more pensioners and rising health care costs and fewer tax receipts.That’s why it’s not a question of confidence. It’s a question of debt default. Who’s going to go first?The alternative being contemplated is a kind of firebreak engineered by the IMF and the European Central Bank. These organisations would draw “a line in the sand” and provide a large line of credit or loan guarantees to all the troubled nations of Europe. And how much would THAT cost?According to the good people at Goldman Sachs and JP Morgan, about €600 billion. That seems like a lot of money. And that seems like a big gamble. You try and restore confidence by putting a trillion dollars on the table and saying, “Look at THAT!”But that looks more like bravado than real self-confidence. So it looks like we’ll see how durable the common currency project is. And in the meantime, that ought to mean more U.S. dollar and gold strength. In fact, with so many governments in so many places printing so much money, it shouldn’t surprise you to see a whole basket of commodities benefit...for now.However this just pushes out into time and amplifies in size the next phase of the crisis. It’s all, at heart, a debt crisis. And before it’s over we reckon there will be both collapsing asset values AND hyperinflation.

And here’s a bonus thought for the day: what if the inevitable collapse of the social welfare state funding model leads people to change their primary loyalty from the State to something more local? For starters, it would mean, we reckon, that the centralising principle of the last 200 years of Western history (in commerce, politics, and living arrangements) may have reached its natural limits.The centralising principle would reach those limits for various reasons. One is the inherent fragility of complex systems and their increasing vulnerability to systemic collapse. Globalisation and the division of labour on a global level creates tremendous complexity AND vulnerability.Politically, the centralising principle, as emotionally successful as it has been in winning market share/votes (let us live at one another’s expense) is being exposed as economically fraudulent (as well as morally wrong to coerce other people to your way of thinking through taxation). It’s a nice idea, but it may be unaffordable without literally mortgaging the future or destroying our standard of living in the pursuit of a social welfare utopia.Robb defines a primary loyalty as “a connection to a non-state group that is greater than loyalty to a state. These loyalties include those to clan, religion, tribe, neighbourhood gang, etc. These loyalties are reciprocated through the delivery of political goods (by the group that the state cannot or will not deliver).”In a prosperous liberal democratic state where people see justice as fair and view the burden of civilisation (taxes) as equitably shared, where corruption is not rife and opportunities exist for social and economic mobility, having your primary loyalty to an abstraction (the rule of law or the State) is no problem. It is the norm.But when the State expands the promises it makes and then fails to deliver on more basic ones, people begin to question their primary loyalty. This doesn’t mean they revolt. No one really wants to do that. You only do that when you have no recourse economically and no better prospects.We reckon a retreat to a more local way of life is in the works. The rising cost of energy and capital will be one factor. And frankly, to use a Marxist term, people might feel less alienated from their labour and life if they felt more connected to their neighbours and their work. And that’s more possible in a small, more sustainable resilient community than it is in an artificial mega-city of millions. But now we’re just prattling on!

The Eurozone Has A Problem Here

More than a few Greek banks are at stake here. This graphic illustrates how large these PIIGS’ debt problem has become.

It’s hard to decide who has it the worst: Spain, Italy, Greece or Portugal… or the German, French and British banks that have lent them so much money.

Greek Crisis Grows

“Capital is going on strike,” our foreign expert Ralph warned us late last week when he swung by the Sound Of Cannons East Tower offices for a quick update on the crisis. Ralph was early… and right on the money with his analysis of the event.
Opening the virtual papers this morning… et voila, the physical manifestation of the idea:
Depicted here, a general strike, as the mob fears austerity measures the government will introduce as part of a deal to borrow an additional $146 billion from the EU and IMF.
Assuming EU approval, the bailout will clock in as the largest sovereign bailout in history.
Soon Greek citizens will see their taxes at record highs and public pensions and benefits cut to the bare minimum. One analysis this morning projects the deal will put Greece in recession until 2017.
“This is going to be the biggest story in financial markets this year,” Ralph continues. “When the Greek government cuts expenditures and raises taxes, it will suck cash flow out of the private sector. Houses and firms will not have as much cash flow. That means the existing debt load to the private sector will be harder to service. So we’re not going to see just public debt distress -- which investors understand now -- but private debt distress as well. Some of these countries, like Spain, have very highly leveraged private sectors -- even more leveraged than their governments.
“What this means is that banks that have exposures in terms of private loans to households and in the eurozone periphery are going to find their loan losses going up. And then investors are going to start asking questions about their capital adequacy. And then, how can they raise capital in such an environment?
“I think many of the eurozone banks could be wonderful shorts.”

Getting Rid Of Gov't Run Schools, Now There's A Thought!

Eliminate Public Schools

The following is a fictionalized scenario of what might result if the public schools were eliminated. At the moment this idea has a near-zero, if not zero, chance of happening, particularly in those states whose constitutions now contain or have been construed to contain provisions enshrining a “positive right” to an education, meaning a positive claim upon the labor and property of others, a claim backed by the left’s stock-in-trade, the coercive force of the state. As resistance to ever-bigger government increases, with a commensurate greater appreciation for individual liberty, state constitutions will be re-examined, perhaps even amended. What follows is not a prediction, only an exploration which in turn may lead to better ideas. Finally, readers should bear in mind that eliminating public schooling is not the elimination of education, but rather the expansion of both freedom and education.“Alright, George Bailey, you’ve got your wish. The public schools were never invented. Now stay calm, and don’t fret about the many strange but freedom-affirming phenomena you’ll encounter as you stroll through a re-invigorated Bedford Falls. Ready.

Freedom for Taxpayers. Property taxpayers would no longer support a system which even its supporters readily admit must be “structurally improved” [Statist-ese for, “Give us more money”]. Anything in constant need of major improvements, not just routine adjustment, which produces uneducated “graduates” year after year (JayWalking anyone?), for decades on end, is irredeemable, netting very poor investment returns for taxpayers despite huge outlays. Since a sizable percentage of local municipal budgets (usually well over 50%, typically with supplemental “help” from state capitols) is dedicated to school funding, the elimination of this line item will give meaningful property tax relief.

Freedom for Municipalities. In the view of some – though at this point in time not nearly enough – all education is intrinsically coupled with morality, religion, and the reason of life itself. Necessarily it cannot then lawfully be a proper function of government if we’re to be serious about individual liberty and separating church and state. Governmental involvement in matters with religious overtones and nuances including differing worldviews conflicts with the Establishment Clause and state constitutional counterparts. Freed of school budgets, cities and towns will confine themselves to matters within their appropriate purview, generally subjects associated with public safety.

Freedom for Parents. Parents, relieved of a portion of their property tax burden, will have greater disposable income with which they may choose a private school appropriate for their child. Including a home school. Today, families wanting alternative schooling for their child/ren pay two tuitions, one to the chosen school directly, another to the municipality to support the public schools.

Freedom for Students. Relief to students who simply do not want to spend time in school for whatever reason (e.g., attitude, disinterest, safety concerns). Relief from One-Size-Fits-All-ism. How these now-emancipated students will choose to spend their newly-acquired time and freedom will be left to them and their parents. For the student willing to learn there will be choices galore as a thousand points of light evolve following the demise of the public schools. Throughout their history Americans have shown themselves to be both generous and ingenious. From scholarships and tuition assistance (remember, property tax relief will enable all citizens to spend their property tax relief as they see fit, not as government sees fit) to an array of different school types, all manner of ideas will come forth on “what to do with all those children.” To believe otherwise is to concede that we have lost our way as well as our senses of freedom and personal responsibility, and that only overseeing superintendent-esque nannies can save us.Repealing the truancy and compulsory attendance laws frees students enabling but also requiring them to become personally responsible for usefully filling their time, simultaneously serving as a sobering means of correcting immature attitudes via a dose of reality. Students and parents will of necessity become discerning consumers of those educational services which they desire. Consider this example. A parent/s believes that comprehensive sex education, including awareness of all different perspectives of human sexuality, is an important educational value and that such information should be taught, at all grade levels, to his/her/their child. These parents will choose, through free association and without compulsion, schools accommodating their expressed wishes. While acknowledging the rights of those parents to choose as they may, other parents might avoid those choices, preferring instead other educational values which for them may include emphasis on math & science, fine arts, building trades, mechanics, religious instruction, and so forth. They too will decide through free association and without compulsion. Open choice aka freedom aka liberty will enable each educational consumer to receive the specific educational values which he/she/they seek/s without the application of governmental force upon others who do not share or want those educational choices

Freedom for Teachers. To those who tsk-tsk the viable idea of doing away with the public schools, they should know that eliminating the public schools will not be the end of education. To the contrary it will encourage genuine learning. In an atmosphere of non-compulsion students who want to learn a chosen curriculum will present themselves before teachers who want to teach. The discipline problems of which teachers complain, including bullying, will largely disappear. Teaching to willing students is a joy unto itself. Having been a teacher in several venues – as seminar instructor on tax law matters to other accounting, tax & legal professionals; as host of numerous client seminars; as a homeschooling parent – I am keenly aware of how fulfilling it is to teach receptive students.
Freedom from Incompetence or Indifference. Every large public school system has its “rubber rooms” (search, “rubber rooms Stossel”) to which incompetent, insubordinate, or dangerous teachers are assigned, at full pay, while their cases for dismissal wend their way through a labyrinth of union contract provisions. Why such rooms? Because in the perverse world of public schools it is next to impossible to get rid of bad teachers. Despite the overriding concern, stated endlessly by politicians, bureaucrats and unions, of how much they all want to “educate the children,” the game is really about protecting government and its employees. Big government types, invariably “led” by Democrats and lapdog teachers’ unions, are the biggest offenders. Bureaucrats and union members have little concern whether children learn or not; their principal worry is their own paycheck. And please, let’s not hear about the m any fine, dedicated teachers, blah, blah, blah. Even if true, these teachers are like students and parents: trapped in the grip of the union–big government vise. The fine intentions of these teachers will never loosen this grip; only an adherence to limited government and a commitment to personal responsibility will do that.

Freedom for the Uninvolved. Elimination corrects an inequity visited upon those who have no current direct stake in the educational system. Why should those who have no school-aged children be burdened with the schooling costs of those who do? If you choose to raise children, your obligations include clothing, sustenance, housing, and education. Before setting out, the cost is to be counted. The decision to start a family was yours, not that of your elderly, childless, or empty-nest neighbors. It doesn’t take a village to raise a family: it takes a responsible mom and a responsible dad. As matters now stand your neighbors, not exercising any influence in your family-raising decision, are sent the bill for educating your children. All sorts of rationales are given for continuing this unfairness. They reduce to one: We benefit when all citizens are educated, or in bumper sticker language, If you think public education is expensive, try ignorance. This sl ogan’s encapsulated arrogance assumes that people are incapable of acting in their own best interests and would forever remain inert until the Nanny State intercedes and affects a rescue, all for their own good you must understand. Who else but leftists sell people for such short money? If those who are inadequately prepared understand that the principal difference between themselves and others who have better prospects, employment, or social standing, is education, common sense says that the former will know what to do.Freedom to Choose. Each of us has different driving wants and needs; we choose cars accordingly, based on factors which include cost, safety, options, color, type (sedans, wagons, SUVs, minivans, pickups, light & heavy duty trucks, et alia). Yet the choice of schooling, also subject to a variety of factors, is far more determinative of an individual’s life direction than the choice of a car whose life span is a matter of mere years. Freedom prevails when parents and students, acting as consumers, make thoughtful choices for their purposes among competing alternatives with funds that would otherwise have been taken from them and wasted on a scheme that has failed for decades. Even leftists endorse educational choice, but only for themselves. When given the chance, leftists never choose the public option. Obama’s daughters go to private schools, as did Chelsea Clinton, as did Ted Kennedy’s kids. If this is leadership by example, then the people too should be able to choose. “Do-as-I-say-not-as-I-do.”What is more, genuine educational choice (without a public option) will defuse, at least in the school setting, many of society’s divisive issues, issues brought into the public schools through raw political power imposed on students, a captive, generally powerless audience. Without forced public schooling there would be no more of the seemingly endless battles on church-state separation and courses on human sexuality. Gone and unmissed will be battles over religious songs and symbols, whether religious days special to a particular faith should be recognized as school holidays, refusals to recite the Pledge of Allegiance, prayers at games or graduations. Mandatory sex education and associated hot-button topics such as abortion counseling, creationism, evolution, environ-ism, and countless other subjects which at best are only marginally tangential to core academic subjects, will be dealt with in a manner agreeable to students and parents since they as consumers will be freely choosing schools compatible with their wishes and expectations in these areas.

Tuition will be reasonable as schools will no longer be forced by law to deal with the selfish demands of public employee unions. Rather than serving the interests of their employees and administrators, schools will compete as every other successful consumer service competes, by placing the customer, here parents and students, not employees, as Priority #1. Sometime in the 1980s I heard Lane Kirkland, a then important union leader, speak at an American Federation of Teachers function. After his prepared remarks he took some questions one of which touched on the declining academic achievements of students. His blunt and forceful answer remains with me to this day. Paraphrased, “When children become union members paying union dues, then I’ll care about children’s education.”Ending educational compulsion will bring freedom and freedom will bring responsibility and accountability. Schools in the post–public school era will be burdened to please their customers, parents and students, if they wish to succeed. Today, failing public schools are neither punished nor eliminated; rather, in the eccentric world that defines the “public domain,” they’re rewarded by being allowed to continue, often with increased funding, in order to “self-correct.” Bailouts may be new to Wall Street & Detroit carmakers, but bailouts have long been a part of failed public school systems.Tomorrow, we’ll discuss the beneficial effects accruing to the American system of federalism, which will naturally flow from the elimination of public schooling.