Weekend Economists Beware the Ides of March 12-14, 2010

[Demeter]

Yes it's that ominous time of year, when the winter flees and the ponds suddenly invert and tyrants get stabbed in the forum.

Well, Winter seems to have bid us farewell, here in SE Michigan. a steady rain last night washed all the salt off the roads and melted the snowbergs left from plowing February's storms. Now we are ankle deep in mud, and the buds are swelling on forsythia and crab apples.

The pond hasn't flipped yet, but the ice is definitely thinning. The swans will not have to skid around when they land. The closets also need inversion. I'm not up to it this weekend, but it's time to wash and bury everything in the back for next winter. I can't believe 50F in March. Just like it used to be in my long-lamented youth!

As for the tyrants? Well, things are getting rather toasty for Fuld, Geithner and to a lesser extent, Bernanke, the co-conspirators. I doubt they were working together on a big pillage project--just a bunch of competing projects, and Lehman was the loser. Obama is probably toast. It won't take much more to put him in the dustbin of history. I've never voted GOP, but there's always a third party option, and next time, it may be more serious than John Anderson.

What is the Story about the Ides of March? For those of us never tasked with Shakespeare's Julius Caesar, or who have Obliviated themselves:

"The Ides of March (Latin: Idus Martias) is the name of March 15 in the Roman calendar. The term ides was used for the 15th day of the months of March, May, July, and October. The Ides of March was a festive day dedicated to the god Mars and a military parade was usually held. In modern times, the term Ides of March is best known as the date that Julius Caesar was killed in 709 AUC or 44 B.C.

According to Plutarch, Caesar was warned by a seer to be on his guard against a great peril on the Ides of March. On his way to the Theatre of Pompey (where he would be assassinated) Caesar saw the seer with a joked "Well, the Ides of March have come," to which the seer replied "Ay, they have come, but they are not gone."<2> This meeting is famously dramatized in William Shakespeare's play Julius Caesar, when Caesar is warned to "beware the Ides of March."

Another incident on this date happened in 1917, when Nicholas II of Russia abdicated...The Temple Hill Association in New Windsor, NY holds an annual dinner in honor of the Ides of March because it is also the day that General George Washington quelled a mutiny of his Officers in 1783.

The term idūs (ides) originally referred to the day of the full moon. The Romans considered this an auspicious day in their calendar. The word ides comes from Latin, meaning "half division" (of a month) but is probably of non-Indo-European origin.

http://en.wikipedia.org/wiki/Ides_of_March


The phrase came to represent a specific day of abrupt change that set off a ripple of repercussions throughout Roman society and beyond.

Josiah Osgood, an assistant professor of classics at Georgetown University in Washington, D.C., said: "You can read in Cicero's letters from the months after the Ides of March. … He even says, 'The Ides changed everything.'"

By the time of Caesar, Rome had a long-established republican government headed by two consuls with joint powers. Praetors were one step below consuls in the power chain and handled judicial matters. A body of citizens forming the Senate proposed legislation, which general people's assemblies then approved by vote. A special temporary office, that of dictator, was established for use only during times of extreme civil unrest.

The Romans had no love for kings. According to legend, they expelled their last one in 509 B.C. While Caesar had made pointed and public displays of turning down offers of kingship, he showed no reluctance to accept the office of "dictator for life" in February 44 B.C. According to Osgood, this action may have sealed his fate in the minds of his enemies. "We can see that that was enough to get him killed," Osgood said.

Caesar had pushed the envelope for some time before his death. "Caesar was the first living Roman ever to appear on the coinage," Osgood said. Normally, the honor was reserved for deities. He notes that some historians suspect that Caesar might have been attempting to establish a cult in his honor in a move towards deification.

It is unclear if Caesar was aware of the plot to kill him on March 15 in 44 B.C. But Caesar was not oblivious to the mounting danger of a backlash, noted Charles McNelis, an assistant professor of classics and Osgood's colleague at Georgetown University.

The plot's conspirators, who termed themselves "the liberators," had to move quickly. "Caesar had plans to leave Rome on March 18th for a military campaign in Parthia, the region around modern-day Iraq. So the conspirators did not have much time," McNelis said. Whether or not Caesar was a true tyrant is debated still to this day. It is safe to say, however, that in the mind of Marcus Brutus, who helped mastermind the attack, the threat Caesar posed to the republican system was clear.

Brutus's involvement in the murder is made tragic given his close affiliations with Caesar. His mother, Servilia, was one of Caesar's lovers. And although Brutus had fought against Caesar during Rome's recent civil war, he was spared from death and later promoted by Caesar to the office of praetor.

"Caesar had always … tried to cultivate talent that he saw in younger people," Osgood said. "And Brutus was no exception."

Brutus, however, was torn in his allegiance to Caesar, Osgood noted. Brutus's family had a tradition of rejecting authoritarian powers. Ancestor Junius Brutus was credited with throwing out the last king of Rome, Tarquin Superbus, in 509 B.C. Ahala, An ancestor of Marcus Brutus's mother, had killed another tyrant, Spurius Maelius. This lineage, coupled with a strong interest in the Greek idea of tyranicide, disposed Brutus to have little patience with perceived power grabbers.

The final blow came when his uncle Cato, a father figure to Brutus, killed himself after losing in a battle against Caesar in 46 B.C. Brutus may have felt shame over accepting Caesar's clemency and obligation to do Cato honor by continuing his quest to "save" the republic from Caesar, Osgood speculated.

It is this moral dilemma that has caused debate over whether or not Brutus should be branded a villain. Plutarch's Life of Brutus, Osgood noted, is quite sympathetic in comparison to surviving documents naming other enemies of Caesar and his successors...Scholars disagree on just who was the on the side of "good." McNelis believes neither side is entirely in the clear. "We need to realize that we're dealing with very brutal and ruthless men on both sides." (THE SAME COULD BE SAID FOR US POLITICS AND ECONOMY TODAY)

http://news.nationalgeographic.com/news/2004/03/0311_040311_idesmarch.html

Perhaps Brutus should best be labelled a failure. He didn't stop the death of the Republic of Rome, and any personal vendetta was swiftly ended when Julius' heir Octavian became the first Emperor of Rome.

Handel Wrote an Opera for Julius Caesar:

http://www.youtube.com/watch?v=xo741xq6oLw

DON'T ASK ME HOW CLEOPATRA KEEPS THAT DRESS ON--SHE MUST BE GLUED INTO IT

[Demeter]

1. To Start the Bank Closings, We Have Yesterday's Failure and another NY bank!

LibertyPointe Bank, New York, New York, was closed Thursday by the New York State Banking Department, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Valley National Bank, Wayne, New Jersey, to assume all of the deposits of LibertyPointe Bank.

The three branches of LibertyPointe Bank will reopen on Friday as branches of Valley National Bank...

As of December 31, 2009, LibertyPointe Bank had approximately $209.7 million in total assets and $209.5 million in total deposits. Valley National Bank will pay the FDIC a premium of 0.15 percent to assume all of the deposits of LibertyPointe Bank. In addition to assuming all of the deposits, Valley National Bank agreed to purchase essentially all of the failed bank's assets.

The FDIC and Valley National Bank entered into a loss-share transaction on $181.5 million of LibertyPointe Bank's assets. Valley National Bank will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $24.8 million. Valley National Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. LibertyPointe Bank is the 27th FDIC-insured institution to fail in the nation this year, and the first in New York. The last FDIC-insured institution closed in the state was Waterford Village Bank, Williamsville, July 24, 2009.

The Park Avenue Bank, New York, New York, was closed today by the New York State Banking Department, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Valley National Bank, Wayne, New Jersey, to assume all of the deposits of The Park Avenue Bank.

The four branches of The Park Avenue Bank will reopen during normal business hours beginning tomorrow as branches of Valley National Bank...

As of December 31, 2009, The Park Avenue Bank had approximately $520.1 million in total assets and $494.5 million in total deposits. Valley National Bank will pay the FDIC a premium of 0.15 percent to assume all of the deposits of The Park Avenue Bank. In addition to assuming all of the deposits of the failed bank, Valley National Bank agreed to purchase essentially all of the assets.

The FDIC and Valley National Bank entered into a loss-share transaction on $379.8 million of The Park Avenue Bank's assets. Valley National Bank will share in the losses on the asset pools covered under the loss-share agreement...As part of this transaction, the FDIC will acquire a cash appreciation instrument. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $50.7 million. Valley National Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. The Park Avenue Bank is the 28th FDIC-insured institution to fail in the nation this year, and the second in New York. The last FDIC-insured institution closed in the state was LibertyPointe Bank, New, York, New York, on March 11, 2010.

[Demeter]

4. FDIC wants pension funds to prop up failed banks

http://rawstory.com/2010/03/fdic-pension-funds-prop-failed-banks/

Over 140 U.S. lenders folded in 2009 alone. To remedy the financial void left in their wake, the Federal Deposit Insurance Corporation wants public pension funds, which safeguard the retirement funds of millions, to buy in part or in whole the banks that couldn't manage to keep their depositors' funds.

"Direct investments may allow funds such as those in Oregon, New Jersey and California to cut fees for private-equity managers, and the agency to get better prices for distressed assets," anonymous sources reportedly told Bloomberg News.

In a speech to the National Association for Business Economics Washington Policy Conference, FDIC Chairwoman Sheila Bair outlined what she called "a pre-funded resolution mechanism," but did not specify what exactly that is. She instead said it would be "similar to the FDIC's receivership authority for failed banks," exposing only shareholders to risk, as opposed to the bank bailouts that saw billions of taxpayer dollars funneled into a near-crippled financial system.

"Shareholders and creditors would bear the losses, not the public," she explained. "But, the process would be orderly and help prevent a catastrophic collapse of other firms."

"From this speech, it's a little unclear whether or not Bair has a more simplistic view, where a resolution authority would just close troubled firms," wrote The Atlantic's staff editor, Daniel Indiviglio. "Right now, most banks are just wound down by the FDIC with failure looming. While that's one option, if the market could be saved from some additional losses associated with outright failure without taxpayers bearing the cost of keeping a firm going, then I don't see why regulators wouldn't want to include that option as well."

Bloomberg News notes that pension funds in Oregon, New Jersey, California and New York may participate. The wire service also reported that firms being targeted for the plan control over $2 trillion in retirement funds.

"Investing in distressed banks doesn’t always pay off, as the U.S. Treasury Department learned with the Troubled Asset Relief Program," Bloomberg added. "At least 60 lenders skipped some of their promised dividends to the TARP fund, according to SNL Financial, and a $2.33 billion stake in CIT Group Inc. was wiped out last year when the lender went bankrupt."

"The House has approved a bill to create a $150 billion fund, while the Senate is considering a measure that would first use taxpayer funds to dismantle an institution, with those funds later recouped from banks," MarketWatch noted.

A total of 26 U.S. banks have failed so far in 2010.

The FDIC holds about $40 billion of assets from seized banks and expects to gather more as institutions continue to collapse after the worst U.S. recession and real-estate slump since the Great Depression, according to agency officials," iStockAnalyst reported. "Real estate loans at U.S. banks that are at least 90 days overdue or that are expected to default almost doubled in 12 months to 7.1 percent, according to December FDIC data."

[Demeter]

12. Two More Banks Bite the Dust

Statewide Bank, Covington, Louisiana, was closed today by the Louisiana Office of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Home Bank, Lafayette, Louisiana, to assume all of the deposits of Statewide Bank.

The six branches of Statewide Bank will reopen on Saturday as branches of Home Bank...As of December 31, 2009, Statewide Bank had approximately $243.2 million in total assets and $208.8 million in total deposits. Home Bank did not pay the FDIC a premium to assume all of the deposits of Statewide Bank. In addition to assuming all of the deposits, Home Bank agreed to purchase essentially all of the failed bank's assets.

The FDIC and Home Bank entered into a loss-share transaction on $163.5 million of Statewide Bank's assets. Home Bank will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $38.1 million. Home Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Statewide Bank is the 30th FDIC-insured institution to fail in the nation this year, and the first in Louisiana. The last FDIC-insured institution closed in the state was The Farmers Bank & Trust of Cheneyville, Cheneyville, December 17, 2002.

Old Southern Bank, Orlando, Florida, was closed today by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Centennial Bank, Conway, Arkansas, to assume all of the deposits of Old Southern Bank.

The seven branches of Old Southern Bank will reopen on Monday as branches of Centennial Bank...As of December 31, 2009, Old Southern Bank had approximately $315.6 million in total assets and $319.7 million in total deposits. Centennial Bank will pay the FDIC a premium of 1.00 percent to assume all of the deposits of Old Southern Bank. In addition to assuming all of the deposits, Centennial Bank agreed to purchase essentially all of the failed bank's assets.

The FDIC and Centennial Bank entered into a loss-share transaction on $282.7 million of Old Southern Bank's assets. Centennial Bank will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $94.6 million. Centennial Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Old Southern Bank is the 29th FDIC-insured institution to fail in the nation this year, and the fourth in Florida. The last FDIC-insured institution closed in the state was Marco Community Bank, Marco Island, February 19, 2010.

[Demeter]

28. Estimated Damages: $208.2 Million Rather Light

Which as we explained last week, is a minimum figure and due to rise substantially when the dust clears and the bad investments are finally written off.

[Demeter]

2. The Banksters Gossip Column

I could think of a few banks in NY,NY that could stand to be closed, but the FDIC isn't allowed to lay a glove or even a finger on them.

Read up on your favorite banksters in this section:

[Demeter]

3. Goldman Sued for Overpaying Executives

http://www.cbsnews.com/8301-503983_162-20000182-503983.html

The pension fund for an electrical workers' union wants to pull the plug on large executive compensations at Goldman Sachs, filing a lawsuit against the bank in a Delaware court.

The International Brotherhood of Electrical Workers pension fund said the bank allocates about 47 percent of its 2009 revenue toward compensation, according to the Reuters news agency. The lawsuit aims to recoup some of the compensation for Goldman shareholders, saying the payments "vastly overcompensate management and constitute corporate waste."

Last week, Goldman said it would limit its compensations for last year at a 36 percent ratio or $16.2 billion. In early February, Goldman revealed it would pay CEO Lloyd Blankfein a $9 million stock bonus for 2009.

The lawsuit also directly targets Blankfein, saying that he and other executives should be in charge of allocating charitable donations the bank pledged as a way to make amends for its behavior. The bank's shareholders are now responsible for making decisions about those donations.

"We believe the lawsuit is completely without merit," Goldman spokesman Ed Canaday told the news outlet. A lawyer for the union's pension fund did not return a Reuters phone call.

Goldman took money from the federal government's bank bailout in 2008, but the bank has since paid back the money with interest and recorded record profits.

The lawsuit was filed in Delaware Chancellery Court.

[mbperrin]

50. Will be interesting to see if the actual owners of a corporation have any

rights compared to the hired management.

[Demeter]

53. Rather Similar to Expecting that a Govt. of the People By the People , For the People

actually listen to the People, no?

[mbperrin]

54. Very similar to me, but I know that many shareholders consider themselves

some kind of "insiders" rather than the "suckers" that they make fun of.

Always startling to find that someone else finds you rather sweet, delicious, and entirely disposable....

[Joe Chi Minh]

68. Yes, but the focus is nice and pointed.

[Ghost Dog]

90. Heh heh.

(Irony overload, this wikend). :evilgrin:

[Demeter]

6. Bank of America to stop debit card overdrafts

http://news.yahoo.com/s/ap/20100310/ap_on_bi_ge/us_overdraft_fees_bank_of_america

Bank of America customers will soon be unable to spend more than they have in the accounts linked to their debit cards. It's a step that may become a common move ahead of new regulations limiting overdraft fees.

Rules set by the Federal Reserve that will ban banks from charging such fees, without first getting permission from the customer, are set to take effect July 1.

But Bank of America is going a step further than the regulations require. It will simply no longer allow debit card purchases to go through if there isn't enough money in the account.

For ATM transactions, customers who try to withdraw more than their balance will have to agree to pay a $35 overdraft fee before they can get the money.

"The majority of our customers who overdraw their account do so with everyday debit purchases," said Susan Faulkner, senior vice president of consumer banking for Charlotte, N.C.-based Bank of America. "They're doing this unknowingly, because they aren't aware that they are about to overdraft."

Since the bank doesn't have the ability to notify the customer when they're at the register and give them the chance to agree to a fee, it will simply reject such transactions.

Consumers have demonstrated a willingness to pay overdrafts for covering the mortgage and the car payment, said Greg McBride, who follows the banking industry for Bankrate.com. "But not if it's things like covering a latte and a scone."

The bank's new policy will kick in on June 19 for new accounts, and in early August for existing accounts. It will replace the bank's current terms, which allow overdrafts to go through but only charge a fee if the deficit is greater than $10.

Bank of America likely won't be the last to make the change. That's because while the new rules will save consumers from surprising dings on their accounts, they will also cut deeply into the more than $1.77 billion annual revenue overdraft fees generate for the banking industry.

Faulkner would not estimate how much such fees pulled in for Bank of America in the past.

The Federal Deposit Insurance Corp. estimates about 41 percent of that total is from point-of-sale debit transactions. About 8 percent was from ATM transactions. The rest were from bad checks and online bill payments, which are not addressed in the regulation.

What's more, 93 percent of overdraft fees are generated by just 14 percent of customers.

Because most of the fees were paid by what Robert Meara, a banking analyst with the consultant Celent, called "serial overdrafters," the rules may not save the average consumer much money. In fact, because banks will look to make up that lost revenue, it may actually cost most individuals more.

"What this may do really is produce the unintended consequence of creating the demise of free checking," said Meara. Banks jumped into free checking in the last decade because of competition, but at the same time started allowing overdrafts that generated huge sums. If they can't charge those fees, it's likely they won't offer the free products anymore either.

Or, he suggested, consumers might start seeing deals advertised where free checking kicks in after a certain number of transactions, or if a customer has several accounts linked together.

"I think banks will use this as an opportunity to be creative and differentiate themselves in ways that was really hard to do when everybody had a free checking account," Meara said. "There's a way this can be a win-win for everybody, but in the short term I think it's going to be challenging for banks to make up for that lost revenue."

[DemReadingDU]

7. Yay!

If there is no money in the account, then you can't buy it, and don't have to worry about penalty fees.

1st rec!

[Demeter]

19. New York ties with London for finance crown

http://www.ft.com/cms/s/0/31521254-2d4e-11df-9c5b-00144feabdc0.html

London has lost its crown as the pre-eminent home of banking and finance, as it tied for the first time with New York in the latest ranking of financial centres.

Fears about a regulatory backlash and new taxes drove down London’s score by 14 points to tie with New York at 775 points, in the Global Financial Centres Index compiled by Z/Yen for the City of London Corporation.

London was one of only four cities to lose points in the semi-annual ranking, which combines a survey of financial professionals with factors such as office rental rates, airport satisfaction and transport. New York’s score rose by only 1 point.



Asian cities continue to rise in the ranking of 75 global centres. Hong Kong and Singapore posted double-digit gains in third and fourth place and the gap between London and New York and the rest of the world is at its narrowest since the survey began in 2007.

“This research is a wake-up call for decision-makers,” said Stuart Fraser, policy chairman for the City of London Corporation, which promotes the UK financial services sector and provides local services. “You can’t take this route without endangering the competitiveness of London.”

A chart of rankings of global financial centresNew York fared better than London for business environment, availability of people and infrastructure, even though those participating in the survey agreed that New York had taken the bigger hit from the financial crisis.

The most recent rankings were based on surveys taken from July to December 2009, when discussion of tougher regulation and higher taxes in the UK was at fever pitch.

Not only had the UK just finished raising personal income tax rates to 50p in the pound, but the government announced plans for a one-off 50 per cent payroll tax on all bonuses over £25,000. While France followed with a similar tax, the US and Germany pointedly did not.

The UK Financial Services Authority was also the first big regulator to propose rules for bonuses and bank liquidity, and its leaders have been particularly vocal about their “more intrusive approach”. London’s reputation may also have been damaged by widespread discussion of planned European-wide rules for private equity and hedge funds. The proposal has been widely seen as an attack on both industries.

“This should be of concern not just in the City but throughout the business community. For London to retain its global position as a leading financial centre and fuel UK economic growth, we must have certainty and proportionality on regulation and tax policy. This report is a warning shot,” said Rob McIvor, spokesman for the Association for Financial Markets in Europe, which represents the securities industry.

London might do better in the next round. Since the surveys were carried out, global banking regulators have made liquidity proposals along the lines of the UK rules, while Barack Obama, US president, has proposed a tax on bank balance sheets and new limits on proprietary trading.

“We seem to be taking turns shooting ourselves in the foot,” Mr Fraser said. “When they did it , business flowed to us. Now New York is taking advantage.”

But the surveys suggest that the long-term threat comes from Asia. Hong Kong was the favourite among insurance professionals, the first time a city other than New York or London topped a sector rating. The shift may already be having practical effects. The Prudential announced this week that it would seek a Hong Kong listing.

Peter Vipond, director of financial regulation for the Association of British Insurers, noted that his group had already warned on the issue with a report on competitiveness this year.

“The City’s role as a financial centre of choice will be under severe pressure if reforms to the financial system are not thought through properly,” he said. “Our members are also clear that a stable tax system, which does not penalise global businesses through taxation of foreign profits, would greatly enhance the UK as a place to do business.”

[mbperrin]

52. Gosh, if we stop giving crack dealers preferred street corners, they

might not sell crack to our kids!

The horror!

[Demeter]

30. Senators eye pre-funded resolution authority (CITI IS TOAST)

http://www.ft.com/cms/s/0/a8e88ff0-2bd7-11df-8033-00144feabdc0,s01=1.html

Senators in the banking committee have agreed in principle to a partially pre-funded “resolution authority” to wind down a failing bank holding company, favouring a structure that would levy a $50bn charge on the industry.

Talks on a variety of issues in the Senate’s regulatory reform package continued on Tuesday and little has been settled. The resolution authority is the intellectual core of the Obama administration’s original overhaul proposed last summer.

While the Treasury has argued in favour of levying fees on the industry to recoup the costs of a wind-down after the fact, others - notably Sheila Bair, chairman of the Federal Deposit Insurance Corporation - have argued that a fund should be established in advance of a resolution.

The recondite argument is not particularly heated but, if the House’s pre-funded model were adopted by the Senate, it would mean levying $150bn in charges over a number of years.

Key senators, led by Mark Warner, the Democrat from Virginia, and Bob Corker, the Republican from Tennessee, have explored a variety of options with Mr Warner pushing for a post-funded structure but the current consensus, according to people involved, is a half-way house.

There would be a $50bn fund, which might cover the costs of a future failing company like Lehman Brothers or AIG, but may have to be supplemented by after-the-fact levies on the industry.

To answer some Republican concerns about government over-reach, there would be a role for a bankruptcy judge to decide whether a company was systemically risky and needed to be guided down the unconventional resolution channel.

That would allow regulators to use a fund, or temporarily tap public funds, to wind down transactions and pay any creditors that needed to be paid. Executives would be fired, shareholders would be wiped out and unsecured creditor would also be likely to lose their interest.

As with most of the drawn-out discussions in the committee, the exact shape of the resolution fund has not been nailed down.

Ms Bair told the Financial Times on Monday that she was still pushing for a pre-funded “resolution authority” to wind down the next Lehman Brothers-style failure even though the biggest banks faced an additional $90bn tax announced by President Barack Obama.

“I think it would be for both in aggregate about $10bn a year,” she said. “It is not an insignificant amount of money but spread over the largest institutions that would be paying into it – I don’t think it would be a tremendous hit to their balance sheet.”

Under a tentative agreement in the Senate banking committee the costs of winding down a future failure would be recouped from the industry but an upfront fee would not be levied, according to people familiar with the discussions. The “resolution authority” also makes room for a traditional bankruptcy judge to have a say.

“I think the most important thing is getting a resolution process or mechanism in place but I do think a very strong argument can be made ,” said Ms Bair, whose agency manages an industry-funded insurance pool that insures customers’ savings in deposit-taking institutions.

[Demeter]

31. Pandit sees revival of Citi’s fortunes (HE GOT THE MESSAGE)

http://www.ft.com/cms/s/0/373a0674-2c8e-11df-be45-00144feabdc0.html

Vikram Pandit, Citigroup’s chief executive, will on Thursday raise the prospect of the US bank earning as much as $20bn from its core business within a few years, a big increase from current levels that would mark a sharp revival in Citi’s fortunes.

Mr Pandit’s move – to be made as he details Citi’s strategy to investors – is a bold attempt to shift financial markets’ attention away from Citi’s huge losses and repeated government bail-outs during the crisis. But it will also raise the stakes over Mr Pandit’s tenure at the helm of the financial group by linking his future to the success of the strategy and financial performance.

People close to the situation said Mr Pandit would not give a specific profit target for Citicorp, the wholesale and retail banking operations that will remain part of the company once it sheds some $500bn-plus in unwanted assets and businesses. However, the Citi chief is expected to walk investors through Citicorp’s earnings potential as the company focuses on its unrivalled reach across the global economy.

Mr Pandit will estimate that Citicorp could earn a yearly return of 1.25 per cent or more on its assets. The unit had assets of more than $1,300bn at the end of 2009, but Citi executives estimate the assets will increase by about 5 per cent a year. On that basis, Citicorp could earn about $20bn by the end of 2012.

Citicorp, which includes the commercial, investment and retail banks and the cash management business, had net income of $14.7bn in 2009, although Citigroup recorded a loss of $8.7bn due to its struggling non-core businesses.

Mr Pandit told the Financial Times he wanted Citi to harness its presence in more than 100 countries to serve clients ranging from large companies and governments to wealthy savers.

“Clients look to us as being the financial conduit to the world,” he said. “We want to be a global bank for institutions and individuals.”

Citi’s international focus may upset some US politicians because the government bailed out the company and still owns a 27 per cent stake, but Mr Pandit regards it as the bank’s biggest competitive advantage.

Mr Pandit did not comment on the government’s stake ahead of next week’s expiry of a lock-up period but officials have indicated that they will try to sell it over the next few months.

Citi’s share price needs to be above $3.25 for the government to be able to sell at a profit.

The stock rallied more than 3 per cent on Wednesday and was trading at $3.94 in afternoon in New York amid analysts’ upgrades and news of the sale of Citi’s property investments division to Apollo, the private equity group.

SO NOW WE SEE A LITTLE CHANGE IN THE WEATHER--THE WINDS OF DISSOLUTION BLOWING ABOUT CITI, AND PANDIT SWEATING FOR HIS JOB, WHEN THE ENTIRE BANK IS SCHEDULED FOR DEMOLITION..STAY TUNED FOR DEVELOPMENTS!

[Demeter]

32. Barclays eyes large US bank deal (A WHITE KNIGHT---ALICE IN WONDERLAND STYLE?)

http://www.ft.com/cms/s/0/09e25e8c-2bbd-11df-a5c7-00144feabdc0.html


Barclays is looking at buying a large US retail bank as it tries to rebalance its business away from a booming investment banking franchise.

According to people briefed on the plan, Antony Jenkins, the new head of Barclays’ retail banking activities, is preparing a strategy paper that will go to the board in the next two to three months.

“Nothing is imminent but we’re opportunistic,” said one person close to the bank. “If we do something, we will do it big.”

Barclays has not identified firm targets for a US retail bid or begun any talks, according to people close to the bank. But bankers and analysts point to the likes of SunTrust, PNC Financial and US Bancorp – all bailed-out US banks – as potential targets.

UK banks have suffered setbacks in the past from investments in US retail financial services. HSBC’s Household operation left it nursing billions of dollars of subprime loan losses.

However, Barclays will point to the success of its most recent US deal – when it bought the American assets of the defunct Lehman Brothers – as proof that it can digest large acquisitions.

Mr Jenkins, formerly head of Barclaycard, has worked at Citigroup in the US and knows the market. He does not share the negative views about the US of Frits Seegers, his predecessor.

But investors expressed some scepticism at the prospect of Barclays making another large US acquisition. The shares rose 0.6 per cent to 346p, having initially fallen.

“It does not make a lot of sense,” Jane Coffey at Royal London Asset Management, which invests in Barclays shares, told Bloomberg news. “Very few European banks have made a success of buying US retail banks and almost all have lost their shirts doing it.”

Barclays may struggle to raise equity for an acquisition, according to Richard Champion at Principal Investment Management which also owns shares in the UK bank.

“Barclays would require more equity in a difficult regulatory scene,” Mr Champion told the news agency. It “might be premature” for Antony Jenkins, the new head of retail banking, to make acquisitions, he said.

Barclays last month reported pre-tax profits for 2009 of £11.6bn, up 90 per cent, boosted by the Lehman deal. But looming regulations that will demand far higher levels of capital to support investment banking activity have hardened the resolve of John Varley, Barclays’ chief executive, to boost the group’s other activities.

Mr Varley announced recently that he would invest £350m to expand Barclays Wealth.

BARCLAY'S MIGHT DO BETTER TO GO AFTER A BETTER BANK--WE WILL SEE

[Demeter]

33. MEANWHILE: Apollo to buy Citi real estate unit (LOAD BEING LIGHTENED)

http://www.ft.com/cms/s/0/f4410690-2be0-11df-8033-00144feabdc0.html

Apollo Management signed a preliminary agreement to buy Citigroup’s property investment unit in a deal that would give Leon Black’s private equity firm a far bigger presence globally, according to people familiar with the matter on Tuesday.

The deal comes as many investors believe the real estate market has bottomed.

Apollo will get about $12.5bn in gross assets and exposure to Europe for the first time. It will also acquire the team of 60 professionals employed by Citi.

Apollo was believed to have had an inside track against other bidders since its head of real estate, Joe Azrack, once headed the Citi real estate unit. Mr Azrack left Citi in June 2008 as part of a number of high-profile departures from the bank against a backdrop of heavy losses in real estate. At that time, the value of the portfolio was said to consist of around $13.5bn of equity investments in commercial real estate.

The sale is part of Citi’s continuing effort to shrink its balance sheet and raise money by selling assets. Citi’s real estate business was one of the assets the bank slated for disposal as it restructured and repositioned itself in the aftermath of the financial crisis.

The bank’s alternative-investments arm, where Citi Property is housed, has undergone a major overall. Citi is also in talks to sell its hedge fund division to SkyBridge Capital, people familiar with the matter have said.

Apollo recently hired Grant Kelley and a team of investors in Hong Kong to expand Apollo’s real estate efforts in Asia.

The two companies declined to comment.

ODDS ARE THEY WILL ALL LOSE THEIR SHIRTS

[Demeter]

34. JUST TO INCREASE PRESSURE: Regulators tell US banks to hold funds

http://www.ft.com/cms/s/0/7f6368c4-2bc0-11df-a5c7-00144feabdc0.html

US regulators have told banks not to increase dividends or buy back shares until political and economic uncertainty surrounding the industry dissipates, in a move that will delay by months the return of capital to shareholders.

Some investors in financial stocks argue that winners of the credit crisis, such as JPMorgan Chase and Goldman Sachs, have profitable businesses and strong balance sheets and should consider raising dividends or buying back stocks.

Executives at the two companies have talked in public and with regulators about the possibility of returning cash to investors after taking action to conserve resources during the turmoil. But they say they are not in a rush to go ahead, especially if their watchdogs oppose such moves. “Regulators are gun-shy at this stage, partly because they fear that giving the green light to healthier banks to return cash to investors would prompt demands from more troubled institutions to do the same,” one senior Wall Street executive said.

JPMorgan, which cut its dividend by 87 per cent in 2009, and Goldman, which halted share buy-backs in July 2008, declined to comment. Goldman’s incentive to buy back stock is heightened as it pays $500m a year in dividends to Warren Buffett since his purchase of $5bn of preferred securities at the height of the crisis in September 2008.

People close to the situation said government agencies, led by the New York Federal Reserve and the Treasury, told banks they would have to wait until the economic and legislative picture became clearer before returning funds to investors.

In a letter sent in December, officials reminded financial groups they would have to meet criteria, such as “stress-testing” their balance sheets and achieving sustainable profitability, before releasing funds to shareholders. The New York Fed and Treasury declined to comment.

Some bank executives are optimistic the regulators’ stance may soften in the coming months should more evidence emerge that the economic recovery has gained steam and corporate profits surge.

But industry watchers argue that even a sustained improvement may not be enough to sway regulators until Congress and international bodies draw up new rules on capital buffers and how to deal with failing banks, which is likely to be late this year at the earliest.

Mike Mayo, an analyst at CLSA, said: “The word banks have used the most ... is ‘fragile’. With all the uncertainty around capital ratios and regulation, it seems early for banks to consider these moves.”

Jamie Dimon, JPMorgan’s chief executive, told investors last month that he would like to increase the bank’s dividend “soon”, but not before he sees US employment increase “consistently, for several months”.

“We have tons of capital and tons of liquidity,” Mr Dimon said. ”If we are lucky will happen some time this year.”

JPMorgan had slashed its quarterly payout in December 2008, to 5 cents a share, from 38 cents. Executives have said the bank would like to raise it to around 25 cents a quarter. Mr Dimon also said JPMorgan “would buy back tons of stock” in the next couple years if the bank runs out of opportunities to invest in its businesses and the stock price is low.

WITH A RESOLUTION TRUST MECHANISM, CITI WOULD BE ONLY THE FIRST TO BE LIQUIDATED...MAYBE CONGRESS WILL ACTUALLY DO SOMETHING.

SO I'M AN OPTIMIST--BUT CONGRESS IS STARING AT THE GREAT DEPRESSION.

[Demeter]

5. Why Is The Pentagon Worried About Consumer Protection?

http://www.theatlantic.com/business/archive/2010/03/why-is-the-pentagon-worried-about-consumer-protection/37241/?rss=37241

Those fighting for the consumer financial protection agency just got a new ally with unparalleled battle strategy know-how, literally. The Defense Department has come out in support, according to Politico. It's reportedly worried about U.S. armed forces getting ripped off by banks and finance companies. I'm a little confused as to why.

Auto dealers, a powerful local constituency with outlets across the nation, won the first round of their own battle against new consumer protection rules, successfully lobbying House members for an exemption from oversight by the stand-alone consumer financial protection agency.

The Pentagon's concerns were raised in a Feb. 26 letter from Clifford Stanley, undersecretary of defense for personnel and readiness. He said that "unscrupulous" lending by auto dealers has hurt troops -- and has even prevented them from being deployed, as some groups have documented. That may blunt the sympathy the National Automobile Dealers Association members received during the House debate.

"Predatory lending affects our military preparedness. That's how outrageous it is to not include these guys" in the consumer entity's oversight, Mierzwinski said. "It explains that this is not just some liberal position."

Firstly, if you're going to have a consumer financial protection agency, the idea that auto dealers would be exempt is rather ridiculous. Auto loans are easily among the top three largest areas of consumer finance, along with mortgages and credit cards.

But what's odd is that the military would be so concerned with consumer protection. I find this strange because all U.S. armed forces are eligible to do their banking with USAA, a special bank founded by Army officers, which seeks to provide high quality, low cost banking products to members of the military and their families. Its website explains its mission:

The mission of the association is to facilitate the financial security of its members, associates, and their families through provision of a full range of highly competitive financial products and services; in so doing, USAA seeks to be the provider of choice for the military community.

From what I have heard, USAA is pretty great. And I would also note that auto loans are among its robust product offerings. So if the U.S. armed forces are aware of this alternative (and they generally are), why is the Defense Department so concerned about other bad lenders? If anyone should be relatively content with consumer lending practices, it's the Pentagon since the military has the benefit of using USAA.

[Po_d Mainiac]

26. USAA is a nightmare to deal with if you have a claim. n/t

[Demeter]

8. Barney Eats Seconds – Or Blows Smoke - Or Both

http://brucekrasting.blogspot.com/2010/03/barney-eats-seconds-or-blows-smoke-or.html

Yesterday Barney Frank came out with a letter addressed to some of the big banks putting some muscle on them. He wants them to write off their second lien mortgages. He thinks the seconds are junk. His words:

"Large numbers of these second liens have no real economic value."


In this case I just want to shoot the messenger. Not the message. Subordinated debt is not money good when there is a problem. Period. There is a problem and the Second’s deserve the losses. In that sense I would support the pressure on the banks to move more aggressively to write this unpayable crap off. It is part of the cleansing process.

Mr. Frank has lost his right to contribute to this debate any longer. He speaks with a forked tongue. As Chairman of the House Financial Services Committee Congressman Barney Frank is well aware of the financial activities of the D.C. mortgage Agencies. I don’t believe he calls the shots or even has a veto on significant policy decisions. But I also doubt that anything big happens without his knowledge. If he strongly objects to something it either won’t happen or it will get restructured to where he will bless it.

With that in mind it is important to look at how the subordinated creditors (seconds) of both Fannie Mae and Freddie Mac have been treated. The answer is they are being treated like kings. The holders of the Sub debt are making a bundle. They should be facing a near total loss.

The following are three slides of Fannie’s Sub debt. Note that these bonds trade on a daily basis, that they are trading at significant premiums to par and also that our pals at Moody’s and S&P rank this swill at a very respectable AA.(SEE LINK FOR SLIDES)

How could the subordinated debt of a functionally bankrupt entity be trading at a premium and be ranked investment grade? That’s easy. D.C. put the “fix” in on this one. Here’s the language from Fannie as to how this magic could happen:



Freddie did not want to be bothered with the problems with its sub debt. They just bought it in. They borrowed from the Fed to do it. This was part of the $175b of unsecured debt of the Agencies that was part of the QE process. Here is the public announcement of the Freddie buy back. Note that the bonds were bought in at significant premiums. I wrote a piece on this back in July. I referred to this buyback as heinous. It’s still heinous.





Barney Frank owes us an explanation. How can he maintain that second lien mortgages have no economic value while he supported a money good attitude toward the sub debt of the Agencies? He can’t have this one both ways. If he tries to have it both ways it will just prove that he is an opportunist blowing smoke at the electorate.

That the Sub Debt got favorable treatment in the conservatorship was a historical mistake. I don’t think it was a mistake at all. It was quite deliberate. Some big shots put some muscle on some folks to get this carve out. I, for one, would like to understand where that muscle came from.

The numbers here are both big and at the same time rounding errors. The total of the sub debt in question comes to only$15 billion. The taxpayers will pay this in full. The total losses the taxpayers will bear as a result of the Agencies will exceed $500b. So the question, “What’s another $15b in the scheme of things” is relevant.

For me this $15b is a number the taxpayers should not bear. It is exactly the same mentality that went into the back door bank bailout re AIG. That deal ended with the banks involved getting paid 100% when they should have been entitled to a much smaller number. The Fan/Fred sub debt treatment is no different than that.

So Congressman Frank which door do you choose? If you want to do the “right” thing today, you have to reverse the “sins” of yesterday. Possibly the best choice is to choose neither. Having been part of the sins of the past you make a very poor spokesman for what should be done today.
Posted by Bruce Krasting

[Demeter]

9. In the European Union Common Market

news in and about goes here

and here's some music for a market:

http://www.youtube.com/watch?v=Q2lANtTxKYw

[Demeter]

10. Germany's eurozone crisis nightmare

http://www.ft.com/cms/s/0/d23c785e-2bb3-11df-a5c7-00144feabdc0.html

Ever since the federal republic was founded, Germany has had two over-riding strategic objectives: sound money and European integration. These were the twin imperatives learned from the calamities of the early 20th century. The euro embodies these aims. Now they conflict with each other.

Is the right answer to rescue sinners, thereby strengthening the cohesion of the eurozone, but threatening monetary stability? Or is it to let sinners default, thereby strengthening monetary credibility, but weakening cohesion? Germany could avoid such choices before the single currency: uncompetitive countries simply devalued.

Unfortunately, the domestic German debate assumes, wrongly, that the answer is for every member to become like Germany itself. But Germany can be Germany – an economy with fiscal discipline, feeble domestic demand and a huge export surplus – only because others are not. Its current economic model violates the universalisability principle of Germany’s greatest philosopher, Immanuel Kant.

The idea that countries are in difficulty because of their own sloppiness is easy to reach in the case of Greece. According to the latest Economic Outlook from the Organisation for Economic Co-operation and Development, gross public debt was 115 per cent of gross domestic product last year, the general government deficit was 12.7 per cent of GDP and the current account deficit was 11.1 per cent.

Eurozone financial balances

This, then, would be a classic case for intervention by the International Monetary Fund. Normally, the latter would offer temporary liquidity support in return for a devaluation and fiscal stringency. Yet the German government rejects the idea that an outside body should dictate policy to a country that shares Germany’s money. It suggests, instead, that a European Monetary Fund should be created, to provide conditional liquidity support. Under the direction of the other members of the eurozone, the EMF would dictate fiscal policy to the sinner.

Members of the German government also want penalties to be imposed. Among the ideas are: suspension of European Union subsidies, the “cohesion funds”, to countries that fail to observe fiscal discipline; suspension of voting rights in ministerial meetings; and even suspension from the eurozone. A less controversial idea is to enforce fines already permitted under the EU’s “stability and growth pact”.

Yet, establishing the EMF would require a new treaty, as would exclusion from eurozone institutions (while a country could not be stopped from using the euro itself). Fining countries in fiscal difficulties has proved unworkable in the past. Today, most members would need to be fined. Dream on!

We must note an even greater difficulty. The notion that the big threat is fiscal indiscipline is false.

Greece is a special case. Today’s fiscal excesses are not the result of fiscal indiscipline, but of private indiscipline. The latter, moreover, was an inherent element in the workings of the eurozone itself. It is how the eurozone economy balanced, at a reasonable level of overall demand, in the pre-crisis period.

The point is best understood from the financial balances of eurozone members in 2006, before the crisis, and 2009, at its height (see charts).

http://www.ft.com/cms/s/0/d23c785e-2bb3-11df-a5c7-00144feabdc0.html#

The balance between income and expenditure in the private, government and foreign sectors must sum to zero. In 2006, Germany, the Netherlands and Austria ran huge private surpluses, relative to GDP, while the private sectors of Portugal, Ireland, Greece and Spain ran huge deficits. Fiscal positions seemed under control everywhere: Ireland and Spain even ran substantial (albeit illusory) fiscal surpluses. Meanwhile, the private surpluses of Germany and the Netherlands were offset by huge capital outflows. In all, we see private disequilibria, but the illusion of fiscal stability, with countries more or less in line with treaty criteria for fiscal deficits.

Then came the crisis: overextended private sectors retrenched. By 2009, the private sectors of almost every member were running a huge surplus: they are all Germans now! So what are the offsets? The answer is: fiscal deficits. The picture for Ireland and Spain is dramatic. In the short run, it is impossible to shift external balances quickly, particularly when domestic demand in the surplus countries is so weak.

Now Germany insists that every country should eliminate its excess fiscal deficit as quickly as possible. But that can only happen if current account balances improve or private balances deteriorate. If it is to be the latter, there needs to be a resurgence in private, presumably debt-financed, spending. If it is to be the former, there are two choices: first, current account balances must deteriorate elsewhere in the eurozone, entailing a move to smaller private surpluses in countries like Germany. Or, second, the overall balance of the eurozone must shift towards surplus – a “beggar my neighbour” policy.

In practice, the most likely outcome of such fiscal retrenchment would be a slump in countries with large external and fiscal deficits. Given the lack of competitiveness of such external deficit countries and the weakness of demand elsewhere in the eurozone, such slumps might become very long-lasting. The question is whether populations would put up with this. If not, political crises will emerge, with inherently uncertain consequences.

Let me put the point starkly: Germany’s structural private sector and current account surpluses make it virtually impossible for its neighbours to eliminate their fiscal deficits, unless the latter are willing to live with lengthy slumps. The problem could be resolved by a eurozone move into external surpluses. I wonder how the eurozone would explain such a policy to its global partners. It might also be resolved by an expansionary monetary policy from the European Central Bank that successfully spurred private spending in the surplus countries and also raised German inflation well above the eurozone average.

Germany is in a trap of its own devising. It wants its neighbours to be as like itself as possible. They cannot be, because its deficient domestic demand cannot be universalised. As another great German philosopher, Hegel, might have said, the German thesis demanded a Spanish antithesis. Now that the private sector’s bubble has burst, the synthesis is a eurozone fiscal disaster. Ironically, Germany must become less German if the eurozone is to become more so.

[Demeter]

18. Call for ban on CDS speculation

http://www.ft.com/cms/s/0/e7ba5862-2c7c-11df-be45-00144feabdc0.html

Germany and France on Wednesday called on the European Union to consider banning speculative trading in credit default swaps and set up a compulsory register of derivatives trading.

The move came as Angela Merkel, German chancellor, called for EU institutions to be given “more teeth” both to control speculation and to police the deficit spending of member states. François Fillon, French prime minister, said after talks in Berlin that both governments were “very much in agreement in tackling extreme speculation”.

The two leading economies in the eurozone are asking for an immediate investigation of the role and effect of speculative trading in CDSs in the sovereign bonds of European Union member states. Their request came in a letter sent on Wednesday to José Manuel Barroso, president of the European Commission, and José Luis Rodríquez Zapatero, Spanish prime minister and current chairman of the EU ministerial council.

As an alternative to a ban on speculative trading in CDSs they suggest a bar on so-called naked transactions, in which investors buy swaps without holding a direct investment in the underlying debt, and tighter regulation of short-term swaps in the bond markets.

A growing European consensus on the need for tougher regulation of CDS trading was reflected by Lord Turner, chairman of the UK Financial Services Authority, who warned that naked trading in corporate CDSs could force companies into default.

CDS market

The Franco-German initiative, backed by Luxembourg and Greece, also calls for regulators to be given “unlimited access” to a register of derivatives trading in order to identify who is trading and what they are doing.

It proposes that derivatives transactions should only be allowed on exchanges, electronic platforms and through centralised clearing houses.

CDSs are commonly used by banks and hedge funds to reduce their risk, but they are also popular with investors who buy and sell them with an eye to making a quick profit.

Naked CDSs have been blamed for helping driving down Greek bonds this year and financial companies last year.

Lord Turner, who is also a member of the Financial Stability Board, which works on global regulatory proposals, said he wanted regulators to look at the question of naked CDSs on both corporate and sovereign debt.

“We need to think about whether we are being radical enough on credit default swaps . . . as to whether naked CDSs should be allowed,” Lord Turner said, adding he was particularly concerned that corporate CDSs could be manipulated to force a company into default, a form of market abuse.

But he warned against hasty action. “We need to look at these issues very carefully. There is a danger of an oversimplistic belief that everything going on is shorting in the CDS market,” Lord Turner said.

In a clear indication of the gathering international support for action, Mario Draghi, chairman of the FSB, signalled this week that the group was focused on the issue.

“This way of betting has systemic implications,” he said.

“The sense I have is that governments are increasingly uneasy with this. Whenever something has systemic implications, you can bet it is going to get systemic regulation.”

Reporting by Quentin Peel in Berlin, Brooke Masters and Sam Jones in London, Aline van Duyn in New York, and David Oakley

The problems with derivative regulation

Why has the controversy over credit derivatives blown up?
The Greek budget deficit crisis has focused attention on the market because of accusations that speculators used it to cause a sell-off in the Athens debt and stock markets and made large sums from violent moves in prices.

So what is a credit derivative?
Otherwise known as credit default swaps (CDS), it is a contract between two parties. One buys protection against a certain bond defaulting, while the other sells protection in a swap agreement. Buying a CDS contract is not the same as buying an insurance contract, but it does reduce market risk for a buyer.

Why have calls for regulation increased?
The Greek deficit crisis has prompted some politicians to demand more oversight and restrictions of the market. However, moves to regulate the market have been in motion since the financial crisis because it is considered too opaque and murky as it is traded privately, or over-the-counter, and is difficult to track.

Is a credit derivative used for speculation or to hedge risk?
Both. This is where problems exist in regulating the market as hedging risk is considered a legitimate use of the instrument. However, it is difficult to differentiate between funds that are speculating to make quick profits and those that are trying to reduce their risks by buying CDS protection.

What type of regulation is likely?
It seems certain that regulators will force CDS to become a public market by making banks and funds trade them on exchanges or through clearing houses, which will oversee and publish trades.

Naked CDS trading is also under attack. What’s that? This is trading a CDS contract by a bank or hedge fund that does not own the underlying bond or related security. Some politicians blame this kind of trade for exacerbating the Greek deficit crisis as they say it is purely speculative and designed to make quick profits mainly by hedge funds.

Will naked CDS trading be banned?
This could prove tough and regulators are increasingly against it because it is difficult to define.

Will regulations be co-ordinated globally?
The Basel-based Financial Stability Board is co-ordinating the G20’s response to the financial crisis and will try to encourage similar regulations in different jurisdictions. If regulations are not co-ordinated globally, then traders will simply migrate to the markets where there are no regulations.

[Demeter]

21. Violence mars protest by Greek unions

http://www.ft.com/cms/s/0/b1094090-2cfd-11df-8025-00144feabdc0.html

Dozens of youths wearing hoods and ski-masks attacked groups of police on motorbikes patrolling streets around Omonia Square, just as members of the leftwing PAME union were starting to disperse. Although the violent incidents did not appear to involve trade unionists, they highlight a mood of increasing bitterness over the austerity package.

“First we had a 4 per cent wage cut, now it’s 7 per cent – and we’re going to lose a big chunk of the Easter bonus, too,” said Mariana Mousouri, a primary teacher. “It isn’t fair that public sector workers should foot the bill for this crisis.”

Aristotelis Tsouganis, a retired port official, said he voted Socialist because “they promised to look after vulnerable people. Then they turned round and froze my pension.”

The youths smashed the windows of shops and several bank branches, and prised off pieces of marble from building facades to use as missiles. Clouds of teargas blew across streets around the square.

The violence marked an escalation from similar incidents that took place last Friday amid similar protests by public sector trade unions.

Athens international airport shut down for the third time in three weeks as air traffic controllers – employees of the transport ministry – joined the walkout.

All ferry services to the Aegean islands were cancelled. Schools stayed closed and state hospitals were handling only emergency cases.

The GSEE, a federation of private sector unions, said 90 per cent of its 2m members adhered to the strike. More than 20,000 drivers, doctors, journalists and teachers marched through Athens to protest against €4.8bn ($6.5bn, £4.3bn) of wage cuts and tax increases announced by George Papandreou, prime minister, earlier this month.

The latest fiscal measures, which include further increases in excise taxes on fuel and alcohol and a rise in value-added tax rates, are aimed at ensuring Greece cuts its budget deficit this year by 4 percentage points of gross domestic product, as agreed with the European Commission.

The government in Athens is desperate to pull in additional income after revenues in the first two months of the year fell below target, despite a 7.9 per cent increase, according to the finance ministry.

In an unexpected move, VAT refunds to Greek exporters have also been frozen until June – a measure that has triggered strong protest, according to Constantinos Michelos, head of the chamber of commerce in the capital. “This is a heavy blow for businesses when they’re already struggling to cope with a squeeze on lending by the banks,” Mr Michelos said.

Greek bond prices fell sharply on Thursday as jitters over the economy and the mounting debt problems resurfaced. Greek two-year bond yields, which have an inverse relationship with prices, rose to 4.86 per cent, nearly a quarter of a point higher.

The extra yield premium Greece has to pay over Germany, Europe’s benchmark economy, widened sharply. Greece has to pay nearly 4 percentage points more than Germany in interest rate costs for two-year bonds.

Investors also speculated on the likelihood of Greece attempting to raise more money in the debt markets this week. Athens needs to refinance about €10bn ($13.7bn, £9bn) of debt next month.

The latest strike marked an unusual show of solidarity between Adedy, the public sector union; GSEE; and PAME, the communist-led union, which together represent almost half the country’s 5m workforce.

Public sector workers face across-the-board pay cuts of about 7 per cent this year including an unprecedented 30 per cent reduction in Easter, summer and Christmas bonuses.

“The government’s policies will push the country further into recession,” said Yiannis Panagopoulos, chairman of GSEE. “Increases in indirect taxes will bring higher inflation and that will affect everyone.”

Thousands of strikers marched through the city centre to parliament holding black flags and banners saying, “We’re not going to pay for this crisis”.

“It’s true we have job security but we bear the burden of paying taxes when the self-employed seem able to avoid it,” said Penelopi Arseni, a bank employee.

[Demeter]

24. France and UK seek hedge fund deal

http://www.ft.com/cms/s/0/3a2d919e-2d1e-11df-8025-00144feabdc0.html

Gordon Brown and Nicolas Sarkozy will on Friday try to hammer out a compromise deal over European Union reforms that the US and UK believe could damage the hedge fund and private equity industries.

The British prime minister shares the concerns of Tim Geithner, US Treasury secretary, that a draft EU directive to introduce tighter regulatory controls could impose new barriers to business.

London believes that French cultural opposition to hedge funds lies behind the drive to clamp down on the operation of “alternative investment funds”. British officials say Mr Brown will discuss the issue when he meets the French president in London on Friday, ahead of an EU summit this month.

The debate over the shape of financial regulation and the EU directive has raised transatlantic tensions.

Mr Geithner, in a letter to Michel Barnier, Europe’s internal market commissioner, voiced concern about “various proposals that would discriminate against US firms”.

The US has stopped short of threatening retaliatory action. However, if the directive becomes law in its current form, Europe-based fund managers could face reprisals in the US Congress for what is being seen as an attempt to dictate the global regulatory landscape.

Senior EU officials hit back on Thursday at the US criticism. A spokesman for Michel Barnier, the new EU internal market commissioner who is responsible for financial services regulation and to whom Mr Geithner addressed his concerns, said that the EU decision to act on hedge funds was in line with a G20 decision to reinforce transparency in the financial system.

Diplomats from the EU’s 27 states again failed to agree a compromise package of rules.

Britain, Europe’s biggest centre for hedge funds, is leading opposition to aspects of the directive, which it fears could impede the operations of funds based in London.

He added that the new commissioner wanted to “work closely” with the US, to ensure “robust standards” in financial services. Mr Barnier is due to visit the US shortly, although no final date has been set.

The spat comes at a sensitive time. Diplomats from the 27 EU member states again failed on Thursday to agree a compromise package for regulating hedge funds and private equity funds on a pan-EU basis.

Britain, by far Europe’s biggest centre for hedge funds, is leading opposition to aspects of the directive, which it fears could impede the operations of funds based in London.

Alistair Darling, UK chancellor of the exchequer, has argued that hedge funds authorised by regulators to operate in one EU country should be allowed to operate under a “passport” in all other countries.

He has sided with Mr Geithner in opposing provisions that would mean that US hedge funds – or funds operating from London but registered for tax outside Europe – would need authorisation from each European jurisdiction.

A US Treasury spokesman said: “All financial institutions, including hedge funds, should be covered by the global regulatory net.

“But we need to ensure any regulation is sensible and proportionate. There have already been significant improvements to the EU proposal since it first emerged last year and we’ll keep working with our European partners to improve it further.”

Other countries unhappy with aspects of the proposed text are thought to have included Ireland, the Czech Republic, Malta, Sweden and Austria.

The latest setback comes after lengthy discussions that have now been under way for about six months.

However, Spain, which holds the rotating EU presidency, is understood to be anxious to take a text to a scheduled meeting of EU finance ministers next Tuesday. Further negotiation and efforts at finessing the text are expected to continue over the weekend.

People involved in the discussions say a couple of issues remain particularly difficult.

The biggest is the so-called “third country” issue – the access, and the terms on which this would be given, for alternative investment fund managers (AIFMs) from outside the EU to market to professional investors within the bloc. This was the issue that Mr Geithner raised and which has sparked fears of protectionism.

The Spanish compromise text proposed allowing access, provided that there were “appropriate co-operation arrangements for the purpose of systemic risk oversight and in line with international standards … in place between the competent authorities of the member state where the fund is marketed and the competent authorities of the AIFM”.

However, without more detail on how these so-called “equivalence” arrangements will work, the fund management industry is concerned that the directive will become protectionist.

“All the guys here are very worried about the free flow of capital,” said Javier Echarri, director-general of European Private Equity & Venture Capital Association, speaking from an investors’ forum in Geneva.

He pointed out that economic conditions had led to an unprecedented drop in fund-raising and investment last year, and said he was concerned that the regulatory hiatus might deter recovery.

“Investors say they need legal certainty,” Mr Echarri.

The hedge fund rules will also need approval from the European Parliament, as well as individual member states.

MEPs are working on their own amendments to the original, much-criticised European Commission proposals. While these have not yet crystallised, there are signs that the MEPs may take a more conciliatory approach on the “third country” issue – allowing current national arrangements to remain in place for a transition period while the equivalence standards are drawn up.

Managers from third countries which met the equivalence standard might also enjoy EU-wide marketing rights – a so-called “EU passport”.

However Spain, which holds the rotating EU presidency, is understood to be anxious to take a text to the next meeting of EU finance ministers on Tuesday. Negotiations are expected to continue over the weekend.

[Demeter]

63. Weber dubs EMF idea a ‘sideshow’

http://www.ft.com/cms/s/0/ac780622-2b83-11df-9d96-00144feabdc0.html

Germany’s proposal for a European Monetary Fund to bail out crisis-hit countries ran into opposition on Tuesday from the country’s central bank, which warned it could prove a damaging distraction and undermine eurozone rules.

Axel Weber, the Bundesbank’s president, described as “not helpful” discussions about the “institutionalisation of emergency help” when countries such as Greece should be focused on cutting public sector borrowing. “Any other discussion is a sideshow that will distract from the necessary consolidation,” he said.

The Bundesbank president’s comments came as a blow to Wolfgang Schäuble, Germany’s finance minister, as he sought European support for an initiative aimed at making the 16-country eurozone better able to deal with future crises.

In a further slight, Mr Weber noted that, under current plans, Greece would bring its public sector deficit back below the European Union’s limit of 3 per cent of gross domestic product faster than Germany.

Since its launch at the weekend, the EMF proposal has divided eurozone policymakers – suggesting Berlin had either failed to consult properly in advance or knew its proposal would face resistance. Christine Lagarde, French finance minister, gave the idea a cool reception, describing it as “interesting” but not “an absolute priority in the short term”. Anders Borg, her Swedish counterpart, supported “an organisation that can more concretely help countries with financial problems” but “most important” was to tighten the rules to stop countries from “misbehaving”.

Mr Weber’s comment followed a similarly frosty reaction on Monday by Jürgen Stark, a European Central Bank executive. However, the ECB’s 22-strong governing council – of which Mr Weber and Mr Stark are members – has yet to agree a joint position on the proposal, and includes others who support measures to increase the eurozone’s political effectiveness.

Although the German finance ministry has given few details about how a European Monetary Fund would work, economists regard it as a long-term project to avert future crises that would have little relevance for the current Greek situation.

Mr Weber said he had not been involved in finance ministry discussions and it was unclear what such a plan would entail.

He favoured any steps that strengthened eurozone procedures for applying the “stability and growth pact”, which sets limits on government’s deficit and debt levels. But with Greece responding to pressure to put its finances back in order, discussion about “a plan B” would be “counterproductive”. Moreover, the eurozone’s “no bail-out clause”, which prevents countries assuming the liabilities of others, was a crucial part of the monetary union’s institutional framework.

Separately, Mr Weber suggested the ECB could take a more flexible stance in accepting assets with lower credit ratings as collateral in its liquidity operations. Currently, assets can become ineligible if they fall below a minimum rating. The ECB could discuss simply applying a bigger discount to lower rated products, said Mr Weber.

But he offered little hope that Greece would be helped by any modifications in the ECB’s regime. “There will be no changes over this year,” he said.

[Demeter]

64. France and UK seek hedge fund deal

http://www.ft.com/cms/s/0/3a2d919e-2d1e-11df-8025-00144feabdc0.html

Gordon Brown and Nicolas Sarkozy will on Friday try to hammer out a compromise deal over European Union reforms that the US and UK believe could damage the hedge fund and private equity industries.

The British prime minister shares the concerns of Tim Geithner, US Treasury secretary, that a draft EU directive to introduce tighter regulatory controls could impose new barriers to business.

London believes that French cultural opposition to hedge funds lies behind the drive to clamp down on the operation of “alternative investment funds”. British officials say Mr Brown will discuss the issue when he meets the French president in London on Friday, ahead of an EU summit this month.

The debate over the shape of financial regulation and the EU directive has raised transatlantic tensions.

Mr Geithner, in a letter to Michel Barnier, Europe’s internal market commissioner, voiced concern about “various proposals that would discriminate against US firms”.

The US has stopped short of threatening retaliatory action. However, if the directive becomes law in its current form, Europe-based fund managers could face reprisals in the US Congress for what is being seen as an attempt to dictate the global regulatory landscape.

Senior EU officials hit back on Thursday at the US criticism. A spokesman for Michel Barnier, the new EU internal market commissioner who is responsible for financial services regulation and to whom Mr Geithner addressed his concerns, said that the EU decision to act on hedge funds was in line with a G20 decision to reinforce transparency in the financial system.

Diplomats from the EU’s 27 states again failed to agree a compromise package of rules.

Britain, Europe’s biggest centre for hedge funds, is leading opposition to aspects of the directive, which it fears could impede the operations of funds based in London.

He added that the new commissioner wanted to “work closely” with the US, to ensure “robust standards” in financial services. Mr Barnier is due to visit the US shortly, although no final date has been set.

The spat comes at a sensitive time. Diplomats from the 27 EU member states again failed on Thursday to agree a compromise package for regulating hedge funds and private equity funds on a pan-EU basis.

Britain, by far Europe’s biggest centre for hedge funds, is leading opposition to aspects of the directive, which it fears could impede the operations of funds based in London.

Alistair Darling, UK chancellor of the exchequer, has argued that hedge funds authorised by regulators to operate in one EU country should be allowed to operate under a “passport” in all other countries.

He has sided with Mr Geithner in opposing provisions that would mean that US hedge funds – or funds operating from London but registered for tax outside Europe – would need authorisation from each European jurisdiction.

A US Treasury spokesman said: “All financial institutions, including hedge funds, should be covered by the global regulatory net.

“But we need to ensure any regulation is sensible and proportionate. There have already been significant improvements to the EU proposal since it first emerged last year and we’ll keep working with our European partners to improve it further.”

Other countries unhappy with aspects of the proposed text are thought to have included Ireland, the Czech Republic, Malta, Sweden and Austria.

The latest setback comes after lengthy discussions that have now been under way for about six months.

However, Spain, which holds the rotating EU presidency, is understood to be anxious to take a text to a scheduled meeting of EU finance ministers next Tuesday. Further negotiation and efforts at finessing the text are expected to continue over the weekend.

People involved in the discussions say a couple of issues remain particularly difficult.

The biggest is the so-called “third country” issue – the access, and the terms on which this would be given, for alternative investment fund managers (AIFMs) from outside the EU to market to professional investors within the bloc. This was the issue that Mr Geithner raised and which has sparked fears of protectionism.

The Spanish compromise text proposed allowing access, provided that there were “appropriate co-operation arrangements for the purpose of systemic risk oversight and in line with international standards … in place between the competent authorities of the member state where the fund is marketed and the competent authorities of the AIFM”.

However, without more detail on how these so-called “equivalence” arrangements will work, the fund management industry is concerned that the directive will become protectionist.

“All the guys here are very worried about the free flow of capital,” said Javier Echarri, director-general of European Private Equity & Venture Capital Association, speaking from an investors’ forum in Geneva.

He pointed out that economic conditions had led to an unprecedented drop in fund-raising and investment last year, and said he was concerned that the regulatory hiatus might deter recovery.

“Investors say they need legal certainty,” Mr Echarri.

The hedge fund rules will also need approval from the European Parliament, as well as individual member states.

MEPs are working on their own amendments to the original, much-criticised European Commission proposals. While these have not yet crystallised, there are signs that the MEPs may take a more conciliatory approach on the “third country” issue – allowing current national arrangements to remain in place for a transition period while the equivalence standards are drawn up.

Managers from third countries which met the equivalence standard might also enjoy EU-wide marketing rights – a so-called “EU passport”.

However Spain, which holds the rotating EU presidency, is understood to be anxious to take a text to the next meeting of EU finance ministers on Tuesday. Negotiations are expected to continue over the weekend.

[Demeter]

65. Car Talk--With Apologies to Tom and Ray!

How could we live without transportation?

[Demeter]

66. VW joins rush into electric vehicles

http://www.ft.com/cms/s/0/224a0132-2ad7-11df-886b-00144feabdc0.html

Volkswagen, a long-time sceptic about hybrid and electric cars, has officially shifted gears.

At last week’s Geneva motor show – where nearly every leading carmaker showcased a planned or experimental hybrid or battery-powered model – the German carmaker said it planned an “unprecedented” drive into electric vehicles.

Porsche's 918 Spyder hybrid petrol-electric concept car

Porsche showed its 918 Spyder hybrid petrol-electric concept car at the Geneva motor show last week

Martin Winterkorn, the chief executive, said the group aimed to increase the cars’ share in its portfolio from zero to 3 per cent of its total sales by 2018.

In a preview of forthcoming models, VW’s Seat brand rolled a sleek, sporty all-electric “concept” vehicle, the IBE, down a catwalk. Porsche showed the 918 Spyder, a hybrid petrol-electric concept car that it said could shift from petrol mode on the highway to hybrid driving in the city, delivering 78 miles per gallon.

Elsewhere in Geneva, VW’s luxury competitor Daimler announced a partnership with China’s BYD to build a battery-powered vehicle for the world’s largest car market under a new brand.

And Nick Reilly, General Motors’ European boss, drove the carmaker’s forthcoming electric Ampera from Opel’s headquarters near Frankfurt to Geneva, where the mud-spattered prototype took a place on the show floor.

Carlos Ghosn, chief executive of Renault and Nissan, rebuffed VW’s bid for leadership in battery-powered cars, saying the Franco-Japanese alliance would have enough capacity to produce about half a million electric cars and batteries by 2013-2014.

Mr Ghosn predicted a shortage of manufacturing capacity for both plug-in cars and the batteries needed to power them within two years.

“From everything I’m seeing, in 2011 or 2012 we’re going to have to rush to build capacity for both batteries and for cars,” he said.

Mr Ghosn has predicted that zero-emission cars – primarily electric vehicles – will capture a tenth of the world market by 2020.

But most industry analysts and some carmakers – including those planning plug-in models themselves – predict smaller sales for electric cars and hybrids, which rely on a combination of a large battery and a combustion engine.

Chart showing the market share of hybrid and pure electric car volumesWhile most predict a long-term shift to electrification, they say the cars’ higher initial cost and the lack of widely available recharging infrastructure will limit demand initially.

“Ten years down the road, more than 90 per cent of cars will be the conventional cars that we have now,” said Al Bedwell, an automotive technology expert with JD Power, the consultancy. “Ten per cent will be hybrids or electric vehicles.”

Within that figure, all-electric vehicles would account for just 3 per cent, Mr Bedwell said.

National and local governments around the world are investing or pledging billions of dollars in charging points and tax breaks to promote electric cars, which are not yet widely available, and have not proven they will find a significant market.

The uncertainty surrounding demand makes carmakers’ forthcoming electric models – not to mention the billions of dollars being invested in lithium-ion batteries expected to power them – largely a leap of faith.

Early motoring press reviews of pioneering all-electric models such as Tesla Motors’ electric roadster or BMW’s prototype Mini E have mostly praised the cars, but dwelled at length on the anxiety caused to drivers by the lack of public places to recharge them.

Even hybrids, which have been on the road for more than a decade, are still selling modestly except in countries like the Netherlands and Japan that offer generous incentives to people who buy them.

In Geneva Takanobu Ito, Honda’s chief executive, said the carmaker, whose flagship Insight hybrid has sold poorly in the US, had been able to sell hybrids in Japan largely because of scrapping and “eco-car” incentives.

He said he was not expecting high sales for a planned all-electric model, which he said Honda was developing to meet California’s legislation requiring zero-emission vehicles.

“Pure battery-electric vehicles will be a rather small figure: under optimistic criteria, for Europe less than 5 per cent in 2020,” said Wolfgang Bernhart, a partner with Roland Berger Strategy Consultants. “On a global scale, the figure will be even lower.”

The doubts are not deterring Renault and Nissan, which have made leadership in electric vehicles a central plank of their corporate strategy.

The two carmakers are planning eight electric vehicles over the next four years, the biggest line-up of any major carmaking group.

At a dinner with reporters in Geneva, Patrick Pelata, Renault’s chief operating officer, dwelt primarily on the carmaker’s electrification plans, devoting relatively little time to other questions about the company’s current products and markets during one of the most challenging times in its history.

In order to lower the prices of its electric cars, Renault and Nissan plan to lease the batteries to customers, and recycle them as energy-storage units after their natural life in vehicles comes to an end.

The group claims that this – coupled with generous tax subsidies for zero-emissions cars in countries such as France – will allow it to offer its plug-in cars at prices comparable to similarly sized diesel models.

Far from a looming bubble and bear market for electric cars and their batteries, Renault fears the opposite: a global competitive rush to develop them. “The biggest strategic fear is that the Chinese or Indian auto industry will take a shortcut” in the new technology, Mr Pelata said.

[Demeter]

11. Econobloggers need their crisis back/ PEP TALK TIME!

http://ultimibarbarorum.com/2010/03/07/econobloggers-need-their-crisis-back/


...What really rankles this blogger is that the Great Spinozist Republic is being subverted again. Regulatory capture is one thing, the total inability of a political system to make any steps to reform itself when what is wrong is staring at you in the face, is quite another. Political money and public ignorance has corrupted civic decency in the US to such an extent that doing the right thing for the Republic appears quite impossible.

All these things should make econo-bloggers all quiver with righteous anger, which we would communicate to our readers who would then rise up en masse against the legislators captured by Big Banking, and some form of actual reform might even take place.

But something along the chain has broken. Either we have lost interest or, more likely, the world has. To be sure, there are brave souls who carry on the fight. Felix does an admirable job of keeping us up to date with the nuts and bolts of finance reform. Taibbi provides the rhetoric (“vampire squids”, indeed). Calculated Risk and Naked Capitalism carry on doing their thing, as does Zero Hedge in its batshit sawn-off shotgun way. TED gives us the lowdown and I mean low, on what it really means to be a banker (though TED’s next post is just as likely to be about his favourite type of upholstery. Thanks for including us in the list of blogs you read, BTW). There are others, and Abnormal Returns continues to aggregate them. But the rest of us seem to have stopped caring so much. The minutiae of practical policy is much less amusing than making lots of money in financial markets that really, truly appear to be on the mend.

The wider global economy seems to be much better too. Sure, the US seems a bit screwed up still, and unemployment is high, but frankly that’s not where the action is at anymore. Baruch was astonished to read that Gartner is predicting 20% year on year growth in PC units globally. We can talk about overleveraged consumers until we’re blue in the face and we’ll still be wrong. That’s a crapload of PCs, and someone’s buying them. You don’t sell craploads of PCs like that unless there was something going fundamentally right in more places than where things are going fundamentally wrong.

But a better economy just makes people fat and happy, and fat and happy people aren’t likely to be roused by righteous anger. Fat and happy people are not likely to want to change much. Fat and happy people are much more likely to assume the light at the end of the tunnel gives out onto a large outdoor buffet than the next oncoming crisis. Hell, fat and happy people are more likely to do the stuff to bring on the next crisis, to binge, to borrow more, stoke the next bubble wherever that may be and feel pretty smart doing so, just like we did in 2006 and 2007....

....At its best, the econo-blogosphere can be the last haven of truly independent, non-captured, and crucially, informed, commentary able to affect policy and opinion makers positively. It used to do just that. It may not help in the end but let someone at least try.

Get your game back on, people. Get some fire in the belly again. A crisis is a terrible thing to waste, and it looks like we are on the verge of wasting ours....

[Demeter]

13. Housing, Mortgages and Jobs Go Here

Might as well put all the broken nest eggs in one basket...

[Demeter]

14. Alpert: Two years until we see market-clearing prices in housing market

http://www.creditwritedowns.com/2010/03/alpert-two-years-until-we-see-market-clearing-prices-in-housing-market.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+creditwritedowns+%28Credit+Writedowns%29

Ann Lee and Dan Alpert joined Bloomberg’s Pimm Fox today to talk about the housing market recovery. Lee, a professor of finance at New York University, was sceptical that population growth predicts any substantial increase in housing transactions and prices simply due to the continued pressure on wages and disposable income. and Dan Alpert, managing director at Westwood Capital LLC, said we are not looking at market-clearing prices in the near-term because home ownership percentages need to drop. This process will take two to two and a half years in his view.

http://www.youtube.com/watch?v=oPdosno-VA0&feature=player_embedded

[Demeter]

16. Dodging deficiency: Play mortgage lenders' tough-guy game before deficiency judgments are filed

http://www.marketwatch.com/story/walking-away-from-property-isnt-always-so-easy-2010-03-12?siteid=YAHOOB


Question: My wife owns a house in her name and she makes enough money to pay for the mortgage and the taxes, but the property is depreciating almost daily with no light on the horizon. She does not live in it. She lives in a different state. She wanted to keep the house but can not refinance because of the depressed debt/value ratio. She's also considered a short sale, a loan modification, deed-in-lieu and foreclosure, but none of them seem logical at this point. Bankruptcy is not an option, either, because her income is too great.

We are not necessarily worried about her credit. We are ready to lose it. All we are concerned about is the possibility of the bank and government coming after us and garnishing our wages and properties. On top of everything, what frustrates me the most is the fact that in states like California, where people made killings in real estate for years, people can simply walk away from their properties when things turned south with no real consequence. But in Michigan, where my wife's house is located, we always suffered economically, real estate never moved anywhere, people never made money on their properties, and yet, we are not allowed to walk away because they can post deficiency judgment on us. It is so not fair.

I am really looking for someone who can explain this to me. We are ready to take the loss, demolish the credit to nothing and forget about it -- as long as we will not deal with legal consequences for years for them to collect the deficiency.

Answer: You are, indeed, correct. California is one of 11 states where lenders are prohibited by law from filing deficiency judgments against borrowers to collect the difference between what was owed and what was collected when the asset was sold. The others are: Alaska, Arizona, Iowa, Montana, North Dakota, Oregon, Pennsylvania, South Carolina, Washington and Wisconsin. But your worries may be unfounded. And besides, you may be able to work out a deal in which the lender agrees not to come after you.

First, let's look at the practicality of deficiency judgments. In instances where the loan has been sold by the lender to another investor, the new owner is far more likely to chase down a borrower, if only because the loan was probably purchased for pennies on the dollar. That means the new owner's profit lies in pursuing the deficiency. But otherwise, many mortgage companies don't go after the balance still due. For one thing, deficiency judgments are not automatic. Rather, the lender would have to go back to court, obtain a judgment and then try to enforce it in the county or state where you now reside, if they can find the borrower at all. Besides, most people who lose their homes to foreclosure or simply hand the keys back to their lenders don't have any money left, anyway. So it is often a waste of time for a lender to go after them.

Unfortunately, your wife's lender probably knows where she is, and she makes enough money to be a worthy target. So here's what I would do: Negotiate. That is, in return for simply handing the house over to the lender and sparing the company the expense of going through a long, drawn-out and costly foreclosure proceeding, I'd ask that the lender put it in writing that it will not pursue a deficiency judgment. Even though the house in question may be a lost cause, you still have some bargaining power, so use it to your advantage. Threaten (in a nice way) to string out the foreclosure to the point where it would cost the lender more to take back the house than the amount of the deficiency. Lenders aren't stupid, but sometimes you have to play their tough-guy game.

Question: I came across your MarketWatch column and would like to get your opinion on the following idea: With one out of four homeowners underwater and the current financial crisis affecting everyone, wouldn't it be prudent for the government to consider allowing people to tap their 401(k) without penalty to pay off or pay down their mortgages? I see many benefits to this move. For one thing, it helps banks' liquidity and moves bad or soon-to-be bad mortgages off their books. It also helps the economy by increasing people's spending power once mortgage payments are reduced or eliminated. And it reduces tax deductions and increases taxable income, which, in turn, increases tax revenues to the government. I see everyone, including the government, benefiting from the move. I know this goes against conventional wisdom, but we are in desperate times. The down side is that if the housing market continues to sag, so will many people's retirement nest eggs. Many 401(k)s saw double digit decreases in the past years and that will continue to happen if the stock market continues to decline. I am certain that this idea has come across before, so what am I missing?

Answer: I haven't heard of your idea being floated anywhere on Capital Hill. People often ask if it is wise to take money out their retirement accounts to pay for mortgages they can no longer afford. And you're right, conventional wisdom has it that you shouldn't do so until you have exhausted every other option available. Even if doing so was penalty-free, it's just not a good idea. If you are in the throes of losing your home, the last thing you want to do is liquidate your IRA or 401(k), at least not unless you see a light at the end of the tunnel -- that is, some ray of hope that you will be able to keep your home, not a train coming the other way.

If you end up giving up your home after running through your retirement savings, you have absolutely nothing left, nothing to fall back on. It seems to me that the only benefit of making withdrawals without penalty would be that it will stretch your savings a little bit further. Banks would love to get at those funds if they could, so I'd leave well enough alone.

That said, this is just my opinion. If you disagree, see what kind of feedback you get from your congressman here in Washington.

[Demeter]

15. Senators question $1 million pay for charity's CEO

http://news.yahoo.com/s/ap/20100312/ap_on_bi_ge/us_charity_expenses

A group of Republican senators is questioning high salaries and expensive travel bills for executives at the Boys & Girls Clubs of America, raising issues that could jeopardize millions in federal funding for the national charity.

The four senators said they were concerned that the chief executive of a charity that has been closing local clubs for lack of funding was compensated nearly $1 million in 2008. They also questioned why in the same year officials spent $4.3 million on travel, $1.6 million on conferences, conventions and meetings, and $544,000 in lobbying fees.

"The question is whether or not a very top-heavy organization might be siphoning off federal dollars that should be going to help kids," said Sen. Chuck Grassley of Iowa, the top Republican on the Senate Finance Committee.

The senators sent a letter to the head of the charity's board of governors Thursday seeking detailed financial information about executive compensation, travel and lobbying expenses, and how the national charity awards grants to local clubs.

The issues they raise could threaten the reputation of a popular charity that supports 4,300 local Boys & Girls Clubs serving about 4.8 million children. The timing threatens a bill moving through the Senate that would provide up to $425 million in federal money to the national organization over the next five years.

"That bill isn't going anywhere until we get the answers to these questions," said Sen. Tom Coburn, R-Okla.

Along with Grassley and Coburn, the letter was signed by Republican Sens. Jon Kyl of Arizona and John Cornyn of Texas. The senators noted in their letter that the organization posted a $13.6 million loss in 2008, according to tax records.

"We find it hard to reconcile this loss with the amount spent on executive salaries, perks, and lobbying expenses," the senators wrote. "We are especially concerned because it is our understanding that some independent clubs have closed or are on the cusp of closing because of a lack of funding."

Community Boys & Girls Clubs are all locally governed, but most receive tens of thousands of dollars each year from the Atlanta-based national charity. In 2008, the national charity reported receiving $41 million in government grants and $51 million in other gifts and contributions.

That same year, the national organization spent $57.6 million on grants to local clubs and $37.5 million on salaries and benefits, according to tax records.

In 2009, the Justice Department awarded the Boys & Girls Clubs of America a $44 million grant for mentoring services. The money came from the economic recovery package enacted last year. The grant was more than twice the size of the next largest, $19 million, which went to Goodwill Industries International.

Roxanne Spillett, president and CEO of the Boys & Girls Clubs of America, received a total compensation of $988,591 in 2008, according to the charity's tax filings. She got a base salary of $360,774, a bonus of $150,000 and other compensation of $83,152, for a total of $593,926. She also received $385,500 in deferred compensation, most of which went to a retirement plan, and $9,165 in nontaxable benefits.

The organization listed two registered lobbyists among its highest paid employees. Glenn Permuy, a senior vice president, received $427,355 in total compensation, including $22,500 deferred. Kevin McCartney, senior vice president of government relations, had $217,859 in total compensation, including $13,502 deferred.

Evan McElroy, senior vice president of communications for the Boys & Girls Clubs of America, said the charity would respond to the letter before the March 29 deadline set by the senators. He declined to answer questions about the charity's finances when contacted Thursday but said in an e-mail that Spillett's base salary has not increased since 2006.

In the e-mail, McElroy said the charity's compensation committee follows Internal Revenue Service guidelines for nonprofit organizations. He said Mercer, a human resources consulting firm, analyzed executive compensation and found it was "appropriate for a large, national, tax-exempt, youth organization."

Despite recent closings, Spillett has overseen significant growth in the number of local Boys & Girls Clubs since becoming president of the national organization in 1996. During that time, the number of local clubs grew from 1,850 to 4,360.

Experts were split on whether Spillett's pay was excessive for a charity with revenues of $107 million in 2008, the latest year available.

"It's certainly not unusual to see people leading major charities, which after all, are very large, complex operations, making substantial salaries," said Brian Vogel, a senior principal with Quatt Associates, a management consulting firm in Washington.

Vogel said "$500,000 or $600,000 wouldn't be outside the marketplace. ... Remember, these are organizations that can be as hard to manage as a major for-profit business."

Annual compensation averaged $462,000 last year for the CEOs of charities with expenses of more than $100 million, according to a compensation study by Charity Navigator, a Web site that evaluates charities.

"The people who use our site, donors, would be appalled by a salary like this," Ken Berger, president and CEO of Charity Navigator, said of Spillett's compensation. "If you want to be a millionaire, go and work in the for-profit sector."

[Demeter]

22. US households deleverage at record rate

http://www.ft.com/cms/s/0/c16c4788-2d35-11df-9c5b-00144feabdc0.html

Americans deleveraged their balance sheets aggressively in 2009, reducing household debt for the first year on record as they coped with the aftermath of the recession, Federal Reserve figures showed on Thursday.

US household debt contracted by 1.75 per cent in 2009, according to the closely watched “flow of funds” data. It was the first annual decline since the Fed began tracking household borrowing in 1946 and marks a sharp shift from the euphoric borrowing that led up to the recession.

During the last three months of 2009 mortgage debt continued to fall while consumer credit continued to contract. Economists warn, however, that much of this can be attributed to debts being written off rather than repaid.

While consumers and homeowners retrenched, US state governments and the Federal government continued to borrow heavily to support measures to stimulate the economy.

Federal borrowing grew at an annual rate of 22.7 per cent last year, while state and local governments upped borrowing by 4.8 per cent. By comparison, in 2007 when the recession officially began, Federal borrowing rose by just 4.9 per cent.

Borrowing was also off at businesses, falling by 1.8 per cent last year after rising by 5.2 per cent in 2008, as consumer demand remained weak and banks were reluctant to lend. According to the Fed, the 1.75 per cent decline of non-financial business debt last year was the sharpest since the early 1990s.

“It’s the un-holy alliance that banks don’t want to lend and people aren’t interested in borrowing,” said Brian Bethune, an economist at IHS Global Insight. “The only borrowers are our friendly governments.”

On Wednesday, Tim Geithner, US Treasury secretary, said that the US economy and financial system face “substantial” challenges, but that stimulus measures have been effective in addressing the crisis.

Mr Bethune noted that the downturn in debt is not necessarily due to greater discipline. High levels of home foreclosures have translated into weaker credit ratings and lower credit card debt is due to banks cancelling cards and writing off the losses.

Meanwhile, US households continued to get richer in the fourth quarter of last year, with net worth rising by $700bn to $54,200bn. It was the third quarter running that household wealth increased, thanks to rising home prices and the strength of the stockmarket.

For the year, household wealth rose by $2,800bn, making a small dent in the $14,000bn of wealth that was demolished by the recession, when net worth in US households plunged by 26.4 per cent from peak to trough.

Mike Englund, an economist at Action Economics, projects that US households will not return to their previous levels of wealth until mid-2012.

“That could delay some retirement plans,” Mr Englund said.

[Po_d Mainiac]

27. The third paragraph is key

People are defaulting, not paying down.

Although the pumpers won't admit it.

[Demeter]

37. National US grocery brands regain ground

http://www.ft.com/cms/s/0/422d99a0-2c76-11df-be45-00144feabdc0.html

US shoppers are regaining their taste for the national brand groceries that some steered away from during the recession, providing evidence of an improvement in consumer confidence.

Kroger, the largest US traditional supermarket, said on Monday it had seen robust fourth quarter growth of national brands. David Dillon, chief executive, described this as “another positive sign” of an improving consumer mood.

During the depth of the recession, sales surged of Kroger’s lower cost own brand goods, such as Kroger Value Wheat Puffs Cereal, outstripping established national brands as shoppers focused on saving money.

National and private label brands grew at about the same speed during its fourth quarter, ending on January 30.

Mr Dillon noted that some of the national brand growth resulted from more aggressive promotional spending by manufacturers. But he said it was also in line with other signs of renewed discretionary spending, such as stronger sales at Kroger’s Fred Meyer jewellery chain, and improving sales of flowers and speciality coffee. I'LL SAY THEY DID--AND KROGER HELPED WITH THEIR TARGETTING OF COUPONS

“I actually take it as one sign of some glimmer of hope of improvement,” he said, of the stronger national brand performance. Kroger has the largest private label business of the three largest US supermarket chains. Private label sales account for 27 per cent of its sales, or more than $12.5bn.

Separately, Walter Robb, co-president of Whole Foods Market, said its more than 270 natural and organic supermarkets were seeing a similar slowdown in sales growth for its private label products. As the recession hit, Whole Foods private brands growth rose to four times the rate of national brands, he said but had slowed to more normal rates of 2-2.5 times larger. “It’s still growing faster, but the brands are starting to come back. Which I would say would be another indication that . . . it is coming back towards a more appropriate balance between private label and branded goods.”

Steve Burd, Safeway chief executive, last week said the retailer was seeing continued growth in its private label products but “maybe not as strong as in previous quarters”.

Robert Moskow, retail analyst at Credit Suisse, noted that volume sales of branded foods rose 2.4 per cent in February against a year ago, versus 3.2 per cent growth for private label: “Private label continues to grow faster than brands, but the rate at which it is growing is resembling historical averages, of 100 to 120 basis points faster.“

Private label goods account for only around 15 per cent of total food sales in the US by value, compared with rates of 60 per cent or more in Europe.

[Demeter]

41. Officials: 2.5 million Floridians on food stamps

http://www.miamiherald.com/2010/03/10/1521776/officials-25-million-floridians.html

More than 2.5 million Floridians are on food stamps, up from three years ago where 1.2 million residents received assistance.

That's according to records kept by the Department of Children and Families, which administers the program.

DCF Secretary George Sheldon told the South Florida Sun-Sentinel Tuesday that Florida's food stamp rolls grew the fastest in the nation since 2007. Florida's food stamp numbers hit a low in April 2007, when the state paid out $109.9 million to 1.2 million residents. Back then, 6.4 percent of the state population was on food stamps.

To qualify, Floridians must make 133 percent of the federal poverty level or less. For a family of four, that's just under $29,000 a year.

Maximum monthly benefits are $200 for one person and $668 for a four-member family.

[Demeter]

42. New round of foreclosures threatens housing market

http://www.washingtonpost.com/wp-dyn/content/article/2010/03/11/AR2010031104866.html?referrer=emailarticle



The housing market is facing swelling ranks of homeowners who are seriously delinquent but have yet to lose their homes, and this is threatening a new wave of foreclosures that could hit just as the real estate market has begun to stabilize.

About 5 million to 7 million properties are potentially eligible for foreclosure but have not yet been repossessed and put up for sale. Some economists project it could take nearly three years before all these homes have been put on the market and purchased by new owners. And the number of pending foreclosures could grow much bigger over the coming year as more distressed borrowers become delinquent and then, if they can't obtain mortgage relief, wade through the foreclosure process, which often takes more than a year to complete.

As these foreclosed properties add to the supply of homes for sale, they could undercut housing prices, which have increased modestly through December, according to the most recent figures in the S&P/Case-Shiller home prices index. That rise partly reflected a slowdown in the flow of foreclosed homes onto the market.

The rate at which J.P. Morgan Chase seized properties, for example, peaked in the middle of 2008 and fell steadily last year, according to a February investor report. But the bank expects repossessions to increase this year, nearly doubling to 45,000 by the fourth quarter.

"Some of the positive housing data may not be signaling a true turning point, as many servicers are holding back on foreclosures and the related houses are not yet being offered for sale," said Diane Westerback, a managing director at Standard & Poor's. Westerback said it could take 33 months to clear the backlog.

Data released Thursday by RealtyTrac illustrate the dynamic. While banks repossessed fewer homes in February than a month earlier, borrowers continued to fall behind on their payments, adding to the inventory of properties headed toward foreclosure that have yet to be put on the market, said Daren Blomquist, RealtyTrac's spokesman.

"Just looking at the numbers, we would expect there to be a bigger percentage of properties" repossessed by banks by now, he said.

This "shadow market" reflects the increasing lag between defaults and foreclosures. Many lenders are struggling to keep up with the overwhelming number of borrowers who can't make their payments, and they're reluctant to rush repossessed homes onto the market when prices are depressed.

Delinquent borrowers

Today's delinquent borrowers, for the most part, differ in a key regard from those who were caught up in the surge of defaults in 2008. That earlier wave, which precipitated the financial crisis, consisted largely of subprime borrowers who defaulted when their risky loans became unaffordable.

The borrowers in trouble now are, for the most part, people who have better credit and safer loans and have become delinquent because they've lost their jobs or are dealing with other economic setbacks, economists said. More than 75 percent of the borrowers who are now seriously delinquent -- meaning they have missed at least three monthly payments -- have traditional prime loans, according to First American CoreLogic. Most of these borrowers have not made a mortgage payment in six months.

These borrowers are among the most difficult to help. Homeowners with economic troubles such as extended unemployment often cannot make even reduced mortgage payments. And the longer borrowers stay delinquent, the more difficult it is to fashion a mortgage relief plan for them.

Some lenders are giving distressed borrowers more time to see whether they can modify the terms of their loans.

It can take a borrower six to seven months to find out whether he or she qualifies for a permanent loan modification under the federal foreclosure relief program, Making Home Affordable, according to Barclays Capital.

In Maryland, for example, lawmakers extended the foreclosure process from 15 days to 135 days in 2008 and are considering emergency legislation to force lenders into mediation with a borrower before foreclosing on a property. But other states and jurisdictions have even more drastic measures to slow down the foreclosure process. "There were cases where sheriffs were refusing to file foreclosure notices," said Jay Brinkmann, chief economist for the Mortgage Bankers Association.

After a temporary foreclosure moratorium in 2008, the backlog of homeowners facing foreclosure in Maryland has surged. The number of Maryland homeowners who are seriously delinquent or in the midst of the foreclosure process nearly doubled during the fourth quarter of 2009 compared with the same period a year earlier, according to data from the Mortgage Bankers Association.

"Lenders are deluged by late-stage delinquencies. The pent-up foreclosure inventory is there," said Massoud Ahmadi, director of research for the Maryland Department of Housing and Community Development.
Housing prices

The uptick in foreclosure sales is helping depress Maryland home prices, he said. "We have seen that home sales are on an upswing, but prices are on a downswing. That is the impact of the shadow inventory. It is keeping prices down," Ahmadi said.

In addition to those already in default are 11 million more U.S. borrowers who owe more on their mortgage than their home is worth -- known as being underwater -- and are in danger of becoming delinquent, said Sam Khater, chief economist for First American CoreLogic.

Over the past year, the number of foreclosed homes going up for sale has declined. Distressed properties made up just 38 percent of purchases in January, compared with the 49 percent peak in March 2009, according to the National Association of Realtors. That helped the inventory of homes on the market fall to a 7.8-month supply, close to the figure during normal times and down from more than 11 months in July 2008. But as prices continue to stabilize, lenders are likely to take advantage of the situation by putting more of these distressed properties on the market, economists said.

"Banks have remained in foreclosure paralysis, allowing that backlog to get larger and larger. You can't do that indefinitely," said Sandeep Bordia, head of U.S. residential credit strategy at Barclays Capital.

That impact could be muted if enough buyers emerge to snap up properties or efforts to enroll borrowers in mortgage relief programs improve. Some lenders are looking for ways to ease delinquent borrowers out of their homes without a foreclosure. For example, lenders are allowing more short sales, in which the home is sold for less than the outstanding loan balance. Citigroup is testing a program that allows delinquent borrowers to stay in their home for six months free if they leave the property in good condition, making it easier to sell afterward.

"We are anticipating a foreclosure glut that is likely to come up in next 16 to 18 months. We are trying to stay ahead of this," said Sanjiv Das, chief executive of CitiMortgage. These types of programs are "protecting house prices and consumer sentiment from going down further," he said.

Regional impact

The impact of the coming foreclosure wave will vary by region. The Washington area has a "shadow inventory" of about 67,000 properties that could go into foreclosure this year, an 11-month supply at the current sales rates, according to research by John Burns Real Estate Consulting in Irvine, Calif. That is slightly higher than the national average but far less than the hardest-hit communities, such as Orlando and Miami, where there is two-year backlog.

And the backlog will hang over some communities for years. By the end of 2012, 39 percent to 50 percent of home purchases in Phoenix will still be foreclosed properties, J.P. Morgan Chase has estimated. In Los Angeles, they'll account for 28 percent of home sales.

[Demeter]

43. Mortgage Principal Writedown Won't Save Housing

http://www.cnbc.com/id/35768105

Big gun lawmakers are making the move toward principal writedowns as the last resort to save the housing market.

In a letter to the CEOs of Bank of America, Wells Fargo, JP Morgan Chase and Citigroup, House Financial Services Committee Chairman Barney Frank wrote, "To save homes on a large scale, we must move past temporary modifications in interest rates or terms and focus on permanent principal reductions that result in truly sustainable mortgages."

I agree and disagree with that statement: I agree that temporary modifications (even though the Treasury calls them permanent) are going to keep some borrowers in their homes for a while, but are really just prolonging the agony. I disagree that principal reductions will create truly sustainable mortgages.

The problem is prices. Home prices have fallen so far in the hardest hit areas, the areas where the bulk of the troubled loans are, that banks would have to write down principal 30 to 50 percent to put borrowers back in the green. Accounting rules require that banks write down the value of those loans on their books, and experts tell me that if banks really accounted for all the losses in the home loan market, they'd all be insolvent.

That's why the Obama Administration has created this kind of shell game in the first place.

I stole that shell game idea from housing consultant Howard Glaser: "We're spending tens of billions of dollars on a tax credit to get people to purchase homes, we're spending federal money to keep them in their homes through the modification program, and now we're going to pay them to move out of their homes. This is not a sustainable system for the housing market. It's a shell game. Bernie Madoff could have created this system," Glaser told me today.

Chairman Frank is focusing on second liens, blaming them for holding up the first lien modification process. But the largest second lien holders are also the largest first lien holders. "Large numbers of second liens have no real economic value," writes Frank. He's right.

These lenders are getting pennies on the dollar even when they do get some kind of payoff, and they get nothing in a foreclosure. His theory is that if you get rid of the second lien then the first lien can be written down just fine and dandy. But the banks don't want to write down the first liens either. Why? Simple math.

Politicians want to keep borrowers in the homes because that's the compassionate thing to do. The big bad banks just want to cut their losses right? Well, maybe not. Sure they want to cut their losses, but they also want to save the value of the housing market, and foreclosure is how they're doing it.

Take Las Vegas as an example. Foreclosures are the whole market there, but there is actually very little inventory on the market. Why? Because banks are holding onto inventory, releasing it slowly and measurably, so as to put a bottom under prices.

I realize this is not the compassionate argument to make, but the fact is that most troubled borrowers are never going to get out from under these bad loans, even with reduced principal, and many many of them don't want to. If you foreclose on the properties, take them back, hold them a bit, don't write down the losses, and then slowly sell them back onto the market to hungry cash investors or buyers with good, well-underwritten loans, then home prices will stabilize.

As for the borrowers, the rental market is ripe. Rent rates are low, vacancies are high, and the hit to personal credit isn't going to matter as much a few years from now when banks are desperate once again sell mortgages.

THIS OF COURSE ASSUMES THE BANKS WILL STAY IN BUSINESS LONG ENOUGH TO FEED THESE FORECLOSED HOMES BACK INTO THE MARKET IN AN ORDERLY FASHION, AND THAT TITLES CAN BE CLEARED FOR THE SECURITIZED PROPERTIES...AND THAT ENOUGH SUCKERS CAN BE FOUND

[Demeter]

47. 21.1 percent unemployment rate for young veterans of Iraq, Afghanistan wars

http://www.courant.com/business/nationworld/wire/sns-ap-us-veterans-unemployment,0,1125001.story

The unemployment rate last year for young Iraq and Afghanistan veterans hit 21.1 percent, the Labor Department said Friday, reflecting a tough obstacle combat veterans face as they make the transition home from war.

The number was well above the 16.6 percent jobless rate for non-veterans of the same ages, 18 to 24.

As of last year, 1.9 million veterans had deployed for the wars since the Sept. 11, 2001, terrorist attacks. Some have struggled with mental health problems, addictions, and homelessness as they return home. Difficulty finding work can make the adjustment that much harder.

The just-released rate for young veterans was significantly higher than the unemployment rate of young veterans in that age group of 14.1 percent in 2008.

Many of the unemployed are members of the Guard and Reserves who have deployed multiple times, said Joseph Sharpe, director of the economic division at the American Legion. Sharpe said some come home to find their jobs have been eliminated because the company has downsized. Other companies may not want to hire someone who could deploy again or will have medical appointments because of war-related health problems, he said.

"It's a horrible environment because if you're a reservist and you're being deployed two or three times in a five-year period, you know you're less competitive," Sharpe said. "Many companies that are already hurting are reluctant to hire you and time kind of moves on once you're deployed."

One veteran looking for work is Dario DiBattista, 26, of Abingdon, Md., a graduate student who did two tours in Iraq in the Marine Reserves with a civil affairs unit. He said he's found that a lot of military skills don't readily transfer into the workplace, and in many cases, there aren't jobs to apply for even if companies want to hire veterans.

"If you don't have a strong family support system ... it's hard to get over the hump to make the decision of where you're going to live, what you do for work, where you're going to go to school, if you can even qualify to get into school," DiBattista said.

Justin Wilcox, a 30-year-old Iraq veteran who is participating in a work-study program at a vet center operated by the Veterans Affairs Department in Charleston, W.Va., said he hasn't just had problems finding jobs, but keeping them. He's done work as a coal miner, as a salesman selling drill bits and in other positions, but he said mental health problems stemming from the war with side effects such as anger and difficulty concentrating have made it difficult.

There's a lack of understanding about the needs some veterans have, said Wilcox, who is studying to become a teacher.

"Basically, it's been a real hard time for me. Because when I do get a job, it's not a real high paying job," Wilcox said. "I have a difficult time relating to people and ... one job that I had that paid really good, I couldn't comprehend what I was supposed to do and how I was supposed to do it."

For veterans of all ages from the recent wars, the unemployment rate in 2009 was 10.2 percent. Historically, younger veterans have had more difficulty than their older counterparts finding a job because they often have less training and job experience. Some joined the military right out of high school.

Lisa Rosser, an Army veteran and company owner who sits on the advisory board of the Call of Duty Endowment that funds projects focused on veterans employment issues, said she encourages veterans to emphasize to prospective employers what they learned about managing people in a stressful combat environment.

"If they talk about their general leadership skills and their ability to supervise and to manage people, especially at a very young age, that is a good sell ... because the average 24-year-old and 27-year-old in the military has similar supervisory and managerial experience as someone in their 30s on the civilian side," Rosser said.

One possible solution is to make it easier for veterans to transfer certifications they have for jobs they did in the military into the civilian workforce, Sharpe said.

The Labor and Veterans Affairs departments have a variety of programs addressing the problem, including one that educates employers about how to work with veterans with special needs. The hope is that another program, the Post-9/11 GI Bill rolled out last year, will be particularly effective. Under it, $78 billion is expected to be paid out in education benefits over the next decade for veterans of the recent wars to attend school.

The national unemployment rate last year was 9.3 percent, the highest since 1983.

[Demeter]

62. Forbes: Crisis Hits Only Low Income Earners By Vlad Grinkevich

http://www.informationclearinghouse.info/article24979.htm



March 12, 2010 "RIA Novosti" -- The current global financial and economic crisis once again confirms the fact that during economic upheavals the rich get richer and the poor become even more destitute.

On Thursday, Forbes Magazine carried an updated list of the world's wealthiest people.

As of late 2009, the number of billionaires soared from 793 to 1,011 and their total fortunes from $2.4 trillion to $3.6 trillion. The number of Russian billionaires almost doubled, from 32 to 62.

The list's authors believe that an increase in the number of wealthy people highlights the end of the recession, but it may also signal the appearance of new bubbles in the economy.

Mexican telecommunications king Carlos Slim Helu opens the list with $53.5 billion. He is followed by last year's leader, Microsoft founder Bill Gates with $53 billion and American investor, businessman, and philanthropist Warren Buffet with $47 billion.

However, this does not mean that Gates and Buffet now have less money than before. On the contrary, they have both increased their fortunes by $13 billion and $10 billion, respectively.

There have also been some tactical changes in the list of Russian billionaires. For instance, ONEXIM Group CEO Mikhail Prokhorov, who has expanded his fortune from $9.5 billion to $13.4 billion in one year, has ceded first place to Vladimir Lisin with $15.8 billion. Lisin, who is Chairman of the Board of Directors at Novolipetsk Steel (NLMK), came fifth in the rating only 12 months ago.

Despite the crisis, the list of billionaires has grown by 200 people and their aggregate capital has expanded by 50%. This may seem paradoxical but only at first glance. This result was predictable, if we recall how governments all over the world have dealt with the economic crisis.

Anti-crisis measures essentially implied massive infusion of money into the economy. The United States alone spent over $10 trillion. Against the backdrop of a global recession, the funding could only be put to good use on stock and raw materials markets, leading to the creation of new financial bubbles.

Consequently, oil prices which had hit an all-time low of $47 per barrel in December 2008, now stand at about $80. Global financial indices are also climbing steadily. The Russian stock market grew by over 100% over the course of 2009.

The lists of billionaires and their countries of residence have changed. China, which posted a 8.7% GDP growth last year despite the crisis, is now home to 64, rather than 62, billionaires, ousting Russia from second to third place. Although Russia has suffered a harsher blow from the crisis than most industrial and even developing countries, it now has 100% more billionaires than last year, regardless of the fact that the national GDP has plunged by 7.9% by late 2009.

The number of Russian billionaires correlates with raw materials prices, primarily oil and metals prices, Forbes Magazine Editor-in-Chief Steve Forbes told RIA Novosti. The 2009 price slump reduced the number of Russian billionaires by 50. And now they are back because of rising raw materials prices.

Although oil price hikes played an important role, other factors should also be considered. Igor Nikolayev, head of strategic analysis at FBK, one of the first private auditing firms in Russia, said this country used the same methods to fight the crisis as the others, but that it has achieved better results.

The volume of federal allocations injected by the Russian government into the economy was much higher than in Europe and the U.S. Forbes tactfully referred to this as the government's cooperation with big business, primarily raw materials companies.

However, even high-ranking Russian officials have repeatedly complained that anti-crisis allocations were either used for stock market operations or deposited in foreign bank accounts.

The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.

[formercia]

17. Sic Semper Tyrannis. n/t

[Demeter]

20. Japanese groups creep into Africa

http://www.ft.com/cms/s/0/87bf6b0e-2d3b-11df-9c5b-00144feabdc0.html

About 30 Japanese children were getting instructions from a teacher on how to wave their Rising Sun flags when a car with Kenyan security men hanging out of the doors screeched to a halt.

A few seconds later, a bigger car swept in and the children cheered as Japan’s Crown Prince Naruhito stepped out and greeted Kenya’s vice-president in Nairobi’s plushest safari hotel.

The heir to the imperial throne has been in Ghana and Kenya this week on his first trip south of the Sahara, which coincides with a Japanese move to make a late entry into the scramble for resources and economic influence in Africa.

With the Tokyo government behind them, Japanese trading companies and manufacturers are creeping rather than sweeping into Africa as they cautiously pursue some of the same goals as China, India and Brazil: capturing oil, minerals and markets.

In 2008, Tokyo set the twin goals of doubling its development aid to Africa and helping Japanese companies to double their own investment in the continent to $3.4bn (€2.48bn, £2.26bn) by 2012. Last week, Toyota Tsusho, the carmaker’s trading arm, said it was interested in building a planned $1.5bn oil pipeline from south Sudan to the Kenyan coast.

But questions still linger about whether Japan has the will to achieve its goals in a region where business conditions do not always play to the strengths of its bureaucrats or executives.

Aid for agriculture and infrastructure projects has long been Japan’s defining presence in Africa. Although the sums are down from a peak in 1997, they are rising and already come close to the target for 2012 of $1.8bn, according to Japan’s foreign ministry.

‘One Japanese goal is ... investment through loans from its state-controlled banks’

But having followed a model of engagement not dissimilar to the west for many years, Japan is reorienting its strategy to become more competitive and aid is getting less emphasis than before as attention turns to the private sector.

Dennis Awori, a former Kenyan ambassador to Japan and now chairman of Toyota East Africa, says: “At the beginning we used to hear comments from the Japanese government that ‘That’s private sector stuff, we can’t force them to go to Africa’.” However, by the fourth Japan-Africa conference for heads of state in 2008, Mr Awori says: “We were working together to approach the private sector.”

One Japanese goal is to encourage investment through loans from its state-controlled banks. Toyota Tsusho said a “key success factor” for the pipeline project would be securing finance from the Japan Bank for International Co-operation.

After last year’s historic transfer of power to the Democratic party, some in Tokyo say the government’s lack of a clear foreign policy strategy could undermine its efforts in Africa. But Katsuya Okada, foreign minister, has pledged to meet “without fail” commitments made by the previous administration.

The political change does not alter what is seen as Japan’s primary goal: securing oil and other minerals.

Indeed, Japan’s small corporate presence consists mainly of trading companies involved in resource extraction and the construction of energy infrastructure, such as Sojitz, which is active in Angola, Nigeria and Gabon.

LNG Japan Corp announced on Thursday that it might invest in the construction of a liquefied natural gas plant in Nigeria.

Although African roads are filled with old Toyotas, Nissans and Hondas, the carmakers themselves tend to stay out of the second-hand car trade.

Other manufacturers do see opportunities for selling products to Africa’s low-income consumers, including Sumitomo Chemical, which has two factories in Tanzania producing mosquito nets treated with insecticide.

Panasonic has pledged to invest Y2.5bn ($28m) to increase its sales in Nigeria, and Sony, which operates 14 stores in six African countries, says it aims to increase sales outside South Africa this year by 50 per cent.

There is no question of Japan matching China’s level of finance for business ventures in Africa, nor Beijing’s hand-in-glove co-ordination of the state and large companies. In 2008, Japanese trade with Africa was less than a third of the $107bn recorded between China and the continent.

Yoshitaka Akimoto, director-general for Africa affairs at Japan’s foreign ministry, acknowledges that Chinese companies are “more active” though he says this is not a cause for concern.

But Japanese companies often associate Africa with political instability, poor infrastructure and a shortage of skilled labour.

Mr Akimoto admits that meeting the goal for substantive investment in Africa will be “very tricky”.

[Demeter]

23. Hatoyama says yen is too strong

http://www.ft.com/cms/s/0/feed067e-2d94-11df-a971-00144feabdc0.html

Yukio Hatoyama, the Japanese prime minister, said on Friday the yen was too strong, given the state of Japan’s economic recovery.

The prime minister said that because of the global financial crisis and concerns about sovereign debt in Greece, “the recent rise in the yen does not necessarily reflect the strength of the Japanese economy and its industries”.

Mr Hatoyama was res­ponding to an opposition lawmaker who asked what the impact of the currency’s strength was on corporate Japan. While saying markets should determine currency levels, Mr Hatoyama said the Japanese government needed “to take firm measures against such a type of strong yen”.

Without providing any detail, Mr Hatoyama added that “some sort of global political co-ordination is also necessary”.

Naoto Kan, finance minister, told the same committee that the government had the option to intervene in currency markets when exchange rates were volatile, but that the markets should decide rates.

The comments from both men sparked initial mild selling of the yen. But the market soon turned a blind eye as traders determined that the comments did not signal an intervention in the currency markets.

Movements in the Japanese currency, which is more than five yen weaker than November’s 14-year high against the dollar, have not been volatile recently.

One ruling Democratic party official said Mr Hatoyama was not signalling action at the moment.

“Traders knew this didn’t mean he wanted to intervene as it would be extremely difficult to co-ordinate inter­nationally and the yen isn’t at such levels,” said Yuji Saito, a director in the foreign exchange department at Crédit Agricole in Tokyo.

“It is likely he wants to put pressure on the to take some action that will help weaken the yen.”

Market speculation is growing that BoJ board members will begin discussions on extending the three-month 0.1 per cent rate lending programme it introduced last December, both in terms of amount and duration. The scheme helped weaken the yen soon after introduction.

The government has been putting progressively more vocal pressure on the BoJ to do more to end deflation, though has stopped short of suggesting specific action.

Christian Carrillo, a strategist at Société Générale in Tokyo, said the central bank is “becoming increasingly sensitive to currency movements when deciding to ease monetary policy, since the main engine for the economy now is net exports”.

Although the yen is stronger than before the start of the financial crisis, the Bank of Japan’s real, trade-weighted exchange rate index shows that the yen is about a third weaker than its peak in 1995.

[Demeter]

25. Good Night Folks!

The middle pond is thawed, and a trumpeter swan floats on the newly freed water like a ghost, calling for a mate. I think this is early for a swan return.

But the front pond is still at least half frozen.

The Kid is well, more than she's been in years.

And tomorrow, if the truck shows up, I'll bring home the oak flooring.

It could be worse.

[Demeter]

29. India’s tribes in land fight with business

http://www.ft.com/cms/s/0/5279512c-2ba5-11df-a5c7-00144feabdc0.html

First, the land surveyors came. Then the rumours spread through the villages: Tata, one of India’s biggest conglomerates, would build a steel mill in the district.

Finally, government officials came to ask the villagers in Lohandiguda in Chhattisgarh state, who are mainly illiterate farmers from the Gond tribe, to relinquish their fields for the promise of cash, jobs and a better future.

For Banga Ram, the 65-year-old patriarch of a large family, the request was absurd. “What will we do with the money?” he asked. “We have to do agriculture to feed these children.” But local officials were not taking “No” for an answer.

Banga Ram was arrested. After he spent 13 days in jail, he says his sons signed away the land and accepted compensation.

In nearby Chindgaon village, Sundar Kashyap, who earns Rs10,000 ($219, €161, £146) a month working for the government animal husbandry department, says his bosses warned him of trouble if his younger brothers refused to sign over two of their five acres. They, too, signed.

Yet five years after Tata Steel announced its plans for the mill, the families of both men are still cultivating their ancestral fields. Officials are struggling to complete the contentious land acquisition, with 20 per cent of the required 5,000 hectares still outstanding and a local civil rights lawyer threatening legal action against the process.

“I am going to challenge it,” says Pratap Agrawal, an attorney in the nearby small town of Jagdalpur. “Villagers are absolutely against handing over even an inch of their land.”

Battles over forcible acquisition of agricultural land for industry are raging across India. But nowhere are they as fraught as in India’s tribal belt, where long-neglected indigenous animist tribes, known as adivasis, have upset the plans of corporate groups such as Vedanta, Tata Steel, Essar Steel and National Mineral Development Corp to tap mineral riches.

About 8.4 per cent of India’s population are classified as adivasis, members of hundreds of distinct tribes whose languages have no written form. Living in severe poverty in remote areas with limited government services, tribal communities have India’s lowest literacy rates and its highest incidence of infant mortality and malnourished children.

Ostensibly, tribal communities have special legal protection to prevent them from being involuntarily dispossessed of their land. Yet critics say that pro-business government officials, who argue that mines and other large-scale industries would bring economic development and progress to neglected areas, are brazenly manipulating public consultation processes and overriding community sentiments to take tribal lands.

“Indigenous people live in pre-industrial societies, so if the government goes to acquire their land for mining or special economic zones, it’s a matter of life and death for them,” says Prashant Bhushan, a prominent New Delhi-based civil rights lawyer. “But all they have been doing is having some sham formal consultation process in which the views of adivasis are not seriously sought.”

Mapping out legal rights

Schedule V of India’s constitution maps out customary tribal lands where indigenous animist tribes are seen as requiring special protection against the threat of exploitation and dispossession.

In 1996, India adopted a law requiring authorities to consult village councils before taking land in tribal areas for development or industry. Civil rights lawyers say this should be interpreted to require the consent of local communities.

India’s Supreme Court ruled in a 1997 judgment that Schedule V, combined with laws in Andhra Pradesh, prohibited the transfer of tribal land there to non tribe members for a mining lease. It also suggested 20 per cent of the profits from mining in tribal areas be set aside for tribe members. It urged New Delhi to clarify policies about mining in tribal areas.

These conflicts, which tend to pit India’s most neglected people against its most powerful business houses, are helping to fuel the radical Naxalite guerrilla movement in the tribal belt, now increasingly considered India’s “Red Corridor”. “There are slogans on walls saying ‘Naxals come and save us’,” says Arundhati Roy, the writer and social activist. “People are begging them, ‘just come and train us’.”

Among India’s most controversial mining projects is the plan by UK-listed Vedanta to mine bauxite from a mountain that the 2,800-strong Dongria Kondh tribe believe is its deity’s sacred home.

In a recent report, Amnesty International, the human rights group, said neither government officials nor Vedanta made any meaningful attempt to inform the illiterate tribes near the site about the project but merely published advertisements for a public hearing.

Vedanta, which says no one lives on the prospective mine site, says local government offices were notified about the project and given a chance to spread the word. India’s Supreme Court found all requirements were fulfilled.

“The Indian regulatory system is robust – it does not leave room for anybody to take advantage,” says Mukesh Kumar, Vedanta Aluminium’s chief operating officer. However, the Church of England and several other social investors recently sold their shareholdings in Vedanta, citing concern for the way the company had handled its relations with local communities.

In Lohandiguda, Tata Steel says it has agreed to all but one of 13 conditions laid down by affected villagers for selling their land. Besides cash, Tata says villagers will be given “land for land”, skills training and the promise of a job to one member of every affected household.

“I think that development is something that everyone, especially if it’s brought by a company like Tata, would find acceptable,” says Sanjay Choudhry of Tata Steel.

He says the mechanics of the land-buying process are handled by state authorities. “If and when they hand over the land, we will put up the industry in the best way we can.”

SO INDIA HAS ITS OWN "INDIAN" PROBLEM, AND MODERN WAYS OF DISPOSSESSING THEIR RIVAL TRIBES....

[Demeter]

35. Europe cries foul over US defence tender

http://www.ft.com/cms/s/0/f3605b70-2b4c-11df-9d96-00144feabdc0.html

European countries have accused Washington of foul play after the continent’s largest aerospace and defence company pulled out of a multibillion-dollar race to supply the US ­military, alleging unfair ­competition.

Ministers in the UK, France and Germany, as well as the European Commission, hinted at possible repercussions from the collapse of the $50bn (£33bn) tender to supply the US Air Force with 179 air refuelling tankers.

EADS (NOT TO BE CONFUSED WITH ESAD)and its US partner Northrop Grumman decided late on Monday night to pull out of the tender after concluding that, under current rules, their larger A330 tanker could not win.

The decision is likely to raise transatlantic trade tensions further. Relations between America and Europe on trade are already stretched by the on­going row between Boeing and Airbus over government subsidies for aircraft programmes.

The French foreign ministry said it would, with the European Commission, “examine the new development and its possible implications”. Christine Lagarde, French finance minister, openly suggested the competition had been rigged to favour EADS’s US rival Boeing, now the sole bidder.

“The best situation is one of fair competition and I think it’s a shame that the company wasn’t in the best competitive situation” for the bid, she said.

Rainer Bruederle, German economy minister, also said the US government had given a clear advantage to Boeing.

In Britain, one of the countries that would have benefited from an Airbus win, Lord Mandelson, business secretary, said he was “disappointed”. “Given the open market to US producers we have in Europe, it is very disappointing that a US-led European consortium feels that the revised tanker procurement process is now so biased against them that it is not even worth making a bid,” he said.

People close to the UK government warned there could be repercussions for US trade. “The ramifications of this are potentially very serious. It sends a protectionist signal,” said one.

Some US politicians were dismayed. Richard Shelby, Republican senator of Alabama, where EADS would have created jobs, said: “This so–called competition was not structured to produce the best outcome for our men and women in uniform; it was structured to produce the best outcome for Boeing.”

The Pentagon said last night: “The Northrop decision does not change our commitment to transatlantic defence ties . . . We do not set the rules to favour one party or another, European or American companies. We set the requirements that the war fighter needs and hope that a range of companies find it lucrative enough to bid.”

Concerns have been growing over the fairness of the bid process. In 2004, Boeing was awarded a contract, which was rescinded after an ethics scandal. The competition was re-tendered and won by Northrop-EADS in 2008, only for Boeing to protest successfully.

[Demeter]

38. US suspended BAE Systems’ licences

http://www.ft.com/cms/s/0/c20fc8a4-2c8b-11df-be45-00144feabdc0.html

Washington is likely to allow the US subsidiary of BAE Systems to obtain export licences as before, following the UK defence group’s $400m (£267m) plea agreement over bribery allegations, a State Department official told the Financial Times.

Last week the State Department put on hold all pending licence applications by BAE to export sensitive US-made content. The official said the State Department was likely to find that BAE Systems Inc, BAE’s US subsidiary, was not involved in corrupt and illegal practices and that the processing of its licence applications would be able to proceed as before.

“That is where I expect we will come out, but we just need to make sure we have the full facts,” the official said.

The person said the State Department had relaxed the hold on applications to allow licences for defence equipment for Iraq and Afghanistan and Nato and major non-Nato allies to go through.

The official added that it was speeding up the process for a final decision on the State Department’s policy on BAE.

“We know the importance of BAE to the US-UK defence trade relationship, so we are working as expeditiously as possible,” he said. “Ordinarily a case like this would take months of disclosures. But because of the importance, we are working to have this process completed in weeks.

“We are staffing the remainder of licences up until the point of decision, so that once we have the policy we will be able to move those licences quite quickly.”

The State Department is mandated to ensure no licences are granted to BAE subsidiaries involved in corrupt or illegal practices, a process that involves obtaining information from the company. BAE pleaded guilty in a US district court on March 1 to charges that it conspired to defraud the US, made false statements about its anti-bribery compliance programme and violated arms control rules.

Immediately afterwards, the State Department posted a statement on its web site announcing a “hold all licences or other approvals where BAE Systems, or any its subsidiaries, is an applicant, consignee, end user, manufacturer or source.”

That statement and another that followed it were taken down within 24 hours. State Department officials say the hold was never intended to be a policy decision and there had been no question of revoking or freezing approved licences.

BAE said on Wednesday night: “It is our understanding that the Department of State is continuing to staff and process our pending and new applications and may grant certain new licenses while they continue to review the BAE Systems settlement with the Department of Justice.”

[Demeter]

36. HP faces raft of complaints in China

http://www.ft.com/cms/s/2/cab3f206-2bae-11df-a5c7-00144feabdc0.html

Chinese lawyers have filed a complaint on behalf of more than 170 consumers against Hewlett-Packard, requesting that the Chinese government order a recall of allegedly faulty notebook computers.

The move is the first time the world’s largest PC brand has faced organised action from overseas consumers.

It is a sign that shoppers in the world’s most populous market are increasingly aware of their consumer rights and more willing to fight for them.

The complaint, seen by the Financial Times, was delivered to the General Administration for Quality Supervision, Inspection and Quarantine (AQSIQ) on Monday.

It requests that the quality watchdog investigate the quality of HP notebooks and order the company to buy back or exchange allegedly faulty machines bought by the plaintiffs and to compensate them for losses. It also calls for AQSIQ to request a recall of the notebooks.

Laweach, a not-for-profit website that helped organise laptop users for the case, said Chinese buyers of certain HP laptop computers sold since 2007 had faced malfunctioning screens and overheating problems on a massive scale.

The complaint said the problems were due to faulty graphics cards produced by Nvidia, a chipmaker which supplies several PC makers with this component.

In July 2008, Nvidia publicly acknowledged quality problems with some graphics cards and announced it was paying PC makers to deal with resulting problems.

The complaint said that although HP had offered an extension of warranty periods for some notebook models, that was not a thorough solution to the problem.

“We have also noticed that HP in the US offered consumers extended warranty periods for even more models and compensated them for transport costs, but in China, it has not made a statement or offered services, and openly discriminated against Chinese consumers,” the complaint said.

Jiang Suhua, a lawyer at Yingke Law Firm in Beijing, said the group was not taking HP to court because the absence of class action in China meant the prospects for such action were dim. He said he hoped AQSIQ would order a recall, and consumers could then negotiate compensation with HP.

AQSIQ has increasingly muscled in on consumer rights. So far this year, in the car market alone, the quality watchdog ordered recalls of two Mitsubishi models, two Peugeot models, one Citroën model and one Chrysler model.

A decision in the HP case would set a new precedent, however, as Chinese law so far has clear rules only for recalls of cars, food products, drugs and toys.

“We hope we can set a precedent and help strengthen the protection of consumer rights in China,” said Mr Jiang.

HP said it was not able to comment by the time of going to press. AQSIQ declined to comment.

The issue has come to light just as HP announced it would sue MicroJet Technology, a Taiwanese maker of printer ink cartridges, and three other companies, alleging their products infringed its patents.

[Demeter]

39. The Oil Patch

If it smells, is slippery, and expensive...

[Demeter]

40. BP strikes $7bn Brazil oil deal

http://www.ft.com/cms/s/0/f8f22566-2cb7-11df-8abb-00144feabdc0.html

BP on Thursday confirmed it would enter the deep waters off the coast of Brazil, one of the world’s most promising areas for oil exploration, with a $7bn (£4.7bn) deal to buy international oil and gas assets from Devon Energy.

Under the terms of the deal, BP will also expand its operations in the Gulf of Mexico, where it is already the largest producer of oil and gas, and increase its interests in Azerbaijan.

In addition, the UK oil and gas exploration company will receive a $500m payment to create a joint venture with Devon Energy to exploit oil sand interests in Alberta, Canada.

The deep fields off the Brazilian coast are estimated to hold at least 80bn barrels of oil. Industry executives think the region could be as important as the North Sea. Already one of the top 10 oil suppliers to the US, Brazil is set to become an increasingly important exporter.

Several western companies have formed partnerships with Petrobras, the Brazilian national oil company, to explore and develop fields in the region. These include ExxonMobil of the US, BG of the UK, Galp of Portugal, Repsol of Spain and Royal Dutch Shell, which is based in the Netherlands.

The deal with Devon, an Oklahoma-based US company which has six licence blocks in partnership with Petrobras to explore Brazil’s “most promising offshore areas”, provides BP with a faster and more direct route into the country.

“This strategic opportunity fits well with BP’s operating strengths and key interests around the world, offering us significant additional long-term growth potential with an emphasis on high-margin oil,” said Tony Hayward, BP’s chief executive, in a statement.

While Brazil offers great promise, industry executives and analysts say challenges need to be overcome before the country can realise its potential as an oil and gas exporter.

The deep-water oil reservoirs, which are 7,000 metres below sea level and under a thick layer of salt, are technically difficult to develop. There has also been widespread concern that the government’s ambition to maximise Brazil’s income from its oil wealth could create problems for foreign investors.

The deal will give BP interests in eight licence blocks in the Campos and Camamu-Almada basins as well as two onshore licences in the Parnaiba basin. The Campos basin blocks include three discoveries – Xerelete, pre-salt Wahoo and Itaipu – and the producing Polvo field.

The Devon deal also strengthens BP’s position in the Gulf of Mexico, a region that it sees as very important strategically. With discoveries such as the Tiber field last year, BP is opening up new reserves six miles below the sea bed in the deep waters of the Gulf. It is already a partner of Devon in the Kaskida field, a large deep-water discovery in the area made in 2006.

Statoil of Norway is also taking a keen interest in the deep-water reserves of the Gulf, buying Devon’s stake in the St Malo project.

Andy Inglis, chief executive of exploration and production at BP, said: ”Through our entry into Brazil, BP will add a major position in another attractive deepwater basin. Together with the additional new access in the Gulf of Mexico, it further underlines our global position as the leading deepwater international oil company.”

Devon, one of the biggest US independents, last year said it would sell its Gulf of Mexico and international assets to generate up to $7.5bn towards focusing fully on high-return US and Canadian onshore assets and to retire debt.

That announcement underlined the success of the US onshore natural gas business in recent years, which has been led by the independents – US companies that produce oil and gas but have no refining business.

Devon holds a leading position in the Barnett Shale – the biggest producing gas field in the US, as well as other shale fields across the country.

The company had said it did not believe some of its assets, particularly those in the Gulf and internationally, were being properly valued.

Analysts welcomed the deal.

“Whilst the deal comes at the top end of the values speculated in the press recently, the acquisition is a key strategic move for BP,” said Merrill Lynch in a note to clients. “All-in we see the Devon deal... offering significant exploration upside over the longer term.”

Jason Kenney, senior oil analyst at ING, said: “The $7bn asset-focused cash deal announced with Devon Energy displays a great deal of confidence in the value accretive, high margin opportunity that this move offers, but also signifies a strong confidence in the recently announced cost cutting gains in BP’s own business and the cash generative capability of its operations near and medium term in our view.”

Shares in BP fell 2p to 622.9p in morning trading on Thursday.

[Demeter]

44. The Most Powerful Destructive Corporate Business Club Most Americans Have Never Heard of

http://www.alternet.org/economy/145996/the_business_roundtable:_the_most_powerful_corporate_business_club_most_americans_have_never_heard_of


Editor's Note: The following is Part III of David DeGraw's report, "The Economic Elite vs. People of the USA."

DeGraw writes in the introduction to his report:

"It has now become evident to a critical mass that the Republican and Democratic parties, along with all three branches of our government, have been bought off by a well-organized Economic Elite who are tactically destroying our way of life. The harsh truth is that 99% of the US population no longer has political representation. The US economy, government and tax system is now blatantly rigged against us.Current statistical societal indicators clearly demonstrate that a strategic attack has been launched and an analysis of current governmental policies prove that conditions for 99% of Americans will continue to deteriorate. The Economic Elite have engineered a financial coup and have brought war to our doorstep. . . and make no mistake, they have launched a war to eliminate the US middle class."

***

Part III: Exposing Our Enemy: Meet the Economic Elite

I don’t view the Economic Elite as a small group of men who meet in secrecy to control the world. They do feature elements of conspiracy and are clearly composed of secretive organizations like the Bilderberg Group -- this is not a conspiracy theory, this is a conspiracy fact - but as a whole the Economic Elite are primarily united by ideology. They’re made up of thousands of individuals who subscribe to an ideology of exploitation and the belief that wealth and resources need to be concentrated into the fewest hands possible (theirs), at the expense of the many.

That being said, there are some definite lead players in this group and it is important that we are not too vague and expose the individuals who publicly lead them. Focusing on the fundamental structure of the US economy, we have people like Hank Paulson, Tim Geithner, Ben Bernanke, Robert Rubin, Larry Summers, Alan Greenspan, Lloyd Blankfein, Jamie Dimon, John Mack, Vikram Pandit,and John Thain.

In total, the Economic Elite are made up of about 0.5% of the US population. At the center of this group is the Business Roundtable, an organization representing Fortune 500 CEOs that is also interlocked with several lead elite organizations. Most Americans have never heard of the Business Roundtable. However, in my analysis, it is the most influential and powerful Economic Elite organization.

“The Business Roundtable joined the Business Council at the heart of both the corporate community and the policy-formation network and now has the most powerful role…. The Roundtable’s interlocks with other policy groups and with think tanks are presented .” -– G. William Domhoff, Who Rules America?

The Roundtable’s first year of operation was 1972, which coincided with the beginning of the CEO salary explosion, and has been the driving force behind the unprecedented concentration of wealth since their inception. Their dominance over the US economy and government is unparalleled. Their members are a Who’s Who of everything that is wrong with our economy. Here is a partial list of some of their lead members:

——-Lloyd C. Blankfein, Goldman Sachs
——-James Dimon, JPMorgan Chase & Co.
——-James P. Gorman, Morgan Stanley
——-Vikram S. Pandit, Citigroup, Inc.
——-Brian T. Moynihan, Bank of America
——-Brendan McDonagh, HSBC
——-Robert W. Selander, MasterCard Incorporated
——-Kenneth I. Chenault, American Express Company
——-Rupert Murdoch, News Corporation
——-Glenn A. Britt, Time Warner Cable Inc.
——-Philippe Dauman, Viacom, Inc.
——-Jeffrey R. Immelt, General Electric Company
——-Brian L. Roberts, Comcast Corporation
——-Steven A. Ballmer, Microsoft Corporation
——-John T. Chambers, Cisco Systems, Inc.
——-Randall L. Stephenson, AT&T Inc.
——-Ivan G. Seidenberg, Verizon Communications
——-David G. DeWalt, McAfee, Inc.
——-Steven R. Loranger, ITT Corporation
——-Paul T. Hanrahan, AES Corporation, The
——-Riley P. Bechtel, Bechtel Group, Inc.
——-W. James McNerney , Boeing Company, The
——-Rex W. Tillerson, Exxon Mobil Corporation
——-Marvin E. Odum, Shell Oil Company
——-John S. Watson, Chevron Corporation
——-James J. Mulva, ConocoPhillips
——-John B. Hess, Hess Corporation
——-James E. Rogers Duke Energy Corporation
——-J. Larry Nichols, Devon Energy Corporation
——-Ronald A. Williams, Aetna Inc.
——-David Cordani, CIGNA
——-Jeffrey B. Kindler , Pfizer Inc.
——-Angela F. Braly, WellPoint, Inc.
——-John C. Lechleiter, Eli Lilly and Company
——-Edward B. Rust, Jr., State Farm
——-Andrew N. Liveris, Dow Chemical
——-James W. Owens, Caterpillar Inc.
——-Ellen J. Kullman, DuPont
——-Edward E. Whitacre Jr., General Motors Company
——-Michael T. Duke, Wal-Mart Stores, Inc.

The Business Roundtable is the most powerful activist organization in the United States. Their leaders regularly lobby members of Congress behind closed doors and often meet privately with the President and his administration. Any legislation that affects Roundtable members has almost zero possibility of passing without their support.

For three major examples, look at healthcare and financial reform, along with the military budget. The healthcare reform bill devolved into what amounts to an insurance industry bailout and was drastically altered by Roundtable lobbyists representing interests like WellPoint, Aetna, Cigna, Pfizer, Eli Lilly and Johnson & Johnson. Obama and Congress are trying to please the Roundtable with a bill that supports their interests. This led to the dropping of the public-option put forth in the House bill. However, when it came to finishing the bill, Roundtable members began to walk away from the process. That’s the real reason why the reform bill has stalled. Obama met with the Roundtable on February 24th, in hopes of getting healthcare reform back on track. After that meeting, he held a bipartisan healthcare meeting with members of Congress.

Also addressed in Obama’s meeting with the Roundtable are issues concerning financial reform. Almost every aspect of financial reform has been D.O.A. thanks to Roundtable lobbyists representing the interests of Goldman Sachs, JP Morgan, Morgan Stanley, Citigroup, Bank of America, HSBC, Master Card and American Express. They even pushed to make sure Ben Bernanke was reconfirmed as the head of the Federal Reserve and they have also guided Obama into focusing on deficit reduction, now that their member companies are healthy again and making record profits after receiving trillions in government subsidies. The Roundtable played a pivotal role in the appointment of Hank Paulson, formerly the CEO of Roundtable member Goldman Sachs, who replaced Roundtable member John Snow as US Treasury Secretary. The Roundtable also strongly lobbied on behalf of current Treasury Secretary Tim Geithner and White House National Economic Council Director Larry Summers. Although there has been recent talk of Geithner being replaced at the Treasury, the lead choice to replace him is Jamie Dimon, Roundtable member and CEO of JP Morgan Chase.

The drastic rise in military spending is also a result of Roundtable lobbyists pushing the interests of large military companies like Boeing and Bechtel, along with the largest oil companies like ExxonMobil, Shell, Hess and Chevron.

The Roundtable tells politicians what they want done, and the politicians do it. At times, Roundtable members even write the laws themselves. On financial reform alone, those representing Wall Street firms gave “$42 million to lawmakers, mostly to members of the House and Senate banking committees and House and Senate leaders.” During the 2008 election cycle, they gave $155 million: $88 million to Democrats and $67 million to Republicans. Keep in mind, this is the spending on just their financial reform initiative. When it came to health reform, they gave even more.

When it comes to getting elected, over 90% of the time the candidate who simply spends more money on their campaign wins the election. The Roundtable and politicians recognize this fact, so the overwhelming majority of current elected officials relied heavily on campaign funding from Roundtable members, including President Obama.

Shortly after Obama’s inauguration he held a meeting with Roundtable members at the St. Regis Hotel. The president of the Business Roundtable is John J. Castellani. Throughout the first nine months of Obama’s presidency, Castellani met with him at the White House more than any other person, with the exception of Chamber of Commerce CEO Tom Donohue. If you look at the records of people who have spent the most time with Obama in the White House, other than these two, another frequent visitor is Edward Yingling, the president of the American Bankers Association.

These organizations - the Business Roundtable, Chamber of Commerce and the American Bankers Association - along with the Federal Reserve, a secretive quasi-government private institution, form the center of the Economic Elite’s power structure. Since the bailout, the Federal Reserve has been working closely with private firm BlackRock. Due to this relationship, BlackRock has emerged as the world’s largest money manager and now manages more assets than the Federal Reserve. They also “manage many of the Treasury Department’s big investments.”

On a global level, you have economic institutions like the World Trade Organization (WTO), the International Monetary Fund (IMF) and the World Bank, and international treaties like NAFTA. These organizations already form a de facto world government that has rights beyond our constitutional rights and national sovereignty. If the WTO makes a ruling that goes against US law, the WTO ruling supersedes US law and wins out.

Here is how Global Exchange explains these global institutions:

“The World Trade Organization is the most powerful legislative and judicial body in the world. By promoting the ‘free trade’ agenda of multinational corporations above the interests of local communities, working families, and the environment, the WTO has systematically undermined democracy around the world…. Unlike United Nations treaties, the International Labor Organization conventions, or multilateral environmental agreements, WTO rules can be enforced through sanctions. This gives the WTO more power than any other international body. The WTO’s authority even eclipses national governments.



When the Bank and the Fund lend money to debtor countries, the money comes with strings attached. These strings come in the form of policy prescriptions called ’structural adjustment policies.’ These policies—or SAPs, as they are sometimes called—require debtor governments to open their economies to penetration by foreign corporations, allowing access to the country’s workers and environment at bargain basement prices. Structural adjustment policies mean across-the-board privatization of public utilities and publicly owned industries. They mean the slashing of government budgets, leading to cutbacks in spending on health care and education…. And, as their imposition in country after country in Latin America, Africa, and Asia has shown, they lead to deeper inequality and environmental destruction.”

In addition to dominating our political and economic system, the Economic Elite have already created their own private military. Their private military is now more powerful than the US military. As mentioned earlier, private mercenaries now outnumber US soldiers and receive the lion’s share of military spending.

Corporations like SAIC, Blackwater, Bechtel, Raytheon and Halliburton are composed of the most elite worldwide intelligence and military officers. These are the highly profitable and powerful entities that the Economic Elite turn to when national militaries and intelligence agencies - like the CIA, FBI or other government run entities - can’t get the job done.

For instance, SAIC, a “stealth company” that most people have never heard of, is considered to be the brains of the entire US intelligence apparatus, more powerful than the much more popularly known CIA, NSA and FBI - all agencies that SAIC is deeply intertwined with. I urge you to research SAIC to get a crash course in how the true power structure functions. You can start by reading an excellent investigative report by Donald L. Barlett and James B. Steele titled, “Washington’s $8 billion shadow.”

The Economic Elite dominate US intelligence and military operations. Other than the obvious geo-strategic reasons, the never-ending and ever-expanding War on Terror’s objective is to drain the US population of more resources and further rob US taxpayers, while using our tax money to create a private military that is more powerful than the US military.

I think any logical person can see the ominous implications of having such a vast and powerful private military and intelligence complex, created for and used, in secrecy, by the Economic Elite. Outside of the blatant economic policy attacks, heavily armed and sophisticated covert powers led by small groups of Economic Elite are now a serious risk and present danger.

In conclusion, these economic and government policy forming organizations, along with their private military and intelligence corporations, form the core of the Economic Elite power structure.

[Demeter]

45. The Richest 1% Have Captured America's Wealth -- What's It Going to Take to Get It Back?

http://www.alternet.org/story/145705/

This is Part II of David DeGraw's report, "The Economic Elite vs. People of the USA."

"The war against working people should be understood to be a real war.... Specifically in the U.S., which happens to have a highly class-conscious business class.... And they have long seen themselves as fighting a bitter class war, except they don't want anybody else to know about it." -- Noam Chomsky

As a record amount of U.S. citizens are struggling to get by, many of the largest corporations are experiencing record-breaking profits, and CEOs are receiving record-breaking bonuses. How could this be happening, how did we get to this point?

The Economic Elite have escalated their attack on U.S. workers over the past few years; however, this attack began to build intensity in the 1970s. In 1970, CEOs made $25 for every $1 the average worker made. Due to technological advancements, production and profit levels exploded from 1970 - 2000. With the lion's share of increased profits going to the CEO's, this pay ratio dramatically rose to $90 for CEOs to $1 for the average worker.

As ridiculous as that seems, an in-depth study in 2004 on the explosion of CEO pay revealed that, including stock options and other benefits, CEO pay is more accurately $500 to $1.

Paul Buchheit, from DePaul University, revealed, "From 1980 to 2006 the richest 1% of America tripled their after-tax percentage of our nation's total income, while the bottom 90% have seen their share drop over 20%." Robert Freeman added, "Between 2002 and 2006, it was even worse: an astounding three-quarters of all the economy's growth was captured by the top 1%."

Due to this, the United States already had the highest inequality of wealth in the industrialized world prior to the financial crisis. Since the crisis, which has hit the average worker much harder than CEOs, the gap between the top one percent and the remaining 99% of the US population has grown to a record high. The economic top one percent of the population now owns over 70% of all financial assets, an all time record.

As mentioned before, just look at the first full year of the crisis when workers lost an average of 25 percent off their 401k. During the same time period, the wealth of the 400 richest Americans increased by $30 billion, bringing their total combined wealth to $1.57 trillion, which is more than the combined net worth of 50% of the US population. Just to make this point clear, 400 people have more wealth than 155 million people combined.

Meanwhile, 2009 was a record-breaking year for Wall Street bonuses, as firms issued $150 billion to their executives. 100% of these bonuses are a direct result of our tax dollars, so if we used this money to create jobs, instead of giving them to a handful of top executives, we could have paid an annual salary of $30,000 to 5 million people.

So while US workers are now working more hours and have become dramatically more productive and profitable, our pay is actually declining and all the dramatic increases in wealth are going straight into the pockets of the Economic Elite.
Buy the Book: The Economic Elite Vs. The People of the United States of America
If our income had kept pace with compensation distribution rates established in the early 1970s, we would all be making at least three times as much as we are currently making. How different would your life be if you were making $120,000 a year, instead of $40,000?

So it should come as no surprise to see that we now have the highest inequality of wealth in the industrialized world and the highest inequality of wealth in our nation's history. The backbone of America, a hard working middle class that has made our country a world leader, has been devastated.

Now that we have a better understanding of how our income has been suppressed over the past forty years, let's take a look at how the economy has been designed to take the limited money we receive and put it into the hands of the Economic Elite as well.

Costs of Living

Other than in the workplace, in almost all our costs of living the system is now blatantly rigged against us. Let's take a look at it, starting out with our tax system.

In total, the average US citizen is forced to give up approximately 30% of our income in taxes. This tax system is now strategically designed to flow straight into the hands of the Economic Elite. A huge percentage of our tax dollars ultimately end up in their pockets. The past decade proves that -- whether it's the Republicans or the Democrats running the government -- our tax money is not going into our community, it is going into the pockets of the billionaires who have bought off both parties - it is obscene.

For an example of how this system flows to the Economic Elite, just look at the Wall Street "bailout." The real size of the bailout is estimated to be $14 trillion - and could end up costing trillions more than that. By now you are probably also sick of hearing about the bailout, but stop and think about this for a momentÖ Do you comprehend how much $14 trillion is?

What could be accomplished with this money is almost beyond common comprehension.

And this is just the tip of the iceberg that has hit us. On top of the trillions given to the Wall Street elite, we already have a record $12.3 trillion in national debt - and we now have to pay $500 billion in interest to the Economic Elite on this debt every year, yet another way they are milking us dry. When you add in unfunded liabilities owed, like social security payments, we actually owe a stunning $74 trillion. That adds up to a debt of $242,000 for every man, woman and child in America.

Trillions more, 25% of taxpayer dollars allocated to military spending goes unaccounted for every year, not to mention the billions spent on overcharging and outright fraud. During the War on Terror, the Economic Elite have used our tax money to build a private army that has more soldiers deployed than the US military - a congressional study revealed that 69% of the "US" fighting forces deployed throughout the world in our name are in fact private mercenaries, 80% of them are foreign nationals. Private contractors regularly get paid three to five times more than our soldiers, and have been repeatedly caught overcharging and committing fraud on a massive scale. A congressional investigation revealed this and strongly recommended that we seize wasting tax dollars on these private military contractors. However, under Obama, there has actually been a drastic increase in total tax dollars spent on them.

In 2009, just over $1 trillion tax dollars were spent on the military, it's safe to say that at least $350 billion of that was needlessly wasted.

When you research our tax system you see an unprecedented level of waste and fraud rampant throughout most expenditures. Our tax system is a national disaster of epic proportions. It is literally an organized criminal operation that continues to rob us in broad daylight, with zero accountability.

Politicians and mainstream "news" outlets will not tell you this, but most every serious economist knows that due to so much theft and debt created in the tax system, the only way to fix things, other than stopping the theft and seizing the trillions that have been stolen, will be for the government to cut important social funding and drastically raise our taxes. Other than the record national debt, many states are running record deficits and ìbarreling toward economic disaster, raising the likelihood of higher taxes, more government layoffs and deep cuts in services.î Our nation's biggest state economies, like California and New York, are the ones in most trouble.

To merely say that things will not be improving economically is to be a delusional optimist. The truth that you will not hear: we have been hit by an economic deathblow and the United States lay in ruins.

It's not just this criminal tax system; the theft is now built into all our costs of living.

Trillions more in our spending on food and fuel has been stolen due to fraudulent stock transactions and overcharging. Just ten years ago, in 2000, American families paid 7% of our income on food and fuel. We now pay 20%. This drastic increase is primarily driven by fraudulent market manipulation that drives up stock prices. Congress uncovered this in 2006, as part of the Enron investigation they found that companies manipulated the oil market to create major spikes in stock values, and then they didn't do anything about it - nothing to see here, just move on.

As mentioned before, we have the most expensive health care system in the world and we are forced to pay twice as much as other countries, and the overall care we get in return ranks 37th in the world. On average, US citizens are now paying a record high 8% of their income on medical care.

Part of the reason why foreclosure rates are so high is because the percentage of income Americans pay on their housing has risen to 34%.

So for these basic necessities - taxes, food, fuel, shelter and medical bills - we have already lost 92% of our limited income. Then factor in ever-increasing interest rates on credit cards, student loans, rising prices for cable, internet, phone, bank fees, etc., etc., etcÖ. We are being robbed and gouged in all costs of living, in every aspect of our life. No wonder bankruptcies are skyrocketing and the amount of people suffering from psychological depression has reached an epidemic level.

The American worker is screwed over every step of the way, and it all starts with the explosion in the cost of a college education. This is one of the Economic Elite's most devastating weapons. To have any chance of succeeding in this economy, it is commonly believed that you must attend the best college possible. With the rising costs involved, today's students are graduating with record levels of debt from student loans. At the same time, the unemployment rate among recent college graduates has risen higher than the national average, and those that do find work are making significantly less than they expected to make. This combination of extreme debt and reduced pay has crippled an entire generation right from the start and has put them in a vicious cycle of spiraling debt that they will struggle with for the rest of their lives. The most recent college graduates are now known as a "lost generation."

The American dream has turned into a nightmare. The economic system is a sophisticated prison cell; the indentured servant is now an indebted wage slave; whips and chains have evolved into debts.

"There are two ways to conquer and enslave a nation. One is by sword. The other is by debt." -- John Adams

Concealing National Wealth

"Liberty in the concrete signifies release from the impact of particular oppressive forces; emancipation from something once taken as a normal part of human life but now experienced as bondage... Today, it signifies liberation from material insecurity and from the coercions and repressions that prevent multitudes from participation in the vast cultural resources that are at hand."-- John Dewey

When you take the time to research and analyze the wealth that has gone to the economic top one percent, you begin to realize just how much we have been robbed. Trillions upon trillions of dollars that could make the lives of all hard working Americans much easier have been strategically funneled into the coffers of the Economic Elite. The denial of wealth is the key to the Economic Elite's power. An entire generation of massive wealth creation has been strategically withheld from 99% of the US population.

The US public doesn't have any understanding of how much wealth has been generated and concentrated into the hands of the Economic Elite over the past 40 years; there is no historical frame of reference. This withholding of wealth is truly the greatest crime against humanity in the history of civilization.

What could be done with all the money that has been hoarded by the Economic Elite is extraordinary!

Let's consider what we could do with the money that has been stolen from us? On top of what should be our average six-figure yearly income, we could have:

* Free health care for every American,
* A free 4 bedroom home for every American family,
* 5% tax rate for 99% of Americans,
* Drastically improved public education and free college for all,
* Significantly improved public transportation and infrastructure,

The list goes on...

This is not some far-fetched fantasy. These are all things that Franklin D. Roosevelt talked about doing in the 1940's, long before the explosion of wealth creation in our technologically advanced global economy. The money for all this is already there, stashed into the claws of the Economic Elite. The denial of wealth to the masses is the key to the Economic Elite's power. Outside of outdated and obsolete economic models and theories -- and incredibly short-sighted greed -- there is no reason why all this money should be kept in the hands of a few, at the immense suffering and expense of the many.

If Americans could just understand how much wealth is being withheld from us, we would have a massive uprising and the Economic Elite would be swept away, into the history books alongside the evil despots of the past.

This is Part II of David DeGraw's report, "The Economic Elite vs. People of the USA."

[Demeter]

46. The Economic Elite Have Engineered an Extraordinary Coup, Threatening the Very Existence of the Mid

http://www.alternet.org/story/145667/

"The American oligarchy spares no pains in promoting the belief that it does not exist, but the success of its disappearing act depends on equally strenuous efforts on the part of an American public anxious to believe in egalitarian fictions and unwilling to see what is hidden in plain sight." -- Michael Lind, To Have and to Have Not

We all have very strong differences of opinion on many issues. However, like our founding fathers before us, we must put aside our differences and unite to fight a common enemy.

It has now become evident to a critical mass that the Republican and Democratic parties, along with all three branches of our government, have been bought off by a well-organized Economic Elite who are tactically destroying our way of life. The harsh truth is that 99 percent of the U.S. population no longer has political representation. The U.S. economy, government and tax system is now blatantly rigged against us.

Current statistical societal indicators clearly demonstrate that a strategic attack has been launched and an analysis of current governmental policies prove that conditions for 99 percent of Americans will continue to deteriorate. The Economic Elite have engineered a financial coup and have brought war to our doorstep...and make no mistake, they have launched a war to eliminate the U.S. middle class.

To those who feel I am using extreme rhetoric, I ask you to please take a few minutes of your time to hear me out and research the evidence put forth. The facts are there for the unprejudiced, rational and reasoned mind to absorb. It is the unfortunate reality of our current crisis.

Unless we all unite and organize on common ground, our very way of life and the ideals that our country was founded upon will continue to unravel.

Before exposing exactly who the Economic Elite are, and discussing common sense ways in which we can defeat them, let's take a look at how much damage they have already caused.

Buy the Book: The Economic Elite Vs. The People of the United States of America

Casualties of Economic Terrorism, Surveying the Damage

The devastating numbers across-the-board on the economic front are staggering. I'll go through some of them here, many we have already become all too familiar with. We hear some of these numbers all the time, so much so that it appears as if we have already begun "to normalize the unthinkable." You may be sick of hearing them, but behind each number is an enormous amount of individual suffering, American lives and families who are struggling worse than they ever have.

America is the richest nation in history, yet we now have the highest poverty rate in the industrialized world with an unprecedented amount of Americans living in dire straights and over 50 million citizens already living in poverty.

The government has come up with clever ways to downplay all of these numbers, but we have over 50 million people who need to use food stamps to eat, and a stunning 50 percent of U.S. children will use food stamps to eat at some point in their childhoods. Approximately 20,000 people are added to this total every day. In 2009, one out of five U.S. households didn't have enough money to buy food. In households with children, this number rose to 24 percent, as the hunger rate among U.S. citizens has now reached an all-time high.

We also currently have over 50 million U.S. citizens without health care. 1.4 million Americans filed for bankruptcy in 2009, a 32 percent increase from 2008. As bankruptcies continue to skyrocket, medical bankruptcies are responsible for over 60 percent of them, and over 75 percent of the medical bankruptcies filed are from people who have health care insurance. We have the most expensive health care system in the world, we are forced to pay twice as much as other countries and the overall care we get in return ranks 37th in the world.

In total, Americans have lost $5 trillion from their pensions and savings since the economic crisis began and $13 trillion in the value of their homes. During the first full year of the crisis, workers between the age of 55 - 60, who have worked for 20 - 29 years, have lost an average of 25 percent off their 401k. "Personal debt has risen from 65 percent of income in 1980 to 125 percent today." Over five million U.S. families have already lost their homes, in total 13 million U.S. families are expected to lose their home by 2014, with 25 percent of current mortgages underwater. Deutsche Bank has an even grimmer prediction: "The percentage of 'underwater' loans may rise to 48 percent, or 25 million homes." Every day 10,000 U.S. homes enter foreclosure. Statistics show that an increasing number of these people are not finding shelter elsewhere, there are now over 3 million homeless Americans, the fastest-growing segment of the homeless population is single parents with children.

One place more and more Americans are finding a home is in prison. With a prison population of 2.3 million people, we now have more people incarcerated than any other nation in the world -- the per capita statistics are 700 per 100,000 citizens. In comparison, China has 110 per 100,000, France has 80 per 100,000, Saudi Arabia has 45 per 100,000. The prison industry is thriving and expecting major growth over the next few years. A recent report from the Hartford Advocate titled "Incarceration Nation" revealed that "a new prison opens every week somewhere in America."

Mass Unemployment

The government unemployment rate is deceptive on several levels. It doesn't count people who are "involuntary part-time workers," meaning workers who are working part-time but want to find full-time work. It also doesn't count "discouraged workers," meaning long-term unemployed people who have lost hope and don't consistently look for work. As time goes by, more and more people stop consistently looking for work and are discounted from the unemployment figure. For instance, in January, 1.1 million workers were eliminated from the unemployment total because they were "officially" labeled discouraged workers. So instead of the number rising, we will hear deceptive reports about unemployment leveling off.

On top of this, the Bureau of Labor Statistics recently discovered that 824,000 job losses were never accounted for due to a "modeling error" in their data. Even in their initial January data there appears to be a huge understating, with the newest report saying the economy lost 20,000 jobs. TrimTabs employment analysis, which has consistently provided more accurate data, "estimated that the U.S. economy shed 104,000 jobs in January."

When you factor in all these uncounted workers -- "involuntary part-time" and "discouraged workers" -- the unemployment rate rises from 9.7 percent to over 20 percent. In total, we now have over 30 million U.S. citizens who are unemployed or underemployed. The rarely cited "employment-participation" rate, which reveals the percentage of the population that is currently in the workforce, has now fallen to 64 percent.

Even based on the "official" unemployment rate, just to get back to the unemployment level of 4.6 percent that we had in 2007, we need to create over 10 million new jobs, and most every serious economist will tell you that these jobs are not coming back. In fact, we are still consistently shedding jobs, on just one day, January 27, several companies announced new cuts of more than 60,000 jobs.

Due to the length of this crisis already, millions of Americans are reaching a point where the unemployment benefits they have been living on are coming to an end. More workers have already been out of work longer than at any point since statistics have been recorded, with over six million now unemployed for over six months. A record 20 million Americans qualified for unemployment insurance benefits last year, causing 27 states to run out of funds, with seven more also expected to go into the red within the next few months. In total, 40 state programs are expected to go broke.

Most economists believe the unemployment rate will remain high for the foreseeable future. What will happen when we have millions of laid-off workers without any unemployment benefits to save them?

Working More for Less

The millions struggling to find work are just part of the story. Due to the fact that we now have a record high six people for every one job opening, companies have been able to further increase the workload on their remaining employees. They have been able to increase the amount of hours Americans are working, reduce wages and drastically cut back on benefits. Even though Americans were already the most productive workers in the world before the economic crisis, in the third quarter of 2009, average worker productivity increased by an annualized rate of 9.5 percent, at the same time unit labor cost decreased by 5.2 percent. This has led to record profits for many companies. Of the 220 companies in the S&P 500 who have reported fourth-quarter results thus far, 78 percent of them had "better-than-expected profits" with earnings 17 percent above expectations, "the highest for any quarter since Thomson Reuters began tracking data."

According to the Bureau of Labor Statistics, the national median wage was only $32,390 per year in 2008, and median household income fell by 3.6 percent while the unemployment rate was 5.8 percent. With the unemployment rate now at 10 percent, median income has been falling at a 5 percent rate and is expected to continue its decline. Not surprisingly, Americans' job satisfaction level is now at an all-time low.

There are also a growing number of employed people who, despite having a job, are still living in poverty. There are at least 15 million workers who now fall into this rapidly growing category. $32,390 a year is not going to get you far in today's economy, and half of the country is making less than that. This is why many Americans are now forced to work two jobs to provide for their family to hopefully make ends meet.

A Crime Against Humanity

The mainstream news media will numb us to this horrifying reality by endlessly talking about the latest numbers, but they never piece them together to show you the whole devastating picture, and they rarely show you all the immense individual suffering behind them. This is how they "normalize the unthinkable" and make us become passive in the face of such a high causality count.

Behind each of these numbers, is a tremendous amount of misery; the physical toll is only outdone by the severe psychological toll. Anyone who has had to put off medical care, or who couldn't get medical care for one of their family members due to financial circumstances, can tell you about the psychological toll that is on top of the physical suffering. Anyone who has felt the stress of wondering how they were going to get their child's next meal or their own, or the stress of not knowing how they are going to pay the mortgage, rent, electricity or heat bill, let alone the car payment, gas, phone, cable or Internet bill.

There are now well over 150 million Americans who feel stress over these things on a consistent basis. Over 60 percent of Americans now live paycheck to paycheck.

These are all basic things every person should be able to easily afford in a technologically advanced society such as ours. The reason we struggle with these things is because the Economic Elite have robbed us all. This amount of suffering in the United States of America is literally a crime against humanity.

This is Part I of David DeGraw's report, "The Economic Elite vs. People of the USA. "

Read more of David DeGraw's work on Amped Status.

[Demeter]

48. How champions of Neoliberal economics are reversing New Deal economics By Ismael Hossein-zadeh

http://www.informationclearinghouse.info/article24970.htm

Back to Market Fundamentalism

March 12, 2010 "Information Clearing House" -- The “golden” years of the U.S. economy in the immediate post-WW II period, along with the recovery and expansion of the economies of other industrialized countries, afforded the working class of these countries a decent, even middle-class, standard of living. Combined with extensive social safety-net programs such as the New Deal reforms in the U.S. and Social-Democratic reforms in Europe, the economic recovery and high employment rates of that period paved the way for a relatively cooperative relationship between the working and capitalist classes in these countries.

This led many pundits of historical developments to argue that perhaps Karl Marx had underestimated capitalism’s ability to carry out reform and share the fruits of economic progress with the poor and working class, thereby obviating revolution. They pointed to guaranteed employment and labor-management cooperation in a number of industrialized countries such as Germany and Japan as indications of “erroneous” Marxian judgment of the antagonistic capital-labor relationship.

These pundits failed, however, to point out the fact that the New Deal and Social-Democratic reforms that evolved out of the Great Depression and World War II were not courtesy of “benevolent” capitalism, voluntarily bestowed upon the poor and working people. They did not bother to explain that those reforms were, rather, the product of years of struggle by the working class and their allies against the brutalities of the capitalist system—struggle that often entailed great sacrifices, including occasional loss of life. The anti-Depression and anti-war struggles of the 1930s and 1940s compelled the capitalist class to “carry out reform in order to prevent revolution,” to paraphrase President Franklin D. Roosevelt.

The laissez-faire doctrine, which firmly believed in the self-correcting ability of unbridled market mechanism, was the dominant economic principle before to the Great Depression. The financial crash of 1929 and the consequent long Depression shattered this long-held, religious-like belief. The Depression, precipitated largely by predatory loan-pushing and the resulting unsustainable bubble of asset (stock) prices, made living conditions for the overwhelming majority of people extremely difficult. The ensuing economic distress, in turn, precipitated popular unrest.

Large numbers of the discontented frequently took to the streets in the early 1930s. Their desire for change swelled the ranks of socialist, communist, and other opposition parties and groups. Left activists gained certain influence among labor ranks and workers’ movement for unionization, illegal in many industries until 1935, spread rapidly. Labor and other grassroots support for third party candidates in the 1932 presidential election resulted in unprecedented number of votes for those candidates. Third-party votes were even more impressive in congressional and local elections. “The union literature was like the labor literature of a century ago—looking toward a successor to capitalism,” wrote the late Studs Terkel in his Hard Times: An Oral History of the Great Depression (Pantheon Books, p. 309).

Business and government leaders clearly understood the gravity of the situation and the need for action. The pressure from “below” created consensus and coalitions at the “top” as the need for reform to fend off revolution became evident. “. . . F.D.R. was very significant in understanding how best to lead this sort of situation. . . . The industrialists who had some understanding recognized this right away. He could not have done what he did without the support of important elements of the wealthy class. They did not sabotage the programs. Just the opposite” (Ibid., pp. 268-69).

Two principles lay at the core of the ensuing big business-government consensus reforms, which came to be known as the New Deal reforms. The first was that Adam Smith’s “invisible hand” was not capable of resuscitating the badly depressed economy; it needed government’s visible hand. The second principle was that government intervention must be limited to stimulative and distributive measures, and that the management of industries and businesses should be left to the private sector. Facilitating and maintaining a certain level of purchasing power in the market was considered crucial to the New Deal package. While this would provide relief to the economically hard pressed, and thus reduce social tension, it would also stimulate the economy and promise stable growth and rising profitability.

Regardless of the degree of the effectiveness of the New Deal reform package, the fact remains that it rescued U.S. capitalism—just as Social-Democratic reforms rescued the economies of West European countries. Combined with what the late Ernest Mandel called “extra-economic” factors (such as pliant labor leadership and peaceful trade unionism, establishment of the Bretton Woods international monetary system, Cold War ideology and the suppression or pacification of any possible dissent, and relative decline in the price of oil and other raw materials in the immediate post-WW II period), the New Deal and other government-sponsored reforms ushered in a period of rapid economic expansion that came to be known as the “golden years of US capitalism,” which lasted until around 1970.

While the pressure from below played a key role in compelling the ruling establishment to carry out the New Deal and other welfare state programs, a number of other factors also contributed to the realization of those programs. One such factor was the emergence of an alternative economic model to capitalism from the ruins of the two world wars and Great Depression: the centrally-planned economies of the Soviet Union and its allies. The emergence of the rival economic system, despite its bureaucratic and dictatorial character, further exposed the unjust character of market mechanism because while in the 1930s the capitalist West was suffering from economic depression, unemployment, and poverty, the Soviet and other centrally-planned economies were enjoying impressive rates of growth—with no unemployment, homelessness, or hunger.

The popularity of the Soviet-type economic system at the time also meant that many of the colonial and other less-developed areas of the world combined their anti-colonial and anti-imperial national liberation struggles with demands for government-sponsored models of socialist-oriented or “non-capitalist” development. In the core capitalist countries of the West, too, demands for reform and voices of revolution were frequently heard during the widespread protest demonstrations of the 1930s. Anti-capitalist sentiments and demands to harness or to do away with the skittish, unreliable and, at times, brutal forces of market mechanism in favor of regulating and/or managing national economies were heard not only among the Left and working classes but also in the ranks of the middle and lower-middle classes.

Although the fear of total economic collapse in the face of the Depression, and the “threat of revolution,” compelled government and business leaders to embark on reform in order to fend off revolution, proponents of unbridled market mechanism never really accepted or reconciled with those reforms as permanent features of capitalism. Not surprisingly, soon after the Depression turned to expansion in the immediate postwar period, and Western capitalism regained its lost confidence, the financial oligarchy and government leaders began to introduce “restructuring” measures that would undermine the New Deal reforms and revive the pre-Depression model of market fundamentalism.

Just as the rival economic system of the Soviet Union and its allies, which guaranteed basic needs and job security for their citizens, indirectly contributed to the implementation of the New Deal and Social-Democratic reforms in the industrialized West, the collapse of that rival system is now contributing to the retrogressive process of reviving pre-Depression market orthodoxy. Not only has the collapse of the Soviet-type economies opened up vast markets and huge reservoirs of cheap labor in places such as the former Soviet Union, China, and India, it has also served as grounds for capitalist triumphalism—and its self-assured or self-righteous promotion of trickledown economics.

Many people believe that efforts to reverse the New Deal reforms began with the arrival of Ronald Reagan in the White House in 1980. Evidence shows, however, that such efforts, pursued by both Republican and Democratic administrations, began long before the election of Ronald Reagan to presidency. As Alan Nasser, professor emeritus of Political Economy and Philosophy at The Evergreen State College in Olympia (Washington), points out, “The foundations of neoliberalism were established in economic theory by liberal Democrats at the Brookings Institution, and in political practice by the Carter administration.”

Reagan picked the Democrat’s timid agenda of gradual return to economic liberalism and ran with it, replacing the rhetoric of capitalism-with-a-human-face with the imperious, self-righteous rhetoric of rugged individualism that greed and self-interest are virtues to be nurtured.

Neither President Clinton changed the course of neoliberal corporate welfare policies of Reaganomics, nor is President Obama hesitating to carry out those policies. This is clearly reflected in his administration’s supply-side restructuring policies whose core principle consists of redistributing national resources in favor of the rich and powerful—cutting the critically-need social spending on basic needs to pay Wall Street gamblers and Pentagon contractors.

Perhaps a most sinister neoliberal strategy to roll back the New Deal and other poverty-reducing reforms has been deliberate creation of budget deficits in order to force cuts in social spending. This has often been accomplished by a combination of drastic tax cuts for the wealthy along with drastic hikes in military spending. As this combination creates big budget deficits, it then forces cuts in non-military public spending as a way to fill the budget gaps that are thus created.

The Obama administration has, indeed, escalated this creepy strategy by bailing out the Wall Street gamblers, financing multiple wars of choice and more than 800 military bases around the world, and then cutting social spending in an effort to reduce the national debt and budget deficits thus generated.

Another strategy of reviving the pre-New Deal laissez faire economics has been the increasing use of various schemes of outsourcing and privatization. The outsourcing of public services to private hands pervades all areas of state responsibility. Perhaps a most notorious example of this policy is the case of the Pentagon/security contracting. The services outsourced by the Pentagon are no longer limited to the relatively simple or routine tasks and responsibilities such as food and sanitation services. More importantly, they include contracts for services that are highly sophisticated and strategic in nature, such as the contracting of security services to corporate private armies, or modern-day mercenaries.

Reporting on the steadily rising trend of outsourcing, Scott Shane and Ron Nixon of the New York Times reported, “Without a public debate or formal policy decision, contractors have become a virtual fourth branch of government. On the rise for decades, spending on federal contracts has soared during the Bush administration, to about $400 billion last year from $207 billion in 2000, fueled by the war in Iraq, domestic security and Hurricane Katrina, but also by a philosophy that encourages outsourcing almost everything government does.”

The policy of privatization and outsourcing has led the U.S. Department of Housing and Urban Development (HUD), tasked with expanding the American dream of home ownership and affordable housing free from discrimination to people of modest means, to surreptitiously “move a chunk of that role to Wall Street since 2002,” reports Pam Martens, a freelance investigative reporter. Martens further writes:

“From 2002 to 2005, HUD transferred in excess of $2.4 billion of defaulted mortgages insured by its sibling, the FHA, into the hands of Citigroup, Lehman Brothers and Bear Stearns while providing the firms with wide latitude to foreclose, restructure or sell off in bundles to investors. HUD retained a minority interest of 30 to 40 percent in each joint venture. Citigroup was awarded the 2002 and 2004 joint ventures; Lehman Brothers the 2003; Bear Stearns the 2005.

“What the program effectively did was allow the biggest retail banks in the country to get accelerated payment on their defaulted, FHA-insured, single family mortgage loans while allowing another set of the biggest investment banks to make huge profits in fees for bundling and selling off the loans as securitizations. Once the loans were securitized (sold off to investors) they were no longer the problem of HUD or the Wall Street bankers. The loans conveniently disappeared from the radar screen and the balance sheet. The family’s fate had been sold off by HUD to Wall Street in exchange for a small piece of the action. Wall Street then sold off the family’s fate to thousands of investors around the world for a large piece of the action.”

Outsourcing policies are bound to be further accelerated by the rising budget deficits of many states and municipalities, and their need to sell off public property or outsource their traditional services in order to raise funds to finance their budgetary needs. These include outsourcing the maintenance of parks, the management of toll roads, the collection of waste, the operation of municipal neighborhood centers, and more. For example, according to a recent MSNBC report, in the two years since Mitch Daniels was elected governor in Indiana, “the state has leased the 157-mile Indiana Toll Road to an outside company for the next 75 years for $3.8 billion, hired vendors for $1.16 billion over 10 years to process welfare applications, and brought in a company to serve food at a mental hospital.”

While cash-strapped states and other local governments can generate quick cash by privatizing public property or outsourcing public services, they forgo long-term opportunities of income generation from such properties and services.

Another Wall Street plot to rob the people of their social safety net programs is the recently renewed attack on the once-sacred entitled programs such as Social Security, Medicare and Medicaid. Having piled up huge sums of national debt and deficit (through bank bailouts, military spending, and tax cuts for the affluent), Wall Street champions, firmly ensconced at the Congress and the White House, are now singing the “fiscal responsibility” song as a prelude to chip away at Social Security and other entitlements. This ominous scheme is clearly reflected in President Obama’s recently appointed “National Commission on Fiscal Responsibility and Reform,” a bi-partisan group that is tasked with reviewing the Social Security and other entitlements in an effort to further “trim” social spending in order to pay for the sins of major banks and military contractor.

The bipartisan nature of the attack on Social Security indicates that the plan to undercut economic safety net programs cannot be blamed solely on the blatently neoliberal Republicans. It shows that, with few exceptions, Democrats are as much indebted and committed to the powerful financial interests as are Republicans. The neoliberal economic policies of the Obama administration, crafted by his economic team of ex-bankers/Wall Street advisors, should dispel any illusions that he is committed to “change” in favor of the people.

The New Deal and other basic needs programs were put in place not so much because of F.D.R.’s or Keynes’s genius, or the goodness of their heart, as they were because of the compelling pressure from the people. Freed (or feeling free) from that pressure, the government, as the executive body of the financial/economic oligarchy, is now trying to undermine those social safety net programs, and revive the pre-New Deal/pre-Keynesian economic orthodoxy, that is, the economic model of the survival of the fittest. This sinister, profit-driven effort at undermining the poor and working people’s hard-won basic needs programs can be stopped only through a renewed and compelling pressure from the grassroots—pressure that must be exerted not through the Democratic Party machine but independent of the so-called two-party system.

Ismael Hossein-zadeh, author of The Political Economy of U.S. Militarism, teaches Economics at Drake University, Des Moines, Iowa.


In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. Information Clearing House has no affiliation whatsoever with the originator of this article nor is Information ClearingHouse endorsed or sponsored by the originator.)

[Demeter]

49. Ponzi Nation: How Get-Rich-Quick Crime Came to Define an Era By Andy Kroll

http://www.informationclearinghouse.info/article24975.htm

Every great American boom and bust makes and breaks its share of crooks. The past decade -- call it the Ponzi Era -- has been no different, except for the gargantuan scale of white-collar crime. A vast wave of financial fraud swelled in the first years of the new century. Then, in 2008, with the subprime mortgage collapse, it crashed on the shore as a full-scale global economic meltdown. As that wave receded, it left hundreds of Ponzi and pyramid schemes, as well as other get-rich-quick rackets that helped fuel our recent economic frenzy, flopping on the beach.

The high-water marks from that crime wave, those places where the corruption reached its zenith, are still visible today, like the 17th floor of 885 Third Avenue in midtown Manhattan, the nerve center of investment firm Bernard L. Madoff Investment Securities -- and, as it turned out, a $65 billion Ponzi scheme, the largest in history. Or Stanfordville, a sprawling compound on the Caribbean island of Antigua named for its wealthy owner, a garrulous Texan named Allen Stanford who built it with funds from his own $8 billion Ponzi scheme. Or the bizarrely fortified law office -- security cards, surveillance cameras, hidden microphones, a private elevator -- of Florida attorney Scott Rothstein, who duped friends and investors out of $1.2 billion.

The more typical marks of the Ponzi Era, though, aren't as easy to see. Williamston, Michigan, for instance, lacks towering skyscrapers, Italian sports cars, million-dollar mansions, and massive security systems. A quiet town 15 miles from Lansing, the state capital, Williamston is little more than a cross-hatching of a dozen or so streets. A "DOLLAR TIME$" store sits near Williamston's main intersection -- locals affectionally call it the "four corners" -- and its main drag is lined with worn brick buildings passed on from one business to the next like fading, hand-me-down jeans. It's here, far from New York or Antigua, that thanks to two brothers seized by a financial fever dream, the Ponzi Era made its truest, deepest American mark.

Jay and Eric Merkle, active church members and successful local businessmen, were well known among Williamston's residents. In 2004, the brothers discovered that an oil-and-gas venture, which they had invested in and which promised them quick, lucrative returns, was a scam. They'd been duped. Their next move should have been simple: turn in the crooks and get on with their lives, their pockets a few dollars lighter. Jay and Eric, however, grasped the spirit of their age and made another decision entirely -- they teamed up with the guys who had ripped them off, in the process switching from prey to predator.

That first venture actually floundered, but in 2005, court records show, they started their own Ponzi scheme, Platinum Business Industries (PBI). Based in Williamston, PBI claimed it was socking its investors' money into lucrative oil and gas exploration opportunities in Oklahoma and Texas, and it promised the investors absurdly high returns -- 6% a month, or 72% a year. Despite such promises, the brothers assured town locals handing over their hard-earned dollars that little risk was involved. Even if the energy exploration didn't pay off, the land acquired by PBI was valuable and could be sold to offset any losses.

Like Madoff in Palm Beach, the Merkles in Williamston exploited local ties -- church and family -- to reel in new investors; and like Madoff's investment fund, PBI, too, was a complete sham, and a classic Ponzi scheme -- that is, an investment scam in which existing investors' returns are paid for with money from new investors. In the case of PBI, there was no energy exploration in Oklahoma and Texas.

Some of the money they received from later investors the Merkles used to pay off earlier ones and give their scheme the look of success. But in their case, there was a rub. The Merkles were distinctly creatures of the Ponzi Era: they evidently couldn't help themselves. Even as they ran their own Ponzi racket, documents show, they were getting fleeced. What they weren't paying out in fake returns the Merkles bet on high-yield, get-rich-quick schemes in the U.S. and abroad that had nothing to do with oil and gas -- and other Ponzi schemers and con artists were robbing them blind.

Their financial crime spree collapsed in 2008. Dead-broke, with investigators closing in, they told investors that various foreign governments and banks had frozen their assets. The brothers then asked them to wire more than a million dollars to Nigeria, Ghana, and other countries as "fees" to release their money, even as they warned them against cooperating with an FBI investigation. Then, on a brisk autumn day in October 2008, the feds arrested to the two brothers; the game was up. In all, via PBI and other scams, they had duped more than 600 investors out of $50 million, robbing some of their life savings.

When compared to Madoff's or Stanford's heists, that sum was little more than pocket change. But the Merkle brothers caught the true, democratic spirit of a decade of an unrestrained magical thinking that infected rich and poor, successful and ne'er-do-well, the financially savvy and neophytes who couldn't tell a stock from a bond. Think of their story as a parable for the Ponzi Era: they were taken, decided to become takers, took others, then got taken again. In the rush for the pot of gold at rainbow's end, they bet everything Main Street had to offer, believing they could get away with it.

Thanks to an open credit spigot, a booming housing market, and visions of unimaginable wealth on Wall Street, practically everyone in the United States in the past decade seemed to aspire to get rich -- and quick. Perfectly ordinary people refinanced their homes, refinanced again, and used the money they got to stake themselves at the crooked casino table of American life. Some rolled the dice in stocks, bonds, and second homes. For millions more, the gamble took the form of "investment opportunities" that promised wealth in a hurry, opportunities now exposed as little more than financial con jobs. "People were shooting for that home run," says Peter Henning, a law professor at Wayne State University and white-collar crime expert. "They were saying, ‘I'm just as smart as Warren Buffet.'"

Today, with easy credit and the buy-now-pay-tomorrow culture that it spawned in the dustbin of history, the Ponzis and pyramid schemes of the past decade can be seen for what they really were. Not a week seems to go by without the Securities and Exchange Commission (SEC) or the FBI or law enforcement officials busting another get-rich hustle. Yet the full scope of the criminality of the Ponzi Era remains elusive; no one yet knows just how widespread those Ponzi schemes were -- and how many may remain, hidden or in plain sight.

Beyond the headliners like Madoff and Stanford, Americans may not actually be aware of just how many schemes of this sort were abroad in our land -- but it probably doesn't matter much either. Disillusionment with the past decade is such that many Americans now simply assume that our world is little but a giant Ponzi scheme.

Ponzis, Ponzis, Everywhere

The wave of financial crime may have peaked in 2005 or 2006, but the detritus of such collapsed schemes has left regulators and investigators ever busier. Almost four times as many Ponzi schemes broke down in 2009 -- 150 -- as in 2008 -- 40. According to the Associated Press, the FBI began more than 2,100 securities fraud cases last year, an increase from 1,750 the year before. The SEC likewise dealt out 82% more restraining orders against Ponzi schemes and similar frauds in 2009 than the previous year.

2008 belonged to Madoff, but 2009 and 2010 have displayed a far more eclectic cast of crooks. We learned of mini Madoff, Miami Madoff, and Montreal Madoff, of Ponzis targeting African Americans, Haitian Americans, and Cuban Americans. There were fraudulent real-estate schemes and farm-grain schemes. Some were banal, like a Ponzi built on investments in state-worker uniforms or one that siphoned off retirement funds from bus drivers. Others were sexier, like the high-profile Florida race-car driver who, investigators say, swindled investors for $5 million claiming to peddle iron-ore contracts, or the clutch of professional athletes, among them the National Football League's Michael Vick, allegedly fleeced for $3 million by an elite "adviser" offering guidance on buying luxury properties and private jets. There were Ponzis piled atop each other, like a recent Detroit scam described by a state official as "a multiheaded Ponzi hydra."

Faltering Ponzis have spread woe in Dallas and Boca Raton, Livermore and Long Island, Seattle and Atlanta. And the legacy of the past decade's procession of white-collar criminals has indelibly marked our society in ways that go far beyond the financial losses they caused to their unfortunate investors.

Just use the word "Madoff" and see if you don't inspire a visceral sense of revulsion in your listeners. (So notorious is the name that Bernie's daughter-in-law wants to legally change her daughter's last name from Madoff to Morgan to avoid "additional humiliation.") Indeed, the Ponzi scheme is now so imprinted on the American imagination that it has, to some extent, become a prism through which we interpret the world.

The World's a Ponzi, and We're All Getting Duped

A decade ago, few Americans would have described the world around them in Ponzi terms, if they even knew what it was. Today, it's become increasingly commonplace to describe American politics as a series of massive, plain-as-day Ponzi schemes. Medicare, for instance, or Social Security are regularly deemed Ponzis by right-wing protestors railing against the spread of big government. "It's become part of the political nomenclature," says law professor Henning. "That may be the greatest effect Madoff had. He's now taken a term of art and made it into common public discourse."

Last month, for instance, Tim Pawlenty, the drawling Minnesota governor and potential Republican presidential candidate, described not just Social Security and Medicare but all federal government spending as the "Ponzi scheme on the Potomac." That scheme, Pawlenty wrote, "sooner or later" will

"come crashing down, and the loss will be mammoth... Ponzi schemes succeed because people want to believe in a free lunch as long as the easy money is rolling in. But a day of reckoning always arrives, and ours is right around the corner. The sooner we open our eyes, the sooner we can clean up this mess."

The inexorable rise of our closest economic competitor, China, is apparently a massive Ponzi, too. According to some journalists and analysts, that country's success has been built on a bloated stock market, a growing housing bubble, cheap labor, and the promise of increasing returns. If so, it's undoubtedly the greatest heist ever pulled in plain sight, involving the duping of China's billion-plus inhabitants and the billions more worldwide whose lifestyles wouldn't exist without the Middle Kingdom's industrial rise.

To some, the Ponzi scheme knows no borders at all. Joe Romm, a climate science expert and blogger at ClimateProgress.org -- a left-leaning website, since the Ponzi mindset is bipartisan -- casts our current climate nightmare as a global Ponzi. By devouring natural resources now and cavalierly spewing greenhouse gases to poison the planet's future, Romm says, we're mortgaging the lives of future generations:

"You can get this burst of wealth that we have created from this rapacious behavior. But it has to collapse, unless adults stand up and say, ‘This is a Ponzi scheme. We have not generated real wealth, and we are destroying a livable climate...'"

What does it mean that we so eagerly slap the label "Ponzi scheme" on those things that most frustrate, infuriate, or confound us? Why do so many Americans feel like hapless investors who have thrown away their life savings to pay off guys at the top whose only goal is to screw over everybody else?

It's an unmistakable sign, at the very least, of a deep, simmering distrust and disillusionment, a dark undercurrent of despair spreading through our culture, whether voiced by Governor Pawlenty or a newspaper reader in rural Ohio who wrote in a letter to the editor that Social Security "is, by definition, a Ponzi scheme." Today, for Americans, the literal Ponzi schemers may be the least of it. Sooner or later, they usually go to jail. But the distrust they sparked has made its way to the very kings of finance, who, like the Ponzi-schemers, were not so long ago going to make us all rich, who struck the match and then stoked the flames of the financial crisis, who created oblique financial products like collateralized debt obligations and pick-a-pay subprime mortgages, and then walked away unscathed with multi-million dollar salaries and bonuses in their pockets.

The distrust extends as well to the government that finally jailed Madoff and is prosecuting Stanford, but has dealt a free pass to Lloyd Blankfein of Goldman Sachs and Dick Fuld of Lehman Brothers. What might be thought of as an American Ponzi mood can be seen in the rise of anti-government groups like the burgeoning Tea Party movement. The scattered "patriot" groups that comprise the Tea Partiers passionately claim the president, the Democrats, and even the Republicans are "stealing" their country and liberty from them; in some cases, they are prepared to take up arms against what they see as fraud of the largest order, which they term "socialist tyranny."

Most disquieting in the Ponzi Era is the disillusionment it has bred, the sense that people you know or work with could be ripping you off. In Bernie Madoff's case, there's a possibility he deceived his own wife and children. The Merkle brothers exploited members of their church and extended family. "You work hard your whole life to be smart with your money and save and then it is taken by someone you know," said a resident of tiny Van Wert, Ohio, who'd been duped by the Merkles. "People need to be warned that it can happen in Van Wert, too."

How long it will take for that embedded distrust to dissipate is anyone's guess. As the victims of Madoff can attest, justice is bittersweet in the wake of a Ponzi scheme: the ringleader may spend his life in prison, his belongings publicly auctioned off as a form of catharsis as much as restitution, but investors are rarely made whole again. The scars remain.

Ours is now a Ponzi nation. There is a new mood in the land. Just how it will play out is unknown, but a sense of having been conned is still spreading -- as if not just surprising numbers of investors, but the whole country had experienced the last days of a giant Ponzi scheme. With it goes a feeling that what we've been living through, even in "the best of times," wasn't an American dream, but pure nightmare. Welcome to America, sucker.

Andy Kroll, an associate editor at TomDispatch, is a reporter for Mother Jones magazine

[Demeter]

51. Sometime in the Night the Front Pond Thawed

and there are three pure white trumpeter swans floating on its rippling waters. The children have come home!

It's been raining more often than not. (spring is here) I must whisper, in case Old Man Winter hears. It's supposed to go down to freezing tonight, just because it's paper route and Daylight Savings time day. One of the first things I insist upon when Tansy and AnneD take over, is the end to the travesty of "daylight saving". Leave the damn clocks alone so our natural rhythms can stabilize.

Well, sometime in the past week, I demanded names. Just above, I got them.

Making a list, checking it twice...

[UpInArms]

55. Repos Played a Key Role in Lehman's Demise

http://online.wsj.com/article/SB10001424052748703447104575118150651790066.html?mod=WSJ_hpp_LEFTWhatsNewsCollection

Six weeks before it went bankrupt, Lehman Brothers Holdings Inc. was effectively out of securities that could be used as collateral to back the short-term loans it needed to survive. The bank's subsequent scramble to stay alive exposed the murky but crucial role that short-term lending, done in a corner of Wall Street known as the repo market, plays in the financial world.

The report by Lehman's court-appointed bankruptcy examiner, which runs thousands of pages, recounts efforts by the bank to use sleight-of-hand accounting transactions to spiff up its financial picture and sometimes use low-quality collateral to get loans. It also details the sometimes angry and confusing tussles between Lehman and its lenders over who got to hold the assets.

Lehman's battles show that the repo market, the lifeblood of Wall Street, often isn't as routine as some investors believe. The basic mechanics involve firms raising cash to fund operations by posting high-quality assets, with an obligation to repurchase them within days.

But the examiner's report exposes the market's lack of information and the confusing, sometimes contradictory agreements between Lehman and its lenders that help explain why the market seized up in the financial crisis.

In one such tussle, Lehman had posted as collateral with J.P. Morgan Chase & Co. over the summer of 2008 a security called Fenway, which Lehman claimed had a value of $3 billion. J.P. Morgan concluded the security "was worth practically nothing" just days before Lehman went under, prompting the big bank to demand more collateral from Lehman.

Those factors, combined with collapsing market conditions, put repo agreements into a tailspin. "The basic problem is that the investment banks have become highly dependent on the repo markets for their funding ... but they were using a whole bunch of nontraditional securities for those repo agreements," said Stephen Lubben, a professor at Seton Hall University's law school who specializes in bankruptcy and corporate debt.

"The market is extremely opaque and had become very dependent on the value of mortgage-backed securities. As we got into the second half of 2008, it became very unclear what the value was on a lot of those things," Mr. Lubben said.

The result was the market froze up as lenders refused to do business with one another, potentially sending other major Wall Street firms into bankruptcy. The market only began functioning again after governments stepped in to backstop banks.

The report also cited a July discussion where a top Lehman finance executive told a Citigroup executive that all of Lehman's liquid securities had already been used as collateral in repo transactions and that to get the type of collateral Citigroup wanted, it would have to take it from another repo agreement. At another point, Lehman offered Citigroup a package of structured securities, which Citi rejected as "bottom of the barrel" and "junk," adding that they hardly ever traded.

Yet at the same time, the report says, Lehman was able to double-count some liquid securities by using them in repo transactions and counting them in its internal liquidity pool, which would be "monetized at short notice in all market environments." Lehman said it had $42 billion in that pool at the end of the third quarter of 2008, but according to the report, at least $10 billion of that pool had been pledged as collateral in repo agreements.

...more...

[UpInArms]

56. some background on "repos" or repurchase securities

here's a website that has been absolutely steadfast in keeping records on the "repo" market since September 2001 -

http://www.321gold.com/fed/temp_bank_res.html

here's a link to all the records -

http://www.321gold.com/fed/fed_archives.html

here are the repos for May-June 2008

http://www.321gold.com/fed/temp_bank_res_41.html

here's the current page -

http://www.321gold.com/fed/temp_bank_res.html

To see the Fed injecting money into the banking system is a bizarro thing indeed.

:hi:

[DemReadingDU]

58. Here's how Lehman Brothers' 'Repo 105' scam worked

This is the best explanation how the scam worked that I have read.

3/13/10 per John Xenakis blog...

Here's how Lehman Brothers' 'Repo 105' scam worked

I've read a number of articles on the Lehman bankruptcy report on Friday. As far as I can figure out, Lehman's "Repo 105" scam worked as follows:

* Suppose that I have $100 billion in bad loans in my portfolio, and that I call them assets, even though they're really "toxic assets," which means that I'm stuck with them, unless I sell them for 20 cents on the dollar.

* Ideally what I'd want to do is sell them to you, or to some sucker, who'll pay me $100 billion for the toxic assets. That would be great for me, because now I'd have cash in my portfolio, not toxic assets. That would be a SALE, and would make my balance sheet look a lot better.

* Since there are no such suckers around, you and I make an agreement. I'll borrow $100 billion from you, and give you the toxic assets as collateral. In two weeks, I'll return $102 billion to you (original amount plus interest), and you'll return the toxic assets to me. This deal is a short-term LOAN, not a sale. It doesn't affect my balance sheet, because I still own the toxic assets, even though I've used them to borrow money.

* A "Repo 105" transaction is the above LOAN transaction, set up in a convoluted way so that it can be declared as a SALE transaction under securities law. In some cases, this may be legal, but at best it's borderline.

* Lehman Brothers did $50 billion in these short-term Repo 105 loans in Q2 of 2008, just before the company collapsed, according to FT Alphaville. So what's the big deal? Glad you asked.

* The big deal is that these Repo 105 loans were done RIGHT AT THE END of the quarter, so that they appeared as a "sale" on the quarterly financial reports, even though the sales would be reversed a week later.

* There's more. In order to pull off this scam, Lehman needed signoff from a law firm, but none of the Wall Street law firms they approached would sign off on it, saying that it violated American securities laws.

* Soooooooooo ... Lehman did the deal through its London office, and got London's high class Linklaters (pronounced LINK-lay-ters) law firm, as well as the London office of accountancy firm Ernst & Young, to sign off on the deal, according to the London Times.

Lehman used these transactions to hide their financial problems until the day they declared bankruptcy. Thus, any investor who invested in Lehman in Q3 of 2008 was being defrauded.

It's incredibly sleazy, but is it illegal? I've been listening to financial pundits debate this question, and most of them say that CEO Richard Fuld, as well as other Lehman officials, would figure out a way to protect themselves, and avoid criminal convictions.

I disagree with this assessment, because it doesn't take into account changing moods. In the 1930s, bankers perpetrated the same sorts of sleaze, but it took a few years to send them to jail, as people got angrier and angrier.

The same thing is happening today, and banks charge 30% interest rates and use the money to pay themselves million dollar bonuses. The public is getting angrier and angrier, and the financial crisis is nowhere near its worst point yet.

Here's what I wrote in 2006: I have some advice for the economics experts, journalists, professors, investors, central bankers, pundits and politicians that have been telling us that everything is OK and getting better: You'd better have your underground bunker picked out, because people are going to be coming after you, and the guillotine is going to seem mild compared to the punishment that they're going to want to inflict on you.

The Lehman bankruptcy report is 2,200 pages long, and will serve as a roadmap for civil and criminal charges brought against many other financial executives who perpetrated Repo 105 scams and broke other laws.

The report was prepared by Anton R. Valukas, Chairman of Jenner & Block. You can find the entire report on their web site at http://lehmanreport.jenner.com/.

I heard one pundit on CNBC attempt to justify these scams by pointing out that Lehman management knew they were in trouble, so they had no choice but to "double down to save themselves - hope for a run of good luck." The problem with that logic is that they're doubling down with other people's money. If you want to gamble with your own money, that's one thing, but when you gamble with other people's money, without their permission, then you're defrauding them.

Nobody believes that Lehman was the only bank using these and other scams to defraud investors. That's why so many banks had to be bailed out.

The important lesson from all this, as I pointed out yesterday, is that all of these practices are continuing today, and exactly the same people are perpetrating them. Your favorite bank or country could be close to bankruptcy, but you'd have no idea because the management is lying to everyone, and using accounting gimmicks like Repo 105. That means that your favorite bank or country could go bankrupt tomorrow, and there's no way you could even have any idea that it's coming.

http://www.generationaldynamics.com/cgi-bin/D.PL?xct=gd.e100313#e100313

[UpInArms]

the last two sentences are chilling

Your favorite bank or country could be close to bankruptcy, but you'd have no idea because the management is lying to everyone, and using accounting gimmicks like Repo 105. That means that your favorite bank or country could go bankrupt tomorrow, and there's no way you could even have any idea that it's coming.

[UpInArms]

67. the last two sentences are chilling

Your favorite bank or country could be close to bankruptcy, but you'd have no idea because the management is lying to everyone, and using accounting gimmicks like Repo 105. That means that your favorite bank or country could go bankrupt tomorrow, and there's no way you could even have any idea that it's coming.

[DemReadingDU]

69. double posted, double chilling

:scared: :scared:

[UpInArms]

71. oops!

:blush:

:scared:

[burf]

75. There is a Dylan Ratigan clip

that give a good explanation of these financial do-hickees.

They Cooked The Books

The Video That Will Put Geithner Behind Bars

One Of The Greatest Crimes Ever Perpetrated


Link: http://www.informationclearinghouse.info/article24980.htm

[Demeter]

87. Love Spizter's Preventative Measure: "Handcuffs"

[Dr.Phool]

57. Speaking of the Ides, I loved that HBO mini series "Rome".

One of the lead characters was a Forrest Gump-like centurion, scheduled to be executed, but gets a new lease on life, and just happens to be in the right place at the right time. He saves the treasury, survives a storm at sea. He even boinks Cleopatra, and Caesar thinks the kid is his.

In the end, he's the only one left. Dumb and happy.

[bread_and_roses]

84. I loved it too! (n/t)

[Demeter]

59. Well, There's 800 sq ft of flooring in my garage

and I have to get it done before the snow flies. Wish me luck.

My sister says I'm crazy. I don't argue the point. Getting rid of the carpet will make me decidedly less crazy. QED

[Dr.Phool]

60. Move it into the house for a few days first,

It has to acclimate to the environment it's going to be installed in.

I'll be getting 1600 sq ft pretty soon. It looks like a lot of fun. But, I'll lose 170# after I'm done. I'll get my wife off my back.

[Demeter]

61. I hate vacuuming

I hate the noise. The weight of the equipment and its clunkiness. The crappy job it does. And shampooing the carpet, never really cleans it.

With a wood floor, just damp mop or sweep, and restore the poly once a year, and it lasts a lifetime, maybe two. or three.

My idea of carpets is wash and toss.

So, we can compare stories and compete for milestones. I have to take out the old carpet and do any work on the subfloor, though. Where does your job start?

[Dr.Phool]

77. I have one room with carpet. The rest is tile.

I'm gonna install laminate, or maybe bamboo. Whatever the boss decides. I'm going to paint the entire interior first.

Carpet, and Labs don't mix well. They shed constantly.

[Demeter]

78. How Well I Remember That!

At least he was blond, and blended in with the rest of the family.

[DemReadingDU]

91. When we got new carpet, we brought home various samples

We had to make sure the carpet we chose, blended with the color of our dog!

[Tansy_Gold]

92. Laminate is the cat's meow! (Especially for those with dogs!)

Just last week I ripped the carpet out of the family room and put down laminate. I still have a tiny bit of trim work to do, but all in all, it's a one day job, start to finish.

Off-white carpet does not go well with an acre of desert landscaping (no grass, just gravel and dust) and four large dogs, two of whom have lots and lots and lots of long black hair.

Have fun, Demeter and Doc. This stuff is -- dare I say it on 14 March? -- easy as pi!



Tansy Gold

[DemReadingDU]

70. 3/14/10 60 minutes: Wall Street: Inside The Collapse

Click link for preview video

Wall Street: Inside The Collapse
Author Tells "60 Minutes" What Led to Wall Street Collapse and Who Predicted It

(CBS) The big banks that received billions of dollars from the U.S. government and continue to pay their executives large bonuses are engaged in a "very elegant form of theft" says former bond-trader-turned-author Michael Lewis.

He spoke to "60 Minutes" correspondent Steve Kroft in an interview to be broadcast Sunday, March 14, at 7 p.m. ET/PT.

Wall Street banks, many on the verge of collapse just over a year ago, paid employees about $20 billion in bonuses for 2009 profits. Lewis tells Kroft that bonuses paid out by big banks that were propped up by the Federal Reserve in the economic crisis were essentially a scam on taxpayers. When you are a big bank on Wall Street, says Lewis, "You have access to a zero percent loan in virtually unlimited quantities from the Federal Reserve. You can take that money and reinvest it in treasury bonds or government agency securities and you will get the spread and you could do it over and over," says Lewis. "You're essentially borrowing from the government and lending the government and taking a cut."

Add to that the vicious cycle of greed within the industry and the bonuses flowed, says Lewis. "Really what's going on is the people on the top of the firm want to make a lot of money and if they're going to make a lot of money, they have got to pay the people under them a lot of money," he says. "So it's a very elegant form of theft right now," Lewis says.

Lewis believes the political connections of Goldman Sachs played at least some role in the Federal Reserve's decision to subsidize it and other banks deemed "too big to fail." "There’s no proof but… it certainly didn't hurt that was a former Goldman CEO…that a lot of the people at the table were former Goldman employees…that the air..everybody breathed contained the assumption that we can never do anything to harm Goldman Sachs," Lewis tells Kroft. "I can't really see how their political influence didn’t have anything to do with it."

In his newest book, The Big Short: Inside the Doomsday Machine, Lewis explores how a handful of Wall Street outsiders who realized the subprime mortgage business was a house of cards, found a way to bet against it and made millions doing it. He tells Kroft the people who decided to create and trade these flawed financial instruments were blinded to the danger by greed for the most part, but should have known better because that was their job.

Lewis says despite the fact that their dealings managed to destroy $1.7 trillion - and counting - of wealth, these people still left their companies with big payouts. "I didn't run across a single character who didn't get rich." Even richer: "And they're being paid all over again to sort through the mess…that is an age-old trick on Wall Street…people who create the disasters make a lot of money cleaning up the disaster because they're the ones who know about the disaster," Lewis tells Kroft.


Click link for preview video
http://www.cbsnews.com/stories/2010/03/12/60minutes/main6292458.shtml

[DemReadingDU]

72. Video - Professor William Black on PBS' Newshour

Former regulator talks fraud and big bank getaway, appx 8 minutes
http://neweconomicperspectives.blogspot.com/2010/03/professor-william-black-on-pbs-newshour.html

[DemReadingDU]

73. Dr. Black - WARNING: The US is Heading Toward Crony Capitalism

2/18/10 The title of Dr. Black's talk is: Why Elite Frauds Cause Recurrent, Intensifying Economic, Political and Moral Crises. appx 70 minutes
https://webdisk.lclark.edu/econ/steinhardt2010/steinhardt2010.html

[Roland99]

74. We're not already there?

[DemReadingDU]

76. Blinko - The Truth Invention

What everyone needs, especially those running for high office.

http://www.youtube.com/watch?v=Z4zmkVhoBMM

[Demeter]

79. Happy Pi Day!

HAPPY PI DAY: March 14th (3.14) is PI day and all around the world mathematicians are celebrating this compelling and mysterious constant of Nature. Pi appears in equations describing the orbits of planets, the colors of auroras, the structure of DNA. It's everywhere.

Humans have been struggling to calculate Pi for thousands of years. Divide the circumference of a circle by its diameter; the ratio is Pi. Sounds simple, but the devil is in the digits. While the value of Pi is finite (a smidgen more than 3), the decimal number is infinitely long:

3.1415926535897932384626433832795
02884197169399375105820974944592307
81640628620899862803482534211706...more

http://www.geom.uiuc.edu/~huberty/math5337/groupe/digits.html

Supercomputers have succeeded in calculating more than 200 billion digits and they're still crunching. The weirdest way to compute : throw needles at a table or frozen hot dogs on the floor.

http://www.angelfire.com/wa/hurben/buff.html

http://www.wikihow.com/Calculate-Pi-by-Throwing-Frozen-Hot-Dogs

"Mathematicians insist (pi)R squared, but everyone knows Pie are Round!"

http://www.teachpi.org/

http://en.wikipedia.org/wiki/Pi

http://www-groups.dcs.st-and.ac.uk/~history/HistTopics/Pi_chronology.html


That ought to satisfy most people's cravings for Pi, but I believe I'd like another slice, please!

[DemReadingDU]

80. Yumm, Pie!

[Demeter]

81. And We Geeks All LOVE Pie Charts!

[DemReadingDU]

82. Yumm, Pie chart!

[Demeter]

88. You reminded Me of That Holiday Favorite

Pumpkin Pi!

Covers Halloween, Thanksgiving, and if it's a big enough pumpkin, Christmas, too!

[DemReadingDU]

83. Thinking Pie?

[bread_and_roses]

85. Michael Parenti has an interesting take on Caesar

http://www.michaelparenti.org/Caesar.html

" The Assassination of Julius Caesar
A People’s History of Ancient Rome"

presents us with a compelling story of popular resistance against entrenched power and wealth. Parenti shows that Caesar was only the last in a line of reformers, dating back across the better part of a century, who were murdered by opulent conservatives.

Here's a video of him giving a talk on the subject (disclaimer - I have not watched this - intend to one of these days - I've read the book and enjoyed it very much - and I usually find him quite listenable when I've heard him on "Alternative Radio)

http://www.youtube.com/watch?v=SKxnZ-a4RNc

I enjoyed the book very much - and his dissection of Cicero is alone worth the read - Dr.Phool, if you enjoyed "Rome" on HBO, you'd recognize Parenti's Cicero

Parenti is, probably, too easy on Caesar in some respects - I do not recall his spending much time on the hideous slaughters in Gaul - but it could be argued that his subject was the politics and power in Rome, not the military campaigns.

[Joe Chi Minh]

86. Innovators and parasites - with some mingling of of parasitism in the former, no doubt.

The Guardian article is written by Will Hutton:

http://www.guardian.co.uk/commentisfree/2010/mar/14/will-hutton-economics-billionaires

[Demeter]

89. Didn't the Oracle Say:"Beware the Ides of March"?

We didn't cover everything this weekend, but we sure hit paydirt on Timmy, Bernanke, and if he doesn't get his ass in gear and prosecute, Obama.

The fraud has been exposed and the obstinate little facts have made their debut.

The ball is in Eric Holder's court.

If Obama won't take down the war criminals, he better take down the white collar criminals. STAT!

This wraps up the Weekend for me. I have to recover from moving 1800 lbs of oak in wind and rain Saturday, and then about 400 lbs of newsprint in wind and rain this morning, plus some Kid shopping.

But it didn't freeze, it didn't snow, so things are looking like spring!