Bailout is 'multi-trillion-dollar crime scene'

a blast from the recent past...

Naomi Klein on Democracy Now, November 17, 2008

1,600 Line Up for Free Food in Sacramento

Happy Thanksgiving!

NEWS10ABC:

posted by Karen Massie

SACRAMENTO, CA - It's a sign of just how difficult times are for many Sacramento area residents. About 1,600 people waited in line for up to five hours to get a free Thanksgiving Day food basket.

The line of people hoping to get into the Sacramento Food Bank was more than three blocks long in Oak Park. Thomas Kirkendoll tried to keep his toddler amused as they slowly moved toward the pick-up area.

"I came to get Thanksgiving Day dinner for my two kids," said Kirkendoll. "It's been really tough because we didn't have a place to live. We just barely got a place and are getting on our feet."

Julia Covell said she'd never been to the food bank before. "I can't afford a turkey. I have a father-in-law who just got out of the hospital and we wanted to spend Thanksgiving with him," she said.

Unemployed electrician Joseph Dill said he was surprised by long lines outside the facility. "I'll cook this turkey tonight because Mother Hubbard's cupboards are bare," said Dill. "I've been off work for about a month. The company I was working for didn't send my wages in so I've been penalized twice because I wasn't able to get unemployment. This is helping me out."

"We knew we would be busy but we never expected anything like this," said food bank Operations Manager Shannin Saulnier.

[. . .]

"We're seeing much greater need this year," said Saulnier. "We've seen our number of clients increase by as much as 15 percent over the last three or four months."

Russian Analyst Predicts Breakup of the US

...actually, he predicted it ten years ago, but no one thought anything of it... until now.

NOVOSTI:

MOSCOW, November 24 (RIA Novosti) - A leading Russian political analyst has said the economic turmoil in the United States has confirmed his long-held view that the country is heading for collapse, and will divide into separate parts.

Professor Igor Panarin said in an interview with the respected daily Izvestia published on Monday: "The dollar is not secured by anything. The country's foreign debt has grown like an avalanche, even though in the early 1980s there was no debt. By 1998, when I first made my prediction, it had exceeded $2 trillion. Now it is more than 11 trillion. This is a pyramid that can only collapse."

The paper said Panarin's dire predictions for the U.S. economy, initially made at an international conference in Australia 10 years ago at a time when the economy appeared strong, have been given more credence by this year's events.

When asked when the U.S. economy would collapse, Panarin said: "It is already collapsing. Due to the financial crisis, three of the largest and oldest five banks on Wall Street have already ceased to exist, and two are barely surviving. Their losses are the biggest in history. Now what we will see is a change in the regulatory system on a global financial scale: America will no longer be the world's financial regulator."

When asked who would replace the U.S. in regulating world markets, he said: "Two countries could assume this role: China, with its vast reserves, and Russia, which could play the role of a regulator in Eurasia."

Asked why he expected the U.S. to break up into separate parts, he said: "A whole range of reasons. Firstly, the financial problems in the U.S. will get worse. Millions of citizens there have lost their savings. Prices and unemployment are on the rise. General Motors and Ford are on the verge of collapse, and this means that whole cities will be left without work. Governors are already insistently demanding money from the federal center. Dissatisfaction is growing, and at the moment it is only being held back by the elections and the hope that Obama can work miracles. But by spring, it will be clear that there are no miracles."

He also cited the "vulnerable political setup", "lack of unified national laws", and "divisions among the elite, which have become clear in these crisis conditions."

He predicted that the U.S. will break up into six parts - the Pacific coast, with its growing Chinese population; the South, with its Hispanics; Texas, where independence movements are on the rise; the Atlantic coast, with its distinct and separate mentality; five of the poorer central states with their large Native American populations; and the northern states, where the influence from Canada is strong.

He even suggested that "we could claim Alaska - it was only granted on lease, after all."

On the fate of the U.S. dollar, he said: "In 2006 a secret agreement was reached between Canada, Mexico and the U.S. on a common Amero currency as a new monetary unit. This could signal preparations to replace the dollar. The one-hundred dollar bills that have flooded the world could be simply frozen. Under the pretext, let's say, that terrorists are forging them and they need to be checked."

When asked how Russia should react to his vision of the future, Panarin said: "Develop the ruble as a regional currency. Create a fully functioning oil exchange, trading in rubles... We must break the strings tying us to the financial Titanic, which in my view will soon sink."

Panarin, 60, is a professor at the Diplomatic Academy of the Russian Ministry of Foreign Affairs, and has authored several books on information warfare.

China's Incentives For Abandoning The Dollar

MarketSkeptics.com:

Thursday, November 20, 2008

by Eric deCarbonnel

About a week ago, Peter Schiff wrote an article making a very good point about China's $600 billion economic stimulus package. He rightly suggests that China would be wise to fund such spending through the sale of US treasuries:

(emphasis mine)

China's Stimulus Spells Trouble for U.S.

This week, Asian markets were initially energized by China's announcement of a near $600 billion economic stimulus package for its own economy. Although I have never been a fan of government-fueled stimuli, the relative wisdom of the plan hinges on the source of funds the Chinese government decides to utilize. Their best choice would be the country's nearly $2 trillion in foreign reserves, the largest portion of which is held in U.S. Treasury and agency debt. This pile of dollars, which really amounts to no more than a subsidy for U.S. consumers, does nothing to benefit Chinese citizens.

If it does decide to employ this ocean of cash, China will become a net seller of U.S Treasuries just as the U.S. Government itself will be pushing up its issuance of new Treasury bonds into record territory. With two huge sellers and few major buyers (just about every major creditor nation having problems of their own), the Federal Reserve will become the only reliable customer. As a result, not only will the Fed monetize our own economic stimulus packages, but will be forced to provide the same service to the Chinese.

Most economists feel that China will maintain the status quo by borrowing or printing the funds for their own stimulus while continuing to hoard its trillions of existing U.S. dollars. Most also believe that the Chinese will substantially increase their dollar holdings in order to finance America's never-ending string of bailouts and its ballooning Federal deficit, which is soon to pass $1 trillion annually. These optimists are in for a rude awakening.

The Chinese cannot follow such a course without unleashing intolerable inflation at home. Selling down their vast reserves of U.S. debt and using the proceeds for domestic infrastructure projects (or anything else for that matter) is a vastly superior stimulus mechanism than "lending" to Americans so we keep "buying" their products. When Chinese authorities finally figure this out the United States will suffer the consequences.

My reaction: For China, selling U.S. Treasuries to finance domestic economic stimulus packages makes sense for three reasons:

1) As outlined by Peter Schiff, selling US treasuries would allow China to finance its spending at home without printing or borrowing money, thereby avoiding inflation.

2) If China sold its 2 trillion dollars in foreign reserves, the dollar would collapse, forcing the US to drastically scale back on its consumption of the world's resources, especially oil. Who knows? If the dollar's purchasing power drops enough, the US might become a net exporter of oil as abandoned SUVs litter the roads. China and other creditor nations would reap the rewards of cheaper oil and gas prices, boosting their domestic economies.

3) Increasingly, China's purchases of US debt aren't translating into new consumer spending. Instead, all the money China is pouring into the dollar is being funneled and absorbed into the black hole which banks call a balance sheet. China now faces the law of diminishing returns: it is take ever bigger purchases of US treasuries to prevent falling US consumer spending from collapsing entirely. It is only a matter of time before China accepts that funding the US trade and current account deficits is no longer worth it.

The Day China Starts Selling Treasuries

What should you do to prepare for the day China starts selling treasuries? For starters, buy some physical gold. Then ask yourself the questions: What would 10 dollar gas do to the US economy? Do I really want to be here when that happens?

Chris Hedges fears more of the same from Obama

Interspersed with reports of the truly needy in Trenton, New Jersey, we have this summation:

TruthOut.org:

If Barack Obama continues to turn to the elites who created the mess, if he does not radically redirect the nation's resources to assist the working class and the poor, we will become a third-world country. We will waste gargantuan amounts of money we cannot afford on our military, our national security state and bloated corporations while we damn the middle and working class to the whims, idiocy and greed of an entrenched, corporate oligarchy. Obama's appointments of Timothy Geithner as treasury secretary and Lawrence Summers as director of the National Economic Council are ominous signals that these elites remain entrenched.
[. . .]
So while our nation crumbles, physically and morally, while our empire implodes, while our economy tanks, the bankrupt elites who got us here play the merry-go-round game of power in Washington. They will continue to oversee our demise, including the obscene drain of our military and security budget, which now accounts for half of all discretionary spending. Pentagon officials have reportedly asked the Obama transition team for $581 billion, an increase of $67 billion. This increase does not, of course, include the $3 trillion for the wars in Afghanistan and Iraq. We will pay these loans later.

Banks, automotive companies and investment firms, all sinking under the weight of their own incompetence and greed, head to Washington, usually in private jets, to engage in the largest looting of the treasury in American history. And Congress doles out our money without oversight in the greatest transference of wealth upwards in modern times.

As this pitiful march of folly rolls forward, children in Trenton and across America go to bed hungry.

CIA proves once again why it's a Agency of Intelligence

A Tiny Revolution:

For a Mere 30 Billion Bucks, Here Is What You Get!

By: Bernard Chazelle

Every 4 years the best and the brightest in the US Intelligence community get together and peek into their $30 billion crystal ball to tell us what's coming. OK, they missed the fall of the Shah, they missed the demise of the Soviet Union, they missed the Internet bubble, they missed the credit crunch crisis, they missed the electoral success of Hamas, they missed the rise of Putin, Saddam's WMD were a slam dunk, but, never mind, this time they REALLY REALLY get it right! Check this out -- this is not a spoof: these are genuine quotes.

Excerpts from Global Trends 2025 by National Intelligence Council:

Canada will be spared several serious North-American climate-related developments -- intense hurricanes.

What? No more intense hurricanes in Saskatoon???

A terrorist use of a nuclear weapon would graphically demonstrate the danger of nuclear weapons.

Any moron could say that a terrorist use of a nuclear weapon would demonstrate the danger of nuclear weapons. What makes you a US Intelligence analyst is the most deliciously felicitous addition of the adverb graphically.

The Middle East will remain a geopolitically significant region in 2025 based on the importance of oil to the world economy.

This sounds like drivel but it's not: it's a nasty swipe at Barbados! (CIA humor)

No history of the past 100 years can be told without delving into the roles and thinking of such leaders as Vladimir Lenin, Josef Stalin, Adolf Hitler, or Mao Zedong.

Wait! What about Gerald Ford? (I've been told that, because of budgetary constraints, the report hopes to double as a history textbook for 2nd graders.)

With high [oil] prices, major exporters such as Russia and Iran would have the financial resources to increase their national power.

A sustained plunge in oil prices would have significant implications for countries relying on robust oil revenues to balance the budget or buid up domestic investment.

Or, as that famous spook, Charlie Brown, used to say, "I'd rather be rich and healthy than poor and sick."

To be a US Intelligence analyst requires the ability to write English as a second language:

The views of Western Europeans appear to be buoyed to the extent that the United States, its key allies, NATO, and the EU deepen practical multilateral approaches to international problems.

While you deepen your practical multilateral approaches, consider this interesting discrepancy between this report and its predecessor. Today we're told:

A global multipolar world is emerging with the rise of China, India, and others. The US is one among many global actors who manage problems.

But 4 years ago, the prediction was:

The 2020 Report projects continued US dominance, positing that most major powers have forsaken the idea of balancing the US.

So how can we trust these clowns if they contradict themselves every 4 years? Now they got me all worried about hurricanes in Saskatoon...

— Bernard Chazelle

Panel: Gulf War Illness Confirmed

Gulf War Syndrome? Isn't that all in their heads? That's more or less what the official line has been for 17 years.

by: Thomas D. Williams, t r u t h o u t | Report

Tuesday 18 November 2008

Anthony Averella, a Gulf War veteran, struggles with Lou Gehrig's disease as well as inadequate medical benefits. (Photo: Chiaki Kawajiri / The Baltimore Sun)

A federal health panel released conclusions Monday that evidence strongly and consistently indicates hundreds of thousands of US troops in the first Gulf War contracted long-term illnesses from use of pills, given by their own military to protect them from effects of chemical weaponized nerve agents, and from their military's pesticide use during deployment.

Research Advisory Committee on Gulf War Veterans' Illnesses report covers a large range of scientific research and government investigations on Gulf War illness. Its authors claim their "comprehensive analysis" resolves many questions about what caused Gulf War illness and what types of health care can address these serious conditions, which affect at least one in four of the 697,000 Gulf War veterans.

A committee summary describes veterans' various, painfully nagging and long-term health obstacles. "Illness profiles typically include some combination of chronic headaches, cognitive difficulties, widespread pain, unexplained fatigue, chronic diarrhea, skin rashes, respiratory problems, and other abnormalities. This symptom complex, now commonly referred to as Gulf War illness, is not explained by routine medical evaluations or by psychiatric diagnoses and has persisted, for many veterans, for 17 years. While specific symptoms can vary between individuals, a remarkably consistent illness profile has emerged from hundreds of reports and studies of different Gulf War veteran populations from different regions of the US and from allied countries."

In addition to pills supposedly protecting soldiers from nerve agents, the deadly agents themselves ultimately became a crucial wartime exposure. During the January and February 1991 ground war and after, US and allied forces destroyed large stores of Iraqi chemical weapons. And, as the war itself progressed, thousands of military chemical alarms went off, causing soldiers to don chemical protective equipment. Since then, the US General Accountability Office (GAO) and veterans' advocates have repeatedly criticized the lack of quality of the chemical protective masks and protective suits worn by US troops.

Two of the most controversial after-war explosions of underground Iraqi chemical storage depots were set off by US forces themselves at Khamisiyah, Iraq, on March 4 and 10, 1991. Few of the troops were wearing protective gear at the time even though US forces had access to earlier intelligence reports detailing the chemicals inside the bombed bunkers. The Defense Department (DoD) first estimated that 5,000 troops were exposed, and then increased the estimates repeatedly until the number rose to 100,000. Another GAO report said the number is much higher than that but gave no specific figure. At the time and years afterward, the DoD claimed the troops' exposure to chemical warfare agents was too weak to have seriously harmed their health.

Still another of the Research Advisory Committee's conclusions says, "Studies indicate that Gulf War veterans have significantly higher rates of amyotrophic lateral sclerosis (ALS) than other veterans, and that Gulf War veterans potentially exposed to nerve agents have died from brain cancer at elevated rates. Although these conditions have affected relatively few veterans, they are cause for concern and require continued monitoring."

Pesticides, mentioned in Monday's committee report, were used routinely during the war to protect service members against harmful or molesting insects biting troops throughout the Iraq war zone. Common Gulf War insecticides included d-phenothrin, chlorpyrifos, resmethrin, malathion, methomyl and lindane, according to the US Department of Defense Deployment Health Clinical Center. Deet and permethrin (a pyrethroid), are technically repellents rather than insecticides, says the center, but they were also an ultimate health concern, the center opines.

The Research Advisory Committee's continued conclusions say that limited other evidence, not totally decisive, shows that the armed service members could have become sick from low-level exposure to chemical warfare nerve agents as well as their close proximity to oil well fires, their receipt of multiple so-called preventative vaccines, and the effects of combinations of their hazardous other Gulf War exposures.

There's more.

How the wealthiest American make money off the poor

David Cay Johnston on Democracy Now, January 18, 2008

Tax Cuts: The B.S. and the Facts

A bubble and a crash are not my definition of a good economy.

from the author of "Wag the Dog":

Alternet: (via Thom Hartmann)

By Larry Beinhart, AlterNet. Posted November 11, 2008.

That tax cuts stimulate the economy is taken as a matter of faith, but the brute facts suggest otherwise.

The Myth

Do tax cuts stimulate the economy?

Yes. Tax cuts allow people to keep more of their own money. Therefore, they have more to invest and spend into the economy, and they have more money to start business and create jobs, therefore also helping to stimulate the economy. -- Yahoo Answers

I think when people take a look back at this moment in our economic history, they'll recognize tax cuts work. They have made a difference. -- George W. Bush

The Realities

The brute facts are these:

• Large income tax cuts are followed by a bubble and then a crash.
• High income taxes correlate with economic growth.
• Income tax increases are followed by economic growth.
• Moderate income tax cuts are followed by a flat economy.
• All of this is especially true as applied to the top tax rates, the amount paid on income that exceeds the highest bracket.

Detailed documentation follows...

Cell Phones and Blood Brain Barrier—a New Study

weepnews.blogspot.com:

Tuesday November 11th 2008, 7:34 am

From Cindy Sage
CHE-EMF Working Group

A new study from Sweden has been published by Eberhardt et al, and is co-authored by veteran EMF researchers Leif Salford and Bertil RR Persson of Lund University.

The study reports that cell phone GSM frequency exposure induces pathological leakage of albumin across the blood-brain barrier. Such effects have been reported in prior studies (for example, Salford 2003 and Schirmacher, 2007).

The blood-brain barrier is a critical structure in the brain that separates the flow of blood through the brain from the brain matter itself. Blood contains toxins being carried to excretory organs and also certain molecules like albumin that can be lethal to brain tissue. Exposure to extraordinarily small RF levels on the order of .... may open' the blood-brain barrier, making it 'leaky' and allowing toxins and molecules to cross directly into the brain, which in turn can cause nerve cell damage and neuron death.

Eberhard et al (2008) report that two-hour exposures to cell phone GSM microwave RF resulted in leakage of albumin across the blood-brain barrier (BBB) and in neuron damage. Neuronal albumin uptake was significantly correlated to occurrence of damaged neurons when measured at 28 days post-exposure. The lowest exposure level was 0.12 mW/kg (0.00012 W/kg) for two hours. The highest exposure level was 120 mW/kg (0.12 W/kg). The weakest exposure level showed the greatest effect in opening the BBB, and in neuron damage and death.

The current FCC exposure limit is 1.6 W/kg and the ICNIRP exposure limit is 2 W/kg.

"The most remarkable observation in our studies on the effects of microwaves on the BBB is the fact that the lower SAR values (around 1 mW/kg) give rise to more pronounced albumin leakage than the higher SAR values. If increase in dose had led to increased response, we feel that the risk of cellular telephones, base-stations, and other RF-emitting sources could be managed by reduction of their emitted energy. The indications from our study that the weakest fields are the biologically most harmful, poses a complicated problem. The most pronounced BBB-opening effect of the mobile telephone may not be in the most superficial layers of the brain, but several centimeters deep in central cerebral structures. It seems quite possible that bystanders in the vicinity of mobile phone users may be affected through passive GSM exposure, as well as larger groups exposed from distant base-stations. More, substantial research is needed, however, before reliable dose-response relationships can form the basis for recommendations for future exposure limit values that take into account non thermal effects of microwaves from mobile communications on the human brain."

JL Eberhardt BRR Persson AE Brun LG Salford LOG Malmgren, 2008.

Blood-brain barrier permeability and nerve cell damage in rat brain 14 and 28 days after exposure to microwaves from GSM mobile phones. Electromagnetic Biology and Medicine 27:215-229. DOI:10.10801536370802344037

Submitted by:
Cindy Sage
CHE-EMF Working Group

Are things so dire that Progressive Political Action might be possible?

the Monthly Review:

[. . .]

No one has a crystal ball to look into the future, and the nature of this crisis makes it impossible to predict what will happen next. But a few things seem obvious. First, the bailout to be carried out by the Treasury Department, though massive, will at best only stop an immediate meltdown. It will not bring the financial crisis to a close. The genie of financialization is out of the bottle and it is going to take time to get it back in again. The crisis of housing and mortgage lending has not in any way abated. The Federal Reserve and other agents of the federal government had already poured more than the $700 billion bailout package (including home mortgage rescues) into the financial system over the previous year in the form of loans, guarantees, swaps, giveaways, and takeovers (“A Tally of Federal Rescues,” New York Times, September 28, 2008; “Treasury and Fed Looking at Options,” New York Times, September 29, 2008). Moving rapidly from a lender of last resort to an investor of last resort, the federal government has enormously stretched its resources—already under strain due to the Iraq and Afghanistan wars.

Second, the rapid decline in U.S. economic hegemony is now obvious to the entire world and is likely to impair the willingness of foreign investors and governments to take dollars—necessary to finance the growing U.S. debt. International pressure is growing to prevent Washington from exporting its crisis abroad. Brazilian President Luiz Inácio Lula da Silva has demanded that Latin American, African, and Asian states not be made into “victims of the casino erected by the American economy” (“U.S. Crisis Deepens Divisions in S. America,” Washington Post, October 1, 2008). Indeed, U.S. imperialism is visibly weakening everywhere—despite $1 trillion of actual U.S. military expenditures in 2007 alone (see “The U.S. Imperial Triangle and Military Spending,” Monthly Review, October 2008).

Third, the real problem is still not being addressed: the stagnation of the U.S. (and advanced capitalist) economy. This is not so much an effect of financial crisis, as commonly supposed, as the cause of the vast growth of the financial superstructure in the first place—and why the bursting of the financial bubble is such an immense and currently insurmountable disaster (see “The Financialization of Capital and the Crisis,” MR, April 2008). The stagnation of production, symbolized by the recent $25 billion in federal loan guarantees to the big automakers, has received relatively little attention in the face of the astronomical financial crisis, but remains at the heart of the economic malaise.

Finally, it is now sinking deep into the public consciousness in the United States that the most important question in the end is: Who will pay? The bailout deal skirted the issue by leaving it up to the next president to come up with a way to compensate the public for losses from the Treasury’s buying up of financial toxic waste. What this means is that the real political battle has only just begun.

If these are the main dimensions of the problem, what should U.S. leftists do at this point? This is not an easy question to answer. It is not our job to fix their system. Nor in fact is it fixable. As Harry Magdoff and Paul Sweezy argued in 1988 in the aftermath of the 1987 stock market crisis, this is, judged from the longer-view, an Irreversible Crisis. There are therefore no visible solutions. Under these circumstances the emphasis should be on reducing inequality, strengthening the position of workers, providing decent jobs for people doing the work for which they are equipped, and guaranteeing such social essentials as: adequate health care, nutrition, housing, education, Social Security, retirement pensions, and environmental protection. Military spending should be cut drastically and used to fund needed social programs. A tax on securities trading and ideally a wealth tax should be imposed. Such things can only be achieved, however, if the population rises up and demands control over the political economy. Again, we should not pretend for a moment that any of this would repair what is wrong with the capitalist system. It would not. But some such set of measures is necessary to create a better life for the vast majority of the population, and as a step away from capitalism and toward a better socioeconomic alternative.

Certainly, there is something to be said for the view of U.S. Representative Peter DeFazio (D-OR) when he wrote in response to the Paulson bailout(“Wall Street Bailout Won’t Help Main Street,” Eugene Register-Guard, September 29, 2008): “In President Franklin Roosevelt’s Works Progress Administration, we invested in building roads, bridges, hydroelectric dams and other public works projects to rebuild our nation’s broken economy.” DeFazio went on to argue that if a bailout plan was to be adopted it should be paid for by a securities transfer tax, such as actually existed in the United States from 1914 to 1966. Senator Bernie Sanders of Vermont has proposed a five year, 10 percent surtax on individuals with incomes of more than $500,000 a year and of households with incomes of more than $1 million a year. None of this would solve the core contradictions of the system. But such actions would represent a start in the right direction. It is high time that in the relentless class war that has been waged by the capitalist class against the working class since the early 1970s, the U.S. populace at last begins to fight back en masse, insisting that their needs be met. In much of the rest of the world of course the continued existence of the U.S. dominated order of monopoly-finance capital, commonly identified as neoliberalism, is already—or soon will be—under challenge.

These problems will be discussed more fully in the December Review of the Month and in a book by John Bellamy Foster and Fred Magdoff, The Great Financial Crisis: Causes and Consequences,to be published by Monthly Review Press in January.

We need not remind MR readers that the present economic disaster is only part of a more general failure of the capitalist system, and that there are other equally pressing reasons for revolt: most notably, the growing catastrophes of war and environmental destruction. What we are facing quite clearly is a new historical moment, in which a genuinely radical politics may once again be possible—in the United States itself.

—October 3, 2008

Banks Ask for TOTAL INSURANCE from FDIC

Elaine Meinel Supkis at EMSnews:

Bloomberg.com: Banks See Flaws in FDIC Program to Guarantee Debt

JPMorgan Chase & Co., Bank of America Corp. andGoldman Sachs Group Inc. are among banks that told the government its program to back their bonds is flawed because it doesn’t have a strong enough guarantee.

The Federal Deposit Insurance Corp. guarantee for repayments in default needs to be clearer, fees are too high and banks need more freedom on whether to opt in, according to a letter from law firm Sullivan & Cromwell LLP posted on the agency’s Web site on behalf of nine banks. The comment period on the interim rules for the FDIC’s Temporary Liquidity Guarantee Program ends today.

The comments shed light on why almost a month after the government placed its guarantee behind new bank bonds, no U.S. company has yet tested the market. By contrast, under a similar program in the U.K., banks have issued the equivalent of 13.9 billion pounds ($20.6 billion) of government-guaranteed bonds.

“A guarantee obligation that is anything less than an obligation to pay all amounts due could severely curtail the demand for these securities and might impair a bank’s access to guaranteed funding,” New York-based Sullivan & Cromwell said in the Oct. 31 letter.

First of all, this letter from the Sullivan & Cromwell lawyers came online at the very last possible minute. This was deliberate, I would guess. This way, the outrageous demands from the Goldman Sachs and JP Morgan gnomes and the various pirate outfits would not raise a huge ruckus before comments close. We can’t ‘fight’ this latest attempt at robbery. This banking heist is being foisted upon the US people. Who are already very suspicious and rightfully so.

This news was just too much. At every possible turn, our own Treasury officials are cooperating with the Federal Reserve and our gnome community to privatize the profits and nationalize all the risks inherent in banking. Then, and only then, will they loan to us!

Talk about cheeky! They need this guarantee because they know what lies in the dark shadows of the future: the bankruptcy of our government.

Bloomberg.com: banks want total insurance of even interest rate profits!

Without rules that “fully and irrevocably” guarantee repayment, the size of the program and the number of banks that participate will be “significantly below the expectations of the FDIC, the industry, and all interested parties in the health of the U.S. banking system,” wrote Fred Sherrill, managing director at Credit Suisse Securities USA LLC in New York….

Interim rules for the government program fall short of traditional bond guarantees because they leave the timing of principal and interest payments in the event of a bank default open to changes by bankruptcy courts, Sherrill wrote.

“We are optimistic that, with appropriate modifications, the program will be successful in helping to mitigate systemic fear in the interbank and capital markets,” he wrote.

Standard & Poor’s issued a report Nov. 10 supporting the banks’ position on the guarantee.

“We do not view the issue of timeliness as a mere technicality,” according to the report from the New York-based unit of McGraw-Hill Cos.

This whole mega-trillion dollar future obligations being ‘insured’ by the US government who stands in for you and me and all of us, the banking gnomes want this to NOT be in US courts! They want this ‘insurance’ set in CEMENT. This way, we cannot escape paying for THEIR loans THEY hand out to ANYONE ON THIS PLANET. Got that? Anyone and anywhere.

Way back in the Stone Age, around 1931, our gnomes wanted this. They didn’t get it. They all then went bankrupt. The US government then launched the FDIC. But they cautioned the gnomes that this was NOT going to be an open window so they could make infinite loans. For back in the Stone Age, back in the 1930’s, our elders knew perfectly well, the banking gnomes would go to infinity in an eye blink if they were allowed to make infinite loans.

The insurance limits of the FDIC were restrictions. Set up to prevent endless lending that is increasingly reckless. Gnomes are infamous for reckless lending. They can’t help it. This makes them richer. So of course, they would dearly love to be able to simply write up loans, nonstop. They had a great scheme going with foreign powers this last 10 years. They could unload any and all lending they wrote by selling it to the countries running up huge trade surpluses with the US.

This round-robin of lending to the US so we could buy foreign goods and commodities was a great game which has collapsed. Due to the US being too deep in debt. Now, we enter a New World Order: everyone overseas knows that our days are numbered. They are not ready for us to fail. They want this to continue until 2020. This is the Chinese 50 Year Plan which the Politburo wrote up back in the very early 1980’s. We are a tad ahead of schedule here.

So they all want to buy our debts some more. But they don’t want to do it with no guarantee of INTEREST RATE PROFITS. Namely, they want to keep ahead of inflation. And worse, when we go bankrupt, they want to NOT be in our court system. And even worse, they want to be AT THE HEAD OF THE LINE when we do go inevitably bankrupt! This is a legal matter.

This way, they get paid first, not last. The US retirees go down a few rungs on the ‘pay up’ ladder. We have dumped 100% of our Social Security surplus into our National Debt black hole. Remember the push during the 1970’s and 1980’s that egged voters into allowing SS withholding taxes to nearly double?

This supposedly was so we could pay for the baby boomers retiring. But all this loot was put in the government red ink sea and to recover the interest due on this gigantic sum, over $5 trillion, the retirees have to be first in line when the US gives up running on red ink in about 2020.

[. . .] [text of letter from attorneys to FDIC]

The entire letter is a coup being pulled against our own government. The US people cannot insure all dollars being generated by the banks. The entire planetary financial system is focused on making us eat all the dollars the Bank of Japan generated via the carry trade. All this easy money is going to be paid back in full or else, is the message.

The US will be denied further loans from our competitors if we don’t sign onto this series of demands from the gnomes who channel all that lending from Asia, the Caribbean and OPEC, into the US economic system.

The kicker here is this: these same entities will also NOT buy US government debt if we refuse to insure all our debts in such a way, they take over all our finances and ALL OUR FUTURE TAX REVENUES. Many an empire has fallen for this trick. Spain, in 1750, owed over 100 years of future taxes to creditors, for example. They went bankrupt and lost their entire empire very rapidly. Napoleon even invaded Spain.

Then there was France: 75 years of future taxes were promised by the Bourbons. The king and queen then got their heads guillotined. The revolutionaries simply denounced these bad loans and kicked the bankers to the curb. Or rather, that is where their heads rolled. When outside lenders complained, France said, ‘Non!’ and ignored them.

So surrounding kingdoms invaded. Thus arose Napoleon. He turned the tables and set a formerly bankrupt France into this amazing war machine. Took over nearly all of Europe. Like Hitler who rose to power exactly the same way after Germany said, ‘Nein’ to paying similar debts. Both Napoleon and Hitler then went on to do the same exact stupid thing: invade Russia in the summer, hoping to take Moscow before fall.

This takes me back to something very serious: the Goddess of History doesn’t do much of anything but strive to not laugh to death at human follies. The US is trotting down this exact same road. The Chinese know about history and maybe even read my blog at the very top. After all, they know me!

And they worry about us choosing the Hitler/Napoleon road of not paying our debts. And the more debts we take on, the more likely we will have to choose this particular, deadly road. For the desire to rule the earth is not gone at all. Indeed, the US is firm in this: we want to rule this planet and eat up 24% of earth’s resources! We desire this greatly. And we cannot pay our past debts and will probably not use our courts to skip out. Instead, we will take the other road.

Shareholders Pay Price as Barclays, UniCredit Raise Capital Like `Casinos’

Incidentally, this story is hilarious because of what the reporter got various people to say. So, the banks are now ‘casinos’? HAHAHA. Yup. This reminds me of a conversation I had with a Chinese official back in 1985. He ran off to Atlantic City to get rich, quick. Instead, he lost every penny.

So I explained how the games played in casinos are rigged. I introduced him to a card sharp I knew who was, like me, banned from entering any casino in Atlantic City. ’The bank ALWAYS wins,’ I told him. He was the first to say to me, ‘I be bank!’

The banking system has evolved into this great, big, cheating casino. The latest demands by the gnomes is clear: they always need to win or else. Or else, they won’t lent infinite funny money to us that they create out of thin air.

FEEL FREE TO EMAIL ME AT emeinel@fairpoint.net

Thomas Friedman's econimic thoughts may be evolving

Elaine Meinel Supkis:

Thomas Friedman’s World Is Flat Broke: Politics and Power: vanityfair.com

It would be easy to dismiss today’s rant (however spot-on it might be) by New YorkTimes columnist Thomas Friedman as yet another ideological tirade against the U.S. automobile industry. But based on the bad news coming out of shopping-mall owner General Growth Properties [GGP], it is no wonder Friedman is feeling crankier than usual. That’s because the author’s wife, Ann (née Bucksbaum), is an heir to the General Growth fortune. In the past year, the couple—who live in an 11,400-square-foot mansion in Bethesda, Maryland—have watched helplessly as General Growth stock has fallen 99 percent, from a high of $51 to a recent 35 cents a share. The assorted Bucksbaum family trusts, once worth a combined $3.6 billion, are now worth less than $25 million.

But don’t expect Friedman to go from Beirut to Jerusalem begging for money. The distinguished columnist (and former New Establishment member) is still said to get at least $50,000 per speaking engagement on top of the millions he makes writing best-sellers.

He lost 99% of his wealth? This is good news. I wonder if he will finally figure out that he was a fool, a knave and a bastard? He is totally at fault here. The mess that ate up his wealth is the same that is eating all wealth: too much debt. The organization that allowed this beastly man to live in a mansion and ride in a private jet and lecture us little people from his high perch was all based on debt.

[. . .]

When stocks were at $70, I bet old Friedman felt like a king. Well, I hope he enjoys his new pauper status. Maybe he can write a book about how great it is to be protected rather than ravaged by exterior forces. Maybe this fool will connect more than two dots and figure out how his wife’s stocks became a bubble. For what we are looking at is where just one part of the massive Japanese carry trade lending flowed: to any organization willing to sop it up. This flood of funny money is now vanishing and so all the stocks that fed off of it are falling off the exact same cliff.

The cost of the Bailout so far? How about $2.5 trillion..!

Bailout Sleuth:

By Chris Carey on November 10, 2008 6:50 PM

Although the price tag on the Treasury Department's Troubled Asset Relief Program is $700 billion, the full amount that the government has invested in its rescue effort for struggling financial institutions appears to be closer to $2.5 trillion.

Bloomberg L.P., the parent company of Bloomberg News, said last week that it filed a lawsuit seeking information on the collateral that a group of banks pledged for some $2 trillion in emergency loans from the Federal Reserve.

Bloomberg asked a federal court in New York to require the Federal Reserve to disclose the identity of the banks that borrowed money through certain financing mechanisms, and to disclose what assets they pledged against those loans.

Bloomberg filed the suit after the Federal Reserve said that it would deny Bloomberg's request for the information under the Freedom of Information Act.

The financial firms that were eligible for some of the loans through the Federal Reserve included many of the same firms that split $125 billion in the first round of the Treasury Department's relief program.

The Treasury Department has approved more than $170 billion in capital injections for banks that applied to sell preferred stock to the government. It has about $80 billion remaining for additional participants, who must submit their applications by Friday.

The Treasury Department announced Monday that it also is investing $40 billion in the preferred shares of American International Group Inc. The financing it part of a new plan to salvage an earlier rescue plan that was going awry.

The revised plan brings the total assistance that AIG has received from the Federal Reserve and the Treasury Department to $150 billion.

Bloomberg reported that the Federal Reserve made its $2 trillion in emergency loans under 11 different programs, eight of which were created in the past 15 months.

The Treasury Department also made a little-noticed change to tax policy that experts say could save banks that merge with other banks as much as $140 billion in taxes. One of the biggest beneficiaries of the change would be Wells Fargo & Co., which is absorbing Wachovia Corp. in a deal spurred by the Federal Deposit Insurance Corp.'s concerns about Wachovia's solvency. According to an article Sunday in the Washington Post, Wells Fargo stands to save about $25 billion in taxes.

Adding together the $170 billion that the Treasury Department has currently agreed to provide banks in additional capital, the $150 billion that the Treasury Department and the Federal Reserve are providing to AIG and the $2 trillion that the Federal Reserve has provided banks in emergency loans brings the total assistance to $2.32 trillion.

If the estimated savings from the new tax breaks are included, the assistance would climb to $2.46 trillion. That total does not include other measures not focused directly on banks, such as Treasury Department's $200 billion in support for Fannie Mae and Freddie Mac, and the Federal Housing the Administration's $300 billion HOPE for Homeowners program.

The Carbon Racket

Sanders Research Associates: via Catherine Austin Fitts:

By Carlton Meyer Nov/11/2008

The United States is the major opponent to a global carbon “emissions” trading scheme. Most people blame this on ignorance in the Bush administration and expect President-elect Obama to endorse the “cap-and-trade” scheme of the 1998 Kyoto Accords. This would be a mistake. Cap-and-trade schemes push polluters and their jobs to poorer nations, while enriching bankers with trading commissions and rewarding established polluters with valuable credits.The reason carbon trading is popular is because existing polluters are exempted by providing them with free emissions credits. In many cases, they are provided with extra credits to allow future growth. Amazingly, they can sell these free credits for a hefty profit. Meanwhile, carbon trading provides the financial community with a new line of business where they earn commissions, while the cost of carbon trading falls upon consumers as prices rise.

This is why it was easy to convince most major industrialized nations to agree to a global cap-and-trade scheme. Australia was opposed, yet its new government has promised to sign on. President-elect Obama prefers a 100% auction scheme so that existing polluters must buy credits, yet this idea of fairness is probably politically unacceptable in Congress.[1] Meanwhile, polluters whose nation did not sign at Kyoto have a competitive advantage. Carbon caps are exploited to reduce labor costs. Germany is one of the only large nations that reduced their greenhouse emissions to meet Kyoto targets. However, most of the reduction was possible because polluting factories moved to poorer nations. Nations that agreed to carbon trading now find domestic factories and their jobs moving aboard, where they can pollute for free and use cheap, coal-powered electricity.

For example, European cement makers may move to countries like Morocco. Dutch manufacturers with the world’s cleanest and most efficient industrial equipment cannot compete with those in Asia that use older and dirtier techniques because emissions restrictions caused their electricity rates to soar.[2] This is another reason why carbon trading is popular with corporations. It gives them an excuse to move manufacturing abroad where labor and electricity is much cheaper.

Carbon Taxation

Those aware of the carbon racket advocate a carbon tax so that money flows to governments, rather than indirectly to established polluters and “carbon traders.” It results in a faster reduction in greenhouse emissions because today’s biggest polluters would pay the most, thus encouraging them to adopt new technology. A carbon tax favors new companies that introduce environmentally friendly equipment. For example, the newer Boeing 777 passenger jet is around 50% more efficient that the older 747 because its airframe incorporates more lightweight composite materials and the 777 uses two bigger engines, rather than four in the 747. With carbon trading, a new company that plans to use 777s must pay for carbon credits to introduce a more environmentally friendly aircraft into the market, while users of the 747 continue to fly with gifted credits. Likewise, a builder of a clean coal plant must buy carbon credits to compete with an old dirty coal plant that paid nothing.

This is why major corporations support carbon trading. It requires them to pay nothing and rewards them with billions of dollars in carbon credits that future competitors must buy from them in the market. In contrast, a carbon tax treats all polluters equally, thus favoring the cleanest. In addition, carbon trading provides no incentive for governments to closely monitor emissions, which results in cheating. In contrast, a carbon tax ensures keen government interest in monitoring emissions to pursue tax cheaters. A final advantage of a carbon tax is that it can be levied on imports from nations that are heavy polluters,

Ban or Tax Coal Exports

Carbon trading is a racket. A carbon tax is better, but difficult to administer because pollution is a worldwide problem. A practical solution in some nations is to gradually ban or heavily tax coal exports, especially to nations that use old coal powered plants without scrubbers. Australia is the world’s top coal exporter generating $17.5 billion in 2007. The USA produces its own coal domestically, and exports around 6% of total production. Demand has increased rapidly and worldwide prices have recently tripled. Coal companies have not invested enough in capacity expansion, so prices will rise further.[3]

The simple solution for Australia and the USA to restrain energy prices and reduce worldwide greenhouse emissions is to heavily tax or gradually ban the export of coal. Why should Australians and Americans pay outrageous prices for coal generated electricity in order to supply China with all the coal it desires? Even dictators in oil exporting nations do not expect their citizens to pay the market price for oil, so why should Americans and Australians pay the world market price for coal?

The U.S. Department of Energy reports that hundreds of new coal plants will be built in the USA over the coming decade because it is the cheapest option to meet growing demand. During his campaign, President-elect Obama expressed conflicting views on coal, preferring “clean” coal if practical.[4] The price advantage has weakened as prices soared due to exports. Those concerned about pollution and climate change are blocking the construction of some coal plants in the USA. Why should Americans pay high prices for imported energy, while cheap coal is exported and burned abroad? Moreover, much of the exported coal is burned in old power plants that produce far more emissions than new, modern power plants in the USA.

While some call the USA the “Saudi Arabia of coal,” they overlook the challenges of increasing domestic coal production. Data showing the USA has more than a hundred years of coal reserves always use “at current rates of consumption.” Future rates of coal consumption will be much higher due to population growth and depleting reserves of natural gas and oil. In addition, coal-to-liquid refineries are under construction to produce expensive synthetic petroleum that will deplete coal reserves as well. Finally, new “clean coal” technologies require substantial energy to operate, so more coal must be burned to clean it.

The USA was the world’s leading exporter of oil a few decades ago. It is now the world’s leading importer. American and Australian coal companies are booking record profits, although an export ban should cap price increases. The only opposition to this sensible idea comes from free trade advocates, who view such action as a sin. Yes, banning the export of coal would result in lower electricity prices, preserve this non-renewable resource for future generations, and reduce worldwide pollution, but it is a free trade sin.

The Cap and Trade Illusion

Cap-and-trade emissions schemes are an ineffective method of reducing pollution. Taxes are better since they produce revenue that can be directed toward energy research. However, pollution is a worldwide problem that must be addressed with international agreements and import/export taxes efforts. These complex issues are evaded when victory is declared by implementing carbon trading schemes that push polluters and their jobs to poorer nations, while enriching bankers with trading commissions and established polluters with valuable credits.

_________________________________

[1] “Interview with Barack Obama”, SF Gate.com, January 17, 2008.

[2] “U.S. looks to green Europe - Mistakes there could shape American plans to curb carbon gases”, MSNBC, April 10, 2007.

[3] “Coal mine expansions in U.S. can’t match global shortfall”, Mineweb, June 17, 2008.

[4] “Barack Obama Statements on Coal”; Sourcewatch, accessed November 10, 2008.

Average Change in Annual Houshold Income in Various Countries

from a tiny portion of a long post by Elaine Meinel Supkis:

Interview with Nassim Nicholas Taleb and Dr. Mandelbrot,

Ten Minutes to scare the pants off of you.

10/21/08: PBS NEWS HOUR

During Democratic Convention, Undercover Denver cops fake fight with Police Commander

http://www.thedenverchannel.com/news/17930712/detail.html#-

And they were so convincing that some other officers maced them.

Hmmm. Causing a fake fight with police. And, coincidentally, 106 people were arrested there that night. Couldn't have been any connection there, could there? Of course not...

Some owners deserting factories in China

LA Times:

Email Picture

Don Lee / Los Angeles Times

Equipment is moved last month at the shuttered Jianglong Group factory in Shaoxing, China. The textile dye firm was abandoned by the owner. Government officials said recently that he and his wife had been caught.

Financially troubled plants are being abandoned by the boss, leaving behind unpaid workers and debts.

By Don Lee
November 3, 2008

Reporting from Shaoxing, China -- First, Tao Shoulong burned his company's financial books. He then sold his private golf club memberships and disposed of his Mercedes S-600 sedan.

And then he was gone.

And just like that, China's biggest textile dye operation -- with four factories, a campus the size of 31 football fields, 4,000 workers and debts of at least $200 million -- was history.

"We're pretty much dead now," said Mao Youming, one of 300 suppliers stiffed last month by Tao's company, Jianglong Group. Lighting a cigarette in a coffee shop here, the 38-year-old spoke calmly about the bleak future of his industrial gas business. Tao owed him $850,000, Mao said, about 60% of his annual revenue. "We cannot pay our workers' salaries. We are about to be bankrupt too."

Government statistics show that 67,000 factories of various sizes were shuttered in China in the first half of the year, said Cao Jianhai, an industrial economics researcher at the Chinese Academy of Social Sciences. By year's end, he said, more than 100,000 plants will have closed.

Another Paradigm for the Debt Economy

This post dove-tails nicely into the following one I just posted about a typical couple being washed out of the middle class by a tsunami of debt...

charles hugh smith in of two minds.com:

The Company Store, Debt and Serfdom

Way back in May 2006 I wrote about Michael Hudson's work on The New Road to Serfdom: A Negative-Equity Mortgage.

I am now thinking there's another analog to our entire economy: the company store. I actually lived in one of the last plantation "company towns" in Hawaii, and though Dole Pineapple didn't operate a "company store" in 1969, earlier plantations (and coal mining towns, etc.) did--and the set-up was sweet indeed.

Much like a serf renting/sharecropping land owned by a manor-house or nobility, the plantation worker needed to borrow money to buy food and other necessities at the company store, which just happened to operate as a monopoly and just happened to charge skyhigh prices. (The serf needed to borrow seed for the next planting, and money to buy food for the family in between harvests.) The rate of interest paid by the serf/worker was always much higher than market rates--another monopoly capital (and highly profitable) feature of the set-up.

The system's most pernicious feature: the worker/serf never escaped debt. Indeed, the system was constructed to increase the debt to the point it could never be paid off, insuring a lifetime of profitable servitude to the nobility/corporation.

Now the Powers That Be, as embodied in this Republican Administration and its lackeys/minions in both parties, have perfected an entire economy based on this "Company Store"/manor-house model.

As Jesse over at Jesse's Cafe Americain noted in The Safety and Immediacy of Liquid Assets in a Deleveraging Panic:

This is a critical point, and little debated or understood as it is emotionally charged with words like 'socialism.' Most do not understand the fractional reserve banking system, but it seems more official, more palatable, to give them billions, enormous sums, and to give the public as little as possible for fear of debasing the value of work and the currency.

Paulson and Bernanke both view the economy as an adjunct to the financial system so from their perspective the choice is obvious.

The power of the serf/company store model is only truly revealed by examining not just negative-equity home mortgages but negative-equity auto loans, credit card debt, etc. How about the serf who bought an SUV with no money/low money down? How much is his auto loan, and how much is the gashog SUV worth now? Far less than what he owes; he has hugely negative equity in not just his house but in his vehicles and indeed, in everything he "owns" which was purchased on credit.

And how about the clothing and TVs and other toys purchased on a zero-interest "teaser rate" credit card? How much is all that used stuff worth? Ten cents on the dollar? And what happens when the debt serf--who bless his naive little heart, actually believes the illusion that he is "middle class"--har har har--is late one payment? Bam! That zero-interest balance is suddenly being charged 23% interest.

Oh, and the late fee is $50. And one other thing--all the other credit cards he "owns" will also pop to 23% interest because, well, they can raise the rates whenever they want--but the official excuse is he's now a "credit risk."

As if he was ever not a credit risk?

Just like the worker and the company store, the credit card debt actually rises regardless of how much the worker pays. It's a beautiful lifetime system for serfdom/poverty and endless rentier profits for banks. Thus we read story after story in which a credit card balance of $1,500 balloons toover $5,000 as interest rates are jacked to 24% and huge late fees and overdraft fees are levied.

As Merle Travis wrote about the company store:

You load sixteen tons . . . what do you get?
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store

Exactly what is the difference between the serf or the plantation/mine worker and today's debt-enslaved "middle-class" peasant?

A key con of the Company Store model circa 2001-2007 was that extracting money from your home equity was essentially identical to withdrawing savings. This conceit was enabled by absurdly low interest rates and essentially qualification-free money; if equity is like savings, then withdrawing it--at almost no extra increase in monthly mortgage payments!--was just like taking money out of a savings account.

Except for one little tiny feature of the equity extraction--it was debt, not savings.

Another key con was the illusion that this debt was essentially risk-free. With house prices rising, and loans getting ever cheaper, then only a fool would forego the chance to extract and spend the "savings" of rising equity.

As often noted here, real wages (as measured by purchasing power or adjusted for inflation) has been stagnant since the mid-1970s. Like the indentured serf, the average "middle class" (sounds so much better than debt-serf, doesn't it?) wage earner saw a seemingly golden path out of stagnating purchasing power: borrow more for a lower monthly payment.

But alas, the teaser rates on the adjustable-rate mortgage and the credit cards expired, and now the real costs are being levied.

Many readers write to remind me that "nobody forced anyone to take out the loan," and that is true. We all have so-called free will. But it is naive to focus on free will (which does not operate in a vacuum but in a cultural and historical context) and ignore the incredibly concentrated power of the Ministry of Propaganda. I have illustrated the rough inter-connected structure of the Ministry in this helpful little diagram:

Most astonishingly, the Ministry has succeeded in diverting the nation's attention from the Company store/debt-serf realities to a bogus "debate" over "socialism" and "capitalism." As Michael Hudson has pointed out, the rentier class which owns the mortgages, loans and credit card debt is not capitalist at all; it is essentially medieval in structure. It takes no risks, creates no innovations, invests no capital in new enterprises or indeed, performs any classical capitalist functions at all.

It simply indebts the serfs, convinces them via doublespeak, propagands and phony statistics that they are still gloriously "middle class" (that is, obscuring or reifying their true nature as mere miserable debt serfs) and then sits back and collects the interest and profits which the debt serfs will be struggling to pay until their last breath.

Nice set-up. No criminal extortion scheme could be more effective or venal.

We should note that the Democratic members of the Powers That Be all voted for the banker-bailout, knowing full well that the bankers/company store could have been allowed to go bankrupt and the $700 billion could have spent--if it was to be spent at all--on education, rebuilding bridges, transmission lines, and other desperately needed infrastructure projects.

But this could not be allowed to happen. Why? Because money spent on infrastructure flows directly into workers' pockets, removing the intermediary debt which is the entire key to the Company Store model. The Paulson bailout's key feature is that it does not put a single dollar in the pocket of a mere serf/worker--every dollar goes to save the current system, which is based on the serf borrowing money constantly at ever higher interest rates.

[. . .]

Jim Rogers doesn't care for the current Economic Bailout, parts one and two

heck, the guy wears a purple bow tie and a pink shirt. That must count for somethin'....

Bloomberg via YouTube:

DEA complicit in drug trade, says Morales

I'm shocked! Shocked, you hear! Next thing you know, he'll be saying the CIA was in on it...

Agence France-Presse via RawStory:

Morales says evidence will be presented to President Obama

Bolivian leader Evo Morales on Thursday accused the US government of encouraging drug-trafficking as he explained his decision to banish the US Drug Enforcement Administration (DEA).

Morales, a staunch opponent of the Washington government, said the staff from the US agency had three months to prepare to leave the country, because "the DEA did not respect the police, or even the (Bolivian) armed forces."

"The worst thing is, it did not fight drug trafficking; It encouraged it," the Bolivian leader said, adding that he had "quite a bit of evidence" backing up his charges.

Presidential Minister Juan Ramon Quintana presented a series of documents and press clippings at a news conference, which he described as "object data" that had influenced Morales' decision to suspend DEA activities last week.

Quintana said Morales was ready to present the evidence to incoming US president Barack Obama "to prove the illegality, abuse and arrogance of the DEA in Bolivia."

Throughout the 1990s, the DEA in Bolivia "bribed police officers, violated human rights, covered up murders, destroyed bridges and roads," said Quintana.

Morales earlier Thursday said that after a 1986 operation in Huanchaca National Park, it was determined that the largest cocaine processing plant "was under DEA protection."

He also charged that the DEA had investigated political and union leaders opposed to neoliberal economic policies, which he said amounted to political persecution.

On Wednesday, he had accused the DEA of shooting and killing Bolivians during their anti-drug operations, including members of the coca farmers' movement.

Morales, Bolivia's first indigenous president, has served as the leader of the Bolivian coca-growers union. The coca plant, from which cocaine is derived, has many uses in traditional Andean culture.

The Bolivian leader announced last Saturday he was suspending the work of the DEA in the impoverished Andean nation, and accused it of having encouraged political unrest that killed 19 people in September.

"From today all the activities of the US DEA are suspended indefinitely," the Bolivian leader had said in the coca-growing region of Chimore, in the central province of Chapare, where he was evaluating efforts to combat drug trafficking.

The DEA has denied Morales' accusations.

US President George W. Bush, in a finding released in September, added Bolivia to a list of countries that have "failed demonstrably" in anti-drugs cooperation.

Reality 101—a horror story for our time

Warning. This is one of the most frightening things I've ever read. (But then, I say that about almost all the things I post...)

from Hubris and Nemesis:

The Financial Crisis and an Ordinary man.

• Nov. 3rd, 2008 at 12:57 AM

With all the facts and figures going around, I think it's time to talk about what has happened, but on a personal scale, ie the story of just one man and his family as they started out with hope and ended up reaping the whirlwind as so many families have so far. Let's take a guy called Joe, for example. Joe went to college and got his degree in Information Techonology. After graduation , Joe landed a really nice, well paid job with a software development company in Silicon valley, California. He enjoyed the good life, he went out with his friends and partied all night long and managed to produce the goods every day. Normal for a young guy in Silicon Valley, the Nirvana of Information technology in the States!
One day, Joe meets Sarah, a gainfully employed, pretty blonde with Blue eyes and Joe is in love from the get go. They go out, have fun, both working, money is not a problem. These are the boom days in IT and nobody even dreams that these days will ever end. It's the gravy train and they both have first class tickets all the way. Love turns to thoughts of marriage and Joe and Sarah start to plan for the monumental day. They start to think; well, we'll have to buy a house to raise a family.

So far, so good.

...but from there, like a roller coaster cresting the top of a hill, it's a gradual, then increasingly steep decline...