Saturday, July 2, 2011
It's China's turn to wrestle with a pile of bad debt: Massive infrastructure spending has created a mountain of bad loans
The U.S. banking system was the first to get hit by the financial Panic of 2008. For the past year, European bankers have been scrambling to head off exploding debt bombs in Greece and other countries with high debt loads.Now, it looks like it's China’s turn to face up to a giant pile of bad debt. This being China, though, the story isn’t playing out like an ordinary Western financial crisis.
The source of China's current problem dates back to the collapse of the global economy in 2008 when, like its Western counterparts, the Chinese government unleashed a flood of cash to stimulate its economy. Much of that money was loans from state-owned banks to local governments, which were supposed to spend all those yuan on new roads, railways, power plants and other projects to help China maintain its torrid pace of economic growth.
Many of those yuan didn't get where they were supposed to go. It's still not clear exactly where they all went. But this week the Chinese government announced the results of a nationwide audit of 31 provinces and hundreds of municipalities which found that those local governments are now carrying some $1.6 trillion worth of loans. And a large portion — as much as 20 percent — may have to be written off as bad debt. (Reader contributed - read more)
Weeks-long wildfire forces closure of massive Okefenokee swamp
All entrances to the Okefenokee National Wildlife Refuge are closed through the holiday weekend as firefighters continue to battle a 10-week-old blaze that has burned well over half the 400,000-acre preserve.Jason Curry, a spokesman for the federal Incident Management Team, said the preserve will be shuttered to the public indefinitely -- at least until authorities, likely with major help from the weather, get it under control. The group is trying to corral what is being called the Honey Prairie Complex Fire.
"Mother Nature is in charge, with both the cause of the fire and the resolution to it," he said.
Lightning first sparked a fire on April 28 and it has been burning, in some form, ever since -- consuming about 268,000 of the refuge's 402,000 acres.
National Weather Service meteorologist Coleen Decker noted that there's no immediate relief in sight.
"We are looking forward to dry conditions, with relative humidity near 30 to 35% (and) temperatures slightly above normal at 95 degrees," she said of the upcoming forecast for the region. "We are not expecting significant precipitation until Tuesday." (read more)
Coal Lobby Warns Wind Farms May Blow Earth Off Orbit!
In The Know: Coal Lobby Warns Wind Farms May Blow Earth Off Orbit
All you global warmists better take heed!
Official Calls For Riverside, 12 Other Counties To Secede From California
Riverside County Supervisor Jeff Stone apparently thinks so, after proposing that the county lead a campaign for as many as 13 Southern California counties to secede from the state.
Stone said in a statement late Thursday that Riverside, Imperial, San Diego, Orange, San Bernardino, Kings, Kern, Fresno, Tulare, Inyo, Madera, Mariposa and Mono counties should form the new state of South California.
The creation of the new state would allow officials to focus on securing borders, balancing budgets, improving schools and creating a vibrant economy, he said.
“Our taxes are too high, our schools don’t educate our children well enough, unions and other special interests have more clout in the Legislature than the general public,” Stone said in his statement.
He unveiled his proposal on the day Gov. Jerry Brown signed budget legislation that will divert about $14 million in 2011-12 vehicle license fee revenue from four new Riverside County cities.
Officials fear the cut will cripple the new cities of Eastvale, Jurupa Valley, Menifee and Wildomar.
Stone said he would present his proposal to the Board of Supervisors July 12.
The new state would have no term limits, only a part-time legislature and limits on property taxes. (read more)
It's happened: Minnesota Government Shuts Down
Minnesota encountered its second government shutdown in six years on Friday as Democratic Gov. Mark Dayton and Republican lawmakers failed to reach a compromise on closing the state's $5 billion budget gap.Meanwhile, lawmakers in Iowa averted a shutdown Thursday, and several other states waited for governors to finalize their budgets.
Without a two-year budget agreement in place, state parks and the Minnesota Zoo will be shut for the July 4 holiday weekend, nonemergency road construction will halt and thousands of state workers will be furloughed.
Government functions deemed critical by a county judge on Wednesday will keep operating, including the state patrol, prisons and the Medicaid health-insurance program for the poor. Courts will stay open, and welfare and food-stamp payments will continue.
Republican leaders met with Mr. Dayton several times Thursday, but both sides gave few details about the talks.
Senate Majority Leader Amy Koch, a Republican, said late Thursday that the state's health and human-services budget was a sticking point in the negotiations.
Ms. Koch was interrupted several times by protestors in the Capitol chanting, "Tax the rich!"
Republican lawmakers had suggested approving a short-term budget to keep the government running, but Mr. Dayton had said he wasn't interested. (read more)
"Passing major debt deal by Aug. 2 seems doubtful" -- Is America's financial meltdown just around the corner?
ime for a broad deal to raise the government's borrowing limit and slash spending may be even shorter than it seems.Even if quarreling lawmakers agree this month on a deal, it is doubtful Congress can pass it before an Aug. 2 deadline. That's when the Treasury Department says the U.S. will run short of money to pay bills.
Congress may have to vote at least twice on the political poisonous issue of raising the $14.3 trillion debt ceiling to avoid such a default. The first would be on an interim raise, possibly tens of billions of dollars, to provide time to wrap up a grand bargain that would let the government to go trillions deeper into debt - in exchange for spending cuts and possibly higher taxes. (Source)
Treasury confirms deadline for raising debt limit: One month until crisis
Congress has one month to raise the nation's borrowing limit or the government will default on its debt, the Treasury Department said Friday.Treasury officials confirmed the Aug. 2 deadline in a monthly update that assesses the nation's borrowing situation. The United States reached the $14.3 trillion limit in May. Higher revenue and accounting maneuvers have allowed the government to keep paying its bills in the interim.
Treasury Secretary Timothy Geithner urged Congress to raise the limit and "avoid the catastrophic economic and market consequences of a default crisis."
President Barack Obama and Congressional Republicans are engaged in tough negotiations over resolving the issue. Republicans are demanding deep spending cuts as a condition of increasing the limit. But Republicans will not support tax increases, which Democrats say must be part of any deal.
A Democratic official said Thursday that the real deadline for reaching agreement is mid-July. That's because congressional leaders need a week or two to finalize the details and line up votes. (read more)
Will Barack Obama Use The 14th Amendment As A Way To Get Around The Debt Ceiling?
As the deadline to raise the debt ceiling draws closer, many are now wondering if Barack Obama will try to go around Congress if a deal is not reached by August 2nd. In particular, a number of voices (including U.S. Treasury Secretary Timothy Geithner) are now touting the 14th Amendment as a way to get around the debt ceiling. There are others that believe that Barack Obama should invoke "national security" in order to avoid a default. If the Republicans and the Democrats do not reach a deal by the end of July, things are going to get really, really interesting and there is no telling what Barack Obama may do.Section 4 of the 14th Amendment to the U.S. Constitution says the following....
"The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."
At a breakfast hosted by Politico last month, U.S. Treasury Secretary Timothy Geithner actually pulled out a copy of the Constitution and read this clause out loud.
Geithner (and others) are now attempting to argue that the debt ceiling is actually unconstitutional. They believe that the phrase "shall not be questioned" means that if the U.S. government refuses to make debt payments it would be directly violating the U.S. Constitution.
So what does Barack Obama think of this legal theory?
Reporters have been trying to ask him this question, but right now Obama is not answering.
Certainly Obama would very much prefer to have the Republicans and the Democrats reach a deal far before the debt ceiling deadline arrives.
So what will Obama do if a deal is not reached?
Nobody seems to know. (read more)
Obama Raffle Video Not Legal, Election Law Experts Say
A video of President Barack Obama filmed in the White House and included in a fundraising e-mail sent to supporters is not legal, two election law experts told CNSNews.com.The video was included in an e-mail sent to supporters of President Obama promoting a fundraising drive that offered participants a chance to win an invitation to dinner with Obama and Vice President Joe Biden.
The video was filmed in the White House and, because it is intended to raise funds, constitutes a violation of federal law, according to two election law experts contacted by CNSNews.com.
“I think this is a violation [of the law],” Cleta Mitchell, a member of the American Bar Association’s election law committee, told CNSNews.com.
“It is a specific prohibition on solicitation [of money] by the president, the vice president, or any member of Congress on any federal property,” she said. (read more)
Authorities offer $500 for tips in heist of more than 60 hydrants and manhole covers
Water agency officials hope that rewards offered Friday will flush out whoever stole more than 60 fire hydrants, manhole covers and other pieces of utility equipment throughout Riverside County.The Eastern and Western municipal water districts are each offering $500 for tips that lead to the arrest and conviction of the thieves, whose actions are not only costing the utilities money, but “endangering communities,” according to a joint statement released by the agencies.
Officials pointed out that missing hydrants prevent fire crews from accessing badly needed water supplies during a blaze, and missing manhole covers put drivers at risk.
The fact that the thieves are dislodging fire hydrants without triggering a flood reflects a “level of sophistication” that could indicate the suspects have experience with plumbing or similar work, according to Western Municipal Water District spokeswoman Michele McKinney-Underwood.
“Whoever is doing this must have the ability and know-how to turn off the valve,” she said.
In addition to hydrants and manhole covers, thieves have stolen backflow devices, which control irrigation and prevent contamination of a resident's water source.
The thefts have increased in frequency over the last two months but have been an ongoing problem since the prices of copper, aluminum and other base metals began rising a few years ago, according to the water agencies. (read more)
Thieves steal and destroy air conditioning units at Animal Shelter
Large industrial fans were being used Friday to cool off more than 100 orphan dogs and cats at the Animal Welfare League after thieves destroyed the adoption center's main air conditioning units.After an event Thursday night, organizers noticed the center felt hot and found the AC units damaged on the roof. One unit was completely broken, the other torn apart.
"The wires were cut and the copper piping and coils on the inside were stolen," said AWL manager Diane Spryka.
With the July heat, Spryka is scrambling keep the animals safe.
"We need the ventilation. We need the air circulating to have air exchanged for our animals," she said.
Some animals exposed to high temperatures for long periods of time could suffer from severe health consequences and even death, said Bridget Nolan, a volunteer at the shelter.
One of the AC units can be fixed, but the estimated cost for its repair is $20,000, an unaffordable price for the shelter on a tight budget.
"We need funds," said Spryka, near tears. "It saddens me because for 35 years we’ve been here to serve the community. Now the funds we receive that could be going directly to the animals will be used elsewhere to stabilize the units. (read more)
50 Yemeni troops missing after battling militants
About 50 Yemeni soldiers are missing after battling Islamic militants in the south of the country, a military official said Saturday.The soldiers have been missing since Thursday, following fierce clashes with the al-Qaida-linked group Ansar al-Sharia in the southern city of Zinjibar, said the official, who spoke on condition of anonymity because he was not authorized to speak to reporters. On Thursday, 15 soldiers and eight Islamic militants were killed in fighting in Zinjibar.
The official said he had no further information on the fate of the missing soldiers.
Government forces are battling al-Qaida's most dangerous wing in southern Yemen at a time when the weakened regime of President Ali Abdullah Saleh faces an array of opponents. Government forces do not appear to have the will to fight the Islamists, raising fears that al-Qaida is making significant gains.
Recent advances made by the militants in the nearly lawless south are a clear attempt to exploit the power vacuum and turmoil caused by a popular uprising against Saleh that began in February. The revolt gained momentum when a coterie of the president's close aides, military commanders and Cabinet ministers joined the protesters.
Government troops and warplanes have so far targeted only two southern cities, Zinjibar and Jaar, in Abyan province. (read more)
Protests in Belarus over economic crisis threaten stability of government
Belarus’ latest “silent protest” was roughly quelled on Wednesday evening in Minsk as police detained more than 200 participants in the demonstrations. In Belarus, zero-tolerance, heavy-handed crackdowns on opposition demonstrations are nothing new, but the protests are growing in size and extending beyond Minsk at a pivotal moment for Belarus, when analysts are looking closely for signs that the country’s economic crisis is weaking the current regime’s grip on power. Yet in a country where dissatisfaction does not equal political activism and the opposition is viewed with some suspicion by rank-and-file Belarusians, Alexander Lukashenko should not yet be counted out.“It was Belarusian special forces, spetsnaz, and police officers. No one presented documents, despite laws saying that it is necessary. They were simply hunting for people. They attacked protesters, manhandled them and threw them into buses,” said Vladimir Labkovich, a representative for the Minsk-based Viasna human rights organization. So ended the latest manifestation of the “silent” protests, weekly demonstrations largely organized through online social networks in which participants express solidarity solely by clapping. According to Viasna, as of yesterday evening around 60 of those detained had been charged with hooliganism, which carries a 15-day sentence in the country.
As Belarus sinks deeper into a staggering economic crisis that erupted in May, the possibility of growing unrest has been cited as a serious danger to the regime. While Belarus attempts to keep a handle on the domestic situation, where a devaluation of the Belarusian ruble has led to massive shortages and increased hardships, it is also being squeezed by Russia to sell state-run assets in exchange for financial support to pull the country out of the crisis. Yet this strategy also presents its own dangers, note analysts, who say that a possible loss of sovereignty to Russia could seriously decrease Lukashenko’s stock before the Belarusian people. (read more)
4 Little Charts Show the Coming Depression
You don’t have to be a conservative or a liberal, or anything at all, to understand that America is about to be flattened by a tidal wave of debt.That’s right, folks. If Obama’s latest proposed budget passes, he takes that debt up to 90.4 percent of GDP. At that level, debt held by the public will be nearly as high as the highest it’s ever been in U.S. history.
It doesn’t matter whether you prefer the CBO’s figures or Obama’s. We’re merely talking about different shades of disaster. When you’re dead you’re dead. There aren’t some people who are “more dead” than others.
That means that, by 2020, half of all income tax revenues will go toward paying interest on a $23 trillion national debt. Very shortly, it will take all of our income taxes to pay the interest. (read more)
David Brown' killed on level crossing changed his mind seconds before train hit - 2nd July 2011
A suicidal car salesman killed by a train on a level crossing had changed his mind and desperately tried to get off the tracks seconds before he was hit, an inquest has heard.David Brown's change of heart came seconds too late when the Vauxhall Corsa he was sitting in was destroyed by the 60mph train at a level crossing in Wokingham, Berks.
The 58-year-old had moments earlier driven onto the unmanned crossing to wait for a passing train, but was then seen by the train's driver frantically trying to get out the way before it hit.
Distraught train driver James Collinson told an inquest into Mr Brown's death how he saw the father-of-two look up at him a split second before the devastating impact.
Mr Brown had tried to turn the ignition back on in a panicked state but 'didn't have much opportunity to bail out' before being hit by the train travelling on the Reading to London Waterloo line. Read More
Yellowstone: Exxon oil spill in Montana river prompts evacuations in Billings area - 2nd June 2011
LAUREL, Mont. — An ExxonMobil pipeline that runs under the Yellowstone River near Billings in south-central Montana ruptured and dumped an unknown amount of oil into the waterway, prompting temporary evacuations along the river Saturday morning. Company spokeswoman Pam Malek, who was at the scene, said the pipe leaked for about a half-hour, though it's not clear how much oil leaked.
The cause of the rupture wasn't known.
Brent Peters, the fire chief for the city of Laurel about 12 miles east of Billings, said the break in the 12-inch diameter pipe occurred late Friday about a mile south of Laurel.
He said about 140 people were evacuated in the area starting about 12:15 a.m Saturday due to concerns about possible explosions and the overpowering fumes. Source
France reports E. coli death, 4000 now ill in Germany -- does it seem like the whole E.Coli thing is being buried?
Authorities have recorded France's first death from the European E. coli outbreak.Health officials in Bordeaux said the 78-year-old woman died early Saturday morning from complications of an E. coli infection but a doctor said she was not suffering from the strain that has infected many other people in France and Germany.
The woman had been hospitalized in Bordeaux in southwest France since June 24 with hemolytic uremic syndrome — the rare kidney condition affecting a small number of people infected with E. coli.
Dr. Benoit Vendrely at Bordeaux Hospital said the strain of E.coli the woman was infected with was not the one implicated in the deaths of 48 people in Germany and one each in the United States and Sweden. He didn't identify the source of the French woman's E. coli contamination.
Seven other patients remain in stable condition at the same French hospital, six of whom have been confirmed to have the same strain of E.coli as in the outbreak that originated in Germany.
European health experts said Thursday that contaminated Egyptian fenugreek seeds were likely the source of that deadly outbreak.
Meanwhile, German authorities on Friday reported another death in the European E. coli outbreak, bringing the total to 50.
A total of 3,999 people have now been reported to be ill in Germany from the outbreak, including 845 with a complication that can lead to kidney failure. Another 122 cases have been reported in 16 other countries. (read more)
Greece and Portugal are sitting on tons of gold
The first thing any insolvent private person is forced to do is relinquish the family silver. But other rules seem to apply to governments. Whether they’ve been living above their means for a few years or for decades, certain countries hold on tight to their assets, declare themselves unable to pay back their debts and turn to other countries for help.The European Union (EU) has seen many an example of this. Right now, Greece is negotiating with the EU-European Central Bank-International Monetary Fund troika for a new rescue package — all the while Athens sits on an impressive four-million-ounce (125 U.S. tons) stash of gold, about what four large, fully-loaded trucks could carry.
The gleaming bars in the vaults of the Greek National Bank are worth 4 billion euros. If Athens were to sell that gold, the Greek state would theoretically be able to meet at least part of the debt payments due soon without any outside help.
Another country in crisis, Portugal, also holds significant amounts of precious metal dating back to the days of António de Oliveira Salazar’s regime. Instead of aid, Lisbon could have converted its 13 billion euro's worth of gold into cash.
Nick Moore, chief commodities strategist at the Royal Bank of Scotland (RBS) in London, reports that a question often asked by bank clients is why these governments don’t sell some of their gold. It is after all recognized worldwide as an asset that can be sold even in tough economic times. The gold in the central banks of Eurozone members together is worth some 375 billion euros. (read more)
Libya's Gadhafi threatens attacks on Europe
A defiant Moammar Gadhafi threatened Friday to carry out attacks in Europe against "homes, offices, families," unless NATO halts its campaign of airstrikes against his regime in Libya.The Libyan leader, sought by the International Criminal Court for brutally crushing an uprising against him, delivered the warning in an audio message played to thousands of supporters gathered in the main square of the capital Tripoli.
Several hours later, a series of powerful explosions rattled the heart of the capital, apparently new NATO airstrikes, as Gadhafi supporters cheered, honked horns and fired into the air in the street. Black smoke could be seen rising from the area near Gadhafi's Bab al-Aziziya compound.
Gadhafi spoke from an unknown location in a likely sign of concern over his safety. Addressing the West, Gadhafi warned that Libyans might take revenge for NATO bombings.
"These people [the Libyans] are able to one day take this battle ... to Europe, to target your homes, offices, families, which would become legitimate military targets, like you have targeted our homes," he said.
"We can decide to treat you in a similar way," he said of the Europeans. "If we decide to, we are able to move to Europe like locusts, like bees. We advise you to retreat before you are dealt a disaster." (read more)
Mudslide in southeastern Bangladesh kills 15
The bodies of at least 15 people, including women and children, were recovered Friday after hours of steady downpours triggered a mudslide at Batali Hill in Chittagong, in southeastern Bangladesh, the state-run news agency said.Six homes were buried under thick mud after a retaining wall collapsed, according to the Bangladesh Sangbad Sangstha news agency. Two victims were taken to an area hospital after being pulled from the muck.
"We are equipped with necessary equipment, but the scene of the landslide appeared difficult to operate the machines," an army officer told reporters. BSS reported that, hours before the mudslide, Chittagong Mayor Mohammad Monjur Alam had visited the area, seen the hillside shanties and warned residents to take shelter.
Some people wept and others waited anxiously as workers used pickaxes and shovels in search of more victims in the mud.
Over the past decade, officials said, landslides have killed 500 people in greater Chittagong and Chittagong Hill Tracts.
Continuing monsoon rainfall led authorities to warn hillside residents of Chittagong, Rangamati, Teknaf and Cox's Bazar to prepare for the possibility of more landslides.
CNNI Meteorologist Ivan Cabrera said more heavy rain was expected Saturday. (Source)
Airplanes "can make it snow"
Airplanes flying through super-cooled clouds around airports can cause condensation that results in more snow and rain nearby, according to a new study. The correct conditions for this inadvertent weather modification occur about five per cent of the time — but 10-to-15 per cent in winter — according to Andrew J. Heymsfield of the National Center for Atmospheric Research in Boulder, Colo., lead author of the study appearing in Friday's edition of the journal Science.
Aircraft take off into the wind, he noted, so if they are generating extra ice particles upwind of an airport, the result can be snow right on the airport. That might mean planes will require more de-icing, he said, though other researchers weren't so sure.
The team was investigating holes or canals that are sometimes seen drilled in clouds after an airplane has passed through.
Studying six commercial airports, including the one in Yellowknife, they found that increased snow and rainfall occurs in areas where the unusual cloud holes appear, usually within 100 kilometres of the airport. Places farther away from an airport are more likely to be at higher altitudes, above the clouds.
The added rain or snowfall occurred when conditions in the clouds were super-cooled. That means the clouds were made up of water droplets that were colder than freezing, but which had not yet frozen.
Water in the atmosphere can remain liquid at temperatures below freezing if it doesn't have any type of nucleus to freeze onto, such as bits of dust or salt. It will freeze without a nucleus when it gets very cold, however — about -15 C. (read more)
Vatican budget emerges from the red -- once again making "a profit"
The Vatican has announced its finances have returned to profit - after three consecutive years in the red. Its report said the Holy See saw revenues of 245.2m euros (£222m; $356m) against expenses of 235.3m in 2010.
But annual donations from churches worldwide - known as Peter's Pence - were down nearly $15m to $67.7.
The separately administered Vatican City State also made a 21m-euro profit due to strong ticket sales at the Vatican Museums.
The Vatican lost 4m euros in 2009 and was also in the red in 2008 and 2007.
Most of the Vatican's outlay is to cover the activities of Pope Benedict XVI, and services such as Vatican Radio which is broadcast on five continents in 40 different languages. (read more)
The great land grab: India's war on farmers
In India, the state forcibly acquires land from farmers and hands it over to private speculators, real estate corporations, mining companies and leisure industries.Land is life. It is the basis of livelihoods for peasants and indigenous people across the Third World and is also becoming the most vital asset in the global economy. As the resource demands of globalisation increase, land has emerged as a key source of conflict. In India, 65 per cent of people are dependent on land. At the same time a global economy, driven by speculative finance and limitless consumerism, wants the land for mining and for industry, for towns, highways, and biofuel plantations. The speculative economy of global finance is hundreds of times larger than the value of real goods and services produced in the world.
Financial capital is hungry for investments and returns on investments. It must commodify everything on the planet - land and water, plants and genes, microbes and mammals. The commodification of land is fuelling the corporate land grab in India, both through the creation of Special Economic Zones and through foreign direct investment in real estate.
Land, for most people in the world, is Terra Madre, Mother Earth, Bhoomi, Dharti Ma. The land is people's identity; it is the ground of culture and economy. The bond with the land is a bond with Bhoomi, our Earth; 75 per cent of the people in the Third World live on the land and are supported by the land. The Earth is the biggest employer on the planet: 75 per cent of the wealth of the people of the global south is in land.
Colonisation was based on the violent takeover of land. And now, globalisation as recolonisation is leading to a massive land grab in India, in Africa, in Latin America. Land is being grabbed for speculative investment, for speculative urban sprawl, for mines and factories, for highways and expressways. Land is being grabbed from farmers after trapping them in debt and pushing them to suicide. (read more)
Evolution Of The Financial Bubble That Led To The Global Crisis Discussed
The collapse of the U.S. stock and housing markets and the subsequent credit crisis have left many Americans asking how it could have happened. However, to understand how the collapse happened, says financial analyst and author Emily Eisenlohr, one must first understand how the huge systemic bubble that led to the collapse was built. Fairy Tale Capitalism: Fact and Fiction Behind Too Big To Fail (published by AuthorHouse) outlines the evolution of the financial bubble and brings simple perspective to a seemingly daunting question. Fairy Tale Capitalism presents a brief history of how the biggest banks became ‘Too Big to Fail’. The book peels away the fictions and presents the facts. Although reforming the financial sector may be complex, understanding how systemic risk grew is rather simple. Fairy Tale Capitalism puts the puzzle together one piece at a time.
Political leaders and Big Bank CEOs would have the public believe that the systemic bubble and its bursting resulted from human greed, global financial developments and regulatory neglect – all outside the control of Congress. Not so, says Eisenlohr. She demonstrates the fiction of that claim in Fairy Tale Capitalism. The real history, Eisenlohr explains, is that Congress played a huge role in building the systemic bubble. The Big Bank CEOs made sure that nobody really understands the role of derivatives in systemic risk.
Fairy Tale Capitalism uses public information to show how Congress had been well informed about systemic risks. Public hearing testimony and congressionally mandated reports alerted Congress to the risks of derivatives, regulatory gaps and the poorly understood relationship between the biggest banks and hedge funds. Then turning her attention to current congressional leadership, Eisenlohr shows how the financial sector continues to ensure the support of Congress.
Fairy Tale Capitalism offers a compelling primer for national public policy and the risks of derivatives. (read more)
“At least 10,500 people with criminal records entered the [mortgage-broker] field in Florida"”
Sacrosanct capitalism searches causes behind the Great Financial Crisis among individuals instead of in the system it owns and operates, and fails to nab the culprits, the individuals involved with the crisis. The act and the failure reiterate the fact mentioned many years ago: the entire capitalist system safeguards capital, and governing machines – finance regulatory, law enforcement or whatever it is – are not class-neutral. The failure to nab culprits, the system’s in-built friend-foe-within, signifies class solidarity of capital’s ruling machine. Reports by the US governing system, and from media, an ideal sample for study, tell reality of class solidarity. Based on (and liberally quoted from) these reports the old pattern of failure and collaboration is reiterated: as class-tool, state’s first job is to defend dominating interests.
Wall Street and the Financial Crisis: Anatomy of a Financial Collapse (WFC), the 650-page report released in mid-April, 2011, describes finance capital-friendly practices, improper even according to governing standards set by capital, at different levels, and the governing standards were ignored, in different styles and through different work methods and procedures by the speculating capital and its regulators. Higher rate of quicker profit in a stagnant economy made them reckless. The report focuses on a number of players in the speculation game – Washington Mutual, the Office of Thrift Supervision (OTS), Standard & Poor’s, Moody’s Investors Service, Goldman Sachs and Deutsche Bank – while it provides evidence of collaboration that enters the den of criminality.
Senator Levin, co-chairman of the Senate Permanent Subcommittee on Investigations that released the report said: “The report pulls back the curtain on shoddy, risky, deceptive practices on the part of a lot of major financial institutions.” “[T]hose institutions deceived their clients and deceived the public, and they were aided and abetted by deferential regulators and credit ratings agencies…They gained at the expense of their clients and they used abusive practices to do it.” (New York Times, Apr. 13, 2011) Others including a Time story (the report on 25 blame-worthy, and referred in The Age of Crisis), quite some time back, also made almost similar observations and presented facts. (read more)
The Truth About Bank Capital
Joe Nocera in the New York Times has decided he's in favor of more bank capital. In his column, he makes this seem like his personal endorsement is necessary to push across the line what he calls "the most important reform moment since the financial crisis broke out three years ago. More important even than the wrangling over Dodd-Frank." Well, this falls within the pundit's right to hyperbole, as the headline on the column, "Banking's Moment of Truth," falls within the bounds of the headline writer's exaggeration exemption -- though the more I look at it, the more that "truth" bothers me. Personally, turning to the most important person in the world -- moi -- I would, if forced to take a stand, vote for higher capital standards for the big banks, though the question is not nearly as clear and straightforward as Nocera makes out. There's not a lot of "truth," or a lot of empirical economic evidence arrayed against any of this. There's intuition, gut feel, a sense that something must be done and lots of credentialed and noncredentialed opinions. Both Dodd-Frank and the bank capital standards are classic economically driven arguments that will be judged by future performance and consequences that, unfortunately, we have no way to predict. It's like voting for a president. Nocera gets the basic argument essentially right. Generally, the more equity you amass, the less debt you can take on. That will tend to dampen leverage and, as we know, leverage was one of those evils at the center of the crisis. Nocera's blithe confidence that if Merrill Lynch & Co. and AIG had had "adequate capital requirements" those two firms would not have been bailed out is a stretch, given the shadow banking system that grew up and the obvious failures of oversight. How does he explain Bear Stearns Cos. and Lehman Brothers? How do you factor in the degree of sheer panic as opposed to inadequate capital that threatened all firms? Nocera is correct that a larger equity capital cushion does provide a way for banks, rather than taxpayers, to absorb more losses. But there are no guarantees. Banks have been collapsing for centuries. Even the Swiss, which have already mandated capital of 19% (both in equity and so-called contingent convertible bonds), well above anything Basel III envisions, know that banks stuffed with capital can collapse. Indeed, the most obvious sign of trouble is the belief that your capital is adequate to withstand stupidity and disaster. Historically, there seems to be a positive relation between stupidity and excess capital (although, to be fair, thin capital may be evidence of recklessness as well). (read more)
Twelve cases of measles confirmed in Noble and LaGrange Counties, State of Indiana - 1st July 2011
The first cases of Last week, five cases of the highly-contagious disease were confirmed in Noble County. On Friday, health officials there reported six more in Noble and one more in LaGrange County.
Officials think it was contracted overseas and then spread.
Measles is spread much like a cold but can be stopped with updated MMR shots.
Some health departments will provide the vaccine free of charge if you think you've been exposed to an infected person. Source
High algae levels found at Cullaby Lake in Clatsop County, State of Oregon - 1st July 2011
A health advisory prompted by high algae levels found in Cullaby Lake, located just off Hwy 101 on the northern Oregon coast between Astoria and Seaside, was issued today by Oregon Health Authority's Public Health Division and Clatsop County Health Department officials. Water monitoring has confirmed the presence of blue-green algae that can produce toxins harmful to humans and animals. These algae levels are likely to be associated with dangerous toxin concentrations in the water, according to World Health Organization guidelines.
Swallowing or inhaling water droplets should be avoided, as well as skin contact with water by humans or animals.
Drinking water from Cullaby Lake is especially dangerous. Oregon Public Health officials advise campers and other Cullaby Lake visitors that toxins cannot be removed by boiling, filtering or treating the water with camping-style filters.
People who draw in-home water directly from Cullaby Lake are advised to use an alternative water source because private treatment systems are not proven effective in removing algae toxins. However, public drinking water systems can reduce algae toxins through proper filtration and disinfection. If people on public water systems have questions about treatment and testing, they should contact their water supplier.
Oregon health officials recommend that people who choose to eat fish from waters where algae blooms are present should remove all fat, skin and organs before cooking since toxins are more likely to collect in these tissues.
Additionally, public health officials advise that people should not eat freshwater clams from Cullaby Lake. Crayfish muscle can be eaten, but internal organs and liquid fat should be discarded.
Exposure to toxins can produce symptoms of numbness, tingling and dizziness that can lead to difficulty breathing or heart problems and require immediate medical attention. Symptoms of skin irritation, weakness, diarrhea, nausea, cramps and fainting should also receive medical attention if they persist or worsen. Children and pets are particularly susceptible.
The public will be advised when the concern no longer exists.
With proper precautions to avoid water contact, people are encouraged to visit Cullaby Lake and enjoy activities such as camping, hiking, biking, picnicking, catch-and-release fishing and bird watching. Boating is safe as long as speeds do not create excessive water spray, which could lead to inhalation risk. Source
Mystery illness kills 4, downs 16 others in Philippines - 1st July 2011
ZAMBOANGA DEL NORTE, Philippines - Four people died while 16 others were hospitalized in Zamboanga del Norte because of a mysterious illness, health officials said Friday. The victims, who all live in Barangay Mantebo, Sibuco town in Zamboanga del Norte, complained of pain and numbness in their lower extremities.
Pantera Nadjal, one of the patients said she started feeling numbness and a tingling sensation in her feet and legs starting last May.
"Parang hangin dito sa paa nagsimula tapos umakyat hanggang sa tyan," Nadjal said.
Fifteen other villagers who experienced the same sysmptoms have been admitted at the Zamboanga City Medical Center (ZCMC).
Dr. Saibzur Edding, Sibuco hospital chief, said other residents of Mantebo were admitted to the hospital.
Four have died due to the unidentified infection.
Edding said there is no mining activity in or near Mantebo. Fishermen also do not use either dynamite or cyanide when fishing.
Dr. Maribel Felisario, ZCMC information officer, said they sent samples of the patients' urine and blood to the Department of Health in Manila for testing.
They have also gathered samples from the village including water, fish, and seaweeds that are reportedly part of the patients' diet.
Felisario said they have encountered similar cases before but "this one is different since the patients come from one area." Source
Global warning: Scientists in U-turn as they claim extreme weather and climate change are linked - 1st July 2011
Climate change is inextricably linked to the extreme weather that has wreaked destruction all over the world in the last ten years, scientists now claim.Experts are convinced of a legitimate link between the two after more than 20 years of reluctance to blame greenhouse gas emissions for the heavy storms, floods and droughts which have made global headlines.
The controversial U-turn is a radical departure from the previous standpoint and was made by a new international alliance of climate researchers from around the world.
The Attribution of Climate-Related Events has been formed to investigate exceptional weather events.
The coalition is in the process of drafting a report on the issue which will be published at a meeting at Denver's World Climate Research Programme later this year, reported the Independent. Read More
U.S. bribery inquiry into $1.4bn held by HSBC for Gaddafi - 1st July 2011
HSBC faces being caught up in a U.S. bribery inquiry over hundreds of millions of pounds it held on behalf of Libya. There has been a dramatic rise in deposits with the bank, according to a leaked internal report from the Libyan Investment Authority – which invests some £40billion of oil wealth collected by Colonel Gaddafi's regime.
Last June, HSBC held £182million of Libya's money, the document shows.
Just three months later, that had risen to more than £870million.
As details of the report emerged, sources said HSBC could be caught up in a U.S. investigation looking at whether banks paid Libyan officials in return for managing the North African nation's money.
The Serious Fraud Office, which prosecutes white-collar crime in the UK, is understood to be helping U.S. regulators with their inquiries into banks that did business with Gaddafi's regime.
Insiders said the investigation revolves around allegations that banks, hedge funds and private equity firms paid so-called 'placement agents' in return for being given access to Libya's state investment fund.
One source confirmed that the U.S. Securities and Exchange Commission was looking into HSBC, Britain's biggest bank, as it casts its net for evidence. Read More
Texas declared a natural disaster area after devastating drought and wildfires continue - 1st July 2011
The entire state of Texas has been declared a natural disaster zone after suffering the worst drought in decades and a number of devastating wild fires.In all 213 counties in Texas have lost at least 30 per cent of their crops or pasture, while a record 236 counties have an outdoor burn ban in place as the drought continues.
The disaster declaration from the U.S. Department of Agriculture, now means farmers and ranchers can apply for emergency loans at a lower rate of interest.
Mike Swain, who farms south of Brownfield, told the Lubbock Avalanche Journal that loans aren't what he's looking for.
'I will be real honest, I don't need a loan - I need rain,' Swain said.
Meanwhile West Texas farmer Billy Brown remembers the devastating drought that spanned the state in the 1950s - and believes this one is worse.
'The grass just crackles underneath the feet,' Brown, 72, said of walking across his acreage in the town of Panhandle where he grows corn, cotton, wheat and grain sorghum.
'It will be that way until we get sufficient rain to turn everything around.'
The Agriculture Department designated 213 of Texas' counties directly affected by drought as disaster areas, and the remaining 41 also qualified for assistance because they are contiguous.
Thirty-two counties in Louisiana, Oklahoma, Arkansas and New Mexico also garnered the designation because they are adjacent to Texas counties. Read More
Spectacular storm electrifies Chicago skyline with 1,100 strikes in a single hour - 1st July 2011
They say lightning doesn't strike twice but Chicago residents who weathered a thunderous electric display this week would beg to differ.Powerful thunderstorms that erupted over northern Illinois produced spectacular lightning, hurricane-force gusts, golf ball-sized hail and a waterspout over Lake Michigan.
The National Weather Service says there were more than 1,100 cloud-to-ground lightning strikes in a single hour during the height of Thursday night's storm; that included dazzling strikes to Chicago's Willis Tower, North America's tallest building.
A weather service meteorologist says a trained storm spotter reported a waterspout at 8:20pm over Lake Michigan east of Zion, about 45 miles north of Chicago.
A wind gust of 81 miles per hour was reported at a water-intake crib about three miles off Chicago's shoreline, and a 94 miles per hour gust was reported off Waukegan Harbor, about 40 miles north of Chicago.
Golf ball-sized hail caused severe damage across parts of northern Illinois.
ConEdison reported a total of 100,000 power outages, which spanned across the north, west and southern suburbs of Chicago.
Problems were also reported at the city's O'Hare and Midway international airports, where flights were delayed 20 to 30 minutes, according to the Chicago Sun-Times Media Wire.
Witnesses said a sailing class was also on the water near Montrose Harbor when winds picked up, creating waters so rough that some boats capsized and their crews rescued. Read More
Jim and Charity Marlatt forced to move their entire home after New York's biggest landslide leaves it teetering over 30ft drop - 2nd July 2011
New York's biggest landslide has left one home destroyed and at least five others teetering perilously on the slide's edge, which overhands a 30-foot drop in some places.Among those in jeopardy is the dream retirement home of Jim and Charity Marlatt in Keene, NY.
So desperate are the couple to keep their precious home, they have enlisted a house-moving company to relocate the entire thing to a new foundation about 150-200 feet away from the landslide's edge.
This they must do at their own expense however - at a price tag of at least $150,000 - because routine homeowner's insurance policies will not pay for landslide damage, they said.
'My heart is broken,' Mrs Marlatt said. 'Because we're only human and this is Mother Nature and God's will, we have no idea what will happen.'
The mile-wide landslide, which is unleashing hundreds of millions of tons of debris in New York's Adirondack Mountains, is the largest in the state's history, but also one of its slowest.
Geologists say an 82-acre piece of earth on Little Porter Mountain in Keene Valley, New York, is creeping downhill at a rate of between just six inches and two feet per day, dragging boulders, trees and house foundations along with it.
'That's the side of a mountain that's in full motion right now,' Kozlowski said. 'This thing isn't even close to being at equilibrium yet. There's every indication that this is going to continue to move for some time.' Read More
'Cindy Anthony DID lie on the stand': Bosses testify Casey's mother was at work when crucial chloroform searches were made - 1st July 2011
Cindy Anthony's bombshell claim that she looked up 'chloroform' on her home computer was dramatically undermined today as her former boss told the Florida court she was still at work when the searches were made.Prosecutors allege Mrs Anthony made up the story to try to protect her daughter, Casey, who they say searched for information on chloroform, 'neck breaking' and death in the months leading up to the death of Caylee, her two-year-old daughter.
A chief compliance officer for Mrs Anthony's old company today produced records which showed she was still logged into her work computer on the afternoons she claimed to be conducting the internet searches at home.
Previously, she had testified that her boss allowed her to leave early on some days, so any absences wouldn't show up on official records.
John Camperlengo, of Gentiva Health Services, showed the court computer records which revealed somebody had used Mrs Anthony's username and password to log in early every morning and log out at around 4 or 5pm every evening the week she claimed she searched for chloroform at home. Read More
U.S. forces STILL flying hundreds of bombing raids over Libya as Obama says America is only playing a limited role - 2nd July 2011
U.S. forces are still flying hundreds of bombing raids over Libya even though the Obama administration claims that American armed forces are only playing a limited role in the conflict.Since NATO’s Operation Unified Protector took over from the American-led Operation Odyssey Dawn on 31 March, the U.S. has flown hundreds of strike missions, according to United States Africa Command (AFRICOM).
The White House originally claimed that U.S. planes were mostly providing intelligence, surveillance and reconnaissance and played down the number of bombing raids.
However AFRICOM spokeswoman Nicole Dalrymple said: 'U.S. aircraft continue to fly support missions, as well as strike sorties under NATO tasking.
'Since 31 March, the U.S. has flown a total of 3,475 sorties...Of those, 801 were strike sorties, 132 of which actually dropped ordnance.'
A White House report on the Libya conflict sent to Congress on 15 June says that 'American strikes are limited to the suppression of enemy air defense and occasional strikes by unmanned Predator UAVs against a specific set of targets.'
The report also said the U.S. provides an 'alert strike package.'
The U.S. has mainly been deploying the Air Force’s F-16CJ and Navy’s EA-18G Growler electronic attack aircrafts in Libya, according to Ms Dalrymple. Read More
The lies that freed Strauss-Kahn: Letter reveals how 'rape victim' made up claims of torture and gang-rape in asylum application - 2nd July 2011
Former IMF boss Dominique Strauss-Kahn was today sensationally handed his freedom without bail as damaging details emerged on the credibility of the hotel maid accusing him of rape.The charges against Strauss-Kahn, which include attempted rape, have not been reduced, but background investigations of the ‘victim’ have created 'serious credibility issues' for prosecutors.
As Strauss-Kahn was released from house arrest and had his security ankle tag removed, it emerged today in a letter to court from Assistant District Attorney Joan Illuzzi-Orbon that the woman:
- Lied in a U.S. asylum application that her husband was tortured in jail and died of injuries
- Lied about having been gang raped by soldiers in Guinea to help her asylum application
- Lied about waiting in the hall outside the suite of the 'attack' until Strauss-Kahn left
- Lied by claiming a friend's child as her own for the last two years to get a higher tax refund
The 32-year-old hotel maid accused the International Monetary Fund ex-chief of chasing her through his luxury suite in May, trying to pull down her pantihose and forcing her to perform oral sex.
Forensic tests have revealed the pair definitely had a sexual encounter, but defence lawyers have claimed it was consensual - and public opinion is stunningly starting to shift in his favour.
The move in court signals prosecutors do not see the accusations as ironclad aymore. Strauss-Kahn had been under house arrest for weeks in a Manhattan loft on $6million in cash and bond.
‘It is a great relief,’ said Strauss-Kahn's attorney, William Taylor, adding that the case underscores ‘how easy it is for people to be charged with serious crimes and for there to be a rush to judgement.’
Strauss-Kahn arrived at the courthouse on Friday morning in a Lexus SUV and strode confidently up the granite steps with his wife, French journalist Anne Sinclair, at his side.
After the hearing, he walked slowly out with his arm on her shoulder, smiling slightly at the throng of reporters and members of the public gathered outside. Read More
Boy aged just FIVE shoots his four-year-old friend in the playground - 1st July 2011
A five-year-old boy has shot and badly injured his four-year-old friend at an apartment complex playground in Maryland.Neighbours carried the wounded boy into the building, while the five-year-old ran off with the weapon and hid in his family's apartment.
Hillcrest Heights police are now investigating how the little boy managed to get hold of the gun, believed to be a 0.22-calibre pistol.
The two boys, who both live in the complex, had been playing happily in the playground when neighbours heard a loud boom.
Ebony Webb rushed downstairs to discover the five-year-old had shot his four-year-old playmate through the chest.
She told ABC7: 'He shot him real close so I took him upstairs... took metal pieces out of the wound.'
She added: 'He didn't cry or nuthin.' He's a soldier.'
Miss Webb said the injured boy was in shock, so she laid him on her bed and called police, then did her best to clean him up.
When officers arrived they found the five-year-old shaking with fear inside his apartment.
Neighbours said his 18-year-old sister had been looking after him while their mother was out at work.
Dee Johnson, who identified himself as the boy's uncle, told The Washington Post he had found the gun outside. Read More
