Defaulting banks - where will it stop?

[Jan Klimkowski]

Attempting to read the tealeaves - always a precarious & imprecise art - suggests major elite in-fighting is currently taking place.

The $10 trillion figure mentioned at the end of this AFP article is coming up in a lot of online chatter about specific claims of insider, criminal, looting with the money "hidden" from the reach of international regulators. If $10 trillion really has been stolen, then the imposition of what Naomi Klein describes as Shock Therapy must be imminent.

France, Germany Lead Bid To Write New Tax Havens Blacklist

PARIS (AFP)--Seventeen countries led by France and Germany decided Tuesday to draw up a new blacklist of tax havens that could include Switzerland, in a first step toward rewriting the rules of global finance.

The world's 40-odd tax havens, such as the Cayman Islands and Jersey, are known hideaways for undeclared revenue and host many of the non-regulated hedge funds that came under fire following the recent financial meltdown.

French Budget Minister Eric Woerth said the 17 governments at the Paris meeting agreed to task the Organization for Economic Cooperation and Development with drafting a new expanded blacklist of countries that fail to cooperate on tax evasion and transparency.

"We want to come up with a blacklist of official tax havens," Woerth told a news conference following the meeting of countries from the OECD.

German Finance Minister Peer Steinbrueck singled out Switzerland for criticism, saying it had failed to fully cooperate on taxation issues and deserved to be on the new list.

"Switzerland should be on the blacklist and not the green list" of countries that do cooperate, he said.

"Banking secrecy has its limits," Woerth added. "Switzerland has made progress... but we must take matters farther."

Switzerland, often criticized for its opaque bank secrecy laws, decided to boycott the meeting along with Luxembourg, while the U.S. and Austria declined to send representatives.

The absence of such financial powerhouses could call into question the importance of Tuesday's meeting, but France and Germany decided to forge ahead.

The OECD will have until mid-2009 to draft the new list and a conference will take place in Berlin in May or June to decide on further steps, Woerth said.

After U.S. and European governments bailed out a number of banks, politicians began questioning how and why some of those same financial institutions were able to continue to operate in countries that encourage tax evasion.

"Is it normal that a bank to which we guarantee loans or allocate our own funds continues operating in tax havens? The answer is no," French President Nicolas Sarkozy said last week.

The OECD lists 38 countries that have adopted tight banking secrecy laws and are tax-free, or have very low taxation.

But only three of those - Andorra, Liechtenstein and Monaco - are on the OECD blacklist for refusing to share any information on their finance sectors.

The new blacklist could contain about a dozen countries, said a French official earlier.

"This would have an important stigmatizing effect. Bankers don't like to be seen as delinquents," he said.

Some financial centers in Asia may find themselves on the list while others that were taken off a few years ago may once again be singled out for failing to follow through on pledges of more transparency, said the official.

Prime Minister Francois Fillon has called for wiping out tax havens altogether as a prerequisite for global finance reform.

"Black holes like offshore centers should no longer exist," Fillon told parliament last week. "Their disappearance must be a prelude to a reform of the international financial system."

Transparency International France estimates that about $10 trillion - four times France's gross domestic product - are stashed in secret offshore accounts away from the prying eyes of regulators or tax inspectors.

http://www.nasdaq.com/aspxcontent/NewsSt...0Blacklist

[Jan Klimkowski]

Couldn't happen to a nicer company...

Moody's Cuts Rio Tinto's Rating Outlook on Lower Metal Prices

By Rebecca Keenan

Nov. 7 (Bloomberg) -- Rio Tinto Group, the world's third- largest mining company, had its rating outlook cut by Moody's Investor Services because of global market turmoil, falling metal prices and slow progress in asset sales.

``Rio Tinto's 2009 performance will be adversely impacted by the negative market conditions in, and the outlook for, key metal markets,'' the New York-based agency said in a statement. It reduced its rating to ``developing'' from ``positive.''

Commodity prices have declined 44 percent since the end of June as the financial crisis deters lending. Rio, which has $8.9 billion of its $42 billion in debt maturing in October, has said the credit crisis may delay $10 billion in asset sales.

Rio, traded in London and Sydney, slumped 9.8 percent to A$71.30 at 11:26 p.m. Sydney time on the Australian stock exchange, giving it a market value of about A$91 billion ($60 billion). It has declined 47 percent this year compared with a 37 percent fall in the benchmark index.

The slower-than-anticipated progress in asset sales and the chance that proceeds could be lower, contributed to the change to Moody's outlook, it said. Still, Rio will be able to meet its debt requirements unless metal prices decline ``materially farther'' from current levels, Moody's said.

Sales Program

``The company's ability to execute on its divestiture program and reduce debt over the next 12 months will be a key factor in its rating,'' Moody's said. ``The lower cash generation, in combination with continued high debt levels, is pressuring the company's ratings.''

Concern that London-based Rio may not being able to repay debt were not ``valid'', Chief Financial Officer Guy Elliot said Oct. 15. There was ``no doubt'' the company could service its current debt, he said. Rio Tinto spokeswoman Amanda Buckley declined to comment when contacted at her Melbourne office today.

Rio's debt to capital ratio at June 30 was 55 percent, according to Moody's standard measurements, compared with 16 percent at the end of 2006, the ratings company said.

Rio Tinto has also joined United Co. Rusal and Cia. Vale do Rio Doce in reining in spending and cutting output to match the drop in demand for metals.

http://www.bloomberg.com/apps/news?pid=2...4eSr.q0Io8

[Magda Hassan]

Yes, you're right Jan. It couldn't happen to a better company . However, Moody's is one of the entrail readers who gave AAA rating to the mortgage backed securities aka toxic junk now floating around polluting the economy and costing ordinary workers billions. Does anyone trust them to tell night from day? Could they organise a piss up in a brewery?

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[Jan Klimkowski]

Obama's economic team. In post #107 of this thread, Michael Hudson speculates that Rubin & co may be in the process of inflicting the same Shock Therapy on the US that Rubin personally inflicted on Russia in the 90s...

Obama appoints advisers including Buffett
US President-elect Barack Obama has appointed a team of high-level advisers including billionaire investor Warren Buffett and Google chief executive Eric Schmidt to guide his thoughts on the economy ahead of taking office on January 20.

Mr Obama’s team – to be called the Transition Economic Advisory Board (TEAB)– will meet for the first time on Friday to discuss the state of the economy and the prospect of taking early action ahead of his inauguration.

The President-elect will meet with the board in Chicago on Friday, before then giving his first press conference since being elected at 1.30pm local time (7.30pm GMT).

It is not known if he will use this opportunity to appoint his first Treasury Secretary – although speculation was mounting on Thurday night that he may well do so.

One of two favourites for the post – former Treasury Secretary Larry Summers – is on the advisory board, but his main rival, New York Fed chief Tim Geithner is not.

One source suggested the fact that Mr Geithner’s name did not appear on the list of advisers was telling, but refused to elaborate.

Of a poll of 48 leading economists conducted by Reuters, 26 thought Mr Geithner will be chosen for the key role.

Other members of the advisory board include former Fed chairman Paul Volcker, whose name has also been connected with the Treasury job, as has former Treasury Secretary Robert Rubin, who will also be at the meeting at the Chicago Hilton on Friday.

Corporate America is also well represented, with Time Warner chairman Dick Parsons and Xerox chairman Anne Mulcahy sitting alongside Mr Schmidt, who was a loyal supporter of Mr Obama during his election campaign.

The members of the TEAB could yet form the backbone of the President-elect Obama’s Council of Economic Advisers.(CEA)

Laura Tyson, one of Obama’s key economic aides who will sit on the TEAB, was chairman of President Bill Clinton’s CEA from 1993-1995.

Full list of TEAB members:

-David Bonior (Member House of Representatives 1977-2003)

-Warren Buffett (Chairman and CEO, Berkshire Hathaway)-will participate via speakerphone

-Roel Campos (former SEC Commissioner)

-William Daley (Chairman of the Midwest, JP Morgan Chase; Former Secretary, U.S. Dept of Commerce, 1997-2000)

-William Donaldson (Former Chairman of the SEC 2003-2005)

-Roger Ferguson (President and CEO, TIAA-CREF and former Vice Chairman of the Board of Governors of the Federal Reserve)

-Jennifer Granholm (Governor, State of Michigan)

-Anne Mulcahy (Chairman and CEO, Xerox)

-Richard Parsons (Chairman of the Board, Time Warner)

-Penny Pritzker (CEO, Classic Residence by Hyatt)

-Robert Reich (University of California, Berkeley; Former Secretary, U.S. Dept of Labor, 1993-1997)

-Robert Rubin (Chairman and Director of the Executive Committee, Citigroup; Former Secretary, U.S. Dept of Treasury, 1995-1999)

-Eric Schmidt (Chairman and CEO, Google)

-Lawrence Summers (Harvard University; Managing Director, D.E. Shaw; Former Secretary, U.S. Dept of Treasury, 1999-2001)

-Laura Tyson (Haas School of Business, University of California, Berkeley; Former Chairman, National Economic Council, 1995-1996; Former Chairman, President’s Council of Economic Advisors, 1993-1995)

-Antonio Villaraigosa (Mayor, City of Los Angeles)

-Paul Volcker (Former Chairman, US Federal Reserve 1979-1987)

http://www.telegraph.co.uk/news/newstopi...ffett.html

[David Guyatt]

The $10 trillion figure mentioned at the end of this AFP article is coming up in a lot of online chatter about specific claims of insider, criminal, looting with the money "hidden" from the reach of international regulators. If $10 trillion really has been stolen, then the imposition of what Naomi Klein describes as Shock Therapy must be imminent.

I am not surprised by this figure of $10 trillion. Black money from the drugs trade, arms trade and all other criminal activities has been filtering into offshore accounts for decades. That money is then put back to work in legitimate business enterprises.

The key to this was outlined by Michele Sindona when in prison and slightly before his death when he was interviewed by Nick Tosches for his book "Power On Earth".

I very much suspect this is how Hedge funds have accrued so much clout to play and manipulate the markets.

Also, from Joel's website the following statement:

http://www.isgp.eu/dutroux_and_nebula/Be...Nebula.htm

"To comprehend this nebula, it is necessary to abandon traditional financial or political logic; this is not merely a question of nation, political party, or of ordinary economics... Our conclusion would be that at least over the last twenty years, the economic powers, some of which mafia types, have allied themselves with political forces and organized criminal structures, and reached the 4th stage of money laundering, namely, Absolute Power. It has been specified to us that at the present moment these characters control 50% of the world economy."
- Introduction of a Belgian gendarmerie report to a number of senior officials, District of Liege, November 21, 1994.

Note the date of this report was 14 years ago...

[Linda Minor]

I am not surprised by this figure of $10 trillion. Black money from the drugs trade, arms trade and all other criminal activities has been filtering into offshore accounts for decades. That money is then put back to work in legitimate business enterprises.

The key to this was outlined by Michele Sindona when in prison and slightly before his death when he was interviewed by Nick Tosches for his book "Power On Earth".

Here's something I wrote about ten years ago, which I found on my computer:

In 1964 Sindona founded Euromarket Money Brokers (commonly known as Moneyrex) to deal in debt brokerage and in buying and selling of spot and future currencies. Sindona described what Moneyrex did as follows:

"We had ten Telex machines, twenty telephones. . . . Say Barclays Bank of California needed $100 million. We go to the Telex, the telephone. We call Banca Nazionale del Lavoro, Bank of Tokyo, Chase Manhattan. We quote a rate of interest that Barclays is willing to pay, say eleven and a quarter percent. They say OK, and they transfer $100 million automatically. To our account then is automatically credited one-eighth of one percent of $100 million, or maybe one-sixteenth, one thirty-second of one percent, depending on the fickleness of the market. We never took risks, there was no speculation with Moneyrex--just commissions, brokerage fees."1

Since as early as 1959 when Sindona started Banca Privata, he had been acquainted with David M. Kennedy, the president and chairman of the Board of Continental Illinois Bank. Kennedy, a Mormon from Utah, who worked for the Federal Reserve in Washington, D.C. for 16 years before going to Chicago, became Secretary of the Treasury during the Nixon administration.2 The two men in 1968 attempted to found an Italian investment bank that would "rival the great British banks in the field of international commerce." 3 The other partners in the venture were Hambros Bank and Lehman Brothers of New York, an investment banking partnership which later became Shearson, Lehman. The attempt failed, Sindona claimed, because of sabotage by Enrico Cuccia, director of Mediobanca, the largest investment bank in Italy. Sindona believed Cuccia spread rumors to the press that Sindona was operating on behalf of the Mafia.

According to Penny Lernoux, Sindona did have origins "in Sicily, which took over from Marseilles as the world's heroin center when the French Connection was broken in the early 1970s."4 Chuck Giancana, brother of Chicago mobster Sam Giancana, stated in his book Double-Cross, that "millions of dollars flowed to Continental Illinois, a bank then heavily invested in Finibank, a Swiss bank owned in part by the Vatican and controlled by financier Michele Sindona."5 Other money was couriered by Catholic priests to Mexico and placed in Central American banks, most commonly in Panama, from which the funds were diverted to Milan and then to the Vatican Bank in Rome, from which they could be transferred to banks and companies controlled by Sindona. Sindona was associated with Paul Marcinkus, secretary of the Vatican bank, who as a Chicago priest, had been used in the 1940's and early 50's by Sam Giancana as a courier to funnel money from the diocese to the Vatican, and who later was accused of international money laundering and involvement in the murder of Pope John Paul I. Chuck Giancana also reported that his brother had assisted the CIA in laundering its money through the same channels, in exchange for contributions to Catholic charities.

In January 1969 an allegation appeared in Le Figaro of Paris claiming that through Sindona, "the Bank of America had come to serve 'Frank Sinatra and the powerful financial interests of certain Siciliens d'Amerique who seemed to gather around the singer.'"6 In August 1973, after Sindona purchased Loews' stock in Franklin National Bank in New York, an article by Dan Cordtz appeared in Fortune stating that there was no documentary basis for the rumors connecting Sindona to the Mafia. Nevertheless, in 1973, Sindona approached Bank of America, which:

had been founded by Amodeo Gianini, an Italian immigrant to San Francisco. Now, at the suggestion of the head of the Bank of America's Italian subsidiary, Banca d'America e d'Italia, Sindona proposed to Giannini's daughter, Claire, that the Bank of America refresh its Italian roots. This refreshment, of course, should take the form of Michele Sindona's acquisition of 10, perhaps 15, percent of the bank's stock. The founder's daughter responded to the notion with charmed approval, and Sindona undertook a formal presentation to the bank's administration, headed by Tom Clausen. While Sindona's talks with Clausen progressed, David Kennedy informally approached the Federal Reserve on Sindona's behalf. He reported to Sindona that no one in Washington would deny his Bank of America plans as long as he simultaneously sold his interest in Franklin.7

Franklin Bank was declared insolvent on October 8, 1974. In July 1978 the FDIC, as Receiver for the bank, filed suit against Lawrence Tisch, Loews Corporation and Lawton General Corp., a subsidiary, claiming:
(1) that Mr. Tisch misused his position as a director of FNB and its parent, Franklin New York Corporation (FNYC) and "inside information" to obtain a premium for defendants, the Company and Lawton, on the sale of 1,000,000 shares of FNYC common stock to Fasco International Holding, S.A. (Fasco), a company then controlled by Michele Sindona;
(2) that Mr. Tisch misused his position as a director of FNB and FNYC to "facilitate" various steps whereby Sindona and his associates were placed in positions of management control of FNB and, particularly, its international business, as a result of which Sindona caused FNB to suffer substantial damages; and
(3) that Mr. Tisch and the defendant corporations owed a fiduciary duty to FNYC and FNB which was breached by alleged failure to make proper investigation of Sindona.8

In 1980 Sindona was sentenced to 25 years in a U.S. federal prison for fraud, misappropriation of funds and perjury in connection with the draining of funds from Franklin National Bank.9 In 1982 he was indicted with 75 Italian Mafiosi in a heroin conspiracy and was extradited to Italy in 1986 for trial on charges of ordering the murder of the Italian judge involved in liquidating Sindona's assets. He died in jail of cyanide poisoning four days after his conviction. Before he died he was interviewed by Nick Tosces for the book mentioned above, which sets out Sindona's descriptions of various means of laundering money and of the potential for destroying a country's monetary system. The following is an intriguing section of the book:

. . .[T]he central bank of Hungary, acting on behalf of the Soviet government, placed an order through Moneyrex to sell [the grain contracts] short $20 billion. Sindona realized that Moscow, having closely followed the decline and instability of the dollar since the Smithsonian Agreement of August 1971, was betting that a greater, sudden decline was imminent--a decline that could be abetted by the massive short-sale order it was now placing. If Moscow succeeded, it should realize both a purely speculative profit and an indirect profit on the grain contracts, which had been stipulated in terms of more valuable dollars. . . . Sindona's reports of the Soviet plot were not acted upon by Nixon's economic advisors. In fact, as if orchestrated by the Kremlin itself, Secretary of the Treasury John Connally devalued the dollar by 10 percent on February 12.10
Thus in a few weeks' time, the Soviet Union realized a $4 billion profit: $2 billion in the selling short of the $20 billion (which had been bought largely by the Bundesbank) and $2 billion in the 10-percent devaluation of their grain-deal dollars. * * *
It was also in late 1972 that Moneyrex had been approached by representatives of an international consortium looking to sell short in the equivalent of $6 billion in lire. At the time, the lira was veering toward a fall under strong speculative pressures; and Sindona saw that the proposed short sale would likely have catastrophic results.
"They did not so much want to make money," he recalled. "They wanted to destroy the lira. They told me that there was $300 million in it for me.
After giving the matter some thought, Sindona decided to call his friend Prime Minister Andreotti and to explain the situation. He told Andreotti that there was a way for the hunter to be captured by the game, and Andreotti told him to go forward as he saw fit.
"I did not accept the consortium's order, and it was given to others. At the same time, I contacted a number of foreign banks and told them in confidence that the prime minister had authorized me to seek temporary support for the lira. Many of them agreed to cover the short sale. After about 400 billion lire had been sold short, the consortium abandoned its venture. The lira was being defended too strongly."
Later in June 1973, Prime Minister Andreotti--who once had privately commented to Sindona, "I can't even draw a drink of water without first asking the communists"--resigned from office. Two days later, the lira plummeted.
In discussing the plot to destroy the lira, Sindona seemed reluctant to reveal the identity of the consortium. "It sounds bad," he told me, waving his hand. "I already have enough enemies." Finally, he waved his hand in the opposite direction. "They were Jews," he said. "The people who handled the money and did the talking were from Geneva, but the money was from Israel." He shrugged, then he looked away. "Many strange things I learned, many very strange things."11

1 Ibid., p. 72.
2 Nick Tosches, Power on Earth: Michele Sindona's Explosive Story, 1986.
3 Tosces, p. 104.
4 Penny Lernoux, In Banks We Trust.
5 Sam and Chuck Giancana, Double-Cross: The Explosive, Inside Story of the Mobster Who Controlled America, Warner Books, 1992.
6 Tosces, p. 107.
7 Tosces, p. 145.
8 SEC 10-K filing for Loews Corporation, 1978.
9 David E. Scheim, Contract on America: The Mafia Murder of President John F. Kennedy, 1988.
10 Incidentally, in The Case Against the Vatican, the author reports that there was evidence from _____ indicating that John Connally had been paid off by ______, who was involved in schemes with Sindona. Incidentally, John Connally's Houston office was in Walter Mischer's building at 2727 North Loop East. Pete Brewton has also connected Connally in a business deal with Jim Bath, who was acting as trustee for Sheikh Kalid bin Mahfouz, and another Saudi, Gaith Pharoan, who was indicted in the BCCI scandal [p. 222]. In 1976 they bought into Main Bank of Houston, formerly owned by Bob Lanier. Connally sold his investment in 1980, and in 1981 Capital Bank's holding company, Mercantile Texas Corporation (later MCorp) bought Main Bank from Sheikh Khalid. Main Bank was situated on Block 271 in downtown Houston, just across Travis Street from the Houston Natural Gas Building.
11 Tosces, pp. 139-140.

[David Guyatt]

Thanks for this Linda. Sindona has always intrigued me.

My copy of the Tosches book is now in storage and is not easily available, or I would go get it and copy the relevant section I had in mind. The general thrust was the abuse of the futures and options market and how these are used to invisibly launder vast sums of money via multiple entities domiciled in multiple jurisdictions.

As I recall, it was way beyond the ability of national agencies to police the laundering system and the only chance was the formation of multinational agencies that could legally operate throughout the many jurisdictions - and so far as I know, this has never really happened effectively.

The net result is that deep political forces -- organized crime, big business, politics etc., are able to accrue a stranglehold on the financial markets because of the vast oceans of money they have at their disposal.

If 14 years ago this was estimated by the Belgian police to amount to 50% of the world economy, today it must be incredible.

[Linda Minor]

Thanks for this Linda. Sindona has always intrigued me.

My copy of the Tosches book is now in storage and is not easily available, or I would go get it and copy the relevant section I had in mind. The general thrust was the abuse of the futures and options market and how these are used to invisibly launder vast sums of money via multiple entities domiciled in multiple jurisdictions.

As I recall, it was way beyond the ability of national agencies to police the laundering system and the only chance was the formation of multinational agencies that could legally operate throughout the many jurisdictions - and so far as I know, this has never really happened effectively.

The net result is that deep political forces -- organized crime, big business, politics etc., are able to accrue a stranglehold on the financial markets because of the vast oceans of money they have at their disposal.

If 14 years ago this was estimated by the Belgian police to amount to 50% of the world economy, today it must be incredible.

I did another search on my external hard-drive and turned up an excerpt from research I wrote up in 1997. Unfortunately, the footnote numbers get deleted, but I pasted the footnotes from that section below the text:

What the George Bush chapter depicts is how one branch of the fondi took root in the fertile soil of Texas. There are more chapters to be written. Funds for investment in railroads, lumber companies, oil exploration—all the industries developed in Houston after 1836—came from somewhere other than Texas, which had no means of raising capital at the time. Capital was created by the issuance of bonds, which were sold in other locations—New York, Boston or Europe. But the fondi saw a means of acquiring power quickly by laundering profits earned from trading in slaves, liquor and opium through a new system of investment trusts developed in Philadelphia and continued in Hanover, Morris County, New Jersey—home of the Prudential Company. An examination of the first insurance fund in America, founded even before the 1776 revolution, can be very instructive.

The very first life insurance company in America—the Presbyterian Ministers’ Fund--began about 1761 in Philadelphia. The date roughly corresponds with the date the first life insurance policies were written by the Equitable Assurance Society of London. The American company was a corporation dominated by Presbyterian clergymen to provide protection for their families after their demise. The insurance contracts were reinforced by bonds drawn by Benjamin Chew, Esq., one of the first of the “Philadelphia lawyers.”

After a few decades of not very successful operation, the fund’s management came to include the Bevan family of Quakers who have been trustees in Barclays Bank for centuries. In fact, the American Bevan family began with Matthew L. Bevan, born in Pennsylvania in 1777 to a Quaker family. He became a Presbyterian in 1849, joining a church in Philadelphia pastored by Dr. Jacob Janeway, a Fund board member. Although Bevan was a shipping merchant for the firm of Bevan and Humphreys—largely engaged in cotton handling—his contacts with Barings Bank of Liverpool and with Nicolas Biddle’s son may have helped to get him named as president of the Presbyterian Ministers Fund, carrying with it a directorship on the board of the Insurance Company of North America (ICNA)--1822-41. A subsidiary of this insurance company was North America Land Company, one of the trustees of which was John Barclay, whose family in England were partners with the Bevans.

Another Philadelphia associate was Robert Ralston, shipping merchant in the China trade, director of the ICNA, and a founder and director of the Second Bank of the U.S. and of the Philadelphia Exchange. Ralston was therefore acquainted with fellow church member, Matthew L. Bevan, Presbyterian Corporation president in 1844, who liquidated the assets of the Second Bank of the U.S. It is clear from the author’s tone of writing that he did not care for these 18th century Philadelphians. As he says:

It is to be remembered that Philadelphia was then a city of Democrats. By the term “Democrats” we mean Democrats as opposed to Whigs. They were not exactly Jacksonian Democrats. They were silk-stocking Democrats. The group included such men as A.J. Dallas, John Winthrop Sargeant, and Charles J. Ingersoll. The real Jacksonian Democrats were the folk out on the frontiers—not very elegant gentlemen and ladies in every case, but people who thought for themselves and spoke out about it.

The reader senses the author is implying that around 1820 a group invaded the Presbyterian Corporation for the purpose of looting the fund, and the same people did the same thing to the National Bank, but he is afraid to say so in so many words. But he does furnish a number of clues to connect the managers of this fund to various other life insurance companies. He says there was an “interesting link” with the Equitable Life Assurance Society of New York, in that the Rev. James W. Alexander, a Presbyterian minister insured under the fund, was the father of William C. Alexander, the first president of the Equitable, who was appointed by Henry Baldwin Hyde, the founder of the company, at the time he left Mutual Life of New York. The Equitable’s attorney was another son, James W. Alexander, later president of the company. The author was definitely angry at someone, but he seems not to have known who was at fault. He repeatedly compares the founders of the Fund with their successors. The founders were “Dissenters—Nonconformists…men who insisted on the right of private judgment, the right to think and to do for themselves.” Such men, he says, “may easily sell their birthright for a mess of pottage.” He then warns about the dangers of becoming complacent and regimented, and of allowing men without principles to think for us.

Barclays’ banking business grew up in the country districts of England, carried on by successful traders who had correspondents in London, choosing to use the descendants of the goldsmith bankers, mainly grouped in Lombard Street and its vicinity. What these associations of traders set up was a clearing house system by which transactions were made possible between the country agents and a London bank without transporting cash. According to a history of Barclays Bank:

English merchants abroad [in British colonies] gradually developed into bankers in much the same fashion; so that a century later, the bill [of lading] on London had become, what it still remains, the most valued form of international currency. Thus first the country bankers, and then the merchant bankers abroad, created the famous bill on London, which by the punctuality of payment of their London agents ultimately obtained world-wide repute.

The book explains British banking history, including the rise of joint-stock banking, limited liability and the great banking amalgamations after 1915, but it indicates that there was a “quite peculiar” manner which amalgamation has taken place in the case of Barclays bank, as follows:

The nucleus of the combination consisted of two great firms united in 1888; Barclay, Bevan, Tritton & Co., and Ransom, Bouverie & Co.; each of them London agents of a number of country banks; and their first amalgamation of 1896, a most natural one, was a union with some twenty of these country banks, in which the Gurneys of Norwich and Backhouse of Darlington figured most actively. From time to time after 1896 there were many similar unions with local banks, especially in districts where the bank was not previously represented. Finally, after 1915, Barclays joined in the general movement for concentration on a far larger scale, and amalgamated with large centralised banch-banks of a different type. In the end it has become the third in size of our Big Five clearing banks, with deposits of over 300 million pounds, and 1838 bank offices.

A review of the Barclays history book found in The Economist in 1927 summarizes as follows:

In the course of the narrative the reader is introduced to a large number of the best known names in English banking: Alexander, Backhouse, Barclay of course, Bevan, Birkbeck, Bolitho, Bosanquet, Bouverie, Buxton, Eaton, Foster, Gosling, Gurneys, Hoare, Leatham, Lucas, Pease, Peckover, Seebohm, Tritton, Tuke, Williams and many others. * * * * It is really astonishing how intimately the English banking families were inter-related. The writer was once shown by an English banker a very elaborate pedigree, some four feet square, on which he made out his descent from Sir John Houblon, the first Governor of the Bank of England. It further appeared from this tangled web of descents and marriages that he was also connected with almost every banking family one had heard of. This intimate and complicated relationship is fully illustrated in the book we are considering. It largely extends our printed record of such connections, and perhaps even more of those religious sympathies on which they were grounded. The Quakers have played a great part in English banking, nowhere more than in the Barclay group; the Huguenots may rank next; but a certain pietistic and mystical form of religious feeling seems to have characterised nearly all the original Barclay bankers.

According to the writers of Dope, Inc., the clearinghouse for the banks involved in the drug trade is the Assicurazioni Generali of Venice, whose major stockholders are the S.G. Warburg merchant bank of London and the Paris Banque de Pris et des Pays-Bas. The Warburg chairman, Lord Eric Roll of Ipsden became chairman of Kissinger Associates in 1984, replacing its founder, Lord Carrington, who had also been a director of Hambro’s Bank, when it financed Michele Sindona’s entry into the United States, as well as a director of Barclays Bank—which is, incidentally, the principal financier for the gold and diamond mining in Africa. As stated in Dope, Inc., these men are
representatives of the ancient fondi who have collaborated for centuries. What is new and ominous is that the men who perform the dirty work of the fondi have moved out of shadows of Caribbean offshore banking and Hong Kong smuggling, and into the board rooms of the most powerful American financial institutions, and close to the councils of the United States government itself.
For a description of how these bankers launder drug money, all we have to do is read the explanation given to Nick Tosches by Michele Sindona:

“Only about 5 percent of all the options traded are executed on behalf of corporations wishing to hedge the currency risks of their international trade. The vast majority of the trading is purely speculative in nature, carried out by banks on behalf of their clients or themselves.

“In the international currency flow of some $60 trillion a year, it is extremely hard to distinguish those transactions carried out simply to realize legal profits from those carried out to launder dirty money.

“So,” he [Michele Sindona] went on, “your dirty money has been deposited in Hong Kong or Singapore in the name of your ghost company. Now you buy, say, a yen option at 240 yen per dollar. This option gives you the right, but it does not obligate you, to buy 24 billion yen for $100 million six months from now. The premium for the option is $1 million.

“If, during those six months, the yen falls to, say, 260 per dollar, you can buy the 24 billion yen in the spot market for $92 million, or you can sell the option contract. In either case, you make a profit of $7 million. That is, $8 milion less the $1 million premium.

“Your counterpart in the deal is officially the bank in Hong Kong or Singapore. But, in reality, that bank is acting only on behalf of the ghost company that deposited the dirty money with them. Your real counterpart is yourself. Therefore, the $7 million profit you earn is not recorded as the bank’s loss, but as the loss of your anonymous bearer-share company.

“The deal has turned $7 million in hidden dirty money into a clean profit. You haven’t even really lost the $1 million option premium, because it has been paid to the ghost company that was your counterpart in the deal—that is, to yourself. Your final profit from the transaction is reduced only by the commission you must pay the bank for the fiduciary transaction—here, about $20,000—and by the income tax you must pay to the American government.
“In practice, a man who is expert at this system might buy and sell the same option many times during the six-month period, according to the fluctuations of the market. In this way, he could launder hundreds of millions of dollars in a relatively brief time.

“All right,” he then said. “But what if, during those six months, the yen rises? What if it goes up to 220 per dollar?

“In this case, you allow the option to expire unexercised, and you lose only the cost of the premium, $1 million, and the $20,000 commission to the bank. Bus, again, that $1 million loss is not actually a loss. It is offset by the $1 million in black profits earned by your ghost company as a premium for the option you have granted it. And, as you can deduct the $1 million ‘loss’ from your income, not only do you suffer no real losses, but you also, through this deduction, lower the tax you must pay on the laundered profits from other deals.

“In these days of floating exchange rates, there are often rapid fluctuations within a span of hours. Working prudently, a man who knows what he’s doing can realize enormous profits without risk—profits that are not really profits, but dirty money made clean.

“The same system can be used with commodities. You buy a futures contract valued at $100 million. Once again, the counterpart of the American bank or broker you use will be, upon your request, the bank in Hong Kong or Singapore where your dirty money has been deposited in the name of your bearer-share company. The Far East bank will receive a notice that the contract proposed by the American bank or broker is to be stipulated for the ghost company. The Far East bank takes no risk, and asks only a very slight margin as a formality—perhaps $1 million.

“If the price of the commodity rises 10 percent, you make $10 million in profit. The counterpart company registers a loss in the same amount. Thus you have turned dirty money to clean….

“Whether currency or commodities options are used, the system is invincible. It is”—he looked away, feeling for a phrase—“it is the system at the end of the world.” He smiled wickedly then. “Your government, perhaps, should speak of this to Mr. Colby, the former CIA director, who is now privately employed by the Singapore government.”

Whatever one’s opinion of the honesty or criminality of Sindona, his explanation of how money is laundered makes sense. As a matter of fact, Barclays Bank almost admitted as much in a March 9, 1997 article in the London Sunday Telegraph, which reported as follows:

Every bank has vast derivative liabilities. Barclays, for example, admitted in its results that it had derivatives worth 922 billion pounds at the end of last year, up more than a quarter on 1995.

Barclays and its peers say the risk of these vast positions is nominal because they are all matched and hedged. If the financial markets crash the losses from one set of contracts will be offset by the profits on another.
Barclays Bank is also involved in a consortium with International Trust Corporation (Itco), which was created by Anglo-American Mining—an arm of the Cecil Rhodes trust—a subsidiary of the Oppenheimer mining group, the Royal Bank of Canada and N.M. Rothschilds of London, to create banks, investment companies, tax shelters and trust funds in the Caribbean. The Assicurazioni Generali has taken over control of the Jefferson Insurance company located in Greensboro, N.C., whose chairman, Nathaniel Samuels (formerly of Kuhn Loeb) was a State Department crony of Henry Kissinger. Samuels was also New York chairman of the Banque Louis-Dreyfus Holding Company in the U.S. and a director of Banque Louis-Dreyfus of Paris. It appears that this insurance company may have been instrumental in providing funds for the purchase of the Esperson Building in Houston by George Butler of the Bank of Texas and Post Oak Bank. But their presence in Houston was not new. In another chapter, the history of these connections will be more fully explored.

The question then becomes, if Barclays and similar banks which began as merchant banks, are involved in laundering drug money, who do the drug profits belong to? EIR writers have deduced that the drug trade is being run out of the companies chartered by the colonial governments dating from the time the Venetian bankers took over the British and Dutch oligarchical families.

Notes:
Alexander Mackie, Facile Princeps: The Story of the Beginning of Life Insurance in America (Lancaster, Pa.: Lancaster Press, 1956), p. 1.
Mackie, p. 250.
Mackie, p. 272.
“History of Barclay’s Bank,” a review of a book compiled by P.W. Matthews, Chief Inspector of the Bankers’ Clearing House (1900-1920), edited by Anthony W. Tuke, Local Director of Barclays Bank (Blades, East and Blades, Ltd., 1926)—as reviewed by H.S. Foxwell in The Economic Journal, September 1927, pp. 411-417.
Foxwell at p. 413.
Foxwell at pp. 414-15.
Dope, Inc., p. 108.
Dope, Inc., p. 109.
Nick Tosches, Power on Earth (New York: Arbor House, 1986), pp. 94-96.
Dope, Inc. p. 108.
London Sunday Times Team—Nicholas Fraser, Philip Jacobson, Mark Ottaway and Lewis Chester, Aristotle Onassis (Philadelphia and New York: J.B. Lippincott Co. 1977), p. 40.
Fraser et al, p. 54.
Fraser et al, p. 99.

[Jan Klimkowski]

It seems the Fed is genuinely out of money, is levered at 50:1, and is currently engaged in "kiting" - aka counterfeiting or pass the parcel & hope the music doesn't stop when you're holding it....

Karl Denninger's latest analysis:

Yes We Will (Have A Depression)

The mainstream media is finally starting to figure it out.

In Barrons "Other Voices" column for publication on Monday we have this:

NOW WE CAN SEE THAT THE ECONOMY IS A CONFIDENCE GAME. With markets spinning out of control and liquidity frozen, analysts and commentators repeat again and again that the problem is that investors have lost confidence. What they don't adequately stress is that this loss of confidence is fully justified.

In the past several decades, financial markets have become a sophisticated confidence game, and the people in the markets are latter-day versions of Herman Melville's wily character in The Confidence-Man, duping passengers floating down the nation's great artery, the Mississippi River, on the paddle-steamer Fidèle. (Melville's novel, appropriately, takes place on April Fool's Day.)

.....

The world Melville imagined more than 150 years ago has become a reality today. In the microcosm of the Fidèle, devious con men prey on credulous victims, who no longer know what is real and what is not.

Although the disguises have changed, the game has not. When values-financial, moral and religious-are based on nothing, redemption is impossible. We will not solve our economic problems until we unmask the disingenuous tricksters and reassess values that are not merely financial."

Bloomberg Media is also on the case now with a lawsuit aimed at The Fed:

``The American taxpayer is entitled to know the risks, costs and methodology associated with the unprecedented government bailout of the U.S. financial industry,'' said Matthew Winkler, the editor-in-chief of Bloomberg News, a unit of New York-based Bloomberg LP, in an e-mail.

The Fed has lent $1.5 trillion to banks, including Citigroup Inc. and Goldman Sachs Group Inc., through programs such as its discount window, the Primary Dealer Credit Facility and the Term Securities Lending Facility. Collateral is an asset pledged to a lender in the event that a loan payment isn't made. "

It only took nearly a year and a half from when I started to sound the alarm before the evidence became incontrovertible and the media began to wake up: over a million jobs were lost, the market is down 40% (with a target of down 90% - halfway there on the road to hell!) and unemployment is in the process of skyrocketing.

But the voices calling for "more hiding of the truth!" have not ceased; indeed, the stridency of their screaming has gone parabolic. Chief among them are one of the architects of the lies in the first place, the National Association of Realtors (NAR)'s Lawrence Yun:

Given the sentiment in Washington, and also with a new president coming in, President Obama -- and he has indicated that he is favoring some sort of economic stimulus -- we believe that the stimulus package should be focused on housing because we cannot have solid, sound economic recovery without housing market recovery," Yun said."

Yun then goes on to list yet more ways to lie about value, including interest rate "buydowns" (which in fact just take the money out of your pocket as a taxpayer to pay what comes out of your pocket as a home buyer - and does nothing), making increased "conforming" price limits permanent (again - transferring risk from you to you) and similar nonsense.

Oh, and they're forecasting that home prices will increase in 2009 and 2010.

This is, of course, the same group that had its former economist publish a book which had as its subtitle "Why the housing boom will not bust."

Put NAR firmly in the camp of those who refuse to acknowledge economic facts due to their own twisted self-interest.

Nor shall we exclude Berkshire Hathaway, which reported huge losses - more than a billion - on marks taken against derivatives that Warren called "financial weapons of mass destruction" - just before he wrote some.

Oh, and this is one of Obama's chief economic advisers. You'd think that the man who ran on "Change" would, in fact, be interested in seeing some. Perhaps it was just a slogan.

Put The Federal Reserve in the camp of liars and cheats.

"Previously, the rate on required reserve balances had been set at the average target federal funds rate established by the Federal Open Market Committee (FOMC) over a reserves maintenance period minus 10 basis points. The rate on excess balances had been set as the lowest federal funds rate target in effect during a reserve maintenance period minus 35 basis points. Under the new formulas, the rate on required reserve balances will be set equal to the average target federal funds rate over the reserve maintenance period. The rate on excess balances will be set equal to the lowest FOMC target rate in effect during the reserve maintenance period. These changes will become effective for the maintenance periods beginning Thursday, November 6."

Let's talk about this a second. The EFF, or effective Fed Funds Rate, has traded at 0.23% on average since shortly after the target was lowered to 1%. This is a spread of 75 basis points, roughly.

The "discount" on deposited reserves was 35 basis points.

Therefore, were I a bank I could borrow as much as I wanted at 25 basis points and deposit it as "excess reserves" at The Fed (instead of lending against it) and earn an absolutely risk-free return of 40 basis points.

Who pays the 40 basis points? You, the taxpayer.

What is the change they proposed likely to actually do? Increase the EFF? Probably not. More likely it will increase the amount you, the taxpayer, pay banks to 75 basis points.

This is called a "liquidity trap" and is one of the problems with allowing The Fed to pay interest on reserves - they have a direct line to the Treasury for that money, which of course means that you, the taxpayer, are the one who ends up paying.

Did Congress object to funneling off yet more of your money to the banks where they could (and are) stashing those funds with The Fed instead of lending them out? Oh, Chris Dodd and Barney Frank have made much noise about the Tarp, but have either of them made noise about rescinding the ability of The Fed to pay interest on reserves?

Nope, because, in all probability, they don't understand it - and if they do, they sure as hell are counting on you not understanding how all this works.

Never mind that The Fed has found itself powerless to impact the real economy. Remember that Ben Bernanke, back in September of last year, said that he was lowering interest rates and that monetary policy had a "transmission delay" of six to twelve months.

Well Ben? We're six to twelve months later, and instead of easing the upcoming storm what we've seen is the collapse of two major investment banks, the near-collapse of the largest insurer in the world, and the near-collapse of the two largest mortgage issuers and guarantors.

Never mind General Motors, which now has a negative $60 billion book value.

Behind all of this destruction is the ugly truth expressed in the top article I referenced here - that we have gone from an economy that produces cars, grain and TVs to one that shuffles paper.

The first produces real wealth and allocates some of it to the producers up and down the line.

The second invents wealth that does not exist, and relies on people believing the lies in order to succeed - at least for a little while.

We did the same thing in the 1920s, and we got the consequences in the 1930s.

Now we've done this in the 1990s and 2000s, refusing to take our medicine in the 00-03 timeframe, and since we did it "at least twice as bad" this time around, we should expect that it could easily be worse than the 1930s in response.

Sure, we have people who "get it" more than they did in the 1930s. But what we don't have is leaders, either in The Fed or Government, that are willing to do anything about disclosing the truth - which is that they've been complicit in this entire mess (just as they were in the 1920s) and thus they need to fall on their swords.

The greatest area of danger here is that The Fed is in fact trying to catch not a falling knife but rather a falling piano. The idea that The Fed can prevent a debt deflation of this magnitude is pure folly; even with expanding its balance sheet from $800 billion to over $2 trillion in less than a year and increasing its leverage to 50:1 (as of the most recent Fed report) it pales beside a housing market that has roughly $3 trillion of bad debt to be expunged - and that's just one sector of damage.

Taken in total the debt that must be defaulted in order to restore balance is likely in the $8-10 trillion range in the United States, and The Fed is not limiting its influence-peddling to the US. The swap lines it has opened to places like South Korea are an attempt to prevent debt deflation there from reflecting back into trade and global currencies; when one looks at the global deflationary forces at play one is staggered - they may in fact exceed global GDP (~$50 trillion)

As just one small example of this we have AIG, which Friday "announced" that it is "annoyed" that banks got better terms than it did in the TARP and thus they now want to "renegotiate", desiring to "pledge their MBS" to restructure the loan and/or do a "debt to equity swap" (akin to my "cramdown" in The Genesis Plan.)

Someone's been smoking some damn good stuff over there at AIG.

You see, AIG already pledged all its assets to The Fed to secure the original line of credit. And what did they pledge to get the second line of credit? Who the hell knows - how do you pledge more as collateral than what you have? One must assume that second credit line is in fact unsecured!

This bit of game playing raises all sorts of questions for The Fed and our government, none of which are being asked or answered as of yet, such as:

*
We still don't know what happened to the mysterious NY Fed credit line that went out to Lehman Brothers to settle certain obligations at or about the time they went under. As far as I can tell, it has not been repaid. Where's the money, who got it, and what security is being held against it (if any)?
*
If AIG pledged "all its assets" on the original $80 billion, what did they pledge for their second line of credit? How do you pledge more than you have? And how do you cram down something that is already pledged off as security when you want to "restructure" your deal?

This is kind of like a poker player who goes bust in the casino and troops to the cage to demand another marker; when told that his check is no good he threatens to commit suicide right there and make a hell of a mess that will drive away business unless they give him cash for his worthless paper.

Or we could take GM's case (mentioned above); they are threatening to open up with a tommy gun on the casino patrons before turning the weapon on themselves (in the form of a threatened 2 million jobs to be lost) if they aren't given a gift - it sure as hell isn't a loan if you have negative net worth!

Care to bet on how many other "suicide threats" The Fed and Congress have had presented to them over the last year but we have not been told about (or at least, not with any sort of real disclosure!)

The precipice America stands on is narrowing dramatically and our government and The Fed are chipping away at the rock with jackhammers.

The Fed is essentially kiting and praying that the clock doesn't run out on them - or worse, that someone doesn't hold up the funds "somewhere" long enough to disrupt the chain. In a "kiting" scheme the crook deposits a check into Bank #1 from Bank #2 (which is in fact no good!), then draws the funds on Bank #1 and deposits them in Bank #2 to make the check good that they wrote. This is illegal, by the way, if you're an "ordinary Joe", as you are effectively counterfeiting the money (it doesn't exist in both places at once!) during the time of the float.

But wait! Isn't counterfeiting of credit the entire nexus of the last five years of "financial innovation"?

Yep.

And now we have The Fed continuing the game but on a global grand scale, taking the excess leverage that everyone else had and consolidating it on its own balance sheet. Where we had a few investment banks running at 30:1 leverage, we now have our Fed running at fifty to one!

The Fed is running what amounts to a gigantic kiting scheme where it borrows $500 billion (the "supplemental Treasury program") from various foreign and domestic sources then loans that money out to the same domestic and foreign sources who settle those trades!

As further evidence of this game we have an enormous number of "fails to deliver" in Treasuries. Why would there be a fail to deliver unless the person who sold it doesn't have it? That's the essence of a kiting scheme - you're effectively counterfeiting, because you're writing a draft that you can't settle. This is showing up in the Treasury market, where "fails" reached an aggregate five trillion dollars in October.

If you or I pulled this game we'd be under indictment. Yet this is the essence of the various programs that Treasury and The Fed has put into place - primary dealers take down Treasury supply yet they are, in no small part, recipients of these various alphabet soup financing programs.

That is the definition of kiting folks. Go look it up.

Why doesn't Congress - or our President-Elect Obama - get out in front of this and stop it?

For one, 99.9% of Americans don't understand it. Many people "kite" checks unknowingly, or at least did before the advent of near-instantaneous electronic clearing. How many people used to go to the grocery store on Thursday night knowing they would be paid Friday, and write a check for groceries that they knew was no good until Friday morning?

Lots. In fact, most people don't even understand that this is against the law because it is in fact counterfeiting the credit (money) that you are allegedly paying the store with.

The Fed (from its balance sheet) can be demonstrated to have about $1 trillion out in loans. Bank lending is actually way up - it is not collapsing.

So where did the loans go?

To other banks and "shadow" financial entities (hedge funds, etc), back and forth, kiting the money while chewing off little bits here and there for their own salvation such as the excess reserve interest payments, all of which is being charged back to you, the taxpayer.

Paulson's TARP (in its various forms, including its original design) makes it worse; in addition to kiting funds back and forth the TARP makes possible the exchange of Treasuries (money good) for trash (MBS and other "assets" that are worth fractions of a dollar.) Bluntly, what Paulson is doing is taking your money and giving it to the banks at a discount (based on whatever they tender to him) who then loan it to you at interest.

Perhaps Obama (or Paulson) can explain exactly how is it beneficial to the economy to:

*
Take capital (your tax receipts) from you and instantly devalue it by whatever the real value of those MBS and other "assets" are.
*
Exacerbate this drain on the real economy and consumer (you) by then loaning that money back to you at interest.

I see only damage there to the real economy and to taxpayers, not benefit.

This mistake is the root of all of the so-called "liquidity facilities" proposed thus far, and it is precisely the same set of mistakes made during 1929-31 that led to what was destined to be an ordinary (if deep) recession turning into The Great Depression.

Nor does it stop there. Obama declared that his first priority was a "second stimulus."

The problem with such a "stimulus" is that it can't and won't work, and public support for same relies on the ignorance of the body politic. As I demonstrated the last time the first "stimulus" cost you more in the first year if you were a home buyer than you got in the check; that is, it had a negative real value to you, and worse, it continued to accrue that negative value through the next 30 years!

This is what must happen because our government does not have a surplus from previous "good years" banked in the Treasury; if we had we could use it to cushion the blow. But since our government has never managed to accumulate such a surplus any such "stimulus" is in fact coming out of your pocket in the form of additional debt upon yourself in order to pay yourself.

It is exactly identical to you having $20,000 worth of credit card debt, "rolling it over" into a new credit card and then charging up the now-cleared credit line. You have not improved your financial situation one iota but rather have made things much worse!

Yet this is what President-Elect Obama and the Democratic party have proposed.

We're headed for another Depression folks and I no longer consider the actions that are being taken by our government to be "mistakes" - at this point they must be classified as knowing and intentional acts, depending on you, the public, being too ignorant of how banking and finance work to figure it out and demand that they stop it.

"Stop it" means what I've said all along - force the bad debt out into the open where it must be recognized and defaulted, no matter who it screws, then pick up the necessary pieces. This will result in a lot of bankruptcies but it will also realign debt payment capacity with debt outstanding, which is the critical element that must and will come back into balance.

We can do this via the marketplace or we can continue to increase the imbalances and guarantee a far worse outcome; it is only through government endorsement of a refusal to recognize insolvency that recessions are turned into Depressions, and right now we're getting it in spades.

If you're wondering how bad it can get, and how fast, read this:

"Overnight, people lost their savings. Prices are soaring. Once-crowded restaurants are almost empty. Banks are rationing foreign currency, and companies are finding it dauntingly difficult to do business abroad. Inflation is at 16 percent and rising. People have stopped traveling overseas. The local currency, the krona, was 65 to the dollar a year ago; now it is 130. Companies are slashing salaries, reducing workers’ hours and, in some instances, embarking on mass layoffs.

“No country has ever crashed as quickly and as badly in peacetime,” said Jon Danielsson, an economist with the London School of Economics. "

To "borrow" (sorry, no interest either Barack) a couple of our new President's slogans:

Yes we can - have a Depression.

Yes we will - have a Depression, unless our "leaders" stop it, and President Obama and The Democrats will own it, being the party with complete control of Congress and the White House.

Our government is counting on you remaining ignorant.

Will you meet their expectations?

PS: Watch Ireland. Closely.

http://market-ticker.org/archives/651-He...ssion.html

[Peter Lemkin]

August talk by Michael Hudson here http://www.kpfa.org/archives/index.php?arch=29257 Title: From Cold War to Class War.
Pretty depressing stuff - but he at least has ideas for how to resolve the situation and even [imagine that] tax the rich and get our money back from them...etc. You won't find him on Obama's anything list - only shit-list, if they even know he exists.