Thursday, January 28, 2010

Record number of young Americans jobless

People talk to job recruiters at a career fair in Los Angeles, February 3, 2009. REUTERS/Lucy Nicholson

CHICAGO (Reuters) - The U.S. economic recession has taken a particularly heavy toll on young Americans, with a record one out five black men aged 20 to 24 neither working nor in school, according to research released on Tuesday.

U.S.

Teenagers have found it significantly harder to get a job since the recession began in late 2007, with black youths and young people from low-income families faring the worst, wrote Andrew Sum of Northeastern University in Boston, a employment researcher commissioned by the Chicago Urban League and the Alternative Schools Network.

"Low-income and minority youth, who depended on part-time jobs as a significant stepping stone to future employment, have been forced out of the job market and economically marginalized," Herman Brewer of the Chicago Urban League said in a statement.

Overall, 26 percent of American teenagers aged 16 to 19 had jobs in late 2009, said the report, which was based on U.S. Census Bureau data. That figure is a record low since statistics began to be kept in 1948, the researchers said.

Employment counts the number of people with a job as a percentage of the entire work force. By contrast, the unemployment rate -- which stood at 10 percent in December in the United States -- does not include people who have grown discouraged and stopped looking for work.

Joblessness was particularly rife among high school dropouts aged 16 to 24 who were neither in school nor holding a job, the report said. Family income also had a influence on joblessness.

Only 13 percent of low-income black teenagers in Illinois held a job in 2008 compared with 48 percent of more affluent white, non-Hispanic teens.

The "disconnection rate" -- Americans aged 20 to 24 who were neither in school nor working -- jumped to 28 percent last year from 17 percent in 2007.

"If you included those in prison it would be a couple of points higher," the report's co-author Joseph McLaughlin of Northeastern.

Among the proposals the report supported were government-funded jobs programs directed at the young, additional funding to help re-enroll school dropouts, and government-funded expansions of work internships.

(Reporting by Andrew Stern; Editing by Eric Walsh)

Geithner Conspires to Dupe Investors

Taylor Connat emails:
Geithner just told Cummings that the reason they don't want to disclose who the counter-parties in the AIG fiasco were is because it would threaten their ability to recoup taxpayer money spent on these bailouts. Essentially, if the market had this info, it would value related securities more realistically and the Treasury/Fed would lose out on their operation, costing the taxpayers money.

So, Geithner just admitted that they are trying to pull one over on investors and deny them material information in order to trick them into paying more for various assets than they're worth, in order to be able to pay back the taxpayer.

Isn't this called fraud?

Record foreclosure filings threaten housing recovery

The total of outstanding foreclosure auction notices on Orange County homes hit 10,513 at the end of December, the highest in this housing downturn, reports ForeclosureRadar.com.

click to enlarge

The total has more than doubled in the nine months since March, when it was 4,573.

ForeclosureRadar tracks outstanding notices of trustee’s sale, which announce a house or condo will be sold at auction. Such notices are usually good for only one year.

Sean O’Toole, head of ForeclosureRadar, said although foreclosure filings overall decreased at the end of 2009, the backlog of delinquent loans keeps growing.

He said only a portion of borrowers are getting loan modifications enabling them to avoid foreclosure.

“It is clear that political pressure on lenders to delay foreclosure is working,” O’Toole said. He went on via email:

I think it is postponing a real, long term, sustainable recovery. As a nation we simply have too much of our income going to housing debt, to have a meaningful recovery in a consumer driven economy. That said … we are seeing quite a few positive trends in housing currently … even if they have been artificially created by holding back (or “preventing”) foreclosures, lowering interest rates and offering tax credits. Whether you call it “helping families save their homes”, or “extend and pretend”, I don’t foresee a change in course anytime soon.

As for the percentage that end up successful loan mods that really depends on what happens with principal balance reductions. Right now our country is pretty divided on that issue. Some are yelling from the rooftops that it is the only solution, others are ready to tar and feather any politician that even considers giving their neighbor a bailout. This will be one of the most interesting housing debates of 2010.

Note: ForeclosureRadar did not provide data from past corrections, but I would guess December’s total of outstanding NTS is the highest ever.

美國‧希拉里不做8年國務卿‧盼退位後寫作教書

(美國‧華盛頓)美國國務卿希拉里週三(1月27日)表示,如果奧巴馬能成功連任,她也不會在國務卿的位置上坐滿8年,她更希望退休後能從事寫作和教書的工作。

希拉里已經在政壇上活躍了數十年,她表示自己很享受作為美國頂級外交官的工作,但身體已經相當疲憊。

希拉里在接受媒體訪問時被問及是否會在國務卿的位置上工作8年時說:“不會,我真的做不到。”

“整整8年——這太有挑戰性了。”

瑞士‧世界經濟論壇索羅斯法總統開炮‧中國貨幣貿易政策遭轟

(瑞士‧達沃斯)出席達沃斯世界經濟論壇的政治領導人、中央銀行和銀行家,抨擊中國的貨幣和貿易政策,同時質疑中國處理過熱經濟的能力。

中國官員則堅稱,維持人民幣疲弱和龐大的貿易盈餘,是為了全球經濟利益。去年中美貿易盈餘高達1961億美元。

第40屆世界經濟論壇年會週三(1月27日)開幕,時值全球景氣漸趨復蘇,但不確定因素仍多,因此這場盛會備受矚目。

法總統:貨幣導致貿易失衡

法國總統薩爾科齊在開幕式上發表講話時,不點名地攻擊中國,聲稱日趨惡化的貿易不平衡正在危害全球經濟復蘇。

他說:“貨幣是造成貿易失衡的中心。匯率不穩定和一些貨幣幣值被低估,對公平貿易和誠實的競爭力產生影響。”

科威特中央銀行行長達夫多布在講話中則提到“持續性的外在失衡”,並指必須解決中國和美國之間,及波斯灣石油出口國和美國之間的貿易失衡。

索羅斯:應放手人民幣升值

億萬富豪索羅斯也加入歐洲和北美的陣營,呼吁中國立即“放手”讓人民幣升值。

他說:“重新評估人民幣匯率的事實越來越強烈。”他堅稱,更強勢的人民幣將有利“中國和全世界”。

中國副總理李克強為中國的貨幣政策作出辯護。他強調,維持穩定的人民幣是非常重要的,特別是在這個動蕩的市場,“這對中國,對世界都好”。李克強將於今日(週四,1月28日)發表主旨演說。

台灣‧“我要嫁個有錢人”‧女生“整貴婦容”改姻緣

(台灣‧台北)我要做貴婦!歲晚臨近,台灣掀起新春整容熱潮,不少愛美女士趕在年關前做整容手術改運,要塑造一副“貴婦相”以催桃花改姻緣。

台灣的整形醫院指出,整容需要較長時間復原,故近年每逢春節長假前都是整容旺季,但今年生意更旺,不少人希望趕在新年前改頭換面,以全新形象示人。

有整容醫生透露,主要顧客均為女性,多是要求讓臉頰更為圓潤、好看,希望更接近貴婦“好命”的面相。

以具福相明星名媛為樣本

這些女顧客大都以具“福相”的明星名媛為“樣本”,部份甚至拿著明星名媛的照片,要求“依樣畫葫蘆”,依照相中人重塑臉形、顴骨、鼻子、下巴及額頭等部位,整出標準貴婦福相。

醫生稱,年輕一輩整容多是為貪靚,令臉部輪廓更美,而適婚、失婚的人多是希望能靠整貴婦福相,提昇桃花運,嫁個有錢人、做少奶奶。

貴婦相榜有林志玲小S

整容醫生統計指,最受女顧客歡迎的5大熱門貴婦相,分別是蔡依珊的鵝蛋臉、郭晶晶的高鼻、小S的渾圓下巴,還有前太平洋電線電纜集團董事長女兒、微風廣場老闆娘孫芸芸的光滑額頭,以及嫁入豪門的女星郁方的飽滿顴骨;名模林志玲、女星林青霞等也榜上有名。

不過,若要炮製完美的貴婦福相,代價不菲,做齊臉頰、鼻子、顴骨、額頭、下巴5個部位的整容手術,估計約要花28萬元新台幣(約馬幣2萬9850令吉),其中,修整臉形最貴,女士要成為貴婦前,荷包先要大出血。

美國‧奧巴馬發表首個國情咨文‧“美國不能做老二”

(美國‧華盛頓)美國總統奧巴馬表示,美國絕不能接受做第二名。

奧巴馬當地時間週三(1月27日)晚上(大馬時間1月28日早上10時)在國會發表上任以來首個國情咨文,他誓言將擴大就業、進行金融改革、增加出口。

續恪守改變承諾

奧巴馬在68分鐘的講話中坦承,白宮在這一年來遭受了許多政治挫折,他希望所有人相信的“改 變”來得不夠快,許多美國人對失業及政治感到失望,但他誓言不會放棄,會在重要議題上繼續恪守改變的承諾。奧巴馬說,當歐洲、中國、德國、印度都不願停止 腳步,不肯接受第二名的時候,美國必須加緊步伐,快速邁進。

改正阻美進步問題

他說,華盛頓幾十年來一直在跟老百姓說等一等,即使問題已經惡化。而在此同時,中國不等,德國不等,印度也不等。他們不是站在那裡不動,他們不願接受第二名。

他們越來越重視數學和科學;他們正在興建基礎建設;他們正在積極投資乾淨能源。

奧巴馬強調,無論再怎麼困難,無論再怎麼辯論,現在已到美國認真思考,改正阻止美國進步的問題的時候。

不做老二須做到四點

奧巴馬強調,如果美國不甘屈居第二名,就必須做到以下四點:首先是完成金融改革。絕不能再讓那些金融機構再拿老百姓的存款,去進行投機、威脅美國的經濟。

其次是要鼓勵創新。國會必須通過鼓勵研究能源和氣候法案,因為只有在能源經濟、能源領先的國家,才能領導世界經濟。

第三是必須增加出口。美國必須設定目標,在未來5年內出口增加一倍,這樣將可製造200萬個就業機會。

第四是投資技術和教育。現在在美國,高中畢業已經不能保證找到工作,未來必須加強社區大學,讓青年有更多進修機會。同時,大學也必須降低學費,讓中產階級家庭的小孩都有就學機會。

奧巴馬呼吁不同黨派人士,摒棄政治分歧,共同創造國家的美好明天。

誓言不放棄醫改

奧巴馬誓言不會“放棄”對巨大且成本驚人的醫療制度改革的努力。他說:今天晚上,在我發言完畢時,將有更多的美國人失去醫療保險。我不會棄他們而去。在場的各位也不應走開。”

奧巴馬表示,過去一年可能是美國有史以來最困難的一年,經濟風暴最嚴峻的時刻已經過去,但不少人仍對前景感到憂慮,故創造就業是今年首要任務。

他表示,美國政府去年採取的措施已經使美國免於重覆1930年代的大蕭條,而美國眾院已經通過 進行許多變革的金融改革,但遊說團體卻試圖扼殺它們,政府不能讓這些人贏得這場戰役,他將否決任何沒有涵蓋實質改革的金融法案,一旦沒有進行實際改革的法 案送到他的桌上,他會否決它們。

圖舒緩國債高漲擔憂

奧巴馬在講話中試圖舒緩美國人對國家債務日益高漲的擔憂,他宣佈凍結與國家安全無關的部份國內項目開支,為期3年。

他同時承諾在推動氣候變化相關立法上與國會合作。

奧巴馬在講話中也向共和黨的國會政策開砲。他說:“對每一項議程說不或許是一個很好的短期性策略,但那不是領導。”

奧巴馬在講話中提到,將與國會共同努力廢止目前軍隊中對於同性戀者實行的“不問,不說”政策。

大篇幅談經濟問題

奧巴馬在國情咨文著中,花了三分之二篇幅談經濟問題,在講話的尾端,才闡述了外交政策。

當奧巴馬和米歇爾踏入國會時,共和黨人也給予鼓掌。但這跨黨派的氣氛很快消散,民主黨人對奧巴馬的講話作出熱烈回應時,共和黨人則木無表情地坐著。

當奧巴馬談到將對銀行徵收費用時,民主黨人站起來叫好,共和黨人文風不動地坐著;奧巴馬提到去年通過的經濟刺激方案時,民主黨又起立拍掌贊好,共和黨議員也僅是瞪著眼。

警告伊朗朝鮮
重申伊拉克撤軍

奧巴馬在講話中警告伊朗和朝鮮,並表示伊拉克戰爭即將結束,美國士兵將要回國。

他說:“我們將支持伊拉克政府舉行大選,繼續同伊拉克人民一起促進地區安全與繁榮。”

他重申,這場戰爭即將結束,美國將在8月底之前從伊拉克撤出美軍戰鬥部隊。

支持建立無核武世界

奧巴馬也警告伊朗和朝鮮,若繼續尋求獲得核武器,他們將面臨更嚴厲的製裁。他說,即使美國正在應對伊拉克和阿富汗兩場戰爭,核武器威脅仍是美國民眾所面對的最大威脅。他支持建立一個無核武器的世界。“這就是為甚麼朝鮮正在面臨更嚴厲的製裁,這是強制執行的有力的製裁。”

“因此國際社會比以往更加團結,而伊朗卻日益孤立。”

承諾速應對生化襲擊威脅

他警告,如果伊朗忽視國際義務,將繼續為此承擔後果。奧巴馬還表示,美國和俄羅斯就削減進攻性戰略核武器新條約的談判即將結束。

奧巴馬也矢言繼續打擊“基地”恐怖組織;奧巴馬並承諾,將對生化襲擊恐怖威脅作出快速反應,並迅速應急傳染病疫情。

批評預算赤字及醫改
共和黨回應溫和

對奧巴馬首個國情咨文,共和黨的正式回應大致溫和,但在預算赤字及醫療改革上,仍持有不同看法。

就預算赤字部份,共和黨批評美國聯邦債務仍不斷增加,5年內將會倍增,10年內將成為原來的3倍,這種作法無法確保美國的永續發展,奧巴馬雖然凍結部份預算,但仍不足夠。

醫改部份,共和黨強調,雖然所有美國人民都需要可負擔、可近用、高品質的醫療體系,但人民並不想將健保交由聯邦政府管理。

共和黨是由甫就任維吉尼亞州州長的麥克唐納出面發表評論。

就教育問題,麥克唐納贊成奧巴馬的主張,但在國家安全部份,他強調,雖然增兵阿富汗是正確的決定,但政府近來處理恐怖份子疑犯的方式,卻讓共和黨深感憂心。



奧巴馬語錄

‧“我曾以改變的承諾進行競選……我們可以相信的改變,這個口號依然延續著。”

‧“改變的到來似乎過於緩慢。現在,我知道許多美國人不確定,他們是否還能繼續相信我們能布來改變─或者我能兌現這改變的承諾。”

‧“我對美國未來所抱的希望從未像今天晚上這樣大。儘管我們依然有困苦,但我們的團結是強大的。我們沒有放棄。我們沒有離去。我們不會允許恐懼和分歧使自己垂頭喪氣。”

‧“今天,我們再一次面臨著歷史的考驗,我們也再一次必須接受歷史的挑戰。”

Geithner Told To Quit After E Mails Reveal Involvement In AIG Cover-up

Geithner Told To Quit After E Mails Reveal Involvement In AIG Cover up 270110top2

Treasury Secretary Timothy Geithner’s denial that he played any role in the AIG cover-up is contradicted by emails which confirm that both Geithner and the New York Federal Reserve were both intimately involved in keeping details about payments to banks including Goldman Sachs from the public.

Geithner told lawmakers today that he had no involvement in withholding information about the bailout of AIG, much to the chagrin of House Oversight Committee Ranking Member Darrell Issa, who wasn’t buying it for a second.

“He has asserted complete ignorance of the Fed’s efforts to cover up the bailout details,” said Issa, R-Calif. “Many Americans, including members of this Committee, have a hard time believing that Secretary Geithner entered an absolute cone of silence on the day that his nomination was announced.”

John Mica of Florida went further, calling for Geithner to quit as a result of the scandal.

“Why shouldn’t we ask for your resignation?” Mica asked Geithner. “We’re not getting the whole story, we’re getting the blame story. You’re either incompetent on the job or you knew what was taking place and you tried to conceal it, and I think that’s grounds for your review.”

Mica characterized Geithner’s denials as “lame excuses” as the Treasury Secretary became visibly angry.

In November and December 2008, The Federal Reserve Bank of New York, headed up by Geithner, instructed the bailed out AIG to hide from the public details regarding payments the insurance giant made to banks, including Goldman Sachs Group Inc. and Societe Generale SA.

Using Fed secured taxpayer bailout money, AIG paid several banks 100 percent of the face value of credit-default swaps, as other financial institutions were negotiating deep discounts for the unregulated paper assets that do not have to be backed by cash.

The decision to pay the banks in full may have cost AIG, and therefore taxpayers, at least $13 billion over the odds.

The “backdoor bailout” of the banks, as it has been dubbed was exposed in March 2009 after the SEC challenged AIG’s filing, however, e-mails obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee, reignited the situation after they conclusively exposed a collusion between AIG and the Fed to deceive the public.

The e-mails between company and regulator show that The New York Fed crossed out reference to the payments and that AIG also omitted the details when the Securities and Exchange Commission filing was made public on Dec. 24, 2008.

The emails, the content of which are highlighted in this Bloomberg News article, also show that the Fed wanted numerous other details about the AIG bailout withheld or delayed from public oversight.

“It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information,” said Issa, adding that taxpayers “deserve full and complete disclosure under our nation’s securities laws, not the withholding of politically inconvenient information.”

Geithner’s denial that he, even as President of the New York Fed, had no involvement with the AIG case is contradicted by fresh revelations this week in a new report issued by Issa that show Geithner was “at a minimum, engaged personally in reviewing what information about the AIG bailout would be revealed to Congress and the public.”

On November 6, 2008 Geithner received an email from Sarah Dahlgren, the FRBNY’s lead staff member in AIG’s operations, seeking Geithner’s approval for a proposed statement regarding AIG’s upcoming equity capital raise. The fact that Geithner’s approval had to be obtained merely for putting out statements concerning AIG clearly indicates that he was deeply involved in the matter.

On November 13, Geithner was sent a report on AIG’s restructuring that would be sent to Congress. Sophia Allison, a staff member of the Federal Reserve’s Board of Governors, asked that Geithner point out any information that he believed should not be “publicly disclosed”.

In addition, records of who Geithner met with during his tenure as President of the FRBNY “show that he was regularly engaged with top AIG officials and the FRBNY officials directly responsible for AIG’s disclosures to the SEC. Geithner’s schedule shows that he had at least six formal meetings with top FRBNY staff members about AIG-related issues between November 4, 2008, and November 21, 2008.”

Watch the clip from today’s hearings where Mica demands Geithner’s resignation.


How Bush's grandfather helped Hitler's rise to power

Rumours of a link between the US first family and the Nazi war machine have circulated for decades. Now the Guardian can reveal how repercussions of events that culminated in action under the Trading with the Enemy Act are still being felt by today's president

George Bush's grandfather, the late US senator Prescott Bush, was a director and shareholder of companies that profited from their involvement with the financial backers of Nazi Germany.

The Guardian has obtained confirmation from newly discovered files in the US National Archives that a firm of which Prescott Bush was a director was involved with the financial architects of Nazism.

His business dealings, which continued until his company's assets were seized in 1942 under the Trading with the Enemy Act, has led more than 60 years later to a civil action for damages being brought in Germany against the Bush family by two former slave labourers at Auschwitz and to a hum of pre-election controversy.

The evidence has also prompted one former US Nazi war crimes prosecutor to argue that the late senator's action should have been grounds for prosecution for giving aid and comfort to the enemy.

The debate over Prescott Bush's behaviour has been bubbling under the surface for some time. There has been a steady internet chatter about the "Bush/Nazi" connection, much of it inaccurate and unfair. But the new documents, many of which were only declassified last year, show that even after America had entered the war and when there was already significant information about the Nazis' plans and policies, he worked for and profited from companies closely involved with the very German businesses that financed Hitler's rise to power. It has also been suggested that the money he made from these dealings helped to establish the Bush family fortune and set up its political dynasty.

Remarkably, little of Bush's dealings with Germany has received public scrutiny, partly because of the secret status of the documentation involving him. But now the multibillion dollar legal action for damages by two Holocaust survivors against the Bush family, and the imminent publication of three books on the subject are threatening to make Prescott Bush's business history an uncomfortable issue for his grandson, George W, as he seeks re-election.

While there is no suggestion that Prescott Bush was sympathetic to the Nazi cause, the documents reveal that the firm he worked for, Brown Brothers Harriman (BBH), acted as a US base for the German industrialist, Fritz Thyssen, who helped finance Hitler in the 1930s before falling out with him at the end of the decade. The Guardian has seen evidence that shows Bush was the director of the New York-based Union Banking Corporation (UBC) that represented Thyssen's US interests and he continued to work for the bank after America entered the war.

Tantalising

Bush was also on the board of at least one of the companies that formed part of a multinational network of front companies to allow Thyssen to move assets around the world.

Thyssen owned the largest steel and coal company in Germany and grew rich from Hitler's efforts to re-arm between the two world wars. One of the pillars in Thyssen's international corporate web, UBC, worked exclusively for, and was owned by, a Thyssen-controlled bank in the Netherlands. More tantalising are Bush's links to the Consolidated Silesian Steel Company (CSSC), based in mineral rich Silesia on the German-Polish border. During the war, the company made use of Nazi slave labour from the concentration camps, including Auschwitz. The ownership of CSSC changed hands several times in the 1930s, but documents from the US National Archive declassified last year link Bush to CSSC, although it is not clear if he and UBC were still involved in the company when Thyssen's American assets were seized in 1942.

Three sets of archives spell out Prescott Bush's involvement. All three are readily available, thanks to the efficient US archive system and a helpful and dedicated staff at both the Library of Congress in Washington and the National Archives at the University of Maryland.

The first set of files, the Harriman papers in the Library of Congress, show that Prescott Bush was a director and shareholder of a number of companies involved with Thyssen.

The second set of papers, which are in the National Archives, are contained in vesting order number 248 which records the seizure of the company assets. What these files show is that on October 20 1942 the alien property custodian seized the assets of the UBC, of which Prescott Bush was a director. Having gone through the books of the bank, further seizures were made against two affiliates, the Holland-American Trading Corporation and the Seamless Steel Equipment Corporation. By November, the Silesian-American Company, another of Prescott Bush's ventures, had also been seized.

The third set of documents, also at the National Archives, are contained in the files on IG Farben, who was prosecuted for war crimes.

A report issued by the Office of Alien Property Custodian in 1942 stated of the companies that "since 1939, these (steel and mining) properties have been in possession of and have been operated by the German government and have undoubtedly been of considerable assistance to that country's war effort".

Prescott Bush, a 6ft 4in charmer with a rich singing voice, was the founder of the Bush political dynasty and was once considered a potential presidential candidate himself. Like his son, George, and grandson, George W, he went to Yale where he was, again like his descendants, a member of the secretive and influential Skull and Bones student society. He was an artillery captain in the first world war and married Dorothy Walker, the daughter of George Herbert Walker, in 1921.

In 1924, his father-in-law, a well-known St Louis investment banker, helped set him up in business in New York with Averill Harriman, the wealthy son of railroad magnate E H Harriman in New York, who had gone into banking.

One of the first jobs Walker gave Bush was to manage UBC. Bush was a founding member of the bank and the incorporation documents, which list him as one of seven directors, show he owned one share in UBC worth $125.

The bank was set up by Harriman and Bush's father-in-law to provide a US bank for the Thyssens, Germany's most powerful industrial family.

August Thyssen, the founder of the dynasty had been a major contributor to Germany's first world war effort and in the 1920s, he and his sons Fritz and Heinrich established a network of overseas banks and companies so their assets and money could be whisked offshore if threatened again.

By the time Fritz Thyssen inherited the business empire in 1926, Germany's economic recovery was faltering. After hearing Adolf Hitler speak, Thyssen became mesmerised by the young firebrand. He joined the Nazi party in December 1931 and admits backing Hitler in his autobiography, I Paid Hitler, when the National Socialists were still a radical fringe party. He stepped in several times to bail out the struggling party: in 1928 Thyssen had bought the Barlow Palace on Briennerstrasse, in Munich, which Hitler converted into the Brown House, the headquarters of the Nazi party. The money came from another Thyssen overseas institution, the Bank voor Handel en Scheepvarrt in Rotterdam.

By the late 1930s, Brown Brothers Harriman, which claimed to be the world's largest private investment bank, and UBC had bought and shipped millions of dollars of gold, fuel, steel, coal and US treasury bonds to Germany, both feeding and financing Hitler's build-up to war.

Between 1931 and 1933 UBC bought more than $8m worth of gold, of which $3m was shipped abroad. According to documents seen by the Guardian, after UBC was set up it transferred $2m to BBH accounts and between 1924 and 1940 the assets of UBC hovered around $3m, dropping to $1m only on a few occasions.

In 1941, Thyssen fled Germany after falling out with Hitler but he was captured in France and detained for the remainder of the war.

There was nothing illegal in doing business with the Thyssens throughout the 1930s and many of America's best-known business names invested heavily in the German economic recovery. However, everything changed after Germany invaded Poland in 1939. Even then it could be argued that BBH was within its rights continuing business relations with the Thyssens until the end of 1941 as the US was still technically neutral until the attack on Pearl Harbor. The trouble started on July 30 1942 when the New York Herald-Tribune ran an article entitled "Hitler's Angel Has $3m in US Bank". UBC's huge gold purchases had raised suspicions that the bank was in fact a "secret nest egg" hidden in New York for Thyssen and other Nazi bigwigs. The Alien Property Commission (APC) launched an investigation.

There is no dispute over the fact that the US government seized a string of assets controlled by BBH - including UBC and SAC - in the autumn of 1942 under the Trading with the Enemy act. What is in dispute is if Harriman, Walker and Bush did more than own these companies on paper.

Erwin May, a treasury attache and officer for the department of investigation in the APC, was assigned to look into UBC's business. The first fact to emerge was that Roland Harriman, Prescott Bush and the other directors didn't actually own their shares in UBC but merely held them on behalf of Bank voor Handel. Strangely, no one seemed to know who owned the Rotterdam-based bank, including UBC's president.

May wrote in his report of August 16 1941: "Union Banking Corporation, incorporated August 4 1924, is wholly owned by the Bank voor Handel en Scheepvaart N.V of Rotterdam, the Netherlands. My investigation has produced no evidence as to the ownership of the Dutch bank. Mr Cornelis [sic] Lievense, president of UBC, claims no knowledge as to the ownership of the Bank voor Handel but believes it possible that Baron Heinrich Thyssen, brother of Fritz Thyssen, may own a substantial interest."

May cleared the bank of holding a golden nest egg for the Nazi leaders but went on to describe a network of companies spreading out from UBC across Europe, America and Canada, and how money from voor Handel travelled to these companies through UBC.

By September May had traced the origins of the non-American board members and found that Dutchman HJ Kouwenhoven - who met with Harriman in 1924 to set up UBC - had several other jobs: in addition to being the managing director of voor Handel he was also the director of the August Thyssen bank in Berlin and a director of Fritz Thyssen's Union Steel Works, the holding company that controlled Thyssen's steel and coal mine empire in Germany.

Within a few weeks, Homer Jones, the chief of the APC investigation and research division sent a memo to the executive committee of APC recommending the US government vest UBC and its assets. Jones named the directors of the bank in the memo, including Prescott Bush's name, and wrote: "Said stock is held by the above named individuals, however, solely as nominees for the Bank voor Handel, Rotterdam, Holland, which is owned by one or more of the Thyssen family, nationals of Germany and Hungary. The 4,000 shares hereinbefore set out are therefore beneficially owned and help for the interests of enemy nationals, and are vestible by the APC," according to the memo from the National Archives seen by the Guardian.

Red-handed

Jones recommended that the assets be liquidated for the benefit of the government, but instead UBC was maintained intact and eventually returned to the American shareholders after the war. Some claim that Bush sold his share in UBC after the war for $1.5m - a huge amount of money at the time - but there is no documentary evidence to support this claim. No further action was ever taken nor was the investigation continued, despite the fact UBC was caught red-handed operating a American shell company for the Thyssen family eight months after America had entered the war and that this was the bank that had partly financed Hitler's rise to power.

The most tantalising part of the story remains shrouded in mystery: the connection, if any, between Prescott Bush, Thyssen, Consolidated Silesian Steel Company (CSSC) and Auschwitz.

Thyssen's partner in United Steel Works, which had coal mines and steel plants across the region, was Friedrich Flick, another steel magnate who also owned part of IG Farben, the powerful German chemical company.

Flick's plants in Poland made heavy use of slave labour from the concentration camps in Poland. According to a New York Times article published in March 18 1934 Flick owned two-thirds of CSSC while "American interests" held the rest.

The US National Archive documents show that BBH's involvement with CSSC was more than simply holding the shares in the mid-1930s. Bush's friend and fellow "bonesman" Knight Woolley, another partner at BBH, wrote to Averill Harriman in January 1933 warning of problems with CSSC after the Poles started their drive to nationalise the plant. "The Consolidated Silesian Steel Company situation has become increasingly complicated, and I have accordingly brought in Sullivan and Cromwell, in order to be sure that our interests are protected," wrote Knight. "After studying the situation Foster Dulles is insisting that their man in Berlin get into the picture and obtain the information which the directors here should have. You will recall that Foster is a director and he is particularly anxious to be certain that there is no liability attaching to the American directors."

But the ownership of the CSSC between 1939 when the Germans invaded Poland and 1942 when the US government vested UBC and SAC is not clear.

"SAC held coal mines and definitely owned CSSC between 1934 and 1935, but when SAC was vested there was no trace of CSSC. All concrete evidence of its ownership disappears after 1935 and there are only a few traces in 1938 and 1939," says Eva Schweitzer, the journalist and author whose book, America and the Holocaust, is published next month.

Silesia was quickly made part of the German Reich after the invasion, but while Polish factories were seized by the Nazis, those belonging to the still neutral Americans (and some other nationals) were treated more carefully as Hitler was still hoping to persuade the US to at least sit out the war as a neutral country. Schweitzer says American interests were dealt with on a case-by-case basis. The Nazis bought some out, but not others.

The two Holocaust survivors suing the US government and the Bush family for a total of $40bn in compensation claim both materially benefited from Auschwitz slave labour during the second world war.

Kurt Julius Goldstein, 87, and Peter Gingold, 85, began a class action in America in 2001, but the case was thrown out by Judge Rosemary Collier on the grounds that the government cannot be held liable under the principle of "state sovereignty".

Jan Lissmann, one of the lawyers for the survivors, said: "President Bush withdrew President Bill Clinton's signature from the treaty [that founded the court] not only to protect Americans, but also to protect himself and his family."

Lissmann argues that genocide-related cases are covered by international law, which does hold governments accountable for their actions. He claims the ruling was invalid as no hearing took place.

In their claims, Mr Goldstein and Mr Gingold, honorary chairman of the League of Anti-fascists, suggest the Americans were aware of what was happening at Auschwitz and should have bombed the camp.

The lawyers also filed a motion in The Hague asking for an opinion on whether state sovereignty is a valid reason for refusing to hear their case. A ruling is expected within a month.

The petition to The Hague states: "From April 1944 on, the American Air Force could have destroyed the camp with air raids, as well as the railway bridges and railway lines from Hungary to Auschwitz. The murder of about 400,000 Hungarian Holocaust victims could have been prevented."

The case is built around a January 22 1944 executive order signed by President Franklin Roosevelt calling on the government to take all measures to rescue the European Jews. The lawyers claim the order was ignored because of pressure brought by a group of big American companies, including BBH, where Prescott Bush was a director.

Lissmann said: "If we have a positive ruling from the court it will cause [president] Bush huge problems and make him personally liable to pay compensation."

The US government and the Bush family deny all the claims against them.

In addition to Eva Schweitzer's book, two other books are about to be published that raise the subject of Prescott Bush's business history. The author of the second book, to be published next year, John Loftus, is a former US attorney who prosecuted Nazi war criminals in the 70s. Now living in St Petersburg, Florida and earning his living as a security commentator for Fox News and ABC radio, Loftus is working on a novel which uses some of the material he has uncovered on Bush. Loftus stressed that what Prescott Bush was involved in was just what many other American and British businessmen were doing at the time.

"You can't blame Bush for what his grandfather did any more than you can blame Jack Kennedy for what his father did - bought Nazi stocks - but what is important is the cover-up, how it could have gone on so successfully for half a century, and does that have implications for us today?" he said.

"This was the mechanism by which Hitler was funded to come to power, this was the mechanism by which the Third Reich's defence industry was re-armed, this was the mechanism by which Nazi profits were repatriated back to the American owners, this was the mechanism by which investigations into the financial laundering of the Third Reich were blunted," said Loftus, who is vice-chairman of the Holocaust Museum in St Petersburg.

"The Union Banking Corporation was a holding company for the Nazis, for Fritz Thyssen," said Loftus. "At various times, the Bush family has tried to spin it, saying they were owned by a Dutch bank and it wasn't until the Nazis took over Holland that they realised that now the Nazis controlled the apparent company and that is why the Bush supporters claim when the war was over they got their money back. Both the American treasury investigations and the intelligence investigations in Europe completely bely that, it's absolute horseshit. They always knew who the ultimate beneficiaries were."

"There is no one left alive who could be prosecuted but they did get away with it," said Loftus. "As a former federal prosecutor, I would make a case for Prescott Bush, his father-in-law (George Walker) and Averill Harriman [to be prosecuted] for giving aid and comfort to the enemy. They remained on the boards of these companies knowing that they were of financial benefit to the nation of Germany."

Loftus said Prescott Bush must have been aware of what was happening in Germany at the time. "My take on him was that he was a not terribly successful in-law who did what Herbert Walker told him to. Walker and Harriman were the two evil geniuses, they didn't care about the Nazis any more than they cared about their investments with the Bolsheviks."

What is also at issue is how much money Bush made from his involvement. His supporters suggest that he had one token share. Loftus disputes this, citing sources in "the banking and intelligence communities" and suggesting that the Bush family, through George Herbert Walker and Prescott, got $1.5m out of the involvement. There is, however, no paper trail to this sum.

The third person going into print on the subject is John Buchanan, 54, a Miami-based magazine journalist who started examining the files while working on a screenplay. Last year, Buchanan published his findings in the venerable but small-circulation New Hampshire Gazette under the headline "Documents in National Archives Prove George Bush's Grandfather Traded With the Nazis - Even After Pearl Harbor". He expands on this in his book to be published next month - Fixing America: Breaking the Stranglehold of Corporate Rule, Big Media and the Religious Right.

In the article, Buchanan, who has worked mainly in the trade and music press with a spell as a muckraking reporter in Miami, claimed that "the essential facts have appeared on the internet and in relatively obscure books but were dismissed by the media and Bush family as undocumented diatribes".

Buchanan suffers from hypermania, a form of manic depression, and when he found himself rebuffed in his initial efforts to interest the media, he responded with a series of threats against the journalists and media outlets that had spurned him. The threats, contained in e-mails, suggested that he would expose the journalists as "traitors to the truth".

Unsurprisingly, he soon had difficulty getting his calls returned. Most seriously, he faced aggravated stalking charges in Miami, in connection with a man with whom he had fallen out over the best way to publicise his findings. The charges were dropped last month.

Biography

Buchanan said he regretted his behaviour had damaged his credibility but his main aim was to secure publicity for the story. Both Loftus and Schweitzer say Buchanan has come up with previously undisclosed documentation.

The Bush family have largely responded with no comment to any reference to Prescott Bush. Brown Brothers Harriman also declined to comment.

The Bush family recently approved a flattering biography of Prescott Bush entitled Duty, Honour, Country by Mickey Herskowitz. The publishers, Rutledge Hill Press, promised the book would "deal honestly with Prescott Bush's alleged business relationships with Nazi industrialists and other accusations".

In fact, the allegations are dealt with in less than two pages. The book refers to the Herald-Tribune story by saying that "a person of less established ethics would have panicked ... Bush and his partners at Brown Brothers Harriman informed the government regulators that the account, opened in the late 1930s, was 'an unpaid courtesy for a client' ... Prescott Bush acted quickly and openly on behalf of the firm, served well by a reputation that had never been compromised. He made available all records and all documents. Viewed six decades later in the era of serial corporate scandals and shattered careers, he received what can be viewed as the ultimate clean bill."

The Prescott Bush story has been condemned by both conservatives and some liberals as having nothing to do with the current president. It has also been suggested that Prescott Bush had little to do with Averill Harriman and that the two men opposed each other politically.

However, documents from the Harriman papers include a flattering wartime profile of Harriman in the New York Journal American and next to it in the files is a letter to the financial editor of that paper from Prescott Bush congratulating the paper for running the profile. He added that Harriman's "performance and his whole attitude has been a source of inspiration and pride to his partners and his friends".

The Anti-Defamation League in the US is supportive of Prescott Bush and the Bush family. In a statement last year they said that "rumours about the alleged Nazi 'ties' of the late Prescott Bush ... have circulated widely through the internet in recent years. These charges are untenable and politically motivated ... Prescott Bush was neither a Nazi nor a Nazi sympathiser."

However, one of the country's oldest Jewish publications, the Jewish Advocate, has aired the controversy in detail.

More than 60 years after Prescott Bush came briefly under scrutiny at the time of a faraway war, his grandson is facing a different kind of scrutiny but one underpinned by the same perception that, for some people, war can be a profitable business.

Congratulations! You’re Donating $2,000 per Family to Wall Street’s Bonuses

President Obama won’t tell us in his State of the Union address. The deficit hawks won’t crow about it. Don’t expect the Tea Party or Rush and Beck to highlight our generosity either. But the sad fact is this: During the worst year since the Great Depression, with 30 million people out of work or forced into part-time jobs, Wall Street is awarding itself $150 billion in bonus money…..and it comes from us!

That’s $500 for every man, women and child in the country — $2,000 for a family of four. (Maybe we should try deducting it from our income taxes as a charitable donation.)

Had we not bailed out the financial sector, there would be no bonus pool this year. Zip, zero, ziltch.

It seems like financial Alzheimer’s setting in as many forget how all this happened. Wall Street, and no one else, crashed the economy through its fantasy finance extravaganza. It created, sold and traded a slew of newfangled financial instruments that were supposed to remove risk from risky investments. Wall Street went begging for subprime debt in order to create and market their new financial securities, the most profitable activity in their history. As a result of their securitization casino, which leveraged bet upon bet, the housing market turned into a bubble and finally burst. Wall Street had miscalculated, big time. The risk returned with a vengeance.

Not matter what Rick Santelli proclaims, government interference didn’t cause the crash. Greedy, stupid home buyers didn’t cause the crash. Poor people backed by the Community Reinvestment Act didn’t crash the system. And China didn’t cause it either. The book should be closed on this: Wall Street’s fantasy finance casino did us in. (Please see The Looting of America for a fuller account.)

Once housing prices stopped their meteoric rise, the entire precarious structure of bets piled upon subprime loans, turned toxic. The banking system froze and the real economy was tossed off a cliff. We truly were on our way to the next Great Depression.

Policy leaders of all stripes bailed out the financial system because they thought there was no choice–and that was true to an extent. Preventing total financial collapse was necessary. The choices to be made were about how to prevent a further collapse and what kinds of demands we’d make on the banks that had brought disaster upon themselves and the rest of us. Bush, Paulson, Bernanke, Obama, Geithner, Summers and Congress made their choices. They poured money into the banking sector like never before. We gave the Wall Street banks gigantic loans and enormous guarantees on their toxic assets. We gave them TARP. It all totaled to more than $12 trillion, with most of it still in play, even after the TARP repayments. (See Nomi Prins’s excellent accounting..)

We can, and should, argue about whether the bailout was put together properly. A strong case can be made that the victims (the public), rather than the perpetrators (Wall Street’s casinos), should have received our support. Clearly, there were much better ways to rescue the failing economy and produce jobs, which is still by far our number one problem.

Wall Street was saved from bankruptcy, including Goldman Sachs which now cavalierly insists that it didn’t really need the bailout money (yet it took $12.9 billion of taxpayer support via AIG, and tossed it into its bonus pool.) Wall Streeters actually think they’ve earned the $150 billion in bonuses through their own cleverness. Think again. It’s nothing more than taxpayer welfare.

Of course, no one wants to admit that we put the richest people in the world on welfare. It’s embarrassing to acknowledge that we are rewarding those who killed millions of jobs. And worst of all, our political establishment doesn’t have the nerve to take our money back.

Instead the President talks about getting back every penny of our TARP money, with interest. Not good enough, because that still leaves the $150 billion of taxpayer largess in the bankers’ pockets, where it doesn’t belong.

The deficit chicken hawks (who now seem to have Obama in their roost) also have no intention of clawing back our money. Instead they would rather attack domestic programs that assist unemployed workers, the old and the infirm. (Of course, you won’t hear them question the wasted billions in the military budget or in the needless war in Afghanistan.)

The only group really kicking up a fuss is the Tea Party. But their ideology is so screwed up that they’d rather see the money stay on Wall Street. Their righteous indignation is fueled by blaming government, Obama, the Fed and the liberal elites for putting it there. They have no room in their ideological universe for windfall taxes on unwarranted bonuses, which they derisively call the redistribution of income, even when their own hard-earned incomes are being redistributed to Wall Street bankers. Very generous of them.

That leaves the terrain wide open for a new progressive populist movement aimed directly at taking back from our $2,000 per family from Wall Street’s unearned bonuses. It’s not a panacea for our jobs crisis or even a solution to Wall Street’s dysfunctional role in our economy, but it is a very good place to start.

Canada resale home price index up for 7th month

TORONTO (Reuters) - Canadian home resale prices rose for a seventh straight month in November on gains in all six major metropolitan markets surveyed, according to a report on Wednesday.

The Teranet-National Bank composite house price index, which measures price changes for repeat sales of single-family homes, showed overall prices were up 0.8 percent in November from October.

Vancouver led the gains, rising 1.9 percent, the only market to exceed the national average. Without Vancouver, the composite index would have been up 0.5 percent, the report said.

Toronto and Calgary both recorded gains of 0.6 percent in November, followed by 0.4 percent increases in each of Halifax and Ottawa. Montreal posted the smallest rise, up 0.1 percent.

"Except for Vancouver, monthly price increases slowed to more sustainable levels in each of the metropolitan regions," said Marc Pinsonneault, a senior economist at National Bank Financial.

Teranet's year-over-year national measure showed prices were up 2.6 percent. The year-over-year data showed all the cities except Calgary climbed.

The report is in line with other data that has shown the housing sector has momentum and is leading the fragile economy out from its downturn.

The Teranet-National index tracks home prices over time for repeat sales, so properties with at least two sales are required in the calculations. The report did not provide actual prices.

(Reporting by Ka Yan Ng; editing by Rob Wilson)

DND, RCMP mum on UFO mystery

Residents of Harbour Mille, N.L., reported seeing this object fly over their community Monday night.
Residents of Harbour Mille, N.L., reported seeing this object fly over their community Monday night.
(Courtesy of Darlene Stewart)

People who saw a missile-like object soaring through the sky over a small rural community in Newfoundland Monday night are getting no answers about what it was, although police say they'd gotten to the bottom of the mystery.

Darlene Stewart spotted the object while taking pictures of the sunset over Harbour Mille, a community of about 200 residents on the south coast of the province. She says she started snapping photos.

She then called her neighbour, Emmy Pardy, and the two women, along with Stewart's husband, say they saw three similar objects flying through the air minutes apart, one up close and two farther off in the distance.

"I really did get sick to my stomach, I was shaking when I seen it," Stewart told CBC News Wednesday. "We were just in awe of what we seen."

The photos taken by Stewart show blurry pictures of what appears to be a long, round object, much like a missile, seemingly rising from the ocean, with either smoke or flames shooting out the back end.

Objects made no noise

Stewart said the objects didn't make any noise.

"We confirmed that it was something," Sgt. Wayne Edgecombe told CBC News Wednesday. But Edgecombe said he couldn't reveal what the police investigation uncovered.

He said the focus of any police investigation is on whether something criminal has occurred.

"It's nothing criminal," he said, in relation to the unidentified object.

Edgecombe said he contacted the Department of National Defence and "they gave me some info," but he said that it is up to that department to release the information publicly.

Defence department officials were refusing comment.

The sighting has intrigued people in the Harbour Mille area, with some saying they were told by officers who were in the community Tuesday investigating the sightings, that the objects were test missiles launched from the nearby French islands of St. Pierre and Miquelon.

Edgecombe said that rumour is completely false.

The suggestion that the object possibly involved the military has Liberal MP Gerry Byrne, who represents the Newfoundland riding of Humber-St. Barbe-Baie Verte, demanding answers.

"There's a credible body of evidence," Byrne told CBC News, "that suggests there's something spectacular happened off of our shore. Before this goes any farther, I think the government needs to actually respond very quickly with a straightforward, factual statement."

Was safety in jeopardy?

Byrne said if it was some kind of military test, then people should be told whether their safety was jeopardized.

"If indeed this was a man-made object, that it was a missile, was there any potential risk to health and safety from collateral damage should the missile fire have failed?"

Byrne used the mystery to take a shot at the federal government for proroguing Parliament. He said if the House of Commons was opened, he'd be able to question the ministers of defence, transport and public safety about the incident.

"It's cloaked in relative secrecy," he said. "And the only way to get around that secrecy is a special institution called the floor of the House of Commons."

Stewart said Tuesday she has been overwhelmed by the number of calls she has received about the sighting. But she said nobody has told her officially what it was that she saw.

"I would like to get to the bottom of it," she said.

Drug firms 'drove swine flu pandemic warning to recoup £billions spent on research'

Drug companies manipulated the World Health Organisation into downgrading its definition of a pandemic so they could cash in on a swine flu outbreak, it is claimed.

An inquiry heard yesterday that the WHO allegedly softened its criteria for declaring a H1N1 flu pandemic last spring - just weeks before announcing there was a worldwide outbreak.

Critics said the decision was driven by pharmaceutical companies desperate to recoup the billions of pounds they had invested in researching and developing pandemic vaccines after the bird flu scares in 2006 and 2007.

Students quarantined in China chat with a health worker in Beijing

Pandemic status: Students quarantined in China chat with a health worker in Beijing

As a result, millions of people have been vaccinated against a mild illness, and money that could have been used to prevent and treat major killers such as heart disease has been squandered.

The claims, which emerged during the first of several Council of Europe hearings into the handling of the swine flu pandemic, were strongly rejected by the WHO.


Following the organisation's declaration of a pandemic, the Department of Health warned of 65,000 deaths, set up a special advice line and website, and suspended normal rules so anti-flu drugs could be given without prescription.

But with just 250 or so deaths in Britain and 14,000 worldwide, the WHO is being asked to account for its actions.

The Government is now trying to off-load millions of jabs it ordered at the height of the scare. Sources say it is even considering giving some doses away for free.

Wolfgang Wodarg, former head of health at the Council of Europe, the Strasbourg-based 'senate'

responsible for the European Court of Human Rights, said vaccine contracts were put in place in 2007, when it was feared the more lethal bird flu virus would mutate into human form.

Drug companies, which spent up to £2.5billion developing a vaccine, then pushed their interests within the WHO, leading to the definition of a pandemic being softened and an outbreak declared.

He told the hearing: 'It was stated in panic- stricken terms that this was a flu that could threaten humanity and a great number of humans could fall ill.

'This is why billions of dollars of medications were bought.

Dr Wodarg, an expert on the spread of disease, said that the change in definition made it possible for a worldwide pandemic to be declared and for the pharmaceutical companies to cash in.

Also giving evidence, Professor Ulrich Keil, a WHO adviser on heart disease, said the decision had led to a 'gigantic misallocation' of health budgets.

'We know the great killers are hypertension, smoking, high cholesterol, high body mass index, physical inactivity and low fruit and vegetable intake,' he said.

'In spite of all these facts, governments instead wasted huge amounts of money by investing in pandemic scenarios whose evidence base is weak.'

But Dr Kieji Fukuda, the WHO's top flu expert, rejected the allegations. 'We do not wait until (these global virus outbreaks) have developed and we see that lots of people are dying,' he said.

'What we try to do is take preventive actions. Our purpose is to try to provide guidance, to reduce harm.'

Unredacted AIG Schedule A Released And Initial Data Spread

Update: here is a first run of the data, with a focus on Goldman Sachs.

It appears that of the roughly 38 Goldman CUSIPs which have data available, there are exactly zero rated A or higher by Moody's (we ignore the rating from the other rating agency as they apparently have long stopped rating most of these securities). There are 9 CUSIP issued after 2006, 21 between 2005 and 2006, and 8 issued before 2005. As Matt Goldstein points out, of the 25 or so deals that had CDS written on them after January 1, 2006, Goldman accounts for 40% of this late (post 2005) issuance. Goldstein notes: "that’s critical because in December 2007, former AIG Financial Products head Joseph Cassano had said AIG largely got out of the CDS business by the end of 2005." Some more reasons to finally indict the man who, more so than anyone, cost taxpayers hundreds of billions with horrendous risk management practices.

Another observation is that of Goldman's roughly $15.7 billion in original issues, the current amount outstanding on the underlying securities is only $11.7 billion as of January 2010, a factor of about 75%. Yet, based on paid down amounts, Goldman had the benefit of having almost the full contractual notional on the CDS: recall per BlackRock the firm had exposure of roughly $14.5 billion. In other words: even though Goldman was on the hook for about $11.7 billion in actual outstandings (as of January 2010, the current amount in November 2008 was likely higher), the amount that it received between collateral and ML III presumed almost an unamortized exposure. We are backing into the data to determine what the actual amount as of November 2008 was: we estimate it was about ~$13 billion, which unless we are misreading the data, means that Goldman likely got the extra benefit of amortization on the underlying, which could have amounted to over $1.5 billion.

Yet the critical question is: since there is not one security rated A, and in fact the median rating is a high C, and since we know that Soc Gen had parked its securities with the Fed in November 2008, just what standards does the Federal Reserve have when accepting securities in the discount window to lend against? And the implication is that Bernanke will allow any toxic crap to be eligible collateral, likely at par.

We will continue analyzing the other firms' securities as well, and solicit reader input in ideas on how to steer this analysis.


The previously top-secret Schedule A has been released and is attached. We are currently going through the data, focusing on prices, ratings, LTVs and other taxpayer critical data. Stephen Friedman saying, as we type, that revealing Schedule A will injure the taxpayer interest, as when the Fed will try to sell these CUSIPs, sophisticated buyers will have an advantage. Of course, we note, these sophisticated buyers will exist only because this list was offloaded to the taxpayers in the first place.

h/t Shahien Nasiripour

Ron Paul - Cavuto Fox Business 01/26/10

Click this link ...... http://eclipptv.com/viewVideo.php?video_id=9704

Henry Paulson VS Stearns - The GOLDMAN SACHS - AIG Coverup

Click this link ...... http://eclipptv.com/viewVideo.php?video_id=9703

AIG Hearing: It Wasnt My Job, Paulson Says

Click this link ..... http://eclipptv.com/viewVideo.php?video_id=9705

Alex Jones Tv 1/2: FBI Flyer Worries Gun Store Owners Like Jim Snow

Click this link ..... http://eclipptv.com/viewVideo.php?video_id=9706

Marc Faber - Obama Makes Bush Look Like a Genius

Click this link ..... http://eclipptv.com/viewVideo.php?video_id=9700

West Coast Wasteland

In the pretty northern Los Angeles suburb of Glendale, the staff of VMH (formerly Verdugo Mental Health) go to work in a brand-new building. It is elegantly constructed in Spanish colonial style, and when you wander the corridors you can still sniff out that fresh-paint odor coming from some of the cream-colored, plushly carpeted counseling rooms. On the surface, it all looks good. Spend a few hours at the clinic, however, and you realize that there's something grievously amiss. The rooms, even during prime counseling hours, are almost all unoccupied.

VMH has provided counseling and medication to impoverished children and adults since 1957. But in August, shortly after the new facility opened, the clinic lost most of its funding for adult services when the state and county yanked their dollars, triggering huge matching-fund losses from the federal government. Eighty percent of the counseling staff, including nearly all of the site's adult counselors, were laid off. Kids still receive some counseling, but the walls of the rooms in which they are seen by staff are bare--the clinic ran out of funds before it could decorate them--and the doors have paper signs taped to them instead of brass plaques.

Nowadays, VMH's adult clients are treated exclusively with medication. And the indigent mentally ill--whose treatment had been paid for by LA County, which in turn received money from the state--are turned away at the door. Many of them end up sleeping on park benches near the clinic. "These are the chronically mentally ill," says psychologist Janie Strasner glumly, "who will end up being the raving lunatics on the street."

What makes this all the more troubling is that Glendale isn't an outstandingly poor neighborhood, Los Angeles isn't a poor city and California certainly isn't a poor state. And yet something is seriously wrong with the organism that is California. The state's savage budget cuts--$26 billion in 2009, an expected shortfall over the next year that could reach $20 billion--now serve as anti-stimulus to the federal stimulus package. Its basic educational, public safety and social service infrastructure is crumbling. As a self-sustaining political system, as a set of relationships between local and state governments, as a revenue-raising and revenue-spending mechanism, California is deeply damaged. And the impact of that damage is hitting an awful lot of people awfully hard.

The state's unemployment rate stands at more than 12 percent, and in some poorer counties it's in the 25 percent range. In Los Angeles, that number is 12.2 percent. "It boggles the mind," says LA's mayor, Antonio Villaraigosa. "Not since the Depression have we had numbers this bad." To make matters worse, in an attempt to slow the state's fiscal implosion, halfway through 2009 Sacramento forcibly borrowed billions of dollars from city coffers statewide. "They took our community redevelopment dollars that are capital we need to create jobs and housing in this town," the mayor argues.

The network of public universities, long the country's most prestigious state-supported higher education system, is wilting. The state's schools, starved of money from a combination of thirty-year-old local property-tax revolts and the more recent budget implosion, are rapidly sinking into what can only charitably be called mediocrity.

There's a Mad Max feel to daily life in many neighborhoods. The Central Valley has a swath of cities whose home foreclosure rates rank in the top ten in the country. Friends looking to buy a home in a poor part of Sacramento tell me of foreclosed houses stripped of their copper wires, their toilets, their pipes, even their drywall. An ex-student reports visiting homes in which furious foreclosed owners and evicted tenants have urinated and defecated on the carpeting, abandoned pets to starve, left kitchens filled with rotting food. Sure, you can buy these properties for next to nothing, but you'll have to bring in the biohazard squads before you can safely occupy them.

University departments looking to pinch pennies are removing their professors' office phones. Judges in some counties have donated a percentage of their salaries back to the courts so that the courts will have enough money to stay open. And on furlough Fridays, downtown Sacramento--the capital city of the world's eighth-largest economy--is practically a ghost town. The restaurants are empty, the streets quiet. Nobody's at work.

Why this has happened, how the mess can be cleaned up, how big-picture fixes to a discredited political machine can be implemented--well, that's all up for debate. Political consensus is as rare a commodity in California these days as baseball-sized gold nuggets were after the forty-niners had picked the mountains clean. Practically the only thing conservatives and liberals agree on in Sacramento is that the decision-making system has stalled and that the state leadership's ability to implement long-term strategic plans in the face of economic crisis has been corroded in recent years. California, historically the country's most populous, wealthiest, most dynamic state, has become chronically anxious about its future. Its citizens have grown distrustful of those who govern them, increasingly aware that ineptitude is making a bad economic situation worse. Recent polling suggests only 13 percent of voters approve of the job their state legislators are doing.

Some residents want tax reform--though Governor Arnold Schwarzenegger's tax reform commission recently issued recommendations that appear, in their chilly reception, to have been stillborn. Others want to tweak term limits; curb the sprawling, open-ended initiative process; introduce open primaries; further cut government services; even hold a constitutional convention to rewrite the basic governing mechanisms of the state. Few, though, deny the storm clouds overhead.

China issues warning over US arms sales to Taiwan

Military contacts likely to suffer if Beijing retaliates over US arms sales to Taiwan

Contacts with China's military would likely be the first to suffer if Beijing moves to retaliate over upcoming U.S. arms sales to Taiwan — the latest in a flurry of disputes elevating tensions between Washington and Beijing.

Foreign Ministry spokesman Ma Zhaoxu warned Tuesday that the Obama administration risked damaging bilateral ties with China if it proceeds with the arms package deal, which is likely to include Black Hawk helicopters and Patriot missiles.

"Once again, we urge the U.S. side to recognize the sensitivity of weapon sales to Taiwan and its gravity," Ma said. Failure to halt sales would "impair the larger interests of China-U.S cooperation."

The weapons sale to Taiwan, a self-ruled island that Beijing claims as part of its territory, are among several sensitive issues roiling ties between China and the United States that have prompted pointed responses from Beijing.

Last week, China issued a sharp counterattack after U.S. Secretary of State Hillary Rodham Clinton criticized Internet censorship and called on China to investigate cyberattacks against Google. The search giant has threatened to pull out of the world's most populous online market if Beijing doesn't relax its Internet censorship.

On Tuesday, another government spokesman rebuked Washington for Clinton's comments, saying they aimed to discredit China. An editorial in the People's Daily the same day accused U.S. politicians of using the issue to "meddle in other nations' affairs on the one hand and to consolidate American hegemony in cyberspace on the other hand."

Arms sales to Taiwan are a constant irritant in relations. They are mandated by a U.S. law requiring Washington to ensure Taiwan is capable of defending itself from Chinese threats, including the more than 1,000 ballistic missiles pointed at the island.

In 2008, China suspended most military dialogue with Washington after the Bush administration approved a $6.5 billion arms package to Taiwan that included guided missiles and attack helicopters.

Among upcoming exchanges that could suffer: Gen. Chen Bingde, the Chinese military's chief of the general staff, was due to visit the U.S., while U.S. Secretary of Defense Robert Gates and Admiral Michael Mullen, Chairman of the U.S. Joint Chiefs of Staff, had planned to come to China.

Washington has sought to raise the profile and frequency of such visits, using them as the basis for expanded cooperation in practical areas such as joint rescue drills. The Pentagon also hopes to build trust with Beijing to convince the communist government to reveal more about the aims of its massive military buildup.

Also potentially at risk are a planned exchange of visits this year by the heads of NASA and China's national space program and a hoped-for revival of a bilateral dialogue on human rights.

Arms sale disputes also highlight Beijing's complicated relationship with Taiwan, which split from the mainland amid civil war in 1949 and has in recent years forged an increasingly independent identity. The U.S. broke diplomatic relations with Taiwan in 1979 in order to normalize relations with Beijing, but remains Taipei's closest ally and chief source of weapons.

Since the election of Taiwan's China-friendly President Ma Ying-jeou in 2008, Beijing has played down its threat to use force to bring the island under its control, while pressing ahead with economic dialogue and easing its campaign to isolate the island internationally. Direct scheduled flights have opened, Chinese tourists can now visit Taiwan and a new round of talks on a free trade agreement began Tuesday in Beijing.

Such progress ought to be seen in Washington as a powerful argument against providing more weapons to Taiwan, said Liu Jiangyong of Tsinghua University's Institute of International Studies on Tuesday.

"Selling arms to Taiwan is a mistake that will bring negative effects to the development of the China-U.S. relations and shows the American government's lack of strategic insight," Liu said.

The sanctity of military spending

(updated below - Update II)

Administration officials announced last night that the President, in tomorrow's State of the Union address, will propose a multi-year freeze on certain domestic discretionary spending programs. This is an "initiative intended to signal his seriousness about cutting the budget deficit," officials told The New York Times.

But the freeze is more notable for what it excludes than what it includes. For now, it does not include the largest domestic spending programs: Medicare, Medicaid and Social Security. And all "security-related programs" are also exempted from the freeze, which means it does not apply to military spending, the intelligence budget, the Surveillance State, or foreign military aid. As always, the notion of decreasing the deficit and national debt through reductions in military spending is one of the most absolute Washington taboos. What possible rationale is there for that?

The facts about America's bloated, excessive, always-increasing military spending are now well-known. The U.S. spends almost as much on military spending as the entire rest of the world combined, and spends roughly six times more than the second-largest spender, China. Even as the U.S. sunk under increasingly crippling levels of debt over the last decade, defense spending rose steadily, sometimes precipitously. That explosion occurred even as overall military spending in the rest of the world decreased, thus expanding the already-vast gap between our expenditures and the world's. As one "defense" spending watchdog group put it: "The US military budget was almost 29 times as large as the combined spending of the six 'rogue' states (Cuba, Iran, Libya, North Korea, Sudan and Syria) who spent $14.65 billion." To get a sense for how thoroughly military spending dominates our national budget, consider this chart showing where Americans' tax revenue goes:

Since much of that overall spending is mandatory, military spending -- all of which is discretionary -- accounts for over 50% of discretionary government spending. Yet it's absolutely forbidden to even contemplate reducing it as a means of reducing our debt or deficit. To the contrary, Obama ran on a platform of increasing military spending, and that is one of the few pledges he is faithfully and enthusiastically filling (while violating his pledge not to use deceitful budgetary tricks to fund our wars):

President Barack Obama will ask Congress for an additional $33 billion to fight unpopular wars in Afghanistan and Iraq on top of a record $708 billion for the Defense Department next year, The Associated Press has learned.

In sum, as we cite our debtor status to freeze funding for things such as "air traffic control, farm subsidies, education, nutrition and national parks" -- all programs included in Obama's spending freeze -- our military and other "security-related" spending habits become more bloated every year, completely shielded from any constraints or reality. This, despite the fact that it is virtually impossible for the U.S. to make meaningful progress in debt reduction without serious reductions in our military programs.

Public opinion is not a legitimate excuse for this utterly irrational conduct, as large percentages of Americans are receptive to reducing -- or at least freezing -- defense spending. A June, 2009 Pew Research poll asked Americans what they would do about defense spending, and 55% said they would either decrease it (18%) or keep it the same (37%); only 40% wanted it to increase. Even more notably, a 2007 Gallup poll found that "the public's view that the federal government is spending too much on the military has increased substantially this year, to its highest level in more than 15 years." In that poll, 58% of Democrats and 47% of Independents said that military spending "is too high" -- and the percentages who believe that increased steadily over the last decade for every group.

The clear fact is that, no matter how severe are our budgetary constraints, military spending and all so-called "security-related programs" are off-limits for any freezes, let alone decreases. Moreover, the modest spending freeze to be announced by Obama tomorrow is just the start; the Washington consensus has solidified and is clearly gearing up for major cuts in Social Security, Medicare and Medicaid, with the dirty work to be done by an independent "deficit commission." It's time for "everyone" to sacrifice and suffer some more -- as long as "everyone" excludes our vast military industry, the permanent power factions inside the Pentagon and intelligence community, our Surveillance and National Security State, and the imperial policies of perpetual war which feed them while further draining the lifeblood out of the country.

UPDATE: I just saw this scary headline on MSNBC, became very frightened, and have changed my mind, as I now realize we need to massively increase our military spending to Stay Safe!!!

Glenn Greenwald

The sanctity of military spending

Salon/Reuters

(updated below - Update II)

Administration officials announced last night that the President, in tomorrow's State of the Union address, will propose a multi-year freeze on certain domestic discretionary spending programs. This is an "initiative intended to signal his seriousness about cutting the budget deficit," officials told The New York Times.

But the freeze is more notable for what it excludes than what it includes. For now, it does not include the largest domestic spending programs: Medicare, Medicaid and Social Security. And all "security-related programs" are also exempted from the freeze, which means it does not apply to military spending, the intelligence budget, the Surveillance State, or foreign military aid. As always, the notion of decreasing the deficit and national debt through reductions in military spending is one of the most absolute Washington taboos. What possible rationale is there for that?

The facts about America's bloated, excessive, always-increasing military spending are now well-known. The U.S. spends almost as much on military spending as the entire rest of the world combined, and spends roughly six times more than the second-largest spender, China. Even as the U.S. sunk under increasingly crippling levels of debt over the last decade, defense spending rose steadily, sometimes precipitously. That explosion occurred even as overall military spending in the rest of the world decreased, thus expanding the already-vast gap between our expenditures and the world's. As one "defense" spending watchdog group put it: "The US military budget was almost 29 times as large as the combined spending of the six 'rogue' states (Cuba, Iran, Libya, North Korea, Sudan and Syria) who spent $14.65 billion." To get a sense for how thoroughly military spending dominates our national budget, consider this chart showing where Americans' tax revenue goes:

Since much of that overall spending is mandatory, military spending -- all of which is discretionary -- accounts for over 50% of discretionary government spending. Yet it's absolutely forbidden to even contemplate reducing it as a means of reducing our debt or deficit. To the contrary, Obama ran on a platform of increasing military spending, and that is one of the few pledges he is faithfully and enthusiastically filling (while violating his pledge not to use deceitful budgetary tricks to fund our wars):

President Barack Obama will ask Congress for an additional $33 billion to fight unpopular wars in Afghanistan and Iraq on top of a record $708 billion for the Defense Department next year, The Associated Press has learned.

In sum, as we cite our debtor status to freeze funding for things such as "air traffic control, farm subsidies, education, nutrition and national parks" -- all programs included in Obama's spending freeze -- our military and other "security-related" spending habits become more bloated every year, completely shielded from any constraints or reality. This, despite the fact that it is virtually impossible for the U.S. to make meaningful progress in debt reduction without serious reductions in our military programs.

Public opinion is not a legitimate excuse for this utterly irrational conduct, as large percentages of Americans are receptive to reducing -- or at least freezing -- defense spending. A June, 2009 Pew Research poll asked Americans what they would do about defense spending, and 55% said they would either decrease it (18%) or keep it the same (37%); only 40% wanted it to increase. Even more notably, a 2007 Gallup poll found that "the public's view that the federal government is spending too much on the military has increased substantially this year, to its highest level in more than 15 years." In that poll, 58% of Democrats and 47% of Independents said that military spending "is too high" -- and the percentages who believe that increased steadily over the last decade for every group.

The clear fact is that, no matter how severe are our budgetary constraints, military spending and all so-called "security-related programs" are off-limits for any freezes, let alone decreases. Moreover, the modest spending freeze to be announced by Obama tomorrow is just the start; the Washington consensus has solidified and is clearly gearing up for major cuts in Social Security, Medicare and Medicaid, with the dirty work to be done by an independent "deficit commission." It's time for "everyone" to sacrifice and suffer some more -- as long as "everyone" excludes our vast military industry, the permanent power factions inside the Pentagon and intelligence community, our Surveillance and National Security State, and the imperial policies of perpetual war which feed them while further draining the lifeblood out of the country.

UPDATE: I just saw this scary headline on MSNBC, became very frightened, and have changed my mind, as I now realize we need to massively increase our military spending to Stay Safe!!!

The Washington Post is hyping the same report. Apparently, it's breaking news -- meriting screaming red-alert headlines -- that Al Qaeda would like to ("aims to") acquire WMDs and use them against the U.S. But we should all try to remain a little calm, at least. I'm sure if we just buy some more fighter jets, create some better underground bombs, invade a few more Muslim countries, keep more Muslims imprisoned forever with no charges, give the Pentagon, the CIA and their private contractors a lot more unaccounted-for cash and stay out of their way, expand our domestic spying networks even further through private sector telecom contracts, pour tens of billions of dollars more into the coffers of our Middle East client states, and kill a few more civilians with drones, this problem will be handled. It's just a matter of making sure we bulk up our military budget -- and Look Forward, not Backward to what was done in the past -- and we'll be able to Stay Safe from this Terrorist-WMD menace.

As for the deficit, no need to worry about that. We can just freeze programs for national parks and cut Social Security and Medicare.

UPDATE II: Thankfully, some among us will be spared the pain of these budgetary freezes and imminent cuts:

Defense Secretary Robert Gates hosted a meeting with the nation's top defense company executives Wednesday, stressing the need for a closer partnership with them and pledging to work with the White House to secure steady growth in the Pentagon's budgets over time, according to his spokesman. . . .

Gates's meeting was part of a day-long session between Deputy Defense Secretary William Lynn, Pentagon acquisition chief Ashton Carter and the Aerospace Industries Association, the top trade group for American aerospace firms. The heads of the nation's top two defense firms -- Lockheed Martin and Boeing -- attended, said Pentagon spokesman Geoff Morrell.

Did they mention that Al Qaeda aims to get WMDs and attack the U.S. with them?

What Does Senator Bunning Know, And, More Relevantly, What Does The Just Disclosed Fed Whistleblower Know?

First, watch the below video. Note Senator Bunning's agreement with Zero Hedge on who the proposed head of the Fed should be (i.e., John Taylor). But that's irrelevant. What is - at 5:40 Bunning says that "Geithner will be fired by the President for his inability to handle his job as Secretary of the Treasury." True. What is even more relevant, and hints at a potential smoking gun, begins at 8:00 "[Bernanke's] staff did not agree with him [on bailing out AIG]...I am talking about an email that he sent his staff, after his staff recommended that the Federal Reserve not touch AIG, just like Lehman Brothers."

Ok fine, so Bernanke steamrolled opposition: that's nothing new - whoever thought the Fed is any more democratic than the country it is supposed to serve, surely is naive. Here is HuffPo's Ryan Grim on the matter:

A Republican senator said Tuesday that documents showing Federal Reserve Board Chairman Ben Bernake covered up the fact that his staff recommended he not bailout AIG are being kept from the public. And a House Republican charged that a whistleblower had alerted Congress to specific documents provide "troubling details" of Bernanke's role in the AIG bailout.

Sen. Jim Bunning (R-Ky.), a Bernanke critic, said on CNBC that he has seen documents showing that Bernanke overruled such a recommendation. If that's the case, it raises questions about whether bailing out AIG was actually necessary, and what Bernanke's motives were.

And as we type, Harry Reid has noted that he wants to get a reconfirmation vote on Bernanke on Thursday - presumably before all the rot that will soon be uncovered about yet another Bernanke fiasco is made public. Hopefully the man who owns roughly $3 million in commercial real estate and is thus a direct beneficiary of a Bernanke reconfirmation, has done his math on senatorial support. A key question however is: shouldn't the debt ceiling issue be resolved first - after all the fact that our national debt "ceiling" is nothing but a joke these days, is a direct consequence of Fed policies to pile bail out upon bail out. It also leaves the question open of what additional information has to still be presented. Back to HuffPo:

Senators will be voting on Bernanke's confirmation for a second term in the coming days. But only senators on the Banking Committee have had access to documents that illuminate just what decisions he made and how he made them. And that access only came after Bunning publicly complained that Dodd and Sen. Richard Shelby (R-Ala.) were the only members of the committee could see them.

Darrell Issa identifies the specific documents that need to be disclosed (see below) and has requested from Edolphus Towns that these be made public, as the "Board's staff did not return calls" in an attempt to procure these documents directly.

The take home message: the Fed has finally produced a whistleblower. Could this be the catalytic event that brings the house of cards down.

One only wonders at this point how deep the rabbit hole runs: if one declassified document confirms that recent testimonies by various bankers and Head of Treasury Departments may have bordered on perjury, one can only imagine the impact of not only the 250,000 pages of AIG docs already in Commission possession are released for crowdsourced analysis, but also what would happen if there is finally disclosure around the second bailout of AIG in February of 2009, which as we have repeatedly noted, was an even closer call for AIG bankruptcy than before. Oddly, with Goldman having no more risk exposure to AIG whatsoever then, courtesy of ML III, the insurer was still not allowed to fail. The question remains - why?