Monday, March 15, 2010

China wants US reassurance over dollar

BEIJING – China's premier expressed concern about the U.S. dollar and called on Washington on Sunday to take "concrete steps" to reassure Beijing about the safety of its huge Treasury bond holdings.

"Any fluctuation in the value of the U.S. currency is a big concern for us," Premier Wen Jiabao said at a news conference.

"We cannot afford any mistake, how slight it is, when running our financial assets," he said. "I would like the United States to take concrete steps to reassure investors."

China has pressed Washington to control its yawning budget deficit and prevent inflation that would erode the value of the dollar and China's holdings.

The premier said Treasury values were a matter of the "national credibility" of the United States.

Wall Street: Inside the Collapse

(CBS) If you had to pick someone to write the autopsy report on the Wall Street financial collapse 18 months ago, you couldn't do any better than Michael Lewis. He is one of the country's preeminent non-fiction writers with a knack for turning complicated, mind numbing material into fascinating yarns.

He wrote his first bestseller, "Liar's Poker," about his experiences as a young Wall Street bond trader when he was still in his 20s and has since followed up with seven more bestsellers on subjects ranging from Silicon Valley in "The New New Thing" to big time sports in "Money Ball" and "The Blind Side."

His new book, called "The Big Short: Inside the Doomsday Machine," comes out later this week and it explains how some of Wall Street's finest minds managed to destroy $1.75 trillion of wealth in the subprime mortgage markets.

"60 Minutes" and correspondent Steve Kroft spent two days debriefing Lewis at his home in California.

Full Segment, Part 1: Inside The Collapse
Full Segment, Part 2: Inside The Collapse
Web Extra: Is Wall Street Overpaid?
Web Extra: Bailout Blues
Web Extra: The $8.4 Billion Bet
Web Extra: Wall Street Misfit
Web Extra: "The Blind Side"

"This was an episode where capitalism was almost destroyed, just by the capitalists. And, in the most sensational way, they were sort of destroyed by their own folly," Lewis told Kroft.

Asked what happened, Lewis said, "The incentives for people on Wall Street got so screwed up, that the people who worked there became blinded to their own long term interests. And because the short term interests were so overpowering. And so they behaved in ways that were antithetical to their own long term interests."

Lewis, a one-time wonder boy on Wall Street, is about to turn 50 now, ensconced in a hillside compound in Berkeley, Calif. The property has a main house and three cottages and he is much happier writing about business than actually conducting it.

Asked which book produced the money to buy the home, Lewis said, "This would've been 'The New, New Thing,' that bought this place."

Lewis estimates he has sold "some millions" of books. "I don't know how many millions. Not John Grisham millions, but millions," he said.

He lives in Berkeley with his wife, former MTV News correspondent Tabitha Soren and their three children - a three-year-old son and two young daughters who he takes to all of Cal Berkley women's basketball games.

It's one of the few breaks that Lewis allowed himself over the past 18-months as he dug into the idiocy and negligence that produced the worst financial crisis since the Great Depression.

"I'm afraid that our culture will come to the conclusion, 'cause it's always the easy conclusion, that everybody was just a bunch of criminals. I think the story is much more interesting than that. I think it's a story of mass delusion," Lewis said.

Lewis' forte has always been discovering little-known facts and characters that change people's perception about a story. So when he finally sat down at his computer with sacks full of research to write about this calamity, he had no interest in Treasury Secretary Hank Paulson, or Ben Bernanke, or the CEOs of Wall Street's big investment banks, who he believes had no clue what was going on while it was going on.

He wanted to tell the story through the eyes of people who were paying attention and who knew that a financial disaster was inevitable.

"There are a handful of characters who actually had seen it coming and made a fortune off of it. And there were so few of them, and there were so many people who had been on the other side that I thought that I kind of wondered who they were and why they got themselves into that position," Lewis said. "What they saw. Almost more how they saw."

Asked how many people he thinks were in the world who understood what was going on, Lewis told Kroft, "Between 10 and 20 investors at most and this is from the universe of tens of thousands of people who could have conceivably made that bet."

Continued

States May Delay Tax Refunds

Several states (Alabama, Hawaii, Kansas, New York, North Carolina) are considering delaying tax refund checks because of state budget shortfalls.

United States of Foreclosures: How 'Bankquakes' Shake People from Their Homes

The financial crisis started as a housing bubble with the financial industry convinced that home values never fall. How wrong they were even as they leveraged and securitized their investments to create a global crisis.

Now, brace yourself because not only is it not over, but in some respects it's just begun. There will be more foreclosures this year than last and as a result more suffering for American families.

Ed Harrison who monitors this industry for a website called Credit Write Downs sees a "second wave coming"--like a new tsunami in a industry that All of Obama's horses and all of Obama's Men have not been able to do anything about. The idea of challenging fraud and deception with a debt relief plan goes a bit too far for these self-styled centrists. Writes Harrison:

When the crisis first developed, in February of 2007, it was subprime where the worries were, with the lion's share of writedowns coming from mark-to-market losses in the securitisation market. However, subprime was a relatively small part of the overall market, making up 14% of loans outstanding at that time. Alt-A loans were 27% and prime loans were 57% respectively of loans outstanding according to a Banc of America Securities report.

As the 2004-2007 co-horts of Alt-A option ARM mortgages have started to reset and prime borrowers have come under stress, we have started to see defaults in markets which are an order of magnitude larger than subprime.

I love phrases like "order of magnitude" because they make problems seem too big to do anything about. As we aggregate the losses we lose sight of the individuals whose lives are at risk even as financial websites carry more and more articles about how to profit from foreclosures.

Today, it's not just that prime loans are about to go belly up but more and more tenants living in private homes are at risk-with no one looking out for them because they don't own anything and so are considered disposable.

Mounting foreclosures is an issue I have been writing and railing about. Protests against them are featured in my forthcoming film Plunder: The Crime Of Our Time.

There is a macro dimension to this crisis abut also a far more personal micro one.

Here's a story I was told about a middle class woman on Long Island, who happens to be Haitian. I am sure its not the worst case--and certainly not the best outcome. Read it and weep-but as you do remember this bell may toll for more of us.

At the same time, as a reporter, I find myself personally exposed to people experiencing these problems. One is a close friend of a close friend who found herself on the street last week.

I offered to help her write an op-ed about her situation based on what she told me. She really liked it, but then had second thoughts about having it appear under her name. It is intimidating if you are not used to challenging powerful institutions even after you have been terribly mistreated. There is always a hope that some deal might save you, or get your home back. I have to respect her right to anonymity, but I can vouch for the accuracy of this sad account implicating a predatory bank and their servicer, the County Sheriff, and a moving company that makes money off of people's misery.

Here is the account.

MY HAITIAN EARTHQUAKE (BANKQUAKE?) IN NASSAU COUNTY

Almost two months ago, the country I was born in suffered a natural calamity. Hundreds of thousands died in the Haitian earthquake, members of my own family among them. Our family home was destroyed. It was heartbreaking and traumatizing. I am still grieving. I was happy to know that so many people who live here on the Island responded with an outpouring of donations and concern. No homeowner would ever want to share the same experience of sudden forced homelessness.

Less than a week ago, I stood outside a home that I have lived in for 14 years and watched the Nassau County Sheriff's office and a team of movers (from Network Moving & Trucking) that they hired, evict me, crudely packing up all my possessions, throwing precious belongings in boxes and somehow also stealing my grand daughter's laptop in the process before physically pushing her into the street.

My family had just been dispossessed in Haiti, and now I was having a similar (but far less deadly) experience in Nassau County. Only this calamity was not due to a natural disaster, but to a well-proven chain of fraud and abuse by banks. The FBI has confirmed we have been living through a "fraud epidemic" since 2004.

No big name musicians are raising money for the victims of this disaster. So far, the government agencies that have promised to curb an out of control foreclosure crisis have been ineffectual. The big banks have paid lip service to helping their customers, but, as study after study documented, they make more money throwing people out of their homes and reselling them than modifying mortgages so residents can stay where they are. They are in the game for profits, not to help people.

In my case, I persistently reached out to the bank with emails and calls to try to negotiate. No one would take my calls or respond. There was no there there. I have been experiencing disdain and insensitivity at every turn.

I reached out to legal agencies which Nassau County itself advises people facing eviction to go to, What happened? They told me there was nothing they could do.

In my case, I wanted to buy the house I lived in with my grandchild - I am nearly 65 - but the mortgage broker and the REMAC realty agency and the courts were less than helpful. No one would assist me. The Administration has stopped deportation orders for Haitians convicted of crimes, but seems uninterested in helping law abiding people like myself.

Was it my accent, my Haitian background? I am an American citizen and a former civil servant with a long history of public service and employment. Ethnicity may be a factor but they treat people of all races this way-with contempt!

Compounding the problem for me is that I wasn't even the homeowner but a tenant whose landlord had disappeared leaving the home with all sorts of major structural problems and unpaid bills. I tried reaching him and the bank for months on end with no success.

The bank in this case was HSBC, one of the most notorious subprime lenders which has written off billions of dollars because of its irresponsible lending policies, and been subject to investigations and reprimand. Their servicer is part of the scheme. It is no wonder that the public calls these people banksters. That is who they are.

I went to Court and had my appeal to stay the eviction denied without any reasons given. The Sheriff told me the eviction could be stopped if I applied for bankruptcy. I did so, and when I tried to call him with the file number, as instructed, before his office carried out the eviction, no one would take my call. His secretary told he would not talk to me. A bankruptcy filing should have stopped the eviction. It didn't. These are the bureaucratic games they play with people's lives.

And then to add insult to injury, the moving company had the nerve to yell at me for trying to stop my own eviction claiming that I was trying to cheat them out a $2000 fee for doing the job during which my grandchild was pushed physically and "lost" her computer.

I am appealing to my Nassau neighbors to express concern about this outrage like they did for the victims of the quake.

Please help me call for an investigation and reversal of this rushed eviction without a fair hearing or recourse. Will someone look into the actions by the Sheriff of Nassau County who did the bank's bidding, and Judge Scott Fairgreive who callously signed the order without an ounce of compassion.

I am now, as a senior citizen homeless and personally at risk. I fainted on the day of the eviction and had to be hospitalized. I don't know what will happen to me, and if something does, what will happen to my grandchild? For me, this calamity was like an earthquake destroying my life. Call it a 'bank-quake' if you will. I need help now.

Will someone stand up for me as I have for years for people all over the world?


Groundwater Levels Continue Downward Spiral Around Coca-Cola Plant Continues Bottling in Drought Area, Farmers and Villagers Left Without Water

KALA DERA, INDIA - March 11 - The Coca-Cola company has continued to operate its bottling plant in Kala Dera in Jaipur, India even as the area has been declared a drought area last summer and the groundwater levels are falling sharply - leaving the largely agrarian community with severely restricted access to water.

Data obtained this week by the India Resource Center from the Central Groundwater Board, a government agency, confirm that groundwater levels in Kala Dera fell precipitously again - a drop of 4.29 meters (14 feet) in just one year between August 2008 and August 2009, from 30.83 meters below ground level to 35.12 meters respectively.

The latest government figures on groundwater depletion are extremely alarming given last year's sharp drop in groundwater levels - 5.83 meters (19 feet) between May 2007 and May 2008.

Kala Dera has never experienced such sharp drops in groundwater levels and such precipitous drops have become common since Coca-Cola started its bottling operations in 2000.

In the nine years prior to Coca-Cola's bottling operations in Kala Dera, groundwater levels fell just 3 meters. In the nine years since Coca-Cola has been operating in Kala Dera, the groundwater levels have dropped 22.36 meters.

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The community of Kala Dera and surrounding villages have challenged Coca-Cola for depleting the water resources and destroying livelihoods, demanding that the bottling plant be shut down.

A study paid for by Coca-Cola and conducted by the Energy and Resources Institute (TERI) in 2008 confirmed the community allegations and concluded that Coca-Cola's use of water in Kala Dera was unsustainable. The study recommended that Coca-Cola shut down the plant, relocate the plant or bring in piped water from outside the area to meet its production needs.

Coca-Cola has chosen to ignore the recommendations of the study and, not surprisingly, the groundwater conditions continue to worsen dramatically.

Kala Dera is a water-stressed area and the government declared the area's groundwater resources as over-exploited in 1998. Yet the Coca-Cola company built a new bottling plant in 2000.

Coca-Cola refuses to share the Environmental Impact Assessment (EIA) it says it conducted prior to building the plant "due to legal and confidential reasons." An adequate EIA should have informed Coca-Cola that the area was already water-stressed and a bottling plant will seriously aggravate the existing water crisis in the area.

Coca-Cola, meanwhile, has announced that it has become " water positive" in Kala Dera, implying that they recharge more water than they use. Coca-Cola officials also suggest that groundwater levels have increased as a result of their bottling operations in Kala Dera. A visit to Coca-Cola's rainwater harvesting structures in the area by the India Resource Center found them ill-maintained and not functional. The TERI study also found all Coca-Cola rainwater harvesting projects to be in "dilapidated" conditions.

"Water is life and by denying us our water, Coca-Cola is destroying our lives and livelihoods. We urge people around the world to put pressure on Coca-Cola so that they shut down the bottling plant in Kala Dera," said Mahesh Yogi of the Kala Dera Sangharsh Samiti, the community group spearheading the campaign.

"Coca-Cola's continued operations in Kala Dera are nothing short of criminal. In spite of the growing evidence, including the company's own study, that confirm its operations are not sustainable, the company chooses to operate recklessly without regard to the well being of the community. If Coca-Cola were at all serious about being the water steward they claim to be, it would not suck water in drought areas and it would immediately discontinue its operations in Kala Dera," said Amit Srivastava of the India Resource Center, an international campaigning organization that works with the community in Kala Dera to oppose the plant.

The community groups in Kala Dera and surrounding villages have vowed to continue their campaign to shut down Coca-Cola.

For more information, visit www.IndiaResource.org

Social Security to start cashing Uncle Sam's IOUs

PARKERSBURG, W.Va. – The retirement nest egg of an entire generation is stashed away in this small town along the Ohio River: $2.5 trillion in IOUs from the federal government, payable to the Social Security Administration.

It's time to start cashing them in.

For more than two decades, Social Security collected more money in payroll taxes than it paid out in benefits — billions more each year.

Not anymore. This year, for the first time since the 1980s, when Congress last overhauled Social Security, the retirement program is projected to pay out more in benefits than it collects in taxes — nearly $29 billion more.

Sounds like a good time to start tapping the nest egg. Too bad the federal government already spent that money over the years on other programs, preferring to borrow from Social Security rather than foreign creditors. In return, the Treasury Department issued a stack of IOUs — in the form of Treasury bonds — which are kept in a nondescript office building just down the street from Parkersburg's municipal offices.

Now the government will have to borrow even more money, much of it abroad, to start paying back the IOUs, and the timing couldn't be worse. The government is projected to post a record $1.5 trillion budget deficit this year, followed by trillion dollar deficits for years to come.

Social Security's shortfall will not affect current benefits. As long as the IOUs last, benefits will keep flowing. But experts say it is a warning sign that the program's finances are deteriorating. Social Security is projected to drain its trust funds by 2037 unless Congress acts, and there's concern that the looming crisis will lead to reduced benefits.

"This is not just a wake-up call, this is it. We're here," said Mary Johnson, a policy analyst with The Senior Citizens League, an advocacy group. "We are not going to be able to put it off any more."

For more than two decades, regardless of which political party was in power, Congress has been accused of raiding the Social Security trust funds to pay for other programs, masking the size of the budget deficit.

Remember Al Gore's "lockbox," the one he was going to use to protect Social Security? The former vice president talked about it so much during the 2000 presidential campaign that he was parodied on "Saturday Night Live."

Gore lost the election and never got his lockbox. But to illustrate the government's commitment to repaying Social Security, the Treasury Department has been issuing special bonds that earn interest for the retirement program. The bonds are unique because they are actually printed on paper, while other government bonds exist only in electronic form.

They are stored in a three-ring binder, locked in the bottom drawer of a white metal filing cabinet in the Parkersburg offices of Bureau of Public Debt. The agency, which is part of the Treasury Department, opened offices in Parkersburg in the 1950s as part of a plan to locate important government functions away from Washington, D.C., in case of an attack during the Cold War.

One bond is worth a little more than $15.1 billion and another is valued at just under $10.7 billion. In all, the agency has about $2.5 trillion in bonds, all backed by the full faith and credit of the U.S. government. But don't bother trying to steal them; they're nonnegotiable, which means they are worthless on the open market.

More than 52 million people receive old age or disability benefits from Social Security. The average benefit for retirees is a little under $1,200 a month. Disabled workers get an average of $1,100 a month.

Social Security is financed by payroll taxes — employers and employees must each pay a 6.2 percent tax on workers' earnings up to $106,800. Retirees can start getting early, reduced benefits at age 62. They get full benefits if they wait until they turn 66. Those born after 1960 will have to wait until they turn 67.

Social Security's financial problems have been looming for years as the nation's 78 million baby boomers approached retirement age. The oldest are already there. As that huge group of people starts collecting benefits — and stops paying payroll taxes — Social Security's trust funds will shrink, running out of money by 2037, according to the latest projection from the trustees who oversee the program.

The recession is making things worse, at least in the short term. Tax receipts are down from the loss of more than 8 million jobs, and applications for early retirement benefits have spiked from older workers who were laid off and forced to retire.

Stephen C. Goss, chief actuary for the Social Security Administration, says the crisis has been years in the making. "If this helps get people to look more seriously at that in the nearer term, that's probably a good thing. But it's only really a punctuation mark on the fact that we have longer-term financial issues that need to be addressed."

In the short term, the nonpartisan Congressional Budget Office projects that Social Security will continue to pay out more in benefits than it collects in taxes for the next three years. It is projected to post small surpluses of $6 billion each in 2014 and 2015, before returning to indefinite deficits in 2016.

For the budget year that ends in September, Social Security is projected to collect $677 billion in taxes and spend $706 billion on benefits and expenses.

Social Security will also collect about $120 billion in interest on the trust funds, according to the CBO projections, meaning its overall balance sheet will continue to grow. The interest, however, is paid by the government, adding even more to the budget deficit.

While Congress must shore up the program, action is unlikely this year, said Rep. Earl Pomeroy, D-N.D., who just took over last week as chairman of the House subcommittee that oversees Social Security.

"The issues required to address the long-term solvency needs of Social Security can be done in a careful, thoughtful and orderly way and they don't need to be done in the next few months," Pomeroy said.

The national debt — the amount of money the government owes its creditors — is about $12.5 trillion, or nearly $42,000 for every man, woman and child in the country. About $8 trillion has been borrowed in public debt markets, much of it from foreign creditors. The rest came from various government trust funds, including retirement funds for civil servants and the military. About $2.5 trillion is owed to Social Security.

Good luck to the politician who reneges on that debt, said Barbara Kennelly, a former Democratic congresswoman from Connecticut who is now president of the National Committee to Preserve Social Security and Medicare.

"Those bonds are protected by the full faith and credit of the United States of America," Kennelly said. "They're as solid as what we owe China and Japan."

States Freezing Tax Refunds

Residents eager to get their state tax refunds may have a long wait this year: The recession has tied up cash and caused officials in half a dozen states to consider freezing refunds, in one case for as long as five months.

States from New York to Hawaii that have been hard-hit by the economic downturn say they have either delayed refunds or are considering doing so because of budget shortfalls.

“It’s an indicator of how bad it is,” says Scott Pattison, executive director of the National Association of State Budget Officers. “You know things are bad when you have to do that.”

New York, hit with a $9 billion deficit, may delay $500 million in refunds to keep the state from running out of cash, says Gov. David Paterson.

ARTICLE CONTINUES…

Anti-Semitism – Zionist myth vs truth and reality

Alan Hart views the myth and reality of anti-Semitism and argues that the myth, created and propagated by Israel and Zionism, is the single biggest potential threat to Jews the world over.

There are two definitions of anti-Semitism in its Jewish context. One was born in real history and represents a truth. The other is part and parcel of Zionist mythology and was invented for the purpose of blackmailing non-Jewish Europeans and North Americans into refraining from criticizing Israel or, to be more precise, staying silent when its leaders resort to state terrorism and demonstrate in many ways their absolute contempt for international law.

A tale of two anti-Semitisms

Anti-Semitism properly and honestly defined is prejudice against and loathing and even hatred of Jews, all Jews everywhere, just because they are Jews.

Anti-Semitism as defined by Zionism, the colonial, ethnic cleansing enterprise of some Jews, has come to mean almost all criticism of Israel’s policies and actions, in particular its oppression of the Palestinians, and, also, criticism on the basis of revelations from the documented truth of history which expose Zionism’s propaganda for the nonsense it is. Put another way, anti-Semitism as defined by supporters of Israel right or wrong is anything written or said by anybody that challenges and contradicts Zionism’s version of events. In effect Zionists say, “If you disagree with us, you’re anti-Semitic”.

Anti-Zionist poster

As a blackmail card to silence criticism of Israel and prevent informed and honest debate about who must do what and why for justice and peace in the Middle East, Zionism’s false charge of anti-Semitism has worked wonderfully well to date. Why? In the long (and still present) shadow of the obscenity of the Nazi holocaust, a European crime for which, effectively, the Arabs were punished, there are few things Westerners in public life, politicians and media people especially, fear more than being accused of anti-Semitism.

Unable to refute the substance of documented and objective messages of challenge and criticism, Zionism’s policy always was, and still is, to shoot the messengers with false charges of anti-Semitism.

Zionism – myth and reality

For a complete understanding of what anti-Semitism is and is not, it’s necessary to know what Zionism is and is not.

Zionism claims to be the nationalist movement of the Jews, all Jews everywhere. If this were so, the assertion that anti-Zionism is almost by definition a manifestation of anti-Semitism might appear to have a degree of credibility. But this Zionist claim does not bear examination.

As I document in detail in my book Zionism: The Real Enemy of the Jews, the truth is that from Zionism’s foundation in 1897 until the Nazi holocaust, its colonial enterprise was endorsed and supported by only a tiny minority of the world’s Jews and was opposed by many of them.

Also true is that from Israel’s unilateral declaration of independence in 1948 until the final countdown to the 1967 war, most Jews of the world had no great affinity with Israel. That changed when most Jews believed – because they were conditioned by Zionism and the mainstream Western media to believe – that poor little Israel was in danger of annihilation. In that light Israel’s stunning victory was a source of great pride for most Jews of the world.

Though most Jews didn’t and still don’t want to know it, the truth was different. The Arabs did not attack first and were not intending to attack. The 1967 war was one of Israeli aggression.

Today much of what supporters of Israel, right or wrong, claim to be anti-Semitism is actually anti-Israelism, which in my view is best described as anti-Zionism. And contrary to the assertions of Zionism’s spin doctors, anti-Zionism is not by definition anti-Semitism.

Short or long, any discussion of anti-Semitism should include the fact that Zionism needs it. The first to acknowledge this was none other than Theodore Herzl, Zionism’s founding father. In one of his diaries, not published until 1962, Herzl wrote the following:

Anti-Semitism is a propelling force which, like the wave of the future, will bring Jews into the promised land. Anti-Semitism has grown and continues to grow – and so do I.

He was right. Without the anti-Semitism unleashed by Adolf Hitler in his Germany and Nazi-occupied Europe, Zionism’s colonial enterprise would have been doomed to failure for lack of enough Jewish support.

Today Zionism needs anti-Semitism or what it can present as anti-Semitism to go on justifying its policies and actions.

Zionism – a catastrophe for Jews

Any discussion of anti-Semitism should also take note of the words of Yehoshafat Harkabi, Israel’s longest serving director of military intelligence. In his book Israel’s Fateful Hour, he wrote: “I believe it was a damaging error on Menachem Begin’s part to insinuate that criticism of Israel is a manifestation of anti-Semitism.” In the same book Harkabi gave this warning:

Israel is the criterion according to which all Jews will tend to be judged. Israel as a Jewish state is an example of the Jewish character, which finds free and concentrated expression within it. Anti-Semitism has deep and historical roots. Nevertheless, any flaw in Israeli conduct, which initially is cited as anti-Israelism, is likely to be transformed into empirical proof of the validity of anti-Semitism. It would be a tragic irony if the Jewish state, which was intended to solve the problem of anti-Semitism, was to become a factor in the rise of anti-Semitism. Israelis must be aware that the price of their misconduct is paid not only by them but also Jews throughout the world.

From the early 1980s when those words were written, Israel’s “misconduct” has been the prime cause in the rise of what Zionism presents as anti-Semitism but which is actually anti-Israelism/anti-Zionism. Today the biggest danger to the Jews of the world is, as Harkabi warned, that anti-Israelism/anti-Zionism will be transformed into anti-Semitism, with the consequence at some point of another great turning against Jews.

My own view is that such a catastrophe will happen unless the citizens of the mainly gentile Western world, among whom most Jews live, are made aware of the difference between Judaism and Zionism. As I have previously written and never tire of repeating, knowledge of this difference is the key to understanding two things.

One is why it is perfectly possible to be passionately anti-Zionist (opposed to Zionism’s still on-going colonial enterprise) without being in any way, shape or form anti-Semitic.

The other is why it is wrong to blame all Jews everywhere for the crimes of the hardest core Zionist few in Israel.

In my analysis, the day when citizens of the Western world understand those two things and what anti-Semitism is and is not, is the day that will mark the beginning of the end of Zionism’s freedom and ability to impose its will on the Palestinians, the whole of the Arab world and the governments of the major Western powers, and to remain above and beyond international law.

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The Force is with us

(1) Police Force

Anti-Police Brutality march today - Montreal
Protesters fear cops' anger
A group that organizes an annual and controversial anti-police brutality march that last year was the scene of more than 200 arrests says it had nothing do with an attack by vandals early Saturday that left 11 Montreal police squad cars smashed and a neighbourhood police station splashed with graffiti.
YYC: The photos might just as well never have been taken, so little do they reveal. The comments below the article reek with ugly racism - the story was an excuse to trash immigrants - but there is also a suspicion that the vandalism was done by the police themselves.

Coming just ahead of the protest march, vandalism by 20 hooded people dressed in black, carrying rocks, baseball bats and a hammer, none of whom was caught, does look suspiciously like police provocatuerism - especially since the Quebec police tossed their credibility to the wind by wearing black and carrying rocks at the Montello SPP protest event.

There's also every indication that there was at least one police agent in the crowd at the Vancouver Olympics protest.
“He was pushing forward and forcing people into the police basically,” Walia said on her cellphone from the Downtown Eastside. “From past experience, when someone falls into a police officer, they pick you up for assault.”

While the man appeared to be a photojournalist, he refused to identify his media affiliation when asked by protesters around him. He also remained silent as activists accused him of being a police officer. After the crowd chanted, “I smell bacon, I smell pork”, the man accepted an offer by officers to leave through the police line.
The Quebec provocateurs didn't wait for the police to offer; they just walked into their protective arms. (Union heavy, Dave Coles, took undue credit for stopping the provocateurs. He ought to have shared the credit with the black-garbed kids he was initially berating because it was they who kept telling him that the guys carrying rocks were cops, and Coles was actually quite slow to catch on.)

The CBC quotes "witnesses" saying there 15 to 20 perps, and says that the building was empty at the time. What no surveillance cameras? Again, the photo tells nothing.

The CP had nothing new, and didn't bother with photos.

The very fact that so many people are marching against police brutality should tell us something about the times we live in, and who it is that the police really serve and protect, as harsh authoritarianism increases while politicians prate on about freedom and democracy.

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(2) Israeli Force

About the so-called dressing down Netanyahu is said to have received from Obama via Clinton, here's Bibi's response to the media clamor:
"I propose not to be carried away and to calm down," he said. "We know how to handle these situations, calmly, responsibly and seriously."
He kind of echoes Sharon who was quoted as having said (and several prominent Americans concurred):
" ... don't worry about American pressure, we the Jewish people control America."
It may well be a fact that Israel has access to all American communications which may have proved a goldmine of blackmail material on politicians.

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(3) Military Force
Ted (Newfoundland) writes:
Matthew Hoh, the former senior U.S. civilian representative in Zabul province, Afghanistan, says that civilian deaths in Marjah caused by Operation Moshtarak were unnecessary and that the operation isn't accomplishing anything.
This link leads to another one.
The NATO-led military force in Afghanistan said on Saturday it had confidence in the choice of a man picked to run a former Taliban stronghold, despite a NATO commander saying he spent years in a German prison for assault. Abdul Zahir had been convicted in Germany of assaulting his stepson and jailed for four years.
Enter the commander of NATO troops in southern Afghanistan, British Major General Nick Carter, who says:
... that domestic violence such as that for which he said Zahir had been jailed was not necessarily unacceptable in Afghan culture. "Haji Zahir's mistake was to behave like an Afghan in Germany," Carter said, using an honorific title for a man who had made the pilgrimage to Mecca.
This is the same Carter, as I mentioned a little while back, who compromised the US big guy McChrystal, after he had apologized for the innocent civilian deaths by saying the missile was off course by 300 meters. Carter said a few days later it was right on course. Carter just loves the Afghan people.

Meanwhile over at Dawg's Blawg, he has an issue with the former Supreme Court Justice Mr. Iacobucci looking at the Torture documents.

And while the Liberals are huffing and puffing,they also knew about this under Paul Martin. But Iggy finally said something right: “let the chips fall where they may".
YYC: Dawg's Blawg also has a well-balanced article on "that Niqab thing" (Educational Force).

With regard to convicted child abuser Zahir, the truth is he was behaving as much like a German, an Israeli, an American , a Canadian, or a Roman Catholic priest as he was "like an Afghan".

But a prison sentence for violence probably should preclude a command position. However, since violence is the name of the game on both sides of the Afghan war, his record of abuse is probably considered an asset.

It's being reported that domestic abuse in the homes of American war veterans is on the increase due to the culture of violence in which they have been immersed. Therefore, we can assume it's on the increase in all of the other countries mentioned above.

Spiegel: 2009 swine flu pandemic a boost for Big Pharma/R. C. Camphausen

Those who suspected a money- and greed-driven conspiracy behind the 2009 swine flu outbreak - declared a pandemic by overzealous WHO officials and their advisers from within the industry - are being proven right by recent revelations in Der Spiegel.
The article Reconstruction of a Mass Hysteria - The Swine Flu Panic of 2009 in Spiegel Online of March 12 will hopefully not be the last one to show that the so-called pandemic of 2009 was engineered, but it does provide ample information to show that the so-called 'conspiracy theorist' were far from being nutty or plain crazy. Instead, so it emerges now, they had their finger right on the pulse of what had been happening. The article in Germany's foremost investigative magazine is long and rather exhaustive in its reconstruction of events, and the following excerpt clearly spells out what is becoming public knowledge, and what may serve as a guide to real evidence when a multitude of individuals and nations will soon take the companies and individuals to court:
"The pharmaceutical industry did not influence any of our decisions," says Fukuda. But in mid-May, about three weeks before the swine flu was declared a pandemic, 30 senior representatives of pharmaceutical companies met with WHO Director-General Chan and United Nations Secretary General Ban Ki Moon at WHO headquarters. The official reason for the meeting was to discuss ways to ensure that developing countries would be provided with pandemic vaccine. But at this point in time the vaccine industry was mainly interested in one question: the decision to declare phase 6. Everything hung on this decision. At stake was nothing less than a move to supply large segments of the world's population with flu vaccine. Phase 6 acted as a switch that would allow bells on the industry's cash registers to ring, risk-free. That's because many pandemic vaccine contracts had already been signed. Germany, for example, signed an agreement with the British firm GlaxoSmithKline (GSK) in 2007 to buy its pandemic vaccine -- as soon as phase 6 was declared. This agreement could explain why Professor Roy Anderson, one key scientific advisor to the British government, declared the swine flu a pandemic on May 1. What he neglected to say was that GSK was paying him an annual salary of more than €130,000 ($177,000).
This answers some of the questions and emerging suspicions earlier reported by Digital Journal, in several articles that can be found here, here and here. Following the various leads and leaks now provided to the public, and the public prosecutors in various countries, other investigations by other media will surely follow soon. Another interesting fact is, for example, that certain pharmaceutical companies had made deals and signed agreements with governments already in 2007, way before the swine flu broke out, contracts that stipulated that when and if a pandemic would be declared, those government would become multi-million buyers of the respective vaccines. The Spiegel article ends by discussing the brave example of the Polish health minister, the 53-year-old physician Ewa Kopacz who was one of the few politicians who apparently saw through the scam and declined to be part of it. Other political leaders, left, right or middle, should have followed her lead. The article says:
When she stepped up to the podium in the Polish parliament, the Sejm, during its vaccine debate, she wore a bright-red dress -- her combat gear. "As a doctor, my first obligation is to harm no one," she said. For this reason, she added, Poland was not going to follow in the rest of Europe's footsteps. "We will not purchase any vaccine against the swine flu," Kopacz told the Sejm. Politicians grumbled, but the health minister stood her ground. "Is it my duty to sign agreements that are in the interest of Poles, or in the interest of the pharmaceutical companies?" she asked. Today, Europe can admire her steadfastness. About 170 people died of the swine flu in Poland, a much lower number than the annual death toll attributable to the seasonal flu.

The GM War in Europe Starts Here!

'Not just a spud, this is likely to prove a very hot political potato indeed. It is living, knobbly proof of the determination of Brussels bureaucrats to spread GM crops throughout Europe, against the will of most of its people.

In a little-noticed move last week, the European Commission defied most of the governments to which it is supposed to answer to give the green light to growing a modified potato across the continent. It was the first time a GM crop had been authorised for cultivation in 13 years. But, now the long moratorium has been broken, similar approvals for others are expected rapidly to follow.

The decision has its origins in a couple of secret, top-level meetings called by Jose Manuel Barroso, the Commission's strongly pro-GM president. He invited the prime ministers of each of the 27 EU member states to send a personal representative along to discuss how to "speed up" the spread of the technology and "deal with" public opposition.'

Bailout deal for Greece? Just rumors!!!

It looks like these FALSE RUMORS of a bailout are being driven by speculators - and particularly Goldman Sachs - in an effort to PROP UP THE EURO against the US dollar. Greece has said they don’t want or need a bailout. Germany has said that Greece needs to take care of its own problems and Germany won’t jump in and give them any money. Nothing has changed in the positions of Greece or Germany throughout this whole matter.

From the German Finance Ministry: “Bailout deal for Greece? What bailout deal?”

Sunday March 13, 2010

GERMAN FINANCE MINISTRY UNAWARE OF GREEK BAILOUT DEAL

BERLIN (Reuters) - The German Finance Ministry said on Saturday it was not aware of any agreement by euro zone members to provide a multi-billion euro bailout package for heavily indebted Greece.

“We are not aware that this is being planned,” a ministry spokesman said, adding that Greece had not requested any aid.

Cynthia Mckinney and Dr Nafeez Ahmed discuss 9/11 in UK Parliment

On the 8th of March 2010 Cynthia Mckinney (a former US Congresswoman and 2008 Green Party Presidential nominee) and Dr Nafeez Ahmed (best selling author and political scientist) address a meeting of Members of Parliament on the subject of the need for an independent investigation into the events of September 11th 2001.

PART 1

PART 2

PART 3

www.nosmokewithoutfire.co.uk

brought to you by Dead Dean films join us on facebook
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Cynthia Mckinney www.allthingscynthiamckinney.com

Dr Nafeez Ahmed
http://nafeez.blogspot.com
http://iprd.org.uk

They spoke at the invitation of http://Reinvestigate911.org

Hope you enjoy and spread about

Dean Puckett

The Video That Will Put Geithner Behind Bars

They Cooked The Books

One Of The Greatest Crimes Ever Perpetrated

March 13, 2010 "Information Clearing House" -- You gotta see this! If this doesn't convince you that the Timothy Geithner knew about the securities shenanigans that were going on at Lehman, than I don't know what will.

Keep in mind, that Geithner ran Lehman through 3 "stress tests" prior to bankruptcy; all of which Lehman failed, and yet, nothing was done. Anton R. Valukas--the examiner who wrote the 2,200 page investigative-report which was released on Thursday-- has provided plenty of information detailing Lehman's “materially misleading” accounting and “actionable balance sheet manipulation.”

In other words, they cooked the books.

Eves Smith at Naked Capitalism sums up what was going on like this:

"Quite a few observers... have been stunned and frustrated at the refusal to investigate what was almost certain accounting fraud at Lehman. ....The unraveling isn’t merely implicating Fuld (Lehman CEO) and his recent succession of CFOs, or its accounting firm, Ernst & Young, as might be expected. It also emerges that the NY Fed, and thus Timothy Geithner, were at a minimum massively derelict in the performance of their duties, and may well be culpable in aiding and abetting Lehman in accounting fraud and Sarbox violations....

We need to demand an immediate release of the e-mails, phone records, and meeting notes from the NY Fed and key Lehman principals regarding the NY Fed’s review of Lehman’s solvency. If, as things appear now, Lehman was allowed by the Fed’s inaction to remain in business, when the Fed should have insisted on a wind-down ..... at a minimum, the NY Fed helped perpetuate a fraud on investors and counterparties.

This pattern further suggests the Fed, which by its charter is tasked to promote the safety and soundness of the banking system, instead, via its collusion with Lehman management, operated to protect particular actors to the detriment of the public at large.

And most important, it says that the NY Fed, and likely Geithner himself, undermined, perhaps even violated, laws designed to protect investors and markets. If so, he is not fit to be Treasury secretary or hold any office related to financial supervision and should resign immediately. (Naked Capitalism)

Repeat: "Accounting fraud", "collusion", "aiding and abetting." These are serious charges by a usually restrained blogger.

And this is from Zero Hedge:

"Lehman has become merely the latest example of all that is broken with today's crony capitalist system.... The evident conclusion is that the core driver of modern capitalist society is fraud at its very core, and nothing short of a massive revolutionary overhaul of the political system, which is the number one defender .. of very lucrative bribes and kickbacks originating from the same rotten Wall Street that (is) nothing but a sham filled with toxic assets" Zero Hedge

This story isn't going away. Someone has to go to jail. It's clear that Geithner acted as the "chief facilitator" of industrial scale securities flim-flam which led directly to the Great Crash of '08. He needs to be held accountable for his actions.

WH Chief Helped GOP Sink 9/11 Trial

White House chief of staff Rahm Emanuel has collaborated behind the scenes with Republican Sen. Lindsey Graham to oppose the Obama administration’s plans to use federal civilian courts, not military commissions, to try alleged Islamic terrorists, according to sources and press reports.

Emanuel’s back-room dealings with Graham represent a little-noticed element of President Barack Obama’s gradual retreat from promises to rely on traditional civilian and military courts as the best way to bring alleged terrorists to justice and to close the Guantanamo Bay prison.

Though Emanuel’s defenders insist that he has been loyal to the administration’s decisions once they’ve been made, some evidence suggests that he continued to encourage Graham to resist politically sensitive judgments, such as Attorney General Eric Holder’s decision to try five alleged 9/11 plotters in civilian court rather than before military commissions.

For instance, the Washington Post reported that after losing out to Holder on the internal debate last fall, Emanuel tried to keep tabs on the process through Graham and apparently used profane language to suggest that the South Carolina Republican drive home to the White House how much damage Holder’s decision had caused.

Graham told the Post that Emanuel would "say: 'How's it going? Did you tell them they were going to lose you?' And in terms a sailor could understand."

The seeds of the Emanuel-Graham collaboration and Obama’s policy reversals can be traced back to the weeks after Obama’s election when the President-elect met with Graham and Sen. John McCain, Obama’s defeated presidential rival, at the transition headquarters in Chicago in December 2008. The goal was a bipartisan approach to the dilemma of Guantanamo detainees.

Obama told Graham, a former judge advocate general in the military reserves, that he needed his help in closing Guantanamo and put him in touch with Emanuel about working on a bipartisan plan to turn that vision into a reality, the Post reported.

Emanuel and Graham did speak, and Emanuel, known as a hard-charging political dealmaker, soon realized that winning Graham's support as well as the support of other Republicans to shutter Guantanamo would not be possible unless self-professed 9/11 mastermind Khalid Sheikh Mohammed (KSM) was prosecuted before a military commission.

However, in his first days in office, President Obama focused on fulfilling his campaign promise to overturn many of Bush’s “war on terror” policies.

Obama ruled out abusive interrogations and struck down some of Bush’s secrecy edicts. Obama also issued an executive order halting the military commissions at Guantanamo, while setting up a task force and ordering a review of the more than 200 cases there to determine which detainees should face criminal prosecution as part of a larger effort to permanently close the facility by January 2010.

In April 2009, Obama also overruled CIA Director Leon Panetta and sided with Attorney General Holder in releasing the contents of the Bush administration’s memos that had justified the use of torture against alleged terrorists.

The Pressure Mounts

Soon, however, Obama was coming under fierce attack from former Vice President Dick Cheney and other Republicans who claimed that the new President was putting the nation at greater risk of terrorist attack while also putting into legal jeopardy CIA and Justice Department personnel who had been following orders in implementing the interrogation policies.

Obama reacted to these broadsides by shifting direction. Under pressure from Graham and other members of Congress, Obama flip-flopped on an agreement to disclose photographs depicting U.S. soldiers abusing prisoners in Iraq and Afghanistan.

Then, on May 15, 2009, after what three sources described as months of pressure from Defense Department officials – as well as from Graham and the Republicans – Obama announced that his administration would resurrect the Bush-era military commissions.

''Military commissions have a long tradition in the United States,” Obama said. “They are appropriate for trying enemies who violate the laws of war, provided that they are properly structured and administered."

The White House promised that Obama would first get Congress to include more legal safeguards, such as prohibitions on evidence gleaned through torture or via hearsay, and providing detainees with more freedom in choosing their own military lawyers.

Graham praised this move as a step in the right direction – and renewed Emanuel’s hopes of closer cooperation with the Republicans on Guantanamo.

''I continue to believe it is in our own national security interests to separate ourselves from the past problems of Guantanamo,'' Graham said at the time. "I agree with the President and our military commanders that now is the time to start over and strengthen our detention policies. I applaud the President's actions today.''

However, civil liberties groups and legal scholars denounced Obama’s decision as Bush-lite.

Zachary Katznelson, legal director of Reprieve, a legal charity based in London that represents more than two dozen Guantanamo prisoners, said, as a constitutional scholar, "Obama must know that he can put lipstick on this pig - but it will always be a pig."

Constitutional law professor Jonathan Turley said no amount of spin from the White House could change the fact that Obama was politicizing the law.

"It is clear that Obama has determined that these men stood a chance of being released if they were given full legal protections and procedures," Turley wrote on his blog. "Thus, he has discovered the value of extrajudicial punishment with indefinite detentions and tribunals. The tribunal system is run on rules written by the Bush administration to ensure convictions.”

Civilian Trials

Yet, while resurrecting the military tribunals, Obama granted Attorney General Holder the principal say over where and how to try which Guantanamo detainees, including KSM and the four other accused 9/11 plotters.

Sensitive to Graham’s feelings, Emanuel opposed using the civilian courts. However, Holder prevailed and – on Nov. 13, 2009 – announced that the trial for the five would be held in federal court in lower Manhattan.

Holder did agree to send other Guantanamo detainees who were involved in overseas attacks, such as the bombing of the USS Cole in 2000, to stand trial before military commissions.

Though praised by civil libertarians and initially endorsed by New York City Mayor Michael Bloomberg, the 9/11 trial decision infuriated the Right, which said the alleged plotters didn’t deserve the protections of the U.S. Constitution, an argument that seemed to resonate with many rank-and-file Americans.

"During this whole civilian-trial debate, Rahm's gut instincts knew that taking KSM to New York for civilian trials was going to be a misstep," Graham told the Washington Post. "He has a better ear for domestic politics on this issue than anybody in the administration, quite frankly."

Though Emanuel declined to be interviewed by the Post for its story (which generally praised his political pragmatism), Graham’s remarks suggest that Emanuel continued a rearguard action against Holder’s decision, signaling to Graham that he shouldn’t let up on the political pressure.

Last month, Jane Mayer of The New Yorker reported that Emanuel also disdained the Guantanamo legal philosophizing that absorbed Holder and White House counsel Greg Craig. “When Guantánamo walked in the door, Rahm walked out,” one informed source told Mayer.

Worried about alienating the U.S. intelligence community, Emanuel also opposed other decisions by Holder, such as an expansion of special counsel John Durham’s investigation into abuses in the CIA’s interrogation program, Mayer wrote.

Noting that the United Nations Convention Against Torture requires any nation where there are serious torture allegations to investigate the facts, Holder maintained that he was obligated, as the chief U.S. law enforcement officer, to do something.

“Emanuel couldn’t complain directly to Holder without violating strictures against political interference in prosecutorial decisions,” Mayer wrote. “But he conveyed his unhappiness to Holder indirectly, two sources said. Emanuel demanded [about Holder], ‘Didn’t he get the memo that we’re not re-litigating the past?’”

‘A Lot of Drama’

Mayer reported, too, that Emanuel took Sen. Graham’s side in battling Holder over the 9/11 cases.

“There was a lot of drama,” Mayer’s informed source said. “Rahm felt very, very strongly that it was a mistake to prosecute the 9/11 people in the federal courts, and that it was picking an unnecessary fight with the military-commission people. …

“Rahm had a good relationship with Graham, and believed Graham when he said that if you don’t prosecute these people in military commissions I won’t support the closing of Guantánamo. …

“Rahm said, ‘If we don’t have Graham, we can’t close Guantánamo, and it’s on Eric!’”

Emanuel got Holder to speak with Graham several times, according to Mayer, who quoted Graham as saying, “It was a nonstarter for me. There’s a place for the courts, but not for the mastermind of 9/11.”

Graham has vowed to do all he can to derail Holder’s decision on civilian trials. “The President’s advisers have served him poorly here,” Graham told Mayer. “I like Eric, but at the end of the day Eric made the decision.”

However, some elected officials welcomed Holder’s decision to bring the alleged 9/11 plotters to New York City to stand trial.

Rep. Jerrold Nadler, D-New York, who had chaired the House Judiciary subcommittee hearing about the deep-seated legal problems with the military commissions system, said "it is fitting" to prosecute KSM and the four other alleged 9/11 co-conspirators in New York.

"New York has waited far too long for the opportunity to hold these terrorists responsible," Nadler said. "We have handled terrorist trials before, and we welcome this opportunity to do so again. Any suggestion that our prosecutors and our law enforcement personnel are not up to the task of safely holding and successfully prosecuting terrorists on American soil is insulting and untrue.”

Then Christmas happened.

The Underwear Bomber

On Dec. 25, Nigerian Umar Farouk Abdulmutallab allegedly attempted to blow up a Northwest Airlines jet that he had boarded in Amsterdam as the plane was landing in Detroit. He had concealed the bomb in his underwear.

Republicans soon were blasting the Obama administration for turning this al-Qaeda sympathizer over to the FBI for questioning, a decision that Holder ultimately made after consulting the FBI, the Pentagon and the CIA.

Republicans issued statements saying Abdulmutallab should have been treated as an "enemy belligerent" and pressed for actionable intelligence. They accused the administration of treating al-Qaeda’s actions as a criminal issue rather than as a “war,” as Bush had framed the conflict.

The Christmas Day incident became a rallying cry for Republicans who cast Democrats as weak on national security. Republicans also reprised their complaint about the planned civilian trial of KSM and his four co-defendants.

Scott Brown, the Republican Senate candidate in Massachusetts, touched a raw nerve with the voters when he argued that taxpayers’ money should be spent on weapons to kill terrorists, “not on lawyers to defend them.” Brown’s surprising victory on Jan. 19 suggested that many voters agreed that constitutional protections should not be afforded alleged Islamic terrorists.

Over the following weeks, the drive to push the Obama administration into fully embracing military commissions for Guantanamo detainees took off.

On Jan. 27, Mayor Bloomberg withdrew his support for holding the trial in New York, citing costs. The next day, the White House ordered the Justice Department to find a new venue, while still insisting that the trial would be held in a civilian setting. News reports suggested that Obama would personally be involved in choosing a new venue for the trial.

Then, with Graham leading the charge, a bipartisan group of senators introduced legislation prohibiting federal funds from being used to prosecute KSM and other alleged 9/11 plotters in federal court. Holder and Defense Secretary Robert Gates opposed the move, noting that "the exercise of prosecutorial discretion has always been and should remain an Executive Branch function."

But news reports began to surface disclosing that Emanuel, as a Graham ally, had clashed with Holder over the decision to prosecute KSM in federal court. It seemed the Justice Department was being politicized once again.

Pushing for a Reversal

Emanuel essentially confirmed his role in an interview with The New York Times last month. "You can't close Guantanamo without Senator Graham, and KSM was a link in that deal," Emanuel said.

By publicly stating his own position on the KSM trial, Emanuel seemed to be suggesting that the White House no longer supported Holder's decision. For his part, Graham told the Times that the trial issue "is the one that could bring the presidency down."

Democrats for the most part remained silent while Republicans spent months attacking the decision to prosecute KSM in federal court.

On Feb. 11, however, Senate Judiciary Chairman Patrick Leahy and Senate Intelligence Committee Chairwoman Dianne Feinstein sent Obama a letter saying they believe that whether the 9/11 trial is held in New York City or another location, “these men should be brought to justice in a federal court."

Holder also continued to lobby for civilian trials. On Feb. 22, federal prosecutors secured a guilty plea in New York against Najibullah Zazi, a native of Afghanistan and a U.S. permanent legal resident who admitted he was recruited by al-Qaeda to plan an attack on New York City's subway system.

At a news conference following the announcement of Zazi's agreement to plead guilty to three criminal charges, which included providing material support to al-Qaeda, Holder said the case "demonstrates that our federal civilian criminal justice system has the ability to incapacitate terrorists, has the ability to gain intelligence from those terrorists and is a valuable tool in our fight against terrorism.

"To take this tool out of our hands, to denigrate the use of this tool flies in the face of the facts, in the face of the history of the use of that tool and is more about politics than it is about facts," Holder said.

But the writing was already on the wall. Or so it seemed.

It would appear that the half dozen or so news reports published over the past two months that detailed the infighting and disagreements between Emanuel and Holder over the 9/11 trial were coordinated by the Obama administration as a way of softening the blow for what lay ahead.

Last Friday, the Washington Post, citing unnamed sources, said Obama's "advisers" are close to recommending that KSM be prosecuted before a military commission.

"The President's advisers feel increasingly hemmed in by bipartisan opposition to a federal trial in New York and demands, mainly from Republicans, that Mohammed and his accused co-conspirators remain under military jurisdiction, officials said," according to the Post.

"If Obama accepts the likely recommendation of his advisers, the White House may be able to secure from Congress the funding and legal authority it needs to close the U.S. military prison at Guantanamo Bay, Cuba, and replace it with a facility within the United States."

Justice Department spokesman Dan Boyd told me that the "case is under review. There hasn't been a final decision made, and I can't speculate on what the department might or might not do until that happens."

Pushing Back

Civil liberties groups, however, wasted no time condemning the anticipated move.

"If this stunning reversal comes to pass, President Obama will deal a death blow to his own Justice Department, not to mention American values," said Anthony Romero, executive director of the ACLU.

"If the President flip-flops and retreats to the Bush military commissions, he will betray his campaign promise to restore the rule of law, demonstrate that his principles are up for grabs and lose all credibility with Americans who care about justice and the rule of law.

"Even with recent improvements, the military commissions system is incapable of handling complicated terrorism cases and achieving reliable results. President Obama must not cave in to political pressure and fear-mongering. He should hold firm and keep these prosecutions in federal court, where they belong."

Human Rights First arranged a conference call for reporters with three retired military officials who warned the Obama administration about caving in to political pressure and embracing a system of justice that is rife with flaws.

"I think it's sad and a mistake that we should politicize these decisions and get Congress involved in what is clearly the constitutional responsibility of the President," said U.S. Navy Rear Adm. John D. Hutson, a retired judge advocate general.

"The President has to push back and say, this is the right thing to do and I'm going to do it that way. I'm not going to succumb to the political pressure of people who are trying to undermine the administration."

Maj. Gen. William L. Nash of the U.S. Army said if Obama reversed Holder, it "would give aid to our enemies, it would lessen our reputation with our allies who have been extremely happy with the reverse course that we've taken. This is not the time to be scared. …

“This is not the time to accommodate those who have led this country under an aura of fear for eight years. And it's time to do the right thing and persevere through."

On Sunday, the ACLU ratcheted up the pressure, delivering a blunt message to Obama in the form of a full-page ad in The New York Times, which posed the question: "What will it be Mr. President? Change or more of the same?"

The ad showed a picture of Obama morphing into Bush across four panels.

Sen. Graham, in an appearance Sunday on CBS News' "Face the Nation," responded to the ACLU's ad, saying it shows how Obama is getting "unholy grief from the Left."

Graham then put his offer on the table, the same one that Emanuel received 15 months earlier during his meeting with Graham at the transition headquarters in Chicago, the same one Emanuel has been publicly lobbying for over the past few months.

Graham said he told the White House that if KSM is prosecuted before a military commission, "I will help you in getting the Republican votes that are needed to close Guantanamo."

A decision is expected to be announced before Obama leaves for Indonesia on March 18.

Iceland, the Mouse that Roared

I thought I heard something the other night. It was a distant sound, a low rumbling, a roar from some far off beast that had finally pronounced its presence. It woke me for a second, but it was so distant I felt no threat and simply rolled over and went back to sleep. The next morning I learned that Iceland was taking a stand. It was refusing to pay its British and Dutch debts. It is claiming the debts are a result of fraud, and it's right. They have made the offer to pay some years from now, if they can afford it at that time, and only as a percentage of their GDP. This offer has been, of course, declined by Iceland's creditor banks as they demand payment in the form of real assets.

The Icelanders have grown a pair, so to speak. They are doing something I wish Americans would have done, or will do in the future. They are standing up to the privately owned banks that seem to think they are above the law, that they can change the rules at their whim, and that they alone know what's best for the world, which of course happens to empower them and help their profits. I may not agree with all the politics of Iceland. It might not be the bastion of freedom one looking to get away from intrusive government might run to, but I do admire their stance against the banksters.

Let's examine the situation a little closer. The Icelanders claim that private banks owe the money to other private banks, not taxpayers. The people who own the private banks should be responsible for paying back the creditor banks, not the people of Iceland. I agree wholeheartedly with that assessment. Furthermore, I would take it a step further and make the assertion that any government official voting for any public borrowing that requires payment of public funds for interest be held responsible, or their family be held responsible, should the loans go into default. In other words, these public officials should not be allowed to maintain their fortunes while the common folk are expected to pay for the mistakes they made. Perhaps that would help stop the corruption.

It seems that Iceland was fooled into the same ponzi scheme the rest of the world finds itself in. This all revolves around the fact that money in and of itself has no intrinsic value. It is just paper, for the most part, and in the modern world it is just data floating around in cyberspace. Even metal coins are made from cheap and common metals anymore. The fiat system devised by the central banks are designed to collapse at some point, and it's designed to collapse in such a way that the very few, very rich, very powerful end up with all the marbles. It's not enough to them, it seems, to be at the top of the heap, they have to be so high up and keep the common folk down so low as to be untouchable.

Those that own the banks now hope that they can swoop in and buy up the nation's infrastructure for pennies on the dollar, or in this case aurar on the krona. This is how they operate. They print money based on nothing but debt at negligible cost to themselves, then charge interest on that debt, interest that is never created by the way, and then when the debt can't be repaid they end up acquiring all the real wealth that's been created. It's a brilliant scheme in its simplicity. They end up with all the real wealth and they risk nothing of any real value. I could be wrong, but I think it's safe to say that the Icelanders figured this out when their creditor banks started demanding things like their geothermal power stations and other such publicly owned infrastructure as payment for their defaulted loans. They cried "foul!" - as well they should having played by the rules all this time - and charged that they had been defrauded. They may well have shocked the establishment with their refusal to pay the extortion.

One may well ask, "Is this the fate that awaits all nations?" How many nations in the world today are in the same boat as Iceland? How many are having problems just servicing the interest on their debt? I dare say it would be easier to count the nations that weren't experiencing debt trouble. And one could rightly ask where all the money has gone. Certainly the debt hasn't been put back into the economy to create more wealth. Indeed, I would venture a guess that there's trillions of dollars, euros, yens, pounds, francs, marks, you name it, stashed away in vaults somewhere just waiting for the day when they can be used again, money that should no longer exist that somehow found its way into secret vaults that also shouldn't exist.

It is interesting to note that the biggest banks, the ones that managed to get bailed out by US tax dollars rather than made to liquidate, are intimately connected to the same international bankers who own the central banks across the globe. Indeed, Goldman Sachs seems to have become a "bank of the world," so to speak, as it has its fingers in a little bit of everyone's pies these days. It is also interesting to note that their largest competitors were allowed to fail, effectively setting them up with monopoly privileges. That's how the power banking elite want it, all the money in their hands and all the corporations under their thumb as they monopolize the issuance of currency and credit. Everyone will have to do as they say or they will quickly become bankrupt and destitute. Such is the power of monopoly.

One may well wonder what happens next. The British and Dutch have threatened economic sanctions should the Icelanders fail to fall in line, but is this how we want to treat our brethren? Is this how we want to treat our allies that stood by us in the darkest of times? Do we now just shun people we consider friends simply because they stand up for what they believe is right? Do we go so far as to commit an act of war on such a democratic nation because they recognize a fraud when they see one? This situation should get everyone thinking. The corruption now exposed is so grievous and obvious that we should all realize the time has come to obliterate the current system and deny any power to those who brought this situation to bear.

It is once again time to set up a system of money based on labor instead of debt. We should have a system where free people are able to own property outright, not have to borrow to afford it and then worry that an uncaring bank may come and claim it should one find one´s self in financial trouble. Similarly, it is very disturbing that government can claim private property via eminent domain and non payment of property taxes as if they feel they already own the land you pay for. These wrongs have needed correction for a long time now and hopefully the actions of the Icelanders will help start the ball rolling.

While the Greeks are rioting because they worry their entitlements will be taken away, the Icelanders have been able to take a more direct roll in the political process. The Greeks may well feel they have been left out of the political process, much like many Americans feel at this point in time as we watch the congress blatantly ignore the wishes of the common folk time and again. The bailouts, the wars, the passing of laws violating our rights and the health care bills are all examples of the minority political class ignoring the wishes of the majority to the detriment of society. The Icelanders may have to pay a price for their bravery, but they are finding their way back to freedom and self reliance.

We have been dependent on these banks for far too long and they have taken advantage of it. They have threatened our lawmakers with martial law and economic destruction. They have refused to honor the will of the people and answer questions involving how they´ve spent our money. As I write this, a very few senators, Bob Corker (R-TN), Richard Shelby (R-AL), Chris Dodd (D-CT) and Judd Gregg (R-NH), are working to strip the Audit the Fed amendment from the Financial Reform Bill and give the Federal Reserve even more power. This will assure they will never be held accountable for the wrongs they have done. These senators need to be shown in no uncertain terms that we the people have had enough and will not obey their dictates and whims any longer.

We as a society need to start producing again. We need to start competing with others who wish to produce. This is how wealth is created. The more wealth we create, the more prosperous we all become. For a few decades now, we have tried to maintain our lifestyles with a service economy. It didn´t work. Now the economy is collapsing worldwide. Now the banks are hoarding that which they created and are trying to claim the real wealth that should be owned by private sovereigns. We need to ask ourselves, can we be proactive and stop this before we wake up and find ourselves in the same boat as Iceland? If not, will we simply say no and refuse to pay as they did, or will we allow our society to break down and resort to violence as the Greeks? Don´t let a few politicians on the bankster´s payroll dictate what needs to be done. Demand action now. Roar louder than the Icelanders. Hopefully, we will find justice later. Hopefully, we can avoid the fate of nations that remain on the central banker´s preferred course.

The financial system in America is on the edge of default

The dramatic and costly undertow of deflation continues unabated, as government via fiscal policy and the Federal Reserve, by creating money and credit out of thin air, proceed to overpower this deflation with massive inflation.

Unbeknownst to most the Fed and the Treasury have been maintaining this program for the past several years, accompanied by most major countries, all of which have taken the path of least resistance rather than address the underlying problems.

The current stage of problems had to be addressed 2-1/2 years ago in what has become known as a credit crisis. This continuing crisis has been accompanied by 22-1/8% current unemployment that has resulted in a perpetual fall in tax revenues and a resultant enlargement of government deficits. We might add that this condition is being experienced by many countries worldwide, which followed America’s leadership into this terrible financial and economic morass. These policies have led to massive sovereign debt policies, a hangover of the policies of 1933 and 1971.

The financial system in America is on the edge of default. A recent poll found that 92% of those surveyed wanted to unseat their current representative or Senator in Washington and only 21% believed that government enjoyed the consent of the governed. It’s very obvious people are not happy with the political, economic and financial situation presently. Eighty percent believe that government is enmeshed in partisan infighting. Not only between parties, but within parties as well. Politicians are very aware of these numbers and are frantic to get reelected. The public has recoiled in disgust. People are demanding that the power of government be curbed. People are sick and tired of paid off corrupt politicians, more than half of whom have been in office for more than ten years.

It is not healthy for a nation to have $3.3 trillion in Treasury bonds held by foreigners. China holds about $900 billion and Japan about $800 billion. We also understand that hedge funds and others also are fronting both countries, so the figures are not really reflective in their total positions. These nations for the most part are rolling their positions, but have not injected new capital into US Treasuries. That is why the Fed had to fund 80% of new Treasury debt last year.

Presently the Fed is fighting and pulling out all stops to halt legislation to audit the Federal Reserve, a private corporation, which has managed our monetary policy since 1913, under the Federal Reserve Act. On Monday the Treasury held a media conference for financial reporters and bloggers in which the Fed was discussed. The meeting had some very strange conditions. Mr. Geithner, Mr. Krueger and Mr. Sperling could be paraphrased but not quoted and what was paraphrased could not be connected to a specific official. Again, the element of secrecy to protect the guilty. One blogger said, “Did they get the ground rules from Al Qaeda?” The meeting was a travesty. How can government officials demand secrecy in public briefings? It is no wonder that 90% of the public and 317 members of Congress want more Treasury transparency and an audit and investigation of the Fed. This is the same gang run by Geithner and Bernanke that are currently running the gold suppression scheme. When you have a criminal cabal involved you have no transparency. That is why the audit of the Fed is so important. Such an exercise would expose exactly what both have been doing in the markets. The Fed and Treasury have lied for years about what they have been up too in behalf of their Illuminist friends. It is not only about the actions of the President’s Working Group on Financial Markets, but the funding of Watergate, Saddam Hussein, who they supposedly conveniently hung, the countries that secretly received loans, how much, who got them and what was the collateral? Were currency swaps with foreign control banks used to strengthen the dollar by the Fed and for those foreign control banks to purchase Treasury and Agency paper? How about all the inside information funneled to Wall Street and banking for almost a century from both the Fed and Treasury? Their lies are legion. They both are manipulating every market in the world 24/7 and the American people want it stopped. We also want an audit of America’s gold and the testing of the gold bars held. There is much we want to know, so we can save our country and our freedom.

Investors continue to chase yields, which is a dumb practice. Interest rates are at 80-year lows and can only stay the same or rise. People are grabbing junk bond yields that will come back to haunt them.

At least for now Greece and euro problems are being shuffled into the background. You can imagine this is not the last of the eurozone problems. The PIIGS will be back one by one to cause never-ending problems until they are forced to leave the eurozone. That will cause a eurozone breakup, probably by the end of next year.

This is the first real threat to the eurozone since its beginning ten years ago, and we think they will find that their rules are so restrictive that weak members will be forced to leave. The monetary policy and interest rates may be singular, but fiscal policy is not. Exchange rates for the euro must fit all members, but rates and methods of growth vary widely. With one currency sovereignty has effectively been lost. Public debt to GDP has to be under 3%, while most are over 3%: Greece is at 10.7%. There is also a public debt limit of 60% of GDP, which all nations in the zone have broken. All precepts have not and cannot be met. There is no effective policy because there is no way to enforce the rules. In addition most have current account deficits and the zone effectively has been carried by Germany from this aspect. The bottom line is a few have growth, the rest do not. As a result there is pressure, due to poor growth in some of the nations, for austerity measures to reduce fiscal deficits at the worst possible time. Greece comes first along with Ireland and the rest will follow.

Just as an example, Spain has a fiscal deficit of 10% of GDP that has to fall to 3% within three years, which is virtually impossible just as it is in Greece. Their current account deficit is 4.5% of GDP. In a recessionary/depressionary world getting into the plus column is a tall order. This dilemma is the result in part of the housing collapse caused by Spanish banks and inattention by the Bank for International Settlements. We see consumption continuing to fall in the face of 20% unemployment, which worsens by the day. The PIIGS and a present total of 19 nations are effectively bankrupt. We do not believe they can survive without devaluation and debt default. That is why we expect that to happen next year.

Historically banks have kept loan loss allowance ratios at $1.33 for every dollar of debt. Today it is 0.58%.

The commercial paper market rose $11.2 billion last week to $1.145 trillion.

The Treasury sold $21 billion in 10-year T-notes. The bid-to-cover was 3.45 to 1, which is average vs. 2.85 to 1. This was the highest since 1995. Indirect bidders, which include foreign central banks, bought 35.1%, compared to an average of 41.7% at the last four re-openings.


Almost 39 million Americans received food stamps in December, the most ever, as the jobless rate hovered near a 26- year high, the government said.

Recipients of the subsidies for food purchases climbed 23 percent from a year earlier and rose 2.1 percent from November, the U. S. Department of Agriculture said Thursday in a statement on its Web site. The number receiving the benefit has set records for 13 straight months.

Food aid climbed as the national unemployment rate reached 10.1 percent in October, the highest since June 1983, and remained at 10 percent through December before easing to 9.7 percent in January.

An average of 40.5 million people will get food stamps each month in the federal fiscal year that began Oct. 1, Agriculture Secretary Tom Vilsack said last week. The figure is projected to rise to 43.3 million in 2011.

Nevada had the biggest increase in the percentage of the population receiving the coupons, up 49 percent from December, USDA figures show. Texas had the most recipients, at 3.31 million, topping California’s 3.11 million.

The U.S. government recorded a budget deficit of $221 billion in February, the Treasury Department reported Wednesday, even as its income posted a big increase for the month.

Income totaled $107.5 billion in February, a 23% increase over last February's total, and marking the first monthly year-over-year increase since April 2008.

Spending was $328 billion in February, up 17% year over year. That was the largest February total on record, a Treasury official said.

February was the 17th consecutive month that the government recorded a deficit. It was a little less than expected: last week the Congressional Budget Office predicted that the deficit would be $223 billion in February.

Year to date, the deficit is $652 billion, according to the Treasury data.

The Senate approved a $140 billion package of tax breaks and aid to the unemployed Wednesday, the most substantial effort by the chamber to boost the nation's economy since passing the stimulus bill last year.

Six Republicans joined 56 Democrats to pass the "tax extenders" measure, 62 to 36. The package faces an uncertain future in the House, where Democrats have taken a markedly different approach to the "jobs agenda" than have their Senate colleagues.

Small defense companies, energy firms, and other technology start-ups throughout New England could lose tens of millions of dollars a year because of a decision by House Democrats yesterday to abruptly halt budget earmarks for companies.

The decision follows a House ethics probe into an alleged pay-to-play system in which investigators followed a trail of campaign contributions and linked them to earmarks — a provision added to a bill that directs money to a specific project, in this case, a private company. Although the House Ethics Committee cleared members of specific wrongdoing, House leaders remained sensitive to the appearance of a rampant quid-pro-quo system that has stoked outrage around the country.

The decision, which exempts earmarks for nonprofit groups, could significantly affect Massachusetts because the House delegation has proved adept at the political horse-trading required to obtain funding for private companies.

Can Nancy Pelosi Get the Votes?

The Senate bill's abortion language is not the House Speaker's only problem.

http://online.wsj.com/article/SB10001424052748703701004575113292688090292.html#printMode

*****

SEVEN HOUSE members, including Northern Virginia Rep. James P. Moran Jr. (D), collected more than $840,000 in political contributions from employees and clients of a lobbying firm, Paul Magliocchetti and Associates Group (PMA), during a two-year span. In that same period, the lawmakers, strategically situated on the Appropriations defense subcommittee, directed more than $245 million in earmarks to clients of PMA.

If you think those two facts are unrelated, you are qualified to be on the House ethics committee. The panel recently found that "simply because a member sponsors an earmark for an entity that also happens to be a campaign contributor does not, on these two facts alone, support a claim that a member's actions are being influenced by campaign contributions."

The ethics committee acknowledged that "there is a widespread perception among corporations and lobbyists that campaign contributions provide enhanced access to members or a greater chance of obtaining earmarks." Gee, how could anyone have gotten that impression? Maybe because the lawmakers targeted those seeking earmarks for campaign contributions? Sent their key appropriations staffers to fundraisers?

For instance, in 2008, the appropriations director for Rep. Pete Visclosky (D-Ind.) told corporations interested in obtaining earmarks that they needed to submit requests by Feb. 15. On Feb. 27, Mr. Visclosky's campaign manager sent a letter to companies that had sought his help on defense matters inviting them to a fundraiser on March 12. Mr. Visclosky's political committees received $35,300 from clients of PMA that month, plus another $12,000 from the lobbying firm and its employees. A week after the fundraiser, which was focused on defense contractors and attended by his chief of staff and appropriations director, Mr. Visclosky requested earmarks for six PMA clients, totaling more than $14 million.

House leaders understand that voters may not be quite as obtuse as the ethics committee seems to assume, and their extreme embarrassment -- over this and other scandals -- may lead to useful action. The House is right to ban lawmakers from earmarking government funds for for-profit companies. It should go further, and extend the prohibition to nonprofit and educational institutions as well. Some nonprofit institutions spend enormous sums on lobbyists, who dispense campaign donations in hope of obtaining earmarks. More important, the Senate must follow suit, as much as it appears disinclined to do so. A system that aligns campaign cash and earmarks is inherently unseemly, if not outright corrupt, and the Senate is tainted by this setup as well.

We say this fully aware that the Constitution grants Congress the power of the purse and that earmarks are not close to the biggest reason for out-of-control spending. And that lawmakers have taken steps in recent years to reduce the number of earmarks and make the process more open. And that eliminating earmarks would not end every instance in which private interests lobby for -- and make campaign contributions in hope of obtaining -- particular favors.

It would, however, eliminate the worst such abuse. The House Ethics Manual cautions members "to avoid even the appearance that solicitations of campaign contributions are connected in any way with an action taken or to be taken in an official capacity." The ethics committee, dismissing that caution and a recommendation by the newly created independent Office of Congressional Ethics to investigate two of the seven representatives, decided there was nothing to worry about in the PMA case. With standards this lax, the only reasonable choice is to end the earmarks that fuel this sleazy process. [This dramatically shows you why campaign contributions have to end.]

The dramatic and costly undertow of deflation continues unabated, as government via fiscal policy and the Federal Reserve, by creating money and credit out of thin air, proceed to overpower this deflation with massive inflation.

Unbeknownst to most the Fed and the Treasury have been maintaining this program for the past several years, accompanied by most major countries, all of which have taken the path of least resistance rather than address the underlying problems.

The current stage of problems had to be addressed 2-1/2 years ago in what has become known as a credit crisis. This continuing crisis has been accompanied by 22-1/8% current unemployment that has resulted in a perpetual fall in tax revenues and a resultant enlargement of government deficits. We might add that this condition is being experienced by many countries worldwide, which followed America’s leadership into this terrible financial and economic morass. These policies have led to massive sovereign debt policies, a hangover of the policies of 1933 and 1971.

The financial system in America is on the edge of default. A recent poll found that 92% of those surveyed wanted to unseat their current representative or Senator in Washington and only 21% believed that government enjoyed the consent of the governed. It’s very obvious people are not happy with the political, economic and financial situation presently. Eighty percent believe that government is enmeshed in partisan infighting. Not only between parties, but within parties as well. Politicians are very aware of these numbers and are frantic to get reelected. The public has recoiled in disgust. People are demanding that the power of government be curbed. People are sick and tired of paid off corrupt politicians, more than half of whom have been in office for more than ten years.

It is not healthy for a nation to have $3.3 trillion in Treasury bonds held by foreigners. China holds about $900 billion and Japan about $800 billion. We also understand that hedge funds and others also are fronting both countries, so the figures are not really reflective in their total positions. These nations for the most part are rolling their positions, but have not injected new capital into US Treasuries. That is why the Fed had to fund 80% of new Treasury debt last year.

Presently the Fed is fighting and pulling out all stops to halt legislation to audit the Federal Reserve, a private corporation, which has managed our monetary policy since 1913, under the Federal Reserve Act. On Monday the Treasury held a media conference for financial reporters and bloggers in which the Fed was discussed. The meeting had some very strange conditions. Mr. Geithner, Mr. Krueger and Mr. Sperling could be paraphrased but not quoted and what was paraphrased could not be connected to a specific official. Again, the element of secrecy to protect the guilty. One blogger said, “Did they get the ground rules from Al Qaeda?” The meeting was a travesty. How can government officials demand secrecy in public briefings? It is no wonder that 90% of the public and 317 members of Congress want more Treasury transparency and an audit and investigation of the Fed. This is the same gang run by Geithner and Bernanke that are currently running the gold suppression scheme. When you have a criminal cabal involved you have no transparency. That is why the audit of the Fed is so important. Such an exercise would expose exactly what both have been doing in the markets. The Fed and Treasury have lied for years about what they have been up too in behalf of their Illuminist friends. It is not only about the actions of the President’s Working Group on Financial Markets, but the funding of Watergate, Saddam Hussein, who they supposedly conveniently hung, the countries that secretly received loans, how much, who got them and what was the collateral? Were currency swaps with foreign control banks used to strengthen the dollar by the Fed and for those foreign control banks to purchase Treasury and Agency paper? How about all the inside information funneled to Wall Street and banking for almost a century from both the Fed and Treasury? Their lies are legion. They both are manipulating every market in the world 24/7 and the American people want it stopped. We also want an audit of America’s gold and the testing of the gold bars held. There is much we want to know, so we can save our country and our freedom.

Investors continue to chase yields, which is a dumb practice. Interest rates are at 80-year lows and can only stay the same or rise. People are grabbing junk bond yields that will come back to haunt them.

At least for now Greece and euro problems are being shuffled into the background. You can imagine this is not the last of the eurozone problems. The PIIGS will be back one by one to cause never-ending problems until they are forced to leave the eurozone. That will cause a eurozone breakup, probably by the end of next year.

This is the first real threat to the eurozone since its beginning ten years ago, and we think they will find that their rules are so restrictive that weak members will be forced to leave. The monetary policy and interest rates may be singular, but fiscal policy is not. Exchange rates for the euro must fit all members, but rates and methods of growth vary widely. With one currency sovereignty has effectively been lost. Public debt to GDP has to be under 3%, while most are over 3%: Greece is at 10.7%. There is also a public debt limit of 60% of GDP, which all nations in the zone have broken. All precepts have not and cannot be met. There is no effective policy because there is no way to enforce the rules. In addition most have current account deficits and the zone effectively has been carried by Germany from this aspect. The bottom line is a few have growth, the rest do not. As a result there is pressure, due to poor growth in some of the nations, for austerity measures to reduce fiscal deficits at the worst possible time. Greece comes first along with Ireland and the rest will follow.

Just as an example, Spain has a fiscal deficit of 10% of GDP that has to fall to 3% within three years, which is virtually impossible just as it is in Greece. Their current account deficit is 4.5% of GDP. In a recessionary/depressionary world getting into the plus column is a tall order. This dilemma is the result in part of the housing collapse caused by Spanish banks and inattention by the Bank for International Settlements. We see consumption continuing to fall in the face of 20% unemployment, which worsens by the day. The PIIGS and a present total of 19 nations are effectively bankrupt. We do not believe they can survive without devaluation and debt default. That is why we expect that to happen next year.

Historically banks have kept loan loss allowance ratios at $1.33 for every dollar of debt. Today it is 0.58%.

The commercial paper market rose $11.2 billion last week to $1.145 trillion.

The Treasury sold $21 billion in 10-year T-notes. The bid-to-cover was 3.45 to 1, which is average vs. 2.85 to 1. This was the highest since 1995. Indirect bidders, which include foreign central banks, bought 35.1%, compared to an average of 41.7% at the last four re-openings.

Almost 39 million Americans received food stamps in December, the most ever, as the jobless rate hovered near a 26- year high, the government said.

Recipients of the subsidies for food purchases climbed 23 percent from a year earlier and rose 2.1 percent from November, the U. S. Department of Agriculture said Thursday in a statement on its Web site. The number receiving the benefit has set records for 13 straight months.

Food aid climbed as the national unemployment rate reached 10.1 percent in October, the highest since June 1983, and remained at 10 percent through December before easing to 9.7 percent in January.

An average of 40.5 million people will get food stamps each month in the federal fiscal year that began Oct. 1, Agriculture Secretary Tom Vilsack said last week. The figure is projected to rise to 43.3 million in 2011.

Nevada had the biggest increase in the percentage of the population receiving the coupons, up 49 percent from December, USDA figures show. Texas had the most recipients, at 3.31 million, topping California’s 3.11 million.

The U.S. government recorded a budget deficit of $221 billion in February, the Treasury Department reported Wednesday, even as its income posted a big increase for the month.

Income totaled $107.5 billion in February, a 23% increase over last February's total, and marking the first monthly year-over-year increase since April 2008.

Spending was $328 billion in February, up 17% year over year. That was the largest February total on record, a Treasury official said.

February was the 17th consecutive month that the government recorded a deficit. It was a little less than expected: last week the Congressional Budget Office predicted that the deficit would be $223 billion in February.

Year to date, the deficit is $652 billion, according to the Treasury data.

The Senate approved a $140 billion package of tax breaks and aid to the unemployed Wednesday, the most substantial effort by the chamber to boost the nation's economy since passing the stimulus bill last year.

Six Republicans joined 56 Democrats to pass the "tax extenders" measure, 62 to 36. The package faces an uncertain future in the House, where Democrats have taken a markedly different approach to the "jobs agenda" than have their Senate colleagues.

Small defense companies, energy firms, and other technology start-ups throughout New England could lose tens of millions of dollars a year because of a decision by House Democrats yesterday to abruptly halt budget earmarks for companies.

The decision follows a House ethics probe into an alleged pay-to-play system in which investigators followed a trail of campaign contributions and linked them to earmarks — a provision added to a bill that directs money to a specific project, in this case, a private company. Although the House Ethics Committee cleared members of specific wrongdoing, House leaders remained sensitive to the appearance of a rampant quid-pro-quo system that has stoked outrage around the country.

The decision, which exempts earmarks for nonprofit groups, could significantly affect Massachusetts because the House delegation has proved adept at the political horse-trading required to obtain funding for private companies.

http://www.manpower.com/investors/releasedetail.cfm?releaseid=450330

Though 73% of firms surveyed said they plan on hiring NO employees and 8% intend to fire employees, Manpower is trying to spin the survey as a sign of an improving employment picture. But under multiple extensions enacted by the federal government in response to the downturn, workers can collect the payments for as long as 99 weeks in states with the highest unemployment rates -- the longest period since the program's inception.


But complaints that extending unemployment payments discourages job-seeking have begun to bubble into the political debate. "If anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work," Kyl said. "I am sure most of them would like work and probably have tried to seek it, but you can't argue it is a job enhancer."

Shopping blues: Top tax 12%. Chicago's 10.25% highest big-city rate. More Internet tax fights loom. But Vertex Inc., which calculates sales tax for Internet sellers, reports that the average general sales tax rate nationwide reached 8.629% at the end of 2009, the highest since the Berwyn, Pa., company started tracking data in 1982. That was up a nickel on a taxable $100 purchase from a year earlier and up nearly 40 cents for the decade. http://finance.yahoo.com/taxes/article/109012/us-sales-tax-rates-hit-record-high

The number of Americans filing first-time claims for jobless benefits fell for a second week to a level that indicates companies are nearing the end of payroll reductions as the economy recovers.

First-time jobless applications dropped by 6,000 to 462,000 in the week ended March 6, Labor Department figures showed today in Washington. The number of people receiving unemployment insurance increased, while those getting extended benefits fell.

The labor market in the United States remains fragile with the initial jobless claims declining less than expected and continuing claims increasing against expectations.
From the previous revised data of 468,000. 4-week average was 475,500, 5,000 claims more than previous week average of 470,500.

Continuing claims has been posted as increased of 37,000 in the week of February 27 to 4,558,000 from previous revised data of 4,521,000. Expectations were a decline to 4,500,000

Unemployment tops 20% in eight California counties. The state's jobless rate of 12.5% in January was its worst on record and fifth-highest in the nation.

For many California areas, unemployment rates moved persistently higher in January, indicating that the national economic recovery hasn't yet translated into jobs for the Golden State.

New county-by-county figures released by the state Wednesday showed that in eight counties, more than 1 in 5 people were out of work. Moreover, revised numbers for last year show that fewer people were employed than was previously believed.
The state was one of five, along with Florida, Georgia, North Carolina and South Carolina, that reached their highest unemployment rates since the government began keeping track in 1976, according to the Bureau of Labor Statistics. California's was 12.5% in January, up from 12.3% in December.

"The unemployment rate will be persistently at this high level for at least a few more months," said Esmael Adibi, an economist at Chapman University in Orange.

The unemployment rate for the Riverside-San Bernardino-Ontario metro area reached 15% in January, its highest since 1990, the earliest year for which the state has comparable data available. Unemployment in Orange County reached 10.1%, up from 9.1% in December.

The state's revised data for last year showing elevated unemployment indicate that a recovery could take longer than previously predicted.

"The impact on the labor market was much more severe than what we had estimated," Adibi said. Most counties were still struggling under the burden of joblessness, especially the eight counties where rates were higher than 20%. Merced County, for instance, had an unemployment rate of 21.7% in January, and Imperial County's rate was 27.3%.

The national unemployment rate in January was 9.7%, and the country experienced a strong 5.75% annualized increase in gross domestic product in last year's final three months.

"The real mystery now is why we aren't getting job growth when the GDP has been positive," said Stephen Levy, director of the Center for Continuing Study of the California Economy.

Budget problems in state and local government are expected to further drag down the state's recovery, Levy said. Even if they don't get pink slips, state employees are earning less money because of furloughs and salary reductions, which reduces consumer spending in the state.

The government sector, which includes public education, lost 4,500 jobs from December to January. Nancy Hack lost her job as a gardener with the Los Angeles Department of Recreation and Parks a year ago, and said that finding work has been a challenge at her age, 54.

"I'm like a fish out of water," she said.

Los Angeles County, with an unemployment rate of 12.5%, was hard hit by declines in the trade, transportation and utilities sector, which shed 21,900 jobs, and professional and business services, which lost 16,300 jobs.

The same sectors were hit in the Inland Empire, losing 7,700 and 3,600 jobs, respectively. Orange County lost 5,700 jobs in trade, transportation and utilities and 3,000 in professional and business services.

San Diego County's unemployment rate reached 11% in January, up from a revised 10.3% in December. The unemployment rate in Ventura County was 11.6% in January, up from a revised 10.9% in December.

California's unemployment rate was the fifth-highest in the nation, behind Michigan, Nevada, Rhode Island and South Carolina.

The foreclosure crisis in the U.S. isn't over, but the pace of growth may finally be slowing down.

RealtyTrac Inc. said Thursday that the number of households facing foreclosure in February grew 6 percent from a year ago, the smallest annual increase in four years. On the state level, foreclosures declined on a monthly and yearly basis in the hard-hit states of Nevada, Arizona and California, but still grew rapidly in Florida.

More than 308,000 U.S. households, or one in every 418 homes, received a foreclosure-related notice, the Irvine, California-based foreclosure listings company reported. That was down more than 2 percent from January

Still, fears remain about the hundreds of thousands of homeowners who are still being evaluated for help under loan modification programs. Many analysts say most of those borrowers will eventually lose their homes, sparking a new round of foreclosures later this year.

"It's premature to declare victory just yet," said Rick Sharga, a RealtyTrac senior vice president. He did, however, allow that, "If this is the beginning of a slowdown in growth rates, that would be a good thing."

Banks repossessed nearly 79,000 homes last month, down 10 percent from January but still up 6 percent from February 2009.

The RealtyTrac report follows an encouraging report last month from the Mortgage Bankers Association. It said the percentage of borrowers who had missed just one payment on their home loans fell to 3.6 percent in the October to December quarter, down from 3.8 percent in the third quarter.

While that was a surprising piece of positive news, foreclosures were still at record high levels. The number of borrowers who have either missed a payment or are in foreclosure was at 15 percent.

A record 2.8 million households were threatened with foreclosure last year, RealtyTrac said, and the number is expected to rise to more than 3 million homes this year.

The foreclosure crisis forced the federal government and several states to come up with plans to prolong the process so delinquent borrowers can try to find help. But those efforts have barely dented the problem. Case in point: The Obama administration's $75 billion foreclosure prevention program has helped only 116,300 homeowners in the past year.

After a year of trying to enroll homeowners in the Obama administration's program, housing counselors are feeling deflated.

At many of the 100 mortgage companies charged with running the program, employees still "don't really know what the guidelines are -- or refuse to adhere" to them, said Cheryl Cassell, manager of housing counseling at the National Community Reinvestment Coalition, a community group in Washington.

Foreclosed homes are typically sold at steep discounts, lowering the value of surrounding properties. Cities lose property tax dollars from homes that sit empty and lower property values.

Economic woes, such as unemployment or reduced income, are expected to be the main catalysts for foreclosures this year. Initially, lax lending standards were the culprit, but homeowners with good credit who took out conventional, fixed-rate loans are the fastest growing group of foreclosures.

Among states, Nevada posted the highest foreclosure rate, though foreclosures there were down 7 percent from January and down more than 30 percent from a year earlier. It was followed by Arizona, Florida, California and Michigan.

The metro area with the highest foreclosure rate in February was Las Vegas.

Apartment vacancies in the U.S., which reached a record high of 7.4 percent in 2009, will fall this year as job losses stabilize and fewer new rental homes enter the market, CB Richard Ellis Group Inc. said.

The vacancy rate will decline to 6.8 percent in 2010, the property broker said in a report today. Effective rents, or what tenants pay after concessions, will end the year less than 1 percent down from the fourth quarter of 2009. Rents fell 4.7 percent in the final quarter of last year from a year earlier.

Apartments could fill up quickly as employers start hiring again and Americans in their 20s and early 30s give up sharing housing with roommates and parents, Bryce Blair, chief executive officer of apartment developer AvalonBay Communities Inc., said in an interview last month. Builders will have to ramp up rapidly to meet demand after cutting apartment starts by 58 percent last year.

“We’re seeing some stabilization in fundamentals for apartments as we do in the broader economy,” said CB Richard Ellis Senior Economist Gleb Nechayev, who expects job growth in the third quarter. “This gives us reason to be cautiously optimistic.”

Manhattan, Boston, Washington D.C., Denver, and Seattle are among the markets where rents will rise, Nechayev said.

In Boston, monthly rates will climb 2.8 percent in the fourth quarter of 2010 compared with a year earlier. Rents will increase about 1 percent in Washington and Seattle and 2 percent in Denver, he said.

The trade deficit in the U.S. unexpectedly narrowed in January as imports fell for the first time in five months, indicating demand is cooling following the fastest pace of growth in six years.

The gap shrank 6.6 percent to $37.3 billion from $39.9 billion in December as refineries imported the fewest barrels of crude oil in a decade, Commerce Department figures showed today in Washington. Exports decreased for the first time in nine months, on fewer shipments of aircraft and autos.

“The somewhat disappointing trade data seem likely to prove a brief pause in a generally improving trend,” said David Resler, chief economist at Nomura Securities International Inc. in New York. “Trade flows are notoriously volatile from month- to-month, but declines in both exports and imports are hardly signs of economic vitality.”

After advancing at a 5.9 percent annual pace last quarter, the world’s largest economy may expand at less than half that pace in the first half of 2010, reflecting smaller gains in business investment and exports, according to economists surveyed this month by Bloomberg News. Another report showed fewer Americans filed claims for jobless benefits, pointing to a gradual recovery in the labor market.

The city's major hospital network, which runs Miami's only round-the-clock trauma center and is a safety net for the poor and uninsured, is running out of money and could close, a predicament that illustrates the precarious financial state of many hospitals around the country.

The Jackson Health System will have little cash on hand by the end of March if it does not receive a $67 million advance from the county, said Marcos Lapciuc, treasurer of the Public Health Trust, the institution's governing board.

"We are very close, if not already in, a health care death spiral," Chief Operating Officer David Small said.

Jackson could run out of cash and shut by May or sooner, Lapciuc said, and the county mayor said officials were preparing to advance the hospital some money.

"Sadly, it's not all that unique," Larry S. Gage, president of the National Association of Public Hospitals & Health System, said of financial difficulties like the one Jackson is facing.

US debt grew at the slowest pace on record during the fourth quarter, as households and businesses continued to deleverage, nearly offsetting another huge increase in federal debt, according to the quarterly flow of funds report released Thursday by the Federal Reserve. With businesses cutting their outstanding debt the most since 1991, nonfinancial debts increased at a 1.6% annual rate to $34.7 trillion at the end of the quarter, the smallest increase since the Fed began tracking the data in 1952. Meanwhile, household net wealth increased by $683 billion to $54.2 trillion, a 5.1% annual increase, the Fed said. [What they fail to tell you is that these figures are low because banks were writing off debt against the increase in debt growth.]

US households increased their holdings of Treasury securities to the highest level in at least two years, according to data released by the Federal Reserve on Thursday. Households held $795.2 billion in Treasuries at the end of the fourth quarter of 2009, up from $735.5 billion in the third quarter, as Americans continued to find U.S. debt an attractive investment amid continued uncertainty over the strength of the U.S. economic rebound and sovereign-debt problems abroad. That's the highest level of holdings in any quarter since at least the beginning of 2008, according to the flow of funds data. The Fed's household and nonprofit corporations sector include domestic hedge funds. [It is absolute fantasy to believe that American households purchased these securities. This is how the Fed is hiding their purchases of US Treasuries.]

State banking regulators on Thursday evening shut down the troubled LibertyPointe Bank, whose chairman, Shaya Boymelgreen, built more than 2,400 apartments in New York City in the last decade. The failure was the 27th in the nation this year but the first in the city in more than a decade, regulators said.

LibertyPointe, which had one branch in Manhattan and two in Brooklyn, had been struggling under the weight of bad real estate loans for many months. In mid-July, federal regulators ordered the bank to stop lending to developers and to raise cash.

But time ran out for LibertyPointe on Thursday. State regulators seized the bank and turned it over to the Federal Deposit Insurance Corporation, which struck a deal with Valley National Bank. Valley National will assume LibertyPointe’s deposits, which totaled about $210 million, and about one-tenth of its outstanding loans.

Valley National, which is based in Wayne, N.J., agreed to share losses on the rest of LibertyPointe’s loan portfolio with the F.D.I.C., regulators said. The F.D.I.C. estimated that the rescue would cost its insurance fund $24.8 million.

Gerald H. Lipkin, the chairman and chief executive of Valley National, said in a statement that the three branches would reopen Friday morning as part of Valley National’s 201-branch network. LibertyPointe’s depositors will be treated as customers of Valley National. “Our primary focus is to assure customers that their deposits are safe and remain readily accessible to them,” Mr. Lipkin said.

The recession has caused a wave of bank failures across the country, but only one bank failed in New York State in the last five years. The State Banking Department closed Waterford Village Bank, based in Williamsville, near Buffalo, in July. The last failure of a New York City-based bank occurred in December 1999, when regulators closed Golden City Commercial Bank, a small bank that had an office in Flushing, Queens, and one on Lower Broadway in Manhattan.

JPMorgan Chase & Co. and Citigroup Inc. helped cause the collapse of Lehman Brothers Holding Inc. by demanding more collateral and changing guarantee agreements, a bankruptcy examiner said today in a report.

“The demands for collateral by Lehman’s lenders had direct impact on Lehman’s liquidity pool,” said Anton Valukas, the U.S. Trustee-appointed examiner, in a 2,200-page report filed in Manhattan federal court. “Lehman’s available liquidity is central to the question of why Lehman failed.”

Former Lehman Chief Executive Officer Richard Fuld, former Chief Financial Officer Erin Callan, former executive vice president Ian Lowitt and former managing director Christopher O’Meara certified misleading statements, the report said. Fuld was “at least grossly negligent,” the report said. Lehman collapsed in September 2008 with $639 billion in assets, the biggest bankruptcy in U.S. history.

Commenting on Barclays Plc’s purchase of Lehman’s North American brokerage, Valukas said a “limited amount of assets” belonging to Lehman were “improperly transferred to Barclays.”

Kerrie Cohen, a Barclays spokeswoman in New York, and JPMorgan spokesman Brian Marchiony declined to comment. Citigroup spokeswoman Danielle Romero-Apsilos didn’t have an immediate comment. Lowitt, who is now at Barclays, didn’t immediately repond to an e-mail seeking comment. Barclays is Britain’s second-biggest bank. Citigroup is the third biggest U.S. bank, and JPMorgan is second.

Ezra Levy, a former hedge fund trader and former chief financial officer of Boston Provident Partners LP, pleaded guilty to federal charges he stole about $3 million from the Manhattan-based firm.

Levy, who was arrested in November, pleaded guilty to two schemes to defraud Boston Provident.

In federal court yesterday, Levy admitted he transferred $2.45 million from Boston Provident to his own account. He also said he had the fund buy shares of Atlas Energy Inc. and another stock at inflated prices from an account he controlled, generating a $537,000 profit.

“I used the funds to pay my personal expenses,’’ Levy, 32, told US District Judge Kevin Castel.

Boston Provident fired Levy after learning of the scheme.

Levy joined Kramer Spellman LP, which changed its name to Boston Provident in 2004, as an analyst in 2001.

Before that, he worked for Prudential Securities and SG Cowen after starting out as an accountant in a textiles firm.

Under federal sentencing guidelines, Levy, who is free on bail, faces between 63 and 78 months in prison when he is sentenced for securities fraud and wire fraud.

Sales at U.S. retailers unexpectedly climbed in February as shoppers braved blizzards to get to the malls, signaling consumers will contribute more to economic growth.

Purchases increased 0.3 percent, the fourth gain in the past five months, Commerce Department figures showed today in Washington. Figures for the prior two months were revised down, taking some of the shine off of today’s data. Sales excluding autos rose 0.8 percent, exceeding all estimates.

A report last week showing the economy lost fewer jobs than anticipated in February signaled employment is on the verge of accelerating, a development that would spur spending in coming months. Macy’s Inc. was among retailers that beat estimates last month as customers overcame the weather to shop for Valentine’s Day gifts and spring merchandise, a sign the expansion is broadening beyond manufacturing.

“The storms were apparently not quite as disruptive as anticipated,” said Adam York, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina, whose forecast for a 0.6 percent gain excluding autos was the highest of those surveyed. “As we start adding jobs in the spring, employees will gain income and hours and retail sales should follow.” [This numbers are impossible. Washington still doesn’t get it. We know they are fudging the figures]

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

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

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

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

Business inventories were unexpectedly flat in January, while sales rose to their highest level since October 2008, government data showed on Friday.

The Commerce Department said inventories were unchanged after falling by a revised 0.3 percent in December, previously reported as a 0.2 percent drop.

Economists polled by Reuters had expected a 0.2 percent rise in January inventories.

Inventories are a key component of gross domestic product changes over the business cycle and a sharp slowdown in the pace of inventory liquidation handed the economy its fastest growth rate in six years in the fourth quarter.

Business sales rose 0.6 percent to $1.05 trillion in January following a 1.0 percent increase in December. The rise in sales left the inventory-to-sales-ratio, which measures how long it would take to clear shelves at the current sales pace, at 1.25 months' worth, the lowest since November 2007.

Manufacturers' inventories rose 0.2 percent in January after falling 0.2 percent the prior month. Inventories at retailers fell 0.1 percent after a 0.2 percent rise in December.

Retail motor vehicle and parts inventories rose 0.5 percent after falling 0.3 percent in December. Excluding autos, retail inventories fell 0.2 percent in January. Inventories at furniture, electronic and appliance stores fell 0.3 percent after a 0.2 percent gain the prior month

BOISE - Idaho may see more budget cuts next year.

At the state of the state address back in January, Governor Otter announced the state faced an 83 million dollar budget shortfall. To pick up the slack, public areas like schools took massive cuts. Now the state is losing even more money.

Idaho has 41 million fewer dollars than Governor Otter projected back in January.

And in an already troubling economic time, that's not a good sign for public institutions.

"The signs are not good. The fact that we're down another 15-million dollars in February in income tax is not a good sign," said Governor Otter. "We've spent most all the rainy day funds. There's no savings like we had last year. We had the opportunity to plug some money back into the system because we had some savings accounts. We've spent the savings accounts."

Confidence among U.S. consumers unexpectedly declined for a second month in March, a sign Americans are discouraged about the labor market.

The Reuters/University of Michigan preliminary consumer sentiment index fell to 72.5 from February’s final reading of 73.6. Economists surveyed by Bloomberg News projected the gauge would increase to 74, according to the median estimate.

Illinois Governor Pat Quinn is the latest Democrat to demand a tax increase, this week proposing to raise the state's top marginal individual income tax rate to 4% from 3%. He'd better hope this works out better than it has for Maryland.

We reported in May that after passing a millionaire surtax nearly one-third of Maryland's millionaires had gone missing, thus contributing to a decline in state revenues. The politicians in Annapolis had said they'd collect $106 million by raising its income tax rate on millionaire households to 6.25% from 4.75%. In cities like Baltimore and Bethesda, which apply add-on income taxes, the top tax rate with the surcharge now reaches as high as 9.3%—fifth highest in the nation. Liberals said this was based on incomplete data and that rich Marylanders hadn't fled the state.

Well, the state comptroller's office now has the final tax return data for 2008, the first year that the higher tax rates applied. The number of millionaire tax returns fell sharply to 5,529 from 7,898 in 2007, a 30% tumble. The taxes paid by rich filers fell by 22%, and instead of their payments increasing by $106 million, they fell by some $257 million.

Yes, a big part of that decline results from the recession that eroded incomes, especially from capital gains. But there is also little doubt that some rich people moved out or filed their taxes in other states with lower burdens. One-in-eight millionaires who filed a Maryland tax return in 2007 filed no return in 2008. Some died, but the others presumably changed their state of residence. (Hint to the class warfare crowd: A lot of rich people have two homes.)

Federal Reserve Bank of San Francisco President Janet Yellen is President Barack Obama’s pick for vice chairman of the central bank in Washington, two people with knowledge of the selection process said.

The nomination is pending completion of vetting by the Obama administration, one person said. The vice chairman gets a four-year term, subject to Senate approval, and a separate term on the Fed Board of Governors. The people spoke on condition of anonymity because the selection hasn’t yet been announced.

Yellen, 63, would replace Donald Kohn, a 40-year Fed veteran who resigned last week effective June 23. Yellen, who served as President Bill Clinton’s chief economist in the 1990s, said last month that the U.S. economy “still needs the support of extraordinarily low” interest rates. She would gain a permanent vote on monetary policy, instead of having a vote one year out of every three as a regional Fed chief. [She is a well-known inflationist.]

The brazenly bogus unemployment data disseminated to the news media each month by the U.S. Bureau of Labor Statistics appears to have tripped up Colorado. Although the state had reported a loss of 89,375 non-farm jobs in 2009, the actual number appears to have been much larger — 106,300, according to the latest revision. Colorado attributes the discrepancy to the Bureau’s rosy estimates of the number of businesses that start and fail each year. Until the new numbers came out earlier this week, Colorado’s official line was that it had somehow been spared the worst of Great Recession’s effects on the labor market. Unofficially, however, the picture was never so bright. “I was surprised when they reported the numbers the first time,” Zoltan Mak, a freight-train conductor on furlough since October, told the Denver Post. “I see everybody around me scraping by and having a really hard time. I don’t think we’re any better off than any other state.”

As much could be said of the supposed economic recovery in the U.S. that we keep reading about but which few workers or businesspeople are able to corroborate. In the Rick’s Picks chat room, for one, out of the many hundreds who log on each day, there has been only a single person who has reported an upswing in business. He lives in the Michigan rust belt, of all places, and that is why his claims have met with skepticism, to put it mildly. But here in Colorado, the notion that recession has been somewhat less severe than elsewhere is flatly contradicted by a blighted retail landscape that seems to be metastasizing with each passing week. Entire strip malls and even some larger malls in the Denver area have imploded, and in our own neighborhood, a Sam’s Club called it quits. At a personal level, nearly everyone we know with a job or a business is working harder than ever just to stay afloat, and virtually everyone who was in real estate has left the field.

JP Morgan Chase & Co. and Citigroup Inc. helped cause the collapse of Lehman Brothers Holding Inc. by demanding more collateral and changing guarantee agreements, a bankruptcy examiner said today in a report.

“The demands for collateral by Lehman’s lenders had direct impact on Lehman’s liquidity pool,” said Anton Valukas, the U.S. Trustee-appointed examiner, in a 2,200-page report filed in Manhattan federal court. “Lehman’s available liquidity is central to the question of why Lehman failed.”

http://www.bloomberg.com/apps/news?pid=20601110&sid=aH2GbcSnGE9

A one-year probe into the collapse of Lehman Brothers found “credible evidence” that top executives, including the former chief Dick Fuld, approved misleading financial statements and used an “accounting gimmick” to flatter results.

The long-awaited report by the court-appointed examiner Anton Valukas also said that there was enough evidence to claim that Ernst & Young, Lehman’s auditors, failed to “question and challenge improper or inadequate disclosures” in the firm’s results.

The 2,200-page report found some evidence that JPMorgan Chase and Citigroup might have contributed to Lehman’s slide into bankruptcy in September 2008 by demanding collateral from the struggling bank in the run-up to its failure.

Mr. Valukas’ report could pave the way for legal action by the Lehman estate, which is charged with recovering as much money as possible for its creditors, and class action lawsuits by investors who bought Lehman’s securities before its collapse. http://www.ft.com/cms/s/0/2e412d50-2d6e-11df-a262-00144feabdc0.html

There are other bombshells in Lehman bankruptcy report. Valukas avers that Lehman used accounting gimmicks, specifically Repo 105s, to conceal its true financial condition – leverage and exposure.

Repo 105 transactions were not used for a business purpose, but instead for an accounting purpose: to reduce Lehman’s publicly reported net leverage and net balance sheet.

As set forth more fully below, the Examiner concludes that a fact finder could find that Lehman’s failure to disclose its use of Repo 105 transactions to impact its balance sheet at a time when both the market and senior Lehman management were keenly focused on the reduction of Lehman’s firmwide net leverage and balance sheet, and particularly in light of the specific volumes at which Lehman undertook Repo 105 transactions at quarterend in fourth quarter 2007, first quarter 2008, and second quarter 2008, materially misrepresented Lehman’s true financial condition.

A trier of fact could find that Lehman’s use of tens of billions of dollars of Repo 105 transactions at quarterend in late 2007 and early 2008 rendered the firm’s financial statements and related disclosures materially misleading. http://lehmanreport.jenner.com/VOLUME%203.pdf

We have complained for over a decade and a half that there is blatant manipulation of markets at month end and quarter end to manufacture profits. The practice is pervasive, if not endemic. Yet the Fed, Treasury and other regulators allow this repeated abuse, which conceals earnings and financial conditions for many entities. PS - Derivatives’ marking-to-model is the biggest abuse in generating bogus profits.

The big question is: What other banks, hedge funds, financial subsidiaries of major corporations, insurances companies, etc. are engaged in Repo 105 or similar means to conceal their finances.

The Fed expanded its balance sheet $2.321B for the week ended on Wed by buying $2.344B of MBS and $1.5B of agencies.

The nascent US recovery could falter because businesses are still reluctant to invest in new equipment and technology, the head of global delivery and logistics company FedEx has warned.

“Business investment went up somewhat in the fourth quarter but is far below what it ought to be in a cyclical recovery like this,” Fred Smith, chairman and chief executive of FedEx, told the Financial Times…“In my opinion, for consumers to spend you have to get business investment up because that is what creates the jobs,” Mr. Smith said. “I don’t think you will see substantial increases in employment until you see substantial increases in business investment.”

To help encourage businesses to start investing again, Mr. Smith has been urging politicians to change the tax rules on capital expenditures to allow companies to recoup money earlier than in the past.

Illinois is the leader of the pack when it comes to stupidity. They have a $13 billion budget deficit and the moron who is governor, Pat Quinn, says he will only raise taxes 1% for education. He will borrow money and let unpaid bills pile up, a true politician that Illinois surely deserves.

There are an additional 7 million homes eligible for foreclosure that have not been foreclosed on. The banks are hiding them. That is a 3 plus year overhang on the market.

As we reported long ago, but no one would listen, JP Morgan Chase and Citigroup caused the collapse of Lehman Bros. by cutting off their loans. We bet there will be no civil or criminal charges. The Illuminists again devour their own.

On Thursday Citi’s volume accounted for 20% of NYSE volume and AIG was second, with Bank of America third. It is great having some 50% of daily volume in what we consider bankrupt entities.


Bob Chapman is a frequent contributor to Global Research. Global Research Articles by Bob Chapman