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Financial Industry Paid Millions to Obama Aide
2009-04-04, New York Times
http://www.nytimes.com/2009/04/04/us/politics/04disclose.html?partner=rss&emc...

Lawrence H. Summers, the top economic adviser to President Obama, earned more than $5 million last year from the hedge fund D. E. Shaw and collected $2.7 million in speaking fees from Wall Street companies that received government bailout money, the White House disclosed. Mr. Summers, the director of the National Economic Council, wields important influence over Mr. Obama’s policy decisions for the troubled financial industry, including firms from which he recently received payments. Last year, he reported making 40 paid appearances, including a $135,000 speech to the investment firm Goldman Sachs, in addition to his earnings from the hedge fund, a sector the administration is trying to regulate. Mr. Summers’s role at the White House includes advising Mr. Obama on whether — and how — to tighten regulation of hedge funds, which engage in highly sophisticated financial trading that many analysts have said contributed to the economic collapse. Mr. Summers ... appeared before large Wall Street companies like Citigroup ($45,000), J. P. Morgan ($67,500) and the now defunct Lehman Brothers ($67,500), according to his disclosure report. While Mr. Obama campaigned on a pledge to restrict lobbyists from working in the White House, a step intended to reduce any influence between the administration and corporations, the ban did not apply to former executives like Mr. Summers, who was not a registered lobbyist. In 2006, he became a managing director of D. E. Shaw, a firm that manages about $30 billion in assets, making it one of the biggest hedge funds in the world.

Note: For many revealing reports on the realities behind the Wall Street bailouts, click here.

Whitney Sees Credit Cards as the Next Crunch: Report
2009-03-10, CNBC
http://www.cnbc.com/id/29611789/

Prominent banking analyst Meredith Whitney warned that "credit cards are the next credit crunch," as contracting credit lines will lower consumer spending and hurt the U.S. economy. "Few doubt the importance of consumer spending to the U.S. economy and its multiplier effect on the global economy, but what is under-appreciated is the role of credit-card availability in that spending," Whitney wrote in the Wall Street Journal. Although credit was extended "too freely over the past 15 years" and rationalization of lending is unavoidable, what needs to be avoided was "taking credit away from people who have the ability to pay their bills," said Whitney, CEO of Meredith Whitney Advisory Group. Whitney said available lines were reduced by nearly $500 billion in the fourth quarter of 2008 alone, and she estimates over $2 trillion of credit-card lines will be cut within 2009, and $2.7 trillion by the end of 2010. "Inevitably, credit lines will continue to be reduced across the system, but the velocity at which it is already occurring and will continue to occur will result in unintended consequences for consumer confidence, spending and the overall economy," Whitney said. There is roughly $5 trillion in credit-card lines outstanding in the U.S., and a little more than $800 billion is currently drawn upon, she said. "Lenders, regulators and politicians need to show thoughtful leadership now on this issue in order to derail what I believe will be at least a 57 percent contraction in credit-card lines," she said.

Note: Some believe that rising defaults on credit card debt could cause yet another financial shock to the system. For many more revelations of the amazing realites of the Wall Street bailout and the now world-wide financial and credit crises, click here.

Executive Pay Limits May Prove Toothless
2008-12-15, Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/14/AR20081214026...

Congress wanted to guarantee that the $700 billion financial bailout would limit the eye-popping pay of Wall Street executives, so lawmakers included a mechanism for reviewing executive compensation and penalizing firms that break the rules. But at the last minute, the Bush administration insisted on a one-sentence change to the provision. The change stipulated that the penalty would apply only to firms that received bailout funds by selling troubled assets to the government in an auction, which was the way the Treasury Department had said it planned to use the money. Now, however, the small change looks more like a giant loophole, according to lawmakers and legal experts. In a reversal, the Bush administration has not used auctions for any of the $335 billion committed so far from the rescue package, nor does it plan to use them in the future. Lawmakers and legal experts say the change has effectively repealed the only enforcement mechanism in the law dealing with lavish pay for top executives. "The flimsy executive-compensation restrictions in the original bill are now all but gone," said Sen. Charles E. Grassley (Iowa), ranking Republican on of the Senate Finance Committee. Senators on the Finance Committee have expressed concern to Paulson and are now considering whether they should amend the law to apply the enforcement mechanism to all firms participating in the bailout.

Note: For a treasure trove of reliable reports exposing the realities of the Wall Street bailout, click here.

Idled workers occupy factory in Chicago
2008-12-06, Chicago Tribune/Associated Press
http://www.chicagotribune.com/news/chi-ap-il-workersoccupyfact,0,1928458.story

Outraged and determined Chicago factory workers who were abruptly laid off this week have occupied their former workplace and say they won't leave until they get the severance and vacation pay they say they're owed. The employees say they received three days notice their plant was closing. In the second day of a sit-in on the factory floor Saturday, about 250 union workers occupied the building in shifts while union leaders outside criticized a Wall Street bailout they say is leaving laborers behind. Leah Fried, an organizer with the United Electrical Workers, said the Chicago-based vinyl window manufacturer failed to give its 300 employees the 60 days' notice required by law before shutting. She said the company can't pay employees because its creditor, Charlotte, N.C.-based Bank of America, won't let them. Bank of America received $25 billion from the government's financial bailout package. The company said in a statement to news outlets Saturday that it isn't responsible for Republic's financial obligations to its employees. "Across cultures, religions, union and nonunion, we all say this bailout was a shame," said Richard Berg, president of Teamsters Local 743. "If this bailout should go to anything, it should go to the workers of this country." Outside the plant, protesters wore stickers and carried signs that said, "You got bailed out, we got sold out."

Note: For many revealing reports on the Wall Street bailout from major media sources, click here.

Congress Wants Details On Bailout Firms' Bonus Plans
2008-10-30, CNBC
http://www.cnbc.com/id/27423117

The hot-button issues of CEO pay and the Wall Street bailout may soon collide with the real world of Wall Street bonuses, taxpayer and shareholder anger over the financial crisis, and a Treasury secretary with deep roots on Wall Street. And that collision could be loud and ugly. Though what's commonly known as the Wall Street bailout package includes modest restrictions on CEO pay, it hardly prevents participating financial firms from paying bonuses to top executives and others. And in an environment of beaten-down stock prices, rising layoffs, recession and huge government bailouts, experts and legislators say big end-of-year bonuses will cause a firestorm of public outrage and likely provoke a Congressional backlash. "The corporate community doesn't seem to get it," says a seething Nell Minow, founder of the Corporate Library, which focuses on corporate governance issues. "If the corporate leaders don't come to the American people with some accountability, they are going to find themselves in a world of pain. Congress will set CEO pay." "People are going to be demanding that someone go to jail," say Rep. Peter DeFazio (D.-Ore), who says his constituents have applauded him for voting against the legislation. "It will require Democrats to revisit restrictions [on CEO pay]. " DeFazio says he would also recommend Congress "empower a division in the FBI and Justice Department to investigate the fraud and misdeeds that went on."

Note: For many revealing reports on the realities of the Wall Street bailout, click here.

'Run on UK' sees foreign investors pull $1 trillion out of the City
2009-03-07, The Independent (One of the U.K.'s leading newspapers)
http://www.independent.co.uk/news/business/news/run-on-uk-sees=foreign-invest...

A silent $1 trillion "Run on Britain" by foreign investors was revealed yesterday in the latest statistical releases from the Bank of England. The external liabilities of banks operating in the UK – that is monies held in the UK on behalf of foreign investors – fell by $1 trillion (£700bn) between the spring and the end of 2008, representing a huge loss of funds and of confidence in the City of London. Some $597.5bn was lost to the banks in the last quarter of last year alone, after a ... massive $682.5bn haemorrhaged in the second quarter of 2008 – a record. About 15 per cent of the monies held by foreigners in the UK were withdrawn over the period. This is by far the largest withdrawal of foreign funds from the UK in recent decades – about 10 times what might flow out during a "normal" quarter. The revelation will fuel fears that the UK's reputation as a safe place to hold funds is being fatally compromised by the acute crisis in the banking system and a general trend to financial protectionism internationally. The slide in sterling – it has shed a quarter of its value since mid-2007 – has been both cause and effect of the run on London, seemingly becoming a self-fulfilling phenomenon. The danger is that the heavy depreciation of the pound could become a rout if confidence completely evaporates. Paranoia that the UK could follow Iceland into effective national insolvency and jibes about "Reykjavik on Thames" will find an unwelcome substantiation in these statistics.

Note: For many deep revelations of the realities of the world financial crisis from reliable sources, click here.

Bair Says Insurance Fund Could Be Insolvent This Year
2009-03-04, Bloomberg News
http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=alsJZqIFuN3k

Federal Deposit Insurance Corp. Chairman Sheila Bair said the fund it uses to protect customer deposits at U.S. banks could dry up amid a surge in bank failures, as she responded to an industry outcry against new fees approved by the agency. “Without these assessments, the deposit insurance fund could become insolvent this year,” Bair wrote in a March 2 letter to the industry. “A large number” of bank failures may occur through 2010 because of “rapidly deteriorating economic conditions.” The fund, which lost $33.5 billion in 2008, was drained by 25 bank failures last year. Sixteen banks have failed so far this year, further straining the fund. Smaller banks are outraged over the one-time fee ... Camden Fine, president of the Independent Community Bankers of America, said yesterday. The agency, which has released the change for 30 days of public comment, could modify the assessment to shift the burden to the large banks “that caused this train wreck,” Fine said. “Community bankers are feeling like they are paying for the incompetence and greed of Wall Street,” he said. Consumers should watch this issue closely, said Edmund Mierzwinski, consumer program director at U.S. PIRG, a Boston- based consumer-watchdog group. “I wouldn’t take their money out of the bank yet,” Mierzwinski said. “If the FDIC is saying that there is this serious problem, then we should all be concerned. I think there is a chance the FDIC is going to have to ask taxpayers for money in the future.”

Note: For lots more on the financial crisis from reliable sources, click here.

Goldman, JPMorgan Won’t Feel Effects of Executive-Salary Caps
2009-02-05, Bloomberg News
http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=azVLk.22AkLI

Executives at Goldman Sachs Group Inc., JPMorgan Chase & Co. and hundreds of financial institutions receiving federal aid aren’t likely to be affected by pay restrictions announced yesterday by President Barack Obama. The rules, created in response to growing public anger about the record bonuses the financial industry doled out last year, will apply only to top executives at companies that need “exceptional” assistance in the future. The limits aren’t retroactive, meaning firms that have already taken government money won’t be subject to the restrictions unless they have to come back for more. Pay caps may provide the political cover the administration needs to deliver additional infusions of capital into the financial sector. Obama ... “is not proposing to go back and get that $18.4 billion in bonuses back,” Laura Thatcher, head of law firm Alston & Bird’s executive compensation practice in Atlanta, said of the cash bonuses New York banks paid last year, the sixth-biggest haul in history. “Right now, we have not clamped down” on pay at banks. In addition, some executives may be compensated for the potential reduced salaries with restricted stock grants, which may result in huge paydays after the bank repays the government assistance with interest. “They’re just allowing companies to defer compensation,” said Graef Crystal, a former compensation consultant. The restrictions are “a joke,” he said, because “if the government is paid pack, you can be sure that the stock will have risen hugely.”

Note: For many revealing reports from reliable sources on the realities behind the Wall Street bailout, click here.

With economic crisis making credit scarce, bartering is booming
2008-11-21, Los Angeles Times/Boston Globe
http://www.boston.com/news/nation/articles/2008/11/21/with_economic_crisis_ma...

As the financial crisis makes cash and credit increasingly scarce, the ancient custom of bartering is booming. Cost-conscious consumers are getting creative to make every dollar count. Some are dusting off books, DVDs, video games, and other little-used items to trade for necessities or gifts. Others are exchanging services such as house painting for Web design or guitar lessons for clerical work. These newly minted cheapskates are seeing the world through green eyeshades, cutting costs wherever and whenever they can. "In the last couple of months, it's been like a bucket of cold water in our faces," said Mary Hunt, founder of money management site DebtProofLiving.com. "It has woken us up. We are paying attention to what things cost." Every recession triggers bartering, economists say. But the Internet has given the practice unprecedented reach. Before the Web connected strangers from anywhere, bartering was limited by geography and social circle. As a form of everyday currency, bartering has downsides. It's far more time-consuming and tricky to negotiate the exchange of goods and services than it is to simply plunk down some bills. Sometimes prospective swappers flake out or try to rip off their trading partners. Transactions don't always go smoothly. Still, exchanging something you no longer want or need for something you do is appealing to many. A growing number of websites, including TradeaFavor.com and JoeBarter.com, cater to the cost-conscious. There were 148,097 listings in the barter category of Craigslist in September, up sharply from 83,554 a year earlier.

Keating 5 ring a bell?
2008-09-25, Los Angeles Times
http://www.latimes.com/news/columnists/la-oe-brooks25-2008sep25,0,1039504.column

Once upon a time, a politician took campaign contributions and favors from a friendly constituent who happened to run a savings and loan association. The contributions were generous: They came to about $200,000 in today's dollars, and on top of that there were several free vacations for the politician and his family, along with private jet trips and other perks. The politician voted repeatedly against congressional efforts to tighten regulation of S&Ls, and in 1987, when he learned that his constituent's S&L was the target of a federal investigation, he met with regulators in an effort to get them to back off. That politician was John McCain, and his generous friend was Charles Keating, head of Lincoln Savings & Loan. While he was courting McCain and other senators and urging them to oppose tougher regulation of S&Ls, Keating was also investing his depositors' federally insured savings in risky ventures. In 1989, [Lincoln] went belly up -- and more than 20,000 Lincoln customers saw their savings vanish. Keating went to prison, and McCain's Senate career almost ended. Together with the rest of the so-called Keating Five ... McCain was investigated by the Senate Ethics Committee and ultimately reprimanded for "poor judgment." But the savings and loan crisis mushroomed. Eventually, the government spent about $125 billion in taxpayer dollars to bail out hundreds of failed S&Ls. The $125 billion seems like small change compared to the $700-billion price tag for the Bush administration's proposed Wall Street bailout. But the root causes of both crises are the same: a lethal mix of deregulation and greed.

Facing foreclosure? Don't leave. Squat
2009-02-04, San Francisco Chronicle (San Francisco's leading newspaper)
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/02/04/EDK215MNA0.DTL

Marcy Kaptur of Ohio is the longest-serving Democratic congresswoman in U.S. history. Her district, stretching along the shore of Lake Erie from west of Cleveland to Toledo, faces an epidemic of home foreclosures and 11.5 percent unemployment. Now, she is recommending a radical foreclosure solution from the floor of the U.S. Congress: "So I say to the American people, you be squatters in your own homes. Don't you leave." She criticizes the bailout's failure to protect homeowners facing foreclosure. These mortgages were made, then bundled into securities and sold and resold repeatedly, by the very Wall Street banks that are now benefiting from [a government bailout]. The banks foreclosing on families very often can't locate the actual loan note that binds the homeowner to the bad loan. "Produce the note," Kaptur recommends [to] those facing foreclosure demands of the banks. "[P]ossession is nine-tenths of the law," Rep. Kaptur [said]. "Therefore, stay in your property. Get proper legal representation ... [if] Wall Street cannot produce the deed nor the mortgage audit trail ... you should stay in your home. It is your castle. It's more than a piece of property. ... If you look at the bad paper, if you look at where there's trouble, 95 to 98 percent of the paper really has moved to five institutions: JPMorgan Chase, Bank of America, Wachovia, Citigroup and HSBC. They have this country held by the neck."

Note: Why is it that with the trillions of dollars given by the U.S. government to prop up banks who used shady loan practices, so few homeowners facing foreclosure have received any assistance? For many revealing reports on the realities of the Wall Street bailout, click here.

Wall Street Follies: The Next Act
2009-10-25, New York Times
http://www.nytimes.com/2009/10/25/weekinreview/25morgenson.html

Hoping, perhaps, to persuade a dubious public that curbing reckless business practices is indeed a Washington priority, the Obama administration and Congress produced a hat trick of financial reforms last week. For all the apparent action in Washington, some acute observers say that it was much ado about little. Last week’s moves, they say, were tinkering around the edges and did nothing to prevent another disaster like the one that unfolded a year ago. The white-hot focus on pay, for example, looks like a way for the government to reassure an angry public that they are making genuine changes. But compensation is a trifling matter compared to, say, true reform of derivatives trading. “The American public understands the immorality of paying people huge bonuses for failures that damaged the economy,” said Michael Greenberger, a law professor at the University of Maryland and a former commodities regulator. “What they don’t understand is that those payments are only a small fraction of the irregularities that took place and that, in essence, the compensation problems, as bad as they are, are a sideshow to the casino-like nature of the economy as it existed, pre-Lehman Brothers, and as it exists today.” Regulating derivatives is far more important to those interested in eliminating the possibility of future billion-dollar bailouts. But the derivatives bill generated by the House Agriculture Committee contains a sizable loophole. Many derivatives would not trade in the light of day.

Note: For many revealing reports from reliable sources on the realities of the continuing bank bailout, click here.

Citi raises card rates on millions
2009-06-30, Financial Times
http://www.ft.com/cms/s/0/e1d0c610-65c7-11de-8e34-00144feabdc0.html

Citigroup has sharply increased interest rates on up to 15 [million] US credit card accounts just months before curbs on such rises come into effect, in a move that could fuel political anger at the treatment of consumers by bailed-out banks. People close to the situation said that Citi, which is about to cede a 34 per cent stake to the US government as part of its latest rescue, had upped rates on between 13 [million] and 15 [million] credit cards it co-brands with retailers such as Sears. Citi’s rate increases emerged on the day the government proposed legislation to create a new regulator with sweeping powers on consumer protection and a week after the bank was attacked by some politicians for raising employees’ salaries. Holders of co-branded cards who failed to pay their balance in full at the end of the month saw their rates rise by an average 24 per cent – or nearly 3 percentage points – between January and April, according to a Credit Suisse analysis of data from the consultancy Lightspeed Research. Citi’s move came as the economic downturn caused record defaults among US card users and prompted many issuers to raise rates, both to cushion their losses and pre-empt the new restrictions set to come into effect in February. However, Citi’s increases have been larger than those of its main rivals, according to Lightspeed, which tracks about 12,000 US credit card accounts. Carolyn Maloney, Democratic representative for New York, the author of the new rules that will sharply constrain lenders’ ability to raise rates for risky borrowers, criticised Citi’s move. “It’s hard to tell if rate hikes on existing balances being put in place now are the result of prior bad business decisions or getting in under the wire of the new law,” Ms Maloney told the Financial Times.

Note: Evidently one of the key effects of the forced multi-billion-dollar bailout of Citibank by US taxpayers has been to enable the bank to continue to gouge the public with exorbitant interest rates. This is called "saving the financial sytem." For lots more on the realities of the Wall Street bailout, click here.

Fed to Buy Up to $300 Billion Long-Term Bonds
2009-03-18, CNBC/Reuters News
http://www.cnbc.com/id/29755961/

The Federal Reserve announced Wednesday it will spend up to $300 billion over the next six months to buy long-term government bonds, a new step aimed at lifting the country out of recession by lowering rates on mortgages and other consumer debt. Fed purchases should boost Treasury prices and drive down their rates. That would ripple through and lower rates on other kinds of debt. The last time the Fed set out to influence long-term interest rates was during the 1960s. The Fed also said it will buy more mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac to help that battered market. The central bank will buy an additional $750 billion, bringing its total purchases of these securities to $1.25 trillion. It also will boost its purchase of Fannie and Freddie debt to $200 billion. Pimco's Bill Gross tells CNBC that the move has expanded the Fed’s balance sheet by perhaps 50 percent, up to $3 trillion. In addition, the Fed said a $1 trillion program to jump-start consumer and small business lending could be expanded to include other financial assets. Across the Atlantic, the Bank of England last week began buying government bonds from financial institutions as it turned to other ways to help revive Britain's moribund economy. The Bank of England, like the Fed, already had lowered its key interest rate to a record low of 0.5 percent. Finance leaders from top economies have discussed coordinating actions from their governments and central banks to provide a more potent punch against the global financial crisis.

Note: The Fed is now buying long-term Treasury bonds because it cannot directly lower interest rates any further. Isn't this just a hidden form of increasing the money supply, with the risk of further devaluing the dollar and eventually causing high inflation? For lots more on the hidden realities of the Wall Street bailout, click here

Treasurys Are 'Disaster Waiting to Happen'
2009-03-17, CNBC
http://www.cnbc.com/id/29720589/

The Federal Reserve has no option but to start buying Treasurys as the government's needs for financing are huge, but the government bond market is a disaster in the making, Marc Faber, editor and publisher of The Gloom, Boom & Doom Report, told CNBC. "Other central banks have done it already around the world but basically what it amounts to is money printing and in fact I don't think that it will help the bond market at all in the long run," Faber told CNBC. "Yields have already backed up pretty substantially and I tell you, I think the US government bond market is a disaster waiting to happen for the simple reason that the requirements of the government to cover its fiscal deficit will be very, very high," Faber said. "The Federal Reserve will have to buy Treasurys, otherwise yields will go up substantially," he said, adding that as their reserves were dwindling, foreign investors were likely to scale down their purchases. But there will be a time when the Federal Reserve will have to increase interest rates to fight inflation, and it will be reluctant to do so because the cost of servicing government debt will rise substantially. "So we'll go into high inflation rates one day," Faber said. The stock market ... outlook is bleak, he added. "I think we may still have a rally ... until about the end of April and probably then a total collapse in the second half of the year sometimes, when it becomes clear that the economy is a total disaster," Faber said.

Note: For lots more on the hidden realities of the Wall Street bailout, click here

Regulatory reports show 5 big banks face huge loss risk
2009-03-09, Miami Herald/McClatchy News
http://www.miamiherald.com/news/politics/AP/story/940829.html

Five of America's largest banks, most of which have received $145 billion in taxpayer bailout dollars, still face potentially catastrophic losses from exotic investments if economic conditions substantially worsen, their latest financial reports show. Citibank, Bank of America, HSBC Bank USA, Wells Fargo Bank and J.P. Morgan Chase reported that their "current" net loss risks from derivatives — insurance-like bets tied to a loan or other underlying asset — surged to $587 billion as of Dec. 31 ... a jump of 49 percent in just 90 days. The banks' potentially huge losses ... shed new light on the hurdles that President Barack Obama's economic team must overcome to save institutions it deems too big to fail. While the potential loss totals include risks reported by Wachovia Bank, which Wells Fargo agreed to acquire in October, they don't reflect another Pandora's Box: the impact of Bank of America's Jan. 1 acquisition of tottering investment bank Merrill Lynch, a major derivatives dealer. The risks of these off-balance sheet investments, once thought minimal, have risen sharply. Fears are rising that a spate of corporate bankruptcies could deliver a new, crippling blow to major banks. Because of the trading in derivatives, corporate bankruptcies could cause a chain reaction that deprives the banks of hundreds of billions of dollars in insurance they bought on risky debt or forces them to shell out huge sums to cover debt they guaranteed. The biggest concerns are the banks' holdings of contracts known as credit-default swaps.

Note: For many powerful revelations from major media sources of the Wall Street bailout, click here.

Gold Climbs to Seven-Month High as Economy May Worsen
2009-02-17, Bloomberg News
http://www.bloomberg.com/apps/news?pid=20601082&sid=acerPa4tlqXg

Gold rose to its highest [price] in almost seven months in London as investors bought the precious metal to preserve their wealth on speculation the global economy will deteriorate. Bullion has climbed 33 percent since October as governments lowered interest rates and spent trillions of dollars to combat the recession. “The very big uncertainties in the stock market and economy are driving investors into gold and precious metals,” said Peter Fertig, owner of Quantitative Commodity Research Ltd. in Hainburg, Germany. Gold for immediate delivery rose as much as $25.40, or 2.7 percent, to $967.15 an ounce, the highest since July 22. April futures gained $22.10, or 2.4 percent, to $964.40. Some investors are buying precious metals on speculation government stimulus packages [and bank bailouts] will spur inflation, Fertig said. Treasury Secretary Timothy Geithner last week pledged as much as $2 trillion in financing for programs aimed at spurring new lending. The Treasury will likely borrow a record $2.5 trillion this fiscal year ending Sept. 30, according to Goldman Sachs Group Inc. “Investors have been aggressively adding physical gold to their portfolios as concerns about counterparty risk” increase, ETF Securities wrote in a report. Investors are hedging “against the risk of currency depreciation and longer term inflation risks as government debt projections balloon.” “Gold has become, for all intents, the world’s second reserve currency,” Dennis Gartman, an economist and the editor of the ... Gartman Letter, said.

Note: For many revealing reports on the realities of government bailouts of banks worldwide, click here.

Global economic crisis called biggest U.S. security threat
2009-02-13, Los Angeles Times
http://www.latimes.com/news/nationworld/nation/la-na-security-threat13-2009fe...

The nation's new intelligence chief [has warned] that the global economic crisis is the most serious security peril facing the United States, threatening to topple governments [and] trigger waves of refugees. The economic collapse "already looms as the most serious one in decades, if not in centuries," said Dennis C. Blair, director of national intelligence, in [testimony before the Senate Intelligence Committee]. Blair's focus on the economic meltdown represents a sharp contrast from the testimony of his predecessors in recent years, who devoted most of their attention in the annual threat assessment hearing to the issues of terrorism and the wars in Afghanistan and Iraq. "Time is probably our greatest threat," Blair said. "The longer it takes for the recovery to begin, the greater the likelihood of serious damage to U.S. strategic interests." He said that one-quarter of the world's nations had already experienced low-level instability attributed to the economic downturn, including shifts in power. He cited anti-government demonstrations in Europe and Russia, and he warned that much of Latin America and the former Soviet satellite states lacked sufficient cash to cope with the spreading crisis. "Countries will not be able to export their way out of this one because of the global nature" of the crisis, Blair said. U.S. intelligence analysts fear there could be a backlash against American efforts to promote free markets because the crisis was triggered by the United States. "We're generally held to be responsible," Blair said.

Note: For the complete text of Blair's testimony, click here. For an excellent analysis, click here. For more on the realities behind the economic crisis, click here.

Ariz. police say they are prepared as War College warns military must prep for unrest
2008-12-17, Phoenix Business Journal
http://www.bizjournals.com/phoenix/stories/2008/12/15/daily34.html

A new report by the U.S. Army War College talks about the possibility of Pentagon resources and troops being used should the economic crisis lead to civil unrest, such as protests against businesses and government or runs on beleaguered banks. �Widespread civil violence inside the United States would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security,� said the War College report. The study says economic collapse ... and loss of legal order are among possible domestic shocks that might require military action within the U.S.. U.S. Sen. James Inhofe, R-Okla., and U.S. Rep. Brad Sherman, D-Calif., both said U.S. Treasury Secretary Henry Paulson brought up a worst-case scenario as he pushed for the Wall Street bailout in September. Paulson ... said that might even require a declaration of martial law, the two noted. State and local police in Arizona say they have broad plans to deal with social unrest, including trouble resulting from economic distress. The security and police agencies declined to give specifics, but said they would employ existing and generalized emergency responses to civil unrest that arises for any reason. �The Phoenix Police Department is not expecting any civil unrest at this time, but we always train to prepare for any civil unrest issue. We have a Tactical Response Unit that trains continually and has deployed on many occasions for any potential civil unrest issue,� said Phoenix Police spokesman Andy Hill.

Note: Use of military forces to maintain domestic order has been forbidden since 1878 by the Posse Comitatus Act. The Pentagon appears to be planning to abrogate this key support of civil liberties.

Foreclosures: 'Worst three months of all time'
2009-10-15, CNN Money
http://money.cnn.com/2009/10/15/real_estate/foreclosure_crisis_deepens/

Despite concerted government-led and lender-supported efforts to prevent foreclosures, the number of filings hit a record high in the third quarter. 937,840 homes received a foreclosure letter -- whether a default notice, auction notice or bank repossession. That means one in every 136 U.S. homes were in foreclosure, which is a 5% increase from the second quarter and a 23% jump over the third quarter of 2008. Most disturbing is that all foreclosures -- not just repossessions -- are rampant despite efforts to corral them. There are no firm statistics for it, but many industry watchers claim the percentage of REOs [properties possessed by the mortgage company after an unsuccessful foreclosure auction] caused by borrowers voluntarily walking away from their homes is skyrocketing. The foreclosure crisis may not diminish anytime soon.

Note: For lots more from major media sources on the impacts of the financial crash, click here.

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