The War On Waste
2002-01-29, CBS News
http://www.cbsnews.com/stories/2002/01/29/eveningnews/main325985.shtml

On Sept. 10 [2001], Secretary of Defense Donald Rumsfeld declared war. Not on foreign terrorists, "the adversary's closer to home. It's the Pentagon bureaucracy." He said money wasted by the military poses a serious threat. Rumsfeld promised change but the next day—Sept. 11—the world changed and in the rush to fund the war on terrorism, the war on waste seems to have been forgotten. Just last week President Bush announced, "my 2003 budget calls for more than $48 billion in new defense spending." More money for the Pentagon ... while its own auditors admit the military cannot account for 25 percent of what it spends. "According to some estimates we cannot track $2.3 trillion in transactions," Rumsfeld admitted. $2.3 trillion—that's $8,000 for every man, woman and child in America. A former Marine turned whistle-blower is risking his job by speaking out ... about the millions he noticed were missing from one defense agency's balance sheets. Jim Minnery, Defense Finance and Accounting Service ... tried to follow the money trail, even crisscrossing the country looking for records. "The director looked at me and said 'Why do you care about this stuff?' It took me aback. My supervisor asking me why I care about doing a good job," said Minnery. He was reassigned and says officials then covered up the problem. The Pentagon's Inspector General "partially substantiated" several of Minnery's allegations.

Note: To see the CBS video clip of this shocking admission, click here. For another key clip, click here. For other media articles revealing major corruption, click here. Even though originally not reported because of the trauma of 9/11, why wasn't this news broadcast far and wide later? Why isn't it making media headlines now?

Inside the secretive Bilderberg Group
2005-09-29, BBC News
http://news.bbc.co.uk/1/hi/world/americas/4290944.stm

How much influence do private networks of the rich and powerful have on government policies and international relations? One group, the Bilderberg, has often attracted speculation that it forms a shadowy global government. Every year since 1954 [they have brought] together about 120 leading business people and politicians. At this year's meeting in Germany, the audience included the heads of the World Bank and European Central Bank, Chairmen or Chief Executives from Nokia, BP, Unilever, DaimlerChrysler and Pepsi ... editors from five major newspapers, members of parliament, ministers, European commissioners ... and the queen of the Netherlands. The chairman ... is 73-year-old Viscount Etienne Davignon. In an extremely rare interview, he played down the importance of Bilderberg. "I don't think (we are) a global ruling class because I don't think a global ruling class exists." Will Hutton ... who attended a Bilderberg meeting in 1997, says people take part in these networks in order to influence the way the world works, to create what he calls "the international common sense". And that "common sense" is one which supports the interests of Bilderberg's main participants. For Bilderberg's critics the fact that there is almost no publicity about the annual meetings is proof that they are up to no good. Bilderberg meetings often feature future political leaders shortly before they become household names. Bill Clinton went in 1991 while still governor of Arkansas, Tony Blair was there two years later while still an opposition MP. All the recent presidents of the European Commission attended Bilderberg meetings before they were appointed. Informal and private networks like Bilderberg have helped to oil the wheels of global politics and globalisation for the past half a century.

Note: Why is this meeting of top world leaders kept so secret? Why is there no website? Why, until a few years ago, was there virtually no reporting on this influential group in the major media? (Note that the alternative media has had some good articles and a Google search can be highly informative) For lots more reliable information on powerful, secret groups like this, click here.

Where'd the Bailout Money Go? Shhhh, It's a Secret
2008-12-22, ABC News/Associated Press
http://abcnews.go.com/Business/wireStory?id=6508158

It's something any bank would demand to know before handing out a loan: Where's the money going? But after receiving billions in aid from U.S. taxpayers, the nation's largest banks say they can't track exactly how they're spending the money or they simply refuse to discuss it. "We've lent some of it. We've not lent some of it. We've not given any accounting of, 'Here's how we're doing it,"' said Thomas Kelly, a spokesman for JPMorgan Chase, which received $25 billion in emergency bailout money. "We have not disclosed that to the public. We're declining to." The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what's the plan for the rest? None of the banks provided specific answers. "We're not providing dollar-in, dollar-out tracking," said Barry Koling, a spokesman for Atlanta, Ga.-based SunTrust Banks Inc., which got $3.5 billion in taxpayer dollars. The answers highlight the secrecy surrounding the Troubled Assets Relief Program, which earmarked $700 billion—about the size of the Netherlands' economy—to help rescue the financial industry. There has been no accounting of how banks spend that money. "It is entirely appropriate for the American people to know how their taxpayer dollars are being spent in private industry," said Elizabeth Warren, the top congressional watchdog overseeing the financial bailout. But, at least for now, there's no way for taxpayers to find that out.

Note: For more key information that the bankers don't want you to know, click here. For many revealing reports from reliable sources on the realities of the Wall Street bailout, click here.

Senate Blocks Bid to Audit Federal Reserve
2009-07-09, Fox News
http://www.foxnews.com/story/0,2933,531045,00.html

JUDGE ANDREW NAPOLITANO, HOST: Despite growing pressure from the House and ordinary people, the Senate decided not to increase scrutiny on the Federal Reserve. They actually blocked a bid on procedural grounds to have the Government Accountability Office audit the Federal Reserve and issue a report. Here is Republican Senator Jim DeMint. Senator DeMint, ... Why should the Federal Reserve be audited? DEMINT: Well, the value of our dollar, our whole economic system, rides on [this] unelected, secret agency called the Federal Reserve. We're not sure what they're doing right now. And Ron Paul in the House with over half of the House signing up as cosponsors, and me and Bernie Sanders in the Senate are pushing the idea of a complete audit of the Federal Reserve, because frankly, a lot of us here in this country and around the world, are concerned that we're going to destroy the American dollar and the worldwide reserve currency. NAPOLITANO: How is it that legislation that has more than half the members of the House behind it and is proposed by a staunch conservative Republican like you and then independent socialists like Bernie Sanders is stopped on the floor of the Senate cold before you can even formally introduce it, before you can make a speech in favor of it? DEMINT: Well, if we could get the Federal Reserve under control, it would make it more difficult for the Obama administration, I think, to carry out the continued spending and growing of debt. Because one thing we're concerned about is the Federal Reserve ... will do what we call monetize the debt, basically print money, buy our own debt as a country, and devalue the dollar that way.

Note: For two powerful, short videos revealing efforts to expose the intriguing secrets of the Federal Reserve, click here and here. If you care about the financial health of the U.S. and its implications in our world, these are both must watch videos.

'Bailout psychology' destroying the economy
2009-04-05, San Francisco Chronicle (San Francisco's leading newspaper)
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/04/04/INR316Q4F5.DTL

President Obama must stop the bailouts and start the prosecutions. It's time to focus on anti-poverty programs to protect the growing unemployed from hunger and homelessness. Stealth payments to billionaire bondholders must cease immediately. Since the mid-1970s, average Americans' wages have stayed flat when adjusted for inflation. Productivity rose, profits rose, but not wages. To compensate for stagnant wages and the desire to consume more each year, Americans worked more, retired later, spouses went to work, and many burned savings. Then they started borrowing. Debt became America's growth industry. The scheme collapsed because Americans' wages weren't sufficient to pay the interest on existing debts. The administration and the banks keep talking about a credit crisis, but there isn't one. Banks are lending. If you want a mortgage and can afford to pay it back, you can borrow at low rates today. But most Americans don't want more debt because it is a debilitating path to poverty. The average American family already pays 14 percent of annual income in interest to banks. To fix this fake crisis, there are fake discussions about what the government must do. The endlessly recycled plan to buy "troubled" assets isn't to get banks lending again, because they haven't stopped lending. The plan seeks for taxpayers to buy worthless assets at high prices to absorb rich investors' losses. That's it. It keeps coming back as a different plan, but with that same goal. There is no goal beyond that one goal: keep rich people from taking losses.

Note: For an extensive archive of key reports on the hidden realities of the Wall Street bailout, click here.

The $700 trillion elephant
2009-03-06, MarketWatch (Wall Street Journal Digital Network)
http://www.marketwatch.com/news/story/The-700-trillion-elephant-room/story.as...

There's a $700 trillion elephant in the room and it's time we found out how much it really weighs on the economy. Derivative contracts total about three-quarters of a quadrillion dollars in "notional" amounts, according to the Bank for International Settlements. These contracts are tallied in notional values because no one really can say how much they are worth. But valuing them correctly is exactly what we should be doing because these comprise the viral disease that has infected the financial markets and the economies of the world. Try as we might to salvage the residential real estate market, it's at best worth $23 trillion in the U.S. We're struggling to save the stock market, but that's valued at less than $15 trillion. And we hope to keep the entire U.S. economy from collapsing, yet gross domestic product stands at $14.2 trillion. Compare any of these to the derivatives market and you can easily see that we are just closing the windows as a tsunami crashes to shore. The total value of all the stock markets in the world amounts to less than $50 trillion, according to the World Federation of Exchanges. To be sure, the derivatives market is international. But much of the trouble we're in began with contracts "derived" from the values associated with U.S. residential real estate market. These contracts were engineered based on the various assumptions tied to those values. Few know what derivatives are worth. I spoke with one derivatives trader who manages billions of dollars and she said she couldn't even value her portfolio because "no one knows anymore who is on the other side of the trade."

Note: Banks and financial firms deemed "too big to fail" are being bailed out worldwide at taxpayers' expense. But what will happen if losses in the derivatives market skyrocket? No government in the world has the resources to save financial corporations from a collapse in their derivatives trading. For lots more on the realities of the Wall Street bailout, click here.

The Madoff Economy
2008-12-19, New York Times
http://www.nytimes.com/2008/12/19/opinion/19krugman.html?partner=rss&emc=rss&...

The revelation that Bernard Madoff — brilliant investor (or so almost everyone thought), philanthropist, pillar of the community — was a phony has shocked the world, and understandably so. The scale of his alleged $50 billion Ponzi scheme is hard to comprehend. Yet ... how different, really, is Mr. Madoff’s tale from the story of the investment industry as a whole? The financial services industry has claimed an ever-growing share of the nation’s income over the past generation, making the people who run the industry incredibly rich. Yet, at this point, it looks as if much of the industry has been destroying value, not creating it. And it’s not just a matter of money: the vast riches achieved by those who managed other people’s money have had a corrupting effect on our society as a whole. Last year, the average salary of employees in “securities, commodity contracts, and investments” was more than four times the average salary in the rest of the economy. Earning a million dollars was nothing special, and even incomes of $20 million or more were fairly common. The incomes of the richest Americans have exploded over the past generation, even as wages of ordinary workers have stagnated. High pay on Wall Street was a major cause of that divergence. Wall Street’s ill-gotten gains corrupted and continue to corrupt politics, in a nicely bipartisan way. From Bush administration officials ... who looked the other way as evidence of financial fraud mounted, to Democrats who still haven’t closed the outrageous tax loophole that benefits executives at hedge funds and private equity firms ... politicians have walked when money talked. The pay system on Wall Street lavishly rewards the appearance of profit, even if that appearance later turns out to have been an illusion.

Note: This entire, penetrating article is well worth a read at the link above. For many revealing reports from reliable sources on the realities of the Wall Street bailout, click here.

US diluted loan rules before crash
2008-12-01, ABC News/Associated Press
http://abclocal.go.com/wpvi/story?section=news/business&id=6532267

The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents. "Expect fallout, expect foreclosures, expect horror stories," California mortgage lender Paris Welch wrote to U.S. regulators in January 2006, about one year before the housing implosion cost her a job. Bowing to aggressive lobbying - along with assurances from banks that the troubled mortgages were OK - regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way. The administration's blind eye to the impending crisis is emblematic of its governing philosophy, which trusted market forces and discounted the value of government intervention in the economy. Its belief ironically has ushered in the most massive government intervention since the 1930s. Many of the banks that fought to undermine the proposals by some regulators are now either out of business or accepting billions in federal aid to recover from a mortgage crisis they insisted would never come. In 2005, faced with ominous signs the housing market was in jeopardy, bank regulators proposed new guidelines for banks writing risky loans. Those proposals all were stripped from the final rules.

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

All Fall Down
2008-11-26, New York Times
http://www.nytimes.com/2008/11/26/opinion/26friedman.html?partner=rss&emc=rss...

I spent Sunday afternoon brooding over a [New York Times] front-page article, entitled ["Citigroup Saw No Red Flags Even as It Made Bolder Bets”]. In searing detail it exposed ... how some of our country’s best-paid bankers were overrated dopes who had no idea what they were selling, or greedy cynics who did know and turned a blind eye. But it wasn’t only the bankers. This financial meltdown involved a broad national breakdown in personal responsibility, government regulation and financial ethics. So many people were in on it: People who had no business buying a home, with nothing down and nothing to pay for two years; people who had no business pushing such mortgages, but made fortunes doing so; people who had no business bundling those loans into securities and selling them to third parties, as if they were AAA bonds, but made fortunes doing so; people who had no business rating those loans as AAA, but made fortunes doing so; and people who had no business buying those bonds and putting them on their balance sheets so they could earn a little better yield, but made fortunes doing so. Citigroup was involved in, and made money from, almost every link in that chain. And the bank’s executives, including ...the former Treasury Secretary Robert Rubin, were ... so ensnared by the cronyism between the bank’s risk managers and risk takers (and so bought off by their bonuses) that they had no interest in stopping it. These are the people whom taxpayers bailed out on Monday to the tune of what could be more than $300 billion.

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

So When Will Banks Give Loans?
2008-10-25, New York Times
http://www.nytimes.com/2008/10/25/business/25nocera.html?partner=rssuserland&...

“Chase recently received $25 billion in federal funding. What effect will that have on the business side and will it change our strategic lending policy?” It was Oct. 17, just four days after JPMorgan Chase’s chief executive, Jamie Dimon, agreed to take a $25 billion capital injection courtesy of the United States government, when a JPMorgan employee asked that question [during] an employee-only conference call. The JPMorgan executive who was moderating the employee conference call didn’t hesitate to answer. “What we ... think it will help us do is perhaps be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way.” Read that answer as many times as you want — you are not going to find a single word in there about making loans to help the American economy. On the contrary: It is starting to appear as if one of Treasury’s key rationales for the recapitalization program — namely, that it will cause banks to start lending again — is a fig leaf, Treasury’s version of the weapons of mass destruction. In fact, Treasury wants banks to acquire each other and is using its power to inject capital to force a new and wrenching round of bank consolidation. Treasury would even funnel some of the bailout money to help banks buy other banks. And, in an almost unnoticed move, it recently put in place a new tax break, worth billions to the banking industry, that has only one purpose: to encourage bank mergers. As a tax expert, Robert Willens, put it: “It couldn’t be clearer if they had taken out an ad.”

Note: Was the real purpose of the "bailout" to strengthen the biggest banks by enabling them to gobble up the smaller ones at the public's expense? No wonder the legislation was rushed through without discussion! For lots more highly revealing reports on the Wall Street bailout, click here.

Class Struggle
2006-11-15, Wall Street Journal
http://www.opinionjournal.com/editorial/feature.html?id=110009246

The most important--and unfortunately the least debated--issue in politics today is our society's steady drift toward a class-based system, the likes of which we have not seen since the 19th century. America's top tier has grown infinitely richer and more removed over the past 25 years. Few among them send their children to public schools; fewer still send their loved ones to fight our wars. They own most of our stocks, making the stock market an unreliable indicator of the economic health of working people. The top 1% now takes in an astounding 16% of national income, up from 8% in 1980. The tax codes protect them, just as they protect corporate America, through a vast system of loopholes. Incestuous corporate boards regularly approve compensation packages for chief executives and others that are out of logic's range. As this newspaper has reported, the average CEO of a sizeable corporation makes more than $10 million a year, while the minimum wage for workers amounts to about $10,000 a year, and has not been raised in nearly a decade. When I graduated from college in the 1960s, the average CEO made 20 times what the average worker made. Today, that CEO makes 400 times as much. Trickle-down economics didn't happen. Wages and salaries are at all-time lows as a percentage of the national wealth. This ever-widening divide is too often ignored or downplayed by its beneficiaries. A sense of entitlement has set in among elites, bordering on hubris.

New Fed powers not matched with accountability
2009-06-25, Reuters News
http://www.reuters.com/article/topNews/idUSTRE55O6EZ20090625

President Barack Obama's proposal for a regulatory overhaul of the financial industry vastly expands the reach of the Federal Reserve, yet fails to make policy-makers more accountable for their actions. Critics argue that the new legislation fundamentally misses the problems that led to the financial crisis. It was a lack of enforcement by supervisors, they say, not insufficient rules, that fostered a cowboy culture of rampant risk-taking on Wall Street. "Obama is letting the Fed and everyone else off the hook by saying that the problem was with the regulations and not the regulators," said Dean Baker, co-director of the Center for Economic Policy Research in Washington. "If regulators know that even if they totally fail on the job, they will face no career consequences, then at some future point, when there is a choice between confronting the financial industry or just going along, the regulators will just go along," said Baker. Some feel uncomfortable with a broader role for the Fed primarily because of the Fed's closeness to the banking sector. The Fed is not technically a public entity. Each of the Fed's 12 branches are overseen by a nine-member board of directors, two-thirds of whom are elected by the bankers in the district. "The Federal Reserve has massive conflicts of interest that make it ill-suited for its present regulatory functions and certainly for an expanded regulatory reach," said Robert Auerbach, a professor of public affairs at the University of Texas at Austin. "The officials leading the Fed today preside over an organization that is run in substantial part by the bankers they regulate."

Note: For empowering insight into the historic roots of the Federal Reserve's unaccountability, click here.

Fed Would Be Shut Down If It Were Audited, Expert Says
2009-06-10, CNBC News
http://www.cnbc.com/id/31204170

The Federal Reserve's balance sheet is so out of whack that the central bank would be shut down if subjected to a conventional audit, Jim Grant, editor of Grant's Interest Rate Observer, told CNBC. With $45 billion in capital and $2.1 trillion in assets, the central bank would not withstand the scrutiny normally afforded other institutions, Grant said. "If the Fed examiners were set upon the Fed's own documents ... to pass judgment on the Fed's capacity to survive the difficulties it faces in credit, it would shut this institution down," he said. "The Fed is undercapitalized in a way that Citicorp is undercapitalized." Grant said he would support legislation currently making its way through Congress calling for an audit of the Fed. Moreover, he criticized the way the Fed has managed the financial crisis, saying the central bank's target rate should not be around zero. "I think zero is the wrong rate for almost any economy," Grant said, adding the Fed has "embarked on a vast experiment in moral hazard. Interest rates are the traffic signals in a market economy, and everything's green. ... You have to wonder whether these interest rates are the right clearing rate or rather they are the imposition of a central bank." Amid a disparity between analysts predicting there will be no rate hikes soon and the fed funds futures indicating tightening by the end of the year, Grant said he thinks the Fed indeed will begin raising rates as inflation creeps into the picture. Fed funds futures have fully priced in as much as a half-point rise in the target rate from its current range of zero to 0.25 percent. "If the hairs on the back of your neck stand up when there's too much unanimity of opinion, then one begins to worry about this," he said. "The Fed proverbially has been late."

Note: For an astonishing five-minute video clip of a Congressional hearing where the Inspector General of the Fed acknowledges she knows almost nothing about trillions of dollars missing from the Fed, click here. For many more important reports shedding light on the hidden realities of the economic crisis, click here.

Fed Shrouding $2 Trillion in Bank Loans in ‘Secrecy,’ Suit Says
2009-04-16, Bloomberg News
http://www.bloomberg.com/apps/news?pid=20601087&sid=aS89AaGjOplw

U.S. taxpayers need to know the risks behind the Federal Reserve’s $2 trillion in lending to financial institutions because the public is now an “involuntary investor” in the nation’s banks, according to a court filing by Bloomberg LP. The Fed refuses to name the borrowers, the amounts of loans or assets banks put up as collateral under 11 programs, arguing that doing so might set off a run by depositors and unsettle shareholders. The largest U.S. banks have tapped more than $125 billion in government aid under the Troubled Asset Relief Program in the past seven months. Assets, including loans and securities, on the Fed balance sheet totaled $2.09 trillion as of April 9. Banks oppose any release of information because that might signal weakness and spur short-selling or a run by depositors, the Fed argued in its March 4 response. The release of the information “can fuel market speculation and rumors,” including a drop in stock price and a run on the bank, the Fed said. Bloomberg replied yesterday that “these speculative injuries relate only to the reactions of customers, shareholders and other members of the public, not to competitors’ use of the borrowers’ proprietary information to their advantage,” the exception to disclosure under the FOIA law. Government loans, spending or guarantees to rescue the U.S. financial system total more than $12.8 trillion since the international credit crisis began in August 2007, according to data compiled by Bloomberg as of March 31. The total includes about $2 trillion on the Fed’s balance sheet.

Note: For an extensive archive of key reports on the hidden realities of the Wall Street bailout, click here.

‘No-Risk’ Insurance at F.D.I.C.
2009-04-07, New York Times
http://www.nytimes.com/2009/04/07/business/07sorkin.html?partner=rss&emc=rss&...

The Federal Deposit Insurance Corporation was set up 76 years ago with the important but simple job of insuring bank deposits. Now, because of what could politely be called mission creep, it’s elbowing its way into the middle of the financial mess as an enabler of enormous leverage. In the fine print of Treasury Secretary Timothy F. Geithner’s plan to lend as much as $1 trillion to private investors to help them buy toxic assets from our nation’s banks, you’ll find some details of how the F.D.I.C is trying to stabilize the system by adding more risk, not less, to the system. It’s going to be insuring 85 percent of the debt, provided by the Treasury, that private investors will use to subsidize their acquisitions of toxic assets. These loans, while controversial, were given a warm welcome by the market when they were first announced. And why not? The terms are hard to beat. They are, for example, “nonrecourse,” which means that if an investor loses money, he owes taxpayers nothing. It’s the closest thing to risk-free investing — with leverage! — around. But, as we’ve learned the hard way these last couple of years, risk-free investing is an oxymoron. So where did the risk go this time? To the F.D.I.C., and ultimately, to us taxpayers. A close reading of the F.D.I.C.’s statute suggests the agency is using a unique — some might call it plain wrong — reading of its own rule book to accomplish this high-wire act. Somehow, in the name of solving the financial crisis, the F.D.I.C. has seemingly been given a blank check, with virtually no oversight by Congress.

Note: For a powerfully revealing archive of reports from reliable sources on the hidden realities of the financial bailout, click here.

Fed Refuses to Disclose Recipients of $2 Trillion
2008-12-12, Bloomberg News
http://www.bloomberg.com/apps/news?pid=20601109&sid=apx7XNLnZZlc

The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral. Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression. The Fed responded Dec. 8, saying it’s allowed to withhold internal memos as well as information about trade secrets and commercial information. “If they told us what they held, we would know the potential losses that the government may take and that’s what they don’t want us to know,” said Carlos Mendez, a senior managing director at New York-based ICP Capital LLC. The Fed stepped into a rescue role that was the original purpose of the Treasury’s $700 billion Troubled Asset Relief Program. The central bank loans don’t have the oversight safeguards that Congress imposed upon the TARP. Total Fed lending exceeded $2 trillion for the first time Nov. 6. It rose by 138 percent, or $1.23 trillion, in the 12 weeks since Sept. 14, when central bank governors relaxed collateral standards to accept securities that weren’t rated AAA. “There has to be something they can tell the public because we have a right to know what they are doing,” said Lucy Dalglish, executive director of the Arlington, Virginia-based Reporters Committee for Freedom of the Press.

Financial Bailout Balloons to the Trillions
2008-11-25, ABC News
http://abcnews.go.com/Business/Economy/story?id=6332892

The government's financial bailout will be the most expensive single expenditure in American history, potentially costing around $7.5 trillion -- or half the value of all the goods and services produced in the United States last year. In comparison, the total U.S. cost of World War II adjusted for inflation was $3.6 trillion. The bailout will cost more than the total combined costs in today's dollars of the Marshall Plan, the Louisiana Purchase, the Korean War, the Vietnam War and the entire historical budget of NASA, including the moon landing, according to data compiled by Bianco Research. It remains to be seen whether the government's multipronged approach to bail out banks, stimulate spending and buy up mortgages will revive the economy, but as the tab continues to grow so does concern over where the government will find the money. Monday the government guaranteed an additional $306 billion to bail out Citigroup, and today Treasury Secretary Henry Paulson pledged $800 billion to make credit more available to consumers and small businesses, and to buy up mortgages from Fannie Mae and Freddie Mac. Congress last month allocated $700 billion for an emergency bailout of some of Wall Street's most storied firms by purchasing their troubled assets. The funds allocated through the Troubled Assets Relief Program are but a small part of the government's overall bailout spending. Bailout programs also include a Federal Reserve plan to buy as much as $2.4 trillion in short-term notes called commercial paper that began Oct. 27, and an FDIC plan to spend $1.4 trillion to guarantee bank-to-bank loans that commenced Oct. 14, according to Bloomberg News, which first compiled the total cost of the bailout.

Note: $7.5 trillion amounts to about $25,000 for every person in the U.S. What's going on here? For many revealing reports on the realities of the Wall Street bailout, click here.

Paulson makes it clear: He's in charge
2008-11-13, San Francisco Chronicle (San Francisco's leading newspaper)
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/11/13/BUUK1439IF.DTL

Henry Paulson's speech Wednesday made it pretty clear: The Treasury secretary has seized control of the financial system. "He is absolutely the most powerful person in the country. Maybe the world," says Wall Street accounting expert Robert Willens. The most telling line in his speech came when Paulson was explaining why he did a 180-degree turn with money approved by Congress under the $700 billion bailout bill. Instead of using it to buy troubled mortgage assets from banks, as clearly envisioned, he scrapped that idea and used it to make equity investments in banks. "In consultation with the Federal Reserve, I determined that the most timely, effective step to improve credit market conditions was to strengthen bank balance sheets quickly through direct purchases of equity in banks," he said. If Paulson bothered consulting with President Bush, he didn't mention it. In fact, he didn't even mention the president until the tail end of his speech, when he talked about the global summit Bush is hosting this weekend. I can understand why Paulson wants to distance himself from an unpopular president, especially one who has little facility for complex financial matters. But Bush is [the] president and even President-elect Barack Obama knows there can be only one president at a time. And his last name is not Paulson. In September, when Paulson asked for a $700 billion blank check from Congress to fix the financial markets, he got a lot of blowback. By the time Congress was done with his proposal, it had grown from 2 1/2 pages to more than 450. Yet it now appears that Paulson got the blank check he wanted.

Note: Why doesn't Congress have some say in what is done with this $700 billion? That's over $3,000 for every taxpayer in the U.S. which is being spent with practically no accountability. Is this what democracy looks like? For many key articles revealing the hidden realities of the bailout, click here.

Warning: King Henry's bailout like Rummy's Iraq
2008-11-10, MarketWatch (A Wall Street Journal Digital Network Website)
http://www.marketwatch.com/news/story/reagonomics-hides-sleeper-cells-harbori...

So you thought Barack Obama's victory signaled the death of Reaganomics? Wrong, wrong: Reaganomics is very much alive. In a subtle, bloodless coup, the Reaganomics ideology magically pulled victory out of the jaws of defeat in the meltdown. The magic happened fast and quietly, in the shadows, while you were in a trance, distracted by the election drama. Recently Naomi Klein, author of The Shock Doctrine: The Rise of Disaster Capitalism, framed the issue perfectly: "Has the Treasury partially nationalized the private banks, as we have been told? Or is it the other way around?" The question was rhetorical, the answer painfully clear. In a few weeks Wall Street did the old bait and switch, emerging from an economic and market disaster with new powers, in total control of America. And thanks to Treasury Secretary Henry Paulson's brilliant bailout coup, Reaganomics is now the new "sleeper cell" quietly hidden inside the Obama White House and America's Treasury, where it will be for a long time to come. Listen closely folks: You and your government are and will continue being conned out of trillions. Klein further exposed this insanity in a recent Rolling Stone article, "The New Trough: The Wall Street bailout looks a lot like Iraq, a 'free-fraud zone' where private contractors cash in on the mess they helped create." Paulson's privatization, outsourcing and management of the $700 billion bailout has the exact same Reaganomics ideological, strategic and deceptive footprints that President George W. Bush and former Defense Secretary Donald Rumsfeld used to privatize, outsource and mismanage the costly Iraq War blunder.

Note: For the powerfully revealing article by Naomi Klein mentioned in the article above, click here. Speaking on Tulsa Oklahoma’s 1170 KFAQ, Senator James Inhofe of Oklahoma (Republican) has revealed that Treasury Secretary Henry Paulson was the source of the threat of martial law in the US if the $700 billion bailout bill was not passed that was exposed on the House floor by Rep. Brad Sherman. For many key articles revealing the hidden realities of the bailout, click here.

Bernanke Is Fighting the Last War
2008-10-18, Wall Street Journal
http://online.wsj.com/article/SB122428279231046053.html

"Nothing," [famed economist] Anna Schwartz says, "seems to have quieted the fears of either the investors in the securities markets or the lenders and would-be borrowers in the credit market." The credit markets remain frozen, the stock market continues to get hammered, and deep recession now seems a certainty -- if not a reality already. [Recently, according to Schwarz, Secretary of the Treasury Hank Paulson has] shifted from trying to save the banking system to trying to save banks. These are not, Ms. Schwartz argues, the same thing. In fact, by keeping otherwise insolvent banks afloat, the Federal Reserve and the Treasury have actually prolonged the crisis. "They should not be recapitalizing firms that should be shut down." Rather, "firms that made wrong decisions should fail," she says bluntly. "You shouldn't rescue them. Everything works much better when wrong decisions are punished and good decisions make you rich." How did we get into this mess in the first place? As in the 1920s, the current "disturbance" started with a "mania." But manias always have a cause. "In every case, it was expansive monetary policy that generated the boom in an asset. The particular asset varied from one boom to another. But the basic underlying propagator was too-easy monetary policy and too-low interest ratest. And then of course if monetary policy tightens, the boom collapses." Today's crisis isn't a replay of the problem in the 1930s, but our central bankers have responded by using the tools they should have used then. They are fighting the last war. The result, she argues, has been failure.

Note: Anna Schwarz and Nobel-winner Milton Friedman authored A Monetary History of the United States. It's the definitive account of how misguided monetary policy turned the stock-market crash of 1929 into the Great Depression. The excellent article above mentions that Fed Reserve Chairman Bernanke once said "I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. We won't do it again." Top bankers and their cronies have been aware of what causes the boom/bust cycle for over 100 years and taken full advantage of it. Try to find one top banker who lost significant money in any bust cycle.

A Few Speculators Dominate Vast Market for Oil Trading
2008-08-21, Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2008/08/20/AR20080820038...

Regulators had long classified a private Swiss energy conglomerate called Vitol as a trader that primarily helped industrial firms that needed oil to run their businesses. But when the Commodity Futures Trading Commission examined Vitol's books last month, it found that the firm was in fact more of a speculator, holding oil contracts as a profit-making investment rather than a means of lining up the actual delivery of fuel. Even more surprising to the commodities markets was the massive size of Vitol's portfolio -- at one point in July, the firm held 11 percent of all the oil contracts on the regulated New York Mercantile Exchange. The discovery revealed how an individual financial player had gained enormous sway over the oil market without the knowledge of regulators. Other CFTC data showed that a significant amount of trading activity was concentrated in the hands of just a few speculators. The CFTC ... now reports that financial firms speculating for their clients or for themselves account for about 81 percent of the oil contracts on NYMEX, a far bigger share than had previously been stated by the agency. That figure may rise in coming weeks as the CFTC checks the status of other big traders. Some lawmakers have blamed these firms for the volatility of oil prices, including the tremendous run-up that peaked earlier in the summer. "It is now evident that speculators in the energy futures markets play a much larger role than previously thought, and it is now even harder to accept the agency's laughable assertion that excessive speculation has not contributed to rising energy prices," said Rep. John D. Dingell (D-Mich.).

Investors' Growing Appetite for Oil Evades Market Limits
2008-06-06, Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2008/06/05/AR20080605043...

Hedge funds and big Wall Street banks are taking advantage of loopholes in federal trading limits to buy massive amounts of oil contracts, ... helping to push oil prices to record highs. The federal agency that oversees oil trading, the Commodity Futures Trading Commission, has exempted these firms from rules that limit speculative buying. The CFTC has also waived regulations over the past decade on U.S. investors who trade commodities on some overseas markets, freeing those investors to accumulate large quantities of the future oil supply by making purchases on lightly regulated foreign exchanges. Over the past five years, investors have become such a force on commodity markets that their appetite for oil contracts has been equal to China's increase in demand over the same period, said Michael Masters, a hedge fund manager who testified before Congress on the subject last month. The commodity markets, he added, were never intended for such large financial players. Commodities have become especially enticing to investors as the credit crisis has roiled other investment opportunities such as stocks and debt-related securities. The recent flood of investment money has transformed the markets for oil, as well as uranium, wheat, cotton and other goods, into a volatile realm that some insiders call the Wild West of Wall Street. Michael Greenberger, a professor at the University of Maryland and former CFTC commissioner, said there were loopholes the agency could close without much effort. "There's smoke here, and the CFTC hasn't wanted to look if there's a fire," he said. "But these are dark markets. They don't even know who's doing the trading."

Note: For revealing reports on financial corruption and criminality from major media sources, click here.

Davos: Wealth, power and a sprinkling of stardust
2008-01-22, The Independent (One of the U.K.'s leading newspapers)
http://www.independent.co.uk/news/business/analysis-and-features/davos-wealth...

For a few days an obscene proportion of the world's wealth and clout will be concentrated in one normally obscure Alpine town, [Davos, Switzerland]. Some 27 heads of state or government; 113 cabinet ministers; hundreds of chief executives, bankers, sovereign wealth fund managers, economists and the media: about 2,500 participants in all. So who's coming and what will they be chattering about? The official co-chairs of the Forum are mostly well-known names: Tony Blair, of JP Morgan; James Dimon, chairman and CEO of JP Morgan; KV Kamath, MD and CEO of India's ICICI Bank; Henry Kissinger, chairman of Kissinger Associates; Indra K Noovi, chairman and CEO of PepsiCo; David J O'Reilly, chairman and CEO of Chevron Corporation; and Wang Jianzhou, CEO of China Mobile Communications Corporation. The prominent role allotted to Mr Wang, while not entirely novel, is nonetheless significant. In 2008, for the first time, China will contribute more to the growth of the world economy than the United States. Double-digit growth in China should still just be possible this year, and it alone seems to stand between the world and a full-blown recession. Sovereign wealth funds (SWFs) from China and elsewhere have already been busy re-capitalising the West's stricken banks. The recycling of trillions of dollars of trade surpluses and petro dollars means that such deals will become more prevalent. Davos will provide one more opportunity for distressed American investment bankers to bump into munificent Singaporean or Qatari or Chinese SWF managers.

Note: Yet these meetings are kept largely secret. Why isn't the media giving lots more coverage to this gathering of some of the most powerful people on the planet? For other reliable, verifiable reports on secret meetings of the power elite of the world, click here.

Government Accountability Office Report
2006-12-15, Comptroller General of the United States
http://fms.treas.gov/fr/06frusg/06gao2.pdf

The Secretary of the Treasury ... is required annually to submit financial statements for the U.S. government to the President and the Congress. GAO is required to audit these statements. Certain material weaknesses in financial reporting and other limitations on the scope of our work resulted in conditions that continued to prevent us from expressing an opinion on the accompanying consolidated financial statements for the fiscal years ended September 30, 2006 and 2005. The federal government did not maintain effective internal control over financial reporting. While we are unable to express an opinion ... the following key items deserve emphasis. The U.S. government’s total reported liabilities, net social insurance commitments, and other fiscal exposures continue to grow and now total approximately $50 trillion, representing approximately four times the Nation’s total output (GDP) in fiscal year 2006, up from about $20 trillion, or two times GDP in fiscal year 2000. The retirement of the“baby boom” generation is [also] closer to becoming a reality with the first wave of boomers eligible for early retirement under Social Security in 2008. It seems clear that the nation’s current fiscal path is unsustainable and that tough choices by the President and the Congress are necessary in order to address the nation’s large and growing long-term fiscal imbalance. Other material weaknesses were the federal government’s inability to: determine the full extent to which improper payments exist; identify and resolve information security control weaknesses; and effectively manage its tax collection activities.

Note: The full 172-page report is available here. Why didn't any of the media cover this eye-opening report? Is the fact that the national debt has risen 150% since 2000 not news? For a possible answer, click here. To learn of the trillions of unaccounted for dollars in the military, click here.

Insiders' stock sale-purchase ratio widens
2006-12-07, Chicago Tribune/Bloomberg
http://www.chicagotribune.com/business/chi-0612070153dec07,0,3801935.story

Stock sales by America's corporate leaders exceeded purchases last month by the widest ratio in nearly 20 years. Executives sold $63.18 of shares for every $1 they bought in November, the largest ratio since at least January 1987. U.S. securities laws require company executives and directors to disclose stock purchases or sales within two business days. Insiders sold $8.4 billion in shares last month, according to data compiled from SEC filings. Buying was ... $133 million. The overall insider-selling amount was the fifth-highest since 1987. Selling peaked at $13.9 billion in March 2000. The data have "value for investors," said Wayne Reisner at Carret Asset Management in New York. "It's people who are very familiar with their company and their stock." Insiders executed 6.34 sales transactions for each purchase transaction in the eight weeks ended Dec. 1. That's up from 2.45 in the period ended Aug. 4 and above the ratio of 2.25 he considers neutral for the market. Microsoft ranked first among U.S. companies, with $594.2 million in sales by insiders in November. Seagate Technology and DreamWorks Animation SKG Inc. ranked second and third, at $311.8 million and $224.2 million, respectively. Google Inc. was fourth, at $182.1 million.

Note: Isn't it interesting that the NASDAQ stock index reached it's all-time high in March 2000, the exact month executive stock selling hit its record, and just prior to the huge NASDAQ crash. Is it possible that corporate executives knew something the rest of us didn't?

World's wealth gap grows; poorest half has 1% of assets
2006-12-05, Denver Post (Denver's leading newspaper)
http://www.denverpost.com/headlines/ci_4785148

The richest 2 percent of adults still own more than half of the world's household wealth, perpetuating a yawning global gap between rich and poor, according to research published Tuesday. The report from the Helsinki-based World Institute for Development Economics Research shows that in 2000 the richest 1 percent of adults - most of whom live in Europe or the United States - owned 40 percent of global assets. The richest 10 percent of adults accounted for 85 percent of assets. By contrast, the bottom 50 percent of the world's adult population owned barely 1 percent of the world's wealth. "Income inequality has been rising for the past 20 to 25 years, and we think that is true for inequality in the distribution of wealth," said James Davies, a professor of economics at the University of Western Ontario, one of the report's authors. But ... there are some hopeful signs: China and India, which are developing rapidly, are gaining wealth, and in countries such as Bangladesh, the spread of microcredit institutions is helping people increase their personal wealth.

Note: If you are interested in a secure vehicle in which to place your investments which helps to directly pull families out of poverty in a big way through microcredit and microloans, click here.

Military waste under fire: $1 trillion missing
2003-05-18, San Francisco Chronicle (San Francisco's leading newspaper)
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2003/05/18/MN251738.DTL

The Department of Defense, already infamous for spending $640 for a toilet seat...couldn't account for more than a trillion dollars in financial transactions, not to mention dozens of tanks, missiles and planes. The nonpartisan General Accounting Office has raised the volume of its perennial complaints about the financial woes at Defense, which recently failed its seventh audit in as many years. "Overhauling DOD's financial management operations represent a challenge that goes far beyond financial accounting," GAO chief David Walker told lawmakers. Recent government reports suggest the Pentagon's money management woes have reached astronomical proportions. A GAO report found Defense inventory systems so lax that the U.S. Army lost track of 56 airplanes, 32 tanks, and 36 Javelin missile command launch-units. When military leaders were scrambling to find enough chemical and biological warfare suits to protect U.S. troops, the department was caught selling these suits as surplus on the Internet "for pennies on the dollar," a GAO official said. "We are overhauling our financial management system," said Dov Zakheim, the Pentagon's chief financial officer. "The Pentagon has failed to address financial problems that dwarf those of Enron," said Rep. Henry Waxman, D-Los Angeles. Gregory Kutz, director of GAO's financial management division [said] "I've been to Wal-Mart. They were able to tell me how many tubes of toothpaste were in Fairfax, Va. And DOD can't find its chem-bio suits." Opposition to defense spending is portrayed as unpatriotic. Legislators are often more concerned about winning Pentagon pork than controlling defense waste.

Note: You can read the GAO Report (Page 17 on missing planes). Page two states, "To date, no major part of DOD has yet been able to pass the test of an independent audit." For an intriguing Online Journal article exposing the deep role of the Pentagon's former CFO (Chief Financial Officer) Zakheim in this corruption, click here. Why wasn't and isn't this front page headlines? Why are newspaper editors keeping this most vital information from the public?

666: Goldman's latest bonus bears the mark of the beast
2009-05-03, The Independent (One of the U.K.'s leading newspapers)
http://www.independent.co.uk/news/business/analysis-and-features/666-goldmans...

Something strange is afoot when Popbitch – provider of a weekly email beloved of students, stuffed full of celebrity tittle-tattle and links to the silliest miscellany of the web – breaks off from such glorious trivia to encourage readers to support GoldmanSachs666.com, a deadly serious website measuring the political tentacles of the mighty investment bank. The credit-market catastrophe that has plunged the world into recession is everywhere stirring new ways of thinking about how banking relates to the wider world, but nowhere more so than among a generation coming into political consciousness in these searing times. Something is brewing, some argue, that could make the "regulatory-financial complex" something to rail against in the same way that the military-industrial complex was in the Cold War. This should worry Goldman Sachs. More so than any other firm, it exists at the intersection of politics and high finance. "It was listening to the news coming out of AIG that got me fired up," says Mike Morgan, founder of GoldmanSachs666.com. "While politicians were screaming about $165m paid out to AIG executives in bonuses, $180bn was walking out the door." The Federal Reserve and the then-treasury secretary, Hank Paulson, decided to funnel public funds to AIG, and its counterparties were paid in full. You don't have to scratch far into the internet to find conspiracy theories: Mr Paulson was chief executive of Goldman before going into government; he appointed Edward Liddy, formerly of Goldman, to run AIG; Goldman was AIG's biggest counterparty, receiving $12.9bn from AIG after the bailout.

Note: For lots more on the Wall Street bailout, click here.

Why Creditors Should Suffer, Too
2009-04-05, New York Times
http://www.nytimes.com/2009/04/05/business/economy/05view.html?partner=rss&em...

The Obama administration’s proposals to reform financial regulation sound ambitious enough as they aim to bring companies like A.I.G. under a broader umbrella of government rule-making and scrutiny. But there is a big hole in these proposals, as there has already been in the government’s approach to bailing out failing financial companies. Even as they focus on firms deemed too big to fail, the new proposals immunize the creditors and counterparties of such firms by protecting them from their own lending and trading mistakes. This pattern has been evident for months, with the government aiding creditors and counterparties every step of the way. Yet this has not been explained openly to the American public. In truth, it’s not the shareholders of the American International Group who benefited most from its bailout; they were mostly wiped out. The great beneficiaries have been the creditors and counterparties at the other end of A.I.G.’s derivatives deals — firms like Goldman Sachs, Merrill Lynch, Deutsche Bank, Société Générale, Barclays and UBS. These firms engaged in deals that A.I.G. could not make good on. The bailout, and the regulatory regime outlined by Timothy F. Geithner, the Treasury secretary, would give firms like these every incentive to make similar deals down the road. In both the bailouts and in the new proposals, the government is effectively neutralizing creditors as a force for financial safety. This suggests a scary possibility — that the next regulatory regime could end up even worse than the last.

Note: For a powerfully revealing archive of reports from reliable sources on the hidden realities of the financial bailout, click here.

Big Bonuses at Fannie and Freddie Draw Fire
2009-04-04, New York Times
http://www.nytimes.com/2009/04/04/business/04bonus.html?partner=rss&emc=rss&p...

Fannie Mae and Freddie Mac, the two troubled companies at the heart of the nation’s mortgage market, are set to pay their employees “retention bonuses” totaling $210 million, despite calls from lawmakers to cancel the payments. The bonuses, which were made public on Friday, were defended by the companies’ federal regulator, James B. Lockhart, who said he intended to let them proceed. In a letter sent last week to Senator Charles E. Grassley, an Iowa Republican, Mr. Lockhart disclosed that 7,600 Fannie and Freddie workers were scheduled to receive payouts aimed at retaining those “employees most critical to keep and difficult to replace.” Under the plan, 213 employees will receive retention bonuses worth more than $100,000 this year, and one Freddie Mac executive will receive $1.3 million. Those figures drew sharp rebukes from Mr. Grassley and other lawmakers, who noted that Fannie and Freddie had received pledges of $400 billion from taxpayers to offset huge losses since they were seized by the government in September. Similar bonuses paid by the American International Group, which was also bailed out by taxpayers, incited fiery attacks from the White House and legislators when they were revealed last month. “It’s hard to see any common sense in management decisions that award hundreds of millions in bonuses when their organizations lost more than $100 billion in a year,” Mr. Grassley said in a statement. “It’s an insult that the bonuses were made with an infusion of cash from taxpayers.”

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

Obama’s Ersatz Capitalism
2009-04-01, New York Times
http://www.nytimes.com/2009/04/01/opinion/01stiglitz.html?partner=rss&emc=rss...

The Obama administration’s $500 billion or more proposal to deal with America’s ailing banks has been described by some in the financial markets as a win-win-win proposal. Actually, it is a win-win-lose proposal: the banks win, investors win — and taxpayers lose. Treasury hopes to get us out of the mess by replicating the flawed system that the private sector used to bring the world crashing down, with a proposal marked by overleveraging in the public sector, excessive complexity, poor incentives and a lack of transparency. In theory, the administration’s plan is based on letting the market determine the prices of the banks’ “toxic assets” — including outstanding house loans and securities based on those loans. The reality, though, is that the market will not be pricing the toxic assets themselves, but options on those assets. The two have little to do with each other. The government plan in effect involves insuring almost all losses. Since the private investors are spared most losses, then they primarily “value” their potential gains. This is exactly the same as being given an option. Under the plan by Treasury Secretary Timothy Geithner, the government would provide about 92 percent of the money to buy the asset but would stand to receive only 50 percent of any gains, and would absorb almost all of the losses. Some partnership! What the Obama administration is doing is far worse than nationalization: it is ersatz capitalism, the privatizing of gains and the socializing of losses. It is a “partnership” in which one partner robs the other.

Note: The author of this analysis, Joseph E. Stiglitz, is a professor of economics at Columbia University. He was chairman of the Council of Economic Advisers from 1995 to 1997, and was awarded the Nobel prize in economics in 2001. For many revealing reports on the realities behind the Wall Street bailouts, click here.

A.I.G. Planning Huge Bonuses After $170 Billion Bailout
2009-03-15, New York Times
http://www.nytimes.com/2009/03/15/business/15AIG.html?partner=rss&emc=rss&pag...

The American International Group, which has received more than $170 billion in taxpayer bailout money from the Treasury and Federal Reserve, plans to pay about $165 million in bonuses by Sunday to executives in the same business unit that brought the company to the brink of collapse last year. Treasury Secretary Timothy F. Geithner told the firm they were unacceptable and demanded they be renegotiated, a senior administration official said. But the bonuses will go forward because lawyers said the firm was contractually obligated to pay them. The payments to A.I.G.’s financial products unit are in addition to $121 million in previously scheduled bonuses for the company’s senior executives and 6,400 employees across the sprawling corporation. The payment of so much money at a company at the heart of the financial collapse that sent the broader economy into a tailspin almost certainly will fuel a popular backlash against the government’s efforts to prop up Wall Street. A.I.G., nearly 80 percent of which is now owned by the government, defended its bonuses, arguing that they were promised last year before the crisis and cannot be legally canceled. Of all the financial institutions that have been propped up by taxpayer dollars, none has received more money than A.I.G.. The bonuses will be paid to executives at A.I.G.’s financial products division, the unit that wrote trillions of dollars’ worth of credit-default swaps that protected investors from defaults on bonds backed in many cases by subprime mortgages. Seven executives at the financial products unit were entitled to receive more than $3 million in bonuses.

Note: For many revelations of the amazing realities of the Wall Street bailout, click here.

Some Banks, Feeling Chained, Want to Return Bailout Money
2009-03-11, New York Times
http://www.nytimes.com/2009/03/11/business/economy/11bailout.html?partner=rss...

Financial institutions that are getting government bailout funds have been told to put off evictions and modify mortgages for distressed homeowners. They must let shareholders vote on executive pay packages. They must slash dividends, cancel employee training and morale-building exercises, and withdraw job offers to foreign citizens. As public outrage swells over the rapidly growing cost of bailing out financial institutions, the Obama administration and lawmakers are attaching more and more strings to rescue funds. The conditions are necessary to prevent Wall Street executives from paying lavish bonuses and buying corporate jets, some experts say. Some bankers say the conditions have become so onerous that they want to return the bailout money. The list includes small banks ... as well as giants like Goldman Sachs and Wells Fargo. They say they plan to return the money as quickly as possible or as soon as regulators set up a process to accept the refunds. A senior Treasury official involved in the bailout effort said the administration was carefully trying not to do anything that could harm the banks and was giving financial incentives to modify mortgages. But by keeping weak banks operating, the markets continue to sink and taxpayer costs are mounting, outside experts said. “The current policy is likely to result in weaker banks,” Mr. Seidman said. “And keeping insolvent banks in operation does not benefit the system.”

Note: Could it be that that the main reason top bank executives are now talking about giving money back is that don't want to give up their lavish bonuses and corporate jets? What about all the talk about how the whole world would go to pot if they didn't get this bailout money? Somehow this is not surprising.

New Bank Bailout Could Cost $2 Trillion
2009-01-29, Wall Street Journal
http://online.wsj.com/article/SB123319689681827391.html

Government officials seeking to revamp the U.S. financial bailout have discussed spending another $1 trillion to $2 trillion to help restore banks to health, according to people familiar with the matter. President Barack Obama's new administration is wrestling with how to stem the continuing loss of confidence in the financial system, as it divides up the remaining $350 billion from the $700 billion Troubled Asset Relief Program launched last fall. The potential size of rescue efforts being discussed suggests the administration may need to ask Congress for more funds. The administration is expected to take a series of steps, including relieving banks of bad loans and distressed securities. The so-called "bad bank" that would buy these assets could be seeded with $100 billion to $200 billion from the TARP funds, with the rest of the money -- as much as $1 trillion to $2 trillion -- raised by selling government-backed debt or borrowing from the Federal Reserve. The administration is also seeking more effective ways to pump money into banks, and is considering buying common shares in the banks. Government purchases so far have been of preferred shares, in an effort to both protect taxpayers and avoid diluting existing shareholders' stakes. Given the weakened state of the banking industry, with bank share prices low and their capital needs high, economists say the government probably can't avoid owning at least some banks for a temporary period.

Note: Note that the U.S. government has to borrow from the Federal Reserve, which most people don't realize is privately owned by the richest banks. For more on this, click here. The $2 trillion of taxpayer money for Wall Street's toxic assets revealed here is in addition to over $7 trillion already committed according to CNN and others. Wouldn't government debt of this magnitude threaten a broad range of government services and risk seriously weakening the dollar? For many other revealing reports on the Wall Street bailout, click here.

Execs of bailed-out banks got $1.6B last year, AP finds
2008-12-21, USA Today/Associated Press
http://www.usatoday.com/money/companies/management/2008-12-21-bank-execs-bail...

Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits last year, an Associated Press analysis reveals. The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue. Some trimmed their executive compensation due to lagging bank performance, but still forked over multimillion-dollar executive pay packages. Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management. The total amount given to nearly 600 executives would cover bailout costs for many of the 116 banks that have so far accepted tax dollars to boost their bottom lines. The AP compiled total compensation based on annual reports that the banks file with the Securities and Exchange Commission. The 116 banks have so far received $188 billion in taxpayer help. Among the findings: • Lloyd Blankfein, president and chief executive officer of Goldman Sachs, took home nearly $54 million in compensation last year. The company's top five executives received a total of $242 million. The New York-based company on Dec. 16 reported its first quarterly loss since it went public in 1999. It received $10 billion in taxpayer money on Oct. 28. • John A. Thain, chief executive officer of Merrill Lynch, topped all corporate bank bosses with $83 million in earnings last year. Like Goldman, Merrill got $10 billion from taxpayers on Oct. 28.

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

House Arrest for Madoff in $7 Million Apartment
2008-12-17, abcnews.com
http://abcnews.go.com/Blotter/WallStreet/story?id=6480363

Bernard Madoff, accused of the largest fraud in U.S. history, will be allowed to remain in his $7 million Park Avenue apartment instead of being sent to jail, under terms of an agreement announced today by federal prosecutors. Madoff was unable to meet the bond conditions set last week by a federal magistrate which required him to get four people to sign his personal recognizance bond. According to the U.S. Attorney's office, only Madoff's wife and brothers were willing to sign the document. But instead of ordering him held in jail, prosecutors agreed to home detention with electronic monitoring. Madoff and his luxury apartment on Manhattan's upper east side will be fitted with an electronic monitoring device by the court's pre-trial services and Madoff will be under a curfew of between 7 p.m. through 9 a.m. Madoff's wife agreed to post the mansions in her name in Palm Beach, Florida and in Montauk on New York's Long Island. The Securities and Exchange Commission chairman said today the agency has found "no evidence of wrongdoing by any SEC personnel" in connection with Madoff's alleged $50 billion Ponzi scheme and that the SEC intends to get to the bottom of where it may have gone wrong. "I was very concerned to learn this week that credible allegations about Mr. Madoff had been made over nearly a decade and yet never referred to the commission for action," Commissioner Christopher Cox said at a press conference. Yesterday, Cox acknowledged what amounted to a generational failure on the part of the SEC to discover any hint of Madoff's scheme, despite allegations dating back to 1999.

Note: Why is the criminal responsible for the largest single banking scandal in history given house arrest rather than jail before his trial? Isn't it remarkable that the hands-off treatment Madoff received over the years from the SEC seems to be continuing from the Federal prosecutors? For more on Wall Street corruption, click here.

Why AIG Gets Billions, GM Gets Scorn
2008-12-12, U.S. News & World Report blog
http://www.usnews.com/blogs/flowchart/2008/12/12/why-aig-gets-billions-gm-get...

AIG, the huge insurance company, has so far gotten $173 billion worth of federal aid, because traders at one small division made bets on exotic securities that were so calamitous they threatened to bring down the whole company. So far, the amount of money the feds have pledged to this one firm equals nearly one-third of the nation’s defense budget. General Motors, America’s biggest automaker, has asked for a $10 billion federal loan, equal to one-seventeenth of what AIG has gotten – and Congress has said no. There were no rogue traders at GM, and the company’s problems have intensified in plain view, over several months, instead of coming from out of nowhere in a single, cataclysmic episode. Make sense? Doesn’t to me. So maybe if we look at each company a bit more closely, it will be clearer why the government favors companies like AIG over ones like GM. Does have AIG have friends in high places? You could say that. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke both support the AIG bailout, and they’ve steered money to the company without Congressional approval. GM’s most important friends in Washington have been the Michigan Congressional delegation, which obviously doesn’t have the clout it used to. Paulson has actually argued against using part of the huge $700 billion financial bailout fund to help the automakers, because they can’t pass a “viability” test proving they’ll stay in business long enough to pay back the loans. But AIG hasn’t passed a viability test either, and without federal help there’s little doubt it would be in bankruptcy.

Note: At least someone is asking the right questions! For many highly revealing reports from reliable sources on the realities of the Wall Street bailout, click here.

Wall Street legend Bernard Madoff arrested over '$50 billion Ponzi scheme'
2008-12-12, Times of London
http://www.timesonline.co.uk/tol/news/world/us_and_americas/article5331997.ece

Shock and panic spread through the country clubs of Palm Beach and Long Island after Bernard L Madoff, a trading powerbroker for over four decades, allegedly confessed to a massive fraud that will cost his wealthy investors at least $50 billion, perhaps the largest swindle in Wall Street history. Mr Madoff, 70, a former Nasdaq stock chairman, was apparently turned in by his two sons and arrested on Thursday morning at his Manhattan apartment by the FBI. The FBI claims that three senior employees of Mr Madoff's investment firm - once a towering presence on Wall Street - turned up at his apartment on Wednesday to ask questions about the company's solvency. Two of them are believed to be his sons, Andrew and Mark, who have worked for their father for two decades. Mr Madoff told them that he was "finished", that he had "absolutely nothing", and that "it's all just one big lie". He said the investment arm of his firm was "basically a giant Ponzi scheme," and that it had been insolvent for years. A Ponzi scheme, named after the swindler Charles Ponzi, is a fraudulent investment operation that pays abnormally high returns to investors paid from money put into the scheme by subsequent investors, rather from real profits generated by share trading. The FBI complaint states that Mr Madoff told his sons he believed the losses from his scheme could exceed $50 billion. If that is the case, his fraud would be far greater than past Ponzi schemes and easily the greatest swindle perpetrated by one man.

Note: If a former Nasdaq chairman was committing this kind of blatant fraud while still the chairman of Nasdaq, what does it say about the level of corruption on Wall Street? For a treasure trove of reports from reliable sources exposing the realities of the Wall Street corruption, click here.

15 corporate chieftains each top $100 million in 5 years
2008-11-20, Denver Post/Wall Street Journal
http://www.denverpost.com/business/ci_11036514

The credit bubble has burst. The economy is tanking. Investors in the U.S. stock market have lost more than $9 trillion since its peak a year ago. But in industries at the center of the crisis, plenty of top officials managed to emerge with substantial fortunes. Fifteen corporate chieftains of large home-building and financial-services firms each reaped more than $100 million in cash compensation and proceeds from stock sales during the past five years, according to a Wall Street Journal analysis. Four of those executives, including the heads of Lehman Brothers Holdings Inc. and Bear Stearns Cos., ran companies that have filed for bankruptcy protection or seen their share prices fall more than 90% from their peak. The study ... showed that top executives and directors of the firms cashed out a total of more than $21 billion during the period. The issue of compensation and other rewards for corporate executives is front-and-center in the wake of the financial meltdown. In the tech bubble of the late 1990s, more than 50 individuals each made more than $100 million from selling shares just prior to the crash. Many had just founded companies that had never turned a profit. "The system tends to reward people for participating in bubbles," says Roy C. Smith, a finance professor at New York University's business school.

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

Panel grills credit raters over inflated ratings
2008-10-23, MSNBC/Associated Press
http://www.msnbc.msn.com/id/27326652

Executives and employees at the major credit ratings agencies were often aware of problems in the AAA grades awarded to thousands of mortgage-related securities whose downgrades helped plunge the nation into a financial meltdown. The companies — Standard & Poor, Moody’s and Fitch, Inc. — made enormous profits as they evaluated a ballooning number of mortgage-backed bonds, many of which were given top marks as long as housing prices went up. “The story of the credit rating agencies is a story of colossal failure,” said Rep. Henry Waxman, chairman of the House Oversight and Government Reform Committee. The California Democrat said, “Millions of investors rely on them for independent, objective assessments. The rating agencies broke this bond of trust, and federal regulators ignored the warning signs and did nothing to protect the public. The result is that our entire financial system is now at risk.” The companies are important because their high assessments assured investors that their money should be safe. The inflated ratings awarded to securities backed up by subprime loans led investors to buy them in enormous numbers. But now, most of these securities have been downgraded and the market for them has largely evaporated, contributing to the current crisis. The panel also heard former ratings agency executives say there’s an inherent conflict of interest in the industry because they’re paid by bond issuers instead of investors who trust their ratings to make smart investments.

Note: For many reports on corporate corruption from reliable sources, click here.

Wall Street's 'Disaster Capitalism for Dummies'
2008-10-21, MarketWatch.com (owned by Dow Jones)
http://www.marketwatch.com/news/story/14-reasons-main-street-loses/story.aspx...

Sorry to pop your bubble folks, but it no longer matters who's president. Why? The real "game changer" already happened. Democracy has been replaced by Wall Street's new "disaster capitalism." That's the big game-changer historians will remember about 2008, masterminded by Wall Street's ultimate "Trojan Horse," Hank Paulson. Congress simply handed over voting power and the keys to trillions in the Treasury to Wall Street's new "Disaster Capitalists" who now control "democracy." We let it happen. In one generation America has been transformed from a democracy into a strange new form of government, "Disaster Capitalism." Three decades of influence peddling in Washington ... accelerated under Reaganomics and went into hyperspeed under Bushonomics, both totally committed to a new disaster capitalism run privately by Wall Street and Corporate America. No-bid contracts in wars and hurricanes. A housing-credit bubble -- while secretly planning for a meltdown. Finally, the coup de grace: Along came the housing-credit crisis, as planned. Press and public saw a negative, a crisis. Disaster capitalists saw a huge opportunity. Yes, opportunity for big bucks and control of America. This end game was planned for years in secret war rooms on Wall Street, in Corporate America, in Washington and the Forbes 400. Naomi Klein summarizes the game in Shock Doctrine: the Rise of Disaster Capitalism. This "new economy" generates enormous profits feeding off other peoples' misery: Wars, terror attacks, natural catastrophes, poverty, trade sanctions, subprime housing meltdowns and all kinds of economic, financial and political disasters.

Note: The author of this highly critical commentary, Paul B. Farrell, is a well-known writer on finance and investment and a long-time columnist at The Wall Street Journal's sister-site MarketWatch.

Wealthy Americans Under Scrutiny in UBS Case
2008-06-06, New York Times
http://www.nytimes.com/2008/06/06/business/worldbusiness/06tax.html?partner=r...

One afternoon in April, six dozen wealthy Americans were entertained at a luncheon party in Midtown Manhattan, along with a special guest from Paris: Henri Loyrette, the director of the Louvre. The host of the exclusive gathering was the Swiss bank UBS, whose elite private bankers built a lucrative business in recent years by discreetly tending the fortunes of American millionaires and billionaires. But now, as the federal authorities intensify an investigation into offshore bank accounts, the secrets of this rarefied world are being dragged into the open — and UBS’s privileged clients are running scared. Under pressure from the authorities, UBS is considering whether to divulge the names of up to 20,000 of its well-heeled American clients, according to people close to the inquiry, a step that would have once been unthinkable to Swiss bankers, whose traditions of secrecy date to the Middle Ages. Federal investigators believe some of the clients may have used offshore accounts at UBS to hide as much as $20 billion in assets from the Internal Revenue Service. Doing so may have enabled these people to dodge at least $300 million in federal taxes on income from those assets, according to a government official connected with the investigation. The case could turn into an embarrassment for Marcel Rohner, the chief executive of UBS and the former head of its private bank, as well as for Phil Gramm, the former Republican senator from Texas who is now the vice chairman of UBS Securities, the Swiss bank’s investment banking arm. It also comes at a difficult time for UBS, which is reeling from $37 billion in bad investments, many of them linked to risky American mortgages.

Note: For an illuminating overview of the secret world of banking and finance, click here.

Lou Dobbs Tonight: NAFTA Superhighway
2008-05-28, CNN News
http://transcripts.cnn.com/TRANSCRIPTS/0805/28/ldt.01.html

[News anchor LOU DOBBS:] Open borders advocates are refusing to acknowledge rising evidence of plans for a NAFTA superhighway. Many in the mainstream media absolutely refuse to acknowledge the reality. The plans could be a major step toward that North American Union of the United States, Canada and Mexico. BILL TUCKER, CNN Correspondent: There is no NAFTA superhighway. Not officially. In Texas planning a development is under way for what are officially called transportation corridors. The Trans Texas Corridor, I-69, a combination of rail lines, utility lines, car and truck lanes, [is planned] to be as wide as three football fields laid end to end. It will be financed by a private foreign company ... who will then own the lease on the road and the revenue generated by the tolls. Texas may use eminent domain to lay claim to some of the land needed to build it. For an imaginary road there's a lot of money and effort involved [and] some very real opposition. TERRI HALL, TEXASTURF.ORG: There's just no doubt that this is happening. We've been to the public hearings. We've seen the presentations. We've seen the documents. We waded through them and there's a whole lot more groups besides just ours. And we've got Farm Bureau, Sierra Club, a whole host of groups from the left and the right. TUCKER: In Kansas a resolution opposing the superhighway overwhelmingly passed the State House.

Note: To watch a video of this Lou Dobbs Tonight segment, click here.

What Power Looks Like
2008-04-14, Newsweek magazine
http://www.newsweek.com/id/130637

[In] speaking [with New York Federal Reserve Bank president Timothy] Geithner while I was doing the research for my recently published book Superclass, he sketched in fascinating detail how the world's power elite rallies when the markets quake. Recalling an earlier crisis in global securities markets that he helped to manage, Geithner said the Fed brought together the leaders of the world's 14 major financial firms, from five countries, representing 95 percent of all the activity in global markets. The Swiss were there, the Germans were there, the British were there. Goldman Sachs chairman and CEO Lloyd Blankfein "jokingly called them 'the 14 families,' like in 'The Godfather'," says Geithner. "And we said to them, 'You guys have got to fix this problem. Tell us how you are going to fix it and we will work out some basic regime.' You ... need a critical mass of the right players. It is a much more concentrated world." Geithner's description of the financial elite in crisis mode came many months before the recent meltdown of Bear Stearns, yet foreshadowed [it] in an uncanny way. The people ... described by Geithner, plus a few thousand more like them, not only in business and finance, but also politics, the arts, the nonprofit world and other realms, are part of a new global elite that has emerged over the past several decades. I call it the "superclass." They have vastly more power than any other group on the planet. Each of the members is set apart by his ability to regularly influence the lives of millions of people in multiple countries worldwide. Each actively exercises this power, and often amplifies it through the development of relationships with other superclass members.

Note: For many revealing stories from reliable sources on secret societies of the world's most powerful people, click here.

The three trillion dollar war
2008-02-23, The Telegraph (One of the U.K.'s leading newspapers)
http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/articl...

The Bush Administration was wrong about the benefits of the war and it was wrong about the costs of the war. The president and his advisers [forecast] a quick, inexpensive conflict. Instead, we have a war that is costing more than anyone could have imagined. The cost of direct US military operations - not even including long-term costs such as taking care of wounded veterans - already exceeds the cost of the 12-year war in Vietnam and is more than double the cost of the Korean War. And, even in the best case scenario, these costs are projected to be almost ten times the cost of the first Gulf War, almost a third more than the cost of the Vietnam War, and twice that of the First World War. The only war in our history which cost more was the Second World War, when 16.3 million U.S. troops fought in a campaign lasting four years, at a total cost (in 2007 dollars, after adjusting for inflation) of about $5 trillion. Most Americans have yet to feel these costs. The price in blood has been paid by our voluntary military and by hired contractors. The price in treasure has, in a sense, been financed entirely by borrowing. Taxes have not been raised to pay for it - in fact, taxes on the rich have actually fallen. Deficit spending gives the illusion that the laws of economics can be repealed, that we can have both guns and butter. But of course the laws are not repealed. The costs of the war are real even if they have been deferred, possibly to another generation. From the unhealthy brew of emergency funding, multiple sets of books, and chronic underestimates of the resources required to prosecute the war, we have attempted to identify how much we have been spending - and how much we will, in the end, likely have to spend. The figure we arrive at is more than $3 trillion. Our calculations are based on conservative assumptions.

Note: For many reports from major media sources which reveal massive war profiteering, click here.

Stimulus Plan a Scam to Benefit the Rich
2008-02-03, San Francisco Chronicle (San Francisco's leading newspaper)
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/03/IN8LUO095.DTL

Congress is about to sell us the biggest fraud in American history. It's been highly touted as an economic stimulus bill that will help millions of Americans. As part of the bill, Congress is set to rush through an increase in the mortgage loan limits for Fannie Mae and Freddie Mac (and Federal Housing Administration insurance, too) - from $417,000 to $729,750 - the first step toward a massive financial disaster in which taxpayers will end up paying through the nose. Now, thanks to Congress, junk bond investors will be able to pawn off their bad debt to Fannie and Freddie. This shift will certainly doom Fannie Mae and Freddie Mac, so don't be surprised if we, the taxpayers, have to bail out poor Fannie and Freddie - to the tune of more than $1 trillion. The irony here is that the collapse in housing prices could make Fannie insolvent even without raising the loan limit. Increasing Fannie's limit is like going on a spending spree with your credit cards because you know you are going to file for bankruptcy in a few months. Only here the taxpayer is left holding the bag. Our children will pay interest on this debt in perpetuity. It is our debt. It is inescapable. In the coming months, Fannie and Freddie will buy up mortgages based on old, fraudulent appraisals and on loans with bogus inflated incomes. Unfortunately, many of these loans will still default. Expansion of Fannie and Freddie's reckless lending is exactly what Congress wants because it's plausibly deniable. Teary-eyed lawmakers can take to the airwaves a year from now and declare: "We had no idea Fannie could go under, but we can't cut and run now. Those same lawmakers won't mention the fact that they get paid far more by real estate lobbyists than they do from our Treasury.

Note: The author wrote this article seven months before the collapse of Fannie Mae and eight months before the huge banking bailout. For more news articles suggestion major manipulations to transfer public tax monies to the banking sector, click here.

It's all Friedman's doing
2007-09-09, Toronto Star (Toronto's leading newspaper)
http://www.thestar.com/entertainment/article/254550

[Naomi Klein in her new book The Shock Doctrine] argues persuasively that over the last 40 years, no single thinker has shaped the economic and political policies of corporate CEOs, military dictators, presidents, prime ministers and bankers more than [Milton] Friedman. His thesis was simple: The job of governments is to facilitate the free flow of capital across national borders by removing any impediments to trade [and establishing] a drastic regimen of market deregulation, free trade treaties, spending cuts to social programs, the breaking of labour unions and mass privatization of publicly owned resources and industries ... chiefly through the careful manipulation of collective crises such as wars, military coups, natural disasters and economic recessions and depressions. For Friedman's ideas to be implemented, a nation's existing economy and civic society must first be reduced to a state of tabula rasa before being rebuilt according to the [Chicago School] model. [Klein contends] that this capitalist doctrine also has its roots in a series of mind-control experiments performed on often unwilling patients by psychiatrist Ewan Cameron, working out of McGill University in the late 1950s. He imposed a sustained regimen of sensory deprivation, isolation, enforced sleep and a cocktail of LSD, PCP, insulin and barbiturates [and] a barrage of electroshock therapy. The CIA, which paid for Cameron's experiments, modified these techniques for use in prisoner-interrogation sessions. The results were so good that the CIA taught the methods to the Latin American security forces in charge of reprogramming anyone who dared resist the devastating free market "reforms" that swept through South and Central America after Augusto Pinochet's successful, Chicago-School inspired (and CIA-sponsored) coup of populist leader Salvador Allende in 1973.

Special Note: For an incredibly revealing interview on the role of the Milton Friedman and the Chicago school of economists in promoting radical change against democracy by using states of public shock to push through unwanted changes, don't miss the powerful talk with Naomi Klein available here.

1934: The Plot Against America
2007-07-28, Harper's magazine
http://www.harpers.org/archive/2007/07/hbc-90000651

In November 1934, federal investigators uncovered an amazing plot involving some two dozen senior businessmen, a good many of them Wall Street financiers, to topple the government of the United States and install a fascist dictatorship. An alert FDR shut it down but stopped short of retaliatory measures against the plotters. A key element of the plot involved [Smedley Butler,] a retired prominent general who was to have raised a private army of 500,000 men from unemployed veterans and who blew the whistle when he learned more of what the plot entailed. The plot was heavily funded and well developed and had strong links with fascist forces abroad. A story in the New York Times and several other newspapers reported on it, and a special Congressional committee was created to conduct an investigation. The records of this committee were scrubbed and sealed away in the National Archives, where they have only recently been made available. The Congressional committee kept the names of many of the participants under wraps and no criminal action was ever brought against them. But a few names have leaked out. And one is Prescott Bush, the grandfather of the incumbent president. Prescott Bush was ... deep into the business of the Hamburg-America Lines, and had tight relations throughout this period with the new Government that had come to power in Germany a year earlier under Chancellor Adolph Hitler. It appears that Bush was to have formed a key liaison for the group with the new German government. The role of the most powerful political dynastic family in the nation’s history in this whole affair is shocking.

Note: You can listen to the BBC Radio broadcast on Bush/Nazi ties by clicking here. And to watch a History Channel documentary on the coup plot, click here. U.S. Marine Corps General Smedley Butler was the author of "War is a Racket," summarized here.

Indebted
2007-03-18, Washington Times
http://www.washingtontimes.com/op-ed/20070317-113251-1533r.htm

The U.S. current-account deficit is the broadest measure of America's activity in international trade and global finance. It totaled $857 billion last year, the Commerce Department reported last week. For the fifth year in a row, the nation's current-account deficit set a record. As Federal Reserve Chairman Ben Bernanke testified last year before Congress: "The immediate implication [of the nation's soaring current-account deficit] is that the U.S. economy is consuming more than it's producing, and the difference is being made up by imports from abroad, which in turn is being financed by borrowing from abroad." Last year's current-account deficit meant that Americans effectively borrowed $3.3 billion every single working day to fund the gap between their spending and their income. The accumulation of ever larger current-account deficits over the past quarter century has played an indispensable role in transforming the United States from the world's largest creditor nation into the planet's biggest debtor nation. Specifically, in 1982, America's net international investment position was a positive $236 billion. That meant that foreigners owed us nearly a quarter of a trillion dollars more than we owed them. At the end of 2005 (the latest year for which data are available), the net international investment position of the United States was a negative $2.55 trillion. In other words, we owed foreigners more than $2.5 trillion than they owed us. Since 1994 alone, America's net international investment position has deteriorated by more than $2.4 trillion.

Note: The Washington Times was the only media source to report on this highly important story. Why? For a possible answer, click here. For more underreported, yet massive government corruption, click here.

To Fill His Shoes, Mr. Bernanke, Learn to Dance
2005-10-30, Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2005/10/28/AR20051028024...

In his 18 years as chairman of the Federal Reserve, Greenspan has occasionally drawn criticism, but no one disputes his technical prowess or sniffs at his track record of low inflation and steady, almost uninterrupted growth. Enter Ben S. Bernanke, President Bush's nominee to take Greenspan's place. The former Princeton economics professor is currently the chairman of the president's Council of Economic Advisers. The following are excerpts from [a speech] by Ben S. Bernanke. "On Milton Friedman's Ninetieth Birthday," Nov. 8, 2002: "I first read 'A Monetary History of the United States' early in my graduate school years at M.I.T. I was hooked, and I have been a student of monetary economics and economic history ever since. Friedman and [his co-author Anna J.] Schwartz made the case that the economic collapse of 1929-33 was the product of the nation's monetary mechanism gone wrong. What I take from their work is the idea that monetary forces, particularly if unleashed in a destabilizing direction, can be extremely powerful. "I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."

Note: The chairman of the Federal Reserve Board admits here that the Federal Reserve caused the Great Depression. The Federal Reserve is owned by powerful private banks. It was created in 1913 largely in secrecy and fought by many who understood the dangers involved. For more reliable information on this, click here.

How Bush's grandfather helped Hitler's rise to power
2004-09-25, The Guardian (One of the UK's leading newspapers)
http://www.guardian.co.uk/usa/story/0,12271,1312540,00.html

George Bush's grandfather, the late US senator Prescott Bush, was a director and shareholder of companies that profited from their involvement with the financial backers of Nazi Germany. Newly discovered files in the US National Archives [confirm] that a firm of which Prescott Bush was a director was involved with the financial architects of Nazism. His business dealings...continued until his company's assets were seized in 1942 under the Trading with the Enemy Act. There has been a steady internet chatter about the "Bush/Nazi" connection, much of it inaccurate and unfair. But the new documents, many of which were only declassified last year, show that even after America had entered the war...he worked for and profited from companies closely involved with the very German businesses that financed Hitler's rise to power. Remarkably, little of Bush's dealings with Germany has received public scrutiny, partly because of the secret status of the documentation involving him. But now [a] multibillion dollar legal action for damages by two Holocaust survivors against the Bush family, and the imminent publication of three books on the subject are threatening to make Prescott Bush's business history an uncomfortable issue for his grandson. Three sets of archives spell out Prescott Bush's involvement. All three are readily available, thanks to the efficient US archive system. Like his son, George, and grandson, George W, he went to Yale where he was, again like his descendants, a member of the secretive and influential Skull and Bones student society.

U.S. corporations paying less in taxes
2004-09-23, MSNBC/Forbes
http://msnbc.msn.com/id/6080561/

The effective tax rate for America's largest and most profitable corporations has sharply declined in recent years, and one third of such companies paid zero taxes -- or less -- in at least one of the last three years. In 2003 alone, 46 of the 275 companies...paid no taxes at all in 2003, despite reporting a total of $42.6 billion in pre-tax profits. Indeed, these companies received $5.4 billion in tax rebates that year. Half of the "tax-break dollars" over the three-year period went to just 25 companies. All told, 82 companies paid zero or negative taxes in at least one of the last three years and 28, including Boeing, paid negative taxes for the entire period. The largest beneficiaries were some of the most profitable companies: General Electric, SBC Communications, Citigroup, IBM and Microsoft. Of the 10 most profitable U.S.-based companies on the Forbes 2000, only Wal-Mart and Freddie Mac do not appear on the study's list of top 25 tax break beneficiaries. At the same time, IRS data indicates that the overall share of federal taxes paid by corporations in now less than 10 percent, down from nearly 13 percent in 1997. This trend occurred against a backdrop of rising corporate earnings. The study attributes the trend to the widening availability of offshore tax shelters and other lawful avoidance techniques.

Economist tallies swelling cost of Israel to US
2002-12-09, Christian Science Monitor
http://www.csmonitor.com/2002/1209/p16s01-wmgn.html

Since 1973, Israel has cost the United States about $1.6 trillion. If divided by today's population, that is more than $5,700 per person. This is an estimate by Thomas Stauffer, a consulting economist in Washington. Mr. Stauffer has tallied the total cost to the US of its backing of Israel in its drawn-out, violent dispute with the Palestinians. The bill adds up to more than twice the cost of the Vietnam War. Israel is the largest recipient of US foreign aid. It has been getting $3 billion a year for years. Israel has been given $240 billion since 1973, Stauffer reckons. In addition, the US has given Egypt $117 billion and Jordan $22 billion in foreign aid in return for signing peace treaties with Israel. Stauffer wonders if Americans are aware of the full bill for supporting Israel since some costs, if not hidden, are little known. Other US help includes: • Israel buys discounted, serviceable "excess" US military equipment. Stauffer says these discounts amount to "several billion dollars" over recent years. • Israel uses roughly 40 percent of its $1.8 billion per year in military aid, ostensibly earmarked for purchase of US weapons, to buy Israeli-made hardware. It also has won the right to require the Defense Department or US defense contractors to buy Israeli-made equipment or subsystems, paying 50 to 60 cents on every defense dollar the US gives to Israel. US help ... has enabled Israel to become a major weapons supplier. Weapons make up almost half of Israel's manufactured exports. US defense contractors often resent the buy-Israel requirements and the extra competition subsidized by US taxpayers. Stauffer [has] been assisted in this research by a number of mostly retired military or diplomatic officials who do not go public for fear of being labeled anti-Semitic.

Note: Israel has a population of 6.5 million. Yearly foreign aid to Israel has generally varied between $2.5 to 3.0 billion for many years (it's difficult to locate these figures on U.S. government websites). If you do the math, U.S. taxpayers are giving every man, woman, and child, in Israel about $400/year -- over ten times the per capita rate paid to any other country. That's quite a tax break, especially considering they are not Americans.

The demise of the dollar
2009-10-06, The Independent (One of the UK's leading newspapers)
http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798...

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar. Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars. The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets. The Americans ... are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security." This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region's conflicts into a battle for great power supremacy.

Note: The publication of this article caused the value of the dollar to fall and the price of gold to rise worldwide. For important ideas on how to reform the role of money in the world, click here.

Michael Moore blames capitalism for meltdown
2009-09-18, San Francisco Chronicle (San Francisco's leading newspaper)
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/09/18/MN0V19OTKP.DTL

Two weeks before his movie "Capitalism: A Love Story" opens nationwide, filmmaker Michael Moore swept through San Francisco ... with a rally, a Commonwealth Club appearance and an unlikely new antagonist: Democrats. When Moore criticized Sen. Chris Dodd, D-Conn., this week on NBC's "The Jay Leno Show" for getting "sweetheart loans" from a mortgage company he was charged with overseeing, Moore said he got a call from a top Democratic Party official telling him to "back off." But Moore, a longtime supporter of a single-payer health plan, didn't back off. In an interview with The Chronicle, he chided House Speaker Nancy Pelosi for not being aggressive enough in pushing health care reform and ripped President Obama's financial team as "the foxes guarding the henhouse." There is plenty of conservative-bashing in the film, which focuses on capitalism as the "evil" at the root of the financial crisis, but the film also refers to Democratic leaders as the "deliverymen" of the government bailouts for financially troubled Wall Street firms. In his new film, Moore focuses on the investment house Goldman Sachs as a main beneficiary of capitalism's largesse. He notes that Treasury Secretary Timothy Geithner and senior White House economic adviser Lawrence Summers are proteges of Robert Rubin, longtime Goldman executive and President Bill Clinton's Treasury secretary. "The fact that Geithner and Summers are part of this administration makes everything that happens open to question and needs our vigilance," Moore said, "because, literally now, the foxes are guarding the henhouse."

Note: For a review of Michael Moore's new film, "Capitalism: a Love Story," click here.

Why Are Corporate Insiders Selling Their Shares?
2009-09-08, Time magazine
http://www.time.com/time/business/article/0,8599,1920635,00.html

Any time corporate executives and directors are heavily selling their company's stock there's reason for concern. And lately they've been doing just that. The last time insider selling was as high as it is now was in the period from late 2006 to late 2007. It was right after that insider-selling surge that the stock market began its long painful decline, says Charles Biderman, CEO of TrimTabs, an independent institutional research firm. Biderman believes that insider trades shoot higher when there's a disconnect between broad market opinions and what business executives feel in their gut. "When [insiders think] things are going better than most people think, they buy stock," he says. "When things are going worse than people think, they sell." That's to say, insiders have no crystal ball but they often have access to up-to-the-minute sales data as well as firsthand impressions from their sales managers — and that gives them an inside track on what's happening in the economy. When this special access leads them to be big sellers of their stock, well, it's a vote of no confidence in their employer's near-term future. Biderman has measured the ratio of insider selling to buying since 2004, and says historically the ratio is 7 to 1. (Insiders almost always sell more than they buy because they receive stock as part of their compensation.) Right now the ratio is 30, one of the highest he's recorded. November 2007 is the last time the ratio even came close, at 24.

Note: According to the New York Times, insider trading levels are at the "highest levels since the firm started keeping numbers in 2004." Why does this Time article state they were higher in 2006 to 2007? For a treasure trove of revealing reports from reliable sources on the realities of the Wall Street bailout, click here.

Revelations of the wholesale greed and blatant transgressions of Wall Street
2009-04-03, PBS Bill Moyers Journal
http://www.pbs.org/moyers/journal/04032009/transcript1.html

BILL MOYERS: For months now, revelations of the wholesale greed and blatant transgressions of Wall Street have reminded us that "The Best Way to Rob a Bank Is to Own One." In fact, the man you're about to meet wrote a book with just that title. Bill Black, ... what's your definition of fraud? WILLIAM K. BLACK: Fraud is deceit. And the essence of fraud is, "I create trust in you, and then I betray that trust, and get you to give me something of value." And as a result, there's no more effective acid against trust than fraud, especially fraud by top elites, and that's what we have. Well, The way that you do it is to make really bad loans, because they pay better. Then you grow extremely rapidly, in other words, you're a Ponzi-like scheme. And the third thing you do is we call it leverage. That just means borrowing a lot of money, and the combination creates a situation where you have guaranteed record profits in the early years. That makes you rich, through the bonuses that modern executive compensation has produced. It also makes it inevitable that there's going to be a disaster down the road. BILL MOYERS: So you're ... saying that CEOs of some of these banks and mortgage firms in order to increase their own personal income, deliberately set out to make bad loans? WILLIAM K. BLACK: Yes. BILL MOYERS: If I wanted to go looking for the parties to this, with a good bird dog, where would you send me? WILLIAM K. BLACK: Well, that's exactly what hasn't happened. We haven't looked, all right? You'd look at the specialty lenders. The lenders that did almost all of their work in the sub-prime and what's called Alt-A, liars' loans.

Note: William K. Black is the former senior regulator who cracked down on banks during the savings and loan crisis of the 1980s. He is now an Associate Professor of Economics and Law at the University of Missouri. The video of this fascinating interview is available here. For a powerfully revealing archive of reports from reliable sources on the hidden realities of the financial bailout, click here.

Hidden Pension Fiasco May Foment Another $1 Trillion Bailout
2009-03-03, Bloomberg News
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=alwTE0Z5.1EA

Public pension funds across the U.S. are hiding the size of a crisis that’s been looming for years. Retirement plans play accounting games with numbers, giving the illusion that the funds are healthy. The paper alchemy gives governors and legislators the easy choice to contribute too little or nothing to the funds, year after year. The misleading numbers posted by retirement fund administrators help mask this reality: Public pensions in the U.S. had total liabilities of $2.9 trillion as of Dec. 16, according to the Center for Retirement Research at Boston College. Their total assets are about 30 percent less than that, at $2 trillion. With stock market losses this year, public pensions in the U.S. are now underfunded by more than $1 trillion. That lack of funds explains why dozens of retirement plans in the U.S. have issued more than $50 billion in pension obligation bonds during the past 25 years -- more than half of them since 1997 -- public records show. The quick fix for pension funds becomes a future albatross for taxpayers. The public gets nothing from pension bonds -- other than a chance to at least temporarily avoid paying for higher pension fund contributions. Pension bonds portend the possibility of steep tax increases. By law, states must guarantee public pension fund debts. “What appears to be a riskless strategy is actually very risky,” says David Zion, director of accounting research for New York-based Credit Suisse Holdings USA Inc. “If the returns on the pension bond-financed assets don’t exceed the cost of servicing the debt, the taxpayers bear the brunt.”

Note: The risks to pension funds may require yet another huge public bailout. Where will the money come from? For lots more on the realities of the Wall Street bailout, click here.

Stimulus Plan Places New Limits on Wall St. Bonuses
2009-02-14, New York Times
http://www.nytimes.com/2009/02/14/business/economy/14pay.html?partner=rss&emc...

Buried deep inside the ... economic stimulus bill ... is some bitter medicine for companies that have received financial bailout funds. Over staunch objections from the Obama administration, Senate Democrats inserted a provision that would impose restrictions on executive bonuses at financial institutions that are much tougher than those proposed 10 days ago by the Treasury Department. The provisions would prohibit cash bonuses and almost all other incentive compensation for the five most-senior officers and the 20 highest-paid executives at large companies that receive money under TARP. The restriction with the most bite would bar top executives from receiving bonuses that exceed one-third of their annual pay. The provision, written by Sen. Chris Dodd, D-Conn., highlighted the growing wrath ... over the lavish compensation that top Wall Street firms and big banks awarded to senior executives at the same time that many of the companies, teetering on the brink of insolvency, received taxpayer-paid bailouts. "The decisions of certain Wall Street executives to enrich themselves at the expense of taxpayers have seriously undermined public confidence," Dodd said Friday. "These tough new rules will help ensure that taxpayer dollars no longer effectively subsidize lavish Wall Street bonuses." Top economic advisers to President Obama adamantly opposed the pay restrictions, according to congressional officials.

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

Bad bank + toxic debts = moral hazard x10
2009-02-02, MarketWatch.com
http://www.marketwatch.com/news/story/Bad-bank-toxic-debt-one/story.aspx?guid...

BusinessWeek says Paulson/Bush & Co. wasted $350 billion in TARP money ... the Congressional Budget Office and GOP say Obama & Co. will waste another $800 billion on "non-stimulus" programs ... Nobel economist [Joseph Stiglitz] calls [the Bad Bank] plan "cash for trash" ... Warning, you are entering a bizarre space-time continuum ... where Wall Street makes random quantum leaps between metaphoric realities. In the "Lost" television series we're transported into a parallel reality, a perfect metaphor for today's global economic meltdown, which is misunderstood and grossly mismanaged. Wall Street crashed ... on the "Lost Island ... of Manhattan," the former center of world banking. The collateral damage has been enormous: Freddie Mac, Fannie Mae, Lehman Brothers, Bear Stearns, global trade, Iceland. [Wall Street's] clueless leaders ... are "Lost" with no bottom, no recovery, no strategy in sight. A new president, a secretive Fed and an old Congress are throwing around taxpayer trillions like free candy ... on top of Bush's "$10 Trillion Hangover" ...after a clueless Wall Street wrote off trillions in toxic debt, then wasted $350 billion in TARP bailout money, buying $50 million private jets, attending golf outings at exclusive resorts, spending millions on CEO's office renovations and paying $18 billion in year-end bonuses. Hope masks denial: Even President Obama's consultant [Warren] Buffett acknowledges that the proposed stimulus plan "might not work." The stimulus might not work? What if this last bullet is a blank? Should you prepare for the worst-case scenario?

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

What Red Ink? Wall Street Paid Hefty Bonuses
2009-01-29, New York Times
http://www.nytimes.com/2009/01/29/business/29bonus.html?partner=rss&emc=rss&p...

By almost any measure, 2008 was a complete disaster for Wall Street — except, that is, when the bonuses arrived. Despite crippling losses, multibillion-dollar bailouts and the passing of some of the most prominent names in the business, employees at financial companies in New York, the now-diminished world capital of capital, collected an estimated $18.4 billion in bonuses for the year. That was the sixth-largest haul on record, according to a report released Wednesday by the New York State comptroller. Some bankers took home millions last year even as their employers lost billions. The comptroller’s estimate, a closely watched guidepost of the annual December-January bonus season, is based largely on personal income tax collections. It excludes stock option awards that could push the figures even higher. The state comptroller, Thomas P. DiNapoli, said it was unclear if banks had used taxpayer money for the bonuses, a possibility that strikes corporate governance experts, and indeed many ordinary Americans, as outrageous. He urged the Obama administration to examine the issue closely. “The issue of transparency is a significant one, and there needs to be an accounting about whether there was any taxpayer money used to pay bonuses or to pay for corporate jets or dividends or anything else,” Mr. DiNapoli said in an interview.

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

U.S. moving toward czarism, away from democracy
2009-01-18, San Francisco Chronicle (San Francisco's leading newspaper)
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/01/18/INGP158S4G.DTL

Every patriot should be concerned about the intensifying efforts to supplant democracy with something far more authoritarian. Call it American czarism. Czars - i.e., policymakers granted extralegal, cross-agency powers - have become increasingly prevalent in our government over the past century. Until now, this slow lurch toward czarism has primarily reflected the ancient, almost innate human desire for power and paternalistic leadership. In recent years, this culture of "presidentialism," as Vanderbilt Professor Dana Nelson calls it, has justified the Patriot Act, warrantless wiretaps and a radical theory of the "unitary executive" that aims to provide a jurisprudential rationale for total White House supremacy over all government. But only in the past three months has American czarism metastasized from a troubling slow-growth tumor to a potentially deadly cancer. In October, Congress relinquished its most basic oversight powers and gave Treasury Secretary Henry Paulson sole authority to dole out billions of bailout dollars to Wall Street. At the same time, it did nothing when Federal Reserve chairman Ben Bernanke used fiats to commit $5 trillion worth of new money, loan guarantees and loosened lending requirements ... all while he refused to tell the public who is receiving the largesse. Indeed, the Economist magazine's prediction that the "economic crisis may increase the attractiveness of the Chinese model of authoritarian capitalism" is coming true right here at home, as we seem ever more intent on replicating - rather than resisting - that model.

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

Madoff's fund may not have made a single trade
2009-01-15, Reuters News
http://www.forbes.com/afxnewslimited/feeds/afx/2009/01/15/afx5928915.html

Bernie Madoff's investment fund may never have executed a single trade, industry officials say, suggesting detailed statements mailed to investors each month may have been an elaborate mirage in a $50 billion fraud. An industry-run regulator for brokerage firms said ... there was no record of Madoff's investment fund placing trades through his brokerage operation. That means Madoff either placed trades through other brokerage firms, a move industry officials consider unlikely, or he was not executing trades at all. 'Our exams showed no evidence of trading on behalf of the investment advisor, no evidence of any customer statements being generated by the broker-dealer,' said Herb Perone, spokesman for the Financial Industry Regulatory Authority. Each month, Madoff sent out elaborate statements of trades conducted by his broker-dealer. There also appear to be discrepancies between monthly statements sent to investors and the actual prices at which the stocks traded on Wall Street. To some, the numbers did not add up. About 10 years ago, Harry Markopolos, then chief investment officer at Rampart Investment Management Co in Boston, asked risk management consultant Daniel diBartolomeo to run Madoff's numbers after Markopolos tried to emulate Madoff's strategy. DiBartolomeo ran regression analyses and various calculations, but failed to reconcile them. For a decade, Markopolos raised the issue with the U.S. Securities and Exchange Commission, which has come under fire in Congress in recent weeks for failing to act on Markopolos's warnings.

Note: For lots more on corporate corruption from reliable, verifiable sources, click here.

Investors dump $89B in U.S. securities in historic fire sale
2009-01-04, USA Today
http://www.usatoday.com/money/markets/2009-01-04-foreign-investors-us-securit...

The deep river of private money that helped knit together the global economy has abruptly dried up, new government figures show. As the global financial crisis grew more severe this summer, foreigners sold almost $90 billion of U.S. securities — the greatest quarterly fire sale by overseas investors since the government began keeping track in 1960. U.S. investors also are retrenching; they unloaded about $85 billion worth of foreign holdings in the quarter, says the Commerce Department's Bureau of Economic Analysis. "We've had a global panic. Everyone is pulling their money home," says economist Adam Posen of the Peterson Institute in Washington, D.C. That's bad for economic growth in the U.S. because it threatens to starve capital-hungry companies and entrepreneurs. But it's especially serious for emerging-market countries that rely heavily on outside financing. Capital flows into countries such as South Korea, Turkey and Brazil were evaporating even before the mid-September Lehman Bros. bankruptcy made things worse. The reversal of private capital flows signals an abrupt end to a nearly two-decades-long era of financial globalization, says economist Brad Setser of the Council on Foreign Relations. Private flows into and out of the U.S. for purchases of stocks, corporate bonds and federal agency bonds have dropped from around 18% of economic output to near zero "in a remarkably short period of time," Setser says.

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

Credit-card industry may cut $2 trillion lines: analyst
2008-12-01, Reuters News
http://www.reuters.com/article/topNews/idUSTRE4B01HI20081201

The U.S. credit-card industry may pull back well over $2 trillion of lines over the next 18 months due to risk aversion and regulatory changes, leading to sharp declines in consumer spending, prominent banking analyst Meredith Whitney said. The credit card is the second key source of consumer liquidity, the first being jobs, the Oppenheimer & Co analyst noted. "In other words, we expect available consumer liquidity in the form of credit-card lines to decline by 45 percent." Closing millions of accounts, cutting credit lines and raising interest rates are just some of the moves credit card issuers are using to try to inoculate themselves from a tsunami of expected consumer defaults. A consolidated U.S. lending market that is pulling back on credit is also posing a risk to the overall consumer liquidity, Whitney said. Mortgages and credit cards are now dominated by five players who are all pulling back liquidity, making reductions in consumer liquidity seem unavoidable, she said. "We are now beginning to see evidence of broad-based declines in overall consumer liquidity. Already, we have witnessed the entire mortgage market hit a wall, and we believe it will, for the first time ever, show actual shrinkage over the next few months," she wrote. "In a country that offers hundreds of cereal and soda pop choices, the banking industry has become one that offers very few choices", Whitney wrote in a note dated November 30. "Pulling credit when job losses are increasing by over 50 percent year-over-year in most key states is a dangerous and unprecedented combination, in our view," the analyst said.

Note: This article, in pointing out that the banking industry offers few choices for consumers, fails to mention that the industry is rapidly becoming extremely concentrated, with major bank failures and takeovers accelerating due to the financial crisis on Wall Street. And the bailout from the Fed and Treasury has encouraged this concentration through huge tax breaks and risk protections. For many revealing reports on the Wall Street bailout from reliable sources, click here.

Economic rescue could cost $8.5 trillion
2008-11-30, Los Angeles Times
http://www.latimes.com/business/la-fi-pricetag30-2008nov30,0,7549258.story

With its decision last week to pump an additional $1 trillion into the financial crisis, the government eliminated any doubt that [it has] no hesitation in pledging to spend previously almost unimaginable sums of money and running up federal budget deficits on a scale not seen since World War II. Indeed, analysts warn that the nation's next financial crisis could come from the staggering cost of battling the current one. Just last week, new initiatives added $600 billion to lower mortgage rates, $200 billion to stimulate consumer loans and nearly $300 billion to steady Citigroup, the banking conglomerate. That pushed the potential long-term cost of the government's varied economic rescue initiatives, including direct loans and loan guarantees, to an estimated total of $8.5 trillion -- half of the entire economic output of the U.S. this year. The spending already has had a dramatic effect on the federal budget deficit, which soared to a record $455 billion last year and began the 2009 fiscal year with an amazing $237-billion deficit for October alone. Analysts say next year's budget deficit could easily bust the $1-trillion barrier. "I didn't think we'd see that for a long time," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. "There's a huge risk of another economic crisis, a debt crisis, once we get on the other side of this one." Once the financial crisis eases, higher interest rates and soaring inflation will be risks.

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

Citigroup gets a monetary lifeline from feds
2008-11-25, San Francisco Chronicle (San Francisco's leading newspaper)
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/11/24/BUST14B71M.DTL

The bailouts keep coming, and they seem to be getting worse for taxpayers. The deal worked out over the weekend to prevent the collapse of Citigroup "is a terrible deal for taxpayers," says Campbell Harvey, a Duke University global finance professor. "Some intervention was necessary. But the terms of the intervention basically shafted the U.S. taxpayer." Under the deal, the U.S. government will invest $20 billion in Citigroup preferred stock (on top of its previous $25 billion capital injection from the Troubled Asset Relief Program) and guarantee up to $306 billion in mortgage and other assets. Citigroup would absorb the first $29 billion in losses on that asset pool. Losses exceeding $29 billion would be shared 90 percent by the government and 10 percent by Citigroup. What do taxpayers get for taking on this risk? Citigroup will pay an 8 percent dividend on the preferred stock or $560 million a year. By comparison, when Warren Buffett's Berkshire Hathaway recently invested $5 billion in Goldman Sachs and $3 billion in General Electric, it got preferred stock that pays a 10 percent dividend. The government also gets warrants to purchase about $2.7 billion worth of Citigroup common stock at $10.61 per share. Citigroup's shares closed at $5.95 per share Monday, up $2.18 from Friday. For the warrants to become profitable, the common shares would have to nearly double.

Note: The answer to the question of what taxpayers get should be essentially nothing. Only Citigroup shareholders will see the benefits mentioned, and very few taxpayers are shareholders. Money is being thrown around like never before. For many revealing reports on the realities of the Wall Street bailout, click here.

Financial Crisis Tab Already In The Trillions
2008-11-18, CNBC
http://www.cnbc.com/id/27719011

Given the speed at which the federal government is throwing money at the financial crisis, the average taxpayer, never mind member of Congress, might not be faulted for losing track. CNBC, however, has been paying very close attention and keeping a running tally of actual spending as well as the commitments involved. Try $4.28 trillion dollars. That's $4,284,500,000,000 and more than what was spent on WW II, if adjusted for inflation, based on our computations from a variety of estimates and sources. Not only is it an astronomical amount of money, it's a complicated cocktail of budgeted dollars, actual spending, guarantees, loans, swaps and other market mechanisms by the Federal Reserve, the Treasury and other offices of government taken over roughly the last year, based on government data and news releases. Strictly speaking, not every cent is a direct result of what's called the financial crisis, but it is arguably related to it. Some 68-percent of the sum falls under the Federal Reserve's umbrella, while another 16 percent is the under the Troubled Asset Relief Program, TARP, as defined under the Emergency Economic Stabilization Act, signed into law in early October. The TARP alone is bigger than virtually any other US government endeavor dating back to the Louisiana Purchase.

Note: That's over $10,000 per man, woman, and child in the U.S. Click on the link above to view a highly informative slideshow, the "Biggest Budget Items in US History," comparing the Wall Street bailout to famous historic government expenditures, and a chart, the "Financial Crisis Balance Sheet," detailing the many components of the bailout. For many key articles revealing the hidden realities of the bailout, click here.

No curbs on Wall Street pay despite meltdown
2008-10-24, San Francisco Chronicle/Associated Press
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/10/24/national/a143651D...

Despite the Wall Street meltdown, the nation's biggest banks are preparing to pay their workers as much as last year or more, including bonuses tied to personal and company performance. So far this year, nine of the largest U.S. banks, including some that have cut thousands of jobs, have seen total costs for salaries, benefits and bonuses grow by an average of 3 percent from a year ago, according to an Associated Press review. "Taxpayers have lost their life savings, and now they are being asked to bail out corporations," New York Attorney General Andrew Cuomo said of the AP findings. "It's adding insult to injury to continue to pay outsized bonuses and exorbitant compensation." That there is a rise in pay, or at least not a pronounced dropoff, from 2007 is surprising because many of the same companies were doing some of their best business ever, at least in the first half of last year. In 2008, each quarter has been weaker than the last. "There are, of course, expectations that the payouts should be going down," David Schmidt, a senior compensation consultant at James F. Reda & Associates. "But we haven't seen that show up yet." Some banks are setting aside large amounts. At Citigroup, which has cut 23,000 jobs this year amid the crisis, pay expenses for the first nine months of this year came to $25.9 billion, 4 percent more than the same period last year. Typically, about 60 percent of Wall Street pay goes to salary and benefits, while about 40 percent goes to end-of-the-year cash and stock bonuses that hinge on performance, both for the individual and the company.

Note: For lots more on the Wall Street bailout, click here.

U.S. Is Said to Be Urging New Mergers in Banking
2008-10-21, New York Times
http://www.nytimes.com/2008/10/21/business/21plan.html?partner=rssuserland&em...

In a step that could accelerate a shakeout of the nation’s banks, the Treasury Department hopes to spur a new round of mergers by steering some of the money in its $250 billion rescue package to banks that are willing to buy weaker rivals, according to government officials. As the Treasury embarks on its unprecedented recapitalization, it is becoming clear that the government wants not only to stabilize the industry, but also to reshape it. Two senior officials said the selection criteria would include banks that need more capital to finance acquisitions. “Treasury doesn’t want to prop up weak banks,” said an official who spoke on condition of anonymity, because of the sensitivity of the matter. “One purpose of this plan is to drive consolidation.” With bankers traumatized by the credit crisis and the loss of investor confidence, officials said, there are plenty of banks open to selling themselves. The hurdle is a lack of well-capitalized buyers. Stable national players like Bank of America, JPMorgan Chase, and Wells Fargo are already digesting acquisitions. A second group of so-called super-regional banks are well positioned to take over their competitors, officials said, but have been reluctant to undertake or unable to complete deals. By offering capital at a favorable rate, the government may encourage them to expand.

Note: So the U.S. government is using billions of taxpayer dollars to support megamergers which create less competition and more monopolistic conditions. Hmmmm. Is that what the taxpayers really want? For lots more highly revealing reports on the Wall Street bailout, click here.

Banks Are Likely to Hold Tight to Bailout Money
2008-10-17, New York Times
http://www.nytimes.com/2008/10/17/business/17bank.html?partner=rssuserland&em...

All of the combined profits that major banks earned in recent years have vanished. Since mid-2007, when the credit crisis erupted, the country’s nine largest banks have written down the value of their troubled assets by a combined $323 billion. The problems that began with home mortgages, analysts say, are migrating to auto, credit card and commercial real estate loans. The deepening red ink underscores a crucial question about the government’s plan: Will lenders deploy their new-found capital quickly, as the Treasury hopes, and unlock the flow of credit through the economy? Or will they hoard the money to protect themselves? John A. Thain, the chief executive of Merrill Lynch, said on Thursday that banks were unlikely to act swiftly. “We will have the opportunity to redeploy that,” Mr. Thain said of the new capital. “But at least for the next quarter, it’s just going to be a cushion." For every dollar the banks earned during the industry’s most prosperous years, they have now wiped out $1.06. [Treasury Secretary Henry M.] Paulson unveiled plans to provide $125 billion to nine banks on terms that were more favorable than they would have received in the marketplace. The government, however, has offered no written requirements about how or when the banks must use the money. “There is no express statutory requirement that says you must make this amount of loans,” said John C. Dugan, the comptroller of the currency. The banks could use the money from the government for any number of things. Some analysts say the banks may use it to acquire weaker competitors. Others say they might use it to avoid painful cost-cutting. And still others say the banks may sit on the capital.

Note: With no requirements placed on how the bailout money is to be used, what is to stop the banks from using taxpayers's money to inflate the bonuses to top executives, or to increase political campaign contributions to Congress members in return for future favorable legislation?

Outrage Leads AIG To Cancel Second Luxury Retreat
2008-10-09, ABC News
http://www.abcnews.go.com/Blotter/story?id=5994567

Battered by outrage over the $440,000 it spent on a luxury retreat less than a week after the federal government loaned it $85 billion dollars, the giant AIG Insurance Company says it has called off plans to hold a second retreat next week at the exclusive Ritz-Carlton Resort in Half Moon Bay, California. The Ritz-Carlton outing, like the earlier one, was to reward top independent insurance agents, which the company called a "standard industry practice." "I am somewhat relieved to hear that AIG has canceled their Ritz-Carlton conference, which was nothing less than a slap in the face of the American people," said Rep. Elijah Cummings (D-MD). "I cannot fathom how in the same day -- the very same day -- that AIG asked the government for another $37.8 billion loan, the company would even consider moving forward with plans to host another large conference at another luxury resort." Critics ... have denounced AIG for holding an expensive retreat at a time of economic crisis. The criticism has been "demoralizing" within AIG said Nicholas Ashooh, a spokesperson for AIG, "but we have to recognize that we're in a different environment and we have to adjust to that." AIG says it has instructed its worldwide managers to re-scrutinize how money is being spent. "We're certainly reviewing all our expenditures in light of financial circumstances and the fact that taxpayer dollars are helping to support AIG as we get through this difficult credit crisis," said Ashooh.

Note: For many reports of corporate corruption from reliable sources, click here.

After Bailout, AIG Execs Head to California Resort
2008-10-07, ABC News
http://abcnews.go.com/Blotter/story?id=5973452&page=1

Less than a week after the federal government committed $85 billion to bail out AIG, executives of the giant AIG insurance company headed for a week-long retreat at a luxury resort and spa, the St. Regis Resort in Monarch Beach, California, Congressional investigators revealed today. "Rooms at this resort can cost over $1,000 a night," Congressman Henry Waxman (D-CA) said. AIG documents obtained by Waxman's investigators show the company paid more than $440,000 for the retreat, including nearly $200,000 for rooms, $150,000 for meals and $23,000 in spa charges. "They're getting their pedicures and their manicures and the American people are paying for that," said Cong. Elijah Cummings (D-MD). Appearing before the committee, Martin Sullivan, the AIG CEO until June, said the company was overwhelmed by a "financial global tsunami," and that "no simple or single cause" was to blame. "I am heartbroken at what has happened," Sullivan said. Robert Willumstad, the CEO from June to September, 2008, maintained AIG was a victim of a "crisis in confidence" and an "unprecedented global catastrophe." But Congressional investigators raised questions of "mismanagement" and whether AIG executives sought to "cook the books" and hide negative information from outside auditors. Waxman also said there is evidence the two men changed the bonus schedule once the company began to post losses, so that executives under the "Senior Partners Plan" would continue to make multi-million dollar salaries. Sullivan was given a $15 million "golden parachute" payment after being replaced as CEO in June.

Note: For lots more on corporate corruption from reliable sources, click here.

'Deficit hawks' revive attacks on nation's fiscal woes
2008-06-24, USA Today
http://www.usatoday.com/news/washington/2008-06-24-budget-hawks_N.htm

Eleven years after the last major effort to balance the federal government's books, advocates of fiscal integrity are seeking to make a comeback. Most notable is Pete Peterson, a son of Greek immigrants and Wall Street chieftain who has vowed to invest $1 billion of his personal fortune to alert Americans that their government is going broke. He has lured former U.S. comptroller general David Walker to his fledgling Peter G. Peterson Foundation, which will finance advertising, lobbying and grass-roots efforts designed to pressure the next president and Congress. The situation has gotten much worse since past presidents and Congress negotiated deficit-reduction deals in 1990, 1993 and 1997. The federal deficit is estimated at $357 billion. The national debt, as calculated by the Treasury Department, is more than $9.3 trillion. Future liabilities, from government pensions to elderly entitlements, bring the total to $53 trillion — $175,000 per person, according to Peterson and Walker. Both men say a comprehensive fix will need to include overhauls of the nation's health care and tax systems. At the core of the effort is Peterson, 82, a founder of the Concord Coalition fiscal watchdog group, who has preached the danger of federal budget deficits for decades. He and Walker spoke Tuesday at a House Budget Committee hearing and met privately with congressional backers of balanced budgets. Peterson is retiring this year as senior chairman of the Blackstone Group, which he co-founded. [He is a] former secretary of Commerce in the Nixon administration and chairman of Lehman Brothers.

Economists Debate Link Between War, Credit Crisis
2008-04-15, Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2008/04/14/AR20080414026...

For House Speaker Nancy Pelosi, the connection between the Iraq conflict and the U.S. economic downturn is simple: "The president has taken us into a failed war," [she] said recently. "He's taken us deeply into debt, and that debt is taking us into recession." Joseph E. Stiglitz, a Nobel Prize-winning economist who wrote the new book The Three Trillion Dollar War, contends that the connection is real. Even with a growing energy demand from China, the United States and elsewhere, oil traders anticipated before the war that the price of oil would remain about $25 a barrel. Instead, it has soared to more than $100 a barrel. Iraqi oil production has not risen with demand, in part because investment in the Middle East has been stunted by war-related unrest. Those price increases are self-perpetuating, Stiglitz argues. Oil-rich Persian Gulf states are so awash in money that they are not sure what to do with it all. That cash, through state-owned sovereign wealth funds, has flowed into stocks, bonds and other investments, creating incentives for lenders to offer low-interest loans, many of which have now gone sour. But that is only one factor, by Stiglitz's accounting. The federal government has sunk deeply into debt, first with tax cuts, then with accelerating war expenditures that have easily topped half a trillion dollars. So the Federal Reserve Board used low interest rates and the free flow of money to keep the economy growing. Cheap credit sparked rash loans, a housing bubble and the current crisis. "The war played a very important role," Stiglitz said. The analysis is politically powerful because people believe it. A CNN poll last month found that 71 percent of Americans say government spending in Iraq is a factor in the economic downturn.

Note: For a powerful personal account of the economic underpinnings of modern war by a US Marine Corps general, click here.

JPMorgan memo shows dirty tricks of mortgage trade
2008-03-28, Reuters News
http://www.reuters.com/article/vcCandidateFeed1/idUSN2838474720080328

An internal JPMorgan Chase memo entitled "Zippy Cheats & Tricks" offers a peek into just the sort of dubious lending tactics that underpinned the U.S. housing market's deepening downward spiral. The memo outlines step-by-step instructions on how to beef up mortgage applicants' stated incomes in order to help them qualify for home loans. They read as follows: "1. Make sure you input all income in base income. DO NOT break it down by overtime, commissions or bonus. 2. If your borrower is getting a gift, add it to a bank account along with the rest of the assets. Be sure to remove any mention of gift funds. 3. If you do not get (the desired results), try resubmitting with slightly higher income. Inch it up $500 to see if you can get the findings you want. Do the same for assets." In the context of a broader housing debacle, the memo [provides] some clues into just what lengths bankers went to [to] push loans through the system. Over the past six months, rising defaults on home loans have not only battered the mortgage sector, threatening recession, but also sent the banking industry into a tailspin. Many large banks repackaged mortgages and held them on their balance sheets as complex derivatives securities, essentially bonds backed by other types of loans. The conclusion of the JPMorgan memo, written in bright purple letters, certainly hints at a credit system gone awry: "It's super easy! Give it a try!" it reads. "If you get stuck, call me ... I am happy to help!"

Note: Though this highly revealing news was reported by the venerable Reuters news agency, why did no major media pick it up? For numerous reports of financial corruption from verifiable sources, click here.

Foreign investors veto Fed rescue
2008-03-17, The Telegraph (One of the U.K.'s leading newspapers)
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/17/ccview117.xml

As feared, foreign bond holders have begun to exercise a collective vote of no confidence in the devaluation policies of the US government. The Federal Reserve faces a potential veto of its rescue measures. Asian, Mid East and European investors stood aside at last week's auction of 10-year US Treasury notes. "It was a disaster," said Ray Attrill from 4castweb. "We may be close to the point where the uglier consequences of benign neglect towards the currency are revealed." The share of foreign buyers ("indirect bidders") plummeted to 5.8pc, from an average 25pc over the last eight weeks. On the Richter Scale of unfolding dramas, this matches the death of Bear Stearns. Rightly or wrongly, a view has taken hold that Washington is cynically debasing the coinage, hoping to export its day of reckoning through beggar-thy-neighbour policies. But even if you think the Fed has no choice other than to take dramatic action, the critics are also right in warning that this comes at a serious cost and it may backfire. The imminent risk is that global flight from US Treasury and agency debt drives up long-term rates, the key funding instrument for mortgages and corporations. The effect could outweigh Fed easing. Overall credit conditions could tighten into a slump (like 1930). It's the stuff of bad dreams. As the Wall Street Journal wrote this weekend, the entire country is facing a "margin call". The US has come to depend on $800bn inflows of cheap foreign capital each year to cover shopping bills. As of June 2007, foreigners owned $6,007bn of long-term US debt. [Most] likely, the twin crash in the dollar and US agency debt reflects a broad exodus by global wealth managers, afraid that America is spinning out of control.

Note: Why is the U.S. media not reporting important information like this? And why was the fact that gold broke $1,000 for the first time ever in mid-March not reported widely in the media?

Wall Street paying record bonuses
2008-01-08, New York Daily News/Bloomberg News
http://www.nydailynews.com/money/2008/01/18/2008-01-18_wall_street_paying_rec...

Wall Street's five biggest firms are paying a record $39 billion in bonuses for 2007. It was a year when three of the firms suffered their worst quarterly losses in history and shareholders lost over $80 billion. Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers and Bear Stearns together awarded $65.6 billion in compensation and benefits last year to their 186,000 employees. That means year-end bonuses, at 60% of the total, exceeded the $36 billion distributed in 2006 when the industry reported all-time high profits. The firms have said they are eliminating at least 6,200 jobs amid mounting losses from the subprime mortgage mess. The payouts come as the economy slows, with unemployment rising, retail sales declining and new home foreclosures surging to a record. The industry's bonuses are larger than the gross domestic products of Sri Lanka, Lebanon or Bulgaria, and the average bonus of $219,198 is more than four times higher than the median U.S. household income in 2006, according to Census Bureau data. Shareholders in the securities industry endured their worst year since 2002, as Merrill and Bear Stearns slumped more than 40% and the CEOs at both firms gave up their jobs. Morgan Stanley fell 21% and Lehman dropped 16%. Only Goldman rose, gaining 7.9%.

Note: For lots more on escalating income inequality, click here.

Bleakonomics
2007-09-30, New York Times
http://www.nytimes.com/2007/09/30/books/review/Stiglitz-t.html?ex=1348804800&...

The Shock Doctrine is [Naomi] Klein’s ambitious look at the economic history of the last 50 years and the rise of free-market fundamentalism around the world. “Disaster capitalism,” as she calls it, is a violent system that ... requires terror to do its job. Extreme capitalism loves a blank slate, often finding its opening after crises or “shocks.” Klein compares radical capitalist economic policy to shock therapy administered by psychiatrists. She interviews Gail Kastner, a victim of covert C.I.A. experiments in interrogation techniques that were carried out by the scientist Ewen Cameron in the 1950s. His idea was to use electroshock therapy to break down patients. Once “complete depatterning” had been achieved, the patients could be reprogrammed. For Klein the larger lessons are clear: “Countries are shocked — by wars, terror attacks, coups d’état and natural disasters.” Then “they are shocked again — by corporations and politicians who exploit the fear and disorientation of this first shock to push through economic shock therapy.” People who “dare to resist” are shocked for a third time, “by police, soldiers and prison interrogators.” Klein offers an account of Milton Friedman — she calls him “the other doctor shock”. In the 1950s, as Cameron was conducting his experiments, the Chicago School was developing the ideas that [dominate capitalist planning today]. She quotes the Chilean economist Orlando Letelier on the “inner harmony” between the terror of the Pinochet regime and its free-market policies. Letelier said that Milton Friedman shared responsibility for the regime’s crimes, rejecting his argument that he was only offering “technical” advice. Letelier was killed in 1976 by a car bomb planted in Washington [DC]. For Klein, he was another victim of the “Chicago Boys” who wanted to impose free-market capitalism on the region. “In the Southern Cone, where contemporary capitalism was born, the ‘war on terror’ was a war against all obstacles to the new order,” she writes.

Note: For highly revealing, verifiable information on government mind control programs, click here.

Auditors: Billions of U.S. tax dollars wasted in Iraq
2007-02-16, CNN News/Associated Press
http://edition.cnn.com/2007/POLITICS/02/16/iraq.reconstruction.ap

The three top auditors overseeing work in Iraq told a House committee their review of $57 billion in Iraq contracts found that ... about $10 billion has been squandered by the U.S. government on Iraq reconstruction aid because of contractor overcharges and unsupported expenses. Of the $10 billion in overpriced contracts or undocumented costs, more than $2.7 billion were charged by Halliburton Co., the oil-field services company once headed by Vice President Dick Cheney. Federal investigators warned Thursday that significantly more taxpayer money is at risk. More than one in six dollars charged by U.S. contractors were questionable or unsupported, nearly triple the amount of waste the Government Accountability Office estimated last fall. "There is no accountability," said David M. Walker, who heads the auditing arm of Congress. "Organizations charged with overseeing contracts are not held accountable. Contractors are not held accountable. The individuals responsible are not held accountable." The investigators urged the Pentagon to reconsider its growing reliance on outside contractors. Layers of subcontractors, poor documentation and lack of strong contract management are rampant. Walker complained that GAO investigators have difficulty getting basic detail about reconstruction contracts such as expenses and subcontractors involved because many Pentagon divisions fail to consistently track or fully report them. Noting that auditors still have $300 billion of Iraq spending to review, Waxman said the total amount of waste, fraud and abuse "could be astronomical."

Note: To understand how so much money can go missing, read what a top U.S. general has to say here. And for major media articles claiming hundreds of billions of dollars are missing, click here.

Getting closer to Uncle Sam
2006-09-20, Toronto Star (One of Canada's top newspapers)
http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Articl...

Public kept in dark as business leads talks about North American integration. Away from the spotlight, from Sept. 12 to 14, in Banff Springs, Minister of Public Safety Stockwell Day and Defence Minister Gordon O'Connor met with U.S. and Mexican government officials and business leaders to discuss North American integration at the second North American Forum. The guest list included such prominent figures as U.S. Defence Secretary Donald Rumsfeld, Mexican Secretary of Public Security Eduardo Medina Mora and Canadian Forces chief General Rick Hillier. The event was chaired by former U.S. secretary of state George Schultz, former Alberta premier, Peter Lougheed and former Mexican finance minister Pedro Aspe. Organizers did not alert the media about the event. Our government ... refuses to release any information about the content of the discussions or the actors involved. The event was organized by the Canadian Council of Chief Executives. The media have paid little attention to this far-reaching agreement, so Canadians are unaware that a dozen working groups are currently "harmonizing" Canadian and U.S. regulations on everything from food to drugs to the environment and even more contentious issues like foreign policy. This process ... is about priming North America for better business by weakening the impacts of such perceived obstacles as environmental standards and labour rights. This is why the public has been kept in the dark while the business elite has played a leading role in designing the blueprint for this more integrated North America.

Note: If the above link fails, click here. Why has the U.S. media not covered this key topic? For a second article discussing this secret meeting on a top Canadian TV website, click here. To learn about other secret meetings of the power elite: click here

Senate panel probes ways super-rich can avoid taxes
2006-08-01, San Francisco Chronicle/New York Times
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/08/01/MNGO6K8OI41.DTL

So many super-rich Americans evade taxes using offshore accounts that law enforcement cannot control the growing misconduct, according to a Senate report that provides the most detailed look ever at high-level tax schemes. Cheating now equals about 7 cents out of each dollar paid by honest taxpayers, as much as $70 billion a year, the report estimated. "The universe of offshore tax cheating has become so large that no one, not even the United States government, could go after all of it," said Sen. Carl Levin, D-Mich., whose staff ran the investigation. The report details how the Quellos Group, a tax shelter boutique based in Seattle, "concocted a tax shelter" using $9.6 billion "worth of fake securities transactions that were used to generate billions of dollars of fake capital losses." When investigators asked for trading records, Levin said, they were first told the trades were private, over-the-counter transactions. He said investigators asked for trading tickets or other evidence of who owned the $9.6 billion worth of stock and were told the stocks were never owned by the parties involved. "They just wrote down numbers on paper and claimed losses," he said. "It was just like fantasy baseball, except the taxes not paid were for real."

Note: Up to $70 billion is lost to the U.S. Treasury each year, yet law enforcement "cannot control" the problem. Hmmmm. If just $10 million were directed to stop the losses, I suspect things might change and the investment would be paid back many fold. Could pressure from high places be preventing such an investigation?

Intelligence Czar Can Waive SEC Rules
2006-05-23, BusinessWeek
http://www.businessweek.com/bwdaily/dnflash/may2006/nf20060523_2210.htm

President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations. Notice of the development came in a brief entry in the Federal Register, dated May 5, 2006, that was opaque to the untrained eye. Unbeknownst to almost all of Washington and the financial world, Bush and every other President since Jimmy Carter have had the authority to exempt companies working on certain top-secret defense projects from portions of the 1934 Securities Exchange Act. Administration officials told BusinessWeek that they believe this is the first time a President has ever delegated the authority to someone outside the Oval Office. It couldn't be immediately determined whether any company has received a waiver under this provision. The timing of Bush's move is intriguing. On the same day the President signed the memo, Porter Goss resigned as director of the Central Intelligence Agency. Only six days later ... USA Today reported that the National Security Agency had obtained millions of calling records of ordinary citizens provided by three major U.S. phone companies. Negroponte oversees both the CIA and NSA in his role as the administration's top intelligence official. In addition to refusing to explain why Bush decided to delegate this authority to Negroponte, the White House declined to say whether Bush or any other President has ever exercised the authority and allowed a company to avoid standard securities disclosure and accounting requirements.

Note: For many revealing reports on government secrecy from major media sources, click here.

Technology gets under clubbers' skin
2004-06-09, CNN News
http://edition.cnn.com/2004/WORLD/europe/06/09/spain.club

Queuing to get into one nightclub in Spain could soon be a thing of the past for regular customers thanks to a tiny computer chip implanted under their skin. The technology, known as a VeriChip, also means nightclubbers can leave their cash and cards at home and buy drinks using a scanner. The bill can then be paid later. Clubbers who want to join the scheme at Baja Beach Club in Barcelona pay 125 euros (about US $150) for the VeriChip -- about the size of a grain of rice -- to be implanted in their body. Then when they pass through a scanner the chip is activated and it emits a signal containing the individual's number, which is then transmitted to a secure data storage site. The club's director, Conrad Chase, said he began using the VeriChip, made by Applied Digital Solutions, in March 2004 because he needed something similar to a VIP card and wanted to provide his customers with better service. He said 10 of the club's regular customers, including himself, have been implanted with the chip, and predicted more would follow. "I know many people who want to be implanted," said Chase. "Almost everybody now has a piercing, tattoos or silicone. Why not get the chip and be original?" Chase said VeriChip could also boost security by speeding up checks at airports, for example. He denied the scheme had any drawbacks. The VeriChip is an in-house debit card and contains no personal information.

Note: Why is the media so upbeat about this? The article raises very few questions, yet seems to promote microchip implants in humans as the wave of the future for commerce.

Bush's Grandfather Directed Bank Tied to Man Who Funded Hitler
2003-10-17, Fox News/Associated Press
http://www.foxnews.com/story/0,2933,100474,00.html

President Bush's grandfather was a director of a bank seized by the federal government because of its ties to a German industrialist who helped bankroll Adolf Hitler's rise to power, government documents show. Prescott Bush was one of seven directors of Union Banking Corp., a New York investment bank owned by a bank controlled by the Thyssen family, according to recently declassified National Archives documents reviewed by The Associated Press. Fritz Thyssen was an early financial supporter of Hitler. Reports of Bush's involvement with the seized bank have been circulating on the Internet for years and have been reported by some mainstream media. The newly declassified documents provide additional details about the Union Banking-Thyssen connection. Union Banking was owned by a Dutch bank, Bank voor Handel en Scheepvaardt N.V., which was "closely affiliated" with the German conglomerate United Steel Works, according to an Oct. 5, 1942, report from the federal Office of Alien Property Custodian. The Dutch bank and the steel firm were part of the business and financial empire of Thyssen and his brother, Heinrich Thyssen-Bornemisza, the report said. The 4,000 Union Banking shares owned by the Dutch bank were registered in the names of the seven U.S. directors, [including Prescott Bush and E. Roland Harriman, the bank chairman and brother of former New York Gov. W. Averell Harriman]. Both Harrimans and Bush were partners in the New York investment firm of Brown Brothers, Harriman and Co., which handled the financial transactions of the bank as well as other financial dealings with several other companies linked to Bank voor Handel.

Judge upholds three-word foreclosure strategy
2009-05-29, KGO-TV (San Francisco ABC-TV affiliate)
http://abclocal.go.com/kgo/story?section=news/7_on_your_side&id=6839404

A Bay Area couple has successfully blocked their lender from taking their home. A federal judge in San Jose brought the foreclosure process to a stop after the couple invoked a three-word strategy first outlined last month by 7 On Your Side's Michael Finney. A home could be saved with three words: "produce the note." Facing foreclosure, owners Isabel and Richard Caporale are using a novel legal strategy to hang on to their home. The couple went to federal court and basically said just three words. "They claim they have it, but I have no proof that they have this note, and you would think by now it's been almost three months," says attorney Marc Voisenat. The "they" Voisenat is referring to is the loan servicing company and "the note" is the legal document proving money is owed. Without it, the strategy goes, money can't be collected and there can be no foreclosure. On Thursday, a federal judge agreed, stopping the foreclosure in its tracks and for now, the Caporales can stay in their home. "It's wonderful because I'm almost positive the next time we come back to court the house will be ours," says Isabel Caporale. Thousands could use this strategy and it all comes down to sloppy paperwork. Mortgages are chopped up, bundled and resold around the world as complicated financial vehicles. Often the paperwork doesn't follow the loan and if there's no paperwork and no proof, the foreclosure is a no-go. "We've never seen a company produce the original note yet," says Attorney Chris Hoyer. Hoyer set up a website offering consumers advice and paperwork to pursue a "produce the note" strategy. In Florida "produce the note" is gaining momentum as a safety net for homeowners.

Note: For more information on how to use this strategy, see the Consumer Warning Network's excellent information available here. More information is also available in this article.

Chrysler rejects new loan over exec pay limits
2009-04-21, CNN
http://www.cnn.com/2009/BUSINESS/04/21/chrysler.loan/

Chrysler turned down additional government funding this month because executives at the troubled auto manufacturer could not agree to new government-mandated limits on executive pay, according to a source familiar with the matter. An official with Chrysler Financial told CNN that the loan was turned down because the company "has determined that it has adequate private capital funding to cover the short-term needs of our dealers and customers and as such, no additional TARP funding is necessary at this time." The official also said that company executives "have not been presented with any new demands with regard to executive compensation." Chrysler already borrowed $1.5 billion from the Treasury under the Troubled Asset Relief Program, or TARP, but those loans were made under less strict regulations pertaining to executive compensation. The Washington Post, which first reported the story online Monday, said the amount of the loan Chrysler rejected was $750 million. A Treasury department spokesman declined to confirm the loan rejection, but told CNN that the administration's Auto Task Force continues to monitor the financing situations for Chrysler and General Motors. "This is an issue that Chrysler and its stakeholders will need to address as part of this process," the spokesman said.

Note: The reason many banks are giving back government loans is very likely also because of executive pay limits. The limits were reported in a NY Times article on Feb. 14, 2009. Not long after came the first news that banks were considering returning the bailout money. Do you think these top execs are more interested in their own paychecks or the health of the company? For a highly revealing archive of reports on the hidden realities underlying the Wall Street bailout, click here.

The G20 moves the world a step closer to a global currency
2009-04-03, The Telegraph (One of the U.K.'s leading newspapers)
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5096524/The...

The world is a step closer to a global currency, backed by a global central bank, running monetary policy for all humanity. A single clause in Point 19 of the communiqué issued by the G20 leaders amounts to revolution in the global financial order. "We have agreed to support a general SDR allocation which will inject $250bn (£170bn) into the world economy and increase global liquidity," it said. SDRs are Special Drawing Rights, a synthetic paper currency issued by the International Monetary Fund that has lain dormant for half a century.In effect, the G20 leaders have activated the IMF's power to create money and begin global "quantitative easing". In doing so, they are putting a de facto world currency into play. It is outside the control of any sovereign body. Conspiracy theorists will love it. There is now a world currency in waiting. In time, SDRs are likely evolve into a parking place for the foreign holdings of central banks, led by the People's Bank of China. Beijing's moves this week to offer $95bn in yuan currency swaps to developing economies show how fast China aims to break dollar dependence.

Note: For an extensive archive of key reports on the hidden realities of the Wall Street bailout, click here.

Banks Get New Leeway in Valuing Their Assets
2009-04-03, New York Times
http://www.nytimes.com/2009/04/03/business/03fasb.html?partner=rss&emc=rss&pa...

A once-obscure accounting rule that infuriated banks ... was changed Thursday to give banks more discretion in reporting the value of mortgage securities. The change seems likely to allow banks to report higher profits by assuming that the securities are worth more than anyone is now willing to pay for them. But critics objected that the change could further damage the credibility of financial institutions by enabling them to avoid recognizing losses from bad loans they have made. Critics also said that since the rules were changed under heavy political pressure, the move compromised the independence of the organization that did it, the Financial Accounting Standards Board. During the financial crisis, the market prices of many securities, particularly those backed by subprime home mortgages, have plunged to fractions of their original prices. That has forced banks to report hundreds of billions of dollars in losses over the last year, because some of those securities must be reported at market value each three months, with the bank showing a profit or loss based on the change. At first FASB ... resisted making changes, but that changed within a few days of a Congressional hearing at which legislators from both parties demanded the board act. “There is a perception that we are yielding to political pressure,” one board member, Lawrence W. Smith, said as he voted for the changes. A group headed by two former chairmen of the Securities and Exchange Commission, one who served under President Bill Clinton and one who was appointed by President George W. Bush, said that it feared that politicization of accounting standards would destroy the credibility of the board.

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

AIG - the biggest shark of all
2009-03-19, San Francisco Chronicle (San Francisco's leading newspaper)
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/03/18/ED0316IQ82.DTL

There must be a criminal investigation of the AIG debacle, and it looks as if New York's top lawman is on the case. The collusion to save this toxic company in order to salvage the rogue financiers who conspired to enrich themselves by impoverishing millions is being revealed as the greatest financial scandal in U.S. history. Instead of taking bonuses, the culprits should be taking perp walks. The real culprits are the AIG leaders who, as New York Attorney General Andrew Cuomo revealed Tuesday, signed those bonus contracts a year ago to reward the very people "principally responsible for the firm's meltdown." As Cuomo noted in a letter to Rep. Barney Frank: "The contracts shockingly contain a provision that required most individuals' bonuses to be 100 percent of their 2007 bonuses. Eleven of the individuals who received 'retention' bonuses of $1 million or more are no longer working at AIG, including one who received $4.6 million." But the $165 million in taxpayer funds used to reward them is but a sideshow in a far larger drama of moral decay swirling around the banking bailout. It should not distract from the many billions, not paltry millions, of our dollars being diverted to reward the very folks who brought us such misery. Consider the $12.8 billion of the $170 billion that taxpayers gave AIG in bailout funds that AIG then secretly diverted to Goldman Sachs, a company that evidently has a lock on both the Treasury Department and the Federal Reserve no matter which political party is in power.

Note: For an excellent analysis of "the real AIG conspiracy", click here. For lots more on the hidden realities of the Wall Street bailout, click here.

Spitzer Takes Aim at ‘Real Disgrace’ at A.I.G.
2009-03-17, New York Times blog
http://dealbook.blogs.nytimes.com/2009/03/17/spitzer-takes-aim-at-real-disgra...

Eliot Spitzer must miss his glory days when he was the scourge of Wall Street as New York’s attorney general. With the bonus battle exploding at the American International Group, Mr. Spitzer has jumped into the fray — and dismissed the bonus scandal, arguing that it is obscuring the “real disgrace” at A.I.G. “Why are A.I.G.’s counterparties getting paid back in full, to the tune of tens of billions of taxpayer dollars?” he asks in an article on Slate. Mr. Spitzer notes that A.I.G.’s trading parties were all the big banks including Goldman Sachs, many of which received billions of dollars from the government’s Troubled Asset Relief Program. “So now we know for sure what we already surmised: The A.I.G. bailout has been a way to hide an enormous second round of cash to the same group that had received TARP money already,” he writes. “It all appears, once again, to be the same insiders protecting themselves against sharing the pain and risk of their own bad adventure,” Mr. Spitzer writes. Recounting how the economic crisis is affecting workers, with tax increases, pay cuts and layoffs, Mr. Spitzer asks: “Why can’t Wall Street royalty shoulder some of the burden? Why did Goldman have to get back 100 cents on the dollar? Didn’t we already give Goldman a $25 billion capital infusion, and aren’t they sitting on more than $100 billion in cash? What is the deeper relationship between Goldman and A.I.G.?”

Note: For the article written in 2008 by former NY Governor Spitzer which likely caused him to be targeted for a takedown just weeks later, click here. For lots more on the hidden realities of the Wall Street bailout, click here.

Curtailing executives' pay? Good luck with that
2009-02-05, San Francisco Chronicle (San Francisco's leading newspaper)
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/02/05/BUHF15NF2U.DTL

Will President Obama's new plan to rein in executive compensation at companies receiving taxpayer money be more successful than previous attempts? Not if history is any guide. Since at least 1984, Congress and accounting authorities have enacted measures designed in whole or part to stem runaway pay. Yet compensation for top executives has continued to climb in both dollar terms and as a multiple of average worker pay. In 1992, the average chief executive earned $5 million, or 126 times the average hourly worker. By 2007, the average CEO was earning $12.3 million, or 275 times the average worker. No matter what Congress cooks up, it seems like executives, companies and their consultants find a way over, under or through the rules. "It's like putting up a dam for a river. The water tries very hard to find a way around it," says John Olson, a partner with Gibson Dunn & Crutcher who advises corporate boards on compensation and other matters. Obama's plan will apply only to companies taking bailout money in the future and has escape hatches of its own. "You can try all these different reforms," [says Corey Rosen, executive director of the National Center for Employee Ownership,] but none will be truly effective "unless the board of directors, the media and public stop thinking of executives as superstars and that if we just get the right CEO, everything will be OK."

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

U.N. crime chief says drug money flowed into banks
2009-01-25, International Herald Tribune/Reuters News
http://www.iht.com/articles/reuters/2009/01/25/europe/OUKWD-UK-FINANCIAL-UN-D...

The United Nations' crime and drug watchdog has indications that money made in illicit drug trade has been used to keep banks afloat in the global financial crisis, its head was quoted as saying on Sunday. Vienna-based UNODC Executive Director Antonio Maria Costa said in an interview released by Austrian weekly Profil that drug money often became the only available capital when the crisis spiralled out of control last year. "In many instances, drug money is currently the only liquid investment capital," Costa was quoted as saying by Profil. "In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor." The United Nations Office on Drugs and Crime had found evidence that "interbank loans were funded by money that originated from drug trade and other illegal activities," Costa was quoted as saying. There were "signs that some banks were rescued in that way." Profil said Costa declined to identify countries or banks which may have received drug money and gave no indication how much cash might be involved.

Note:. For powerful evidence that corporations and even rogue elements of government are involved in the huge amounts of cash generated in the drug trade, click here. For lots more on corporate corruption, click here.

U.S. Debt Expected To Soar This Year
2009-01-03, Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2009/01/02/AR20090102023...

With President-elect Barack Obama and congressional Democrats considering a massive spending package aimed at pulling the nation out of recession, the national debt is projected to jump by as much as $2 trillion this year, an unprecedented increase that could test the world's appetite for financing U.S. government spending. For now, investors are frantically stuffing money into the relative safety of the U.S. Treasury, which has come to serve as the world's mattress in troubled times. Interest rates on Treasury bills have plummeted to historic lows, with some short-term investors literally giving the government money for free. But about 40 percent of the debt held by private investors will mature in a year or less, according to Treasury officials. When those loans come due, the Treasury will have to borrow more money to repay them, even as it launches perhaps the most aggressive expansion of U.S. debt in modern history. With the government planning to roll over its short-term loans into more stable, long-term securities, experts say investors are likely to demand a greater return on their money, saddling taxpayers with huge new interest payments for years to come. Some analysts also worry that foreign investors, the largest U.S. creditors, may prove unable to absorb the skyrocketing debt, undermining confidence in the United States as the bedrock of the global financial system.

Note: For many revealing reports on the realities of the Wall Street bailout and its impacts on the national debt, click here.

UAW busting, Southern style
2008-12-18, Los Angeles Times
http://www.latimes.com/news/opinion/commentary/la-oe-raynor18-2008dec18,0,406...

The foreign nonunion auto companies located in the South have a plan to reduce wages and benefits at their factories in the United States. And to do it, they need to destroy the United Auto Workers. Last week, Senate Republicans from some Southern states went to work trying to do just that, on the foreign car companies' behalf. [Republican] representatives from states that subsidize companies such as Honda, Volkswagen, Toyota and Nissan first tried to force the UAW to take reductions in wages and benefits as a condition for supporting the auto industry bailout bill. When the UAW refused, those senators torpedoed the bill. They claimed that they couldn't support the bill without specifics about how wages would be "restructured." They didn't, however, require such specificity when it came to bailing out the financial sector. Their grandstanding, and the government's generally lackluster response to the auto crisis, highlight many of the problems that have caused our current economic mess: the lack of concern about manufacturing, the privileged way our government treats the financial sector, and political support given to companies that attempt to slash worker's wages. When one compares how the auto industry and the financial sector are being treated by Congress, the double standard is staggering. At Goldman Sachs ... employee compensation made up 71% of total operating expenses in 2007. In the auto industry, by contrast, autoworker compensation makes up less than 10% of the cost of manufacturing a car. Hundreds of billions were given to the financial-services industry with barely a question about compensation; the auto bailout, however, was sunk on this issue alone.

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

Jim Rogers calls most big U.S. banks "bankrupt"
2008-12-11, Reuters News
http://www.reuters.com/article/InvestmentOutlook09/idUSTRE4BA5CO20081211

Jim Rogers, one of the world's most prominent international investors, ... called most of the largest U.S. banks "totally bankrupt," and said government efforts to fix the sector are wrongheaded. Co-founder with George Soros of the Quantum Fund, [Rogers] said the government's $700 billion rescue package for the sector doesn't address how banks manage their balance sheets, and instead rewards weaker lenders with new capital. "Without giving specific names, most of the significant American banks, the larger banks, are bankrupt, totally bankrupt," said Rogers. "What is outrageous economically and is outrageous morally is that normally in times like this, people who are competent and who saw it coming and who kept their powder dry go and take over the assets from the incompetent," he said. "What's happening this time is that the government is taking the assets from the competent people and giving them to the incompetent people and saying, now you can compete with the competent people. It is horrible economics." While not saying how long the U.S. economic recession will last, he said conditions could ultimately mirror those of Japan in the 1990s. "The way things are going, we're going to have a lost decade too, just like the 1970s," he said. "Governments are making mistakes," he said. "They're saying to all the banks, you don't have to tell us your situation. You can continue to use your balance sheet that is phony.... All these guys are bankrupt, they're still worrying about their bonuses, they're still trying to pay their dividends, and the whole system is weakened."

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

Ditch the smooth transition. The people voted for change
2008-11-14, The Guardian (One of the U.K.'s leading newspapers)
http://www.guardian.co.uk/commentisfree/2008/nov/14/obama-white-house-wall-st...

The more details emerge, the clearer it becomes that Washington's handling of the Wall Street bail-out is not merely incompetent: it is borderline criminal. In a moment of high panic in September, the US treasury pushed through a radical change in how bank mergers are taxed - a change long sought by the industry. Despite the fact that this move will deprive the government of as much as $140bn in tax revenue, legislators found out only after the fact. According to the Washington Post, more than a dozen tax attorneys agree that "[the] treasury had no authority to issue the [tax change] notice". Of equally dubious legality are the equity deals the treasury has negotiated with many of the banks. According to Congressman Barney Frank, one of the architects of the legislation that enables the deals: "Any use of these funds for any purpose other than lending - for bonuses, for severance pay, for dividends, for acquisitions of other institutions ... is a violation of the act." Yet this is exactly how the funds are being used. Then there is the nearly $2 trillion that America's central bank, the Federal Reserve, has handed out in emergency loans. Incredibly, the Fed will not reveal which corporations have received these loans or what it has accepted as collateral. Bloomberg news service believes this secrecy violates the law and has filed a federal suit demanding full disclosure. Yet the Democrats are either openly defending the administration or refusing to intervene. Obama owes it to the people who elected him to call this what it is: an attempt to undermine the electoral process by stealth.

Note: For many key articles revealing the hidden realities of the bailout, click here.

F.B.I. Struggles to Handle Financial Fraud Cases
2008-10-19, New York Times
http://www.nytimes.com/2008/10/19/washington/19fbi.html?partner=rssuserland&e...

The Federal Bureau of Investigation is struggling to find enough agents and resources to investigate criminal wrongdoing tied to the country’s economic crisis, according to current and former bureau officials. The bureau slashed its criminal investigative work force to expand its national security role after the Sept. 11 attacks, shifting more than 1,800 agents, or nearly one-third of all agents in criminal programs, to terrorism and intelligence duties. The cutbacks have left the bureau seriously exposed in investigating areas like white-collar crime, which has taken on urgent importance in recent weeks because of the nation’s economic woes. So depleted are the ranks of the F.B.I.’s white-collar investigators that executives in the private sector say they have had difficulty attracting the bureau’s attention in cases involving possible frauds of millions of dollars. Since 2004, F.B.I. officials have warned that mortgage fraud posed a looming threat, and the bureau has repeatedly asked the Bush administration for more money to replenish the ranks of agents handling nonterrorism investigations. But each year, the requests have been denied, with no new agents approved for financial crimes, as policy makers focused on counterterrorism. According to previously undisclosed internal F.B.I. data, the cutbacks have been particularly severe in staffing for investigations into white-collar crimes like mortgage fraud, with a loss of 625 agents, or 36 percent of its 2001 levels.

Note: How fortunate for the financial fraudsters that the FBI doesn't have the resources to investigate them! Was it just a coincidence that first the "war on terror" and then the Wall Street bailout both have resulted in trillions of dollars going to a few well-positioned corporations? For more on government corruption from reliable sources, click here.

Illinois sheriff scolds banks for evictions of 'innocent' renters
2008-10-09, CNN
http://www.cnn.com/2008/US/10/08/chicago.evictions/index.html

An outraged sheriff in Illinois who refuses to evict ... renters from foreclosed homes criticized mortgage companies ... and said the law should protect victims of the mortgage meltdown. Sheriff Thomas J. Dart said earlier he is suspending foreclosure evictions in Cook County, which includes the city of Chicago. The county had been on track to reach a record number of evictions, many because of mortgage foreclosures. "Many good tenants are suffering because building owners have fallen behind on their mortgage payments," he said Thursday on CNN's "American Morning." "These poor people are seeing everything they own put out on the street. ... They've paid their bills, paid them on time. Here we are with a battering ram at the front door going to throw them out. It's gotten insane," he said. Mortgage companies are supposed to identify a building's occupants before asking for an eviction, but sheriff's deputies routinely find that the mortgage companies have not done so, Dart said. "This is an example where the banking industry has not done any of the work they should do. It's a piece of paper to them," Dart said. "These mortgage companies ... don't care who's in the building," Dart said. "They simply want their money and don't care who gets hurt along the way. "On top of it all, they want taxpayers to fund their investigative work for them. We're not going to do their jobs for them anymore. We're just not going to evict innocent tenants. It stops today. When you're blindly sending me out to houses where I'm coming across innocent tenant after innocent tenant, I can't keep doing this and have a good conscience about it."

Note: For many reports of corporate corruption from reliable sources, click here.

Bailout tests how much the American public will tolerate theft
2008-09-23, San Francisco Chronicle (San Francisco's leading newspaper)
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/09/23/ED0J132MOV.DTL

Treasury Secretary Paulson's edict to create a $700 billion fund to buy worthless mortgage securities from agitated wealthy bond investors is nothing short of a final step on the path to the end of the republic. The secretary claims he can only be effective if his decisions are beyond judicial review. Our government and its owners appear to be testing how much the American public will tolerate. A few years ago, no one could have imagined that the silent majority would quietly accept thefts of this magnitude from a government that stopped tiny payments to single mothers with poor children in the name of welfare reform because the program's $10 billion cost was breaking the federal budget. If the public allows this theft, then it will signal to powerful forces that they can essentially do anything, because the American public has become so mushy-headed that it will stand up for nothing. When power discovers that those from whom it would exact payment are powerless, its viciousness increases infinitely. Our enemy has revealed itself, and it is our own government. Because the American public has not been introduced to methods for controlling its government for generations, I will suggest one called a general strike. This fundamental democratic power is where everyone decides to send a message to the government by not going to work, to school, shopping, nowhere. This is the critical time when charlatans among us will promise they can save us from the inevitable if we only allow them the power they need to save us. They are lying.

Note: This article's author Sean Olender is an attorney in San Mateo, California. Mr. Oleander predicted the bailout of Fannie Mae and Freddie Mac months before it happened based on clearly disempowering moves by the government. To see his prescient article on this from Feb. 2008, click here.

Almost Armageddon: Markets were 500 Trades from a Meltdown
2008-09-21, New York Post
http://www.nypost.com/seven/09212008/business/almost_armageddon_130110.htm

The market was 500 trades away from Armageddon on Thursday [September 18], traders inside two large custodial banks tell The Post. Had the Treasury and Fed not quickly stepped into the fray that morning with a quick $105 billion injection of liquidity, the Dow could have collapsed. According to traders, who spoke on the condition of anonymity, money market funds were inundated with $500 billion in sell orders prior to the opening. The Fed's dramatic $105 billion liquidity injection on Thursday (pre-market) was just enough to keep key institutional accounts from following through on the sell orders and starting a stampede of cash that could have brought large tracts of the US economy to a halt. Cracks started to show in money market accounts late Tuesday when shares in one fund, the Reserve Primary Fund - which touted itself as super safe - fell below the golden $1 a share level. By Wednesday, banks sensed a run on their accounts. They started stockpiling cash in anticipation of withdrawals. Banks, which usually keep an average of $2 billion in excess reserves earmarked for withdrawals, pumped that up to an astounding $90 billion, Lou Crandall, chief economist at Wrighton ICAP, told The [Wall Street] Journal. And for good reason. By the close of business on Wednesday, $144.5 billion - a record - had been withdrawn. How much money was taken out of money market funds the prior week? Roughly $7.1 billion, according to AMG Data Services. By Thursday, that level ... had grown to $100 billion.

Note: For insight into the banking and financial powers that runs today's governments, click here.

The Global Ruling Class: Billion-dollar Babies
2008-04-24, The Economist magazine
http://www.economist.com/books/displaystory.cfm?story_id=11081878

Who rules the world? The rise of nation states produced national ruling classes. It would be odd if the current integration of the world economy did not produce new global elites — business people and financiers who run global companies and global politicians who steer supra-national organisations such as the European Union (EU) and the International Monetary Fund. David Rothkopf, a visiting scholar at the Carnegie Endowment for International Peace, argues that these elites constitute nothing less than a new global “superclass”. They have all the clubby characteristics of the old national ruling classes, but with the vital difference that they operate on the global stage, far from mere national electorates. They attend the same universities. They are groomed in a handful of world-spanning institutions such as Goldman Sachs. They belong to the same clubs — the Council on Foreign Relations in New York is a particular favourite — and sit on each other's boards of directors. Many of them shuttle between the public and private sectors. They meet at global events such as the World Economic Forum at Davos and the Trilateral Commission or — for the crème de la crème — the Bilderberg meetings or the Bohemian Grove seminars that take place every July in California. Mr Rothkopf is anything but a crank, and he is right when he says that, these days, the most influential people around the world are also the most global people. He is also admirably ambivalent about his subject. He worries about surging inequality — the richest 1% of humans own 40% of the planet's wealth — and about the rumbling backlash against so much unaccountable power.

Note: For reliable, verifiable information the secret societies of which the global elite are a part, click here. Superclass: The Global Power Elite and the World They Are Making by David Rothkopf is available here.

Rescue Me: A Fed Bailout Crosses a Line
2008-03-16, New York Times
http://www.nytimes.com/2008/03/16/business/16gret.html?ex=1363320000&en=04d1c...

What are the consequences of a world in which regulators rescue even the financial institutions whose recklessness and greed helped create the titanic credit mess we are in? Will the consequences be an even weaker currency, rampant inflation, a continuation of the slow bleed that we have witnessed at banks and brokerage firms for the past year? Or all of the above? Stick around, because we’ll soon find out. And it’s not going to be pretty. Agreeing to guarantee a 28-day credit line to Bear Stearns, by way of JPMorgan Chase, the Federal Reserve Bank of New York conceded last Friday that no sizable firm with a book of mortgage securities or loans out to mortgage issuers could be allowed to fail right now. It was the most explicit sign yet of the Fed’s “Rescues ‘R’ Us” doctrine that already helped to force the marriage of Bank of America and Countrywide. But why save Bear Stearns? “Why not set an example of Bear Stearns, the guys who have this record of dog-eat-dog, we’re brass knuckles, we’re tough?” asked William A. Fleckenstein, president of Fleckenstein Capital in Issaquah, Wash., and co-author with Fred Sheehan of Greenspan’s Bubbles: The Age of Ignorance at the Federal Reserve. After years of never allowing any of our financial institutions to fail, they have become so enormous that nobody will be allowed to sink beneath the waves. Otherwise, a tsunami would swamp the hedge funds, banks and other brokerage firms that remain afloat. If Bear Stearns failed, for example, it would result in a wholesale dumping of mortgage securities and other assets onto a market that is frozen and where buyers are in hiding. This fire sale would force surviving institutions carrying the same types of securities on their books to mark down their positions, generating more margin calls and creating more failures.

Note: This excellent article should be read in its entirety by anyone who wants to understand the impending financial meltdown and the government's response to it.

Predatory Lenders' Partner in Crime (by then N.Y. Governor Eliot Spitzer)
2008-02-14, Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR20080213027...

Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers' ability to repay, making loans with deceptive "teaser" rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets. Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers. Predatory lending was widely understood to present a looming national crisis. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York's, enacted laws aimed at curbing such practices. When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.

Note: Isn't it interesting that just weeks after former New York Governor Eliot Spitzer wrote this highly revealing article his sexual affairs were exposed, leading to his resignation!

Anybody Seen Our Gold?
2008-01-30, Full Page Ad in Wall Street Journal
http://www.gata.org/node/wallstreetjournal

The gold reserves of the United States have not been fully and independently audited for half a century. Now there is proof that those gold reserves and those of other Western nations are being used for the surreptitious manipulation of the international currency, commodity, equity, and bond markets. The Federal Reserve’s general counsel, J. Virgil Mattingly, acknowledged as much when he told the Federal Open Market Committee on January 31, 1995, that the Treasury Department’s Exchange Stabilization Fund had undertaken gold swaps. Federal Reserve Chairman Alan Greenspan acknowledged as much in testimony to Congress on July 24, 1998, when he said that “central banks stand ready to lease gold in increasing quantities should the price rise.” Since last May the U.S. Treasury Department’s weekly report of the government’s international reserve position has cited loans and swaps from the U.S. gold reserves. Since 2004 four major international investment houses — Sprott Asset Management, Cheuvreux, Citigroup, and Redburn Partners — have issued reports stating that Western central banks have been manipulating the gold market. The objective of this manipulation is to conceal the mismanagement of the U.S. dollar so that it might retain its function as the world’s reserve currency. But to suppress the price of gold is to disable the barometer of the international financial system so that all markets may be more easily manipulated. This manipulation has been a primary cause of the catastrophic excesses in the markets that now threaten the whole world.

Note: Did you notice that for the first time in history gold passed the $1,000 per ounce mark on March 13, 2008? Why did the major media practically ignore this huge milestone? Gold rose 32% in 2007 and continues to rise, yet the media is giving very little attention to this. Some newspapers which regularly listed the price of gold in their business section are no longer doing so. Why? For more, click here.

The shock doctrine
2007-09-08, Guardian (One of the U.K.'s leading newspapers)
http://business.guardian.co.uk/comment/story/0,,2165023,00.html

At the big Red Cross shelter in Baton Rouge, Louisiana ... the news ... was that the Republican Congressman Richard Baker had told a group of lobbyists, "We finally cleaned up public housing in New Orleans. We couldn't do it, but God did." Joseph Canizaro, one of New Orleans' wealthiest developers, had just expressed a similar sentiment: "I think we have a clean sheet to start again. And with that clean sheet we have some very big opportunities." All that week Baton Rouge had been crawling with corporate lobbyists helping to lock in those big opportunities: lower taxes, fewer regulations, cheaper workers and a "smaller, safer city" - which in practice meant plans to level the public housing projects. One of those who saw opportunity in the floodwaters of New Orleans was the late Milton Friedman, grand guru of unfettered capitalism and credited with writing the rulebook for the contemporary, hyper-mobile global economy. "Most New Orleans schools are in ruins," Friedman observed, "as are the homes of the children who have attended them. The children are now scattered all over the country. This is a tragedy. It is also an opportunity." Friedman's radical idea was that instead of spending a portion of the billions of dollars in reconstruction money on rebuilding and improving New Orleans' existing public school system, the government should provide families with vouchers, which they could spend at private institutions. In sharp contrast to the glacial pace with which the levees were repaired and the electricity grid brought back online, the auctioning-off of New Orleans' school system took place with military speed and precision. Within 19 months, with most of the city's poor residents still in exile, New Orleans' public school system had been almost completely replaced by privately run charter schools.

Bankers for poor win peace Nobel
2006-10-13, CNN News/Associated Press
http://www.cnn.com/2006/WORLD/europe/10/13/nobel.peace.ap

Bangladeshi microcredit pioneer Muhammad Yunus and his Grameen Bank were awarded the Nobel Peace Prize on Friday for their work in advancing economic and social opportunities for the poor, particularly women. The economist and the bank he founded will share the prize. They were cited for their efforts to help "create economic and social development from below" ... by using innovative economic programs such as microcredit lending. Grameen Bank has been instrumental in helping millions of poor ... improve their standard of living by letting them borrow small sums to start businesses. Loans go toward buying items such as cows to start a dairy, chickens for an egg business, or mobile phones to start businesses where villagers who have no access to phones pay a small fee to make calls. "Every single individual on earth has both the potential and the right to live a decent life. Across cultures and civilizations, Yunus and Grameen Bank have shown that even the poorest of the poor can work to bring about their own development," the Nobel Committee said in its citation. Microcredit is the extension of small loans, typically US$50 to US$100, to entrepreneurs too poor to qualify for traditional bank loans. The bank claims to have 6.6 million borrowers, 97 percent of whom are women, and provides services in more than 70,000 villages in Bangladesh.

Note: If the above CNN link does not work, click here. To make a real difference in the world and to help reduce poverty in a dramatic way, see our empowering summary of this inspiring worldwide movement.

Sustained Improvement in Federal Financial Management Is Crucial to Addressing Our Nation's Financial Condition and Long-term Fiscal Imbalance
2006-03-01, Government Accountability Office (GAO) Website
http://www.gao.gov/docsearch/abstract.php?rptno=GAO-06-406T

GAO is required by law to annually audit the consolidated financial statements of the U.S. government. Until the problems discussed in GAO's audit report on the U.S. government's consolidated financial statements are adequately addressed, they will continue to...hinder the federal government from having reliable financial information to operate in an economical, efficient, and effective manner. For the ninth consecutive year, certain material weaknesses in internal control and in selected accounting and financial reporting practices resulted in conditions that continued to prevent GAO from being able to provide the Congress and American people an opinion as to whether the consolidated financial statements of the U.S. government are fairly stated in conformity with U.S. generally accepted accounting principles. Major impediments to an opinion on the consolidated financial statements continued to be (1) serious financial management problems at the Department of Defense. The federal government's fiscal exposures now total more than $46 trillion, representing close to four times gross domestic product (GDP) in fiscal year 2005 and up from about $20 trillion or two times GDP in 2000.

Note:For the official .pdf version on the GAO website click here. Why didn't this become headline news? Why isn't anyone being assigned to seriously investigate these continually unresolved core issues and report to the public that the largest, most powerful country in the world is a long way from being able to track its own finances. For lots more major media articles on major government corruption, click here. You can help to build a better world by sharing this vital information with your friends and colleagues and contacting members of the media and your government representatives asking them to address this pervasive problem. Thanks for caring.

Congress Passes Wide-Ranging Bill Easing Bank Laws
1999-11-05, New York Times
http://www.nytimes.com/1999/11/05/business/congress-passes-wide-ranging-bill-...

Congress approved landmark legislation today that opens the door for a new era on Wall Street in which commercial banks, securities houses and insurers will find it easier and cheaper to enter one another's businesses. The measure, considered by many the most important banking legislation in 66 years, was approved in the Senate by a vote of 90 to 8 and in the House tonight by 362 to 57. The bill will now be sent to the president, who is expected to sign it, aides said. ''Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century,'' Treasury Secretary Lawrence H. Summers said. ''This historic legislation will better enable American companies to compete in the new economy.'' The decision to repeal the Glass-Steagall Act of 1933 provoked dire warnings from a handful of dissenters that the deregulation of Wall Street would someday wreak havoc on the nation's financial system. The original idea behind Glass-Steagall was that separation between bankers and brokers would reduce the potential conflicts of interest that were thought to have contributed to the speculative stock frenzy before the Depression. Consumer groups and civil rights advocates criticized the legislation for being a sop to the nation's biggest financial institutions. The opponents of the measure ... predicted that by unshackling banks and enabling them to move more freely into new kinds of financial activities, the new law could lead to an economic crisis down the road when the marketplace is no longer growing briskly.

Note: Clearly these critics of the elimination of Glass-Steagall have been proven right by the financial crisis which has unfolded less than 10 years later. Note the key role played by President Obama's top economic advisor, Larry Summers. If the players haven't changed, how likely is it that the game has?

Reported Suicide Is Latest Shock at Freddie Mac
2009-04-23, New York Times
http://www.nytimes.com/2009/04/23/business/23freddie.html?partner=rss&emc=rss...

The pressures were already immense when David B. Kellermann was promoted to the top financial position at the mortgage giant Freddie Mac last September. Mr. Kellermann's boss and other top executives were ousted when the Treasury secretary seized Freddie Mac and its sibling company, Fannie Mae; others left on their own and were not replaced. Early on Wednesday, Mr. Kellermann went to the basement of his brick home and hanged himself, according to people familiar with the situation who were not authorized to speak. His body was removed five hours later, through a throng of neighbors, television crews and others. "David was such an honest and humble person," said Tim Bitsberger, Freddie Mac"s treasurer until he left in December. "It just doesn't make sense," Mr. Bitsberger said. The roots and causes of suicide are often unclear. It is not known if Mr. Kellermann succumbed to the pressures of his job. But in the aftermath of his death, it is plain that at Freddie Mac, as at many of the companies in the center of this economic storm, there are forces so strong they can overwhelm almost anyone. Mr. Kellermann ... was at the intersection of some of the most difficult issues facing the company. Mr. Kellermann was also working in a poisonous political atmosphere. He was recently involved in tense conversations with the company's federal regulator over its routine financial disclosures. Freddie Mac executives wanted to emphasize to investors that they believed the company was being run to benefit the government, rather than shareholders.

Note: For a revealing archive of reports on the hidden realities underlying the Wall Street bailout, click here.

Restrain the credit card industry
2009-04-23, San Francisco Chronicle (San Francisco's leading newspaper)
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/04/22/EDK817761J.DTL

While American consumers have been struggling, credit card companies have been enjoying a field day. Not only are most of them receiving federal bailout money, but they've been jacking up interest rates (there were rate hikes on nearly 25 percent of accounts between 2007 and 2008) and switching the terms of agreements with consumers. Why the rush to gouge consumers in the depths of a recession? In July 2010, the Federal Reserve will impose new, consumer-friendly disclosure and administrative restrictions on the credit card industry. Scrambling to get ahead of the deadline, the card companies have been raising interest rates, slicing credit lines and, in too many cases, simply dumping customers with little rhyme or reason. Defaults and delinquencies have skyrocketed - and consumers are livid. "It's off the charts in terms of their ire about paying higher interest rates, particularly when their money, as they see it, is being given to the banks to prop them up," said Rep. Jackie Speier, D-Hillsborough. Speier's staff says her office has been "flooded" with calls from furious constituents. Speier is ... a co-sponsor of HR627, better known as "The Credit Cardholders' Bill of Rights." The bill - which has the support of the Obama administration - would prevent card issuers from raising interest rates without advance notice and end the practice of "double-cycle billing" so that consumers do not have to pay interest on debts they've already paid.

Note: For a highly revealing archive of reports on the hidden realities underlying the Wall Street bailout, click here.

The U.S. Financial System Is Effectively Insolvent
2009-03-05, Forbes Magazine
http://www.forbes.com/2009/03/04/global-recession-insolvent-opinions-columnis...

With economic activity contracting in 2009's first quarter at the same rate as in 2008's fourth quarter, a nasty U-shaped recession could turn into a more severe L-shaped near-depression (or stag-deflation). The scale and speed of synchronized global economic contraction is really unprecedented (at least since the Great Depression), with a free fall of GDP, income, consumption, industrial production, employment, exports, imports, residential investment and, more ominously, capital expenditures around the world. And now many emerging-market economies are on the verge of a fully fledged financial crisis, starting with emerging Europe. In the meantime, the massacre in financial markets and among financial firms is continuing. The debate on "bank nationalization" is borderline surreal, with the U.S. government having already committed--between guarantees, investment, recapitalization and liquidity provision--about $9 trillion of government financial resources to the financial system (and having already spent $2 trillion of this staggering $9 trillion figure). Thus, the U.S. financial system is de facto nationalized, as the Federal Reserve has become the lender of first and only resort rather than the lender of last resort, and the U.S. Treasury is the spender and guarantor of first and only resort. And even with the $2 trillion of government support, most of these financial institutions are insolvent, as delinquency and charge-off rates are now rising at a rate ... that means expected credit losses for U.S. financial firms will peak at $3.6 trillion. So, in simple words, the U.S. financial system is effectively insolvent.

Note: The author of this insightful analysis, Nouriel Roubini, has a very informative blog, available here.

The Death of 'Rational Man'
2009-02-08, Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/06/AR20090206027...

What allowed some people to see the financial crash coming while so many others missed its gathering force? I put that question recently to Nouriel Roubini, who has come to be known as "Dr. Doom" because of his insistent warnings starting in 2006 that we were heading into a global firestorm. Roubini gave two kinds of answers. The first involves standard number-crunching of the sort that economists routinely do -- and that Roubini just did better and sooner. It's his second answer that's more interesting, because it goes to the heart of what we should take away from this crisis: Roubini decided to discard the assumption of market rationality that underlies most economics and to embrace the psychological insights of what's known as "behavioral economics." Everyone else had those same numbers. Why did Roubini act? The answer is that he decided to trust his gut, which told him there was trouble ahead, rather than Wall Street's "wisdom of the crowd," which -- as reflected in stock prices -- said everything was rosy. He concluded that the markets were not pricing in the degree of risk that was actually present in housing. "The rational man theory of economics has not worked," Roubini said last month at a session of the World Economic Forum at Davos. That's why he and other prominent economists are paying more attention to behavioral economics, which starts from the premise that economic decisions, like other aspects of human behavior, are influenced by irrational psychological factors.

Note: To visit Nouriel Roubini's highly informative blog, click here. For lots more on the financial crisis and bailout, click here.

US Treasury overpaid $78 bln under TARP-watchdog
2009-02-06, CNN News/Reuters
http://money.cnn.com/news/newsfeeds/articles/reuters/MTFH29185_2009-02-06_01-...

The U.S. Treasury looks to have overpaid financial institutions to the tune of $78 billion in carrying out capital injections last year, the head of a congressional oversight panel for the government's $700 billion bailout program told lawmakers. Elizabeth Warren, a Harvard law professor, said her group estimated the Treasury paid $254 billion in 2008 in return for stocks and warrants worth about $176 billion under the Troubled Asset Relief Program, or TARP. Warren said the Treasury, under then-Secretary Henry Paulson, misled the public about how it would price them. "Treasury simply did not do what it said it was doing ... They described the program one way, and they priced it another," Warren said at a hearing before the Senate Banking Committee. She added that Paulson "was not entirely candid" in describing TARP's bank capital injection program. Neil Barofsky, another watchdog for the TARP program, told the Senate committee his office is turning to criminal investigations. "That's going to be a large focus of my office," he said. Warren told the banking committee that after three months on the job, her panel is still not getting enough answers from Treasury. She described the bailout as "an opaque process at best." Barofsky raised concerns about potential fraud in one of several programs funded by bailout money -- the Federal Reserve's Term Asset-Backed Loan Facility (TALF).

Note: Was the overpayment by Treasury to Wall Street banks for nearly-worthless assets they created a mistake? Or was it the real, hidden purpose of TARP to pay the banks more for the assets than they are worth? For many revealing reports from reliable sources on the realities behind the Wall Street bailout, click here.

U.S. Pledges Top $7.7 Trillion to Ease Frozen Credit
2008-11-24, Bloomberg News
http://bloomberg.com/apps/news?pid=20601109&sid=arEE1iClqDrk

The U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers after guaranteeing $306 billion of Citigroup Inc. debt yesterday. The unprecedented pledge of funds includes $3.18 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the plan approved by lawmakers, the Treasury Department’s $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis. When Congress approved the TARP on Oct. 3, Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson acknowledged the need for transparency and oversight. Now, as regulators commit far more money while refusing to disclose loan recipients or reveal the collateral they are taking in return, some Congress members are calling for the Fed to be reined in. “Whether it’s lending or spending, it’s tax dollars that are going out the window and we end up holding collateral we don’t know anything about,” said Congressman Scott Garrett, a New Jersey Republican who serves on the House Financial Services Committee. “The time has come that we consider what sort of limitations we should be placing on the Fed so that authority returns to elected officials as opposed to appointed ones.”

Note: How is it possible that trillions of taxpayer dollars are being thrown around, yet Congress is not being told where the money is going? For revealing information on how the Fed manipulates government, click here.

World Bank Under Cyber Siege in 'Unprecedented Crisis'
2008-10-10, FOX News
http://www.foxnews.com/story/0,2933,435681,00.html

The World Bank Group's computer network — one of the largest repositories of sensitive data about the economies of every nation — has been raided repeatedly by outsiders for more than a year, FOX News has learned. It is still not known how much information was stolen. But sources inside the bank confirm that servers in the institution's highly-restricted treasury unit were deeply penetrated with spy software last April. Invaders also had full access to the rest of the bank's network for nearly a month in June and July. In total, at least six major intrusions — two of them using the same group of IP addresses originating from China — have been detected at the World Bank since the summer of 2007, with the most recent breach occurring just last month. In a frantic midnight e-mail to colleagues, the bank's senior technology manager referred to the situation as an "unprecedented crisis." In fact, it may be the worst security breach ever at a global financial institution. The crisis comes at an awkward moment for World Bank president Robert Zoellick. This weekend, the bank holds its annual series of meetings in Washington — and just in advance of those sessions, Zoellick called for a radical revamping of multilateral organizations in light of the global economic meltdown. Zoellick is positioning himself and the bank as an institution that can help chart a new path toward global financial stability. But that reputation ... depends on the bank's stable information infrastructure. The fact that the information vaults of the World Bank have been repeatedly pried open won't help Zoellick's case.

Note: For analysis of the role of banks and financial corporations in today's world, click here.

A Bailout. For Everyone.
2008-03-12, Washington Post
http://www.washingtonpost.com/wp-dyn/content/story/2008/03/11/ST2008031103060...

Last week, it was a $200 billion cash-for-bond swap for the banks. This week, it was a $200 billion bond-for-bond swap for the big investment houses. If they keep this up, pretty soon you'll be able to walk into any Federal Reserve bank and hock that diamond brooch you inherited from Aunt Mildred. Forget all that nonsense about the Bernanke Fed being too timid or behind the curve. In the face of what is turning into the most serious financial market crisis since the Great Depression, the Fed has been more aggressive and more creative in using its limitless balance sheet -- in effect, its ability to print money -- than at any time in history. We can argue till the cows come home about whether this is a bailout for Wall Street. It is -- but only to the extent that it is also a bailout for all of us, meant to prevent a financial and economic meltdown that drags everyone down with it. In broad strokes, we're going through a massive "de-leveraging" of the economy, wringing out trillions of dollars of debt that had artificially driven up the price of real estate and financial assets, and, more generally, allowed Americans to live beyond their means. Fed officials warn that this de-leveraging is nowhere near finished. It's anyone's guess how long this credit crunch will last, but the chances are that we'll have several more market meltdowns and Fed rescues before it's over, probably in the fall. Until then, the dollar will continue to get hammered and stocks will continue their fitful decline. And if the last two financially induced recessions are any guide, it will be well into 2009 before the economy hits bottom, followed by a couple of years of slow growth and "jobless" recovery.

Note: The title of this article is quite revealing. A bailout for the big banks is considered to be a bailout for everyone. If you believe this, we most highly encourage you to read our powerful two-page summary of the banking cover-up available here.

Energy Traders Avoid Scrutiny
2007-10-21, Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2007/10/20/AR20071020012...

One year ago, a 32-year-old trader at a giant hedge fund named Amaranth held huge sway over the price the country paid for natural gas. Trading on unregulated commodity exchanges, he made risky bets that led to the fund's collapse -- and, according to a congressional investigation, higher gas bills for homeowners. But as another winter approaches, lawmakers and federal regulators have yet to set up a system to prevent another big fund from cornering a vital commodity market. Called by some insiders the Wild West of Wall Street, commodity trading is a world where many goods that are key to national security or public consumption, such as oil, pork bellies or uranium, are traded with almost no oversight. Part of the problem is that the regulator, the federal Commodity Futures Trading Commission, has had a hard time keeping up with the sector it oversees. Commodity trading has exploded in complexity and popularity, growing six-fold in trading volume since 2000 -- the year that a handful of giant energy companies, including Enron, successfully lobbied to get Congress to exempt energy markets from government regulation. Meanwhile CFTC's staffing has dropped to its lowest level in the agency's 33-year history. Its computer systems that monitor trades are outdated. Its leadership has seen frequent turnover. "We are facing flat budgets and exponential growth in the industry," said CFTC Acting Chairman Walter Lukken. "Over the long term this type of budgetary situation is not sustainable." Commodities markets also have become complex with many trading futures contracts as well as financial tools called derivatives and swaps, whose value is based on the risk of futures contracts. Gathering data on these products has been a challenge for the CFTC. The evolution of the markets has led to some tension between the CFTC and the Federal Energy Regulatory Commission.

Note: For more revealing major media reports of unregulated financial corruption and its impact, click here.

Radical banking: You shop locally -- why not bank locally too?
2007-09-04, San Francisco Chronicle (San Francisco's leading newspaper)
http://www.sfgate.com/cgi-bin/article.cgi?file=/g/a/2007/09/04/moneytales.DTL

Jessica ... lives what some might consider the perfect alternative lifestyle. She makes enough money to pay for rent and food (from the farmer's market) by teaching classes at the Solar Living Institute and selling her self-published zine about alternative fuel. She grows much of her own food and raises chickens and bees in her backyard. As a child, her family life centered around growing food and cooking meals together. Her parents never emphasized money. She hasn't strayed far from her upbringing. When asked about her views on money, she said: "It's better to be happy than to worry about your credit card bill or working a lot." One of the key points of being happy, for Jessica, is to bank at Cooperative Center Federal Credit Union. Jessica's made it a point to convert her friends to using credit unions, which are nonprofit banks. "I say to people: So you shop at a farmer's market. You use alternative fuel or bike or take public transportation. But you still bank at Bank of America?" She laughed at the paradox of the small-is-beautiful crowd supporting a global corporation. "With banks, it's a business and all your money goes to make someone you don't know rich -- but with credit unions, all the money goes back into the community," Jessica explained. "It's people banding together to share the abundance." Credit unions -- also called cooperative banks or people's banks -- have origins in Europe. They were first started by German farmers in the 1860s who felt private banks were charging unfair fees. These rural people pooled money together in order to make loans within their tight-knit community. In North America, the idea of credit unions was first embraced by Canadians. These days in the United States, there are over 8,000 credit unions; 536 of them are in California.

Note: To locate a credit union near you (in the United States), click here.

Defense Department drops $100M on unused airline tickets
2004-06-09, USA Today/New York Times/Associated Press
http://www.usatoday.com/travel/news/2004-06-09-pentagon-flights_x.htm

The Defense Department spent an estimated $100 million for airline tickets that were not used over a six-year period and failed to seek refunds even though the tickets were reimbursable, congressional investigators say. The GAO estimated that between 1997 and 2003, the Defense Department bought at least $100 million in tickets that were not used or used only partially by a passenger who did not complete all legs of a flight. The waste went undetected because the department relied on individuals to report the unused tickets. They did not do so. "The millions of dollars wasted on unused airline tickets provides another example of why DOD financial management is one of our high-risk areas, with DOD highly vulnerable to fraud, waste and abuse," the GAO said. Two of the three lawmakers who asked for the study were Republicans, and both were highly critical of the Pentagon's lack of financial control. Sen. Charles Grassley, R-Iowa, said, "It's outrageous that the Defense Department would be sending additional federal tax dollars to the airlines by way of unused passenger tickets." While one GAO report focused on the unused tickets, the second investigation found potential fraud. It said the department paid travelers for tickets the department already bought and reimbursed employees for tickets that had not been authorized. It is a crime for a government employee knowingly to request reimbursement for goods and services he or she did not buy. To demonstrate how easy it was to have the Pentagon pay for airline travel, the investigators posed as Defense employees, had the department generate a ticket and showed up at the ticket counter to pick up a boarding pass.

Note:To read this astonishing article on the New York Times website, click here.

New York City Mayor Hylan Foresees A Revolt
1922-12-10, New York Times
http://query.nytimes.com/mem/archive-free/pdf?res=9F07EED6153AEF33A25753C1A96...

One of the most astounding facts about our American life is that the wealth and property of the country and the control of the machinery of government are in the hands of less than 2 per cent of the inhabitants. A small group of excessively wealthy individuals, members of the Republican and Democratic Parties alike, have, through the exercise of powerful, sinister and, too often, unlawful influence, usurped the government and seized public property on such a wholesale scale that they have become ... virtual dictators. A small group of international bankers and money lenders, public utility exploiters and tariff beneficiaries have actually dictated nominations for offices up to the Presidency. They have placed the slickest, cleverest, and most cunning manipulators in official positions, even in the minor posts, where they could be of service when called upon by the invisible power which, utterly devoid of all humanity, seeks but to wallow in riches. So absolute is the power of America's secret dynastic rulers that they have, without hindrance, written the very platforms and pledges of political parties, and because of substantial contributions to campaign chests they have arrogated to themselves the right to dictate the governmental policies of the administration elected to office regardless of party. Woe to the public officials who dare to resent their dictatorship! If there be such public officials who will not submit to their imperious dictation, then the flood-gates of lying press propaganda are released, sweeping the unhappy public servant to an earthly as well as political grave, or compelling him to compromise with his conscience and become their subservient tool to the end of his term.

Note: John F. Hylan was Mayor of New York City from 1918 to 1925. New York has long been the US banking and financial headquarters, with the mayor's office about a half-mile from the New York Stock Exchange. The rest of this important article can be accessed at this link as well as the one above. It is interesting to note that this article was published not long after the Federal Reserve was created, turning over huge amounts of control of the U.S. economy to the most powerful bankers in the country. For more on this, click here.

U.S. Deficit Rises to $1.4 Trillion; Biggest Since 1945
2009-10-17, New York Times
http://www.nytimes.com/2009/10/17/us/17deficit.html

The Obama administration [has said] that the federal budget deficit for the fiscal year that just ended was $1.4 trillion, nearly a trillion dollars greater than the year before and the largest shortfall relative to the size of the economy since 1945. The shortfall for the fiscal year 2009, which ended Sept. 30, translates to 10 percent of the economy, according to a joint statement from the Treasury secretary, Timothy F. Geithner, and the director of the Office of Management and Budget, Peter R. Orszag. For the 2008 fiscal year, the deficit of $459 billion was 3.2 percent of the economy, as measured by the gross domestic product. At 10 percent of the gross domestic product, the 2009 deficit is the highest since the end of World War II, when it was 21.5 percent. The overall national debt, which is the accumulation of annual deficits, is nearly $12 trillion, and projected deficits for the next decade will add an estimated $9 trillion more. Administration officials say two-thirds of that is due to Bush administration policies.

Note: The current debt of $12 trillion equals $40,000 for every man, woman, and child in the U.S. Most of the increased deficit is due to the government bailout of the biggest Wall Street banks and investment houses. For lots more on the realities of the Wall Street bailout, click here.

Piggish capitalism endangers us all
2009-05-08, San Francisco Chronicle (San Francisco's leading newspaper)
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/05/07/ED1117GOT8.DTL

Even if you don't dig on swine, it has become impossible to avoid them. If you're not pummeled by television reports about Wall Street oinkers, you're bombarded by talk-radio rants about congressional pork and newspaper dispatches about swine flu. They are each part of what might be called piggish capitalism - an economic theory that mixes subsidization, consolidation and deregulation - and it endangers us all. In 1999 ... President Bill Clinton signed a landmark deregulation measure that "ushered in an era of aggressive bank mergers," as Reuters reports. The result was what critics like Rep. John Dingell, D-Mich., predicted at the time: Wall Street created "a group of institutions which are too big to fail" and that "taxpayers are going to be called upon to cure." Mass producing mortgage-backed securities that were quickly infected with subprime mutations, these financial factory farms became so enormous and unregulated that they spread toxic assets throughout the entire economy. And when losses mounted, the government made banks whole with trillion-dollar bailouts. Incredibly, our government hasn't learned from these crises. Regulation-wise ...new financial rules have yet to move in Congress. Additionally, the much-vaunted bank "stress tests" have been shrouded in secrecy, which experts say created the potential for rampant insider trading. Meanwhile, the White House seems loath to break up financial firms, preferring instead another bank bailout - even as analysts warn that such bailouts fuel merger mania. Pigs may, in fact, be the smartest domestic animal. But when charged with managing capitalism, they clearly have trouble comprehending the simplest lessons.

Note: For a clear example of the lack of concern about trillions of dollars unaccounted for by the Federal Reserve, listen to a five-minute video testimony of the inspector general of the Fed being question by a Congressman at this link. Then learn more about the major manipulations of the Fed on our highly banking and financial revealing summary available here.

Inquiry Asks Why A.I.G. Paid Banks
2009-03-27, New York Times
http://www.nytimes.com/2009/03/27/business/27cuomo.html?partner=rss&emc=rss&p...

Members of Congress and the New York State attorney general demanded detailed information Thursday on how tens of billions of taxpayer dollars flowed through the American International Group during its crisis last fall and ended up in the coffers of several dozen big banks, shielding them from losses. The new inquiries shine a spotlight on a question that is exponentially bigger, in dollars, than the $165 million in bonuses that A.I.G. paid out this month, but which has been overshadowed until now by the uproar over the bonuses. “We would like to know if the A.I.G. counterparty payments, as made, were in the best interests of the taxpayers who provided the funding,” said Representative Elijah E. Cummings, Democrat of Maryland, in a letter to Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program. The banks and investment firms that ended up with A.I.G.’s bailout money last fall were, in many cases, counterparties to derivatives contracts it had sold, known as credit-default swaps, which guaranteed the value of assets in their investment portfolios. They included Wall Street firms, like Goldman Sachs, JPMorgan Chase and Merrill Lynch, that have successfully resisted efforts to regulate credit derivatives in the past. In several hearings this month, members of Congress said they believed the derivatives had often been used to speculate, not to manage risk. They have expressed outrage that A.I.G.’s trading partners got 100 cents on the dollar for their money-losing trades when ordinary Americans paying for the bailout have suffered big losses in their 401(k) accounts and other investments.

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

IRS defends drop in audits of millionaires
2009-03-22, MSNBC/Associated Press
http://www.msnbc.msn.com/id/29831158

The Internal Revenue Service is not living up to its pledge to crack down on wealthy tax cheats, an IRS watchdog group says, citing a drop in audits of millionaires last year. Those with incomes of $1 million and above had a 5.6 percent chance of getting audited in fiscal year 2008, which ended last September, down from 6.8 percent the previous year, according to IRS figures. The actual number of millionaires audited fell from 23,200 to 21,874; the number of millionaires filing tax returns grew from 339,138 to 392,776. "In the face of growing federal deficits and public calls to lower the tax gap — the amount of taxes due but not reported and paid — the drop in millionaire audits is surprising," said the Syracuse University-based Transactional Records Access Clearinghouse in a report Monday. It said the significant drop in audits of richer Americans contrasted with IRS statements last year that it was making strong progress in enforcement, especially of those with incomes of more than $1 million. The TRAC report said focus on high earner returns is critical because of the huge rewards. Among those millionaire audit cases where additional taxes were recommended, the average was $198,000 after face-to-face audits and $137,000 for audits done through correspondence. In total, the IRS collected $56.4 billion in enforcement revenues last year, down from $59.2 billion in 2007 and the first decline in collections in a decade.

Note: The highly important statistic only mentioned in passing here is "the number of millionaires filing tax returns grew from 339,138 to 392,776." That's an over-15% increase in the number of millionaires in one year, while most everyone else seems to be losing money. Hmmmm. Makes you wonder.

Alternative Currencies Grow in Popularity
2008-12-14, Time magazine
http://www.time.com/time/business/article/0,8599,1865467,00.html

Most of us take for granted that those rectangular green slips of paper we keep in our wallets are inviolable: the physical embodiment of value. But alternative forms of money have a long history and appear to be growing in popularity. It's not merely barter or primitive means of exchange like seashells or beads. Beneath the financial radar, in hip U.S. towns or South African townships, in shops, markets and even banks, people throughout the world are exchanging goods and services via thousands of currency types that look nothing like official tender. Alternative means of trade often surface during tough economic times. "When money gets dried up and there are still needs to be met in society, people come up with creative ways to meet those needs," says Peter North, a senior lecturer in geography at the University of Liverpool and the author of [a book] on the subject. He refers to the "scrips" issued in the U.S. and Europe during the Great Depression that kept money flowing and the massive barter exchanges involving millions of people that emerged amid runaway inflation in Argentina in 2000. "People were kept from starving [this way]," he says. Closer to home, "Ithaca Hours," with a livable hourly wage as the standard, were launched during the 1991 recession to sustain the economy in Ithaca, N.Y., and stem the loss of jobs. Hours, which are legal and taxable, circulate within the community, moving from local shop to local artisan and back, rather than leaking out into the larger monetary system. The logo on the Hour reads "In Ithaca We Trust." Alternative (or "complementary") currencies range from quaint to robust, simple to high tech.

Note: Read the entire article at the link above to learn about the great range of uses and benefits provided by alternative currencies.

Bailout Oversight Lacking, GAO Says
2008-12-03, Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/02/AR20081202022...

The Bush administration has failed to adequately oversee its $700 billion bailout program and must move rapidly to guarantee that banks are complying with the plan's limits on conflicts of interest and lavish executive compensation, congressional investigators said yesterday. The new report by the Government Accountability Office, the nonpartisan investigative arm of Congress, said the Treasury Department has yet to impose necessary safeguards or decide how to determine whether the program is achieving its goals. The auditors said it was too soon for them to tell whether the bailout was working. "The rapid pace of implementation and evolving nature of the program have hampered efforts to put a comprehensive system of internal control in place," the report said. "Until such a system is fully developed and implemented, there is heightened risk that the interests of the government and taxpayers may not be adequately protected and that the program objectives may not be achieved in an efficient and effective manner." So far, the rescue package has provided at least $150 billion in capital infusions to 52 financial institutions, the auditors said. They added that no applications for funding were denied by the Treasury. The congressional auditors urged Treasury officials to determine how each bank receiving bailout money is using the money and whether they are using it in a way consistent with the intent of the law. Several congressional leaders have criticized financial firms for hoarding the money instead of using it to lend to borrowers.

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

Sovereign Funds Become Big Speculators
2008-08-12, Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2008/08/11/AR20080811024...

Sovereign wealth funds, the massive investment pools run by foreign governments, are now among the biggest speculators in the trading of oil and other vital goods like corn and cotton in the United States, according to interviews with brokers who handle their investments at leading Wall Street banks, veteran traders and congressional investigators. Some lawmakers say the unregulated activity of sovereign wealth funds and other speculators such as hedge funds has contributed to the dramatic swing in oil prices in recent months. The agency regulating the market said it had not picked up on this activity by sovereign wealth funds. In a June letter, the Commodity Futures Trading Commission told lawmakers that its monitoring showed that these funds were not a significant factor in commodity trading. But the CFTC is not detecting the growing influence of foreign funds because they invest through Wall Street brokers known as "swap dealers" who often operate on unregulated markets. For this reason, the extent of their activities may be known only to the swap dealers at investment banks such as Goldman Sachs, Lehman Brothers and Morgan Stanley, which handle such transactions. The foreign funds involved in commodity trading are ... mainly from countries ... in Asia that do not already make money from producing oil. While it is difficult to quantify how large foreign funds have become, they now represent 12 percent or more of the overall commodity business for some of the largest investment banks, said an industry veteran who spoke on condition of anonymity.

Note: For many revealing reports on corporate corruption from reliable, verifiable sources, click here.

Let's Break up the Fed
2009-07-28, Wall Street Journal
http://online.wsj.com/article/SB10001424052970203946904574300263148640896.html

The Obama administration's plan to increase the powers of the Federal Reserve, says one critic, is like giving a teenager "a bigger, faster car right after he crashed the family station wagon." Broadening the Fed's responsibilities won't help. Instead, we should think of how best to dismantle an overextended Fed. The Fed has been incapacitated by its transformation into an omnibus enterprise with responsibilities ranging from boots-on-the-ground regulation to high-level monetary policy. The Federal Reserve Act of 1913, which created the Federal Reserve System, did so to forestall financial panics rather than pursue macroeconomic policies. The gold standard defined monetary policy. The Fed was merely meant to "provide an elastic currency" by serving as lender of last resort in times of crisis. The Act also assigned the Fed routine responsibilities for maintaining and improving the financial system – examining banks, issuing currency notes, and helping clear checks. The adoption of Keynesian and monetarist ideas by central bankers and elected officials subsequently cast the Fed in a proactive macroeconomic role. In 1977, an amendment to the 1913 Act explicitly charged the Fed with promoting "maximum" employment and "stable" prices. The Bank Holding Company Act of 1956 gave the Fed responsibility over holding companies designed to circumvent restrictions placed on individual banks. Congress further tasked the Fed with enforcing consumer-protection and fair-lending rules. While the record of the Fed's monetary policy has been mixed, its supervision of financial institutions has been a predictable and comprehensive failure. The Fed's excessively broad mandate also has thwarted accountability.

Note: The bill to audit the Fed (HR 1207) in the US Congress now has 276 co-signers -- more than 50% of all members. Yet the media is hardly reporting on this. Contact your Congressional representatives now at this link.

U.S. May Enlist Small Investors in Bank Bailout
2009-04-09, New York Times
http://www.nytimes.com/2009/04/09/business/09fund.html?partner=rss&emc=rss&pa...

During World War I, Americans were exhorted to buy Liberty Bonds to help their soldiers on the front. Now, it seems, they will be asked to come to the aid of their banks — with the added inducement of possibly making some money for themselves. As part of its sweeping plan to purge banks of troublesome assets, the Obama administration is encouraging several large investment companies to create the financial-crisis equivalent of war bonds: bailout funds. The idea is that these investments, akin to mutual funds that buy stocks and bonds, would give ordinary Americans a chance to profit from the bailouts that are being financed by their tax dollars. But there is another, deeply political motivation as well: to quiet accusations that all of these giant bailouts will benefit only Wall Street plutocrats. If, as some analysts suspect, the banks’ assets are worth even less than believed, the funds’ investors could suffer significant losses. Nonetheless, the administration and executives in the financial industry are pushing to establish the investment funds, in part to counter swelling hostility against the financial industry. The embrace of smaller investors underscores the concern in Washington and on Wall Street that Americans’ anger could imperil further efforts to stimulate the economy with vast amounts of government spending. Many Americans say they believe the bailout programs ... will benefit only a golden few, including some of the institutions that helped push the economy to the brink. Critics like Joseph E. Stiglitz, a Nobel Prize-winning economist, argue that the bailouts merely privatize profits and socialize losses.

Note: For a powerfully revealing archive of reports from reliable sources on the hidden realities of the financial bailout, click here.

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.

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.

U.S. corporations are sitting on huge stockpiles of cash
2006-05-28, Seattle Post-Intelligencer/Associated Press
http://seattlepi.nwsource.com/business/271828_market27.html

Imagine the dilemma of having so much cash in your bank account that you didn't know what to do with it. This pipe dream for the average American is now reality for the country's biggest corporations. The industrial companies that make up the Standard & Poor's 500 index...have a staggering $643 billion in cash and equivalents. "We're in a time that is out of whack with all historical numbers," said Howard Silverblatt, equity market analyst at Standard & Poor's. "People are demanding why corporations need so much cash, what are they going to do with it?" Companies began propping up their reserves through 16 straight quarters of double-digit profit growth. Leading the pack with the most cash is Exxon Mobil Corp., which has about $36.55 billion on its balance sheet. That amount is nearly equal to its 2005 profit of $36.13 billion, the highest ever for a U.S. company. Some results of the cash riches: An unprecedented $500 billion of stock buybacks. Last year, ExxonMobil spent $18.2 billion buying its shares. One of the biggest avenues in which companies have spent this excess money has been through mergers and acquisitions. Some 75.4 percent of all deals under $1 billion so far this year were done purely with cash.

Note: A Google search reveals that though this Associated Press article was widely picked up by medium-sized newspapers in the U.S., none of the top 10 papers picked it up. The Seattle newspaper above also removed the word "huge" from the title after it was published. $36 billion means that more than $100 for every man, woman, and child in the U.S. went into ExxonMobil profits last year, and another $100 for each person went into their cash reserves. If ExxonMobil and other oil companies have so much extra cash, why are gas prices so high? It's also quite interesting that the advertisements of these mega-corporations continually invite us to go into debt buying their products, while their profits and cash reserves grow ever higher.

'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.

Mukasey Declines to Create a U.S. Task Force to Investigate Mortgage Fraud
2008-06-06, New York Times
http://www.nytimes.com/2008/06/06/business/06justice.html?partner=rssuserland...

Attorney General Michael B. Mukasey rejected ... the idea of creating a national task force to combat the country’s mortgage fraud crisis, calling the problem a localized one akin to “white-collar street crimes.” He gave his most definitive answer ... in a briefing for reporters, saying that he did not think that the kind of national task force created at the Justice Department in 2002 to investigate the collapse of Enron was “the proper response” to the current crisis. Some critics have called for the same sort of broad federal law enforcement response seen in the Enron case and a wave of other corporate scandals earlier this decade, or in the collapse of the savings and loan industry in the 1980s and 1990s. “This is disappointing,” Representative Barney Frank, the Massachusetts Democrat who leads the House financial services committee, said. Calling the mortgage crisis “worse than Enron,” Mr. Frank said “Enron didn’t cause a worldwide recession. This has more innocent victims.” Mr. Frank noted that a $2.4 billion bill to prevent mortgage foreclosure, which has already passed the House, includes a provision backed by Republicans to provide an additional $300 million for law enforcement officials to fight mortgage fraud. He questioned how that money could be spent without a more centralized effort. The Federal Bureau of Investigation is investigating 19 major corporate fraud cases related to the mortgage crisis. The targets of most of those investigations have not been disclosed. In addition, the F.B.I. has 1,380 small mortgage fraud investigations now open in field offices around the country.

Note: For many powerful reports on government corruption, click here.

Secretly, tiny nations hold much wealth
2005-04-25, Christian Science Monitor
http://www.csmonitor.com/2005/0425/p17s01-cogn.html

They're tax havens: 70 mostly tiny nations that offer no-tax or low-tax status to the wealthy so they can stash their money. Usually, the process is so secret that it draws little attention. But the sums - and lost tax revenues - are growing so large that the havens are getting new and unaccustomed scrutiny. There are about 3 million shell companies (set up largely to duck taxes) in offshore tax havens, Komisar reckons. These tiny tax havens hold 31 percent of total world assets and 26 percent of the stock of US multinationals.

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.

US and EU agree 'single market'
2007-04-30, BBC News
http://news.bbc.co.uk/2/hi/europe/6607757.stm

The United States and the European Union have signed up to a new transatlantic economic partnership at a summit in Washington. The pact is designed to boost trade and investment by harmonising regulatory standards, laying the basis for a US-EU single market. The two sides agreed to set up an "economic council" to push ahead with regulatory convergence in nearly 40 areas, including intellectual property, financial services, business takeovers and the motor industry. The aim is to increase trade and lower costs. Some reports suggest that incompatible regulations in the world's two richest regions add 10% to the cost of developing and producing new cars.

Note: Why is this important news getting such minimal press coverage?

Congressional Testimony of DOD Inspector General - Report No. D-2001-120
2001-05-08, Department of Defense Inspector General's Website
http://www.dodig.osd.mil/Audit/reports/fy01/01-120.pdf

Statement of Robert J Lieberman, Deputy Inspector General, Department of Defense, Before the Subcommittee on Governmental Efficiency, Financial Management and Intergovernmental Relations, House Committee on Government Reform of Defense Financial Management. The extensive DoD efforts to compile and audit the FY 2000 financial statements, for the Department as a whole and for the 10 subsidiary reporting entities like the Army, Navy and Air Force General Funds, could not overcome the impediments caused by poor systems and unreliable documentation of transactions and assets. Some examples of the problems in these year-end statements follow. Department-level accounting adjustment entries used to compile the financial statements were $4.4 trillion, with $1.1 trillion of those unsupported by reliable explanatory information and audit trails. This is an improvement from FY 1999, when $7.6 trillion of adjustments were made with $2.3 trillion unsupported, but remains a good indication of the need for wholesale changes to the financial data reporting systems. Accurate reporting of inventory and property remains a continuing challenge for each of the Military Departments and Defense Logistics Agency because of problems in logistics and other feeder systems. Although the DoD has put a full decade of effort into improving its financial reporting, it seems that everyone involved-—the Congress, the Office of Management and Budget, the audit community, and DoD managers—-have been unable to determine or clearly articulate exactly how much progress has been made.

Mondragón Worker-Operatives Decide How to Ride Out a Downturn
2009-07-00, Yes! Magazine
http://www.yesmagazine.org/article.asp?id=3511

The Mondragón Cooperative Corporation (MCC), the largest consortium of worker-owned companies, has developed a different way of doing business—a way that puts workers, not shareholders, first. Here’s how it played out when one of the Mondragón cooperatives fell on hard times. The worker/owners and the managers met to review their options. After three days of meetings, the worker/owners agreed that 20 percent of the workforce would leave their jobs for a year, during which they would continue to receive 80 percent of their pay and, if they wished, free training for other work. This group would be chosen by lottery, and if the company was still in trouble a year later, the first group would return to work and a second would take a year off. The result? The solution worked and the company thrives to this day. The central importance of workers permeates every aspect of the Mondragón Cooperatives. Even though the MCC businesses are affected by the global financial crisis, there is no unemployment within the MCC businesses. People are moved around to other jobs, or hours are cut without cutting pay. The wages for unworked hours are to be repaid through extra hours worked later in the year. Contrary to what some advocates of top-down management say, this worker-centered focus hasn’t been an obstacle to growth. Founded in 1956 by Father Don Jose Arizmendi, a Basque Catholic priest, the Mondragón cooperatives today comprise more than 100 cooperatives, as well as more than 100 subsidiaries that MCC has purchased and hopes to convert. Altogether, MCC companies employ more than 100,000 worker/owners and in 2007 generated revenues of more than $24 billion.

Mystery of Fake U.S. Bonds Fuels Web Theories
2009-06-26, New York Times
http://www.nytimes.com/2009/06/26/business/global/26fake.html

Ever since two middle-aged men with Japanese passports were caught in Italy this month trying to smuggle a purported $134.5 billion in United States government bearer bonds into Switzerland, the Internet has been abuzz with theories. In all, the Italian financial police and customs guards confiscated 249 paper bonds, each supposedly worth $500 million, and 10 bonds with a face value of $1 billion each. After reports of the seizure began to trickle out of Italy, the blogosphere sprang into action, the ponderings fueled by suspicions that the mainstream media was willfully ignoring the tale. The story took on greater life after Italian authorities — who have refused to talk about the scandal — declined to declare the bonds fakes until they were examined by Washington. Col. Rodolfo Mecarelli, the provincial commander of the financial police in Como, said the investigations were focused on “understanding who these men were and where they were from.” Also unknown are the whereabouts of the two men, who were released after being stopped in early June. “The men were questioned, but not arrested,” said Naoki Oyakawa, an official at the Japanese consulate in Milan. He said the two men had valid Japanese passports, but he would not elaborate further on their identities. “We don’t know where they are now,” he said. “We have had no contact with the two men. They have not asked us for our help.” What the bonds were for remains unclear. “It’s not the sort of thing that you can just go into a bank and convert,” said Colonel Mecarelli. “But they may have been useful to guarantee business deals among people who don’t use cash.” Agencies that deal with financial crimes, including Europol, declined to comment while the Italian investigation was still under way.”

Note: Although this dismissive article asserts that the bonds seized are fakes, many odd circumstances remain unexplained, including the "unknown" identity of the smugglers and why they would smuggle fake securities. The US, Italian and Japanese authorities and mainstream media again have failed to report something of potential significance.

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.

Credit crunch may take out large US bank warns former IMF chief
2008-08-19, Times of London
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_f...

The deepening toll from the global financial crisis could trigger the failure of a large US bank within months, a respected former chief economist of the International Monetary Fund claimed today, fuelling another battering for banking shares. Professor Kenneth Rogoff, a leading academic economist, said there was yet worse news to come from the worldwide credit crunch and financial turmoil, particularly in the United States, and that a high-profile casualty among American banks was highly likely. “The US is not out of the woods. I think the financial crisis is at the halfway point, perhaps. I would even go further to say the worst is to come,” Prof Rogoff said at a conference in Singapore. In an ominous warning, he added: “We’re not just going to see mid-sized banks go under in the next few months, we’re going to see a whopper, we’re going to see a big one — one of the big investment banks or big banks". Professor Rogoff, who was chief economist at the IMF from 2001 to 2004, predicted that the crisis would foster a new wave of consolidation in the US financial sector before it was over, with mergers between large institutions. He also suggested that Fannie Mae and Freddie Mac, the struggling US secondary mortgage lending giants, were likely to cease to exist in their present form within a few years. His prediction over the fate of Fannie and Freddie came after investors dumped the two groups’ shares on Monday after reports suggested that the US Treasury may have no choice but to effectively nationalise them.

Note: For revealing reports on banking and financial corruption from reliable sources, click here.

They Rule the World
2008-05-25, Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/22/AR20080522033...

David Rothkopf's Superclass [can be viewed] as a map of how the world really works. Rothkopf, a former managing director of Kissinger Associates and an international trade official in the Clinton Administration, has identified roughly 6,000 individuals who have "the ability to regularly influence the lives of millions of people in multiple countries worldwide" ... with a growing allegiance ... to each other rather than to any particular nation. Rothkopf [cites] the Pareto principle of distribution, or the "80/20 rule," whereby 20 percent of the causes of anything are responsible for 80 percent of the consequences. That means 20 percent of the money-makers make 80 percent of the money and 20 percent of the politicians make 80 percent of the important decisions. That 20 percent belongs to the superclass. Superclass ... is as much about who is not part of the superclass as who is. As I read Rothkopf's chronicles of elite gatherings -- Davos, Bilderberg, the Bohemian Grove (all male), Fathers and Sons (all male) -- I was repeatedly struck by the near absence of women. When Rothkopf summarizes "how to become a member of the superclass," his first rule is "be born a man." Only 6 percent of the superclass is female. Superclass is written in part as a consciousness-raising exercise for members of the superclass themselves. Rothkopf worries that "the world they are making" is deeply unequal and ultimately unstable. But it's likely to take more than exhortation. In the words of former Navy Secretary John Lehman, "Power corrupts. Absolute power is kind of neat." Why would the superclass want to give it up?

Note: The website www.theyrule.net allows visitors to trace the connections between individuals who serve on the boards of top corporations, universities, think thanks, foundations and other elite institutions. For lots more on secret societies, click here.

Every bank transaction triggers snooping
2008-03-26, Atlanta Journal-Constitution (Atlanta's leading newspaper)
http://www.ajc.com/blogs/content/shared-blogs/ajc/barrcode/entries/2008/03/26...

The sad saga of [Eliot] Spitzer should concern every American. The web of snooping in which federal investigators and regulators are now able to ensnare any person who engages in any form of financial transaction has become so complex and pervasive that almost no person anywhere in the world can escape its clutches. The seeds of this modern-day Orwellian financial web were sown in the late 1960s and early 1970s when such expansive federal laws as the Bank Secrecy Act were enacted. Designed as tools to ferret out organized crime figures, major drug traffickers and international money launderers, this family of far-reaching regulatory-cum-criminal laws initially was used largely as intended. Many of the “Suspicious Activity Reports” (or SARs) required by the Bank Secrecy Act of 1970, for example, were largely ignored by investigators and prosecutors, who viewed them as burdensome and difficult to catalog and utilize. Two events have conspired to change all that. First, the advent of digital technology has elevated dramatically the ability of the government to gather, analyze, manipulate, retrieve and disseminate the SAR data. The second factor ... was, of course, the events of 9/11 and the ensuing USA Patriot Act. These two things institutionalized fear as the driving force in virtually all federal policies, including those relating to financial reporting. [A section of] the Patriot Act — has been interpreted by banking examiners to require banks to profile their customers and the full range of their transactions, regardless of amount. These “know your customer” regulations are among the most insidious of this entire class of invasive federal laws and regulations.

Note: This informative article is by former US Congressman Bob Barr, who has become a crusader against the excesses of the PATRIOT Act.

Unintended Consequences
2008-03-24, Newsweek magazine
http://www.newsweek.com/id/123489

When Congress passed the Patriot Act in the aftermath of the 9/11 attacks, law-enforcement agencies hailed it as a powerful tool to help track down the confederates of Osama bin Laden. No one expected it would end up helping to snag the likes of Eliot Spitzer. In the fine print were provisions that gave the Treasury Department authority to demand more information from banks about their customers' financial transactions. But Treasury went further. It issued stringent new regulations that required banks themselves to look for unusual transactions (such as odd patterns of cash withdrawals or wire transfers) and submit SARs—Suspicious Activity Reports—to the government. Facing potentially stiff penalties if they didn't comply, banks and other financial institutions installed sophisticated software to detect anomalies among millions of daily transactions. They began ranking the risk levels of their customers ... based on complex formulas that included ... whether an account holder was a "politically exposed person" [PEP]. At first focused on potentially crooked foreign officials, the PEP lists expanded to include many U.S. politicians and public officials who were conceivably vulnerable to corruption. Federal prosecutors around the country routinely scour the SARs for potential leads. One of those leads led to Spitzer. Last summer New York's North Fork Bank, where Spitzer had an account, filed a SAR about unusual money transfers he had made. The governor called attention to himself by asking the bank to transfer money in someone else's name. The SAR was not itself evidence that Spitzer had committed a crime. But it made the Feds curious enough to follow the money.

Note: This story provides useful information about how the PATRIOT Act has been applied since its passage. The reasons for the investigation of Eliot Spitzer, leading to his resignation, may not have been so simple, however, given his many powerful enemies in government and on Wall Street.

Foreclosure wave sweeps America
2007-11-05, BBC
http://news.bbc.co.uk/2/hi/business/7070935.stm

A wave of foreclosures and evictions is about to sweep the United States in the wake of the sub-prime mortgage lending crisis. This could destabilise the US housing market and may also lead to further turmoil in financial institutions, who collectively own $1 trillion (£480.6bn) worth of sub-prime debt. Cleveland, Ohio, is an industrial city on the banks of Lake Erie in the US "rust belt". It is the sub-prime capital of the United States. One in ten homes in the city is now vacant, and whole neighbourhoods have been blighted by foreclosed, vandalized and boarded-up homes. Cleveland is facing a rising crime wave, and the cost of demolishing the vacant houses alone will cost the city $100m of its tax base. According to Jim Rokakis, the County Treasurer for Cleveland's Cuyahoga County, "Wall Street strategies that made the cycle of no-money-down, no-questions-asked lending possible have sucked the life out of my city". As the credit crunch continues to bite "families all over the country continue to lose homes in record numbers, stripping families of their wealth and destroying entire neighbourhoods," says Michael Calhoun of the Center for Responsible Lending, which tracks these issues. There have already been 1.7 million foreclosure proceedings in the US in the first eight months of 2007, and up to 2 million families are expected to lose their homes over the next two years, according to estimates by the US Congress's Joint Economic Committee. Many of these mortgages were sold by unscrupulous and little regulated mortgage brokers, who received handsome commissions for selling expensive and unsuitable products. Some customers were not told that their interest rates would go up sharply after two years; others were promised they could refinance their home before higher rates took effect. Others found that when they had difficulties paying, huge unexplained fees were added to their bills, putting them further in debt.

Music Manager, Film Producer Dies at 64
2007-08-25, Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2007/08/25/AR20070825011...

Aaron Russo, who managed Bette Midler and went on to produce such films as "Trading Places," has died. He was 64. Russo died from cancer before dawn on Friday, surrounded by family at Cedars-Sinai Medical Center, said Heidi Gregg. Russo had been battling the disease for nearly six years. "He was my best friend for 27 years," said Gregg. "Aaron was a freedom fighter, a film maker and a lover of life." Russo ... began promoting rock and roll shows at a local theater while still in high school. He later ... promoted some of the most successful rock acts of the 1960s including Janis Joplin and The Grateful Dead. In the 1970s, Russo managed Bette Midler, producing the Tony award winning "Clams on the Half-Shell Revue" starring the singer. Russo eventually turned to producing feature films including "The Rose" which starred Midler in 1979 as a self destructive rock star, and later "Trading Places" in 1983 which starred Eddie Murphy and Dan Aykroyd. Russo was also a long time political activist. In 2006, Russo finished work on a documentary titled "America: Freedom to Fascism," which was billed as an expose of the Internal Revenue Service. "He was an absolutely amazing man," said Ilona Urban, his press secretary. "He was pointed and once he knew there was a direction to go, you couldn't get him to turn left or right. He was very committed."

Note: Aaron Russo was one of the few respected film makers who dared to reveal some of the major cover-ups going on behind the scenes in the world of banking and more. To view his highly popular, five-star-rated 2006 documentary on this topic, America: From Freedom to Fascism, click here.

Learn from the fall of Rome, US warned
2007-08-14, Financial Times
http://www.ft.com/cms/s/80fa0a2c-49ef-11dc-9ffe-0000779fd2ac.html

The US government is on a ‘burning platform’ of unsustainable policies and practices with fiscal deficits, chronic healthcare underfunding, immigration and overseas military commitments threatening a crisis if action is not taken soon, the country’s top government inspector has warned. David Walker, comptroller general of the US, issued the unusually downbeat assessment of his country’s future in a report that lays out what he called “chilling long-term simulations”. These include “dramatic” tax rises, slashed government services and the large-scale dumping by foreign governments of holdings of US debt. Drawing parallels with the end of the Roman empire, Mr Walker warned there were “striking similarities” between America’s current situation and the factors that brought down Rome, including “declining moral values and political civility at home, an over-confident and over-extended military in foreign lands and fiscal irresponsibility by the central government. In my view, it’s time to learn from history.” Mr Walker’s views carry weight because he is a non-partisan figure in charge of the Government Accountability Office, often described as the investigative arm of the US Congress. In an interview with the Financial Times, Mr Walker said he had mentioned some of the issues before but now wanted to “turn up the volume”. Some of them were too sensitive for others in government to “have their name associated with. I’m trying to sound an alarm and issue a wake-up call,” he said. “As comptroller general I’ve got an ability to look longer-range and take on issues that others may be hesitant, and in many cases may not be in a position, to take on."

N.Y.'s Cuomo alleges appraiser, lender collusion upped home values
2007-11-02, San Francisco Chronicle (San Francisco's leading newspaper)
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/11/02/MNO8T4NNM.DTL

In a major legal action alleging misdeeds in the mortgage business, New York's attorney general [Andrew Cuomo] has accused appraisers of helping fuel the nation's foreclosure crisis by pumping up home values at the behest of lenders and other real estate professionals. The lawsuit said that First American eAppraiseIT, a subsidiary of Fortune 500 company First American Corp., caved in to pressure from Washington Mutual to rely on "proven appraisers" who were willing to inflate home prices. Washington Mutual profited from the artificially high appraisals because they allowed the company to close more home loans at greater values, the lawsuit said. First American, a provider of business information, title insurance and related services, wanted to win more business from Washington Mutual, the suit said. The lawsuit comes in the midst of the nation's subprime lending crisis, which industry experts say could cause up to 2 million homes to be lost to foreclosure over the next couple of years. Most subprime foreclosures are caused by a confluence of two factors: mortgage payments that rise when adjustable loans reset, and home prices that are lower than the amount owed on the mortgage. A moribund real estate market has caused prices to flatten or fall. But if home prices were artificially high to begin with - which would be the case if appraisers inflated values, as the lawsuit alleged - the likelihood increases of homeowners owing more on the mortgage than their properties are worth. Cuomo said fraudulent appraisal practices were pervasive in the industry. At a news conference announcing the lawsuit, he said lenders, mortgage brokers, real estate agents and others frequently pressured appraisers to "come in with the right number, the number that justifies the transaction" so that everyone in the chain would receive commissions.

Clinton, Obama are Wall Street darlings
2008-03-21, Los Angeles Times
http://www.latimes.com/news/nationworld/nation/la-na-wallstdems21mar21,1,1953...

Hillary Rodham Clinton and Barack Obama, who are running for president as economic populists, are benefiting handsomely from Wall Street donations, easily surpassing Republican John McCain in campaign contributions from the troubled financial services sector. It is part of a broader fundraising shift toward Democrats, compared to past campaigns when Republicans were the favorites of Wall Street. The flow of campaign cash is a measure of how open-fisted banks and other financial institutions have been to politicians of both parties. Concern is rising that "no matter who the Democratic nominee is and who wins in November, Wall Street will have a friend in the White House," said Massie Ritsch of the nonprofit Center for Responsive Politics, which tracks campaign donations. "The door will be open to these big banks." Sen. Clinton of New York is leading the way, bringing in at least $6.29 million from the securities and investment industry, compared with $6.03 million for Sen. Obama of Illinois and $2.59 million for McCain. Those figures include donations from the investment companies' employees and political action committees. The candidates' receipts reflect a broader trend that demonstrates how money follows power in Washington. It suggests that the nation's money managers are betting heavily that either Clinton or Obama will capture the White House and that Democrats will retain control of Congress. "What that Wall Street money means is that few people in Washington, including the leading presidential candidates, say a thing when the government moves to bail out Wall Street before it helps homeowners," said David Sirota, a liberal activist and former congressional aide.

Note: For more insight into the relationship between big finance and big government, click here.

Cost of Iraq war nearly $2b a week
2006-09-28, Boston Globe
http://www.boston.com/news/world/middleeast/articles/2006/09/28/cost_of_iraq_...

A new congressional analysis shows the Iraq war is now costing taxpayers almost $2 billion a week -- nearly twice as much as in the first year of the conflict three years ago and 20 percent more than last year -- as the Pentagon spends more on establishing regional bases. The total cost of military operations at home and abroad since 2001...will top half a trillion dollars. The spike in operating costs -- including a 20 percent increase over last year in Afghanistan, where the mission now costs about $370 million a week -- comes even though troop levels in both countries have remained stable. [A] major factor...is "the building of more extensive infrastructure to support troops and equipment in and around Iraq and Afghanistan," according to the report. Based on Defense Department data, the report suggests that the construction of so-called semi-permanent support bases has picked up in recent months, making it increasingly clear that the US military will have a presence in both countries for years to come. The United States maintains it is not building permanent military bases in Iraq or Afghanistan. "You would expect [operating costs] to level off if you have the same level of people," said the report's principal author, Amy Belasco, a national defense specialist at the Congressional Research Service. "It's a bit mysterious." The Pentagon has not provided Congress with a detailed accounting of all the war funds, making it impossible to conduct a full, independent estimate.

Note: Many hundreds of billions of dollars have been reported missing by top media sources. Do you think it's possible there might be some corruption going on here?

Fiscal Year 2005 U.S. Government Financial Statement
2006-03-01, Government Accountability Office
http://www.gao.gov/docsearch/abstract.php?rptno=GAO-06-406T

For the ninth consecutive year, certain material weaknesses in internal control and in selected accounting and financial reporting practices resulted in conditions that continued to prevent GAO from being able to provide the Congress and American people an opinion as to whether the consolidated financial statements of the U.S. government are fairly stated in conformity with U.S. generally accepted accounting principles. Until the problems discussed in GAO's audit report on the U.S. government's consolidated financial statements are adequately addressed, they will...hinder the federal government from having reliable financial information to operate in an economical, efficient, and effective manner. The cost to operate the federal government--increased to $760 billion in fiscal year 2005 from $616 billion in fiscal year 2004. This represents an increase of about $144 billion or 23 percent. The federal government's gross debt was about $8 trillion as of September 30, 2005. The federal government's fiscal exposures now total more than $46 trillion, representing close to four times gross domestic product (GDP) in fiscal year 2005 and up from about $20 trillion...in 2000.

Note: For the full 20-page GAO report on the sad state of U.S. government finances, click here. For the text-only version, click here. The GAO is one of the few branches of government which works hard to prevent corruption. Why didn't this devastating report get any press coverage? Why does the media fail to inform the public that the Pentagon cannot account for literally trillions of dollars? (see CBS article on this) For possible answers, see our highly informative mass media summary.

Dubious Fees Hit Borrowers in Foreclosures
2007-11-06, New York Times
http://www.nytimes.com/2007/11/06/business/06mortgage.html?ex=1352005200&en=2...

As record numbers of homeowners default on their mortgages, questionable practices among lenders are coming to light in bankruptcy courts, leading some legal specialists to contend that companies instigating foreclosures may be taking advantage of imperiled borrowers. Because there is little oversight of foreclosure practices and the fees that are charged, bankruptcy specialists fear that some consumers may be losing their homes unnecessarily or that mortgage servicers, who collect loan payments, are profiting from foreclosures. Bankruptcy specialists say lenders and loan servicers often do not comply with even the most basic legal requirements, like correctly computing the amount a borrower owes on a foreclosed loan or providing proof of holding the mortgage note in question. “Regulators need to look beyond their current, myopic focus on loan origination and consider how servicers’ calculation and collection practices leave families vulnerable to foreclosure,” said Katherine M. Porter, associate professor of law at the University of Iowa. In an analysis of foreclosures in Chapter 13 bankruptcy, the program intended to help troubled borrowers save their homes, Ms. Porter found that questionable fees had been added to almost half of the loans she examined, and many of the charges were identified only vaguely. Collectively they could raise millions of dollars for loan servicers at a time when the other side of the business, mortgage origination, has faltered. In one example, Ms. Porter found that a lender had filed a claim stating that the borrower owed more than $1 million. But after the loan history was scrutinized, the balance turned out to be $60,000. And a judge in Louisiana is considering an award for sanctions against Wells Fargo in a case in which the bank assessed improper fees and charges that added more than $24,000 to a borrower’s loan.

China's Wealth Woes
2006-09-04, Newsweek
http://www.msnbc.msn.com/id/14535192/site/newsweek/

With its dollar hoard rising at $17 billion a month and about to pass the $1 trillion mark, Beijing is finding out that it is possible to have too much money. Beijing's growing dollar hoard represents the most dangerous imbalance in today's global economy. The United States is both importing heavily from China and borrowing heavily from the country to finance those purchases, pushing the dollar down and putting the two economic superpowers on a collision course.

Analysts outraged over U.S. adjustments of employment data
2006-11-07, Globe and Mail (One of Canada's leading newspapers)
http://www.theglobeandmail.com/servlet/story/LAC.20061107.RNONFARM07/TPStory/...

U..S. non-farm payrolls data—arguably the most closely watched indicator in the world's largest economy—are revised so often and by so much that they can't be trusted, some strategists argued yesterday. Their comments come after Friday's report for October showed huge upward revisions for job creation in August and September. And last month, the Bureau of Labour Statistics said 810,000 more jobs were created between March, 2005, and March, 2006, than originally thought—the biggest revision ever made to the data. "How can you trust a non-farm payroll report that shows such massive revisions—we have never seen this before to such an extent," David Rosenberg, North American economist at Merrill Lynch & Co., railed in a note to clients. The U.S. report—which measures the creation of non-agricultural jobs—is usually released on the first Friday of the month and provides the earliest economic snapshot of the previous month. It tends to be one of the top market-moving indicators, influencing stocks, bonds and currency markets in the U.S. and beyond. "We find it utterly comical and at times almost contemptible that some in our business still wish to trade pending this report," [investment guru] Dennis Gartman wrote in his newsletter yesterday. "Such is nonsense, for the report itself is nonsense."