giovedì 24 novembre 2011

Debt Free & Interest Free Money

Banking for the Big Society

Beneficial allocation of money

Who allocates money?

Where money comes from

Richard Werner: Banking & The Economy

Anonymous Message to Police - This Will Not Be Tolerated

Vulture Funds Feeding on the Dispossessed

Down by Law: Vulture Funds Feeding on the DispossessedPDFPrintE-mail

FRIDAY, 18 NOVEMBER 2011 11:13
I am glad to see the renewal of interest in "vulture funds," where predatory elites buy up bits of the debt of impoverished nations from various creditors – at pennies on the dollar – then use the courts of the 'developed,' 'civilised' world to force the debtor to cough up the full amount, plus punitive interest payments. The Guardian is running a series of articles on this heinous practice (herehereherehereherehere and here), and CounterPunch has a good piece as well.

I wrote about vulture funds back in 2007. This was one of the many posts which were destroyed in the many hack attacks on the website. So I'm taking the opportunity to re-post it full here, as background to the new push to combat these avid feasters on human misery.

Down By Law: Vulture Funds Feeding on the Dispossessed

(March 2007)
I. The Lessons of Civilization

Every day, millions of people around the world are taught hard truths about how the instruments of "civilization" are used to help the powerful at the expense of the deprived. They see the brutal hypocrisy behind the soaring rhetoric of noblesse oblige that issues from the citadels of wealth and privilege. They see, and learn, that raw self-interest is the true coin of the global realm; they see it in the ruins of their own lives and in the blighted futures of their children. Is it any wonder, then, that many of them come to reject the putative offerings of civilization and embrace extremist or nihilistic or "asymmetrical" responses to their distress?

Every instance of systemic or institutional injustice contributes to the growing instability of the world community, to the violence and corruption and despair that howl outside the shrinking "Green Zones" of prosperity and security in the developed nations. This holds true at every level, from the vast and glaring crime of aggressive war, as in Iraq, to obscure rulings on arcane points of international finance – as in a London courtroom last month, when the British High Court upheld the right of a well-connected financial predator to feast on one of the world's poorest nations.

The case involved the little-known but highly lucrative world of "vulture funds" – or as its practitioners prefer to call it, the "secondary market in sovereign debt." It works like this: private investors buy up bits of the debt of impoverished nations from various creditors – at pennies on the dollar – then go to court to force the debtor to cough up the full amount, plus punitive interest payments. In the London case, a New York vulture named Michael Sheehan and his off-shore, UK-registered front company, Donegal International, were trying to turn a $.3.3 million debt purchase into a $55 million profit bonanza squeezed out of the Zambian people, some of the poorest on earth. Donegal won the case, even though Justice Andrew Smith ruled that Sheehan and one of his associates "were at times being deliberately evasive and even dishonest" in their testimony, as the Financial Times reports.

The amount Donegal is asking for would effectively wipe out the debt relief Zambia would have received this year from the deal signed at the famous "Live 8" summit in Scotland in 2005, when the G-8 nations agreed – amidst much harrumphing self-congratulation – to a large-scale debt relief and restructuring program for poorer countries. Zambia had earmarked the relief money for health programs and education, in a country where the life expectancy is 37, more than half a million children have been orphaned, and 1 in 5 adults have HIV, as Oxfam reports.

Justice Smith indicated that it is unlikely he will grant the company the full whack of $55 million when he makes his final ruling later this month; indeed, Smith made clear his distaste for the enterprise, but said current law compelled a ruling on behalf of the vultures. Even so, Sheehan and the boys will still walk away with a hefty profit – and many Zambians will die of disease or sink further into poverty and ignorance as a result. Meanwhile, some of Zambia's assets have been frozen until the final amount is set and the payoff to Donegal discharged, causing further financial distress to the poverty-wracked country, which is trying to emerge from the shadow of the corrupt and undemocratic regime that took on many of the onerous debts.

Although there are some novel elements to the Donegal-Zambia case, in many respects it is a typical example of how vulture funds use legal back alleys to profit from human misery. Donegal – a British Virgin Islands incorporation of Sheehan's U.S.-based firm, Debt Advisory International – uses all the tricks of the trade, including highly-placed political influence. For years, DAI paid huge fees to the lobbying firm of Jack Abramoff – the convicted wheeler-dealer at the center of the Republican Party's fund-raising (and fund-shuffling) apparatus, a man who had direct entrée to the White House before his current turn in prison stripes took him out of Beltway circulation.

And Donegal, like all vulture funds, preys on poor nations that are undergoing restructuring or forgiveness of debt. They pluck off small chunks of outstanding debt here and there – the Zambia case stemmed from Donegal's purchase of a 1979 loan from then-Communist Romania to Zambia to buy tractors – then, through the vagaries of financial law, they can hold up major debt relief until they reap vast profits from their miniscule share. Debtor nations are thus blackmailed into settling with the vultures in order to clear the way for large-scale initiatives like the G8 measures to take effect.

But Donegal's squeeze play on Zambia is actually rather mild compared to the operations of one of the giants in the field, a pioneer in global vulturing: Elliott Associates L.P., a New York-based hedge fund established by Paul Singer. In addition to managing $6 billion in assets for Elliott, Singer doubles as a major moneybags for the Republican Party. As Greg Palast reported last month on BBC's Newsnight, Singer has been George W. Bush's biggest donor in New York City – no mean feat among the Wall Street kingpins of whom Bush said in 2000: "Some people call you the elites; I call you my base." Singer has given Bush and the Republicans more than $1.7 million since that disputed 2000 race – and is now a top fundraiser for GOP presidential candidate Rudy Giuliani, promising to raise $15 million to put all of America on "Giuliani Time," as Palast reports.

Currently, Singer is hoping to litigate a $10 million purchase of Congo-Brazzaville debt into a $400 million payday – a magnificent profit to be wrung from the populace of yet another of the poorest nations on earth. And this latter point – the real targets of vulture funds – should be kept in mind For although it's true that the debts of these distressed nations are often run up by corrupt regimes – often in collusion with the lofty financial institutions of the civilized world, or with governments of the "developed" nations seeking political advantages for themselves or financial gain for their cronies – it is the ordinary people who pay the price when these bad debts come due.

But it was Singer's assault on Peru in 2000, with its hardball tactics of legally sanctioned extortion, that has proven to be the classic of the genre, clearing the path for a flock of vultures to swoop down from the financial heights and feed on the carcasses of ruined economies.

Singer put a new twist on an old piece of legal boilerplate – the "pari passu" clause – that had been part of debt instruments for more than a century, as Charles D. Schmerler notes in the New York Law Journal. The clause essentially means that all creditors of the debtor nation must be treated equally. When Peru, which had been devastated by the financial crises that shook global markets in the 1990s, struck a deal with governmental and private creditors that would allow it to manage some $3.7 billion in reduced debts, Singer – who had bought $20 million of Peruvian debt for $11 million on the secondary markets – refused to go along. Under pari passu, Singer said, it didn't matter that the other creditors were willing to restructure Peru's debt; he was their equal (despite the minor chunk he owned), and so his needs must also be met. After losing one round, he found friendly courts in America and Belgium that agreed and declared that Peru's debt relief program could not go through until Singer was paid – not just the $20 million he had purchased at knock-down prices, but an extra $38 million in capitalized interest as well. What's more, Peru's assets were frozen until the vulture got his feed. The country was unable to pay its other creditors under the $3.7 billion restructuring, and was thus in danger of defaulting on the new deal, which would have had catastrophic effects.

Peru fought the case but could make no headway against the multibillion-dollar deep pockets of Elliott Associates. Finally, just before defaulting, it bowed to main force and paid Singer the full $58 million. (The strongarm boodle arrived in Singer's coffers on October 7, 2000 – just in time for the home stretch of Bush's presidential run and the successful machinations that followed his second-place finish.) What's more, as Schmerler notes, the Elliott rulings have destabilized the entire structure of international debt relief, giving vultures a new weapon to hijack major restructuring programs and shake down cash-strapped debtors.

II. Broken Mercy

But let's be clear about one thing. What the vultures are doing is legal. They are building on two decades of precedents in which Western courts have "all but abandoned the protections against liability previously afforded sovereign (nations)," as Schmerler writes. "The debate now centers firmly on issues of enforcement."

And here we see financial law echoing long-running trends in foreign policy and domestic governance: first, the steady erosion of the idea of national sovereignty in the face of bristling official doctrines of military "pre-emption," then the equally relentless encroachment on individual liberties – personal sovereignty – in the Anglo-American "homelands." In these areas too, the debate centers firmly on "enforcement": What country do we strike next? Which freedom should we curtail now? Are there any limits to the powers of the "unitary executive" to spy and torture and jail indefinitely as he sees fit? The rise of the vultures is of a piece with this growing institutional bias toward authoritarianism and punishment. The quality of mercy is increasingly strained, often to the breaking point.

Taking advantage of this draconian zeitgeist, the vultures operate profitably in the moral murk that shrouds the system of international debt. As noted, the debts accrued by poor nations are often the result of foolish or venal choices by despots (and a willing lack of due diligence by lenders). But it is hard to prove that a given debt is, technically, an "odious debt" – financial obligations "knowingly contracted without the consent of a population and without benefit to it," as New York attorney Jeff King told me. Odious debts are more narrowly defined than vulture funds. But with the standard practice of "developed" governments pushing arms deals and cozy arrangements for cronies on corrupt or unstable Third World regimes, the line marking off "odious debt" is vague indeed.

"Vulture funds may be morally odious, but the debts they enforce are not necessarily odious debts," said King, a research fellow at the Center for International Sustainable Development Law. "For example, the original debts in the Donegal case were meant for the purchase of agricultural machinery from Romania for the use of Zambia, a seeming benefit. Zambia later defaulted on that debt, and Romania sold it to Donegal."

Ironically, Donegal stepped in to buy the debt just before Zambia itself was about to redeem it. The original 1979 debt had a face value of $15 million; Romania had agreed to accept $3 million for it in 1999. Then Donegal intervened, offering approximately $3.3 million for the debt. In last week's court hearing, Zambia – whose case, in a further irony, was argued by Tony Blair's older brother, William – charged that "Donegal's local agent had bribed civil servants to pass the debt to Donegal rather than allowing Zambia to pay it off at a heavily discounted rate to Romania," the FT reports. But the court ultimately rejected the bribery charges.

"Thus the debt generated legally by Donegal was itself not necessarily odious in the technical sense," King said. "The moral outrage generated by this case is that Donegal seeks to realize an enormous profit at the expense of Zambia's desperate population."

That indeed is the crux of the matter: the disparity between the legality of vulture funds and the immorality of their pernicious effects on the world's most vulnerable people. It is this brutal disparity that teaches the dispossessed of the world the true meaning of the fine words that flow from the mouths of the powerful. "Blowback" doesn't always come from the launching of reckless wars or other high-profile depredations; it can also come from the sight of one's child dying of a preventable disease, while the guardians of civilization reward predators armed with the rule of law.

Marx on ‘Technical Government’

Political Crisis in Italy and Greece: Marx on ‘Technical Government’

In recent years Karl Marx has again been featured in the world's press because of his prescient insights into the cyclical and structural character of capitalist crises. Now there is another reason why he should be re-read in the light of Greece and Italy: the reappearance of the ‘technical government.’

As a contributor to the New York Tribune, one of the widest circulation dailies of his time, Marx observed the political and institutional developments that led to one of the first technical governments in history: the Earl of Aberdeen cabinet of December 1852 to January 1855.

Marx's reports stood out for their perceptiveness and sarcasm. The Times, for its part, celebrated the events as a sign that Britain was “at the commencement of the political millennium in which party spirit is to fly from the earth, and genius, experience, industry and patriotism are to be the sole qualifications for office”; and it called on “men of every class of opinion” to rally behind the new government because “its principles command universal assent and support.” All this excited Marx's derision, which poured forth in his article “A Superannuated Administration. Prospects of the Coalition Ministry, &c” (January 1853). What The Times found so modern and enthralling was for him sheer farce. When the London press announced “a ministry composed entirely of new, young and promising characters,” he mused that “the world will certainly be not a little puzzled [to learn] that the new era in the history of Great Britain is to be inaugurated by all but used-up decrepit octogenarians (...), the bureaucrat, who served under almost every Administration since the close of the last century; other members of the Cabinet twice dead of age and exhaustion and only resuscitated into an artificial existence.”

Alongside the judgments of individuals are others, naturally of greater interest, concerning their policies. “We are promised the total disappearance of party warfare, nay even of parties themselves,” Marx noted. “What is the meaning of The Times?” The question is unfortunately all too topical today, in a world where the rule of capital over labour has become as feral as it was in the middle of the nineteenth century.

Economics and Politics
The separation between economics and politics that differentiates capitalism from previous modes of production has reached its highest point. Economics not only dominates politics, setting its agenda and shaping its decisions, but lies outside its jurisdiction and democratic control – to the point where a change of government no longer changes the direction of economic and social policy.

In the last thirty years, the powers of decision-making have passed inexorably from the political to the economic sphere. Particular policy options have been transformed into economic imperatives which, brooking no contradiction, disguise a highly political and utterly reactionary project behind an ideological mask of apolitical expertise. This shunting of parts of the political sphere into the economy, as a separate domain impervious to change, involves the gravest threat to democracy in our times; national parliaments, already drained of representative value by skewed electoral systems and authoritarian revisions of the relationship between executive and legislature, find their powers taken away and transferred to the market. Standard & Poor's ratings and the Wall Street index – those mega-fetishes of contemporary society – carry incomparably more weight than the will of the people. At best political government can ‘intervene’ in the economy (the ruling classes often need to mitigate the destructive anarchy of capitalism and its violent crises), but they cannot call into question its rules and fundamental choices.

The events of recent days in Greece and Italy are a striking illustration of these tendencies. Behind the facade of the term ‘technical government’ – or ‘government of all the talents,’ as it was known in Marx's day – we can make out a suspension of politics (no referendum, no elections) that supposedly hands over the whole field to economics. In an article of April 1853, “Achievements of the Ministry,” Marx wrote: “The best thing perhaps that can be said in favour of the Coalition ["technical"] Ministry is that it represents impotency in [political] power at a moment of transition.” Governments no longer discuss which economic orientation to take; economic orientations bring about the birth of governments.

In Italy, the key programmatic points were listed last summer in a letter (meant to remain secret!) from the European Central Bank to the Berlusconi government. To restore market ‘confidence,’ it was necessary to proceed rapidly down the road of ‘structural reforms,’ an expression now used as a synonym for social devastation: in other words, wage cuts, attacks on workers’ rights over hiring and firing, increases in the pension age, and large-scale privatization. The new ‘technical governments,’ headed by men with a background in some of the economic institutions most responsible for the crisis (Papademos in Greece, Monti in Italy), will set off down this road – no doubt ‘for the good of the country’ and ‘the well-being of future generations.’ And they will come down like a ton of bricks on anyone who raises a discordant voice.

If the Left is not to disappear, it must discover again how to identify the true causes of the crisis that is now upon us. It must also have the courage to propose, and experiment with, the radical policies necessary to achieve a solution.

Marcello Musto is a Professor of Political Theory at York University, Toronto, Canada. This article was first published on his blog The photo is by helst1. 

In the Face of Financial Crisis

Bernard-Henri Lévy


In the Face of Financial Crisis, Redo Ancient History

The Huffington Post, 11/23/11 08:13 AM ET

Rome and Athens, epicenters of the economic and financial storm currently shaking Europe and the world. You read it right: Rome and Athens. In other words, the two cradles of Europe. Two of the three sources (Jerusalem, thank heavens, not yet included) of its ethics and its religions. The double matrix of its languages. The great blocs of faith and memory that seal its destiny. The site of the invention of the models of democracy and citizenship we have lived by, until this very day. The source of our knowledge and of our legal concepts. The idiom of our double commerce, of things and of minds. The native land of our philosophers, our rhetors, our jurisconsults, our pontiffs, and our artists. Our compass, in both senses of the word. Our secret but all the more imperious ancestry. Obviously, I'm leaving things out. I'm leaving out a great deal. For this is a sign that, clearly, points to two things. First, it is Europe itself that is in crisis. Not finance. Not the economy. Europe. Its culture. Its genius. Its unconscious conscience. Its immemorial and its memory. All that makes up its bases and its origins. Its heart, that beats more and more faintly. Its soul. Its common and hidden grammar. The distinction, that it invented, between law and right. Or between man and citizen. The articulation, that is its own, of multiple forms of the Multiple and of the unique name of the One. In short, its being. Its substance. To such an extent that, in order to understand what is happening, to know what it entails when we speak of the crisis of the debt or of the euro, to understand, just to understand, what the popular movements of protest currently shaking Rome and Athens, the two great capitals of European intelligence, are saying, we should be rereading Gibbon, Humboldt, or even Polybius -- these theoreticians of the fate and the fall of the Athenian paradigm or the Roman road -- rather than Friedman or Keynes. There was the time when the Greek Idea spread, via the Empire, and then through its budding catholicity. There was the schism, early in the second millennium, between the masters of the Idea and those of the medium, between the inheritors of Athens and those of Rome, each retrieving their own. In the midst of crossing over to the modern European political project, there was the reconciliation of 1965, with the lifting of excommunications, the peace of the Churches and their priests, the disarmament of minds. Well, perhaps we are entering into a new new phase, outwardly resembling a rapprochement, in superficial appearance a reunion, but this time for the worst. Sudden and cataclysmic, as though Rome and Athens joined together in the same disaster, as though both dead legacies were conspiring in the same amnesia, posturing of relations, caricature. So it is. Second, the solution to this crisis will be neither financial nor economic, either, but once again, according to choice, either spiritual, moral, or political. Governments of technocrats, of course. Eminent civil servants, experts, competent individuals, Mario Montis and Lucas Papademoses, very well. Plans of austerity and rigor, stress tests for the banks, reformed States that have broken off with Berlusconian antics, obviously, and no one can escape it. But if the above is exact, if it is no accident that Rome and Athens are the two names of this suspended apocalypse and of its horsemen gone mad, if, behind this explosion of sovereign debt, the apprehensively expected bankruptcy of States, the widespread crisis of confidence, the speculation, the crazy money, the increasing irresponsibility of the actors involved, all hiding, henceforth, behind an anonymous and inevitably irreproachable "System ", there is, indeed, this radical unbeing, none of these efforts will touch the heart of the matter. If it is really the seat of Europe, its axe of foundation, its symbolic and imaginary double name, its profane religion that are struck to the quick, none of these measures will suffice, not one of these ligatures will reshape the world of Europe, and there is no reform that will succeed in staving off the anticipated catastrophe. Europe was established, a first time, by substituting the word of the citizen-magistrate for the sayings of the oracles and auspices. It reconstructed itself a second time by favoring reason over anathema, preferring that a consciousness become transnationally national to the schism of faith and corps. Well, here, in the same way, we must confront these new soothsayers (the agitators of the financial markets), and the new grand excommunicators (agents of the triple A ratings), with a word, a wisdom, a manner of speaking and listening of the archons and the polemarches, faithful to the best of European heritage.
Go back to Rome. Restore Athens.
That is the only plan.
For the rest, in other words the administrators, will follow, as usual.

mercoledì 23 novembre 2011

Corzine, Goldman Sachs alumni



By Kurt Nimmo, INFOWARS

It is not certain if John S. Corzine will ever do the perp walk - or even be compelled to answer questions - for his role in the disappearance of over a billion dollars in the MF Global swindle.
The House Financial Services Committee, however, has started a laborious investigation process, no matter how timidly. It has asked Corzine to testify about the collapse of MF Global and the whereabouts of hundreds of millions of dollars in customer money that mysteriously went missing.
It should be noted that Corzine will not be compelled to answer questions or even respond to the request by the House Financial Services Committee. If push comes to shove, the committee has the power to subpoena Corzine and his underling, Bradley Abelow, the firm's chief operating officer. It has yet to say one way or the other if it intends to do this.
The FBI and the Commodity Futures Trading Commission are now involved finding out what happened. An investigation may take months - long enough for the scandal to fall out of view so it can be swept conveniently under the rug.
It looks like Corzine may avoid accounting for the money or facing responsibility for its disappearance. Instead, blame may be shifted around and lawmakers will spank the regulatory agencies supposedly overseeing the industry.
Corzine is Goldman Sachs alumni and as everybody knows Goldies are above the law.

Regolare le mega-banche si può

Regolare le mega-banche si può: la Svizzera lo dimostra
di Maurizio Blondet - 23/11/2011



La Banca Centrale Svizzera ha imposto a UBS e Credit Suisse (i suoi colossi “troppo grandi per fallire”) una severa cura dimagrante, obbligandoli a liberarsi di attività ad alto rischio e a restringersi, concentrandosi sulla normale attività di credito commerciale e gestione del risparmio. 

L’occasione dell’intervento è stato il salvataggio della UBS, che nel 2008 ha ricevuto 6 miliardi di franchi svizzeri (5,2 miliardi di dollari) dallo stato, e ha messo 60 miliardi di dollari di “attivi a rischio” presso un fondo garantito dalla banca centrale (il Credit Suisse aveva rifiutato l’aiuto pubblico, ed è stata obbligata a cercare capitale fresco, essenzialmente fornito dal fondo sovrano del Qatar).

Al contrario delle altre banche centrali (vedi Federal Reserve e BCE) che hanno finanziato a pié di lista le perdite incorse dalle loro banche in speculazioni azzardate senza porre condizioni, la Swiss National Bank ha obbligato UBS e Crédit Suisse a rivolgersi a revisori dei conti indipendenti, che hanno intervistato il personale per capire in che pasticci si erano cacciati per perseguire i loro bonus miliardari. S’è visto che la UBS s’era buttata a corpo morto nei derivati, non solo mantenendo i suoi CDO (Collateralized Debt Obligations, insomma tranches di mutui sub-prime cartolarizzati) con il rating AAA, ma comprandone da altre banche, per poi ‘coprirli’ con Credit Default Swap. 

I revisori independenti (che però le banche sotto esame hanno dovuto compensare a loro spese) hanno stilato un rapporto rivelando i dettagli più sanguinosi della speculazione. Questa informazione è stata resa pubblica. 

Dopo ciò, la banca centrale svizzera ha dato la prima bastonata: forzando le due banche ad alzare la riserva obbligatoria (il cuscinetto di capitale proprio) al 19%, misura senza precedenti che da sola costa alle due banche un 18 miliardi di dollari ciascuna .

Seconda botta: ha obbligato UBS a delineare il proprio business per un ritorno al normale, tagliando a sangue le proprie attività come banca d’investimento: rinunciando alla metà dei suoi 300 miliardi di attività derivate, e ad uscire da ‘industrie’ come la cartolarizzazione di cosiddetti “attivi” (securitization, ossia lo spaccio a terzi di debiti che qualcun altro sta pagando) e prodotti finanziari strutturati complessi. Come si legge in un comunicato della stessa UBS, “la banca d’investimento sarà meno complessa, tratterà meno Risk Weighted Assets, e richiederà sostanzialmente meno capitale per produrre profitti sostenibili agli azionisti”. Il Credit Suisse ha promesso di fare lo stesso entro il 2014.

Ciò dimostra quanto vuota sia la minaccia dei bankster internazionali che , di fronte alle più timide proposte di regolamentazione, rispondono che si stabiliranno all’estero, nei paesi dove la regolamentazione non c’è. Risulta che la UBS ha anche provato a spezzare la sua sezione d’investimento a rilocarla altrove, onde sfuggire all’occhio della Swiss National Bank: ma s’è accorta che la fuga era impraticabile. Per certe operazioni c’è bisogno di avere alle spalle una banca centrale credibile, e Giappone e Cina non amano nuovi arrivi stranieri; hanno scoperto che la nuova entità non riusciva a finanziarsi a tassi competitivi; e che occorre restare vicino ai clienti, e i traders devono restare fisicamente vicini ai venditori. Insomma, la globalizzazione è una tigre di carta di fronte ad una risoluta volontà politica. Il regolatore elvetico ha spiegato che, dato che le due banche che si sono comportate irresponsabilmente avevano accumulato “attivi” pari al quintuplo (500%) del Pil svizzero, la messa sotto tutela era una priorità nazionale.

Maurizio Blondet

#Occupy Bat Signal for the 99%

#Occupy Bat Signal for the 99%

Goldfinger eats Congo

Goldfinger eats Congo

Greg Palast, Wednesday, November 23, 2011
Goldfinger eats Congo
Amy Goodman, Democracy Now!...

"Top funders of the Republican Party have demanded that two African nations pay them over half a billion dollars.... Is one of these vulture’s claims based on a stolen security, criminally transferred to an American financier called 'Goldfinger'? Greg Palast, author of the new book, Vultures' Picnic, investigates for BBC Television and The Guardian."

Greg Palast reporting from Kinshasa, Congo; Sarajevo, Bosnia; and Brooklyn, New York

If God doesn't give a rat's ass about The Vulture, and what he does for a living, and what he's done for Africa, why should I?
The thought struck me while sitting here, coffee getting cold, in my old Toyota, trying to look invisible, staked out in front of 300 Dekalb Avenue. It's just after dawn here in Brooklyn, New York, and I'm hoping that Peter Grossman, a Wall Street star, will pop out of his posh brownstone for a jog or a cup of joe. Then I can jump him. He's on the look-out for me because I'd already jumped his crony, Goldfinger, the man who's making Grossman stunningly rich.
Grossman's riches, nearly $100 million for his firm, FG Management, come from the Congo. I was just there in Congo, two days before this stake-out, at a cholera quarantine center in the capital, Kinshasa.
Besides lots of cholera, Congo has lots of cobalt. Grossman has, through a crazy legal loophole in British law, waylaid a payment of $80 million to the African government for a shipment of cobalt from a government-owned mine.
Grossman is a "vulture," the name Wall Street gives, with an affectionate smile, to those who somehow can get their hands on old, forgotten debts of desperately poor nations––Congo, Zambia, Peru, and Liberia are cases I've investigated––which they pick up for pennies on the dollar of face value.
When ––usually after a Bono concert–– Western nations forgive debts owed by these poor countries, the nation receiving this aid is now ripe enough, and flush enough, for attack by the Vulture who demands many a pound of flesh for the debt he suddenly brandishes.
In Grossman's case, his company FG paid about $3 million for a debt Zaire (now Congo) owed Yugoslavia (now Bosnia). A court on the tiny island of Jersey, a tax haven in the English Channel, has ordered Congo to turn over the $80 million the African nation has in a bank account there, the payment for the cobalt. Furthermore, Congo must pay an additional $20 million to Grossman if the Africans can find it.
If that seems weird and nuts to you, it is. The United Kingdom and other nations bar collections by vultures against poor countries where Western government treasuries have agreed to give up their own claims. However, Vulture Grossman was free to pounce on Congo in Jersey, a pseudo-colony of Britain, because Britain's Parliament failed to include the magic words, "and Jersey" in its anti-Vulture law.
Question: How did Vulture Grossman get his hands on Congo's debt to Bosnia? That's what, while suppressing my need to urinate, I was waiting in the Brooklyn cold to ask him.
Here's what I can piece together: Only three days before I was in the Congo cholera clinic, I was in the office of the chief of financial police in Sarajevo, Bosnia. With master sleuth Drew Sullivan of the Sarajevo Center for Investigative Reporting, we tracked down the police report asserting that the nation's own prime minister had slipped control of the debt to one Michael Sheehan, a.k.a. Goldfinger who, for a fee, passed it from the Bosnia state power company to Grossman.
Goldfinger. We meet again. The Bond-movie Goldfinger is a Girl Scout compared to the real one. He's the man I discovered four years ago who paid off the President of Zambia to shaft his own nation out of its AIDS medicine money. The FBI and I have been discussing Goldfinger.
In Sarajevo, the Bosnian police chief told me the little hand-to-hand-to-hand business with the Congo debt was a crime, and the (now former) prime minister, a man named Nedzad Brankovic, should be in prison. The cops have written out the criminal complaint, but prosecutors have yet to touch the powerful politician.
I got to the man who blew the whistle on Brankovic, Brigadier-General Izet Spahic. He'd worked out a deal for the Bosnia power company (desperately broke) to make power pylons for the Congo (desperately broke). The project would generate electricity, clean water and profits for both countries.
It was quite a heart-warming story of two nations coming out of civil wars, with a combined total of four million dead, helping each other. But when it was discovered that the Vulture at 300 Dekalb Avenue in Brooklyn had secretly seized control of the debt between the nations, the electricity deal was off.
I went by the Bosnia pylon-making factory. It was now shut and its several thousand workers gone. At least there's no cholera.
The Brigadier was furious. He asked me, how could these people think about making a profit off of civil war, poverty and unimaginable suffering?
Well, General, When do humans grow feathers and claws?
It's a question I'm going to ask Vulture Grossman when he comes out because the Guardian and BBC Newsnight want me to ask.
For myself, the Vulture's answer is inconsequential.
I assume that after we break our story, the British Parliament will move to close the loophole it so glaringly left open to the Vulture; and the US Congress will at least pretend to consider anti-vulture legislation now languishing in some committee.
But I think the focus on Grossman and his fellow carrion chewers is distracting. The destruction of Bosnia's power-pylon industry was the direct consequence of privatizing it, bringing the free market to socialist Yugoslavia and Brankovic to power, allowing him to buy and sell debt securities on the de-regulated world financial market.
It was the privatization of Congo's state cobalt mine and the looting of its riches, all at the behest of the World Bank, IMF and privateers, that drained Congo's treasury.
Grossman is just the re-po man, the latest of the financial carnivores who've bitten into Congo and Bosnia––and Greece and Detroit.
Grossman's vulture operation is just over the bridge from Occupied Wall Street, occupied at the bottom by protesters, "The 99%," and occupied at the top by The One Percent, those who kill economies for a profit.
It's easy to target Grossman. But Vultures can only feast when the system kills, when, for easy profits, economies are turned into rotting carcasses.
Greg Palast is the author of Vultures' Picnic: In Pursuit of Petroleum Pigs, Power Pirates and High-Finance Carnivores, released this week in the US and Canada by Penguin.
You can read Vultures' Picnic, "Chapter 1: Goldfinger," or download it, at no charge: click here.
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Occupy has to move again!

We are the 99%, thus there is a 1% that is different.
Where are the actions against the 1%? 
The marvellous slogan “We are the 99%” unites all 99%-ers and provides them with a clear target. When the power of the 1% is not broken, the world never will change. But alas, the brilliant slogan seems to disappear as Occupy is indecisive.
Occupy should move again. 
“Occupy the financial centres” inspired many people to become active. All over the world about 3000 places were occupied. It moved, the 99% were alerted. What happened next was disappointing. Activity was restricted to occupied squares and occupiers became sitting ducks. They were under heavy influence of leftist activists who adhered to the old action protest methods as demonstrations and strikes. A new kind of offensive activities did not emerge.  
 “We are the 99%” is an inspiring slogan but the deeper meaning is not considered. When we are the 99% there is logically a 1% that is different. This 1%, the powerful greedy grabbers, should become the target of all activities. They are destroying our world.
Actions must never hurt the 99%. We need other activities than demonstrations and strikes that often affect only the life of the 99%. In the past is it proven that this kind of leftist actions has not been very successful. The 1% - better said their puppets in the governments - started to use the police against the Occupiers. First against a demonstration on 
 Bridge, the hard way against the occupation in Oakland, then many more occupied squares were cleared.

The strategic rule that you have to plot your own course and must not be guided by the words and the deeds of the 1% was neglected. The discussion in Occupy changed direction. Not how to pressure the 1% stood central but what to do against the police who are also 99%.Occupy lost its initiative.
Another negative development was the advancement of partial solutions as the demand for more jobs. By trying to convince elected officials to improve society a little Occupy is drawn into the political quagmire. Obama also proposed to have more jobs. Partial solutions can never succeed when the not-elected 1% maintains its power. The discussion about partial solutions moves Occupy away from its basic attention point, the 1% that remains out of range. Occupy does not need a political program, it needs an action program about how to take power away from the 1%. "Any action should disturb the 1%, not affect the 99% and it should always be possible for 99% to carry them out.”  
The important slogan “We are the 99% and thus the 1% has to be pressured” opens an unbridgeable gap between Occupy and political organisations that are embedded in the system that is dominated by the 1%. The slogan is however not yet supported by appropriate actions. The movement concentrates itself on the building-up, the maintenance and the defence of occupied places and is not very active in the outside world. After the clearing of some occupied squares Occupy seems not to know how to proceed. The problem how to pressure the 1% is hardly discussed in the occupations or on the Facebook-sites. Sometimes Occupy attacks the 1% with words but has not yet initiated concrete direct actions against the 1%. The marvellous leading slogan “We are the 99% and thus there is a 1% that is different” starts to disappear by lack of activities. Occupy lost some of its advantages and starts to lose its vigour. Without movement there is no change.
Occupy has to move again!

Joost van Steenis

MF Global may be the next Lehman

MF Global may be the next Lehman, Turk tells King World News
Submitted by cpowell on Tue, 2011-11-22 01:08. Section: Daily Dispatches
8p ET Monday, November 21, 2011

Dear Friend of GATA and Gold (and Silver):

GoldMoney founder and GATA consultant James Turk today tells King World News that the bankruptcy of the MF Global brokerage house may be the new "Lehman moment" for world markets. Turk speculates that the physical markets for the precious metals now may separate from the paper markets. An excerpt from the interview has been posted at the King World News blog here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.