venerdì 29 giugno 2012

Nigel Farage talks about EU


http://www.ukip.org/ http://www.ukip.tv/ http://www.oneworldscam.com/
After a tough night of wrangling, EU leaders have agreed to set up a new authority - tasked with keeping sinking banks afloat. And to do that, the new agency will be given access to Europe's mammoth bailout funds - stocked in a large part by taxpayer money. This exact function was previously carried out by governments.But now, the EU can bailout a nation's banks - without adding to the government's debt levels - at least on the books. It's something that Germany strongly opposed, but was forced to relent on due to Spanish and Italian insistence. Nigel Farage, a member of the European Parliament and leader of the UK Independence Party, believes that it's Germany who plays the deciding role in these talks.Odious debt.EU failing.Arrest corrupt bankers.The rest of the world would benefit from following the example set by Iceland: Arresting the corrupt bankers who are responsible for the current economic turmoil.The difference between banking cartels and the mafia is becoming increasingly indistinguishable.

Nigel Farage- Van Rompuy, Barroso worst people in EU since 1945

RT (Russia Today) is a global news network broadcasting from Moscow and Washington studios. RT is the first news channel to break the 500 million YouTube views benchmark.

Farage says on FOX: it's all a huge ponzi scheme

Gerald Celente on Capitalaccount

giovedì 28 giugno 2012

Big banks craft "living wills"


It is that time now.. To fill your gas tank and get your money out of the bank even if it is for a couple of weeks. Keep cash on hand. I hope you are prepared. The world is going to change. We may have some challenges but everything is going to come together in a very good way.
Maryhrt 

Big banks craft "living wills" in case they fail


A customer exits the lobby of JPMorgan Chase & Co. headquarters in New York May 14, 2012. REUTERS/Eduardo Munoz
A customer exits the lobby of JPMorgan Chase & Co. headquarters in New York May 14, 2012.
Credit: Reuters/Eduardo Munoz

NEW YORK/WASHINGTON | Wed Jun 27, 2012 4:29am EDT
(Reuters) - Five of the biggest banks in the United States are putting finishing touches on plans for going out of business as part of government-mandated contingency planning that could push them to untangle their complex operations.
The plans, known as living wills, are due to regulators no later than July 1 under provisions of the Dodd-Frank financial reform law designed to end too-big-to-fail bailouts by the government. The living wills could be as long as 4,000 pages.
Since the law allows regulators to go so far as to order a bank to divest subsidiaries if it cannot plan an orderly resolution in bankruptcy, the deadline is pushing even healthy institutions to start a multi-year process to untangle their complex global operations, according to industry consultants.
"The resolution process is now going to be part of the cost-benefit analysis on where banks will do business," said Dan Ryan, leader of the financial services regulatory practice at PricewaterhouseCoopers in New York. "The complexity of the organizations will shrink."
JPMorgan Chase & Co (JPM.N), Bank of America Corp (BAC.N), Citigroup Inc (C.N), Goldman Sachs & Co (GS.N) and Morgan Stanley (MS.N) are among those submitting the first liquidation scenarios to regulators at the Federal Reserve and the Federal Deposit Insurance Corp, according to people familiar with the matter.
The five firms, which declined to discuss their plans for this story, have some of the biggest balance sheets, trading desks and derivatives portfolios of financial institutions in the United States.
Great Britain and other major countries are imposing similar requirements for "resolution" plans on their big banks, too.
The liquidation plans are coming amid renewed questions about the safety of big banks following JPMorgan's stunning announcement last month that a trading debacle has cost it more than $2 billion - a sum far too small to endanger the bank, but shocking enough to bring back memories of the financial crisis.
A NOD TO GLASS-STEAGALL
If the extensive planning and review process works as proponents hope, big banks will become less hazardous to the public and regulators will be more confident that they can let wounded institutions die without wrecking the economy.
In congressional hearings earlier this month, JPMorgan CEO Jamie Dimon said that the bank's contingency plan for going out of business would let it fail without cost to taxpayers. Living wills reduce the systemic risk of a big bank failing, Dimon said.
The living will requirement could actually yield similar results to restoring Glass-Steagall without actual re-enactment of the Depression-era laws separating commercial banking from investment banking, former FDIC Chairman Sheila Bair told Reuters TV earlier this month.
Bair said regulators may determine that for a liquidation plan to work, a bank must separate traditional banking and insured deposits into subsidiaries set apart from volatile securities trading and securities underwriting.
The rules push banks to untangle their complex structures, which can include thousands of legal entities, and which, in Bair's opinion, have effectively blocked proposals for breaking up the corporations.
Whether the Fed and the FDIC would actually force any banks to sell businesses or cordon off insured deposits remains to be seen, cautioned Richard Herring, a banking professor at the University of Pennsylvania.
"We don't know if they will have the guts to do it, but the tools are there," said Herring, a leading proponent of living wills for more than a decade, who was appointed to an FDIC advisory panel on the plans.
Herring worries, too, that the plans will be so long and complex that they will overwhelm the staff at the agencies.
Still, that the plans are being written at all is progress, Herring said.
PLAN FOR TWO WAYS TO DIE
Under the Dodd-Frank Act, banks and regulators must imagine liquidations in two different ways. The first is through bankruptcy courts with banks negotiating with their creditors. This is the going-out-of-business method planned in the living wills due July 1. The living wills must include how subsidiaries in foreign jurisdictions will be liquidated.
The second way is through a new kind of liquidation process in which the FDIC takes control of putting a financial giant down. This method has more flexibility than is allowed in bankruptcy courts, but still uses critical information collected in the banks' living wills, such as where exactly to find collateral.
The new rules stagger deadlines for the banks to file plans, depending on their size and complexity. Nine banks will file first, including five based in the United States and four owned abroad. Regulators have declined to name the nine banks included in the first round.
Other large banks will have until July and December of next year to hand in their plans, according to the FDIC. Eventually about 124 banks are expected to submit plans, according to the FDIC. There are about 7,300 banks in the United States.
Regulators and the big banks have been meeting since January on what the plans are expected to include. Fed and FDIC officials have said they expect the back-and-forth to continue once the plans have been submitted.
The rules give the banks a series of chances to refine their plans.
But if banks cannot come up with feasible liquidation plans, regulators could order the banks to get rid of businesses.
Government intervention is a last resort, said John Simonson, the FDIC's deputy director of Systemic Resolution Planning and Implementation in the Office of Complex Financial Institutions.
"I think a lot of progress can be made in having these firms make themselves more resolvable before you get to that point of actually imposing those severe remedies," Simonson said.
The regulators will want to see evidence that the banks can safely resolve their debts and transfer vital customer services and assets to healthy institutions.
The plans could easily be 2,000 or 4,000 pages long, depending on the complexity of the banks, said Ryan of PricewaterhouseCoopers. The plans include "very granular detail" about bank operations, he noted, adding that "in many cases, this is a large documentation exercise."
For example, the banks must spell out plans for hiring lawyers and contacting regulators in key countries.
The rules for crafting the living wills are 74 pages long, including an explanatory supplement. The plans could even include drafts of press releases showing how the banks would announce that they are going out of business, Herring said.
The plans are to include summaries for the public, but most of the data will be kept confidential at the request of the banks concerned about revealing trade secrets, according to the rules.
The FDIC has not said when the summaries would be released.
The regulators estimated it will take all of the 124 banks combined about 1.3 million hours of work to write their initial plans, and each year afterwards, 267,544 hours to keep them up to date. A 40-hour work week for a single employee equals 2,080 hours a year.
(Reporting by David Henry in New York, Dave Clarke and Karey Wutkowski in Washington andRick Rothacker in Charlotte, North Carolina; Editing by Alwyn Scott and Jan Paschal)

mercoledì 27 giugno 2012

Worldwide Bank Raid Ongoing, Estimated €2 Billion Taken


BREAKING ALERT: Huge Worldwide Cyber Bank Raid Ongoing, Confirmed €60M Taken By 1 Server, Estimated €2 Billion Taken By Another 59 Servers…This Is Huge!!!


Breaking on Sky just now…..
Momma coop further down has link. Also check sky news twitter feed..
Cyber Raid..
McAfee Virus researchers have uncovered a series of attacks on financial services industry on high balance accounts, some transfers of over 100,000 Euros have been reported…….
Over 60 million euros stolen so far from Dutch, Italian and Germany banks……
Some guy talking about it before saying its China, possibly geeks in a warehouse he said, also said that the west, UK and US on the offensive…
Is this Cyber Robbery or Cyber War…
UPDATE:
Guy on sky news again….
They have attacked UK and US , over 60 servers around world attacking banks, attacks are ONGOING still, €60m confirmed from 1 server, they estimate over €2 billion from other servers.
This is Huge and explains what happed to RBS..[googlevid]
There is a blip about it here. you have to scroll down a bit
“The majority of attacks appear to have taken place across European banking systems, but McAfee warns that it has found evidence of attacks at Latin American and North American financial institutions too. The company is warning that 60 servers have been processing thousands of attempted thefts from high-value accounts over a period of months, resulting in attempts to steal at least €60 million (US$78 million). McAfee says that if all the attempted fraud attacks were successful then the total attempted fraud could be as high as €2 billion ($2.49 billion).”


- Gizzie
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Bank for International Settlements on Big Banks


businesstrade.jpg
Bank for International Settlements on Big Banks

http://www.batr.org/negotium/062712.html
ShadowBanking.jpg

Bank for International Settlements on Big Banks


The shadow-banking component that adds to the risk of non-regulatory oversight just deepens the mystery behind the most powerful banking institution that runs roughshod over global finance. In order to gain an insight into the complexity of deception, examine the function of the BIS. The granddaddy of all central banks, the Bank for International Settlement, latest BIS Annual Report 2011/2012, foretells future financial consolidation.



Watch the Banker to the World's Bank: Time to Deleverage, video interview on CNBC.

From Chapter V. Restoring fiscal sustainability, in this report concludes:
"Sovereigns have been losing their risk-free status at an alarming rate. Fiscal positions were already unsustainable in many advanced economies before the financial crisis, which in turn led to significant further weakening. The deterioration of public finances has undermined financial stability, lowered the credibility of fiscal and monetary policy, impaired the functioning of financial markets, and increased private sector borrowing costs. Restoring sustainable fiscal positions will require implementing effective fiscal consolidation, promoting long-term growth, and breaking the adverse feedback loop between bank and sovereign risk."
The section called, 
Box VI.A: Shadow banking, states:
"While definitions differ, the term "shadow banking" broadly refers to financial activities carried out by non-bank financial institutions that create leverage and/or engage in maturity and liquidity transformation. Thus, even though they are subject to different regulatory frameworks, shadow and traditional banks operate alongside each other.
Shadow banking exists because historical and institutional factors, the rapid pace of financial innovation and specialization have all increased the attractiveness of performing certain types of financial intermediation outside traditional banking. In normal times, shadow banking enhances the resilience of the broader financial system by offering unique financial products and a range of vehicles for managing credit, liquidity and maturity risks. But shadow banking also creates risks that can undermine financial stability in the absence of prudential safeguards."
The bombshell news that raises alarm is the admission that "Too Big To Fail" is still the operative principle that drives the banking system into an unsustainable servicing of debt obligations. The cloak of the shadow banking practice, intended to circumvent usual regulatory standards, creeps along the soft underbelly of respectable central banking. When a collapse catches up with the racket of excessive leverage, the ensuing scandal is directed to some esoteric phantom operation that is expendable.
The analysis in 
Big Banks Take Risks Expecting Taxpayers To Cover Lossesidentifies who ultimately bears the risk of the world fiat, debt created, financial system.
"The report also emphasized the need to increase the safety of the banking system by pushing banks to be responsible for their losses, add to their financial buffers and avoid risky practices. It added that big banks still have an interest in using high-risk debt – so-called "leveraging" – to magnify any trading gains because they can expect taxpayers to step in and cover their losses if things go bad.
"Big banks continue to have an interest in driving up their leverage without enough regard for the consequences of failure: because of their systemic weight, they expect the public sector to cover the downside, " said BIS. "Another worrying sign is that trading, after a brief crisis-induced squeeze, has again become a major source of income for large banks."
Protecting the fractional reserve scheme, at all cost, is the true purpose of the BIS. Sovereign holdings, with their ensuing national debt owed to the banksters pays homage to the real owners of underlying collateral assets.
From a source in the essay, 
Revolution against Central Banks, explains a scheme of global magnitude for financial control.
"The BIS is taking national currency deposits from the 55 member/owner central banks and converting them to SDR's on its own balance sheet. The SDR's are "claims on the freely usable currencies of IMF members," therefore, the deposits of the central banks become claims on those currencies--the deposits of the fiat central banks who can deposit as much as they feel at the BIS in whatever currency the chose--including the SDR's allotted to their "nation," as the central banks are the sole depositories for the national wealth/sellers of the national debt. The BIS is then paying out dividends to these same member CB's in the form of SDR's, which again can be used to claim currencies. By August 2009, they had just made up out of thin air almost twelve times the supposed global supply of SDR’s. They are truly acting like the "central bank of the world," complete with printing!"
By any objective standard of decency and accountability, the BIS is the ultimate clearinghouse of worldwide debt for the New World Order. Need proof, just reflect on the diversion used by a captain from one of the most powerful "Godfather" family of investment banking.
Finally in, 
Time to Stop Expecting So Much From the Fed?, Goldman Sachs strategist Jim O’Neill told CNBC:
Even the central bank for central banks, the Bank for International Settlements, is playing down the power of the Fed and other central banks.
"It would be a mistake to think that central bankers can use their balance sheets to solve every economic and financial problem," the BIS said in its annual report.
"In fact, near-zero policy rates, combined with abundant and nearly unconditional liquidity support, weaken incentives for the private sector to repair balance sheets and for fiscal authorities to limit their borrowing requirements," the report said.
World consumers are being pick-pocketed in the graveyard of financial ruin. Strip away the skin of a decayed corpse and what remains is the stark skeleton of a dead paper monitory system. The life-support methods used to keep the interest payments accruing, only forestall the day of reckoning. The end game for the central bankers is foreclosure on pledged guarantees. Currency swaps will become a recall of national fiat species and a replacement with a float of a new world coinage.
National governments are mere public diversions from the real power behind the thrones.
For additional information on the BIS, visit the Facebook Group, 
BIS (Bank for International Settlements) awareness.James Hall – June 27, 2012

lunedì 25 giugno 2012

Stiglitz Sees Terrifying Future for America


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Exclusive Interview: Joseph Stiglitz Sees Terrifying Future for America If We Don't Reverse Inequality

What will life look like down the road if we don't reverse economic inequality? We must see through the myths of capitalism and build a mass movement if we are to save ourselves.
 
 
  

 
Nobel Prize-winning economist Joseph Stiglitz, one of America's most prescient voices, wrote an article for Vanity Fair several months before Occupy Wall Street was born. "Of the 1%, by the 1%, for the 1%" called attention to the widening gap between rich and poor and its deadly impact on our society and its democratic institutions. In his newly released book, The Price of Inequality, Stiglitz returns to this theme of a divided society, delving into the origins and consequences of economic unfairness. I caught up with Professor Stiglitz and talked to him about how the persistent myths and beliefs associated with our capitalist system help to drive this trend, turning America from a land of opportunity to a land of broken dreams.
Lynn Parramore: An argument has been made, particularly since the end of the Cold War, that capitalism is great at producing things that can improve our lives, and so we ought to therefore tolerate some unfairness. What's wrong with that narrative?
Joseph Stiglitz: Well, capitalism does have a lot of strengths, including producing things that are very innovative. But what drives capitalism is the profit motive. You can profit not only by making good things, but also by exploiting people, by exploiting the environment, by doing things that are not so good. The narrative that you describe ignores the extent to which a lot of the inequalities in the United States are not the result of creative activity but of exploitive activity. And if you look at the people at the top, what is so striking is that the people who've made the most important creative contributions are not there.
By that I mean the really foundational things like the computer, the transistor, the laser. And how many people at the top are people who made their money out of monopoly -- exercising monopoly power? Like bankers who exploited through predatory lending practices and abusive credit card practices. Or CEOs who took advantage of deficiencies in corporate governance to get a larger share of the corporate revenues for themselves without any regard to the extent to which they have actually contributed to increasing the the sustainable well-being of the firm.

LP: How does our current situation compare to other eras in terms of the differences between ordinary Americans and the richest among us?

JS: Doing a precise comparison is difficult because we don't have data sets that go back that far. But we do have data sets that go back more than 30 years and what is clear is that the share of the top 1 percent has almost tripled since 1980. So, this kind of inequality at the top has unambiguously gotten much, much, much worse. We also have data on the extent to which there's been a hollowing out of the middle class. The data that recently came out from the Fed indicated that we've wiped out 20 years of increases and wealth for the middle American.

LP: So for most of us, 20 years of economic progress just went up in smoke. But the super-rich are doing very well. What happened?

JS: It's the peculiar nature of the American economy, which is that's it's a very powerful machine that is working for a very few people, and has not been delivering for most Americans. If you had an economic machine that worked the way it was supposed to, everybody would be getting better. And an economy that's normally growing, say, 3 percent, even over a 20-year period. Steady accumulation would lead to their wealth more than doubling in that period. And it clearly hasn't happened. And adjusted for inflation, it would have even increased even before, unadjusted for inflation, would have increased it even more. And that clearly hasn't happened.

LP: There's a persistent myth that America is still the "land of opportunity." Why is that myth so prevalent, even in the face of so much evidence to the contrary?

JS: Well, there are two reasons for this. One of them is that the myth is so much part of our sense of identity as Americans that it is devastating for us to give it up -- for us to say we are less of a land of opportunity than old ossified Europe. It was one of the things we were most proud of, and clearly, it's not true. When you have something that's so inconsistent with your self image, it's really, really hard to face the facts. 
The second reason has to do with the nature of evidence. Everybody know examples of people who make it from the bottom or the middle-bottom to the top. And our press talks about them. The media calls attention to the successes. But when they call attention to successes they don't say this is one of a million or one of a thousand. In fact, the reason they write about it is because they are so unusual. If most people did it, it wouldn't be an unusual story. So, in a sense that's how our media works. It encourages us to think of the exceptions as the norm.

LP: Some say that if we redistribute income in a more equitable way, people won't want to work as hard. Is that true? What happens to our motivation to work when things are so inequitable?

JS: One of the myths that I try to destroy is the myth that if we do anything about inequality it will weaken our economy. And that's why the title of my book is The Price of Inequality. What I argue is that if we did attack these sources of inequality, we would actually have a stronger economy. We're paying a high price for this inequality. Now, one of the mischaracterizations of those of us who want a more equal or fairer society, is that we're in favor of total equality, and that would mean that there would be no incentives. That's not the issue. The question is whether we could ameliorate some of the inequality -- reduce some of the inequality by, for instance, curtailing monopoly power, curtailing predatory lending, curtailing abusive credit card practices, curtailing the abuses of CEO pay. All of those kinds of things, what I generically call "rent seeking," are things that distort and destroy our economy.

So in fact, part of the problem of low taxes at the top is that since so much of the income at the very top is a result of rent seeking, when we lower the taxes, we're effectively lowering the taxes on rent seeking, and we're encouraging rent-seeking activities. When we have special provisions for capital gains that allow speculations to be taxed at a lower rate than people who work for a living, we encourage speculation. So that if you look at the design bit of our tax structure, it does create incentives for doing the wrong thing.

LP: When ordinary people see this speculation and unfairness, do you think it disincentivizes them to work harder, to take risks?

JS: Oh, very much so. It has a very enervating effect on our society and our economy. I describe experimental results in in my book where peoples' incentives to work hard are reduced when they believe they are part of an unfair system.

LP: We also hear that deregulation and downsizing government is somehow supposed to make capitalism work better for all of us. Why has that persistent belief failed us?

JS: A lot of these are questions about perception. To the extent that we can see waste, obviously we say that if we could get rid of that waste, we would be a better economy. By definition, waste is waste. The Republican rhetoric has focused on waste in the public sector. But waste, at some level, is an inherent consequence of human fallibility. We're going to make mistakes, and that's going to be true in the public and the private sector. No government program has ever wasted resources on the scale of America's private financial sector in the run-up to the crisis. So the first thing you realize is there is waste everywhere including in the private sector.
Now if you ask people about things there are important to them ... obviously they care a lot about the school their children go to. They worry about too-large classes. They worry about police protection. Those are all things that people value a lot. They value the Internet, which was created by government-funded research. Health care and drugs were are all based on government-funded research. So the bottom line is that government services have proved highly valuable. And this is where the big lie, the big distortion is.  By talking about the few instances of inefficiency, they try to direct the attention away from the teachers, the policeman, the fireman, the researchers, the people building the roads to make our society function. And they turn our attention away from the failures in the private sector.

LP: What is the connection between the increase of deregulation and the rise of inequality?

JS: I think there are a couple of things going on simultaneously. The most important aspect for deregulation was in the financial sector. And that deregulation led to this over-bloated financial sector, predatory lending, abusive credit card practices and so forth. That did double function. It lead to more wealth at the top. It took away wealth and income from the bottom. So that really was very bad for American inequality. Not good for American economic growth. So that's one aspect of it.

Deregulation was, in part, the result of an ideology. A lot of weight was given to the business community and the people of the top. Corporations and the one percent. It reflected the increasing influence of money in politics. That itself again led to more inequality. Under Bush, you get bills where the government said that it would not bargain with the drug companies, giving the drug companies over a half trillion dollars over 10 years, lowering progressive income taxes, special provisions for capital gains and dividends. Things in turn which created a more distorted economy and a more unequal society. So some of the forces that gave rise to deregulation gave rise to these other activities that also gave rise to inequality.

LP: Obviously there are lot of costs that this inequality imposes upon us. What, in your view is the biggest cost, particularly to young people? 

JS: One aspect of it is the problem about student debt. Market forces are global. America's inequality is distinctive because of the way we shape those market forces and a good example are our bankruptcy laws which are the kind of laws that regulate our economy. Our bankruptcy law gave priority to the banks, to derivatives, to risky products and AIG and so forth. But when you do that, you expand risk-taking by the banks. You encourage the banks to go into risk, into gambling, rather than into lending.
At the other extreme, we passed a change in the bankruptcy code. There's a provision that students in bankruptcy cannot discharge their debt -- even if the school doesn't provide what was promised. Then you combine that with this austerity going on today, where we're forcing many of the states to raise their tuition enormously. So what you have is the situation in which the students who want access to education have no choice but to borrow. Their parents' incomes are doing very badly, and yet if they borrow, there's no way, no matter what they do, to get out from under this debt. Even if their education doesn't pay off. That's compounded by the fact that we have this very high unemployment, and particularly high youth unemployment. And data show very clearly that if a young person graduates from college in a period in which there's high unemployment, the income prospect for your entire life is going to be greatly diminished.

LP: You've talked about the corruption in our political system.  What is our best hope in the political realm of reversing this trend in economic inequality?

JS: On the positive side, let me just say that there are a number of reasons for hope. One of them is that if we look at countries like Brazil that seemed to be over the precipice, people saw where it was going and the country came together and did things like education under Cardoso. And hunger and nutrition and health programs. You can already see in the data that inequality has been coming down. The United States faced high levels of inequality in the Gilded Age, in the period in the Roaring '20s. But it backed off. The social legislation of the '30s reversed the trend. So there is hope that societies that are moving in this direction that we've been moving will see the light and change.

And there's lots that you can do. In my book, I described this very comprehensive economic agenda. It's not hard. And you don't have to do everything. What I try to put forward are two hypotheses of how that might happen. In one of them, what I call the "1 percent" will finally realize that it's in their enlightened self interest, rightly understood, to care about the rest of society. You cannot do well at the top of the pyramid unless the base of the pyramid is strong. And the other one is that the 99 percent realize that they've been sold a bill of goods. And they realize that some of these ideas that we've been talking about -- trickle-down economics that destroy the interests of the poor, the middle class -- are just wrong. They come to realize that the United States is not the land of opportunity, that the United States has higher level of inequality of any of the other advanced industrial countries. As they come to realize this, then maybe they'll wake up and say, why is that? 
LP: And if we wake up, if we understand it, how do we get our politicians to listen to us? What can we do to fix our political system?

JS: Well, you know, just as in the case of the economic agenda, I don't think there is any single magic bullet that is going to make a big difference -- one that will be definitive. There are lots of things. Economic inequality has many dimensions and has manifested in many levels of our complex political system. I guess I have to believe that the single thing that probably distorts our democracy the most is campaign finance. So that would be a place to start. Public funding of all campaigns would probably take away a lot of the power of money.
So in one way, you have to ask the fundamental question, how is it that we've become a country that's more accurately described as one dollar, one vote, than one person, one vote? And one has to say it has something to do with that power of money in the political process. There are other changes in legislation that would make a great deal of difference. We have a system where you need a lot of money to get out the vote. So if you went to the Australian route, and said youhave to vote, that would also have an impact.
LP: I want to paint a picture, particularly for the young people. What might life actually look for them 20 years down the road, 30 years down the road, if we can reverse this trend? And what might life look like if we don't?

JS: Let me step back and say that economists always like to think about the counter-facts or what life would be if we go down one course versus another. We're not gonna to be entering the Garden of Eden. But if we go down the route that we're going, we're going to a world where people live in gated communities. We already have by far the largest fraction of our population locked up in prison. We will have an increasingly insecure society. Americans will be facing insecurity, of economic insecurity, healthcare insecurity, a sense of physical insecurity. We will be worrying politically about the role of extremism. Extremism on the right, extremism on the left. So that's the kind of picture that I can see as going down towards. I see so many other countries that have these divided societies going down this directions.

The other one is a society where most Americans are actually better off.  I mean, the reality is that Americans are wonderfully optimistic. Even when things are not going very well, they'll smile and say well, you know, we're just having a temporary setback. A 20-year, zero-increase in wealth is not a small setback, and so I think the alternative is that they can see a world in which our increasing wealth is more equitably shared, and that will be a world where they will have more security, more wealth, more time to spend doing what they really care about. Some individuals will be absorbed in their work, other individuals will have sufficient income that they'll be able to have a hobby. A society in which everybody will be able to exercise their creativity in their own way.

LP: Has there been any reaction to your book that you didn't anticipate as you were writing?

JS: I guess the thing that was most moving in a number of the talks that I've given is the large number of young people that have come to the microphone and asked questions where you can sense their sense of despair, their sense of frustration at being saddled by student loans, their sense of job prospects being not very good. A couple of them really articulated a sense of unfairness. One kid said "To get a job, you have to have an internship. I don't have the connections. I don't have the money to live on to accept one of these low-paying internships."
And then another one said "You know, to get a job now, you need a master's degree. I can't afford it. I already have too much student debt." And these were, you know, intelligent kids, who obviously played by the rules, done everything right, worked hard at school. But they were hitting the kind of frustration that you shouldn't be getting from young people. To me, that was really heart-rending. And it came from not just one kid. Not in just one talk.

LP: Do you sense that they have energy for action? Political action or participation in social movements?

JS: I don't see them enervated. These are kids who have not dropped out. They really have a thirst. They want to know what could we do. But I didn't get the sense that they felt very confident that either the political system or protest movements work. So they were expressing a sense of frustration, despair, that, you know, "Occupy Wall Street didn't work, the political system hasn't been reformed, the economy's not functioning, we're saddled with these debts, job prospects are bleak. And, we don't have the money like a rich kid to stay in school. What do we do?"

LP: And what's your answer to them? 

JS: Well, all I can say is that I just felt enormously empathetic with them. And I think the only hope at this point is to try to get political activism, including protests like Occupy Wall Street. But also engaging in the political movements. Or trying to make the protest movements more linked to our political process.

LP: When you were saying that young people felt a sense that Occupy Wall Street didn't work, do you think that's really true? 

JS: I think it did move the conversation. What is clear is that it hasn't yet reached fruition. It did move the conversation, but certainly, in the context of one of the political parties, things haven't really changed where they're going. It may have succeeded in getting President Obama to talk a little bit more forthrightly about the problems of inequality in our society. And in that sense, it has made, I think, Americans more receptive to the fact that economic inequality is one of the major problems we're facing today.
Lynn Parramore is an AlterNet contributing editor. She is cofounder of Recessionwire, founding editor of New Deal 2.0, and author of 'Reading the Sphinx: Ancient Egypt in Nineteenth-Century Literary Culture.' Follow her on Twitter @LynnParramore.

venerdì 15 giugno 2012

Time to Pay the ECB, Greece!


MarketBeat
WSJ.com's inside look at the markets
March 16, 2012, 7:38 AM
Time to Pay the ECB, Greece!
By Charles Forelle
http://blogs.wsj.com/marketbeat/2012/03/16/time-to-pay-the-ecb-greece/

With all the excitement over the Greek bond swap, we’d forgotten about the European Central Bank’s holdings, which we detailed a few weeks ago here.

Remember, the ECB (and the euro-zone national central banks) didn’t “participate” in the Greek debt exchange, though they had more than €50 billion in Greek debt. Rather, Greece arranged a side deal in which the central banks exchanged their bonds for new ones that are identical in all material respects–except the issue date, which was changed to 2012. Thanks to that difference, they weren’t covered by the restructuring, which included only bonds issued on Dec. 31, 2011, or earlier.

Nicely done.

Now the two versions of same old bond are getting very different treatment.

Credit Suisse’s fixed-income research team points out in a note this morning that the first bill is coming due. The famous March 20 bond–the €14.5 billion issue that Greece didn’t have the money to repay–matures next week. Most of the holders were private creditors. They’ll get nothing next week. Instead, they’ve received some cash-like securities and a withered package of new bonds that doesn’t begin maturing until 2023.

The ECB and the national central banks still hold €4.7 billion worth of the March 20 bond; they’ll get their money back on Tuesday.

giovedì 14 giugno 2012

ECB mafia is plunging with MARIOnet's OMERTA

The replies from the ECB to the 10 questions
http://simonthorpesideas.blogspot.fr/2012/01/and-replies-from-ecb-to-10-questions.html
My Photo
Well, I certainly can't complain about the swiftness of the response from the nice person at the ECB info desk to my 10 questions this morning. Looks like we'll need to get the journalists at Bloomberg on the job if we want to know who the 523 banks were that took the 489 billion, and whether or not any of them got turned down. Frankly, I doubt it, since the decisions were apparently made the following day.

Anyway, here are the replies to the 10 questions. Thank you ECB....
---------------------------- Original Message ----------------------------
Subject: RE: 10 questions forMario Draghi and the ECB
From:    info@ecb.int
Date:    Wed, January 4, 2012 12:48
To:      Simon Thorpe
--------------------------------------------------------------------------

Dear Mr Thorpe,

Please see below our answers.

1) Where can I find a list of the banks to which the ECB provided money?
The identity of the banks participating in the Eurosystem's credit (and other monetary policy) operations is covered by confidentiality and therefore not publicly available. It is analogue to the relationship between commercial banks and their customers.

2) Where can I find a list of the amounts of money provided for each bank?
Same as above.

3) What percentage of the applications were funded in full?
Under the current policy of the ECB's Governing Council, credit operations are conducted with what we call "full allotment", which means that the restriction on (solvent) banks' possibility to borrow is determined by the bank's possession of eligible collateral that has to be posted against all credits from the central bank.

4) How long did it take the ECB to decide whether to provide funds to a given bank?
The Eurosystem has a list of eligible counterparties, based on criteria that are published here:(Chapter 2 in Annex 1 of the guideline) 
All banks that are eligible according to the criteria can participate in the monetary policy operations

5) What checks are made on the suitability of a bank before consenting to make such a loan?
Same as under 4)

6) Was there any limit on the total amount of money that could be provided via this mechanism?
Same as under 3)

7) If not, does this mean that the ECB could print an arbitrarilly large amount of money?
Indeed, according to the Treaty on the functioning of the European Union (Protocol No. 4) the ECB (or, more accurately: the Eurosystem) has the competence to "conduct credit operations with credit institutions and other market participants, with lending being based on adequate collateral." Please see Article 18 here

8) Was any money provided to "publicly owned credit institutions" as stated by paragraph 2 of Article 123 of the Lisbon treaty?
Same as under 1) and 2)

9) If such a publicly owned credit institution was to supply the money to
a government such as the Greek government in order for that government to
pay off its debts to the financial markets, would the ECB object?
According to the Treaty - as you have just quoted - such publicly owned credit institutions "shall be given the same treatment by national central banks and the ECB as private credit institutions." It is up to the banks to decide how to use the money they have borrowed from the central bank system.  

10) Has Mario Draghi read Michel Rocard and Pierre Larrouturous tribune in
Le Monde on the 2nd of January entitled "Pourquoi faut-il que les Etatspayent 600 fois plus que les banques".
You can be assured that Mr. Draghi is very well informed of all pertinent proposals and ideas that are discussed in the public domain and among monetary policy experts. 


With kind regards,

EUROPEAN CENTRAL BANK
Directorate Communications
Press and Information Division
Kaiserstraße 29
D-60311 Frankfurt am Main
Tel: +49 69 13 44 74 55
Fax: +49 69 13 44 74 04
E-mail: info@ecb.europa.eu

martedì 12 giugno 2012

The Latest Adventures Of Alice In Euroland

Submitted by Tyler Durden on 06/12/2012 07:39 -0400
From Mark Grant, author of Out Of The Box
"When I use a word," Humpty Dumpty said, in rather a scornful tone, "it means just what I choose it to mean ? neither more nor less."
"The question is," said Alice, "whether you can make words mean so many different things."
"The question is," said Humpty Dumpty, "which is to be the master ? that's all."
It is now quite obvious; the political elite of Europe are all now deeply immersed in "Alice in Wonderland." This must be the case. The Spanish Prime Minister says one thing, the German Finance Minister says the exactly opposite thing and is joined by the Prime Minister of Finland and the caterpillar sits in the tree smoking his hookah pipe and they all must be joining him. It may be left or it may be right but I choose to believe those who are providing the money and not those who are in receipt of it. Rajoy's "This is a great victory for Europe" speech may go down as one of the most audacious of the decade as it was surely written by the caterpillar or someone who had joined him in puffing away prior to the siesta. Maybe Rajoy should start a new show on TV; "Huff and Puff" sponsored by Amigo (Bud) Light and Inquisition Light.
"As laid down in the ordinances of St. Dominica, the penitent, it was commanded should be stripped of his clothes and beaten from by a priest three Sundays in succession from the walls of the village to the gate of the church; he must not eat any kind of meat during his whole life; must abstain from fish, oil, and wine three days in the week during life, except in case of sickness or excessive labor; must wear a religious dress with a small cross embroidered on each breast; must attend mass every day, if he has the means of doing so, and vespers on Sundays and festivals; must recite the service for the day and night and repeat the patemoster seven times in the day, ten times in the evening, and twenty times at midnight. If he failed in any of these requirements he was to be burned as a relapsed heretic."
-Llorente
The Wizard Posts a Serious Warning
With the Italian 10 year at a 6.15% and the Spanish 10 year at a 6.60% this morning; pause. My recommendation is to be out of all European sovereign and bank debt but if you have to own some because of your mandate or because you are attached to some Index then it is time to stop, look and listen. The Red Queen (Angela Merkel) and her minions are playing "off with their head" games and the situation is not a joke. The EFSF loans are going to be replaced by ESM money when the fund comes into existence and this means that your position as a senior bond holder will be subordinated to the IMF and/or the ESM. Any country including the existing troubled nations (Greece, Ireland, Portugal, Spain and shortly Cyprus) are going to have their debt replaced by the capital of the ESM so if you own any of these sovereign credits or any of their banks then you are going to be placed in a junior position by fiat. Then we have just seen what happens with "local law" bonds as demonstrated by Greece so that you need to swap out of any "local law" bonds ASAP and only own bonds governed by American, British or Swiss law. This would be for any and all nations on the Continent without exception. When it comes to bond holders versus taxpayers the taxpayer will always win so you must protect yourselves now rather than having your head handed to you later. There is no joy in finding your head on some silver platter I assure you and you must make the changes now and not later. I cannot stress this enough and I hope you are paying attention!
The final consideration is a matter of the currency; what if Europe does blow up? If you own good old American names such as IBM or DuPont that are denominated in Euros; what if there is not a Euro any longer? This may have been an outlier question several years ago and you may be in the camp that "everything will be just fine" but what if you are wrong? The currency issue is not an outlier consideration any longer. It is then a question of how much risk you wish to take or have your clients take and it is an issue that surely can be ignored no longer. Consequently I place it squarely on the table for you to ponder and vote on; one way or the other.
Europe is behaving badly. There is no apparent game plan besides shifting with the tides. From one day to the next it is not apparent what they are going to do or how they are going to do it. The Continent is a mess and will likely worsen as their troubles increase. The European banks are in never-never land, leveraged to the hilt, financial statements without the ring of truth and lied about by the nations that govern them. Fantasies of some silver bullet or of Germany rolling over are hookah induced dreams in my view and moving everything down the road just makes the walking more difficult until the traveler stumbles under the burden that he has accumulated and then falls. The purported financial wall that was to protect Spain was little more than a puff of hot air on a summer afternoon and the notion that Italy would also be protected has just been shot with holes courtesy of Marino of Madrid.
The markets, as demonstrated by the 4.4 hour relief rally that quickly went south, are beginning to get the joke and institutions all across the world are heading for the door as a matter of the loss of faith and the imposition of seniority that could eventually apply not just to the sovereigns and the banks but to any and all asset classes in Europe. The Socialists demand, the Germans refuse and the winner, always the winner, are those with the money and not those that demand that it be shared. If you want a weighting then the bailed-out nations get a "1" and the socialist countries needing money get a "2" and Germany gets a "10" and that is how I would weight their statements in terms of what actually will get done.

Capital controls, visas contemplated in Europe



Capital controls, visas contemplated in Europe if Greece drops euro

 Section: 
Euro Zone Discussed Capital Controls if Greek Exits Euro: Sources
By Luke Baker
Reuters
Monday, June 11, 2012
BRUSSELS -- European finance officials have discussed limiting the size of withdrawals from ATM machines, imposing border checks, and introducing euro-zone capital controls as a worst-case scenario should Greece decide to leave the euro.
EU officials have told Reuters the ideas are part of a range of contingency plans. They emphasized that the discussions were merely about being prepared for any eventuality rather than planning for something they expect to happen -- no one Reuters has spoken to expects Greece to leave the single-currency area.
But with increased political uncertainty in Greece following the inconclusive election on May 6 and ahead of a second election on June 17, there is now an increased need to have contingencies in place, the EU sources said.
The discussions have taken place in conference calls over the past six weeks, as concerns have grown that a radical-left coalition, SYRIZA, may win the second election, increasing the risk that Greece could renege on its EU/IMF bailout and therefore move closer to abandoning the currency.
No decisions have been taken on the calls, but members of the Eurogroup Working Group, which consists of euro zone deputy finance ministers and heads of treasury departments, have discussed the options in some detail, the sources said.
Belgium's finance minister, Steve Vanackere, said at the end of May that it was a function of each euro zone state to be prepared for problems. These discussions have been in that vein, with the specific aim of limiting a bank run or capital flight.
As well as limiting cash withdrawals and imposing capital controls, they have discussed the possibility of suspending the Schengen agreement, which allows for visa-free travel among 26 countries, including most of the European Union.
"Contingency planning is underway for a scenario under which Greece leaves," one of the sources, who has been involved in the conference calls, said. "Limited cash withdrawals from ATMs and limited movement of capital have been considered and analyzed."
Another source confirmed the discussions, including that the suspension of Schengen was among the options raised.
"These are not political discussions, these are discussions among finance experts who need to be prepared for any eventuality," the second source said. "It is sensible planning, that is all, planning for the worst-case scenario."
The first official said it was still being examined whether there was a legal basis for such extreme measures.
"The Bank of Greece is not aware of any such plans," a central bank spokesman in Athens told Reuters when asked about the sources' comments.
The vast majority of Greeks -- some surveys have indicated 75 to 80 percent -- like the euro and want to retain the currency, something Greek politicians are aware of and which may dissuade them from pushing the country too close to the brink.
However, SYRIZA is expected to win or come a strong second on June 17. Alexis Tsipras, the party's 37-year-old leader, has said he plans to tear up or heavily renegotiate the 130-billion-euro bailout agreed with the European Union and International Monetary Fund. The EU and IMF have said they are not prepared to renegotiate.
If those differences cannot be resolved, the threat of the country leaving or being forced out of the euro will remain, and hence the need for contingencies to be in place.
Switzerland said last month it was considering introducing capital controls if the euro falls apart.
In a conference call on May 21, the Eurogroup Working Group told euro zone member states that they should each have a plan in place if Greece were to leave the currency.
Belgium's Vanackere said two days after that call that it was a basic function of each euro zone member state to be prepared for any eventuality.
"All the contingency plans (for Greece) come back to the same thing: to be responsible as a government is to foresee even what you hope to avoid," he told reporters.
"We must insist on efforts to avoid an exit scenario but that doesn't mean we are not preparing for eventualities."