[Desperate Treasury Secretarys] Brother, Can You Spare A Trillion?

From Daily Bail:



Tim Geithner wants your spare cash
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Related:

Give Us Your Money, Suckers — U.S. Government Requesting Public Donations To Help Pay The Debt

Dominique Strauss-Kahn, Tim Geithner And The IMF - Australian PM Calls Geithner An 'UTTER FAILURE' For His Horrible Decisions When He Managed The IMF Bailouts For Asia

[Beyond Bizarre] Football Legend Cristiano Ronaldo To Be Used As ECB Collateral

From Zero Hedge, by Tyler Durden 07/28/2011:

We were pretty much speechless when we read this - it sure puts guarantees by Noyer, Trichet and all the other bureaumonkeys that the ECB does not accept just any collateral in perspective. From Presseurop.eu: "The most expensive footballer in history may now be used to guarantee the solvency of a Spanish bank. “Ronaldo in the bailout fund,” headlines Süddeutsche Zeitung. The daily reports that the Bankia group of savings banks, which financed Real Madrid’s acquisition of the Portuguese player, is now seeking to borrow funds from the European Central Bank. In response to the ECB’s demand for guarantees, Bankio are putting up… Ronaldo and the Brazilian Kaka, who also plays for the Madrid football club. In 2009, Real borrowed 76.5 million euros to pay transfer fees of 100 millions euros to Manchester United, and 60 million to Milan AC."

“Could we see a situation in which the ECB seizes one of the players?“ wonders the Munich daily. “In theory, it is possible. Bankia would first have to become insolvent. Thereafter, Real would have to default on its loans, which are secured by advertising and television revenues. It goes without saying that Real Madrid is in debt to the tune of several million euros. However, in Spain football clubs have a history of obtaining publicly funded bailouts — just like the country’s banks.”

This is beyond even The Onion's (and even Zero Hedge's) level of sarcasm. 

There is nothing that can be added to this insanity. Furthermore, the fact that the "collateral" most likely has a virulent case of Paris Hiltonitis which will infect all the other worthless collateral, likely leading to the latest and greatest reality TV show, only adds to the complete farce that the global ponzi scheme has now become.

h/t Stock Bitch
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Related:

Italy Bonds Smacked in Selloff, Yields Now Approach Spain; Vote of "No Confidence" on Debt Plan

Jim Rickards: Germany’s Fourth Reich Has Conquered Europe

Going Bananas

From Financial Armageddon,  July 27, 2011
by Michael Panzner

It's been a while since I discussed our country's increasing resemblance to a banana republic, but four recent reports essentially confirm that we're more like those third world countries we used to make fun of than many people think. Among the things we have in common:

1. Significant corruption

"Poll: Plurality Say Congress is Corrupt" (UPI)

A plurality of Americans say they think most members of Congress are corrupt, with less than a third saying the opposite, a Rasmussen Reports survey indicated.

The survey, released Wednesday, also indicated a staggering 85 percent of voters said they believe congressional members are interested in advancing their own careers rather than helping people.

Forty-six percent of likely voters said they view most members of Congress as corrupt, up 7 percentage points from June and the highest finding yet, Rasmussen Reports said.

2. Deteriorating infrastructure

"Infrastructure Woes Take Toll on US Economy-Engineers" (Reuters)

Failing infrastructure will cost the United States billions of dollars in lost productivity, income and trade in coming decades, according to a civil engineering report released on Wednesday that said the impact on gross domestic product could reach $2.7 trillion.

The American Society of Civil Engineers regularly tallies the amount needed to upkeep declining U.S. roads, bridges and waterways. It said the country will need to invest roughly $220 billion annually to maintain the country's infrastructure in "minimum tolerable conditions."

It said the gap between infrastructure needs and federal funding is growing.

"If present trends continue, the funding gap for rail and bus transit, seen as 41 percent in 2010, is expected to increase to 55 percent in 2040," it said. "The expected gap in highway funding, 48 percent in 2010, is expected to increase to 54 percent by 2040."

3. Reckless fiscal policies

"Republican Leaders Voted for Debt Drivers They Blame on Obama" (Bloomberg)

House Speaker John Boehner often attacks the spendthrift ways of Washington.

“In Washington, more spending and more debt is business as usual,” the Republican leader from Ohio said in a televised address yesterday amid debate over the U.S. debt. “I’ve got news for Washington - those days are over.”

Yet the speaker, House Majority Leader Eric Cantor, House Budget Chairman Paul Ryan and Senate Minority Leader Mitch McConnell all voted for major drivers of the nation’s debt during the past decade: Wars in Afghanistan and Iraq, the 2001 and 2003 Bush tax cuts and Medicare prescription drug benefits. They also voted for the Troubled Asset Relief Program, or TARP, that rescued financial institutions and the auto industry.

Together, according to data compiled by Bloomberg News, these initiatives added $3.4 trillion to the nation’s accumulated debt and to its current annual budget deficit of $1.5 trillion.

As Congress nears votes to raise the $14.3-trillion debt ceiling to avert a default on U.S. obligations when borrowing authority expires on Aug. 2, both parties are attempting to claim a mantle of fiscal responsibility. They both bear some of the blame: Many Democrats contributed to the expenses that are forcing lawmakers to boost the nation’s debt limit, as have Republican leaders at odds over how much borrowing authority to hand President Barack Obama and when.

“There’s plenty of blame to go around,” for the debt, said Robert Bixby, executive director of the Concord Coalition, an Arlington, Virginia-based group that advocates for balanced budgets. “If there had been no Barack Obama, we would still be bumping up against the debt limit.’”

4. Significant wealth and income inequality

"Growing Share of Income for the Rich" (Washington Post)

Inequality in the U.S. has has grown steadily since the 1970s, following a flat period after World War II. In 2008, the wealthiest 10 percent earned almost the same amount of income as the rest of the country combined.

SHARE OF NATION'S INCOME  Including capital gains

The top 0.1 percent of the population (those making about $1.7 million or more) saw the sharpest increase in income share, taking home 2.6% of the nation’s earnings in 1975 and 10.4% in 2008.

It's not your father's America, that's for sure.
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Related:

CRapitalism: The Liquidating of America/ Part 1

America: Heading for Tyranny and Impoverishment

By Stephen Lendman, July 27, 2011

It's present, hardening, and threatening to subvert all constitutional and social rights. Among others, three previous articles discussed the danger, accessed through the following links
http://sjlendman.blogspot.com/2007/12/police-state-america-l
ook-back-and.html
http://sjlendman.blogspot.com/2010/09/continuity-of-governme
nt-coup-detat.html
http://sjlendman.blogspot.com/2011/07/fix-is-in-washingtons-
planned-social.html

The first article covered post-9/11 police state laws, Executive Orders, Military Orders, as well as National and Homeland Security Presidential Directives (NSPDs and HSPDs). It addressed George Bush granting himself "Unitary Executive" authority to govern extrajudicially (a virtual dictator) in the name of national security, though no constitutional provisions permit it.

The second article discussed "Continuity of Government (COG)" authority under declared national or catastrophic emergency conditions, defined as:

"any incident (such as a terrorist attack), regardless of location, that results in extraordinary levels of mass casualties, damage, or disruption severely affecting the US population, infrastructure, environment, economy, or government functions."

COG is then defined as:

"a coordinated effort within the Federal Government's executive branch to ensure that National Essential Functions continue to be performed during a Catastrophic Emergency."

In other words, COG authority gives the president and DHS unprecedented police state powers to declare martial law without congressional approval, and be able to rule extrajudicially, free from constitutional constrains. It also lets the vice-president assume dictatorial powers:

"implemented in a manner that is consistent with, and facilitates effective implementation of, provisions of the Constitution concerning succession to the Presidency or the exercise of its powers, and the Presidential Succession Act of 1947 (3 U.S.C. 19), with consultation of the Vice President and, as appropriate, others involved. Heads of executive departments and agencies shall ensure that appropriate support is available to the Vice President and others involved as necessary to be prepared at all times to implement those provisions."

COG authority is renewed annually. Obama did it twice and will again in September, letting him govern dictatorially if he chooses.

The third article discussed how complicit Democrats and Republicans plan to destroy America's social contract to transfer maximum wealth to corporations and super-rich elites. Obama's out in front arranging it in dirty back room deals. It's a take the money and run scam, hollowing out America and impoverishing millions in the process.

Now a new threat. Paul Craig Roberts mentioned it in his article headlined, "Debt Ceiling Intransigence: Unintended Consequences," saying:

The current debt ceiling/budget cutting debate conceals a hidden issue - namely, that if resolution isn't achieved, Obama can use extrajudicial "presidential directives and executive orders in place, put there by (Bush to) declare a national emergency, suspend the debt ceiling limit, and continue to issue Treasury debt. This is exactly what would happen" to avoid default. If it occurs, it would create "a crisis beyond anything the world has ever seen."

Avoiding it extrajudicially, however, involves giving the president COG authority by other means for a different purpose. It would end congressional power, already surrendered on war and peace issues. "Now Congress would lose its power over debt, taxes, and the budget itself."

In fact, it might as well close shop and leave if it gives the president sole governing power on issues mattering most. Will it happen? Perhaps with a looming August 2 deadline, but maneuvering could extend it until September 30. The FY end may be the real drop dead date by which the debt ceiling issue must be resolved.

It will be now or weeks later. Default won't happen because the consequences would be too catastrophic. However, popular interests will be sacrificed to avoid it.

At the same time, Senate party leaders have another solution in mind, weakening constitutional power with it. Proposed by Minority Leader Mitch McConnell (R. KY) and Majority Leader Harry Reid (D. NV), it would establish a Super Congress, an idea a despot would love as one step from a Super President, aka a dictator.

The McConnell/Reid idea would empower 12 lawmakers, six from each party, to fast-track legislation through both Houses without amendments. In other words, Big Money-written bills would be voted on up or down, no changes. It will facilitate ending social contract protections and enact more police state enforcement laws, crushing opposition to transfer all public and private wealth to capital interests running America, making it more than ever unfit to live it.

The deal is done, perhaps with Super Congress authority, an idea House Speaker John Boehner (R. OH) endorses in two steps. In fact, multiple steps will entirely destroy America's social contract, leaving working households on their own sink or swim.

All New Deal/Great Society programs will end. Privatizing profits while socializing losses on steroids will accelerate more than ever. Poverty, homelessness, hunger, depravation and despair will grow. America will resemble Guatemala in the worst sense.

Obama's duplicitous rhetoric seduces Americans to support it, the same "shared sacrifice" baloney that's all sacrifice and no sharing. His latest July 25 monologue dripped with cynicism, asking Americans to endorse their own demise, at the same lavishing handouts on corporations and America's super-rich, omitting details to conceal them.

Last year, his National Commission on Fiscal Responsibility (NCFRF) laid the framework, the hellish Simpson/Bowles agenda, calling for:

-- ending or capping middle class tax breaks, including deductions for home mortgage interest and tax-free employer provided medical insurance;

-- taxing capital gains and dividends the same as ordinary income; long-term capital gains and qualified dividends are currently taxed at 15%;

-- lowering income tax rates dramatically to 9, 15 and 24%, down from six current brackets ranging from 10 - 35% for income over $373,650;

-- slashing corporate tax rates from the top 35% rate to 26%, combined with eliminating some deductions, but creating loopholes that more than make up the difference;

-- making permanent the research and development tax credit;

-- making deeper Medicare cuts; increasing Medicaid co-pays; slashing $54 billion from graduate medical education; and enacting "comprehensive tort reform," making it harder for aggrieved patients to file malpractice suits;

-- raising the Social Security retirement age to 69 by 2075; reducing cost-of-living increases, now based on annual inflation rates; raising the payroll tax ceiling to $200,000, letting million dollar earners off the hook like now;

-- cutting the federal work force 10% by 2015, adding to unemployment rolls;

-- raising the federal gasoline tax by 15 cents a gallon and imposing "user fees" on motorists - to have workers fund the federal transportation and highway spending program, not big monied interests profiting most from them; and

-- cutting $100 billion in military spending, including administration, inefficiencies, "unnecessary" weapons (ones Pentagon brass don't want in lieu of others they won't sacrifice), force contingents on overseas bases, and healthcare benefits for military retirees through enacted premiums and higher co-pays.

Unmentioned were the Pentagon's open-ended black budgets, supplemental Iraq and Afghanistan appropriations, added spending for Libya and other operations, and commitment to permanent imperial wars. Also that military spending will grow annually, unimpeded because America's business is war, so working people have to sacrifice to fund them.

Under COG, Super Congress, or other authority, Big Money runs America. Obama serves it dutifully as a crime boss, subservient to a higher power. A moral coward, he's also unprincipled, dishonest and corrupt, a weasel impersonating a populist, a disgrace to his people and all working Americans who deserve better.

Never on his watch. He now even abandoned taxing the rich, what he never had in mind in the first place, putting a lie to his "shared sacrifice" deception.

In Obama's America, only wealth and power interests matter, everyone else abandoned on their own. Only a Democrat could pull it off, a smooth-talking con man. Who better than a Black one.

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

__________-


Related:

How The Two-Party Oligarchy Uses Left-Right Charade To Loot The Country

Busting Posse Comitatus: Military Cops Arrest Civilians in Florida City

Nothing left to loot, the old props dont work

From The International Forecaster, July 27 2011:


Debt in the air, nothing left to loot, the old props dont work to describe manipulated markets, Greece hopelessly buried in debt, all major currencies falling vs gold and silver, home prices drop, Argentina gets a huge bill to pay.

As we write the US government short-term debt extension is still up in the air. Both sides are not about to give up and lose a political victory. The President still is trying to recover from his ill-timed attempt at extortion. That is if a solution is not found by August 2nd, that he will let US bonds fall into default and terminate government’s Social Security obligations. Our question is how can you loot what has already been looted? The account is already empty. We also found it very strange the opposing party members had nothing to say on the issue, but then again it isn’t so surprising. They are all being paid off and controlled by the same group of people. This sort of behavior is fraud, but what does that mean to an illegal alien, who has already broken so many laws that he cannot keep up with the number. If the facts be known the government has plenty of money to keep running uninterrupted. There are those who call the President a scoundrel, but we have better adjectives to describe him.

Essentially, except for current income, to loot Social Security is absurd, because there is nothing to loot. The bonds held in behalf of the Social Security Trust are valueless. They cannot be traded on the open market and must be redeemed by the US government, which is broke. All the President has to do is issue new bonds, sell them to the Fed, and fund SS and Medicare for that matter.

The extension of the short-term debt solves nothing and only throws problems into the future. Like so many things the elitists do, the debt extension is a distraction. The congressional game is being played to keep people’s attention away from the very real economic and financial problems. How can anyone believe that creating more debt will solve the debt problem?

We have to laugh at these geniuses that continue to make economic and financial predictions, which are incorrect more than 90% of the time. Their listeners and subscribers have to be losing many opportunities if not considerable lots of money. Worse yet have been many so-called chartists, waviest and cyclists. You cannot use these props in manipulated markets and worse yet most of these purported forecasters have no experience or professional background to make such decisions. Remember, a fool and his money are soon parted. Furthermore, they do not understand or know the historical perspective of events that have and will take place and why they have and are taking place. Few have the knowledge to understand and those who discovered what makes things happen are reluctant to write about them.

We wonder if Americans and others realize that for 25 years the war on terror has been the excuse to move forward most any agenda. The latest is that is why we need the debt extension. That is totally ludicrous and a visual bit of foolishness some actually believe. There is little talk of making real budget cuts or raising taxes. Almost the entire House is interested in maintaining the status quo. One of the salient points of the whole event points out that Congress is a sad lot. They are happy to receive the benefits of deficit spending without additional taxation. They know very well the way to reducing the budget deficit is to cut military spending. Few propose that because the military and industrial machine has paid these so-called public servants too much money in campaign contributions to say no. Deficit spending is never going to end until the rules are changed or there is revolution. We do not see the House and Senate ending the gravy train anytime soon. 95% of both parties have sold out, so how can anyone expect change. Essentially that means there is little hope America’s problems will be solved by this motley lot.

The EU supposedly has an agreement that will solve Greek problems for a year or so, which will cost $229 billion. Borrowing from the EFSF, the European Financial Stability Facility will be doubled to 15-years, as interest rates on the debt will slide between 3.5% and 4.0%. The debt load itself really won’t change much. Greece is hopelessly buried in debt. It would take 50 years, or more, of austerity and depression to pay the debt and interest off. A bailout is an insane exercise in futility.

Over and over again we refer to the historical record and what can be expected in the future. Who has ever heard of selective default? It must be something like being partially pregnant. In general we understand the plan, but statements vary from what is in the documents. The final figures will vary. Greece will receive $157 billion dollars and governments and bankers will take losses, but of about 1/5th of their holdings.

The agreement will allow countries to default on their debt, but that is not official. Once the seal has been broken we see five more defaults. The terms are not workable. Greece will never work its way out of their debt.

Greek bond maturities will be extended to 15 or 30 years. The low interest rates show you the priority is to keep the euro in place and solvent and to prevent the euro zone from falling apart. There is going to be a new stimulus plan to get growth going via investments. Greece and the other members have to return to public debt at 3% of GDP by 2013. Don’t hold your breath. In this whole episode the bankers want to look like saviors by taking 21% losses, when in fact they caused the whole problem. What started out as a grab for assets has ended as bankers fighting for their existence. That is why maturities can be extended and guaranteed. Again, the EU taxpayers will eventually foot the bill, not the bankers.

Historically borrowers have been going bankrupt for centuries, thus, the conditions in the six European countries in trouble, England and the US are not at all unusual. The key to preventing insolvency is in the hands of the lenders, the banks. You probably wonder why banks make the same mistakes over and over again. Very often it has been for political expediency and in today’s cases it is to break down the financial system as much as possible to force the inhabitants of the US, UK, Europe and the remainder of the world to accept World government. Any professional knows Greece is hopelessly insolvent and other sovereigns will follow. That is why there are only short-term solutions.

The leaders want us to believe that the European Financial Stability Facility, EFSF, will be able in the future to cut trouble off before it happens. Our view is it will be as hide bound as the ECB, European Central Bank, as well as the clowns in Brussels. They will act in a manner similar to that of the Federal Reserve. They will essentially manipulate markets to achieve their desired outcome. This group will officially destroy any semblance that is left of a free market in Europe and relieve the Fed of keeping it afloat. When the EFSF needs funds all they will have to do is call the Fed. These two entities along with the ECB will be the basis for a new world financial control mechanism to control all markets at all times in the typical manner of a corporatist, fascist world state. Those who are busy constructing a world government count this as an important achievement. This will expedite moves toward that goal allowing European taxpayers to pay the bills. These bailouts, such as Greece will be endless, as the economically stronger nations will be forced to carry the others until the entire edifice collapses. This will be the ultimate in oral hazard. This will be the prime moving force to bail out European banks. The public won’t be told that but that is exactly what they are up too.

Remember, these very same banks that will be controlling this European Monetary Fund from behind the scenes created the global finance bubble. The key operative word is monetary and to monetize. The EFSF will do the same thing the Fed does and that is distorting financial perceptions by the major media, which they control and to manipulate market pricing to fit the bank’s needs, not the public’s needs. The effort will be to hide from the public the enormous bubble they have created and from their point of view keep it going in perpetuity. This will lead to dysfunctional, volatile and unpredictable markets. Sooner or later they will again lose control and be forced to find another temporary solution, if in fact they can find one.

Contagion rages and when it becomes evident that Greece is incapable of cutting sufficiently and that revenues are not increasing then the patchwork will come unglued again and a new crisis will begin. That could be in three months or a year, but it is inevitable. The denigration of markets in Europe are in full swing and with the exception of Germany nothing is going to change. The politics of world government is the path the bankers and politicians will follow, so they can complete their goals of enslaving the peoples of the world because they believe they know what is best for mankind.

All major currencies are falling vs. gold and silver, particularly the US dollar and that doesn’t say much for fiat currencies. These weaknesses affect the cost of goods sold in these currencies. Commodities are generally sold in US dollars. If the dollar is falling in terms of gold and silver the price of commodities will rise. As central banks and governments struggle to keep their economies afloat they smother any chance of deflation at least until they have created hyperinflation. The implementation of QE3 and its ultimate cost, probably $2.3 trillion, means that 2 to 2-1/2 years from now we will probably be entering hyperinflation. In the meantime the results of QE1 and stimulus 1 is hitting the economy with 10.6% inflation and 14% by the end of the year. As a result of QE2 and stimulus 2 we see 25% to 30% and when QE3 hits the economy we should approach 50% and hyperinflation. By that time the dollar should be 40 to 50 o the USDX. It is currently 73.5.

Talk of QE3, or its equivalent, will begin in mid-august based on some excuse and become reality in September. That is why gold and silver will rally into September warning you of what is on the way. That is because, like the secret issuance by the Fed of $16 trillion, the introduction of QE3 will be stealth and secret. That process presents another excuse to terminate the Federal Reserve. In this process it will be interesting to see whether other nations deliberately devalue their currencies, as they have in the past, to maintain trade advantages. If they do not their cost of goods exported to the US will climb and in that process bring more inflation to the US.

As a result of the Fed’s actions gold and silver are under strong accumulation. We have just seen the Hong Kong Mercantile Exchange open and are waiting for its positive affect on the gold and silver markets. It is possible their investment power out of China along could be as high as $80 billion, never mind the remainder of Asia.

Comex silver inventories could realistically be only 33% of what they say they have. There is no question the exchange traded fund, SLV, has been lending the shorts silver for delivery illegally. As you know there are no rules for these elitists. They do as they please. We also have believed for a long time SLV inventories are probably about 1/3rd of stated levels, or less. The positions of JPM, HSBC, SLV and others are staked against the reality of falling physical inventory and a deficit of production versus usage, plus investment off take. That means to us that over the next seven months silver could be priced at $70 to $100 an ounce and gold between $2,200 and $3,000. 

Last week the Dow gained 1.6%, S&P 2.2%, the Russell 2000 1.6% and the Nasdaq 100 3.1%. Banks gained 3.3%, broker/dealers 6.6%; cyclicals 0.2%; transports 1.6% and consumers were unchanged. Utilities rose 1.5%, high tech rose 2%, semis rose 4.7%, Internets gained 1.7% and biotech’s rose 1.4%. Gold bullion rose $8.00; the HUI the unhedged gold index gained 17% and the USDX the dollar index fell 1.2% to 74.24.

Two-year T-bills rose 3 bps to 0.39%, the 10-year T-note rose 6 bps to 2.97% and the German bund rose 13 bps to 2.83%.
Freddie Mac 30-year fixed rate mortgage rates rose 1 bps to 4.52%, the 15’s rose 1 bps to 3.66%, the one-year ARMs gained 2 bps to 2.97% and the 30-year jumbos fell 6 bps to 4.99%.

Fed credit fell $4.2 billion to $2,855 trillion having risen 23% yoy. Fed holdings of Treasury and Agency debt rose $3.2 billion to $3.454 trillion. Custody holdings for foreign central banks rose $104 billion and $322 billion yoy, or 10.3%.

M2, narrow, money supply increased $6.5 billion to a record $9.259 trillion. It expanded at an 8.9% pace ytd, and 7.6% yoy.

Total money fund assets fell $24.76 billion to $2.672 trillion. Year-to-date they are down $114 billion and yoy $126 billion, or 4.5%.

Total commercial paper fell $24.4 billion to $1,208 trillion. CP was up $239 billion ytd, or 37%.

“U.S. companies have taken out almost $1 trillion of syndicated loans so far this year, an 82% increase from 2010 levels and a return to levels last seen before the crisis. Borrowers are turning to the loan market because that is where investors are migrating, attracted by floating rates, which will rise when interest rates go up; the security of collateral; and a higher position in the capital structure, meaning loans are repaid before bonds if the borrower runs into trouble… ‘Banks are stepping out on the risk spectrum and lending money.’”

“U.S. home prices fell 6.3% in May from a year earlier as foreclosures weighed down values and purchases slumped.  The decline was led by a 9.9% decrease in the region that includes California, the Federal Housing Finance Agency said today in a report from Washington. The second-largest drop was 9.2% in the area that includes Nevada and Arizona.”

“U.S. commercial property prices increased in May for the first time in six months as a rebound in distressed real estate helped boost values, according to Moody’s… The Moody’s/REAL Commercial Property Price Index rose 6.3% from April… It’s down 11% from a year earlier and 46% below the peak of October 2007...” 

“Federal legislation to simplify a hodge-podge of state tax laws would give businesses a multi-billion dollar tax break and further strain state and local government budgets, according to state government officials… ‘You’re taking existing revenue away from states at a time when they’re trying to recover,’ David Quam, director of federal relations for the National Governors Association, told Bloomberg…”

Economists at Northeastern University have found that the current economic recovery in the United States has been unusually skewed in favor of corporate profits and against increased wages for workers.

In their newly released study, the Northeastern economists found that since the recovery began in June 2009 following a deep 18-month recession, “corporate profits captured 88 percent of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1 percent” of that growth. The study, “The ‘Jobless and Wageless Recovery’ From the Great Recession of 2007-2009,” said it was “unprecedented” for American workers to receive such a tiny share of national income growth during a recovery.

http://economix.blogs.nytimes.com/2011/06/30/the-wageless-profitable-recovery/

In December 2001 the Argentine state was finally served the bill for decades of economic Peronism. The government decided to default on a debt worth some $81 billion, the largest debt default in international monetary history. Now, 10 years later, international investors who lost significant sums still have no way of knowing whether they'll ever get their money back -- thanks in part to the Argentine government's unwitting accomplice, the Basel-based Bank for International Settlements.

The BIS has a long and checkered history. It was founded in 1930 as a transfer vehicle for the reparations agreed to in the Treaty of Versailles and subsequent international negotiations. During World War II, the Nazi regime used it as a shadow bank to hide most of its ill-gotten gains. During the Bretton Woods negotiations, John Maynard Keynes intervened to save it from disappearing along with most of the pre-war financial architecture. It eventually ended up playing a central role in the coordination of international capital supervision and helped to set benchmarks for the monetary policies of the world's central banks. As the de facto central bank of the world's central banks, the BIS also allowed its members to use its accounts to conduct a range of transactions.

The BIS has played a vital role in creating a more stable and predictable international monetary system. Unfortunately, the fact that both the BIS and its customers have immunity from international jurisdiction and regulation provides an unintended legal loophole to regimes that care very little for the solidity of the international monetary system. From last year's Wikileaks scandal, we know that in the mid-1990s, Nigerian dictator Sani Abacha used that same legal loophole to store billions of dollars that he had stolen from his own people at the BIS, thus protecting it from litigation.

Which brings us to Argentina. Following its 2001 default, that country's central bank openly began transferring large parts of its capital reserves to the BIS, a process that accelerated after Argentina's 2005 debt restructuring. And indeed, even on the eve of the 2001 default, Buenos Aires announced its intention to move assets to other institutions such as the BIS, where they would be beyond the reach of creditors. Today, the Argentine central bank holds $45 billion in its account at the BIS -- a staggering 86% of Argentina's total capital reserves. By comparison, the size of other central banks' average deposits held at the BIS is a mere 4% of their total capital reserves.

By refusing to pay its bills, Argentina is defying the judicial systems of Italy, the United States, Germany, and Japan, which have issued hundreds of judgments ordering Argentina to repay its debt. By hiding its assets at the BIS, it has also been depriving its creditors the ability to settle their claims since the unilateral 2005 and 2010 debt restructurings. This is in clear violation of the ancient Roman legal principle of actio pauliana, which specifically forbade any transfer of property in the case of an imminent bankruptcy, when that transfer put a creditors' property beyond his reach.

Just recently Dow Jones Newswires reported that a number of Argentine bond investors have filed a complaint in a Swiss court accusing the BIS of complicity in money laundering. It is disappointing to say the least that the BIS, which has always championed transparency in central banks' monetary reserve policies, may have allowed itself to be used for these kinds of disappearing acts by its own member banks.

The BIS committee must now demonstrate its commitment to a sound global financial system by tackling what looks very much like the corruption of its own regulations. Rooting out abuses such as the Nigerian and Argentine cases is vital to re-establishing the proper mandate of the world's central bank.

Sales of new U.S. homes unexpectedly declined for a second month in June, indicating housing is still languishing two years into the economic recovery.

Purchases dropped 1 percent to a 312,000 annual pace, a three-month low, figures from the Commerce Department showed today in Washington. The median estimate in a Bloomberg News survey of economists called for a 320,000 rate. The median selling price of a new home rose from a year earlier, while inventories fell to the lowest on record.

Builders have little incentive to start projects as the prospect of more distressed properties entering the foreclosure pipeline depresses home values. The figures underscore Federal Reserve Chairman Ben S. Bernanke’s comments that demand for homes has been held back by slow job growth and restrained consumer optimism.

Home prices in 20 U.S. cities dropped in the year ended May by the most in 18 months, adding to evidence the housing market is struggling.

The S&P/Case-Shiller index of property values in 20 cities fell 4.5 percent from May 2010, the group said today in New York. The decline matched the median forecast of 32 economists surveyed by Bloomberg News.

A pipeline of foreclosures and uneven demand will keep prices from rising this year, discouraging new-home construction and delaying a rebound in housing. Shrinking home equity and an unemployment rate at 9.2 percent are weighing on consumer spending, which accounts for about 70 percent of the economy.

“Home prices have yet to find a bottom,” said John Herrmann, senior fixed-income strategist at State Street Global Markets LLC in Boston. “Buyers are incredibly cautious. They are concerned about the unemployment rate. There is uncertainty about the economic outlook.”

Stock-index futures erased earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing in September was down less than 0.1 percent at 1,333.3 at 9:19 a.m. in New York. Treasury securities were little changed.

Estimates ranged from declines of 5.2 percent to 3.5 percent. Year-over-year records began in 2001.

Putting pressure on an already lousy job market, the mass layoff is making a comeback. In the past week, Cisco, Lockheed Martin and Borders announced a combined 23,000 in job cuts.

Those announcements follow 41,432 in planned cuts in June, up 11.6% from May and 5.3% vs. a year earlier, according to Challenger, Gray & Christmas.

Meanwhile, state and local governments have cut 142,000 jobs this year, The WSJ reports, and Wall

Street is braced for another round of cutbacks. This week, Goldman Sachs announced plans to let go 1000 fixed-income traders.

If these trends continue, we may soon be talking about losses in the monthly employment data -- not just disappointing growth, says Howard Davidowitz, CEO of Davidowitz & Associates.

The 400 richest Americans used to pay 30% of their income on the average to Uncle Sam. Today, they pay 18% on the average, according to Steve Rattner, a Wall Street financier, who just presented these figures on Mornings With Joe, MSNBC.

The main reason for the drop in their tax rate of some 40% is the tax cuts by George Bush in 2003, taking the rate paid on dividends and capital gains down to 15%. This reduction in the investment class’s taxes powered the bull market in stocks from the fall of 2003 until the fall of 2007.

Shockingly, the plan to raise the debt ceiling collects nothing from the wealthiest Americans to reduce our budget deficit. The Republican right wing holds the Obama White House hostage. It’s a sad day for the principle of sharing the pain equitably.

Actually, the 18.11% effective tax rate the 400 highest income taxpayers paid in 2008 was UP from the record low of 16.62% they paid in 2007. By contrast, taxpayers with an adjusted gross income between $500,000 and $1 million paid an effective tax rate of 23.4% in 2008. Here’s another shocking figure: the 400 highest income taxpayers collected a record 13% of all net capital gains reported by taxpayers in 2008. For more, see my story.

State governments across America know the stakes for them are high in Washington's gathering debt-ceiling crisis but are finding few ways to hedge against the big losses they know are coming.

The weeks-old negotiations in Washington over enlarging the federal government's borrowing authorization are so scattered and twisted that state officials reliant on federal monies for large portions of their budgets can't handicap the outcomes.

"A complete unknown at this point ...," said H.D. Palmer, spokesman for California's finance department of the standoff. "We just don't know where things are going to end up."

Officials in Maine, and in Virginia, which was one of five AAA-rated states called out for possible ratings cuts last week by Moody's Investors Service because of the debt face-off, said they can't plan adjustments because outcomes were so clouded.

"We have been examining areas where we think there could be impacts, but cannot make any firm contingency plans because of the uncertainty of what impacts we may see ...," said Jeff Caldwell, spokesman for Virginia Gov. Bob McDonnell.

Some state and local governments, which together got $478 billion from the federal government in 2010, said they will tap reserves or borrowings and use other funds to make up for any short-run losses of federal monies.

Some state finance officials have shifted bond sales because of the federal standoff and others are bracing for possible downturns in sales tax revenues if Social Security and other payments to individuals are interrupted.

In Wisconsin, where federal revenue is about 29 percent, or $9.3 billion, of the annual budget, the state has enough money to fund federal programs for at least three months due to proceeds from a recent $800 million note sale and the state's ability to borrow from other funds, an official said.

"Right now it appears that Wisconsin will be able in the short term to handle any type of default the federal government would have," Mike Huebsch, secretary of the state's administration department, told reporters on Monday.

Huebsch said the federal debt crisis could affect Medicaid healthcare spending, student loans, state university research grants, low-income heating assistance and child welfare.

But even if a deal is reached by August 2, the day U.S. Treasury officials say the government's current borrowing authorization expires, big questions about federal funds for states and local governments will linger for a long time.

"If there is a deal, there will be a headline number," said Chris Whatley of the Council of State Governments. "But the cuts themselves won't be known for months. You won't know what the numbers will be for your state for a long time."

Even so, governors, legislators and local officials do know that the flows of money from the federal government will be slower in coming years, according to Whatley.

"This is uncharted territory. I don't think we know how it could affect us," said Martha Haynie, comptroller for Florida's Orange County.

According to Richard Ciccarone, managing director at McDonnell Investment Management, Washington's debt-ceiling drama does make clear that any hopes of significant federal aid for state governments in a recession, such as 2009's economic stimulus program, are pointless.

"There is an expectation there would be some help in another downturn for states again. But I think the debate in Washington gives us the indication that money will be harder to come by because (the federal government) is worried about their own survival," Ciccarone said.

Writers Cited in Breivik Manifesto Have Spoken at U.S. Military Colleges as Anti-Terrorism Experts

Wednesday, July 27, 2011

New piece by MRFF Senior Research Director
Chris Rodda on the OpEdNews homepage details the
links between familiar MRFF foes and extremist
Anders Behring Breivik.

Anti-Muslim writers cited in Breivik's Manifesto
have spoken at the U.S. Air Force Academy and Joint
Forces Staff College as Anti-Terrorism experts.

MRFF has been exposing Walid Shoebat's
fraudulent Islamophobic career since early 2008.
Today's publication of the below article again
pre-empted CNN's coverage of the connection
between Shoebat and Breivik.

Selected Article Excerpts:

• In February 2009, the Military Religious Freedom Foundation (MRFF) received some very good news. A woman named Brigitte Gabriel had been disinvited from speaking at the United States Air Force Academy, due to MRFF's year-long battle to stop the U.S. military from allowing Islamophobic fear-mongers to speak at our military's colleges and service academies under the guise of anti-terrorism training.
  
  
• Just about a year earlier, in February 2008, the Air Force Academy had invited a group called the "3 ex-Terrorists" to speak at its 50th Annual Academy Assembly on the topic "Dismantling Terrorism: Developing Actionable Solutions for Today's Plague of Violence." One member of this trio of self-proclaimed ex-terrorists turned evangelical Christians was Walid Shoebat.
  
  
• So, what does all this have to do with Norwegian Christian terrorist Anders Behring Breivik? Well, Walid Shoebat and Brigitte Gabriel are two of the anti-Muslim activists who show up in his manifesto.Shoebat is quoted about fifteen times throughout the manifesto, and a link to a 45-minute Brigitte Gabriel video is provided for further information on one of the sections.
  
  
• But the most frequently cited author in the manifesto is Robert Spencer, director of Jihad Watch and author of The Politically Incorrect Guide to Islam. [...] MRFF is quite familiar with Robert Spencer's book, having received numerous complaints over the past few years from service members who want it removed from the military's PXs and BXs, where it is usually displayed right next to the military Bibles.

Click to read this article at OpEdNews.com

________

Related:

Terrorism Experts on Parade

Who would Jesus nuke? Air Force Cites New Testament, Ex-Nazi, to Train Officers on Ethics of Launching Nuclear Weapons


Fake Terror expert makes $500K telling fake terror stories.