Pentagon: Colleges must hand over names

From Marine Corps Times

By Rick Maze

Tue, 01 Apr 2008 15:25 EDT

The Defense Department has announced a new get-tough policy with colleges and universities that interfere with the work of military recruiters and Reserve Officer Training Corps programs.

Under rules that will take effect April 28, defense officials said they want the exact same access to student directories that is provided to all other prospective employers.

Students can opt out of having their information turned over to the military only if they opt out of having their information provided to all other recruiters, but schools cannot have policies that exclude only the military, defense officials said in a March 28 notice of the new policy in the Federal Register.

The Defense Department “will honor only those student ‘opt-outs’ from the disclosure of directory information that are even-handedly applied to all prospective employers seeking information for recruiting purposes,” the notice says.

Directories are an important recruiting tool because they include the names, birthdates, phone numbers and academic pursuits of college students that can be used to identify people with knowledge and interests that are particularly useful to the military.

The new policy also no longer lets schools ban military recruiters from working on campuses solely because a school determines that no students have expressed interest in joining the military. If other employers are invited, the military has to have the same access.

Federal funding can be cut off if colleges and universities do not give recruiters and ROTC programs campus access. While student financial assistance is not at risk, other federal aid, especially research funding, can disappear if a school does not cooperate.

The Pentagon can declare colleges or universities anti-ROTC if they prohibit or prevent a Senior ROTC program from being established, maintained or efficiently operated.

The new policy is, in part, the result of a 2006 U.S. Supreme Court decision that upheld the federal government’s ability to use funding as a means of forcing equal access for military recruiters and ROTC units on campuses.

Congress, the Bush Adminstration and Continuity of Government Planning

From CounterPunch

Peter Dale Scott

Mon, 31 Mar 2008

In August 2007, Congressman Peter DeFazio, a member of the House Homeland Security Committee, told the House that he and the rest of his Committee had been barred from reviewing parts of National Security Presidential Directive 51, the White House supersecret plans to implement so-called “Continuity of Government” in the event of a mass terror attack or natural disaster. (1)

Norm Ornstein, of the conservative American Enterprise Institute, commented, “I cannot think of one good reason” for denial. Ornstein added, “I find it inexplicable and probably reflective of the usual, knee-jerk overextension of executive power that we see from this White House.” (2)

The story, ignored by the mainstream press, involved more than the usual tussle between the legislative and executive branches of the U.S. Government. What was at stake was a contest between Congress’s constitutional powers of oversight, and a set of policy plans that could be used to suspend or modify the constitution.

There is nothing wrong with disaster planning per se. Like all governments, the U.S. government must develop plans for the worst contingencies. But Congress has a right to be concerned about Continuity of Government (COG) plans refined by Dick Cheney and Donald Rumsfeld over the past quarter century, which journalists have described as involving suspension of the constitution. (3)

In the 1980s, a secret group of planners inside and outside the government were assigned, by an Executive Order, to develop a response to a nuclear attack in which the U.S. government had been decapitated, forcing an alternative to the constitutional rules of succession. Two of these planners were Dick Cheney, then a Congressman, and Donald Rumsfeld, then a private citizen and CEO of the G.D. Searle drug company.

“One of the awkward questions we faced was whether to reconstitute Congress after a nuclear attack.It was decided that no, it would be easier to operate without them,” said one of the COG planners in the 1980s, who spoke to James Mann (The Rise of the Vulcans, 141-42). James Bamford reported the same remark in his book Pretext for War (p. 74).

After the end of the Cold War, the urgency of coming up with plans faded. The COG nuclear planning project “has less than six months to live,” reported Tim Weiner of the New York Times. (April 17, 1994). Mann and Bamford concluded, wrongly, that all the COG planning of the Reagan era had been abandoned.

In fact, Reagan’s Executive Order 12656, issued in 1988, remained in effect. The order states that Continuity of Government procedures are called for in the event of “any occurrence, including natural disaster, military attack, technological emergency, or other emergency, that seriously degrades or seriously threatens the national security of the United States.” (4)

Under Clinton, some parts of the planning, presumably military, were continued by a group including Rumsfeld and others whose roster (according to Andrew Cockburn) was “filled almost exclusively with Republican hawks.” Cockburn quotes one participant, a former Pentagon official, who said “They’d meet, do the exercise, but also sit around and castigate the Clinton administration in the most extreme way.” (5)

According to the 9/11 Commission Report (p. 326; cf. p. 38), “Contingency plans for the continuity of government” were implemented on September 11, 2001. (6) But what measures were invoked remains unclear.

Some clues may be supplied by COG’s past history. COG planning in the 1980s was handled by the Federal Emergency Management Agency and its controversial director, Louis Giuffrida. According to a Miami Herald article by Alfonso Chardy on July 5, 1987, Giuffrida’s plans included “suspension of the Constitution,” along with detailed arrangements for the declaration of martial law. (7)

Those suspicious of what COG means today have pointed to a number of post 9/11 steps to facilitate the implementation of martial law, including the creation of a new military command (NORTHCOM) for the continental United States. They note also Homeland Security’s strategic plan Endgame, whose stated goal is the creation of detention camps designed to “remove all removable aliens,” including “potential terrorists.”

Then in 2007 National Security Presidential Directive 51 (NSPD 51), issued by the White House, empowered the President to personally ensure “continuity of government” in the event of any “catastrophic emergency.” (8) According to the Washington Post (May 10, 2007), this directive “formalizes a shift of authority,” from the Department of Homeland Security to the White House, in establishing ” a shadow government” after an emergency. (9) Congress has yet to hold a single hearing on NSPD 51. (10)

NSPD 51 contains “classified Continuity Annexes” which shall “be protected from unauthorized disclosure.” Congressman DeFazio twice requested to see these Annexes, the second time in a letter cosigned by House Homeland Security Committee Chairman Bennie Thompson and Oversight Subcommittee Chairman Christopher Carney. It was these requests that the White House denied.

Without full disclosure, such suspicions will only fester and distract from the real issue: the role of Congress in constitutional government. In the event of national emergency, Congress must be at the heart of the defense of democratic government and American territory. It is reasonable for the citizenry to ask, “How do Continuity of Government plans preserve and protect the role of the popularly chosen branch of government?” The answer is, we simply don’t know.

DeFazio’s inability to get access to the NSPD Annexes is less than reassuring. If members of the Homeland Security Committee cannot enforce their right to read secret plans of the Executive Branch, then the systems of checks and balances established by the U.S. Constitution would seem to be failing.

To put it another way, if the White House is successful in frustrating DeFazio, then Continuity of Government planning has arguably already superseded the Constitution as a higher authority.

Will Congress insist on its right of review COG planning? The answer to this question will depend on discussion in the blogosphere, the degree of pressure exerted by the electorate on their representatives, and the questions asked the men and women who would be president.

Peter Dale Scott is the author of The Road to 9/11.

Notes.

1. Congressional Record, August 2, 2007. The text of National Security Presidential Directive 51 can be seen here.

2. Jeff Kosseff, The Oregonian, July 20, 2007.

3. Scott, The Road to 9/11, 183-87; citing Ross Gelbspan, Break-ins, Death Threats, and the FBI: The Covert War against the Central America Movement (Boston: South End Press, 1991), 184; Alfonso Chardy, Miami Herald, July 5, 1987.

4. The provisions of Executive Order 12656 of November 18, 1988, appear at 53 FR 47491, 3 CFR, 1988 Comp., p. 585, “Executive Order 12656-Assignment of Emergency Preparedness Responsibilities,” . The Washington Post (Gellman and Schmidt, “Shadow Government Is at Work in Secret,” March 1, 2002) later claimed, incorrectly, that Executive Order 12656 dealt only with “a nuclear attack.”

5. Andrew Cockburn, Rumsfeld: His Rise, Fall, and Catastrophic Legacy (New York: Scribner, 2007), 88)

6. 9/11 Commission Report, 326, cf. 38; Scott, Road to 9/11, 220-29.

7. Alfonso Chardy, “Reagan Aides and the ‘Secret’ Government, Miami Herald, July 5, 1987.

8. National Security Presidential Directive 51.

9. Spencer S. Hsu, “Bush Changes Continuity Plan: Administration, Not DHS, Would Run Shadow Government,” Washington Post, May 10, 2007,

10. Lewis Seiler and Dan Hamburg, San Francisco Chronicle (February 4, 2008),

Yuan in, dollar out at Cosco Corp

http://www.seatradeasia-online.com/News/2472.html

Singapore: Singapore-listed shipyard Cosco Corp has begun quoting new sales contracts in Chinese yuan to reduce the impact of any further decline in the U.S. dollar, the company’s president said Monday.

‘We have already started quoting (new contracts) in Chinese renminbi,’ Cosco President Ji Hai Sheng told Dow Jones Newswires. ‘Some customers may accept it and some may not.’

Cosco now has contracts worth $6.5 billion denominated in U.S. dollars, but labour costs at its Chinese shipyards are paid in yuan. So far this year, the Chinese currency has gained 4.3% against the US dollar, reflecting an annualized rise of 17.4%.

Cosco is also trying to re-negotiate the terms of some past contracts to address the rise in the yuan as well as higher steel and labor prices.

‘We are talking to our customers about it,’ Ji said.

According to analysts, a 10% increase in steel prices will reduce Cosco’s net profit by 4%. Steel, which is generally priced in U.S. dollars, accounts for 20% of input costs for shipbuilding.

Some homes worth less than their copper pipes

http://www.reuters.com/article/topNews/idUSN2527885420080401?feedType=RSS&feedName=topNews&sp=true

By Jason Szep

BROCKTON, Massachusetts (Reuters) – Shards of broken glass outside the basement window of 31 Vine Street hint at the destruction inside the three-story home.

Thieves smashed the window to break in and then gutted the property for its copper pipes — a crime that has spread across the United States as the economy slows and foreclosed homes stand empty and vulnerable.

“They cut it here and then pulled it right out of the wall,” real estate broker Marc Charney said, pointing to broken plaster near a wrecked baseboard heating system in the 2,774-sq-ft home in Brockton, Massachusetts, a working-class city of 94,304 people.

Similar stories are unfolding nationwide as a glut of home foreclosures coincides with record highs in the price of copper and other metals.

Real estate brokers and local authorities say once-proud homes coast-to-coast are being stripped for copper, aluminum, and brass by thieves. Much of it ends up with scrap metal traders who say nearly all copper gets shipped overseas, much of it to China and India.

In areas hit hardest by foreclosures, such as the Slavic Village neighborhood of Cleveland, Ohio, copper and other metals used in plumbing, heating systems and telephone lines are now more valuable than some homes.

“We’re in an incredibly unfortunate time where the nonferrous metals commodities market for scrap is at an all-time high. Houses are getting stripped pretty quickly once they go through the foreclosure process,” Cleveland city councilor Tony Brancatelli said.

“We’re seeing houses sold for $100 that are distressed houses that should not be recycled,” he said. Some boarded-up homes in his Slavic Village community have “No copper, only PVC” painted on the boards to stop would-be thieves.

In Brockton, which suffered 400 foreclosures last year, blamed largely on predatory lending, and which is bracing for another 400 this year, Charney said the thieves inflicted about $15,000 of damage on the home on Vine Street.

“I had this property under agreement. We negotiated. The offer was accepted. The buyer came back to the property three weeks later only to find they had gotten in and stolen the copper, so we had to go back to the bank and renegotiate,” said Charney, president of CharneyRealEstate.com.

After haggling, the bank shaved $5,000 off the $105,000 price.

“The problem is there’s almost no security. Does this look like anybody lives here?” he said, gesturing to the boarded-up home with chipped yellow paint and a “notice of foreclosure” letter affixed to its door.

“It’s like a big billboard saying ‘come and take me,’” he added. “It’s an epidemic.”

DEPRESSING HOME PRICES

Jonathan Osman, a broker in Charlotte, North Carolina, said growing numbers of banks are balking at lending to prospective buyers of foreclosed homes that are stripped of copper pipes and other metals, further depressing housing prices.

“If the appraiser spots something that is not right, like copper tubing lying on the floor or something missing a lot of wiring, that’s a red flag to the buyer’s bank. That will essentially melt down any transaction you’ve got,” he said.

“They don’t want to make a $200,000 loan on a house that has serious problems in case the buyer defaults and they are stuck with it,” he said in a telephone interview. “It stinks for the banks that have foreclosed on the property because they now have a house that they really can’t sell. They have nothing to do but auction it off for whatever they can get for it.”

Along with copper, he often sees air conditioners and garbage disposals torn out. “I don’t know what the solution is other than for the banks to not put a sign in the window saying the house is vacant,” he said, “or maybe keep tenants there.”

At least 15 U.S. states — from California to New York — drafted legislation in the past year to deal with the problem, from tighter regulations on scrap metals’ traders to tougher penalties for metal theft, local authorities and metals industry officials say.

“In my district, we’ve got a lot of foreclosed homes and we’ve got a ton of people who are breaking into these homes, stealing the copper wiring right out of the walls,” said Andy Meisner, a lawmaker in Michigan’s state Legislature who plans an April 15 hearing on two bills intended to tackle the issue.

“It is a problem that is really affecting us throughout the whole state,” he said. “When all the copper is taken out, the house basically becomes a knock-down. It then has a depressing impact on property values.”

He said authorities in Hazel Park, a city in his district, ran a clandestine sting operation on a metal trader. “They saw a guy literally walking down the street with bundles of wire in each hand. They saw him walk into a scrap yard and walk out having sold this scrap he had obviously stolen,” he said.

EXPORTED TO CHINA

Several scrap traders contacted by Reuters said they had measures in place to identify metals stolen from homes.

“If somebody looks suspicious we don’t buy the material,” said Marc Kaplan, one of the largest scrap metals traders in New Jersey. He said scrap copper sells for about $3.50 a pound — against 70 cents just three years ago.

He and other scrap traders estimate that more than 80 percent of recycled copper is exported to China and India.

Warren Gelman, president of merchant broker Kataman Metals Inc in St Louis, Missouri, said illegal trade is just a small fraction of the scrap metals business.

He notes that the Institute of Scrap Recycling Industries, an industry body, sends frequent alerts to all scrap traders on metal thefts in an attempt to stop illegal deals.

“If local law enforcement has a theft, they report it to us and we then turn around and package it for our members in the region,” said the institute’s spokesman, Bruce Savage.

“This problem has been gathering a certain amount of momentum over the last year as you’ve seen commodity prices spike up to record highs at the same time you’ve got an economy that’s teetering domestically,” he said.

But real-estate brokers say more needs to be done to stave off further damage to areas hit hard by waves of foreclosures.

“It’s happening in too many places throughout the country for people to be saying that they are policing who they are getting it from,” said Bill Collins, president of the New Jersey chapter of the National Association of Real Estate Brokers.

SHARON ASTYK: THIS MAY BE WORSE THAN THE GREAT DEPRESSION

http://sharonastyk.com/

“Recognizing Parallels When they Slap You In the Face with a Haddock”

Nearly every financial report that discusses how bad the economic situation is going to be reports two facts.  1. Ben Bernanke is a student of the Great Depression, which means we’re safe from making the same mistakes twice.  2. Clearly, we aren’t in the same situation as the Depression, because after all, the situation isn’t the same.  Consider today’s essay in “Fortune” which repeats a mantra I’ve noticed over and over again – remember, things aren’t nearly as bad as in the Great Depression.

“No, Meltzer isn’t saying that a Great Depression – 25% unemployment, social unrest, mass hunger, millions of people’s savings wiped out in bank collapses – is upon us. Nor, for that matter, am I. But the precedent is unsettling, to say the least. You can only imagine how unsettling it is to Federal Reserve chairman Ben Bernanke, a former economics professor who made his academic bones writing about the Great Depression.”

This is supposed to reassure us – and, despite acknowledging the danger,  to point up the radical differences between the Depression period and the present.  And I suspect for some people it works.

The problem is, the parallel is a false one.  The statistics that the commentators are citing are statistics from deep in the middle of the Depression from 1933 when unemployment really was 25%, and they are holding them up against our present situation – at the very beginning of a financial disaster.  Observing that the Great Depression isn’t upon us isn’t very helpful, because at the comparable stage of the Great Depression, those things weren’t upon us either.

For example, when the stock market crashed in October of 1929, a news report observed that “the vast majority of Americans remain unaffected.” Two months after the stock market crash, Secretary of the Treasury Andrew Mellon said, “I see nothing in the present situation that is either menacing or warrants pessimism.”

Unemployment did not instantly rise to 25% – in March of 1930, it was 3, 250,000 (and this is some months after the crash).  By 1931, however, a year and a half into the crash, it had doubled to above 7,000.  By 1933 it would double again.  But again, at a parallel point in time, unemployment was comparatively reasonable (high by our present standards, but fairly typical for the period).

Meanwhile, those who were lucky enough to keep their jobs found themsleves at first in a decent position – as Don Lescohier reports in Common’s _History of Labor in the United States_ “The first impact of the Depression of the ‘thirties did not affect the wages structure.  It cut the earning of millions through unemployment and part-time work before it affected wage rates.  It was not until the last quarter of 1930 that appreciable downward changes in manufacturing wages occurred.”  Yet again, the first ripples in the financial centers didn’t actually translate right away.  But by 1932, wages in Ohio had fallen by nearly 60%.

In that sense, the current system may be worse than the Depression – while wages haven’t declined, buying power has declined much more precipitously than it did in a parallel period during the Depression.  For example, in the news today, food stamp use is approaching record highs – that is, while unemployment remains comparatively low and wages are still stable.  This is not a good sign.

On the other hand, there are parallels we might want to look at.  For example, in Harper’s Magazine in 1933, a lawyer from Mason City, Iowa wrote about the housing bubble that preceeded the collapse,

“Farm prices shot sky high almost over night.  The town barber and the small-town mercahant bought and sold options  until every town square was a real estate exchange.  Bankers and lawyers, doctors and ministers left their offices adn clients and drove pell mell over the country to procure options and contracts upon this farm and that, paying a few hundred dollars down and expecting to sell the rights before the following March brought settlement day.  Not to be in the game marked on as an old fogy, while paper profits were pyramided and Cadillac cars and pleasure trips to the cities took the place of Fords and Sunday afternoon picnics.  Everyone then maintained that there was only a little land as fertile as the fields of Iowa, Illinois and Minnesota, and everyone ought to get his part before it was all goine.  Like gold, it was limited in extent and of great potential value.  Prices skyrocketed from $100 to $250 and $400 per acre without regard to the producing power of the land.

During this period insurance companies were bidding against one another for the privelege of making loans on Iowa farms at $90 or $100 or $150 per acre.  Prices of products were soaring.  Everyone was on the highroad, not only to comfort, but to wealth and luxury.  Second, third and fourth mortgages were considered just as good as government bonds.  Money was easy and every bank was ready and anxious to loan money to any Tom, Dick or Harry on the possibility that he would make enough in these trades to replay the loans almost before the day was over.”

I bet you thought we invented housing bubbles .  But again, the bust didn’t happen instantly.  There were foreclosures in 1929 to be sure, but the wave of property taking occurred primarily in 1931 and 1932.

Right now the media is starting to warn that there “might” be a real Depression.  But they are quick to say that now isn’t much like 1929 – and we are buying it,  because most people’s relationship to historical events is pretty sketchy – when talking on a long historical scale, the fact unemployment really began to get bad 2 years after the stock market crash is a blurry fact, the difference of a typo in numbers.  Who cares whether it happened in 1930 or 1931, the depression is the depression.  But the thing is, if you were living it, watching things unfold, it looked to people just like it looks to us now – a few steps forward, some good news, a few steps back, a bit of bad news.  And in the interval between one piece of history (the stock market crash) and another (unemployment peaking) were four miserable years of life gradually sliding down.   We understand history in chunks, but we live in history day to day, and everyone who lives in history experiences it that way.  We forget that at our peril.

Telling us that it isn’t as bad as the mid-point of the depression isn’t just useless, it is misleading, and intentionally so.  Compare the worst to the not so bad, and things don’t look that bad.  But compare where we are now to where we were at a comparable period of the Depression, and things begin to look worse – and more accurate.

I can only hope that Ben Bernanke is a better student than the people who write these articles.  But of course, he has even more incentive to tell us that things aren’t really so bad.

Mukasey Admits Government Knew Of Call About 9/11, Before 9/11

http://www.prisonplanet.com/articles/april2008/040108_government_knew.htm

Echelon spy network would have intercepted, catalogued all transmissions

Paul Joseph Watson

Tuesday, April 1, 2008

During a speech at the Commonwealth Club in San Francisco on Thursday, Attorney General Michael Mukasey tacitly admitted that the U.S. government intercepted a call about 9/11 – before 9/11.

Before the 2001 terrorist attacks, he said, “we knew that there had been a call from someplace that was known to be a safe house in Afghanistan and we knew that it came to the United States. We didn’t know precisely where it went,” reports the San Francisco Chronicle.

Mukasey is then reported to have “grimaced, swallowed hard, and seemed to tear up as he reflected on the weaknesses in America’s anti-terrorism strategy prior to the 2001 attacks. “We got three thousand. . . . We’ve got three thousand people who went to work that day and didn’t come home to show for that,” he said, struggling to maintain his composure.”

Despite Mukasey using the example to justify warrantless wiretapping of Americans by claiming the government was unable to intercept the call, the fact is that no law would have prevented the government from listening in on the call. Existing FISA provisions would have covered the interception of the call.

In addition, it would be naive to consider that Echelon – the global spy network run by the NSA – did not intercept and catalogue the call. In 1999, the Australian government admitted that they were part of an NSA-led global intercept and surveillance grid in alliance with the US and Britain that could listen to “every international telephone call, fax, e-mail, or radio transmission,” on the planet.

Furthermore, two days after 9/11, Germany’s daily Frankfurter Allgemeine Zeitung reported that the Echelon spy network had provided warnings of the terror attack 6 months in advance.

It is admitted that the CIA had tracked the alleged hijackers to an Al-Qaeda meeting in Malaysia in January 2000 and then let them back into the US. The U.S. government was fully aware of their movements without the need for a phone tap and allowed them safe passage around the globe.

As Newsweek reported, five of the named hijackers “received training at secure U.S. military installations in the 1990s”.

Under these circumstances, the contention that the U.S. government intercepted such a call but was unable or unwilling to listen to it due to legal restrictions is completely inconceivable.

Mukasey’s admission is therefore further evidence that the U.S. government was responsible for – at the very bare minimum – “malfeasant complicity in the 9/11 attacks,” as Keith Olbermann stated on his MSNBC show yesterday.

Olbermann thinks it likely Mukasey is simply embellishing in order to propagandize for warrantless wiretapping, but the fact that the hijackers were carefully tracked every step of the way before 9/11 by the U.S. government and indeed trained at their military installations, in addition to Echelon having recorded phone conversations about 9/11 six months before the attack, strongly suggests that Mukasey unintentionally told the truth – and unequivocally let slip U.S. government foreknowledge of 9/11.

Hades Confirms: Hank Paulson Works for the Devil

By Charles Hugh Smith
March 31, 2008

I was preparing to write a nuanced, subtle analysis of the U.S. financial system’s regulatory failures and the inadequacy of Treasury Secretary Henry Paulson’s proposals to “fix” the system (double entendre intended) when I came across a document which proves beyond a shadow of doubt that Hank Paulson is working directly for the Devil.

I know this is a shocking revelation, and unfortunately I can’t scan the incriminating document, as it was written in goat’s blood and only becomes visible for extremely short periods when sluiced with a secret Dark Arts formula (eye of a newt, etc.)

Despite the difficulties, I was able to transcribe the text, which is reprinted below just as it was written.

To provide the proper context for understanding the fiendish cleverness of Paulson’s “reform” proposals, let’s turn to a cogent quote from Gullivers Travels by that incomparable satirist Jonathan Swift, courtesy of frequent contributor U. Doran:

“They look upon fraud as a greater crime than theft, and therefore seldom fail to punish it with death; for they allege, that care and vigilance, with a very common understanding, may preserve a mans goods from thieves, but honesty has no defence against superior cunning; and, since it is necessary that there should be a perpetual intercourse of buying and selling, and dealing upon credit, where fraud is permitted and connived at, or has no law to punish it, the honest dealer is always undone, and the knave gets the advantage.”
Here’s the letter from the Devil to Paulson:

FROM THE OFFICE OF SATAN
“Prince of Lies and proud of it”

Dear Hank:

You have outdone yourself once again, my loyal servant, with these fraudulent, deliciously deceptive proposals to reform the utterly corrupt financial system you exploited so profitably as head of Goldman Sachs.

My plans for the destruction of the United States of America have been going along rather swimmingly until we rushed things a bit with Bear Stearns–ah, the wondrous power of pure, unmitigated greed! It remains my favorite tool–and calls for reform were suddenly everywhere.

The rules which would have undone us were simple indeed, as you know all too well:

1. complete transparency of risk and leverage in all financial documents and financial instruments
2. the marking to market of all financial instruments and assets at the close of the trading day, as is currently done with commodities futures and stock options
3. the banning of “off balance sheet” accounting
4. the banning of offshore accounts and holding companies
5. the uniform enforcement of these regulations across all financial classes, assets, firms, brokers and banks

As you know, Hank, transparency, mark-to-market and strictly enforced regulations of all banks, broker-dealers and financial institutions would deal a death blow to my plans to destroy the U.S. via destruction of its financial system. Having sold your soul to me for the glory and riches you received at Goldman Sachs, you had to comply with my orders to destroy any such useful regulations with cunning “fixes” of your own.

Though I counted on your native feral survival instincts, I did not expect a plan of such evil genius. Imagine how foolish and naive humans must be to accept your “fix”! My mind boggles at the ease with which you have conned the gullible gallery of idiots in Congress and the mainstream media:

1. you diminish the powers of the Federal agencies and favor the “shadow government” Federal Reserve, which is not even a government agency but a private institution
2. Instead of proposing transparency, you are adding another layer of secrecy in what the Fed can investigate and do to “fix” future problems
3. Enable more “self-regulation” (hahahaha, I can’t stop laughing at this one! You really are a comedian!)

I am still amused that the American populace hasn’t noticed that you, Master of the Dark Arts at Goldman Sachs, have been duly appointed as the wolf assigned to guard the sheep. Now you have suggested opening the rusty wire fencing and lighting the opening so your brethren can more easily slip in and slaughter as many sheep as they wish–and the American sheep sit there mesmerized by my other crowning achievement, the TV, blithely accepted that the most voracious, cleverest wolf is now their “guardian.” Never in my wildest imaginations did I hope for such gross stupidity, ignorance and naivite.

Keep up the fine work–

Your Lord and Master,

Lucifer
Lest you think I exaggerate: please read the following excerpts and commentaries:

Bleakonomics (New York Times, by Roger Lowenstein, courtesy of frequent contributor Harun I.)

Government interventions always bring disruptions, but when Washington meddles in financial markets, the potential for the sort of distortion that obscures proper incentives is especially large, due to our markets’ complexities. Even Robert Rubin, the Citigroup executive and former Treasury secretary, has admitted he had never heard of a type of contract responsible for major problems at Citi.

Capitalism isn’t supposed to work like this, and before the advent of modern finance, it usually didn’t. Market values fluctuate, but — in the absence of fraud — billion-dollar companies do not evaporate. Yet it’s worth noting that Lehman Brothers, stock also fell by half and then recovered within a 24-hour span. Once, investors could get a read on financial firms’ assets and risks from their balance sheets; those days are history.

Firms now do much of their business off the balance sheet. The swashbuckling Bear Stearns was a party to $2.5 trillion — no typo — of a derivative instrument known as a credit default swap. Such swaps are off-the-books agreements with third parties to exchange sums of cash according to a motley assortment of other credit indicators. In truth, no outsider could understand what Bear (or Citi, or Lehman) was committed to. The thought that Bear’s counterparties (the firms on the other side of that $2.5 trillion) would call in their chits — and then cancel their trades with Lehman, perhaps with Merrill Lynch and so forth — sent Wall Street into panic mode. Had Bear collapsed, or so asserted a veteran employee, “it would have been the end: pandemonium and global meltdown.”
Harun also sent along this story,

Plan would expand Fed’s power to intervene in financial crisis (CNN)

and made these comments:

The Fed doesn’t want another BSC because there is probably no entity with the capital to buy another failed institution. How many bullets does the Fed have left?

I find it somewhat ironic that Paulson, fresh from years of financial alchemy, wants to expand the powers of the banking cartel. It is as if no one remembers that by default he played a part and therefore is partly responsible for what is happening today.

But it seems (as much as I don’t like the banking cartel having more power) that Paulson and the Fed realized that WS firms do create credit money (fiduciary media) and left unchecked as it has been leaves the system vulnerable to serious dislocations.

However, if the Fed can’t or won’t recognize “bubbles” and act, all of this will be academic.

We should be wary of the Fed having sprawling powers. It potentially means that no big institution will be allowed to fail, meaning this could easily segue into normalizing the socialization of losses. We must remember that this is a private organization, its officials are not publicly elected. It is not transparent or accountable like the SEC or CFTC. And without sweeping reforms in regards to transparency and accountability I would vigorously resist the expansion of the Feds powers.
Knowledgeable correspondent Jon H. recommended this thought-provoking story: Revolution Monday: The Bankster’s Coup

Back in earlier times in America, before the Central Bankers took over, there were lots of financial institutions in the country. Most were fiercely independent and they played a key role in the development of the nation. That was a time when the White House was able to dictate to the banks and financial interests rather than today’s mirror/reversed situation where bankers largely tell the government what to do.

So the Banker’s Revolution begins Monday and the choice is simple:

We can take the easy way which means more government and a furtherance of the recent price fixing in markets…I’m sorry; maintenance of market stability. Come to the great casino, no losers here. Good times, but more regulations, less freedom of choice and a bigger and meaner Big Brother. Did someone over there lose? Well, you just chip in and pay for their losses. The house will keep a share for its hard work, of course.

Or, we can take the hard path and limit bankers, contain government, hold greedy speculators accountable, and let the markets clean themselves. And if we make bad choices, we will live with those. Hard times for a while, but 30% interest rates can be beaten back to 8%, states can legislate usury, and the wealthy elite ‘ruling class’ can be sent packing: Those who would export our jobs, leave our borders unfenced, and abdicate their responsibilities to preserve sound money, are welcome to leave.

So give it some thought this weekend. Which side will you choose? Soft and Easy but totally Ruled, or Hard and Thrifty – yet FREE?
U. Doran recommended this from Peter Schiff: Bail me out Bennie (Financial Sense)

and this history of The Federal Reserve System

Erudite reader Michael S. recommended this article Taleb Outsells Greenspan as Black Swan Gives Worst Turbulence (bloomberg.com) and submitted this haiku:

ECONOMIC HOPE

the black swan dives deep
but becomes white from a cloud
caught in a rainbow

Thank you, readers, for the recommendations and thank you Harun for the comments and Michael for the haiku. I for one feel better knowing about Hank and Lucifer. Now who appointed Hank? Hmm….

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Thank you, William M. ($50), for your extremely generous contribution to this humble site. I am greatly honored by your support and readership. All contributors are listed below in acknowledgement of my gratitude.

Paulson’s Fixit Plan for Wall Street

From Counterpunch

By MIKE WHITNEY

It is being billed as a “massive  shakeup of US financial market regulation”, but don’t be  deceived. Treasury Secretary Henry Paulson’s proposals for broad  market reform are neither “timely” nor “thoughtful”  (Reuters) In fact, its all just more of the same free market  “we can police ourselves” mumbo jumbo that got us into  this mess in the first place. The real objective of Paulson’s  so called reforms is to decapitate the SEC and increase the powers  of the Federal Reserve. Same wine, different bottle. Paulson’s  motive is to preempt any regulatory sledgehammer that might  descend on the entire financial industry following the 2008 election.  There’s growing fear that an incoming Democrat may tote a firehose  down to Wall Street.

If Paulson’s plan is approved  in its present form, Congress will have even less control over  the financial system than it does now and the same group of self-serving  banking mandarins who created the biggest equity bubble in history  will be able to administer the markets however they choose without  the inconvenience of government supervision. That’s exactly what  Wall Street, the Treasury Secretary and the folk at the Fed want;  unlimited power with no accountability.

Paulson is expected to lay  out guidelines and principles that are intended to help regulators supervise the financial markets. According to AFP:

“The President’s Working  Group on Financial Markets said the current regulatory structure  is working well despite calls by some US lawmakers.”

In other words, the failing  banking system, the housing meltdown, and the frozen corporate  bond market are all signs of a robust financial system? This may be the most ludicrous statement since “Mission accomplished”.  The system is imploding and people are being hurt by the fallout.  Thirty years of industry-led lobbying has dismantled the (admittedly  frail and porous) regulatory regime which made US financial markets  the envy of the world. Whatever credibility and transparency  once existed were washed out in the Clinton era, as with Glass-Steagall  and government oversight of the explosive growth of over-the  counter derivatives instruments. Now the system is prey to all  types of dodgy debt instruments, suspicious “dark pool”  trading and off-balance sheets operations which further reinforce  the belief that cautious investment is no better than casino gambling.

“The regulatory line of  sight today is by the counterparties,” the official said,  adding that the guidelines should be “beneficial to industry.”  (AFP)

How is that different than  saying, “Caveat emptor”? That’s not a motto that inspires  confidence. Many people still naively believe that planning their retirement should not have to be a Darwinian tussle with a crafty  junk-bond salesman.

Under Paulson’s plan, the Federal  Reserve will be granted new regulatory powers, but whatever for? The Fed doesn’t use the powers it has now. No one stopped the  Fed from intervening in the mortgage lending fiasco, or the ratings  agency abuses or the off-balance sheets shenanigans. They had  the authority and they should have used it. The folks at the  Fed knew everything that was going on—including the mushrooming  sales of derivatives contracts which soared from under $1 trillion  in 2000 to over $500 trillion in 2006—but they decided to cheerlead  from the sidelines rather than do their jobs. The fact is, they  were worried that if they got involved they might upset the gravy-train  of profits that was enriching their bankster friends.

Former Fed chief Greenspan  used to croon like a smitten teenager every time he was asked  about subprime loans or adjustable rate mortgages. And, as New  York Times columnist Floyd Norris points out, (Greenspan) “praised  the growth in the derivatives market as a boon for market stability,  and resisted calls to use the Fed’s power to increase regulation.” Of course, he did. It was all part of Maestro’s “New Economy”;  trickle-down Elysium, where the endless flow of low interest  credit merged with financial innovation to create a Reaganesque  El Dorado. There are no regulations in this version of Eden,  not even “Don’t bite the apple”. Anything goes and  to heck with the public, they can fend for themselves.

 Now its Paulson’s job to keep the neoliberal flame lit long enough  to make sure that government busybodies and bureaucratic do-goodies  don’t upset the cart. That means concocting a wacky public relations  campaign to convince the public that Wall Street is not just  a pirate’s cove of land-sharks and bunko artists, but a trusted  ally in maintaining a strong economy through vital and efficient  markets.

The Times’ Norris summed up  Paulson’s sham reforms like this:

“The plan has its genesis  in a yearlong effort to limiting Washington’s role in the market.  And that DNA is unmistakably evident in the fine print. Although  the proposal would impose the first regulation of hedge funds  and private equity funds, that oversight would have a light touch, enabling the government to do little beyond collecting information  – except in times of crisis. The regulatory umbrella created  in the 1930s would grow wider, with power concentrated in fewer  agencies. But that authority would be limited, doing virtually nothing to regulate the many new financial products whose unwise  use has been a culprit in the current financial crisis. (“In Treasury Plan, a Reluctant Eye over Wall Street”, Floyd  Norris, New York Times)

What nonsense. The house is  on fire and hyperventilating Hank is still wasting our time with this rubbish. The real problem is that Paulson and his buddies  at the Federal Reserve think of the financial system as their  personal fiefdom so they refuse to loosen their grip even though  the economy is listing starboard and the water is flooding into  the lower decks.

 Once again, the New York Times:

“All the checks and balances  in the plan reflect the mindset of its architect, Treasury Secretary  Henry Paulson, who came to Washington after a long career on  Wall Street. He has worried that any effort to substantially  tighten regulation could hamper the ability of American markets  to compete with foreign rivals.”

No one elected Paulson to do  anything. He has no mandate. He is an industry rep. who has worked exclusively for a small group of wealthy investors who have put  the entire country at risk with their toxic mortgage-backed bonds,  their reckless Ponzi-type speculation, and their off-book chicanery.  Paulson should be removed immediately and returned to his wolf’s  lair at G-Sax. If Bush is serious about straightening out Wall  Street, then bring in Eliot Spitzer. He’s probably available,  at least in daytime hours. And he’ll do what it takes to clean  house, that is, put a truncheon-wielding robo-cop in every trading-pit  at the NYSE, and dispatch government accountants to every office  of every CFO making sure they have a Big Red Pen in one hand  and a taser in the other. That’s the only way to get the attention  of the bandit-class.

“I do not believe it is  fair or accurate to blame our regulatory structure for the current  turmoil,” says Paulson.

Paulson is wrong. The current  turmoil is all about the lack of regulation and he’d better prepare  himself for some big changes. The pendulum is already in motion  and tighter regulations will soon follow. There needs to be an  accounting process for all transactions and capital requirements  for every financial institution that creates credit. No exceptions.  All of these businesses pose a real danger to the overall system and, therefore, must conform to clearly articulated and strictly  enforced rules; no off-balance sheets operations, no dark pool  trading, no unregulated derivatives contracts, no level 3 assets,  no “mark to model” garbage bonds where CFOs unilaterally  decide what they are worth by picking a number out of a hat.  Its time to restore order to the markets so retirees and working  class families can feel safe investing in their futures. They  are the ones who are most hurt by Wall Street’s endless trickery.

 Paulson’s plan is a non starter. The era of sandbagging, supply-side  banditry is over. Good riddance.

Mike Whitney lives in Washington state. He can  be reached at: fergiewhitney@msn.com

What will you eat when cheap oil runs out?

http://timesonline.typepad.com/environment/2008/03/what-will-you-e.html

I’ve done what I can, what with ordering local food from a box scheme, and getting my own allotment, and irritating my wife by planting vegetables and salad leaves all round the garden where she wanted merely ornamental plants – but here’s fresh evidence that we’re in for a very serious food crisis indeed.

The former newspaper editor turned farmer Rosie Boycott points out in The Guardian today that Britain has not been self-sufficient in food since the late 18th century, and the situation is rapidly worsening. “In 2006, 37% of the UK’s food was imported, with London dependent on imports for 80% of its food. For the capital, a food shortage would clearly be disastrous.”

In the food crisis, in 1939, we still had productive orchards and plenty of farmers. Today, there are now more people in jail than farmers. And half of all vegetables and 95% of all fruit consumed in the UK now come from overseas.

A large part of the problem is meat eating, which accounts for unsustainable use of land and water and fuel. When Boycott was a child, the family ate meat just once a week. I hope we’ll be able to carry on eating it even that infrequently in years to come.

In the meantime, rather than finish on a bleak note, I should point out that when Cuba lost access to Soviet oil Cubans only narrowly avoided starvation – but after embarking on a crash programme of home-growing, even urban Havana managed to produce half its own food needs. To find out more about this, I very strongly recommend that you get hold of the short film The Power of Community, which sets out the Cuban story, and host a screening with your neighbours (for a preview, see this clip on YouTube).

Posted by John-Paul Flintoff on March 28, 2008

Regime Change: An American Addiction

From: The People’s Voice
04/01/08

William Hughes

“The seizure of faraway lands by America…is a perversion of our national mission.” – President Grover Cleveland, in 1893.

It didn’t start with the U.S.’s Neocon-inspired invasion of Iraq in March, 2003. Whether knowingly or not, the morally bankrupt Bush-Cheney Gang was following an imperial script which is over 110 years old. During that period, the U.S. has “overthrown fourteen governments that displeased it for various ideological, political and economic reasons,” writes Stephen Kinzer, in his riveting book, “Overthrow: America’s Century of Regime Change from Hawaii to Iraq.” Why did America betray its values and become itself a brutal colonizer? Well, after you blow away all the baloney about “national security and liberation,” Kinzer reveals: “The U.S. acted mainly for ‘economic’ reasons–specifically, to establish, promote and defend the right of ‘Americans’ to do business around the world without interference.” By “Americans,” Kinzer mostly means the giant multinational corporations.

Each of the respective countries on which the U.S. forced a regime change followed a basic kind of pattern, an M.O., if you please. Unfortunately, for our closest neighbors in Central and South America, they felt, more than any other nations, the consistent brunt of our greedy, violent, murderous and racist reach. Destabilization and intervention were two of our tactics, which often times resulted in horrific consequences for the targeted country and their inhabitants. Kinzer puts it this way: “Almost every American overthrow…left in its wake a bitter residue of pain and anger. Some have led to the slaughter of innocents…The U.S. was willing to support any governing clique, ‘no matter how odious,’ as long as it did America’s bidding.”

Over time, Cuba, Guatemala, Puerto Rica, Panama, Chile, Grenada, Nicaragua and Honduras to our South were subjected to some type of coercive, gangster-like intervention from the U.S. bully. Sometimes, it took the form of a direct invasion by military forces, like in Panama and Grenada. In other cases, the CIA initiated covert activity to bring the targeted regime to its knees.

Take Honduras as a prime example of how “regime change” worked in Central America. What the U.S. did there reads like a script of fiction. Yet, it’s all true. It really did happen. Kinzer shows that in 1910, a “soldier of fortune,” Lee Christmas, conspired with the rapacious Sam Zemurray, a wheeler-dealer planter in Central America, along with an Honduras native, Manuel Bonilla, to take over that country. The conspiracy was hatched in New Orleans. All the wrongdoing was accomplished with the support, on a nod and wink basis, of the U.S. government. Christmas was to supply the muscle for the illegal coup, (think mercenary army). Zemurray provided the money to pay the hired thugs and to purchase the necessary weapons, and Bonilla was to be installed as “The President.” Thanks to some timely gunboat diplomacy from the U.S., via its naval vessels, Marietta and Tacoma, it became a done deal by Nov. 1912. Honduras, a liberal democracy under its then President Miguel Davila, was never the same again.

Here is how the author describes Zemurray: “‘Sam the Banana Man’ was one of the most colorful figures in the history of… capitalism…Some Jews considered him an exemplary figure of their Diaspora, an immigrant from Eastern Europe…[who] rose to great wealth and power. In Honduras, people know him as the man who ‘overthrew’ their government and ‘took over’ their country.”

After “President Bonilla” was installed, he rewarded Zemurray “10,000 hectares of banana land–about 24,700 acres–near the north coast. Later he added 10,000 hectares near the Guatemala border.” Zemurray was also allowed “to import whatever he needed, duty-free. Finally, [President Bonilla] authorized Zemurray to raise a $500,000 loan in the name of the Honduran government, and to use the money to repay himself for what he claimed to have spent organizing the revolution…With assets like these, it is no wonder Zemurray soon became known as the ‘uncrowned king of Central America’…Later [Zemurray] merged his enterprises with UNITED FRUIT…Four decades later, this uniquely powerful company would help overthrow another Central American government.”

The corrupt takeover in Honduras was repeated time and again, with various schemes, by U.S. interests, (corporate and government combined], in Central America. When I think about how a slippery character, like Zemurray, was permitted to profit so unfairly at the expense of generations of Honduran citizens, the word “Reparations” jumps out at me. If ever there was a case that cries out for justice, it’s this one!

Recently, I was in Costa Rica for a holiday. It’s located south of Nicaragua and north of Panama. It’s a lovely little country that has mostly been spared the blood-stained upheavals experienced by many of its unfortunate neighbors, who fell under the hegemony of Wall Street-based interests. Bananas and coffee are its main exports and the people are very friendly, with a high literacy rate. In 1948 Costa Rica abolished its army! Tourism is booming in this Caribbean paradise of myriad natural wonders. (1) Although it has its share of problems, its outlook is positive. If we ever learn to keep our corporate/government hands off of other countries, Costa Rica can be the future for all of our neighbors.

On another front, the U.S., with the Brits as a partner, orchestrated a violent coup in Iran back in 1953. This subject comes up in Kinzer’s book, although his definitive account of that massive crime against the Iranian people is recorded more fully in his excellent tome, “All the Shah’s Men.” I’m also highly recommending that book to readers. It is well documented and you will find it difficult to put down. Query: Why doesn’t Hollywood do a movie about that U.S. induced “regime change?” (2)

Enter Ted Koppel! I remember when that gabby news-reader first started out in 1979, with his popular “America Held Hostage” shows about the Iranian takeover of the American Embassy in Tehran. What Koppel never told his ABC-TV audiences, however, was how the U.S. and British governments (on behalf of “Big Oil’) had plotted a coup d’etat (“Operation Ajax”) in Iran, in 1953. It unseated the then-democratically elected government of Prime Minister Mohammad Mossadegh. They (the CIA and British Intelligence] replaced him with a tyrannical stooge, one Mohammad Reza Shah. It was the Shah’s ultra corrupt regime which in turn inspired the student-led 1979 Islamic Revolution in Iran. If you want to know why we’re really hated in the Islamic World, this is one of the many reasons why. Think BLOWBACK! (3)

As I had written earlier, the 1953 Iranian coup “was critical background material that I don’t recall Koppel ever revealing. In addition, by ‘Nightline’ playing, ad infinitum, the hostage situation, it helped to undermine [support for] Democratic President Jimmy Carter and, eventually, it led to the GOP’s Ronald Reagan capturing the White House, in 1980. Once in office, Reagan began to systematically undercut the social justice programs enacted under FDR’s ‘New Deal.’ He also greatly enlarged the Pentagon’s budget, assaulted Organized Labor, [introduced the ‘Racket of ‘Deregulation’ all to the glee of the Wall Street Wirepullers], and created national deficits of unprecedented proportions.” (4)

Finally, the U.S. record in overthrowing governments around the world is a sordid one. It is also a stain on our Republic as Kinzer’s book so resounding shows. On a karmic level, some of the evil we’ve unleashed by our numerous criminal enterprises has, indeed, come home to roost. It is long past the time for our Republic to end this “perversion of its historic mission.”

Notes:

1. http://www.youtube.com/watch?v=pmWr9zT1M7A
2. See, “All The Shah’s Men: An American Coup and the Roots of Middle East Terror,” by Stephen Kinzer.
3. “Blowback” by Chalmers Johnson. Check out: http://www.thirdworldtraveler.com/Sept_11_2001/Blowback_CJ_article.html
4. http://www.americanchronicle.com/articles/3850
See, also: http://www.thepeoplesvoice.org/cgi-bin/blogs/voices.php/2008/03/29/p24391 and
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/30/AR2008033002138.html