Planned Swine flu Hoax,Rumsfeld,and Bush Admin May 2, 2009
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If we are to believe what our trusted international media report, the world is on the brink of a global pandemic outbreak of a new deadly strain of flu, H1N1 as it has been labelled, or more popularly, Swine Flu. As the story goes, the outbreak of the deadly flu was first discovered in Mexico . According to press reports, after several days, headlines reported as many as perhaps 150 deaths in Mexico were believed caused by this virulent people-killing pig virus that has spread to humans and now is allegedly being further spread from human to human. Cases were being reported hourly from Canada to Spain and beyond. The only thing wrong with this story is that it is largely based on lies, hype and coverup of possible real causes of Mexican deaths.
One website, revealingly named Swine Flu Vaccine, reports the alarming news, ‘One out of every five residents of Mexico ’s most populous city wore masks to protect themselves against the virus as Mexico City seems to be the epicenter of the outbreak. As many as 103 deaths have been attributed to the swine flu so far with many more feared to be on the horizon. The health department of Mexico said an additional 1,614 reported cases have been documented.’ We are told that the H1N1 ‘shares genetic material from human, avian and swine influenza viruses.’1
Airports around the world have installed passenger temperature scans to identify anyone with above normal body temperature as possible suspect for swine flu. Travel to Mexico has collapsed. Sales of flu vaccines, above all Tamiflu from Roche Inc., have exploded in days. People have stopped buying pork fearing certain death. The World Health Organization has declared a ‘a public health emergency of international concern,’ defined by them as ‘an occurrence or imminent threat of illness or health conditions caused by bioterrorism, epidemic or pandemic disease, or highly fatal infectious agents or toxins that pose serious risk to a significant number of people.’2
What are the symptoms of this purported Swine Flu? That’s not at all clear according to virologists and public health experts. They say Swine Flu symptoms are relatively general and nonspecific. ‘So many different things can cause these symptoms. it is a dilemma,’ says one doctor interviewed by CNN. ‘There is not a perfect test right now to let a doctor know that a person has the Swine Flu.’ It has been noted that most individuals with Swine Flu had an early on set of fever. Also it was common to see dizziness, body aches and vomiting in addition to the common sneezing, headache and other cold symptoms. These are symptoms so general as to say nothing.
The US Government’s Center for Disease Control (CDC) in Atlanta states on its official website, ‘Swine Influenza (swine flu) is a respiratory disease of pigs caused by type A influenza viruses that causes regular outbreaks in pigs. People do not normally get swine flu, but human infections can and do happen. Swine flu viruses have been reported to spread from person-to-person, but in the past, this transmission was limited and not sustained beyond three people.’ Nonetheless they add, ‘CDC has determined that this swine influenza A (H1N1) virus is contagious and is spreading from human to human. However, at this time, it is not known how easily the virus spreads between people.’3
How many media that have grabbed on the headline ‘suspected case of Swine Flu’ in recent days bother to double check with the local health authorities to ask some basic questions? For example, the number of confirmed cases of H1N1 and their location? The number of deaths confirmed to have resulted from H1N1? Dates of both? Number of suspected cases and of suspected deaths related to the Swine Flu disease?
Some known facts
According to Biosurveillance, itself part of Veratect, a US Pentagon and Government-linked epidemic reporting center, on April 6, 2009 local health officials declared a health alert due to a respiratory disease outbreak in La Gloria, Perote Municipality, Veracruz State, Mexico.
They reported, ‘Sources characterized the event as a ‘strange’ outbreak of acute respiratory infection, which led to bronchial pneumonia in some pediatric cases. According to a local resident, symptoms included fever, severe cough, and large amounts of phlegm. Health officials recorded 400 cases that sought medical treatment in the last week in La Gloria, which has a population of 3,000; officials indicated that 60% of the town’s population (approximately 1,800 cases) has been affected. No precise timeframe was provided, but sources reported that a local official had been seeking health assistance for the town since February.’ What they later say is ‘strange’ is not the form of the illness but the time of year as most flu cases occur in Mexico in the period October to February.
The report went on to note, ‘Residents claimed that three pediatric cases, all under two years of age, died from the outbreak. However, health officials stated that there was no direct link between the pediatric deaths and the outbreak; they stated the three fatal cases were “isolated” and “not related” to each other.’
Then, most revealingly, the aspect of the story which has been largely ignored by major media, they reported, ‘Residents believed the outbreak had been caused by contamination from pig breeding farms located in the area. They believed that the farms, operated by Granjas Carroll, polluted the atmosphere and local water bodies, which in turn led to the disease outbreak. According to residents, the company denied responsibility for the outbreak and attributed the cases to “flu.” However, a municipal health official stated that preliminary investigations indicated that the disease vector was a type of fly that reproduces in pig waste and that the outbreak was linked to the pig farms.’4
Since the dawn of American ‘agribusiness,’ a project initiated with funding by the Rockefeller Foundation in the 1950’s to turn farming into a pure profit maximization business, US pig or hog production has been transformed into a highly efficient, mass production industrialized enterprise from birth to slaughter. Pigs are caged in what are called Factory Farms, industrial concentrations which are run with the efficiency of a Dachau or Bergen-Belsen concentration camp. They are all conceived by artificial insemination and once born, are regularly injected with antibiotics, not because of illnesses which abound in the hyper-crowded growing pens, but in order to make them grow and add weight faster. Turn around time to slaughter is a profit factor of highest priority. The entire operation is vertically integrated from conception to slaughter to transport distribution to supermarket.
Granjas Carroll de Mexico (GCM) happens to be such a Factory Farm concentration facility for hogs. In 2008 they produced almost one million factory hogs, 950,000 according to their own statistics. GCM is a joint venture operation owned 50% by the world’s largest pig producing industrial company, Smithfield Foods of Virginia.5 The pigs are grown in a tiny rural area of Mexico , a member of the North American Free Trade Agreement, and primarily trucked across the border to supermarkets in the USA , under the Smithfields’ family of labels. Most American consumers have no idea where the meat was raised.
Now the story becomes interesting.
Manure Lagoons and other playing fields
The Times of London interviewed the mother of 4-year-old Edgar Hernandez of La Gloria in Veracruz , the location of the giant Smithfield Foods hog production facility. Their local reporter notes, ‘Edgar Hernández plays among the dogs and goats that roam through the streets, seemingly unaware that the swine flu he contracted a few weeks ago — the first known case — has almost brought his country to a standstill and put the rest of the world on alert. ‘I feel great,’ the five-year-old boy said. ‘But I had a headache and a sore throat and a fever for a while. I had to lay down in bed.”
The reporters add, ‘It was confirmed on Monday (April 27 2009-w.e.) that Edgar was the first known sufferer of swine flu, a revelation that has put La Gloria and its surrounding factory pig farms and ‘manure lagoons’ at the centre of a global race to find how this new and deadly strain of swine flu emerged.’ 6
That’s quite interesting. They speak of ‘La Gloria and its surrounding factory pig farms and ‘manure lagoons.” Presumably the manure lagoons around the LaGloria factory pig farm of Smithfield Foods are the waste dumping place for the feces and urine waste from at least 950,000 pigs a year that pass through the facility. The Smithfield ’s Mexico joint venture, Norson, states that alone they slaughter 2,300 pigs daily. That’s a lot. It gives an idea of the volumes of pig waste involved in the concentration facility at La Gloria.
Significantly, according to the Times reporters, ‘residents of La Gloria have been complaining since March that the odour from Granjas Carroll’s pig waste was causing severe respiratory infections. They held a demonstration this month at which they carried signs of pigs crossed with an X and marked with the word peligro (danger).’7 There have been calls to exhume the bodies of the children who died of pneumonia so that they could be tested. The state legislature of Veracruz has demanded that Smithfield ’s Granjas Carroll release documents about its waste-handling practices. Smithfield Foods reportedly declined to comment on the request, saying that it would ‘not respond to rumours.’8
A research compilation by Ed Harris reported, ‘According to residents, the company denied responsibility for the outbreak and attributed the cases to ‘flu.’ However, a municipal health official stated that preliminary investigations indicated that the disease vector was a type of fly that reproduces in pig waste and that the outbreak was linked to the pig farms.’9 That would imply that the entire Swine Flu scare might have originated from the PR spin doctors of the world’s largest industrial pig factory farm operation, Smithfield Foods.
The Vera Cruz-based newspaper La Marcha blames Smithfield ’s Granjos Carroll for the outbreak, highlighting inadequate treatment of massive quantities of animal waste from hog production.10
Understandably the company is perhaps more than a bit uncomfortable with the sudden attention. The company, which supplies the McDonald’s and Subway fast-food chains, was fined $12.3 million in the United States 1997 for violating the Clean Water Act. Perhaps they are in a remote tiny Mexican rural area enjoying a relatively lax regulatory climate where they need not worry about being cited for violations of any Clean Water Act.
Pig Factory Farm Industrial Production is a classic breeder of disease and toxins but little attention is being paid to this source
Factory Farms as toxic concentrations
At the very least the driving force for giant industrial agribusiness outsourcing of facilities to third world sites such as Veracruz, Mexico has more to do with further cost reduction and lack of health and safety scrutiny than it does with improving the health and safety quality of the food end product. It has been widely documented and subject of US Congressional reports that large-scale indoor animal production facilities such as that of Granjos Carroll are notorious breeding grounds for toxic pathogens.
A recent report by the US Pew Foundation in cooperation with the Johns Hopkins School of Public Health notes, ‘the method of producing food animals in the United States has changed from the extensive system of small and medium-sized farms owned by a single family to a system of large, intensive operations where the animals are housed in large numbers in enclosed structures that resemble industrial buildings more than they do a traditional barn. That change has happened primarily out of view of consumers but has come at a cost to the environment and a negative impact on public health, rural communities, and the health and well-being of the animals themselves. 11
The Pew study notes, ‘The diversified, independent, family-owned farms of 40 years ago that produced a variety of crops and a few animals are disappearing as an economic entity, replaced by much larger, and often highly leveraged, farm factories. The animals that many of these farms produce are owned by the meat packing companies from the time they are born
- or hatched right through their arrival at the processing plant and from there to market.’ 12
The study emphasizes that application of ‘untreated animal waste on cropland can contribute to excessive nutrient loading, contaminate surface waters, and stimulate bacteria and algal
growth and subsequent reductions in dissolved oxygen concentrations in surface waters.’13
That is where the real investigation ought to begin, with the health and sanitary dangers of the industrial factory pig farms like the one at Perote in Veracruz . The media spread of panic-mongering reports of every person in the world who happens to contract ‘symptoms’ which vaguely resemble flu or even Swine Flu and the statements to date of authorities such as WHO or CDC are far from conducive to a rational scientific investigation..
Tamiflu and Rummy
In October 2005 the Pentagon ordered vaccination of all US military personnel worldwide against what it called Avian Flu, H5N1. Scare stories filled world media. Then, Defense Secretary Donald Rumsfeld announced he had budgeted more than $1 billion to stockpile the vaccine, Oseltamivir sold under the name, Tamiflu. President Bush called on Congress to appropriate another $2 billion for Tamiflu stocks.
What Rumsfeld neglected to report at the time was a colossal conflict of interest. Prior to coming to Washington in January 2001, Rumsfeld had been chairman of a California pharmaceutical company, Gilead Sciences. Gilead Sciences held exclusive world patent rights to Tamiflu, a drug it had developed and whose world marketing rights were sold to the Swiss pharma giant, Roche. Rumsfeld was reportedly the largest stock holder in Gilead which got 10% of every Tamiflu dose Roche sold. 14 When it leaked out, the Pentagon issued a curt statement to the effect that Secretary Rumsfeld had decided not to sell but to retain his stock in Gilead, claiming that to sell would have indicated something to hide.’ That agonizing decision won him reported added millions as the Gilead share price soared more than 700% in weeks.
Tamiflu is no mild candy to be taken lightly. It has heavy side effects. It contains matter that could have potentially deadly consequences for a person’s breathing and often reportedly leads to nausea, dizziness and other flu-like symptoms.
Since the outbreak of Swine Flu Panic (not Swine Flu but Swine Flu Panic) sales of Tamiflu as well as any and every possible drug marketed as flu related have exploded. Wall Street firms have rushed to issue ‘buy’ recommendations for the company. ‘Gimme me a shot Doc, I don’t care what it is…I don’ wanna die…’
Panic and fear of death was used by the Bush Administration skilfully to promote the Avian Flu fraud. With ominous echoes of the current Swine Flu scare, Avian Flu was traced back to huge chicken factory farms in Thailand and other parts of Asia whose products were shipped across the world. Instead of a serious investigation into the sanitary conditions of those chicken factory farms, the Bush Administration and WHO blamed ‘free-roaming chickens’ on small family farms, a move that had devastating economic consequences to the farmers whose chickens were being raised in the most sanitary natural conditions. Tyson Foods of Arkansas and CG Group of Thailand reportedly smiled all the way to the bank.
Now it remains to be seen if the Obama Administration will use the scare around so-called Swine Flu to repeat the same scenario, this time with ‘flying pigs’ instead of flying birds. Already Mexican authorities have reported that the number of deaths confirmed from so-called Swine Flu is 7 not the 150 or more bandied in the media and that most other suspected cases were ordinary flu or influenza
Weapons of mass destruction!!!…CDS!!!!!!!!!!! April 27, 2009
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As Congress wrestles with another bailout bill to try to contain the financial contagion, there’s a potential killer bug out there whose next movement can’t be predicted: the Credit Default Swap.
In just over a decade these privately traded derivatives contracts have ballooned from nothing into a $54.6 trillion market. CDS are the fastest-growing major type of financial derivatives. More important, they’ve played a critical role in the unfolding financial crisis. First, by ostensibly providing “insurance” on risky mortgage bonds, they encouraged and enabled reckless behavior during the housing bubble.
“If CDS had been taken out of play, companies would’ve said, ‘I can’t get this [risk] off my books,’” says Michael Greenberger, a University of Maryland law professor and former director of trading and markets at the Commodity Futures Trading Commission. “If they couldn’t keep passing the risk down the line, those guys would’ve been stopped in their tracks. The ultimate assurance for issuing all this stuff was, ‘It’s insured.’”
Second, terror at the potential for a financial Ebola virus radiating out from a failing institution and infecting dozens or hundreds of other companies – all linked to one another by CDS and other instruments – was a major reason that regulators stepped in to bail out Bear Stearns and buy out AIG (AIG, Fortune 500), whose calamitous descent itself was triggered by losses on its CDS contracts (see “Hank’s Last Stand“).
And the fear of a CDS catastrophe still haunts the markets. For starters, nobody knows how federal intervention might ripple through this chain of contracts. And meanwhile, as we’ll see, two fundamental aspects of the CDS market – that it is unregulated, and that almost nothing is disclosed publicly – may be about to change. That adds even more uncertainty to the equation.
“The big problem is that here are all these public companies – banks and corporations – and no one really knows what exposure they’ve got from the CDS contracts,” says Frank Partnoy, a law professor at the University of San Diego and former Morgan Stanley derivatives salesman who has been writing about the dangers of CDS and their ilk for a decade. “The really scary part is that we don’t have a clue.” Chris Wolf, a co-manager of Cogo Wolf, a hedge fund of funds, compares them to one of the great mysteries of astrophysics: “This has become essentially the dark matter of the financial universe.”
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AT FIRST GLANCE, credit default swaps don’t look all that scary. A CDS is just a contract: The “buyer” plunks down something that resembles a premium, and the “seller” agrees to make a specific payment if a particular event, such as a bond default, occurs. Used soberly, CDS offer concrete benefits: If you’re holding bonds and you’re worried that the issuer won’t be able to pay, buying CDS should cover your loss. “CDS serve a very useful function of allowing financial markets to efficiently transfer credit risk,” argues Sunil Hirani, the CEO of Creditex, one of a handful of marketplaces that trade the contracts.
Because they’re contracts rather than securities or insurance, CDS are easy to create: Often deals are done in a one-minute phone conversation or an instant message. Many technical aspects of CDS, such as the typical five-year term, have been standardized by the International Swaps and Derivatives Association (ISDA). That only accelerates the process. You strike your deal, fill out some forms, and you’ve got yourself a $5 million – or a $100 million – contract.
And as long as someone is willing to take the other side of the proposition, a CDS can cover just about anything, making it the Wall Street equivalent of those notorious Lloyds of London policies covering Liberace’s hands and other esoterica. It has even become possible to purchase a CDS that would pay out if the U.S. government defaults. (Trust us when we say that if the government goes under, trying to collect will be the least of your worries.)
You can guess how Wall Street cowboys responded to the opportunity to make deals that (1) can be struck in a minute, (2) require little or no cash upfront, and (3) can cover anything. Yee-haw! You can almost picture Slim Pickens in Dr. Strangelove climbing onto the H-bomb before it’s released from the B-52. And indeed, the volume of CDS has exploded with nuclear force, nearly doubling every year since 2001 to reach a recent peak of $62 trillion at the end of 2007, before receding to $54.6 trillion as of June 30, according to ISDA.
Take that gargantuan number with a grain of salt. It refers to the face value of all outstanding contracts. But many players in the market hold offsetting positions. So if, in theory, every entity that owns CDS had to settle its contracts tomorrow and “netted” all its positions against each other, a much smaller amount of money would change hands. But even a tiny fraction of that $54.6 trillion would still be a daunting sum.
The credit freeze and then the Bear disaster explain the drop in outstanding CDS contracts during the first half of the year – and the market has only worsened since. CDS contracts on widely held debt, such as General Motors’ (GM, Fortune 500), continue to be actively bought and sold. But traders say almost no new contracts are being written on any but the most liquid debt issues right now, in part because nobody wants to put money at risk and because nobody knows what Washington will do and how that will affect the market. (”There’s nothing to do but watch Bernanke on TV,” one trader told Fortune during the week when the Fed chairman was going before Congress to push the mortgage bailout.) So, after nearly a decade of exponential growth, the CDS market is poised for its first sustained contraction.
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ONE REASON THE MARKET TOOK OFF is that you don’t have to own a bond to buy a CDS on it – anyone can place a bet on whether a bond will fail. Indeed the majority of CDS now consists of bets on other people’s debt. That’s why it’s possible for the market to be so big: The $54.6 trillion in CDS contracts completely dwarfs total corporate debt, which the Securities Industry and Financial Markets Association puts at $6.2 trillion, and the $10 trillion it counts in all forms of asset-backed debt.
“It’s sort of like I think you’re a bad driver and you’re going to crash your car,” says Greenberger, formerly of the CFTC. “So I go to an insurance company and get collision insurance on your car because I think it’ll crash and I’ll collect on it.” That’s precisely what the biggest winners in the subprime debacle did. Hedge fund star John Paulson of Paulson & Co., for example, made $15 billion in 2007, largely by using CDS to bet that other investors’ subprime mortgage bonds would default.
So what started out as a vehicle for hedging ended up giving investors a cheap, easy way to wager on almost any event in the credit markets. In effect, credit default swaps became the world’s largest casino. As Christopher Whalen, a managing director of Institutional Risk Analytics, observes, “To be generous, you could call it an unregulated, uncapitalized insurance market. But really, you would call it a gaming contract.”
There is at least one key difference between casino gambling and CDS trading: Gambling has strict government regulation. The federal government has long shied away from any oversight of CDS. The CFTC floated the idea of taking an oversight role in the late ’90s, only to find itself opposed by Federal Reserve chairman Alan Greenspan and others. Then, in 2000, Congress, with the support of Greenspan and Treasury Secretary Lawrence Summers, passed a bill prohibiting all federal and most state regulation of CDS and other derivatives. In a press release at the time, co-sponsor Senator Phil Gramm – most recently in the news when he stepped down as John McCain’s campaign co-chair this summer after calling people who talk about a recession “whiners” – crowed that the new law “protects financial institutions from over-regulation … and it guarantees that the United States will maintain its global dominance of financial markets.” (The authors of the legislation were so bent on warding off regulation that they had the bill specify that it would “supersede and preempt the application of any state or local law that prohibits gaming …”) Not everyone was as sanguine as Gramm. In 2003 Warren Buffett famously called derivatives “financial weapons of mass destruction.”
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THERE’S ANOTHER BIG difference between trading CDS and casino gambling. When you put $10 on black 22, you’re pretty sure the casino will pay off if you win. The CDS market offers no such assurance. One reason the market grew so quickly was that hedge funds poured in, sensing easy money. And not just big, well-established hedge funds but a lot of upstarts. So in some cases, giant financial institutions were counting on collecting money from institutions only slightly more solvent than your average minimart. The danger, of course, is that if a hedge fund suddenly has to pay off on a lot of CDS, it will simply go out of business. “People have been insuring risks that they can’t insure,” says Peter Schiff, the president of Euro Pacific Capital and author of Crash Proof, which predicted doom for Fannie and Freddie, among other things. “Let’s say you’re writing fire insurance policies, and every time you get the [premium], you spend it. You just assume that no houses are going to burn down. And all of a sudden there’s a huge fire and they all burn down. What do you do? You just close up shop.” Stay tuned I have more on derviatives…
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Wanna know how,what,why,and who,caused this mess! April 27, 2009
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Global Research, April 24, 2009
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Warren Buffett called them “weapons of mass destruction” in 2003.
President Bush said they had to be regulated. So did the chairman of the Securities and Exchange Commission, and the current head of the Federal reserve. As did the G-20 group of the world’s 20 richest nations. Former Federal Reserve Chairman Alan Greenspan – after being one of their biggest cheerleaders – now says they are dangerous. And a Nobel prize-winning economist said they should be “blown up or burned”, and we should start fresh. What Are They Talking About? What are the above-listed folks talking about? A financial instrument called “credit default swaps” (CDS for short). CDS are like an insurance contract, where the purchaser buys “insurance” that a company won’t go out of business from a seller. If the company stays in business, the purchaser pays premiums to the seller, but if the company goes belly up, the seller has to pay the face value of the CDS “policy”. Why are CDS so dangerous? According to the experts, CDS were largely responsible for bringing down Bear Stearns, AIG (and see this) and other giant financial companies. Indeed, many leading experts say that CDS were the main cause of the financial crisis. As just 3 examples:
I’ll explain the reason that CDS are so dangerous in a future post (basically, they let the financial players to pretend that they had less risk, less stretched-too-thin leverage, and more stability then they really did). But for now, just keep in mind that some of the world’s top financial experts say that they are extremely dangerous. They are not the only cause of the financial crisis, but they are one of the main causes. But at least the risks from CDS are over, right? Not exactly . . . Credit default swaps continue to bring down large companies, partly because they make it less likely that the companies can restructure. And one of the main reasons that banks have been hoarding the bailout money instead of lending to consumers it because of CDS.Wall Street firms and banks have been hoarding cash. As the Financial Times wrote on October 7th:
And as Fox News put it:
And guess where most of the AIG bailout went? Yup – to corporations which bought CDS from AIG. $13 billion dollars worth of the bailout money paid to AIG went to Goldman Sachs for CDS contracts. $40 billion dollars worth of AIG’s bailout money (and see this) went to foreign banks for CDS contracts. (Even AIG’s former chief said that the government used AIG “to funnel money to other institutions, including foreign banks“). Unless something is done to change things, taxpayers may have to continue shelling out bailout money to keep bailing out CDS contract-holders. Well, At Least the Regulators are Bringing CDS Under control so That They Can’t Cause Damage Indefinitely. Right? Unfortunately, regulators have so far caved into lobbying pressure from those in the CDS industry, and have failed to take any decisive action to reign CDS in. As Newsweek writes:
Credit default swaps may continue to deepen the economic crisis and prevent a recovery – and cause future crises - unless regulators stand up to the lobbyists and take real action to reign them in. |
Are ou ready for the future…More foreclosures…this summer April 22, 2009
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Due to the lifting of the foreclosure moratorium at the end of March, the downward slide in housing is gaining speed. The moratorium was initiated in January to give Obama’s anti-foreclosure program—which is a combination of mortgage modifications and refinancing—a chance to succeed. The goal of the plan was to keep up to 9 million struggling homeowners in their homes, but it’s clear now that the program will fall well-short of its objective.
In March, housing prices accelerated on the downside indicating bigger adjustments dead-ahead. Trend-lines are steeper now than ever before–nearly perpendicular. Housing prices are not falling, they’re crashing and crashing hard. Now that the foreclosure moratorium has ended, Notices of Default (NOD) have spiked to an all-time high. These Notices will turn into foreclosures in 4 to 5 months time creating another cascade of foreclosures. Market analysts predict there will be 5 MILLION MORE FORECLOSURES BETWEEN NOW AND 2011. It’s a disaster bigger than Katrina. Soaring unemployment and rising foreclosures ensure that hundreds of banks and financial institutions will be forced into bankruptcy. 40 percent of delinquent homeowners have already vacated their homes. There’s nothing Obama can do to make them stay. Worse still, only 30 percent of foreclosures have been relisted for sale suggesting more hanky-panky at the banks. Where have the houses gone? Have they simply vanished?
600,000 “DISAPPEARED HOMES?”
Here’s a excerpt from the SF Gate explaining the mystery:
“Lenders nationwide are sitting on hundreds of thousands of foreclosed homes that they have not resold or listed for sale, according to numerous data sources. And foreclosures, which banks unload at fire-sale prices, are a major factor driving home values down.
“We believe there are in the neighborhood of 600,000 properties nationwide that banks have repossessed but not put on the market,” said Rick Sharga, vice president of RealtyTrac, which compiles nationwide statistics on foreclosures. “California probably represents 80,000 of those homes. It could be disastrous if the banks suddenly flooded the market with those distressed properties. You’d have further depreciation and carnage.”
In a recent study, RealtyTrac compared its database of bank-repossessed homes to MLS listings of for-sale homes in four states, including California. It found a significant disparity – only 30 percent of the foreclosures were listed for sale in the Multiple Listing Service. The remainder is known in the industry as “shadow inventory.” (”Banks aren’t Selling Many Foreclosed Homes” SF Gate)
If regulators were deployed to the banks that are keeping foreclosed homes off the market, they would probably find that the banks are actually servicing the mortgages on a monthly basis to conceal the extent of their losses. They’d also find that the banks are trying to keep housing prices artificially high to avoid heftier losses that would put them out of business. One thing is certain, 600,000 “disappeared” homes means that housing prices have a lot farther to fall and that an even larger segment of the banking system is underwater.
Here is more on the story from Mr. Mortgage “California Foreclosures About to Soar…Again”
“Are you ready to see the future? Ten’s of thousands of foreclosures are only 1-5 months away from hitting that will take total foreclosure counts back to all-time highs. This will flood an already beaten-bloody real estate market with even more supply just in time for the Spring/Summer home selling season…Foreclosure start (NOD) and Trustee Sale (NTS) notices are going out at levels not seen since mid 2008. Once an NTS goes out, the property is taken to the courthouse and auctioned within 21-45 days….The bottom line is that there is a massive wave of actual foreclosures that will hit beginning in April that can’t be stopped without a national moratorium.”
JP Morgan Chase, Wells Fargo and Fannie Mae have all stepped up their foreclosure activity in recent weeks. Delinquencies have skyrocketed foreshadowing more price-slashing into the foreseeable future. According to the Wall Street Journal:
“Ronald Temple, co-director of research at Lazard Asset Management, expects home prices to fall 22% to 27% from their January levels. More than 2.1 million homes will be lost this year because borrowers can’t meet their loan payments, up from about 1.7 million in 2008.” (Ruth Simon, “The housing crisis is about to take center stage once again” Wall Street Journal)
Another 20 percent carved off the aggregate value of US housing means another $4 trillion loss to homeowners. That means smaller retirement savings, less discretionary spending, and lower living standards. The next leg down in housing will be excruciating; every sector will feel the pain. Obama’s $75 billion mortgage rescue plan is a mere pittance; it won’t reduce the principle on mortgages and it won’t stop the bleeding. Policymakers have decided they’ve done enough and are refusing to help. They don’t see the tsunami looming in front of them plain as day. The housing market is going under and it’s going to drag a good part of the broader economy along with it. Stocks, too.
The Tower of Basel April 19, 2009
Posted by tetrahedron in Uncategorized.Tags: BIS, central bank, conspiracy, g20, global currency, global economy, Imf, private bank, switzerland
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In an April 7 article in The London Telegraph titled “The G20 Moves the World a Step Closer to a Global Currency,” Ambrose Evans-Pritchard wrote:
“A single clause in Point 19 of the communiqué issued by the G20 leaders amounts to revolution in the global financial order.
“We have agreed to support a general SDR allocation which will inject $250bn (£170bn) into the world economy and increase global liquidity,’ it said. SDRs are Special Drawing Rights, a synthetic paper currency issued by the International Monetary Fund that has lain dormant for half a century.
“In effect, the G20 leaders have activated the IMF’s power to create money and begin global ‘quantitative easing’. In doing so, they are putting a de facto world currency into play. It is outside the control of any sovereign body. Conspiracy theorists will love it.”
Indeed they will. The article is subtitled, “The world is a step closer to a global currency, backed by a global central bank, running monetary policy for all humanity.” Which naturally raises the question, who or what will serve as this global central bank, cloaked with the power to issue the global currency and police monetary policy for all humanity? When the world’s central bankers met in Washington last September, they discussed what body might be in a position to serve in that awesome and fearful role. A former governor of the Bank of England stated:
“[T]he answer might already be staring us in the face, in the form of the Bank for International Settlements (BIS)…. The IMF tends to couch its warnings about economic problems in very diplomatic language, but the BIS is more independent and much better placed to deal with this if it is given the power to do so.”1
And if that vision doesn’t alarm conspiracy theorists, it should. The BIS has been called “the most exclusive, secretive, and powerful supranational club in the world.” Founded in Basel, Switzerland, in 1930, it has been scandal-ridden from its beginnings. According to Charles Higham in his book Trading with the Enemy, by the late 1930s the BIS had assumed an openly pro-Nazi bias. This was corroborated years later in a BBC Timewatch film titled “Banking with Hitler,” broadcast in 1998.2 In 1944, the American government backed a resolution at the Bretton-Woods Conference calling for the liquidation of the BIS, following Czech accusations that it was laundering gold stolen by the Nazis from occupied Europe; but the central bankers succeeded in quietly snuffing out the American resolution.3
Modest beginnings, BIS Office, Hotel Savoy-Univers, Basel
First Annual General Meeting, 1931
In Tragedy and Hope: A History of the World in Our Time (1966), Dr. Carroll Quigley revealed the key role played in global finance by the BIS behind the scenes. Dr. Quigley was Professor of History at Georgetown University, where he was President Bill Clinton’s mentor. He was also an insider, groomed by the powerful clique he called “the international bankers.” His credibility is heightened by the fact that he actually espoused their goals. He wrote:
“I know of the operations of this network because I have studied it for twenty years and was permitted for two years, in the early 1960’s, to examine its papers and secret records. I have no aversion to it or to most of its aims and have, for much of my life, been close to it and to many of its instruments. … [I]n general my chief difference of opinion is that it wishes to remain unknown, and I believe its role in history is significant enough to be known.”
Quigley wrote of this international banking network:
“[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.”
The key to their success, said Quigley, was that the international bankers would control and manipulate the money system of a nation while letting it appear to be controlled by the government. The statement echoed an often-quoted one made by the German patriarch of what would become the most powerful banking dynasty in the world. Mayer Amschel Bauer Rothschild famously said in 1791:
“Allow me to issue and control a nation’s currency, and I care not who makes its laws.”
Mayer’s five sons were sent to the major capitals of Europe – London, Paris, Vienna, Berlin and Naples – with the mission of establishing a banking system that would be outside government control. The economic and political systems of nations would be controlled not by citizens but by bankers, for the benefit of bankers. Eventually, a privately-owned “central bank” was established in nearly every country; and this central banking system has now gained control over the economies of the world. Central banks have the authority to print money in their respective countries, and it is from these banks that governments must borrow money to pay their debts and fund their operations. The result is a global economy in which not only industry but government itself runs on “credit” (or debt) created by a banking monopoly headed by a network of private central banks; and at the top of this network is the BIS, the “central bank of central banks” in Basel.
Behind the Curtain
For many years the BIS kept a very low profile, operating behind the scenes in an abandoned hotel. It was here that decisions were reached to devalue or defend currencies, fix the price of gold, regulate offshore banking, and raise or lower short-term interest rates. In 1977, however, the BIS gave up its anonymity in exchange for more efficient headquarters. The new building has been described as “an eighteen story-high circular skyscraper that rises above the medieval city like some misplaced nuclear reactor.” It quickly became known as the “Tower of Basel.” Today the BIS has governmental immunity, pays no taxes, and has its own private police force.4 It is, as Mayer Rothschild envisioned, above the law.
The BIS is now composed of 55 member nations, but the club that meets regularly in Basel is a much smaller group; and even within it, there is a hierarchy. In a 1983 article in Harper’s Magazine called “Ruling the World of Money,” Edward Jay Epstein wrote that where the real business gets done is in “a sort of inner club made up of the half dozen or so powerful central bankers who find themselves more or less in the same monetary boat” – those from Germany, the United States, Switzerland, Italy, Japan and England. Epstein said:
“The prime value, which also seems to demarcate the inner club from the rest of the BIS members, is the firm belief that central banks should act independently of their home governments… . A second and closely related belief of the inner club is that politicians should not be trusted to decide the fate of the international monetary system.”
In 1974, the Basel Committee on Banking Supervision was created by the central bank Governors of the Group of Ten nations (now expanded to twenty). The BIS provides the twelve-member Secretariat for the Committee. The Committee, in turn, sets the rules for banking globally, including capital requirements and reserve controls. In a 2003 article titled “The Bank for International Settlements Calls for Global Currency,” Joan Veon wrote:
“The BIS is where all of the world’s central banks meet to analyze the global economy and determine what course of action they will take next to put more money in their pockets, since they control the amount of money in circulation and how much interest they are going to charge governments and banks for borrowing from them… .
“When you understand that the BIS pulls the strings of the world’s monetary system, you then understand that they have the ability to create a financial boom or bust in a country. If that country is not doing what the money lenders want, then all they have to do is sell its currency.”5
The Controversial Basel Accords
The power of the BIS to make or break economies was demonstrated in 1988, when it issued a Basel Accord raising bank capital requirements from 6% to 8%. By then, Japan had emerged as the world’s largest creditor; but Japan’s banks were less well capitalized than other major international banks. Raising the capital requirement forced them to cut back on lending, creating a recession in Japan like that suffered in the U.S. today. Property prices fell and loans went into default as the security for them shriveled up. A downward spiral followed, ending with the total bankruptcy of the banks, which had to be nationalized – although that word was not used, in order to avoid criticism.6
Among other collateral damage produced by the Basel Accords was a spate of suicides among Indian farmers unable to get loans. The BIS capital adequacy standards required loans to private borrowers to be “risk-weighted,” with the degree of risk determined by private rating agencies; and farmers and small business owners could not afford the agencies’ fees. Banks therefore assigned 100 percent risk to the loans, and then resisted extending credit to these “high-risk” borrowers because more capital was required to cover the loans. When the conscience of the nation was aroused by the Indian suicides, the government, lamenting the neglect of farmers by commercial banks, established a policy of ending the “financial exclusion” of the weak; but this step had little real effect on lending practices, due largely to the strictures imposed by the BIS from abroad.7
Similar complaints have come from Korea. An article in the December 12, 2008 Korea Times titled “BIS Calls Trigger Vicious Cycle” described how Korean entrepreneurs with good collateral cannot get operational loans from Korean banks, at a time when the economic downturn requires increased investment and easier credit:
“‘The Bank of Korea has provided more than 35 trillion won to banks since September when the global financial crisis went full throttle,’ said a Seoul analyst, who declined to be named. ‘But the effect is not seen at all with the banks keeping the liquidity in their safes. They simply don’t lend and one of the biggest reasons is to keep the BIS ratio high enough to survive,’ he said… .
“Chang Ha-joon, an economics professor at Cambridge University, concurs with the analyst. ‘What banks do for their own interests, or to improve the BIS ratio, is against the interests of the whole society. This is a bad idea,’ Chang said in a recent telephone interview with Korea Times.”
In a May 2002 article in The Asia Times titled “Global Economy: The BIS vs. National Banks,” economist Henry C K Liu observed that the Basel Accords have forced national banking systems “to march to the same tune, designed to serve the needs of highly sophisticated global financial markets, regardless of the developmental needs of their national economies.” He wrote:
“[N]ational banking systems are suddenly thrown into the rigid arms of the Basel Capital Accord sponsored by the Bank of International Settlement (BIS), or to face the penalty of usurious risk premium in securing international interbank loans… . National policies suddenly are subjected to profit incentives of private financial institutions, all members of a hierarchical system controlled and directed from the money center banks in New York. The result is to force national banking systems to privatize … .
“BIS regulations serve only the single purpose of strengthening the international private banking system, even at the peril of national economies… . The IMF and the international banks regulated by the BIS are a team: the international banks lend recklessly to borrowers in emerging economies to create a foreign currency debt crisis, the IMF arrives as a carrier of monetary virus in the name of sound monetary policy, then the international banks come as vulture investors in the name of financial rescue to acquire national banks deemed capital inadequate and insolvent by the BIS.”
Ironically, noted Liu, developing countries with their own natural resources did not actually need the foreign investment that had trapped them in debt to outsiders:
“Applying the State Theory of Money [which assumes that a sovereign nation has the power to issue its own money], any government can fund with its own currency all its domestic developmental needs to maintain full employment without inflation.”
When governments fell into the trap of accepting loans in foreign currencies, however, they became “debtor nations” subject to IMF and BIS regulation. They were forced to divert their production to exports, just to earn the foreign currency necessary to pay the interest on their loans. National banks deemed “capital inadequate” had to deal with strictures comparable to the “conditionalities” imposed by the IMF on debtor nations: “escalating capital requirement, loan writeoffs and liquidation, and restructuring through selloffs, layoffs, downsizing, cost-cutting and freeze on capital spending.” Liu wrote:
“Reversing the logic that a sound banking system should lead to full employment and developmental growth, BIS regulations demand high unemployment and developmental degradation in national economies as the fair price for a sound global private banking system.”
The Last Domino to Fall
While banks in developing nations were being penalized for falling short of the BIS capital requirements, large international banks managed to escape the rules, although they actually carried enormous risk because of their derivative exposure. The mega-banks succeeded in avoiding the Basel rules by separating the “risk” of default out from the loans and selling it off to investors, using a form of derivative known as “credit default swaps.”
BIS Tower Building, Basel
Botta 1 Building, Basel
However, it was not in the game plan that U.S. banks should escape the BIS net. When they managed to sidestep the first Basel Accord, a second set of rules was imposed known as Basel II. The new rules were established in 2004, but they were not levied on U.S. banks until November 2007, the month after the Dow passed 14,000 to reach its all-time high. The economy was all downhill from there. Basel II had the same effect on U.S. banks that Basel I had on Japanese banks: they have been struggling ever since to survive.8
Basel II requires banks to adjust the value of their marketable securities to the “market price” of the security, a rule called “mark to market.”9 The rule has theoretical merit, but the problem is timing: it was imposed ex post facto, after the banks already had the hard-to-market assets on their books. Lenders that had been considered sufficiently well capitalized to make new loans suddenly found they were insolvent. At least, they would have been insolvent if they had tried to sell their assets, an assumption required by the new rule. Financial analyst John Berlau complained:
“The crisis is often called a ‘market failure,’ and the term ‘mark-to-market’ seems to reinforce that. But the mark-to-market rules are profoundly anti-market and hinder the free-market function of price discovery… . In this case, the accounting rules fail to allow the market players to hold on to an asset if they don’t like what the market is currently fetching, an important market action that affects price discovery in areas from agriculture to antiques.”10
Imposing the mark-to-market rule on U.S. banks caused an instant credit freeze, which proceeded to take down the economies not only of the U.S. but of countries worldwide. In early April 2009, the mark-to-market rule was finally softened by the U.S. Financial Accounting Standards Board (FASB); but critics said the modification did not go far enough, and it was done in response to pressure from politicians and bankers, not out of any fundamental change of heart or policies by the BIS.
And that is where the conspiracy theorists come in. Why did the BIS not retract or at least modify Basel II after seeing the devastation it had caused? Why did it sit idly by as the global economy came crashing down? Was the goal to create so much economic havoc that the world would rush with relief into the waiting arms of the BIS with its privately-created global currency? The plot thickens … .
April 19, 2009
Posted by tetrahedron in Uncategorized.Tags: aig, auto industry, bank of america, ben bernanke, chase manhattan, citigroup, collapse, fraud, jp morgan, larry summers, ponzi scheme, scam, tim geithner, Wall Street
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Wall Street is in the midst of a huge rally, primarily sparked by two recent occurrences. The first was the “surprising” announcement that Citigroup, JP Morgan Chase and Bank of America — major “zombie” banks laden with “toxic assets,” on the verge of collapse, and the recipients of billions in government (US taxpayer) bailout money — mysteriously posted profits this year. Wells Fargo, regarded as one of the healthier big banks, and a recipient of $25 billion, also reported a profit last week, rallying the stock markets again before the Easter holiday. We now know, based on insider reports from securities traders, that a massive fraud and manipulation by AIG funneled “bailout” funds (US taxpayer money) to AIG’s counterparties, the very same big “toxic” banks that are now posting profits: Exclusive: Big Banks’ Recent Profitability Due to AIG Scam? The second big event occurred when the Obama administration and Congress threw out the “Mark to Market” rules. Banks and financial institutions, which by law were previously obligated to price, or “mark,” the toxic holdings to the current market price (honestly take huge losses), now have carte blanche to magically erase all of these losses, and price these toxic assets however they wish. In other words, Wall Street has been given the green light to lie — with the full blessing of the Obama administration and Congress. “Toxic assets”? Gone, just like that. In yet another example of collusion and cover-up, federal regulators have told the nation’s largest banks to “keep quiet” about their performance in the Obama administration’s “stress tests”: Feds tell banks to keep quiet on outcome of stress tests This blatant cover-up, ordered at the top, prevents negative news from spoiling the bogus Wall Street rally. Obama himself will announce the results later, after he and his economic minions have had a chance to “manage” the data. So much for accountability. So much for transparency and disclosure. So much for the populist hot air and propaganda gases spewing from the Obama administration, Ben Bernanke’s Federal Reserve, Tim Geithner, and Larry Summers. The momentum from the latest fabrication and the latest fraud must not be broken. The worst is over, according to the new noise, and the constant “are we there yet?” yammering from CNBC. No, it’s already time for The Recovery, despite the fact that the worst economic crisis since the Great Depression began mere months ago, and despite the fact that the “toxins” — the magnificent bubble of derivatives, leverage, hedging and other interlocking Ponzi finance schemes that began the crisis to begin with — are still out there, still unpopped. The books are cooked and the numbers are faked anyway. Why not? Who’s going to know? So while the US auto industry is strong-armed into massive restructuring, and the common people of Main Street are told to get used to the suffering, Wall Street is not only given a free pass, but the additional gift of back-door swindles and a massive cover-up. |
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Want the truth…The Real Economy? Ookaay! March 3, 2009
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Financial manipulation is an integral part of the New World Order. It constitutes a powerful means to accumulate wealth through this, hyper-inflationary delusion.
Under the present political arrangement, those responsible for monetary policy are quite deliberately serving the interests of the financiers, to the detriment of working people, leading to economic dislocation, unemployment and mass poverty. This article has focused on how financial manipulation has served to shatter the structure of US public expenditure.
This restructuring of global financial markets and institutions (alongside the pillage of national economies) has enabled the accumulation of vast amounts of private wealth – a large portion of which has been amassed as a result of strictly speculative transactions.
This critical drain of billions of dollars of household savings and state tax revenues paralyses the functions of government spending and spurs the accumulation of a public debt, which can no longer be be financed through the emission of US dollar denominated debt. To understand what has happened: follow the money trail of electronic transfers with a view to establishing where the money has gone.
What we are dealing with is the fraudulent transfer and confiscation of lifelong savings and pension funds, the fraudulent appropriation of tax revenues to finance the bank bailouts, etc. The monetary system, which is integrated into the State budgetary process has been destabilized. The fundamental relationship between the monetary system and the real economy is in crisis.
The creation of money “out of (Notebook school paper)… thin air” threatens the value of the US dollar as an international currency. Similarly, the financing of a mammoth US budget deficit through dollar denominated debt instruments is impaired as a result of exceedingly low interest rates. Moreover, the process of household savings is undermined with interest rates close to zero.
What we have dealt with in this article is one central aspect of an evolving process of global financial collapse. The international payments system is in crisis. The economic prospects are terrifying. Bankruptcies in the US, Canada, the European Union are occurring at an alarming rate. Country level exports have collapsed, leading to a contraction of international trade Reports from the Asian economies indicate a massive increase in unemployment. In China’s Pearl River basin in Southern Guangdong province’s industrial export processing economy, some 700,000 were laid off in January. In Japan, industrial output has collapsed by more than 20 percent since December. In the Philippines, a country of 90 million people, exports collapsed by more than 40 percent in December.
Financial Disarmament
There are no solutions under the prevailing global financial architecture. Meaningful policies cannot be achieved without radically reforming the workings of the Internationale banking system.
What is required is an overhaul of the monetary system including the functions and ownership of the central bank, the arrest and prosecution of those involved in financial fraud both in the financial system and in governmental agencies, the freeze of all accounts where fraudulent transfers have been deposited, the cancellation of debts resulting from fraudulent trade and/or market manipulation. .
People across the land, nationally and internationally must mobilize. This struggle to democratise the financial and fiscal apparatus must be broad-based and democratic encompassing all sectors of society at all levels, in all countries. What is ultimately required is to disarm the financial establishment: Source: Michel Chosssudovsky.
-confiscate those assets which were obtained through fraud and financial manipulation.
-restore the savings of households through reverse transfers
-return the bailout money to the Treasury, freeze the activities of the hedge funds. .
- freeze the gamut of speculative transactions including short-selling and derivative trade.
Black History, What…? February 6, 2009
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Of all the things, why do we need a month for black people to be recognized for their contribution to america? If black people can have a month out of the year to honor and appreciate their deeds, then why can’t white people have one; too! And if you feel that others have not made a contribution to our society, collectively speaking, for the sake of “American change” let’s stop the nonsense, the brow beating, and the hypocritical blundering , where you gotta have a day for this and a day for that, hell, it means nothing if some-body’sgotta tell ya when to acknowledge someone for the good they’ve done, or the bad, and if you’re going to acknowledge some, you shouldn’t be so hypocritical and undermine the accomplishments of others. They too, have made their contributions and have feelings as well. if you are one that’s bothered by the illegitimacy and the hypocrisy of our democracy, then let me hear from you, or am I the only one with the ability to see how this climate… hurts us as a nation, and a people. Are you willing to take a stand and be ostracized whether you are black or white or any other color on the color spectrum.
