WATCH OUT!!! DON’T DO IT!!! READ PEOPLE!!! November 1, 2009
Posted by tetrahedron in Uncategorized.Tags: Obama, cdc, SWINE FLU, VACCINE, FLU, SCIENTIST, government, influenza, fda, h1n1, world health organization
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President Obama and his top health officials are engaging in a major public relations effort to divert attention away from whether its swine flu vaccine is effective and safe – to whether there is enough of it to go around. And the media, as always, is cooperating fully. This echoes the way media debate was manipulated during the Vietnam and Iraq Wars. Instead of debating whether we should even be fighting those wars, the media debated only whether we were using the correct military strategy.
Increasing numbers of scientists and doctors are issuing harsh criticisms of the Government’s plan to vaccinate (forcibly if necessary) virtually the entire U.S. population with what they claim is a poorly tested vaccine that is not only ineffective against swine flu, but could cripple and even kill many more people than it helps.
The CDC’s public relations campaign has been running “scare” ads that portray swine flu as a full-blown “pandemic” responsible for snuffing out countless lives, and which, unless stopped by universal vaccination, could kill millions of American citizens. But scientists and health officials throughout the world have called the governments claims unjustified and deliberately misleading.
For example, Dr. Anthony Morris, a distinguished virologist and former Chief Vaccine Office at the U.S. Federal Drug Administration (FDA), states that “There is no evidence that any influenza vaccine thus far developed is effective in preventing or mitigating any attack of influenza” and that “The producers of these vaccines know they are worthless, but they go on selling them anyway.”
And in November 2007, the UK newspaper The Scotsman, made public warnings by the inventor of the “flu jab,” Dr. Graeme Laver. Dr. Laver was a major Australian scientist involved in the invention of a flu vaccine, in addition to playing a leading scientific role in the discovery of anti-flu drugs. He went on record as saying the vaccine he helped to create was ineffective and [that] natural infection with the flu was safer. “I have never been impressed with its efficacy,” said Dr. Laver.
We hear the assumption being made by the Centers for Disease Control (CDC) that the number of deaths from the H1N1 virus is at pandemic levels and now a “national emergency.” One would assume that with all of its resources, the New York Times’ October 26 front page story on the CDC’s statistics would be accurate: 20,000 hospitalizations and 1,000 deaths due to the swine flu. However, this is all fiction. And it is a fiction solely based upon the CDC’s own contradictory statements and actions.
Our independent investigations into the clinical trials and statistical studies of influenza vaccines reveal glaring discrepancies. Let us not forget that it is this same New York Times, with its “star” reporter Judith Miller, who led America into believing that Saddam Hussein possessed weapons of mass destruction, tried to purchase yellow cake uranium from Niger, and had dealings with al-Qaeda. And let us also remember that it is the same CDC and health officials in Washington, including President Ford and his top health advisor Joseph Califano, who pushed through and propagandized an untested vaccine during the 1976 swine flu scare, which resulted in thousands of severely neurologically damaged Americans and about 500 reported deaths. Aside from permanent paralysis, many of these vaccine victims also underwent torturous processes for many years to get the government to recognize their illnesses and help cover their costs. Not only was the CDC’s prediction and vaccination campaign for the 1976 flu season a total disaster, it also turned into a deadly scandal, witnessed across the United States on 60 Minutes when Dr. David Sencer, then head of the CDC, confirmed that the vaccine was never field tested, that there were only several reported incidents of H1N1 infection and none of these had been officially confirmed, and then lied about the CDC having no prior evidence that the swine flu vaccine could cause severe and permanent neurological damage. The end result from the 1976 debacle cost the government $3.5 billion in damages, two-thirds were for severe neurological injury and death directly due to the CDC’s vaccination campaign.
Therefore, being anti-vaccine or pro-vaccine is not the most urgent issue. What is critical is whether or not there is legitimate, sound science to support either position; in this regard, the vaccine manufacturers and our federal health agencies have failed in the past, and continue to fail today. And they fail dismally. There is absolutely no evidence for sound-scientific protocol or anything resembling a gold-standard behind the swine flu infection statistics and vaccine efficacy and safety clinical trials to support Obama’s and his health advisors’ claims. Instead, the reports on hospitalizations and deaths due to the H1N1 virus are grossly distorted. What we are really witnessing is “official” science and statistics that are little more than propaganda.
One unfortunate development over the years is the notion that there is such a thing as a “flu season.” The truth is that we move annually into periods where there are dramatic increases in flu-like causing pathogens, however, the majority of these are unrelated to any strain of influenza virus. There can between 150 and 200 different infectious pathogens—adenovirus, rhinovirus, parainfluenza, the very common coronavirus and, of course, pneumonia—that produce flu-like symptoms, and worse, during a “flu season.” For example, how many people have heard of bocavirus, which is responsible for bronchitis and pneumonia in young children, or metapneumovirus, responsible for more than 5 percent of all flu-related illnesses? This is true during every flu season and this year is no different. Furthermore, all flu vaccinations, including the swine flu, are useless for protecting people from these many prevalent infectious organisms.
If we take the combined figure of flu and pneumonia deaths for the period of 2001, and add a bit of spin to the figures, we are left believing that 62,034 people died from influenza. The actual figures determined by Peter Doshi, then at Harvard University, are 61,777 died from pneumonia and only 257 from flu. Even more amazing, among those 257 cases only 18 were confirmed positive for influenza. A separate study conducted by the National Center for Health Statistics for the flu periods between 1979 through 2002 revealed the true range of flu deaths were between 257 and 3006, for an average of 1,348 per year.
The recent CBS Investigative Report, published on October 21, is one example. After the CDC refused to honor CBS’s Freedom of Information request to receive flu infection data for each individual state, the network performed independent outreach to all fifty states to get their statistics. Their report contradicts dramatically the CDC’s public relations blitz. For example, in California, among the approximate 13,000 flu-like cases, 86 percent tested negative for any flu strain. In Florida, out of 8,853 cases, 83 percent were negative. In Georgia and Alaska, only 2.4 percent and 1 percent respectively tested positive for flu virus among all reported flu-like cases. If the infectious-rate ratios obtained by CBS are accurate, the CDC’s figures are significantly reduced and agree with earlier predictions that the H1N1 virus will be simply an unwelcomed annoyance. So we are in the midst of an enormous medical hoax, a design and purpose that has yet to unfold completely, that will nevertheless reap huge revenues for the vaccine industrial complex.
Another example is a recent alarmist report issuing from Georgetown University, also usurped by federal health officials and their multimedia comrades to fuel a campaign of fear and panic. The report announced that over 250 students were infected by swine flu when in fact none of these students were tested for H1N1 infection. The university’s figure was based solely on a count of student visits to the health clinic and calls into an H1N1 hotline.
This is not the first time the CDC’s predictions for influenza strains have been overstated and miscalculated. In an interview on Swedish television, Dr. Tom Jefferson, head of vaccine studies at the prestigious international Cochrane Database Collaboration, after reviewing hundreds of influenza studies and statistical analyses, has said the WHO’s and CDC’s “performance is not very good.” And in an ITN News interview last month, Jefferson called the swine flu pandemic a “juggernaut they [the WHO, government agencies and vaccine makers] created.” For the 1992-1993 season, the prediction was off by 84 percent. For the 1994-1995 season, it was off 43 percent for the primary strain and off 87 percent and 76 percent for two other strains. The Laboratory Center for Disease Control’s study comparing vaccine strains with the strains appearing during the 1997-1998 season found the match was off by 84 percent. Again Dr. Jefferson in a Der Spiegel interview remarked,
“there are some people who make predictions year after year, and they get worse and worse. None of them so far have come about, and these people are still there making these predictions. For example, what happened with the bird flu, which was supposed to kill us all?… Swine flu could have even stayed unnoticed if it had been caused by some unknown virus rather than an influenza virus… An influenza vaccine is not working for the majority of influenza-like illnesses because it is only designed to combat influenza viruses. For that reason, the vaccine changes nothing when it comes to the heightened mortality rate during the winter months.”
Our review of all clinical trial studies conducted by the H1N1 vaccine makers for pre-licensing in the American market—CSL, Novartis, Sanofi-Pasteur, Medimmune and now GlaxoSmithKline—reveals they were poorly designed and feebly executed. Any professor in molecular biology or virology would fail a graduate student who presented a paper relying on research conducted in the manner of the studies the vaccine corporations submit to the FDA. Nevertheless, it is this lack of sound randomized, double-blind controlled placebo studies, particularly for inactivated virus vaccines, that our government is declaring definitive and is using to justify mass vaccination of our population.
Last week, Switzerland’s health authorities rejected Novartis’ new swine flu vaccine, Celtura, being targeted for women and children, because the company’s studies were insufficient to guarantee its safety. In addition, the new Novartis vaccine, which uses a cell base from dogs, was found to be contaminated with canine-specific bacteria. The Swiss newspaper, Tagesanzeiger, also noted there remains some suspicion that Novartis’ new vaccine may be a repackaging of an earlier 2008 vaccine responsible for killing almost two dozen homeless people during an illegal clinical trial in Poland. This is the same Novartis whose Fluvirin H1N1 vaccine being distributed in the US relied only on a hasty clinical efficacy and safety trial enrolling only a small number of health adults. Novartis likely remains unperturbed. The Swiss pharmaceutical giant has reported a $6.1 billion profit so far this year and expects to boost sales for the final quarter with is swine flu vaccine.
In July, the CDC announced it would cease testing and counting H1N1 virus infections. Their public reason was simply that they are convinced there is a pandemic and, therefore, accurate monitoring was unnecessary. On August 30, the CDC declared the states should report influenza and pneumonia-associated hospitalizations and deaths together, not singling out actual cases of H1N1 infection if there happen to be any actually confirmed from a laboratory. This has always been the CDC’s policy, and the 36,000 figure of annual flu deaths repeated ad nausea on their website and spewed from the media’s health pulpits for several years straight, does not distinguish between pneumonia, influenza and other flu-like pathogenic deaths. Perhaps it would make very little difference because the current rapid diagnostic tests for the H1N1 virus can range in only 10-50 percent accuracy.
Elsewhere in the world, particularly in Europe, civilians are increasingly rejecting the H1N1 vaccine. Recent polls in Germany and Austria show only 13 and 18 percent respectively willing to take the shot. In Sweden, four vaccine related deaths have been announced and almost 200 healthcare workers have reported becoming more seriously ill from the vaccination than they might have from a flu infection. In the US, anywhere from 90-99 percent of adverse events go unreported.
If people would simply shut off the CDC’s supported propaganda noise being blasted across the airwaves and newspapers— the spectacle of newscasters being inoculated, interviews with government health officials or private doctors and academics receiving consultation fees from drug makers, and the drivel of the New York Times—and simply do their homework, Americans would wake up and realize the hoax behind the swine flu pandemic. All of the information is before us. Nothing is hidden. All the contradictions and hypocrisies are contained within the massive vaccine industrial complex—including the government health agencies and professional medical associations. The lie is too large for them to not expose themselves if we simply look.
Richard Gale is the Executive Producer of the Progressive Radio Network and a former Senior Research Analyst in the biotechnology and genomic industries.
Medical slavery,”death by your attending physician” October 23, 2009
Posted by tetrahedron in Uncategorized.Tags: America, Wall Street, fraud, pharmaceutical industrial complex, health insurance, ama, cdc, hhs, nih, national institute of health, gardisil, hpv, lou gehrig's disease, merck, cymbalta, zyprexa, eli lilly
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It has been a particularly bad month for the pharmaceutical industrial complex in its ongoing litigations in American courts. Among the main pharmaceutical headlines, Merck’s Gardasil vaccine for HPV, now being widely administered to pre-teens, was found to be linked to amyltrophic lateral sclerosis, commonly known as Lou Gehrig’s disease; following a $1.4 billion fine in promoting one of its blockbuster drugs Zyprexa off-label, deceptive correspondence was uncovered by Eli Lilly gaming the system again by promoting another one of its drugs, Cymbalta, off-label for fibromyalgia; AstraZeneca was fined $160 million for scamming the Medicaid system in Kentucky after being fined $215 million for ripping off Alabama; Glaxo lost a Pennsylvania trial for failing to warn doctors and pregnant women of the dangers of its antidepressant drug Paxil related to birth defects; and Pfizer scored a record-breaking fine of $2.3 billion for illegally marketing several drugs over the years: Bextra, Zyvox, Geodon and Lyrica. These kinds of charges, among the many others, have become a habit for drug makers for the past dozen years.
When we speak of the pharmaceutical industry complex, it does not refer solely to private drug manufacturers. The complex, like a Matrix that holds captive the health of the nation in medical slavery by its own design and manipulation, is a consortium, a spiders’ web woven with financial attachments throughout the medical profession. In addition to the pharmaceutical and medical device firms, this complex includes every government health agency—the Food and Drug Administration (FDA), the Centers for Disease Control (CDC), the National Institutes of Health (NIH), and or course the Department of Health and Human Services (HHS)—as well as drug lobbying firms now employing a large number of former Congresspersons, insurance and HMO companies, all of the leading professional medical associations such as the American Medical Association (AMA) and the American Psychiatric Association (APA), the majority of medical schools and their research departments who are heavily funded by drug money, many of the most prestigious medical journals, and ultimately all of this filtering downward to the physicians who diagnose our illnesses and prescribe our medications and treatments.
America is rightly regarded as having led much of the world in many qualitative innovations in all fields. That reputation is duly deserved. However, there is a new dynamic at work that is causing this reputation to be challenged. We are a nation that prides itself in our humanity, our sense of fairness, but today there is a growing concern that we are now being monikered as a country held hostage to a national security complex, which includes the largest military complex in the world, an obscenely expensive healthcare system and self-serving bureaucracies and private industries that serve their own financial ends. So it is not surprising that after spending this year $2.6 trillion on healthcare, we have such little health to show for it. There are second world countries where people live longer and healthier lives. And we have the worst healthcare among developed nations. So what have we received for our $2.6 trillion.
As the current healthcare debate continues to rage over in sundries—the $200 billion net profit health insurance industry—the entire deliberation over disease prevention and treatment has been overshadowed. And amidst this partisan and ideological anarchy, perpetuated by our elected officials, the media, and fueled by the pharmaceutical complex, two other areas America excels as a leader above all other developed nations is in being the premier breeding ground for the pharmaceutical industrial complex’s greatest profits and, second, as the world’s exemplar in medical fraud and corruption. The fairy tale of America’s health as being best served by drugs is a creation of this complex, a lullaby that brings ill citizens repeatedly to their doctors and hospitals for diagnosis and treatment, or simply to deny healthcare altogether to the uninsured.
The country is pacified by a blind belief that the drugs being prescribed to them have been proven safe because our government health agencies have our physical health and well-being in their best intentions. This is a lie, an extraordinarily deadly lie. Iatrogenesis, medically induced injury and death, is the number one cause of death in American medicine annually, since only a small percentage of these deaths are actually reported. Each year more Americans die from preventable deaths due to our medical system than all military causalities in the two world wars combined. This is tantamount to medical genocide. One of the major causes of these deaths is the overmedication of Americans in all ages. The constant need for profits has created an environment that allows the pharmaceutical industrial complex to use their enormous financial and political clout to literally make normal life experiences into new diseases, such as social anxiety disorder, in order to sell its drugs. The pharmaceutical industry has been given the authority to pathologize life, with the drugging of our children, seniors, etc. For example, the leading cause of AIDS deaths today is a result of liver failure. This is not a condition of HIV infection, but a direct result of the anti-HIV drug AZT. Is it little wonder then that we are being intimidated and frightened into believing that mandatory vaccination is being touted even though the science of efficacy and safety, even the need, for these new swine flu vaccines is patently unproven. It is perhaps one of the largest falsehoods ever perpetuated on humanity that dwarfs the sleaze on Wall Street. ( global research )I will talk more on this four part series further on, stay blogged…
The Dogs Are In The M—-F——Streets! September 16, 2009
Posted by tetrahedron in Uncategorized.Tags: american, white supremist, whitehouse
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Hey People, Take a moment and resonate on what was said the night President Obama was addressing the congress, for those of you who didn’t see it; It was Congressman Joe Wilson surrounded by 9 other Congressmen, 3 to his left, 3 to his right, 3behind him and 3 in front of him , which put him in the middle; very cunnung and crafty, as all nine were whitemen I should say, that still cannot believe there’s an intelligent black man in charge, and speaking to them as their boss and the “new” leader of the free world. This Joe Wilson is the same leader of the Sons of the Confederate Veterans, who in 2000 led a campaign where they were instrumental in lobbying for the support of the confederate flag to continue flying over the state capitol building in South Carolina. This Joe Wilson has a propensity to turn his nose up and even perpetuate bigotry among the rank and file. He has always been instrumental in initiating racist behavior. Wilson very clearly does not like being lectured and rebuked by the brains for brains black president in such a majestic venue. I hate to admit that ever increasing lunacy of those impulsive efforts to paint our first black president as some brother from a another planet…socialist, racist, marxist, nazi, communist, and even someone that would kill old people, a dictator sliding around on his belly to try and indoctrinate kids—Never in the history of any President of the United States giving a speech to the congress, has there ever been such an outburst, calling the president a”LIAR” right to his face during a speech. Even though former President Bush 41—while hawking a fake case to the congress concerning going to war with Iraq which was based on lies, no one called him a liar; Clinton and his executed plot that killed commerce secretary Ron Brown and 34 others of his administration during his presidency, FDR to Joe McCarthy, John Birchers agianst JFK, etc. It was Rep. Jim Clyburn that called out Bill Clinton on his racially charged attacks on Barack Obama during the primaries. This incident with Wilson prompted Nancy Pelosi to persue a formal resolution reprimanding Wilson.
But Wilson’s total disregard for the office of the president—- This is clearly a case of the “Revolution” beginning, and everyone is treating it as just another page of america’s dark past. This is serious business people, this is what I call “over the top”. These are not your ordained congressmen and women, these are white supremists crawling out from under every rock and infested area in america, sitting in positions of authority placed there by the powers, which has to provoke serious thought to all those non white races out there.
We are at a time now when all people should come together despite our color, origin, sexual orientation, creed, etc… But the fact that the economy is on the brink of disaster, the empire is being lost, hunger is on the rise, the H1N1 vaccine is about to pushed down the throats of the american people by way of marshall law, under the command of dick cheney, george bush, and donald rumsfeld (who are the owners of the tamiflu vaccine manufacturing)… it’s obvious that this is not of concern to this republican and some yes, white, democratic congressional members. There is one common gound they all agree upon and that is to see Barack Obama DEAD and if they can’t kill him, then they want to delegitimatize the office of the president to the lowest common denominator. The dogs are in the street.
It seems as though Obama may be out of touch with reality. I say this because, Silence gives consent… seeing as though he wasn’t around in america during the major civil rights struggles and movement, nor has he been denied a taxi, or got beaten up by the police, at least not in Hawaii. I say that because of the way he handled the outburst by Joe Wilson, when Nancy Pelosi’s look was everything but casual, because, she and the rest of his administration knows, that was no accidental outburst, but a contrived one in fact. Race in america has never been so turbulent and intense as it is now, now, that there’s a black man and a black woman living in the white house.
Some people just can’t believe a black man is president and they will never accept it.
There is no civility there at the capitol; these members of congress are intent on getting things going with this “shadow government” that no one seems to be concerned about other than myself and a small few. Read about the shadow government on my blog and perhaps you all might wake-up before it’s too late, if not already.
Bill Maher had it right when he said that the 70 million people that got Barack Obama elected should be thronging in the streets, demonstrating and raising hell over the outright lies and disrespect being directed toward OUR PRESIDENT OF THESE UNITED STATES…now is the time that we who put Barack in office should be loudly confronting the lunatic fringe of “cracker america” (as Bill put it so succinctly) instead of sitting home on the couch yelling at the TV.
We 70 million who supported Obama should be organizing our own March on Washington and we won’t have to use a 10 year old picture to prove our numbers! Come on! such blatant deception ought to make you scream with outrage! Why are you so silent???
August 7, 2009
Posted by tetrahedron in Uncategorized.Tags: banks, billions, bonuses, citigroup, general motors, goldman sachs, jp morgan, merrill lynch, TARP, taxpayer, wal-mart, Wall Street
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Why do we(taxpayer) coninue to ignore the fact that the nine mega-banks graced with $125 billion in taxpayer bailout money under the Troubled Asset Relief Program (TARP) were reported last week to be paying out billions of dollars in bonuses to their executives. At least 4,793 bankers and traders received more than $1 million each in bonus payments, although it was one of Wall Street’s worst years on record. After months of investigating banker compensation, New York Attorney General Andrew Cuomo said on July 30, “The repeated explanation from bank executives that bonuses are tied to performance in a manner designed to promote (national economic) growth does not appear to be accurate.”
To say that it was an understatement would be an understatement. The bonuses paid to executives not only were not tied to national economic growth but were not even tied to some reasonable percentage of company profits. In fact they were generally greater than the net income of the banks. Morgan Stanley, for example, had $1.7 billion in earnings and paid $4.475 billion in bonuses. Goldman Sachs had $2.3 billion in earnings and paid $4.8 billion in bonuses. JP Morgan Chase had $5.6 billion in earnings and paid $8.69 billion in bonuses. JP Morgan’s largesse involved showering 1,626 of its favorite execs and traders with bonuses of $1 million or more. For most people, a “bonus” is a few hundred dollars at Christmastime. A million dollars is what you work a lifetime to try to save, and few people reach that goal. Even Citigroup and Merrill Lynch, which have been called zombie banks, paid $5.33 billion and $3.6 billion in bonuses, respectively — although they lost more than $27 billion each in earnings. The bar for merit is apparently so low that you’re entitled to a bonus if your zombie bank simply keeps breathing!
These blatantly inflated bonuses are just the last in a litany of abuses by those same profligate banks that nearly destroyed our economic system. If the derivatives on their books were “marked to market” (valued at what they would fetch on the market), the banks would be bankrupt, and their employees would be out of a job. Instead, they have been allowed to inflate the value of their “toxic” assets – and sell them to the U.S. government at the inflated value. Then they have taken the money they got from the government at these inflated prices and paid back the TARP money they received – allowing them to post inflated earnings and reward themselves with inflated bonuses! Many people feel that these bankers are thieves stealing from the public till who should be looking at jail time. But who is there to stop their parade of outrages? No one in Congress, the White House, or the news media is calling them on the carpet for it. As Senator Dick Durbin said recently, Wall Street owns Congress; and that is also true of the major media.
We may not be able to stop them, but we can join them. We the people need to play the bankers’ game ourselves. Even corporate giants such as General Motors and WalMart have now gotten into the banking game and are easing their credit problems by forming their own banks. The U.S. public sector is late to the party. States, counties, public universities could take the lucrative system the private banking industry has created for itself and turn it to productive use in the public interest.
Keeping the Banks Honest with Some Public Competition
In President Obama’s July 17 weekly address, he repeated his call for a public option in health care, in order to “increase competition and keep insurance companies honest” and to “put an end to the worst practices of the insurance industry.” The same call needs to be made for a public option in banking. In some countries, publicly-owned banks have operated alongside privately-owned banks for decades; and in those countries, the current crisis has served to show that public banks generally do a better job of serving the people and protecting their interests than their private counterparts.
In Canada, the trendsetter in public banking is the province of Alberta. Alberta’s publicly-owned banking systemwas initiated during the Great Depression to give the private banks a run for the public’s money. According to a government publication titled “These Are the Facts: An Authentic Record of Alberta’s Progress, 1935-1948”:
“The Treasury Branch system enables the people to pool their financial resources and to use these resources for their mutual benefit thereby enabling them to progressively free themselves from the stranglehold of the existing financial monopoly. These Treasury Branches provide effective competition for chartered banks thereby ensuring banking services at reasonable rates.”
From 1929 to 1933, the average annual income in Alberta had fallen from $548 to $212, a staggering 61 percent drop. Interest payments continued to bleed the farmers of cash, and taxes had increased. In 1935, Albertans decided they wanted a change and swept the Alberta Social Credit Party into power. In 1938, the system of Alberta Treasury Branches was set up literally as a branch of the provincial government. The stated goal of the ATB was to “provide the people with alternative facilities for gaining access to their credit resources.” Bankers initially scoffed at Alberta’s attempts to establish a competing economic system, but Albertans had high hopes and rushed to deposit their meager savings in the Treasury Branches. The government invested in the ATB only once, contributing $200,000 in 1938. That was all that was necessary, as the system was self-funding after that. By 1946, the ATB was turning an annual profit of $65,000. According to a booklet titled “Albertans Investing in Alberta 1938-1998,” by 1998 the ATB had remitted $68 million to the provincial government.
In India, public sector banks also operate alongside private sector banks. Privatization has made significant inroads into the banking system but fully 80 percent of the country’s banks are still government-owned. Before the current crisis, neoliberals criticized India’s public banks for being oriented more toward serving the customer than turning a profit; but studies showed that the public sector banks were doing better than the private sector banks in terms of customer satisfaction. Today, when the credit crisis has hit the aggressive private international banks particularly hard, customers are fleeing into the safety of public banks, which have emerged largely unscathed from the credit debacle. The public banks have been credited with keeping the country’s financial industry robust at a time when the private international banks are suffering their worst crisis since the 1930s.
In China, private-sector banking has also made some inroads; but state-owned banks still predominate. In a article in June 2009 “The Chinese Puzzle: Why Is China Growing When Other Export Powerhouses Aren’t?”, Brad Setser noted that nearly all countries relying heavily on exports for growth have experienced major downturns and remain in the doldrums — except for China. When China’s external markets fell off, the government turned its credit machine inward to domestic development. Its state-owned banks engaged in a huge increase in lending, with local governments and state enterprises borrowing on a large scale. The result was to create a real fiscal stimulus that put workers to work and got money circulating again in the economy.
In the United States, the trendsetter in public banking is the state of North Dakota, which has owned its own bank for nearly a century. North Dakota is one of only two states (along with Montana) that are currently not facing short falls. Ever since 1919, North Dakota’s revenues have been deposited in the state-owned Banks. Under the “fractional reserve” lending scheme open to all banks, these deposits are then available for leveraging many times over as loans. Other banks in the state do not see the BND as a threat because it partners with them and backstops them, serving as a sort of central bank for the state. BND’s loans are not insured by the Federal Deposit Insurance Corporation (FDIC) but are guaranteed by the state. North Dakota has plenty of money for student loans, makes 1% loans to startup farms, has the lowest job loss rate in the country, and is generally not feeling the pinch of the credit crisis at all.
Theory and Practice: The Proof Is in the Pudding
A bank charter brings with it the privilege of simply creating cash as an accounting entry on the bank’s books. The flaw in the private banking scheme is that banks create the principal portion of their loans but not the interest, which is continually drawn off the top as profit. New borrowers must continually be found to take out new loans to create this extra profit, making private banking effectively a Pyramid Scheme; and like any pyramid scheme, it has mathematical limits. Today, those limits appear to have become a reality. Personal and national debts have gotten so large relative to incomes that it is no longer possible to maintain the fiction of solvency. We soon won’t have the money even to pay the interest on our existing debts, let alone to incur new ones. Public banking does not suffer from that flaw, because interest is not drawn out of the system but is returned to the public coffers. Public banking is thus mathematically sound and sustainable.
That is the theory, but there is nothing so persuasive as putting it to the test. Like with the public option in health care, we need to pit the public banking option against the private banking option and see which works best. My money is on the public option,where is yours?
Pretext to Shadow Government August 2, 2009
Posted by tetrahedron in Uncategorized.Tags: commander in chief, level 6, miltary, national emergency, pandemic, pentagon, president, robert gates, u.s. northcom, vaccines, WHO
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US Northern Command
Much of the groundwork for the intervention of the military has already been established. There are indications that these “regional teams” have already been established under USNORTHCOM, which has been involved in preparedness training and planning in the case of a flu pandemic . The implications are far-reaching.
“The proposal is awaiting final approval from Defense Secretary Robert Gates.
The officials would not be identified because the proposal from U.S. Northern Command’s Gen. Victor Renuart has not been approved by the secretary.
The plan calls for military task forces to work in conjunction with the Federal Emergency Management Agency. There is no final decision on how the military effort would be manned, but one source said it would likely include personnel from all branches of the military.
It has yet to be determined how many troops would be needed and whether they would come from the active duty or the National Guard and Reserve forces.
Civilian authorities would lead any relief efforts in the event of a major outbreak, the official said. The military, as they would for a natural disaster or other significant emergency situation, could provide support and fulfill any tasks that civilian authorities could not, such as air transport or testing of large numbers of viral samples from infected patients.
As a first step, Gates is being asked to sign a so-called “execution order” that would authorize the military to begin to conduct the detailed planning to execute the proposed plan.
Orders to deploy actual forces would be reviewed later, depending on how much of a health threat the flu poses this fall, the officials said.” (CNN, Military planning for possible H1N1 outbreak, July 2009, emphasis added)
The decision points towards the militarization of civilian institutions, including law enforcement and public health.
A nationwide vaccination program is already planned for the Fall.
The pharmaceutical industry is slated to deliver 160 million vaccine doses by the Fall, enough doses to vaccinate more than half of America’s population.
The Pentagon is already planning on the number of troops to be deployed,. with a view to supporting a mass vaccinaiton program.
It is worth noting that this involvement of the military is not being decided by the President, but by the Secretary of Defense, which suggests that the Pentagon is, in a key issue of of national interest, overriding the President and Commander in Chief. The US Congress has not been consulted on the issue. This is nothing more than a ploy to undermined President Obamas’ authority simply to undergo this shadow government put in place by Donald Rumsfeld, Dickless Cheney, and of course George W. Bush. Listen, people there is, no, ep-andemic or anything of a such, this product called TAMIFLU is owned by those three listed above. You have to ask yourself some burning questions (ie)Why is there no national emergency put in place? Why use a level 6 pandemic from the WHO as a pretext?this is planned and systematic overthrow of the Whitehouse to bring forth this “Shadow Government” Continuation of Government(COG)and (COOP)…more ways to enslave the people because in order to implement a program of that magnitude you have to put the whole country under martial law…
This decision to mobilise the Armed Forces in the vaccination campaign is taken in anticipation of a national emergency. Although no national emergency has been called, the presumption is that a national public health emergency will occur, using the WHO Level 6 Pandemic as a pretext and a justification.
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
Posted by tetrahedron in Uncategorized.add a comment
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
Posted by tetrahedron in Uncategorized.add a comment
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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. |
