Fed Says “Recovery” May Lose Steam
CNNMoney
April 7, 2010
Federal Reserve policymakers are worried that the economic recovery may lose steam going forward, despite recent moderate improvements, according to minutes from their recent policy meeting released Tuesday.
Though the latest data suggest an uptick in economic activity, Fed members believe that some sectors of the economy could stifle overall growth, the minutes from the March 16 meeting said.
“While participants saw incoming information as broadly consistent with continued strengthening of economic activity, they also highlighted a variety of factors that would be likely to restrain the overall pace of recovery, especially in light of the waning effects of fiscal stimulus and inventory rebalancing over coming quarters,” the minutes said.
http://www.infowars.com/fed-says-recovery-may-lose-steam/
TODAY'S CHART
Current Track Record
Thursday, April 8, 2010
Jobless Claims on the Rise Again
Jobless Claims on the Rise Again
Ruth Mantell
MarketWatch
April 8, 2010
The number of people applying for unemployment benefits rose 18,000 to a seasonally adjusted 460,000 in the week ended April 3, the Labor Department reported Thursday.
Economists surveyed by MarketWatch had expected a result of 442,000. The four-week average of initial claims — a better gauge of employment trends than the volatile weekly number – rose 2,250 to 450,250.
A Labor Department official said interpretation of the data now is clouded by the timing of the Easter holiday, which makes it difficult to properly adjust for seasonal factors.
Still, initial claims are down almost 30% from the same period of the prior year. While economists say recent data indicate that job destruction has moderated, claims would have to fall to about 400,000 to indicate a strong hiring trend.
http://www.infowars.com/jobless-claims-on-the-rise-again/
TODAY'S CHART
Current Track Record
Ruth Mantell
MarketWatch
April 8, 2010
The number of people applying for unemployment benefits rose 18,000 to a seasonally adjusted 460,000 in the week ended April 3, the Labor Department reported Thursday.
Economists surveyed by MarketWatch had expected a result of 442,000. The four-week average of initial claims — a better gauge of employment trends than the volatile weekly number – rose 2,250 to 450,250.
A Labor Department official said interpretation of the data now is clouded by the timing of the Easter holiday, which makes it difficult to properly adjust for seasonal factors.
Still, initial claims are down almost 30% from the same period of the prior year. While economists say recent data indicate that job destruction has moderated, claims would have to fall to about 400,000 to indicate a strong hiring trend.
http://www.infowars.com/jobless-claims-on-the-rise-again/
TODAY'S CHART
Current Track Record
World Stocks Drop as Greek Debt Default Nears
World Stocks Drop as Greek Debt Default Nears
AFP
April 8, 2010
Financial markets turned on Greece again on Thursday, driving up its borrowing costs to record levels on rising doubt that the EU will provide a debt rescue, and the euro plunged further.
The yield on Greece’s 10-year sovereign bond soared to 7.423 percent Thursday, the highest since the country adopted the euro in 2001, amid mounting fears it might be unable to repay huge debts falling due soon.
The Greek financial turmoil also heightened pressure on the euro, which fell to 1.3299 dollars from 1.3339 Wednesday. The single European currency at one point plunged to 1.3283 dollars.
Meanwhile financial markets awaited an expected statement from the head of the European Central Bank, Jean-Claude Trichet, after an ECB rate meeting later in the day.
http://www.infowars.com/world-stocks-drop-as-greek-debt-default-nears/
TODAY'S CHART
Current Track Record
AFP
April 8, 2010
Financial markets turned on Greece again on Thursday, driving up its borrowing costs to record levels on rising doubt that the EU will provide a debt rescue, and the euro plunged further.
The yield on Greece’s 10-year sovereign bond soared to 7.423 percent Thursday, the highest since the country adopted the euro in 2001, amid mounting fears it might be unable to repay huge debts falling due soon.
The Greek financial turmoil also heightened pressure on the euro, which fell to 1.3299 dollars from 1.3339 Wednesday. The single European currency at one point plunged to 1.3283 dollars.
Meanwhile financial markets awaited an expected statement from the head of the European Central Bank, Jean-Claude Trichet, after an ECB rate meeting later in the day.
http://www.infowars.com/world-stocks-drop-as-greek-debt-default-nears/
TODAY'S CHART
Current Track Record
Looting Main Street
Looting Main Street
Published on 04-06-2010
By Matt Taibbi - Rolling Stone
How the nation's biggest banks are ripping off American cities with the same predatory deals that brought down Greece
If you want to know what life in the Third World is like, just ask Lisa Pack, an administrative assistant who works in the roads and transportation department in Jefferson County, Alabama. Pack got rudely introduced to life in post-crisis America last August, when word came down that she and 1,000 of her fellow public employees would have to take a little unpaid vacation for a while. The county, it turned out, was more than $5 billion in debt — meaning that courthouses, jails and sheriff's precincts had to be closed so that Wall Street banks could be paid.
As public services in and around Birmingham were stripped to the bone, Pack struggled to support her family on a weekly unemployment check of $260. Nearly a fourth of that went to pay for her health insurance, which the county no longer covered. She also fielded calls from laid-off co-workers who had it even tougher. "I'd be on the phone sometimes until two in the morning," she says. "I had to talk more than one person out of suicide. For some of the men supporting families, it was so hard — foreclosure, bankruptcy. I'd go to bed at night, and I'd be in tears."
Homes stood empty, businesses were boarded up, and parts of already-blighted Birmingham began to take on the feel of a ghost town. There were also a few bills that were unique to the area — like the $64 sewer bill that Pack and her family paid each month. "Yeah, it went up about 400 percent just over the past few years," she says.
The sewer bill, in fact, is what cost Pack and her co-workers their jobs. In 1996, the average monthly sewer bill for a family of four in Birmingham was only $14.71 — but that was before the county decided to build an elaborate new sewer system with the help of out-of-state financial wizards with names like Bear Stearns, Lehman Brothers, Goldman Sachs and JP Morgan Chase. The result was a monstrous pile of borrowed money that the county used to build, in essence, the world's grandest toilet — "the Taj Mahal of sewer-treatment plants" is how one county worker put it. What happened here in Jefferson County would turn out to be the perfect metaphor for the peculiar alchemy of modern oligarchical capitalism: A mob of corrupt local officials and morally absent financiers got together to build a giant device that converted human shit into billions of dollars of profit for Wall Street — and misery for people like Lisa Pack.
And once the giant shit machine was built and the note on all that fancy construction started to come due, Wall Street came back to the local politicians and doubled down on the scam. They showed up in droves to help the poor, broke citizens of Jefferson County cut their toilet finance charges using a blizzard of incomprehensible swaps and refinance schemes — schemes that only served to postpone the repayment date a year or two while sinking the county deeper into debt. In the end, every time Jefferson County so much as breathed near one of the banks, it got charged millions in fees. There was so much money to be made bilking these dizzy Southerners that banks like JP Morgan spent millions paying middlemen who bribed — yes, that's right, bribed, criminally bribed — the county commissioners and their buddies just to keep their business. Hell, the money was so good, JP Morgan at one point even paid Goldman Sachs $3 million just to back the fuck off, so they could have the rubes of Jefferson County to fleece all for themselves.
Birmingham became the poster child for a new kind of giant-scale financial fraud, one that would threaten the financial stability not only of cities and counties all across America, but even those of entire countries like Greece. While for many Americans the financial crisis remains an abstraction, a confusing mess of complex transactions that took place on a cloud high above Manhattan sometime in the mid-2000s, in Jefferson County you can actually see the rank criminality of the crisis economy with your own eyes; the monster sticks his head all the way out of the water. Here you can see a trail that leads directly from a billion-dollar predatory swap deal cooked up at the highest levels of America's biggest banks, across a vast fruited plain of bribes and felonies — "the price of doing business," as one JP Morgan banker says on tape — all the way down to Lisa Pack's sewer bill and the mass layoffs in Birmingham.
Once you follow that trail and understand what took place in Jefferson County, there's really no room left for illusions. We live in a gangster state, and our days of laughing at other countries are over. It's our turn to get laughed at. In Birmingham, lots of people have gone to jail for the crime: More than 20 local officials and businessmen have been convicted of corruption in federal court. Last October, right around the time that Lisa Pack went back to work at reduced hours, Birmingham's mayor was convicted of fraud and money-laundering for taking bribes funneled to him by Wall Street bankers — everything from Rolex watches to Ferragamo suits to cash. But those who greenlighted the bribes and profited most from the scam remain largely untouched. "It never gets back to JP Morgan," says Pack.
If you want to get all Glenn Beck about it, you could lay the blame for this entire mess at the feet of weepy, tree-hugging environmentalists. It all started with the Cahaba River, the longest free-flowing river in the state of Alabama. The tributary, which winds its way through Birmingham before turning diagonally to empty out near Selma, is home to more types of fish per mile than any other river in America and shelters 64 rare and imperiled species of plants and animals. It's also the source of one of the worst municipal financial disasters in American history.
Back in the early 1990s, the county's sewer system was so antiquated that it was leaking raw sewage directly into the Cahaba, which also supplies the area with its drinking water. Joined by well — intentioned citizens from the Cahaba River Society, the EPA sued the county to force it to comply with the Clean Water Act. In 1996, county commissioners signed a now-infamous consent decree agreeing not just to fix the leaky pipes but to eliminate all sewer overflows — a near-impossible standard that required the county to build the most elaborate, ecofriendly, expensive sewer system in the history of the universe. It was like ordering a small town in Florida that gets a snowstorm once every five years to build a billion-dollar fleet of snowplows.
The original cost estimates for the new sewer system were as low as $250 million. But in a wondrous demonstration of the possibilities of small-town graft and contract-padding, the price tag quickly swelled to more than $3 billion. County commissioners were literally pocketing wads of cash from builders and engineers and other contractors eager to get in on the project, while the county was forced to borrow obscene sums to pay for the rapidly spiraling costs. Jefferson County, in effect, became one giant, TV-stealing, unemployed drug addict who borrowed a million dollars to buy the mother of all McMansions — and just as it did during the housing bubble, Wall Street made a business of keeping the crook in his house. As one county commissioner put it, "We're like a guy making $50,000 a year with a million-dollar mortgage."
To reassure lenders that the county would pay its mortgage, commissioners gave the finance director — an unelected official appointed by the president of the commission — the power to automatically raise sewer rates to meet payments on the debt. The move brought in billions in financing, but it also painted commissioners into a corner. If costs continued to rise — and with practically every contractor in Alabama sticking his fingers on the scale, they were rising fast — officials would be faced with automatic rate increases that would piss off their voters. (By 2003, annual interest on the sewer deal had reached $90 million.) So the commission reached out to Wall Street, looking for creative financing tools that would allow it to reduce the county's staggering debt payments.
Wall Street was happy to help. First, it employed the same trick it used to fuel the housing crisis: It switched the county from a fixed rate on the bonds it had issued to finance the sewer deal to an adjustable rate. The refinancing meant lower interest payments for a couple of years — followed by the risk of even larger payments down the road. The move enabled county commissioners to postpone the problem for an election season or two, kicking it to a group of future commissioners who would inevitably have to pay the real freight.
But then Wall Street got really creative. Having switched the county to a variable interest rate, it offered commissioners a crazy deal: For an extra fee, the banks said, we'll allow you to keep paying a fixed rate on your debt to us. In return, we'll give you a variable amount each month that you can use to pay off all that variable-rate interest you owe to bondholders.
In financial terms, this is known as a synthetic rate swap — the spidery creature you might have read about playing a role in bringing down places like Greece and Milan. On paper, it made sense: The county got the stability of a fixed rate, while paying Wall Street to assume the risk of the variable rates on its bonds. That's the synthetic part. The trouble lies in the rate swap. The deal only works if the two variable rates — the one you get from the bank, and the one you owe to bondholders — actually match. It's like gambling on the weather. If your bondholders are expecting you to pay an interest rate based on the average temperature in Alabama, you don't do a rate swap with a bank that gives you back a rate pegged to the temperature in Nome, Alaska.
Not unless you're a fucking moron. Or your banker is JP Morgan.
In a small office in a federal building in downtown Birmingham, just blocks from where civil rights demonstrators shut down the city in 1963, Assistant U.S. Attorney George Martin points out the window. He's pointing in the direction of the Tutwiler Hotel, once home to one of the grandest ballrooms in the South but now part of the Hampton Inn chain.
"It was right around the corner here, at the hotel," Martin says. "That's where they met — that's where this all started."
They means Charles LeCroy and Bill Blount, the two principals in what would become the most important of all the corruption cases in Jefferson County. LeCroy was a banker for JP Morgan, serving as managing director of the bank's southeast regional office. Blount was an Alabama wheeler-dealer with close friends on the county commission. For years, when Wall Street banks wanted to do business with municipalities, whether for bond issues or rate swaps, it was standard practice to reach out to a local sleazeball like Blount and pay him a shitload of money to help seal the deal. "Banks would pay some local consultant, and the consultant would then funnel money to the politician making the decision," says Christopher Taylor, the former head of the board that regulates municipal borrowing. Back in the 1990s, Taylor pushed through a ban on such backdoor bribery. He also passed a ban on bankers contributing directly to politicians they do business with — a move that sparked a lawsuit by one aggrieved sleazeball, who argued that halting such legalized graft violated his First Amendment rights. The name of that pissed-off banker? "It was the one and only Bill Blount," Taylor says with a laugh.
Blount is a stocky, stubby-fingered Southerner with glasses and a pale, pinched face — if Norman Rockwell had ever done a painting titled "Small-Town Accountant Taking Enormous Dump," it would look just like Blount. LeCroy, his sugar daddy at JP Morgan, is a tall, bloodless, crisply dressed corporate operator with a shiny bald head and silver side patches — a cross between Skeletor and Michael Stipe.
The scheme they operated went something like this: LeCroy paid Blount millions of dollars, and Blount turned around and used the money to buy lavish gifts for his close friend Larry Langford, the now-convicted Birmingham mayor who at the time had just been elected president of the county commission. (At one point Blount took Langford on a shopping spree in New York, putting $3,290 worth of clothes from Zegna on his credit card.) Langford then signed off on one after another of the deadly swap deals being pushed by LeCroy. Every time the county refinanced its sewer debt, JP Morgan made millions of dollars in fees. Even more lucrative, each of the swap contracts contained clauses that mandated all sorts of penalties and payments in the event that something went wrong with the deal. In the mortgage business, this process is known as churning: You keep coming back over and over to refinance, and they keep "churning" you for more and more fees. "The transactions were complex, but the scheme was simple," said Robert Khuzami, director of enforcement for the SEC. "Senior JP Morgan bankers made unlawful payments to win business and earn fees."
Given the shitload of money to be made on the refinancing deals, JP Morgan was prepared to pay whatever it took to buy off officials in Jefferson County. In 2002, during a conversation recorded in Nixonian fashion by JP Morgan itself, LeCroy bragged that he had agreed to funnel payoff money to a pair of local companies to secure the votes of two county commissioners. "Look," the commissioners told him, "if we support the synthetic refunding, you guys have to take care of our two firms." LeCroy didn't blink. "Whatever you want," he told them. "If that's what you need, that's what you get. Just tell us how much."
Just tell us how much. That sums up the approach that JP Morgan took a few months later, when Langford announced that his good buddy Bill Blount would henceforth be involved with every financing transaction for Jefferson County. From JP Morgan's point of view, the decision to pay off Blount was a no-brainer. But the bank had one small problem: Goldman Sachs had already crawled up Blount's trouser leg, and the broker was advising Langford to pick them as Jefferson County's investment bank.
The solution they came up with was an extraordinary one: JP Morgan cut a separate deal with Goldman, paying the bank $3 million to fuck off, with Blount taking a $300,000 cut of the side deal. Suddenly Goldman was out and JP Morgan was sitting in Langford's lap. In another conversation caught on tape, LeCroy joked that the deal was his "philanthropic work," since the payoff amounted to a "charitable donation to Goldman Sachs" in return for "taking no risk."
That such a blatant violation of anti-trust laws took place and neither JP Morgan nor Goldman have been prosecuted for it is yet another mystery of the current financial crisis. "This is an open-and-shut case of anti-competitive behavior," says Taylor, the former regulator.
With Goldman out of the way, JP Morgan won the right to do a $1.1 billion bond offering — switching Jefferson County out of fixed-rate debt into variable-rate debt — and also did a corresponding $1.1 billion deal for a synthetic rate swap. The very same day the transaction was concluded, in May 2003, LeCroy had dinner with Langford and struck a deal to do yet another bond-and-swap transaction of roughly the same size. This time, the terms of the payoff were spelled out more explicitly. In a hilarious phone call between LeCroy and Douglas MacFaddin, another JP Morgan official, the two bankers groaned aloud about how much it was going to cost to satisfy Blount:
LeCroy: I said, "Commissioner Langford, I'll do that because that's your suggestion, but you gotta help us keep him under control. Because when you give that guy a hand, he takes your arm." You know?
MacFaddin: [Laughing] Yeah, you end up in the wood-chipper.
All told, JP Morgan ended up paying Blount nearly $3 million for "performing no known services," in the words of the SEC. In at least one of the deals, Blount made upward of 15 percent of JP Morgan's entire fee. When I ask Taylor what a legitimate consultant might earn in such a circumstance, he laughs. "What's a 'legitimate consultant' in a case like this? He made this money for doing jack shit."
As the tapes of LeCroy's calls show, even officials at JP Morgan were incredulous at the money being funneled to Blount. "How does he get 15 percent?" one associate at the bank asks LeCroy. "For doing what? For not messing with us?"
"Not messing with us," LeCroy agrees. "It's a lot of money, but in the end, it's worth it on a billion-dollar deal."
That's putting it mildly: The deals wound up being the largest swap agreements in JP Morgan's history. Making matters worse, the payoffs didn't even wind up costing the bank a dime. As the SEC explained in a statement on the scam, JP Morgan "passed on the cost of the unlawful payments by charging the county higher interest rates on the swap transactions." In other words, not only did the bank bribe local politicians to take the sucky deal, they got local taxpayers to pay for the bribes. And because Jefferson County had no idea what kind of deal it was getting on the swaps, JP Morgan could basically charge whatever it wanted. According to an analysis of the swap deals commissioned by the county in 2007, taxpayers had been overcharged at least $93 million on the transactions.
JP Morgan was far from alone in the scam: Virtually everyone doing business in Jefferson County was on the take. Four of the nation's top investment banks, the very cream of American finance, were involved in one way or another with payoffs to Blount in their scramble to do business with the county. In addition to JP Morgan and Goldman Sachs, Bear Stearns paid Langford's bagman $2.4 million, while Lehman Brothers got off cheap with a $35,000 "arranger's fee." At least a dozen of the county's contractors were also cashing in, along with many of the county commissioners. "If you go into the county courthouse," says Michael Morrison, a planner who works for the county, "there's a gallery of past commissioners on the wall. On the top row, every single one of 'em but two has been investigated, indicted or convicted. It's a joke."
The crazy thing is that such arrangements — where some local scoundrel gets a massive fee for doing nothing but greasing the wheels with elected officials — have been taking place all over the country. In Illinois, during the Upper Volta-esque era of Rod Blagojevich, a Republican political consultant named Robert Kjellander got 10 percent of the entire fee Bear Stearns earned doing a bond sale for the state pension fund. At the start of Obama's term, Bill Richardson's Cabinet appointment was derailed for a similar scheme when he was governor of New Mexico. Indeed, one reason that officials in Jefferson County didn't know that the swaps they were signing off on were shitty was because their adviser on the deals was a firm called CDR Financial Products, which is now accused of conspiring to overcharge dozens of cities in swap transactions. According to a federal antitrust lawsuit, CDR is basically a big-league version of Bill Blount — banks tossed money at the firm, which in turn advised local politicians that they were getting a good deal. "It was basically, you pay CDR, and CDR helps push the deal through," says Taylor.
In the end, though, all this bribery and graft was just the table-setter for the real disaster. In taking all those bribes and signing on to all those swaps, the commissioners in Jefferson County had basically started the clock on a financial time bomb that, sooner or later, had to explode. By continually refinancing to keep the county in its giant McMansion, the commission had managed to push into the future that inevitable day when the real bill would arrive in the mail. But that's where the mortgage analogy ends — because in one key area, a swap deal differs from a home mortgage. Imagine a mortgage that you have to keep on paying even after you sell your house. That's basically how a swap deal works. And Jefferson County had done 23 of them. At one point, they had more outstanding swaps than New York City.
Judgment Day was coming — just like it was for the Delaware River Port Authority, the Pennsylvania school system, the cities of Detroit, Chicago, Oakland and Los Angeles, the states of Connecticut and Mississippi, the city of Milan and nearly 500 other municipalities in Italy, the country of Greece, and God knows who else. All of these places are now reeling under the weight of similarly elaborate and ill-advised swaps — and if what happened in Jefferson County is any guide, hoo boy. Because when the shit hit the fan in Birmingham, it really hit the fan.
For Jefferson County, the deal blew up in early 2008, when a dizzying array of penalties and other fine-print poison worked into the swap contracts started to kick in. The trouble began with the housing crash, which took down the insurance companies that had underwritten the county's bonds. That rendered the county's insurance worthless, triggering clauses in its swap contracts that required it to pay off more than $800 million of its debt in only four years, rather than 40. That, in turn, scared off private lenders, who were no longer interested in bidding on the county's bonds. The banks were forced to make up the difference — a service for which they charged enormous penalties. It was as if the county had missed a payment on its credit card and woke up the next morning to find its annual percentage rate jacked up to a million percent. Between 2008 and 2009, the annual payment on Jefferson County's debt jumped from $53 million to a whopping $636 million.
It gets worse. Remember the swap deal that Jefferson County did with JP Morgan, how the variable rates it got from the bank were supposed to match those it owed its bondholders? Well, they didn't. Most of the payments the county was receiving from JP Morgan were based on one set of interest rates (the London Interbank Exchange Rate), while the payments it owed to its bondholders followed a different set of rates (a municipal-bond index). Jefferson County was suddenly getting far less from JP Morgan, and owing tons more to bondholders. In other words, the bank and Bill Blount made tens of millions of dollars selling deals to local politicians that were not only completely defective, but blew the entire county to smithereens.
And here's the kicker. Last year, when Jefferson County, staggered by the weight of its penalties, was unable to make its swap payments to JP Morgan, the bank canceled the deal. That triggered one-time "termination fees" of — yes, you read this right — $647 million. That was money the county would owe no matter what happened with the rest of its debt, even if bondholders decided to forgive and forget every dime the county had borrowed. It was like the herpes simplex of loans — debt that does not go away, ever, for as long as you live. On a sewer project that was originally supposed to cost $250 million, the county now owed a total of $1.28 billion just in interest and fees on the debt. Imagine paying $250,000 a year on a car you purchased for $50,000, and that's roughly where Jefferson County stood at the end of last year.
Last November, the SEC charged JP Morgan with fraud and canceled the $647 million in termination fees. The bank agreed to pay a $25 million fine and fork over $50 million to assist displaced workers in Jefferson County. So far, the county has managed to avoid bankruptcy, but the sewer fiasco had downgraded its credit rating, triggering payments on other outstanding loans and pushing Birmingham toward the status of an African debtor state. For the next generation, the county will be in a constant fight to collect enough taxes just to pay off its debt, which now totals $4,800 per resident.
The city of Birmingham was founded in 1871, at the dawn of the Southern industrial boom, for the express purpose of attracting Northern capital — it was even named after a famous British steel town to burnish its entrepreneurial cred. There's a gruesome irony in it now lying sacked and looted by financial vandals from the North. The destruction of Jefferson County reveals the basic battle plan of these modern barbarians, the way that banks like JP Morgan and Goldman Sachs have systematically set out to pillage towns and cities from Pittsburgh to Athens. These guys aren't number-crunching whizzes making smart investments; what they do is find suckers in some municipal-finance department, corner them in complex lose-lose deals and flay them alive. In a complete subversion of free-market principles, they take no risk, score deals based on political influence rather than competition, keep consumers in the dark — and walk away with big money. "It's not high finance," says Taylor, the former bond regulator. "It's low finance." And even if the regulators manage to catch up with them billions of dollars later, the banks just pay a small fine and move on to the next scam. This isn't capitalism. It's nomadic thievery.
[From Issue 1102 — April 15, 2010]
http://www.blacklistednews.com/news-8133-0-13-13--.html
TODAY'S CHART
Current Track Record
Published on 04-06-2010
By Matt Taibbi - Rolling Stone
How the nation's biggest banks are ripping off American cities with the same predatory deals that brought down Greece
If you want to know what life in the Third World is like, just ask Lisa Pack, an administrative assistant who works in the roads and transportation department in Jefferson County, Alabama. Pack got rudely introduced to life in post-crisis America last August, when word came down that she and 1,000 of her fellow public employees would have to take a little unpaid vacation for a while. The county, it turned out, was more than $5 billion in debt — meaning that courthouses, jails and sheriff's precincts had to be closed so that Wall Street banks could be paid.
As public services in and around Birmingham were stripped to the bone, Pack struggled to support her family on a weekly unemployment check of $260. Nearly a fourth of that went to pay for her health insurance, which the county no longer covered. She also fielded calls from laid-off co-workers who had it even tougher. "I'd be on the phone sometimes until two in the morning," she says. "I had to talk more than one person out of suicide. For some of the men supporting families, it was so hard — foreclosure, bankruptcy. I'd go to bed at night, and I'd be in tears."
Homes stood empty, businesses were boarded up, and parts of already-blighted Birmingham began to take on the feel of a ghost town. There were also a few bills that were unique to the area — like the $64 sewer bill that Pack and her family paid each month. "Yeah, it went up about 400 percent just over the past few years," she says.
The sewer bill, in fact, is what cost Pack and her co-workers their jobs. In 1996, the average monthly sewer bill for a family of four in Birmingham was only $14.71 — but that was before the county decided to build an elaborate new sewer system with the help of out-of-state financial wizards with names like Bear Stearns, Lehman Brothers, Goldman Sachs and JP Morgan Chase. The result was a monstrous pile of borrowed money that the county used to build, in essence, the world's grandest toilet — "the Taj Mahal of sewer-treatment plants" is how one county worker put it. What happened here in Jefferson County would turn out to be the perfect metaphor for the peculiar alchemy of modern oligarchical capitalism: A mob of corrupt local officials and morally absent financiers got together to build a giant device that converted human shit into billions of dollars of profit for Wall Street — and misery for people like Lisa Pack.
And once the giant shit machine was built and the note on all that fancy construction started to come due, Wall Street came back to the local politicians and doubled down on the scam. They showed up in droves to help the poor, broke citizens of Jefferson County cut their toilet finance charges using a blizzard of incomprehensible swaps and refinance schemes — schemes that only served to postpone the repayment date a year or two while sinking the county deeper into debt. In the end, every time Jefferson County so much as breathed near one of the banks, it got charged millions in fees. There was so much money to be made bilking these dizzy Southerners that banks like JP Morgan spent millions paying middlemen who bribed — yes, that's right, bribed, criminally bribed — the county commissioners and their buddies just to keep their business. Hell, the money was so good, JP Morgan at one point even paid Goldman Sachs $3 million just to back the fuck off, so they could have the rubes of Jefferson County to fleece all for themselves.
Birmingham became the poster child for a new kind of giant-scale financial fraud, one that would threaten the financial stability not only of cities and counties all across America, but even those of entire countries like Greece. While for many Americans the financial crisis remains an abstraction, a confusing mess of complex transactions that took place on a cloud high above Manhattan sometime in the mid-2000s, in Jefferson County you can actually see the rank criminality of the crisis economy with your own eyes; the monster sticks his head all the way out of the water. Here you can see a trail that leads directly from a billion-dollar predatory swap deal cooked up at the highest levels of America's biggest banks, across a vast fruited plain of bribes and felonies — "the price of doing business," as one JP Morgan banker says on tape — all the way down to Lisa Pack's sewer bill and the mass layoffs in Birmingham.
Once you follow that trail and understand what took place in Jefferson County, there's really no room left for illusions. We live in a gangster state, and our days of laughing at other countries are over. It's our turn to get laughed at. In Birmingham, lots of people have gone to jail for the crime: More than 20 local officials and businessmen have been convicted of corruption in federal court. Last October, right around the time that Lisa Pack went back to work at reduced hours, Birmingham's mayor was convicted of fraud and money-laundering for taking bribes funneled to him by Wall Street bankers — everything from Rolex watches to Ferragamo suits to cash. But those who greenlighted the bribes and profited most from the scam remain largely untouched. "It never gets back to JP Morgan," says Pack.
If you want to get all Glenn Beck about it, you could lay the blame for this entire mess at the feet of weepy, tree-hugging environmentalists. It all started with the Cahaba River, the longest free-flowing river in the state of Alabama. The tributary, which winds its way through Birmingham before turning diagonally to empty out near Selma, is home to more types of fish per mile than any other river in America and shelters 64 rare and imperiled species of plants and animals. It's also the source of one of the worst municipal financial disasters in American history.
Back in the early 1990s, the county's sewer system was so antiquated that it was leaking raw sewage directly into the Cahaba, which also supplies the area with its drinking water. Joined by well — intentioned citizens from the Cahaba River Society, the EPA sued the county to force it to comply with the Clean Water Act. In 1996, county commissioners signed a now-infamous consent decree agreeing not just to fix the leaky pipes but to eliminate all sewer overflows — a near-impossible standard that required the county to build the most elaborate, ecofriendly, expensive sewer system in the history of the universe. It was like ordering a small town in Florida that gets a snowstorm once every five years to build a billion-dollar fleet of snowplows.
The original cost estimates for the new sewer system were as low as $250 million. But in a wondrous demonstration of the possibilities of small-town graft and contract-padding, the price tag quickly swelled to more than $3 billion. County commissioners were literally pocketing wads of cash from builders and engineers and other contractors eager to get in on the project, while the county was forced to borrow obscene sums to pay for the rapidly spiraling costs. Jefferson County, in effect, became one giant, TV-stealing, unemployed drug addict who borrowed a million dollars to buy the mother of all McMansions — and just as it did during the housing bubble, Wall Street made a business of keeping the crook in his house. As one county commissioner put it, "We're like a guy making $50,000 a year with a million-dollar mortgage."
To reassure lenders that the county would pay its mortgage, commissioners gave the finance director — an unelected official appointed by the president of the commission — the power to automatically raise sewer rates to meet payments on the debt. The move brought in billions in financing, but it also painted commissioners into a corner. If costs continued to rise — and with practically every contractor in Alabama sticking his fingers on the scale, they were rising fast — officials would be faced with automatic rate increases that would piss off their voters. (By 2003, annual interest on the sewer deal had reached $90 million.) So the commission reached out to Wall Street, looking for creative financing tools that would allow it to reduce the county's staggering debt payments.
Wall Street was happy to help. First, it employed the same trick it used to fuel the housing crisis: It switched the county from a fixed rate on the bonds it had issued to finance the sewer deal to an adjustable rate. The refinancing meant lower interest payments for a couple of years — followed by the risk of even larger payments down the road. The move enabled county commissioners to postpone the problem for an election season or two, kicking it to a group of future commissioners who would inevitably have to pay the real freight.
But then Wall Street got really creative. Having switched the county to a variable interest rate, it offered commissioners a crazy deal: For an extra fee, the banks said, we'll allow you to keep paying a fixed rate on your debt to us. In return, we'll give you a variable amount each month that you can use to pay off all that variable-rate interest you owe to bondholders.
In financial terms, this is known as a synthetic rate swap — the spidery creature you might have read about playing a role in bringing down places like Greece and Milan. On paper, it made sense: The county got the stability of a fixed rate, while paying Wall Street to assume the risk of the variable rates on its bonds. That's the synthetic part. The trouble lies in the rate swap. The deal only works if the two variable rates — the one you get from the bank, and the one you owe to bondholders — actually match. It's like gambling on the weather. If your bondholders are expecting you to pay an interest rate based on the average temperature in Alabama, you don't do a rate swap with a bank that gives you back a rate pegged to the temperature in Nome, Alaska.
Not unless you're a fucking moron. Or your banker is JP Morgan.
In a small office in a federal building in downtown Birmingham, just blocks from where civil rights demonstrators shut down the city in 1963, Assistant U.S. Attorney George Martin points out the window. He's pointing in the direction of the Tutwiler Hotel, once home to one of the grandest ballrooms in the South but now part of the Hampton Inn chain.
"It was right around the corner here, at the hotel," Martin says. "That's where they met — that's where this all started."
They means Charles LeCroy and Bill Blount, the two principals in what would become the most important of all the corruption cases in Jefferson County. LeCroy was a banker for JP Morgan, serving as managing director of the bank's southeast regional office. Blount was an Alabama wheeler-dealer with close friends on the county commission. For years, when Wall Street banks wanted to do business with municipalities, whether for bond issues or rate swaps, it was standard practice to reach out to a local sleazeball like Blount and pay him a shitload of money to help seal the deal. "Banks would pay some local consultant, and the consultant would then funnel money to the politician making the decision," says Christopher Taylor, the former head of the board that regulates municipal borrowing. Back in the 1990s, Taylor pushed through a ban on such backdoor bribery. He also passed a ban on bankers contributing directly to politicians they do business with — a move that sparked a lawsuit by one aggrieved sleazeball, who argued that halting such legalized graft violated his First Amendment rights. The name of that pissed-off banker? "It was the one and only Bill Blount," Taylor says with a laugh.
Blount is a stocky, stubby-fingered Southerner with glasses and a pale, pinched face — if Norman Rockwell had ever done a painting titled "Small-Town Accountant Taking Enormous Dump," it would look just like Blount. LeCroy, his sugar daddy at JP Morgan, is a tall, bloodless, crisply dressed corporate operator with a shiny bald head and silver side patches — a cross between Skeletor and Michael Stipe.
The scheme they operated went something like this: LeCroy paid Blount millions of dollars, and Blount turned around and used the money to buy lavish gifts for his close friend Larry Langford, the now-convicted Birmingham mayor who at the time had just been elected president of the county commission. (At one point Blount took Langford on a shopping spree in New York, putting $3,290 worth of clothes from Zegna on his credit card.) Langford then signed off on one after another of the deadly swap deals being pushed by LeCroy. Every time the county refinanced its sewer debt, JP Morgan made millions of dollars in fees. Even more lucrative, each of the swap contracts contained clauses that mandated all sorts of penalties and payments in the event that something went wrong with the deal. In the mortgage business, this process is known as churning: You keep coming back over and over to refinance, and they keep "churning" you for more and more fees. "The transactions were complex, but the scheme was simple," said Robert Khuzami, director of enforcement for the SEC. "Senior JP Morgan bankers made unlawful payments to win business and earn fees."
Given the shitload of money to be made on the refinancing deals, JP Morgan was prepared to pay whatever it took to buy off officials in Jefferson County. In 2002, during a conversation recorded in Nixonian fashion by JP Morgan itself, LeCroy bragged that he had agreed to funnel payoff money to a pair of local companies to secure the votes of two county commissioners. "Look," the commissioners told him, "if we support the synthetic refunding, you guys have to take care of our two firms." LeCroy didn't blink. "Whatever you want," he told them. "If that's what you need, that's what you get. Just tell us how much."
Just tell us how much. That sums up the approach that JP Morgan took a few months later, when Langford announced that his good buddy Bill Blount would henceforth be involved with every financing transaction for Jefferson County. From JP Morgan's point of view, the decision to pay off Blount was a no-brainer. But the bank had one small problem: Goldman Sachs had already crawled up Blount's trouser leg, and the broker was advising Langford to pick them as Jefferson County's investment bank.
The solution they came up with was an extraordinary one: JP Morgan cut a separate deal with Goldman, paying the bank $3 million to fuck off, with Blount taking a $300,000 cut of the side deal. Suddenly Goldman was out and JP Morgan was sitting in Langford's lap. In another conversation caught on tape, LeCroy joked that the deal was his "philanthropic work," since the payoff amounted to a "charitable donation to Goldman Sachs" in return for "taking no risk."
That such a blatant violation of anti-trust laws took place and neither JP Morgan nor Goldman have been prosecuted for it is yet another mystery of the current financial crisis. "This is an open-and-shut case of anti-competitive behavior," says Taylor, the former regulator.
With Goldman out of the way, JP Morgan won the right to do a $1.1 billion bond offering — switching Jefferson County out of fixed-rate debt into variable-rate debt — and also did a corresponding $1.1 billion deal for a synthetic rate swap. The very same day the transaction was concluded, in May 2003, LeCroy had dinner with Langford and struck a deal to do yet another bond-and-swap transaction of roughly the same size. This time, the terms of the payoff were spelled out more explicitly. In a hilarious phone call between LeCroy and Douglas MacFaddin, another JP Morgan official, the two bankers groaned aloud about how much it was going to cost to satisfy Blount:
LeCroy: I said, "Commissioner Langford, I'll do that because that's your suggestion, but you gotta help us keep him under control. Because when you give that guy a hand, he takes your arm." You know?
MacFaddin: [Laughing] Yeah, you end up in the wood-chipper.
All told, JP Morgan ended up paying Blount nearly $3 million for "performing no known services," in the words of the SEC. In at least one of the deals, Blount made upward of 15 percent of JP Morgan's entire fee. When I ask Taylor what a legitimate consultant might earn in such a circumstance, he laughs. "What's a 'legitimate consultant' in a case like this? He made this money for doing jack shit."
As the tapes of LeCroy's calls show, even officials at JP Morgan were incredulous at the money being funneled to Blount. "How does he get 15 percent?" one associate at the bank asks LeCroy. "For doing what? For not messing with us?"
"Not messing with us," LeCroy agrees. "It's a lot of money, but in the end, it's worth it on a billion-dollar deal."
That's putting it mildly: The deals wound up being the largest swap agreements in JP Morgan's history. Making matters worse, the payoffs didn't even wind up costing the bank a dime. As the SEC explained in a statement on the scam, JP Morgan "passed on the cost of the unlawful payments by charging the county higher interest rates on the swap transactions." In other words, not only did the bank bribe local politicians to take the sucky deal, they got local taxpayers to pay for the bribes. And because Jefferson County had no idea what kind of deal it was getting on the swaps, JP Morgan could basically charge whatever it wanted. According to an analysis of the swap deals commissioned by the county in 2007, taxpayers had been overcharged at least $93 million on the transactions.
JP Morgan was far from alone in the scam: Virtually everyone doing business in Jefferson County was on the take. Four of the nation's top investment banks, the very cream of American finance, were involved in one way or another with payoffs to Blount in their scramble to do business with the county. In addition to JP Morgan and Goldman Sachs, Bear Stearns paid Langford's bagman $2.4 million, while Lehman Brothers got off cheap with a $35,000 "arranger's fee." At least a dozen of the county's contractors were also cashing in, along with many of the county commissioners. "If you go into the county courthouse," says Michael Morrison, a planner who works for the county, "there's a gallery of past commissioners on the wall. On the top row, every single one of 'em but two has been investigated, indicted or convicted. It's a joke."
The crazy thing is that such arrangements — where some local scoundrel gets a massive fee for doing nothing but greasing the wheels with elected officials — have been taking place all over the country. In Illinois, during the Upper Volta-esque era of Rod Blagojevich, a Republican political consultant named Robert Kjellander got 10 percent of the entire fee Bear Stearns earned doing a bond sale for the state pension fund. At the start of Obama's term, Bill Richardson's Cabinet appointment was derailed for a similar scheme when he was governor of New Mexico. Indeed, one reason that officials in Jefferson County didn't know that the swaps they were signing off on were shitty was because their adviser on the deals was a firm called CDR Financial Products, which is now accused of conspiring to overcharge dozens of cities in swap transactions. According to a federal antitrust lawsuit, CDR is basically a big-league version of Bill Blount — banks tossed money at the firm, which in turn advised local politicians that they were getting a good deal. "It was basically, you pay CDR, and CDR helps push the deal through," says Taylor.
In the end, though, all this bribery and graft was just the table-setter for the real disaster. In taking all those bribes and signing on to all those swaps, the commissioners in Jefferson County had basically started the clock on a financial time bomb that, sooner or later, had to explode. By continually refinancing to keep the county in its giant McMansion, the commission had managed to push into the future that inevitable day when the real bill would arrive in the mail. But that's where the mortgage analogy ends — because in one key area, a swap deal differs from a home mortgage. Imagine a mortgage that you have to keep on paying even after you sell your house. That's basically how a swap deal works. And Jefferson County had done 23 of them. At one point, they had more outstanding swaps than New York City.
Judgment Day was coming — just like it was for the Delaware River Port Authority, the Pennsylvania school system, the cities of Detroit, Chicago, Oakland and Los Angeles, the states of Connecticut and Mississippi, the city of Milan and nearly 500 other municipalities in Italy, the country of Greece, and God knows who else. All of these places are now reeling under the weight of similarly elaborate and ill-advised swaps — and if what happened in Jefferson County is any guide, hoo boy. Because when the shit hit the fan in Birmingham, it really hit the fan.
For Jefferson County, the deal blew up in early 2008, when a dizzying array of penalties and other fine-print poison worked into the swap contracts started to kick in. The trouble began with the housing crash, which took down the insurance companies that had underwritten the county's bonds. That rendered the county's insurance worthless, triggering clauses in its swap contracts that required it to pay off more than $800 million of its debt in only four years, rather than 40. That, in turn, scared off private lenders, who were no longer interested in bidding on the county's bonds. The banks were forced to make up the difference — a service for which they charged enormous penalties. It was as if the county had missed a payment on its credit card and woke up the next morning to find its annual percentage rate jacked up to a million percent. Between 2008 and 2009, the annual payment on Jefferson County's debt jumped from $53 million to a whopping $636 million.
It gets worse. Remember the swap deal that Jefferson County did with JP Morgan, how the variable rates it got from the bank were supposed to match those it owed its bondholders? Well, they didn't. Most of the payments the county was receiving from JP Morgan were based on one set of interest rates (the London Interbank Exchange Rate), while the payments it owed to its bondholders followed a different set of rates (a municipal-bond index). Jefferson County was suddenly getting far less from JP Morgan, and owing tons more to bondholders. In other words, the bank and Bill Blount made tens of millions of dollars selling deals to local politicians that were not only completely defective, but blew the entire county to smithereens.
And here's the kicker. Last year, when Jefferson County, staggered by the weight of its penalties, was unable to make its swap payments to JP Morgan, the bank canceled the deal. That triggered one-time "termination fees" of — yes, you read this right — $647 million. That was money the county would owe no matter what happened with the rest of its debt, even if bondholders decided to forgive and forget every dime the county had borrowed. It was like the herpes simplex of loans — debt that does not go away, ever, for as long as you live. On a sewer project that was originally supposed to cost $250 million, the county now owed a total of $1.28 billion just in interest and fees on the debt. Imagine paying $250,000 a year on a car you purchased for $50,000, and that's roughly where Jefferson County stood at the end of last year.
Last November, the SEC charged JP Morgan with fraud and canceled the $647 million in termination fees. The bank agreed to pay a $25 million fine and fork over $50 million to assist displaced workers in Jefferson County. So far, the county has managed to avoid bankruptcy, but the sewer fiasco had downgraded its credit rating, triggering payments on other outstanding loans and pushing Birmingham toward the status of an African debtor state. For the next generation, the county will be in a constant fight to collect enough taxes just to pay off its debt, which now totals $4,800 per resident.
The city of Birmingham was founded in 1871, at the dawn of the Southern industrial boom, for the express purpose of attracting Northern capital — it was even named after a famous British steel town to burnish its entrepreneurial cred. There's a gruesome irony in it now lying sacked and looted by financial vandals from the North. The destruction of Jefferson County reveals the basic battle plan of these modern barbarians, the way that banks like JP Morgan and Goldman Sachs have systematically set out to pillage towns and cities from Pittsburgh to Athens. These guys aren't number-crunching whizzes making smart investments; what they do is find suckers in some municipal-finance department, corner them in complex lose-lose deals and flay them alive. In a complete subversion of free-market principles, they take no risk, score deals based on political influence rather than competition, keep consumers in the dark — and walk away with big money. "It's not high finance," says Taylor, the former bond regulator. "It's low finance." And even if the regulators manage to catch up with them billions of dollars later, the banks just pay a small fine and move on to the next scam. This isn't capitalism. It's nomadic thievery.
[From Issue 1102 — April 15, 2010]
http://www.blacklistednews.com/news-8133-0-13-13--.html
TODAY'S CHART
Current Track Record
Goodbye Paper Money: Does It Mean More Ways for the Banks to Screw Us?
Goodbye Paper Money: Does It Mean More Ways for the Banks to Screw Us?
Published on 04-06-2010
By Joshua Frank - Alternet
The spiral of economic calculation is dizzying, when you factor in inscrutable fees and other invisible transactions banks attach to the light-speed movement of our money.
Currency has come a long way in the past few thousand years of human existence. Ancient Turkey started using hybrid silver and gold coins around 640 B.C. and the Chinese started passing paper around 800 A.D. But it wasn't until the middle of the 20th century that Diners Club finally invented credit cards, or that electronic transfer payment systems like PayPal threw dirt on the century's grave in the late '90s. And now that the 21st century has fully arrived on the heels of both a harrowing terrorist attack targeting finance nerve centers in New York City and an economic depression downsizing everything from global bank accounts to job prospects, it is high time we rethought how we should pay and get paid to live and die.
Despite the deep thoughts and deeper concerns, it's not hard to see that our digital age perhaps deserves a fully digital currency, compliant across real and virtual geographies. In fact, we're pretty much already there, without admitting it.
"Nowadays, when the Federal Reserve prints money, it doesn't mint a new penny or dollar," Mikka Pineda, research analyst at famed economist Nouriel Roubini's think-tank Roubini Global Economics, explained to AlterNet. "It just changes numbers in bank accounts. Individuals can do this too, provided they have electronic access to their accounts. They can transfer money from one account to another, accept deposits and pay bills online."
With one major difference: Unlike the Fed, individuals actually have to back up their virtual ones and zeroes with so-called real money, in the form of deposits. So-called, because what they're really putting into their accounts, at least in America, are dollars, which are merely material symbols of real value made of paper. Or checks, which are even more hyperreal, given that they are just more paper signifying other paper that symbolizes real value. The spiral of economic signification is dizzying, especially when you start factoring in inscrutable fees, levies and other mostly invisible transactions that banks and other parasites attach to the light-speed movement of our money.
The dizziness increases when you factor in recent news from the Fed, whose controversial chairman Ben Bernanke argued in a February speech that America's central bank should no longer have to adhere to a fractional standard. In other words, its currently feverish ex nihilo money creation, more commonly known by the hilarious nomenclature "quantitative easing," finally wouldn't have to be supported by any minimum reserve requirements. That would, wrote Raw Story's Stephen Webster, make "free-floating, infinitely self-replicating capital a pervasive reality." A bottomless ATM machine, altogether unmoored from material value, or reality itself.
Keeping It Hyperreal
It's a logical endgame for such an illogical system of finance still dependent on currency paradigms created during the rise and fall of Jesus Christ, who stars in both America's money and motto, "In God We Trust." Indeed, our fiat currency, and those like the suspicious Fed entrusted with greasing its wheels, is nothing other than that trust made manifest. Paper money, silver and copper coins, bars of gold, whatever. The only thing that has any real value are the goods being exchanged, and the promises we make to each other to live by a set of rules governing our interactions. Pure digital currency is just that ages-old relationship rendered in bits and gigs, rather than dollars and cents.
"There's nothing shocking or strange about a purely digital currency," explained Jonathon Keats, the conceptual artist and Wired contributor who created the First Bank of Antimatter last year in San Francisco. "It's just a logical technological upgrade on old-fashioned paper money."
Keats' economic thought experiment was illuminating, especially for those who think a paper slip actually worth mere pennies nevertheless equals 100 cents. After the global village's inextricably leveraged game of finance and faith imploded in 2007, monstrously birthing our still-ongoing Great Recession, Keats decided it made just as much sense to peg global currencies to antimatter positrons. If we're going to nuke our collective economic and political integrity with arbitrary currencies and rapacious deregulation, we might as well truly nuke ourselves, so to speak. The idea was challenging and, of course, impossible, but it cleverly exposed the stress fractures in our current system, which is obviously overdue, given recently terrible events, for a serious technological upgrade.
"In the 18th century, when the American colonies started printing cash, ink on paper was the state-of-the-art, the most advanced medium for communicating information," Keats told AlterNet. "Since an economy is just a communications network by which a society trades wants and needs, the most efficient system of information storage and transfer ought to serve that society most effectively. Hence, bits."
But since our digital currency, just like the various historical currencies it could eventually replace, is based on trust and faith rather than actual material value, which itself is resolutely fluid given who is buying and selling what in any given transaction, it's just as vulnerable to the type of impenetrable corruption that has sunk us in the worst depression since the '30s. Transparency and regulation is key to any currency transformation. But given the way we've utterly failed at both with our current fiat currency, prospects aren't good for a clean break from our fractured financial past.
"Problems arise when the information is manipulated, as happened in colonial America shortly after Ben Franklin and his fellow printers started inking lucre on paper. They took all sorts of precautions against personal fraud -- threats to punish counterfeiters with death were typeset on each and every shilling note -- but they didn't consider the catastrophic effects of inflation when the government issued more and more cash to pay off larger and larger debts. The same thing is happening today with quantitative easing, and I suspect there would be a similar risk with any central authority issuing state-of-the-art digital cash."
"Digital currencies are fiat currencies too," Pineda cautioned. "They are not backed by hard assets but rather trust that $1 is worth $1. Even if the world moved on to some global, digital currency unbound from the financial woes of any sovereign state, somebody still has to control the supply of money to determine, for example, how many Twinkies $1 can buy nationally on average."
Fine. But who? Some players are starting to emerge.
Trust, But Verify
"This is the highest-potential business I’ve ever seen in my career," eBay CEO John Donahoe gushed, according to Wired's Daniel Roth. That was in 2008, after e-commerce visionary PayPal, which eBay acquired in 2002, launched a presentation to explore the possibilities of, "a true digital currency that could be used on any Web site," Roth wrote, "that enabled money to move as easily as email."
For more than a decade, PayPal had acted as a digital middleman for international online buyers and sellers exchanging goods on the online auction site, gaining ground on the conventional banks, which levied unnecessary but nevertheless escalating finance charges, that customers wanted to deal with less and less. After the recent econopocalypse, trust and faith in the banks is in shorter supply than ever, to say nothing of their overlords at the Federal Reserve Bank, whose itinerant secrecy was recently crippled after the U.S. Court of Appeals in Manhattan ruled that it had to open its books and finger the lenders that would have collapsed were it not for its bailout from thin air. In that duration, however, PayPal's reputation and users have only increased, as has its services. Although it originally functioned "pretty much as an online credit card company," Roth wrote, it has since expanded its operations, urged on by its users, which in fact encouraged eBay's 2002 acquisition. Now it is opensourcing its code to developers and seeing how far it can push the digital finance envelope.
Can it push it far enough? If it doesn't, someone else will, because the current system is full of holes.
"Much more honest and democratic, perhaps," Keats told AlterNet, "would be a free market of free markets, in which everybody started issuing bits, each person disseminating his or her own digital cash based on what he or she owned or could make. Many competing currencies: This is what happened to a somewhat lesser degree with banks in the 19th century, each issuing its own legal tender. Back then, the obvious problem was geographic: A New Yorker couldn't be sure whether a bank as far away as South Carolina was legitimate. But the same technologies that make a currency of bits feasible also make physical distance trivial. Via the internet, one could assess the worthiness of other people's bits, and decide how highly to appraise them relative to one's own. Just imagine: Integrity would take on value."
Such a scenario would be a digital upgrade of our earliest economic arrangement, known as the barter system, which is actually gaining in popularity in America. International barter sites like U-Exchange are reporting skyrocketing traffic, while eBay and Craigslist.org are fearlessly charting the path forward. For now, the latter lean, like all of us, on the foundation of fiat currency; that is, we still expect to get paid, usually via PayPal, in dollars and cents. But what if we could just get paid in things we need, or want, from those sites? Instead of punching in bids for baby clothes, what if we all could offer individual goods or services? What if the seller could post his or her wants or needs, rather than a minimum reserve bid? Wouldn't things move much smoother? The jury is out, ironically enough, because of technology. Or lack thereof.
"People still barter for goods in some parts of Africa," said Pineda. "But a purely digital currency is many decades away from adoption as long as the digital divide remains. Developing countries in Africa, Asia, Latin America and more lack the infrastructure to depend completely on electronic transactions, let alone currency transactions. "
Of course, that could change as well, once the rest of the planet catches up to our new century's wireless broadband benchmark. And given what happened to Zimbabwe's disastrously devalued dollar, the barter system isn't looking as crappy as before. In fact, it's the system most used by Zimbabwe when dealing with its chief trading partner China, whose extensive investment in U.S. Treasuries has also empowered decades of gluttonous American consumption. For victors and victims of fiat currencies, the barter system is still an excellent fallback, if you still need to do biz in rapidly changing times.
Wake Up and Smell the Money
But the barter system only really works for those with material goods desired by an increasingly fickle market, which will get even more fickle as climate change takes hold this century and drastically shrinks what's left of the planet's easily obtainable natural resources, from oil to water to arable land and beyond. To chart a path forward into a truly democratic digital future, those having to live on the margins of the international market need something for when they have nothing to give but their own labor. And since some worry that the dollar could be next in line for a bout of hyperinflation, there's little comfort in the thought of exchanging that labor, which is more or less a universal currency, for a piece of paper that could be less than the labor is worth. If you thought underwater mortgages were bad, underwater labor is even worse. Let's just hope we don't have to go there.
We won't, if dogged financial regulation once again rears its lovely head. That could correct serious imbalances in our currently compromised economic system, and perhaps short-circuit the need for a purely digital currency.
"Electronic finance won't spread the wealth, unless the institutions, such as a bank or an online global clearinghouse, that hold -- or, in the case of digital money, record -- your money for you redistribute that wealth," Pineda explained. "Why can't we do away with banks or clearinghouses? If we decentralized our money holdings there would be no overseer to regulate the transactions between people and make sure everyone's being honest."
But that is obviously not happening now, and given the trillions in bailouts of so-called too-big-to-fail banks, it won't be happening anytime soon either. The United States used to have a series of checks and balances on banks, insurance companies and other hyperreal value peddlers, such as the Glass-Steagall Act. In fact, banks and other clearinghouses are mostly epicenters of financial corruption, rather than its sworn enemy. They're easily as if not more corrupt than the worst of us, and can hardly be called upon to honestly value, much less capably redistribute, the wealth of nations. As for the nations themselves? Should we go there either?
Here's what's obvious: The current system of finance is broken beyond repair, and needs to be rebuilt from the ground up. Literally: We need to reconnect our hyperreal financial stratagems to the Earth spinning beneath our feet, rather than hand them off as playthings of algorithm-addicted monoliths like Goldman Sachs and more. And while some nations like Venezuela, Cuba and more have begun to counter that crime by creating their own regional currencies, and other organizations like the International Monetary Fund are openly lobbying for a global currency, it has become clear that currency as we knew it could soon change forever. The question left to answer is what exactly it will change into as the 21st century unfolds.
While digital currency is just as prone to corruption and manipulation as any other fiat system, it is at least honest. By stripping away the paper dollars and precious metal coins, digital currency could unplugs us all from the hallucination that our papers and coins are worth more than yours. Digital currency could perhaps check speculation and predation, all while putting old-world currency's material resources to better use. And sure, it will be a serious headache. But you don't get the baby unless you take the pain of birth or surgery. And given all the pain we have inflicted lately, in the name of our antiquated money system, perhaps it's time we started making a new life in a still-new century, before the dollar becomes a stillborn reminder of what we can do when we're at our worst.
http://www.blacklistednews.com/news-8139-0-5-5--.html
TODAY'S CHART
Current Track Record
Published on 04-06-2010
By Joshua Frank - Alternet
The spiral of economic calculation is dizzying, when you factor in inscrutable fees and other invisible transactions banks attach to the light-speed movement of our money.
Currency has come a long way in the past few thousand years of human existence. Ancient Turkey started using hybrid silver and gold coins around 640 B.C. and the Chinese started passing paper around 800 A.D. But it wasn't until the middle of the 20th century that Diners Club finally invented credit cards, or that electronic transfer payment systems like PayPal threw dirt on the century's grave in the late '90s. And now that the 21st century has fully arrived on the heels of both a harrowing terrorist attack targeting finance nerve centers in New York City and an economic depression downsizing everything from global bank accounts to job prospects, it is high time we rethought how we should pay and get paid to live and die.
Despite the deep thoughts and deeper concerns, it's not hard to see that our digital age perhaps deserves a fully digital currency, compliant across real and virtual geographies. In fact, we're pretty much already there, without admitting it.
"Nowadays, when the Federal Reserve prints money, it doesn't mint a new penny or dollar," Mikka Pineda, research analyst at famed economist Nouriel Roubini's think-tank Roubini Global Economics, explained to AlterNet. "It just changes numbers in bank accounts. Individuals can do this too, provided they have electronic access to their accounts. They can transfer money from one account to another, accept deposits and pay bills online."
With one major difference: Unlike the Fed, individuals actually have to back up their virtual ones and zeroes with so-called real money, in the form of deposits. So-called, because what they're really putting into their accounts, at least in America, are dollars, which are merely material symbols of real value made of paper. Or checks, which are even more hyperreal, given that they are just more paper signifying other paper that symbolizes real value. The spiral of economic signification is dizzying, especially when you start factoring in inscrutable fees, levies and other mostly invisible transactions that banks and other parasites attach to the light-speed movement of our money.
The dizziness increases when you factor in recent news from the Fed, whose controversial chairman Ben Bernanke argued in a February speech that America's central bank should no longer have to adhere to a fractional standard. In other words, its currently feverish ex nihilo money creation, more commonly known by the hilarious nomenclature "quantitative easing," finally wouldn't have to be supported by any minimum reserve requirements. That would, wrote Raw Story's Stephen Webster, make "free-floating, infinitely self-replicating capital a pervasive reality." A bottomless ATM machine, altogether unmoored from material value, or reality itself.
Keeping It Hyperreal
It's a logical endgame for such an illogical system of finance still dependent on currency paradigms created during the rise and fall of Jesus Christ, who stars in both America's money and motto, "In God We Trust." Indeed, our fiat currency, and those like the suspicious Fed entrusted with greasing its wheels, is nothing other than that trust made manifest. Paper money, silver and copper coins, bars of gold, whatever. The only thing that has any real value are the goods being exchanged, and the promises we make to each other to live by a set of rules governing our interactions. Pure digital currency is just that ages-old relationship rendered in bits and gigs, rather than dollars and cents.
"There's nothing shocking or strange about a purely digital currency," explained Jonathon Keats, the conceptual artist and Wired contributor who created the First Bank of Antimatter last year in San Francisco. "It's just a logical technological upgrade on old-fashioned paper money."
Keats' economic thought experiment was illuminating, especially for those who think a paper slip actually worth mere pennies nevertheless equals 100 cents. After the global village's inextricably leveraged game of finance and faith imploded in 2007, monstrously birthing our still-ongoing Great Recession, Keats decided it made just as much sense to peg global currencies to antimatter positrons. If we're going to nuke our collective economic and political integrity with arbitrary currencies and rapacious deregulation, we might as well truly nuke ourselves, so to speak. The idea was challenging and, of course, impossible, but it cleverly exposed the stress fractures in our current system, which is obviously overdue, given recently terrible events, for a serious technological upgrade.
"In the 18th century, when the American colonies started printing cash, ink on paper was the state-of-the-art, the most advanced medium for communicating information," Keats told AlterNet. "Since an economy is just a communications network by which a society trades wants and needs, the most efficient system of information storage and transfer ought to serve that society most effectively. Hence, bits."
But since our digital currency, just like the various historical currencies it could eventually replace, is based on trust and faith rather than actual material value, which itself is resolutely fluid given who is buying and selling what in any given transaction, it's just as vulnerable to the type of impenetrable corruption that has sunk us in the worst depression since the '30s. Transparency and regulation is key to any currency transformation. But given the way we've utterly failed at both with our current fiat currency, prospects aren't good for a clean break from our fractured financial past.
"Problems arise when the information is manipulated, as happened in colonial America shortly after Ben Franklin and his fellow printers started inking lucre on paper. They took all sorts of precautions against personal fraud -- threats to punish counterfeiters with death were typeset on each and every shilling note -- but they didn't consider the catastrophic effects of inflation when the government issued more and more cash to pay off larger and larger debts. The same thing is happening today with quantitative easing, and I suspect there would be a similar risk with any central authority issuing state-of-the-art digital cash."
"Digital currencies are fiat currencies too," Pineda cautioned. "They are not backed by hard assets but rather trust that $1 is worth $1. Even if the world moved on to some global, digital currency unbound from the financial woes of any sovereign state, somebody still has to control the supply of money to determine, for example, how many Twinkies $1 can buy nationally on average."
Fine. But who? Some players are starting to emerge.
Trust, But Verify
"This is the highest-potential business I’ve ever seen in my career," eBay CEO John Donahoe gushed, according to Wired's Daniel Roth. That was in 2008, after e-commerce visionary PayPal, which eBay acquired in 2002, launched a presentation to explore the possibilities of, "a true digital currency that could be used on any Web site," Roth wrote, "that enabled money to move as easily as email."
For more than a decade, PayPal had acted as a digital middleman for international online buyers and sellers exchanging goods on the online auction site, gaining ground on the conventional banks, which levied unnecessary but nevertheless escalating finance charges, that customers wanted to deal with less and less. After the recent econopocalypse, trust and faith in the banks is in shorter supply than ever, to say nothing of their overlords at the Federal Reserve Bank, whose itinerant secrecy was recently crippled after the U.S. Court of Appeals in Manhattan ruled that it had to open its books and finger the lenders that would have collapsed were it not for its bailout from thin air. In that duration, however, PayPal's reputation and users have only increased, as has its services. Although it originally functioned "pretty much as an online credit card company," Roth wrote, it has since expanded its operations, urged on by its users, which in fact encouraged eBay's 2002 acquisition. Now it is opensourcing its code to developers and seeing how far it can push the digital finance envelope.
Can it push it far enough? If it doesn't, someone else will, because the current system is full of holes.
"Much more honest and democratic, perhaps," Keats told AlterNet, "would be a free market of free markets, in which everybody started issuing bits, each person disseminating his or her own digital cash based on what he or she owned or could make. Many competing currencies: This is what happened to a somewhat lesser degree with banks in the 19th century, each issuing its own legal tender. Back then, the obvious problem was geographic: A New Yorker couldn't be sure whether a bank as far away as South Carolina was legitimate. But the same technologies that make a currency of bits feasible also make physical distance trivial. Via the internet, one could assess the worthiness of other people's bits, and decide how highly to appraise them relative to one's own. Just imagine: Integrity would take on value."
Such a scenario would be a digital upgrade of our earliest economic arrangement, known as the barter system, which is actually gaining in popularity in America. International barter sites like U-Exchange are reporting skyrocketing traffic, while eBay and Craigslist.org are fearlessly charting the path forward. For now, the latter lean, like all of us, on the foundation of fiat currency; that is, we still expect to get paid, usually via PayPal, in dollars and cents. But what if we could just get paid in things we need, or want, from those sites? Instead of punching in bids for baby clothes, what if we all could offer individual goods or services? What if the seller could post his or her wants or needs, rather than a minimum reserve bid? Wouldn't things move much smoother? The jury is out, ironically enough, because of technology. Or lack thereof.
"People still barter for goods in some parts of Africa," said Pineda. "But a purely digital currency is many decades away from adoption as long as the digital divide remains. Developing countries in Africa, Asia, Latin America and more lack the infrastructure to depend completely on electronic transactions, let alone currency transactions. "
Of course, that could change as well, once the rest of the planet catches up to our new century's wireless broadband benchmark. And given what happened to Zimbabwe's disastrously devalued dollar, the barter system isn't looking as crappy as before. In fact, it's the system most used by Zimbabwe when dealing with its chief trading partner China, whose extensive investment in U.S. Treasuries has also empowered decades of gluttonous American consumption. For victors and victims of fiat currencies, the barter system is still an excellent fallback, if you still need to do biz in rapidly changing times.
Wake Up and Smell the Money
But the barter system only really works for those with material goods desired by an increasingly fickle market, which will get even more fickle as climate change takes hold this century and drastically shrinks what's left of the planet's easily obtainable natural resources, from oil to water to arable land and beyond. To chart a path forward into a truly democratic digital future, those having to live on the margins of the international market need something for when they have nothing to give but their own labor. And since some worry that the dollar could be next in line for a bout of hyperinflation, there's little comfort in the thought of exchanging that labor, which is more or less a universal currency, for a piece of paper that could be less than the labor is worth. If you thought underwater mortgages were bad, underwater labor is even worse. Let's just hope we don't have to go there.
We won't, if dogged financial regulation once again rears its lovely head. That could correct serious imbalances in our currently compromised economic system, and perhaps short-circuit the need for a purely digital currency.
"Electronic finance won't spread the wealth, unless the institutions, such as a bank or an online global clearinghouse, that hold -- or, in the case of digital money, record -- your money for you redistribute that wealth," Pineda explained. "Why can't we do away with banks or clearinghouses? If we decentralized our money holdings there would be no overseer to regulate the transactions between people and make sure everyone's being honest."
But that is obviously not happening now, and given the trillions in bailouts of so-called too-big-to-fail banks, it won't be happening anytime soon either. The United States used to have a series of checks and balances on banks, insurance companies and other hyperreal value peddlers, such as the Glass-Steagall Act. In fact, banks and other clearinghouses are mostly epicenters of financial corruption, rather than its sworn enemy. They're easily as if not more corrupt than the worst of us, and can hardly be called upon to honestly value, much less capably redistribute, the wealth of nations. As for the nations themselves? Should we go there either?
Here's what's obvious: The current system of finance is broken beyond repair, and needs to be rebuilt from the ground up. Literally: We need to reconnect our hyperreal financial stratagems to the Earth spinning beneath our feet, rather than hand them off as playthings of algorithm-addicted monoliths like Goldman Sachs and more. And while some nations like Venezuela, Cuba and more have begun to counter that crime by creating their own regional currencies, and other organizations like the International Monetary Fund are openly lobbying for a global currency, it has become clear that currency as we knew it could soon change forever. The question left to answer is what exactly it will change into as the 21st century unfolds.
While digital currency is just as prone to corruption and manipulation as any other fiat system, it is at least honest. By stripping away the paper dollars and precious metal coins, digital currency could unplugs us all from the hallucination that our papers and coins are worth more than yours. Digital currency could perhaps check speculation and predation, all while putting old-world currency's material resources to better use. And sure, it will be a serious headache. But you don't get the baby unless you take the pain of birth or surgery. And given all the pain we have inflicted lately, in the name of our antiquated money system, perhaps it's time we started making a new life in a still-new century, before the dollar becomes a stillborn reminder of what we can do when we're at our worst.
http://www.blacklistednews.com/news-8139-0-5-5--.html
TODAY'S CHART
Current Track Record
Shhh!!!, What If It Was Reported That They Are Spraying Aluminum?
Shhh!!!, What If It Was Reported That They Are Spraying Aluminum?
Published on 04-06-2010
By Michael J. Murphy - BLN Contributing Writer
Geo-engineers gathered once again near Monterey California at the Asilomar International Conference on Climate Intervention Technologies meeting to develop norms and guidelines for what they say will be “controlled experimentation” on geo-engineering the planet. While many claim that stratospheric aerosol geo-engineering (SAG), aka chemtrail programs are in full-scale deployment, organizers of this meeting showed a lack of transparency by either denying or holding reporters to a high set of rules which limited what information was brought to the attention of the public. While we might never know how much information from the conference was suppressed in articles and reports, we do know some of the information that was not included. The issue of current SAG deployment and the use of aluminum in these programs seemed to be missing from reports and articles that came out of the conference.
Mauro Oliveira, webmaster of http://www.geoengineeringwatch.org/ said that aluminum became a concern to many after the American Association for the Advancement of Science (AAAS) meeting when independent journalists sent shockwaves around the world after breaking the story of scientists discussing the plausibility of spraying 10 to 20 mega-tons of aluminum into the sky in SAG campaigns. Francis Mangels, a retired USDA/USFS Biologist commented on the use of aluminum by saying, “although aluminum is an abundant element, it does not exist naturally in the environment in free form. Dispersing massive amounts of ultra-fine aluminum particulates as proposed by geo-engineers into the stratosphere would have unquantifiable human health and environmental impacts”. When scientists were asked about the risks associated with the use of aluminum sprayed as an aerosol in SAG programs, they admitted that they have only begun to research aluminum and have published nothing. They also admitted that something terrible could be found in the future that they don’t know about. Also, when asked about deployment of current programs, scientists denied that any SAG programs have been deployed. This contradicted the findings of many who claim that SAG programs are well under-way and that high amounts of aluminum and other harmful substances from these programs are being found resulting in the devastation of eco-systems and the health of people around the world.
Like the AAAS meeting, the Asilomar geo-engineering conference hosted some of the world’s leading geo-engineers, environmental groups and scientists who gathered to discuss various issues relating to SAG. Unlike the AAAS meeting, reporters were either denied attendance or set to a high standard of rules which included a ban on daily reporting, quoting, and recording anything from the meeting without the consent of presenters. Stewart Howe was one of the reporters denied access into the conference. Howe helped break the story about aluminum when he was sent to the AAAS meeting in San Diego to report for Infowars. He feels that he was denied access because of this and his reporting of evidence that suggests SAG programs are in full-scale deployment. Howe said, “due to the devastating effects of aluminum and world-wide claims of current deployment, transparent reporting of this could devastate the entire SAG agenda compromising billions of dollars in contracts.” He went on to say that it was apparent that this meeting had no intentions of being transparent.
Whereas many reporters were denied access to this event, some “privileged” journalists did have the opportunity to attend. Although some of the articles about the conference appeared to be critical of geo-engineering, they largely ignored the use of aluminum and other serious issues that could have impacted or changed the damaging components of the SAG agenda. Due to their agreement to the strict, non-transparent guidelines of the conference, the reporting journalists not only helped keep some of the meeting secret, they also helped hide the fact that geo-engineers are “planning” to use aluminum in SAG programs. Some articles were also falsely written stating that geo-engineers are planning on using sulfur in the various SAG campaigns. This contradicts articles written by some reporters who attended the AAAS meeting and quoted scientists as stating that they initially considered using sulfur for the program; however, aluminum is more effective and will be the ingredient considered for use. To date, scientists have not corrected the journalists who falsely reported the use of less damaging sulfur instead of harmful aluminum as being an ingredient for SAG programs.
Let’s look at this issue a little more closely. People from around the world are witnessing white trails behind airplanes and believe them to be a product of SAG programs that scientists deny exist. People are also reporting test results of high amounts of aluminum, barium and strontium in their snow, rain and soil where the alleged spraying is occurring. These are the exact substances that scientists are “considering” implementing into the various SAG programs discussed at the AAAS meeting.
Shockwaves were sent around the globe after the AAAS meeting because of reports that led many to believe that the destruction of eco-systems and the massive amounts of aluminum found in the snow, rain and soil are in fact from SAG programs that have already been deployed. As a result of these reports, many around the world are asking questions about the current deployment and the dangers of using aluminum in these programs. And finally, journalists are restricted from reporting certain facts from this conference that could be damaging to the SAG agenda.
Could transparent reporting of certain facts threaten the current and future deployment of SAG programs around the world? Could denying independent reporters the freedom to openly report on this meeting be an attempt to cover-up allegations that SAG programs are in full-scale deployment and are also destroying eco-systems around the world with the use of aluminum? Is it possible that the reporters who were allowed into this meeting were invited for the purpose of protecting the corporate and political interests of those involved with SAG programs? What would the political and monetary implications be for those who have vested interests in SAG if the larger public was made aware of the multiple environmental and health effects of spraying mega-tons of aluminum into our environment? Whatever the reason for this lack of transparency and denial of information, we the public need to hold both reporters and scientists to a higher degree of professionalism, transparency and ethical consideration when it comes to these and other issues of public interests. The future of our health and environment is dependent upon it. More information and videos on the subject of geo-engineering/chemtrails can be found on my blog at http://truthmediaproductions.blogspot.com/ . I can also be reached at whtagft@hotmail.com.
Bio: Michael J. Murphy is a peaceful non-violent independent journalist and political activist from the Los Angeles area whose work focuses on issues that go beyond the interest of the Corporate mainstream media. Michael's interviews include; G. Edward Griffin, Chelene Nightingale (California Governor candidate), Jim King (California lieutenant Governor candidate), Mark Reed (California congressional candidate), Bill Hunt (Orange County Sheriff candidate), Jenny Worman (California congressional candidate), Stewart Rhodes (Oath Keepers, Founder) and Ed Asner (Actor "Mary Tyler Moore", "Lou Grant" and "UP"). Michael has also made a series of short films that address controversial political issues. Many of his interviews and videos can be seen on his blog at http://truthmediaproductions.blogspot.com/. He can be reached by e-mail at: whtagft@hotmail.com.
http://www.blacklistednews.com/news-8141-0-5-5--.html
TODAY'S CHART
Current Track Record
Published on 04-06-2010
By Michael J. Murphy - BLN Contributing Writer
Geo-engineers gathered once again near Monterey California at the Asilomar International Conference on Climate Intervention Technologies meeting to develop norms and guidelines for what they say will be “controlled experimentation” on geo-engineering the planet. While many claim that stratospheric aerosol geo-engineering (SAG), aka chemtrail programs are in full-scale deployment, organizers of this meeting showed a lack of transparency by either denying or holding reporters to a high set of rules which limited what information was brought to the attention of the public. While we might never know how much information from the conference was suppressed in articles and reports, we do know some of the information that was not included. The issue of current SAG deployment and the use of aluminum in these programs seemed to be missing from reports and articles that came out of the conference.
Mauro Oliveira, webmaster of http://www.geoengineeringwatch.org/ said that aluminum became a concern to many after the American Association for the Advancement of Science (AAAS) meeting when independent journalists sent shockwaves around the world after breaking the story of scientists discussing the plausibility of spraying 10 to 20 mega-tons of aluminum into the sky in SAG campaigns. Francis Mangels, a retired USDA/USFS Biologist commented on the use of aluminum by saying, “although aluminum is an abundant element, it does not exist naturally in the environment in free form. Dispersing massive amounts of ultra-fine aluminum particulates as proposed by geo-engineers into the stratosphere would have unquantifiable human health and environmental impacts”. When scientists were asked about the risks associated with the use of aluminum sprayed as an aerosol in SAG programs, they admitted that they have only begun to research aluminum and have published nothing. They also admitted that something terrible could be found in the future that they don’t know about. Also, when asked about deployment of current programs, scientists denied that any SAG programs have been deployed. This contradicted the findings of many who claim that SAG programs are well under-way and that high amounts of aluminum and other harmful substances from these programs are being found resulting in the devastation of eco-systems and the health of people around the world.
Like the AAAS meeting, the Asilomar geo-engineering conference hosted some of the world’s leading geo-engineers, environmental groups and scientists who gathered to discuss various issues relating to SAG. Unlike the AAAS meeting, reporters were either denied attendance or set to a high standard of rules which included a ban on daily reporting, quoting, and recording anything from the meeting without the consent of presenters. Stewart Howe was one of the reporters denied access into the conference. Howe helped break the story about aluminum when he was sent to the AAAS meeting in San Diego to report for Infowars. He feels that he was denied access because of this and his reporting of evidence that suggests SAG programs are in full-scale deployment. Howe said, “due to the devastating effects of aluminum and world-wide claims of current deployment, transparent reporting of this could devastate the entire SAG agenda compromising billions of dollars in contracts.” He went on to say that it was apparent that this meeting had no intentions of being transparent.
Whereas many reporters were denied access to this event, some “privileged” journalists did have the opportunity to attend. Although some of the articles about the conference appeared to be critical of geo-engineering, they largely ignored the use of aluminum and other serious issues that could have impacted or changed the damaging components of the SAG agenda. Due to their agreement to the strict, non-transparent guidelines of the conference, the reporting journalists not only helped keep some of the meeting secret, they also helped hide the fact that geo-engineers are “planning” to use aluminum in SAG programs. Some articles were also falsely written stating that geo-engineers are planning on using sulfur in the various SAG campaigns. This contradicts articles written by some reporters who attended the AAAS meeting and quoted scientists as stating that they initially considered using sulfur for the program; however, aluminum is more effective and will be the ingredient considered for use. To date, scientists have not corrected the journalists who falsely reported the use of less damaging sulfur instead of harmful aluminum as being an ingredient for SAG programs.
Let’s look at this issue a little more closely. People from around the world are witnessing white trails behind airplanes and believe them to be a product of SAG programs that scientists deny exist. People are also reporting test results of high amounts of aluminum, barium and strontium in their snow, rain and soil where the alleged spraying is occurring. These are the exact substances that scientists are “considering” implementing into the various SAG programs discussed at the AAAS meeting.
Shockwaves were sent around the globe after the AAAS meeting because of reports that led many to believe that the destruction of eco-systems and the massive amounts of aluminum found in the snow, rain and soil are in fact from SAG programs that have already been deployed. As a result of these reports, many around the world are asking questions about the current deployment and the dangers of using aluminum in these programs. And finally, journalists are restricted from reporting certain facts from this conference that could be damaging to the SAG agenda.
Could transparent reporting of certain facts threaten the current and future deployment of SAG programs around the world? Could denying independent reporters the freedom to openly report on this meeting be an attempt to cover-up allegations that SAG programs are in full-scale deployment and are also destroying eco-systems around the world with the use of aluminum? Is it possible that the reporters who were allowed into this meeting were invited for the purpose of protecting the corporate and political interests of those involved with SAG programs? What would the political and monetary implications be for those who have vested interests in SAG if the larger public was made aware of the multiple environmental and health effects of spraying mega-tons of aluminum into our environment? Whatever the reason for this lack of transparency and denial of information, we the public need to hold both reporters and scientists to a higher degree of professionalism, transparency and ethical consideration when it comes to these and other issues of public interests. The future of our health and environment is dependent upon it. More information and videos on the subject of geo-engineering/chemtrails can be found on my blog at http://truthmediaproductions.blogspot.com/ . I can also be reached at whtagft@hotmail.com.
Bio: Michael J. Murphy is a peaceful non-violent independent journalist and political activist from the Los Angeles area whose work focuses on issues that go beyond the interest of the Corporate mainstream media. Michael's interviews include; G. Edward Griffin, Chelene Nightingale (California Governor candidate), Jim King (California lieutenant Governor candidate), Mark Reed (California congressional candidate), Bill Hunt (Orange County Sheriff candidate), Jenny Worman (California congressional candidate), Stewart Rhodes (Oath Keepers, Founder) and Ed Asner (Actor "Mary Tyler Moore", "Lou Grant" and "UP"). Michael has also made a series of short films that address controversial political issues. Many of his interviews and videos can be seen on his blog at http://truthmediaproductions.blogspot.com/. He can be reached by e-mail at: whtagft@hotmail.com.
http://www.blacklistednews.com/news-8141-0-5-5--.html
TODAY'S CHART
Current Track Record
California's $500-billion pension time bomb
California's $500-billion pension time bomb
Published on 04-06-2010
Source: LA Times
The state of California's real unfunded pension debt clocks in at more than $500 billion, nearly eight times greater than officially reported.
That's the finding from a study released Monday by Stanford University's public policy program, confirming a recent report with similar, stunning findings from Northwestern University and the University of Chicago.
To put that number in perspective, it's almost seven times greater than all the outstanding voter-approved state general obligation bonds in California.
Why should Californians care? Because this year's unfunded pension liability is next year's budget cut to important programs. For a glimpse of California's budgetary future, look no further than the $5.5 billion diverted this year from higher education, transit, parks and other programs in order to pay just a tiny bit toward current unfunded pension and healthcare promises. That figure is set to triple within 10 years and -- absent reform -- to continue to grow, crowding out funding for many programs vital to the overwhelming majority of Californians.
How did we get here? The answer is simple: For decades -- and without voter consent -- state leaders have been issuing billions of dollars of debt in the form of unfunded pension and healthcare promises, then gaming accounting rules in order to understate the size of those promises.
As we saw during the recent financial crisis, hiding debt is not a new phenomenon. Indeed, General Motors did something similar to obscure the true cost of its retirement promises. Through aggressive accounting, for a while it, too, got away with making pension contributions that were a fraction of what it really needed to make, thereby reporting better earnings than was truly the case.
But eventually the pension promises come due, and for GM, that meant having to add extra costs to its cars, making its prices less attractive to consumers and contributing to its eventual bankruptcy.
In California's case, past pension underfunding means reduced funding of current programs. This explains why pension costs rose 2,000% from 1999 to 2009, while state funding for higher education declined over the same period.
What can we do about this? For the promises already made, nothing. They are contractual, and because that $500 billion of debt must be paid, retirement costs will rise dramatically no matter what we do. But we can reduce the sizes of promises made to new employees and require full and truthful disclosure so that pension debt can never again be hidden.
Last summer Gov. Arnold Schwarzenegger proposed exactly that. Since then? Silence. State legislators are afraid even to utter the words "pension reform" for fear of alienating what has become -- since passage of the Dills Act in 1978, which endowed state public employees with collective bargaining rights on top of their civil service protections -- the single most politically influential constituency in our state: government employees.
Because legislators are unwilling to raise issues that might offend that constituency, they have effectively turned the peroration of Abraham Lincoln's Gettysburg Address on its head: Instead of a government of the people, by the people and for the people, we have become a government of its employees, by its employees and for its employees.
This explains why legislators fight harder to overturn employee furloughs than to reform pensions and elect to pay more in compensation to just 65,000 employees in one single department -- corrections -- than they spend on a higher education system serving 10 times as many people.
Simply put, the single most important step a legislator can take to protect programs and taxpayers is to embrace pension reform. There is no structural impediment to pension reform, and no initiative has forced legislators to issue all that pension debt. All of the damage has been caused by legislation, most notoriously SB 400 in 1999, which retroactively and prospectively boosted pension promises by billions of dollars without boosting contributions. Likewise, all the remediation can be accomplished by legislation.
Even the state legislature of Illinois -- a legendary poster state for pension misbehavior -- has now passed pension reform. There's no reason the California Legislature cannot do the same.
Call or write your legislator about pension reform, and while you're at it, remind him or her that we are indeed a government of the people, by the people and for the people.
David Crane is special advisor to Gov. Arnold Schwarzenegger for jobs and economic growth.
http://www.blacklistednews.com/news-8142-0-13-13--.html
TODAY'S CHART
Current Track Record
Published on 04-06-2010
Source: LA Times
The state of California's real unfunded pension debt clocks in at more than $500 billion, nearly eight times greater than officially reported.
That's the finding from a study released Monday by Stanford University's public policy program, confirming a recent report with similar, stunning findings from Northwestern University and the University of Chicago.
To put that number in perspective, it's almost seven times greater than all the outstanding voter-approved state general obligation bonds in California.
Why should Californians care? Because this year's unfunded pension liability is next year's budget cut to important programs. For a glimpse of California's budgetary future, look no further than the $5.5 billion diverted this year from higher education, transit, parks and other programs in order to pay just a tiny bit toward current unfunded pension and healthcare promises. That figure is set to triple within 10 years and -- absent reform -- to continue to grow, crowding out funding for many programs vital to the overwhelming majority of Californians.
How did we get here? The answer is simple: For decades -- and without voter consent -- state leaders have been issuing billions of dollars of debt in the form of unfunded pension and healthcare promises, then gaming accounting rules in order to understate the size of those promises.
As we saw during the recent financial crisis, hiding debt is not a new phenomenon. Indeed, General Motors did something similar to obscure the true cost of its retirement promises. Through aggressive accounting, for a while it, too, got away with making pension contributions that were a fraction of what it really needed to make, thereby reporting better earnings than was truly the case.
But eventually the pension promises come due, and for GM, that meant having to add extra costs to its cars, making its prices less attractive to consumers and contributing to its eventual bankruptcy.
In California's case, past pension underfunding means reduced funding of current programs. This explains why pension costs rose 2,000% from 1999 to 2009, while state funding for higher education declined over the same period.
What can we do about this? For the promises already made, nothing. They are contractual, and because that $500 billion of debt must be paid, retirement costs will rise dramatically no matter what we do. But we can reduce the sizes of promises made to new employees and require full and truthful disclosure so that pension debt can never again be hidden.
Last summer Gov. Arnold Schwarzenegger proposed exactly that. Since then? Silence. State legislators are afraid even to utter the words "pension reform" for fear of alienating what has become -- since passage of the Dills Act in 1978, which endowed state public employees with collective bargaining rights on top of their civil service protections -- the single most politically influential constituency in our state: government employees.
Because legislators are unwilling to raise issues that might offend that constituency, they have effectively turned the peroration of Abraham Lincoln's Gettysburg Address on its head: Instead of a government of the people, by the people and for the people, we have become a government of its employees, by its employees and for its employees.
This explains why legislators fight harder to overturn employee furloughs than to reform pensions and elect to pay more in compensation to just 65,000 employees in one single department -- corrections -- than they spend on a higher education system serving 10 times as many people.
Simply put, the single most important step a legislator can take to protect programs and taxpayers is to embrace pension reform. There is no structural impediment to pension reform, and no initiative has forced legislators to issue all that pension debt. All of the damage has been caused by legislation, most notoriously SB 400 in 1999, which retroactively and prospectively boosted pension promises by billions of dollars without boosting contributions. Likewise, all the remediation can be accomplished by legislation.
Even the state legislature of Illinois -- a legendary poster state for pension misbehavior -- has now passed pension reform. There's no reason the California Legislature cannot do the same.
Call or write your legislator about pension reform, and while you're at it, remind him or her that we are indeed a government of the people, by the people and for the people.
David Crane is special advisor to Gov. Arnold Schwarzenegger for jobs and economic growth.
http://www.blacklistednews.com/news-8142-0-13-13--.html
TODAY'S CHART
Current Track Record
Subscribe to:
Posts (Atom)
Posts
