Sunday, August 2, 2009

Massive demonstration, serious jam in Malaysia capital

Massive demonstration against the Internal Security Act (ISA) took place here on Saturday, resulting in terrible jams heading towards the city.

More than 30,000 people took part in the procession starting at various locations in the city towards the National Palace to hand over a memorandum to the King on the abolishment of the ISA.

In order to maintain social security, police have set up road blocks as early as Thursday to check for potential participants.

Serious congestion occurred on Saturday when the checks were more stern, causing road users to take more than two hours to complete a travel distance of mere five kilometers.

Police cars with their sirens on could hardly pass through the bumper-to-bumper crawl too.

At least seven cars broke down, believed to be a result of overheated engines.

Protestors and riot police confront in Kuala Lumpur, capital of Malaysia on August 1. More than 30,000 people took part in a massive demonstration against the Internal Security Act (ISA) in the city towards the National Palace to hand over a memorandum to the King on the abolishment of the ISA. (Xinhua/AFP Photo)
According to a local daily, the police began to arrest suspected organizers of illegal gatherings as early as 11 a.m. at the National Mosque here, but the police failed to hinder the restfrom taking part.

The Star said that the number went on and as of 3:30 p.m. police had confirmed the arrest of 157 people.

The Federal Reserve Unit (FRU) from the police force was forced to fire water canons and tear gas to disperse the people but they soon re-gathered.

Some participants took with them salt and water to wash off the irritant caused by the gas.

Roit police are ready to throw tear shell to disperse the massive demonstrators in Kuala Lumpur, capital of Malaysia on August 1. More than 30,000 people took part in the massive demonstration against the Internal Security Act (ISA) in the city towards the National Palace to hand over a memorandum to the King on the abolishment of the ISA. (Xinhua/AFP Photo)
The FRU was seen to be stationed at various parts of the city identified as the gathering "hot spots."

The ISA was enacted to deal with certain threats the country faced. It allowed the police to detain suspected people for 60 days without trial. The detention period may be extended to two years at the consent of Malaysian Home Minister.

However, those who object to the ISA are of the view that the government has been misusing the act as a tool against the members of the opposition parties.

They have also claimed that there are detainees who have been detained for eight years at the Kamunting Detention Center in Perak State.

According to the initial plan, two groups of the opposite opinions towards the ISA are going to submit memoranda to the Kingto respectively support and object the abolishment of the ISA.

Demonstrators try to avoid the tear shells released by police in Kuala Lumpur, capital of Malaysia on August 1. More than 30,000 people took part in a massive demonstration against the Internal Security Act (ISA) in the city towards the National Palace to hand over a memorandum to the King on the abolishment of the ISA.(Xinhua/AFP Photo)
There were six gathering points for the two groups to gather and they would march towards the Palace at 3 p.m.

However, The Star reported that the Pro-ISA rally was canceled.

It has been not confirmed whether the people taking part in the rally Saturday were all anti-ISA.

Later in the afternoon, the Light Rail Transit was directed to skip Masjid Jamek Station, which was also a frequent point of gathering.

Source: Xinhua

Glenn Beck: Government Website Takes Over Your Computer Forever

Criminal charges filed against Obama WHO and UN for Bioterrorism/Intent to Commit Mass Murder

Injunctions and criminal charges have been filed with the FBI against the WHO, the UN, Obama, Rothschild, Rockefeller and many others involved in the NWO plot of mass depopulation by way of bio-warfare genocide. Their plans included the mass murder of over 5 billion people worldwide starting with the USA by creating a man made virus pandemic, and then to euthanize the population via mandatory vaccination injections. The charges have been officially filed with the FBI along with an extensive amount of evidence and a full investigation is now underway.

Link to original article:
http://www.naturalnews.com/026503_pandemic_swine_flu_bioterrorism.html

Actual documents:
https://share.acrobat.com/adc/adc.do?docid=2c7f15d9-53e6-4a9c-ada7-0592054b3675

http://www.scribd.com/doc/17044769/Evidence-of-the-Use-of-Pandemic-Flu-to-Depopulate-USA

http://yourtubenews.ning.com/main/authorization/signIn?target=http%3A%2F%2Fyourtubenews.ning.com%2Fforum%2Ftopics%2Fimportant-jane-burgermeister

http://www.pandemicflu.gov/plan/states/stateplans.html

http://www.pandemicflu.gov/plan/federal/index.html

http://www.pandemicflu.gov/vaccine/index.html

http://www.who.int/csr/disease/avian_influenza/phase/en/index.html

http://www.dhs.gov/xabout/laws/gc_1219263961449.shtm

http://www.hhs.gov/pandemicflu/plan/appendixh.html

http://www.bloomberg.com/apps/news?pid=20601124&sid=aShZig0Cig4g

http://uk.reuters.com/article/idUKTRE53R1PO20090428

http://www.globalresearch.ca/index.php?context=va&aid=13856

http://www.ahrp.org/infomail/0503/22.php

http://dc-chemical.us/?q=node/35

http://publichealthlaw.net/MSEHPA/MSEHPA.pdf

http://involuntaryservant.blogspot.com/2009/04/dr-len-horowitz-names-specific.html

http://elliotlakenews.wordpress.com/2006/12/08/was-the-spanish-flu-man-made/

http://www.rense.com/general85/a1.htm

中國成為跨國汽車公司全球成長熱點

（中央社台北2日電）跨國汽車公司近日公布上半年全球業績，豐田、通用、福特、大眾、本田、日產、現代、標緻雪鐵龍等呈現負成長，僅在中國取得佳績，中國市場成為跨國汽車公司全球主要成長熱點。

新華社報導，從2008年下半年起，全球車市萎靡不振，汽車銷售量大幅下滑。雖然各國政府都採取拯救車市措施，但今年首季全球車市持續下滑，第2季才開始止跌回穩。上半年全球汽車市場需求總體萎縮近18%。

不過，今年以來，在中國政府一系列擴大汽車消費政策推動下，中國汽車產銷兩旺，銷售量達到609萬輛，比去年同期成長近18%，暫時成為全球最大的汽車市場。

據統計，上半年中國609萬輛汽車銷售量中，乘用車佔74.3%，約453萬輛，其中跨國汽車公司投資的合資企業約佔7成。

借助中國和德國市場表現，今年上半年大眾汽車集團全球汽車銷售量達310萬輛，比去年同期下降5%，成為僅次於豐田和通用，世界第3大跨國汽車集團。

上半年，大眾汽車集團（中國）及兩家合資企業：上海大眾和一汽大眾，在中國和香港銷售量達到65.2萬輛，比去年同期成長22.7%。

美國通用汽車公司上半年全球銷售量355萬輛，比去年同期下滑21.8%。但通用汽車中國公司及旗下合資企業上半年銷售81.4萬輛，比去年同期成長38%，創下通用汽車在中國半年銷售業績有史以來新高。

福特汽車上半年全球銷售量大幅下滑，但在中國市場成長14%，創銷售新紀錄。克萊斯勒在中國銷售的進口汽車比去年同期成長。

標緻雪鐵龍集團上半年全球業績大幅下滑，但在中國市場成長18%。日本本田、日產在中國市場取得兩位數成長。

今年6月，福特汽車將亞太和非洲區總部搬遷到上海，加強開拓中國市場。新組建的通用汽車公司，將國際營運總部設在上海。

通用汽車（中國）總裁甘文維表示，新通用下一步將全力發展中國業務，未來5年在中國銷售量將要漲2倍，達到200萬輛規模，並致力於培養產品研發能力。

此外，豐田汽車今年上半年在中國業績保持不升不降，但在全球銷售量下滑26%。豐田全球銷售量險勝通用汽車，保住行業老大的位置。

7月上旬，剛上任的豐田汽車新社長豐田章男赴天津、吉林等地拜訪中國合作夥伴，由此可見豐田對中國市場的重視。

標緻雪鐵龍集團新任首席執行官菲利普．瓦蘭日前表示，將進一步擴大對中國投資，準備成立第2家整車合資企業。

時代：中國不再是未來而是全球經濟現在式

（中央社台北2日綜合外電報導）最新一期「時代雜誌（Time）」指出，中國經濟開始復甦，帶動亞洲出口導向國家經濟好轉，展現全球經濟平衡力量東移趨勢。中國不再是全球經濟的未來，而是現在式。

雜誌引述正在上海通用汽車（GM Motors）門市賞車的中國國營鋼鐵廠主管張意（Zhang Yi，譯音）的話說，「情況仍然很好，我一點都不擔心負擔不起這個」。說話時，他正看著一輛新款別克（Buick）轎車。

這篇文章指出，現在全球沒有幾個城市的消費者敢如此地有自信。去年中國出口成長重挫，但在政府推出2年5860億美元、約中國GDP13%的振興方案後，中國經濟開始反彈，第二季經濟成長達到7.9%，今年可望超過8%。

報導說，身為全球經濟龍頭的美國，正迷失於轉變的經濟政策之中，遠離引導美國經濟全速前進長達約30年的資本主義，公眾激辯有日益升高之勢。中國顯然沒有這樣的異議，在迅速回應危機之餘，經濟已出現轉機。

時代雜誌並指出，中國是全球前十大經濟體中，唯一呈現經濟正成長的國家，很快就能超越日本成為第二大經濟體。上海的經濟學家謝國忠這麼形容，「每個人都想知道一件事：中國能夠拯救世界嗎？」

報導說，這個問題幾年前聽起來頗為荒謬，畢竟中國仍高度仰賴全球經濟火車頭美國的需求。但根據IMF預測，美國今年經濟將萎縮2.6%，失業率已攀升到9.5%，這是1983年來最高數字。（譯者：中央社江今葉）

Regulators shut down banks in five states

WASHINGTON (AP) -- Regulators on Friday shut down banks in Florida, New Jersey, Ohio, Oklahoma and Illinois, boosting to 69 the number of federally insured banks to fail this year amid the pressures of the weak economy and mounting loan defaults.

The Federal Deposit Insurance Corp. was appointed receiver of the five banks.

The agency shut down Integrity Bank of Jupiter, Fla., with $119 million in assets and $102 million in deposits, and First BankAmericano, based in Elizabeth, N.J., with $166 million in assets and $157 million in deposits.

Also closed were Peoples Community Bank, West Chester, Ohio, with $705.8 million in assets and $598.2 million in deposits; First State Bank of Altus, in Altus, Okla., with $103.4 million in assets and $98.2 million in deposits; and Mutual Bank of Harvey, Ill., with $1.6 billion in assets and $1.6 billion in deposits.

Mutual Bank was the largest of the five. It was closed Friday by the Illinois Department of Financial Professional Regulation's division of banking, which appointed the FDIC as receiver. United Central Bank of Garland, Texas, is assuming the deposits and essentially all of the assets. In addition, the FDIC and First United Central Bank entered into a loss-sharing agreement covering $1.3 billion of the assets of Mutual Bank. Its 12 branches will reopen Saturday as offices of United Central Bank.

First State Bank of Altus was closed by the Oklahoma State Banking Department, which appointed the FDIC as receiver. Herring Bank, based in Amarillo, Texas, is assuming the deposits and about $64.4 million of the assets of First State Bank of Altus and the FDIC will retain the remaining assets for eventual sale. The failed bank's branches will reopen Saturday as offices of Herring Bank.

The FDIC said that Stonegate Bank, based in Fort Lauderdale, Fla., had agreed to assume all the deposits and about $52 million of the assets of Integrity Bank. The agency will retain the remaining assets for eventual sale. Integrity Bank's sole office in Jupiter will reopen Monday as a branch of Stonegate Bank.

Crown Bank, based in Brick, N.J., has agreed to assume the assets and deposits of First BankAmericano. The failed bank's six branches will reopen Saturday as offices of Crown Bank.

First National Bank, based in Hamilton, Ohio, is buying the assets and deposits of Peoples Community Bank. In addition, the FDIC and First Financial Bank entered into a loss-sharing agreement covering $657.6 million of the assets of Peoples Community Bank. Its 19 branches will reopen Monday as offices of First Financial Bank.

The 69 bank failures nationwide this year compare with 25 last year and three in 2007.

The FDIC estimates that the cost to the deposit insurance fund from the failure of Integrity Bank will be around $46 million, that of First BankAmericano $15 million, Peoples Community Bank $129.5 million, First State Bank of Altus $25.2 million and Mutual Bank $696 million.

As the economy has soured -- with unemployment rising, home prices tumbling and loan defaults soaring -- bank failures have cascaded and sapped billions out of the deposit insurance fund. It now stands at its lowest level since 1993, $13 billion as of the first quarter.

While losses on home mortgages may be leveling off, delinquencies on commercial real estate loans remain a hot spot of potential trouble, FDIC officials say. If the recession deepens, defaults on the high-risk loans could spike. Many regional banks hold large numbers of them.

The number of banks on the FDIC's list of problem institutions leaped to 305 in the first quarter -- the highest number since 1994 during the savings and loan crisis -- from 252 in the fourth quarter. The FDIC expects U.S. bank failures to cost the insurance fund around $70 billion through 2013.

The May closing of struggling Florida thrift BankUnited FSB is expected to cost the insurance fund $4.9 billion, the second-largest hit since the financial crisis began. The costliest was the July 2008 seizure of big California lender IndyMac Bank, on which the insurance fund is estimated to have lost $10.7 billion.

The largest U.S. bank failure ever also came last year: Seattle-based thrift Washington Mutual Inc. fell in September, with about $307 billion in assets. It was acquired by JPMorgan Chase & Co. for $1.9 billion in a deal brokered by the FDIC.

Ieva M. Augstums reported from Charlotte, N.C.

By Marcy Gordon and Ieva M. Augstums, AP Business Writers

Signs of weakness in economy boost Treasurys

NEW YORK (AP) - Treasury prices bounced higher Friday, capping a tumultuous week that saw a record amount of debt issuance, as a government report pointed to slow growth ahead for the economy.

Long-term Treasurys saw the biggest gains, extending an advance that began Thursday following a successful auction of $28 billion of seven-year notes. The results of that auction helped ease worries about the huge influx of supply coming into the market after two auctions earlier in the week were met with only tepid demand.

On Friday, a government report revealed more weakness in the economy, sending investors in search of safe-haven assets like Treasurys.

The Commerce Department said the nation's gross domestic product, a measure of the economy's total output, fell at a slower-than-expected pace of 1 percent in the second quarter. But the revised first-quarter GDP contraction came in much lower, at 6.4 percent from 5.5 percent, the worst quarterly reading in nearly 30 years.

The report also said consumers cut spending by 1.2 percent in the second quarter, after a slight increase in the previous three-month period. The latest data suggesting a slow recovery helped draw money to bonds, which tend to do well in times of low inflation and muted economic growth.

In early afternoon trading, the benchmark 10-year Treasury note rose 26/32 to 96 26/32, pushing its yield down to 3.51 percent from 3.61 percent late Thursday.

The two-year note rose 4/32 to 99 24/32, and its yield fell to 1.12 percent from 1.18 percent.

The 30-year bond rose 1 6/32 to 98 18/32, and its yield fell to 4.34 percent from 4.41 percent.

The yield on the three-month T-bill held steady at 0.17 percent.

Investors also found some relief Friday in the fact that the Treasury's week of record auctions was over. The government issued more than $200 billion of new debt this week.

One of investors' biggest concerns this year has been whether there will be enough demand to support the massive amounts of debt being pumped into the system to fund the government's economic stimulus programs. If demand were to continually fall short, the government would have to bump up the returns it offers investors on bonds in order to attract enough buyers. That could send borrowing rates higher on loans including mortgages.

With no major Treasury auctions expected now until the week of August 10, analysts believe prices should continue to find support at current levels, keeping yields in check.

By SARA LEPRO

U.S. Recession Worst Since Great Depression, Revised Data Show

Aug. 1 (Bloomberg) -- The first 12 months of the U.S. recession saw the economy shrink more than twice as much as previously estimated, reflecting even bigger declines in consumer spending and housing, revised figures showed.

The world’s largest economy contracted 1.9 percent from the fourth quarter of 2007 to the last three months of 2008, compared with the 0.8 percent drop previously on the books, the Commerce Department said yesterday in Washington. Gross domestic product has shrunk 3.9 percent in the past year, the report said, indicating the worst slump since the Great Depression.

Updated statistics also showed that Americans earned more over the last 10 years and socked away a larger share of that cash in savings. The report signals the process of repairing tattered balance sheets following the biggest drop in household wealth on record may be further along than anticipated.

“The current downturn beginning in 2008 is more pronounced,” Steven Landefeld, director of the Commerce Department’s Bureau of Economic Analysis, said in a press briefing this week. The revisions were in line with past experience in which initial figures tended to underestimate the severity of contractions during their early stages, he said.

Consumer spending, which accounts for 70 percent of the economy, decreased 1.8 percent in last year’s fourth quarter from the same period in 2007, exceeding the prior estimate of a 1.5 percent drop. Purchases also began sinking sooner than previously projected, registering their first decline at the start of 2008 rather than in the second half.

Treasuries, Stocks

Treasuries gained after the GDP report, while stocks closed little changed. Benchmark 10-year note yields dropped to 3.48 percent by the close in New York, from 3.61 percent late the day before. The Standard & Poor’s 500 Stock Index closed at 987.48.

Residential construction fell 21 percent during the period, almost 2 percentage points more than previously reported, aggravating what was already the worst slump since the Great Depression.

The Commerce Department also reported yesterday that the economy contracted at a 1 percent annual rate from April through June after shrinking at a 6.4 percent pace in the first quarter, the most since 1982. The decline in the first three months of the year was previously reported as 5.5 percent.

Recession’s Start

The National Bureau of Economic Research, the arbiter of U.S. business cycles, last year determined the recession started in December 2007. The private group is based in Cambridge, Massachusetts,

Yesterday’s updates are part of comprehensive revisions that take place about every five years and are more extensive than the changes announced at this time each year. Figures as far back as 1929 can be revised.

Over the most recent period, the third quarter of 2008 underwent one of the biggest changes, going from a 0.5 percent decrease in GDP to a 2.7 percent drop. The new reading better illustrates the effect the September collapse of Lehman Brothers Holdings Inc. had on the economy and credit markets.

The deeper deterioration last year underscores why Federal Reserve Chairman Ben S. Bernanke and his colleagues at the central bank cut the benchmark rate to a record low and extended credit to non-banks for the first time since the 1930s.

The new GDP data also help explain why the unemployment rate shot up 2.3 percentage points last year, the biggest annual jump since 1982.

2001 Recession Milder

The revisions showed that the 2001 recession was less severe than originally estimated, reflecting a smaller decline in business investment. The economy actually grew 0.1 percent from the fourth quarter of 2000 to the third quarter of 2001, erasing the 0.2 percent drop previously reported.

Personal income was revised up over the last decade, after the government boosted its adjustments for the underreporting and non-reporting of income using more recent data from the Internal Revenue Service. The increases in the most recent years reflect gains from rents, interest and proprietors’ income. The government changed the way it accounts for natural disasters, such as Hurricane Katrina, eliminating much of the prior volatility in income calculations.

Higher incomes and less spending translated into bigger savings. The savings rate for 2008 was revised up to 2.7 percent from 1.8 percent. The rate shot up to 5.2 percent in the second quarter, the highest level since 1998.

The government revised corporate profits down for 2006-2008 and up for 2004 and 2005.

Finally, Commerce shifted food services, which include meals purchased at restaurants or served in schools, out of the food category. As a result, the Fed’s preferred inflation gauge -- which tracks consumer spending and excludes food and fuel -- was pushed up by 0.2 percentage point for the three-year period from 2006 to 2008.

The costs of meals away from home are not as volatile as fresh food, the government said, and therefore services should be included in the measure commonly known as the core index.

By Bob Willis

Dollar Drops; Stocks, Gold Gain as Economic Contraction Slows

July 31 (Bloomberg) -- The dollar slumped to the lowest level of the year, U.S stocks climbed to a nine-month high and gold, oil and copper rallied after a smaller-than-forecast contraction in the economy sent investors to higher-yielding assets. Treasuries increased as inflation concern eased.

The Dow Jones Industrial Average added 0.3 percent as of 2:38 p.m. in New York, extending its best monthly gain since 2002, after the Commerce Department said gross domestic product contracted a better-than-forecast 1 percent annual pace. The dollar fell 1.3 percent to 1.4258 per euro, from $1.4075 yesterday, while gold, copper and crude futures increased by at least 2 percent. The yield on the 10-year note slipped 10 basis points, or 0.1 percentage point, to 3.51 percent.

Investors bought commodities and securities that benefit most in an expanding economy on speculation the worst recession in half a century is ending. Government bonds rose after a gauge of consumer spending in the GDP report retreated more than projected, suggesting prices remain in check.

“People are looking for more risk,” said Philip Orlando, who helps oversee $400 billion as chief equity market strategist at Federated Investors Inc. in New York. “Investors are coming to the realization that the recession probably ended last quarter and we’re on the path to recovery. At this rate we’re looking at positive GDP in the third and fourth quarters.”

The dollar dropped as an improving economy reduced demand for the currency as a haven, pushing up oil and other commodities. Gold advanced by the most in two weeks, with futures for December delivery adding 2.4 percent to $957.10 an ounce on the Comex division of the New York Mercantile Exchange.

“The market is getting some support from stocks, but the more salient feature is the weakness of the dollar against the euro,” said Jim Ritterbusch, president of Ritterbusch & Associates, a Galena, Illinois, energy consultant.

Equities extended gains after the International Monetary Fund predicted a “gradual” recovery in the U.S. economy. General Electric Co., Bank of America Corp. and Alcoa Inc. led the Dow higher after the report, each adding at least 2.4 percent. The Standard & Poor’s 500 Index, up 7.9 percent in July, is headed for a fifth straight monthly advance, the longest streak since 2007.

Second-quarter profits at companies from Caterpillar Inc. to Dow Chemical Co. reinforced signs a nine-quarter slump in earnings is ending. Today’s Commerce Department report, which included benchmark revisions to past years, showed that GDP has tumbled 3.9 percent since the second quarter of last year -- the biggest drop since quarterly records began in 1947. GDP has fallen four straight quarters, the longest ever.

By Jeff Kearns

Regulators shut down banks in five states

WASHINGTON -Regulators on Friday shut down banks in Florida, New Jersey, Ohio, Oklahoma and Illinois, boosting to 69 the number of federally insured banks to fail this year amid the pressures of the weak economy and mounting loan defaults.

The Federal Deposit Insurance Corp. was appointed receiver of the five banks.

Crown Bank, based in Brick, N.J., has agreed to assume the assets and deposits of First BankAmericano. The failed bank's six branches will reopen Saturday as offices of Crown Bank.

The 69 bank failures nationwide this year compare with 25 last year and three in 2007.

As the economy has soured — with unemployment rising, home prices tumbling and loan defaults soaring — bank failures have cascaded and sapped billions out of the deposit insurance fund. It now stands at its lowest level since 1993, $13 billion as of the first quarter.

The number of banks on the FDIC's list of problem institutions leaped to 305 in the first quarter — the highest number since 1994 during the savings and loan crisis — from 252 in the fourth quarter. The FDIC expects U.S. bank failures to cost the insurance fund around $70 billion through 2013.

By MARCY GORDON and IEVA M. AUGSTUMS

After $182 billion taxpayer rescue, is AIG on the verge of collapse?

You may remember American International Group (AIG). The U.S. government gave it $182 billion of taxpayer money last fall in exchange for a 78 percent stake. Of that money, $165 million went for bonuses to a handful of people in its Financial Products Group (FPG), which sold Credit Default Swaps (CDSs) on which AIG lacked the capital to make good. And $200 million more is slated for those good folks in 2009.

Another $12.9 billion of our taxpayer money went to Goldman Sachs Group (GS) so AIG could pay Goldman 100 cents on the dollar for its CDSs. Hank Paulson wanted to keep the names of Goldman and the other recipients secret -- since so many of them were foreign banks, but the information leaked out in March 2009 after Paulson left office.

Now, thanks to some solid reporting in The New York Times, it looks like the rot at AIG is not limited to FPG. While AIG officials have claimed that its problems were isolated to FPG, the reality is that AIG seems to have been running something akin to a shell game of massive proportions. Its shell game version took the form of selling insurance and assigning the resultant risks among its 71 different North American insurance companies.

Thanks to AIG's regulatory arbitrage -- taking advantage of the fact that its 19 state insurance regulators never conduct examinations at the same time -- AIG may have been able to shift assets among the companies to fool state regulators. If one its companies did not have enough money set aside as reserves against future claims, AIG could move assets to that reserve-deficient company right before the state insurance examiner moved in. And once that examiner was gone, AIG could in theory shift the extra cash to the next reserves-deficient company.

Want an example? Consider AIG affiliate National Union (NU). AIG indicated to Pennsylvania state insurance investigators that it had $33.7 billion in assets at the end of 2008 -- more than enough to protect against $21.9 billion in liabilities. But what the Pennsylvania regulators did not see is that $10.9 billion worth of NU's assets were investments in other AIG affiliates, which are not publicly traded and whose value is hard to measure. Subtract that and you have only $22.8 billion in assets.

But wait -- there's more. NU had $42 billion more in liabilities that the Pennsylvania regulators missed. How so? NU had obligations to pay claims of other AIG insurance affiliates -- the biggest of which was $23.1 billion that it owed AIG affiliate American Home (AH). NU owed another $19 billion to several other AIG afiiliates.

Meanwhile, AH had crushing obligations of its own. While the New York state regulators thought it had $26.3 billion in assets to a mere $19.9 billion in liabilities, the reality was far more dire. How so? AH was on the hook for an additional $120.7 billion in guarantees to 16 other AIG affiliates. Thus AH's liabilities really exceeded its assets by $114 billion.

To summarize, AIG's core insurance companies seem to be like a shell game which AIG was able to continue operating because it was able to keep the cash moving from the affiliate that one state regulator had just examined to the one that another state regulator was about to examine.

Unfortunately, it would not surprise me if this was happening and continues to happen at all big U.S. insurance companies. Moreover, I would be shocked if former AIG CEO Hank Greenberg -- who has heaped scorn on his successors -- was unaware of this practice.

Is it too early to write off that $182 billion?

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. Follow petercohan on Twitter. He owns AIG shares and has no financial interest in the other securities mentioned.

Peter Cohan

FDIC Loan Report and Plan C

Nearly Half of the $7.7 trillion in Loans Outstanding at FDIC Insured Banks are in the form of Commercial Real Estate. USPS Contracting CRE Space. Drop in Restaurant Traffic.

The commercial real estate debacle is heating up. Although the market is cheering the better than expected drop in second quarter GDP, much of the reason for a less than spectacular fall came from the “G” in the equation, government spending. By the way, we revised Q1 GDP lower to -6.4 percent but not much interest was given to that minor detail. Who is to say we do not revise the advanced estimate for Q2 lower? Either way, the GDP release tells us that commercial real estate is on precipice of implosion. Is it any wonder that the U.S. Treasury is secretly working on a preemptive bailout program called Plan C gearing up taxpayers dollars for another toxic mortgage industry that has $3 trillion in loans? The failure of 2008’s residential mortgage bailout should tell you that bailing out CRE loans is a losing cause especially for taxpayers.

The problem for commercial real estate is the shrinking demand from consumers who have now found a new form of forced austerity. With 26,000,000 Americans unemployed or underemployed the demand for armies of strip malls is no longer a pressing issue. Sure, we can offer gimmicks like cash for clunkers but where is this money coming from? Most people realize that conspicuous consumption by consumers, Wall Street, and the government led us here and our solution is more conspicuous consumption?

Like a conductor prepping his orchestra, the defaults are now starting in full force:

The hits are now starting to come from a variety of angles. This is a problem that will hit everyone but will bring down hundreds (maybe up to a thousand) of the regional banks who made extremely risky bets in the commercial real estate markets. Unable to compete with the residential real estate mortgage boom, many regional banks decided to keep things local and saddle their portfolios up with commercial real estate. These loans are more likely to default and default huge. With one residential property in foreclosure, the bank might lose $100,000 given the fall in housing prices but on one really bad CRE deal, a bank can stand to lose millions.

Commercial real estate goes beyond your local strip mall or dental office. The U.S. Postal Service is announcing it will be contracting its need for CRE space:

“(Costar) The Postal Service sent a notice to American Postal Workers Union executives this summer that it was considering consolidation options in every major metro market in the country and would consider closing 3,243 of its 4,851 largest branches and centers in the review process. … The review process was to last most of the summer … but they want the consolidation to occur by October 2010.
…
According to USPS records, it owns 8,546 facilities totaling 219.6 million square feet and leases another 25,272 locations totaling 912.2 million square feet. …

“(Calculated Risk) The postal service has already reduced their footprint a little since 2003 as shown in the chart from the GAO.

But the GAO report suggests the next reductions may be much more significant. How about another 14 million square feet of vacant retail space on the market?”

More space is coming online. A recent deal also had Target, the giant retailer backing out of a major project due to “lack of consumer demand” which of course is what is happening on main street USA with rising unemployment and stagnant wages. The average American household with $46,000 a year doesn’t have the disposable income to support all the failed CRE projects languishing in the market:

This is also being reflected in less people going to restaurants. The National Restaurant Association (the other NRA) announced another month of contraction for the industry. What does this mean? Less demand for CRE space. And in the report they also stated that current restaurant owners are noticing “negative customer traffic” in June. I thought GDP was now booming and the recession was over as Newsweek had proclaimed?

Commerical real estate projects are failing across the country. Take this case from Silicon Valley:

“(SJ Business Journal) Unable to work out a deal, California Bavarian Corp.’s Bordeaux Centre has been sold at auction to its lender Wrightwood Capital for less than $15 million.

Developer Mark Mordell, president of Cal Bavarian, wasn’t at the auction but said Wrightwood was the only bidder on the property located in Sunnyvale.

Mordell said he was told the campus sold for less than half the $34 million debt owed on the never-occupied, 124,000-square-foot project begun by Cal Bavarian in 2007 and finished in 2008

“It was unfortunate that we couldn’t get a deal done with the lender,” Mordell said Tuesday morning.

The property is regarded in the brokerage community as a classy project that has been a victim of the economic downturn and companies fearful about making any moves.”

So let us get some facts straight. The project was encumbered with $34 million in debt but sold at auction for less than $15 million. What does this mean? More bank failures and a painful hit for those that made the loans on this specific project. We’re already up to 69 bank failures for 2009 but that doesn’t seem to phase the market since all the money to fix these problems are going to come from the taxpayer. The U.S. Treasury and Federal Reserve are happy to proclaim that the recession is over; that is, over for the real estate industry, Wall Street, and banks since they have an unlimited safety net backed up by the American public.

But these commercial real estate deals are going to be lingering for years sometimes sitting empty with tumbleweeds spinning in their empty parking lots. This gives us two roads ahead. The first one is the market will start facing major losses in late 2009 and 2010 and will correct once again. The second road, includes stretching out these projects and bailing them out via Plan C and thus forcing the losses out over a decade thus giving us a Japan like trajectory. All the bailouts are looking backwards, not forwards. We need job creation not commercial real estate taxpayer insurance which will drown our economy in debt from toxic bets made in the past from irresponsible banks.

Why do we really need to bailout a bank that made a bad loan in a commercial project in Arizona that doesn’t even have any demand? Or a strip mall in Florida where unemployment is in the double-digits? How does this create a sustainable economy? It doesn’t. Here is the running tab for FDIC insured institutions as of the end of Q1 of 2009:

$1.4 trillion in commercial and industrial loans. $1 trillion in commercial real estate. $566 billion in construction in land development. You add it up and we get over $3 trillion. Nearly half of the $7.7 trillion in loans with FDIC insured institutions is in some form of commercial real estate. Unless people wake up Plan C is going to be implemented and we are going to own a bunch of empty strip malls, restaurants, and other projects with no customers. I didn’t realize we’d be doing a cash for clunkers with commercial real estate.

by mybudget360 in FDIC, bailout, banks, commercial real estate, debt, economy, gimmicks, government, mortgages, real estate, recession

NY AG: Banks Paid Bonuses That Were Substantially Greater Than The Banks' Net Income

New York Attorney General Andrew Cuomo's report on the bonus structures of the banking industry is out and — oh my— it's damning. The AG says that 3 banks, Goldman Sachs, Morgan Stanley, and JP. Morgan Chase, paid out bonuses that " were substantially greater than the banks' net income."

The report says that combined, these three firms earned $9.6 billion, paid bonuses of nearly $18 billion, and received TARP taxpayer funds worth $45 billion. Why did this happen? Because, according to Cuomo, when times were good the bankers rewarded themselves based on performance. When the economy started to sour — they decoupled the bonus structure from reality and kept rewarding themselves.

From the report:

As one would expect, in describing their compensation programs, most banks emphasize the importance of tying pay to performance. Indeed, one senior bank executive noted recently that individual compensation should not be set without taking into strong consideration the performance of the business unit and the overall firm. As this executive put it, "employees should share in the upside when overall performance is strong and they should all share in the downside when overall performance is weak."

But despite such claims, one thing is clear from this investigation to date: there is no clear rhyme or reason to the way banks compensate and reward their employees. In many ways, the past three years have provided a virtual laboratory in which to test the hypothesis that compensation in the financial industry was performance-based.

But even a cursory examination of the data suggests that in these challenging economic times, compensation for bank employees has become unmoored from the banks' financial performance. Thus, when the banks did well, their employees were paid well. When the banks did poorly, their employees were paid well. And when the banks did very poorly, they were bailed out by taxpayers and their employees were still paid well. Bonuses and overall compensation did not vary significantly as profits diminished.

So, how was this allowed to happen? Why did the bankers feel justified in rewarding themselves as the ship sank?

In some senses, large payouts became a cultural expectation at banks and a source of competition among the firms. For example, as Merrill Lynch's performance plummeted, Merrill severed the tie between paying based on performance and set its bonus pool based on what it expected its competitors would do. Accordingly, Merrill paid out close to $16 billion in 2007 while losing more than $7 billion and paid close to $15 billion in 2008 while facing near collapse. Moreover, Merrill's losses in 2007 and 2008 more than erased Merrill's earnings between 2003 and 2006. Clearly, the compensation structures in the boom years did not account for long-term risk, and huge paydays continued while the firm faced extinction.

The AG says that the bankers explained the need to do this by claiming that they had to pay bonuses to individuals working in divisions that were still making money for the firm. The trouble with this rationalization is that banks continued paying bonuses to people in losing divisions.

We recognize, of course, that there can be situations where the distribution of profits to employees who created real profits would be appropriate even though the overall firm may have lost money. This might be the case, for example, where one division of a firm earned large profits but another division lost profits. A principled and consistent approach would, however, balance the need to reward and retain those who created profits with the need for bonuses to reflect the overall performance of the firm. In any event, our investigations have shown numerous instances where large bonuses were paid to individuals in money-losing divisions at firms who saw either substantially reduced profits or losses in 2008.

The entire report can be downloaded from the AG's website, here. (PDF)

Earth is the center of the universe.

Despite ignorance, Despite ridicule, Despite opposition

Truth happens :

Despite ignorance

The telephone too many shortcomings

To be a seriously considered as a means of communication - Western Union [ 1876 ]

US patent commissioner stated everything can be invented [ 1899 ]

Everything can be invented, has been invented

Despite ridicule

The phonograph has no value commercial value at all - Thomas Edison [ 1880 ]

The radio craze will die out in time - Thomas Edison [ 1922 ]

The automobile has practically reached the limit of its development - Scientific American [ 1909 ]

Despite opposition

Despite is all truth happen

Man will not fly for fifty years - Orville Wright [ 1901 ]

The rocket will never leave the earth's atmosphere - New York Times [ 1936 ]

There is a world market for maybe five computers - IBM's Thomas Watson [ 1943 ]

640k ought to be enough for anybody - Bill Gate [ 1981 ]

First they ignore You

No mention of the collapse of WTC 7 – 9/11 Commission report

Let us never tolerate outrageous conspiracies – George W Bush

Then they laugh at you

9/11 truthful are conspiracy nuts – Bill O' Reilly

9/11 truthful are Idiots, Dumb, Dangerous & Anarchists – Glenn Beck

9/11 was an inside job, if that is, you are a Paranoid Loony

Then they fight with you

US government establishes special security wing with the sole task of distancing Washington from any involvement in 9/11 attacks – Russia Today

Then you win

So you are here.

Gross Domestic Product Data

Last Updated: Jul 31, 2009