Tuesday, May 24, 2011

DSK's DNA Found On Maid's Shirt

052311dsk1.jpg
(AP)

A forensic test has turned up Dominique Strauss-Kahn's DNA on the shirt worn by a hotel maid accusing him of rape, sources tell a French website and NBC New York. The NY Post, which is really in its element with this scandal, reports that Strauss-Kahn's "reputation may be stained for good." Guess you could say its unusual to see men as powerful as Strauss-Kahn in this much trouble! But the positive DNA match might also help explain why his lawyers were quick to claim that the encounter was consensual—if they knew there was a chance of DNA surfacing, that strategy makes a lot more sense.

The 32-year-old Sofitel maid maintains that Strauss-Kahn groped her, locked her in a bedroom and forced her to perform oral sex. DNA testing on other evidence from the scene is continuing, a source tells NBC New York.

The Real Reason for NATO Attacking Libya EXPOSED

Is this a taste of the future? Outsourcing goes full circle as Indian firms look to the U.S. for cheap labour

It's a frustration experienced by most people when they've made phone calls to large companies.

An unfamiliar voice answers the phone in a call centre hundreds of miles away where cheap labour is commonplace.

But in a reversal of fortunes it now appears that large Indian companies are actually now themselves outsourcing - to U.S. shores.

A young woman working in a call centre
An Indian woman working in a call centre

Reversal of fortunes: Indian companies are now outsourcing their work to the U.S. where a struggling economy has caused lower wages

Large corporations that have boomed in India amid the country's nimble economy have been drawn to the U.S. where unemployment has soared.

Struggling residents desperate for work are paid between $12 and $14 a hour to be stationed in tiny cubicles for long shifts of telesales work.

Once the employees are established, many are offered the chance to be flown to India themselves - the same tactic Western countries have done in India.

Experts said that the phenomenon, which could become more widespread in the coming years, is partly due to Indian workers demanding higher wages and higher living standards.

'The U.S. became the fastest-growing location for us last year. We expect that to continue this year,' Genpact chief executive V.N. 'Tiger' Tyagarajan said.

Joseph Vafi, an analyst at Jefferies & Co. in San Francisco told the Washington Post: 'What you have going on in India are salary hikes. As these companies get larger and larger, it just makes sense for them to do some hiring in the States.'

Cheap: A number of large companies have targeted Manhattan in New York due to high unemployment, particularly among African Americans

Cheap: A number of large companies have targeted Manhattan in New York due to high unemployment, particularly among African Americans

The Indian economy - boosted by a savings culture of large cash deposits - has boomed and is this year predicted to outpace China.

Businesses around the world have targeted India - part of the 'BRIC' emerging economies - for their global expansion.

Residents there have seen an increase in living standards and higher wages, which has led to higher spending.

WHO OUTSOURCES THE MOST JOBS TO THE U.S?

1.Tata Consultancy Services

Tata Consultancy Service is based in Mumbai and had a turnover of $8bn in 2011. They employ more than 200,000 worldwide with a significant number of those, believed to be around 15,000 based as outsourced jobs in the U.S.

2. Aegis Communications

Technology firm Aegis is part of the Essar group based in Mumbai with an annual revenue of $15bn. Aegis employs 9,000 in the U.S. at offices throughout the country.

3. Wipro

Based in Bangalore, IT specialists Wipro employ around 4,000 people in jobs that have been outsourced to the U.S.

4. Genpact

The IT outsourcing company employs 1,500 people in the U.S. but that is expected to triple over the next two years as bosses find it cheaper than employing Indian staff at home.

5. Infosys

The company is based in Bangalore with an annual revenue of $100m. They have 130,000 employees worldwide.

But in a stark contrast and further sign that global power is shifting from the West to the East, the economies of the U.S.- and many European countries - have spiralled downwards.

Around nine per cent of the work force is now estimated to be unemployed in the U.S. Massive debts have also seen harsh spending cuts.

Indian companies had previously used call centres at home, or shipped large numbers of local workers to the U.S. to work cheaply.

But a crackdown on visas by the Government combined with optimism in India has meant that fewer people want to leave. For Indian companies , it is just as efficient to open offices in America, where there are daily queues of people willing to work.

There is also a growing trend that companies want to have workers based in the countries where organisations have large customer bases, or wish to expand into.

Aegis Communications, based in Mumbai, joined the growing number of overseas companies opening centres in the U.S. to take advantage of the high unemployment.

They have nine centres in the U.S. which employ 5,000 people but that is expected to triple to 15,000 employees.

In Lower Manhattan, the call centre employs a large number of African Americans with few qualifications.

Line manager Ray Capuana said: 'Our recruitment model is simple. I don't care if you come from Park Avenue or the park bench. If you can do the job, we want you.'

He calls the process of hiring U.S. workers instead of local workers in India 'near-sourcing', 'diverse sourcing' or 'cross-shoring'.

But compared with Indian workers, managers have complained that those from the U.S. are 'spoiled' and 'lazy'.

The Revolution Has Started In Spain (Update 4)


The revolution has started in Spain as tens of thousands take to the streets in protest of high unemployment and draconian austerity measures.

In Spain, protesters rally a battered nation as Anti-system movement vows to press beyond election day

In the shadow of a landmark building in Madrid’s center, a village of unhappy Spaniards on Friday kicked off their sixth day of protesting against capitalism and a system they say is not representing them.

Slide show: Madrid protests on eve of elections.

Directly in front of it, the turtle-shaped dome that covers the Sol train station is plastered with banners that read “Spain is not a business, we are not slaves,” and “Now is the time, young people, do not stop.”

And stopping they are not.

Protests have swelled each evening from a clutch of 200 mostly young people who have been camping out into the tens of thousands. The protests have spread beyond Madrid to other cities and reportedly to Italy as well.

Complaints about austerity measures taken to keep Spain from a forced financial bailout are on visible display in Madrid.

Jorge Herrero, 34, has been coming to join the protests each evening after his job as a security worker. He said the government for years has been stripping away workers’ rights, with pensions frozen and labor rights diminished.

“We are 5 million unemployed here in Spain,” said Herrero. “A colleague of mine was fired five months ago just for being sick.”

Read More: In Spain, protesters rally a battered nation as Anti-system movement vows to press beyond election day

THE REVOLUTION HAS STARTED – SPAIN

PUT THIS INTO YOUR BROWSER (LIVE SPANISH TV)
http://ustream.tv/channel/motionlook
(Cliquez sur le lien en haut)

My thanks to eloyente for this snippet of spanish TV videotaped earlier today 21st MAY 2011

Je remerci eloyente a youtube pour la mourceau de video de TV espagnol et aussi a amosLee a Ustream pour la rapportage de mis a jour et actuelle.

Also amosLee at Ustream for the continued TV coverage

Watch The Revolution Live


Live Streaming by Ustream.TV

Media Coverage Of The Spanish Revolution

Time Magazine writes:

Protests: Has the Revolution Come to Spain?

Protesters gather at the Puerta del Sol square

Protesters gather at the Puerta del Sol square in Madrid on May 19, 2011, to speak out against Spain’s economic crisis and its sky-high jobless rate – Pedro Armestre / AFP / Getty

Two political earthquakes have shaken Spanish life in the past week. First were the massive sit-ins that had tens of thousands of citizens camping out in the public squares of major cities in protest of the country’s capsized economy and unresponsive political class. The second came Sunday night, May 22, when voters in regional and municipal elections delivered a sound drubbing to the governing Socialist Party (PSOE). Now, in Monday’s harsh light, no one seems sure whether the first phenomenon had anything to do with the second. And everyone is wondering what both mean for the future of Spain.

Since May 15, tens of thousands of Spaniards have taken over squares in 60 cities, clamoring for political, economic and social reform. As articulated by the group Real Democracy Now, which helped organize the protests, unemployment (21.3% among the general population; a shocking 40% among youth) is high on the list of complaints. But so too are political corruption (more than 100 candidates in Sunday’s elections are currently under judicial investigation), social-welfare cuts and a general sense that elected officials in both of the two main political parties aren’t listening to them. “This isn’t solely about unemployment or the upcoming election,” says Raúl, 29, who works for a marketing agency when he isn’t volunteering in Madrid’s Puerta del Sol. “We’re after a more responsible society.”

The protests, whose success has taken even organizers by surprise, have transformed the public squares of Madrid, Barcelona and other cities into models of the participatory democracies their members would like to create, reminding some observers of the huge examples of civil disobedience in Egypt and Tunisia. Amid a festive air of concerts and impromptu theatrical performances, volunteers have organized themselves into committees to provide food to protesters, organize cleanups, set up an open-air reading room complete with a comfortable sofa and a battered copy of Franz Kafka’s The Trial and even plant an organic vegetable garden. Meanwhile, daily meetings of individual commissions (electoral policy, environmental protection, women’s rights) and a general assembly have helped the spontaneously formed movement elucidate its concerns and propose solutions.

So popular have the protests become that on May 19, when Spain’s electoral commission ruled the gatherings illegal because they would break the ban on political activities the day before elections, participation grew only stronger, even incorporating foreign cities like London, Mexico City and New York. “It’s incredible how fast this is spreading,” said protester Yanira Castro, a 30-year-old musician, as she prepared signs for a rally in Madrid. “On Monday I wasn’t sure about what it meant, but once I came down here, I knew I had to pitch in.”

[...]

Source: Time Magazine

Decay heat in Fukushima reactors

As we noted last week, the Tokyo Electric Power Company (TEPCO) announced it believes the fuel in Fukushima Daiichi reactor 1—and possibly reactors 2 and 3—has melted and is sitting in a lump at the bottom of the reactor vessel. But it believes that workers have been able to keep the lump cool enough that it has not melted through the bottom of the reactor.

Such a melt-through is a concern since it would mean that highly radioactive gases released from the melting fuel would be released into the primary containment. Moreover, the molten fuel mass would then react with the concrete floor of the primary containment and create additional radioactive gases. If these are released to the atmosphere, either through venting or a leak in the containment (which could be caused by the molten fuel), it could add significantly to the total radiation released by the accident.

TEPCO believes the fuel melting occurred on March 12, within a day of the earthquake. If all this is correct, it means that, despite the ongoing problems with the reactors, workers have so far managed to cool the fuel and avoid a reactor breach for more than two months.

The decay heat generated by the fuel is one factor that could result in a breach of the reactor vessel.

The decrease in the level of decay heat with time is shown in the plot below. It shows that after 2 months the decay heat would be about 30% of its value at the time the fuel melted, after 6 months it will be less that 20% of that value, and after a year it will be down to about 10% of that value.

Unfortunately, it’s not clear how the reduced heat load of the fuel affects the overall probability of a breach of the reactor vessel since that depends on a lot of unknown factors, such as the current configuration of the fuel and possible ongoing corrosion of the vessel.

The plot shows that after 5 years, which is the length of time after which people talk about moving spent fuel to dry casks, the decay heat is about 2% of the early value.

Decay heat as a function of time from 0.01 years (about 4 days) to 100 years for spent-fuel burnups of 33, 43, 53 and 63 MWd/kgU. The lowest burnup was typical for the 1970s. Current burnups are around 50 MWd/kgU.

Video: Going For Gold, Utah Legalizes New Currency

Video - Henry Blodget with Aaron Task

Get more detail here...

GE Joins Intel to Advise Obama as Overseas Holdings Expand

Source: Bloomberg

Seven publicly traded U.S. corporations represented on President Barack Obama’s advisory council for jobs and competitiveness -- including General Electric Co. (GE) and Intel Corp. (INTC) -- have devoted a growing pool of their non-U.S. earnings to investments in other countries.

As a group, multinational companies with current or former chief executive officers on Obama’s jobs council have, over the past four years, almost doubled the cumulative amounts they’ve reinvested overseas, according to data compiled by Bloomberg.

By doing so, companies may be able to take advantage of faster-growing markets or lower production costs, and they can defer U.S. income taxes on profits from overseas sales. Underscoring the difference between corporate interests and the national interest, they’re also investing money elsewhere that could be helping the U.S. economy, said former U.S. Labor Secretary Robert Reich.

“That’s a signal that they are betting less on America,” Reich said. “We’ve got to understand there’s a fundamental difference between the competitiveness of these companies and the competitiveness of America and American workers.”

Read Full Article Here...

Day of reckoning for commercial real estate in 2012

largest amount of loans maturing next year as $150 billion in CRE debt comes due. Federal Reserve running out of options in hiding financially disastrous real estate loans.


The Federal Reserve has tried its best to hide the secrets of past banking blunders deep in its balance sheet. Commercial real estate (CRE) loans made in haste during the real estate bubble are part of this national disgrace in banking folly. As the Federal Reserve and U.S. Treasury digitally print the dollar into oblivion the bad CRE loans still linger in the Fed balance sheet. As it turns out the Fed has become the dumping ground for all things real estate and has traded toxic loans for quality liquidity to fuel the banks back up. CRE debt in the form of empty shopping malls, failed hotels, and tumbleweed occupied strip malls is only a flavor of what the Fed is taking on. Yet many of these loans are still occupying the balance sheet of many banks. As it turns out, there was so much junk in the CRE market that the Fed could only balloon their balance sheet and still not encompass one half of the CRE market. Many CRE loans are coming due in 2012. Is the day of reckoning for CRE coming in 2012?

$150 billion coming due in CRE loans in 2012

2012-CRE-chart

Over $150 billion in CRE loans are maturing in 2012 bringing the day of reckoning closer. Why is this a problem? First, the CRE market has completely imploded:

mit-crew-april-2011-values-commercial-real-estate

Source: MIT

CRE values just like residential real estate have cratered and are down over 50 percent since their peak. Much of these properties require actual economic streams of income coming in for example in strip mall rents or hotel occupancies to keep servicing the debt. Unlike a home that has other sentimental values a CRE property is strictly a business decision. The Federal Reserve is seeing the tanking of valuations at the absolute worst time. The Fed treating the crisis as one of liquidity simply exchanged U.S. Treasuries for toxic CRE debt to drinking buddy banks. After all what is the harm in keeping the junk for a few years and when prices recover, a simple hand off and the public has no idea what happened except they just have to contend with greater goods inflation as their purchasing power falls through the floor. However the bailouts of 2007 never helped the overall economy because the crisis is one of solvency, not liquidity. The working and middle class are struggling because their purchasing power has washed away over the decades and the bailouts were simply geared to the too big to fail banks.

CRE is a giant problem because the number of buyers vying for a strip mall is relatively small. Unlike a residential property, if the price drops low enough on a home the market will respond. If a strip mall was poorly built in a bad location you may have no buyers regardless of cost. And make no mistake banks have shut the door on CRE fairly hard:

kj-06302010-chart-1

Source: World Property Channel

The fiasco in CRE can only last so long. The Fed balance sheet has exploded during this crisis and you can rest assured billions of dollars in CRE loans are floating in the un-audited figures:

federal-reserve-balance-sheet

CRE is merely following the pattern outlined by the residential real estate bubble effectively creating a situation where a double bubble developed:

double bubble

Source: The American

2012 is looking like the day of reckoning for CRE debt. First, you have an American public that is absolutely frustrated by the ineffective handouts to the banking system of the country. The hunger for a full Fed audit is getting louder and louder. Politicians will sway in the way of their financial backers but only to the extent they feel they can get away with their smoke and mirrors and deceive the public. That shell game is becoming harder and harder to maintain. At what point does the government step in and do what is best for the economy and not the big banking interests? How does bailing out a failing hotel or empty strip mall really help the average working American? It doesn’t. Banks were eager to make these loans and profited handsomely during the bubble. Now they don’t want to deal with the consequences of taking on too much risk so they rather socialize the losses on the public. This is not capitalism but a banking corporatocracy. CRE debt will come due in large amounts in 2012 and unless prices soar to the sky in the next year, some major rebalancing will need to occur.

There is no inflating out of the real estate mess and CRE is no exception. Unless household incomes go up disposable income is going to get tighter. We are already seeing more money being eaten up by food and energy and baby boomers will definitely see more money flowing into the healthcare industry complex. From one frying pan to another it will become about priorities and CRE will move lower on the list. The day of reckoning for CRE is coming next year and only time will tell how the market will respond.

Obama ‘Clarifies’: 1967 Borders Didn’t Really Mean 1967 Borders

Speaking today at the AIPAC annual conference, President Barack Obama addressed the controversial suggestion he made that the peace process between Israel and a prospective Palestinian state start with the pre-1967 borders, before Israel occupied Palestine.

The only thing more furious than Israeli Prime Minister Benjamin Netanyahu was the backpedalling done by Obama at the speech, where he was quick to insist simultaneously that the reference to 1967 wasn’t new and that he wasn’t really serious about it.

Rather Obama insisted that the “1967 lines” would need to be revised to account for what he referred to in the speech as “demographics changes” but what most people in the world refer to as the construction of settlements in the occupied territories. The expansion of settlements ever deeper into Palestine has been the chief reason the Palestinian Authority left the peace talks in September.

Obama’s speech was aimed primarily at placating the anger his unseemly call for peace caused among AIPAC and its affiliates, and wedged into a tight speech with pledges of more military aid to Israel and promises to move against Iran, he appears to have been successful in his task. Through the speech he was loudly cheered by attendees.

When Greece Finally Defaults, The Real Mayhem Will Begin

Must read from Euro Economist Andrew Lilico.

Source - Guardian

It is when, not if. Financial markets merely aren’t sure whether it’ll be tomorrow, a month’s time, a year’s time, or two years’ time (it won’t be longer than that). Given that the ECB has played the “final card” it employed to force a bailout upon the Irish – threatening to bankrupt the country’s banking sector – presumably we will now see either another Greek bailout or default within days.

What happens when Greece defaults. Here are a few things:

- Every bank in Greece will instantly go insolvent.

- The Greek government will nationalise every bank in Greece.

- The Greek government will forbid withdrawals from Greek banks.

- To prevent Greek depositors from rioting on the streets, Argentina-2002-style (when the Argentinian president had to flee by helicopter from the roof of the presidential palace to evade a mob of such depositors), the Greek government will declare a curfew, perhaps even general martial law.

- Greece will redenominate all its debts into “New Drachmas” or whatever it calls the new currency (this is a classic ploy of countries defaulting)

- The New Drachma will devalue by some 30-70 per cent (probably around 50 per cent, though perhaps more), effectively defaulting 0n 50 per cent or more of all Greek euro-denominated debts.

- The Irish will, within a few days, walk away from the debts of its banking system.

- The Portuguese government will wait to see whether there is chaos in Greece before deciding whether to default in turn.

- A number of French and German banks will make sufficient losses that they no longer meet regulatory capital adequacy requirements.

- The European Central Bank will become insolvent, given its very high exposure to Greek government debt, and to Greek banking sector and Irish banking sector debt.

- The French and German governments will meet to decide whether (a) to recapitalise the ECB, or (b) to allow the ECB to print money to restore its solvency. (Because the ECB has relatively little foreign currency-denominated exposure, it could in principle print its way out, but this is forbidden by its founding charter. On the other hand, the EU Treaty explicitly, and in terms, forbids the form of bailouts used for Greece, Portugal and Ireland, but a little thing like their being blatantly illegal hasn’t prevented that from happening, so it’s not intrinsically obvious that its being illegal for the ECB to print its way out will prove much of a hurdle.)

- They will recapitalise, and recapitalise their own banks, but declare an end to all bailouts.

- There will be carnage in the market for Spanish banking sector bonds, as bondholders anticipate imposed debt-equity swaps.

- This assumption will prove justified, as the Spaniards choose to over-ride the structure of current bond contracts in the Spanish banking sector, recapitalising a number of banks via debt-equity swaps.

- Bondholders will take the Spanish Banking Sector to the European Court of Human Rights (and probably other courts, also), claiming violations of property rights. These cases won’t be heard for years. By the time they are finally heard, no-one will care.

- Attention will turn to the British banks. Then we shall see…

---

Liberal State Council push to force elderly out of homes

public housing

Elderly people could be moved from public housing to smaller units under a plan to be debated by the Liberal Party State Council. Source: HWT Image Library

UPDATE 10.50am: ELDERLY residents should not be forced to give up their homes to make way for units if a policy proposal to be discussed at next week's Liberal State Council gains momentum, community housing advocates say.

The state motion, to be brought before the council next weekend, suggests older residents who occupy large blocks of land should subdivide their large blocks in exchange for a new unit within their original piece of land.

Residents could be forced from their homes to live in a unit a fraction of the size, on their old block of land, under the motion.

Community Housing Federation of Victoria spokesman Steve Staikos said no one should be forced to move if the measure was taken up by the Government and became policy.

"I would urge all delegates to remember that these are actually people we’re talking about. People who have been in their homes for many years and probably do not want to go," he said.

Mr Staikos said the idea of taking away people’s backyards to create more housing was questionable, because it could leave less family homes for future tenants.

"Community Housing Federation of Victoria believes that every person deserves long term security of tenure, especially older members of our community in social housing already battling with cost-of-living pressures and aging related health problems."

Council on the Ageing CEO Sue Hendy said the potential policy was insensitive to elderly residents and "not a good idea ... This sounds like a way to shoehorn people into smaller places to create more land," she said.

Ms Hendy said many older public housing residents had lived in their homes for decades, and relied on the support of their neighbours and local friends.

She said while the proposal suggested residents still live on the same site, a unit would not be suitable for people who looked after their grandchildren or had family visiting.

Any policy like this would be a concern for the elderly, who would feel they had no choice but to agree or face being moved to another neighbourhood where they had less support, she said.

The motion will discuss "the potential level of interest amongst older people with existing large blocks of land to further subdivide their large blocks of land in exchange for the 'free' acquirement of a new unit within their original piece of land".

Two years ago, the Herald Sun revealed pensioners were being forced from homes they had lived in for decades so the former Brumby government could cash in on their rising value.

Hampton great-grandmother June Smith, 73, was allowed to continue living in her public housing home after she publicly complained about being ousted from her home of 36 years.

"I'd be very disappointed if this started happening again," she said.

"Particularly for older people I think it's appalling. I know the housing situation is terrible but there's got to be something better than what they're proposing.

"People would have to get rid of all their furniture to squeeze into a unit and they wouldn't be able to have their grandchildren over."

A Government spokeswoman yesterday said: "As part of an ongoing review of the older stock program, the Coalition Government is looking at better ways to utilise older stock more effectively."

Desperately Needed: A New Political Party

May 22, 2011 "Information Clearing House" ---Count me among the growing number of people who believe support of the Democratic Party, as such, is not merely a waste of time but, worse, a deeply negative activity.

Support for the Democratic Party leads to continued degradation of the United States and great harm to all citizens who are not wealthy.

The same has to be said about support for the Republican Party, but that does not mean rational people must therefore throw in with the Democrats. In plain language, they’re about equally bad for America and its people.

We desperately need a new party, and there is a logical place to begin forming one: With the long list of genuine liberal organizations that were given birth by the Internet. More of that shortly.

Barack Obama should not be re-elected. At any time before the mid 1990s, his actions in office would have identified him clearly as a Republican who leans dangerously to the right. What he claims to believe in while campaigning and what he has done while in office have almost no positive connection. He has capitulated on major issuesbefore any “negotiations” have begun; he has, whenever possible, given the money elite what it wants on everything of importance.

He is as much a warmonger as the younger Bush; he has expanded the Bush wars, put us into the Libyan conflict, inflated the already insanely oversized Pentagon budget, reneged on all of his promises to curb military adventurism and war profiteering. He has enthusiastically supported extension of the grotesquely misnamed Patriot Act and otherwise continued the Bush program of diminishing individual freedoms.

Equally bad for all of us who are not very rich, Obama has actively supported or meekly acquiesced in most of the measures that are pushing us at breakneck speed toward the destruction of the middle class and the creation of a class of tens of millions of proles who will be locked hopelessly into a state of perpetual poverty.

There are five people looking for work in this country for every job that becomes available. Since the financial collapse of 2008, more than two million Americans have sunk into what is officially recognized as poverty -– which is to say, desperate poverty.

More than 43 million Americans now live below the official poverty line. More than one fifth of American children now live in poverty, which is more than twice the percentage of poor children in Great Britain or France. Five percent of Americans live with what is officially called “extreme food insecurity” — which simply means that they don’t know from day to day whether they will have anything to eat, and sometimes they don’t. That population is expanding daily.

A huge number of Americans have lost much or most of the wealth they accumulated through their working lives, because that wealth was invested in their homes.

In Minneapolis, my hometown, home values continue to fall, are down 8 percent from a year ago, and almost half of all homeowners are now “underwater” on their mortgages. Nationally, residential real estate has fallen in value by more than $6 trillion (trillion, with a tr) since 2008.

Our “liberal” president has yet to offer any serious programs or begin any crusades to turn any of those problems around.

He does continue to talk about “compromises” with the Republicans, who are desperately trying to placate and tame a constituency of utter nutcases and clowns, some of whom are multi-billionaires. He’s willing to talk about cuts in Medicare, Medicaid and other programs essential for relative security for millions of Americans. His “compromises” thus far have meant capitulation.

The great majority of Democrats in Congress are as bad or worse. And a substantial number of them care far more about preventing gay Americans from achieving full citizenship than they do about the millions who are facing homelessness and starvation.

(As just one of hundreds of examples, take the Minnesota Democrats’ “liberal” favorite, Sen. Amy Klobuchar. Please. She joined with 16 other Democrats and all Republicans in trying to gut the Clean Air Act. She votes for anything pushed by the National Rifle Association, no matter how far outside the realm of sense or decency, and she does the same for AIPAC, the American lobby for the right-wing government of Israel. She has never seen a “defense” bill she would not support and has few, if any, quarrels with the big banks. And that’s just for starters.)

Once again, we’re seeing the beginning of the flood of missives telling us that we MUST give money to and vote for the Democratic Party.

We are being told again, as we have been told during every election cycle for the past 30 years or more, that the Republicans are just ever so much worse and the country will go entirely to hell if we don’t do our part for the Democrats. Never mind that the majority of Democrats in office are in thrall to the corporate elite to the same degree as their Republican colleagues and the country already is headed rapidly to hell – hell for everyone but the rich.

Corporations and the very wealthy get everything they want from Democrats, though it may take just a little bit longer than when Republicans control everything. They pretend it’s otherwise (wink wink, nudge nudge) so that traditional Democratic voters can go on pretending there is a big difference.

There still are a few “liberal” Democrats. My own congressman, Keith Ellison – yes, the Muslim — is a marvel of honesty and courage in supporting positions that benefit the American people rather than war profiteers and other giant corporations. I haven’t made a count, but there may be 20 other Democratic members of Congress equally steadfast in doing what is right for the country and the people. Maybe. On a good day, possibly 30 or even 40.

The percentage seems to be higher in state legislatures, although those institutions also harbor an excessive number of Democrats who are owned by the economic elite. Again, I am blessed in having an outstanding liberal state representative, Frank Hornstein, and a pretty good state senator in Scott Dibble.

That is not enough, and they are too few.

We do desperately need a new political party at the state and national levels. And, no, it will not come from the various tiny socialist organizations.

“Socialist” is a negative word in this country, made so largely by the hunters for communist witches who held such a grip on this country in the 1940s and ’50s and well into the ’70s. In fact, the commie hunters are making something of a comeback recently –- see Newt Gingrich — even though you probably couldn’t find 100 avowed communists in the entire country.

The right wing long ago successfully equated “socialist” with “communist,” which meant Soviet-style communist, and that remains stuck in the national psyche. And that’s true even though a large and obviously growing number of people in this country favor (shhhhhhh) a goodly number of socialist policies and programs.

Social Security, Medicare, Medicaid, food stamps, Pell grants, among the surprisingly many. Just don’t tell the people who love them that they are practical socialist ideas.

Sadly, many Democrats of today are hell bent on joining Republicans in getting rid of as many of those programs as possible, except where it works (for the moment) to their electoral advantage to support them.

Anyway, socialist parties in this country generally have been pretty light on political sense, although I’ve been seeing more of the socialist press of late, and have to say they seem to have considerably more gravitas than they once had.

Clear-thinking individual socialists always have offered rational ideas, of course, but the parties frequently have wandered off into obscure byways, arguing odd doctrinal points when they should have been actively supporting workable programs for improved health care and citizen rights.

The politically and socially liberal organizations that were born of the Internet have a more obvious claim now to be the parents of a new party.

They have the advantage of already having enormous experience and talent at communicating with the public and with organizing hundreds of thousands and, in some cases, millions of people for political action.

Unfortunately, they also have the drawback that has been cited in dismissing socialists: Too many egos, with too many people who want to be top dog and are unwilling to take a lesser role.

In fact, we almost certainly wouldn’t have so many such organizations if it weren’t for the egos of their founders, a majority of whom could just as well have joined an existing organization.

Still, there are some first-rate organizers among them, and many are people of considerable courage, willing to stand up to the big-money power structure, far more honest than the corporate media moguls and their increasingly dimwitted troops, and eager to fight for what they believe is right for this country and its people.

Jim Fuller Desperately Needed: A New Political PartyIf anyone wanted a list, I probably could name two dozen organizations that would serve the purpose as a starting point, or as a piece of what could be the start, of a new party. And that leaves out the likes of MoveOn and other organizations that are barely camouflaged unofficial arms of the Democratic Party.

What I don’t know is how to get them together, get them into a conference specifically aimed at the formation of a new party. We need to think about that, but quickly, and to get them moving.

James Clay Fuller is a sort-of retired journalist who has worked in newspapers and magazines for more than 45 years. His day job for 30 years was at the Minneapolis StarTribune, where he was a business and economics reporter, features writer, and sometime music critic, as well as an editor in charge of several specialized sections of the newspaper and a number of investigative projects. He was nominated for Pulitzer Prizes in 1977 and 1992, and was the instigator and senior editor on a project that was nominated for a Pultizer in 1997. He has written for many national publications.

How Many People Will Go Hungry When The U.S. Dollar Ponzi Scheme Collapses?

Dees Illustration
Market Bust

The U.S. Dollar which is not really even a dollar but rather a "Federal Reserve Note" is nothing more than a mirage in the desert. Federal Reserve Notes are just that, Notes. What is a Note? It is a formal piece of paper that says one person owes another money, in this case the Federal Reserve.

But what are they going to pay you back with? More Notes of course. And what makes these notes valuable? Nothing more than the belief of the people who use them.

And how are these notes created? Quite simply they are borrowed into existence. This means that Money is just debt. So if all of the debt were to be repaid tomorrow, there would be no more "official Money". FIAT PONZI CURRENCY NOT BACKED BY ANYTHING EXCEPT HOPE.

But one day, and probably sooner than anyone expects, the CONFIDENCE IN FIAT DEBT CRACKHEAD MONEY WILL COLLAPSE ALMOST OVERNIGHT!

People will wake up in a MASS CONSCIOUSNESS AWAKENING and they will realize all at once that THEY HAVE BEEN ROBBED BY THE BANKERS AND THEIR OWN GOVERNMENT.

The people will realize that the government has borrowed so many FIAT DEBT DIGITS into existence and they are all worthless NOTES to be repaid with more worthless notes.

At that point there will be a massive rush to get anything they still can for the FIAT DEBT PONZI money that they have. They will see Silver and Gold rising huge amounts every day along with prices in all necessities rising as well.

To quote Richard Russell, "A hungry man is an angry man, and a hungry, angry man is a dangerous man."

If you haven't done so yet, get out of FIAT TRASH MONEY and buy physical silver and gold, money of history. Don't wait for the stampede, because you will already be too late.

Got Silver?

'Real Deal': Is China's Economy 'Fugazi?'

Fed Considers Tighter Credit As Economy Improve

CHART: China Passes India As World's Biggest Gold Buyer

Chinese investors are snapping up gold bars and coins, buying more than ever before in the first quarter of 2011 and overtaking Indian buyers as the world's biggest purchasers of the metal.

China's investment demand for gold more than doubled to 90.9 metric tons in the first three months of the year, outpacing India's modest rise to 85.6 tons, the World Gold Council said in its quarterly report on Thursday. China now accounts for 25% of gold investment demand, compared with India's 23%.

The report underscores the rising appetite for gold among the growing middle-class in China. Fears of the country's soaring inflation, as well as a search for new investments, is luring investors to gold, and marketing of the precious metal has also increased in recent months.

"I think people will be surprised by the strength in the Chinese demand, but we think this is a trend that is set to continue," said Eily Ong, an investment research manager at the gold council.

Continue reading...

Profiting Despite Pandora’s Econo-Financial Box

“Believe me, the next step is a currency crisis because there will be a rejection of the dollar. The rejection of the dollar is a big, big event, and then your personal liberties are going to be severely threatened.”

Rep. & Presidential Candidate Ron Paul, R-TX

Rep. Paul rightly identifies Important and Impending Negative Consequences of The Fed’s Devaluation of the U.S. Dollar.

And Stanley Druckenmiller makes it clear why the Fed-facilitated Debt Crisis is not likely to be resolved favorably anytime soon, if at all, because Politicians and Treasury Officials are not seriously addressing, much less close to solving, one fundamental Problem: Excessive Spending.

“We hadn't heard much from legendary investor Stanley Druckenmiller since last August when he decided to shut down his Duquesne Capital hedge fund. Until today. In a must read interview, the man who took on the Bank of England in 1992 and won, says that he joins the camp of Bill Gross et al, making it all too clear that all the recent fearmongering about the lack of a debt ceiling hike by the likes of Tim Geithner, Ben Bernanke and, of course, all of Wall Street, is misplaced…

The real MAD, Druckenmiller says, is letting the debt spiral out of control. As anyone with half a working brain will realize.

Mr. Druckenmiller is puzzled that so many financial commentators see the possible failure to raise the debt ceiling as more serious than the possibility that the government will accumulate too much debt. "I'm just flabbergasted that we're getting all this commentary about catastrophic consequences, including from the chairman of the Federal Reserve, about this situation but none of these guys bothered to write letters or whatever about the real situation which is we're piling up trillions of dollars of debt."

He's particularly puzzled that Mr. Geithner and others keep arguing that spending shouldn't be cut, and yet the White House has ruled out reform of future entitlement liabilities—the one spending category Mr. Druckenmiller says you can cut without any near-term impact on the economy.

Next we move to the topic of the US ponzi and why the Fed is at its core.

Some have argued that since investors are still willing to lend to the Treasury at very low rates, the government's financial future can't really be that bad. "Complete nonsense," Mr. Druckenmiller responds. "It's not a free market. It's not a clean market." The Federal Reserve is doing much of the buying of Treasury bonds lately through its "quantitative easing" (QE) program, he points out. "The market isn't saying anything about the future. It's saying there's a phony buyer of $19 billion of Treasurys a week."

Warming to the topic, he asks, "When do you generally get action from governments? When their bond market blows up." But that isn't happening now, he says, because the Fed is "aiding and abetting" the politicians' "reckless behavior."

And blow up they will if nothing changes. Druckenmiller's conclusion:

"I think technical default would be horrible," he says from the 24th floor of his midtown Manhattan office, "but I don't think it's going to be the end of the world. It's not going to be catastrophic. What's going to be catastrophic is if we don't solve the real problem," meaning Washington's spending addiction.”

Druckenmiller Calls Out The Treasury Ponzi Scheme: "It's Not A Free Market, It's Not A Clean Market", Identifies The Real Bond Threat

Tyler Durden, zerohedge.com, 5/14/11

And John Williams pinpoints why the U.S. Economy is not in recovery (contrary to Mainstream Media Spin) and provides the Real Numbers (see note below**).

“The U.S. economy is not in recovery, and what ever upside bouncing there was in retail sales and industrial production increasingly appears to have been transient in nature. In this morning’s (May 17th) reporting, April 2011 housing starts continued their broad downtrend, bouncing downhill in renewed deterioration. More important than the statistically-insignificant monthly decline of 10.6%, the annual decline of 23.9% was significant, and the six-month moving-average has declined for the last three months, pushing the historic low level seen in April 2009…

In tandem with last week’s reporting of retail sales activity gaining less than 0.1%, net of higher prices (see Commentary No. 368), production activity appears to have stalled, with housing and consumer liquidity issues leading general economic activity into what eventually should be recognized as a double-dip recession…

April Housing Starts Were Consistent with a Deteriorating Economy.”

“Commentary No. 369: April Housing Starts, Industrial Production”

John Williams, shadowstats.com, 5/17/11

Faced with the Debt Crisis in Europe, Both The True Finn Party and Jim Willie identify a main cause of the Crisis – the Mega-Bankers, and offer a Solution – a Mega-Banker Haircut.

“The insolvent European big banks must be purged and liquidated in an orderly manner, according to Timo Soini writing in the Wall Street Journal Europe. The True Finn party leader was aggressive and almost hostile in his words, describing the banks as suffering from gangrene, both public and private. He urged amputations to save the body. He called the repairable potential of the sovereign debt condition in Greece, Ireland, and Portugal a grand lie, whose official version takes the people of Europe for idiots. In a remarkable display, the Wall Street Journal [US] edited, censored, and republished the article, scrubbing all negative comments by Soini. He must have ruffled some important bankers who do not favor liquidation and prefer to mold the citizenry into placid idiots.”

Jim Willie, Global Money War Report, May 2011

And a Correspondent Comments:

“The True Finn Party is one to watch. Leaders advocate an end to mass immigration into Finland as well as responsible fiscal policy that does not entail sacrifice of the people's well-being in order to shore up international banking interests.

Although the comments apply to European countries/banks primarily, the points apply generally.”

First one must understand the Hyperstagflation which increasingly threatens to leap out of the Econo-Financial ‘Pandora’s’ Box we face, to understand how to Profit and Protect from it. Consider the following Thumbnail Sketch of the Challenges, which we and others have described in detail elsewhere.

Key Sovereign Nations’ and Other Debts are Unpayable unless the Fiat Currencies in which they are denominated continue to be depreciated by Fed and other Central Banks, or the mega-Bankers get a Haircut.

Moreover, the Prices of Equities-in-General are not justified by the aforementioned Econo-Financial Conditions.

Indeed, given that the Equities Rally since March, 2009 was induced by QE (see Graham Summers’ September 30, 2010 article – “The Only Reason Stocks Have Rallied This Month” quoted in Deepcaster article “Surmounting the Wealth Destruction Juggernaut (09/30/10)”) and the fact that when QE was withdrawn (e.g. in July/August 2010) the Equities Markets fell, more QE (as in QE 3 and 4) will likely be necessary, eventually.

But QE wildly in excess of GDP which has been and is ongoing (see Real Numbers from Shadowstats.com** below) entails Massive Monetary and therefore Price Inflation, as we have seen already with Food and Energy.

Importantly, QE has not significantly aided Economic Recovery if at all (we emphasize, Real U.S. GDP is now a negative 2.6% -- see Shadowstats.com note below – and Real U.S. Unemployment is 22.3%).

But ongoing QE has resulted in piling more debt on unpayable Debt helping to further fatten the Mega-Bank owners of the private for-profit Fed among others. The private for-profit Fed has been creating $19 Trillion out of thin air (as Druckenmiller pointedly notes) for free per week to buy U.S. Treasuries on which Taxpayers must pay interest.

Unfortunately, like a Drug Addict, the Markets and Economy have come to rely on QE and other Stimulus.

Consequently, if QE is Withdrawn, the Markets and Economy Weaken even More.

If QE Continues, Hyperstagflation becomes Inevitable. (Already Real CPI in the USA is 10.69% and Rising - see Note below.)

Since Collapse is not a Palatable Option for Politicians, Central Banks and Governments with continue Vast Monetary Inflation. This will entail Vast Price Inflation i.e. a dramatic Erosion of the Purchasing Power of Fiat Currencies in Countries around the World, at the same time it depresses Economic Growth.

Credit-induced Price Inflation is not the arguably healthy inflation created by savings and investment-generated growth.

So, what to do to preserve Capital and Profit?

Sectors To Buy and NOT to Buy

NOT!

Saving” in the traditional sense of Cash in Bank Accounts, is futile at this time because of the Depreciating Purchasing Power of Fiat Currencies and Because of Fed’s QE has kept Rates artificially low. Qualifiers: Some Currencies, such as the Swiss Franc, Canadian and Australian Dollars will perform relatively better than the Currencies heavily Indebted Countries like the USA. Moreover, there are times of which it makes sense to hold cash (albeit depreciating) for a few months, to be able to timely take advantage of Opportunities.

“Investment” in Equities-in-General is likely to generate massive losses over the Next few Years because Economic and Financial Headwinds are quite daunting. It is critically important to note several characteristics of this now-ongoing Equities rally:

  • It is on record low volume
  • It has been fueled in part by a weaker Dollar. Since January 1, 2011 on a dollar adjusted trade-weighted basis the S&P has actually dropped more than half a percent. The Fed has in effect recommitted to continuing U.S. Dollar Weakness.
  • In other words, one could argue that virtually all the S&P strengthening this year is properly attributed to U.S. Dollar Weakening.
  • But now that the US Dollar has very recently begun strengthening as we earlier forecast, look out below for Equities
  • But of course, it is more complicated. The Dollar Weakening is mainly a function of the Fed’s Money-Printing (QE 2, etc.)
  • It has been fueled in part by Fed Stimulus and POMO-pumping

Thus, virtually all the Rally since March, 2009 is an Artificial (i.e. Fed Money-printing-and-POMO-pumping-induced) Rally.

WARNING: Thus beware, Artificial Highs do not end well and Deepcaster has thus Forecast a Reversal.

Qualifier: There are always a few Special Situations with Profitable Prospects. Certain Individual Stocks with excellent Alpha and Beta Potential are among these.

“Investments” in Bonds-in-general is likely to be a loser because, over the mid-term bonds-in-general should fall in value (because of the Increasing Risk to Principal because of the aforementioned Econo-Financial Crises) and, therefore, yields rise. That is because many Nations, States and Municipalities are or will soon be, as Meredith Whitney and others correctly Point out, insolvent, and face, or could face, Bankruptcy. We are both amused and concerned at the U.S. T-Notes & T-Bonds strengthening which began the second week of April and which we earlier Forecast.

Amused, because THE ONLY REASON U.S. Treasuries have rallied is because the Fed has been buying $19 Trillion/Week via QE, as legendary Investor Stanley Druckenmiller Notes above – at least 70% of the total Auctioned and probably more (though given Fed-led-Cartel Covert Buying, we cannot know for sure).

Concerned, because continued Fed Buying is Unsustainable, and because it is Hyperinflationary and thus in the long run Worsens Outcomes.

If the Fed Continues, Real CPI (as e.g. Food and Energy) will continue to Rise.

If the Fed stops or slows appreciably, then Treasury Yields Vault up, giving the Housing Market specifically, and Equities Markets in General another kick in the teeth.

Qualifier: There are a few promising Issues out there, but intensive research is required to discover “Buy” Sectors at the Right Time. One must be Very Selective.

That leaves Gold, Silver, Food, and Water as “BUY” Sectors.

BUY!

Gold & Silver

Gold and Silver prices have begun to Bottom after the brutal Takedowns, which we earlier forecast, of the past few days.

Given all the foregoing Fundamentals, Gold and Silver will Rally again, but there is a caveat:

A Fed-led Cartel* still actively intervenes to Suppress Precious Metal Prices as recent weeks have shown. Although (due in part to revelations that Major Metal Repositories do not have all the Metal they claim), The Cartel has been weakened recently, They are still Potent.

*We encourage those who doubt the scope and power of Overt and Covert Interventions by a Fed-led Cartel of Key Central Bankers and Favored Financial Institutions to read Deepcaster’s December, 2009, Special Alert containing a summary overview of Intervention entitled “Forecasts and December, 2009 Special Alert: Profiting From The Cartel’s Dark Interventions - III” and Deepcaster’s July, 2010 Letter entitled "Profit from a Weakening Cartel; Buy Reco; Forecasts: Gold, Silver, Equities, Crude Oil, U.S. Dollar & U.S. T-Notes & T-Bonds" in the ‘Alerts Cache’ and ‘Latest Letter’ Cache at www.deepcaster.com. Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at www.gata.org, including testimony before the CFTC, for information on precious metals price manipulation. Virtually all of the evidence for Intervention has been gleaned from publicly available records. Deepcaster’s profitable recommendations displayed at www.deepcaster.com have been facilitated by attention to these “Interventionals.” Attention to The Interventionals facilitated Deepcaster’s recommending five short positions prior to the Fall, 2008 Market Crash all of which were subsequently liquidated profitably.

Thus, Timing the purchase of Precious Metal is crucial. For example, around the time of our forecast Equities Takedown launch, we expect The Cartel to launch another Greatly Intensified Attack on these Precious Metals.

What a magnificent buying opportunity such a Takedown would be! Encouragingly, recent periodic Cartel Takedown Attempts get rapidly bought.

After the aforementioned anticipated Takedown and into the Medium and Long-Term, this Precious Metal Bull will almost surely continue and Intensify.

In sum for the Precious Metals (and though silver has already declined nearly 30%), the next Test will likely come (especially for Silver) when the Next Equities Takedown begins in earnest (see below).

Warning! We repeat: Precious Metal Miner and Explorer shares are stocks, and thus tend to mimic overall Equities Market Movements to a degree as they have on several recent trading days (Result: on the days Equities were down, the HUI typically dropped significantly). In other words, an Equities Takedown tends to take down Precious Metals shares prices also, but Bullion tends to be less affected.

Food (and Water)

Another Sector offers a considerable Measure of Protection and Profit Potential. That Sector is Food, including Food Producers and Processors. Food Prices have a Floor under them (due in large part to annual 80 Million/ Year World Population Growth) which even the Energy Sector does not have, because Energy Prices are vulnerable to Economic Slowdowns.

Therefore, even more than Energy or Even Precious Metals, Food and Potable Water must be at the top of Consumer Shopping lists everywhere around the world. With demand increasing from the 80 million plus annual world population increase, and increased resources of a growing Middle Class, especially in BRIC countries, to buy more and better Food, Food Producers and Processors are in the Catbird Seat. The Problem (and Profit Opportunity for Investors!) is exacerbated by the facts that most of the World’s best arable land is already under cultivation, and the fact that Modern Agriculture is very Fossil-Fuel-Energy-Intensive, and thus sensitive to energy price increases.

Bottom Line: Gold and Silver Investors should also invest in selected Food Producers and those Involved in the Water Treatment/Supply Business***. at the Right Time, because the Factors which help cause Gold, Silver and Crude Oil Prices increases, will also continue to impel Food Price increases, almost regardless of Economic Conditions.

Best regards,


Deepcaster LLC

Matt Taibbi: 'U.S. Politics Are A Reality Show Sponsored By Wall Street' (Video)

What happens when Greece defaults

It is when, not if. Financial markets merely aren’t sure whether it’ll be tomorrow, a month’s time, a year’s time, or two years’ time (it won’t be longer than that). Given that the ECB has played the “final card” it employed to force a bailout upon the Irish – threatening to bankrupt the country’s banking sector – presumably we will now see either another Greek bailout or default within days.

What happens when Greece defaults. Here are a few things:

- Every bank in Greece will instantly go insolvent.

- The Greek government will nationalise every bank in Greece.

- The Greek government will forbid withdrawals from Greek banks.

- To prevent Greek depositors from rioting on the streets, Argentina-2002-style (when the Argentinian president had to flee by helicopter from the roof of the presidential palace to evade a mob of such depositors), the Greek government will declare a curfew, perhaps even general martial law.

- Greece will redenominate all its debts into “New Drachmas” or whatever it calls the new currency (this is a classic ploy of countries defaulting)

- The New Drachma will devalue by some 30-70 per cent (probably around 50 per cent, though perhaps more), effectively defaulting 0n 50 per cent or more of all Greek euro-denominated debts.

- The Irish will, within a few days, walk away from the debts of its banking system.

- The Portuguese government will wait to see whether there is chaos in Greece before deciding whether to default in turn.

- A number of French and German banks will make sufficient losses that they no longer meet regulatory capital adequacy requirements.

- The European Central Bank will become insolvent, given its very high exposure to Greek government debt, and to Greek banking sector and Irish banking sector debt.

- The French and German governments will meet to decide whether (a) to recapitalise the ECB, or (b) to allow the ECB to print money to restore its solvency. (Because the ECB has relatively little foreign currency-denominated exposure, it could in principle print its way out, but this is forbidden by its founding charter. On the other hand, the EU Treaty explicitly, and in terms, forbids the form of bailouts used for Greece, Portugal and Ireland, but a little thing like their being blatantly illegal hasn’t prevented that from happening, so it’s not intrinsically obvious that its being illegal for the ECB to print its way out will prove much of a hurdle.)

- They will recapitalise, and recapitalise their own banks, but declare an end to all bailouts.

- There will be carnage in the market for Spanish banking sector bonds, as bondholders anticipate imposed debt-equity swaps.

- This assumption will prove justified, as the Spaniards choose to over-ride the structure of current bond contracts in the Spanish banking sector, recapitalising a number of banks via debt-equity swaps.

- Bondholders will take the Spanish Banking Sector to the European Court of Human Rights (and probably other courts, also), claiming violations of property rights. These cases won’t be heard for years. By the time they are finally heard, no-one will care.

- Attention will turn to the British banks. Then we shall see…