Economic Breakdowns Cause Social Breakdowns

More to the public option than you know, presidents dont make policy, anger over bailouts at town hall, America's debt will never be repaid, Make no mistake, higher inflation is on the way and probably hyperinflation. It will also be affected by a break down in the tax system as well. The trio leads to economic, financial, social and political dysfunction.

The public option for Obama insurance coverage has been described as just a sliver of the overall proposal. Universal coverage directly by government was not an essential element says Health & Human Services. Of course it was. The program is in retreat and the only way the Democrats can get passage of any kind is to re-craft a toothless passage and ram it through in a party line vote. The public is enraged at what the liberals and socialists have tried to foist on them. Worse yet, the administration has submitted to Wall Street and the insurance giants, which they intended to do from before the beginning. Just look at the line up of campaign contributors. The same goes for the euthanasia section. This could well have been a loss leader to get the rest of this monstrosity passed. The exercise will cost the President and Congress dearly as their approval ratings sink to 41% and 12% respectively. November of 2010 will be the time of reckoning.

We remind you that presidents do not make presidential policies. They are made by the bureaucratic types, who receive their marching orders from the Illuminists above them. This is why you had the seamless transition from the neocon administration to the current decidedly more fascistic one now in power. Team A replaced Team B from the Council on Foreign Relations, Trilateralists and Bilderbergers. Nothing really changed. If you accept the premise that they are all intent on creating world government then you can understand why they all are preparing us for controlled collapse. These planners expected problems, but they were not prepared for the potential of major social unrest displayed at Town Hall meetings nationwide. There is finally growing social unrest and rightly so. All that was initiated by bailing out the rich financial sector to the tune of $23.7 trillion, and then the lying about where funds were going and how they were being used, then more lies, and then the bonuses at AIG and Goldman Sachs and at other Illuminist companies. The public has begun to listen to our story and the elitists cannot let the truth see the light of day. The system is rigged toward the rich insiders and now the public isn’t even getting crumbs and everything is being taken away from them. Those insiders who are dismissive of population and the fairness of the system should check with the ancestors of the 300,000 who lost their heads in France during the revolution.

Government no longer serves the people or the general good and the healthcare and cap & trade are typical issues. It is not what Americans want, but what corporate America and politicians want. All the rewards to the crooks on Wall Street and in banking that have destroyed our financial system. We have just been on the receiving end of dreadful government for 8 years and Americans feel helpless after electing a new president. The result thus far has been disastrous. Still few of their elected representatives listen to anything they have to say and it is no wonder we saw the outpouring of unhappiness displayed at Town Hall meetings. This in part is why people are walking away from debt and not paying their taxes. They believe they have an illegitimate government, which refuses to serve and listen to them. They now only represent corporate America.

Historically about 1/3rd of Americans do not file income tax and only 15% of illegal aliens file. That has cost government about $500 billion a year. Americans are fed up and more are becoming non-filers and more are underestimating or hiding income. It is essentially a tax revolt. Why do you think federal revenues fell so precipitously? People are sick and tired of taxation without representation. They are also outraged at the bailout of banks, Wall Street and insurance companies and a few crumbs for the average American.

They also realize that America’s debt will never be repaid, that they will have hyperinflation and that the dollar is collapsing versus other currencies. In time the public will discover gold, but that will happen as the depression goes further forward.

We have already entered the inflationary spiral again. Its force will depend on the strength of the deflationary undertow and the monetization of monetary aggregates. Make no mistake higher inflation is on the way and probably hyperinflation. It will also be affected by a break down in the tax system as well. The trio leads to economic, financial, social and political dysfunction.

What else should the elitists expect? All the revolving door bureaucrats from the Council on Foreign Relations, The Trilateral Commission and the Bilderberg Group are going to do is give us more of the same, as we had for the previous eight years.
Team A replaced Team B. They are furthering the same financial conditions that brought us the current disaster. We are seven months into the new administration and it has already destroyed any credibility it could have had. Writing blank checks to the financial community, which financed your campaign, does not endear you to the voters, as they are thrown a bone.

After the announcement, that the president had re-nominated Ben Bernanke as Chairman of the Federal Reserve, we were led to believe he saved us from a fate worse than death. Bernanke created enough money and credit to temporarily overcome the deflationary undertow in the economy. Ben created the problem along with Sir Alan Greenspan and now he wants us to believe he is going to save us by solving the problem. This is the same Ben that gave Greenspan academic cover. He had the temerity to blame the credit crisis on foreigners who created a savings glut, particularly Asians. He said this suppressed bond yields. That was probably true, but he conveniently forgets to mention that the Fed created all those dollars in the first place and were responsible for lower interest rates. Ben believes any slowdown or shock to the system can be easily handled by injecting more money and credit into the system.

Ben is the man who is going to lead us to a federal deficit of 100% of GDP over the next decade, as deficits swell to more than $1 trillion a year.

What must be remembered here is that it is not going to be easy or even possible to pull the punchbowl away. In 1936 they tried to slick up liquidity to prevent speculation. It turned out to be premature as money and credit fell into negative territory. By 1937 fiscal stimulus programs ended. The federal deficit fell, creating a counterforce.

This is the kind of risk Ben faces when and if he decides to withdraw the punchbowl. When Ben believed he saw in November 2002, the danger of deflation, he acted by increasing aggregates. There is no doubt he will see the same thing again if he cuts money and credit and raises interest rates. That means the system is entrapped in an endless cycle of money and credit creation, inflation and a lower dollar. Ben fears deflation far more than inflation and so the course will not be altered.

If we are experiencing a bottom it is accompanied by unprecedented budget deficits, which presents a huge financial problem during a recovery. That will be accompanied by inflation. That is what commodities, such as oil and copper are telling us. This presents us with stagflation. The bottom line is more of the same is not going to work and that is what Ben will give us. He simply doesn’t know any other way out of the maze. This also shows us that the president is totally ignorant of what is going on around him. None of the players believe in sound money and we will pay the price for that.

In September we see a renewal of monetization where officially the Fed will buy more and more Treasuries, Agencies and CD’s from banks, besides what they are doing in secret. A large part of the budget deficit, real estate expansion and banks’ bad debt will be monetized by the Fed, which is very inflationary. This is what went on in Argentina and the Weimer Republic and this is where Ben is headed. This is why you have to have gold and silver related investments; they will be your only protection.

The dollar may weaken through “established lows” as signs of a global economic recovery drive gains in equities and oil, Goldman Sachs Group Inc. said.

“That kind of shift could easily be prompted by continued good news from the macro front and the persistently negative dollar-equity and dollar-oil correlations,” Thomas Stolper, an economist at Goldman Sachs in London, wrote in a report yesterday. “Dollar bulls could well end up disappointed. Even a short-term move beyond our three- and six-month forecasts of $1.45 per euro is getting increasingly likely.”

The Dollar Index, which Intercontinental Exchange Inc. uses to track the U.S. currency against the euro, yen, pound, Canadian dollar, Swiss franc and the Swedish krona, has weakened as the Standard & Poor’s 500 Index of U.S. shares gained more than 85 percent of the time since June and more than 50 percent of the time since September as investors sought higher-yielding assets on signs on an economic recovery.

The index fell 11 percent from its high this year on March 4, during which time the S&P 500 gained 44 percent. The index was little changed at 78.592 as of 7:29 a.m. in New York. S&P 500 Index futures were unchanged.

“More and more foreign-exchange players have positioned themselves for a dollar bounce without much impact on the spot market,” Stolper said. Since early June, traders have moved toward favoring contracts that give them the option to buy the dollar against the pound, while “spot remains stuck in the mid- $1.60s,” Stolper said.

The cost of betting that the dollar will rise against the pound in one month’s time are at the highest since July 14, and near the most since March, according to 25 Delta risk reversals.

“All this suggests that the underlying dollar trend is still downward sloping and the risk is that normalization in positioning pushes the dollar through the established lows,” Stolper said.

Sales of newly constructed homes leaped unexpectedly in July to hit their highest level since last September.

New homes sold at an annualized rate of 433,000 during the month, according to a joint report issued by the Census Bureau and Department of Housing and Urban Development.

That far exceeded analysts' forecasts and was up 9.6% from the revised 395,000 rate recorded in June. A consensus of industry experts surveyed by Briefing.com had predicted July sales of 390,000.

U.S. building permits for July were revised to down 1.1% from June to a seasonally adjusted rate of 564,000, the Commerce Department reported Wednesday.

July building permits were originally reported as being down 1.8% at a seasonally adjusted rate of 560,000.

Mortgage applications filed last week increased a seasonally adjusted 7.5% compared with the week before, boosted mainly by filings to refinance existing home loans, the Mortgage Bankers Association said Wednesday.

Refinancing applications rose 12.7% for the week ended Aug. 21 from the prior week -- the third increase for such applications over the last four weeks.

Overall filings had increased a seasonally adjusted 5.6% in the week ended Aug. 14, data compiled by the Washington-based MBA showed. The MBA survey covers about half of all U.S. retail residential mortgage applications.

08/29/2009 Peter Schiff On Your Money The Turning Point

Check this link ...... http://bit.ly/DEUEw

Cybersecurity Act of 2009: President Can Take Over Internet, Access Private Data

Read the draft of the revised Cybersecurity Act bill (S 773) here

More of our freedoms are under attack, this time through s. 773 - The Cybersecurity Act of 2009,

First introduced by Senators Rockefeller and Snowe in April 2009, this bill aims to improve security for critical technology systems within government AND private sectors.

In actuality, all this bill would do is vastly expand government's control by granting the President the authority to shut down Internet traffic, regardless of whether it's in the govt or the private sector.

This bill fits an alarming trend of legislation that vastly expands the role and power of government, while doing absolutely nothing to address the root cause of the problem.

As security expert Bruce Schneier points out, the true causes of government cyber-insecurity include insufficient access controls, a lack of encryption where necessary, poor network management,
failure to install patches, inadequate audit procedures, and incomplete or ineffective information security programs.

The Cybersecurity Act does nothing to address these BASIC 'computer hygeine' issues, and instead, poses a serious threat to our personal freedom & privacy.

The revised version creates a Federal certification program for cybersecurity professionals. This certification would be mandatory for certain systems and networks within the private sector.

So, essentially, we're giving the people with the worst technology track record full authority and control over our critical technical assets. Government consistently gets failing grades when it comes to cybersecurity, yet this bill would look to them to define standards and certify who's qualified to manage private technology networks!?

You know the drill - do your own research, then call and email your reps urging them to oppose this bill and start standing up for our freedom. It's up to us to protect our rapidly-eroding freedoms, so please share this video with your friends and help spread the word.

Learn more about the original bill here (not much of this has changed):

台灣‧達賴台灣行掀風波‧有人抗議有人迎

（台灣‧台北）儘管西藏精神領袖達賴喇嘛強調，來台此行，純為宗教之旅，但仍在台灣掀起風波。

達賴今日（週一，8月31日）上午前往高雄縣甲仙鄉小林村探望災民，在祈福法會後接受訪問時表示，來台之行，純為宗教之旅，沒有政治議程。

達賴。（圖：美聯社）

民進黨南部縣市長邀請達賴低台，引發島內一些團體和民眾的強烈不滿。對此，達賴表示，不想此行為他人帶來麻煩。

由於中國已接連警告達賴之行必影響兩岸關係，國民黨高層5大巨頭，包括總統馬英九、副總統蕭萬長、行政院長劉兆玄、立法院長王金平、國民黨主席吳伯雄等都謹慎應對，並事先表態不會與達賴有任何公開或私下會面的安排。

乘高鐵遇示威者

週日（8月30日）深夜抵達台北的達賴，出閘後立即乘搭高鐵前往高雄，但在桃園高鐵站就遇到逾百名支持兩岸統一的示威者，抗議他到訪。

東森新聞報導，達賴這次第3度來台，卻遇上抗議人士高喊，“達賴回去！”有人拿著“要救災，不要亂”的白布條，有人說“災民水深火熱，陳菊趁火打劫”。

達賴：大家誤解我

週一上午達賴在高雄下榻的酒店外，仍有示威人士舉白布條抗議，警方已出動80名警力維安戒備。

對島內因自己出現的分歧場面，達賴受訪時說：“對於不同意見、不同宗教都是很自然的，是言論自由的一部份”。

至於被指趁風災作政治秀，達賴則說“大家誤解了我”。

他並重申，沒有要求藏獨，又說台灣應跟中國保持密切關係。達賴將在台灣逗留直至週五。

台灣‧國台辦再警告‧部份活動喊停‧達賴赴台不利兩岸關係

（台灣‧台北）中國國務院台辦發言人週日（8月30日）再度警告，西藏精神領袖達賴喇嘛赴台灣訪問，勢必給兩岸關係造成不利影響。

受達賴訪台影響，兩岸原定近期舉行的交流活動有一部份已臨時喊停。

國台辦發言人當天深夜11時，透過新華社發稿，二度警告達賴來台對兩岸關係的影響，除了重話批評民進黨策動達賴來台，也升高態勢稱，達賴來台勢必對兩岸關係造成不利影響。

該發言人並稱，當局將密切關注事態的發展。

國台辦上週四（8月27日）曾就達賴喇嘛來台發出聲明稿指出，堅決反對達賴以任何形式、身份來台，同時批評部份民進黨人趁機破壞兩岸關係。

王毅取消赴台活動

據報透露，國台辦主任王毅原定今日（週一，8月31日）出席在遼寧丹東舉行的台灣週活動已因此取消，改由主任助理李亞飛參加。中央社報導，為因應達賴訪台可能出現的狀況，王毅將坐鎮北京。

此外，兩岸啟動定期航班雖然週一如期開航，但據報導，中國方面已喊停新增航點的大型首航儀式。

《中國時報》引述涉台相關官員透露，在達賴訪台一事，大陸方面如果沒有更明確的“表態”，台灣可能會誤判大陸的嚴正立場。

王金平：重要領導不來台

立法院長王金平表示，一些中國訪問團的重要領導臨時叫停，不願帶團來台。而台北聽障奧運籌備委員會基金會總執行長盛治仁也說，中國隊將於5日晚抵台，確定不參加開幕。

儘管如此，一些既定的兩岸交流活動，例如週一登場的遼寧台灣週等，仍按計劃進行。

中國‧實驗室最快明年升空‧料2020年建空間站

（中國‧北京）中國將在2020年前後，在太空開建首個空間站，最快明年可發射空間實驗室升空。

中國載人航天工程應用系統總指揮及總設計師顧逸東透露，中國載人航天第二步一階段的任務已經全面展開，預計2010年到2015年，發射2到3個空間實驗室（目標飛行器）到太空，壽命為2年。

屆時，將會有包括“神舟8”號等多艘無人或載人太空船發射升空，進行與空間實驗室的太空對接實驗。

顧逸東稱，中國還將建造載人空間站，開展較大規模的、長期有人照料的空間科學與應用任務。預計在2020年前後，將發射空間站核心艙和科學實驗艙，由載人貨運太空船負責給空間站輸送給養。

他指出，中國正在研製大火箭，並在海南建設新的發射場。

英國‧美國男子過不花分文生活‧3年住山洞吃野味

（英國‧倫敦）沒有錢真的萬萬不能？

英國《週日泰晤士報》報導，美國男子瑟洛8年前拒絕當金錢奴隸，堅決遠離金錢，3年前起索性長期住進猶他州莫阿布的沙漠峽谷內一個5呎乘15呎的山洞，隱居避世。

隱居山洞瑟洛每日都以松鼠、浣熊、昆蟲及爬蟲為食。（圖：互聯網）

48歲的瑟洛也可能是美國唯一不受金融海嘯影響的人。當美國人受金融海嘯衝擊而掙扎求存之際，他平靜地住在山洞，毫不擔心房子被沒收或加租。

瑟洛雖然身無分文，卻拒絕接受政府的食物券或任何幫助，每日三餐都靠山吃山，松鼠、浣熊、昆蟲及爬蟲成了他的食物。他有時也會從巿內餐廳的垃圾桶檢拾殘羹來吃，他直指美國人常把大好食物丟棄。

瑟洛當上隱士，源於十多年前一次阿拉斯加之旅，他當時發現原來不花分文也可生活。

他與物質世界的唯一聯繫就是到圖書館利用公家電腦上網寫網誌。

這種如盧梭經典小說《瓦爾登湖》（Walden）般的生活被網友批評不切實際，但瑟洛樂在其中。

英國‧酒店破產婚紗店遇劫‧最倒霉新人‧婚禮屢遇阻

（英國‧倫敦）結婚是人生大事，但英國一對新人卻人算不如天算，他們籌劃的婚禮接二連三出事，計劃不斷更改，令他們成為英國歷來最倒霉的新人。

波特夫婦去年決定拉埋天窗後，於是預訂機票和酒店到希臘度蜜月。豈料錢付了後，光顧的旅行社倒閉，接著是伴娘裙店清盤，154英鎊（約馬幣882令吉）定金泡湯。

波特夫婦籌備婚禮一波三折，還好兩人最終排除萬難，有情人終成眷屬。（圖：互聯網）

兩人所買的麥克傑遜演唱會，卻因他猝死而告吹，改買Oasis演唱會，也因妻子卡倫跌斷腳而去不成。就連舉行婚宴的酒店也申請破產，兩人要臨時更改場地，損失300鎊定金，卡倫光顧的婚紗店被爆竊，新買的熨斗又無故壞掉。

婚前倒霉事，一浪接一浪，幸好兩人最終已在8月15日順利行禮，卡倫說：“結婚後終於轉運了。”

英國‧男子山頂留相機實驗‧證明人可互相信任

（英國‧倫敦）在今日（週一，8月31日）講金不講心的世界，人與人之間仍可以互相信任嗎？

據英國《週日郵報》報導，24歲的英國男生保羅為了尋找答案做了個實驗。

連環圖顯示，保羅留下的相機中，有30多張不同行山人士拍攝的照片。（圖：互聯網）

保羅深信人是可以相信的，他朋友卻唱反調。於是，今年5月他開始實驗，在威爾斯北部的斯諾登尼亞特里凡山山頂，自拍了一張照片後，故意遺留下相機及一張字條，指示發現者用相機拍攝一張相，再留下相機給下一位行山人士使用，直至影完最後一張相，將相機送回給他。

整個實驗，保羅要試驗究竟相機會被貪心的人偷走，抑或按原定計劃送回他手中。經過4天，終於得到結果，一名叫布賴恩的男子，親自將相機送到保羅的家，相機中還有30多張由不同行山人士拍攝的照片。

布賴恩說：“我見到那部相機時，以為有人遺下，看到字條，知道是甚麼回事。”

人仍然信得過，這是一個令人窩心的實驗。

新加坡‧露臀露乳溝火辣辣‧中元歌台也脫

（新加坡）邊唱邊脫、脫剩三點式、大露臀部、展露乳溝、上演走光，多名女歌手在7月歌台掀起火辣“脫衣秀”，公眾炮轟太惹火，認為有猥褻和意識不良之嫌。

今年的7月歌台越演越性感，繼港台歌手輪流上演脫衣秀，邊唱邊脫後，新加坡女歌手也“不甘示弱”，秀出深邃乳溝和上演“意外”走光一幕，越穿越“清涼”。

羅曼穿上深V上衣，酥胸半露。

不少公眾紛紛炮轟，指7月歌台是新加坡獨特的街頭舞台文化，大多數是在組屋區舉行，女歌星穿得太暴露或清涼都不適合。許多人攜老帶幼來欣賞，不少家長更是帶小孩子來看歌台，接連上演性感暴露畫面，令一家大小感到難為情。

家長不敢帶孩子看歌台

一些家長也認為女歌星火辣的裝扮不妥當，會對小孩子起不良的影響，表示不敢帶孩子來看歌台。

首先掀起“脫衣秀”的是台灣的高學歷日語專家芽芽。

她在跑台時延續台灣工地秀傳統，在唱第3首歌時脫剩三點式清涼裝，場面香艷。

接著，來自香港的國際跑秀歌手百美蕙，總是以華麗舞台裝亮相，過後脫去華服，露出貼身內衣裝，還小露翹臀，令男觀眾差點噴鼻血，猛舉手機拍照。

原籍中國，現為新加坡公民的“功夫女星”羅曼，也每天穿著半露酥胸的深V上衣和超短迷你裙跑台，令男歌迷目不轉睛。

這個現象已經引起公眾關注，紛紛詢問這樣的暴露穿著是否適當與合法。

據瞭解，如果有人不能接受或認為三點式是猥褻暴露，並且據此報案，當局就會展開調查。如果沒有人投訴，只要歌台上的清涼裝沒有裸露，一般上並沒有非法成份。

新加坡‧醉酒逆向行駛圖撞警員‧男子監4年罰款禁駕車

（新加坡）醉漢為逃避警方路障，竟逆向行駛，還開車衝向警員，迫使警員朝他的車輪開鎗！

這個在一年多內，5次無執照駕駛妻子週末車的男子，今日（週一，8月31日）被判坐牢4年，罰款3萬9800元（約馬幣9萬7411令吉），並終身不得駕車。

被告傑勒路易斯，48歲，面對多達28項罪狀。

他在去年3月6日到今年6月13日間，在沒執照，也未得到妻子（車主）同意下，一再違例駕駛週末車。

今年6月13日凌晨1時10分左右，更醉酒駕駛，並在經過尼路時，為避開交警設的路障而把車子後退，逆向行車。

一名警員走近示意被告打開車窗，但被告不聽指示繼續後退，警員只得打開司機車門叫他停車。

被告在水車路和尼路交界處停車後，見警員要抽出他的車匙，突然把車駛向左邊還加快車速，迫使警員跳上路堤。

第二名警員這時追來，示意被告停車，但被告竟開車朝警員衝去。

第3名警員跟著追來，但被告仍拒絕停車，並加速朝警員駛去。警員情急下，朝被告的汽車前輪開鎗。

被告過後繼續開車逃跑，在路上橫衝直撞，兩名交警騎電單車在後緊追，終於在丹戎巴葛路將他逮捕。

Democracy Propaganda

Democracy has nothing to do with the 'success' of America. A bunch of greedy rich white people with guns conned a bigger bunch of greedy wanna-be-rich white poeple (whom they had oppressed in their native lands and promised not to any more if they would only help them kill the savages) to steal the greatest bounty of untouched riches and wealth the world had ever seen from the innocent owners of that bounty. America would have been a 'success' no matter which system it had operated under - for 500 years whenever they wanted anything they just had to dig into thier hoard of stolen goods to pay for it. Problem is they just realized the hoard is gone. Now they have to export thier 'democracy' so they can attempt to re-stock it.

The USA is not now, nor has it ever been, a democracy. It is a republic. If you want to get technical, it is a constitutionally-limited democratic republic. That means it is a republic, with some of the representatives being elected in a democratic process, and operaters under the motivations and restrictions of a constitution.

As the post images says, democracy is mob rule. Gangs are a democracy.

Get over the loss of land by the native inhabitants. How did this affect your life? How is going to affect your future? The smart outwit the dumb, the educated fool the ignorant, the greedy take from the altruistic, the powerful overtake the meek. That's nature. The best you can do is learn from the past and make a decision to do right by your morals. Do you want immortality or do you want stuff? Do you want to be famous or to be infamous? Do you want respect or do you want fear?

It was a cheesy movie, but paying it forward works much more than it doesn't. Just don't expect life to be fair, it is what you make it.

xero, about the stealing of the native's land: that IS important to know and to understand. He is just pointing out WHY exactly USA was able to get rich. Capitalism is a zero sum game because for somebody to get rich somebody else MUST gets poorer. It is very important to know how the white people always get rich by going to land that dont belong to them and they reap everything from there and get rich.

Gun Safety Fail

This guy's the only one in this room professional
enough to carry this Glock 40!

»

麻生首相、退陣を表明 「民主圧勝」選挙結果受け Aso expresses retirement after the election results

麻生太郎首相が党総裁を辞任する意向を表明した。2009年8月30日22時20分ごろ、NHKとのインタビューで答えた。NHKなど各局が民主の単独過 半数の「当確」を報じ、政権交代が確実になる情勢を受けての発言だ。麻生首相は選挙結果について「責任を負わなければならない」「速やかに総裁選を行い、 出直さなければならない」と述べた。今後については「一党員として自民党の再生に力を注ぐ」とした。

Aug 30 10:20pm (Japan time) Aso Taro is saying he is is going to retire. Aso holds himself responsible for the LDP's loss. He will have an election again as soon as possible. NHK and many companies are saying the JDP is now more than half of the lower house. They can rule without opposition. Big Changes are inevitable.

Japan Election Results: Opposition Democrats Win Huge Victory

TOKYO — Japan's Prime Minister Taro Aso conceded defeat in elections Sunday as media exit polls indicated the opposition had won by a landslide, sending the conservatives out of power after 54 years of nearly unbroken rule amid widespread economic anxiety and desire for change.

"These results are very severe," Aso said in a news conference at party headquarters, conceding his party was headed for a big loss. "There has been a deep dissatisfaction with our party."

Aso said he would have to accept responsibility for the results, suggesting that he would resign as party president. Other LDP leaders also said they would step down, though official results were not to be released until early Monday morning.

The left-of-center Democratic Party of Japan was set to win 300 or more of the 480 seats in the lower house of parliament, ousting the Liberal Democrats, who have governed Japan for all but 11 months since 1955, according to exit polls by all major Japanese TV networks.

The loss by the Liberal Democrats – traditionally a pro-business, conservative party – would open the way for the Democratic Party, headed by Yukio Hatoyama, to replace Aso and establish a new Cabinet, possibly within the next few weeks.

The vote was seen as a barometer of frustrations over Japan's worst economic slump since World War II and a loss of confidence in the ruling Liberal Democrats' ability to tackle tough problems such as the rising national debt and rapidly aging population.

The Democrats have embraced a more populist platform, promising handouts for families with children and farmers and a higher minimum wage.

The Democrats have also said they will seek a more independent relationship with Washington, while forging closer ties with Japan's Asian neighbors, including China. But Hatoyama, who holds a doctorate in engineering from Stanford University, insists he will not seek dramatic change in Japan's foreign policy, saying the U.S.-Japan alliance would "continue to be the cornerstone of Japanese diplomatic policy."

National broadcaster NHK, using projections based on exit polls of roughly 400,000 voters, said the Democratic Party was set to win 300 seats and the Liberal Democrats only about 100. TV Asahi, another major network, said the Democratic Party would win 315 seats.

The LDP's secretary-general, Hiroyuki Hosoda, said he and two other top officials plan to submit their resignations to Aos, who serves as president of the party.

As voting closed Sunday night, officials said turnout was high, despite an approaching typhoon, indicating the intense level of public interest in the hotly contested campaigns.

"We've worked so hard to achieve a leadership change and that has now become almost certain thanks to the support of many voters," said Yoshihiko Noda, a senior member of the DPJ. "We feel a strong sense of responsibility to achieve each of our campaign promises."

Ruling party leaders said they were devastated by the results.

"I feel deeply the impact of this vote," former Prime Minister Shintaro Abe, a leading Liberal Democratic Party member, told television network TBS. "Our party must work to return to power."

Even before the vote was over, the Democrats pounded the ruling party for driving the country into a ditch.

Japan's unemployment has spiked to record 5.7 percent while deflation has intensified and families have cut spending because they are insecure about the future.

Making the situation more dire is Japan's aging demographic – which means more people are on pensions and there is a shrinking pool of taxpayers to support them and other government programs.

"The ruling party has betrayed the people over the past four years, driving the economy to the edge of a cliff, building up more than 6 trillion yen ($64.1 billion) in public debt, wasting money, ruining our social security net and widening the gap between the rich and poor," the Democratic Party said in a statement as voting began Sunday.

"We will change Japan," it said.

Hatoyama's party held 112 seats before parliament was dissolved in July.

The Democratic Party would only need to win a simple majority of 241 seats in the lower house to assure that it can name the next prime minister. The 300-plus level would allow it and its two smaller allies the two-thirds majority they need in the lower house to pass bills.

Many voters said that although the Democrats are largely untested in power and doubts remain about whether they will be able to deliver on their promises, the country needs a change.

"We don't know if the Democrats can really make a difference, but we want to give them a chance," Junko Shinoda, 59, a government employee, said after voting at a crowded polling center in downtown Tokyo.

Having the Democrats in power would smooth policy debates in parliament, which has been deadlocked since the Democrats and their allies took over the less powerful upper house in 2007.

With only two weeks of official campaigning that focused mainly on broadstroke appeals rather than specific policies, many analysts said the elections were not so much about issues as voters' general desire for something new after more than a half century under the Liberal Democrats.

The Democrats are proposing toll-free highways, free high schools, income support for farmers, monthly allowances for job seekers in training, a higher minimum wage and tax cuts. The estimated bill comes to 16.8 trillion yen ($179 billion) if fully implemented starting in fiscal year 2013.

Aso – whose own support ratings have sagged to a dismal 20 percent – repeatedly stressed his party led Japan's rise from the ashes of World War II into one of the world's biggest economic powers and are best equipped to get it out of its current morass.

But the current state of the economy has been a major liability for his party.

"It's revolutionary," said Tomoaki Iwai, a political science professor at Tokyo's Nihon University. "It's the first real change of government" Japan has had in six decades.

Mari Yamaguchi, Kelly Olsen, Shino Yuasa and Tomoko Hosaka contributed to this report.

FDIC Insured Institutions have $13.3 Trillion in Assets. 8,195 Banks and 116 Institutions Hold $10.2 Trillion of Those Assets. One out of Four Institu

The banking system has taken the country to the financial edge of the greatest recession since the depression. The enormous number of bad loans floating out in the economy only complicates the unemployment situation. When we look into the latest banking data, we realize that over 1,000 of current banks will fail or merge with a too big too fail bank. In fact, the total number will be over 1,000 simply because the “not too big” to fail banks heavily bet on commercial real estate loans that amount to $3 trillion.

Recent data shows that approximately 25% of all the banks insured by the FDIC are unprofitable. That number tells us that some 2,000 banks cannot turn a profit. Let us first look at the current data:

This is probably one of the more telling charts. We have 8,195 institutions. 3,010 of those have less than $100 million in assets. 4,487 have between $100 million to $1 billion. 582 fall between $1 billion and $10 billion. Those over $10 billion? 116. This is incredibly disturbing and shows the monopoly that a few big banks have. 116 banks make up 77 percent of all total banking assets in the United States! So you can have the lower 8,079 banks fail and you wouldn’t even lose 25 percent of the total assets of the banking system.

To show you the heavy weight of commercial real estate loans in the lower rung of banks, take a look at this data:

For commercial and industrial loans the banks with the lowest assets seem to have the highest non performing loans. This is bad news since there are $3 trillion in commercial loans floating out in the market and the U.S. Treasury has already mentioned plans to bail these loans out. Bad news of course for the taxpayer but more money thrown to the bigger banks. It would seem that politically we are letting smaller banks fail to placate the public with bread and circuses while the big banks get the real money. You’ll also notice that the banks with smaller assets are also facing higher credit card non-current loans. Given that many of these banks are small enough to fail by our government standards, you can expect that many will fail in the upcoming months. The government seems to be following one path right now. That path includes protecting those 116 banks.

$13 trillion is a large number of total assets. It equates to approximately one year of our national GDP. The number is even more daunting when you realize much of the assets are secured by real estate. In addition, the 8,195 institutions employ over 2 million people. More bank failures mean more layoffs that will add to the already 26 million unemployed and underemployed Americans. But let us look at that balance sheet:

$1 trillion in non-farm residential loans

$535 billion in construction and development loans

$672 billion in home equity lines

$1.3 trillion in commercial and industrial loans

$398 billion in credit cards

Do you think these loans will do well in the current recession? But a more curious data point, in 2004 there were 8,976 FDIC insured institutions. Now it is down to 8,195. What has happened? The big banks keep swallowing up the smaller banks. Since 2004 we have 781 fewer FDIC insured banks. Not all these are failures. What is happening is that the banking sector is consolidating with the too big to fail. Did we not learn any lessons with the gigantic trusts in the early part of the 1900s? Monopolies are not good but it would appear that is our current philosophy. Let the small fail or be eaten up while the big banks are protected at all taxpayer costs. Recently, the FDIC started charging big and smaller banks, even those that were prudent higher fees because they need more money. More money to help the bigger banks not fail while closing the door on smaller banks. This is selective crony capitalism here. Lehman Brothers collapses yet Goldman Sachs remains. Now tell me, who has more political connections?

The number of problem institutions is steadily growing:

The FDIC has 416 institutions listed as “problem” banks. Keep in mind some of the biggest failures like IndyMac did not appear on this list. It is becoming clear that we may have over 1,000 bank failures since it has little consequence in the total asset size of the banking system of the country and our government seems set on protecting the big banks only.

So far, the non-current loans are growing at a steady pace. This chart does not look like a green shoot:

Over $300 billion in loans are currently non-current. The trend is still heading higher. So the obvious conclusion is more money is going to be launched at banks. Until we start seeing stability in this area we can expect more and more banks to fail. The banking sector posted its second quarterly loss in the last 18 years:

I find the Q1 data incredible. The only way banks turned a profit here was because of the trillions in taxpayer bailouts. This is where your mega banks started stating they turned profits even though they had taxpayer handouts and suspended mark to market accounting.

The charts above tell us that we are going to see a large number of bank failures. Many of those commercial real estate loans come up for refinancing in the next few years:

Source: Zero Hedge

Now you tell me who is going to refinance an empty strip mall in Arizona? Some of these are going to have massive losses. Many banks are carrying these toxic mortgages at close to face value. As the months go along, we are going to become very accustomed to bank failure Fridays. Get used to it.

by mybudget360 in FDIC, banks, commercial real estate, debt, economy, government, i-banking, us treasury

Lehman UK arm to sue for $100bn

Administrators of the London arm of Lehman Brothers, the Wall Street bank that collapsed a year ago, are preparing a $100 billion (£61.5 billion) claim against its former parent company in America.

The demand, which is being finalised by Price Waterhouse Coopers (PWC), Lehman’s UK administrator, will be lodged in the next few weeks. It will mark an acrimonious new stage in the international battles by creditors to recover billions still tied up in the largest corporate collapse in history.

Lehman owed $613 billion when it imploded last September. Liquidators in New York have since been sorting through the wreckage to set up a system to repay creditors and collect money from debtors. The US bankruptcy court has set a September 22 deadline for all creditors to file their claims.

John Suckow, president of Lehman Brothers Holdings — the remains of the US parent company — and a managing director at liquidator Alvarez & Marsal, is braced for a deluge of claims. The one from the London arm, which was the largest operation outside America, is likely to be the biggest.

Tony Lomas, one of the partners at PWC leading the case, said he will file on behalf of “more than 100” Lehman units that fall under the London umbrella. “On the face of it guaranteed most of the obligations of other subsidiaries so we’re going to be filing claims in the many tens of billions. It will be close to $100 billion,” he said.

The London claim will add to tensions between American and British administrators. Earlier this month, Alvarez & Marsal brokered an agreement with 13 other Lehman liquidators around the world.

The deal sets a protocol to share information on claims and assets with the hope of speeding up the reconciliation process and avoiding litigation. PWC declined to participate.

“Why you’d enter into an agreement with a bunch of other parties that you’ll probably end up litigating against is beyond conception,” said Steve Pearson, another PWC partner working on the case.

“We’re talking about billions of dollars. To sit in a room and say, ‘we’re all going to be nice to each other’, is almost certainly the wrong thing to do.”

Alvarez & Marsal’s Suckow added: “A lot of this case will come down to resolving claims made by other Lehman entities. We’re expecting a lot of duplicates. There’s a good chance that the parts will be greater than the whole.”

When the US parent filed for bankruptcy protection, it in effect severed relations with its businesses outside America.

Subsidiaries of the group famous for its “One Firm” ethos were transformed into creditors and debtors that were hit with claims running in the billions — there are 76 different court proceedings taking place around the world.

As the ultimate guarantor of the deals they did, including billions on inter-company loans and share trades, the former Lehman businesses will argue that the US parent should pay.

At the time of its collapse, Lehman had $639 billion in assets on its books. These included everything from real estate to office equipment. The most tangled element is the more than 1.7m “hung trades” to which Lehman was a party — transactions in shares or instruments such as derivatives that were frozen when the company collapsed.

The process of establishing the aggregate claim of any one entity, which may have had thousands of trades, some in the money, some showing a loss, is monumentally involved. Creditors have until November 2 to file more complex derivatives claims.

“We’re an asset management company now,” said Suckow. “Come September 22, it will be a question of sorting the good claims from the bad.”

by Danny Fortson

The Case for Deflation

As Absolute Return Partners wrote in its July newsletter:

The most important investment decision you will have to make this year and possibly for years to come is whether to structure your portfolio for deflation or inflation.

So which is it, inflation or deflation?

I've analyzed this issue in numerous posts, but every day there are new arguments one way or the other from some very smart people.

The biggest deflation bears are rather pessimistic:

• David Rosenberg says that deflationary periods can last years before inflation kicks in

• Renowned economist Dr. Lacy Hunt says that we may have 15-20 years of deflation

The Best Recent Arguments for Deflation

Following are some of the best arguments for deflation.

Wall Street Journal's Scott Patterson writes that we won't get inflation until unemployment is down below 5%:

A rule of thumb is that inflation doesn't become sticky until the unemployment rate dips below 5%...

"I see very little prospect of accelerating inflation" partly because of the employment outlook, said Mark Zandi, chief economist of Moody's Economy.com. "I don't think the risk shifts toward inflation until 2011, or even 2012."

It could take a lot longer for unemployment to go back down to 5%.

Pension expert Leo Kolivakis writes:

The global pension crisis is highly deflationary and yet very few commentators are discussing this!!!

Hoisington's Second Quarter 2009 Outlook states:

One of the more common beliefs about the operation of the U.S. economy is that a massive increase in the Fed’s balance sheet will automatically lead to a quick and substantial rise in inflation. [However] An inflationary surge of this type must work either through the banking system or through non-bank institutions that act like banks which are often called “shadow banks”.

The process toward inflation in both cases is a necessary increasing cycle of borrowing and lending. As of today, that private market mechanism has been acting as a brake on the normal functioning of the monetary engine.

For example, total commercial bank loans have declined over the past 1, 3, 6, and 9 month intervals. Also, recent readings on bank credit plus commercial paper have registered record rates of decline. The FDIC has closed a record 52 banks thus far this year, and numerous other banks are on life support. The “shadow banks” are in even worse shape. Over 300 mortgage entities have failed, and Fannie Mae and Freddie Mac are in federal receivership. Foreclosures and delinquencies on mortgages are continuing to rise, indicating that the banks and their non-bank competitors face additional pressures to re-trench, not expand. Thus far in this unusual business cycle, excessive debt and falling asset prices have conspired to render the best efforts of the Fed impotent.

Ellen Brown argues that the break down in the securitized loan markets (especially CDOs) within the shadow banking system dwarfed other types of lending, and argues that the collapse of the securitized loan market means that deflation will - with certainty - continue to trump inflation unless conditions radically change.

Mish writes:

Conventional wisdom regarding money supply suggests there is massive pent up inflation in the works as a result of the buildup of those reserves. The rationale is that 10 times those excess reserves (via fractional reserve lending) will soon be working its way into the economy causing huge price spikes, a collapse in the US dollar, and possibly even hyperinflation.

However, conventional wisdom regarding the money multiplier is wrong. Australian economist Steve Keen notes that in a debt based society, expansion of credit comes first and reserves come later.

Indeed, this is easy to conceptualize: Banks lent more than they should have, and those loans are going bad at a phenomenal rate. In response, the Fed has engaged in a huge swap-o-rama party with various banks (swapping treasuries for collateral of dubious value) in addition to turning on the printing presses.

This was done so that banks would remain "well capitalized". The reality is those excess reserves are a mirage. Banks need those reserves for credit losses coming down the pike, as unemployment rises, foreclosures mount, and credit card defaults soar.

Banks are not well capitalized, they are insolvent, unwilling and unable to lend...

Total U.S. debt as a percent of GDP surged to 375% in the first quarter, a new post 1870 record, and well above the 360% average for 2008. Therefore, the economy became more leveraged even as the recession progressed.

An over-leveraged economy is one prone to deflation and stagnant growth. This is evident in the path the Japanese took after their stock and real estate bubbles began to implode in 1989.

Leverage is increasing again, according to an article in Bloomberg:

Banks are increasing lending to buyers of high-yield company loans and mortgage bonds at what may be the fastest pace since the credit-market debacle began in 2007...

“I am surprised by how quickly the market has become receptive to leverage again,” said Bob Franz, the co-head of syndicated loans in New York at Credit Suisse...

Indeed, as I have repeatedly pointed out, Bernanke, Geithner, Summers and the chorus of mainstream economists have all acted as enablers for increasing leverage.

Mish continues:

Creative destruction in conjunction with global wage arbitrage, changing demographics, downsizing boomers fearing retirement, changing social attitudes towards debt in every economic age group, and massive debt leverage is an extremely powerful set of forces.

Bear in mind, that set of forces will not play out over days, weeks, or months. A Schumpeterian Depression will take years, perhaps even decades to play out.

Thus, deflation is an ongoing process, not a point in time event that can be staved off by massive interventions and Orwellian Proclamations "We Saved The World".

Bernanke and the Fed do not understand these concepts, nor does anyone else chanting that pending hyperinflation or massive inflation is coming right around the corner, nor do those who think new stock market is off to new highs. In other words, almost everyone is oblivious to the true state of affairs.

And Naufal Sanaullah writes:

So if all of this printed money is being used by the Fed to purchase toxic assets, where is it going?

Excess reserves, of course. Counting for $833 billion of the Fed's liabilities, the reserve balance with the fed has skyrocketed almost 9000% YoY. Excess reserves, balances not used to satisfy reserve requirements, total $733 billion, up over 38,000%!

The Fed pays interest on these reserves, and with an interest rate (return on capital) comes opportunity cost. Banks hoard the capital in their reserves, collecting a risk-free rate of return, instead of lending it out into the economy. But what happens as more loan losses occur and consumer spending grinds to a halt? The Fed will lower (or get rid of) this interest on reserves.

And that is when the excess liquidity synthesized by the Fed, the printed money, comes rushing in and inflates goods prices.

Of course, most people who are arguing we will have deflation for a while believe that we might eventually get inflation at some point in the future.

Roubini: “When Governments Reach the Point Where They Are Borrowing to Pay the Interest on Their Borrowing They Are … Running a Ponzi Scheme”

In a new essay in Forbes, Nouriel Roubini writes:

Net public debt is going to double as a share of GDP between 2008 and 2014. Even using the very optimistic forecasts of the Congressional Budget Office, which anticipate growth of around 4% over the next few years, the net debt burden will rise from 40% of GDP to 80%–that’s an increase in the debt stock of about $9 trillion. The interest charge alone on that increased debt will be in the region of $300 billion to $400 billion a year, which in turn may mean more borrowing to pay the interest if primary deficits are not reduced. When governments reach the point where they are borrowing to pay the interest on their borrowing they are coming dangerously close to running a sovereign Ponzi scheme.

Ponzi schemes have a way of ending unhappily…

Roubini also touches on the issue of the credit ratings of sovereign nations:

Independent rating agencies have already downgraded the sovereign risk rating of countries like Greece and Ireland, and it cannot be ruled out that core economies of the OECD, including the U.S., could eventually be downgraded.

Now much too big to fail

A report by David Cho in today's Washington Post tells of the great advances now being made in restoring the banking sector and financial markets to their pre-2008 glory.

Banks 'Too Big to Fail' Have Grown Even Bigger
When the credit crisis struck last year, federal regulators pumped tens of billions of dollars into the nation's leading financial institutions because the banks were so big that officials feared their failure would ruin the entire financial system.

Today, the biggest of those banks are even bigger.

The crisis may be turning out very well for many of the behemoths that dominate U.S. finance. A series of federally arranged mergers safely landed troubled banks on the decks of more stable firms. And it allowed the survivors to emerge from the turmoil with strengthened market positions, giving them even greater control over consumer lending and more potential to profit.

J.P. Morgan Chase, an amalgam of some of Wall Street's most storied institutions, now holds more than $1 of every $10 on deposit in this country. So does Bank of America, scarred by its acquisition of Merrill Lynch and partly government-owned as a result of the crisis, as does Wells Fargo, the biggest West Coast bank. Those three banks, plus government-rescued and -owned Citigroup, now issue one of every two mortgages and about two of every three credit cards, federal data show.

Now that's a sweet deal - boost your market share in originating what are essentially "no-risk" loans because, either wards of the state Fannie Mae and FreddieMac will buy the loans or you'll get bailed out if things again go awry.

If you're a big bank, what's not to like about that?

It seems that the lines between the U.S. Government, the Federal Reserve, and the nation's largest banks are becoming even more irreparably blurred.

A year after the near-collapse of the financial system last September, the federal response has redefined how Americans get mortgages, student loans and other kinds of credit and has made a national spectacle of executive pay. But no consequence of the crisis alarms top regulators more than having banks that were already too big to fail grow even larger and more interconnected.

"It is at the top of the list of things that need to be fixed," said Sheila C. Bair, chairman of the Federal Deposit Insurance Corp. "It fed the crisis, and it has gotten worse because of the crisis."

Regulators' concerns are twofold: that consumers will wind up with fewer choices for services and that big banks will assume they always have the government's backing if things go wrong. That presumed guarantee means large companies could return to the risky behavior that led to the crisis if they figure federal officials will clean up their mess.

This problem, known as "moral hazard," is partly why government officials are keeping a tight rein on bailed-out banks -- monitoring executive pay, reviewing sales of major divisions -- and it is driving the Obama administration's efforts to create a new regulatory system to prevent another crisis. That plan would impose higher capital standards on large institutions and empower the government to take over a wide range of troubled financial firms to wind down their businesses in an orderly way.

"The dominant public policy imperative motivating reform is to address the moral hazard risk created by what we did, what we had to do in the crisis to save the economy," Treasury Secretary Timothy F. Geithner said in an interview.

The worry for consumers is that the bailouts skewed the financial industry in favor of the big and powerful. Fresh data from the FDIC show that big banks have the ability to borrow more cheaply than their peers because creditors assume these large companies are not at risk of failing. That imbalance could eventually squeeze out smaller competitors. Already, consumers are seeing fewer choices and higher prices for financial services, some senior government officials warn.

It's all good - if you're a big bank.

The Federal Government has even been so kind as to waive the long-standing anti-trust laws that prohibited J.P. Morgan, Bank of America, and Wells Fargo from each holding more than 10 percent of the nation's deposits.

Goldman Busted Again

Goldman Sachs Group Inc. research analyst Marc Irizarry’s published rating on mutual-fund manager Janus Capital Group Inc. was a lackluster “neutral” in early April 2008. But at an internal meeting that month, the analyst told dozens of Goldman’s traders the stock was likely to head higher, company documents show.

The next day, research-department employees at Goldman called about 50 favored clients of the big securities firm with the same tip, including hedge-fund companies Citadel Investment Group and SAC Capital Advisors, the documents indicate. Readers of Mr. Irizarry’s research didn’t find out he was bullish until his written report was issued six days later, after Janus shares had jumped 5.8%.

via Goldman Sachs Trading Tips Reward Big Clients – WSJ.com.

More good news for Goldman Sachs, which now has the WSJ taking a bite out of its posterior. Here it is reported that Goldman was handing out tips to favored clients that one of its analysts was about to publish favorable ratings of a mutual fund, giving those clients the opportunity to buy in six days before the analyst’s rating was published.

This is a practice that’s apparently been going on forever. You give an investment bank enough business, they will throw bon mots like this your way. Here’s Jim Cramer, CNBC’s yipping rumor-poodle who is formerly of Goldman and then of course a hedge fund manager in his own right, describing how his wife and partner Karen Backfisch taught him to butter up investment banks with commissions:

How she did it was by gaming Wall Street, trying to anticipate moves of analysts before they were made, and placing big bets on the direction that analysts were going to go. That way, she said, you always had an edge, you never owned anything idly, and you always had an exit strategy…

Karen explained to me that the analyst game was a game of sponsorship. Analysts like to get behind stocks and bull them. You have to get in on the ground floor when they start their sponsorship campaign. If Merrill is the sponsor of a stock, it could be good for 5 points. If Goldman sponsored something, it could be good for 10. You want to buy something and flip it—sell it immediately—into the sponsorship. That’s the only sure thing on Wall Street.

When I asked her how we could find out about all of these wonderful things when I was jut a little hedge fund manager, she said one word: ‘commish.’… Commissions, she explained, determined what you are told, what you will know, and how much you can find out. If you do a massive amount of commission business, analysts will return your calls, brokers will work for you, and you will get plenty of ideas to make money, on both a short- and long-term basis… Commissions greased everything.

This comes on the same day that the New York Times ran a big story on Sergey Aleynikov, the guy who stole Goldman’s high-frequency trading program.The story is about the use of technology that banks use to make trades in fractions of milliseconds, taking advantage of tiny price discrepancies in the market.

Both of these stories have a common theme. The people who are actively innovating on Wall Street are all involved in the business of gaming the system to take advantage of short-term price swings. The people who invest money for the long-term and stick with their investments are punished in this environment.

Swine Flu: Natural Pandemic or Man-Made Pandemonium?

The latest in the barrage of media reports on swine flu is a Bloomberg news report (August 25, 2009) that it might hospitalize 1.8 million patients in the US and over-burden hospital intensive care units.

This comes from a planning scenario released by the President's Council of Advisers on Science and Technology

The Bloomberg story cites some theatrical numbers:

• Half of the US population infected (that is, over 150 million people)
• 300,000 people in hospital intensive care units
• 30–90,000 people dead
• By-pass surgery emergency operations disrupted

But hidden in paragraph 5 of the Bloomberg piece is the most pertinent part:

These numbers are only "scenario projections" that were "developed from models put together for planning purposes only," says a Centers for Disease Control spokesman.

So.

• Statistical projections.
• Projections from models of past pandemics. (And not the past, as in 1968 or 1957, but way back, as in 1918.)
• Projections developed for planning purposes only.

That's three stages removed from anything you could call reality.

But perish this tenuous link with facts, PCAST wants Obama to rush through vaccine production so that 40 million people can be infect – er – injected by mid-September.

And who should make that decision?

A doctor? The surgeon-general? A medical team?

Why, the homeland security adviser!

That's John Brennan, a former CIA station chief in Saudi Arabia, deputy executive director of the CIA under George Tenet, and the director of the National Counterterrorism Center (CTC) from 2004 to 2005 during the exact period when the CIA became most heavily involved in torture practices in Iraq and elsewhere.

(Question: Why not Janet Napolitano, Secretary for Homeland Security?)

Item: The results of the first trials of the vaccines will be available only in mid-October...

Item: According to UK's Daily Mail, a letter was sent by the UK government to about 600 neurologists on July 29 expressing concern that the vaccine itself could cause serious complications, specifically, the deadly nerve disease Guillain-Barre syndrome. GBS was one of the side-effects when a similar swine-flu vaccine was used in the United States in 1976.

Item: More people died from vaccine-induced GBS than from the 1976 flu.

Item: The current vaccine, which is going to be given to children, hasn't been specifically tested on infants.

Question: Why the rush?

Also hidden way, way down in the Bloomberg piece is the opinion of the chief medical officer of a New Jersey university hospital. He says the PCAST estimates are "overblown."

Also hidden is the admission that normal flu season kills about 36,000 people anyway. And that the normal flu shot is taken by 100 million people.

Question: Then why all the hysteria?

The answer seems to boil down to two things:

• H1N1 targets healthier and younger (12–17 years) people.
• H1N1 seems related to the Spanish flu of 1918, which, reportedly, killed 50 million people – a flu that was displaced by other strains some fifty plus years ago.

(Note: What caused the deaths is not undisputed).

On the surface, at least, it looks like we've got ourselves a plague not seen around for half a century... and it goes in for kids.

Talk about intelligent design. If someone wanted a Friday-the-13th horror story to stir up panic in the population, they couldn't have done better.

Children are already the easiest part of the population to target. Mom and dad might not scare on their own behalf, but let junior sneeze and every parental gene jumps into action.

How hard is it for the government to get involved when most of a child's life is lived on government property anyway, under the eye of government employees – teachers, counselors, nurses, principals, supervisors?

Still, it's a giant step from finding something suspicious to proving it's fraudulent. And that goes double when the thing you suspect is a virus. But while we should hesitate to play amateur virologist, there's no reason at all why we shouldn't question the bureaucrats behind the viruses.

Who are they and what's in it for them?

The first part is easily answered.

The President's Council of Advisers on Science and Technology, the creators of the swine-flu scenario, has three co-chairs:

1. John Holdren (Director, White House Office of Science & Technology)

2. Eric Lander, head of the Broad Institute (MIT)

3. Harold Varmus (CEO of Memorial Sloan-Kettering Center, NY)

A little digging fills in the details.

1. John Holdren:

Holdren isn't just any old scientist. He's a climate change expert who holds the Teresa and John Heinz Professor of Environmental Policy at Harvard's Kennedy School of Government

(The 'Teresa' is, of course, John Kerry's wife when she was spouse of Ketchup king, John Heinz)

The support for climate change policies goes hand in hand with support for nuclear technology, which Holdren believes is needed for those policies. He also believes all nuclear energy should be under the monitoring of the International Atomic Energy.

Note: Climate change and "peaceful nukes" have been the beneficiaries of a huge PR effort over the last twenty odd years, largely stemming from the Pentagon, specifically, from Andrew Marshall, a charismatic theorist of American dominance whose Office of Net Assessments is the most influential outfit you never heard of.

This PR typically derides any dissent from climate orthodoxy and downplays the enormous costs and risks involved in the global move to nuclear energy. It also involves a lot of fear-mongering over states with "ancient rivalries" (read, India-Pakistan, Israel-Palestine) that carries a sub-text of racial anxiety. The underlying horror is masses of starving people (read, brown and black people) threatening the resource-rich (read whites).

That's also the subtext of much population alarmism, including Holdren's.

As early as 1969 Holdren teamed up with neo-Malthusian doomsdayer Paul Ehrlich to advocate population control to "fend off the misery to come." In 1977, he and Ehrlich, as well as Anne H. Ehrlich, co-authored a textbook ("Ecoscience"), in which they discussed "a wide variety of solutions to overpopulation from voluntary family planning to enforced population controls."

Ehrlich, with whom Holdren associated until as late as 2003, is known to have advocated compulsory birth control and to have been part of FAIR, deemed a hate group by the Southern Poverty Law Center. (To be fair to Ehrlich, some people think the SPLC is something of a hate-monger itself.)

For a run-down of the most alarming comments in "Ecoscience," check this webpage.

"Ecoscience" approvingly describes a "planetary regime" that would use a "global police force" to actively control people who "contribute to social deterioration."

An example of Holdren's eco-alarmism:

In 2006 he claimed that global sea levels could rise by 13 feet by the end of the century, whereas the IPCC (Intergovernmental Panel on Climate Change) 4th Assessment Report (2007) suggested a potential rise in the same period 0.6–1.9 feet.

2. Eric Lander:

Lander's work is also suggestive. The Broad Institute, which he heads, has for its goal the mapping of the human genome, with an eye to linking specific genetic markers to diseases in the population.

Put that next to the ongoing rush to digitalize medical information, the rapid development of an "electronic police state" in the US, and the increasing dominance of the insurance industry over all markets (recall the global fall-out when insurance giant AIG threatened to collapse), and you have to wonder whether health insurers wouldn't find genetic markers very, very useful in creating insurance policies...and whether Homeland Security couldn't find uses for that information too.

3. Harold Varmus:

The third co-chair, Harold Varmus, is a Nobel Prize winner in Physiology who's also done work in genetics. As director of the National Institute of Health, Varmus is credited with doubling its budget

More worrisome, Varmus is on the advisory board of something called the Campaign to Defend the Constitution, a group that actively opposes the influence of the religious right on science and policy. He's also on the board of "Scientists and Engineers for America" (SEA), another group which advocates for "sound science."

But though SEA is a non-profit and calls itself non-partisan, it appears to be no more than a revamp of an outfit created in 2004 to support John Kerry's election.

["Scientists and Engineers for Change" – please note the word, "change."]

SEA is far from being non-ideological.

As Wesley Smith writing in The Weekly Standard (October 5, 2006) noted:

"It [SEA] further demands that the government "remove inappropriate limits on stem cell research," meaning dramatic increases in NIH grants for ESCR and public funding of human-cloning research. It urges that public policy "promote new partnerships between government-funded researchers and industry, including the biotechnology and pharmaceutical sectors" – in other words, time to ratchet up the corporate welfare! And it seeks "an aggressive program of research and innovation incentives," to promote more efficient energy use, which would, not coincidentally, provide substantial financial benefits to an increasingly powerful science-industrial complex." ("A New Political Action Committee Enters the Fray")

Most intriguingly, SEA is affiliated with another non-profit, the SEA Action Fund, which is headed up by Michael Stebbins, a bio-weapons expert. Stebbins is also on the Obama team, as a liaison to the science and technology committee.

Bottom line: The Obama "objective science" team has at least two proven ideologues with axes to grind.

It gets more unsettling.

The week before PCAST came up with its H. G. Wells scenario, Varmus was taking part in a Brookings Institution forum on policies to advance science and technology.

The forum was attended by Robert Rubin, Treasury Secretary under Bill Clinton, and Rubin's protégé, Lawrence Summers, chief Obama economic adviser, a former President of Harvard (where PCAST co-chair Holdren teaches) and a former Treasury Secretary, also under Bill Clinton,

Rubin is Mr. Wall Street, ex co-chair of kleptocrat megabank, Goldman Sachs, and ex-chairman of corrupt drug money launderer, Citigroup, a man as responsible as anyone for the deregulation of the financial industry and the consolidation of the banks that snow-balled a crisis of cheap money into a global depression, a man who never met a door he couldn't revolve through, a man who's bailed out of enough corporate-state ships to sink an armada.

Summers, for his part, defends the perfect economic logic of dumping the toxic waste of multinational corporations in Africa.

The outfit that put these power players together, the Hamilton Project, also deserves scrutiny.

HP is the brainchild of its co-chairmen, Bob the Bailer, and another revolving banker of high caliber, Roger Altman, CEO of Evercore, a boutique investment bank.

Altman has had stints at Lehman Brothers (before and after its merger with Shearson) as well as at Treasury, first as an assistant secretary and then as deputy secretary (under Clinton). He's been an adviser of both John Kerry and Hillary Clinton. In fact, he resigned from Treasury after admitting he tipped off the Clintons about criminal referrals arising from an investigation into the Clintons' Whitewater investments.

In other words, Altman is not only a Wall Street insider, he's a Clinton confidante.

Also telling is the fact that Altman has headed up Mergers & Acquisitions and international outreach for the secretive and huge private-equity firm, Blackstone.

Blackstone, as Wall Street watchers know, has a strange way of sneaking into just about everything going on of any importance.

[An aside: Blackstone's CEO is Pete Peterson, commerce secretary under Reagan and also the creator of the Peterson Foundation, the Peterson Institute, and the Concord Coalition. All three outfits present themselves as disinterested policy advocates, but all three betray a focus on budgetary issues that just happens to tally wondrously with Peterson's own financial advantage].

Besides Altman's ties with Blackstone, the Hamilton Project has another link with Peterson. Along with Obama economic adviser and former Federal Reserve chairman, Paul Volcker, Rubin is a vice-chairman of Peterson's Concord Coalition, which gave him its Economic Patriotism award in 2006.

How are any of these ties relevant to swine flu?

Both Blackstone and Evercore have powerful ties to big pharma.

I. Blackstone:

Blackstone entered the huge Indian drug market in 2006, buying shares in Emcure, which produces antiretroviral drugs, antiviruses and antibiotics. Besides pharmaceuticals, Blackstone is also heavily invested in hospitals, nursing homes, health insurance and health care packaging, among other things. So while drug companies don't want Americans buying cheaper generic drugs abroad, companies like Blackstone are investing in foreign drug companies and profiting.

II. Evercore:

Evercore, which Altman now heads, is a big player in the drug industry too.

In July (just one month after swine-flu was declared a pandemic) Evercore concluded its second multi-billion dollar health care deal of this year when it advised leading vaccine maker Sanofi-Aventis (SASY. PA) in its acquisition of the other 50% of Merial from joint owner, Merck. Evercore's previous multi-billion dollar deal was advising Wyeth on its acquisition by Pfizer, the biggest pharma deal of the year when it took place.

Sanofi-Aventis is described as the world's leading flu vaccine maker and is rushing to create a swine-flu vaccine that it began testing on August 6.

Industry analysts have noted that sales of swine-flu vaccine will add billions of dollars to drug company revenues in 2009 and 2010. ("Sanofi-Aventis Starts Swine Flu Shot Trials," Reuters, August 7, 2009).

Meanwhile, the Sanofi-Aventis and Pfizer deals have pushed Evercore ahead of Credit Suisse in volume of mergers & acquisitions in US rankings.

Both deals were put through by Altman and a former Credit Suisse banker who joined Evercore two years ago, after concluding some of the decade's biggest health-care deals for clients like Johnson & Johnson, Schering-Plough, Wyeth, GlaxoSmithKline, Roche Holding and Teva Pharmaceutical.

("The Pharmaceuticals Banker That Helped Evercore Land a $4 Billion Mandate," Deal Journal, July 31, 2009)

Note: Roche Holdings and GlaxoSmithKline are producers respectively of Tamiflu and Relenza, two popular vaccines that retard the spread of swine-flu in the body. The two companies have ramped up their production in anticipation of the pandemic. ("The Quest for a Swine Flu Vaccine," BBC, April 29, 2009)

III. Big pharma has its fingers in the Obama administration in another way.

Billy Tauzin, the former Louisiana congressman, chief of Pharmaceutical Researchers and Manufacturers Association (PhRMA), the biggest pharmaceutical trade group, has recently managed to enlist Obama's support in protecting drug prices. The White House has agreed to stymie congressional efforts to allow drugs from Canada to be imported or bargain for lower drug prices, among other concessions. In exchange, PhRMA has agreed to cut $80 billion in projected costs to taxpayers over ten years

("The White House Deal with Big Pharma Undermines Democracy," Robert Reich, Salon, August 10, 2009)

IV. And where are the insurance companies in all this? The five largest private health insurers and their trade association, lobbied Congress to the tune of over $6 million in Q1 2009 alone.

("It's Robbery," Alternet, August 24, 2009).

It's not swine-flu Americans should be worried about. It's swine-at-the-trough flu, a much more lethal condition.

Symptoms

1. Infiltration of the body politic by activists and unknown agents.

2. Extremism about rising temperatures, feverish statements, and predictions bordering on the delusional.

3. Monopolistic conditions requiring constant monitoring.

4. Frequent and massive collapses needing bailing out and mopping up by supervisors.

5. Ongoing influenz(a)-peddling, symptomatic lobbying, and borderline-racketeering disorder.

6. Reliance on questionable and intrusive foreign bodies.

Diagnosis:

Moderate-Severe Pandemonium

Aetiology:

Cases of pandemonium often tend to be stirred up by government hacks, corporate flacks, and welfare kings interacting with the media, causing acute inflammation in the population. This one is no different.

Note: One of Obama's chief flu-viators, the director of the Center for Disease Control (CDC), Andrew Besser, left to become a correspondent for ABC this past July.

Item:

The team that wants to vaccinate tens of millions of people, with vaccines not yet tested for safety, for a plague that even the government admits is unpredictable consists of the following:

1. An environmental and population alarmist with a forty-year track-record of making apocalyptic predictions that are flat-out wrong. A guy who's spent his whole life convinced that there are too many people, that people are destroying the universe, and that we should actively reduce the number of people on the planet.

2. Another guy who's creating genetic ID's for people prone to disease – a genetic profiler whose work would be invaluable to health insurance companies and to government surveillance.

An aside: What if they come up with a gene for right-wing attitudes?

3. A third guy who doesn't like religious values in public policy and works with ideological and activist "science" groups, one of which is affiliated with bio-weapons. A lobbyist for the science-industrial complex.

4. One of the top five miscreants of the global economic collapse, a big-time Wall Street player responsible for using the government, first, to consolidate the mega-banks; then, to bail those banks out when they blundered; and finally, to eviscerate less powerful banks. An insider with ties to the insurance industry.

5. Another Wall Street and government player with a track record of consolidating big pharmaceutical companies, several of which will directly profit from the swine-flu scare. Also an insider with ties to the insurance industry.

Prognosis:

In the scheme of things, swine-flu is no more than a one-off bonanza for the drug companies.

Far more lucrative over the long-haul is the continuing and increasing use of vaccines of all kinds, especially vaccines subsidized and pushed by the government.

Example: In January 2009, the Department of Health and Human Services awarded a $487 Million contract to Novartis to make avian flu vaccine. Novartis is one of five companies (along with GlaxoSmithKline and Sanofi) that are making both seasonal and swine-flu vaccines for the government.

Conclusion:

Just as the avian flu scare ended up being a dry-run for the current round of medical hysteria, the current panic will likely be most significant as a dry-run for an expansion of the police state and for greater consolidation of the big banks, big insurance, and big pharma. In fact, that's just what Homeland Security adviser Brennan said in remarks to the very influential Center for Strategic and International Studies (CSIS) on August 6, 2009.

Quote:

"Our coordinated response to the H1N1 virus – across the federal government, with state and local governments, and with the private sector and the public – and our extensive preparations for the coming flu season will ensure that we are better prepared for any future bio-terrorist attack."

Health care, anyone?

Prescription:

Turn off the TV, stay out of crowds, wash your hands often, drink plenty of water, and if you do feel sick, check out Dr. Grattan Woodson's website.

by Lila Rajiva

Lila Rajiva [send her mail] is the author of the ground-breaking study, The Language of Empire: Abu Ghraib and the American Media (MR Press, 2005), and the co-author with Bill Bonner of Mobs, Messiahs and Markets (Wiley, 2007). Visit her blog. All responses to email are posted at my blog in the comment section after the relevant article, with personal information omitted to ensure privacy.