Friday, January 15, 2010

Fake gold bars in Bank of England and Fort Knox

It’s one thing to counterfeit a twenty or hundred dollar bill. The amount of financial damage is usually limited to a specific region and only affects dozens of people and thousands of dollars. Secret Service agents quickly notify the banks on how to recognize these phony bills and retail outlets usually have procedures in place (such as special pens to test the paper) to stop their proliferation.

But what about gold? This is the most sacred of all commodities because it is thought to be the most trusted, reliable and valuable means of saving wealth.

A recent discovery — in October of 2009 — has been suppressed by the main stream media but has been circulating among the “big money” brokers and financial kingpins and is just now being revealed to the public. It involves the gold in Fort Knox — the US Treasury gold — that is the equity of our national wealth. In short, millions (with an “m”) of gold bars are fake!

Who did this? Apparently our own government.

In October of 2009 the Chinese received a shipment of gold bars. Gold is regularly exchanges between countries to pay debts and to settle the so-called balance of trade. Most gold is exchanged and stored in vaults under the supervision of a special organization based in London, the London Bullion Market Association (or LBMA). When the shipment was received, the Chinese government asked that special tests be performed to guarantee the purity and weight of the gold bars. In this test, four small holed are drilled into the gold bars and the metal is then analyzed.

Officials were shocked to learn that the bars were fake. They contained cores of tungsten with only a outer coating of real gold. What’s more, these gold bars, containing serial numbers for tracking, originated in the US and had been stored in Fort Knox for years. There were reportedly between 5,600 to 5,700 bars, weighing 400 oz. each, in the shipment!

At first many gold experts assumed the fake gold originated in China, the world’s best knock-off producers. The Chinese were quick to investigate and issued a statement that implicated the US in the scheme.

What the Chinese uncovered:
Roughly 15 years ago — during the Clinton Administration [think Robert Rubin, Sir Alan Greenspan and Lawrence Summers] — between 1.3 and 1.5 million 400 oz tungsten blanks were allegedly manufactured by a very high-end, sophisticated refiner in the USA [more than 16 Thousand metric tonnes]. Subsequently, 640,000 of these tungsten blanks received their gold plating and WERE shipped to Ft. Knox and remain there to this day.

According to the Chinese investigation, the balance of this 1.3 million to 1.5 million 400 oz tungsten cache was also gold plated and then allegedly “sold” into the international market. Apparently, the global market is literally “stuffed full of 400 oz salted bars”. Perhaps as much as 600-billion dollars worth.

An obscure news item originally published in the N.Y. Post [written by Jennifer Anderson] in late Jan. 04 perhaps makes sense now.

DA investigating NYMEX executive ,Manhattan, New York, –Feb. 2, 2004.
A top executive at the New York Mercantile Exchange is being investigated by the Manhattan district attorney. Sources close to the exchange said that Stuart Smith, senior vice president of operations at the exchange, was served with a search warrant by the district attorney’s office last week. Details of the investigation have not been disclosed, but a NYMEX spokeswoman said it was unrelated to any of the exchange’s markets. She declined to comment further other than to say that charges had not been brought. A spokeswoman for the Manhattan district attorney’s office also declined comment.”

The offices of the Senior Vice President of Operations — NYMEX — is exactly where you would go to find the records [serial number and smelter of origin] for EVERY GOLD BAR ever PHYSICALLY settled on the exchange. They are required to keep these records. These precise records would show the lineage of all the physical gold settled on the exchange and hence “prove” that the amount of gold in question could not have possibly come from the U.S. mining operations — because the amounts in question coming from U.S. smelters would undoubtedly be vastly bigger than domestic mine production.

No one knows whatever happened to Stuart Smith. After his offices were raided he took “administrative leave” from the NYMEX and he has never been heard from since. Amazingly, there never was any follow up on in the media on the original story as well as ZERO developments ever stemming from D.A. Morgenthau’s office who executed the search warrant.

Are we to believe that NYMEX offices were raided, the Sr. V.P. of operations then takes leave — all for nothing?

The revelations of fake gold bars also explains another highly unusual story that also happened in 2004:
LONDON, April 14, 2004 (Reuters) — NM Rothschild & Sons Ltd., the London-based unit of investment bank Rothschild [ROT.UL], will withdraw from trading commodities, including gold, in London as it reviews its operations, it said on Wednesday.

Interestingly, GATA’s Bill Murphy speculated about this back in 2004;
“Why is Rothschild leaving the gold business at this time my colleagues and I conjectured today? Just a guess on my part, but [I] suspect something is amiss. They know a big scandal is coming and they don’t want to be a part of it… [The] Rothschild wants out before the proverbial “S” hits the fan.” — BILL MURPHY, LEMETROPOLE, 4-18-2004

What is the GATA?
The Gold Antitrust Action Committee (GATA) is an organisation which has been nipping at the heels of the US Treasury Federal Reserve for several years now. The basis of GATA’s accusations is that these institutions, in coordination with other complicit central banks and the large gold-trading investment banks in the US, have been manipulating the price of gold for decades.

What is the GLD?GLD is a short form for Good London Delivery. The London Bullion Market Association (LBMA) has defined “good delivery” as a delivery from an entity which is listed on their delivery list or meets the standards for said list and whose bars have passed testing requirements established by the associatin and updated from time to time. The bars have to be pure for AU in an area of 995.0 to 999.9 per 1000. Weight, Shape, Appearance, Marks and Weight Stamps are regulated as follows:

Weight: minimum 350 fine ounces AU; maximum 430 fine ounces AU, gross weight of a bar is expressed in troy ounces, in multiples of 0.025, rounded down to the nearest 0.025 of an troy ounce.

Dimensions: the recommended dimensions for a Good Delivery gold bar are: Top Surface: 255 x 81 mm; Bottom Surface: 236 x 57 mm; Thickness: 37 mm.

Fineness: the minimum 995.0 parts per thousand fine gold. Marks: Serial number; Assay stamp of refiner; Fineness (to four significant figures); Year of manufacture (expressed in four digits).

After reviewing their prospectus yet again, it becomes pretty clear that GLD was established to purposefully deflect investment dollars away from legitimate gold pursuits and to create a stealth, cesspool / catch-all, slush-fund and a likely destination for many of these fake tungsten bars where they would never see the light of day — hidden behind the following legalese “shield” from the law:

[Excerpt from the GLD prospectus on page 11]
“Gold bars allocated to the Trust in connection with the creation of a Basket may not meet the London Good Delivery Standards and, if a Basket is issued against such gold, the Trust may suffer a loss. Neither the Trustee nor the Custodian independently confirms the fineness of the gold bars allocated to the Trust in connection with the creation of a Basket. The gold bars allocated to the Trust by the Custodian may be different from the reported fineness or weight required by the LBMA’s standards for gold bars delivered in settlement of a gold trade, or the London Good Delivery Standards, the standards required by the Trust. If the Trustee nevertheless issues a Basket against such gold, and if the Custodian fails to satisfy its obligation to credit the Trust the amount of any deficiency, the Trust may suffer a loss.”

The Federal Reserve knows but is apparently part of the schemeEarlier this year GATA filed a second Freedom of Information Act (FOIA) request with the Federal Reserve System for documents from 1990 to date having to do with gold swaps, gold swapped, or proposed gold swaps.

On Aug. 5, The Federal Reserve responded to this FOIA request by adding two more documents to those disclosed to GATA in April 2008 from the earlier FOIA request. These documents totaled 173 pages, many parts of which were redacted (blacked out). The Fed’s response also noted that there were 137 pages of documents not disclosed that were alleged to be exempt from disclosure.

GATA appealed this determination on Aug. 20. The appeal asked for more information to substantiate the legitimacy of the claimed exemptions from disclosure and an explanation on why some documents, such as one posted on the Federal Reserve Web site that discusses gold swaps, were not included in the Aug. 5 document release.

In a Sept. 17, 2009, letter on Federal Reserve System letterhead, Federal Reserve governor Kevin M. Warsh completely denied GATA’s appeal. The entire text of this letter can be examined at http://www.gata. org/files/ GATAFedRespon” onclick=”window. open(this. href);return false;” onclick=”window. open(this. href);return false;” onclick=”window. open(this. href);return false;” onclick=”window. open(this. href);return false;” onclick=”window. open(this. href);return false;” onclick=”window. open(this. href);return false;” onclick=”window. open(this. href);return false; … 7-2009.pdf.

The first paragraph on the third page is the most revealing.”In connection with your appeal, I have confirmed that the information withheld under exemption 4 consists of confidential commercial or financial information relating to the operations of the Federal Reserve Banks that was obtained within the meaning of exemption 4. This includes information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of information that is customarily disclosed to the public. This information was properly withheld from you.”

above statement is an admission that the Federal Reserve has been involved with the fake gold bar swaps and that it refuses to disclose any information about its activities!

The above statement is an admission that the Federal Reserve has been involved with the fake gold bar swaps and that it refuses to disclose any information about its activities!

Why use tungsten?
If you are going to print fake money you need to have the special paper, otherwise the bills don’t feel right and can be easily detected by special pens that most merchants and banks use. Likewise, if you are going to fake gold bars you had better be sure they have the same weight and properties of real gold.

In early 2008 millions of dollars in gold at the central bank of Ethiopia turned out to be fake. What were supposed to be bars of solid gold turned out to be nothing more than gold-plated steel. They tried to sell the stuff to South Africa and it was sent back when the South Africans noticed this little problem. The problem with making good-quality fake gold is that gold is remarkably dense. It’s almost twice the density of lead, and two-and-a-half times more dense than steel. You don’t usually notice this because small gold rings and the like don’t weigh enough to make it obvious, but if you’ve ever held a larger bar of gold, it’s absolutely unmistakable: The stuff is very, very heavy.

The standard gold bar for bank-to-bank trade, known as a “London good delivery bar” weighs 400 troy ounces (over thirty-three pounds), yet is no bigger than a paperback novel. A bar of steel the same size would weigh only thirteen and a half pounds.

According to gold expert, Theo Gray, the problem is that there are very few metals that are as dense as gold, and with only two exceptions they all cost as much or more than gold.

The first exception is depleted uranium, which is cheap if you’re a government, but hard for individuals to get. It’s also radioactive, which could be a bit of an issue.

The second exception is a real winner:
tungsten. Tungsten is vastly cheaper than gold (maybe $30 dollars a pound compared to $12,000 a pound for gold right now). And remarkably, it has exactly the same density as gold, to three decimal places. The main differences are that it’s the wrong color, and that it’s much, much harder than gold. (Very pure gold is quite soft, you can dent it with a fingernail.)

A top-of-the-line fake gold bar should match the color, surface hardness, density, chemical, and nuclear properties of gold perfectly. To do this, you could could start with a tungsten slug about 1/8-inch smaller in each dimension than the gold bar you want, then cast a 1/16-inch layer of real pure gold all around it. This bar would feel right in the hand, it would have a dead ring when knocked as gold should, it would test right chemically, it would weigh *exactly* the right amount, and though I don’t know this for sure, I think it would also pass an x-ray fluorescence scan, the 1/16″ layer of pure gold being enough to stop the x-rays from reaching any tungsten. You’d pretty much have to drill it to find out it’s fake.

Such a top-quality fake London good delivery bar would cost about $50,000 to produce because it’s got a lot of real gold in it, but you’d still make a nice profit considering that a real one is worth closer to $400,000.

What’s going to happen now?
Politicians like Ron Paul have been demanding that the Federal Reserve be more transparent and open up their records for public scrutiny. But the Fed has consistently refused, stating that these disclosures would undermine its operation. Yes, it certainly would!

US, IMF role in Haiti’s food riots

Filed Under: Food, Agriculture, rice problem

VIOLENT PROTESTS IGNITED BY SOARING FOOD PRICES TOPPLED ON APRIL 12 PRIME MINISTER Jacques Edouard Alexis of Haiti, the poorest country in the Americas. It was the first government in the world that fell victim to angry people suffering from high food costs due to rising fuel prices, weather problems, increased demand in China and India, low global stocks, the use of crops to create biofuels and commodity speculation.

Food riots have also erupted in more than a dozen countries.

There’s another reason for the food riots in Haiti -- highly subsidized US rice that flooded the country in exchange for loans

from the International Monetary Fund. The US cereal put Haitian rice farmers out of business and destroyed the ability of the poor country to feed itself with domestically grown food.

In the Philippines, the Arroyo administration is finally acknowledging the need to be self-sufficient in rice after years of importing the staple to cover production shortfalls. The fear of being ousted by a hungry population has made possible the change in the administration’s mindset. -- Ed.

* * *

THE ST. CLAIRE’S CHURCH Food program in the Tiplas Kazo neighborhood of Port-au-Prince serves 1,000 free meals a day, almost all to hungry children, five times a week in partnership with the What If Foundation.

Children from Cite Soleil have been known to walk the five miles to the church for a meal. The costs of rice, beans, vegetables, a little meat, spices, cooking oil and propane for the stoves have gone up dramatically. Because of the rise in the cost of food, the portions are now smaller.

But hunger is on the rise and more and more children come for the free meal. Hungry adults used to be allowed to eat the leftovers once all the children were fed, but now there are few leftovers.

The New York Times lectured Haiti on April 18 that “Haiti, its agriculture industry in shambles, needs to better feed itself.” Unfortunately, the article did not talk at all about one of the main causes of the shortages—the fact that the United States and other international financial bodies destroyed Haitian rice farmers to create a major market for the heavily subsidized rice from US farmers.

This is not the only cause of hunger in Haiti and other poor countries, but it is a major force.

Thirty years ago, Haiti raised nearly all the rice it needed. What happened?

In 1986, after the expulsion of dictator Jean Claude “Baby Doc” Duvalier, the International Monetary Fund (IMF) loaned Haiti $24.6 million in desperately needed funds. (Baby Doc had raided the treasury on the way out.)

But in order to get the IMF loan, Haiti was required to reduce tariff protections for rice and other agricultural products and some industries to open up its markets to foreign competition. The United States has by far the largest voice in decisions of the IMF.

Doctor Paul Farmer was in Haiti then and saw what happened. “Within less than two years, it became impossible for Haitian farmers to compete with what they called ‘Miami rice.’ The whole local rice market in Haiti fell apart as cheap, US-subsidized rice, some of it in the form of ‘food aid,’ flooded the market. There was violence, ‘rice wars’ and lives were lost.”

“American rice invaded the country,” recalled Charles Suffrard, a leading rice grower in Haiti in an interview with the Washington Post in 2000. By 1987 and 1988, there was so much rice coming into the country that many stopped working the land.

Gerard Jean-Juste, a Haitian priest who has been the pastor at St. Claire and an outspoken human rights advocate, agrees. “In the 1980s, imported rice poured into Haiti, below the cost of what our farmers could produce it. Farmers lost their businesses. People from the countryside started losing their jobs and moving to the cities. After a few years of cheap imported rice, local production went way down.”

Still, the international business community was not satisfied. In 1994, as a condition for US assistance in returning to Haiti to resume his elected presidency, Jean-Bertrand Aristide was forced by the United States, the IMF and the World Bank to open up the markets in Haiti even more.

But Haiti is the poorest country in the Western Hemisphere. What reason could the United States have in destroying the rice market of this tiny country?

Haiti is definitely poor. The US Agency for International Development reports that the annual per capita income is less than $400. The United Nations reports that life expectancy in Haiti is 59, while in the United States it is 78.

Over 78 percent of Haitians live on less than $2 a day, more than half live on less than $1 a day.

Yet, Haiti has become one of the very top importers of rice from the United States. The US Department of Agriculture 2008 numbers show Haiti is the third largest importer of US rice—at over 240,000 metric tons of rice.

Rice is a heavily subsidized business in the United States. Rice subsidies in the United States totaled $11 billion from 1995 to 2006. One producer alone, Riceland Foods Inc. of Stuttgart Arkansas, received more than $500 million in rice subsidies between 1995 and 2006.

The Cato Institute has reported that rice is one of the most heavily supported commodities in the United States—with all three different subsidies averaging over $1 billion a year since 1998 and projected to average more than $700 million a year through 2015. The result? “Tens of millions of rice farmers in poor countries find it hard to lift their families out of poverty because of the lower, more volatile prices caused by the interventionist policies of other countries.”

In addition to three different subsidies for rice farmers in the United States, there are also direct tariff barriers of 3 to 24 percent, reports Daniel Griswold of the Cato Institute—the same type of protection, though much higher, that the United States and the IMF required Haiti to eliminate in the 1980s and 1990s.

US protection for rice farmers goes even further. A 2006 story in the Washington Post found that the federal government had paid at least $1.3 billion in subsidies for rice and other crops since 2000 to individuals who do no farming at all, including $490,000 to a Houston surgeon who owned land near Houston that once grew rice.

And it is not only the Haitian rice farmers who have been hurt.

Paul Farmer saw it happen to the sugar growers as well. “Haiti, once the world’s largest exporter of sugar and other tropical produce to Europe, began importing even sugar—from US-controlled sugar production in the Dominican Republic and Florida. It was terrible to see Haitian farmers put out of work. All this sped up the downward spiral that led to last month’s food riots.”

After the riots and protests, President Rene Preval of Haiti agreed to reduce the price of rice, which was selling for $51 for a 110 pound bag, to $43 dollars for the next month. No one thinks a one-month’s fix will do anything but delay the severe hunger pains a few weeks.

Haiti is far from alone in this crisis. The Economist reports a billion people worldwide live on $1 a day. The US-backed Voice of America reported that about 850 million people were suffering from hunger worldwide before the latest round of price increases.

Thirty three countries are at risk of social upheaval because of rising food prices, World Bank President Robert Zoellick told the Wall Street Journal. When countries have many people who spend half to three-quarters of their daily income on food, “there is no margin of survival.”

In the United States, people are feeling the worldwide problems at the gas pump and in the grocery. Middle-class people may cut back on extra trips or on high-priced cuts of meat. The number of people on food stamps in the United States is at an all-time high.

But in poor countries, where malnutrition and hunger were widespread before the rise in prices, there is nothing to cut back on except eating. That leads to hunger riots. In the short term, the world community is sending bags of rice to Haiti. Venezuela sent 350 tons of food. The United States just pledged $200 million extra for worldwide hunger relief.

The UN is committed to distributing more food.

What can be done in the medium term? The United States provides much of the world’s food aid, but does it in such a way that only half of the dollars spent actually reach hungry people.

US law requires that food aid be purchased from US farmers, processed and bagged in the United States and shipped on US vessels—which cost 50 percent of the money allocated. A simple change in US law to allow some local purchase of commodities would feed many more people and support local farm markets.

In the long run, what is to be done?

The President of Brazil, Luiz Inacio Lula da Silva, who visited Haiti in the third week of April, said: “Rich countries need to reduce farm subsidies and trade barriers to allow poor countries to generate income with food exports. Either the world solves the unfair trade system, or every time there’s unrest like in Haiti, we adopt emergency measures and send a little bit of food to temporarily ease hunger.”

US citizens know very little about the role of their government in helping create the hunger problems in Haiti or in other countries. But there is much that individuals can do. People can donate to help feed hungry people and participate with advocacy organizations like Bread for the World or Oxfam to help change US and global rules which favor the rich countries. This advocacy can help countries have a better chance to feed themselves.

Meanwhile, Merisma Jean-Claudel, a young high school graduate in Port-au-Prince told journalist Wadner Pierre “...people can’t buy food.

Gasoline prices are going up. It is very hard for us over here. The cost of living is the biggest worry for us—no peace in the stomach means no peace in the mind. I wonder if others will be able to survive the days ahead because things are very, very hard.”

On the ground, people are very hungry, according to Fr. Jean-Juste. “Our country must immediately open emergency canteens to feed the hungry until we can get them jobs. For the long run, we need to invest in irrigation, transportation, and other assistance for our farmers and workers,” he said.

In Port-au-Prince, some rice arrived days after Prime Minister Jacques Edouard Alexis was fired. A school in Fr. Jean-Juste’s parish received several bags of rice. They had raw rice for 1,000 children but the principal still had to come to the priest asking for help. There was no money for charcoal or oil.

Jervais Rodman, an unemployed carpenter with three children, stood in a long line on April 19 in Port-au-Prince to get UN-donated rice and beans.

When Rodman got the small bags, he told Ben Fox of the Associated Press, “The beans might last four days. The rice will be gone as soon as I get home.”

(Bill Quigley is a human rights lawyer and law professor at Loyola University New Orleans. He can be reached at

* * *

Irri, WB and Philippine rice imports

By Jessica Reyes-Cantos

US new jobless rise for second week

New claims for jobless insurance benefits in the United States rose for the second consecutive week amid persistent labor market concerns even as the economy recovers from recession.

The seasonally adjusted initial claims for unemployment insurance benefits in the week ending January 9 stood at 444,000, an increase of 11,000 from the previous week's revised figure of 433,000, the Labor Department said.

Most economists had forecast that claims would be around 437,000.

The four-week moving average, a less volatile indicator than the week-to-week figures, however dipped by 9,000 to 440,750 from the previous week's revised average of 449,750.

The latest data also showed a fall in the total number of Americans receiving unemployment benefits.

The number of seasonally adjusted insured unemployment during the week ending January 2 was 4.596 million, a decrease of 211,000 from the preceding week's revised level of 4.807 million, the department said.

Hopes for a quick US economic rebound were dashed last week when government data showed US employers cut 85,000 jobs in December while the unemployment rate held at 10.0 percent.

More than seven million Americans lost their jobs in the recession and nearly 25 million Americans are unemployed, underemployed because they could not find full time work, or have given up looking for work, latest data showed.

The US economy grew at a 2.2 percent pace in the third quarter, reversing four quarters of contraction.

Haiti’s hunger made in USA

The U.S. Coast Guard and a few individual boaters pulled 27 people out of the ocean off south Florida May 13. Ten of them were dead after fleeing mass hunger and misery in Haiti. The sailing vessel they were on had sunk around 2 a.m. and the survivors had to tread water for 10 hours until their rescue. (Boston Globe, May 14)

“The boat was obviously overloaded,’’ Coast Guard Captain James Fitton told the Boston Globe. “It’s a tragedy that someone would be so callous with human life.’’

But the real callous operator in this tragedy is the U.S. government.

There are 30,000 Haitians under deportation orders in the United States. As soon as the U.S. can sort out the details, it intends to send them back.

However, Secretary of Homeland Security Janet Napolitano could use an execute order to grant them the immigration status called temporary protected status (TPS). A whole host of U.S. organizations, newspapers and local governments—such as the NAACP, the Washington Post, the New York City Council, the Miami-Dade Board of County Commissioners—all support TPS. This status has in the past been granted to residents of El Salvador, Nicaragua, Somalia and Liberia, but never to Haitians.

Conditions in Haiti are so horrendous that they obviously justify TPS. More than 80 percent of Haitians live on less than $2 a day and 50 percent live on less than $1 a day. The Famine Early Warning Systems Network of the United Nations estimated the size of the “food-insecure population” in Haiti as 2.4 million in April. This is an improvement over February, but it still means one out of four Haitians never get enough to eat, are seriously hungry all the time. Children are stunted. Adults are prone to get sick and have trouble working.

The worldwide financial crisis is squeezing Haiti, which lives on remittances. The $1.65 billion received from Haitians abroad in 2008 was more than a quarter of the country’s annual income. But as Haitians living abroad lose income, what they can send home is going to shrink. Sending back home 30,000 Haitians now living in the U.S. will mean an additional big drop.

Haiti still hasn’t recovered from the four hurricanes—Ike, Hanna, Gustav and Faye—that hit in 2008, causing over $1 billion in damage and taking nearly 800 lives. Millions of tons of mud still clog the streets of Gonaïves in the north. Less than 2 percent of the terracing work designed to protect the city against mud slides from another hurricane has been done.

Thirty years ago Haiti supplied nearly all its own food, including rice and sugar. But in 1986, when it went to the International Monetary Fund for emergency money after the regime of Jean-Claude Duvalier collapsed under mass pressure and a U.S. plane flew him to the French Riviera, the IMF insisted Haiti open its markets to foreign rice.

IMF spokespeople piously and cynically explain that Haiti didn’t have to agree. It could have forgone the loans. The IMF fails to mention that this would have led to a complete collapse of the Haitian economy.

Since the late 1980s, through a cycle of coups, economic pressure and enticements, along with free food from time to time amply distributed by all sorts of NGOs, the market for food produced in Haiti has been destroyed.

Now, according to Avi Lewis, a producer for Al Jazeera’s “Inside the USA,” nearly all the food sold in Haiti is imported and Haiti is the third-largest market for U.S. rice. Rice is the most subsidized U.S. food. Beyond this, more than 50 percent of the cost of all the rice the U.S. donates to Haiti goes directly to U.S. producers, processors and transporters. By law, the U.S. is forbidden to buy food outside the country that it is “donating” for relief. So the cheaper solution—just buying the rice in Haiti, giving farmers there an income and saving transportation costs—was outlawed.

While hunger and misery, along with U.N. occupation forces, roam the streets of Haiti’s cities, the people have become more politically conscious. In recent partial Senate elections in which Fanmi Lavalas, the party of former President Jean-Bertrand Aristide, was arbitrarily kept off the ballot, only 1 to 3 percent of the people voted. (Haiti-Liberté, April 22-28) The democratically elected Aristide, who had strong popular support, was kidnapped by the U.S. in 2004 and flown out of the country. He has been living in exile.

Berthony Dupont, director of Haïtí-Liberté, points out: “It is with much dynamism and courage that the people not only resisted the Duvaliers’ dictatorship but equally grew politically. Today they know their class enemies as a result of a profound maturing of people’s consciousness confronting the anti-people practices of the owning class and its international allies.”

December retail sales drop 0.3 percent

Retail sales drop 0.3 percent in December as sales for all of 2009 plunge by record amount

WASHINGTON (AP) -- Retail sales fell in December as demand for autos, clothing and appliances all slipped, a disappointing finish to a year in which sales had the largest drop on record.

The weakness in consumer demand highlighted the formidable hurdles facing the economy as it struggles to recover from the deepest recession in seven decades.

The Commerce Department said Thursday that retail sales declined 0.3 percent in December compared with November, much weaker than the 0.5 percent rise that economists had been expecting. Excluding autos, sales dropped by 0.2 percent, also weaker than the 0.3 percent rise analyst had forecast.

For the year, sales fell 6.2 percent, the biggest decline on records that go back to 1992. The only other year that annual sales fell was in 2008, when they slipped by 0.5 percent.

The 0.3 percent decline in December was the first setback since September, when sales had fallen 2 percent. Sales posted strong gains of 1.2 percent in October and 1.8 percent in November, raising hopes that the consumer is starting to mount a comeback.

Consumer spending is considered critical to any sustained economic revival since consumer spending accounts for 70 percent of total economic activity.

The December drop in sales was a surprise given that the nation's big retailers had reported better-than-expected results last week, reflecting a surge of last-minute holiday shopping. But even with the rebound reported by the nation's biggest chains, these retailers suffered their worst annual performance in more than four decades in 2008, according to data from the International Council of Shopping Centers.

The 6.2 percent fall in the government's retail sales figure is only the second decline on records that go back to 1992. In all other years, even during previous recessions, retail sales, which are not adjusted for inflation, have managed to increase.

For December, sales of autos dropped by 0.8 percent following a 1.2 percent rise in November.

Sales at specialty clothing stores fell by 0.6 percent while sales at general merchandise stores, a category that includes big retailers such as Wal-Mart, were down by 0.8 percent while sales at department stores were flat.

Sales at electronics and appliance stores dropped by 2.6 percent and sales at hardware stores dropped by 0.4 percent.

The weakness over the year reflected the battering that consumers have taken from the worst recession since the Great Depression, a downturn that has cost 7.2 million jobs and left households trying to rebuild savings depleted by losses on Wall Street and a crash in housing prices.

Economists are worried about consumer spending in the months ahead given their forecasts that unemployment, currently at 10 percent, will keep rising until perhaps midyear.

The overall economy, as measured by the gross domestic product, grew at an annual rate of 2.2 percent in the July-September quarter and many economists believe that growth strengthened even further in the final three months of last year. However, the worry is that GDP will slow significantly in the early part of 2010 unless consumers continue to spend.

For December, a diverse group of retailers including Costco Wholesale Corp., Target Corp., Macy's Inc. and TJX all reported increases. Luxury stores like Saks Inc. and Nordstrom also saw strong December sales gains and even Sears Holdings posted a small gain on rising sales at its Kmart chain.

Also helping to support retail spending in December was a hint of better days ahead for the battered auto industry. Automakers in the United States ended their worst year in almost three decades in December with slight improvements, led by gains in sales of small cars.

Unemployment claims jump higher

NEW YORK ( -- The number of Americans filing for initial unemployment insurance rose more than expected last week, the government said Thursday.

There were 444,000 initial job claims filed in the week ended Jan. 9, up 11,000 from a revised 433,000 the previous week, the Labor Department said in its weekly report.

A consensus estimate of economists surveyed by expected new claims to rise to 437,000.

The 4-week moving average of initial claims was 440,750, down 9,000 from the previous week's revised average of 449,750.

"For just one week, it's a tick in the wrong direction," said Tim Quinlan, an economic analyst at Wells Fargo. "But the four-week moving average, at its lowest level since fall of 2008, tells me that we're moving in the right direction."

There were 801,086 unadjusted initial claims, nearly double the seasonally adjusted figure mostly due to the number of temporary workers typically hired during the holidays.

"Any time you get around [this time of year] you can start talking about things like layoffs for retail shopping," said Quinlan.

Despite the rise, he predicts there will be significant job growth in 2010.

"In general, I think that the bulk of layoffs are behind us," he said. "I expect payroll growth to increase starting in the first quarter of the year and to gradually improve throughout the course of 2010."

He cautioned that there could be a blip of a rise in jobless claims in May due to the temporary hiring of census workers.

Continuing claims: The government said 4,596,000 people had filed continuing claims in the week ended Jan. 2, the most recent data available. That's down 211,000 from the preceding week's revised 4,807,000 claims.

The 4-week moving average for ongoing claims fell by 151,500 to 4,855,000 from the previous week's revised 5,006,500.

But the decline may just mean that more filers are dropping off those rolls into extended benefits.

Continuing claims reflect people filing each week after their initial claim until the end of their standard benefits, which usually last 26 weeks. The figures do not include those people who have moved to state or federal extensions, or people whose benefits have expired.

In November, Congress passed a record-long extension of federally paid benefits up to 99 weeks. But the law only helps those who use up their unemployment lifelines by the year's end, so depending on the state, not everyone will receive benefits for the entire 99-week span.

The House and the Senate passed measures in December to extend the filing deadline through the end of February.

Lawmakers in both chambers had initially introduced bills to push the deadline to apply for benefits as far back as 2011, but House Democratic leaders compromised the effort in order to speed up the process of getting the bill through the Senate.

State-by-state: Unemployment claims in six states dropped more than 1,000 for the week ended Jan. 2, the most recent data available. Claims in Illinois fell the most, by 6,928, which the state said was due to fewer layoffs in construction, trade and manufacturing industries.

A total of 18 states said the claims rose by more than 1,000. Claims in New York jumped the most, by 22,810, which the state attributed to layoffs in the construction, service and transportation industries. To top of page

Keiser Report №8: Markets! Finance! Scandal!

Click this link .......

Dollar Crisis Looms if US Doesn't Curb Debt: Experts

The United States must soon raise taxes or cut government spending to curb its debt, and failure to act will risk a crippling dollar crisis as investor confidence ebbs, a panel of experts said on Wednesday.

"It has got to be done. It will be done some day. It may be done with enormous pain. Or it may be done more rationally," said Rudolph Penner, a former head of the nonpartisan Congressional Budget office who co-chaired the 24-strong Committee on the Fiscal Future of the United States.

President Barack Obama's administration will present his budget for fiscal 2011 early next month amid intense pressure to live up to election campaign promises not to raise taxes on middle class Americans, while confronting a record deficit.

As a result, Obama is expected to focus on long-term fiscal discipline, while maintaining policy support for an economic recovery in the near-term as the country rebuilds after its worst recession since the Great Depression.

The two-year study by the panel, assembled by the highly respected National Research Council and the National Academy of Public Administration, said that the White House had some time on its side to restore growth, but must then act.

"In the next year or two, large deficits and more borrowing are unavoidable given the severity of the economic downturn. However, action ought to begin soon thereafter," they said..

The national debt has risen above 50 percent of GDP (gross domestic product) from 40 percent two years ago, and within 20 years will blow past a previous record above 100 percent of GDP set after World War Two without stern official steps.

Mounting debt could sap investor confidence in the economy, and the nation's ability to honor its obligations, pushing up interest rates and causing a steep fall in the value of the dollar as international creditors seek safer returns elsewhere.

Cut Health Care

The committee identified curbing Medicare, Medicaid and Social Security spending as the top challenge, and had a lukewarm assessment of cost containment in health care reform currently before Congress that Obama hopes to sign soon.

Committee co-chair John Palmer said the reforms might lay the foundation for improvements in the future, but he was skeptical about presumed saving levels and said that "passage would not change in any substantial way our analysis."

The committee, which included three former heads of the CBO, outlined a range of options to lower the ratio of the national debt to 60 percent of the size of the economy.

The 60 percent threshold of debt to GDP, a target that is also used by the nations sharing the euro common currency, was a "judgment choice", said Penner, who is a senior fellow at the Urban Institute, a Washington think-tank.

He said it was deemed to be the most that could be borne without incurring debt levels that would drive up long-term interest rates, and the least that was politically feasible in terms of reductions in government spending.

At one end of the options, the committee reviewed a policy mix based on low spending and low taxes. This envisaged payroll and income tax rates staying as they are, around 18-19 percent of GDP, but healthcare and retirement program costs sharply curtailed and defense and domestic spending cut 20 percent.

The other end of the scale looked at a high spending/high taxes policy mix that would maintain the projected growth in Social Security and allow higher spending on federal programs.

However, this would see taxes rise above 40 percent of GDP, or in the neighborhood of Denmark or Sweden, in order to hold the national debt to 60 percent, unless a value added sales tax was also introduced to augment government revenue.

Between the two were several intermediary solutions relying on a blend of higher taxes and lower spending. The committee made no recommendations but warned there was no time to waste.

"If action is taken soon, the country has a wide choice of options to help achieve fiscal sustainability. All are difficult; but if action is postponed, the options will be fewer and the choices even more difficult," they said.

The Subsidy That Won't Die

The big banks claim the government isn't helping them anymore. Not exactly. Check out this little-known subsidy.

The Recession's Winners and Losers

Not everyone suffered during the financial crisis. A look at those won and lost big during Wall Street's meltdown.

The big bankers are in the news again, and they're steamed. On Wednesday, bank CEOs will testify before the Financial Crisis Inquiry Commission. Meanwhile, the industry is pushing back against plans from the Obama administration to tax large banks as part of an effort to recoup bailout costs. JPMorgan Chase CEO Jamie Dimon, bristling at criticism of his hardworking bankers, told employees: "I am a little tired of the constant vilification of these people." Wall Street's big shots have had enough They've paid back their TARP money—which, some of them say, they didn't need anyway—with interest. They've got the government off their balance sheets, so now the government should stop meddling with them.

But the big American banks aren't nearly so independent as they would have us believe. JPMorgan Chase, Goldman Sachs, and their peers are still benefitting hugely from significant post-crisis subsidy programs that boost their profits. I'm talking mostly about the Temporary Liquidity Guarantee Program (TLGP). This was a program started in the wake of the Lehman Bros. collapse to deal with the fact that banks were having a tough time raising short-term capital on decent terms. Under the TLGP, the Federal Deposit Insurance Corp., which is ultimately backed by the taxpayers, would guarantee debt in exchange for fees paid by the banks issuing debt.

The TGLP was ended to new entrants in June 2009 and thus far has gone without a loss. But the fact remains: Private companies were allowed to borrow massive amounts of money—$345 billion at the peak in May 2009—on the public's credit. At the end of the third quarter, there was still $313 billion outstanding.

Banks and financial institutions have to pay money to get money. When they pay less to borrow, it's much easier to make profits, and they tend to borrow more of it. When they have to pay more to borrow, it's more difficult to make money. This chart (from Bloomberg, via Zero Hedge) breaks down the TLGP borrowings of individual institutions as of Nov. 30 and the interest rates they're paying. General Electric was the largest user, with nearly $88 billion. (Its GE Capital unit has prodigious borrowing needs.) But GE was followed by the big bailed-out banks: Citigroup ($64.6 billion), Bank of America ($44.5 billion), JPMorgan ($39.7 billion), Morgan Stanley ($25 billion), Goldman Sachs ($21.26 billion), and Wells Fargo ($9.5 billion). With the exception of Citi, the government no longer owns shares in these firms. And so they feel the government should have no say in their practices going forward.

But if these firms are such rugged individualists, why do they persist in borrowing on the public's credit rather than their own? And why did they do it in the first place? After all, unlike with the TARP, participation in the TLGP program was entirely voluntary. Here's a list of the banks that opted out of the program: You'll note that the Wall Street biggies aren't on it. At any time, the banks could go out into the public markets and raise debt to replace the taxpayer-subsidized borrowings. But they haven't. The reason: It would make them less profitable. Take Goldman. The chart shows that Goldman was paying a blended rate of 0.767 percent annual interest on $21.3 billion in FDIC-guaranteed debt. For every 100 basis points (i.e., if that debt bore an interest rate of 1.7 percent instead of 0.7 percent), Goldman is saving $213 million in interest costs per year. In the spring of 2009, when much of this debt was issued, the spread—i.e., the difference between the interest rates charged to private-sector corporate borrowers and to the government borrowers—was significant. In April 2009, it stood at 540 basis points. I don't know what to call this other than a huge subsidy.

There are more ongoing subsidies for the big banks. The fact that taxpayers guarantee the debt of Fannie Mae and Freddie Mac preserved the value of mortgage-backed securities owned by these banks. One of the components of the TARP is the HAMP, under which the government writes checks to lenders who made reckless loans so that they can modify them and keep people in their homes. Funds issued under the HAMP are not expected to be paid back. From April through December 2009, more than $35 billion in such funds have been disbursed to lenders, with more to come. Check out Page 20 of the most recent TARP transactions report, and you'll see that the list of participants in HAMP includes CitiMortgage (a unit of Citi), Wells Fargo, Saxon (owned by Morgan Stanley), and Bank of America and one of its subsidiaries, Countrywide.

Among the first questions the Financial Crisis Inquiry Commissioners should ask each CEO: How much worse would their profits be if taxpayers weren't insuring huge chunks of their debt—and if they had to borrow on their own credit instead of on the public's? And would they care to quantify the amount of the subsidies they're getting?

© 2010

Obama Information Czar Outlined Plan For Government To Infiltrate Conspiracy Groups

Sunstein called for Cointelpro style effort to silence truth using army of hired provocateurs

Obama Information Czar Outlined Plan For Government To Infiltrate Conspiracy Groups 140110top

Harvard law professor Cass Sunstein, Obama’s appointee to head the Office of Information and Regulatory Affairs, outlined a plan for the government to infiltrate conspiracy groups in order to undermine them via postings on chat rooms and social networks, as well as real meetings, according to a recently uncovered article Sunstein wrote for the Journal of Political Philosophy.

As we have often warned, chat rooms, social networks and particularly article comment sections are routinely “gamed” by trolls, many of whom pose as numerous different people in order to create a fake consensus, who attempt to debunk whatever information is being discussed, no matter how credible and well documented. We have seen this on our own websites for years and although some of those individuals were acting of their own accord, a significant number appeared to be working in shifts, routinely posting the same talking points over and over again.

It is a firmly established fact that the military-industrial complex which also owns the corporate media networks in the United States has numerous programs aimed at infiltrating prominent Internet sites and spreading propaganda to counter the truth about the misdeeds of the government and the occupations of Iraq and Afghanistan.

In 2006 CENTCOM, the United States Central Command, announced that a team of employees would be hired to engage “bloggers who are posting inaccurate or untrue information, as well as bloggers who are posting incomplete information,” about the so-called war on terror.

In May 2008, it was revealed that the Pentagon was expanding “Information Operations” on the Internet by setting up fake foreign news websites, designed to look like independent media sources but in reality carrying direct military propaganda.

Countries like Israel have also admitted to creating an army of online trolls whose job it is to infiltrate anti-war websites and act as apologists for the Zionist state’s war crimes.

In January last year, the US Air Force announced a “counter-blog” response plan aimed at fielding and reacting to material from bloggers who have “negative opinions about the US government and the Air Force.”

The plan, created by the public affairs arm of the Air Force, includes a detailed twelve-point “counter blogging” flow-chart that dictates how officers should tackle what are described as “trolls,” “ragers,” and “misguided” online writers.

New revelations highlight the fact that the Obama administration is deliberately targeting “conspiracy groups” as part of a Cointelpro style effort to silence what have become the government’s most vociferous and influential critics.

In a 2008 article published in the Journal of Political Philosophy, Obama information czar Cass Sunstein outlined a plan for the government to stealthily infiltrate groups that pose alternative theories on historical events via “chat rooms, online social networks, or even real-space groups and attempt to undermine” those groups.

The aim of the program would be to “(break) up the hard core of extremists who supply conspiracy theories,” wrote Sunstein, with particular reference to 9/11 truth organizations.

Sunstein pointed out that simply having people in government refute conspiracy theories wouldn’t work because they are inherently untrustworthy, making it necessary to “Enlist nongovernmental officials in the effort to rebut the theories. It might ensure that credible independent experts offer the rebuttal, rather than government officials themselves. There is a tradeoff between credibility and control, however. The price of credibility is that government cannot be seen to control the independent experts,” he wrote.

“Put into English, what Sunstein is proposing is government infiltration of groups opposing prevailing policy,” writes Marc Estrin.

“It’s easy to destroy groups with “cognitive diversity.” You just take up meeting time with arguments to the point where people don’t come back. You make protest signs which alienate 90% of colleagues. You demand revolutionary violence from pacifist groups.”

This is what Sunstein is advocating when he writes of the need to infiltrate conspiracy groups and sow seeds of distrust amongst members in order to stifle the number of new recruits. This is classic “provocateur” style infiltration that came to the fore during the Cointelpro years, an FBI program from 1956-1971 that was focused around disrupting, marginalizing and neutralizing political dissidents.

“Sunstein argued that “government might undertake (legal) tactics for breaking up the tight cognitive clusters of extremist theories.” He suggested that “government agents (and their allies) might enter chat rooms, online social networks, or even real-space groups and attempt to undermine percolating conspiracy theories by raising doubts about their factual premises, causal logic or implications for political action,” reports Raw Story.

Sunstein has also called for making websites liable for comments posted in response to articles. His book, On Rumors: How Falsehoods Spread, Why We Believe Them, What Can Be Done, was criticized by some as “a blueprint for online censorship.”

The Infowars office has been visited on numerous occasions by the FBI as a result of people posting violent comments in response to articles. Since the government now employs people to post such comments in an attempt to undermine conspiracy websites, if a law were passed making websites accountable, Sunstein’s program would allow the government to obliterate such sites from the web merely by having their own hired goons post threats against public figures.

The fact that the government is being forced to hire armies of trolls in an effort to silence the truth shows how worried they are about the effect we are having in waking up millions of people to their tyranny.

Ahmadinejad calls 9/11 attacks “suspicious”

Washington, 14 January (WashingtonTV)—Iranian President Mahmoud Ahmadinejad on Wednesday described the 11 September 2001 terrorist attacks on the United States as a “suspicious” event.

Speaking in the southwestern city of Ahvaz, Ahmadinejad asserted that many “experts” believed that the 9/11 attacks were a US-Israeli plot to occupy Afghanistan and Iraq.

“They want to dominate the Middle East with their military presence and all their planning is aimed to achieve this goal. Human rights, fighting nuclear weapons and fighting terrorism is all a big lie,” he said.

“Even the event of 11 September is a suspicious incident,” the president added.

This was not the first time that Ahmadinejad, who often rails against the West, questioned the 9/11 attacks. In April 2008, he also described the attacks as a “suspect event”, reports the BBC.

On Wednesday, Ahmadinejad said that “many researchers and scholars” believe the attacks were an excuse for waging war in Afghanistan and Iraq and “occupying” Pakistan.

“They even instigated Saddam [Hussein] to [wage] the eight-year war against our nation in order to dominate the Middle East,” Ahmadinejad said.

The 9/11 attacks were the worst terrorist attacks on American soil, with nearly 3,000 deaths.

Sources: Official website of the president of Iran, BBC News

© WashingtonTV 2010. All rights reserved.

Financial adviser Weizhen Tang arrested Wed. on return to Toronto from China

TORONTO - Financial adviser Weizhen Tang - who's accused of orchestrating a Ponzi scheme that allegedly defrauded investors of tens of millions of dollars - was arrested Wednesday night upon his return to Toronto from China.

Click to Enlarge
Weizhen Tang, 51, is shown in this photo release by the Toronto Police.

Toronto police Staff Sgt. Edward Tymburski said two officers from the fraud squad took Tang into custody aboard the plane when his Air Canada flight arrived at Pearson International Airport.

Wearing a dark coat, Tang was whisked away from the airport out of the glare of media cameras. He was taken to Toronto's 51 Division where he was to spend the night in jail pending an arraignment in court on Thursday morning, he said.

"He arranged to surrender himself and he flew from Shanghai tonight and turned himself in to fraud squad officers," said Tymburski.

Toronto police had issued a Canada-wide arrest warrant for Tang, 51, who has been charged with fraud over $5,000 related to defrauding the public.

The charge of defrauding the public covers all the victims of the alleged fraud, said Tymburski.

"He's been co-operative," said Tymburski, who added Tang appeared to be in good physical shape and was calm.

"He expected to step into custody when he got off the plane," said Tymburski.

Some passengers on the plane said they had seen a man arrested on the flight but didn't see handcuffs used. They said that the pilot told them over the intercom to stay calm and remain in their seats for a couple of minutes while Tang was taken off the plane.

"I saw two police come over for one guy, before we get off, everybody was seated," said passenger Daisy Dong, who had arrived on the same Air Canada flight.

The fraud warrant is in addition to 12 counts of breaching the Securities Act laid against Tang last June by the Ontario Securities Commission in connection with the hedge fund Tang administers, the Oversea Chinese Fund Limited Partnership.

It's alleged that between January 2006 and March 2009, more than 100 victims were defrauded of approximately $30 million through an online trading Ponzi scheme. Toronto police allege there were victims in the United States, China and Canada, including one Toronto-area resident who allegedly lost $2.4 million.

Police launched their investigation in April 2009 after a number of people walked into a Toronto police division to complain that they'd been defrauded.

Arrangements had initially been made between police and Tang's lawyer Loftus Cuddy in November to bring the suspect back to Canada on Dec. 29, but he did not return at that time and police and his lawyer said they believed he was trying to raise money for his defence in Asia, which Tang later confirmed.

"I am innocent and welcome any investigations and respect the legal process very much," Tang writes in a letter addressed to police that was posted just a few days ago on his website.

"To be honest, I have nothing to do with fraud and have most of investors and public support, a fraudster could not ever dreamed to have," Tang wrote.

Tang is being represented by a lawyer, said Tymburski.

However earlier in the day, Cuddy had said he had been asked to represent Tang but they couldn't agree on a retainer because Tang was broke and that Tang might have to apply for legal aid.

A native of mainland China, Tang came to Canada in the 1990s. He is a Canadian who lives in Toronto with his wife and children and his company is based in the city, Cuddy said.

A well-known figure in Toronto's Chinese community, Tang helped fund the Chinese Lunar New Year Show and put on investment summits that featured economists from China and the United States.

The Ontario Securities Commission alleges Tang committed securities fraud. He's also accused of unregistered trading in securities and illegal distributions of securities. His trial in provincial court in that case is scheduled to begin April 19.

Earlier this month, the commission put out an investor warning that said Tang may be soliciting residents of Ontario for investment purposes and that previous Oversea Chinese Fund investors, their family or friends may be targeted.

Last April, a federal judge in Dallas granted a request by the U.S. Securities and Exchange Commission for emergency relief for investors, freezing the assets of Tang and several of his businesses, including the Texas-based WinWin Capital Management LLC. The judge appointed a receiver to take control of Tang's assets, which also include WinWin Capital Partners LP and Bluejay Investment LLC.

The U.S. complaint alleges Tang has already told investors of the Ponzi scheme.

In February, the U.S. commission said, he acknowledged in a letter to clients that he tried to conceal trading losses and attract new investors to his hedge fund by posting false profits on account statements and using funds from new investors to pay at least US$8 million in fake profits to earlier investors.

UK Puts Iceland on Terrorist List

One of the casualties of the financial crisis which has gotten little notice in the US is Icleand, and it went down in a particularly ugly fashion. Gordon Brown, the UK’s fantastically unpopular Prime Minister, said that Icelandic banks had threatened to not honor obligations to British account holders, so he declared Iceland a terrorist country and seized the banks assets. This caused the banks to go under and the Icelandic economy to implode to the extent that if Russia hadn’t sent them billions of dollars, they would have literally starved, since they need to import food.

Yes, they asked the US and their friends in the EU for money first, but apparently only Vladimir Putin cared enough about Iceland’s impending famine to do anything about it. It’s times like these when you find out who your friends are. I imagine the Icelanders are feeling a lot warmer towards Russia these days. Perhaps Putin would like a nice naval base there?

Leaving aside, for just a moment, the absurdity of labeling Iceland a terrorist country, the problem is this: Icelanders are saying "prove it" with respect to the allegation that they threatened to not honor account withdrawals, and so far Gordon Brown hasn’t come up with proof.

The thing about Icelandic banks is that they were offshore banks. As a friend of mine in the industry said "this is where the City sent stuff that was too dubious even for them". Iceland made money by doing the deals that were, not dirt exactly, but highly highly speculative and leveraged and in some cases shady. (People go to offshore havens to dodge taxes and keep money private, after all.) Which is to say, the Brits knew these banks were shaky, because they were an extension of the city. So odds are, they just decided to preemptively seize the assets and shut them down, without even giving them a chance (or help.) This is also why Icelanders paid almost no tax, and lived well for years, because huge amounts of money were going into the country. Laissez faire stupidity works when you’re an island with a small population and huge amounts of money churn from foreigners.

Back to the "terrorism" charge. The side effect of the terrorism charge for a country is that a lot of people don’t want to, or can’t do business with you. They know it’s a BS charge, but, legally, you are on the damn list. So not only is Iceland’s economy in free fall, but they’re now partially cut off from cutting deals and doing business.

The British terrorism law is, in this respect, no worse than the US one or those of many other countries. You get on these lists by administrative or executive fiat, there is no way off the lists except political intervention, the criteria is completely arbitrary and opaque. Sort of like the no-fly list in the US, for ordinary people.

These laws were never meant to be used this way, of course. Gordon Brown did something with the law that its writers would have never intended. But that’s the problem—when you give someone a power, they will use it as they see fit, to the widest extent they can. Such laws are extremely dangerous and both the UK and US have a large number of them: laws that allow the executive to hold anyone without charge, to go to war without a declaration of war, to spy on whoever they want without a court reviewing the decision, and so on.

These laws have been repeatedly used and abused, and they will continue to be so. They need to be repealed. No free peoples worthy of the name give such unrestricted power to anyone.

In the meantime, if you want to help the Icelanders, there is a petition you can sign asking Gordon Brown to rescind the declaration of terrorist status. Given that even the stupidest person on the planet knows they aren’t terrorists, it’s sort of the least he can do. Then he should step down as PM, he’s clearly been in government far, far too long.

Related posts:

  1. Dana Perino: No Terror Attack on USA in Bush Era
  2. Shorter National Review: A Failed Terror Attack Would Never Happen on Bush’s Watch
  3. Two Former Bush Counterterrorism Officials: Hyping Terror Threat Helps Terrorists
  4. Obama Appoints Fox to Evaluate Terror Watchlist Henhouse
  5. Bernie Sanders Puts Official Hold on Bernanke Nom

State foreclosures surge

A jump in December pushes monthly and year-end totals to their highest since 2005

A triple-digit increase in December foreclosures transformed Hawaii into a top 10 state for foreclosure activity and pushed monthly and year-end totals to their highest level since 2005.

RealtyTrac, an online marketplace for foreclosure properties, reported today that 1,534 Hawaii properties received foreclosure notices last month. The December tally, which equated to one in every 330 Hawaii properties in foreclosure, rose above the national rate of one per every 366 households, RealtyTrac said.

"The increases don't bode well for Hawaii," said Daren Blomquist, RealtyTrac's marketing communications manager. "Hawaii hit No. 10 in December. I didn't think that would happen, and there are indications that the problems are more broad-based than I initially thought."

While the fallout from speculative buying during the last peak has hurt Hawaii regions where second-home markets were strong, the range of foreclosures shows that high unemployment, a struggling economy, adjustable-rate mortgage increases and balloon payments coming due are taking a toll, Blomquist said.

For the year, Hawaii foreclosures rose 183 percent to 9,002, the most since RealtyTrac began tracking the issue in April 2005, he said. One in every 56 Hawaii households experienced a foreclosure in 2009, Blomquist said.

Typically, numbers fall the month after a big spike; however, there's no sign that the problem will abate this year, he said.

"We won't see the eye-popping increases that we saw in 2009, but there will still be double-digit increases," Blomquist said.

During December and for the year, the neighbor islands continued to be hardest hit, he said.

"For the year, they are all above the national average," Blomquist said. "It might be because they tend to be more dependent on tourism and second-home buyers."

RealtyTrac identified similar trends in places like Idaho and Utah, which attracted second-home buyers during the last boom.

Still, the latest statistics show that Hawaii's foreclosure problems have spread beyond resort and second-home markets, he said.

By year's end, one in every 84 Honolulu households had experienced a foreclosure, RealtyTrac said. Ewa Beach posted the second highest level of foreclosures among Hawaii neighborhoods in December and for the year. Waipahu and Waianae joined Ewa Beach on both lists, and Waikiki and Kapolei were added to the year-end hot spots.

Georgia Roberson, real estate-owned director for Coldwell Banker Pacific Properties, links high foreclosure rates in Kapolei to Ko Olina's declining second-home market, but said problems in Ewa Beach, Waianae and Waipahu are due in larger part to mortgages with rising interest rates or balloon payments. Tighter underwriting has hurt Oahu's condominium and condotel market, too, she said.

"I recently closed on three condominiums in Harbor Square and I've got a fourth pending," Roberson said. "When the market is down and financing is difficult, it's harder for sellers to find buyers."

While rising Hawaii foreclosures have driven pricing down in some neighborhoods and displaced residents and renters, some segments of the population are benefiting.

"I've already had four closings this year and three of them were distressed properties," said Howard Dinits, a Realtor with RE/MAX Resort Realty in Wailea, who specializes in Big Island and Maui sales.

Buyers like Rebecca and Dave Renfroe of Ottawa, Canada, are finding deals.

"We came to Maui about two years ago and decided that buying a second home here was out of our price range," Renfroe said.

"This time around, we found 16 distressed properties in our price range. It's all half off."

Dinits helped the couple find a bank-owned condominium in Lahaina for $250,000, less than half of the $560,000 that it sold for in 2005.


Hawaii's monthly foreclosures over the past year,
including the year-over-year percentage gain:


December 1,534 +207.4%
November 872 +121.9%
October 925 +134.2%
September 969 +63.1%
August 869 +158.6%
July 990 +332.3%
June 706 +426.9%
May 816 +397.6%
April 684 +216.7%
March 724 +503.3%
February 537 +275.5%
January 337 +174.0%


December 499 +283.8%

Hawaii's December foreclosures by area,
including the year-over-year percentage gain:

Big Island 517 +345.7%
Maui 297 +175.0%
Kauai 77 +113.9%
Honolulu 643 +169.0%

Source: RealtyTrac

Obama to Ask For $90 Billion More Dollars

President Barack Obama will Thursday unveil a 90 billion dollar fee on 50 top finance firms to recoup taxpayer dollars used to bail out Wall Street, which is blamed for igniting the economic crisis.

The proposal, to be included in Obama’s next budget, will be rolled out as many of the firms rescued by public funds gear up to announce huge bonus payouts to top executives at a time of economic misery and high unemployment.

The scheme is designed to raise 90 billion dollars over 10 years for the public finances, a senior US official said on condition of anonymity.

Obama is determined to prevent Wall Street firms going back to business as usual and resuming high-risk lending practices and huge bets on mortgages and other instruments he blames for igniting the financial crisis.

The title of the initiative, the “Financial Crisis Responsibility Fee,” makes it clear the administration is placing blame on the financial industry for the worst economic meltdown since the 1930s Great Depression.

Yet Valerie Jarrett, a senior adviser to the president, insisted that “we’re not trying to pick a fight” with banks.

“It’s a very solid solution to make sure taxpayers are made whole,” she told MSNBC television.

The Obama administration has repeatedly said it will try to recoup the full cost of the 700-billion-dollar Troubled Asset Relief Program (TARP) which was also used to bail out crippled automakers.

A senior US official said the program, which has seen some money already paid back, would now effectively leave the government around 117 billion dollars out of pocket.

“It is in many ways offensive for those at our major financial institutions to suggest they can today afford excessive, often outlandish bonuses for their top executives” but cannot repay taxpayers, the official said.

“We feel this is a workable fee, we feel it supports the goal of putting greater burdens and less incentives to excessive size and excessive leverage.”

But the Financial Services Roundtable, which represents 100 top financial services firms, said the fee was a “strictly political.”

“Two-thirds of the TARP investment from banks has already been repaid with a large profit to the taxpayer,” said the Roundtable’s President and CEO Steve Bartlett.

“This proposed tax will do nothing more than stifle economic recovery and encumber more pressing concerns, such as covering new regulatory costs.”

The administration’s proposal, which requires congressional approval, will apply only to firms with over 50 billion dollars in assets, according to the official.

It will cover around 50 firms, including 35 that are US-based and 10 to 15 which are US subsidies of foreign companies. It will last 10 years or as long as necessary to recoup losses under TARP, the official said.

No small or community banks will be covered by the plan, the official said, adding that the scheme was being put together in such a way as to prevent the firms passing on the costs to consumers.

Even though auto firms General Motors and Chrysler also got money from the TARP fund, they will not have to pay the fee, the official added, warning financial firms not to make an issue of that omission.

In addition, not all the firms that will be targeted by the fee actually received TARP funds.

“I don’t think that it would be wise for them to try to suggest that living up to the letter of the law is somehow an unfair burden on them,” the official said.

The cost of the fee levied on the financial firms will be assessed according to a formula looking at their liabilities, total assets and equity and tier-one capital.

A bank fee may help the White House channel public anger over big bonus payments on Wall Street, as Americans face the reality of 10 percent unemployment and a slow economic recovery.

According to a Treasury report to Congress published on Monday, the government had committed 545 billion dollars of TARP funds as of January 6.

Of that figure, 372 billion dollars have been disbursed. Banks have already repaid 165.18 billion dollars of those funds, leaving 209 billion dollars outstanding.

With the bonus issue likely to explode into political controversy, the US government made clear on Monday it had no intention of imposing a one-off 2009 tax on individual bankers bonuses.

Asked if the United States was planning to follow moves unveiled this week by Britain and France for “community” taxes on bankers’ bonuses, Treasury spokeswoman Meg Reilly said in an email: “Not at this time.”

Click here for the full report

China sending lower level rep to six-power meet on Iran

China will send a lower-level representative to a meeting of six world powers on Iran's nuclear program, a State Department spokesman said Thursday.

"We are aware that the representation will be below the level of political director," State Department spokesman Philip Crowley said. "It will be a useful meeting to have regardless of the Chinese representation."

US Secretary of State Hillary Clinton announced Monday that the six powers -- veto-wielding UN Security Council members Britain, China, France, Russia and the United States, plus Germany -- would meet over the weekend in New York to consider new sanctions against Tehran.

The United States and other western powers fear that Iran is developing fissile material for nuclear weapons under the cover of a uranium enrichment program the Islamic republic says is aimed at providing civilian nuclear energy.

Washington and the three European members of the group have been trying for months to persuade Russia and China to set aside their reluctance to impose new sanctions.

Last week, China's ambassador to the United Nations reiterated Beijing's position that it was premature to adopt sanctions against Iran, insisting that diplomacy still had a role to play in getting Tehran to the negotiating table.

"We're gonna work on this issue with our partners," said Crowley.

"We continue to engage China and other countries to convince them that the urgency of the situation requires not only additional engagement, but additional support for additional pressure, which obviously China is still working through."

The State Department's political chief Bill Burns has been in Moscow since Wednesday to prepare for Saturday's meeting.

He is scheduled to travel to Madrid Friday to meet with his counterparts from the European Union and with Foreign Minister Miguel Angel Moratinos of Spain, which holds the rotating EU presidency.

The news that, unlike other members of the so-called P5+1, China would not send the political director of its foreign ministry comes after US Internet giant Google charged it had been hit by massive cyber attacks coming from China.

Clinton reacted to that development by saying she would seek an explanation from Beijing. The US diplomatic chief is expected to address the issue during a speech on Internet freedom next week.

Walgreen Threatens to Stop Filling Medicaid Prescriptions

Due to state cutbacks in payments, pharmacy giant Walgreen (WAG) has threatened to stop filling Medicaid prescriptions at more than half of its locations in Washington state.

As early as last year, Walgreen threatened to stop filling Medicaid prescriptions in Delaware and Washington state, but a settlement was reached. Now, 64 of its 121 locations could be affected, as Walgreen maintains it is losing money on 95% of brand-name drugs given to its Medicaid patients.

Medicaid payment rates are lower than rates paid by Medicare and by private insurers. Many doctors refuse to take Medicaid for that reason.

Shares of Walgreen were flat Thursday at $37.11.

Ansel Herz Reports from Haiti; Jeremy Dupin Reportedly Fine

By Al Giordano

Ansel Herz and Jeremy Dupin, alive and reporting from Port-au-Prince, Haiti

We spent much of the past 24 hours looking for reporters Ansel Herz and Jeremy Dupin - 2010 School of Authentic Journalism scholars - caught in yesterday's 7.3 level earthquake in Port-au-Prince, Haiti, and finally heard from Ansel this afternoon. He writes:

"I'm fine. Have a lot of footage I want to get out. Working on a written piece. Just found Internet. Do you know if Jeremy's ok? Haven't been able to reach him."

Jeremy is reportedly also fine: according to TeleSur US bureau chief Reed Lindsay - now in Santo Domingo, Dominican Republic en route to Port-au-Prince - another staffer from TeleSur was able to reach Jeremy's phone before cell phone service went out last night, speaking to a friend of his who likewise reports he is okay. We will keep hammering away to try and get more information as well as offer any and all logistical support and resources they need to get the story out.

You can listen to Ansel in this audio interview with PBS taken today for an on-the-ground account of the situation outside a UN Peacekeeping Forces base outside of Port-au-Prince describing the scene, as well as what he has seen and heard in his reporting. He says that he had been told last night not to venture downtown, that there could be "violence and theft," but Ansel went anyway and reports he saw no such thing: "Haitians are banding together as best as they can to help each other."

We'll update as we hear more.

Update: Ansel has spoken by telephone with Jeremy, confirming that he's okay. They will meet up tomorrow morning. Meanwhile, Ansel was on CNN with Wolf Blitzer. I'm uploading that interview right now to YouTube...

...and here it is:

He was preceded on CNN by a reporter claiming sensational stories of bandits, looting and unrest (but the only "evidence" cited was a prison warden the national police chief, upset that when a wall fell down the inmates escaped), but Ansel - who has walked miles throughout Port-au-Prince and some of its most impoverished neighborhoods - says that is simply not the case. "I walked the whole way - no one bothered me at all, everyone i talked to offered to help, was asking for info," he just told us.

And there lies the difference between so much commercial media and authentic journalism. Some stay in their hotels and report the rumors they hear. Others, like Ansel Herz, go where the people and the story are happening. I'm so looking forward to the upcoming reports.

Update II: Ansel interviewed on BBC.

Update III: Ansel's brother, Galen, is updating Ansel's blog, with info, including his contact info (for media interviews): Cell phone in Haiti +509 3607 3401 "or by e-mail, but limited Internet access. Also on Skype with username ‘hakomasong.’" (I would just add: please don't clog up his phone line or limited online time unless it is vital for the work of getting the story out. And even when it is vital, be brief. A reporter in a situation like this has to practice triage, and has to work on his own work as well.)