Friday, May 7, 2010

NYSE, Nasdaq Cancel Some Trades at Height of Thursday's Volatility

The New York Stock Exchange and the Nasdaq OMX Group say they will cancel trades involving stocks that saw sharp volatility at the height of the market’s steep intraday decline Thursday afternoon.

The NYSE Arca unit of NYSE Euronext (NYX: 29.85, 0, 0%) and Nasdaq, as well as other markets, planned to cancel all trades executed at prices that were greater than or less than 60% away from the last printed price prior to 2:40 p.m. Eastern time, up to 3 p.m.

The cancelled trades could change how the major indexes actually closed. For instance, there was a questionable trade in Procter & Gamble (PG: 60.48, -0.28, -0.46%) that many in the market blamed for accelerating the selloff, which, at its nadir, saw the Dow Jones Industrial Average off 998 points. It eventually closed down 347.80 points to close as 10520.32. There were also market rumors that a trader made an erroneous sell order for billions of shares of the e-mini futures traded at the Chicago Mercantile Exchange. CME Group (CME: 321.42, 0.03, 0.01%) said in a statement that its markets functioned properly and without issue.

READ List of Stocks Affected by Trading Cancellations

READ Nasdaq Rule 11890 on 'Clearly Erroneous Transactions'

Under the Nasdaq’s cancelled-trades notice, the P&G stock price would conceivably stand, but furious electronic trading caused several stocks to lose almost all of their paper value. Consulting firm Accenture (ACN: 40.5, -0.58, -1.41%), for instance, started the day at $41.94 a share, but a trade crossed for the stock at just 1 cent a share. That would effectively have wiped out $30 billion in market capitalization in a single trade.

Likewise, energy company Exelon Corp. (EXC: 41.7, -0.136, -0.33%) had a print cross at zero cents, wiping out nearly $29 billion in value.

Both stocks closed with far more modest losses. Neither trade actually crossed at the New York Stock Exchange, where both are listed. Rather, they were traded on electronic platforms.

The frantic selling is sure to revive calls for curbs on what’s known as high-frequency trading, which relies on computerized trades executed within fractions of seconds of either news or trades in other stocks. It is believed that the P&G trade – at $39.37, off an opening price of $61.91 -- prompted a steep drop in the value of the Dow, which, in turn, prompted programmed selling that cascaded into a freefall. Within 10 minutes, the Dow Jones Industrials fell close to 700 points – an unheard-of drop for a major stock average. But computers acting on algorithms, rather than traders, were in control of many of the transactions during that period.

Depending on which trades are cancelled, the calculations for the Nasdaq Composite and some of the Standard & Poor’s indexes could be adjusted. Conceivably, if P&G’s questionable trade is also cancelled, the Dow Jones Industrial Average could be recalculated, according to a Dow Jones spokeswoman. That would also mean that, at least from a historical perspective, the indexes never really had such sharp drops.

Still, because of the electronic trading and the steep slide, many stocks likely fell victim to collateral damage and those trades will have to stand.

There were other reasons to sell stocks, outside of the potential for bad trades, notably fears that Europe's sovereign debt crisis will spiral out of control.

The Dow Jones Industrial Average fell 347.80 points, or 3.20%, to 10520.32, the Standard & Poor's 500 dropped 37.75 points, or 3.24%, to 1128.15 and the Nasdaq Composite lost 82.65 points, or 3.44%, to 2319.64. The FOX 50 sank 28.40 points, or 3.33%, to 823.99.

The selloff, which left the Dow at its lowest point since early March, gained momentum as television images of protests outside Greece's parliament triggered big fears that Europe won't have the political will to get its debt crisis under control.

“The tone and tenor of the global debt crisis has taken over the market. Everything else has taken a back seat,” said Peter Kenny, managing director at Knight Capital Partners. "This is a currency crisis that has the potential to blow up into a global financial crisis. The only thing that’s going to turn this thing around is action.”

“Calmer heads prevailed. The U.S. is in a much better place than the rest of the world,” said Brian Belski, chief investment strategist at Oppenheimer. “This is what capitulation feels like.”

Regardless, the Dow still posted its steepest percentage drop since April 2009 and largest point drop since Feb. 2009 amid growing fears that Greece's debt crisis will spread to other high-debt European nations like Portugal and Spain. Underscoring the volatility on Wall Street, the VIX, or so-called fear gauge, soared 50% to fresh 52-week highs.

“The market went into a panic. No one made markets. You had all the machines trying to [sell] things into an abyss,” said Peter Boockvar, equity strategist at Miller Tabak.

At their lows, the blue chips were on track for their point decline in history, exceeding the 777-point drop in 2008 when the House of Representatives voted down the TARP bailout resolution.

In addition to the bad trades and the global worries that have weighed on U.S. markets, stocks were hurt by weaker-than-expected same-store sales reports from a number of retailers, including Target (TGT: 54.1875, -0.7325, -1.33%), Gap (GPS: 22.34, -0.54, -2.36%) and Aeropostale (ARO: 27.56, -0.11, -0.4%).

All 30 blue-chip stocks lost ground. The Dow has tumbled 631.5 points, or 5.66%, over the past three sessions, its largest three-day percentage drop since March 2009 and first three-day decline of any kind since late January.

The euro plunged 1.58% to $1.2619 as cash fled to the relative safety of the U.S. dollar. The stronger greenback sparked a wave of selling in commodities and multinationals. Crude tumbled to a fresh 11-week low, losing $2.86 a barrel, or 3.58%, to $7 down as much as $22.79 at one point.

The debt woes also rattled the bond markets as the yield on the ten-year note fell to its lowest level since Dec. 2009 amid the flight to safety. Bond prices experienced heavy volatility, mirroring the action on Wall Street.

"In my 25 years in the business I have never seen bonds have that type of move in a 20-minute period," said Tom Digaloma, head of bond trading at Guggenheim Securities.

Wall Street was also hurt by weak sales reports from a number of retailers, raising concern about consumers’ ability to continue to withstand high unemployment. Surprisingly strong consumer spending, which accounts for 70% of the U.S. economy, has helped propel the markets and the economy. According to Thomson Reuters, April retail sales were up just 0.5% from a year ago, missing forecasts from analysts for a 1.7% rise. In fact, almost 70% of retailers reporting results missed expectations.

Friday’s jobs report, which tends to be one of the most influential reports of the month, was completely overshadowed by the global jitters. Economists expect the Labor Department will say the U.S. created 185,000 jobs last month and the unemployment rate stayed steady.

Ahead of that report, the government said Thursday the number of people who filed for unemployment insurance fell last week by 7,000 to 444,000, nearly matching the Street’s view. Continuing claims, which are filed by those on unemployment insurance for more than a week, fell by 59,000 claims.

Mr. President: Unplug the F*ing Computers

Shall we talk about RISK in the markets and in particular high-frequency trading and direct-exchange connected computers?

What happened? Part of it was right here:

That trade appears to be part of what set it off.

The DOW (and other indices) dropped hard. The response in the computers connected directly to the exchanges was instantaneous and produced this:

A computer-driven bid collapse followed and the result was a more than 1,000 point selloff.

No, that's not the ONLY oddity. There were plenty of wild moves in both option premia and the FX just before it all went down the toilet - but the computer trading systems, with no humans actually feeding them orders - that is, autonomous robots - did exactly what they were programmed to do. When the bids were exhausted some stocks actually traded at effective zero:

There is absolutely no protection against this sort of thing in the market for the average investor, or anyone other than the HFT boys. Stops don't work as there's "no bid" during these events - there was LITERALLY no bid in the futures for about 30 seconds, then no offer on the way back up. Globex (the E-Mini S&P 500 futures) were deeply involved, with the bid and offer stack basically gone during the middle of the event.

This sort of thing has to be stopped.

This was not humans - it was pure computer algorithm trading. If you had stops set, you got blown out way below any reasonable trading range with no recourse. Margin requirements were raised instantly on futures which sure didn't help.

This was essentially the 1987 program-trading crash powered by the fastest CPUs money can buy, and points out that these systems do not have social utility and at times like this they are unbelievably destructive.

The banks and others who have argued for innovation have just proved once again that their brand of "innovation" means that the average investor gets bent over the table. You cannot, as an investor, be in the market until these outrageous practices are permanently barred from the exchanges.

I was on the right side of the destruction today, but I could have very easily been on the wrong side and gotten badly hurt. As it stands I'm quite certain there were tens of thousands of individual traders who went so far into negative equity in the futures market and got immediately liquidated that we will be hearing of blown up accounts and bankrupted traders for weeks if not months.

To those who say that we have "restored confidence" in the markets and "the worst is beyond us", I want everyone to remember very carefully the early 2007 market collapse that originated in Asia and came over here - the event that began my writing of The Ticker.

When governments tamper with markets as has been done over the last year and change to the point that true liquidity leaves and is replaced by computer-driven volume, this is what happens as there is NO UNDERLYING BID.

VOLUME IS NOT LIQUIDITY. Liquidity creates volume but not the other way around. We have deluded ourselves into believing that a handful of major banks passing shares between each other funded with zero percent loans equals "liquidity."


This is the harbringer of more trouble to come, it is not over, and I have been warning people all through the so-called "new bull market" that this sort of event - and likely more than one - was coming as a direct consequence of the destruction of true liquidity and it's replacement with BS and games.

It was simply a matter of when.

Bernanke, Geithner and Obama have failed to restore confidence - in fact all they've done is put in front of the big banks a near-unlimited amount of money to game the system with and game it they have - right up until you had your stops run today and got screwed once again.

Say thanks to your elected and appointed officials who have taken their bows for something that, just as with "Mission Accomplished", has turned out to be one gigantic lie.

PS: Tickerforum remained up during the entire event, although it recorded the highest load-average and page-count spike ever seen, including during the depths of the 2008/2009 hell.

After stocks plunge, search begins for cause

The gut-wrenching stock market plunge Thursday reflected growing worries about a widening financial crisis in Europe spinning out of control. But the afternoon freefall was intensified by a modern electronic trading system that can move hundreds of millions of shares of stock at the speed of light.

Hours after the plunge, there was no clear explanation for why the Dow Jones industrial average lost some 6 percent of its value in a matter of minutes and then recovered almost as quickly. The Dow ended with a loss of 346.51 points or 3.2 percent after its biggest intraday move in history.

CNBC reported that the wild ride, which played out largely from 2:30 to 3 p.m. ET, might have been caused by human error when a trader hit B for "billion" in a trade instead of M for "million." CNBC said trading sources told it that the error may have happened at Citigroup, the nation's No. 3 bank company.

Citi said it had no evidence of a bad trade but was looking into the situation, a spokesman said.

The Dow already was under pressure, down about 260 points, when the sudden sell-off began. Mounting tensions over Europe’s unsuccessful efforts to calm investor fears about Greece’s debt crisis were worsened by the latest pictures of riots in the streets of Athens. Those tensions were heightened by a vote in the Greek parliament to impose tough economic sanctions.

Once the sell-off began, it was exacerbated by the same rocket fuel blamed for the 1987 crash: A series of program-driven trades that accelerated as the market continued its freefall.

Program trading kicked in and kept rolling on because of trigger points, said Peter Costa, president of Empire Executions, who has 30 years of experience as a New York Stock Exchange broker.

"Every trigger point they hit then hit another trigger point, and they kept selling, " Costa said.

Much of the trading occurred off the New York Stock Exchange, leading some to question whether a human or technical error on one of the electronic exchanges may have been behind the plunge.

The NYSE said there was no technical glitch.

Sanders sells out on Senate Floor : a message from the Campaign for Liberty

Any time you find out Senator Chris Dodd is in support of something – watch out.

According to our sources on the Hill, Senator Bernie Sanders caved to pressure from the White House and Chris Dodd and stripped out the Paul-Grayson language from his Fed transparency amendment.

What Sanders is now proposing is essentially the Watt amendment we all opposed last year in the House. In addition, it supports just a one-time audit.

Talking Points Memo reports that, “In order to allay some of the White House's and the Fed's concerns, Sanders has agreed to limit the scope of what the Government Accountability Office would be allowed to audit--but his plan will still require thorough review of all the Fed's emergency lending, beginning December 1, 2007.”

Call Senator Sanders’ office at (202) 224-5141 and tell him how you feel about this last-minute sell out.

Click here for contact information for your senators and urge them to oppose the Sanders Sellout. Tell them to put back in the original Paul/Grayson language.

A vote could come even late tonight or early tomorrow. Let your senators know where you stand right away.
The American people deserve a real audit.

In Liberty,

John Tate

Arizona, Immigration and Racial Profiling: Liberal Panties are in a Wad

OK, my friends. It’s time for some truth about the law, truth about human nature and some desperately needed perspective.

The civil rights activists are not demonstrating to protect civil rights in Arizona. They are protesting to protect brown-skinned people from getting their feelings hurt.

Once again…I’m not a lawyer. There could exist lots of case law that rolls a grenade under the bed of my arguments. But this is a secession website. I look at EVERYTHING through the liberty-tinted glasses of state liberation from the tyranny of The United States of America. As such, I consider all case law and Federal law irrelevant to the new laws of a new nation.

All I seem to hear on the various media outlets is how the new Arizona immigration law COULD…not will…result in the dreaded practice of “racial profiling.”

According to the redoubtable Wikipedia, Racial Profiling is “the inclusion of racial or ethnic characteristics in determining whether a person is considered likely to commit a particular type of crime or an illegal act or to behave in a “predictable” manner. The fact remains that racial profiling is also targeted against Europeans and others with similar ethnic features when abroad, as the practice has been common throughout the world for centuries.”

Profiling refers to a GENERAL description of a particular type of offender as opposed to listing the physical characteristics or behavioral characteristics of a suspect or group of suspects…like cops do when on the lookout for a criminal (age 20-25, white, blue eyes, brown hair, clean shaven, wearing khaki pants and a red T-shirt).

Another less pejorative word for profiling is “generalize,” which means “to infer trends from particular facts.”

Human beings generalize every day because for the most part…generalization works.

Are farmers “profiling” beetles that eat his corn crop? He learns the particular appearance and behavior of the corn eaters. It ain’t the Monarch butterflies munching on his crop.

You’re on a dark street at night when five young black men approach you. If the young men are heavily tattooed with their pants hanging down, you’ll probably react differently than if you are approached by five young white men in business suits all carrying Bibles. Are you profiling?

Parents see that the neighbor kids have spots all over their skin. Is it profiling to generalize that the kids may have measles or chicken pox? Is it wrong to keep your kids away from the neighbor kids because of what their appearance could mean for your family’s health? Maybe you should keep your children away from ALL the other children, so the children with measles don’t get their feelings hurt.

Consider this scenario: You are driving on a city street. A police car behind you turns on his blue lights, and you pull over. The officer comes to your car window and asks to see your driver’s license, registration and proof of insurance. At this moment, you do not know why he stopped you. Before you ask why you were stopped, answer this question: Has the police officer violated your civil rights by stopping you and asking for your “papers?”

“No,” you say? Why is this not a civil rights violation? Why is it not a civil rights violation for police to request to see your driver’s license without FIRST giving their probable cause, yet it somehow violates a person’s civil rights to ask a person to produce proof of legal residence other than a driver’s license?

The driver’s license serves as your proof of legal residence SOMEWHERE, even if you don’t live in that state. So, unless the police officer suspected that your driver’s license was a forgery, no further inquiry into your citizenship would likely occur.

Here’s another example: You’re a new employee in training at a bank. In training, they show you photos of past bank robbers, and give you a list of the common characteristics of people who rob banks. Is that profiling?

Another: Zimbabwe shares its southern border with South Africa. Let’s posit that southern Zimbabwe has had a long history of criminal vandalism…toilet-papering houses. It is determined after analyzing arrest records that 99% of the crimes were committed by white Afrikaner men coming across the border from South Africa. You’re a Zimbabwean border inspector. When you saw a white Afrikaner man with a backpack coming through the line, would you be profiling if you looked inside the backpack for Ultra Charmin?

Let’s all agree for a moment that the US Constitution still has some relevance, since the majority of Americans still think that it is the highest law of the land. A discussion of constitutional authority is a topic for another day.

The Fourth Amendment says “The right of the People to be secure in their persons, houses, papers and effects, against UNNREASONABLE searches and seizures, shall not be violated, and no warrants shall issue, BUT UPON PROBABLE CAUSE, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.” (Emphasis mine)

So please notice:

The Fourteenth Amendment, Section 1 says: All citizens BORN OR NATURALIZED in the United States and subject to the jurisdiction thereof are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; Nor shall any State deprive any person of life, liberty or property without due process of law; nor deny to ANY PERSON within its jurisdiction the equal protection of the laws. (Emphasis mine)

The Arizona immigration law does not abridge the privileges or immunities of citizens of the United States. It does not deprive any person of life, liberty or property without due process of law.

What the immigration law does is acknowledge that the predominance of illegal immigrants in Arizona are Latinos, and as such, empowers law enforcement personnel to use their common sense to investigate whether any individual Latino human being can proffer verifiable identification and proof of US citizenship. Said another way – if we know that nearly every illegal immigrant in Arizona has Latino physical characteristics, it is not an “unreasonable search” to require that they produce identification and proof of citizenship.

In my never-humble opinion, racial profiling for immigration violations is far superior to the DUI check-points that police like to set up on busy thoroughfares to check EVERY DRIVER for driving under the influence of alcohol. Perhaps civil rights activists would rather have those kinds of random checkpoints scattered throughout Arizona where EVERY DRIVER must produce an ID.

Then, Arizona officials would have embraced the very idiocy that we experience whenever we board a plane at any American airport. Is that what you want?

Speaking of airports and profiling, consider this: EVERY PERSON involved in the bombing of the World Trade Center in 1993, and EVERY PERSON involved in the attack on the World Trade Center on September 11, 2001 was a Middle Eastern male Islamist. No grandmas…no children…no blacks…no whites…no Latinos…no Asians…no active duty military personnel. Only Middle Eastern Islamists.

How about we go back to using common sense, and only inspect those people in line who APPEAR MOST LIKELY to pose a threat to public safety?

In conclusion: What is Arizona going to do WHEN…not IF…Washington decides to assert its superiority over Arizona in this immigration matter? Will Arizona kneel and obey? Arizona needs to secede from the Union. Once they secede, they will be free from the Federal idiocy under which they are burdened.

Secession is the Hope For Mankind. Who will be first?

DumpDC. Six Letters That Can Change History.

© Copyright 2010, Russell D. Longcore. Permission to reprint in whole or in part is gladly granted, provided full credit is given.

Today There Were Literally NO BUYERS On The Stock Market For a Period of Time

CNBC now saying some stocks actually dropped to ZERO for a period of time today....

They can't understand what happened...

They said their were literally NO BIDS.. NO BUYERS..

That means liquidity totally dried up in the market..

STOCKS WERE COMPLETELY WORTHLESS for a period of time today..



WOW!!! Have they lost control of the gold manipulation?

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As Dow Swings, Obama To Come Out Against Audit the Fed Today

Update: Sanders just announced he’s modifying the amendment in conjunction with Chris Dodd, who is now a cosponsor. Not a good sign.

The Dow is swinging wildly–down as much as 980 points within the last hour–largely due to insecurity about the situation in Greece and shaky retail sales. And according to Brad DeLong, who is generally pretty tight with the White House, Obama will come out in opposition to Audit the Fed this afternoon.

At a time when confidence in the markets desperately needs shoring up, the President should be looking to instill confidence in investors by supporting accountability and transparency within the financial system — not acting to shield the banks.

Even as the White House whips against Audit the Fed, Shaheen, Begich and Murkowski have signed on as cosponsors of the amendment. There are now 68 Senators who have either voted for or cosponsored Audit the Fed in the past year. As rioting breaks out in the streets of Greece–after Goldman Sachs helped them hide the extent of their financial troubles–many are evidently not excited about flip-flopping to shield the banks from scrutiny unless Obama puts himself on the line.

Jamie Dimon is on the board of the NY Fed. He knows what they’re up to. No matter what excuse Obama offers for opposing the Sanders amendment, there is no reasonable argument to be made for allowing the Chair of JP Morgan Chase to know what members of Congress cannot.

Senator Party State Voted for Bill in 09 Cosponsored Bill Cosponsored Amendment 2010 Reelection
Akaka D HI x

Barrasso R WY

Begich D AK x
Bennett R UT
x x x
Boxer D CA x x x x
Brown D OH x

Brownback R KS x x x
Bunning R KY x x x
Burr R NC x x x x
Burris D IL x

Byrd D WV x

Cantwell D WA x

Cardin D MD x x

Casey D PA x

Chambliss R GA

Coburn R OK x x x x
Cochran R MS

Collins R ME x

Conrad D ND x

Cornyn R Tx x x

Crapo R ID x x x x
DeMint R SC x x x x
Dorgan D ND x x x
Durbin D IL x

Ensign R NV x

Feingold D WI x x x x
Feinstein D CA x

Graham R SC x x x
Grassley R IA x x x x
Hagan D NC x

Harkin D IA x x

Hatch R UT
x x
Hutchison R TX x x

Inhofe R OK x x

Inouye D HI x

Isakson R GA
Kerry D MA x

Klobuchar D MN x

Landrieu D LA x x

Leahy D VT x x x x
Levin D MI x

Lincoln D AR x x x x
McCain R AZ x x x x
McCaskill D MO x

Merkley D OR x

Mikulski D MD x

Murkowski R AK
Murray D WA x
Nelson D FL x

Pryor D AR x

Reid D NV x

Risch R ID x x x
Roberts R KS x

Rockefeller D WV x

Sanders I VT x x x
Sessions R AL x

Shaheen D NY

Snowe R ME x

Specter R PA x

Stabenow D MI x

Tester D MT x

Thune R SD x x
Udall D NM x

Vitter R LA x x x x
Webb D VA x x

Whitehouse D RI x

Wicker R MS

Wyden D OR x x x x

Japanese PM's Reversal on US Base May Have Political Cost

Political analysts in Japan say Prime Minister Yukio Hatoyama's reversal on a key campaign pledge is likely to cost him in coming elections. Mr. Hatoyama told residents of Okinawa this week it will probably be impossible to completely move a U.S. marine base off the island.

Japanese Prime Minister Yukio Hatoyama went to Okinawa this week to deliver a message that left many islanders disappointed.

He says given the current U.S.-Japan relationship and from the perspective that they need to keep deterrence power, it has become difficult to move all the functions of Futenma air station. He says he brings his "deepest apologies."

The U.S. Marine Corps Futenma air station on Okinawa has long been a target of protesters. A large city has grown around it over the past 50 years, and residents complain the base's aircraft are noisy and dangerous.

Okinawa hosts about half of the 49,000 U.S. troops in Japan, on several bases, as part of an alliance forged after World War II.

In 2006, after years of negotiations, the U.S. and Japan agreed to move Futenma to a coastal area in northern Okinawa, and to move about 8,000 other Marines to the U.S. island of Guam.

But Mr. Hatoyama's Democratic Party won a landslide victory last August, boosted partly by pledges to move Futenma entirely off Okinawa. He had promised a new plan for the base this month.

Tomohiko Taniguchi, adjunct political science professor at Japan's Keio University, says Mr. Hatoyama repeated the pledge "dozens of times," and has embarrassed himself by backtracking.

"It is none other than himself who dropped a huge stone on his own feet … he's made an absolute about face," said Taniguchi.

Taniguchi points out that the town where Futenma is to be moved this year elected a mayor who staunchly opposes the 2006 deal, presenting a challenge for Mr. Hatoyama.

"So no one believes that this plan is going to fly, especially by the end of May, which is a self-imposed deadline for Mr. Hatoyama," said Taniguchi.

Jeff Kingston, an Asian studies scholar at the Tokyo branch of Temple University in the United States, describes Mr. Hatoyama as being "between a rock and a hard place" (trapped between two difficult choices).

"This puts Hatoyama in an extremely difficult position," he said. "He's saying to everybody, 'I'm going to have to back down and go back to square one.' This is going to really hurt him and hurt his party."

Kingston says there are mixed feelings about the U.S. - Japan alliance among many Japanese voters.

"Even though there is a resentment about the high-handed manner in which Washington treats Tokyo, there's also a recognition that Japan lives in a dangerous neighborhood, and that it benefits from U.S. security cooperation and protection," he said.

Elections for Japan's upper house of parliament are scheduled for July. Polls show Mr. Hatoyama's approval rating has plunged this year, and political analysts say his shift on Futenma could further damage his party's chances in the election.

My Big, Fat Greek Disaster

The old saying, "Beware of Greeks bearing gifts," might now be changed to, "Beware of Greeks bearing debt." Indeed, after yesterday's murderous riots, people also need to beware of Greeks bearing Molotov Cocktails, as Greek government employees, after living high on financial bubbles, do not believe they should have to face financial reality.

In a blog post, Paul Krugman acknowledges that the "Greek end game" is going to be disastrous no matter what, as no one there is willing to face the truth: Greece was living in a bubble economy, and when the bubble bursts, there is nowhere to hide. Unfortunately, as a true Keynesian, Krugman believes that the Very Worst Thing that can happen Greece is deflation.

But even Krugman admits that the Greeks need to get their economy into some kind of balance, and that is amazing, given that Keynesians believe that all factors of production, for purpose of economic analysis, are homogeneous, and the way to get costs of factors (especially labor) and prices of goods into "balance" is through inflation. Yet, even that bit of wisdom is tempered with Keynesian foolishness. He writes:
The only thing that could reduce that need for austerity would be something that helped the economy expand, or at least not contract as much. This would reduce the economic pain; it would also increase revenues, reducing the needed amount of fiscal austerity.

But the only route to economic expansion is higher exports — which can only be achieved if Greek costs and prices fall sharply relative to the rest of Europe.
He admits, however, that Greece is not a cohesive society, so the most likely scenario is for Greece to "leave the Euro" and go to printing Drachmas again. That, Krugman admits, will be disastrous, triggering bank runs and worse.

Yet, Krugman does not realize that the problem of leaving the Euro would create even more problems for Greece than bank runs. Should Greece leave the Euro and go back to the Drachma, the currency markets will treat the Drachma as "soft money" and give it the same status as money from Zimbabwe, which does not trade on any currency markets.

To put it another way, Greece will become essentially a Third World country. How did this happen? It happened because central banks around the world engaged in Keynesian "expansion" by creating Dollars, Euros, you name it. Keynesians believe that such action can go on forever without creating any consequences. As you can see, that simply is not true.

Greece is living the consequences. They either can get their house in order and suffer the short-term consequences, or they can go on living in the inflationist fantasy that is Keynesian "economics."

New Revelations on Climategate

Click this link .....

Former bank CEO arrested by Icelandic authorities

REYKJAVIK, Iceland - Icelandic authorities arrested the former chief executive of collapsed bank Kaupthing on Thursday — the first high profile banker to be detained in the wake of the tiny Nordic country's financial crisis.

The special prosecutor tasked with investigating the Icelandic banking crash of October 2008 said that Hreidar Mar Sigurdsson is suspected of falsifying documents and breaking laws on stock trading for personal gain.

Sigurdsson is being held in police custody until a bail hearing Friday at the Reykjavik District Court.

Prosecutor Olafur Thor Hauksson said he planned to ask that the former banker be kept in custody for two weeks to prevent the possibility of him tampering with evidence or interfering with the ongoing investigation.

Sigurdsson can appeal to the Supreme Court if the prosecutor's request is granted in the district court.

Hauksson was appointed by the Iceland's post-crisis government to investigate whether there was any criminal activity in the lead up to the banking crash that crippled Iceland's economy, sending its currency into a tailspin, frightening off foreign investors and forcing out the country's former leaders.

Britain's Serious Fraud Office is still carrying out its own investigation into suspected fraud at Kaupthing, with a focus on efforts by the bank to attract British investors to its "high yield" deposit account, Kaupthing Edge. About 30,000 British individuals, companies and organizations made an investment.

When it opened the investigation in December, the British agency said it would work with the Icelandic special prosecutor as it also looked closely at a series of decisions that appear to have allowed substantial value to be extracted from the bank in the weeks and days prior to its collapse.

The demise of Kaupthing, one of several Icelandic banks to collapse, sparked a political row between Reyjkavik and London because it failed after the British government invoked anti-terrorist legislation to freeze the U.K. assets of another collapsed Icelandic bank, Landsbanki.

Britain's Treasury said the move was necessary to ensure the money that British savers had placed in the bank would not be whisked back to Iceland.

But Iceland's prime minister at the time, Geir Haarde, blasted the move as an "unfriendly act" and blamed the decision for inspiring panic that led to the subsequent collapse of Kaupthing.

A cross-party committee of British lawmakers was later critical of London's handling of the situation, saying that the government's statements on the ability and willingness of Reykjavik to compensate non-Icelandic account holders was "ultimately unhelpful."


AP Business Writer Jane Wardell reported from London.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Plan for Congressional Audits of Fed Dies in Senate

Last-minute maneuvering in the Senate allowed the Federal Reserve to sidestep legislation that would have exposed its interest-rate decision-making to congressional auditors.

Pressure from the Obama administration led Senate lawmakers to alter a provision pushed by Sen. Bernie Sanders (I., Vt.) that was gaining momentum despite opposition from the Treasury and the Fed. It would have largely repealed a 32-year-old law that shields Fed monetary policy from congressional auditors.

European Pressphoto Agency

Sen. Bernie Sanders of Vermont

The compromise, endorsed by Senate Banking Committee Chairman Christopher Dodd (D., Conn.) and the Treasury, would require the Fed to disclose more details about its lending during the financial crisis. It would also require a one-time audit of those loans and a one-time review of Fed governance. A formal vote was pushed back until next week.

Thursday's Senate showdown came after senators on the left and right joined forces to support Mr. Sanders' provision.

"At a time when our entire financial system almost collapsed, we cannot let the Fed operate in secrecy any longer," Mr. Sanders said. "The American people have a right to know."

But Fed Chairman Ben Bernanke, while insisting on a commitment to "openness" at the Fed, said in a letter to Congress the Sanders measure would "seriously threaten monetary policy independence, increase inflation fears and market interest rates, and damage economic stability and job creation."

Deputy Treasury Secretary Neal Wolin, in a statement, endorsed the revisions to the Sanders provision, saying they would provide a comprehensive audit of the Federal Reserve Board's operations in response to the financial crisis, "while preserving the existing protections of the Federal Reserve's independence with respect to monetary policy."

A House bill sponsored by Rep. Ron Paul (R., Texas) that passed in December contains a proposal similar to the original Sanders measure. If the Senate bill passes, it will need to be reconciled in a conference committee. That keeps the pressure on the Fed alive for the coming months.

The original Sanders measure stated that it shouldn't be "construed as interference in or dictation of monetary policy." But the Fed and administration warned that would allow auditors to interview Fed policy makers and staffers about monetary policy, thereby allowing congressional critics to pressure the Fed and undermine its independence.

Like most other capitalist democracies, U.S. politicians have given the central bank considerable latitude to control interest rates on the theory that elected politicians are prone to keep rates too low to get more growth during their terms at the cost of more inflation later. Although sponsors of legislation insisted that wasn't their intent, the Fed and its allies said otherwise.

"It's a chilling kind of circumstance," former Fed Chairman Paul Volcker, an Obama adviser, said in an interview. "The more you have no clear boundaries about what's appropriate and what's inappropriate, you castrate the decision-making process. That's true for any organization, but it's particularly true when you get into the sensitivities of monetary policy that can generate speculative waves in financial markets and speculation in people's minds," said Mr. Volcker, who also urged lawmakers to eliminate the audit provision.

Anil Kashyap, an economist at the University of Chicago's Booth School of Business, stressed that independent central banks need to be insulated from politics and make decisions several months ahead of expected trends.

"There are times when you have to start raising interest rates before the economy's recovering. If you're going to get audited while you do that, you know you're going to be slower—meaning we're going to tolerate higher inflation."

Before the last-minute compromise, the Fed's foes appeared to be winning, and got a major boost when Senate Majority Leader Harry Reid (D., Nev.) said he would side with Mr. Sanders.

Mr. Bernanke, meanwhile, returned to Washington Thursday afternoon after a morning speech in Chicago to continue pressing for changes to the Sanders bill. In the past few days, Mr. Bernanke has spoken to at least a half-dozen senators to argue the Fed's case that the bill would deeply damage the Fed's credibility and ability to make tough decisions about interest rates.

At least half a dozen Obama administration officials joined the blitz, including Treasury Secretary Timothy Geithner—a former Fed official—and Rahm Emanuel, the White House chief of staff. Administration aides credited Mr. Dodd with pushing back against the original amendment and developing an acceptable alternative.

New York Fed President William Dudley also advocated to scale back the scope of the auditing. He was among those arguing that ongoing reviews of the Fed's regular lending to financial institutions would stigmatize the program and cripple the Fed's role as the nation's lender of last resort.

The Senate beat back another amendment with populist tinges, defeating 61-33 a provision that would have put strict caps on the size of the nation's banks. Offered by a bloc of liberal Democrats, it would have capped at 10% the limit on the nation's total insured deposits any single bank holding company could carry. It would have also set a 6% leverage limit for banks and capped their non-deposit liabilities at 2% of U.S. gross domestic product.

—Damian Paletta, Jonathan Weisman and Jon Hilsenrath contributed to this article.

Freddie Mac asks for additional $10,000,000,000 bailout

Troubled US government-backed mortgage firm Freddie Mac on Wednesday asked for an additional 10.6 billion dollars from the Treasury Department to cover losses.

Announcing a 6.7 billion dollar loss in the first quarter, Freddie Mac said it would need the new funding by June 30 this year.

The Washington-based company has already received more than 50 billion dollars in taxpayers cash to cover losses from toxic assets.

It also warned that further demands would be on the way.

"Freddie Mac expects to request additional draws," it said in a statement.

"The size and timing of such draws will be determined by a variety of factors that could adversely affect the company's net worth."

Greece Fuels Fears of Contagion in U.S.

Crisis Would Likely Spread in Europe Before Crossing Atlantic, Economists Say; Wary Investors Monitor Credit Markets


A protester throws a stone at police near the Parliament building in Athens Wednesday. A general strike gripped the country after the government agreed to austerity measures.

Investors and policymakers are starting to worry that the economic crisis in Greece could cross the Atlantic and undermine the U.S. economic recovery, in the same way that U.S. housing woes in 2008 battered Europe.

"What we have seen is that contagion"—economist-speak for a spreading crisis—"has gone global," says Harvard University economist Jeffrey Frankel.

Early credit-market indicators of contagion to the U.S. aren't yet flashing red, but investors are keeping a wary eye on them. "This is like we've agitated a colony of prairie dogs, and everybody is looking out of their hole to see what's going on," said Howard Simons, bond strategist at Bianco Research in Chicago. "But it's no crisis, yet."

Since late last year, Greece has presented several austerity plans to pare its debt burden, and is working through details of a €110 billion ($145 billion) rescue by fellow euro-zone nations and the International Monetary Fund. However, the promise of aid hasn't had a lasting calming effect on European markets or investors.

U.S. Treasury officials have been quietly urging their European and IMF counterparts to move more quickly on the rescue plan, to contain the damage, say U.S. officials. Lobbying was especially heavy during the IMF meeting in Washington in late April. Treasury Secretary Timothy Geithner is a veteran of the U.S. effort to contain the Asia financial crisis, which began in 1997, ping-ponged around the world and eventually led to a debt default in Russia and the collapse of U.S. hedge fund, Long Term Capital Management.

There are a number of ways that a crisis in Greece can spread to the U.S., say economists, though most would require Greece's problems to jump first to larger European countries, such as Spain and Italy. By itself, Greece is far too small to have much effect directly on the U.S. Its economy is about 2% the size of the U.S.'s and it takes in less than 0.1% of U.S. exports.

But Europe as whole has powerful ties to the U.S. through trade, investment and finance. U.S. banks hold more than $1 trillion of European debt, according to the Bank for International Settlements. Bruce Kasman, J.P. Morgan's chief economist, estimates that the 16 nations of the euro zone account for about 14% of U.S exports, apart from petroleum products.

Those ties can become weaknesses in bad times. One big surprise of the U.S. housing crisis was how many European banks held securities tied to worthless U.S. mortgages and how much they lost. A recession in Europe followed quickly on the heels of one in the U.S.

Even before the Greek crisis, the IMF estimated that the euro zone, whose economy contracted by 4.1% in 2009 would grow at just 1% this year. Anything short of that could curb U.S. exports and weaken what is projected to be an already humdrum recovery.


Perhaps the biggest wild card is uncertainty itself. The financial panic of 2008 has made investors skittish of a repeat performance. Some may view that Greece's problem with a heavy debt load will be mirrored over the next few years in the U.S., U.K and other wealthy countries.

"Investors get less and less tolerant of high levels of public debt," says Marco Annunziata, chief economist at UniCredit Group in London. "It might be that investors are so burned by the experience of the last crisis, that once they see that a problem is big enough they feel they can't confidently predict that it can stay limited," so they pull out of the market, deepening the crisis that they feared.

The transfer of any economic trouble to the U.S. from Europe, if it occurs, will register in financial markets before showing up in economic indicators. Markets have begun to brace for the risk of contagion: The Dow Jones Industrial Average is down 3% from its high for the year, reached last week.

The U.S. dollar is up nearly 12% against the euro this year, and has siphoned anxious investors from other currencies. As the dollar strengthens against the euro, U.S. exports to Europe become more expensive, and U.S. businesses face a competitive disadvantage against European firms in Asia and elsewhere.

Offsetting that drag on the U.S. economy is the fact that turmoil in Europe has driven investors into U.S. Treasury bonds, helping to hold down the long-term interest rates at which home buyers and businesses borrow. It also has helped to hold down commodity prices, restraining inflation and keeping market interest rates from rising.

So far, the U.S. market reaction has been orderly—and mostly mild. Corporate borrowers with credit ratings below investment grade—known as "junk," or high-yield, borrowers—are paying about a quarter of a percentage point more to borrow over risk-free debt than they did a week ago. A Bank of America Merrill Lynch index tracking high-yield debt returns has barely budged from a high set just last week.

Other closely watched early indicators of credit tightening have nudged higher lately, but are nowhere near their levels before the 2008 crisis.

The three-month London interbank offered rate, or Libor, which measures how much banks charge to lend money to each other, has ticked up to about 0.36 percentage point from 0.25 percentage point in late February. Just ahead of the 2008 crisis, that rate was about 5.35%.

The mechanism by which financial-market unrest spreads is never immediately clear, nor direct. The 1997 Asian crisis, for instance, contributed to the 1998 Russian crisis by driving down the price of oil, which hurt Russian government revenue, and later spread to Latin America..

This time, losses on loans to Greece and other weaker European nations could produce big losses for European banks, which borrow from U.S. banks, causing a general panic and freezing lending.

"If the problems climb up the ladder to Portugal and Spain and then to France and Germany, there will be worries about public debt everywhere," says Raghuram Rajan, a former IMF chief economist who is now a professor at the University of Chicago's Booth School of Business.

Money-market funds are increasingly leery of buying commercial paper and other assets from European banks, notes Barclays Capital money-market strategist Joseph Abate, a trend that will likely push bank borrowing costs higher. That in turn could lead to tighter credit more broadly.

—Jon Hilsenrath contributed to this article.

Police question climategate information seekers

Police are investigating anyone who requested information from the university department at the centre of the ‘climategate’ scandal.

Norfolk Constabulary is trying to work out who stole thousands of emails from the Climatic Research Unit (CRU) at the University of East Anglia at the end of last year.

The emails, that were posted on the internet, appear to show scientists were unwilling to reveal data on global warming and led to an international scandal known as ‘climategate’.

Already prominent climate change sceptics around the world have been questioned and members of staff at the university, but is has now emerged that ordinary members of the public who did nothing more than request information are also being targeted.

Sebastian Nokes, a businessman and climate change sceptic, wrote to a national newspaper to complain.

He said all he had done was request information on the CRU’s disclosure rules and he was questioned on his political and scientific beliefs.

Detective Superintendent Julian Gregory, who is leading the investigation, said his unit is looking into anyone who could give clues to who stole the emails and working with experts in "extremism".

“As with any investigation we will interview anyone who may have information which is of relevance to the enquiry,” he said.

The university was cleared of scientific malpractice recently. There is separate ongoing investigation by academics into whether Freedom of Information requests were dealt with correctly.

Glitches send Dow on wild ride By Alexandra Twin, senior

NEW YORK ( -- In one of the most gut-wrenching hours in Wall Street history, the Dow plunged almost 1,000 points Thursday before recovering to close down 348, as erroneous trading in Procter & Gamble and several other stocks sparked a massive selloff.

Fears about the spread of the European debt crisis dragged on stocks through the early afternoon. But the selling picked up in intensity and the Dow reached its nadir at around 2:40 p.m. ET.

The selling was a result of technical glitches that caused some stocks, including Dow component Procter & Gamble (PG, Fortune 500), to plunge 37% to $39.37 per share from the close of $62.12 Wednesday. The consumer products maker recovered most of that loss by the close, ending just 2% lower.

But the faulty P&G trading was responsible for 172 of the 998.50 points that the Dow Jones industrial average (INDU) lost at its worst, the biggest one-day point decline on an intraday basis in Dow Jones history.

Accenture, 3M, Sotheby's and other stocks may have been impacted by similar problems. (For details,click here)

At the closing bell, the Dow was down 348 points, or 3.2%, to end at 10,520.32. The Dow's biggest one-day point decline on a closing basis was Sept. 29, 2008, when it fell 777.68, which had also been the previous intraday mark.

The S&P 500 index (SPX) slipped 38 points, or 3.2%. The Nasdaq composite (COMP) dropped 83 points, or 3.4%.

"On the Dow, we were down 400 to 800 points in five minutes, it was horrifying," said Art Hogan, chief market strategist at Jefferies & Co.

Beyond the erroneous trades, the selling pressure of the last few days has been more technical than fundamental, said Hogan. He said the market collapsed some major technical support levels, and could be in for more selling Friday.

However, there are a few factors that could help stabilize the market Friday, said Peter Cardillo, chief market economist at Avalon Partners, including news on Greece.

"The key is to get Germany's vote tomorrow in favor of the Greek aid package from the European Union," he said. "If that happens, that could help calm fears and stabilize the market."

Friday's big April jobs report could end up being a non-event, said Donald Selkin, chief market strategist at National Securities. "We've had good economic reports all week and it hasn't happened."

The CBOE Volatility (VIX) index, Wall Street's so-called fear gauge, closed at 34.16, its highest finish since May 4, 2009. Earlier, it had spiked as high as 40.71, a 62% jump and its biggest one-day surge since February 2007.

Selkin said that often when the VIX gets over 40 that can be a sign that the selling has been overdone, which could be good. But with the fear gauge closing below that level, it may not provide a boost Friday.

"International markets are obviously going to get hit over night and futures are pointing to a weak open in the U.S.," Selkin said.

Gold spiked above $1,200, the euro plunged to a more than 1-year low against the dollar and oil prices fell. Treasury prices rallied, sending the corresponding yields lower as investors sought safety in government debt prices.

The run from the euro and into the dollar and U.S. government debt was a classic flight to quality, said Ted Weisberg, NYSE floor trader, Seaport Securities. He said that the continued weakness of the euro was going to be a big drag on the markets as it pummels dollar-traded commodities and also hurts companies that do a lot of business overseas.

After the close, both the Securities and Exhange Commission and the Commodity Futures Trading Commission said that they would be looking into the unusual trading that took place Thursday.

Movers: All 30 Dow components slid, with oil components Chevron and Exxon Mobil, financial leader JPMorgan Chase, and tech names Hewlett-Packard and IBM among the big losers. 3M, Boeing and United Technologies added to the weakness.

Market breadth was positive. On the New York Stock Exchange, winners beat losers 17 to 1 on volume of 2.58 billion shares. On the Nasdaq, advancers topped decliners seven to one on volume of 4.48 billion shares.

European debt problems accelerate: Stocks have been sliding on and off for the last two weeks as investors mull the ramifications of the growing debt crisis in Europe.

While European leaders have pledged to provide Greece with $146 billion in loans over the next three years, attempts by the nation to institute certain "austerity" measures to bring down the deficit have sparked riots and other violent outbursts.

Meanwhile, investors are concerned that the size of the bailout will make Europe less able to help Spain, Portugal and other debt-plagued nations. The so-called PIIGS also include Italy and Ireland.

"There's no question that Europe and Greece, and specifically the fear of contagion, is what's driving the market lower," said Hank Smith, chief investment officer at Haverford Investments.

"Having said that, we also have to be cognizant that the market was due for a pullback at a minimum, and possibly a correction," he said.

He noted the market hasn't had a correction - technically defined as a selloff of 10% on a closing basis - for at least 14 months.

A slew of good - but not great - retail sales reports from the nation's chain stores, and a report that showed weekly jobless claims dropped were also in focus.

Economy: The number of Americans filing new claims for unemployment fell to 444,000 last week from a revised 451,000 the previous week. Economists surveyed by thought claims would fall to 440,000.

Continuing claims, a measure of Americans who have been receiving benefits for a week or more, dropped to 4,594,000 from a revised 4,653,000 in the previous week. Economists expected 4,600,000 continuing claims.

The report was released one day ahead of the government's closely watched April jobs report, due Friday morning. That report is expected to show employers added 187,000 jobs to their payrolls after adding 162,000 in March, according to economists surveyed by

The growth is considered a step in the right direction, but the number of new jobs is not yet enough to keep up with the number of new entrants in the labor market.

The unemployment rate, generated by a separate survey, is expected to hold steady at 9.7%.

Corporate news: Troubled mortgage lender Freddie Mac (FRE, Fortune 500) reported an $8 billion quarterly loss Wednesday and also said it needs another $10.6 billion from the federal government. The company was put into conservatorship by the government during the height of the financial crisis in 2008, along with its sister company Fannie Mae (FNM, Fortune 500).

World markets: In overseas trading, European markets tumbled, with France's CAC 40 down 2.2%, Germany's DAX down 0.8% and London's FTSE down 1.5%.

Asian markets fell. Japan's benchmark Nikkei index lost 3.3% as investors reacted to the European debt crisis after a long holiday. The Hong Kong Hang Seng lost 1% and the Shanghai Composite lost 1%.

The dollar and commodities: The dollar rallied early versus the euro, with the European currency falling to its lowest level since March of 2009. But by late day, the dollar had turned lower. It also fell versus the Japanese yen.

U.S. light crude oil for June delivery dropped $2.86 to settle at $77.11 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery rose $22.30 to settle at $1,197.30 per ounce.

Bonds: Treasury prices rallied, lowering the yield on the 10-year note to 3.40% from 3.55% Wednesday. Treasury prices and yields move in opposite directions.

-- Staff reporters Hibah Yousuf and Julianne Pepitone contributed to this report. To top of page

Seize BP

The government of the United States must seize BP and freeze its assets, and place those funds in trust to begin providing immediate relief to the working people throughout the Gulf states whose jobs, communities, homes and businesses are being harmed or destroyed by the criminally negligent actions of the CEO, Board of Directors and senior management of BP.

Take action now! Sign the Seize BP petition to demand the seizure of BP!

200,000 gallons of oil a day, or more, are gushing into the Gulf of Mexico with the flow of oil growing. The poisonous devastation to human beings, wildlife, natural habitat and fragile ecosystems will go on for decades. It constitutes an act of environmental violence, the consequences of which will be catastrophic.

BP's Unmitigated Greed

This was a manufactured disaster. It was neither an “Act of God” nor Nature that caused this devastation, but rather the unmitigated greed of Big Oil’s most powerful executives in their reckless search for ever-greater profits.

Under BP’s CEO Tony Hayward’s aggressive leadership, BP made a record $5.6 billion in pure profits just in the first three months of 2010. BP made $163 billion in profits from 2001-09. It has a long history of safety violations and slap-on-the-wrist fines.

BP's Materially False and Misleading Statements

BP filed a 52-page exploration plan and environmental impact analysis with the U.S. Department of the Interior’s Minerals Management Service for the Deepwater Horizon well, dated February 2009, which repeatedly assured the government that it was "unlikely that an accidental surface or subsurface oil spill would occur from the proposed activities." In the filing, BP stated over and over that it was unlikely for an accident to occur that would lead to a giant crude oil spill causing serious damage to beaches, mammals and fisheries and that as such it did not require a response plan for such an event.

BP’s executives are thus either guilty of making materially false statements to the government to obtain the license, of consciously misleading a government that was all too ready to be misled, and/or they are guilty of criminal negligence. At a bare minimum, their representations constitute gross negligence. Whichever the case, BP must be held accountable for its criminal actions that have harmed so many.

Protecting BP's Super-Profits

BP executives are banking that they can ride out the storm of bad publicity and still come out far ahead in terms of the billions in profit that BP will pocket. In 1990, in response to the Exxon Valdez disaster, Congress passed and President Bush signed into law the Oil Pollution Act, which immunizes oil companies for the damages they cause beyond immediate cleanup costs.

Under the Oil Pollution Act, oil companies are responsible for oil removal and cleanup costs for massive spills, and their liability for all other forms of damages is capped at $75 million—a pittance for a company that made $5.6 billion in profits in just the last three months, and is expected to make $23 billion in pure profit this year. Some in Congress suggest the cap should be set at $10 billion, still less than the potential cost of this devastation—but why should the oil companies have any immunity from responsibility for the damage they cause?

The Oil Pollution Act is an outrage, and it will be used by BP to keep on doing business as usual.

People are up in arms because thousands of workers who have lost their jobs and livelihoods as a result of BP’s actions have to wait in line to compete for lower wage and hazardous clean-up jobs from BP. BP’s multi-millionaire executives are not asked to sacrifice one penny while working people have to plead for clean-up jobs.

Take Action Now

It is imperative that the government seize BP’s assets now for their criminal negligence and begin providing immediate relief for the immense suffering and harm they have caused.

Times Square Bomber Linked With CIA-Controlled Terror Group

Sheik Mohammed Rehan, who was arrested on Tuesday in Karachi, “Allegedly drove with Shahzad from Karachi to Peshawar on July 7, 2009, in a pickup truck, authorities said. They returned to Karachi July 22. It is not known why they went to Peshawar and whether they met with anyone there,” reports the L.A. Times.

Rehan is a member of the militant group Jaish-e-Muhammad, a terrorist organization that came to prominence in the mid-1990’s and has been involved in attacks in the disputed Kashmir border region between India and Pakistan. The group also helped carry out the December 2001 attack on the Indian Parliament which brought India and Pakistan to the brink of nuclear war, tensions that proved very lucrative for British and American arms manufacturers who sold weapons to both sides.

“The December 2001 terrorist attacks on the Indian parliament — which contributed to pushing India and Pakistan to the brink of war — were conducted by two Pakistan-based rebel groups, Lashkar-e-Taiba and Jaish-e-Muhammad, both of which are covertly supported by Pakistan’s ISI,” writes Michel Chossudovsky. “Needless to say, these ISI-supported terrorist attacks serve the geopolitical interests of the US. They not only contribute to weakening and fracturing the Indian Union, they also create conditions which favor the outbreak of a regional war between Pakistan and India.”

Jaish-e-Muhammad, the group now emerging in connection with the Times Square incident, was founded by Ahmed Omar Saeed Sheikh, the 9/11 bagman who delivered $100,000 from the United Arab Emirates to Mohammed Atta at the behest of General Mahmud Ahmed, then head of the ISI. Mahmud Ahmed, the man who ordered Ahmed Omar Saeed Sheikh to bankroll the attacks on the Pentagon and the World Trade Center, was meeting with Republican Congressman Porter Goss and Democratic Senator Bob Graham in Washington DC on the morning of 9/11. In the days before and after the attack, Ahmed also met with CIA Head George Tenet as well as current Vice-President Joe Biden, then Chairman of the Senate Foreign Relations Committee.

In a report on Jaish-e-Muhammad’s involvement in the murder of Daniel Pearl, who was investigating the ISI, the Pittsburgh Tribune-Review reported that the Pakistani government, “Believe that Saeed Sheikh’s power comes not from the ISI, but from his connections with our own CIA.”

Former Pakistan President Pervez Musharraf also alleged that Sheikh was recruited by MI6 while studying in London for the effort to destabilize Bosnia. During the 1992-1995 Bosnia conflict, the CIA helped Osama Bin Laden and Al-Qaeda to train and arm Bosnian Muslims.

In 2002, the London Times reported that Sheikh “is no ordinary terrorist but a man who has connections that reach high into Pakistan’s military and intelligence elite and into the innermost circles of Osama Bin Laden and the al-Qaeda organization.”

Despite Sheikh’s intimate involvement in numerous acts of terror as well as political kidnappings, including the 2008 Mumbai massacre, he was protected by both the CIA and British intelligence at every turn.

To recap, this is the man who founded the group now emerging in connection with the botched Times Square bombing – a CIA and MI6 asset.

“Experts believe Jaish-e-Muhammad still benefits from links with Pakistan’s powerful government intelligence community. Some experts believe Pakistan’s Inter-Services Intelligence agency facilitated the group’s formation,” states yesterday’s L.A. Times article.

As the vast majority of geopolitical analysts concur, the Pakistani ISI is virtually nothing more than a CIA outpost. The ISI does nothing without the Agency giving its approval. The CIA has paid millions of dollars to the ISI since 9/11, accounting for no less than a third of the ISI’s entire budget, despite the foreign spy agency’s notorious history of funding and arming terrorist groups like Jaish-e-Muhammad and despite the fact that it bankrolled the 9/11 hijackers.

Since the CIA has its fingerprints all over almost every Middle Eastern terror group, it’s unsurprising that an Agency connection to the Times Square bomber has come to light. We’ve never come across a terrorist who wasn’t trained, equipped, radicalized, entrapped, or provocateured by a western intelligence agency or a terror group controlled by a western intelligence agency.

Source: Prison Planet