One raw day in early February, Vicki Valentine stood by helplessly as real estate investors snatched her West Baltimore home over what began with an unpaid city water bill of $362.
As snow threatened to fall, she watched a work crew hired by the new owners punch out the lock on her front door. A sheriff’s deputy was on the scene while Valentine and her teenage son piled whatever they could into a borrowed car.
Running out of time, Valentine scrambled to pack up clothing and mementos. The home had been her family’s for nearly three decades, and her father had paid off the mortgage in 1984. “It’s hard to say goodbye to this house,” she said. “It’s like someone forcing you out of something that belongs to you. I don’t get it.”
Valentine lost the two-story brick row home after the city sold her debt to investors through a contentious and byzantine legal process called a “tax sale.” This little-known type of foreclosure can enrich investors as growing numbers of property owners struggle to pay their bills.
These foreclosed homeowners are not the families making headlines for taking on mortgages they could ill afford. Families ensnared in the tax sale sometimes are unable to overcome relatively small debts owed to local tax collectors.
Rather than collect the overdue money they are owed, many local governments are selling tax liens. Buyers range from behemoths such as JPMorgan Chase & Co, and some regional banks and law firms, to small-fry investors lured by late-night television commercials promising quick riches. Investors generally bid in an auction for the right to collect delinquent taxes and other municipal debts on property owners, sometimes by paying only a few hundred dollars. When owners can’t pay, investors can pick up property at bargain prices.
It can be a good deal for everyone except the property owner. Selling the debts to investors can help governments efficiently ease budget woes without having the added expenses of debt collection, foreclosing and being a landlord.
Investors, meanwhile, can rake in hefty profits. That’s because they can tack on fees and steep interest rates, which can amount to 18 percent annually in Baltimore.
In Valentine’s case, legal fees and other charges climbed past $3,600 – nearly 10 times her original bill.
Investors purchased an estimated $30 billion of real estate tax debt held by governments across the country in 2009, double the amount a year earlier, according to the Florida-based National Tax Lien Association. Altogether, 29 states and the District of Columbia can sell tax lien debt to investors.
Lien sales in Baltimore have nearly doubled since the housing bubble of 2006. On Monday, the city sold 12,689 liens – a probable record. Properties ranged from boarded-up shells and vacant lots to row homes in gentrified neighborhoods and some commercial buildings.
Britain's biggest insurer is to impose an 'ash tax' on travellers who fear their holidays may be cancelled.
Just a week before thousands of families jet off on breaks during the school half-term, Aviva has become the first firm to impose the levy.
Other big insurance companies are set to follow suit.
Passengers queue at Heathrow's Terminal 5 this week as volcanic ash continues to cause disruptions. Aviva has imposed an 'ash levy' on passengers who fear their holidays may be at risk
The new add-on policy could cost a typical family an extra £40.
More than 150,000 Britons were stranded overseas in April after UK and many European airports were closed for six consecutive days following eruptions from a volcano in Iceland and the dense plume of ash cloud that spread as a result.
Many travellers incurred additional accommodation and transport bills totalling thousands of pounds, but they returned home to find that insurers and airlines refused to pay back costs.
Rochelle Turner, head of research for Which? Travel, said: 'Travel insurers have not come out of this situation very well, people feel let down by them. From now on travellers that want an assurance that their holiday will be protected from the disruption are going to have to pay extra for that.'
After the first closure of airports a handful offered to make a goodwill gesture to stranded travellers. Many have since made a u-turn on this policy.
Anyone who has booked a holiday since April 15 has been told they will definitely not be be able to claim for delays or cancellations. This is because insurers now deem the ash cloud a 'known event'.
As a result travellers book holidays at their own risk. And from July 1 Aviva has said it will not make any more goodwill payments to travellers.
Continuing threat: Iceland's Eyjafjallajokull is again threatening to cause havoc for holidaymakers
Earlier this week airports across Britain were closed again as the volcanic ash cloud once again encroached on airspace.
Lee Griffin, business development director at financial website GoCompare.com, said: 'Consumers may consider the extra cost to be a bit of an ash tax on this year’s holiday which is well worth paying for the extra peace of mind it brings.
'Travel insurers have been reviewing their wordings and others may well join Aviva in bringing out similar add on policies to cater for this unusual situation.'
The Aviva policy was revealed just 24 hours after new rules proposed tougher tests on whether flights could be grounded by ash.
The insurance, which is valid from June 1, costs £5 extra per person on a single trip policy, and £10 per person for an annual trip policy.
It will pay out up to £5,000 per person for travel and accommodation if a trip is cancelled because an airport is closed for 24 hours from the time of departure.
Those stranded overseas will be able to claim up to £100 a day for a hotel room and expenses - up to a total of £1,500. Or they can claim £1,000 for additional travel expenses.
Aviva travel manager Jerry Finch said: 'The risk of air space closure due to volcanic ash continues to loom large, and may be a risk faced by travellers for the foreseeable future.
'However, this was an event that most travel insurers did not cover – and therefore was never factored into the travel insurance premium.
'Aviva took the proactive decision to offer cover for both customers going on holiday or travelling home. We worked hard to develop this cover quickly to provide specific cover for what was previously an uninsured event.
'This is in direct response to what our customers and the public said they wanted: reasonably priced cover that would allow them to make travel arrangements full in the knowledge that should they get stuck abroad, or find that they could not leave the UK, there would be a clear and easy route to compensation.'
A spokesman for Aviva added: 'People can buy add on cover for golf equipment, or for other sports, now we are offering them cover for the ash cloud. You might not want it if you are just going on holiday in the UK or somewhere by ferry but definitely if you are flying you might think it was something that is useful if they were flying and were worried their holiday might be disrupted.'
Greece is a microcosm of a modern class war rarely reported as such.
As Britain's political class pretends that its arranged marriage of Tweedledee to Tweedledum is democracy, the inspiration for the rest of us is Greece. It is hardly surprising that Greece is presented not as a beacon, but as a "junk country" getting its comeuppance for its "bloated public sector" and "culture of cutting corners" (Observer). The heresy of Greece is that the uprising of its ordinary people provides an authentic hope unlike that lavished upon the warlord in the White House.
The crisis that has led to Greece's "rescue" by European banks and the International Monetary Fund is the product of a grotesque financial system that itself is in crisis. Greece is a microcosm of a modern class war rarely reported as such, but waged with all the urgency of panic among the imperial rich.
What makes Greece different is that it has experienced, within living memory, invasion, foreign occupation, military dictatorship and popular resistance. Ordinary people are not cowed by the corrupt corporatism that dominates the European Union. The right-wing government of Kostas Karamanlis that preceded the present Pasok (Labour) government of George Papandreou was described by the sociologist Jean Ziegler as "a machine for systematically pillaging the country's resources".
Epic theft
The machine had infamous friends. The US Federal Reserve board is investigating the role of Goldman Sachs, which gambled on the bankruptcy of Greece as public assets were sold off and its tax-evading rich deposited €360bn in Swiss banks. This haemorrhaging of capital continues with the approval of Europe's central banks and governments.
At 11 per cent, Greece's budget deficit is no higher than America's. However, when the Papandreou government tried to borrow on the international capital market, it was effectively blocked by the US corporate ratings agencies, which "downgraded" Greek debt to "junk". These same agencies gave triple-A ratings to billions of dollars in so-called sub-prime mortgage securities and so precipitated the economic collapse in 2008.
What has happened in Greece is theft on an epic, though not unfamiliar, scale. In Britain, the "rescue" of banks such as Northern Rock and the Royal Bank of Scotland has cost billions of pounds. Thanks to Gordon Brown and his passion for the avaricious instincts of the City, these gifts of public money were unconditional, and the bankers have continued to pay each other the booty they call bonuses and to spirit it away to tax havens. Under Britain's political monoculture, they can do as they wish. In the US, the situation is even more remarkable. As the investigative journalist David DeGraw has reported, the principal Wall Street banks that "destroyed the economy pay zero in taxes and get $33bn in refunds".
In Greece, as in America and Britain, the ordinary people have been told they must repay the debts of the rich and powerful who incurred them. Jobs, pensions and public services are to be slashed and burned, with privateers put in charge. For the EU and the IMF, the opportunity presents to "change the culture" and to dismantle the social welfare of Greece, just as the IMF and the World Bank have "structurally adjusted" (impoverished and controlled) countries across the developing world.
Greece is hated for the same reason Yugo slavia had to be destroyed physically behind a pretence of protecting the people of Kosovo. Most Greeks are employed by the state, and the young and the trade unions comprise a popular alliance that has not been pacified; the colonels' tanks on the campus of AthensUniversity in 1967 remain a political spectre. Such resistance is anathema to Europe's central bankers and regarded as an obstruction to German capital's need to capture markets in the aftermath of Germany's troubled reunification.
Shock therapy
In Britain, such has been the 30-year propaganda of an extreme economic theory known first as monetarism, then as neoliberalism, that the new Prime Minister can, like his predecessor, describe his demands that ordinary people pay the debts of crooks as "fiscally responsible". The unmentionables are poverty and class.
Almost a third of British children remain below the breadline. In working-class KentishTown in London, male life expectancy is 70. Two miles away, in Hampstead, it is 80. When Russia was subjected to similar "shock therapy" in the 1990s, life expectancy nosedived. In the United States, a record 40 million cannot afford to feed themselves.
In the developing world, a system of triage imposed by the World Bank and the IMF has long determined whether people live or die. Whenever tariffs and food and fuel subsidies are eliminated by IMF diktat, small farmers know they have been declared expendable. The World Resources Institute estimates that the toll reaches between 13 and 18 million child deaths every year. This, wrote the economist Lester C Thurow, is "neither metaphor nor simile of war, but war itself".
The same imperial forces have used horrific weapons against stricken countries where children are the majority, and approved torture as an instrument of foreign policy. It is a phenomenon of denial that none of these assaults on humanity, in which Britain is actively engaged, was allowed to intrude on the British election.
The people on the streets of Athens do not suffer this malaise. They are clear who the enemy is and regard themselves as once again under foreign occupation. And once again, they are rising up, with courage. When David Cameron begins to cleave £6bn from public services in Britain, he will be bargaining that Greece will not happen in Britain. We should prove him wrong.
U.S. Secretary of State Hillary Rodham Clinton waves as she steps down the ramp of a plane upon her arrival at Haneda international airport in Tokyo, Japan, Thursday, May 20, 2010. Clinton's three-nation Asia tour is likely to be dominated by a new crisis with North Korea, this time accused by sinking a South Korean naval ship with a deadly torpedo attack.
U.S. Secretary of State Hillary Rodham Clinton says North Korea must face international consequences for the sinking of a South Korean warship.
Speaking in the Japanese capital, Clinton said Friday that the U.S., Japan, South Korea and China are consulting on an appropriate reaction to an international investigation that blamed North Korea for the incident. She says the report proves a North Korean sub fired a torpedo that sank the ship and that it could no longer be "business as usual" in dealing with the matter.
North Korea denies it was responsible for the March sinking and has threatened to retaliate against any attempt to punish it with "all-out war."
McClatchy's Greg Gordon tells the Real News Network what questions he would ask Goldman Sachs if he were sitting on the Financial Crisis Inquiry Commission.
WASHINGTON — While Goldman Sachs' lawyers negotiated with the Securities and Exchange Commission over potentially explosive civil fraud charges, Goldman's chief executive visited the White House at least four times.
White House logs show that Chief Executive Lloyd Blankfein traveled to Washington for at least two events with President Barack Obama, whose 2008 presidential campaign received $994,795 in donations from Goldman's employees and their relatives. He also met twice with Obama's top economic adviser, Larry Summers.
No evidence has surfaced to suggest that Blankfein or any other Goldman executive raised the SEC case with the president or his aides. SEC Chairwoman Mary Schapiro said in a statement Wednesday that the SEC doesn't coordinate enforcement actions with the White House or other political bodies.
Meanwhile, however, Goldman is retaining former Obama White House counsel Gregory Craig as a member of its legal team. In addition, when he worked as an investment banker in Chicago a decade ago, White House Chief of Staff Rahm Emanuel advised one client who also retained Goldman as an adviser on the same $8.2 billion deal.
Goldman's connections to the White House and the Obama administration are raising eyebrows at a time when Washington and Wall Street are dueling over how to overhaul regulation of the financial world.
Lawrence Jacobs, a University of Minnesota political scientist, said that "almost everything that the White House has done has been haunted by the personnel and the money of Goldman . . . as well as the suspicion that the White House, particularly early on, was pulling its punches out of deference to Goldman and its war chest.
"There's now kind of a magnifying glass on the administration for any sign of interference or conversations with the regulators and the judiciary," Jacobs said.
The SEC investigation of Goldman's dealings lasted 18 months and culminated with the SEC filing civil fraud charges against the investment bank last week.
According to White House visitor logs, Blankfein was among the business leaders who attended an Obama speech on Feb. 13, 2009, and he also joined more than a dozen bank CEOs in a meeting with Obama on March 27, 2009.
Blankfein also was supposed be among the CEOs who met with Obama in December, but he and two others phoned in from New York, blaming inclement weather.
He and his wife, Laura, were listed on the logs among 438 presidential guests at the Kennedy Center Honors the previous week.
The logs also indicate that Blankfein met twice in 2009, on Feb. 4 and Sept. 30, with Summers, who was undersecretary of the Treasury Department during the Clinton administration when it was headed by Robert Rubin, a former Goldman CEO.
Asked whether Goldman executives had talked to administration officials about the SEC inquiry, Goldman spokesman Michael DuVally said that the firm doesn't discuss "what conversations we may or may not have had with government officials."
Schapiro's statement said that she's "disappointed" by Republican rhetoric suggesting that the SEC case against Goldman might have been timed to boost legislative prospects for a financial regulation overhaul bill, which Obama plans to pitch in a speech in New York Thursday.
"We do not coordinate our enforcement actions with the White House, Congress or political committees," Schapiro said. "We do not time our cases around political events or the legislative calendar . . . We will neither bring cases, nor refrain from bringing them, because of the political consequences."
Obama dismissed any such suggestion as "completely false" Wednesday, saying in a CNBC television interview that the SEC "never discussed with us anything with respect to the charges that would be brought."
While describing Craig, his former counsel, as "one of the top lawyers in the country," Obama also said that he'd imposed "the toughest ethics rules that any president's ever had."
"One thing he (Craig) knows is that he cannot talk to the White House," Obama said. "He cannot lobby the White House. He cannot in any way use his former position to have any influence on us."
Goldman's chief spokesman, Lucas van Praag, said the firm "wanted Craig . . . for his wisdom and insight."
Craig, now an attorney with the Washington law firm of Skadden, Arps, Slate, Meagre & Flom, said: "I am a lawyer, not a lobbyist. Goldman Sachs has hired me to provide legal advice and to assist in its legal representation."
Goldman's nearly $1 million in campaign contributions to Obama's presidential campaign were the most from any single employer except the University of California. Still, they represented only a fraction of the more than $700 million that the campaign raised.
"The vast majority of the money I got was from small donors all across the country," Obama told CNBC. "Moreover, anybody who gave me money during the course of my campaign knew that I was on record in 2007 and 2008 pushing very strongly that we needed to reform how Wall Street did business."
One White House insider who knows something about how Wall Street does business is chief of staff Emanuel, who earned millions of dollars in investment banking after he left the Clinton White House. His work for the Chicago-based financial services firm Wasserstein Perella & Co. intersected with Goldman in at least one deal.
In 1999, Emanuel was a key player representing Unicom Corp., the parent of Commonwealth Edison, in forging its merger with Peco Energy Co. to create utility giant Exelon Corp. Goldman was also advising Unicom.
The White House declined immediate comment on that connection.
Several former Goldman executives hold senior positions in the Obama administration, including Gary Gensler, the chairman of the Commodity Futures Trading Commission; Mark Patterson, a former Goldman lobbyist who is chief of staff to Treasury Secretary Timothy Geithner; and Robert Hormats, the undersecretary of state for economic, energy and agricultural affairs.
Jacobs of the University of Minnesota said that the administration now risks "kind of a feeding frenzy."
"The administration has to be very careful," he said, "because . . . they're seen as the ones who bailed out Wall Street. If there are indications that the administration was talking to regulators or to Justice Department people about when and how Goldman or other firms would be investigated, I think that's going to create almost a mob scene."
(Margaret Talev, Steven Thomma and Tish Wells contributed to this article.)
The Senate passed a financial "reform" bill today by a 59-39 vote which won't fix any of the core problems in the financial system, and won't prevent the next financial crisis.
The bill doesn't include the Volcker Rule (it wasn't even debated), doesn't break up or even substantially rein in the too big to fails, doesn't stop prop trading, and doesn't force transparency in the derivatives market.
The bill does not eliminate the risk to our economy posed by "too big to fail" financial firms, nor does it restore the proven safeguards established after the Great Depression, which separated Main Street banks from big Wall Street firms and are essential to preventing another economic meltdown. The recent financial crisis triggered the nation's worst recession since the Great Depression. The bill should have included reforms to prevent another such crisis. Regrettably, it did not.
Senator Cantwell agreed, saying:
While this bill takes much needed steps to help prevent a crisis of this magnitude from ever happening again, it fails to close the very same loopholes in derivatives trading that led to the biggest economic implosion since the Great Depression.... Throughout this debate I have fought hard against efforts to weaken this legislation as well as to pass language to strengthen it further. But the fact of the matter is, without key reforms in derivatives trading, this bill does not safeguard America's economy from a repeat of this crisis.
It sets up a process for responding the next time we have a financial crisis, but it doesn't prevent this kind of thing from ever happening again. We have to stop these kinds of dangerous activities. We need stronger bans on banks gambling with depositors' money. We need bright lines - like Glass-Steagall - that separate risky activities from the traditional banking system. We need to refocus our financial system away from synthetic bets and get more capital into the hands of job creators and Main Street businesses. There are good, strong provisions in this bill, and I'm proud of the work we did to get them in there, but I fear that without closing the loopholes primarily responsible for this economic meltdown, we are missing the entire heart of the matter.
Nouriel Roubini said the bill is "cosmetic", and won't stop the next crisis.
In a letter to Senate majority leader Harry Reid and minority leader Mitch McConnell, luminaries including former SEC Chief Accountant Lynn Turner, former Labor Secretary Robert Reich, hedge fund owner Jim Chanos, former Lehman Brothers Vice Chair Peter Solomon, former S&L investigator Bill Black, former Senate Banking Committee Chief Economist Rob Johnson, economists Dean Baker, Barry Eichengreen and others pointed out that Dodd's proposed financial reform legislation wouldn't have prevented the current crisis ... and won't prevent the next crisis.
Dodd himself has admitted that his bill "will not stop the next crisis from coming".
In fact, the bill is wholly ineffective, failing to address the core things which need to be done to stabilize the economy. See this, this and this.
Senator Dodd is trying to push through a financial "reform" which bill won't do anything to break up the too big to fails, or do much of anything at all ...
Just this week, a Moody’s report stated: “…the proposed regulatory framework doesn't appear to be significantly different from what exists today."
***
In sum, little in these reforms is really new and nothing in these reforms will change the size of these mega-banks.
Moreover - as Simon Johnson notes - the bill intentionally doesn't have much in the way of specifics, but just pushes off on regulators the ability to crack down on Wall Street in the future. As Johnson notes, this is a recipe for continued failure to rein in Wall Street:
If legislation can only empower regulators then, given regulators are only as strong a newly elected president wants them to be, the approach in the Dodd bill simply will not work.
Indeed, Democratic Congressman Brad Sherman - a senior member of the House Financial Services Committee and a certified public accountant - said recently:
The Dodd bill has unlimited executive bailout authority. That’s something Wall Street desperately wants but doesn’t dare ask for. The bill contains permanent, unlimited bailout authority.
And as Arthur Delaney points out, the bill is riddled with carve-outs purchased by lobbyists:
"Obtaining a carve-out isn't rocket science," said a Republican financial services lobbyist. "Just give Chairman Dodd [D-Conn.] and Chuck Schumer [D-N.Y.] a shitload of money."
On MSNBC Tuesday morning, Sen. Bob Corker (R-Tenn.), a Banking Committee member who worked closely with Dodd, said there was "no question" that Dodd's draft contained loopholes. Corker mentioned a few hits from the carve-out list: "Private equity firms are left out," he said. "Hedge funds are left out."
The Senate passes the Wall Street Reform Bill (S. 3217) by a 59-39 vote, if it passes the House it will kill jobs by making it difficult for small businesses to succeed and it will give permanent and unlimited bailout authority for the big banks on Wall Street. It would also do nothing to solve problems in the financial system and won’t prevent the next financial crisis.
Republican Senator David Vitter: “Congressional Democrats and the Obama Administration want to create a permanent bailout mechanism all while spouting their rhetoric of getting tough on Wall Street, but if you look at who is already lining up to support their ‘reform’ measure it’s a who’s who of the big banks that have already received the taxpayer bailout the first time.” Democrat Congressman Brad Sherman: “There are serious problems with the Dodd bill. The Dodd bill has unlimited executive bailout authority. That’s something Wall Street desperately wants but doesn’t dare ask for.”
This bill would also break the back of small business by having them register with the SEC to only wait 120 days for the SEC to review their filing. A second provision in the bill raises the wealth requirements for venture capitalists that want to invest in startups – if the bill passes, investors would need assets of more than $2.3 million (up from $1 million) or income of more than $450,000 (up from $250,000). The third restriction removes the federal pre-emption allowing angel and venture financing in the United States to follow federal regulations, rather than face different rules between states.” There’s no doubt about it that the provisions in the bill would absolutely chill investing and small business which is the backbone of our economy. [Source]
The bill doesn’t include the Volcker Rule (it wasn’t even debated), doesn’t break up or even substantially rein in the too big to fails, and doesn’t force transparency in the derivatives market.
The bill does not eliminate the risk to our economy posed by “too big to fail” financial firms, nor does it restore the proven safeguards established after the Great Depression, which separated Main Street banks from big Wall Street firms and are essential to preventing another economic meltdown. The recent financial crisis triggered the nation’s worst recession since the Great Depression. The bill should have included reforms to prevent another such crisis. Regrettably, it did not.
Senator Cantwell agreed, saying:
While this bill takes much needed steps to help prevent a crisis of this magnitude from ever happening again, it fails to close the very same loopholes in derivatives trading that led to the biggest economic implosion since the Great Depression…. Throughout this debate I have fought hard against efforts to weaken this legislation as well as to pass language to strengthen it further. But the fact of the matter is, without key reforms in derivatives trading, this bill does not safeguard America’s economy from a repeat of this crisis.
It sets up a process for responding the next time we have a financial crisis, but it doesn’t prevent this kind of thing from ever happening again. We have to stop these kinds of dangerous activities. We need stronger bans on banks gambling with depositors’ money. We need bright lines – like Glass-Steagall – that separate risky activities from the traditional banking system. We need to refocus our financial system away from synthetic bets and get more capital into the hands of job creators and Main Street businesses. There are good, strong provisions in this bill, and I’m proud of the work we did to get them in there, but I fear that without closing the loopholes primarily responsible for this economic meltdown, we are missing the entire heart of the matter.
Congressmen Brad Sherman and Paul Kanjorski and Senator James Inhofe all say that the government warned of martial law if Tarp wasn't passed. And Rahm Emanuel famously said:
Never let a serious crisis go to waste. What I mean by that is it's an opportunity to do things you couldn't do before.
Last year:
Senator Leahy said "If we learned anything from 9/11, the biggest mistake is to pass anything they ask for just because it's an emergency"
"The rescue is being sold as a must-have emergency measure by an administration with a controversial record when it comes to asking Congress for special authority in time of duress."
***
Mr. Paulson has argued that the powers he seeks are necessary to chase away the wolf howling at the door: a potentially swift shredding of the American financial system. That would be catastrophic for everyone, he argues, not only banks, but also ordinary Americans who depend on their finances to buy homes and cars, and to pay for college.
Some are suspicious of Mr. Paulson’s characterizations, finding in his warnings and demands for extraordinary powers a parallel with the way the Bush administration gained authority for the war in Iraq. Then, the White House suggested that mushroom clouds could accompany Congress’s failure to act. This time, it is financial Armageddon supposedly on the doorstep.
“This is scare tactics to try to do something that’s in the private but not the public interest,” said Allan Meltzer, a former economic adviser to President Reagan, and an expert on monetary policy at the Carnegie Mellon Tepper School of Business. “It’s terrible.”
Not Just Government
But it's not just government . . .
If the too big to fails say that the world economy will crash and there will be martial law unless they are bailed out, politicians - most of whom don't understand finance or economics - will believe them, and sound the alarm themselves.
In the 1974 comedy Blazing Saddles, Cleavon Little plays the new sheriff in an old Western town. The sheriff is African-American, and when he rides into town for the first time, the [racist] townspeople pull out their guns and are about to shoot him.
But he quickly puts a gun to his own head, pretends he's scared of his own gun, and says "BACK OFF OR THE AFRICAN-AMERICAN GUY GETS IT!!!" The townspeople are dumb and fall for it, suddenly terrified that he'll kill himself. Here's the scene.
That's what Wall Street is doing with the bailout.
The fat cats on Wall Street are saying "give us a lot of money, and buy all of our bad debt for a lot more than its worth, or Wall Street will get it and we'll go into a depression!"
Are Americans stupid enough to fall for it?
In a recent interview, William K. Black uses the exact same Blazing Saddles sheriff-bank analogy.
Miles Kendig has a different - but parallel - analogy for the giant banks:
In essence, what we have here folks is a characterization of the banks and the government that has assumed the risk profile of these banks as some sort of 1,000 pound men, unable to move without assistance. They have suckered everyone else into the idea that if anything is done to move these overweight, unhealthy "persons" to health they will have a heart attack and kill us all since they sit upon the crossroads of commerce and have sold most folks the idea that they are the heart of the nation and indeed the world. Given these "objective" circumstance the government is not only beholden to the 1,000 pound persons, but is one of them itself, will do everything to make the rest of us carry them so as to save them the indignity of actually addressing their morbid obesity and the cycle of codependency that enables them all to remain so fat.
Any way you look at it, the too big to fails are not needed and they are dragging our economy into a black hole. Like the sheriff in Blazing Saddles or Kendig's 1,000 pound men, they are playing us for fools.
[Yves Smith] shared another analogy with me: a man with 15lbs. of Semtex strapped to his waist. She says "any surprise people in the vicinity are very attentive to his desires?"
The vote was another victory for the Fed, which months ago faced one of the biggest challenges to its power and independence in its 96- year history as lawmakers responded to public anger over bailouts of Wall Street firms. The amendment Ensign supported was included in the financial regulatory bill the Senate approved yesterday.
“The Fed’s authorities seemed to be under serious threat,” said David Nason, a former assistant U.S. Treasury secretary who’s now a managing director at Promontory Financial Group LLC, a Washington-based consulting firm. Instead, the Fed “appears to have regained its footing and now appears to be emerging with at least as much authority and likely more.”
***
The Senate bill contains most of what Fed officials sought. In addition to preserving their bank-supervisory powers, it maintains a ban on congressional audits of interest-rate decisions that some lawmakers had sought to strip away.
***
The outcome puts Fed Chairman Ben S. Bernanke in a stronger position to withdraw record monetary stimulus as the economy recovers ...
And Tyler Durden provides details of how the Fed blackmailed Congress into expanding the Fed's powers:
A reader provides us with the following letter he received from Senator Mikulski in response to dissatisfaction expressed about Bernanke's reconfirmation. The response from the Senator demonstrates [that the Fed is pressuring] gullible and incompetent senators ... to pass law after law that is only in the Fed's, and thus Wall Street's interests, as the alternative would always be a "market nose dive" ....
Thank you for getting in touch with me about Ben Bernanke's nomination to chair the Federal Reserve. It's great to hear from you.
***
I was advised that rejecting his nomination would cause markets to nose dive, which would hurt retirees and families saving for their future. I am not enthusiastic in my support. But I think Mr. Bernanke understands the job that he still has to do.
***
Sincerely, Barbara A. Mikulski United States Senator
And for the counterpoint, here is an example of a Senator who does not fall for the Fed's racket:
Dear Friend:
Thank you for contacting me. I appreciate hearing your thoughts about President Obama's decision to nominate Ben Bernanke for another four-year term as Chairman of the Federal Reserve (the Fed). I voted against approving Mr. Bernanke, who was nevertheless confirmed by the Senate by a vote of 70-30.
***
While I have heard the concerns of many that the failure to confirm Mr. Bernanke would have damaged the financial markets and jeopardized our economy recovery, I do not believe that anyone, including Mr. Bernanke, is too big to be replaced. We should not hold our economy hostage to the Wall Street threat that total economic collapse is the sure result of not doing everything they want.
Thanks again for contacting me. Please do not hesitate to do so again about this or any other issue that may concern you.
Toxicologist Says Chemicals Harmful, Can Lead To Death
LAFITTE, La. --
More and more stories about sick fishermen are beginning to surface after the oil spill in the Gulf of Mexico.The fishermen are working out in the Gulf -- many of them all day, every day -- to clean up the spill. They said they blame their ailments on the chemicals that BP is using.One fisherman said he felt like he was going to die over the weekend."I've been coughing up stuff," Gary Burris said. "Your lungs fill up."Burris, a longtime fisherman who has worked across the Gulf Coast, said he woke up Sunday night feeling drugged and disoriented."It was like sniffing gasoline or something, and my ears are still popping," Burris said. "I'm coughing up stuff. I feel real weak, tingling feelings."Marine toxicologist Riki Ott said the chemicals used by BP can wreak havoc on a person's body and even lead to death."The volatile, organic carbons, they act like a narcotic on the brain," Ott said. "At high concentrations, what we learned in Exxon Valdez from carcasses of harbor seals and sea otters, it actually fried the brain, (and there were) brain lesions."Rep. Charlie Melancon said he wants something done. He sent a letter to President Barack Obama's administration calling for temporary health care clinics to be set up in the area."There can be immediate attention to any people who feel they have adverse problems caused by the inhalation or exposure to the oil," Melancon said.According to Burris, some equipment was donated to workers in Lafitte, but as far as he can tell BP hasn't added anything to the mix. He said a lot of fishermen are working sick, and they're afraid to speak out because it could cost them."You've got a woman with a baby in the oven, bills due and fishing's closed down," he said. "You're going to do whatever you have to do to look after your family."Burris said that when he went to a doctor after feeling ill on Sunday, the doctor told him his lungs looked like those of a three-pack-a-day smoker, and Burris said he has never smoked.
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A broccoli compound may help prevent or treat breast cancer by targeting cancer stem cells, according to a new study.
Stem cells are the small number of cells that fuel a tumour’s growth.
The study from researchers at the University of Michigan Comprehensive Cancer Center tested sulforaphane, a component of broccoli and broccoli sprouts, in both mice and cell cultures.
Researchers found sulforaphane targeted and killed the cancer stem cells and prevented new tumours from growing.
"Sulforaphane has been studied previously for its effects on cancer, but this study shows that its benefit is in inhibiting the breast cancer stem cells. This new insight suggests the potential of sulforaphane or broccoli extract to prevent or treat cancer by targeting the critical cancer stem cells," says study author Duxin Sun, Ph.D., associate professor of pharmaceutical sciences at the U-M College of Pharmacy and a researcher with the U-M Comprehensive Cancer Center.
Having a close network of family and friends could be your passport to a long and healthy life.
A study of centenarians has revealed that developing close friendships and family ties is key if you want to live to 100.
The researchers quizzed 188 centenarians on the secrets of their staying power. They found that most classed themselves as sociable, open-minded and optimistic.
Only two of the men and women studied were smokers, although 28 per cent were former smokers. Almost all drank alcohol, although only in moderation.
Many were still physically active, with 60 per cent going on regular walks or taking other forms of exercise.
Researcher Robyn Richmond said genetics accounts for just 20 to 30 per cent of a person's chances of living to 100, meaning personality and lifestyle have a major impact.
'Social contact with family and friends is very important,' she said. 'Centenarians have built up strong solid relationships, seeing family, friends and neighbours regularly.
'If they don't have children, if they have very strong connections with their friends or if they are living in a nursing home that gets them doing interesting things with others who live there, they are more likely to live to 100.'
Professor Richmond, of New South Wales University in Sydney, which led the survey, said: 'Low neuroticism is a personality trait.
'They are not prone to negative emotions, so they are not hostile to others, not angry or guilty, not anxious or depressed.
'Centenarians are open to change. They have lived through trials and tribulations. They also tend to be extraverts.
'They are conscientious, which means they follow doctors' advice about a healthy lifestyle.
'Half have a drink each day but none a risky level of alcohol consumption.
'It means even if you have got bad genes but you live a healthy life and stay positive, you could still have a very long life.'
Advances in healthcare and healthier lifestyles means one in eight Britons turning 50 this year is predicted to reach 100.
After dropping 376 points yesterday, the Dow Jones Industrial Average is set to open down 95 points which would put it below the psychologically important 10,000 level. In my previous post, I mentioned that the ‘flash trade’ prices were real and we were heading for a retest of those lows. Currently, the major averages are now trading in oversold territory. That’s the good news. The bad news is that if the February lows are breached, it raises the odds for steeper losses.
Daily chart of the DJIA illustrates the oversold condition.
Facebook users have been warned about a scam which encourages you to click on a link leading to the 'sexiest video ever', but in fact installs malware on the computer.
Thousands of users on the social networking site have been targeted by the new scam which posts a link to a video on a user's newsfeed, addressing the user by name, and then leads to an installation program.
The link reads: 'This is without doubt the sexiest video ever! :P :P :P' and is accompanied by a video entitled 'Candid Camera Prank [HQ]', featuring shots of a busty woman in a bikini and short skirt.
Facebook users are encouraged to click on a 'sexiest video ever' link, which then leads them to download malware
The user is tricked into believing they are downloading a new version of a popular video program, when in fact they are downloading the malware.
The file downloaded also appears to contain adware Hotbar - a toolbar which appears in Internet Explorer and Windows Explorer.
Graham Cluely from security software developer Sophos said: 'Judging by the number of messages posted on Facebook, thousands of people received this attack.
'If you were one of them, you should scan your computer with an up-to-date anti-virus, change your passwords, review your Facebook application settings, and learn not to be so quick as to fall for a simple social engineering trick like this in future.'
Once the link has been clicked on, it is then posted on that user's newsfeed - causing the virus to spread virally throughout the website.
THE PRESIDENT: Good afternoon, everybody. I want to say a few words about the vote on financial reform in the Senate today.
I’ve said many times that the recession we’re emerging from was primarily caused by a lack of responsibility and accountability from Wall Street to Washington. It’s part of the reason our economy nearly collapsed. It’s what led to countless home foreclosures, the failure of community banks and small businesses, and a cascade of job losses that have left millions of Americans out of work. And that's why I made passage of Wall Street reform one of my top priorities as President -– so that a crisis like this does not happen again.
Over the last year, the financial industry has repeatedly tried to end this reform with hordes of lobbyists and millions of dollars in ads. And when they couldn’t kill it, they tried to water it down with special interest loopholes and carve-outs aimed at undermining real change.
Today, I think it’s fair to say that these efforts have failed. Today, Democrats and a handful of Republicans in the Senate have voted to break the filibuster and allow a final debate and vote on financial reform -- reform that will protect consumers, protect our economy, and hold Wall Street accountable. I want to thank Senator Chris Dodd and Majority Leader Reid for their leadership on this legislation, as well as all the senators who put partisan posturing aside in allowing a vote on this important reform. And I want to thank every American who kept the pressure on Washington to change a system that worked better for banks on Wall Street than it did for families on Main Street.
Now, we’ve still got some work to do. Soon we’re going to have a final vote in the Senate, and then the House and the Senate will have to iron out the differences between the two bills. And there’s no doubt that during that time, the financial industry and their lobbyists will keep on fighting. But I will ensure that we arrive at a final product that is both effective and responsible -– one that holds Wall Street to high standards of accountability and secures financial stability, while preserving the strength and crucial functions of a financial industry that is central to our prosperity and our ability to innovate and compete in a global economy.
Our goal is not to punish the banks, but to protect the larger economy and the American people from the kind of upheavals that we’ve seen in the past few years. And today’s action was a major step forward in achieving that goal.
Because of Wall Street reform, we’ll soon have in place the strongest consumer protections in history. If you’ve ever applied for a credit card, a student loan, or a mortgage, you know the feeling of signing your name to pages of barely understandable fine print. It’s a big step for most families, but one that’s often filled with unnecessary confusion and apprehension. As a result, many Americans are simply duped into hidden fees and loans they just can’t afford by companies that know exactly what they’re doing.
Those days will soon end. From now on, every consumer will be empowered with the clear and concise information that you need to make financial decisions that are best for you. This bill will crack down on predatory practices and unscrupulous mortgage lenders. It will enforce the new credit card law we passed banning unfair rate hikes, and ensure that folks aren’t unwittingly caught by overdraft fees when they sign up for a checking account. It will give students who take out college loans information and make sure lenders don’t cheat the system. And it will ensure that every American receives a free credit score if they are denied a loan or insurance because of that score.
Because of financial reform, the American people will never again be asked to foot the bill for Wall Street’s mistakes. There will be no more taxpayer-funded bailouts -- period. If a large financial institution should ever fail, we will have the tools to wind it down without endangering the broader economy. And there will be new rules to prevent financial institutions from becoming “too big to fail” in the first place, so that we don’t have another AIG.
Because of reform, the kinds of complex, backroom deals that helped trigger the financial crisis will finally be brought to the light of day. And from now on, shareholders will have greater say on the pay of CEOs and other executives, so that they can reward success instead of failure, and help change the perverse incentives that encouraged so much reckless risk-taking in the first place.
So, in short, Wall Street reform will bring greater security to folks on Main Street -- to families who are looking to buy their first car or their first home; to taxpayers who shouldn’t have to pay for somebody else’s irresponsibility; to small businesses and community banks who play by the rules; and to shareholders and investors who want to see their companies grow and thrive.
But let me stress that this is not a zero-sum game where Wall Street loses and Main Street wins. As we’ve learned, in today’s economy, we’re all connected. When the economy prospers, we all win. When the financial sector operates under sound rules of the road to ensure fairness and stability, we all win. Every American has an interest in a healthy financial sector. But for that reason, it’s also imperative that those in Wall Street boardrooms and on trading floors be held accountable for the decisions that they make. For behind every dollar traded or leveraged on Wall Street, there is a family looking to buy a house, pay for an education, open a business, or save for retirement.
And the reform I sign will not stifle the power of the free market -- it will simply bring predictable, responsible, sensible rules into the marketplace. Unless your business model is based on bilking your customers and skirting the law, you should have nothing to fear from this legislation.
As we continue to emerge from this recession, this reform is one important step that will strengthen our economy. And despite the ups and downs associated with a recovery, that economy is getting stronger by the day. It’s an economy that’s growing again. Last month, we added jobs -- the fourth straight month of job growth and the largest increase in four years. And we’re working closely with our G20 partners around the world to ensure that growth is balanced and sustained.
I also said when I took office that we can’t simply rebuild this economy on the same pile of sand -- on maxed-out credit cards or housing bubbles or reckless risk-taking on Wall Street. We’re going to have to build it on a firmer, stronger foundation for economic growth. That’s why we invested in renewable energies that currently have the potential of creating new jobs all across America. That’s why we’re reforming our education system so that our workers can compete on the global stage. That’s why we passed health care reform that will lower costs for families and businesses. And that’s why we’re about to pass financial regulatory reform -- to protect consumers and ensure that we don’t have another crisis caused by the irresponsibility of a few.
Along with the steps we’re taking to spur innovation and encourage hiring and rein in our deficits, that is how we will ultimately build an economy that is stronger and more prosperous than it was before.
