Wednesday, May 4, 2011
Pa. suit: Furniture rental co. spies on PC users
PITTSBURGH — A major furniture rental chain provides its customers with computers that allow it to track keystrokes, take screenshots and even snap webcam pictures of renters using the devices at home, a Wyoming couple said in a lawsuit Tuesday.
Computer privacy experts said the firm has the right to equip its computers with software it can use to shut off the devices remotely if customers stop paying their bills, but they must be told if they're being monitored.
"If I'm renting a computer ... then I have a right to know what the limitations are and I have a right to know if they're going to be collecting data from my computer," said Annie Anton, a professor and computer privacy expert with North Carolina State University.
But the couple who sued Atlanta-based Aaron's Inc. said they had no clue the computer they rented last year was equipped with a device that could spy on them. Brian Byrd, 26, and his wife, Crystal, 24, said they didn't even realize that was possible until a store manager in Casper came to their home on Dec. 22.
The manager tried to repossess the computer because he mistakenly believed the Byrds hadn't paid off their rent-to-own agreement. When Brian Byrd showed the manager a signed receipt, the manager showed Byrd a picture of Byrd using the computer — taken by the computer's webcam.
Byrd demanded to know where the picture came from, and the manager "responded that he was not supposed to disclose that Aaron's had the photograph," the lawsuit said.
Aaron's, which bills itself as the nation's leader in the sales and lease ownership of residential furniture, consumer electronics and home appliances, said the lawsuit was meritless. It said it respects its customers' privacy and hasn't authorized any of its corporate stores to install the software described in the lawsuit.
Byrd told The Associated Press by telephone the day before the suit was filed Tuesday in U.S. District Court in Erie that he believes the store manager showed him the picture because he "was just trying to throw his weight around and get an easy repossession."
That's when the Byrds contacted police, who, their attorney said, have determined the image was shot with the help of spying software, which the lawsuit contends is made by North East, Pa.-based Designerware LLC and is installed on all Aaron's rental computers. Designerware is also being sued.
"It feels like we were pretty much invaded, like somebody else was in our house," Byrd told the AP. "It's a weird feeling, I can't really describe it. I had to sit down for a minute after he showed me that picture."
Aaron's, which also manufactures furniture and bedding, said it believes that none of its more than 1,140 company-operated stores had used Designerware's product or had done any business with it.
Aaron's, with more than 1,800 company-operated and franchised stores in the United States and Canada, said the Byrds leased their computer from an independently owned and operated franchisee.
Tim Kelly, who said he's one of the owners of Designerware, said he wasn't aware of the lawsuit and declined to comment.
Two attorneys who are experts on the relevant computer privacy laws, the Electronic Communications Privacy Act and the Computer Fraud and Abuse Act, said it's difficult to tell if either was broken, though both said the company went too far.
Peter Swire, an Ohio State professor, said using a software "kill switch" is legal because companies can protect themselves from fraud and other crimes.
"But this action sounds like it's stretching the self-defense exception pretty far," Swire said, because the software "was gathering lots of data that isn't needed for self-protection."
Further, Swire said the Computer Fraud and Abuse Act "prohibits unauthorized access to my computer over the Internet. The renter here didn't authorize this kind of access."
Fred Cate, an information law professor at Indiana University agrees that consent is required but said the real question might be: "Whose consent?"
Courts have allowed employers to record employee phone calls because the employers own the phones. Similar questions arise as digital technology becomes more omnipresent, Cate said.
"Should Google let you know they store your search terms? Should Apple let you know they store your location? Should your employer let you know 'We store your e-mail?'" Cate said.
If the Byrds' claims are true, Cate said Aaron's made an error in not notifying customers.
"We always talk about deterrence value. Well it doesn't make sense to put (the software) on there" without telling people what it can do," Cate said. "That's why we all put alarm signs in front of our houses, even if we don't have alarms."
According to the lawsuit, the PC Rental Agent product includes components soldered into the computer's motherboard or otherwise physically attached to the PC's electronics. It therefore cannot be uninstalled and can only be deactivated using a wand, the suit said.
The couple's attorney, John Robinson, of Casper, said the computer is currently in police evidence. Prosecutors in Natrona County, Wyo., did not immediately return a call about the progress of any criminal investigation.
The Byrds want the court to declare their case a class action and are seeking unspecified damages and attorneys' fees. The privacy act allows for a penalty of $10,000 or $100 per day per violation, plus punitive damages and other costs, the lawsuit said.
"Crystal gets online before she gets a shower and checks her grades," Brian Byrd said. "Who knows? They could print that stuff off there and take it home with them."
He added: "I've got a 5-year-old boy who runs around all day and sometimes he gets out of the tub running around for 20, 30 seconds while we're on the computer. What if they took a picture of that? I wouldn't want that kind of garbage floating around out there."
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Martin Weiss: U.S. Ranks 33rd Out Of 47 Nations For Credit Risk, Earns 'C' Rating (Video)
http://tinyurl.com/3sbk26k
America's rating was ranked 33rd out of 47 nations, according to Weiss, which began tracking sovereign debt last year. France and Japan also got a "C" rating, while Only China and Thailand received an "A" rating.
Weiss Ratings based its score purely on statistics, and does not take into account qualitative factors such as political stability.
Zuckerman Rips Obama For Failed Deficit Leadership: "The U.S. Is A Ponzi Scheme That Sooner Or Later Will Blow Up"
http://tinyurl.com/3cq5lwn
Video - May 3 (Bloomberg) - Mortimer Zuckerman
Zuckerman is a Democrat who supported Obama, and this isn't the first attack. Watch the first 2 minutes. Morty calls for cuts to defense in addition to means testing medicare.
US Debt Rating Should Be ‘C’: Independent Agency
There have been increasing concerns about the fate of United States’ prized triple-A sovereign debt rating. While Standard and Poor’s recently downgraded its U.S. debt outlook to negative from stable, implying that a ratings cut could happen in two years, one independent ratings agency has given the U.S. sovereign rating a “C”.
“A ‘C’ is equivalent to approximately a triple-B on the S&P, Moody’s and Fitch scales. It’s two notches above junk and one notch above the equivalent of a single A,” Martin Weiss, President of Weiss Ratings, told CNBC Tuesday.
Banks don't look at names, signatures on cheques
A group of B.C. condominium owners is upset Canada's largest credit union allowed the treasurer of their complex to cash about $50,000 in cheques that were payable to others.
"It just upsets me that this much money could be taken … that one person could do this over the years and get away with it," said Don Wright, the current treasurer of the strata, or condo association.
Records suggest Vancity credit union allowed the treasurer to deposit numerous cheques into his personal account.
Some of the cheques were written to the Maple Ridge, B.C., association. Some were written to other parties, on the association's chequing account.
None of the cheques was payable to the treasurer, but all were deposited into his account over a 10-year period.
"He endorsed them as if they were written to him — and put his own bank account number on the back," Wright said. "The longer he got away with it, the larger the amounts of money that he stole."
Standard practice
The deposits were made at Vancity automated bank machines. Vancity told CBC News it is standard practice for Canadian banks and credit unions not to verify or even look at payee names, signatures or endorsements on cheques deposited through ABMs.
"That process isn't meant to look at the name on the cheque. The name on the cheque — when it doesn't match the name on the account — could be a legitimate transaction …payable to a third party."
When asked if Vancity looks to see whether those third-party cheques are properly endorsed, Khalik said: "It goes back again when you are processing hundreds of thousands of cheques on a daily basis. The system isn't meant to check that."
Khalik confirmed Vancity staff who count and bundle cheques from ABMs only look at the amounts payable. The cheques are then couriered to central clearing centres, where the amounts are transferred between banks electronically.
"Every single financial institution uses the same system," Khalik said.
Cheque fraud 'huge'
Kalik said cheque fraud is a huge problem, which financial institutions encounter daily.
For example, 3,277 mailbox thefts were reported to Canada Post in 2010 — and cheques are one thing thieves look for. In Ontario, members of an alleged theft ring were convicted recently after stealing $1 million worth of cheques from mailboxes.
CBC News did its own test by depositing a bogus $100 cheque, written to "Richard Smith," into a female staffer's personal account at TD Canada Trust through an ABM. The cheque cleared in two days, with no questions asked by the bank.
"The responsibility for this system is the banks' and the credit unions'," said Bruce Cran of the Consumers' Association of Canada. "They do this because it's less expensive for them than checking all the signatures on cheques."
"Something should be done to correct this, because who knows how many people are being robbed," Wright said.
The cheque ordeal for the condo owners began when a resident called the current president, Keith Henrey, to ask about a move-in fee she had paid to the association. Henrey said he told her the strata didn't have such a fee.
When the group discovered her "move-in fee" cheque had been deposited into the treasurer's personal account, the owners started digging through records and found 10 years worth of cheques they say were cashed fraudulently.
Wright said the condo association is small and self-managed, and the owners trusted that the resident treasurer was handling the money properly.
"This is a seniors complex," Wright said. "Everyone here is limited in their funds."
Henrey said the group went to the RCMP but was told charges might not be laid for months, if at all. The police and a lawyer suggested the group confront the treasurer directly, Henrey said, and ask him to pay back the money voluntarily.
Half the money recovered
The treasurer paid back $25,000 and moved out of the complex. The association dropped plans to pursue charges, Henrey said, but the owners are still not pleased with Vancity.
"How can this person get away with this for 10 years?" Wright asked. "We can't understand how they can let that many cheques go through that didn't belong to that person."
The Canadian Payments Association, which sets cheque-clearing rules for all financial institutions, told CBC News the depositor's bank is financially responsible for reimbursing funds paid out, if that institution fails to verify a cheque's authenticity.
"Essentially, the bank (credit union) that accepts a cheque on deposit (the collecting FI) is responsible for ensuring that the depositor has the "authority" to deposit the cheque," spokesperson Geoffroi Montpetit wrote by email.
"It is a business decision (risk assessment) on the part of each collecting financial institution to determine what effort it will undertake to do "checks" on deposited items."
Henrey said Vancity did little to help, though, when the group complained to a manager at the treasurer's branch. He refused to tell the association whose account the cheques had gone into, citing privacy, Henrey said.
"They were not helpful at all," he said. "They said 'you have to go to your own credit union.'
CPA rules indicate it would be up to the strata's credit union to initiate an investigation and then go after Vancity for reimbursement. Henrey said the group was told it would need signed affidavits for every cheque, stating it was cashed improperly. That would involve tracking down several people, named as payees.
"If we retrieved $4,000, it would cost $5,000 for the lawyer to do the affidavits," Henrey said.
Vancity expresses sympathy
He said the group dropped plans for legal action when it discovered how complicated it would be, and it has since had to raise condo fees.
"Why can't [Vancity] hire somebody who is going to look after situations like this?" Henrey asked. "I think the whole system is wrong — that the banks allow situations like this to happen."
"We need to investigate the matter," Khalik said. "Obviously, this is a really unfortunate situation. We sympathize with the situation, and we will do our utmost to do the right thing."
The Canadian Banker's Association told CBC News that consumers should choose electronic banking over cheques whenever possible.
"Unfortunately, there have always been, and always will be, individuals who attempt to perpetrate criminal activities such as fraud, and we understand the difficulties that this can cause for victims," wrote CBA spokesperson Andrew Addison.
"We also strongly encourage clients to use electronic payment options wherever possible. They are faster and more secure than paper-based payment products."
A Casual Relationship with the Truth at Guantanamo
There was a champagne brunch at the US military's Bayview Restaurant in Guantanamo on Easter Sunday -- $14.95 a person, with a view of the bay included. Before the brunch, the soldiers' families met for an Easter egg hunt on the golf course, near the white officers' houses with their manicured front lawns. Inflatable castles were set up for the children.
It is a place that has become a symbol worldwide for the failure of a modern constitutional state -- and its weekend activities are reminiscent of a Mediterranean resort hotel. The military base has one of the best funded programs for "Morale, Recreation and the Common Good," including a range of activities more commonly found at a Club Med, like Pilates and belly-dancing lessons, angling, paintball and Ironman competitions.
According to the Joint Task Force Guantanamo's Facebook page, "it's never hard for Guantanamo residents to have fun while keeping in shape." The Guantanamo Triathlon, in which contestants swim 180 meters (200 yards), bike 16 kilometers (10 miles) and run five kilometers, was held in April. The winner was Tom Fisher of the Coast Guard Running Club, with an outstanding time of less than an hour.
Better Staffing than a Five-Star Hotel
There are precisely 172 detainees still being held at the prison camp in the Caribbean, down from a one-time high of 779. About 30 of them are likely to be put on trial, and there are an estimated 49 that the Americans would prefer to lock up for life without trials. The rest could be released -- if there were countries willing to accept them.
The Joint Task Force has 1,300 soldiers working at Guantanamo, a staffing level that exceeds that of any five-star hotel. The trial of Khalid Sheikh Mohammed and Ramzi Binalshibh, the two masterminds of the Sept. 11 attacks, along with three other prisoners is set to begin this year. The date hasn't been scheduled yet.
In early April, US Attorney General Eric Holder announced that the 9/11 trials would take place before the controversial military tribunals in Guantanamo after all, and not before a US federal court in New York, as had previously been planned. The change came at the behest of Congress, which refused to allow the trials in New York.
That, though, was the last that was heard from Guantanamo -- until last week, when 765 classified documents from the prison camp were published. The whistleblower website WikiLeaks had made the documents available to the international media, including SPIEGEL.
The documents, so-called "Detainee Assessments" from the years 2001 to 2009, encompass several thousand pages and disclose countless new details on the whereabouts of the al-Qaida leadership since Sept. 11, 2001, as well as information about plans for further attacks.
'Ignorance, Incompetence and Arbitrariness'
Most of all, however, they draw a devastating picture of the treatment of evidence and witness statements at Guantanamo. The documents show that suppositions and statements from anonymous sources are repeatedly treated as incontrovertible facts. There is nothing to indicate that there was any effort to separate facts and rumors. "The documents are evidence of ignorance, incompetence and arbitrariness. Guantanamo comes across as the Kafkaesque machinery of suspicion," says Bernhard Docke, the attorney of former Guantanamo detainee Murat Kurnaz.
The problem at Guantanamo was the mingling of intelligence activities and prosecutors' investigations, says military prosecutor Stuart Couch. "Prosecutors need historical facts as evidence to prove who did what and when," Couch said at a speech at Berlin's Humboldt University. "If that 'evidence' is obtained by coercion applied during the intelligence-gathering process, there is a huge risk that, at best, the prosecution's case falls apart or, at worst, an unjust conviction can occur."
The documents clearly show that the Guantanamo system could only sustain itself with continuous overstatement. How else is it possible that prisoner number US9CD-000269, Salih al-Qarani, is described in his file as an active member of a London al-Qaida cell, even though, as his attorney has demonstrated, he was only 11 at the time of his suspected terrorist activities?
And how is it possible that another document refers to a "Bremen cell," something German authorities have never heard of? The interrogators also failed to protect the detainees against false statements by other prisoners. In fact, they willingly included them in their dossiers. "There were several cases in which incriminating statements were made by inmates known to be unreliable," says the former chief prosecutor at Guantanamo, Morris Davis, who has since resigned.
Credibility Never Questioned
As the detainee assessments show, the allegations against 255 prisoners are based solely on the statements of eight fellow prisoners. The credibility of these "turncoats" was apparently never questioned.
The interrogators also did not protect the detainees against themselves, as in case of Ahmed Rachidi, a Moroccan who once lived in London. When asked whether he knew al-Qaida leader Osama bin Laden, Rachidi, who is manic-depressive, replied that he had worked for Osama and that he, Rachidi, had been the "general." Rachidi, who was treated at London mental institutions in the past, also said that a snowball would soon swallow the Earth.
The documents indicate that the investigators knew about the man's condition since 2002 and that he had even received treatment for it -- and yet they kept him in Guantanamo for another five years. According to the 2004 risk assessment, he was classified as a "high-risk" threat. The Guantanamo interrogators apparently ignored the fact that throughout the time he was supposedly in Afghanistan, learning how to make bombs, Rachidi had actually worked as a cook in London restaurants, including the Hard Rock Café.
Cooking for the Jihad
Statements by the architect of the 9/11 attacks, Khalid Sheikh Mohammed, who proudly told his interrogators about many other attack plans, seem much more credible. One of his plans was to attack London's Heathrow Airport with an airliner, while another aircraft, with two "shoe bombers" on board, was to be flown into the tallest building in California. Mohammed also had plans to strike the White House and the headquarters of both the CIA and the FBI. Other plans involved cutting the steel cables that support the Brooklyn Bridge in New York, crashing an aircraft into a US warship in the port of Dubai and unleashing a "nuclear inferno" in the United States.
After the meeting Binalshibh traveled to Kandahar, where he met senior al-Qaida member Saif al-Adl, who was partly responsible for the 1998 attacks on US embassies in West Africa. Adl drafted the 9/11 coordinator into kitchen duty, and for the next two weeks Binalshibh helped out in a field kitchen to supply food for al-Qaida fighters on the front.
Apparently even the life of a successful jihad fighter isn't always easy.
Translated from the German by Christopher Sultan
U.S. to Take ‘Extraordinary’ Steps as It Nears Debt Ceiling
By Jeffrey Sparshott
The U.S. this week will start taking “extraordinary” steps to extend the federal government’s authority to borrow funds as it nears the national debt ceiling, Treasury Secretary Timothy Geithner said Monday.
Geithner early last month told lawmakers that the U.S. would hit the debt ceiling by May 16 and could default as soon as July 8.
“Because it appears that Congress will not act by May 16, it will be necessary for the Treasury to begin implementing these extraordinary measures this week,” Geithner said in letters to House and Senate leaders.
The latest steps will buy politicians more time than initially anticipated. Instead of running out of room July 8, Geithner said the Treasury Department now expects to be able to continue borrowing funds until Aug. 2.
“While this updated estimate in theory gives Congress additional time to complete work in increasing the debt limit, I caution strongly against action,” Geithner said.
Geithner has repeatedly asked Congress to raise the $14.294 trillion limit, warning that failure to act would force a U.S. default and an economic catastrophe.
Many Republicans and some Democrats first want a commitment to rein in spending and cut mounting budget deficits.
“I am not going to vote for any long-term extension of the debt [ceiling] unless there is a credible and serious plan to deal with the debt,” Sen. Kent Conrad (D., N.D.), chairman of the Senate Budget Committee, said on Fox News Sunday.
Geithner said the Treasury Department now expects to be able to continue borrowing funds until Aug. 2.
“While this updated estimate in theory gives Congress additional time to complete work on increasing the debt limit, I caution strongly against delaying action,” Geithner said.
Further measures would follow May 16. Geithner said he would declare a debt issuance suspension period for the Civil Service Retirement and Disability Fund, which would permit the Treasury to redeem existing Treasurys and suspend issuing new ones.
Treasury also would suspend daily reinvestment of Treasurys held as investments by the Government Securities Fund for the federal employees’ thrift plan.
Treasury also could later suspend daily reinvestment by the Exchange Stabilization Fund.
As of Thursday, total public debt subject to the limit was $14.231 trillion, leaving little headroom for the federal government.
After the extraordinary measures are exhausted, Geithner has warned that the government would stop or delay military salaries, Social Security and Medicare payments, interest on the debt and unemployment benefits.
Trading Securities AND Ferraris Inside the Bear Stearns Boiler Room - William Cohan
When the first jet hit the World Trade Center towers on the morning of September 11, 2001, Jimmy Cayne, then chairman and CEO of Bear Stearns, turned on a small television in his midtown Manhattan office and watched in disbelief as the second jet hit the south tower. Later in the day, Cayne got a call from Richard Grasso, then CEO of the New York Stock Exchange, telling him that it was important to the United States government that the exchange reopen as quickly as possible. To that end, Grasso said there would be a meeting the next morning at the stock exchange among the heads of all the Wall Street firms.
When Cayne woke up the next morning, he saw on the news that New York City had closed off access to lower Manhattan below 15th Street, including the New York Stock Exchange. Cayne called Grasso at home and offered to host the meeting instead at Bear Stearns. Grasso quickly agreed to Cayne's suggestion, and the meeting was held in the seventh-floor boardroom on Wednesday at two o'clock. "Everybody in the world was there," Cayne said. "Everybody. This was heavy cake. I've never seen all these people, the heads of every major firm, sit in a room and not hate each other."
Bear Stearns, the fifth-largest U.S. investment bank, survived the 9/11 attacks unscathed, just as it had survived unscathed every other major crisis since its founding in 1923, among them: the Great Depression, World War II and the 1987 market crash. Indeed, until the very end, the firm had never had a losing quarter in its history. But in the months following 9-11, Cayne and his senior management team, including Alan "Ace" Greenberg, Warren Spector and Alan Schwartz would unwittingly sow the seeds of the firm's destruction by betting heavily on the manufacture and the sale of mortgage-backed securities.
In the short run, the decision by Bear's executives to become a leader in this business resulted in huge profits for the firm - and massive paychecks for them. Along with bankers at Lehman Brothers, Merrill Lynch and Morgan Stanley (MS, Fortune 500), they were only too happy to capitalize on the mortgage boom that occurred in the wake of 9-11 when the Federal Reserve loosened the money supply.
One of Bear Stearns profit centers was a small hedge-fund division. The firm seeded it with a relatively trifling $45 million equity investment. Ralph Cioffi (pronounced Chee-off-ee), a longtime Bear Stearns fixed-income salesman turned hedge-fund manager, ran it. The funds were part of the firm's relatively tiny asset management business, known as BSAM. BSAM reported to Warren Spector, Bear's resident wunderkind, who as the firm's co-president (with Alan Schwartz) was responsible for overseeing 90% of its revenue, including its massive fixed-income business.
Like Cayne and Ace Greenberg, the boyish Spector was a world-class bridge player and many people both inside and outside Bear Stearns considered it inevitable that he would one day soon run the firm. In October 2003, Spector's friend Cioffi moved from Bear's fixed-income department to BSAM, and set up a hedge fund, called the High-Grade Structured Credit Fund, with money from outside investors. The fund eventually would have around $1.5 billion of investors' cash in it. Then 47, Cioffi had joined Bear Stearns in 1985 as an institutional fixed-income salesman, specializing in structured finance products.
Cioffi grew up in South Burlington, Vermont, near Lake Champlain. From 1989 to 1991, he was the New York head of fixed-income sales and then, for the next three years, served as global product and sales manager for high-grade credit products. As a salesman, Cioffi covered the Ohio Public Employees Retirement System account and was making around $4 million, year after year. "He was the top fixed-income salesman in a firm where fixed income was king," said one senior managing director.
"We all grew up with Ralph here," explained Paul Friedman, who was the chief operating officer of Bear's fixed-income division. "Ralph is one of the smartest guys I've ever met and was absolutely the best salesman I've ever met. When I was a trader, he was a salesman, a fabulous salesman. He was incredibly personable, incredibly smart, creative and could get things done." As a manager, Cioffi was another story. "He had adult ADD," says Friedman.
Helping Cioffi run the hedge fund was Matthew Tannin, six years his junior. Tannin, born in New Jersey, was a graduate of the University of San Francisco law school. He joined Bear Stearns in 1994 and spent seven years structuring collateralized debt obligations. In 2001, he moved over to research, where he studied the trading and value of CDOs.
Continue reading...
Part 1 - Inside Bear's Boiler Room
Part 2 - Trading Securities and Ferraris
- Martin Weiss: U.S. Ranks 33rd Out Of 47 Nations For Credit Risk, Earns 'C' Rating (Video)
- Zuckerman Rips Obama For Failed Deficit Leadership: "The U.S. Is A Ponzi Scheme That Sooner Or Later Will Blow Up"
- Bin Laden Meets His 72 Virgins
- Video: Mississippi River Levee Meets Army Demolition
- Good Will Hunting Got It Right
- Roubini On China, Europe, Greece, Euro Instability
- Rand Paul With The Judge: Budget Conversation Must Be About Spending Less Not Taxing More
- Daily Show: Jon Stewart With William Cohan On Goldman
- Trading Securities AND Ferraris Inside the Bear Stearns Boiler Room - William Cohan
- Video: The Horrific Legacy Of Chernobyl
- William Black: "The de facto policy right now is elite frauds go free if they're in banking because the whole sector is too fragile; That is significantly insane"
- Check Out The 11 U.S. States Most Likely To Default And Need A Taxpayer Bailout In The Next 5 Years
- NYT's Louise Story On How Tim Geithner Convinced NY AG Andrew Cuomo To Back Off Wall Street Prosecutions
- Interview With Creator Of Famous NYC U.S. Debt Clock
- Video: Soros On Obama, Afghanistan: "Doomed To Fail"
Rand Paul With The Judge: Budget Conversation Must Be About Spending Less Not Taxing More
http://tinyurl.com/3ndh68k
Video - Sen. Rand Paul with Judge Andrew Napolitano - May 2, 2011
- Osama Bin Laden's body 'identified by sister's brain'
- Bin Laden dead – but no body - An explosion of conspiracy theories
- Not everyone believes bin Laden really is dead
- WikiLeaks: Osama bin Laden 'protected' by Pakistani security
- Osama bin Laden raid yields trove of computer data
- Debt-Limit Deniers Don’t Buy ’Chicken Little’ Warnings
- Greece Suggests EU/IMF Bailout Extension
- Geithner gives Congress more time on debt limit
- Martin Weiss: U.S. Ranks 33rd Out Of 47 Nations For Credit Risk, Earns 'C' Rating (Video)
- Zuckerman Rips Obama For Failed Deficit Leadership: "The U.S. Is A Ponzi Scheme That Sooner Or Later Will Blow Up"
- Bin Laden Meets His 72 Virgins
- Video: Mississippi River Levee Meets Army Demolition
- Good Will Hunting Got It Right
- Roubini On China, Europe, Greece, Euro Instability
- Rand Paul With The Judge: Budget Conversation Must Be About Spending Less Not Taxing More
- Daily Show: Jon Stewart With William Cohan On Goldman
- Trading Securities AND Ferraris Inside the Bear Stearns Boiler Room - William Cohan
- Video: The Horrific Legacy Of Chernobyl
- William Black: "The de facto policy right now is elite frauds go free if they're in banking because the whole sector is too fragile; That is significantly insane"
- Check Out The 11 U.S. States Most Likely To Default And Need A Taxpayer Bailout In The Next 5 Years
- NYT's Louise Story On How Tim Geithner Convinced NY AG Andrew Cuomo To Back Off Wall Street Prosecutions
- Interview With Creator Of Famous NYC U.S. Debt Clock
- Video: Soros On Obama, Afghanistan: "Doomed To Fail"
U.S. Treasury: China Has Decreased Its Holdings of U.S. Debt
(CNSNews.com) - Mainland China has decreased its holdings of U.S. Treasury securities since last October, according to a report updated today by the U.S. Treasury Department.
Since September 2008, when they eclipsed Japan, entities in mainland China have been the largest foreign owners of U.S. government debt. But, as indicated by the Treasury Department chart linked here, Chinese ownership of U.S. Treasury securities peaked in October 2010 and has declined in each of the four most recent months reported by the Treasury Department.
At the end of October 2010, China owned 1.1753 trillion in U.S. Treasury securities. That dropped to $1.1641 trillion by the end of November, $1.1601 trillion by the end of December, $1.1547 trillion by the end of January, and $1.1541 trillion by the end of February 2011.
February is the latest month for which the Treasury has estimated foreign holdings of U.S. debt.
Back in February 2001, according to historical data reported by the Treasury, the mainland Chinese owned only $63.7 billion in U.S. debt. In the ensuing decade, the Chinese massively increased their holdings of U.S. Treasury securities, and especially in the past five years. In February 2006, China owned $318.4 billion in U.S. debt and Japan owned $656.4 billion.
In September 2008, the Chinese moved ahead of the Japanese in their U.S. debt holdings. At the end of that month, the mainland Chinese owned $618.2 billion in U.S. government debt and the Japanese owned $617.5 billion.
In the two years between September 2008 and September 2010, China increased its U.S. government debt holdings by $533.7 billion—from $618.2 billion to 1.1519 trillion. By the end of October 2010, China’s holdings of U.S. government debt had increased to their peak of 1.1753 trillion.
After that, mainland Chinese holding of U.S. government debt declined for four straight months.
Entities in Hong Kong have also been decreasing their ownership of U.S. government debt. Hong Kong ownership of U.S. Treasury securities peaked at $152.4 billion in February 2010. By the end of February 2011, that had dropped to $124.6 billion.
In fiscal 2010—which ended on Sept. 30, 2010—the U.S. Treasury needed to redeem $7.206965 trillion in maturing U.S. Treasury securities. In order to cover the principle on those securities and borrow the money needed to cover government expenses that exceeded government revenues, the Treasury needed to turn around and sell $8.649171 trillion in U.S. Treasury securities during that fiscal year.
So far in fiscal 2011—which began on Oct. 1, 2010—the U.S. Treasury has needed to redeem $4.176308 trillion in maturing Treasury securities and sell $4.769522 in new Treasury securities.
At the end of February, according to the Treasury, the total U.S. debt was $14.194764 trillion of which $9.565541 trillion was publicly traded Treasury securities. Of those $9.565541 trillion in public Treasury securities, foreigners owned $4.4743 trillion—or almost 47 percent.
The $1.1541 trillion in U.S. debt owned by the mainland Chinese as of the end of February equaled about 12 percent of the publicly held portion of the U.S. debt and almost 26 percent of the publicly held portion of the U.S. debt that was owned by foreign interests.
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5 Alternatives to the Federal Reserve
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| Dees Illustration |
Activist Post
Now that Ron Paul is officially testing the 2012 presidential waters, a hot topic will surely be "Ending the Fed." What used to be seen as a fringe issue may now result in intelligent discussions about how do we end the Fed.
Monetary reform is so vital that it may be precisely what propels Paul into the White House, assuming he gets in all the debates, on all of the ballots, and has an army of computer forensic experts to appeal shady voting machines -- which are inevitable challenges in our so-called democracy.
Joe Weisenthal recently pointed out that Ron Paul may actually have a great shot this time around:
At the time (Paul's 2008 bid), nobody in the GOP really cared about the Fed, and for the most part, Bush’s wars enjoyed broad support.
Today they’re Obama’s wars, and the Fed is one of the most disliked institutions around, taking daily abuse even from mainstream outlets like CNBC.
Anyone who has even a remedial education about the Fed knows that nearly all of America's economic woes can be directly tied to the fraudulent monetary system run by this private monopoly. Ron Paul has been right about this for over 30 years. Inherent in the fractional system is increased inflation and taxation which squeezes every worker and small businessman, resulting in a steadily decreasing standard of living for the vast majority of the population. Also inherent is the Fed spending money (making loans) without Congressional approval or oversight.
As the world's reserve currency, Federal Reserve Notes determine whether people can afford to buy food and fuel on a global scale through commodity price inflation resulting from a devalued dollar. The US dollar is also the world reserve currency for weapons and is used to fund -- with political, economic and literal interest -- both sides of all wars. The Fed has no national patriotism, only a desire for private profits that often come with immense public losses.
Besides resource grabs, the wars in Afghanistan, Iraq, and now in Libya have one thing in common: they each have a new central banking system since their "liberations." The Federal Reserve was also used as a powerful weapon to remove Taliban control of the Afghan Central Bank. Usury, the charging of interest, is strictly prohibited by the Koran, therefore these nations had very conservative banking structures. In other words, these countries operated outside of the international central banking cartel that uses debt to enslave populations. Now they have been brought in line with the cartel at the barrel of a gun, and next comes the wonderful IMF we-own-your-ass loans. This, oil and banking, is also precisely why Iran is public enemy number one even though they never attacked another nation.
Therefore, the Federal Reserve-led central banking cartel is not only a severe detriment to the US and global economies, it is the fuel for conflict around the world -- not religious beliefs, style of government, or other manufactured differences. The Federal Reserve system is the cancer that needs removing and should be the primary issue discussed in the 2012 campaign. Every other is issue seems to be a symptom of this metastasized disease, hence the debate about what type of band-aids to use on the numerous festering tumors is moot without addressing the Fed's function.
Many pragmatic voters will view ending the Fed as unrealistic. Some doubters may be mesmerized by dollar worship with little chance of seeing an end to the system before it's too late. Perhaps it won't end until it merges into a global bank with a universal currency. After all, consolidation of the world is clearly being expedited.
But what do we replace the Fed with before it's too late? It would probably not be wise to "end the Fed" abruptly, as it would surely cause chaos on domestic and, especially, global trade. The solutions rest in exactly the opposite of consolidation: currency competition. As I wrote in December, the first step is to end the Fed's monopoly power by legalizing competing currencies:HR 1098: Free Competition in Currency Act of 2011 will essentially do three things: 1) repeal legal tender laws to remove the monopoly control of the Federal Reserve, 2) legalize private mints to issue coins to be controlled by anti-fraud and anti-counterfeit laws, and, 3) remove taxes from precious metal coins to ensure fair competition among new currencies.Paul claims that it will provide a smooth transition away from the Fed, pointing out that 'if nobody wanted to use them (competing currencies), they wouldn't have to, and everybody could be happy with the Federal Reserve. But if the situation gets so chaotic that the people are looking for an alternative, they can go over to start operating in another currency.'Ultimately you don't start by ending the Fed, you start by competing with it, or opting out of it. Here are five alternatives to consider:1. Gold and Silver: First, by repealing legal tender laws the State will no longer be able to prosecute violators as domestic terrorists for using silver as an alternative currency. As a Constitutionalist, Paul supports gold and silver as a viable currency. Indeed, they have proven to be a safe store of wealth against fiat inflation. Gold and silver money have also been a timeless and border-less medium of exchange that would likely be generally accepted for interstate trade. If HR1098 were ever to pass, a commodity-based economy would likely become very popular as it will operate outside of the Federal Reserve's debt-based, taxable money system.
2. Local Tender: Local currencies are already perfectly legal in the United States "as long as it does not look like dollars, as long as denominations are at least $1.00 value, and if it is regarded as taxable income." In other words, they are essentially tied to U.S. dollars and must be taxed the same. Several communities have adopted alternative paper currencies to stimulate local trade. Many of these currencies have been set up in defiance of the debt-based money system and resemble a barter system. These local tender will obviously face challenges of interstate trade and are, depending on their structure, still somewhat at the mercy of a devaluing U.S. dollars. Under Paul's competing currency act, these local currencies could now be considered "legal" tender, which could conceivably remove their peg to the dollar. However, it is unclear whether they will share the same tax-free benefits as gold and silver under Paul's plan. Either way, they provide an important alternative exchange vehicle should the dollar became completely worthless.
3. Credit Unions and State Banks: Under the current fractional reserve system banks create over 90% of the money in the economy through loans. One way to utilize this power of the banks for the good of the local community is to support credit unions, or by creating state banks modeled after North Dakota. Credit unions may be structured differently depending on the institution; however, they all seem to loan only to depositors for local projects or businesses. They are also typically owned by the depositors themselves. The state bank of North Dakota works similarly in that it only makes in-state loans, fueled by the deposits of the state treasury, and profits go directly back into the state. Both of these entities offer an immediate alternative to the private banking cartel, and could conceivably print an alternative currency, if needed, that would likely be trusted by depositors.
4. Interest-Free Treasury Dollars: Interest-free money issued directly by the Treasury, reminiscent of Lincoln's Greenback, would basically remove the for-profit middleman -- the Federal Reserve. The concept of interest-free money in the U.S. started in Colonial times. Ben Franklin referred to it as "honest money" and wrote "In the Colonies we issue our own money. It is called Colonial Scrip. We issue it in proper proportion to make the products pass easily from the producers to the consumers. In this manner, creating ourselves our own paper money, we control its purchasing power, and we have no interest to pay to no one." Naturally, the private banking cartel will deplore this idea, as it breaks their control over the government and the economy. John F. Kennedy was the last president to attempt this on June 4th, 1963 (Just months before his assassination); he signed Executive Order 11110, which gave him legal clearance to create interest and debt-free money directly from the Treasury. What made Kennedy's plan even more secure is that his interest-free money was to be backed by silver bullion in the Treasury. This would seem to be the best national strategy so long as other local competing currencies are still allowed to exist. Otherwise we are just trading one monopoly for another.
5. Barter: Barter is the oldest form of trade. Simply put, barter is the voluntary exchange of goods and services for other goods and services without the need for currency. Because money is completely eliminated from the equation, barter naturally replaces money as the method of exchange in times of monetary crisis. Many local food cooperatives are starting to implement this type of quasi-underground economy based on credits, sometimes tied to currency for easy valuation. These systems encourage participants to produce something for the cooperative and are typically best used at the local level. Many new local currencies are replicated after barter systems, as money is only seen as a medium of exchange, not an instrument of debt or a store of wealth. Barter systems are quite easy to set up and manage these days utilizing the Internet.
Clearly the impact of the Federal Reserve should be a major part of the 2012 presidential campaign. And if it is, Ron Paul has a good chance of victory. However, if we truly believe in the ideas of competition and freedom then each of these alternatives have a role to play in our economic future.
Please share this article and provide COMMENTS and IDEAS below to move this discussion forward.
US Treasury to cut issues as May 16 debt cap nears
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| The US Treasury © AFP/File Karen Bleier |
WASHINGTON (AFP) - The US Treasury said Monday it would begin cutting certain debt issues as it confirmed the government would reach its borrowing ceiling on May 16.
With Congress still not agreed on raising the ceiling to permit the government to continue financing its spending, the Treasury said it would stop issuing state- and local-government series securities on May 6, money used for things such as local infrastructure development.
While the move appeared aimed at sparking pressure from the states on the legislature, it also would help buy time for a political deal on the ceiling, by extending to August 2 the time the country would be forced to stop borrowing and possibly default on its debt.
"Because the United States is very close to reaching the debt limit, Treasury must take this action now," Treasury Secretary Timothy Geithner said in a letter to Democratic Senator Harry Reid, the leader of the US Senate.
"However, it is not without costs; it will deprive state and local governments of an important tool to manage their outstanding debt expenses," he said.
If Congress does not increase the limit, currently at $14.29 trillion, by May 16, the department will have to take "further extraordinary measures" to allow it to continue servicing the country's debt without default, Geithner said.
"Default by the United States on its obligations would have a catastrophic economic impact," he said.
Geithner said he intends to declare a "debt issuance suspension period" on May 16.
During the period the Treasury would stop issuing bonds to the civil service retirement and savings funds and, if necessary, to the government's exchange stabilization fund.
Such measures, along with tax receipts that are running more than expected, could buy room for continued borrowing through about August 2 -- three weeks longer than had been projected.
"While this updated estimate in theory gives Congress additional time to complete work in increasing the debt limit, I caution strongly against delaying action," said Geithner.
The Democratic and Republican political parties have been sharply divided over raising the cap on the country's borrowing.
With the US debt and government deficit soaring, Republicans say they want the White House to commit to more spending cuts before they agree to raising the ceiling.
Seeking a compromise, last Wednesday Reid, the Senate majority leader, proposed that the government attach a "deficit cap" to legislation raising the borrowing cap.
While the White House has branded Republican tactics irresponsible, last month the country came under international pressure to begin cutting spending, raising revenues, and reduce its debt.
On April 18 Standard & Poor's cut the outlook on US sovereign debt to "negative," the first time the ratings agency has ever placed such a warning on the US's gold-standard AAA rating.
S&P said it did not see Washington agreeing a plan for addressing its debt before the November 2012 presidential election.
The International Monetary Fund has urged the country to "urgently" address its problems, and its chief economist said the US had no credible medium-term plan for its problems.
And China, by far the country's biggest creditor, urged Washington to adopt "responsible measures" to address its deficit and debt levels.
But Geithner said that, political differences notwithstanding, under either party's proposed budgets for the coming year, the debt ceiling would have to be raised.
It would be "irresponsible" for politicians to use the US's good credit standing "as a bargaining chip to advance partisan policy agendas," he said.
© AFP -- Published at Activist Post with license
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