Sunday, January 15, 2012

Occupy campaigners angry at police arrests

Protesters outside the police station after squatters were removed from the Railton Hotel, Lancaster and arrrested. Protesters outside the police station after squatters were removed from the Railton Hotel, Lancaster and arrrested.
PROTESTERS who occupied a disused hotel in Lancaster say they could make a formal police complaint after four were arrested.
Around 100 activists - under the Occupy Lancaster banner - took over the former Railton Hotel in Station Road on Sunday with plans to tidy up the property and garden with a view to it being opened up as community space.
However, up to 50 police later surrounded the property, forced entry and arrested three men and a woman.
They were released without charge after 20 hours in custody.
Supporters camped outside the police station overnight to protest against the arrests, and later celebrated outside the Railton Hotel following the group’s release.
One of the arrested protesters, 48-year-old David Fleet, said the group - dubbed the ‘Lancaster Four’ - will be looking into the possibility of making a complaint against the police after being arrested on suspicion of criminal damage.
See the Lancaster Guardian (12-01-12) for full story.

Voters Choice: Ron Paul or Bibi Netanyahu

Americans who desire a return to George Washington’s admonition that American democracy can be destroyed by foreign entanglements have only Ron Paul as an option.

by William A. Cook

A curious glance at the current crop of presidential candidates makes it clear that Ron Paul stands alone when it comes to the issue of US engagement in foreign wars. He stands with George Washington against foreign entanglements while the rest of the candidates stand with Teddy Roosevelt and the attempted creation of America’s first empire one hundred and twelve years ago. Mark Twain responded to that effort by creating the Anti-imperialist society while he caustically satirized the effort in his depiction of the massacre of the Moros in the Philippines. Now we have more massacres, using drones instead of canons, on equally hapless civilians who are caught unawares or hiding from the wrath of America’s righteousness as we drive to bring virtue to a primitive world.
Today America has an estimated 700 military installations in about 140 nations around the world; its bases surround Iran as does its nuclear capability, and it is engaged in executive “wars” in Iraq, Afghanistan, Pakistan, Libya, Syria, Yemen, Saudi Arabia and Palestine. All of this while carrying a debt that exceeds thirteen trillion dollars, cutting budgets in education, medical care and social security, and retaining a Pentagon budget that exceeds that of the 16 declared developed nations combined. And to top it all off, we are considering armed aggression against Iran that could plunge America into the biggest war since WW II. Why?

Why add Iran to the list of wars when we have succeeded in losing the “wars” in Afghanistan and Iraq? Let’s admit the truth, we do not control Afghanistan and, while we have ostensibly left Iraq, we have left it in chaos and disarray. The question persists, why?
Why invade Iran? Ask first, why did we invade Iraq? Why did we not object to Israel’s bombing in Syria? Why didn’t we object to Israel’s invasion of Lebanon or Gaza? The world’s nations objected in UN Resolution after Resolution. But America voted to support Israel’s illegal aggression. Why? It is America’s reputation that has been placed in the gutter; it is America that is ranked with Israel as the most dangerous nations on the planet; it is America’s democracy that has been diluted, nay emaciated, as our liberties have been eroded with ever increasing draconian delusions that they are purportedly designed to protect while they make the citizen fodder for the few in control. So the question persists, why?
Not long ago, the answer may have been provided when Netanyahu was interviewed by Piers Morgan about the Iranian threat. Relative to this discussion is a comment made by Netanyahu in his interview with Morgan, a comment that I have not seen mentioned in America’s press.
When pressed by Morgan about the Iranian threat constantly broached by Israel and its U.S. supporters and what Israel intends to do about it, the repartee always returns to Iran as not only a threat to Israel, it is a threat to “Europe and the United States.” Morgan asks again, “What is the answer, Prime Minister?” Having successfully avoided saying that Israel would attack Iran to rid it of this danger, Netanyahu resorts to “I’m talking about a credible military action.” “Lead by who,” asks Morgan. “Lead preferably by the United States,” replies Netanyahu. “Could you contemplate some kind of land invasion,” asks Morgan. “Well, I think the United States has proven great effectiveness and I’m going to divulge a secret to you about their capabilities. They’re greater than ours.”
So says the Prime Minister of Israel as he talks about using America’s military to take out the Iranian threat to Israel. Why not use American boys and girls to kill your enemy and save your own sons and daughters? Why not indeed. Mark the tone. It’s almost as though he is saying to this imported talk show host, “Why do you ask, Stupid, it’s so obvious.”
According to recent polls, Americans have fallen out of favor with our numerous wars in countries we neither know nor can spell: Afghanistan, Pakistan, Iraq, Libya, Palestine and Syria. This fact seems to be of little interest to the candidates who appear committed to the military-industrial complex that funds their respective campaigns. Indeed all seem committed to the addition of Iran since it appears to threaten, existentially, our aborted child, Israel. In short, if an American believes that he or she should vote to end America’s foreign entanglements, he or she has only Ron Paul to vote for. All the others have stated unequivocally their support for the state of Israel and its drive to stop Iran from gaining nuclear power. A vote for Romney, Perry, Gingrich, Santorum, or Huntsman means a vote for Netanyahu and his expressed desire to have American boys and girls serve Israel in this cause, or so he says. 
Consider these statements by our candidates:
* Romney on Israel:”I will reaffirm as a vital national interest Israel’s existence as a Jewish state. I want the world to know that the bonds between Israel and the United States are unshakable…If I'm president of the United States, my first trip, my first foreign trip will be to Israel to show the world we care about that country and that region.” Mark that Romney makes no reference to Palestine or Palestinians; how does one resolve a conflict if one does not recognize the second party?
            * Now consider Perry’s comment: “We are going to be there to support you. And we are going to be unwavering in that. So I hope you will tell the people of Israel: Help is on the way." Perry makes no reference to Obama’s unequivocal support for Israel having outspent all previous administrations in dollars and military hardware.
*Not to be outdone, Santorum offered the following: He said more or less what Newt Gingrich stated last month, "All the people who live in the West Bank are Israelis. They're not Palestinian. There [are] no Palestinians. This is Israeli land.” What can one say, Santorum needs to read some history before opening his mouth.
“Gingrich has all but declared that under his presidency, the American position would be that of Netanyahu’s,” Andrew Sullivan recently wrote, and with his recent multi-million dollar support from Adelson, who is linked to Netanyahu by an umbilical cord, he is chained to Israel’s dictates should he be elected.
*And, finally, Jon Huntsman presented his views: “The United States should not pressure Israel to negotiate with terrorists, nor to enter into any negotiated deals that threaten Israel’s security. This is a particularly delicate moment. We are inspired by the “Arab Spring,” in which the Arab people are calling for an end to decades of dictatorial and corrupt leadership. These events also give the lie to the notion Israel is somehow the source of all problems in the Middle East.”
Note that Huntsman does not mention that Israel has occupied Palestine for 63 years, illegally according to international law and the charter of the UN that the US has agreed to. Moreover, the constantly reiterated cause of unrest in the mid-east is the occupation of Palestine by the Israelis. To say it is not so, is, to borrow Gingrich’s eloquent phrase, “baloney.”
            *Since we know that our current president has bragged that his administration has outspent all previous administrations in support of Israel, there is no need to argue that he would change course now. Since we also know that Israel can count on close to 400 supporters in the House and virtually all 100 Senators, as votes in support these past twelve years attest, the choice for Americans who desire a return to George Washington’s admonition that American democracy can be destroyed by foreign entanglements have only Ron Paul as an option.
Ron Paul: Foreign Policy & Israel
Ron Paul on the Economy

Here is what Ron Paul says about American imperialism, a voice crying in the wilderness:
  • Islamists attacked us for US bases on Arab lands. (Sep 2011)
  • Neither Dems nor GOP will cut one nickel from militarism. (Aug 2011)
  • American Empire is big government war & militarism. (Apr 2011)
  • We can't keep troops in 135 countries & 900 bases forever. (Feb 2011)
  • We’re broke and we just can’t continue to police the world. (Feb 2008)
  • Stop policing the world and we can get rid of income tax. (Dec 2007)
  • Bring all troops home from abroad & save $100B’s every year. (Dec 2007)
  • 9/11 resulted from blasphemy of our bases in Saudi Arabia. (Dec 2007)
  • Pre-emptive war policy is a grave mistake. (Jun 2007)
  • Pre-emptive war is not part of the American tradition. (Jun 2007)
  • Military aggressiveness weakens our national defense. (May 2007)
  • Jihadists attack because we have bases in their countries. (Jan 2006)
  • Costs of war always higher than expected & go on for decades. (Jun 2005)
  • Conscription is a trait of totalitarian government. (Dec 1987)
This is the choice presented to the American voter.
What we know clearly is that America has set out on a course of world domination that mocks the very concept of democracy where people are free to choose their government, not be told who will govern them by a foreign power. What we know tragically is that the American government is content to support and sometimes to create dictators that oppress their own people, if they obey America’s dictates, as the fall of Mubarak in Egypt attests. What we also know is that our government has been bought by a foreign power to secure its own ends regardless of the consequences to the people of the United States. What we know unfortunately is that any citizen wishing to run for the office of President must kowtow to the desires of the state of Israel by declaring his or her allegiance to that state or be declared a nut case.. What we know truly is that America is no longer the nation of the free citizen, since we are now subject to the fear that resides in the gut when threatened by unsubstantiated allegations of suspicion as a terrorist that can result in indefinite detention without trial or due process. Such is the decline of the once proud and free experiment that was the United States of America.     

Brian Basham: Beware corporate psychopaths – they are still occupying positions of power

Outlook Over the years I've met my fair share of monsters – rogue individuals, for the most part. But as regulation in the UK and the US has loosened its restraints, the monsters have proliferated.
In a paper recently published in the Journal of Business Ethics entitled "The Corporate Psychopaths: Theory of the Global Financial Crisis", Clive R Boddy identifies these people as psychopaths.
"They are," he says, "simply the 1 per cent of people who have no conscience or empathy." And he argues: "Psychopaths, rising to key senior positions within modern financial corporations, where they are able to influence the moral climate of the whole organisation and yield considerable power, have largely caused the [banking] crisis'.
And Mr Boddy is not alone. In Jon Ronson's widely acclaimed book The Psychopath Test, Professor Robert Hare told the author: "I should have spent some time inside the Stock Exchange as well. Serial killer psychopaths ruin families. Corporate and political and religious psychopaths ruin economies. They ruin societies."
Cut to a pleasantly warm evening in Bahrain. My companion, a senior UK investment banker and I, are discussing the most successful banking types we know and what makes them tick. I argue that they often conform to the characteristics displayed by social psychopaths. To my surprise, my friend agrees.
He then makes an astonishing confession: "At one major investment bank for which I worked, we used psychometric testing to recruit social psychopaths because their characteristics exactly suited them to senior corporate finance roles."
Here was one of the biggest investment banks in the world seeking psychopaths as recruits.
Mr Ronson spoke to scores of psychologists about their understanding of the damage that psychopaths could do to society. None of those psychologists could have imagined, I'm sure, the existence of a bank that used the science of spotting them as a recruiting mechanism.
I've never met Dick Fuld, the former CEO of Lehman Brothers and the architect of its downfall, but I've seen him on video and it's terrifying. He snarled to Lehman staff that he wanted to "rip out their [his competitors] hearts and eat them before they died". So how did someone like Mr Fuld get to the top of Lehman? You don't need to see the video to conclude he was weird; you could take a little more time and read a 2,200-page report by Anton Valukas, the Chicago-based lawyer hired by a US court to investigate Lehman's failure. Mr Valukas revealed systemic chicanery within the bank; he described management failures and a destructive, internal culture of reckless risk-taking worthy of any psychopath.
So why wasn't Mr Fuld spotted and stopped? I've concluded it's the good old question of nature and nurture but with a new interpretation. As I see it, in its search for never-ending growth, the financial services sector has actively sought out monsters with natures like Mr Fuld and nurtured them with bonuses and praise.
We all understand that sometimes businesses have to be cut back to ensure their survival, and where those cuts should fall is as relevant to a company as it is, today, to the UK economy; should it bear down upon the rich or the poor?
Making those cuts doesn't make psychopaths of the cutters, but the financial sector's lack of remorse for the pain it encourages people to inflict is purely psychopathic. Surely the action of cutting should be a matter for sorrow and regret? People's lives are damaged, even destroyed. However, that's not how the financial sector sees it.
Take Sir Fred Goodwin of RBS, for example. Before he racked up a corporate loss of £24.1bn, the highest in UK history, he was idolised by the City. In recognition of his work in ruthlessly cutting costs at Clydesdale Bank he got the nickname "Fred the Shred", and he played that for all it was worth. He was later described as "a corporate Attila", a title of which any psychopath would be proud.
Mr Ronson reports: "Justice departments and parole boards all over the world have accepted Hare's contention that psychopaths are quite simply incurable and everyone should concentrate their energies instead on learning how to root them out."
But, far from being rooted out, they are still in place and often in positions of even greater power.
As Mr Boddy warns: "The very same corporate psychopaths, who probably caused the crisis by their self-seeking greed and avarice, are now advising governments on how to get out of the crisis. Further, if the corporate psychopaths theory of the global financial crisis is correct, then we are now far from the end of the crisis. Indeed, it is only the end of the beginning."
I became familiar with psychopaths early in life. They were the hard men who terrorised south-east London when I was growing up. People like "Mad" Frankie Fraser and the Richardson brothers. They were what we used to call "red haze" men, and they were frightening because they attacked with neither fear, mercy nor remorse.
Regarding Messrs Hare, Ronson, Boddy and others, I've realised that some psychopaths "forge careers in corporations. The group is called Corporate Psychopaths". They are polished and plausible, but that doesn't make them any less dangerous.
In attempting to understand the complexities of what went wrong in the years leading to 2008, I've developed a rule: "In an unregulated world, the least-principled people rise to the top." And there are none who are less principled than corporate psychopaths.
Brian Basham is a veteran City PR man, entrepreneur and journalist

'I’m a graduate, get me out of here!’

 Cait Reilly, who has a degree in geology, was told she would lose her jobseeker’s allowance if she did not stack shelves. She had to give up a volunteer job in a local museum
 - 'I’m a graduate, get me out of here!’
Cait Reilly, who has a degree in geology, was told she would lose her jobseeker’s allowance if she did not stack shelves. She had to give up a volunteer job in a local museum

It’s been quite a week for 22-year-old Cait Reilly. After spending 18 months waiting in vain for her phone to ring with the offer of any one of the hundreds of jobs she has applied for since graduating in the summer of 2010 from Birmingham University, these past few days it hasn’t stopped. And all because of two weeks on a government unemployment programme in her local Poundland in King’s Heath, West Midlands.
A triumph for the scheme presented by ministers as giving 250,000 claimants on jobseekers’ allowance a helping hand back into the workforce? Not quite. For Reilly has made headlines because she is mounting a legal challenge to what she says was the “forced labour” of being made to stack shelves for free in the discount retailer, or lose her £53-a-week in dole. “I was told it was mandatory. There were five of us sent there. I was the only graduate. We were doing exactly the same work as the paid staff. It makes no sense. If the Government subsidises high street chains with free labour, they don’t have to recruit. It causes unemployment rather than solves it.”
What makes the mandatory placement more puzzling, adds Reilly, whose degree was geology, was that going to Poundland meant she had to give up a volunteer post she had at the local Pen Room Museum, part of her plan to gain the experience that would help her along her chosen career path as a curator.
“Right now, I would take any job. I have £18,000 in student debts to pay off and the interest is building all the time. That really worries me. But I have plenty of retail experience already on my CV. I didn’t need to go to Poundland. And I was never told I had a choice.”
Her adviser at the Job Centre has, she reports, been replaced. The Department of Work and Pensions, which oversees the scheme, has responded to her allegations by insisting that, within reason, such “sector-based work academy” schemes are optional. And Chris Grayling, the employment minister, has in the past robustly defended the programme, pointing out that “half of young people leave benefits after they have completed their placement”.

The problem in Reilly’s case seems to be that, as a graduate, her career expectations were different from many other claimants. But she is not, in reality, so unusual. Of those who graduated at the same time as her, in 2010, half were either jobless six months later, or in menial roles. Another survey reports that 38 per cent of graduates have been on the dole after leaving university. And longer-term data from the Higher Education Statistics Agency reveals that 28 per cent of 2006 graduates were not in full-time employment three years later, while, among those who were, only 16 per cent of the men were earning over £20,000, and 29 per cent of the women.
This last figure is particularly significant since, under new tuition fee arrangements, those embarking from this September on degree courses that will cost up to £9,000 a year will only have to start repaying their tuition fees once their income rises above £21,000. The Treasury, it seems, may be about to take a substantial hit.
Reilly remains phlegmatic about her joblessness. “Someone is getting the posts I am applying for, so I have to believe that one day that person will be me. That’s the logic.”
Does she regret not tackling something more vocational – law, medicine, engineering – rather than geology?
“I did think about that before I started, but I loved the subject and geology can provide a whole range of careers in civil engineering, mining, oil exploration and property. So it was a practical choice.” But of her cohort, she says, only one – “and he got a first” – has got a job that uses his degree.
Defending the hike in tuition fees, the Government argues that undergraduates are speculating to accumulate. By taking out loans to pay for a higher education, they are giving themselves the prospect of better-paid careers than school-leavers that will more than justify that investment. However, the Office of National Statistics reported last August that a quarter of graduates are earning less than contemporaries who joined the workforce after A-levels. And even with the other three quarters, the graduate pay premium is shrinking. One factor, it seems, is that the rapid expansion in higher education under Labour has seen the percentage of university-educated workers grow since 1993 from 12 to 25 per cent. And it continues to rise.
“I don’t regret going to university,” says Holly Jerreat, 22, who graduated last summer with a 2:1 in languages from Bath, “but with hindsight I might have done a more vocational course. I chose languages because it was a subject I loved and found intellectually challenging. But here I am, still looking for work.”
Jerreat, who has returned home to live with her parents in Kent, has filled in “endless application forms” for graduate posts in marketing, advertising and media, and has come very close several times to landing the job of her dreams, but the competition is stiff and openings few and far between. To pay
her way in the interim, she has applied “for every job going in our local Bluewater shopping centre. I write off, send in CVs, go in and ask face-to-face, and then get told I am over-qualified.” Currently she is doing a part-time administrative post she got through a family connection. “Basically I do the shredding.”
In these hard times for recent graduates, such family connections – much decried by the Deputy Prime Minister, Nick Clegg, as “the exclusive preserve of the sharp-elbowed and the well-connected” – are one way to gain an advantage.
“I spent a year and a half doing various temping jobs,” says 25-year-old Howard de Podesta, who graduated in aerospace engineering from Bath, “before getting a job in product design in financial IT off the back of an internship. That is the route many graduates go down now.”
People like 24-year-old Kate Ross, who graduated in combined social sciences from Durham in 2009, and then landed a three-month paid internship with a hotel management company with the help of her sister who worked in recruitment. “Having that experience helped me impress my current employer, a property company. Without experience, no one will touch you, however good your degree or your university. You have somehow to find a way to get that experience.”
Unpaid internships, though, especially in London and big cities, depend on being able to rely on family for free accommodation and pocket money. Ross squared the circle by taking a part-time post as a live-in au pair, even though she had no formal training in caring for children. “I was actually better off when I was living for nothing there than when I started work properly and had to pay rent on a flat.”
And therein is another problem. Even when graduates find jobs, starting salaries are so low that it makes it very hard to stand on your own.
“It seems to take friends from university around a year to find a 'proper’ job,” recounts Jerreat, “but they rarely pay more than £18,000. Once you have stated paying back your student loans, which kicks in at £15,000 for my age group, and then pay rent, it really doesn’t leave anything to live on.”
The unpaid internship industry is, says Cait Reilly, pretty much a closed book for her. “I think it probably does skew the market against people like me. I live at home, but my parents can’t afford to support me. I have to make a contribution to my living costs. If I had the option of not signing on, I’d take it like a shot. It tars me with the same brush in the eyes of those who see anyone claiming benefits as lazy or scroungers. And yes, I would be prepared to travel and live somewhere else for work, but it would have to be paid for me to afford to be able to do it.”
So has her week of making headlines and taking calls helped her job search? “No,” she reports flatly. “Or not yet. Some of my friends think I am mad to go to court, that the legal action will mean that no employer will want anything to do with me, but for me it is an abuse that needs highlighting. The idea that any work experience, however irrelevant and menial, will be beneficial just doesn’t add up.”

Woman put in jail for being poor

Woman jailedl for 10 days because she's too poor to pay fine
Woman jailedl for 10 days because she's too poor to pay fine
TAGS: Crisis, USA, Economy

The recession ruined Linda Ruggles’ business and she has been selling plasma twice a week since to make ends meet. The blood bank couldn’t bail her out from behind bars though, which is where she ended up after she couldn’t pay a $480 fine.
That fine, say cops in Mount Pleasant, South Carolina, came about because Linda Ruggles had a messy yard.
Barely getting by in recent years, Ruggles, 53, has been stockpiling scraps to pawn off in order to make her bill payments. In her yard rests a pile of metal that she routinely cashes in to get by. Elsewhere outside her house is a shack of shingles. Paying to have her roof fixed, often a job that comes at a cost of several thousand dollars, has been out of the question.
So when cops ticketed her $480 for having a messy yard, Ruggles wasn’t exactly prepared to pay it.
“I told everyone, ‘If I had $480 to pay the fine, I'd fix the roof,’"' she told Charleston, South Carolina ‘s Post and Courier.
Ruggles couldn’t fix the roof, however, and she couldn’t pay the fine either. For being unable to do so, she was sentenced to serve 10 days in jail for failing to pay her “clean lot violation.”
“I feel like they want to make an example out of me,” Ms Ruggles tells the paper. “This should be an embarrassment for the town of Mount Pleasant. And it should be an embarrassment for my neighbors who called the code enforcement officer, because no one offered to help me – no one.”
Six days into her sentence, however, Ruggles was allowed home only to be greeted by an array of local residents who read about her plight and offered to help. That assistance came only after nearly a week in jail and legal complications which are surely only going to add onto the troubles (and scrap metal) which has already piled up.
“It didn’t change the situation,” she adds. “I just don’t think being handcuffed, photographed and fingerprinted is really a behavior-modification tool to keep me from being poor.”
On the bright side, the neighborhood grocery store that Ruggles works part-time at has allowed her to reclaim her position after her brief stint behind bars. On the bright side, that is, as long as she can forget about her last shift behind the register. It was on the job last month when the cops entered her place of business and hauled her off to jail.

Gerald Celente - Jeff Rense Radio Show - 13 January 2012

Home Seizures May Jump 25% This Year as U.S. Foreclosures Resume

Jan. 12 (Bloomberg) -- Banks may seize more than 1 million U.S. homes this year after legal scrutiny of their foreclosure practices slowed actions against delinquent property owners in 2011, RealtyTrac Inc. said.
About 1.89 million properties received notices of default, auction or repossession last year, down 34 percent from 2010 and the lowest number since 2007, the Irvine, California-based data seller said today in a statement. One in 69 U.S. households received a filing.
While the seizure process has been “highly dysfunctional,” there were “strong signs in the second half of 2011 that lenders are finally beginning to push through some of the delayed foreclosures in select local markets,” RealtyTrac Chief Executive Officer Brandon Moore said in the statement.
The number of home repossessions is likely to rise about 25 percent from the more than 804,000 properties seized last year as lenders resume foreclosure actions, Daren Blomquist, a spokesman for RealtyTrac, said in a telephone interview. Settlement talks are continuing with state attorneys general over documentation flaws, known as “robo-signing,” that surfaced in October 2010.
About 400,000 additional homes would have been repossessed without the slowdown, Blomquist said. The ramp-up in foreclosure proceedings that began in 2011’s second half is likely to continue this year, Moore said in the statement.
Foreclosure filings totaled almost 2.7 million last year as some properties got multiple notices, RealtyTrac said.
Highest in Nevada
Nevada had the nation’s highest rate of foreclosure filings per household for the fifth straight year, at one in 16, while total filings were down 31 percent from 2010. A new state law that took effect in October requires lenders to file an additional affidavit before starting the foreclosure process.
Arizona had the second highest foreclosure rate, with one in 24 households receiving a notice, and California ranked third at one in 31. Georgia was fourth, with one in 37, and Utah fifth at one in 43, according to RealtyTrac.
Michigan, Florida, Illinois, Colorado and Idaho also ranked among the states with the 10 highest rates in 2011.
Las Vegas had the highest rate among metropolitan areas with populations over 200,000, at one foreclosure filing per 14 households. Stockton, Modesto, Vallejo-Fairfield and Riverside- San Bernardino, all in California, ranked second through fifth.
Phoenix; Merced, California; Reno, Nevada; Bakersfield, California; and Sacramento, California, rounded out the top 10, said RealtyTrac, which sells default data from more than 2,200 counties representing 90 percent of the U.S. population.
--Editors: Daniel Taub, Steven Crabill

Records: Federal Reserve Officials Foresaw, Joked About Housing Bubble in 2006


Newly released transcripts from the Federal Reserve's 2006 meetings reveal the extent of what Chairman Ben Bernanke and his colleagues actually knew as the country was about to hit the cusp of the financial crisis. Ray Suarez discusses the board's detailed conversations with The New York Times' Binyamin Appelbaum.


RAY SUAREZ: As the economy climbs back from one of the country's deepest recessions, it's now clear that a dragging housing market remains a pivotal part of the problem.
But, back in 2006, many economists didn't see big risks in a growing housing bubble or the potential body blow housing could give the economy. Yesterday, we learned the extent of that thinking at the Federal Reserve in 2006, on the cusp of the crisis.
The insights come from newly released transcripts detailing conversations between Federal Reserve Chairman Ben Bernanke and his colleagues at the Fed Board of Governors in 2006. They discuss the changing conditions surrounding an overheated housing market.
But, as Bernanke put it that march: "Strong fundamentals support a relatively soft landing in housing. I think we are unlikely to see growth being derailed by the housing market."
Binyamin Appelbaum has been reading these documents for The New York Times. And he joins me now.
And we had anything but a soft landing, but we can now see these deliberations, this new transparency. What did you learn about these meetings? What did you learn about the way a Board of Governors meeting works?
"[Chairman Ben Bernanke] holds the distinction of being, among that group of people, the one most cognizant of the downside possibilities, but it was a group of people who were all unaware of the cracks beneath their feet."
- Binyamin Appelbaum, The New York Times
BINYAMIN APPELBAUM, The New York Times: I think what was fascinating here, we knew the Fed has missed the crisis, right? We knew they didn't see it coming. We all lived through that.
But these minutes show us the extent of their misunderstanding of the health of the economy. They show us how badly they misunderstood the way that the economy was working, how badly they misunderestimated the impact of the housing crash.
And it shows, you know, a group of very intelligent, very thoughtful people, you know, talking about the economic situation in the country in a considered way, evaluating what might happen, and having a discussion that, it turns out in retrospect, was far removed from the reality of the actual situation.
RAY SUAREZ: It's not like they were totally blind. They were seeing steady supplies of intelligence about what was going on in the field.
Here's a quote from Federal Reserve Gov. Susan Bies. She says: "A lot of private mortgages that had been securitized during the past few years really do have much more risk than the investors have been focusing on."
But, often, they moved ahead as it they weren't seeing what they were seeing. Did they ignore the details they were getting?
BINYAMIN APPELBAUM: You know, it's so striking. If you kept reading from that quote, what you would see is that she went on to say, basically, but this is a small problem. The market as a whole is doing fine. The overall quality of these securities is very good. I'm not worried about the housing market.
In fact, at one point, she said that if there was a mild correction in housing, it would benefit the economy by moving resources to healthier sectors of the economy. You're right. They saw it. They saw that housing was crashing. They joked about the problems that home builders were having in selling homes. They would tell these stories about home builders giving away cars or dressing up empty properties so they looked occupied.
And they understood that there was a problem in the housing market. What they didn't understand was how important the housing market had become to the economy as a whole.
RAY SUAREZ: Early in the year, new chairman Ben Bernanke said at a meeting: "So far, we're seeing, at worst, an orderly decline in the housing market, but there still is, I think, a lot to be seen as to whether the housing market will decline slowly or more quickly."
Did Ben Bernanke not join in the rah-rah that many of the other governors around the table were indulging in?
BINYAMIN APPELBAUM: This -- these transcripts offer a really interesting look at Chairman Bernanke, because what does emerge in that, in the context of that board, he was the person who most frequently said, hey, this could be worse than we think. There is a possibility here that we're missing some of the consequences that could unfold, some of the damage that could be done to the real economy.
But it was a relative distinction. He did not see the crash coming. He didn't warn of the consequences that would unfold. You know, he holds the distinction of being, among that group of people, the one most cognizant of the downside possibilities, but it was a group of people who were all unaware of the cracks beneath their feet.
RAY SUAREZ: To be fair, a lot of other economists at the same time were talking about blue skies, soft landing, moderation in the coming years. It wasn't like there were just a bunch of clods sitting around this table, and everybody else could see it, right?
This was a failure to some extent of the economics profession. Most economists, if you put them into this room, would have reached the same conclusions and said the same things. It should always be noted that there were people who were right, who saw this, who warned about it, but they were a minority. Most economists didn't see it.
But it should also be said that you know, it may be the case that any of us put into center field at Fenway Park wouldn't play center field very well, but we're not all the center fielders on the Red Sox. Some people are paid to do this. They're supposed to be doing it well. That's the role the Federal Reserve is supposed to be playing, and they didn't do it.
RAY SUAREZ: This was not only the cusp of the housing crisis. It was also the cusp between the Greenspan era and the Bernanke era.
The old chairman, Alan Greenspan, presides over the first meeting of the year. Now Secretary Tim Geithner, then the head of the Federal Reserve Bank of New York, says into the record: "I would like the record to show that I think you're pretty terrific, too. And thinking in terms of probability, I think the risk that we decide in the future that you have been even better than we think is higher than the alternative."
The Greenspan reputation has not matched Geithner's predictions, has it?
BINYAMIN APPELBAUM: No, there are many fewer people who would probably subscribe to that view at this point.
This was a remarkable send-off for a man who was then regarded as sort of the iconic central banker, the person who had played that role better than maybe anyone else ever had. He had guided the economy through almost two decades of fairly steady growth. People thought the economy was still on an upward trajectory at that point.
And his colleagues praised him to the skies. One called him a Yoda-like figure. Another said that he had left behind for his successor an economy that was like a tennis racket with a giant sweet spot. And they thought he had -- they thought he'd been great.
RAY SUAREZ: One aspect of all of all this that is very interesting is the degree to which these professionals missed how enmeshed housing had become in the economy in the widest sense.
Kevin Warsh, a Federal Reserve governor, says in September 2006: "I would say that the capital markets are probably more profitable and more robust at this moment than they have perhaps ever been."
And they were about to unravel, weren't they?
BINYAMIN APPELBAUM: That's a remarkable mistake for him to have made.
This was the governor who was perhaps most closely attuned to Wall Street, the one who watched that part of the economy most closely. He was a former investment banker. And to have been standing there at that moment looking into financial markets, and to have thought that they were more robust than they had ever been, when, in fact, they were about as fragile as they'd ever been, really underscores how deeply the Fed had misunderstood the nature of what it was looking at.
RAY SUAREZ: For all that emerges in these 1,200 pages of transcript, what about the response that these same people around the table launched when it was clear that there were problems? Did they stop the freefall? Did they keep things from getting worse?
BINYAMIN APPELBAUM: Yeah, that's a very different story, and it's one that the Fed comes out looking much better in.
I think a lot of economists give them a lot of credit for having intervened decisively, for having moved really strongly to arrest the fall of the economy, to prevent what many people were concerned could become the first real depression in 80 years, to have prevented the collapse of financial markets through a series of unprecedented and massive interventions.
So, this story -- you know, we get one year of transcripts at a time. They are released on a five-year lag. So, right now, we're reading sort of the 2006 installment of this story. Next year, we'll get 2007, the year after that, 2008. And, frankly, the story starts to look a little bit better for the Fed in terms of how they were handling the economy as it moves forward.
RAY SUAREZ: Binyamin Appelbaum of The New York Times, thanks a lot.

Celebrities Endorse RON PAUL, Clint Eastwood, Vince Vaughn, Kelly Clarkson

Foreigners Sell Record $85 Billion In Treasurys In 6 Consecutive Weeks - Time To Get Concerned?

Last week, when we pointed out what was then a record $77 billion in Treasury sales from the Fed's custody account, in addition to noting the patently obvious, namely that contrary to what one hears in the media, foreigners are offloading US paper hand over first, there was this little tidbit: "The question is what they are converting the USD into, and how much longer will the go on for: the last thing the US can afford is a wholesale dumping of its Treasurys. Because as the chart below vividly demonstrates, the traditional diagonal rise in foreign holdings of US paper has not only pleateaued, but it is in fact declining: a first in the history of the post-globalization world." Well as of today's H.4.1 update, the outflow has increased by yet another $8 billion to a new all time record of $85 billion, in 6 consecutive weeks, which is also tied for the longest consecutive period of outflows from the Fed's Custody account ever. This week's sale brings the total notional of Treasurys in the Custody account to just $2.66 trillion (down from a record $2.75 trillion) and the same as April of last year. And since the sellers are countries who have traditionally constantly recycled their trade surplus into US paper, this is quite a distrubing development. So while the elephant in the room could have been ignored 4, 3 and 2 weeks ago, it is getting increasingly more difficult to do so at this point, especially with US bond auctions mysteriously pricing at record low yields month after month. But at least the mass dump in Treasurys explains the $100 swing higher in gold in the past month.

The Worst Economic Recovery Since The Great Depression

The record of President Obama’s first three years in office is in, and nothing that happens now can go back and change that.  What that record shows is that President Obama, with his throwback, old-fashioned, 1970s Keynesian economics, has put America through the worst recovery from a recession since the Great Depression.
The recession started in December, 2007.  Go to the website of the National Bureau of Economic Research ( to see the complete history of America’s recessions.  What that history reveals is that before this last recession, since the Great Depression recessions in America have lasted an average of 10 months, with the longest previously lasting 16 months.
When President Obama entered office in January, 2009, the recession was already in its 13th month.  His responsibility was to manage a timely, robust recovery to get America back on track again.  Based on the historical record, that recovery was imminent, within a couple of months or so.  Despite widespread fear, nothing fundamental had changed to deprive America of the long term, world-leading prosperity it had enjoyed going back 300 years.
Supposedly a forward looking progressive, Obama proved to be America’s first backward looking regressive.  His first act was to increase federal borrowing, the national debt and the deficit by nearly a trillion dollars to finance a supposed “stimulus” package, based on the discredited Keynesian theory left for dead 30 years ago holding that increased government spending, deficits and debt are what promote economic growth and recovery. That theory arose in the 1930s as the answer to the Great Depression, which, of course, never worked.

That was the beginning of President Obama’s Rip Van Winkle act, pretending not to know anything that happened over the previous 30 years proving the dramatic, historic success of the new, more modern, supply side economics, which holds that incentives for increased production are what promote economic growth and recovery.  Indeed, that Rip Van Winklism pretended not to remember the 1970s either, when double digit inflation and double digit unemployment proved Keynesian economics grievously wrong.
As should have been long expected, Obama’s trillion dollar Keynesian stimulus did nothing to promote recovery and growth, and almost surely delayed it.  That is because borrowing a trillion dollars out of the economy to spend a trillion back into it does nothing to promote the economy on net. Indeed, it is probably a net drag on the economy, because the private sector spends the money more productively and efficiently than the public sector.
The National Bureau of Economic Research scored the recession as ending in June, 2009.  Yet, today, in the 49th month since the recession started, there has still been no real recovery, like recoveries from previous recessions in America.
Unemployment actually rose after June, 2009, and did not fall back down below that level until 18 months later in December, 2010.  Instead of a recovery, America has suffered the longest period of unemployment near 9% or above since the Great Depression, under President Obama’s public policy malpractice.  Even today, 49 months after the recession started, the U6 unemployment rate counting the unemployed, underemployed and discouraged workers is still 15.2%.  And that doesn’t include all the workers who have fled the workforce under Obama’s economic oppression.  The unemployment rate with the full measure of discouraged workers is reported at as about 23%, which is depression level unemployment.
Today, over 4 years since the recession started, there are still almost 25 million Americans unemployed or underemployed.  That includes 5.6 million who are long-term unemployed for 27 weeks, or more than 6 months.  Under President Obama, America has suffered the longest period with so many in such long-term unemployment since the Great Depression.

24 Stats To Crush Anyone Who Thinks America Has A Bright Economic Future

Beware of bubbles of false hope. Right now there is a lot of talk about how the U.S. economy is improving, but it is all a lie. The mainstream media can be very seductive. When you sit down to watch television your brain tends to go into a very relaxed mode. In such a state, it becomes easy to slip thoughts and ideas past your defenses. Sometimes when I am watching television I realize what the media is trying to do and yet I can still feel it happening to me.
In this day and age, it is absolutely critical that we all think for ourselves. When you look at the long-term trends and the long-term numbers, a much different picture of the U.S economy emerges than the one that is painted for us on television.
Over the long-term, the number of good jobs in America has been steadily going down. Over the long-term, the number of Americans living in poverty and living on food stamps has been steadily going up. Over the past couple of decades, tens of thousands of businesses, millions of jobs and trillions of dollars of our national wealth have gone out of the country.
Our debt is nearly 15 times larger than it was 30 years ago, and U.S. consumer debt has soared by 1700% over the past 40 years. Year after year the rate of inflation goes up faster than our incomes do, and this is absolutely devastating the middle class. Anyone who believes that we can keep doing the same things that we have been doing and yet America will still have a bright economic future is delusional. Until the long-term trends which are taking the U.S. economy straight into the toilet are reversed, any talk of a bright economic future is absolute nonsense.
In America today, we have such a short-term focus. We are all so caught up with what is happening right now. Our attention spans seem to get shorter every single year. At this point it would not be hard to argue that kittens have longer attention spans than most of us do. (If you have ever owned a kitten you know how short their attention spans can be.) Things have gotten so bad that most of our high school students cannot even answer the most basic questions about our history. If people are not talking about it on Facebook or Twitter it is almost as if it does not even matter.
But any serious student of history knows that is is absolutely crucial to examine long-term trends. And when you look at the long-term trends, it rapidly becomes apparent that the U.S. economy is in the midst of a nightmarish long-term decline.
The following are 24 statistics to show to anyone who believes that America has a bright economic future....
#1 Inflation is a silent tax that steals wealth from all of us. We continue to shell out increasing amounts of money for the basic things that we need, and yet our incomes are not keeping pace. Just check out the following example. Gasoline prices have been trending higher for several years in a row as one blogger recently noted....
January 2009           $1.65
January 2010           $2.57
January 2011           $3.04
January 2012           $3.29
#2 If you can believe it, the average American household spent approximately $4,155 on gasoline during 2011.
#3 Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.
#4 Health care costs continue to rise at a very alarming pace.  According to the Bureau of Economic Analysis, health care costs accounted for just 9.5% of all personal consumption back in 1980.  Today they account for approximately 16.3%.
#5 Getting a college education has also become insanely expensive in America.  After adjusting for inflation, U.S. college students are borrowing about twice as much money as they did a decade ago.
#6 To get the same purchasing power that you got out of $20.00 back in 1970 you would have to have more than $116 today.
#7 To get the same purchasing power that you got out of $20.00 back in 1913 you would have to have more than $457 today.
#8 There are fewer payroll jobs in the United States today than there were back in 2000 even though we have added more than 30 million extra people to the population since then.
#9 The U.S. economy is bleeding millions of good jobs.  Greedy CEOs are systematically shipping them overseas and our politicians are standing around and doing nothing about it.  This has gone on year after year after year.  The following is from a recent article by Paul Craig Roberts....
In the first decade of the 21st century, Americans lost 5,500,000 manufacturing jobs. US employment in the manufacture of computer and electronic products fell by 40%; in the production of machinery by 30%, in motor vehicles and and parts by 44%, and in the manufacture of clothing by 66%.
#10 Our economic infrastructure is being torn apart right in front of our eyes.  In 2010, an average of 23 manufacturing facilities a day shut down in the United States.  Overall, more than 56,000 manufacturing facilities in the United States have shut down since 2001.
We have made it legal for big corporations to send millions of jobs to countries where it is legal to pay slave labor wages, where the tax burden is much lighter and where there are barely any regulations.  The following is a brief excerpt from a recent article posted on Economy in Crisis....
Back in the ‘80s, I called my friend Walter in California and asked: “On your next expansion we need a plant in South Carolina.” Walter replied: “We don’t produce anything in the United States. It’s all in China. China furnishes you the plant on a year-to-year basis. If your investment works out, you don’t have to pay any corporate tax; just reinvest it for another plant and more profit. If it doesn’t work out, you can walk away with no legacy costs. I send a quality controller to watch production. I check on it every day. I don’t have any labor, health, safety, or environmental concerns, and have time to play a round of golf.” The bleeding of jobs off-shore started in the ‘80s — now hemorrhages under Bush and Obama. Waiting for the economy to bounce back; calling this “the worst recession” is a bum rap. The reason the economy hasn’t bounced back since 2008 is because the economy is being off-shored.
#11  As a result of our insane economic policies, our trade balances are absolutely exploding.  For example, the U.S. trade deficit with China in 2010 was 27 times larger than it was back in 1990.
#12 As you read this, there are millions of Americans out there wondering why they can't find any jobs.  According to Reuters, 23.7 million American workers are either unemployed or underemployed right now.
#13 The number of good jobs has been steadily shrinking in America.  Since the year 2000, the United States has lost 10% of its middle class jobs.  In the year 2000 there were about 72 million middle class jobs in the United States but today there are only about 65 million middle class jobs.
#14 Over the last three decades, the percentage of low income jobs has consistently risen.  Back in 1980, less than 30% of all jobs in the United States were low income jobs.  Today, more than 40% of all jobs in the United States are low income jobs.
#15 The number of middle class neighborhoods also continues to decline.  In 1970, 65 percent of all Americans lived in "middle class neighborhoods".  By 2007, only 44 percent of all Americans lived in "middle class neighborhoods".
#16 A decade ago, the United States was ranked number one in average wealth per adult.  By 2010, the United States had fallen to seventh.
#17 Our incomes continue to go down.  Since December 2007, median household income in the United States has declined by a total of 6.8% once you account for inflation.
#18 Unfortunately, middle class Americans have been seeing their incomes decline for a very long time.  According to one study, between 1969 and 2009 the median wages earned by American men between the ages of 30 and 50 dropped by 27 percent after you account for inflation.
#19 Since 1971, consumer debt in the United States has increased by a whopping 1700%.  Unfortunately, U.S. consumers have still not learned how to stay out of debt.  According to a recent article posted on Financial Armageddon, the rate of personal savings in the United States is rapidly falling right now at the same time that the total amount of consumer credit is absolutely skyrocketing.
#20 The number of children living in poverty in America keeps rising year after year. The percentage of children living in poverty in the United States increased from 16.9 percent in 2006 to nearly 22 percent in 2010.
#21 The number of Americans on food stamps continues to set new all-time records.  Just check out the following progression....
October 2008: 30.8 million Americans on food stamps
October 2009: 37.6 million Americans on food stamps
October 2010: 43.2 million Americans on food stamps
October 2011: 46.2 million Americans on food stamps
#22 The U.S. debt problem has gotten completely and totally out of control.  Recently, the debt of the federal government surpassed 100% of GDP for the first time ever.
#23 During the Obama administration, the U.S. government has accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office.
#24 Barack Obama's proposed 2012 budget projects that the national debt will rise to 26 trillion dollars a decade from now.  And his budget numbers are ridiculously optimistic.
Are you starting to get the picture?
All of the long-term economic numbers are progressively getting worse.
As the economy continues to crumble, large numbers of Americans are becoming really desperate.  For example, a recent Mother Jones article detailed how large numbers of formerly middle class Americans are now actually growing marijuana in an effort to make ends meet.
As things continue to get worse, people will become even more desperate.  There are millions of people out there that find themselves unable to pay the mortgage and put food on the table for their families.  When people hit rock bottom, they often find themselves doing things that they never dreamed that they would do.
Meanwhile, the big Wall Street banks just keep getting larger and more powerful.  We have allowed the "too big to fail" banks to become much bigger than they have ever been before.  The total assets of the six largest U.S. banks increased by 39 percent between September 30, 2006 and September 30, 2011.
Wealth is becoming increasingly concentrated at the very top even as the overall economic pie in America continues to get smaller.
As our economic problems become worse, more Americans than ever are trying to find ways to "escape".
For example, according to one new government report one out of every six adults in America is a binge drinker.
Other Americans "tune out" by watching endless hours of television, by playing endless hours of video games or by indulging in endless hours of other forms of entertainment.
There are even some Americans that are giving up completely.  For example, one elderly man actually robbed a bank just so that he could get arrested and be taken to prison where he would get free health care.
But as I have written about previously, now is not the time to give up.  Instead, now is the time to prepare for the great challenges that are ahead.
Almost every generation in history has been faced with great challenges and great hardships at some point.
Yes, there will be some incredibly hard times ahead, but that also means that there will be a need for some great heroes.
Just because the U.S. economy is falling apart does not mean that life is over.
We are living during one of the most exciting times in all of human history.  Instead of cowering in fear, let us embrace these times and focus on becoming the people that we were created to be.